Little Budget Travel Book Giveaway

Going on vacation is fun but I do have a problem with it.  Not only are you not earning money while you’re away, you’re also typically spending more money than you would at home.  Of course, I’m not suggesting that you skip your vacation, just find some ways to make it cheaper!

David Ning, over at Money Ning, recently came out with a book called the Little Budget Travel Book that might help you do just that.  Here is what he says about the book, it’s for those who:

    * Want to Spend Less Traveling
    * Wonder Why Your Friends are Always on Vacation
    * Like to Have More Fun Without Emptying the Bank Account
    * Care about Money but Still Believe Experiences are Key to Happiness

I also stopped by Amazon to see what the reviewers over there had to say.  Here’s a review by Mike Piper.

“As you can see from the page count, this book is quite short. There’s very little fluff. The whole book start to finish is tip after tip for saving money on your travels.

 

As to the quality/freshness of the suggestions, I found the overwhelming majority of them to be ones I hadn’t heard before. (Though admittedly, my wife and I aren’t very frequent travelers.)

 

I found myself taking a lot of notes as I read it, and there’s no doubt that I’ll be reading through it again before planning our next trip. If you actually use the tips in this book, it’s easy to see how it could pay for itself many times over with just one trip.”

 

David is going to give away a copy of his new book to two Money Smart Life readers.  To enter the giveaway simply leave a comment below with your favorite frugal travel tip. The giveaway will end on August 17^th when I’ll randomly select two people who have left a comment and David will send them a book!

I’ll start it off with one of my travel tips that saves us money every time we fly somewhere.  Park in satellite parking and take the free bus or train into the airport so you don’t have to pay the high rates at the parking garages close to the terminals.

Leave your budget travel tips below, good luck!

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Warren Buffett’s Calm & Measured Approach to Investing

Warren Buffett is most likely the best investor of modern times. He will certainly go down as one of the top two or three influences. Yet, he goes about investing in ways that are often contradictory to the market’s moods.  Here are some of his quotes:

If a business does well, the stock eventually follows.

 

If past history was all there was to the game, the richest people would be librarians.

 

The investor of today does not profit from yesterday’s growth. 

 
Buffett’s philosophy has not changed, nor his personality or attitude in life. Despite being one of the richest men in the world, he still lives in his small home in Omaha, Nebraska that he bought decades ago.

Investing Strategies & Personalities

Buffet’s investing approach is certainly much different than those of TV shows like “Fast Money” and hosts like Jim Cramer who focus on the next “trade.” I’m not talking down on these guys; I used to watch “Fast Money” religiously until Dylan Ratigan left. Jim Cramer, for all of his antics, generally calls a pretty good game. It’s just if I want a “Booyah,” I’ll turn on ESPN.

Trading Stocks

There are two polarizing styles of playing the stock market here. The CNBCs, Motley Fools, & Jim Cramer’s of the world play for the “trade.” This is a much more labor intensive, and depending on where you hold your account, expensive technique. They use different techniques, analysis and thought processes when making decisions on a particular stock.

On the shows or websites, you will hear or read about option movements, volatility, swaps and spreads among many other things. These are all extremely important for the trader using these techniques to help him or her make a decision.

Investing in Companies

Warren Buffett is not worrying about these things. He is not worried about a dip in a company like Apple (AAPL) because of the news of a price drop on the iPhone. His analysis no less complicated, but a bit more fundamental. To Warren Buffett, it’s all about the balance sheet. He does not look for a good stock. He looks for good companies; good businesses. As in the quote above, he buys on the value of the company. If the company is as good as he thinks it is, he will be rewarded in time with a rise in the stock price.

Warren Buffett is an investor, not a trader. He focuses on the long term and reaps the rewards of his patience. He’s not always right. Last year was a good example of that. He was considerably “early” in his decision to start buying back in. That being said, I’d bet my vintage Welch’s jelly jar glasses that a decade from now, we will hear about the amazing moves he made when everybody else was afraid to go back in the water.

So why am I writing this? For a little perspective, I guess. Young men and women spend years going to the best schools, learning the intricate details of trading techniques and analysis and they race up and down the investment return “roller coaster.” Sometimes you just need to go back to the basics. Is it a strong business? Does it have a healthy balance sheet?

Intelligent Investors

Warren Buffett’s mentor, Benjamin Graham, wrote a book called the Intelligent Investor in 1949; Buffett described the book as “by far the best book on investing ever written”.  Buffett and Jason Zweig collaborated on an updated version of the book containing modern day commentary, relating the concepts to current events in the financial markets.  If you want to learn more about Buffett’s principles of investing, check out the Intelligent Investor.

