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I wrote this post last year before Christmas, but since it is probably something on a lot of people’s minds I decided to repost it. Enjoy!
1. Start Saving Early
Duh. That is SO common-sense. Well, it is. But for some reason, I used to be surprised year after year at how hard Christmas hit my wallet. We know its coming. It is the same day every year. We can’t run from it, so we might as well save up for it. Sometimes these simple things take a while to sink into my skull, but I finally figured out that by saving up for it, I was a lot more likely to stay out of debt. Often times it is the simple things that have the biggest positive impacts on our finances. It is mid-November. Let’s start saving.
2. Create a budget for how much you will spend
Why after every Christmas are most people looking at huge credit card bills wondering, “Where did all that money go?” It is no different than any other area of our lives, if we don’t have a leash on it - it will be out of our control. Think of your money like your neighbor’s dog - Oh yeah, your neighbor thinks he has his dog under control. But every time he has the dog in the front yard it runs over and jumps on you. He thinks he has control of the dog, but I am sure if he had a leash on the beast, he wouldn’t let it jump on you when you are on your way to work. Of course you probably are not going to tell him that his dog is terribly behaved, just like my checkbook isn’t going to tell me that I have no control over my money. In order to have control you have to monitor it (dog or money) or have a system in place (put up a fence or make a budget) that will do it for you.
My wife and I started budgeting for giving a couple years ago, after we realized how out of hand our Christmas spending was getting. We just sat down and made a list of everyone we were going to buy a gift for that year. We wrote down (actually we used an Excel budgeting spreadsheet) how much we were going to spend on each person and totaled it up. We took this total figure and worked backwards from Christmas to see how much we would have to save each week in order to have enough. This helped us get motivated to start saving early.
3. Stick to your budget
After all, that is why you created it in the first place - right? If you decided to spend $20 on Billy Ray, then you have to be vigilant not to buy him that $50 toaster that is just glistening in the florescent light of the department store. Don’t get me wrong, there is nothing more fun than giving great presents, but you have to be honest with yourself and others about what you can spend. Trying to spend $100 on each person’s gift when you only have $10, isn’t being truthful and it is going to hurt you more than anyone else. This is the whole “keeping-up-with-the-Joneses” disease that is rampant these days. I think most people you are buying gifts for would want you to give from your heart, rather than under compulsion to spend huge amounts of money that you do not have.
4. Get Creative
When you are strapped for cash you have to use creativity to get the upper hand. A creative gift can often beat out the most expensive gift. I am not talking about, “it’s the thought that counts, dear.” I am talking about meeting a unique need or desire for that person. To give the best gifts you need to know about the recipient. Listen to what they talk about. Listen for clues as to what they are interested in. It probably isn’t a necktie or a picture frame. Shop accordingly.
5. Shop Online
A lot of brick-and-mortar stores can’t compete with the prices of the online stores even with the additional shipping costs. If you decide to do a bunch of shopping online this year, Amazon.com has a deal where you can ship as much as you want for a year for $79. And they are not just a bookstore anymore, they have everything from electronics to candles and you can even buy an engagement ring from them. You also should look at Ebates - they pay you for shopping via their website.
6. Start Shopping Early
I love the convenience of online shopping, but I also love going to the malls in the heart of the Christmas season. Granted, the parking normally isn’t fun, but I love Christmas (ask my wife and she will tell you how annoying I am - i.e. Christmas music starts November 1st) and it just doesn’t seem like Christmas to me without spending some time in the malls during the season. Since department stores start breaking out the Christmas decorations after the 4th of July sale (slight exaggeration, but not much), you have plenty of time to get started early and have the “spirit of Christmas.”
The key is to use early shopping to your advantage. Having your budget in mind, it gives you a lot more time to think about WHAT to buy everyone and gives you more opportunities to catch things on sale.
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The thing about the whole saving money thing is that it is not just saving money for the sake of saving it. We save money in order that we can have some to spend on things we would like. Each person has his or her areas that they prefer to spend their money on. For some people it is clothes, others really like traveling, and some like to golf. For my wife and I it is eating out.
Eating out is a bad investment
Financially speaking, eating out is a bad investment. It costs a lot more than making food at home, and that is why we have worked hard to discipline ourselves not to do it very often. The beauty of this is that we actually enjoy it more since we don’t go out to dinner every other day, or even every week. Even the fun things in life can become boring when you do them everyday.
Tools to help save money when eating out
Since going out to dinner is something that we love to do, we work to find ways to make it possible. One of the best tools we have found has been the Entertainment Book. I believe they are sold in every major city in the U.S. - if not, you are missing out! 
