Unclaimed Money

In this world geared to instant gratification, patience can be hard to come by. We have the world at our fingertips, and it tells us that we can have what we want now. In most cases exercising patience works to our benefit. Patience, after all, is a virtue, and this is especially true when it comes to our finances.

When I look back at our financial history I see many purchases that were made impulsively. Most of those impulsive buys were made with credit cards. Some of those items seemed like deals to good to pass on at the time. When we were unable to pay the balance of the credit card at the end of the month, the interest charges made those good deals quite expensive.

Some of our impulse purchases were things we convinced ourselves we deserved. We worked hard, and lived frugally most of the year. Didn’t we deserved that three day cruise that we got the good price on? The plain and simple fact was that these items were beyond our means.

Some of these impulse purchases were things we really did need, but maybe did not need right this minute. These purchases were not planned for, nor were they well researched. Taking the time to plan (and save) ahead, and to find the best deal could have saved us a lot of money.

Over the years we have learned to be patient when it comes to our finances and purchases. Things still come up, and we still are tempted to buy impulsively, but where we have exercised patience we have consistently seen three results.

The desire goes away.
Sometimes in the heat of a moment you can convince yourself that you really need something or that a particular item is too good of a deal to pass up. Waiting often shows you that you truly do not need the item, or that the deal really isn’t that good.

One example from our life is our computer. Our computer is old, and a few months ago I was really frustrated by it. I had myself convinced I needed a new one. I went to a local store, and started picking one out. Then I went home to think about it. I am still using the old one. A new one would be nice, but there really isn’t room in the budget, and this one really is adequate.

You find a better deal.
Knowing that you want (or need) to make a purchase, but choosing to wait gives you time to research, and find the best deal. Often, by waiting, we have found the items we were wanting to buy used at a fraction of the cost. In the best cases we have found free items to fit our needs on Freecycle or from acquaintances.

The latest example of this in our lives is bunk beds for the kids. We have four kids; two boys and two girls. They share rooms. We had one set of bunk beds. The youngest two were in a crib and toddler bed. Several months ago we realized that we were going to need another set of bunk beds soon. A few weeks ago my husband’s co-worker mentioned his daughter wanted to give away a set of bunk beds. Score! Now we have a second set, and only need to purchase mattresses.

You find an alternative.
Sometimes when there is a need or want patience breeds creativity, and you find another item that will serve the purpose for less money.

Recently, our microwave died. It was the third one in as many years. I really was ready to go out and buy another one, but wrote about my frustrations at another place. I was surprised by the responses I got from people who do without a microwave. They offered alternatives to some of my most common uses for our microwave. I decided to wait on that purchase. I have found that those alternatives really are almost as convenient, and have decided not to buy a microwave, for now anyway.

Patience really is a frugal virtue, and I hope that the examples above have helped show that. So, how do you develop patience in this world of instant gratification? Here are some things that have worked for us:

Look to the future.
Many times you can see upcoming needs. Prepare for them now by saving money and researching now.

Impose a waiting rule.
If you really want to buy something self impose a three day rule, or whatever time period you feel is sufficient.

Cash only.
Don’t carry your credit cards. Then you can only buy what you can pay for.

Make it a team effort.
If you are married, hopefully, this is something you and your spouse are doing together. If you are single you can partner up with a like minded friend or family to encourage each other in your frugal endeavors, or start a blog. It really does help keep you accountable.

Instant gratification may be the way of the world, but it really is not the best way for your finances. Patience is a frugal virtue. Developing and exercising patience will save you money, and help you to reach the financial goals that are most important to you.

It doesn’t happen often, but sometimes we find, or are given cash we didn’t know we had. Maybe you find five dollars in your jeans from last week. Maybe you get $20 on an instant lottery ticket. No matter the source, unexpected cash is always welcomed, and small amounts like this usually get tucked into your wallet and used for your normal everyday things.

What do you do though when you get a larger sum unexpectedly? Getting an unexpected larger sum is even less common, but it does happen. Perhaps you receive an inheritance you weren’t expecting, get a bonus from your place of employment, or a stock you own has suddenly doubled in worth. If you are an United States tax payer, a nice unexpected sum may be coming your way.

The plan is to put a tidy sum in your pocket in the form of a tax rebate. You are then supposed to go out and spend it to jump start the economy. Should you co-operate with this plan? Well, of course that is a personal decision, but in my opinion the answer is maybe.

I have a great aunt who occasionally will slip me a  handful of twenties, and say, “Go do something fun.” In those rare instances I do go spend the money on something that would not be in my normal budget plan. I obviously do not have the same relationship with the government as I do with my great aunt, and therefore do not feel as inclined to follow their wishes for how I use the money.

When a nice sum of unexpected money comes your way it should be used to meet the financial goals you already have. If you’ve been saving for a house down payment, then a tax rebate will be a nice jump start to that process. If you building an emergency, college, or retirement fund put your unexpected cash into that fund. Trying to pay off debt? Use the money toward that. If you’ve been planning to buy a large screen T.V., then you may be able to it sooner than planned.

