Category Archives: Savings

Are You A Money Hoarder?

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First, let me start by saying I have the potential to be a money hoarder!  The only thing preventing me from being a money hoarder is I don’t have much money…

Honestly, since freeing myself totally from debt, I’m still finding it hard to spend money.

Oh sure, usually we go out to eat once a week, charging the expense on one of my best reward credit cards.  But if an occasion arises where we might have to go out again during the week for a second time, to meet friends or whatever, I’ll excuse myself from going and stay at home so I don’t have to pay the extra money to cover the cost of eating me eat out twice.  My not eating out might not seem like a lot of savings, but it is considering that our kids still eat off of the kid’s menus, and my wife usually gets a lunch portion.

Hoarding Money At Home

Money Hoarder

I play a fairly frugal game, but I don’t hoard money at home.  The most money in the entire house is probably $500.  I know a lady that has over $100,000 stored at various location around her house, sometimes even in gifts that she gives out by mistake (oops)!  One year, we did a gift exchange and she gave us a cheap blue jar.  But when we opened the jar, it had $5,000 in it!  Boy, we were shocked, and once we told our friends about it, she heard and instantly wanted the money back saying that she made a mistake, and that was one of her hiding places.  Of course, we did return the money, but it left us wondering if she has done that before and how much money she gave away by mistake.

Another time while visiting the same lady, I noticed something barely visible at the top of her kitchen cabinet ledge.  Thinking it was a paper that was attached to the furniture, I reach up and grabbed it to read what it said.  Wouldn’t you know it!  It was a couple of fifty dollar bills.  This particular time, I just put it back and made sure it wasn’t visible and kept quiet.

After the mishap with the jar gift, I asked my friend why she keeps so much money hidden throughout the house, and she said that it made her feel safe!  I, on the other hand, thought that money could go out of the house in the pockets of burglars (if they got wind of the amounts that she kept in her house), or up in smoke if the house were to somehow catch on fire!  I’m pretty sure in the case of a fire, the insurance company would say “Sure you have over $100,000 stored at home instead of a bank”.

Symptoms of Money Hoarding

You see these types of people in the news all the time.  Such and such lived in a small one room house and looked like they were homeless their entire life.  They use discarded newspapers for blankets and picked through restaurant garbage for food.  Then once they die, everyone is surprised that they are really very rich and that these hoarders left all of their money to some college or charity.  That’s not the way money is meant to be used.  I’d rather be poor and live a balanced life than be rich and living like I’m poor!

I know when I spend money on merchandise, I get a little ill if it’s an expensive item.  I used to get a little light-headed and my stomach churns on a purchase such as a big screen TVs.

I think the average person looks down on those money hoarding, Scrooge types.  But perhaps it’s actually some form of hoarding illness or disorder?

Other hoarders are products of how they were raised (this is my case), and while you are able to change a bit more easily than those that are actually suffering a hoarding disorder, it’s still a small problem if it affects your health because you don’t spend money on taking care of yourself.

In my opinion, hoarding money is just as bad as spending money and getting in massive debt.  The correct path is somewhere in the middle…

Cheers,

MR

How I Saved $1190 By Purchasing A Cable Modem

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Back in year 1999, I decided to buy internet access through my local city internet service provider.  Back then Time Warner’s RoadRunner service cost around $50 per month, so I instead I opted to go with my local city ISP who with the annual pre-payment brought the cost for ISP service down from $18 to $13 a month.

But my savings came from a calculated decision to buy a Motorola SURFboard cable modem instead of renting one from my local ISP (Internet Service Provider).

 

Motorola SURFboard

Motorola SURFboard

 

Since I have a technology background, I couldn’t for the life of me understand why my ISP sales representative wanted to rent me a cable modem instead that me just going out and purchasing and connecting it myself…

When the ISP wiring technician came out to run my cable, he thought that I was crazy.  I’ve never seen such a bizarre look from a serviceman before.  Even after I told him that I work with computer and networking technology where I work, he still tried to convince me that I should rent the cable modem instead of me buying my own.  Actually it got to a point where I started getting a bit offended, especially when I told him that when my house was built, I went in and wired it with computer networking cable with a small cabling closet down in the basement that my dad and I installed it (very cheaply too). Actually, I got funny looks from him when I told him I wanted my ISP cable wire to run into the basement where my small (more like an enclosed shelf), cabling closet existed.

Based on the response from the ISP technician, I’m sure that the majority of people in my small city started renting cable modem from them.  Obviously, I didn’t cave and told the wiring technician that I would go out and purchase my own cable modem and install it.  After deducting $115 from the savings, it turns out that I saved over $1190 over the past eleven years.  I feel very vindicated!

If you are currently renting your cable modem from your ISP, you might want to consider going out and purchasing one yourself.  My cable modem finally died this week, and I went out and bought a newer Motorola SURFboard (model SB6120).  Last year, I told my neighbors about my experience and they have since went out and bought their own cable modems too.

