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Guest Post: Remodeling in a Recession: Why You Shouldn’t Wait

June 29, 2010 · Filed Under Frugality · 4 Comments 
Today’s guest post was contributed by Jennifer Kardish.  Jennifer is a communications coordinator at Kitchen Cabinets. You can check out their free design tips for your kitchen and home.

With the economy still in a decided downturn and foreclosures reaching all-time highs, now might seem like the worst time in recent history to think about remodeling your home. It certainly won’t be easy to get a loan or a line of equity on your house with the real estate market slow to rebound and banks pulling the purse-strings tighter and tighter. However, if you can find a way to scrape together a little cash, or if you’ve been saving, now is a great time for the frugal shopper to do some home upgrades.

For starters, a little can go a long way in this economy. Retail spending is, simply put, not what it was. Vendors that were thriving a few years ago are now being forced to slash prices and even close their doors. The point is, they want your business! And you can use it to your advantage. Shop around to find the products you want and you will be amazed at the discounts you discover (shopping online may be even more fruitful). Then go to several stores and find out if they are willing to price match or give you a better deal to stop you from going to the competition. You can often get an outrageous bargain just by asking for it. Also, if you’re on a tight budget, consider a merchant that sells reclaimed items (like flooring, cabinets, hardware, etc.). Although it may not be the newest product on the market, and it might have a little wear and tear, you can often find merchandise that has a higher value (in terms of construction, quality, materials, etc.) than you could get for the same price if you bought something new.

And that’s just the parts. You can also save on labor. Of course, there is always the do it yourself method, which is great for handy people. For the rest of us, a contractor is necessary to get the job done. And while contract work has a bad reputation for getting very pricey, very quick, we are currently in a buyer’s market. Building of new structures has slowed significantly and as a result, the market is flooded with contractors looking for work. If you seek several bids (make sure to get recommendations) you stand to save a lot of money on labor. That said, don’t be afraid to do some of the work yourself. Almost anyone can learn to install a backsplash, replace a lighting fixture, or swap out a faucet, so get yourself a home improvement guide to save even more.

Why wait to build your dream home? Even if you plan to upgrade as a way to get more value out of your house, you don’t have to wait until you’re ready to sell. Remodel now, while you can get the best price, and you stand to appreciate an even better return on your investment in a few years when the housing market rebounds. Plus, you’ll get to enjoy a custom-made interior in the mean time.

Stupid Tax: Frozen and Burst Water Pipes

January 20, 2009 · Filed Under Random · 4 Comments 

I never realized that there was actually a penalty for leaving your crawl space access door open.  Well, if you did it on January 16th, 2009 (which just happens to be one of the coldest nights of the year outside of Richmond, VA), the penalty is almost $400!  How do I know, you ask?  Don’t ask.

We woke up Saturday morning to no water in the house (this really stunk because, besides the obvious, I was really looking forward to sleeping in on Saturday morning after not feeling well all day Friday).  After making some phone calls to ask some advice on what to check to determine exactly what was going on, I went outside to check the pipes in the crawl space and realized that the access door was wide open!  Though it was very cold outside, it struck me as I entered the crawl space just how warm it was under there – it was actually quite comfortable.  So I crawled all the way under the house and all the pipes looked fine.  On the way out, however, I saw that the main supply line was bulging and had burst.  The problem was, unfortunately, that the main supply line went right by that open access door.  All night long the wind whipped in just far enough to freeze that main line even though the rest of the pipes were fine.

When I realized it was the supply line, I kinda freaked out because, of course, I had no way to shut the water off if it started to thaw. So, I immediately called the county water people to come and shut off the water ("it will be a while" and "we can turn it off later today but can’t turn it back on until Tuesday" were the gems from that conversation).  I Then put some ice packs on top of the broken parts to prevent them from thawing (the pipe had bulged and burst in a second place by this time).

Anyway, after calling a plumber, I was able to get the situation remedied that the morning before any damage was done and the plumber was able to turn the water back on for us. Literally, the short section of pipe immediately in front of the door opening is the only thing that froze.  I was quite nervous about the next couple nights as they were forecast to be almost as cold, but I did makes sure that door was locked up tight and even wrapped some towels around the exposed section of the pipe.  UPDATE: Two nights have gone by with no more issues (though I admit that I went out to make sure that door was closed before going to bed each night and will probably do so again tonight).

