thefamilynomics

“Cash for clunkers” is a huge success. Now, we are going to have cash for dishwashers. Even Toysrus is coming up with cash/coupon for cribs and strollers!!!

Why is there is so much need for the US consumer to shop?

I know, I know, the US economy needs the US consumer to shop for the recovery. But, I think it is OK, if we are not shopping for a while. It is good for us and also good for the country. We have been used to all the excesses for a long time. It is time for us to take a break. Everyday, we buy stuff that we do not need. Not only do we not need them, it is wasteful and harmful to our finances and to our environment. I mean, here I remember what George Carlin said - we want to buy bigger houses because we have ran out of storage space for our stuff.

I think, we need to be careful about what we buy, and how much we buy too. Everything is not about convenience. I mean, I saw people buy a big pack of small bottles of apple juice at Costco. Why do we need all this convenience for packing lunch for kids. It is more cost effective to buy Apple juice and one plastic bottle and reuse the bottle. It is also better for the environment. The only thing we lost here is a small amount of convenience.

What do you guys think about this? Please do leave a comment.

The small vacuum is a must in every household for picking up everyday spills and general cleaning. With kids, the spills are never ending. So, the small vac really needs to do its job well. But I have had very bad experiences with these devices.

Here is my experience.

Last year we moved into a house that has more hardwood floors. So, a small vac is necessary for general cleaning. The first one we bought was the Dirt Devil broom vac. It was in consumer reports best buy list and the price was $25, so my husband bought it online. I have not used it much because it is too heavy and it does not pick up anything at all. So, in about 2 months I gave up on it and bought the Swiffer Vac. This too I could not use it much since the battery does not charge and hence it is worthless. Now last month I bought the Swivel Cordless Sweeper. At present this has been working pretty nicely. At last, I feel as though I have my answers to everyday cleaning. But, I do not know how long this feeling will last.

To conclude, I can say that the shopping result of this item has not been very financially sound and effective. Hence I wanted to write about this experience. Here is what I mean to say :

3 small vacs in 1 year.

Average cost of each is around $30. That is $90 in 1 year for small vacs. Is it WORTH IT?

The big Hoover vacuum that I bought in 2004 still works well. It picks everything. It has not given us any problem at all. I bought it for $150. I have been using it for 5 years now. so, on an average, the Hoover vacuum cost me $30 a year while all the small vacuums together have cost me $90 a year. It is very clear what is more expensive in the end.

So, according to me the small vacs have cost me more and provided me more frustration than the simple big vacuum. I have paid more for a little convenience. Also, if you note, we  put in very little thought when buying small things because they just cost less.

If you have had such shopping experiences that have in the end cost more money, Please write in …

Recently, I have started learning about stocks and options from Trade Smart University. I think this is the best financial decision I have taken this year. There are many reasons for doing and thinking so.

I have always wanted my money to work for me.

This is important to me so that in retirement years, when there is no paycheck coming, I do not run of out money. With the banks giving so low rates, you need to think of some other way to have your money go further.

I want to be in control of my money and my life.

I have always saved and invested money. But until now I had relied on financial advisiors to direct me towards a particular investment. Until October 2008, I did not see anything wrong with it. I did not know about every investment fund out in the market. So, taking help seemed OK. But, now I feel that my money peformance depends on the financial advisior. This is giving control away. I am giving away control of not only my money but also my life, maybe my retirement. This is too much risk that I thought I cannot afford.

No one can take care of my money better than me.

I always knew this but I still let some financial advisor do my investing. In October 2008, no one from UBS (where I have my IRA and investment account) called me and told me to get into cash. I lost a lot of money. My 401K was down more than 50%. This is not acceptable to me anymore.

Why should I pay some advisor a lot of fees to have 50-60% loss? I think and believe I could manage my money better than most financial advisors. Once I took that decision, I decided to learn about the stock market and invest more in stocks and options myself. I came across the site Trade Smart University. I liked their introduction about stocks and hence decided to learn from them. I am now confident that I can not only take care of my money but I can see it grow pretty well.

Money is something you got to make in case you don’t die. - Max Asnas

According to a new survey by Charles Schwab, the recession has not prompted many people to change their behavior and start saving more for retirement.

The quarterly survey found that many Americans are neither financially nor emotionally ready for retirement, even as they approach their retirement years. Almost four in 10 Americans (39 percent) are not currently saving for retirement.

Everyone around me tell “live for the moment”, enjoy and fulfil your wants because you never know about tomorrow, what if you are not there. I say the opposite, what if I am there for more number of years then I would need that money for the basics. This is one of the basic difference between my spouse and me. I think saving for retirement is the ultimate. During retirement we are the most vulnerable, and having money is important. So, let us save for retirement and secure ourselves.

We all buy many products just because they are on mail-in-rebate. And then very easily forget to mail in the rebate. Even if we remember, to mail it in, we may not get the rebate. How many times all this has happened to you? You must have thought there should be a better way to handle it.

Yes, there is.

I have few simple strategies I use to handle Mail-in-Rebates.

• I have a shelf in the pantry that has products bought through mail-in-rebates. I can use that item only after I fill in the mail-in-rebate. This way I see to it that I remember to mail in the rebate.
• I scan the receipts and store it on my computer. This is how I do it. I have a folder named Mail-in-Rebates. Then I have sub-folders within this folder, for each store. For example if you buy something from Walgreen’s that has rebate, put the scanned receipt in the Walgreen sub-folder. I then name the scanned receipts as item_date.jpg. How does this system work for me. I have made copies so I can follow up and resubmit my rebate if I did not get the rebate amount. When I the get the rebate amount, then I delete the folder or the dated file. If the rebate has not arrived and the dated file helps me to keep track of when the 8 weeks get done.