The Entertainment Book
The Entertainment book is filled with coupons for any and every kind of restaurant, grocery store, movie theaters, dry-cleaners, and a bunch more. Most of the coupons for restaurants offer buy-one-get-one-free meals. This almost cuts our bill in half. Saving this much money makes it a lot easier to justify going out to eat!
Another great thing about this book is that since a lot of the restaurants are smaller “mom-and-pop” type places or new ones it helps to try out restaurants that we otherwise might not have known about.
Restaurant.com
You should also consider Restaurant.com who sells $25 gift certificates (with restrictions) for $10 to thousands of restaurants across the country.
Technorati Tags: save money, eating out
Do you have any tips on how you save money eating out?
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Where is the best place to open a savings account?
I often get asked where the best place is to start a savings account. I think it depends a little bit on your goals, but for now the simple answer is ING Direct.
If you are stocking away a quarter million dollars in your savings account, I wouldn’t recommend them since they do not have the highest interest rates. But they are always competitive with their rates and for most of us a half of a percent difference isn’t going to make much difference. For example, if you have $1000 in the savings account for a whole year a half percent will equal $5. Like I mentioned before, if you have a lot of cash in your savings account I would be looking for the highest interest rate I could find in an FDIC insured bank.
ING is the safest place to save money
Earlier this year I wrote about a study that the University of Berkeley, California did. The purpose of the study was to determine which banks had the highest occurrences of identity theft. They concluded that ING Direct had the fewest incidences of identity theft. HSBC and Bank of America had the highest occurrences.
While preventing identity theft is something that we should be proactive about, it is nice to know that my bank isn’t making it any easier for the bad guys.
They speak English when you call
Don’t get me wrong, after taking four years of Spanish I understand the difficulty of learning a new language. But, I don’t want to have to learn one when I call for help. As we all know a lot of U.S. businesses have delegated customer service to other parts of the world. I have called ING on a couple different occasions and have had great experiences so far.
They focus on simplicity
One of the most important reasons that ING is my preferred place to save money is because they keep it simple. They have a great interface that makes it easy to use bill pay, to send a check, or even to budget. They continuously seek to improve themselves and keep adding new features. At the sake of sounding like a salesman, I offer you 10 more reasons why I love ING. 
They give bonuses
Yep, they offer $25 to new customers who sign up via a referral email. The only catch is that you have to open the account with at least $250. If you would like a referral, let me know.
Technorati Tags: best place to save money, ING Direct
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After the wild popularity of my post on how to make toothpaste, I decided to give another go at a homemade recipe. This time I did a little digging and found out how to make natural and homemade mouthwash. I haven’t yet tried it myself, so you can be the guinea pig this time.
What you need to make homemade mouthwash
Ingredients:
- 2 1/2 cups distilled or mineral water
- 1 tsp fresh mint leaves
- 1 tsp rosemary leaves
- 1 tsp anise seeds
Steps to make your rosemary/mint mouthwash
- Boil the water, add herbs and seeds, infuse for 20 minutes.
- Cool, strain and use as a gargle/mouthwash. If you wish to make up a larger quantity, double or triple the recipe
- (Optional) Add 1 tsp of tincture of myrrh as a natural preservative.
- Enjoy the fact that you are no longer using store-bought chemical-based mouthwash.
Sounds easy enough, doesn’t it? If you try making this mouthwash, let me know how you like it!
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I discovered this fun little DIY lesson that is really cool! Basically you can make an invisible shelf from an old book that you don’t read any more. It is a simple little project and shouldn’t take more than about 15 minutes of work to complete.
http://www.youtube.com/watch?v=gjYjplGSLAg
For those who would just rather purchase an invisible shelf rather than make one, you can find them here for under $10.
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Even Google is now turning green. Not with envy, of course, but with energy savings on the mind. I just found out about new little tool they created to help you calculate how much energy you are wasting and how much money you can save by changing your ways.
Here is the tool, if you want to give it a shot.
Doing my part to save energy
I am green myself - I think. I previously wrote a post about ways to conserve energy and save money. I eat a lot of healthy foods(organic). I don’t like chemicals. And apparently my host for this site is “Green.” I guess that just about makes me as green as they come.
They also created nice list of energy saving tips. Here are a few of my faves from the list…
- Weatherstrip and caulk your windows and doors
- Consider installing a Geothermal Heat Pump to heat and cool your home, save up to 70% on your heating and cooling costs.
