Category Archives: Economy

A Lesson in Silver

Published / by Annie / 13 Comments on A Lesson in Silver

My silly little silver investment has paid off, not in dollars, but in knowledge. I’ve not only learned how to read price charts now but I’ve also realized that there is a big difference between investing in precious metals and the stock market.

While silver, gold, and other precious metals might go up in price you never know exactly when that is going to happen. It is also something of a chore should you decide to sell. If you don’t sell it locally then you have to arrange for a sale with an online broker, package it all up, ship it to them, then wait for them to pay you.

That alone is a pain in the tukus.

The stock market, on the other hand, is a whole lot easier. You buy your stock, wait a bit for the price to go up, then press a few buttons to sell it. You’ll get paid within minutes. I learned this after making a few experimental trades with my new brokerage account. I made a $40 profit just playing around in the past couple of weeks, while the value of my silver has essentially remained flat.

Even better, I’ve learned that certain stocks issue dividends. Buy these stocks and you will receive a small amount of money every one to three months (depending upon how they do their accounting). They are like buying a cow and then selling the milk!

If I can learn how to combine the two methods of investing for dividends and harnessing stock price increases, I should be able to grow my little nest egg into a tidy profit over time. It won’t be overnight, especially with the current stock market fears, but it’s something to look forward to.

In essence, my silver investment may have ended up being a short-term bust, but it taught me more than I would have learned had I not experimented. I’ve even gotten a little memento to keep in my pocket to remind me of what I’ve learned.

What have you learned from your mistakes? Please share your stories in the comments below.

My Silver Has Arrived

Published / by Annie / 10 Comments on My Silver Has Arrived

The fruits of my very first investment have arrived. The mailman delivered the package just a bit ago. My hands shook as I opened the box.

I cried as I held that silver in my hands for the very first time.

I’ve done it. I’ve made my very first step into the big leagues. Tears are streaming down my face as I write this. All of my life I’ve been told that you have to be rich in order to have investments yet here I am, living on minimum wage, holding ten silver rounds – my first investment – in the palm of my hand.

The big dogs might laugh at me for my paltry purchase but I don’t care. My tiny little paycheck might not be much but that’s not going to stop me! I’ll invest and I’ll keep investing until I achieve my goal of true financial independence. And once I figure out how to do it I will stand on the rooftops and shout it out to all of my friends. You don’t have to remain poor, even if all you have to your name is a minimum wage income. For far too long the realm of building wealth has been the domain of the Big Dogs; let’s see how they like it when us scrappers enter the ring.

Unlike those rich farts I don’t need a lot of money to live on. That gives me a big advantage. It may take me a while to do it but I know how to save money and I’m learning how to make it work for me. They’ll be no stopping me once I figure it out.

But for now I am going to sit here and play Scrooge MacDuck. I’m going to close my eyes, play this silver through my fingers, and imagine what it will feel like as my safety net builds. After that I’m going to march my happy butt down to the bank and stick nine of these coins into my safety deposit box. I’m keeping one in my pocket for inspiration.

Getting Serious About Finances

Published / by Annie / 6 Comments on Getting Serious About Finances

While many of the so-called experts are crying, I’ve discovered that my decision to enter the stock market could not have come at a better time. The US Government has decided that inflation is out of control so they’ve started to raise interest rates to “cool off” the economy.

According to my research, every single time the Fed raises rates, stock prices take a hit as emotional investors panic and others move out of the stock market into safer investments like government bonds.

This is very good news for me, because it means that I’ll be able to buy stocks at bargain basement prices.

In order to maximize my long-term profit, I need to take advantage of this dip. The more I can invest now, the better off I’ll be in the future. That means I have to get really serious about my finances.

I picked up a copy of Your Money of Your Life in hopes of some pointers. The book is filled to the brim with helpful information, but one thing I gleaned from the text was the fact that I need to account for every single penny I spend in order to learn where I stand financially and keep track of the progress that I am making.

I tried to do this on the computer at first, using my knowledge of Excel, and I fell flat on my face. I spent more time trying to use the darned program than actually entering information. I switched around to several free finance applications, only to run into the same issue. I ended up being so frustrated that I was ready to toss my computer against the wall!

So I went back to what I know. I understand the basics of paper accounting. I used that method to keep track of my budget for years during the early days, until my budget became so low I didn’t need to bother. I invested in a ledger and got to work.

Every single penny I spend is documented accordingly. It’s a bit of a chore, but it has made me more conscious of how I spend money. For the first time in my life I’m actually documenting how much I spend on food, books, and other items. I intend to use that knowledge to target areas where I can save in order to maximize the amount I have to invest while the market is in this slump.

Once I have a few months’ of numbers available, I’ll even go into parts of my budget that I’ve never discussed before–like groceries. Perhaps that will help you learn a bit more about controlling your finances, as well as show you a bit more about how I spend my money on a daily basis.

If you’re interested, that is.

Have you ever kept track of every penny you spend? Please share your stories in the comments below.

Learning From the Past

Published / by Annie / 3 Comments on Learning From the Past

Back in the 1980’s my father, encouraged by friends and family, decided to get involved with the stock market. I’ll never forget my surprise when I discovered that he actually checked two books out of the library and started reading them. Dad never read books.

But these he did. Then he snagged a subscription to the local Herald Leader. He poured over the financial pages, weighed his options, opened a brokerage account, and invested in American Motors.

