Saving Money by Renting out a Room

In today’s harsh economic climate there are many people that are finding their budgets stretched to the limit, especially their home budget.  Mortgage payments, utility bills, repair costs and maintenance costs can eat up nearly half of a person’s take-home pay and sometimes more, making our homes the #1 biggest expense that we have. If you’re keen on lowering these costs there’s one thing that you can do that will lower them greatly and that’s to rent out a room (or rooms) in your home.

Indeed finding a roommate can literally save you thousands of dollars a year on your mortgage and other home expenses. If you have a nice home in a safe location(or even if you don’t) you can in some cases charge a third of your average month’s mortgage cost just for the room and then ask more for the utilities and other amenities.

Of course there are a lot of factors that come into play when you rent out a room in your house to strangers.  Here are a few good Tips for when you decide to go forward.

  1. Find a roommate through online roommate searches or by placing a free ad on Craigslist.com
  2. Interview prospective roommates very well.  Ask questions about their lifestyle, their habits and so forth. Remember that they’re going to be sharing your living space.  If you don’t think that their views or habits mesh with your keep looking.
  3. Set specific rules, print them and place them in a place where everyone will see them. Who can come and go, who takes care of the garbage, when the rent payment is due and so forth.  Some people have their tenants sign a ‘rule agreement’ so that they have fewer problems.
  4. Se boundaries ahead of time too so that your new roommate is aware of what he can or can’t use, can’t go or access in your home.

It’s best to check with the local government to see what the legalities are of sub-letting a room in your home before you do. I’m not a lawyer but I know plenty of people that don’t involve any paperwork at all when they rent a room and have no problems with their tenants. It’s your call.

Charging a security deposit or a month’s rent in advance is always a good idea, especially if you have a nice home and you’re going to be renting to young-ish people.  It’s just a good idea to protect yourself. After a tenant leaves it’s also a good idea to have all the locks changed on your home, at least for the main entrances.

All in all renting a room can be a slight inconvenience for cutting your monthly home bills down significantly.  Many people who do it rent multiple rooms and have almost everything paid for by their renters. You can do that too, or just rent 1 room, but no matter what you’ll save big bucks.

4 Items That Will Cost More in 2013

While the economy may very well be on a path to recovery (we’re still skeptical) it certainly doesn’t mean that everything is hunky-dory for consumers.  Indeed, many items that we purchase every day are going higher and higher in price and in 2013 it doesn’t appear that some of them are going to stop. With that in mind we thought we’d tell you about 4 items that you buy every day (almost) that, unfortunately, won’t be going down in price anytime soon.  If you can cut down on them now’s the time to start.  Enjoy.

First on the list is maybe the most important; food. Although the severe drought in the Midwest didn’t actually affect consumers last year in 2013 it’s definitely going to do just that.  What the drought has actually done is affected retail prices first and that is finally going to trickle down to the consumer this year. Not only will the drought affect the actual crops but, since there was less feed produced, the cost of feed went up and with it the cost of all meats, dairy and even bakery products that use dairy ingredients. Indeed in 2013 food prices are set to hit some all-time highs.

Next up is Gasoline and, in 2013,  $4.00 a gallon at the pump is going to be where the prices hover.  As summer approaches cities like Atlanta, Los Angeles, Boston and Dallas, among others, are going to see prices inch higher and higher until they peak (hopefully) around the 4 buck mark.  The West Coast will actually get hit even harder as they’re expected to see prices at about $4.50 per gallon for regular. The highest times of the year, when prices will peak, are usually April and May, August through September and the October and November. We’d make a joke about ‘stocking up’ but we don’t want to pour salt on everybody’s wound.

Not exactly a true necessity travel will cost a bit more in 2013 as airfares and lodging prices edge ever higher. Business class as well as economy tickets are probably going to rise about 1 to 4%, depending on the type of ticket, the origin and destination and the carrier.  Hotels will be increasing their rates as well to the tune of 4 to 9%, a rather substantial increase.

Just to show that we’re not all doom and gloom the cost of renting a car will actually be a little bit lower in 2013. The reason; increased competition. It’s only in the United States however so plan your travel wisely.

Last on the list is health insurance. We hope you enjoyed 2012 (it was the lowest increase in 6 years) because in 2013 you’re going to pay almost 7% more to get the health insurance you need. We don’t want to get into any details about why because we don’t want to start any political debates.  Suffice to say that it’s going to cost more.

Best Money Saving Tips for 2013

Now that 2013 is in full swing we thought that a review of some of our best Money Saving Tips was in order to help you put as much of your hard-earned green into the bank as possible this year.  Many of them aren’t all that hard to implement and put to work for your future.  The hardest but most important part is to get started and not procrastinate.  The year is already 1/12th over and, if you don’t start soon, summer will be here and you’ll have gotten nothing done to increase your savings.  So take a look and get to work putting your money where it belongs; in your savings account.