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Investing in Certificates of Deposit with CD Ladders

Certificates of deposit will never offer the same level of returns that you can earn in the stock market but CDs do provide a guaranteed return, unlike stocks. A certificate of deposit gives you a guaranteed interest rate in exchange for agreeing to lend the bank money for a certain period of time.  If you decide to withdraw money before the maturity date, you’ll almost always have to pay a penalty.   

CD Ladders

When making certificate of deposits part of an investing strategy, many people create what’s become known as a CD ladder. Using a “laddering” approach prevents you from investing all of your money into a long term certificate at a low interest rate, and then missing out on better investment opportunities. 

Basically, you take the amount of money you have to invest and split it up into several, smaller amounts.  For example, say you’re investing $15,000 into CDs.  Instead of doing one CD for 5 years with the whole amount, you might do $3,000 in 5 different certificates with varying maturity dates.  Not only does this give you access to part of your money at different intervals, but it allows you to get higher interest rates if the market conditions improve after a couple years of investing.

How to Set Up a CD Ladder

You start a ladder by purchasing several CDs at one time with different maturity dates.  You might get a one year, two year, three year, four year and a five year CD.  When you use this strategy, every year one of your CDs will mature, and you can then roll it over into another CD with a longer term if the interest rates are higher, or a shorter term if you are waiting for the market conditions to improve and interest rates to go up.

In the example above, if you invested $3,000 of your $15,000 in each of the one, two, three, four and five year CDs, you have a ladder with 5 rungs on it.  When your first CD matures after one year, you can roll it into a five year CD, or a four year CD if you want all of your CDs to mature at the same time.   Whichever length of time you choose for your CD is the length of time you can roll over each of your maturing CDs, so that you’ll have money available every year once they start maturing but you’ll never have all of your money locked into a long term, lower-than-market-interest rate investment.

Laddering CDs is a method people use to protect themselves against the fluctuations of interest rates, while still giving access to some of your money within a short time frame without penalty.  If something comes up and you suddenly need some of that money, you will have access to it in a reasonable period of time and can avoid penalty fees for withdrawing investments prior to their maturity dates.          

Trisha Wagner is a personal finance writer for DepositAccounts.com, where you can compare rates of checking accounts from dozens of banks in one place. Trisha writes regularly on the topics of personal finance and savings accounts.

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Payday Loan Question

Payday loans can bleed you dry.  For example, here’s a recent comment from reader Cheryl:

“We started out with Payday Loans when we hit financial bottom when I lost my job. We had just moved with a larger mortgage, plus have 2 kids at home to feed.

 

We now have 6 Payday Loans that are killing us. I’m laying awake at night worrying. We pay one off and it seems something else comes up. Id go without food and eat cereal to pay them off, but I have 2 teenage boys who eat all the time and I even bulk cook and freeze things for them.

 

No junk food, pop etc. I home cook meals every night. It is such a hole to get in, and so frustrating when you cant get out. Our credit has hit rock bottom now.

 

We have considered bankruptcy since some of our other bills have suffered now also. Ive heard you can file against Payday loans, but where will I get the money to file?”

Cheryl, I don’t know how much your loans are for or what interest rate you’re paying on those loans but I do know that the rates on payday loans can be insanely high, higher than any credit card.  As you’ve experienced, the interest accumulates so quickly that your payments go towards the interest, making the original loan difficult to pay off.

If some of the loans are bigger than others you could use Dave Ramsey’s Debt Snowball method of paying off the lowest balance loan first, then once it’s paid off apply the payments you were making towards the next highest balance.  One possible way to raise money to pay off that first loan is to get together some of your personal belongings and sell them on eBay. 

Of course from a pure numbers perspective, it would be good if you could consolidate all of those really high interest loans into one loan at a lower interest.  However, you mention that your credit is bad so you may not be able to find a bank or credit card that will give you a line of credit.

Alternative sources of loans such as Lending Club are useful for some people but if your credit is really bad that won’t help much either.  If you have family that’s willing and able to help out, you could look into borrowing money from them through Virgin Money USA.

Since it sounds like you’re struggling with paying a bigger mortgage without your job, I’d contact the National Foundation for Credit Counseling.  The NFCC has credit counseling, home owners counseling, and bankruptcy counseling all of which may be of some assistance to your family.  Good luck!

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Are You Planning Your Life Around Money?