A few months after that he pulled out at a significant loss.

What can I learn from this? I’ve dug through my mind, searching for clues in hopes of learning from my dad’s mistake, and I’ve learned a lot as a result.

Two Books Do Not Knowledge Make

Dad based his knowledge on two books that he checked out from the library. I’m not even sure that he read both of them. Dad was certainly not a reader. If there is one thing I have learned in my life, it is to not base your knowledge (or your financial future) on just one or two books. The more you read, the more pieces to the puzzle you will find, and the more practical knowledge will stick in your brain.

I’ve easily gotten my dad beat on this score already. I’ve read a handful of books and I’ve got even more on the way to read and study. I’ve even working up a list of books on specific areas of the stock market to acquire and study as time and money allows.

I Have the Internet

Unlike my dad, I’ve got the Internet–and I know how to use it. I can use the Internet to do in-depth research on a company, and I have just enough bookkeeping knowledge thanks to my failed attempts at college to read the SEC filings and translate them to English. I might not be able to understand everything that I read, but I can understand enough to know whether a company is making money, has a history of turning a profit, if they have a long, stable history of issuing dividends even in financial down-turns (we’ve had several of them over the past couple of decades for reference), and whether insiders are buying or selling a particular stock.

I can also go online at any point to immediately see how my stocks are doing. I don’t have to call a broker or trust him to do what I need; all I have to do visit a website.

This is a huge advantage in itself.

I Have a Different Mindset

My family was struggling back in the 1980’s. Dad had his leg amputated early on in that decade so he had went from making big bucks by working two jobs and owning rental property to supporting us on Social Security Disability. During the stretch of time when he became involved in the stock market, he’d also lost the ability to bootleg for extra cash thanks to some legal problems he was involved in.

Because of his personal challenges, he was scared. He was darting around, trying to figure out ways to make a quick buck because he didn’t know how he was going to be able to support us otherwise. My parents may have been cheap but they weren’t necessarily frugal. As a result, they didn’t know how to live on extremely little.

I may be poor but I’m far from desperate. I know beyond a shadow of a doubt that I’ll be just fine working a minimum wage job. I could even get a higher-paying job if I wanted one.

Most importantly, I have no one to support but myself now. My kid is grown and paying her own way in the world. I know what it’s like to worry about how to support your family, how frightening it is trying to make your money stretch as far as you can. Unlike my father I have no one to support but myself.

Instead of looking at this as “I’ve got to make money in order to survive,” I’m looking at this as “if I can figure this out I’ll be able to feather my nest so I won’t have to work so hard in the future, and I won’t have to worry if something happens that prevents me from working later on in my life.”

I also know that if I lose money that I’ll be able to survive the loss. I’ll be able to make it back. I could get a better paying job, re-open my computer repair business, promote my books a bit harder…as long as I don’t go overboard and destroy my pillow, I know I’ll be just fine, regardless of what happens.

I Have the Advantage

In looking through the past I’ve learned that I have a distinct advantage over my father. I intend to take that advantage and run with it.

What’s the worst that can happen? I lose a bit of money, end up having to work through my retirement–I’ll have to do that anyway if I don’t try, so unlike my dad I’ve got nothing to lose. Even better, if I make this work I’ll be able to help others learn how to improve their lives as well.

Looking to the Future

Now that I’ve analyzed my past, it is time to look towards my future. Time to get back to work.

Have you ever analyzed your past in order to learn from yours (or others) mistakes? Please share your stories in the comments below.

What Can I Use to Become Rich?

Published / by Annie / 2 Comments on What Can I Use to Become Rich?

Okay, I’ve calmed down a bit since I wrote that last post. I’ve realized that I want to do this, despite my doubts and fears. The next step is to figure out what I have to work with right now. I’ll worry about how to apply that in the future.

I bring home $600 a month from my public job. I can live on that easily with my current expense rate. That leaves me $84 a month (give or take) in book royalties I can invest but if I work it right, I might be able to chip in a bit more by conserving the money I earn from my day job.

I am an expert when it comes to frugality. I know of no one else who can live on as little as I do. I can use that to my advantage to achieve this goal.

I also have another advantage: I can learn how to do anything by reading books and stuff. Over the years I’ve taught myself how to fix computers, repair things that broke in the homes I lived in, do basic repairs on the vehicles I owned…I even used this skill to learn how to write online, start this website, and eventually write and publish books. If I apply this skill to the task of learning how to earn more money, I’ll eventually hit on an idea that will work. I’ll probably encounter a whole lot of ideas that don’t work, but that’s part of the process.

With this in mind it is time to officially alter my game plan. I will invest extra money left over from my day job into books about business and finance. I already started that a while back when I scored several books at the library book sale while I was contemplating this decision so it is time to get to work. Between socking away my royalty income and searching for answers, I’ll figure out a way to do this.

 

 

Who Do I Think I Am, Wanting to Get Rich?

Published / by Annie / 18 Comments on Who Do I Think I Am, Wanting to Get Rich?

The past few days have been filled with tormenting thoughts. Just who in the hell do I think I am, trying to get rich? Even though my goal is simply to become financially secure, to have enough money to be safe in the event I ever have to stop working again, the thought torments me just the same.