Getting some extra cash should not be an excuse to blow through the money leaving you no better off than before you received the money.  Unexpected cash should be treated as a boost to the financial goals you already have established.

Thanks to Melissa whose post Recession Fears = Flat Screen TV?  was the inspiration for this post.

For most of us buying a vehicle is a task we must tackle at some time. If you are currently in the market for a vehicle, soon will be or, just would like to gather ideas for the future, find basic ideas for purchasing a car, and for those in the U.S., Buying a Car in the USA, at our home page, BeNaif.

We haven’t even carved our pumpkins, and the Christmas trees are already up at the local retailers’. Their objective is to have you start thinking about Christmas now, start spending now, and keep on spending until the end of the year. They are counting on you to make their holiday profitable.

There is nothing wrong with thinking about Christmas now. In fact, if you haven’t already, I highly recommend that you do. Christmas, like any other expenditure, is best on your wallet when it is planned for. Set a budget. Determine how much can you save from every per pay period between now and Christmas.  Start putting that money aside now.  Make a list of people you will be buying for. Now using your budget amount determine how much you can spend per person. Make it equal by dividing the budget by the number of people, or allocate by who you’d like to spend more on. Beside their name note any ideas that you have for them. Keep your list in your wallet. Trust me this is the best place for it.

Start spending now. Go ahead! Look for sales on the items on your list. Keep the gifts in your budget range, and don’t forget to mark the name on the list “completed” when you have their gifts.

Keep on spending. . . until you have marked all the names off your list. Then STOP!  This is why it is important to keep your list with you. If you are out shopping and see the most adorable thing for baby Q, stop, pull out your list. Do you still need something for baby Q? Have you spent your budgeted amount there? Don’t buy it if you have!

Let the retailers decorate their trees in October. They may intend for it to make you spend more, but you know that by planning now, and shopping carefully until the holidays, you can have a Merry Christmas without the burden of spending more than you could afford.

What To Consider Before Filing

Some people think of bankruptcy as an easy way to offload a crushing debt burden, and it’s sometimes the first method they reach for. Well, it may well relieve the burden, but it’s far from easy and should be the very last thing you use to do so.

Recently, my eight year old son got a lesson on this topic. We were getting ready to watch a movie and the children asked for popcorn. We went out to the kitchen. I went to the cupboard and grabbed a bag of the Aldi popcorn. Kellen grabbed a bag of Trail’s End popcorn. If you aren’t familiar with Trail’s End, it is sold as a fund raiser for the Boy Scouts and marketed as “gourmet.” We received a big box of this as a present, and I had put it up until we finished what we already had in the cupboard. My son really wanted the Trail’s End, so I let him get one out. This is what we were holding.

He took the outer wrapping off the Trail’s End popcorn, and I thought, “That is interesting.” I took the outer wrapping off the Aldi bag. This is what we saw.

“How can this be?” said my son, “They are the same bag!” I explained to him that often manufacturers and processors make the same product for different companies. They just use different packaging, according to what each company wants. You are paying for the name, the packaging, and marketing when you purchase the name brand at a higher price.

I am not sure how much the Trail’s End popcorn was since we received it as a gift. I can tell you the Aldi box of six bags was $1.39. I’m sure the Trail’s End was significantly more expensive. It is good popcorn, no matter how much you pay for it!

I really don’t mind paying a bit more for the Trail’s End because it is a fund raiser. I know I am paying for packaging, a name, and a good cause; not better popcorn! But what about other food items? Are the name brands really different from the store brands, or are they the same thing in a different package? Save yourself some money, buy the store brand!

If you still aren’t convinced, I challenge you to conduct your own blind taste test. Buy the brand and the generic. Have someone else (bet the kids would love to do this) open the container, and place a sample from each on a plate. Look at and taste both products. Are they the same? If not, which do you like better? Then have the other person tell you which was the name brand and which was the store brand. You may be surprised by the results.

Apart from spending less, another option to pay your debt faster is to increase your income. You can make money for an extra payment with a little creativity and a few ideas to get you started. You know the best debt reduction technique is to pay faster.

The first step to the ideal financial life is to get organized. Some people are naturally organized, the rest of us have to learn how to do it. Create your personal space to deal with finances.

The idea is to make your finanacial life more efficient. Keeping all papers in one place is a first step. We will reorganize the rest slowly.

Once all a kid had to do to become a meaningful adult was to be able to hunt or gather food. As we evolved, children had to acquire farming and do it yourself skills and some more brainy ones, like reading and writing -not such a matter of fact ability only a hundred years ago- and a talent for numbers. All that is not enough today: it is necessary to get money management expertise

How can parents instill the value of money and the ability to manage it in their little ones?

An allowance is the best way to teach kids personal finance skills, such as:

• Living on a budget – as they cannot spend more money than they have
• Put some money apart to purchase something big - and learn how to delay gratification
• Deciding how they are going to spend their money – they are making financial decisions.

Even if their decisions are not all wise now, be certain they are learning. They are learning how to survive consumerism and how to tell wants apart from needs; be sure they will be faster to evaluate and take better decisions when they grow. There is an immediate benefit: having their own money and using it as they see fit will increase their self-confidence and sense of independence.