First things first you’ll need to give your finances an honest assessment to see where you stand and see what changes need to be made this year, if any.  If you’re using a budget you may need to tweak it as you’ve probably had some financial changes in the last year (hopefully all positive).  If you don’t have a budget (shame on you) then 2013 is the year you should final put one together.  (It really is quite important.)

The next task that you have is to start getting ready for taxes.  Gather all the necessary documents together and make a call to your accountant to make sure that you’re penciled in and will get your taxes done ASAP.  The quicker you get them in the quicker you’ll get your refund if you have one coming.

Save, save, save.  If you didn’t follow our advice last year we’re here to tell you again; save every dollar every chance that you get. Stop frivolous purchases, ask your job to take more out of your paycheck and directly deposit it into savings and start your 401(k) and other retirement savings plans now.

Perform a thorough review of all your services and make sure that you’re getting the best price and have the best plan on all of them.  Electric, gas, cable, mobile and other services could possibly be lowered depending on changes that happened in your life last year.  Take a look and, where you can, lower them for 2013.

Subscribe to ‘deal’ websites like Groupon (who we don’t particularly like but…), Living Social and Slick Deals, to name just 3.  You can also use Google Reader to keep up with deal sites and save big bucks on all your (necessary) purchases this year.

Use the SMART acronym to set your goals for the year.  It stands for Specific, Measurable, Attainable, Realistic and Timely and, if you use SMART to set your goals and drive your decisions, you’ll have a great year financially.

Use these Tips, save as much as you can at every chance you get and we promise that 2013 will be one of your best saving years ever.  Good luck and we’ll see you back here soon.

 

Tips and Advice for Saving Money on Clothing

For many people, women especially, buying clothing is one of the biggest expenses that they have.  The fact is, clothes, shoes and accessories can cost an arm and a leg and, in many cases, are only worn a few times.  If you’re desperately trying to save more money this year and you don’t know where to start your wardrobe may be the best place.  Below are some tips and good advice for you if you want to save money on clothing in 2013.

First just this; if you don’t need it, don’t buy it.  Yes, Carrie on ‘Sex and the City’ could afford new high-end shoes every week but she’s a fantasy figure, not a real life woman.  Those Manolo Blahnik’s would set back a real human by about a month’s worth of groceries. Yes they look great but, unless you’ve got your own ‘Mr. Big’ paying the bills you’re not going to ever be able to save if you don’t have a little self-control.  And that goes for men too!

When you actually do need new clothes try your very best to stay away from designer brands that usually cost 30 to 40% more than the lesser-known brands. The truth is, most times the designer brand is the same exact quality as the lesser so spending more for the more expensive option is just plain wasteful.

Versatility is the name of the game with clothing.  Don’t buy something that can’t be used with multiple ensembles or multiple ways.  Think of it this way; no matter how great a price you paid, if you wear something once and then it just sits in the closet or dresser afterwards you’ve wasted your money.  If, however, you can wear it multiple times and with multiple other pieces of clothing you’re going to get your money’s worth out of it.

Planning ahead is also vital if you’re keen on saving money for clothes.  Buying winter clothing in the winter is just plain crazy.  Better to buy them in spring when the prices have been greatly reduced. This is the same for every season and can save you up to 50, 60, 70% and even more.

One last thing that you can do is to sell your used clothes on eBay or Craigslist.  If you have nice clothes and they’re in great shape this can actually net you some cash that you can then use to buy your new wardrobe.  If you did this all the time you’d almost never spend anything because you’d keep recycling your clothes money. Think about that for a few minutes.

 

Want to save money in winter? Turn down the heat!

OK, we know it’s cold outside and we know that there are very few people that really, truly like to be cold but the fact is, if you’re keen on saving big bucks this winter, one of the very best, top of the heap ways to do it is to turn down the heat in your home, especially during the day.

The first thing you need to do is take a look at the thermostat in your home and, if you don’t have one that’s programmable, you really should invest in one.  Being able to program the heat rather than turn it up or down willy-nilly all day long is very helpful and will definitely help you save. The US Department of Energy says that for every degree of temperature you reduce the heat you’ll save between 1 and 3 % on your heating bill, an amount that can really add up if you have a big house.

The recommended temperature for any home during the winter is 68 degrees.  If you have the heat higher than this you’re not only being silly you’re wasting money. The fact is, if you really don’t want to be cold you should put on some warmer clothes.  For that matter you can open the curtains and let in the sun, sit in whatever room is getting sun and change seats and rooms as the day changes, and stay upstairs if that’s an option because heat rises and the upstairs will generally be warmer.