Imagine a dark day in the future when you’re lying stiff and embalmed in a casket, your friends and family huddled around saying their tear-stained goodbyes.  What will they say about you?  How will you be remembered?

Begin With the End In Mind

Sorry for the unpleasant throughts but this is one of the exercises in Stephen Covey’s book, the Seven Habits of Highly Effective People.  Picturing your own funeral is something he discusses when covering the 2^nd Habit, “Begin With the End in Mind”.

The premise is that you should start everything you do with a clear direction of how you’d like it to end and then take the steps necessary to get to that destination.  Dr. Covey recommends creating a Personal Mission Statement that hones in on what you want to with your life and who you’d like to become.

Life Planning at Ninety Miles an Hour

I remember I skipped that exercise when I first read his book in my mid twenties thinking, “how do I know what I want to be when I grow up?”  Now in my early thirties it still makes me uncomfortable because unlike Owen Meany, I don’t know what day I’ll die or what I should do to prepare for that day.

I do plan for the future finanancially but it’s hard for me to make any BIG life goals because “then” seems so far away and “now” just moves so fast.  I wake up each day to crying, whining, or fussing kids who eventually cheer up (usually) and see me off to work. At the end of the day I rush home to spend time with the little ones before they hit the sack; then I hop on the computer and work as long as my eyes will stay open.

Three Life Planning Questions

Last night I ran across financial planner George Kinder, of the Kinder Institute, and a video where he asks three questions that make you think about where you’ll end up.  They’re similar to Covey’s “imagine you’re dead” exercise but for some reason they seem easier to answer. I suppose because he breaks the questions down into different time frames and they’re a little more specific. Here they are:

1) If you had all the money that you needed, how would you live your life? How would you change your life?

2) If you only had 5-10 years left to live, what would you differently?

3) Imagine the doctor gives you 24 hours left to live. What did you miss?  Who did you not get to be?  What did you not get to do?

Kinder recommends forming your financial plan around the answers to those questions so that you plan the life you want to live rather than planning your life around money. It may be easier said than done but it sounds like a good approach to me.

What about you? Are you planning your life around money or around your goals?

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Five Ways You Can Save Money This Summer

Visit the Library

I’m not a big book reader, mostly because I don’t have much spare time.  I do most of my reading online where I can pick up small chunks of information pretty quickly.  My wife and son on the other had love books. 

If we had to pay for all the books that they read, especially during the summer, we’d have a pretty big credit card bill.  Instead, they head to the library once a week and stock up on loads of kids books for him and Oprah’s book club for her.  It can be hard to keep track of all those books so sometimes they have to pay late fees and once or twice had to buy a book outright but it still saves us hundreds of dolllars a year.

Free Movie Trials

I’ve written before about the competition between Blockbuster and Netflix and how you can benefit by signing up for both.  Basically you can get a Blockbuster free trial followed by a Netflix free trial and enjoy free movies this summer.

Enjoy the Outdoors

You don’t have to be a camping nut to save money by spending time outside this summer.  Before we had kids we’d hit the river for a canoe day trip with friends, ride our bikes to the park, or just grill out in a friends back yard.  Now we spend afternoons at sprinkler parks or the morning playing in a local creek, cheap fun and he loves it.

Home Improvement Referrals

Our neighbors just discovered a nasty water leak in their roof that’s been dripping down into the wall and has rotted out the wall, window frame, and some of the floor.  The previous neighbors discovered the leak and had someone out to look at it.  Apparently he applied a little caulk here and there without really addressing the issue and now they’re faced with major damage.

One of the best ways to find a contractor who will do a good job and not end up costing you money down the road is to get a referral from friends or family.  Another place you can turn is a service like Angies List.  Basically, its a service that has reviews of local contractors from customers that hired and worked with them.  It is a paid service but you can get discounts with Angies list coupon codes.

Shop Garage Sales

If you have kids, this is a tip you don’t want to ignore.  You can buy kids toys and clothes for pennies on the dollar at garage sales.  My son loves anything with wheels and the majority of his trucks, cars, etc came from garage sales.  Toys that cost $40 retail, we bought pretty much brand new at garage sales for a buck.

My wife also shops a season ahead and buys clothes for our kids.  I don’t know how well it works for older children but for kids 4 and under you can buy almost new clothes for dirt cheap.  Seriously, my wife came home with garbage bags stuffed full of kids clothes for $15.

Happy savings!

