Use Cash for 1 Week

Posted on June 3, 2011 by

Some of us can’t help it we are drawn to purchasing things especially when we have our debit cards on us. We can use our debit card practically anywhere and with little effort on our side. Debit cards have brought us a great convenience that we have never had before but with every convenience comes the downside.

Prior to debit cards one would go to the bank to take out cash to pay for groceries, clothing, gifts etc. The wonderful thing about going to the bank is that we were given our bank statement either on a slip of paper or on our bank book (does anyone remember these?). And when we took out money, we saw that we could either afford to take it out or not – in a sense we were forced to budget ourselves.

When we use our debit card at the grocery store for example, we are not given our balance prior to or after the transaction, most of us just pray that the transaction will go through.

Save your moneyWe Challenge You to Use Cash For 1 Week

Go to the bank, either a teller or ATM, and take out as much cash as you will need for the week. Make sure that you look at your bank account statement before you take this money out. Having that cash in your wallet we guarantee you that, most of you, will spend only what you have. Why? Having cash is a reality that most of us cannot turn away from – in other words, if you want to purchase something and you don’t have the cash then you can’t purchase it – that simple. Oh and the most important thing to remember here is buy the most important things first!

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Should You Pay Off Your Credit Card

Posted on May 29, 2011 by

I have read countless blogs/articles etc. from many money managers/advisors and always the number one advice they give people is to pay off their credit cards.

Now, if you have an extra $5,000 or $10,000 or whatever you owe on your credits cards sitting in your bank account doing absolutely nothing but collecting pennies for interest then yes, I would say this should be an option.

However, if you are like 80% of the population in North America you do not have this cash sitting around burning a whole in your pocket. AND furthermore if you did, it may not be the wisest choice to pay off your credit cards especially if that amount is your “rainy day” fund. The optimum solution, in this case, is to look at your entire financial picture and maybe paying the minimum is the best solution for the moment. Having no access to the $5,000 cash should an emergency come up, where you could not use your credit card, would be far worse then paying that 18% interest for a few more months or even one year.

Always, always always have enough in your rainy day account for 6 months worth of living expenses….no matter what any money manager says.

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Retail Therapy – It’s Real

Posted on May 20, 2011 by

Do inanimate objects make us happy….of course they do. Pick up something from your childhood and the happy care-free feelings rush into you.

A study indicated that 33% of shoppers actually experienced a high when they purchased. On the other hand Retail Therapy – there is a psychological disorder for retail therapy called oniomania – that is, compulsive shopping. Retail therapy need not be a terrible or embarrassing term, as long as you are aware that this will not cure a depressed mood or change your life in any way.

All this to say, spend some money on yourself HOWEVER fit it into your budget to ensure there is not buyer’s remorse the next day, or you are in the doghouse with a partner or the creditors are knocking on your door.

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Is Home Ownership For You?

Posted on May 13, 2011 by

Here are a few simple tips to help you figure out if home ownership is for you.

1. Do you get anxious when an unexpected bill comes your way

2. Is your rent on par with the cost of a mortgage

3. Do you live in a large metropolitan area

These are three very simple questions that you want to ask yourself as part of your thinking when purchasing a home.  Of course, your finances need to be such that you can afford it but these questions will help determine if home ownership is for you.

1. Do you get anxious when an unexpected bill comes your way

As a home owner, you can expect things to break or need repair but sometimes things will crop up that you never expected.  Take one of our clients, who just renovated their basement 3 years ago.  Just recently, they found a major water leak and have now had to tear up the entire basement.  This was not something they expected nor was covered by insurance.  Of course this is the extreme, but let’s face it houses and the elements in them break.  If this makes you anxious, then renting is for you.

2. If your rent is at par with your mortgage

This is a very simplistic look at affordability.  Say you rent for $1,500 all inclusive.  If you were to purchase a house you would be looking at a mortgage of roughly $300,000 ($500 per $100,000).  This compares apples to apples.  So you now think, well for the price of what I am paying now, I could get a house.  Yes, you can however, don’t forget the yearly maintenance, the utilities, property taxes, cable, phone, etc.  While the mortgage maybe the same as your current rent, the rest of the additions will take you closer to $2,500.  What could you do with an extra $1,000 per month?

3. Do you live in a metropolitan area?

Choosing to live in a desirable or highly populated location pretty much ensures that your house value will stay intact and in fact increase over the years.  When purchasing a home in a smaller town, you may want to rethink this an as investment.  Housing prices in smaller areas drop when the markets are down or when job are lost in the area. We are not saying that owning a home in a metropolitan area is a guarantee but we can say that you are more likely to come out of a dip in pricing sooner than in smaller markets.

Renting is not bad and don’t get sucked into the mindset of “I’m paying someone’s mortgage”.  This doesn’t mean that you are throwing your money away.  Do the math and do it realistically not what it could or should cost you.  This is the biggest downfall that people get into when purchasing a home and those unexpected costs creep up and then you become cash strapped.  Renting can be a good thing.

