Cents Savvy

Minute Amount of Milk

2010-04-23T08:05:00.000-07:00

I was having coffee with a friend yesterday and as she was about to throw out the milk container she says...."there is only a minute amount of milk I'm going to toss it" to which I responded "minute to you is worth 2 cups of coffee to me". Maybe not the greatest analogy in the world to the one man's garbage is another's treasure but you get my point.

It's that time of year when people are spring cleaning and yes having garage sales. I challenge all of you this weekend to go to some garage sales and pick up and item that is on your normal shopping list that you need but could buy second hand. Coffee makers, tables, and such.

Not only will you save some $$ but you will also save that item from being tossed into the garbage.

Spring Cleaning Money

2010-03-09T07:30:00.001-08:00

It is that time of year - time for spring cleaning!

Although most of you may dread spring cleaning, it may actually make you money. As they say one man's garbage is another's treasure.

Go through the house and take out everything that has not been touched or used in 2 years. Place gently used items on craigslist or take to a consignment store or have a garage sale - you'd be surprised how much money you can make.

Not only will you make money but you will have a cleaner and less cluttered house.

Email us and we can help put you on a budget.

$96,000 in debt

2010-02-17T09:37:00.000-08:00

If you find that crazy then you are like me.

There was a recent study conducted in Canada that places household debt at $96,000. That is up 145% from just a few years ago.

And to top it all off there has been a 40% increase in those that are late on their credit card payments.

We have become a nation and world where we thrive on having the latest and having it now. Gone are the days of saving for a vacation or such - We Want It Now! So now we have to pay for it.

But don't fret there are lots of options out there for us all. Non-profit organizations such as Credit Counseling Canada or private firms that will help build you a household budget and help you manage your debt.

Of course we are here to help. Email us or visit us centssavvy.com

Lending Money to Friends & Family

2010-02-02T06:36:00.000-08:00

If we lived our lives by the words of Shakespeare "Neither a lender or a borrower be" the world would not go 'round.

Now, from time to time we have all been asked by friends and family to lend them money or we have had to ask our families to borrow money. There is no hard or fast rule about lending money but to keep these relationships healthy long-term here are a few things to consider:

1. Write up a contract

It can be on a napkin, preferably email it and ensure that the recipient has read is and is fully aware of the terms. The contract should state the amount of the loan, the interest, how & when it should be paid back . This ensures that all parties are in agreement prior to the money exchanging hands. Once money has exchanged hands without a contract then it is very hard to put terms against it. If this is the only thing that you do then you are way ahead of the game.

2. Ensure you can afford to loan the money

If you cannot live without this money for 1 year then don't lend it - PERIOD.

3. Don't lend if you don't have

Simply put if you don't have it - don't lend it. Don't take out a loan for anyone outside of your spouse - you will be held liable if that loan is ever defaulted.

And lastly, if you feel uncomfortable about lending then just express to anyone who asks, given the recent climate of the economy you are not in a position to lend anyone money....most people will understand.

As always, we are here to help. Email us or visit us as centssavvy.com

Weekend Challenge #4 - Make a List and Check it Twice

2010-01-29T10:33:00.000-08:00

As we are all preparing for the weekend and our weekly grocery shopping trip our challenge this weekend is to make a shopping list for your groceries and put a budget towards it.

It has been noted that when you make a list and are prepared when you go grocery shopping, you don't overspend. Also, when you make a list you can read your weekly flyers and see where to shop to get what you need at the best price.

And always remember, it's better to buy less groceries and shop twice a week then shopping once and over buying. Studies have shown that families throw out an excess of $1,500 worth of spoiled groceries in a year!

As always we are here to help. Contact us centssavvy.com

Weekend Challenge: Save your Pennies

2010-01-22T11:26:00.000-08:00

This weekend's challenge is very simple. Start a coin jar.

Simply put, piggy banks were created for a reason to place your money for keeping until you required it. Much like the banks of today, piggy banks known as "still banks" have been in use for thousands of years.

Use the same ideology from year's past and start yourself a piggy bank. Keep it somewhere handy to drop in your loose change at the end of every day. Before you know it you will have of dollars to use toward a goal and for your rainy day fund.