To help you avoid this stupid tax that I encountered, here are some tips to prevent pipes from freezing (other than moving to Tucson):

  1. Ensure there is no way for wind to get to where the pipes are – seal any leaks (no matter how small) that allow cold air in around your pipes.
  2. Wrap pipe insulation around your pipes
  3. Consider installing electrically powered heat tape around your most vulnerable pipes
  4. On really cold nights, leave a faucet dripping very slowly to ensure water keeps moving and doesn’t sit in the pipe and freeze.
  5. Disconnect and drain hoses, close off inside valves to your hoses and open the outside valves to get the water out.  Then, leave the outside valves open to allow any remaining water room to expand
  6. Open kitchen and bathroom cabinet doors to allow warm air to circulate around the plumbing
  7. Close your crawl space access door! (argh!)

By the way, if you’re looking for a useful hobby to take up, I think plumbing may be the answer.  I spent almost $400 dollars for 30 minutes of work replacing about 5 feet of copper pipe, 1 elbow joint, and two connectors.  I can’t imagine that the materials for the job cost more than $15 (of course there are specialized tools needed but they are reusable).  If I had some plumbing skills, I could have saved myself quite a bit of money as well as time sitting around waiting for the plumber to arrive.  Plus, plumbing is a good skill to have for home additions and renovations.  I think I just might check into this….(just don’t tell my wife I’m contemplating yet another hobby!)

Photo Credits: ellievanhoutte

Some Cost-Savings Tips for Christmas Gifts

December 9, 2008 · Filed Under Frugality · 3 Comments 

Everybody likes getting gifts, and most people like giving them as well (c’mon, admit it, don’t you love it when you have that perfect gift for someone…for me, it doesn’t happen too often but when I have that awesome gift, I’m practically more excited for them to open it then they are!)  Of course, buying gifts for the people you care about takes time and money, both of which are finite resources.  The best way to allocate your time is to get started Christmas shopping early.  Funny, starting early the best way to get good gifts without spending a ton of money as well…but it’s way too late for that now!  A good way to have the money for your Christmas gifts is to set a budget and save up for it throughout the year (but it’s way too late for that now too!)  Ok, so maybe you didn’t do that this year (we did…sorta – we started saving in September after paying off my wife’s student loans).  If you did not, make sure you set it up for next year (heck, go ahead and do it now even if you don’t schedule your automatic transfers to start until January or February).

Now, if you don’t have a big stash of cash saved up for gifts, I’d like to suggest some ways to show you  care for your friends and family without going into debt.

1. Do a Gift Exchange

Instead of everyone in your family buying for everyone else, pick names and have each person buy gift(s) for only one other person.  We’ve done this on my wife’s side of the family for a few years and I think it really works out well.  Instead of having to stress over the time, effort, and money to buy everyone gifts, you can focus your time and money on getting a really good gift for one person.  As a result, each person gets some good gifts and everyone saves money.

2. Make a game out of it

On my side of the family, we’ve done a "gift game" for a number of years.  The basic idea is that each person brings a gift to put into the game (when we do it, each family contributes three gifts).  There are variations to how it is played, of course.  My mom usually hands out a number of little slips of paper with different numbers on them and then draws numbers from a hat (bingo style!).  When your number is called, you can pick a gift from the pile or take one from someone else.  When you are out of numbers, the gift you have is the one you keep.  It is not as personal as doing a gift exchange, but it is a way to save money and have a little fun.

3. Do an ornament exchange or card exchange or <insert item here> exchange

Instead of gifts, decide beforehand that everyone will be exchanging some item like ornaments.  You can then try to find some meaningful ornaments for each other.  Everyone saves some money while at the same time getting a gift that adds to their Christmas decorations.  Maybe the ornament idea wouldn’t work very well if you have a uniformly decorated like my parents.  (My parents literally took home the display model tree with the lights and ornaments already on it – man, talk about convenience setting it up each year!).  If not, try to get each other some really cool Christmas cards.  You should be able to get some really fancy cards without spending as much money as on small gifts.