Think about it: I’m an uneducated, dirt-poor single mother probably suffering from Empty Nest Syndrome as I listen to my daughter discuss her plans to marry and move away. I bring home about $600 a month in a minimum wage job. Last month I received a whopping $84 in book royalties yet here I am, studying my ass off as I work to come up with a plan to spin that paltry amount into enough money to provide a living wage to prepare for a point in the future where I wouldn’t have to work.

I mean, I’ve ran the numbers. It would take $500,000 at 1.5% interest (my current savings account rate) to generate $7,500 a year annual income. That amount would bring in less than $600 a month income after taxes ($625/month pre-tax). I can’t even conceive of having $500,000 in the bank, much less how to build up that type of money. There is no way on earth I can just stick that $84 a month into a savings account and build it to that amount in my lifetime, much less in a shorter amount of time.

If I took part of that $500,000 and invested in a cheap home for me, that would eliminate my rent expense, however. When the kid moves out I will have to pay the whole amount of $250 a month for rent. Using that as a base number (since the kid leaving is inevitable), if I continued to pay $250 a month to myself after I had a house that was paid for, the gap between where I am and what I want to do gets a bit easier to manage. If I reserved $100 a month of that amount for property taxes, repairs, and maintenance, I would then have another $150 a month to invest.

That would allow me to save a total of $234 a month towards my goal of being financially secure when combined with my monthly royalty payments, provided they stay steady.

But there’s a big whopping problem with that scenario: I’d have to find the money to buy a house in the first place. I don’t have a large amount in savings aside from the $1,000 pillow I keep in my checking account for emergencies. That is not near enough for what I would need to start that plan.

So who the hell do I think I am, getting the high-falutin’ notion of becoming rich? The odds against me are so astronomical I cried myself to sleep last night just thinking about it. It’s no wonder so many people in my situation don’t even try.

Okay, I’ve had my rant. It’s time to suck it up and move on. I don’t have to worry about the end point right now; all I have to do is focus on the Baby Steps. I can do this.

I hope.

 

I’m Making a Profit!

Published / by Annie / 2 Comments on I’m Making a Profit!

The other day I mailed off a check to buy 10 ounces of Silver Bullion at $16.45 an ounce.

I checked the market prices today.

I bought ten ounces of the stuff; that means that so far I’ve made $4.10 on my investment and it hasn’t even arrived yet! Oh my God! That’s over half of an hour’s wage!

Okay, so in the long run four bucks isn’t much but it’s a start. Even better, that’s a helluva lot more than I would have earned if I had stuck that paycheck into savings. It would have taken me YEARS to make that much money at 1.5% interest!

I’m chuffed, to say the least. My very first investment is actually earning a profit. Can’t wait to see what I’ve bought!

My First Investment

Published / by Annie / 2 Comments on My First Investment

Note: this website runs a bit behind my real life. Judge my numbers accordingly.

Baby steps can move mountains. I know this; I used a progression of baby steps to not only manage to survive while raising my kids as a single mother, I used baby steps when I began my computer repair business and to learn how to start a website, write and publish books for extra money.

But it takes money to make money, or so the saying goes. It’s the ones with the big bucks to invest that make the fortunes. I don’t have big bucks; all I’ve got to start is one $160 paycheck. Sticking that puppy directly into my savings is highly tempting; the money will be insured and I’ll earn a few pennies in interest.

Can I do better than that?

I stumbled upon an article the other day that declared the death of the Silver Market. I’ve heard time and again that the most successful investors sell when others are buying and buy when others are selling. Silver has been used as currency for thousands of years; even now it is popular in the jewelry market. I’ve always loved silver jewelry, so much so that my daughter even bought me a sterling silver Mother’s Ring for my birthday earlier this year:

With that in mind I decided to check out the Silver Market. I quickly read up on it, learned how to figure out the current price of silver, and how to buy the stuff. There are two ways to do it. You can buy paper Silver, which is essentially a piece of paper that says you own X amount of silver that is stored somewhere else, or you can buy pieces of the metal yourself in the form of coins, rounds, or bars. If you buy pieces of silver, they will be shipped to you so you also have to work out how to keep them safe until you decide to cash in your investment.

The good thing about actually buying the pieces of silver is that I could stash them away somewhere. I wouldn’t be tempted to spend them every time I check my bank balance. More importantly, I would have something to actually hold in my hand for inspiration whenever I became plagued with doubts.

Worst case scenario I could have it melted down by a jeweler to create jewelry if the investment fails to pay off. I’d have a pretty piece of bling at least.

I found a reputable dealer online after a bit more research. To my delight, they were running a special: ten troy ounces of silver rounds at spot (market) price. Since most places charge a bit over market to cover shipping and make a profit I was delighted. To maximize my investment I decided to lock in the price on their website and mail them a paper check. They charge extra if you pay online.

So now, not only am I doing better than many Americans because I have more than $500 in the bank, I now have an investment in precious metals on the way. They will ship as soon as my check clears the bank.

I have no idea what the heck I just ordered to be honest. According to the description I will receive a tube that contains ten silver “rounds” – whatever that is. All I know is that it will be .999 pure silver bullion. I know that I’m taking a risk, considering how little I know about this stuff but you know what? I’ve wasted more than that doing stupid stuff before.

I’m scared but exhilarated just the same. I’ve made a baby step, wrong or right. That’s progress at least. Whatever happens, It sure beats the hell out of just sitting here reading books and wishing for something to happen.

I’ll keep you posted.

