Archives

ModestMoney.com Top Finance Blogs

Binaryoptionrobotinfo.com is the best resource for binary trading.

Binary Options trading made easy at 7binaryoptions.com.

The 30 Day Decluttering Challenge

30 Day Decluttering ChallengeStuff.  We’re all surrounded by it all of the time.  Frequently, we end up with so much stuff that we don’t know what we have.  Have you ever found yourself buying something, only to find you already owned it?  This happens all too often with me when it comes to kitchen and cleaning supplies.  “Oh, I’m almost out of olive oil.  I should buy more.”  And then when I go to put the new bottle of olive oil away, I realize I already have a spare bottle.  When things like this happen, I know it’s time to start the 30 Day Decluttering Challenge.

The 30 Day Decluttering Challenge is an easy one.  On day one, you get rid of one thing.  On day two, you get rid of two things.  Day three, three things, and so on.  If you do the math, that’s a total of 465 things.  That is a lot of stuff.

What should you do with these things?  Any time I do a big declutter, I like to have three categories – trash (or recycle), donate, and sell.  Most things end up in the trash or donate bags, but every so often, I find something that I can put onto Ebay or Craigslist.  (I also currently have a box going for the annual neighborhood yard sale, but if, like last year, I can’t participate, I’m just going to take the whole box to Goodwill.)

So what does this have to do with finances?  Obviously, some of the things you get rid of can be sold, and having some extra money is good.  Items that are donated can lead to a tax deduction.  But more importantly, taking a look at what you have and really making the hard decisions about what to keep and what to get rid of can help you figure out ways you can save money.

Do you realize that you keep buying books at the local library book sale only to never get around to reading them?  Stop buying them!  It doesn’t matter that they’re cheap!

Have you amassed a huge collection of cleaning products, always looking for the next best thing?  Use up what you have.  All of it.  Then limit your purchases (or look into making your own – vinegar and water is a phenomenal combination).

Are you a collector?  Have you been a collector in the past?  Maybe you have a collection that was once important to you that you no longer love the way you did.  Perhaps it’s time to consider selling that collection or gifting it to someone who will love it the way you once did.

I think that much of what you will find are small inexpensive things cluttering up your space.  It’s so easy to drop $5 or $10 on something, because it’s not that much money after all, but over time, those little purchases add up.  (For example, I’m embarrassed by the number of lip balms I own, mostly because I’m forever misplacing them, then finding them again.)  No, you won’t get rich on those tiny savings.  But you won’t be wasting money, and that’s the important thing.  Plus, I think you’ll feel more satisfied in the space around you now that you’ve cleared out a bit.

What are Golden Handcuffs and How to Avoid Them

golden handcuffsWhile I was in law school, a common topic of conversation was paying off the education debt most of us were currently accruing.  For a number of people, the plan was to take a high-paying job, even though the work wasn’t what they wanted, pay off the debt early, and then go do their desired type of work.  Frequently, these were people who wanted to work for non-profits, public defenders, etc.  Awesome careers, but not the most high paying jobs.

The problem, as one professor called it, was that those high-paying jobs came with golden handcuffs.  Yes, you might be working 80 hours a week, but think about the money that was coming in!  Once you got those loans paid off, think of all the great things that money could do.  You could buy a fabulous house.  You could buy a fancy car.  You could hire someone to clean your house for you (you certainly weren’t doing it after spending 80 hours working that week).  You could go on expensive vacations, assuming you could get away from the office.

So what if the work was soul-sucking?  You had money!  You weren’t going to quit that job and go do something that paid less.  And thus, golden handcuffs.

Of course, if you’re in a dire financial situation, getting a higher paying job is sometimes the best way out. But you can’t let the paycheck be the only reason you’re doing the job.

Let’s be honest.  No one has a job that they love every hour of every day.  Sure, in general, I love my job.  But there are parts of it I would love to outsource.  And some mornings, I don’t want to get out of bed, not because I don’t want to go to work, but because my bed is warm and comfy.  But you should try to find a job you enjoy at least some of the time.  Even if it’s just because you have great coworkers.

