Scott On Money

Buying in bulk is a great way to save big bucks. I tend to purchase a lot of household supplies like paper towels and toilet paper in bulk. I save about 30 cents a roll on paper towels and a dime to a quarter on the toilette paper.

I also buy dish soap, dishwasher soap and hand soap in bulk along with printer paper, sponges and frozen foods.

You’ll notice there is not a lot of food on this list. I don’t cook enough to justify buying most foods in bulk. I have a hard enough time using up all my super market consumables like bread before they go bad.

Be careful with foods. Take into consideration how long they will last and how quickly you might get tired of an old favorite.

I once bought a 5 gallon jar of maraschino cherries. It is hard to remember if they went sour on the shelf or in my mind but I only ate about two pounds of the tasty treats before tossing the massive jar.

Go forth and buy in bulk (when it makes sense).

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We frequently hear the advice “You can’t time the market”. The market the advice refers to is the stock market. The idea is that predict the perfect moments to buy and sell stocks is very difficult. But what about other markets? Like the market for bicycles or appliances or cars.

Bankrate.com has an article that goes over many different markets and the best time to be a buyer. You can summarize most of the suggestions as: “buy in the off season”.

Buying in the off season has many advantages beyond price breaks. I have very much enjoyed visits to Boston, Washington D.C., France and Germany during the winter. There was less crowding and better deals all around. Of course you have to deal with the cold and sometimes bad weather.

Even if you find it desirable you may not be able to take advantage of seasonality. If your air conditioning breaks in the summer you might have to deal with it then. If your roof leaks you can’t wait for the summer to fix it.

Read the article and take the time to think ahead to your big purchases over the next 12 months. Taking advantage of seasonality can save you a bundle.

Posted by Scott at 08:27 AM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

If you have debt, especially high interest credit card debt, you have a problem. Your financial well health is being drained away.

A common suggestion offered to people for getting their debt under control is to put together a budget. This helps identify costly holes that your money uses to escape.

Unfortunately the concept of a starting a budget frightens, intimidates and bores many folks. If you fall into this camp it is okay. There is a smaller step you can take to help you get your situation under control.

Spending Log
1- For one week sit down every evening and write down everything that you spent cash on that day. You only need to track cash because everything else should have other records.
2- At the end of the week sit down with your cash list, checkbook, credit card and bank transactions and add them up. If you have online access to your bank and credit cards this will be easy. If you don’t have online access to your accounts just wait a few weeks until you have all your statements.
3- Multiply your cash items by 4. We only tracked these expenses for a week to limit the amount of work you have to do.
4- Add in your big monthly bills like your mortgage, car and utilities.

Now you know approximately what you spend. Look through it. Is there anything that stands out that you are really not happy about? Is there a restaurant you grab lunch at because it is near work that isn’t very good but is quite expensive? Did you buy a bunch of music that you really don’t listen too that much?

Use these items to identify a few simple areas that you can save some money and get started.

Smile when you write a bigger check to the credit card company. You are building your financial health and that should make you happy.

Posted by Scott at 08:21 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

HSBC is offering 6% on its online savings account for three months ending April 30th. It is great that they are offering this rate. If you haven’t setup your emergency fund in an interest bearing account this is a good opportunity to take advantage of a high rate, at least temporarily.

This doesn’t motivate me to move my money from my Emigrant Direct account. Why? The three months boost isn’t worth the administrative hassle.

It is important to keep your eye out for ways to boost your return and this might be such an opportunity for you.

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Give me two dollars!

Not very polite is it? Why should you give me two dollars?

You give it to some guy that owns an ATM just for letting you get at your own money, so I figured you might want to give me some money too.

No?

Okay. But let me suggest you don’t give the guy that owns the ATM machine two dollars either okay?

Go to your bank. It is okay to take out a little more than you need right now to avoid the fee. If you must use whatever is closest go find a bank or credit union that will credit you for using another companies ATM machine. ETrade and USAA are two of the banks that will refund your ATM fees.

Or you could send me two dollars (Just checking)

Posted by Scott at 11:23 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

I just got another credit card offer mailer. It had a 0% teaser on the outside so I opened it to check out the terms. It had an annual fee of almost a hundred dollars. I tossed it, and so should you.

If you have any credit cards with an annual fee that is just money burned. I have never seen a credit card offer a higher cash back rate or other awards in exchange for these fees. Airline and business cards seem to be the biggest culprits.

So look through your mail, or checkout bankrate.com or creditcards.com and find a better deal. Annual fees stink.

Posted by Scott at 09:12 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

For a number of years I have bought many Christmas gifts online. This year I noticed a difference. Online shopping is widely accepted. I say this because of the following observations:
- A large number of my friends and family have adopted online shopping in varying degrees to do their Christmas shopping.
- More of my non-gift and non-book shopping has moved online.
- A greater percentage of my gift buying is online.