A New Focus

Published / by Annie / 4 Comments on A New Focus

First off, I want to thank everyone who has commented or messaged me with suggestions. You are awesome, and you’ve given me a lot to think about.

Second, I’ve been burning the midnight oil as I try to work out a way where I, the Shoestring Girl herself, can build up some sort of passive income stream that will support me in the future so that I won’t have to worry about working should I become unable to.

I’ve temporarily ruled out real estate, though it is something I would like to explore once I get my income in a higher range. As it is, with Katie planning to move out at some point in the future, the expense of acquiring a vehicle to attend any real estate purchases is a bit more than I feel my current finances can handle. The insurance alone (since I haven’t had any for several years) would destroy my budget.

My research has revealed that the stock market has a very low entry point; you can start an account with no minimum deposit; a variety of stocks trading there go for a pittance. Did you know that Ford Motor company is currently trading for around $12 a share? I was floored at some of the prices listed. I thought you had to be rich to even enter that arena.

Thanks to Carla for recommending that I read about Derek Foster! I’ve got two of his books due to arrive any day now. In the meantime I’ve acquired several books on the stock market to read while I’m waiting. Here is a list of the titles:

  • Buffetology
  • Investing for Dummies
  • The Intelligent Investor
  • Get Rich Carefully

This is going to be interesting. I know nothing about the stock market except for the fact that my dad invested in it when I was a teen and lost a small fortune. Since he invested with Merrill Lynch I decided to sign up for an account with Merrill Edge, their online brokerage. They have no minimum deposit to start, they have a ton of information available to help beginners, and they charge a flat rate of $6.95 a trade. I found cheaper brokerages out there but sentimentality won out.

Let’s see if this old bird can figure this out.

Difference Between the Poor and Wealthy

Published / by Annie / 6 Comments on Difference Between the Poor and Wealthy

I’ve spent my nights after work and my days off researching the wealthy. I wanted to learn what they did differently in their lives to see if I could learn from it. To my surprise, I tend to behave rather similar to wealthy folk in some areas.

I read a lot for self-education. This one seems to top most of the lists I’ve come across. While unsuccessful people tend to be big sports fans and watch a lot of movies and television shows, the wealthy tend to spend more time reading. Warren Buffett spends several hours a day reading, for instance. That is probably why the millionaire I met years ago advised me to read books written by people who had accomplished the things I wanted to do in order to improve my knowledge. I would not be where I am today if not for taking his advice to heart.

Wealthy people invest in themselves. Whether it be investing in their health or their education, they tend to spend more time and money to improve themselves than the poor do. While I don’t have much use for the medical community, I do spend a small fortune in books for self-education.

There are other items on the lists I’ve uncovered, but one item in particular stood out.

While the rich buy assets, the poor tend to buy liabilities.

What does this mean? It means that the rich tend to spend their money on things that will make them money instead of costing them money. For instance, while a poor person (I hate to use this term on someone who can afford to do something I can’t currently dream of) might buy a boat what will cost them in taxes, marina fees, and whatnot, a wealthy person would use the money to buy a piece of a business or some rental property. As a result, while the wealth of a person with a poverty mindset will decrease over time, the wealth of someone with a rich mindset will grow.

To my surprise, I’ve discovered that it’s not really about how much money you make. Doctors and lawyers have a lot of money coming in but since they don’t buy many assets quite a few of them struggle financially. Truly wealthy people actually frown on the behavior of these people, since they invest in bling instead of their futures.

Looking back on my life I’ve seen where I’ve committed the exact same mistake. Instead of using any extra cash I had on hand to invest in assets, I merely saved it, stretching it so that I could take time off to spend with my kids. While I don’t regret this decision, I no longer have children to worry about so it is time I start to change that mindset.

Now the next question is: how do I apply what I’ve learned?

Clearance and Coupons

Published / by Annie / 4 Comments on Clearance and Coupons

The other day my daughter and I decided to visit a local store and search for bargains. While many times we don’t find anything that we need, occasionally we come across a really good deal.

This occasion we struck pay dirt. The store had clearanced four boxes of Alka Seltzer Night Time Cold Medicine for $3 a box.

This is one of our staples in the winter when we don’t feel well. We typically spend $6 or more a box during cold season since local stores occasionally raise the price in winter. The normal price at that store was $6 a box so we knew we would save at least $12 on the purchase. We grabbed all four boxes and headed to the checkout.

My kid happened to have an app on her phone that will apply any available coupons to purchases made at that store. She did her thing on the two I purchased (we split the expense in half since we both use the stuff) and to our surprise saved another dollar per box!

We ended up purchasing four boxes of our favorite cold medicine for $2 a box instead of the regular $6. That ends up being a savings of $16.96 once we add in the sales tax we would have had to pay on the higher price. We saved 2.32 hours of income (more if you calculate taxes) simply by watching for bargains, buying in bulk, and applying available coupon discounts.

Two hours’ of wages, folks! That’s two hours of our lives we won’t have to spend working to purchase something we need and use. Since we split the cost we both saved over an hour’s wage each.

We’re rather chuffed about that. Even better, we now have the supplies on hand for the upcoming winter so we won’t have to walk to the store while ill to purchase what we need.

Have you scored any real good deals lately? Please share your stories in the comments below.