If you do find a job that is better paying, be smart about what you do with your money.  Use the added income to pay down your debts, plan for retirement, then start thinking about improvements to your life.  Don’t immediately use a bigger paycheck as an excuse for a nicer car or a bigger apartment.  Do you really need to add all those cable channels or hire that lawn service?  Make smart improvements, and don’t just lock yourself in to a more expensive lifestyle.

I admit, I find myself looking at the pay scale at my office and dreaming about what I could do if I got a promotion. But I have made a decision not to apply for just any job with better pay, even if I qualify.  I want work that I enjoy as well as a paycheck that lets me live a good life.  It’s about finding the balance between the two.

(As an aside, another solution to the golden handcuffs problem would be to not go into significant school debt in the first place.  I went to the school that gave me the most scholarship money, knowing that the career I wanted would never be high paying.  This meant not going to a school with bigger name recognition.  I have never regretted that decision.)

How Much Does Cat Ownership Cost?

How Much DoesCat OwnershipCost-We’ve all seen the signs.  “Free kittens!”  Free!  That’s my favorite price for anything!  But wait a minute, pets need more than just love to stay alive.  So how much does cat ownership cost, anyway?

I have two cats.  They are old man cats now, turning 13 this month.  I’ve never really thought about what they cost me per month or per year.  So I decided to sit down and do the math.

Adoption Fees

I lucked out and got these two cats for free – they were strays who were being taken care of by people who couldn’t keep them.  But if you’re looking for a cat at a shelter, be ready to pay anywhere from $50-$150 in adoption fees.  Younger cats are typically more expensive.  And you have to remember that those adoption fees cover a lot of medical care for the cat.  Most shelters won’t adopt out a cat that hasn’t been spayed or neutered, for example.  Those surgeries can cost $200 or more if you’re paying them on your own.  So in many ways, a shelter cat is a “bargain.”

Of course, these are up front fees, so you’ll have to factor them in for the first year of owning your cat.

Food

My old man cats eat special dietary food.  I order the dry food online, and it costs me around $60 every three months.  Not so bad.  I also supplement with canned wet food.  That runs about $15 a month, give or take.  Let’s say I also spend $5 a month on treats.  Because they are spoiled cats.  And they deserve it.  This adds up to $480 a year, or $240 a year for one cat.  I would take an educated guess that if you don’t need special food, you can probably spend about $150 a year.

Medical Care

I spare no expense when it comes to veterinary care for my cats.  Since my cats aged into “senior” territory, my vet recommends annual bloodwork to make sure they’re staying healthy and to catch any medical issues early.  It’s optional, but I believe it’s a worthwhile option.  I take them to the vet together, so I get somewhat of a break for the visit itself, but this is still a major part of my annual cat budget.

Last year, my total vet expenses were $875.  And this was a healthy year.  No medical issues, no teeth cleanings, just an annual visit and some bloodwork, plus the various fees to the county.  I am aware this is high, partially because of the area I live in and partially because I choose the optional extras.  If I just took them in for exams and required vaccinations, things would be cheaper.  And again, I’m doing the math for two cats.  So for one cat, let’s call it $440 (because I’m not sure how big of a discount I get for the double visit).

Of course, if your cat gets sick, you will have additional medical expenses and it’s something to be prepared for.

Cat Litter and Other “Stuff”

Cat litter easily costs $200 a year.  It’s an annoying expense, but well, I’m not going to go without it.  And trust me, you don’t want to cheap out on your cat litter.  You’ll just end up buying more of it, dealing with a stinky house, and probably have litter tracked all over your house.

Then there’s all the other stuff.  Litter boxes don’t last forever, and well, sometimes you just get suckered into buying a cat toy or two.  Let’s say that comes to $25 a year, but you can easily keep that much lower.