In statistical terms the volume of online purchases was up 26% from last year.

Amazon.com is the flagship online retailer. When I first got out of school you had to go get extra software to access the web and almost everyone was using dialup. I used Amazon quite a bit back in then when it was book focused because in my field education demands are very high and I’m an avid recreational reader. This year more than 60% of my gift purchases were through Amazon.

More and more of our shopping is going to be online and there are many great benefits to this that I welcome. I have to deal with fewer crowds. A mall around Christmas time is a very undesirable place to be. I save time and I save money because I can comparison shop more effectively. With Amazon Prime and quick fulfillment I don’t have to worry much about time delays in online ordering.

Online shopping is not perfect and there are many times you need to go to a physical store to try or touch or feel something you are buying. But online shopping has real benefits. If you haven’t used it much I suggest you take another look.

Posted by Scott at 07:32 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

Okay, for the 80% of you that haven’t finished your Christmas shopping yet: Use your coupons.

I know, I usually throw away all the circulars and other junk mail. This time of year, if you are like me, you spend a good deal more money than the rest of the year. This time of year also sees a good deal of promotions from retailers. Use these offers to your advantage.

Here is just a sampling of offers I’ve received in the past two weeks:
- Best Buy 10% off and 12% off coupons.
- Target $10 off purchases of $100 or more.
- CVS $5 of purchases of $20 or more.
- Linens and Things $10 of a purchase of $50 or more.

I have to say that I’ve blown more than one offer by being overly stressed about shopping this year.

Steps
1) Read junk mail
2) Remove valuable coupons
3) Buy things you need that you have coupons for
4) Use coupon

I’ve missed step 4 a few times and while I had the coupon in the car not remembering it until I left didn’t save me any money.

Better luck with your coupons!

Posted by Scott at 09:29 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

Remember, if your signed up for your Discover Card’s “Get More” program you get 5% cash back at a bunch of places like restaurants, movie theaters and Amazon.com. In normally shop at Amazon for 40-60% of my Christmas gifts already and this is a huge bonus for me.

Read more here.

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I frequently need to make large numbers of long distance calls. I switched a few years back to a flat rate unlimited long distance plan with a normal carrier. I recently noticed the rate on the plan inching up to where it is just shy of $60 a month.

I’ve had seen the Vonage adds and, after checking them out signed up. Their $25 plan seems to run about $29 after taxes and fees. I received the package and set it up. I’ve made and received a few calls since and I have to say I was very impressed with the quality.

Some thoughts:
- Saving $360 a year is a good deal.
- I didn’t switch over my phone number right away because I want to make sure it works well before taking that step.
- You have to have high speed internet (DSL or cable modem to use the service).
- Voange has lots of cool (and free) features that I'll cover later.

I’ll update you as time goes on but it looks like I’m well on my way to saving $360 dollars a year.

Posted by Scott at 07:47 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

I saved four dollars today without trying. I stopped into Vons, a local supermarket, to pick up some shampoo. I normally wouldn’t buy this at a supermarket as their prices are simply too high. Today I had little time and so I bit the bullet and grabbed the $8.39 shampoo.

At the register I entered my card number and the cashier was quite excited. “You saved four dollars!”

Vons has a program were every twelve dollars you spend on health an beauty items until 12/5/06 you get four dollars off. At five dollars this is probably a little bit of a savings of Target or Wal-Mart. The receipt says I have another $7.26 towards my next $12.

Look out for this and other similar loyalty programs at place where you have a club or membership card.

Posted by Scott at 08:24 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

Pizza Hut’s online ordering can save you money. How do I know? Last night I was ordering pizza to launch an evening of handing out candy to the kids in the neighborhood. When I got to the checkout the site asked me if I had any coupons.

I am not generally a coupon clipper and so I didn’t have any.

I did however notice a little button beside the question that let me view their current coupons. I clicked and, at the bottom of the page was one for two dollars off the pizza I was ordering. I clicked it and they took two dollars off my order. Very simple.

Always order your Pizza Hut pizza online. Always scan the coupons page when checking out. It is much easier than clipping coupons.

Posted by Scott at 11:32 AM | Permalink | Comments (1) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

I was out getting dinner the other night and I noticed a yellow Lamborghini parked at Denny’s. I thought about the person that owns that car and where they were eating. For those of you that may not know the car likely cost over one hundred thousand dollars. For those of you that don’t know eating at Denny’s will cost you eight to ten dollars.

I think about cause and effect. Did this person live a frugal life and set aside money to fulfill their dreams? Did this person as a kid have a yellow Lamborghini on their wall? Did this person decide to eat at Denny’s instead of pricier dinner options to save to make their dreams come true? Could be.

