The response to the the Frugal Dad tote bag contest has been great with nearly 200 of you leaving a comment to enter. If you are not already entered, you still have a little time left.  The comments section will close at 11:59pm tonight (October 31st), so leave an entry now, and then come back here and read some great posts.  The three lucky winners will be announced on Saturday morning.  I’m already cooking up next month’s contest…stay tuned!

Top Ten List for Weekend Reading

The MomAdvice Big Give:  Faith Mission of Elkhart, Indiana.  Amy’s post gets the top spot this week because the subject is such a worthy mission.  Basically, Amy has created her own Big Give challenge, calling on bloggers, PR representatives, and others in their community to find a way to give big this holiday season.  Kudos to Amy for getting out front and inspiring so many others to give in their communities!  This is what the Christmas spirit is all about.

24 and Clueless (Rent versus Buy).   A 24 year-old nearing graduation writes in with concerns over her first house purchase.  FrugalTrader advises Jenny to rent–good advice, because after all there is nothing wrong with renting when you can’t quite afford to buy.

What Are the Different Types of Insurance and How Can They Help You?  Nice rundown of the various types of insurance available and how they fit in your overall financial plan.

A Zero-Sum Worldview.  I really enjoyed this from Brip Blap.   What he gets at is the root of the political divide in this country between the “haves” and the “have nots.”  “Have nots” are convinced they can find no success as long as the “haves” keep being successful.  Not true, working together we can all make progress without anyone having to be hurt in the process.

16 Ways to Save Buying in Bulk.   Great tips here to keep “bulk buying” from turning into “bulk spending,” something we’ve realized in our own family.  In the past we went nuts loading up on things because they were a little cheaper, but didn’t get around to using them in time.  This certainly isn’t frugal; it’s just plain wasteful.

Five Questions I Ask Myself Before Making a Purchase.   My favorite? “How can I save money on the product?”  Once you’ve established an item is a need, and not a want, start thinking of ways to acquire it cheaper, without sacrificing too much quality.

5 Tips for Reducing Your Moving Expenses.   Lots of nuggets in this one, like checking CraigsList for moving boxes.  During our last move the largest expense besides renting the moving truck was buying boxes (and it was a close second–those things are expensive!).

Set Aside $1,000 in an Emergency Fund.  Now.  The amount one should keep in their starter emergency fund is debatable ($1k may not be enough for some families), but the advice to get started is concrete.  An emergency fund is the first step away from you and a financial cliff.

Stuck in a Rut?  How Change Does a Mind and Body Good.  I confess–I’ve been in a rut for a while now, and when things settle down with my mom’s medical issues I plan to shake things up a bit to create some new routines.  I’ve heard it said that the only difference between a rut and a grave is six feet.

What Would People Do With a Stimulus Check ?  Reader Responses.   We’d do the exact same thing with another stimulus check as we did with the first one–straight to debt repayment.

While perusing my ever growing backlog of feed reader favorites I ran across an article that caught my eye from One Caveman’s Financial Journey.  He makes the point so many of us who have been paying off debt for some time have all thought:  I Could Be Rich If I Didn’t Have All This Debt.  No kidding!  As I sit down to pay bills each month, and schedule yet another debt snowball payment, I just cringe at the thought of all the good I could be doing with that money.Just this week I retired an old debt consolidation loan that’s been hanging around so long I thought it was a pet (to borrow Dave Ramsey’s line).  The loan represented debt from our early years of marriage, and some leftover debt related to the pursuit of my online degree.  We are still not quite debt free, but getting close!  It felt so good to rid ourselves of that loan payment.  When we signed up for the loan a couple years ago we opted for a shorter repayment term, and a higher monthly payment, in order to get a better interest rate.  The drawback to that plan was we were stuck with a $375 monthly debt payment.  We whittled away at the loan, faithfully making the minimum payments, and throwing any extra earnings at it to get it paid off quicker.  I’m glad we did, but now that it is gone I have reflected on how much money that loan diverted from our other goals.

Opportunity Costs

Economists define “opportunity costs” as the cost of pursuing one choice over another.  It can be applied to the world of personal finance in a variety of ways.  In our case, the opportunity costs of choosing to go into debt and make payments for a couple years were missed opportunities to save and invest that same money so it would be working for us, not the bank.  We now find ourselves behind on college savings, our own retirement, and have struggled to keep up a fully funded emergency fund.  The $375 we were sending towards debt repayment could have helped fund those goals all along.  Now, we’ll have to play a little catch-up to get back on track.

Non-Monetary Opportunity Costs

My wife and I have always wanted to be better givers, and want to instill a giving spirit in our children.  However, it is hard to help others from a position of weakness.  Over the years we’ve heard of friends, family and neighbors going through some hardship and wished we could help.  Having to pass on those opportunities was a painful reminder of how much weaker we were, financially, for carrying debt.  I’m sure there are others out there with similar desires to be givers, but weighed down by similar circumstances.  I’d venture to say if more households were living a debt free life fewer shelters would have bare cupboards, and fewer worthy charities would be closing their doors.  If any good can come from this recent economic fiasco it’s that people are finally starting to think about reducing risk from their lives.  And paying off debt is a great way to start.