3b. A Photo-Exchange

My wife’s family also does a photo exchange with their extended family (My wife’s maternal aunts, uncles, and cousins).  Someone agrees to be the point-person and buys (and maybe decorates) small albums that are provided to each family.  We typically get the really inexpensive albums where you just slide the pictures into the plastic sleeves.  Everyone then sends out a picture of each person in his/her immediate family to everyone else in the family.  I think this is a really neat and inexpensive way to keep up to date with the extended family.  We’ve done it for a few years now and it is fun to look back at some of the earliest pictures.  (As a side note, my 19-month old loves grabbing the albums and sitting down on her little chair and paging through them.  It is hilarious to see even though, as you might imagine, she has destroyed most of the albums).

4. Create Homemade gifts

A great way to give unique, useful and/or enjoyable gifts that show people you care about them without spending a ton of money is to create your gifts.  Food is always a good bet: create a pancake mix kit, roast up some almonds, bake some cookies (always a big hit), cupcakes, or brownies, make some buckeyes (yummy – if you don’t know what a buckeye is, you gotta find out – I was turned on to them by my wife when we first started dating.  She’s from Ohio, so I’m sure they’re called something else in other parts of the country/world). 

You’re only limited by your imagination here.  Be creative and make it fun – you’ll save money while simultaneously creating an out-of-the-ordinary gift. This can be extend to all kinds of areas beyond just food.  Create small gift baskets of lotions, bath salts  (not sure what that is…my wife gave me the suggestion), etc.  Create a small personalized picture album.  Buy a plain photo frame and paint it or decorate it.  Again, the options are endless!

5. Save on shipping

I like buying gifts even though I don’t like spending lots and lots of money.  I do, however, get really annoyed at having to pay exorbitant shipping fees to get the gifts to out of town friends/relatives.  (I’m spending almost as much on shipping as I did on the gift – what a waste!)  So, if you do end up buying gifts for people out of town, here are some tips for saving money on shipping.

Take advantage of free shipping offers

Obviously, there are numerous retailers that will provide free shipping on certain orders.  This is a great place to start…but don’t get carried away.  Remember that the point of this exercise is to save money…it doesn’t help to get free shipping if you have to buy more than you wanted to or if the cost of the item is more expensive than getting it somewhere else even if you do have to pay shipping.  Check out sites like FreeShipping.org to see the different retailers that offer free shipping deals.  ChristianPF provides some other tips on saving money while doing your Christmas shopping .

Shop and ship early to avoid crazy shipping costs

Another obvious way to save money is to shop early and use lower cost shipping options.  So, that means, get out there and get your shopping done…today!  It is getting late, but you still have some time, depending on where you are shipping, to ship your packages at lower rates.  If you wait too long, you will be shocked by how expensive it will be to ship your packages 2-day air of (gasp!) overnight!

How about a gift-buying exchange

Instead of buying presents and shipping them to a friend while he/she buys gifts and ships them to your family, try a gift-buying exchange.  Decide what you want to get for your friend’s family while he/she (he/she is so onerous….let’s just pick "she" for this section) decides what to get for yours.  Then exchange lists and you do her shopping and wrapping while she does yours.  My wife has done this a bit in her family and it certainly saves on shipping.  If you choose to do this, be considerate.  Don’t just tell them to "buy something nice."  Instead, tell them exactly what you want to buy and where to find it.  Of course, it isn’t much fun to say, "go buy yourself a new sweater."  So, still shop and ship your friend’s gift but exchanging the purchasing for everyone else in your respective families should save a bunch of money in shipping costs.

6. Skip the gifts and apply the money to a reunion later in the year

For those families that can’t be together but would like to be together, you could try skipping the gifts (or cutting down on them) and agreeing to save that money to create a vacation where you can get together later in the year.  Maybe not as fun at Christmas time…but I’m sure that a vacation together would be even more fun that opening some gifts from far-off friends at Christmas.  Memories make really good gifts.

Hopefully this post has provided some good ideas or inspired you to create your own.  If you have some great ideas, please share with us!

Here are some more tips on this topic from ChristianPF and BibleMoneyMatters and some tips for being prepared for next year from Gather Little By Little .

Photo Credits: futureshape and Pink Sherbet Photography
and jlz

Warren Buffet’s 10 Ways to Get Rich

September 15, 2008 · Filed Under Random · 22 Comments 

Warren Buffet was on the cover of Parade magazine last week. Parade magazine, you ask? We are trying a coupon experiment and are getting the Sunday paper delivered for two months to see if we can save any money through coupons. Apparently, Parade magazine comes in our Sunday paper…but I digress.