Want to save almost 30% on your heating bill this winter?  Turn the temp down to 55 degrees at night (or lower if you can take it) and you’ll save huge amounts of money.  Worried about getting up to a freezing cold house? If you have the programmable thermostat we talked about above you can set it to heat the house in the morning so that when you get up you don’t freeze.

Keep in mind that, contrary to popular belief, it doesn’t actually cost more to heat the house back up after it gets cold.  The ambient heat that the house has will keep it warm even after the heat is off, a savings that will more than make up for the cost to reheat the house in the morning.

Simply put, the best way to save money on your heating bills this winter is to not waste heat.  Bundle up, open the curtains to let the sun and warmth in, tell the kids to run around if they’re cold and by the end of the winter you’ll have saved more than a pretty penny.

Spending and Saving Advice for Single Moms

There are many single moms today that are working hard to pay their bills, take care of their children and put a little bit aside for retirement and a ‘rainy day’.  It’s tough, no doubt, so with that in mind we put together a little list of some of the best Tips and advice that single moms can use to stay on their single mom budget and save as much as possible.

First, if you don’t know how to use a computer and make an Excel spread sheet you’d better take a class at night school.  Being able to keep track of what you make and what you spend is vital to being able to save more of your money, and an Excel spreadsheet is the best way to do that.  It will show you where your money is going and what you can do to keep more of it in your bank, both very important for a single mom.

The fact is Moms, if you don’t have a clear idea about what’s coming in and going out and also where it’s going you’ll never be able to save any substantial amount of money. Knowing where your money goes is the first step in knowing where there are saving possibilities. If you have problems understanding something ask the people at your bank to help you. That’s what you pay them for.

Single moms need to have plenty of life insurance by the way but nearly 40% have little or none.  The fact is, especially if your kids don’t have a father in their lives, that if you die they’re going to be in trouble unless you have set up insurance to help them out when you’re gone.

Speaking of which, building a 4 to 6 month savings ‘cushion’ to cover the bills should you get sick or lose your job is an excellent idea.  You should have your employer take at least 5% out of your check and deposit it into your savings account directly and, whenever you can, throw a little more in there for safe measure.

No matter what you do every year at tax time (and it’s coming soon) speak to an expert and get as many tax deductions, breaks and reductions as you can.  Depending on your income and how many kids you have this could be a substantial amount of deductions and could mean a substantial amount of money saved.

Finally, don’t abuse your credit cards.  Listen, money is tight already so unless you a) need it or b) you’re going to need it soon just don’t buy it.  We know that kids want, well, everything, but the fact is that you have to be firm and not give in sometimes.  They will survive, we promise, and for that matter so will you, so put that plastic away and use it only in emergencies.

Some New Year’s Saving Resolutions for 2013

With every New Year come new resolutions.  This year, do yourself and your finances a favor and skip the usual diet and exercise resolutions and resolve to do something about saving more money.  Below are some Tips to help you do just that.

Using Rebate Sites when you shop online is a great way to earn a little cash back and even some gift cards.  Yes, it’s only about 1 to 2% but hey, it’s free money.  The best site on the web right now for rebates is Ebates and if you sign up with them and spend $20.00 on any single transaction you’ll get a $10.00 gift card.

Speaking of rebate sites you should continue in 2013 to use any money saving site online that you can and also continue to use coupons as much as possible.  Even a $15.00 a week savings from these 2 will add up to almost $800.00 in savings over the course of the year, and that’s not chump change.

Remember that, even though something is on sale, if you don’t need it and you buy it anyway you haven’t ‘saved’ money you’ve actually spent money and on something you really don’t need.  This is what we humans call ‘wasting money’. If you need it and it’s on sale then by all means go for it but if you don’t actually need it, don’t buy it.

Use a set cash limit for your daily needs like groceries, toiletries and eating out and don’t spend anything else.  Yes, this flies in the face of using plastic and earning ‘rewards’ but it’s the best way to keep track of your spending and stay on a budget.  If you set aside $100.00 a week and you know you can’t spend more than that you will watch what you buy, guaranteed.

Download an app on your phone that you can use to price match items when you shop, whether online or in the real world. (There are lots of them on iTunes and Google Market.) Many stores do ‘price matching’ these days and, if you can get the price matched and be able to buy everything at 1 store, you’ll not only save money on the products but also in gas and time because you won’t have to drive all over town for the best prices.

That’s 5 excellent Resolutions right there.  Use them, save money, and thank us later.

Ways to Make a Family Budget Work

Budgets are critical things that every family must undertake at some point. Regardless of income, families cannot spend above their means, lest they lose important items like homes, cars, and more. Once a family overspends, losing these items may affect them emotionally and psychologically, and harm a family for years to come. Setting up and figuring out your average family budget is critical to living a financially responsible lifestyle.

Because of that, it’s critical that budgets are used – and stuck to – in order to make a family work efficiently. Once you get the hang of it, though, you can learn to love the budget and still have fun for all the affordable stuff that matters.