Photo courtesy of tomeppy

A few years ago I paid some stupid tax.  Suffering from an incurable form of car fever, I went out and financed a late model, used Chevy Silverado pickup truck.  It ranks right up there with the dumbest financial moves I’ve ever made.  I fell victim to the “I work hard, so I deserve it” line of thinking.  I do work hard, but I didn’t deserve it.  After eventually wising up I sold the truck, took a $1,000 hit between what I paid for it and what it sold for, and moved on.  Since then, I’ve received several letter from the dealership offering to “buy back” my truck.

The Vehicle Buyback Pitch

The letters all have the same tone–because of my superior finance history, and the wise choice I made when selecting a vehicle that has held its value over time, I can bring it back to the dealer where I purchased the vehicle and drive off the lot with a new truck, no down payment required.  Sounds like a pretty sweet deal, doesn’t it?

What they don’t tell you in the body of the letter, but reserve for the tiny print in the footer of the letter, is that you also drive away with a brand new, 60-month loan.  How nice.  Assuming I had kept that truck, I would nearly have it paid off by now, so why would I want to obligate myself to another five years of car payments?

What’s In It for the Dealer?

Dealers are trying all they can to move new car inventory.  With the economic downturn, few people can afford the exorbitant costs of a new car, and more and more consumers are looking for used models.  The vehicle buyback program is the auto industry’s attempt to replace their new car inventory with more popular used models.  But there is a catch.  The offer sounds sweet because no down payment is required.  You simply hand over the keys, they pay off any remaining balance on your old car, and you drive off in a new car with the same monthly payment thanks to a longer financing term.

The problem is that your current car is probably worth significantly more than the value they quote for offsetting your down payment for the new model.  In other words, if you owe $3000 on your current car, but it is worth $12,000 in a private sale, you have $9,000 worth of “equity” in your vehicle.  The dealer might require a $2,000 down payment for new cars, but offer to waive that for you in lieu of your trade-in, and pay off your remaining $3,000 loan.  To the naked eye it sounds like a great deal, but if you simply sold your existing car for $12,000, paid off the loan yourself with the proceeds, you’d have $9,000 to play with, not the $5,000 (loan payoff plus down payment waiver) they are offering.

Of course, the dealer’s hope is that you take them up on the offer because they can turn around and sell your used car for $12,000 (or more) and pocket the profit themselves.  Bottom line?  If you like your car, and it is a reliable form of transportation, don’t let some gimmicky sales letter talk you into “trading up.”  That is just dealer-speak for going deeper into debt for a longer period of time.

 
Photo courtesy of dcJohn

In one week our country’s citizens will exercise their right to vote and elect someone President of the United States of America.  It’s been called the most important job in the world.  Millions of dollars have been spent advertising each candidate’s position, and attacking the positions of their opponent.  Some have threatened to leave the country is their guy loses.  Some have even threatened to leave the planet (I doubt many would miss them).  Others have threatened civil unrest, win or lose.  With such high stakes, it seems everyone is on edge anxiously awaiting the outcome.  Not me.

America Is Bigger Than Any One Man

The problem with the office of the Presidency is that someone has to have one heck of an ego to think himself important enough to even run.  That could be said of any high political office.  Sure, there are a few who run because they truly want to make a difference in the lives of others, but most of Washington is full of self-serving individuals content to keep up the status quo, bring pork back to their constituents, and constantly campaign for reelection.  Despite their shortcomings, America is still the model of freedom and democracy around the world, largely due to the ingenuity and perseverance of her citizens.   In other words, we continue to be successful in spite of politicians, not because of them.

Ronald Reagan once said, “The nine most terrifying words in the English language are: ‘I’m from the government and I’m here to help.” Wise words.  You see, it is time we returned to a society of self-sufficiency, less dependent on our government to provide the basic needs we should be responsible for ourselves.   That’s not a call for complete anarchy, as I believe rules and regulations are important for a civil society.  However, those rules and regulations enforced by the federal government should be minimal.

God Bless the USA

We are blessed, no doubt about it.  We live in a time of unprecedented abundance, both in terms of material goods and opportunities.  Unfortunately, those freedoms are largely taken for granted, and in some circles they are even seen as a negative out of feelings of guilt that we enjoy success while citizens of other countries suffer.  We shouldn’t apologize for our success.  However, we should reign in our “irrational exuberance” for conspicuous consumption and learn to be more frugal stewards of our resources.  I should take my own advice here–as my own waistline has been a victim of such abundance!

We are blessed to have an all-volunteer military comprised of men and women willing to sacrifice life and limb for the freedoms we enjoy today, and for the safety of citizens worldwide unable to defend themselves from the rule of murderous dictatorships.  It is their sacrifice, and the sacrifices of their families, that have ensured our democracy for over two hundred years.  We have survived world wars, natural disasters, and terrorist attacks.  We have survived recessions, depressions and times of civil unrest.  We will survive this election.  We will continue to prosper regardless of the person occupying the oval office the next four years.