What I Really Want

Published / by Annie / 13 Comments on What I Really Want

I’ve done a lot of thinking as my Katie’s graduation approached and even more now that I know she will leave the nest in a few short months. What next? What do I want to do now that I know I’ll be on my own?

I honestly don’t know. I don’t know if I want to remain here, relocate, or do something entirely different. I mull over the possibilities and I come up blank.

I do know one thing, however. I don’t want to ever struggle financially again. While I enjoy my simple, frugal lifestyle, I want to build up a larger margin of safety than I’ve had in the past. I want to know that I’ll be okay whether I work a public job in the future or not.

I could do this by marketing my books more aggressively but to do so would compromise my morals. How can I in good conscience market to a group of people who are already struggling financially? I started writing to help people, not rob them blind!

The answer is I can’t. Not if I want to sleep at night.

So I’m going to have to do some research. I want to build up another source of passive income that is unrelated to this website or my book sales. I want to build it to the point where it can not only support this website in the event my book sales completely tank, but to the point where it can support me whether I work a public job or not.

Now, there are a lot of scams out there that promise to do that. I want to avoid them, so instead of following the crowd I’m instead going to study those who have managed to do what I want to do. Since the Average Joe doesn’t get much press, I’m going to research wealthy people, those who started with very little and ended up rich enough that someone wrote a book about them.

Hopefully I can figure out how to apply what I learn to my own life and develop a system that will allow me to not only build a better nest egg for myself but to give you an idea of something you can do to improve your own financial picture.

To start, I know that Chris Gardner was homeless and somehow managed to get a job in the stock market to build his wealth. Steve Jobs, Bill Gates, and others started their own businesses. Robert Kiyosaki made his fortune in real estate as did many of the people who were featured in the “Millionaire Next Door” books written by Thomas Stanley. At the moment I don’t have the resources to even consider real estate as an option so I’ll have to read, and keep reading, until I figure out something that I can start from where I currently stand.

Any suggestions you have concerning research would be extremely welcome. Thank you.

No Regrets

Published / by Annie / 11 Comments on No Regrets

Now that the kid has graduated from high school, what do I do now? My whole focus these past decades has been caring for her.

So now that she’s engaged, that her life is heading in a direction different from mine, it is time to start thinking hard about my next step. Do I want to continue as I am? If not, what do I want to change?

I know I prefer a simpler life, but I also know that I don’t want to take a chance on history repeating itself. Those lean years continue to haunt me. I don’t ever want to experience that again!

It is time to hit the drawing board, to figure out my next big goal in life. Before I do that, however, I want to share something with my haters.

For those who told me that I was lazy, who complained that the only reason I wanted to live on less was to avoid working, you can kiss my lily white ass. I wanted to spend as much time with my daughter as possible but in order to do that I had to stretch my money as far as it could go. It’s kinda hard to spend time with your kids when you’re working your ass off.

I lived on less, worked less, simply so that I could enjoy the fleeting time I had with my daughter, and I don’t care what anyone thinks about that. I also shared my skills to help others make ends meet easier, regardless of their personal reasons.

I have no regrets.

How to Start Buying in Bulk

Published / by Annie / 3 Comments on How to Start Buying in Bulk

It can be a challenge to switch from only purchasing what you need to buying in bulk. Not only do you have to figure out where to put the items you purchase you need to save up money so you can start buying.

I enountered that issue when I resolved to return to my old stockpiling habits here. Money was tight since I was still recovering financially from my injury. I’d also repurposed my old stockpile storage to maximize my living space but with a little shifting of both possessions and finances I made it work.

Create a storage space

You will need to designate a place to store your stockpile. The area will need to be clean, dry, and protected from vermin. A metal shelf in an out of the way spot is ideal if you don’t have a convenient closet or pantry. Try not to store your supplies around water sources in the winter. A broken pipe can destroy a fortune in paper supplies really fast. I learned that the hard way many years ago. I stored my bathroom tissue stockpile beneath my bathroom sink. When the pipes burst I lost a small fortune. Mice and rats can also be a threat to your supplies so make sure you have traps, poison, or other deterrents near your storage areas. I keep the majority of my stockpile on a wire shelf that is kept far enough off of the floor and away from walls to prevent them from climbing onto it. My cats like to help guard my supplies as well.

Start small

Unless you decide to devote part of your income tax refund to the investment your funds will be limited at first. You can overcome this by selecting one or two items at a time to stock up on. I started out by buying a stockpile of bathroom tissue on my first payday. The next payday I laid in a supply of paper towels. Over time as those needs were met I expanded to other items like soap, shampoo, feminine hygeine products, pet food and the like as money allowed.

At first it will seem as if you are spending more (which you actually will be in the beginning) but over time you will begin to reap the savings. As it is, we are now able to make a large purchase once a month or so to keep plenty of supplies on hand.

Take advantage of windfalls

Instead of splurging on treats when a windfall comes, use part of it to increase your stockpile. I use my income tax refund to stock up on all sorts of items and try to purchase enough of certain things to last us the entire year or longer. This increases our money savings as prices tend to rise over time.

Watch for sales

When something you use goes on sale, purchase extra when you can even if you already have a supply on hand. I had recently purchased a large package of paper towels a few weeks before my store offered them on sale but I still purchased some because I knew it would save money in the long run.