Pet Sitting Fees

One big advantage to cats is that you don’t need someone to come in and walk them every day.  Mine are content to sleep all day until I get home.  And if I’m just out of town for a long weekend, I just put out extra food and water and don’t worry about them.  But when I’m gone for an extended period of time (more than a long weekend), I have a pet sitter come in.

My pet sitter charges $25 per visit for two cats.  I’m happy to pay it.  She is someone I trust, has great certifications, she has cared for my cats for years, and she also does stuff like get the mail and water the plants and makes sure that the house doesn’t look empty while I’m gone.

These costs can vary a lot depending on where you live and who you hire to care for your cat.  You may be able to have a friend do it for free, or maybe a neighbor kid will do it for $5 rather than $25.  You may have to board your cat at a kennel, which will be more expensive.

I’m going to list this at $100 a year per cat, which is less than I paid last year, but your rates will vary significantly.

Total Cost of Cat Ownership

Based on this rough estimate, owning a healthy senior cat costs me just over $1000 a year per cat.  That’s not a small amount of money, but it’s actually lower than I anticipated.

You’ll notice I didn’t mention pet insurance.  I don’t have pet insurance.  After doing some research into what it paid, I decided it wasn’t worth it.

I own my own home, so I don’t have any sort of pet fees to an apartment complex.  If you rent, be sure to look into pet fees.  At my last apartment, I paid $35 a month per cat to live there.  Looking back on it, that seems incredibly high.

I also didn’t include the cost of lint rollers, which, when you own a long-haired cat who is a professional when it comes to getting fur on your clothes, well, they’re worth their weight in gold.

Owning a cat is not an inexpensive prospect, but I consider it money well spent.  I enjoy their company, I think they enjoy mine from time to time, and it’s always nice to wake up with a furry little body curled up next to me.  Until they start yowling for breakfast.

 

 

The Paper Money Savings Challenge

paper money savings challengeAre you still hunting for a good savings challenge?  Do you use cash regularly?  Then do I have a challenge for you!  Check out The Paper Money Savings Challenge.

This is a pretty simple way to save.  Pick a denomination of paper money.  The common denomination to pick is one dollar, but some people choose $5 or $10.  For this example, I’m going to use the $1 bill.

Every time I go shopping, I pay in cash.  But when I get change, I take all the $1 bills I have received back and put them in a separate part of my wallet.  If I go to another store, I don’t spend those $1 bills.  When I get home, every $1 bill that I have gets put in a jar, envelope, or box.  After a while, I will have a decent amount of money set aside.

Choosing which denomination to target for The Paper Money Savings Challenge is probably the hardest part of the challenge.  If you choose $1, you probably won’t notice the dent in your spending money quite as much, but you’re also saving quite a bit less, so it will take longer to accumulate a substantial amount of money.  That said, it’s not a bad place to start, and it will probably be fun to watch the cash accumulate in your savings stash.  A big pile of $1 bills looks pretty impressive!

If you pick $10, you will certainly notice the dent in your spending money.  The big question here is how many $10 bills you get in your change.  If you don’t find that you have that many, you won’t end up saving all that much.

I think $5 is a good balance of the two.  It’s not uncommon to get a $5 in change.  You will notice the missing cash in your spending money, but that’s not a bad thing.  And the savings will add up a bit more quickly as well.

Unlike some of the other savings challenges I have discussed recently, this one doesn’t give you a set amount of money at the end of the savings period.  That’s both good and bad.  If you’re saving up for something and need a specific amount of money by a certain time, this probably isn’t the best challenge to help you meet your goals.  But you also aren’t pressured to save.  Is money tight this week?  Well, you’re probably not going out and spending money, so you also won’t be pulling money out of your wallet to put into savings.

One very easy pitfall to end up in is letting that jar, box, or envelope of cash taunt you.  It’s just sitting right there.  Instead of going to the ATM to get cash, it’s so tempting to just pull out of the box.  Maybe you need to pay the pizza guy or give your kids their weekly allowance.  Do not let the temptation get to you!  Do not touch the money in the savings pot.  And make sure that you are keeping it safe.  A cache of cash just sitting around is a thief’s greatest dream.