- Clean your furnace’s filter monthly
- Cover your hot water heater with an insulation blanket
- Reduce the temperature of your hot water heater to 120F or less (or until using little to no cold water in the bath/shower)
- Install a low flow shower head
- Wash clothes in cold water
- Consider air drying your clothes. saves energy, money and keeps your clothes lasting longer.
- Learn how to set power management on your computer
- Download the Google Desktop Power Management Gadget
- Turn down the brightness on your TV and computer monitor
- Don’t keep your refrigerator and freezer too cold. Set temperature between 36-38 degrees F and freezers at 0-5 degrees.
What about you - do you have any energy saving tips that Google might have missed?
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What is the best time to get gas?
I read an interesting article from a local newspaper that said, “… Americans currently spend $2.57 billion more than they should for gasoline and diesel fuel due to gasoline expanding at warmer temperatures.”
That is just unbelievable to me. I have always heard that you should buy gasoline at the coolest time of the day (9pm-6:30am) but I had no idea that so much money was being lost to fuel expansion. The article goes on to say that, “retailers currently measure the gas at 60 degrees Fahrenheit, and consumers are paying a price for gas based on that temperature.”
There is “temperature compensating technology” available, but the big oil companies have successfully argued that it would cost too much to retrofit all of the gas pumps across the U.S. Apparently, here in Missouri, all the gas stations will have to install these compensating tools within 6 years.
What is the best day to get gas?
Since we are on the topic of gas saving, I should mention that some people say the best day to purchase gas is on Tuesday or Wednesday. Typically gas prices are raised over the weekend and fall a bit once they come back into the middle of the week. Personally I have not watched or noticed these trends, so I am not really sure about this. If anyone has noticed this pattern, please share in the comments below.
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What is a Money Merge Account?
Maybe you have heard about this whole Money Merge account thing or United First Financial and wondered what it is. I did too. I first found out about these programs a little less than two years ago and did some quick investigating, but didn’t do enough research to fully understand the Money Merge thing.
Disclaimer: I do not currently have a Money Merge Account. All the information included here about them is from interviews, research, building Excel spreadsheets, and my own calculations - not my own personal experience using them. I say this because there very well could be some pieces to the puzzle that I am missing, if you see any please share them in the comments.
Also, right off the bat, this product is not designed to be a quick fix to pay off your mortgage and it should only be used by people who are very disciplined with their finances. Honest MMA companies and sellers of the products have said that themselves. If your life is a financial mess, you need to get it cleaned up before considering a Money Merge Account.
So what is it anyway?
In researching this, I found a couple of good explanations of what a Money Merge account actually is. TheSimpleDollar defines it as:
A “money merge account” is a special home equity line of credit placed on your home. Every time you receive a paycheck, the whole thing goes straight towards first paying off any balance in your money merge account, then the entire remainder of your check goes towards paying the interest, then the principal of your home loan. Let’s say you had a mortgage with $1,500 payments and you set up a money merge account. Each month, you received $3,500 in paychecks, but only spent $1,200 (and sometimes less). That means that automatically $2,300 (and sometimes more) goes towards that mortgage each month - an extra $800 towards principal every single month. This means a 30 year mortgage would be paid off in 13 years and two months.
GetRichSlowly defines it as:
- The homeowner sets up a home-equity line of credit (HELOC), borrowing against the value of his property.
- Some large sum is withdrawn from the HELOC and used to pay down the primary mortgage.
- The homeowner does not deposit his paychecks, etc. into a traditional savings account, but applies them to pay down the HELOC.
- From time-to-time, another large chunk of money is taken out of the HELOC and applied to the primary mortgage.
- In case of emergency, the homeowner takes more money out of the HELOC.
- Though the HELOC will likely have a higher interest rate than the primary mortgage, it’s actually cheaper to maintain because of the way the interest is calculated.
MMA Pros
- Pay your home off in less than half the time (for most people)
MMA Cons
- You probably won’t know for sure what kind of results you are going to get with the program until it is up and running.
- You will need to open another line of credit.
- You have to have to be bringing in more money than what is going out each month in order for it to help much.
- You have to very closely track your payments!
- It will can become very difficult to budget since everything is coming out of the same bucket. And if you you begin spending more than you would otherwise because of that lack of a budget, you quickly nullify the potential gains possible.
Interview with an MMA company
I recently had an interview with the owner of Smart Equity. He agreed to give me some of his time to answer questions that I had about the Smart Equity MMA program and Money Merge Accounts in general. After talking to him, I felt like I got a better understanding of what was actually happening with the system.