As always we are here to help centssavvy.com or contact us

Time to Renegotiate Your Mortgage

2010-01-19T11:08:00.000-08:00

Interest rates are at an all time low and if you are locked into a fixed mortgage then now is the time to renegotiate.

Two options to choose from:

Option One

Keep your mortgage at your current amount and pay less

Option Two

Take out equity and pay the same or slightly higher.

Here are how the two options look like:

Option One - Keep Mortgage at Current Amount

A $320,000 mortgage at a fixed rate of 5% would equate to $1,707 (rough estimate) per month. If you renegotiate to prime 2.25% then your rate would equate to $1,223. That is $500 monthly in savings and your interest payments and length of the mortgage will go down.

The caveat with this option is that you will need to pay a penalty but even with a $10-15,000 penalty you will still see a savings and your interest payments and amortization will go down.

And of course you will ask, how about if the rates go up. Rates will not go up as quickly as people think, for the interim (roughly the next 6 months or so) rates will not change much as we are not out of our recession yet and any changes to the prime will stunt growth. And you can always lock in within 1 week.

Option Two - Take out Equity

If your home has gone up in value, you can keep your current monthly payment and take out equity. For one client it looked like this $318,000 original mortgage, house went up in value to $525,000, they took out $75,000 in equity and the mortgage climb to $393,000. The good news because the interest rate went down they ended up paying the same monthly figure and had $75,000 in their pocket!

Again, because you are paying a lower interest rate your long term interest payments will go down and so will the life of your mortgage.

There are of course costs to this option as well, however if you do an increase and blend, there are no cancellation fees only lawyers and bank fees which usually amount to $800-$1,000 (approx.) and get taken off the $75,000.

Whatever your option, go to your bank or ask your mortgage broker. In the long run you will end up saving money.

Do not take out more than you can pay on a monthly basis today and long term! Your bank or broker will help you decide your comfort level and what you can pay monthly.

As always we are here to help centssavvy.com

Hidden Costs: Series 1 Mortgage Life Insurance

2010-01-18T07:16:00.000-08:00

Banks make money for a reason, they charge us to use our money, they make money on our money and pay us very little in interest.

One of the ways that Banks make money is they charge us life insurance on our mortgage. When you think about this idea it is sound, my mortgage is paid off when I am dead and no one has to worry. The unfortunate side of this is that we tend to pay 3-5 times what we would normally pay to an insurance company for the coverage as most banks charge us a percentage of our mortgage.

As an example: one of my clients was paying $129 on a $260,000 mortgage. When we shopped around we found her a life insurance policy for $500,000 for $30. Now you do the math on the savings, that's $99 a month or almost $1,200 a year!

If you feel better knowing that your mortgage will be paid off when you are gone then consolidate that amount with your normal life insurance to get the best rate.

As always we can help centssavvy.com or email us

Going Into the Weekend - Challenge #3

2010-01-15T07:09:00.001-08:00

So far our weekend challenges have been:

1. Go into your favourite store and don't buy anything

2. Save $10 on your grocery bill

And this weekend's challenge IS:

Reduce 1 household bill by 10%

Call your home phone, cell phone or cable company and ask them for a better deal. Look at the services that you are receiving and see what you can cut. Most companies will have reduced costs or prepackaged some features for a lower monthly cost but it is up to you to be vigilant to call them and ensure that you are receiving the best price for your services.

One client saved $30 a month on her cell phone bill as the cost of the internet service had gone done by that much. Remember it is up to you to keep after the companies, they will not call you to give you a lower cost!

When you complete this for 1 household bill, it will be that much easier to call the others and see if any discounts can be found. If you do this for enough bills then you will see savings of up to $500+ a year.

And as always we are here to help centssavvy.com

Retail Therapy

2010-01-14T07:28:00.000-08:00

Do inanimate objects make us happy....of course they do. Pick up something from your childhood and the happy care-free feelings rush into you.

A study indicated that 33% of shoppers actually experienced a high when they purchased. On the other hand there is a psychological disorder for retail therapy called oniomania - that is, compulsive shopping disorder. Retail therapy need not be a terrible or embarrassing term, as long as you are aware that this will not cure a depressed mood or change your life in any way.

All this to say, spend some money on yourself HOWEVER fit it into your budget to ensure there is not buyer's remorse the next day, or you are in the doghouse with a partner or the creditors are knocking on your door.

