Consumer Reports Survey – the Joy of Not Buying Things

I’ve always been a fan of Consumer Reports.  I like their mix of reviews from their own staff as well as actual feedback from owners.  This past year I finally became a subscriber (what took me so long?) and have been enjoying the magazine and online site ever since.

I am one of those readers!  You can tell people that you know me.
I am one of those readers! You can tell people that you know me.

But you know what I have enjoyed even more?   The realization of how much money I’ve saved living in the city and renting all these years!

Now, before this spirals off into a debate about the merits of home ownership, rising housing prices, or “throwing away money on rent”, allow me to explain. Continue reading

Time is Money – the True Cost of Labor Saving Devices

It seems to go almost without debate these days that if you have the means you should load your home and life up with what we’ll call Labor Saving Devices such as a dishwasher or clothes washer and dryer.

But what other ‘devices’ could fall under this category of trading money for time?   Perhaps a  riding lawnmower, maid, Roomba, gardener, pool guy or dog walker would count as well.  Do these makes sense from an economic perspective?  Is this a waste of cash or a true time saver? Let’s discuss.

Whether you’re purchasing a service or a machine to do your work you have to take several items into account to determine if it makes sense.

Does it need to be done?

I think we can all agree that dirty clothes and dishes should be

Are you spending too much on gardening?  Tusk tusk.
Are you spending too much on gardening? Tusk tusk.

washed.  It’s clearly a cheaper path to clean the items then to buy them anew each time.  Vacuuming is a good idea, as is gardening.  But vacuuming every day may be overkill.  And getting your bushes turned into elephant topiaries might also be a bit more than you really need.  So first consider what really needs to Continue reading

How Much Do I Need in an Emergency Fund?

This is the third post in the series on emergency funds.
First post: What’s an Emergency Fund?
Previous post: How do I set up an emergency fund?

So just how much does someone need to keep in an emergency fund?  This is where the debate usually starts. There are many answers to this question and answers range from almost nothing (for now) all the way to a full year’s worth of expenses. To begin finding your own number start with whether you currently carry any high interest debt like credit cards or payday loans. If you do have such debt, it’s recommended that you should have at least one thousand dollars set aside before you even begin to tackle paying down your debts.  This will provide you enough cushion to cover minor surprises and hopefully keep you from having to pay overdraft or similar late fees.

Depending on how much life you have to support it may make sense to build up even more of a fund before attacking your debts.  For example, if you are a single renter without children and have a fairly stead job, then a thousand dollars might be plenty.  If instead you have a family to support, don’t get along with your boss, and have a mortgage to pay, you should consider saving five or even ten thousand dollars before turning your focus to debt repayment.

Note: Keeping extra cash instead of paying down debts is of particularly high importance if your credit is maxed out.  If you still have credit remaining, and are sure that will not change soon, then paying down your balance will make more sense as you can  (worst case) borrow the money back again if needed.

Once your debt has become more manageable, or if you do not have any high interest debt, then the goal is to build up a properly sized emergency fund.  What’s the right size for you?  That will depend on several factors.

How stable is your job or income?
Laid Off
Should I have seen this coming?

Emergency funds are often thought of as only covering unexpected expenses that arise in life.  But losing one’s job is the worst kind of expense – the one that kills your income.  If you have nothing coming in for the month even small expected expenses can feel like an emergency very quickly. Without a proper amount of money set aside to cover all your bills in such an event you may quickly find yourself relying on credit cards, family, pay day loans or worse to get by until you find new employment. Continue reading