The Money Merge Account system
For me, I think I figured out (someone please correct me if I am wrong) a good way to think about it…
Let’s say you had a $100,000 mortgage for 30 years (@ 7%). You would be paying 7% interest on that $100,000. What if you could transfer $10,000 of it into a loan that didn’t charge interest? You would then have a $90,000 balance on your mortgage being charged the 7% and $10,000 that you still had to pay for, but that was at 0%. I think this is what is essentially happening in the Money Merge programs. Once the $10,000 was paid off, you would then move another $10,000 to a loan with no interest. Then you would be down to less than $80,000. If you continue this cycle, it would be paid off very quickly.
From what I understand, this is a very generalized example of what is going on with a Money Merge account. The MMA software does the number crunching for you and always keep you at the most optimal point to pay down the mortgage the quickest. While the software would definitely make this an easier and probably safer process, you could still get great results doing it yourself.
For example, Using the details from the example above…
- 30 year $100,000 mortgage at 7%
If you paid $10,000 at the beginning of the year with your credit card that had 12 months of 0% you would have to pay $833.33 each month to have it paid off in a year. This assumes that you have an extra $833.33 every month over and above your normal expenses. If you repeated this process each year (according to my calculations) you would have the house paid off in about 7.5 years. In those 7.5 years you would have paid $29,912.69 in interest charges. This would have been a savings of $109,596.21 in interest charges if you did this method rather than just paying your payment each month for 30 years.
You can see an example of some calculations I made below…
I will be the first to admit that a $100,000 mortgage or having $833.33 to pay extra each month may not be realistic for most. It is just to illustrate the point and I picked simple numbers to make the example clear.
You need to have extra cash for the Money Merge to work well
What I see from all this is that, just like any mortgage pre-payment plan, the speed with which the mortgage is paid off is directly related to the amount extra you have to put towards it. If you only have $50 a month extra to throw towards your mortgage, sure the MMA software will help a little bit and may even pay for itself over time, but you are not going to be able to pay off your 30 year loan in 11 years. In the example we had above paying principal only on the mortgage would take 12.5 years and that is assuming the whole $100,000 was at 0%, which the Money Merge can not do. It takes it in chunks so that you have large chunks that are getting lower interest rates, but it can’t take the whole mortgage.
A local news broadcast about MMAs
http://www.youtube.com/watch?v=90PgchHluM4
Dave Ramsey’s take on money merge accounts
http://www.youtube.com/watch?v=viuUY47wLjs
My final thoughts on Money Merge Accounts
Doing the research, building spreadsheets and running the numbers has led me to one conclusion. It is worth your while to pay extra towards your mortgage. Regardless of whether or not you use the MMA software, it is worth trying to pay some extra principal on your mortgage on a regular basis - it greatly shortens the time you will be paying on the loan.
From what I can tell, the Money Merge software will amplify the process and will help you stay on track, but if you don’t have extra money to pay towards your mortgage, don’t waste your time.
Also, I will say it again, because it bears repeating: you need to have your finances in order before even considering something like an MMA. If you ever pay bills late, if you can’t balance your checkbook, if you don’t know exactly what is going on with your finances, I do not recommend Money Merge Accounts. If that is you right now, I would suggest trying to pay extra towards your mortgage each month and if you can do that successfully for a while, then it may be worth considering.
If you are interested in starting an MMA, I recommend the guys from Smart Equity. They were very helpful and gave me hours of their time - phone calls, emails, research just to help me understand the product. At $695 their MMA is the cheapest one I have found out there (compared to the $3500 UFF product) and customer support is included.
This article was included in the Carnival of Personal Finance
So, those are my thoughts on Money Merge Accounts. I would love to hear from people who are currently using them or who have more information about them in the comments below!
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I will admit it. I am a mild Ebay junkie. I just always find great deals on Ebay! It is almost always the cheapest place I can buy whatever item I am looking for - even for new stuff! But as good as it is, there is something about Ebay that I had to learn the hard way…
Don’t get sucked into the Ebay trap!
A lot of Ebayers get lured into the auction process and the excitement of trying to win causes them to bid more than they wanted to originally. They tell themselves,”oh, but if I can just bid one more dollar, I can probably win it. It’s only a dollar…” This cycle continues as they fight it out in a bidding war against QTprincess32 and fight to the death trying to “win” a book for $10 that they could have bought at Amazon for $8. I, of course, have never succumbed to the Ebay temptation .