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Find $50 to $100 a month

Posted on May 1, 2011 by

Are you saving for a new wardrobe; a much needed trip or the dreaded retirement?  Most of us at one time or another will need to come up with an extra $50-$100 a month.  It may be for something unforeseen or for a goal that you have in mind.  Well whatever the reason,  here are 10 areas to look for that extra money.

Number 1 – Phone
Have a look at your phone bill and see what you can cut out of your services. Do you really need 3-way calling? Phone companies change services every 6 months or so and bundle packages that make it more affordable – what they won’t do is call you and tell you that you are paying much more for services. Renegotiate your phone bill every year.

Number 2 – Groceries
Never buy pre-cut anything. There is usually at least a $1, per item premium, on anything that is pre-cut. And baby carrots – are large carrots that they have cut down to be smaller.

Number 3 – Heating
Turn your thermostat down 1 degree – and see the difference. Also purchase a thermostat that you can program and at night turn it down to 60 degrees F. Studies have shown that at night your bedroom should be colder due to overheating and sleep interruption (your body’s temperature actually goes down when you are sleeping).

Number 4 – Electricity
Purchase halogen bulbs where you can and turn off lights every time you leave the room (for more than 5 minutes that is). Unplug all power bars and charging equipment.

Number 5 – Gym Membership
When was the last time you were at the gym. If it was over 3 months ago put your membership on hiatus. You can purchase exercise dvd’s for around $11 if you need to exercise.

Number 6 – Coffee
Okay, we all like our Starbucks, Tim Hortons, McDonald’s coffee but if your coffee is costing you $2-4 a day cut it out. You can purchase a tin of coffee for roughly $8 which should last you a month – you do the math.

Number 7 – Brown Bag It
Making dinner – make lots for lunch the next day. If lunch is costing you $4+ a day then you need to brown bag it.

Number 8 – Cable Bill
Most of us have 300 or so channels that we never watch. If your cable bill is more than $30 a month cut out the excess!

Number 9 – Cell Phone
I understand that nowadays we all need a cell phone. If your package is costing you more than $50-$60 you need to renegotiate.

Number 10 – Cash Withdrawals
Can you account for all the cash purchases that you make? 80% of people can’t. This is the one biggest area where we can find extra money.

All this takes work but if you are really interested in finding money for a rainy day or for those louboutin’s that you have been eyeing it can happen.

We can help contact us info@centssavvy.com

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A Minute Amount of Milk

Posted on April 11, 2011 by

I was having coffee with a friend yesterday and as she was about to throw out the milk container she says….”there is only a minute amount of milk I’m going to toss it” to which I responded “minute to you is worth 2 cups of coffee to me”.  My second response was who buys your groceries?

What was really going on here is that my nonchalant friend wasn’t really seeing what I was seeing. While I was seeing $ going down the garbage she saw a nuisance of a milk container with no milk (okay not enough for her so let’s just toss it) in the fridge. There have been studies completed that tell us that 1000′s of dollars of groceries are wasted each year in cases such as this. So what can you do?

1. Shop less and shop often
You can find time by simply adding into your daily life. A client of our Cheryl, tells us that she now does her shopping when she runs (literally runs). She tells us that each time she runs she passes, on her way home, a fruit market and a grocery store.

2. Buy frozen
Yes frozen is good and in fact frozen fruits and veggies contain the same amount of minerals and vitamins as fresh.

3. Share with a friend
This works if you can find some common foods to buy.

Comment below and tell us your strategy.

As always we can help. Email us info@centssavvy.com

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Layaway: What is it and would it benefit you

Posted on April 4, 2011 by

We have all heard about the don’t pay a cent event at our local furniture and department stores. The idea behind this came from the store layaway. With layaways you put a certain percentage down on your purchase.  Each week or month,  you would put more money down until you paid off the balance. The only caveat with a layaway is that you don’t get to take your purchases home.

The layaway has made a comeback most likely due to the economic times. The premise of the layaway is fabulous and works really well for most. Here is how they work best – lets take for example furniture for the house:

1. set out a total budget for the furniture purchase – $500

2. set out a time that you require your purchases to be held – 10 weeks (may depend on the store)

3. divide the total you are spending by how you want to pay your installments – either weeks or months (Note: this may depend on the the store’s policy) – $50 per week (estimate as you may be required to put down a deposit)

4. determine if $50 a week is an amount that is acceptable for you

A Few Last Caveats to the Layaway
Always check the store policy to ensure that you can get your deposit back as some hold on to it if you decide that you do not want to take your purchase. 
Ensure your deposit is debited to your purchase price – that is, it comes off the total purchase price
Ensure there is no fee associated with the layaway

Another alternative is using a separate bank account. As the industry has gone electronic you can now, with most banks, withdrawal an amount from one bank account and deposit that amount to another account – a special fund account. This works very well if you are budgeting for the holidays or a special event.

Take advantage of both these options, especially the automatic withdrawal, if you are not a good saver as they will force you to save without you knowing that you are saving.

Email us and we can help you set goals and your home budget to help you realize your financial dreams info@centssavvy.com

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