Consider online purchases

Online stores will frequently offer closeouts and bargains to online shoppers that aren’t available locally while some offer significant discounts to first-time customers. My daughter stocked up on leggings the other day with this method. She discovered that an online store offered her favorite leggings at a 50% discount to new customers. She purchased several pairs and saved a week’s wage as a result. That was like getting an extra paycheck, especially since the leggings in question will last her for several years.

The savings can really add up, even if you only work for minimum wage like we do.

Use social media

It is becoming common for extreme couponers to offer items for sale in social media groups at a significant discount. Joining these groups can save you a small fortune on your favorite brands.

Keep extra money available

Always keep money in your account to take advantage of unexpected sales. You never know when a local store will decide to go out of business and sell their remaining stock at a HUGE discount. I’ve seen some places decide to sell everything in their store for 90% off or simply have a crazy low price for everything. It is also common for stores to stock up on a bargain that they’ve found and pass the savings on to their customers. Keeping money on hand for these unexpected bargains can save you a small fortune.

What other tips do you know that will help people learn how to stockpile and save money? Please share your stories in the comments below.

The Art of Buying in Bulk

Published / by Annie / 6 Comments on The Art of Buying in Bulk

I was taught as a child that buying items in bulk not only saved money when you purchased the items on sale or at a discount, it made life considerably easier because you didn’t have to worry about running out of stuff constantly.

I must confess that over the past few years I questioned that teaching. Minimalist gurus preach expansively against the practice and encourage you to buy only what you need when you need it. I watched my friends purchase just enough supplies to last until their next pay periods and questioned them extensively about the practice, hoping for some tips. While some of them touted the benefit of having the ability to switch brands on a whim and keep up with changing needs, I noticed that they all shared a common refrain: they only purchased what they needed at the time because that was all they could afford.

Despite the fact that this raised alarms in my head I decided to try it. I used up my stockpiles and followed the practice for several years. While it does make shifting brands easier and allow you to avoid large stockpiles of items that you stop using as your needs change, I discovered the hard way that it costs a significant amount more than my old method of stocking up. I also discovered that, on many items such as bathroom tissue and basic cleaning supplies, I didn’t switch brands near as often as some claimed to do. In fact, I realized that the primary reason many of my friends switched brands so frequently was due to cost. They would buy what they could afford at the time even if it wasn’t the brand they preferred.

More importantly, I discovered that it’s a pain in the ass to go shopping every single payday, especially when you don’t own a vehicle.

My current job allows me to see the differences between those who buy in bulk and those who refrain. I noticed that the ones who purchase large amounts of items on sale tend to be wealthier than those who do not. It breaks my heart to see a customer forced to count their pennies in order to purchase a single roll of bathroom tissue, especially when I know from my research that they would save money in the long run if they had simply purchased larger packages to begin with. While I know from experience that financial challenges strike all of us from time to time, buying in bulk when money allows simply makes sense.

The Art of Buying in Bulk

Stock up when money is plentiful. Income tax season is an ideal time to purchase stockpiles of things that you know you will use. Bathroom tissue, paper towels, feminine hygeine products, and cleaning supplies won’t go bad just sitting on a shelf so stock up on these items whenever you can take advantage of sales. I make it a habit to take advantage of back to school season to stock up on notebooks, office supplies, panties, socks, and other items that are offered at a discount then.

Keep money in reserve to take advantage of sales. You never know when you will stumble upon a good bargain so it pays to keep some money available to take advantage of these opportunities. For instance, just the other day the store I work at offered a 16-pack of paper towels for a dollar less than the regular price on two 8-packs of the same brand. While we don’t use a lot of paper towels (one roll typically lasts us a couple of months), the dollar I saved is a dollar (or more, if prices go up) I won’t have to worry about earning in the future.

Know what you need and use. Keep an eye on your stash so that you will know when you are getting low on something. This allows you to start looking for sales before the need is urgent. Few things are more annoying than to discover that you’re on your last roll of bathroom tissue or your last sanitary napkin while you’re sitting on the commode. Last minute purchases can eliminate your money savings.

Use caution when stockpiling perishable items. It isn’t a bargain if most of it will go bad before you use it. Watch your expiration dates carefully. For instance, it saves us money to purchase milk in gallon containers as opposed to half-gallon but there are times when we don’t drink it all before it goes bad. To combat this we buy the containers with the longest expiration date and never purchase more than a gallon at a time regardless of price. We also refuse to purchase milk on clearance since we know it will go bad long before we can drink it all. While canned goods can last for years past the expiration date, items like flour, milk, crackers, and cereal have a limited shelf life.

Stock up during clearance sales. My daughter enjoys giving gifts so after Christmas we stocked up on wrapping paper and related supplies when they were placed on clearance for half price. We focused on items that could be used for any occasion but also selected a few things specifically for the Christmas holiday season. We saved the equivalent of several hours’ wages by doing that.

Check the per-unit price. On some items it is actually cheaper to purchase several small containers of an item instead of a single larger one. For instance, the store I work at purchases four pound bags of sugar by the pallet to save money, passing the savings onto their customers. Since the demand is less, they actually spend more to purchase larger packages of sugar. The people I observe buying the larger packages don’t seem to realize that they aren’t saving any money in this case. While occasionally the larger packages can be offered at a savings, it pays to bring a calculator to verify.

Avoid stockpiling fads. Children are fickle creatures. While they may go through copious amounts of a certain item for a time, the day will come when they suddenly decide not to use it any longer. When my children were younger they would go crazy over a certain brand of cereal. I would stock up only to discover a few days or weeks later that they wanted to move on to something else. I ate a lot of super sweet garbage to avoid waste in those days!