Well, I am finally learning a few ways to buy on Ebay and still get a great deal. These are the five steps I usually take when I make a purchase on Ebay.
1. Check past ebay selling prices
The reason you do this is to see how low it has sold for in the past. Depending on how soon you need the item, you should be able to get close to this price if you can wait long enough.
1. Do a search for the item you are looking to buy, but hit the Advanced Search button
2. Then on the next page, make sure you check the box that says, “show completed listings only.”
3. Now it will show you the completed listings for the item you are looking to purchase. You can use this info to gauge how much you will probably have to pay for your item. I typically take this info and compare it to Ebates and the Amazon price without shipping.
2. Decide on your max price
It is important to decide how much you are willing to spend, because otherwise you risk falling into the trap I mentioned above! Figure out how long you are willing to wait and decide on your max price accordingly. If you are trying to get the lowest price possible it will probably take longer to win an auction at that price.
3. Think of alternative search phrases
I recommend going to the Ebay homepage and using the categories to find your item. But you should also search for the item with a few different search phrases. A “dress shirt” could have just been listed under “button up shirt” finding these unique phrases that others might not be searching for is very helpful in getting a bargain on Ebay.
4. Use sniper software
Ebay sniping is basically just using software or a service to put a bid in for you in at the last possible second. There is research to suggest that by sniping you can get an item for a lower price. The other thing I love about it is that i don’t have to be around to watch the end of the auction. I just pop in my max price and they put the bid in for me 1 second before it expires.
There are a bunch of sniping tools available and a bunch of them want to charge for their services as well. I have been using Gixen.com, which is free, and I have had good luck with it so far.
5. Use Paypal
Paypal is the preferred method for most Ebayers because it is the quickest and easiest way to exchange money. It is also great when buying stuff on Ebay because they offer some protections to the buyer that wouldn’t be available if using a check or money order. You can also use your credit card with Paypal and your credit card number will not be exposed to the seller.
Do you have any Ebay buying tips you have discovered?
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Why do you need natural toothpaste?
Commercial toothpaste contains flouride
There is a lot of debate about Flouride and whether it does or doesn’t have negative effects on our bodies. It is a key ingredient in most tubes of toothpaste that you find in the grocery store today. It also gets added to the local water supplies in most parts of the U.S. I don’t want to start a big debate about whether it is good that it is put into our water supply or not, but just know that even the supporters of floride use agree that too much can lead to Fluorosis.
Personally, I try to avoid flouride and if you do you are well aware that there are few options in the grocery store. Even a lot of the natural and organic toothpastes seem to contain flouride.
Other artificial ingredients
But, regardless of where you stand on the flouride issue, there are many other artificial ingredients contained in commercial toothpaste, like sweeteners (usually saccharin), emulsifiers, preservatives, and artificial flavors. While they may not be as bad as drinking bleach, they aren’t benefiting your body.
Make your own toothpaste
I decided to do some digging and see what it actually takes to make your own toothpaste. It turns out it only requires a few natural and easy to find ingredients. I don’t have kids yet, but this seems like one of those projects that may be good to get your kids involved with. I know I never wanted to brush my teeth when I was 5, but this might have made it more fun!
Ingredients needed to make natural toothpaste
- Baking soda (works as a natural cleansing agent and it polishes and whitens your teeth as well!)
- Table salt
- Hydrogen Peroxide (naturally disinfects your mouth)
- Stevia (optional as sweetener)
- Peppermint oil (optional)
Both 4 and 5 can be found at a health food store
Steps to make your toothpaste
- Pour 1/2 cup baking soda into a mixing bowl
- Add a dash of salt
- Add 1/4 cup of hydrogen peroxide
- Add 1 drop of peppermint oil
- Add a dash of stevia (more if you want it sweeter)
- Mix it all up until it becomes paste like. You may have to add more hydrogen peroxide to get the right consistency.
A few notes about the homemade toothpaste
- You can store it in a plastic container to keep it from drying out.
- If you’re not into the peppermint flavor, you could try ground cinnamon or vanilla extract.
Another quick and easy option is to get Peppermint extract (1/4 tsp.) from the Spice section of the grocery store and mix it with 1 tbsp. of baking soda. Add a dash of salt, mix it up, and you are good to go.
In trying this out, I thought I added a dash of salt, apparently I added way too much because it tasted like the Gulf of Mexico. Next time, I am going to lay off the salt. Brushing with it felt nice and left my teeth feeling so fresh and so clean, clean! I think I am going to try it with cinnamon next time to see what that tastes like.
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