Stick To It

The first tip is the most obvious; a budget doesn’t work if you don’t stick to it! Make sure that once you decide on a budget and specific rules, that it is something you can stick to and live with adequately. If you are unable to stick to a budget, well, what good is it anyways?

Commit to a budget that is realistic in your life style, and stick to that monthly budget by whatever means necessary, though it may mean forgoing some things like clothes, meals at restaurants, or entertainment ventures.

Have A Little Fun

Plan within your budget to let loose occasionally and have some fun. That is, create some areas of flex money that can be spent on fun things to get everyone together and relaxed, even though they may be living on a budget.

By creating a space to have some fun within the budget, you take away some of the stress and anxiety that comes from living on a fixed income and improve the outlook and attitudes of some of the younger family members living with the budget.

Get Everyone On Board

Before you decide on a budget that works for you personally, get the whole family together. Make sure that everyone – big, small, and everywhere in between – is on board with your proposal and understands the reasons behind getting the budget together in the first place.

Once everyone is on board, it becomes easier to create the budget and make sure that everyone is happy, aware of the rules and regulations, and agreeable to what is happening in the family.

Budgets are difficult to live with, but it’s not the end of the world. You can find a happy balance between budgeting your purchases, and having the family enjoy their free time, by sticking to a realistic, sensible budget. Make it carefully, consult everyone, and stick to it, and you’re there before you know it!

Reduce Debt Yourself

Some consumers believe that in order to reduce their debt, they must go to a professional. The truth is, anyone can pay off their debts with hard work and dedication. You have to commit to getting rid of your debt and make every effort to do so. It may take several years—depending on the size of your debt—but it will definitely be worth it.

You can do it yourself, without anyone’s help. First step is to find how much you have. Add up all loan and credit card balances that you owe. Calculate the monthly payments you make on them. Now, to pay off your debt, you must pay more than the minimum payment due. Credit card companies calculate the minimum payment based on the outstanding balance. It is usually little more than the finance charge. For example, the minimum payment on a credit card is $30. About $20 to $25 cover the finance charge. The rest is applied towards the principal balance. How long will it take to pay down $1,000 when you pay only $5 to $10 towards the balance each month? It will be at least five years. Can you afford to pay $60 or $100? Pay as much as you can to pay it off sooner.

Use an online debt reduction planner (such as CNN Money Debt Reduction Planner at http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp) to calculate how long it will take to pay your debt off based on the balance, interest rate and payment amount. You can set a debt-free deadline and work towards it.

When you make a decision to pay off your debts, remember to control your spending. Put away or cut your credit cards. Use cash when making purchases. Before buying something, think whether it is a necessity or a luxury. Save money aside for luxuries and only purchase them when you have the full amount.

Beware of the “quick fix” advertisements. They claim to be able to settle debts at 60 to 70 percent less than what you owe. However, many of these companies scam consumers out of money by charging high fees and failing to deliver what they promise. They prey on those who want a quick way out of debt. Only a little over 1 percent of debtors complete these programs. Others drop out when they realize that they are being scammed.

Why is Budgeting So Important?

Budgeting is allocating the income to cover the expenses. Creating a budget is not difficult. Some people have a difficult time following it. A budget is a financial plan that can help you solve some financial problems. But is budgeting really important? Do you really need a budget? Will it take away your financial freedom? There are many reasons why it is important. Let’s take a look at some of them.

Living on a budget will not take away your financial freedom. It will do exactly the opposite. If you are living paycheck-to-paycheck right now, you probably think that you cannot afford certain things. A budget allows you to reduce some costs and set money aside for other purchases. You can also put money into savings and stop turning to credit cards for emergencies.

A budget can help you get out of debt. By creating a realistic budget, you can allocate enough cash to pay it down faster. It will also help you to save money for future purchases to stay out of debt in the future.

Budgets help you control your spending by assigning a certain amount of money into each expense category. You may say that this is where it takes away your freedom. Not necessarily. You can budget for entertainment, hobbies, shopping, vacation and other things.

Budgeting helps you to cut costs. You’ll be able to eliminate certain unnecessary expenses and have more money to save for other important purchases. A budget helps you set your priorities instead of wasting your money. You can set and achieve financial goals, such as buying a car with cash, saving money for college or taking a dream vacation.

A budget helps you to live within your means. If you are a slave your credit card, you need to break that death grip. You cannot do it if you do not have enough money to pay for your expenses. Having a budget will allow you to set money aside for all your needs and live within your needs.

If you have a hard time keeping track of your bills and paying them on time, you really need a budget. When you set money aside for expenses, you will have the money to pay your bills when they come.

More important, a budget will take away your financial insecurities, because you will be able to put money aside for major purchases and emergencies.