There is a brief article in Parade listing "Warren Buffets secrets that can work for you." Since he currently has a slightly higher net worth than I do, I thought it would make sense to share his "secrets." This is good advice, but I think it says a lot about the state of personal money management in the USA today that some of these are considered "secrets." (and, of course, I mean that in a bad way)

  1. Reinvest your profits – When you first start making some money, don’t spend it all right away. Rather, use it to grow your business and increase your profits.
  2. Be willing to be different – This one confused me somewhat. The article claims that instead of following the herd, Buffet focused on undervalued investments and beat the market year after year which makes a lot of sense. It then states, "To Buffet, the average is just that – what everybody else is doing." This confuses me a bit because Buffet is a big proponent of low-cost index fund investing.  So much so that he bet approximately $320,000 that the S&P 500 Index Fund will outperform a collection of sophisticated hedge funds . The argument against index funds is that they are "just average." Anyway, the point is, don’t just do what everyone else is already doing in the same way that everyone else is already doing it.
  3. Never suck your thumb – Gather your information and make a decision. Calling any extra time wasted before making a decision "thumb sucking," the article states that when people offer Buffet a business or investment, he makes a decision on the spot. (I need to work on this thumb sucking thing with my daughter, actually…"see honey, Warren Buffet says you shouldn’t suck your thumb either and he’s the Oracle of Omaha…")
  4. Spell out the deal before you start – Always agree on the specifics of any deal before starting on it. Buffet notes that your bargaining position is greatest before beginning work on a job. So, even with friends and relatives, make sure everyone understands and agrees to the details of the deal in advance.
  5. Watch small expenses – I think this is what spurs him to recommend low cost index funds. If you read that article above, you’ll see the crazy fees that are levied by those hedge funds.  This suggestion, of course, extends far beyond just investing advice.  Limiting your expenses in all areas of your life will extend the reach of your paycheck as well.
  6. Limit what you borrow – Woohoo, now you’re talking! The article claims that Buffet has never borrowed a significant amount of money. His advice is to become debt-free and then save some money to start investing. This is quite a bit different from all the gurus claiming that rich people get rich by using other people’s money.
  7. Be persistent – Buffet claims that someone possessing persistence (and ingenuity) can win against a bigger and/or more established competitor.
  8. Know when to quit – Sometimes, it is best to just cut your losses and walk away instead of throwing good money after bad. When you are down, resist the inclination to win it all back with the next bet.
  9. Assess the risks – The article describes a situation where Buffet advised his son to imagine the worst-case and best-case scenarios for a certain course of action. This exercise will help you understand the risks and rewards for whatever decision you are making.
  10. Know what success really means – The article claims that Buffet does not measure his success by dollars. Here’s an interesting quote from Buffet:

"I know people who have a lot of money," he says, "and they get testimonial dinners and hospital wings named after them. But the truth is that nobody in the world loves them. When you get to my age, you’ll measure your success in life by how many of the people you want to have love you actually do love you. That’s the ultimate test of how you’ve lived your life."

There you have it, wisdom from the "Oracle of Omaha." For the most part, I really like what Buffet has to say about personal finances. He certainly doesn’t strike me as a Donald Trump type – rich one year, broke the next, rich the next (that makes me wonder how much money Trump actually "owns" and how much his fortune is just a product of "creative accounting"). Anyway, I’m going to try Buffet’s "secrets" and see how close I get to increasing my net worth to $62 Billion.

Seriously, though, this article was attributed to Alice Schroeder, the writer of Buffet’s new authorized biography entitled The Snowball: Warren Buffett and the Business of Life . It and another brief article in the Parade magazine about Buffet has piqued my interest in reading this book. It is in pre-order status right now as it is not scheduled to be released until September 29th…so I guess my library doesn’t have it yet. Is anyone out there planning on purchasing a copy? Has anyone read any other books about Buffet? Do you recommend any of them?

BTW – you can enter a contest at Parade.com to win a signed copy of The Snowball .

Back to School Tips For Starting the School Year – College Edition

August 15, 2008 · Filed Under Random · 3 Comments 

It’s that time of the year again! Everyone is gearing up to go back to school. It’s a very exciting year for most people – kids starting kindergarten, high school, college (and especially parents of teenagers, I think).

In honor of this special time, I’ve tried to collect some tips – especially for you students going back to college. Let’s start it off with some of my personal tips: Click here to continue reading…

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