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Making Extra Money on eBay Edition

I used to sell a lot of stuff on eBay. On the way home from work I’d stop by discount stores and buy heavily discounted products, my favorite were sporting goods. In the evenings I’d create listings in my eBay store and answer any questions that came in about the products I was selling.  In the mornings I’d package up any sales and then over lunch hour I’d go to the post office or UPS store.

Then we had kids and my free time pretty much evaporated so I didn’t have much of a chance to find new things to sell.  I still had a bunch of stuff for sale that wasn’t listed in my eBay store so I found an eBay partner who listed, sold, and shipped a lot of the products I had left.  Now he’s overwhelmed with kids, a 3 year old and 3 month old twins, so he recently cashed out of the eBay game himself.

I still have my eBay store, I’m not adding any inventory but I still make a sale or two per month.  Just this week I sold a brand new motorcycle helmet for $595 that I bought for $300 about a year ago, not a bad return.  Of course, I also sold a router that caused me nothing but headaches.  The guy that bought it decided he couldn’t use the router once it arrived and wanted a refund.  I won’t go into all the details but I ended up refunding him the money with a lot of hassle in between.

My whole point is that if you’re looking to make some extra money, selling on eBay is a simple way to do it.  Once you have some feedback established you can start earning money right away. It does take time to find products, list them, ship them, and field customer questions but if you have the time to spare it’s not a bad way to make some extra money.

If you don’t want to hassle with making money on eBay, here are some money articles on other ways to make or save money:

Make Money

Consumerism Commentary looks at making money with a CD ladder.

The Digerati Life is hosting a contest where you can win $250.

Suns Financial Diary points out a $25 dollar bonus from ING.

Save Money

Generation X Finance might save you some money when financing a car.

Frugal Dad shares some options where you can save birthday money.

Free Money Finance has a guest post on how to save on prescriptions.

My Dollar plan has some tips on how to survive survive during a recession.

No Credit Needed looks at budgeting categories.

Other Money Tips

Five Cent Nickel has a guest article about foreclosures and risk.

Million Dollar Journey has a case study on financial priorities.

Get Rich Slowly reflects back on what he didn’t know about money.

Brip Blap discusses money and his recent business trip.

Lazy Man and Money covers estate planning.

Jeff Rose breaks down the tax rules on Cash for Clunkers.

Thanks to Green Panda Treehouse for hosting the carnival of money stories.

 

To end on a laugh check out this funny list of books at Mighty Bargain Hunter.   Have a great weekend!

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Return of the Credit Card Telemarketers

The credit card interest rate scammers have been calling me about once a month for the last few months.  I’ve been trying figure out what their angle is and each time they call I get a little more information out of them. 

They’ve simplified their inital automated call.  Now instead of talking about President Obama and credit card companies they simply say:

“This is your 2nd and final notice to lower your interest rates.  You should have gotten the first notice in the mail, this is your last chance to lower your rates. Press 1 to lower your interest rates now, Press 3 to be removed from our special list.”

They’re also a little more specific about who they’re after since they follow the intro up with:

“To qualify for lower rates you must have at least $4000 in credit card debt. Press 1 to speak with a representative, Press 3 to be removed from our list.”

So of course I pressed 1 to see what dirt I could dig up on them. A real person actually answered this time, here was our conversation (her questions are in bold, followed by my responses)

Hi, this is Alicia.  Did you press 1 to lower your interest rates?

Yes, I’m sorry what company are you calling from?

I’m Alicia with Universal Card Services.  Let me ask you a few questions. Do you owe more than 2500 in debt?

Yes

How much credit card debt do you have?

$5000

Are your interest rates above 12%?

Yes

How many credit cards is the debt spread across?

Two cards

Are you in good standings on those credit cards? Are you paying your bills on time?

Yes

Are you over credit limit on either of those cards?

No

Congratulation, you qualify for lower interest rates!  I just need to get some basic information.  What is correct spelling of your first and last name?

At that point I hung up.  I had already fibbed about having credit card debt just to keep her talking and wasn’t fast enough on my feet to make up a name, address, etc.  Next time I’ll have a fake name and address ready so I can dig further.

I did a search on Universal Card Services online and did find a reference on the Business Week site:

“Universal Card Services, LLC, was formerly known as AT&T Universal Card Services. The company is based in Jacksonville, Florida. As of April 2, 1998, Universal Card Services, LLC operates as a subsidiary of Ctibank South Dakota N.A.”