Did this person go into massive debt to buy a Lamborghini on impulse? Are they forced to eat at places they don’t like just to stay above water and pay off their debt? Will they be able to keep up with the bills if they lose a job or have health problems? Could be.

I present two completely different speculative, lives. Which would you choose?

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Getting started building your savings is a matter of action. Take a look at what you have now, right now. Figure out what you can set aside be it one hundred dollars or one. Set that money aside today.

Mark this day of the month on your calendar in every month. Every time this day rolls around set aside more money than you did the last time.

This will launch you off on your path to saving.

Good Luck!

Posted by Scott at 10:26 AM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

How hard should you work to get a slightly better interest rate on your investment? Should I really spend a lot of time research investments to boost my rates a few percent?

This chart assumes that you start working at age 18, that you put away 10% of your income a year and that your salary grows at 6% a year. It then shows the impact of different interest rates.

If you look at the right side of the chart you see the dramatic result. As time goes on minor differences in your rate of return make major difference in your net worth. At 70 years old the investor that landed lifelong returns of 4% has 976 thousand dollars. While this is much better than your average investor it is far less than the 1.5 million dollars earned by the investor with a 6% rate, the 2.6 million of the investor that worked hard to achieve a 8% interest rate and it is pocket change to the investor that managed to set aside 8.9 million dollars.

Even at age 35 the 6% investor beats the 4% investor by 17%.

Continue reading "Why Your Interest Rate is so Important" »

Posted by Scott at 09:10 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

I just went to EmigrantDirect's website to check on my account and I noticed that they lowered the rate to 5.05% from 5.15%. We'll have to wait and see if/when they fall farther.

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Consumerism Commentary might be able to help you read more about the $5 billion loss with a free offer.

Posted by Scott at 05:20 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

Seems absurdly simple, but do we do it?

I often will not buy generic or store brand products like toilet paper where the generic doesn't do the job.

But for other items where the generic is, by my estimation, the same quality I pounce.

This is mostly true for me with store brand medications. How do I know? The active ingredients and amounts are printed on the back of brand name and generic medications. Ibuprofen is ibuprofen wheter or not it has Advil stamped on it. Antacids are antacids, except for the new smooth ones that I've only seen under the Tums brand. I usually save 30-50% buy doing this, and medications are some of the most expensive items in my cart.

* A note here, I'm not a doctor. This is not medical advice. List to what your doctor tells you.

Posted by Scott at 10:54 PM | Permalink | Comments (2) | TrackBacks (1) | Subscribe | Digg | del.icio.us | Technorati

As with many of you my local Sav-On store recently switched to become a CVS. I was pleasantly surprised the first time I walked in as the place was better staffed, cleaner and faster.

In addition to that I’ve been taking advantage of a series of three “$5 off purchases $10 or more” coupons that they were handing out. Unfortunately I have to report that CVS prices are quite a bit higher than the prices of nearby stores. It seems that they are about 10-50% higher depending on the item. While I think I will likely go back on occasion as they are the closest drugstore, I’m a bit disappointed at the increased prices. The level of service also seems to have declined in the weeks following the switch.

With the use of the dollar off coupons I saved $15 which translates to about $10-$12 dollars on the market rate for these items. That is a pretty good deal for now, but the coupons are all gone!

The service and prices may or may not be long term trends. Only time will tell.

Posted by Scott at 07:29 PM | Permalink | Comments (0) | TrackBacks (1) | Subscribe | Digg | del.icio.us | Technorati

Nickel at Five Cent Nickel writes about sneaking candy into the theater to save money. This is a great tactic with sodas, candy and popcorn going for 3-5 bucks each. I can attest that very few ticket takers even care. A bottle of soda in one pocket and a bag of candy in the other is not going to cause a confrontation. I’ve even munched on M&M’s while handing in my ticket.

While I’ve never snuck in popcorn (my favorite movie treat) I did once sneak in food that did ruffle some feathers. Once I was going to the movies next to a great deli. I decided that I had to have one of their amazing hot pastrami sandwiches. It ended up taking a while to get through the line and for them to make the sandwich.

It was too late to eat outside without missing the start of the movie. I ended up sneaking this wonderful smelling hot pastrami sandwich into the theater by orbiting the white styrofoam box around my body. I’m sure the ticket taker knew I had something but he really didn’t care.

The wonderful smells spilling off the sandwich earned me more than one dirty look from my fellow movie viewers. Oh well, it was worth it.

The lesson is you aren’t likely to get stopped from bringing food into the theater unless you have a very ambitious ticket taker or are very blatant about it.