This system works so well for me that I have mailed each and every mail-in-rebate and even received the check. Every smart shopper needs to find a way to use Mail-in-rebates effectively to their advantage and also to save some money.

Did you like this article ? Do you have more effective ways to handle Mail-in-Rebates ? Go  ahead and comment and share it with us.

A penny saved is a penny earned. - Ben Franklin

This proverb is so true even now. While we are earning, we save and those savings become our earnings during retirement when there is no actual earnings. I think we can take this proverb to whole new level. According to me a penny saved is more than a penny earned. I will explain how?
When you earn a penny, you actually have less than a penny because some of it goes in taxes. So, to have a penny you have to earn a penny + the amount that goes in taxes. So, I ask you a question, what is easier?

1) To save a penny to have a penny or

2) To earn more than penny to have a penny.

Any common sense person will say saving is easier. Now let us look into the future. We have huge deficits. If you think that we would be paying higher taxes in the future, then we would have to earn even more than before to have a penny but it will always remain the same value when you save a penny. So, I think we should save more to have more.

Even the proverb says so…

My son is 6 years old. This is the first thing that came to his mind when I asked him about money.

What is money?

Many personal finance gurus and everywhere on the news, there is talk and discussion about one thing and one thing only and that is saving money in this recession.

I am a big saver myself and a big proponent of saving money. But, I am presenting here about an alternative view point : Making more money in this recession. 

Making more money : How simple a solution and yet so complicated and difficult. In this bad job market/recession, we should be saving and also concentrating on earning more money. We all have skills that we could use to have a second source of income. There are so many advantages to starting now. Even if you make no money initially, but the fact that you are doing something on the side besides your job, relieves you of the pressure that you have to some how save/keep your job. Once you feel relieved, you actually would perform better at work. Also, another thing is that you do not stress about saving more. These things happen better because you are not fearful about losing your job or having no money. The mere trying to do something on the side (even if it does not bring in money in the beginning) makes you more confident and in charge of your situation.

 So, all you folks, including myself, start some business or try freelancing on the side and generate another stream of income. If nothing else, you increase your profile in the resume too.

EATING OUT is one of the big ticketed items that can put a strain on any one’s budget.

Here are some tips I use to cut out on just that.

1) Plan your grocery shopping. I usually buy 3-4 vegetables, some fruits and bread for the week. Then I have lentils and beans always at home in my pantry.

2) Advance preparation: This is a trimmed down version of the weekend cooking. Every weekend, I would saute some onions, roast some peppers, potatoes, chicken and store in the refrigerator. Also, I would soak and boil 1-2 lentils or beans (kidney, or chick peas). Then sometimes, I would boil some potatoes in advance.
Once all this is done over the weekend, the cooking time during the weekdays shortens. The time taken to cook is then probably less than the time it would take to get food delievered.

Now you may think, oh! so much planning. It is too hard to do so. To that I would say, do not worry. I am unable to do all this every week myself. Then, I use my backup plan.

I keep some frozen pizzas, Boca burgers and some ready to eat stuff for the unplanned times.

This way I try to prepare my own food daily but sometimes I do indulge in the not so healthy foods.
But Hey! this is helps me keep my habit of eating out under control and also helps us keep some balance in food.

3) Have your spouse cook one day of the week for you. This way you get to eat food made by someone else. There are times when we do not want to cook or do not feel like eating our own cooked food, hence the urge to dine out. I have experienced this a lot. So my solution is that one day of the week my husband cooks dinner. Or we try out a recipe from a cookbook whose taste we do not know. This way, I avoid the urge to eat out when I do not feel like cooking.

Another great tip to avoid eating out.

Happy Cooking and Saving!!

On this Father’s Day as I remember my Dad, I would like to write about the important lesson I learned from him about money and life.

It is about Needs and Wants. I saw him practice everyday.

My dad had a expense journal. He used to write our family daily expenses in that book. Every page on that book had a header and 2 columns all through the page.
The header had the money in checking account. It would be the salary amount that he deposited on the 1st of every month or the amount available this month. The columns were both expenses. But he categorized it as Needs and Wants. Every night, he would enter all the expenses on the basis of needs and wants.

As a child, one day I was looking at his expense journal. I was puzzled looking at the book. There were many pages that had nothing on the left column but a lot of items on the right column. So, I asked him. He explained that the left column was expenses done daily that were “needs” and could not have been avoided at any cost. While the right column had expenses that were “wants”. Then I asked him the obvious question, How do you know what to put in needs column and what to put in the wants column?

He explained that for example today, I paid the electricity bill. I put that in the needs column because if I do not pay that bill, we would have no power. Also, today Mom bought a cooking set. We have 2-3 cooking sets already so, this is a want that we could have avoided.

I asked him then why is the wants column so full while the needs column so empty. He said, we have few needs but a lot of wants. We spend so much money and energy in these small wants. He also said that this is our weakness. If only, we could do less of these wants then we would not be slaves to them. These wants actually make us more unhappy.

At that time I understood his journal and understood a little bit about money and finances. But today I understand the life lesson about why he said it our weakness.

I hope, I could teach this concept to my kids as well as my Dad taught me. Thanks Dad!!!