As always we are here to help centssavvy.com to email us.

Going Into the Weekend - Challenge #2

2010-01-08T07:25:00.000-08:00

Here we go again, another weekend.

This weekends financial challenge is to save $10 on your grocery bill. Here are a few tips on how to do it:

Please NOTE, although individually you will look at these tips and say, it's only $1 but as I say $1 extra dollar a day is an extra $365 a year.

#1 - Do not buy pre-cut

You will find at least $2 per item here.

#2 - Buy vegetables or fruits that are in season

You will find at least $1 here.

#3 - Buy what is on sale

Adjust your menu for the week based on what is on sale. Find at least $5 here.

#4 - Change grocery stores

Changing where you shop (it has to be convenient you can't go cross town unless you are saving $$$$$$$). Depending on the store you could save $10 on your bill.

#5 - Use your freezer

The average household THROWS OUT $1500 worth of food every year! And multiply that by 10 years it's $15,000 - Crazy isn't it. If you make dinner use the leftovers for lunch or freeze for another dinner. Shop twice a week instead of once, buy less so you use what you buy. Wouldn't you rather have $1,500 extra for other enjoyable activities

As always, if you need help contact us centssavvy.com

The Worst or Best Financial Advice

2010-01-07T11:06:00.000-08:00

Pay off your credit cards - there I said it.

I have read countless blogs/articles etc from many money managers/advisors and always the number one advice they give people is to pay off their credit cards.

Now, if you have an extra $5,000 or $10,000 or whatever you owe on your credits cards sitting in your bank account doing absolutely nothing but collecting pennies for interest then yes, I would say this should be an option.

However, if you are like 80% of the population in North America you do not have this cash sitting around burning a whole in your pocket. AND furthermore if you did, it may not be the wisest choice to pay off your credit cards if that amount is your "rainy day" fund. The optimum solution in this case is to look at your entire financial picture and maybe paying the minimum is the best solution for the moment. Having no access to the $5,000 cash should an emergency come up, where you could not use your credit card, would be far worse then paying that 18% interest for a few more months or even one year.

Always, always always have enough cash in your account for 6 months worth of living expenses....no matter what any money manager says.

Top 10 Areas to Find Extra Money

2010-01-05T08:47:00.000-08:00

Every client that I work with tells me the same story....I don't know where I can find an extra $50 or $100 a month. I can tell you at least 10 areas to look for extra money.

Number 1 - Phone

Have a look at your phone bill and see what you can cut out of your services. Do you really need 3-way calling? Phone companies change services every 6 months or so and bundle packages that make it more affordable - what they won't do is call you and tell you that you are paying much more for services. Renegotiate your phone bill every year.

Number 2 - Groceries

Never buy pre-cut anything. There is usually $2 per item premium on anything that is pre-cut. And baby carrots - are large carrots that they have cut down to be smaller - people baby carrots do not exist on the farmer's field!

Number 3 - Heating

Turn your thermostat down 1 degree - and see the difference. Also purchase a thermostat that you can program and at night turn it down to 60 degrees F. Studies have shown that at night your bedroom should be colder due to overheating and sleep interuption(your body's temperature actually goes down when you are sleeping).

Number 4 - Electricity

Purchase halogen bulbs where you can and turn off lights every time you leave the room (for more than 5 minutes that is). Unplug all power bars and charging equipment.

Number 5 - Gym Membership

When was the last time you were at the gym. If it was over 3 months ago put your membership on hiatus. You can purchase exercise dvd's for around $11 if you need to exercise.

Number 6 - Coffee

Okay, we all like our Starbucks, Tim Hortons, McDonalds coffee but if your coffee is costing you $2-4 a day cut it out. You can purchase a tin of coffee for roughly $8 which should last you a month - you do the math.

Number 7 - Brown Bag It

Making dinner - make lots for lunch the next day. If lunch is costing you $4+ a day then you need to brown bag it.

Number 8 - Cable Bill

Most of us have 300 or so channels that we never watch. If your cable bill is more than $30 a month cut out the excess!

Number 9 - Cell Phone

I understand that nowadays we all need a cell phone. If your package is costing you more than $35 you need to renegotiate.