Set aside a place to store your stockpile. It won’t save you any money if the items get destroyed before you can use them. I have spaces reserved in my cabinets and on a shelf to avoid this occurrence.

Never use credit to stockpile. The interest charges will eliminate any money you save.

That’s all there is to it. By taking advantage of sales and buying in bulk you will not only remove the need to purchase certain necessities constantly, you will be able to keep more of your paycheck in the end.

Do you buy in bulk? Please share your stories in the comments below.

Grocery Savings

Published / by Annie / 2 Comments on Grocery Savings

One of the things I have never done is factor the cost of food into my budget. Our spending varies too much based on bargains, bulk buying, and available finances for us to set aside a certain amount every month.

While some months we barely buy the basics like milk, other months we come across good deals to take advantage of or we use our available cash to stock up on staples. Our grocery store jobs have really benefited us in this area.

For instance, the grocery I work at had several cases of Manwich that were marked down to ten cents a can in order to liquidate their stock before the expiration date last year. Since I am well aware of the fact that canned goods can last for years, I bought a case of 24. I spent $2.40 as opposed to the $24.00 or more I would have normally paid (I can’t recall their everyday price but I know it was over a dollar a can the last time I purchased it).

My chest freezer has a tidy supply of Hawaiian Sweet Rolls–a treat in our house–that I purchased for a quarter apiece along with a nice stockpile of meat that was placed on clearance or on sale.

My most recent purchase was a case of Mac and Cheese. They were nearing their expiration date but since that stuff will last for ages past that I snagged it without hesitation. Katie loves the stuff so I routinely use it as a base to make other dishes when we have it available.

I paid $4.99 for a case of 24 boxes, which equals up to twenty cents a box. The current price for the stuff is 39 cents a box, meaning that I purchased it for roughly half-price. It will take us several months to use up this supply; I expect it to last us for most of the year. Even better I managed to save most of an hour’s wage by buying in bulk when I discovered the bargain.

Do you purchase food in bulk when you run across a good deal? Please share your stories in the comments below.

Bill Collectors

Published / by Annie / 5 Comments on Bill Collectors

Several months ago I received a phone call. It was a debt collector, claiming that I owed money on an old debt.

Since I’ve been living and writing about the stupidity of debt for a decade, I was skeptical. Even if I did happen to owe something to someone that I magically didn’t remember, that debt would have fallen off of my credit report years ago.

“You do realize that you’re talking to a woman who preaches against credit, right?” I informed the man when I stopped laughing. “I’ve been writing books and articles condemning credit for a decade. Now, tell me just why you believe this debt is mine.”

He did. He claimed that I had opened a credit card over a decade ago and then stopped paying on it some time later. I asked him for the address where I lived when I had the card.

I hadn’t lived in that house for twenty years and I told him as much. “Unless you can give me an address where I’ve lived within the legal statute of limitations on debt, I’m going to have to conclude that this is a scam,” I informed him calmly.

He couldn’t. The man didn’t have a single address for me other than the original one he mentioned.

I didn’t take out a credit card when I lived at that address. I was far too broke at the time to even consider it.

The man huffed and informed me that the debt would damage my credit rating and haunt me for X more years. I laughed. “Do your worst. I don’t own a house, I don’t even own a car, so I have nothing you can place a lien on. So unless you can supply me with valid proof that this debt is mine, I’ll just take my chances. I don’t use credit anyway.”

The man promised me that he would send the information on. I gave him my current address and told him I would look for it.

That was several months ago. I’ve not received a single thing.

Since then I’ve done a bit of research on bill collectors. There’s a scam going on where companies will create completely false debts in hopes that the marks will pay. Here is one particular article that I found rather interesting on the subject.

This is just one reason why I don’t believe in using credit. Not only do you pay a ridiculous amount of money for the ability to live above your means, you open yourselves up to predators who steal your information and attempt to bully you into paying on debts you don’t actually have.

Be warned, folks.

Cash register

It Pays to Use Cash

Published / by Annie / 5 Comments on It Pays to Use Cash

How do you handle your money? Do you deposit your check every payday and then swipe your card when you want to buy something?

Every time you swipe your card in public you place yourself in danger. Not only do you put yourself at risk of having your card information stolen by skimmers, you also run the risk of spending more money. Studies have shown that people who prefer cash over cards spend less money. Even worse, some banks charge you a fee every time you swipe your card. My personal bank charges me a dollar every time I use my bank card as a debit card at stores.

Carrying cash can eliminate this issue. If you withdraw the amount of cash you have budgeted for gas, groceries, lunch, and other extras during that pay period, you eliminate the danger of overspending. You know you have so much money for the week, so you need to be careful with your money.

Paying cash also eliminates any chance that you will fall prey to a skimmer. They can’t steal your card information if you don’t give them access to your card in the first place.

If you’re worried about being robbed of your cash, place your money in a place where thieves won’t look for it. My father kept his stash in his sock; I keep mine in an assortment of places aside from my wallet (no, I’m not going to tell you where). It also helps if you don’t attract attention by driving fancy vehicles or dressing in clothing that indicates you’ve got money. It makes little sense to rob someone who appears to be broke just to get a few pennies. Dressing simpler also comes in handy when haggling for a lower price. Some sellers tend to charge more if they think you can afford it.