Posted by Scott at 04:16 PM | Permalink | Comments (1) | TrackBacks (1) | Subscribe | Digg | del.icio.us | Technorati

Gas prices are starting to fall in a serious way around here. Today I filled up for $2.71. This is a big drop for San Diego where prices not too long ago where consistently in the $3.30 - $3.40 range. I did get gas at Costco so the typical prices are a bit higher. On the way home I saw $2.85 - $2.90.

This amounts to a savings of about $30 a month for me.

Posted by Scott at 05:13 PM | Permalink | Comments (0) | TrackBacks (1) | Subscribe | Digg | del.icio.us | Technorati

I’ve been noticing recently great happy hour deals at local restaurants.

A really good sushi place near me has great happy hour deals. Several rolls, including most of the ones I like, are half price on weeknights. There are many appetizers that are dirt cheap.

I just found out the Chili’s near me has some really good deals as well. The selection is not great and you have to sit in the bar and lounge. I would have saved $7 on a $24 tab using those prices. Unfortunately I ordered takeout. I discovered the deal on an enclosed flyer.

Tip #1 Look for happy hour deals.
Tip #2 Always ask what specials and discounts are available.

Posted by Scott at 08:03 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

I just got an offer in the mail today from ING DIRECT.  If I open a new account with them they will give me $25.  The APR they list is 4.35%, but it says that was current as of 6/30/2006, and my Emigrant Direct rate is 5.15%. On checking they haven't increased their rate since the offer.

Does this pay? How do you compare these?  Use the APY!  This is the standard for comparing these scenarios.  We are missing two pieces of data, the length of time we are looking depositing the money and the amount we are investing.

Here are some comparisons.

If we deposit $100 for 1 year:

If we deposit $1000 for 1 year:

If we deposit $10000 for 1 year:

If we shorten the time to a month (the IngDirect minimum for withdrawing this money):

If we deposit $100 for 1 month:

If we deposit $1000 for 1 month:

So, as you might have guessed for short periods of time or small initial deposits the ING deal beats the Emigrant deal.  So, I plan on depositing a few bucks for about a month and then closing the account.

You might also note that an easy shortcut is that a larger interest rate, given enough time always wins.  Really, the only reason to do the math is to find out if the larger rate wins in time to be used for your goal!

Posted by Scott at 10:12 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

Over the past few years interest rates have been abysmal. I was opening a checking account a few years back and was asked if I wanted to open an account. I said no. A few minutes later she asked why I decided not to. I told her that the rate was probably about 1% and that just wasn’t interesting. She lauhed me off “You are so cute, it is only 0.4%”.

Now, thanks to the fed raising rates, we have a few enterprising institutions offering good rates (so long as inflation stays reasonable).

As of this writing a few of the better looking ones are:
Emigrant Direct has a 4% rate.
My Banking Direct also has a 4% rate. It looks like there terms and restrictions are a bit more onerous like a $5000 minimum to get the rate.
ETrade and INGDirect had promising rates but they seem to have fallen off for now.

It is important to remember that these account types are still only appropriate for short term reserves.

As always you should thoroughly research these yourself. There can be many gotchas in the fine print.

Posted by Scott at 10:21 PM | Permalink | Comments (0) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati

Why does saving seem to be such a difficult thing to do?

Personal Finance Advice offers up a few ideas ranging from the friction with commercial messages to the difficulty of giving up on things we enjoy.

I think those points are valid. Additionally I think that there is often a lack of balance. There is a lot of focus on giving up. Give up eating out. Give up buying a new car. Give up coffee. Give up cable tv. … There is nothing at all wrong with these suggestions. I applaud those that execute on them. Sharing these ideas sparks my thinking.

I also must realize that I must cope with my own mind.

I need to understand what I am going to achieve.

I need to weigh this against what I’m giving up.

I’ve failed too many times by setting a goal that causes me to give up something too dear for a gain that is either too nebulous or too small.

Strike a balance. It is not: give up. give up. give up.

Always understand the reason that you are saving. If you are just giving on something without understanding the reason you are making your life very difficult.

Try to make your goal concrete. Reaching retirement might be too abstract a motivation to compete with the latest model car. Make your goal more real. Something like sitting on a beach in the Caribbean on a sunny, breezy day.

Be creative. Like golfing? Don’t give it up. Try to find a way to do it less expensively. If you really like it think of another way to save money that impact your quality of life less. Better yet find a way to do more of what you like for less money. Like rock climbing? Could you buy some used gear and go climbing outside instead of paying $30 to a rock gym?

There is more to life than money. Find a way to balance your savings with your happiness and I think saving will be much easier.

Posted by Scott at 09:21 PM | Permalink | Comments (1) | TrackBacks (0) | Subscribe | Digg | del.icio.us | Technorati