If you’ve made it this far into the article, I’m sure you are now expecting my official endorsement.  Sorry to disappoint, but I believe your vote is a personal matter, and I don’t want to influence your decision.  Besides, if you have been reading long and are well-aware of my strong fiscal conservatism, you can probably figure out who I’m voting for.  Then again, you probably can’t, because both parties have completely abandoned fiscally conservative ideals.

So my advice to you is to make an informed decision next Tuesday, not one based on the endorsement of your favorite actor, your parents, your pastor, or even your spouse.  Part of what makes this country great is the ability to express individual thought–and there is no greater opportunity to do so than next Tuesday.  Regardless of what happens, the sun will come up the next morning.  Businesses will open.  The markets will react.  And not much will change about your day-to-day life, as it should be.  You are ultimately responsible for your own success, so stop wasting energy worrying over politics, and start taking responsibility for your own happiness.

 
Photo courtesy of rochelle et. al.

Besides having a solid emergency fund, one of the best ways to hedge against financial ruin while surviving a layoff is to have one or two (or three) side hustles.  Side hustles are a little different from traditional part time jobs in that they generally involve you starting up something on your own.  They can range in complexity from selling yard sale finds on eBay to starting your own small business.

1. Dog walker.  On the way to work each morning I pass a lady walking five or six dogs, usually three leashes in each hand.  She carries a small shovel like a sword strapped to her waist, and has quite a few plastic grocery bags stuffed in each pocket.  I’ve never seen them in action, but I assume these tools are for performing the neighborly deed of removing dog poop from lawns along the way.

Pros:  You are getting exercise; your own dog can tag along and get exercise
Cons:  Clean up (need I say more); untangling twisted leashes

2. “Date-night” sitting service.  This is an idea we kicked around a few months ago when we were looking for ways to boost our income, without being away from the kids.  A date-night sitting service is basically a Friday and/or Saturday night in-home service where neighbors and friends drop off their kids for a few hours while the parents enjoy a “date night.”  Hosts charge a little less than a single babysitter would, but make a little more because they have more than one child to watch.  Kids can play games, watch movies, and hosts usually order up some cheap pizza, or grill hotdogs and hamburgers (always a crowd favorite).

Pros:  Your kids can participate in the fun; hourly earnings typically higher than retail job
Cons:  Liability issues; five extra kids running around the house; no date night of your own

3. Survey participant.  Anyone who has been on the web any length of time knows opportunities abound for participants to earn money completing surveys.  What is less known is that there are only a small handful of reputable companies offering this service, in a space crowded by many scams.  I have personal experience working with CashCrate, where I used to net $40-$60 a month working surveys a few minutes each day.  Over time, I’ve managed to take advantage of their lucrative referral system and I now make a couple hundred dollars a month.  It won’t make me rich, but it does add a little to the grocery budget.

Pros:  No costs to participate; can be done from home
Cons:  Email box full of offers (use a separate email account if you sign up)

4. Blogger.  I’ve been writing for nearly a year now, but if I read this myself this time last year I wouldn’t have believed being a blogger could actually become an income-earning opportunity.  The money comes very slowly, but for those with patience it can actually add up to become a nice supplemental income.  It is not completely passive income though, as there is a lot of writing, editing and behind-the-scenes administration that goes along with being a blogger.  Still, if there is a subject you are passionate about it is worth a try.

Pros:  Work at your own pace; minimal startup costs; interacting with readers and other bloggers
Cons:  Time consuming; requires mental effort tough to conjure up at the end of a long day

5. House sitter.  I have family member that recently graduated high school.  He is headed into one of the military services, but his enlistment was delayed.  Instead of hunting down a place to rent, he got the opportunity to house-sit for a couple that would be away from their home for a few months.  While this job doesn’t pay an income, money saved is money earned.  Rather than shelling out several hundred dollars for a half-year lease, now he gets to live rent free and pocket earnings from his job.

Pros:  Free rent; take advantage of amenities (pool, home gyms, etc.)
Cons:  No place for your own things; wondering when you’ll be asked to move out

6. Lawn painter.  No, that’s not a typo.  Painting houses has always been a nice way to make a few extra bucks, but in times of dry climate and numerous foreclosures, greening up lawns with paint is in high demand.  Realtors would much rather show a “green” home than one with a brown yard.  But the benefits of a green lawn don’t stop with curb appeal.  A green lawn makes the house looked lived in, lessening the chances of the home being vandalized, or squatters taking up residence.

Pros:  High demand (especially in winter months)
Cons:  Product costs; green legs and shoes

7.  Holiday Decorations Installer.  This one is seasonal, obviously, but with the holiday season approaching I’ve heard of many enterprising people advertising their services to install decorations.  Many homeowners enjoy adding icicle lights and yard decorations, but don’t have the time, energy, or know-how to set them up themselves.  That’s where you come in.  Charge a flat fee based on the amount of decorations the owner wants displayed, and offer a discounted fee to come back after the holidays and take down the decorations and pack them away for next year.  Who knows…you might earn a little extra Christmas shopping money by helping out your neighbors!

Pros:  Minimal equipment needed (maybe just a ladder, scaffold, etc.); set your own schedule
Cons:  A lot of patience needed (ever try to unwind a 100ft strand of tangled Christmas lights?)