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How Much is It Worth to You?

November 11, 2008 By Shane Ede 2 Comments

In every purchase we make, we should ask ourselves how much is it worth to me?  It’s a very simple question, but in many cases, the answer may surprise you.  And it applies to much more than items.

Let’s try a few examples.

I’ve been keeping my eye on LCD HD receiver televisions.  With the big switchover in February and all the fear marketing going on about the loss of signals, my family may need a new television.  We don’t currently subscribe to a cable service, so we get our tv over the airwaves and will need a HD tv or a subscription to cable.  The tv’s that I’ve been looking at are in the $500 range.  Not a huge amount for tv’s nowadays, but quite a bit for my debt averse family.  Each time I look at them, I have to ask myself if having television is worth $500 to me.  We currently don’t have cable and we only receive one channel over the air.  And to be honest, it wouldn’t be a huge loss to us.  Except.  Except that I like to watch Football in the fall.  Except that my wife is addicted to COPS.  Except.  Except.  Except.  With each exception, the TV or cable subscription becomes more and more worth it to me.  I become more willing to spend the money to get the TV or Cable because of them.

Much like cable, there are some services that demand the question too.  In my hometown, there is only one full service gas station.  All the rest are self service.  The full service station charges $0.02/gallon more for their gas.  This is a non-question for me.  I don’t mind filling my tank up.  I only end up filling up about once a month, so it isn’t a big deal if I have to stand and pump gas for a few minutes.  However, with temperatures falling (it’s about 30 here today) I can certainly see why there might be some people who are asking themselves if the extra $0.02 per gallon is worth staying in the warmth of their car while someone else fills the tank.

The more my wife and I budget and track our money, the more often I find myself asking this question.  Is this service or that item worth the extra money?  Is the convenience worth paying more for or am I just being lazy?  More and more, I find that the answer is No.  In many cases, the convenience isn’t worth a little more slavery to debt.  Each penny that I spend on that convenience is another penny that I cannot use to pay down debt.  Maybe my answers will change when we get rid of our debt, but I think by then our lifestyles and attitudes will have changed significantly enough that the answer will often still be no.

Filed Under: budget, Debt Reduction, Guru Advice, Saving, ShareMe Tagged With: budget, debt, Saving, spending

Know Your Stuff – Home Inventory Software

July 30, 2008 By Shane Ede Leave a Comment

If you own a home, you know that you quickly accumulate lots and lots of stuff.  If you were to ever have a fire or a flood, it could be hard to prove to the insurance company what you had and in what condition.  In fact, if you have a fire and can’t prove you had it, they might just not pay you for it.  One of the best ways to prevent such a disaster is to complete a home inventory.

Ideally, a home inventory will include an itemized list of your possessions that will include serial numbers, model numbers, and replacement value.  It should also include pictures of the items at the least and a video of the items if at all possible.  A home inventory is something that every homeowner should have.

The more industrious of us can easily put together something with a spreadsheet and some archived pictures and videos.  The less technologically inclined might need a little help.  And a little free help is always good!

The Insurance Information Institute has a program designed for just such a solution.  The Know Your Stuff Home Inventory Software is a free download.  It includes a quick wizard for creating your room-by-room inventory and then gives the ability to attach photos to each item.  It also allows for attaching a digital copy of your receipt to the item for quick and easy value proof.

Once you’ve added all your possessions, you have several options for saving and archiving your inventory.  The simplest being a quick save to your harddrive or a print out that gets placed in a safe deposit box or safe.  They also allow for the ability to save the inventory to a 3rd party archiving system, but that carries a fee as well.  If you already have a offsite backup system in place (you should if you have anything important like a budget on your computer), like Mozy, then you can simply save the file to your hard drive and then have your current system back up the file.  Easy as pie!

Don’t forget to take your completed inventory into your Home Owners insurance agent to discuss your coverage and make sure that you have enough insurance to cover your possessions!

Filed Under: Home Tagged With: data backup, Home, home inventory

Don’t Make the Cost of Gas Your Scapegoat

July 22, 2008 By Shane Ede 2 Comments

With all of the discussion about the price of gas that has been going on lately, and rightly so, it’s easy to blame your current financial troubles on the higher cost of gas.  Don’t.  While the higher cost may be hitting you hard, it isn’t the cause of your situation.  But we all like scapegoats and we like to blame things on someone or something other than ourselves.  Something that is out of our control.  As an added bonus, we get to complain about the people behind it and blame them too!

Here’s the dirty truth of it all.  The price of gas is not the reason that you are having trouble financially.  At 17 MPG, the difference between 1.999 a gallon gas and 4.159 a gallon gas is about $1500.00 a year.  A little over $125 a month.  It sounds bad, but when was the last time you remember paying $1.99 a gallon for gas?  It’s been a while.  The recent raises in price took the gas from about $2.499 to 4.159.  The difference there at 17 MPG is just under $1200.00 a year.  Or a little under $100 a month.

And that’s at 17 MPG.  If you are driving a car that gets 25 MPG, the difference is about $800 a year or $66 a month.  At 30 MPG, it drops to about $664 and $55.

$55 a month is nothing to scoff at.  And $125 can be a near catastrophe for some people.  But, if you had your finances in order to begin with it wouldn’t be a disaster.  It’ll still take a dent out of your budget, that’s for sure.  But a person who has control of their money and tells it what to do will be able to quickly rearrange that budget and keep on track with their debt elimination and savings goals.

If you make concessions and shorten trips or consolidate errands, you can cut that gas bill too.  Besides, don’t you feel just a little bit silly about blaming all your financial woes on $50 a month?  I bet you pay more than that on your cable bill…

Wanna see my numbers?  Here’s the spreadsheet I used. http://spreadsheets.google.com/ccc?key=pKnPEyRsjPSLpIC6wCWdjbg&hl=en

Filed Under: Financial Truths, ShareMe Tagged With: budget, frugal, Gas

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