If you have a friend that’s good with computers and networking, consider getting him or her to help you.  Offer to take them out of lunch, I’m sure you’ll find that the money you spend on lunch is worth it over the long run.  Oh, that reminds me, make sure you plug your cable modem and router into a decent power strip that has a surge protector!  If you have a friend that’s a techie, they can help you with that too.

Well, I hope my story has help you or someone you know save money!  It took me about a year to recoup the cost, but it was all savings after that point!

Good luck if you decided to take the plunge.  If you do make the purchase, leave me a comment below, it would make my day!

MR

 

Getting Over 15% Return By Saving Money In An ESPP

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First, let mes explain what an ESPP is.  This acronym stand for “Employee Stock Purchase Plan“, and it enables an employee to buy their employer’s stock at a discount (up to 15% off the market price during the purchase date).

The basic ideas of an ESPP is that it slowly drawn a certain amount of your salary and holds it for you to purchase company stock at a certain date in the future.  My employer does such a purchase on a quarterly schedule.  Then at the end of the time-period (again, my employer uses quarters), your employer uses your money that was saved to purchase your employer’s company stock, at a discount mentioned above!  Where I work at, the discount is 15%, which is a great!

When the company stock is purchased, the next day I go in and sell the stocks that was purchased by my employer.  This gives me an instant 15% rate of return on the money that was saved for the purchase!  So to think about it a different way, for those 3 months, I get a 15% gain on the money saved.  Mind you, the term is only 3 months and not an entire year!  So that 15% return is really better than it seems!

If you hold your shares, only selling them after 2 year, you’ll receive better tax treatment, but I’m more than happy to take the 15% return that my employer offers.  Waiting 2 years to sell the shares for better tax treatment seems risky to me.

Not as obvious as the 15% return is the forced saving provided by my employer.  Since I paid off my mortgage, I was having problems saving the money for investing.  Using the ESPP, my employer is basically saving the money for me, while paying me a 15% to do so!  Tell me this isn’t an awesome mechanism or what?

I’ll admit, I’m excited to have my employer pay me to save money!  The best part is that my employer does the work of saving the money for me, and then at the end of the quarter pay me 15% return…  What’s not to love with is deal?

If your employer has an ESPP, are you taking advantage of it?  IMHO, this is one of my best money hacks that I’ve done!  If your employer offers this benefit, look into it and the tax treatment of such a plan!  Perhaps you’ll view this as a win-win like I do!

Bests,

MR

 

Creative Saving

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Creative Saving

We know the ‘go without your morning coffee’ money saving technique but if you’re going to get serious about saving – whether it’s for a new car, camera or the bigger ticket items like apartments and houses – you need to think outside the box.

One approach is to think about the environment. Put pennies in the bank and do your bit for sustainable living. It’s about being more creative about the way we live and save. Here are some ‘outside the box’ ideas:

  • Buy in bulk: Don’t only buy in bulk, start a bulk buying group. This way you reap the full advantage of wholesale prices, avoid paying for packaging and steer away from impulse buys.
  • Work with the weather: It might sound obvious but switching that air conditioning off in the summer and heating off in the winter will go a long way in cutting the ever-increasing energy bills. It can be as easy as keeping the curtains closed in summer and putting on a few extra layers in winter.
  • Flick the switch: Turning the lights off is another seemingly clear but often overlooked step. It can be tempting to leave a lamp on for ‘later’ but for those hours you’re gone electricity – and the money you pay – is going down the drain.

Saving doesn’t begin and end with these points. Not only are there many more environmentally orientated techniques, there are also those that are usually right in front of your eyes:

  • Avoiding unnecessary charges: Late fees. No one wants to read this in an email or letter. Anything from a credit card late fee to library fines makes our skin crawl. Get yourself organized.
  • Limit ‘takeout’: Another seemingly obvious step to take (but one we can often slack on) is hiding or limiting access to those takeout menus. It’s very tempting – come a rainy Monday night after a long day when all you want to do it curl up on the couch with your favourite Thai takeaway – to not think about cooking. If you do make a concerted effort to cook for yourself more often you will end up saving a lot.
  • Walk, bike, train or bus: If you can leave your car at home you can dodge potentially expensive tolls and the money you spend on petrol (not to mention the good it does for the environment). If you can walk to the local shops, walk. If you can ride, ride. The exercise is a bonus too!
  • Credit quota: Avoid spending money you don’t have. Think carefully to yourself when you next flash plastic at a register. Is this something I can afford? Is it really something I need? Will I end up paying more for this with interest? Use cash when you can.

No matter what you’re saving for – while these suggestions are by no means the be all and end all – they should get you started. When most people start to save seriously it’s for the bigger ticket items. Perhaps it’s a home, or apartment. The cash you saved thinking twice about the credit card and flicking the switch will go directly to that deposit. If you’re one of many first home buyers you’ll have the first home owners grant to boost the fund pool too. But whether you’re buying a new car, home or camera you want to make sure you shop around. Just as you would visit a few dealerships to consider the perfect vehicle or compare cameras across outlets you would weigh up the options for home loans. With determination and discipline you could be walking away with, driving off in or letting yourself into your new camera, car and home within no time.

Thanks for the guest post Gemma!

Cheers,

MR