Spring Cleaning Your Finances

spring cleaning your financesSpring is here, and with it comes spring cleaning.  Every year, I’m determined to get my house in order.  Every year, I fail, mostly because I’m tackling much too large of a task.  But I can break the task down into smaller projects.  This year, one of those projects is to spring clean my finances.  Play along with me and spring clean your finances as well!

Task One – Shred Those Old Documents!

Every so often, various financial paperwork arrives in the mail.  And I dutifully file it away.  (Well, I usually let it pile up, then do a big batch of filing all at once.)  But how much of it do I actually need to keep?

Let’s start with Tax Returns.  You only need to keep 7 years worth of your tax returns.  So all those old folders with your returns and deductions? Put them in the shredder!

How about credit card statements?  Once you’ve passed a year, you don’t need them (unless you need them for tax purposes).  If your statements are available online, you likely don’t need those paper copies at all.  You can either rely on the ability to download them at any time, or you can download them and save them on your computer (though I would recommend making sure your computer is secure and those files aren’t easily accessed – this goes for all your electronic financial documents).  I would recommend still deleting the older files and only keeping those absolutely necessary.

Receipts?  Only keep those for big purchases.  The rest can be shredded once you’ve recorded them in your budget.  No need to keep grocery receipts around forever, after all.

Paycheck stubs?  Keep them for a year, until you get your tax statement from your job at the beginning of the year.  Then shred them.

Task Two – Organize Your Files

Yes, I know, the most dreaded “Spring Cleaning Your Finances” task.  What is your method of storing financial paperwork?  Could it be better?  Now, I’m not saying you need a beautiful filing cabinet with meticulously labeled, color-coded files.  But you do want your paperwork to be somewhat organized.

As I mentioned, I don’t file on a daily basis, or even weekly.  I have a file tray that I pile paperwork in, and then every six weeks or so, I go through the tray and decide what to keep and what to shred, and then how those things should be organized.  I try to keep my categories as simple as possible.  In my file box, I have the following folders:

  • House
  • Car
  • Work (both my main job and my freelance gigs)
  • Pets
  • Current Year Taxes
  • Purchases
  • Bills
  • Medical
  • Other

As I’m prepping for tax season, I go through some of those folders in more detail and decide what needs to be kept and what can get shredded.  It’s not the most sophisticated system, but it works for me.

Task Three – Review Your Budget

The next step in the “Spring Cleaning Your Finances” Plan is to take a look at your budget.  What sort of recurring expenses do you have?  Are they all necessary?  With the prevalence of streaming media, monthly subscription boxes, other paid online accounts, it’s really easy to find yourself spending $100 or more without realizing it.  A $10 subscription box doesn’t sound that bad, and if you enjoy it, it’s certainly worth it, but if you’re suddenly getting two or three of those boxes, that cost is increasing exponentially.  And what about streaming media?  Netflix, Hulu, premium channel accounts, they all add up.  I admit, I subscribe to a few different streaming services, but I’ve made a point to cut down.  I don’t have cable, so these online streams are my main sources of entertainment.

That said, I’ve discovered these accounts are all really easy to cancel and re-subscribe to at any time.  Are you finding yourself not watching very many Netflix shows?  Cancel your account!  Then, when Netflix releases the next season of Stranger Things (or whatever show you happen to be waiting for), you can easily sign back up.  Trust me, they will happily take your money.  Maybe you only unsubscribe for two or three months, but that’s money in your pocket.

Spring cleaning can put money in your pocket in other ways as well.  You may find items you can sell or donate to charity (which leads to a tax deduction if you itemize).  You may discover items you forgot you owned and thus no longer need to buy.  Maybe you’ll simply find peace of mind and a fresh start now that your home is clean and tidy.  Either way, a great first start is spring cleaning your finances.