While you can’t pay cash when shopping online, you can do this for the everyday purchases you make locally. Food, fuel, and other everyday purchases can be made just as easily with cash as with plastic.

If you are not paying cash for your everyday purchases, you need to start doing it now. Your budget will thank you.

 

A Pillow for your Bank Account

Published / by Annie / 4 Comments on A Pillow for your Bank Account

It’s happened to all of us. We spend more than we anticipate, a hacker steals our card info, even a mistake at the bank can lead to overdrafts. Just the other day a mistake at a local bank caused the accounts of several personal friends to appear overdrawn due to an accidental double-posting of charges.

Keeping a financial cushion in your checking account can help immensely. It can not only help prevent overdraft fees (without paying for another service), it can give you needed funds while you sort out the issue.

I keep a minimum of $500 in my checking account for this purpose. I never allow my balance to go below this amount. That way, if I ever do make a mistake while budgeting I know that I won’t have to pay outrageous overdraft fees. I call this my pillow since it cushions me if I fall.

It isn’t always easy to build up a financial cushion, especially when you don’t make a lot of money. I limit how much I spend each month so that I have a little left over to add to my padding. In time I plan to build my cushion to $1,000, the amount I kept in reserve for years but since times were lean a few years back I am still working towards that goal.

It may sound insane to some of you. You may be thinking “How can I save $500? I can barely pay my bills as it is!” but I promise you that it is possible. You may not be able to eat out as much or splurge on those little extras but you can do this. If I can build up $500 while earning minimum wage at a part-time job then you can do it no matter what your story may be.

More importantly, you should. My local bank charges almost $40 in overdraft fees per charge; a single mistake can cost you hundreds of dollars in fees if you use your bank card routinely.

I learned this lesson the hard way. Several years ago an attorney I hired cashed their check a week earlier than agreed. While there was enough in the account to cover it my balance was wiped out. I ended up owing over $250 in overdraft fees alone, on top of my other charges (which my bank thankfully paid). It took a while to climb out of that hole.

Ever since then I have insisted upon keeping a pillow of cash in my checking account on top of my regular savings. I refuse to be that stupid ever again.

How much of a cushion do you keep in your bank account? Please share your stories in the comments below.

I Hate Planned Obsolescence

Published / by Annie / 8 Comments on I Hate Planned Obsolescence

The other day a friend stopped by and announced that he had a surprise in the back seat of his car. Curious, I stepped outside to see what it was.

To my surprise, he had an ancient iMac sitting on his back seat. He explained with a grin that he had been visiting another friend when he saw their neighbors carry it out to the trash.

“I immediately thought of you, so I asked permission to have it,” he explained.

We carried it into the house. It lacked a keyboard and a mouse, but it fortunately still had a power cord, so I connected a spare Windows mouse and keyboard to the machine and plugged it in.

That old dinosaur powered on.

According to my research, this machine (iMac model M5521) came out around the turn of the century, which means that it is almost 20 years old. The hard drive is a bit noisy, the slot loading CD-ROM sticks, but it still works!

The more I played with that old machine the angrier I got. This computer cost someone $999 new. That’s the equivalent of two month’s expenses for me. The thought of someone tossing that much money in the trash just pissed me off, not because they discarded something they no longer needed or used, but because of the fact that this poor machine was obsolete just a few short years after it was purchased.

That’s the way it is with stuff anymore. You purchase a new phone, computer, gadget, outfit, or whatever only to be told it is useless or out of fashion before you’ve hardly managed to break it in, so what do you do? You go out and buy a new one, tossing the old one into a closet or—like this poor old machine—in the trash.

Heck, purchase a new appliance these days and you’ll discover that the lightweight gears and moving parts within the machine will fail within a few short years. Don’t believe me? Go to the store and buy a cheap fan. See how many seasons it will last you before it dies. Next, go to a thrift shop and buy one of those ancient fans with the old cloth-covered power cords. I’ll bet that thing still runs even if it is close to 50 years old. In fact, I happen to know a gentleman who uses an old percolator to make his coffee that is even older than that! He got tired of buying coffee makers every couple of years so he dug out the old percolator his mother used to make her coffee with.

Anyway, back to this computer. After tinkering with it for a while I decided to try an experiment. I’m going to see if I can acquire the parts needed to give this puppy an upgrade and make it useful once again. I want to get it set up with some simple games, configure it for printing, add a word processing program, and let my grandson use it to play and do his homework on.

This isn’t exactly a priority to me so I plan to spend as little as possible. I’m going to ask around for spare parts to upgrade the RAM and search online for a copy of the operating system that I can download and burn to disk. If I get lucky I’ll manage to score a new CMOS battery for it, since the original is long dead.

And piece by piece I am going to turn this ancient machine into something that can be used today, just to prove that it can be done. It won’t be the fastest but that’s not the point. The point is that we spend a fortune on items that manufacturers declare completely useless years before they actually are. We spend hours of our lives each week earning money to buy items like this old computer, only to discard them as worthless a short time later, when in fact, with a little love and a bit of work, they can last longer than Big Business wants us to keep them.

I’ll let you know when I get the old dinosaur running. I will also let you know just how much money I spent turning it into something that can actually be used (paperweight is not an option).

What was the last item you saved from the trash? Please share your stories in the comments below.