Number 10 - Cash Withdrawals

Can you account for all the cash purchases that you make? 80% of people can't. This is the one biggest area where we can find extra money.

All this takes work but if you are really interested in finding money for a rainy day or for a special purchase, it can happen.

We can help contact us

Make Resolutions that are Attainable!

2010-01-04T05:31:00.000-08:00

The number 1 reason why we fail when we make new years resolutions is the fact that we make blanket statements such as "I'm going to start exercising or I'm going to eat healthy food or I'm going to save money".

You can see why this is not going to help you attain your goals so here is my cents savvy. If your goal is to save money first ensure that you:

have a specific goal
are realistic
have actionable steps
your goal contains milestones

GOAL

If your resolution is to save money there is no goal or specifics and you will fail. Set yourself a goal and say your resolution with your goal in your statement. I am going to save $500 by December 31, 2010.

REALISTIC

You can't run a marathon in a month if you have never run before. And so it is true with any resolution. Set yourself a realistic goal. For most that have never saved money or don't even know where to start, simply take a low amount like $500-$1000 a year and start there.

ACTIONABLE STEPS

Next take that $ amount and break it down into actionable steps. What do you have to save by month, by week and by day. This will allow you to understand what you have to trade off to ensure you reach your goal. I like to remember the commercials for Foster Parents at this time - their commercials always speak to its only a cup of coffee a day to give a child education etc. Do you see what they did there, they brought the amount down to something that we can all relate to and is easily attainable and is actionable.

MILESTONES

Set up a different account where your savings can go so you cannot touch the money so readily. Set up a regular withdrawal and let the bank do the automatic savings for you. Check in on the money every few months to see your success.

By setting realistic goals you will always succeed, but please ensure that there is a little bit of a challenge to your goal.

As always we are here to help if you need to determine, what type of goal is realistic, where to find that extra money for your savings and any other money questions you may have. centssavvy.com

Recycling

2009-12-14T06:29:00.000-08:00

I read an interesting article in the national paper in Canada called the globe and mail this morning.

The article, a holiday survival guide, was about buying used toys, be it a Goodwill, Salvation Army or any second hand store, for your tots instead of new toys, basically a new way to recycle and save money at the same time.

The article went on to say that kids don't really care where toys come from. That to kids toys are toys are toys. And furthermore, it states that most kids won't even notice that the toys are used. And it really takes the sting out of buying a new toy for the holidays and the novelty wears off in 24hrs and there goes your money.

What a novel idea, saving money and recycling for the planet!

To read the entire article go to globeandmail.com

My New (Okay not Really New) Finding

2009-12-06T13:43:00.000-08:00

Okay, so it's not really new but I went grocery shopping today and stopped into the Bulk Food store.

I have gone in many times but wasn't really aware of the enormous savings that could be found at the Bulk Food store. I needed some Wheat Germ (to add to my yogurt) and purchased about 9oz or 300mL. What would have cost me $5 at the grocery store cost me a WHOPPING $0.35. I had to smile because I really could not believe my ears or eyes.

So guess, where I will be buying all my dry goods from now on. When was the last time you saved yourself that much money?

Going into the Weekend

2009-12-04T07:18:00.000-08:00

Its that time of the week when we rejoice...its the weekend. And with the weekend come shopping trips to grocery stores and the odd clothing or shoe store.

I challenge all of you to go into your favourite store, pick up things that interest you, look at prices and then walk out (this doesn't apply to the grocery store).

What will you notice? I guarantee that when you walk out of that store, the sense you will have is of freedom. A sense of, I am not tied to my material possessions and don't need to buy to feel good.

What else will you notice? Granted not right away but more money in your wallet, visa, savings account etc.

The challenge is on.

Weekly Money Tip

2009-12-03T10:30:00.000-08:00

All of us have been hit with this recession one way or another. Having said that most of us won't learn coming out of the recession. Here is one sure fire way to save more money.

35% of your net pay goes to a savings of some sort

45% goes to live (shelter, food, etc)

15% goes to you (entertainment, etc)

5% goes to charity

It really is that simple. It may be hard at first but you will figure out what you need to cut and what you don't as the months go by. Follow this simple equation and you will never have to worry about the long term.

Oh and if you need some help visit us at centssavvy.com