According to the Business Week site the company is located in Florida. The calls I’ve been getting have been coming from a 419 area code (Ohio) but of course they could still be coming from a Florida based company.  It could also be that some other company is falsely using the name of Universal Card Services just to cover their spammy phone calls.

They’ve called the last three months in row so I imagine I’ll be getting another call next month and I can dig deeper to find out who they are and what they’re trying to sell me.

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The Costs of Selling Your House

The costs of selling a house may not make or break your decision to sell whether you’re relocating, trading up, or buying a smaller home.  However, the costs can run into the thousands of dollars so they’re something you don’t want to overlook.  The first thing you need to consider if you are thinking about selling your house is why you want to sell it.

Unless you live in a cave, then you know it’s not a good time to maximize the amount of money you can make from the sale of your house. Are you looking to move up in size of house? Do you need to move for a job change? Or do you simply want a change of scenery? Make sure you are moving for the right reasons, because the sale of a house can be a costly endeavor.

Sales Agent Commissions (2% to 10% of the purchase price)

Depending on the value of the home, typically the seller ends of paying the selling agent’s commission and the buying agent’s commission. An agent can charge whatever they want for a sales commission, but typically 2% to 3% of the purchase price is normal. The agent may charge less for higher value homes and more for lower value homes.

By the way, if your agent brings in a buyer, you don’t save money, the agent just makes more commission. If a selling agent brings in the buyer as well, they charge a buyer’s agent commission as well as their selling agent commission.

Selling For Sale By Owner

If you choose to sell your home yourself, it’s not as tough as sales agents and brokers will make it out to be with the power of the internet. If you have a knack for utilizing the power of the web and you are willing to price your home at a reasonable price, you can sell it on your own. You will need to pay for some marketing efforts, but you can potentially save thousands of dollars selling on your own.

My wife and I found the buyer to our first home, a condo in Gainesville, FL, from a free ad on Craigslist. The problem that most for sell by owner (FSBO) sellers run into is that they price the property too high, and they don’t get any bites. You can use sites like Trulia and Zillow to help you find comps in your area to price your home correctly.

Property Inspection (typically $250 to $500)

Sometimes sellers will pay for an inspection as a concession to the buyer. It’s sometimes thrown in as a negotiation technique to sweeten the pot for the buyer. This is a nice gesture to pay for the inspection, especially if you are eager to sell the house quickly.

Home Repairs (varies)

Unless your home is pretty new, many property inspections turn up some issues that need to be resolved. You can choose to have the improvements made or sometimes the buyer  will agree to  do it themselves if you knock some money off the asking price.

Closing Costs ( about 1.5% to 2% of sale price)

The fees you pay for the lenders to handle all the paperwork when you hand over your house to the new owners aren’t cheap.  You can negotiate with the buyer on who pays the closing costs but in a “buyer’s market” you probably won’t have much success with that.

Moving Costs (varies)

After you sell your house, you obviously have to find somewhere new to live.  Be sure to factor in the cost of packing up and moving all your stuff and any days off of work you’ll need to move.  To help compete in a tough real estate market, we’ve actually heard of realtors who actually provide you one days use of a moving truck if you use them to sell your home.

We’ll cover some more financial considerations on selling your house in the days ahead. You can also read some of  the tips from our series on buying a home, with details on home inspection tips, split loans, down payments, interest rates, and mortgage pre approval.

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Money Tunes – Songs About or Involving Money

If you’re like me, money is constantly at the back of your mind.  Most everything you do during the day is somehow tied to money; you’re earning it, spending it, saving it, etc.  I guess that’s why money and money related topics make an appearance in so many songs.  Here are some “money tunes” for you:

– Time has come to say fair’s fair, to pay the rent now to pay our share – Midnight Oil

– My mother says to get a job … but she don’t like the one she’s got – Green Day 

– If I had a million dollars,  I’d be rich – Barenaked Ladies

– I know a treasure is waiting for me, silver and gold in the mountains of Spain… – The Doors

– with my mind on my money, and my money on my mind – Snoop Dog

– Put another dime in the juke box baby! – Joan Jett

– Mike D grabbed the money, MCA snatched the gold… Beastie Boys

– All about the Benjamins 🙂 – Puff Daddy

– Money, Money, Money – ABBA

– bet your bottom dollar that tomorrow they’ll be sun – Annie

– You never count your money when you’re sittin at the table – Kenny Rogers

– … fresh out of clover, mortgaged up to here. But don’t pass the plate folks, don’t pass the cup. I figure whenever you’re down and out the only way is up! – Many Artists

What money tunes did I forget?

 

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