May 2011


 We decided to do something different. Since we enjoy reading other financial blog every week and there is too much good content out there for us to share with you ourselves, we decided to implement what a number of other blogs already do. Once a month, we’re going to let you know what our favorite blog posts were from others. Hopefully you’ll find something useful and find a new blog you enjoy following!

 

Good Financial Cents – The Top 25 Books for Entrepreneurs That Kick Serious Butt – While we haven’t read all the books on this list, those we haven’t will most likely go on our own “to read” list.

 

Len Penzo dot com – When Good Personal Finance Practices Go Too Far – As with many things, taking your finances to the extreme can be detrimental.

 

The Simple Dollar – The True Nature of Fulfillment – This post is in reference to our May book recommendation Your Money or Your Life.

 

Let us know if you have a favorite financial blog that you think we should be reading.

 

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This month’s book recommendation is Your Money or Your Life by Joe Dominguez and Vicki Robin. Originally published in the early 1990s, the main purpose of this book is to walk you through a 9 step process for changing not only your finances, but your entire view of money.

In many ways this book is too detailed. The process recommended for handling your everyday finances involves too much time and energy, and we think that while it may be possible to maintain for a short while, most people (including us!) would never be able to keep up with over the long run. We also feel that counting every penny, which this book recommends, is unnecessary to get to a healthy financial situation. However, if you are the type of person who likes to go into so much detail with your finances, this book’s process might be for you.

So, while we don’t see the value of the entire process, we do think there are some worthwhile ideas about how to change the way you see your finances. The process asks you to look at your life and figure out what you truly value and what gives you real satisfaction. Often times, if you really study what you are spending money on, you may see that you aren’t getting fulfillment from because it just doesn’t matter to you. Dominguez and Robin recommend that you develop a “yardstick for fulfillment.” Try to measure how much fulfillment you get from a potential purchase, and you may see that it just isn’t worth it. From the book:

“You come to differentiate between a passing fancy and real fulfillment, that point of perfect balance where desires disappear because they have been completely met. Any less would be not enough. Any more would be too much.”

While this book is popular (see it on The Simple Dollar which goes into much more detail), we don’t think that it’s a must read. It does have some good concepts though, so if you’re interested, pick it up.

Last week over at The Simple Dollar, Trent Hamm wrote a post called “The Danger of the Rich Act.” Trent is discussing what he calls the “rich act:” people who find themselves in a stable, healthy financial situation and make the decision that they can afford to do more. Go to nicer restaurants, more expensive vacations, etc. Because of this, many people lose touch with things they may truly enjoy (usually the cheap things).

In many ways, this makes sense. If you’ve paid off all your debt and have plenty in savings, why not spend a little more money for enjoyment? There really is nothing wrong with that if you do it the right way, which unfortunately many people don’t. Just because you can afford to go to a nicer restaurant, doesn’t mean you should when you love the local diner so much.

Also, don’t forget how you got to be financially stable. Whatever method or plan you used, we’re sure it didn’t involve going overboard with spending. If you feel you can afford to loosen up some with your enjoyment money, be sure you work that into your plan and have room to budget for it. Don’t just start spending because you feel like you can afford it. Otherwise, you may quickly find yourself on the opposite side of your financial situation.

As Trent discusses:

“Just because you make $100,000 a year doesn’t mean that the things that brought you pleasure when you made peanuts stop bringing you pleasure. Don’t walk away from the meals you loved, the old friends you’ve made, the dive restaurants you’ve enjoyed, or the simple pleasures that you could dive deeply into. “

There is nothing wrong with that local diner if it’s what you love, whether you make $10,000 or $100,000!

Next week’s post will be on Tuesday due to the observance of Memorial Day.

Because of what’s happened to the housing market, if you are looking to buy a house or will be soon, chances are you will see quite a few foreclosures on the market. While not always the case, most of these houses would be considered “fixer-uppers:” houses that need a lot of work and are usually sold “as-is.” Even if a house is not a foreclosure, it is often the case that if the house is in need of work, you could get a good deal on it.

I (Dawn) wanted to write about my own experience buying a fixer-upper house and the dos and don’ts I learned through the process.

My husband and I bought our house almost 2 years ago. While it wasn’t a foreclosure, it had been sitting empty for over a year, and it was a mess. The house had been built in the 1950s, and almost nothing had been upgraded since then. And while the structure of the house was solid (except for some ground water issues in a slightly leaky basement), it needed to be redone from top to bottom (windows, electrical, furnace, flooring, etc.). It was a very daunting task, but the house was a great deal, in a great neighborhood, and we knew it would be worth the time and the cost to fix it up.

Now that we have had the house for almost 2 years, we have made a lot of progress, but not as much as we thought. Like many first-time homebuyers and fixer-upper homebuyers, we overestimated the amount of work we could do and underestimated the cost.

Dos and Don’ts

 

  • Make sure you can live in an unfinished house – Chances are you aren’t going to be able to get everything you want done 100% completed before you move in. If you are the type of person who won’t be able to handle looking around everyday to see unfinished projects, buying a fixer-upper is not for you.
  • Make sure the neighborhood is worth it – Avoid buying a fixer-upper in a neighborhood where the money you put into fixing up the house and the amount you bought the house for is more than it’s worth. So, if you buy the house for $200,000 and put $30,000 of work into it, but the house will only worth $220,000 fixed up in the neighborhood, you may never get your money back when you look to sell. So only look for neighborhoods where fixing a house up will be worth it.
  • Make sure you can do some of the work yourself – While it’s possible to hire someone to come in to do all the work in your house, it would be very expensive. You should certainly hire people to come in a do any big job you have, but if you are handy, try to save some money by doing the smaller projects yourself.
  • Break all the work you want done into small projects – The smaller the better! If you have a list of small projects you can finish in a weekend, you will be much more likely to get them done. Even if those small projects are just part of something bigger, it can give you a sense of accomplishment. While you won’t get “paint every room” done this weekend, you might get “paint the kitchen” done.
  • Make sure you overestimate the cost of each project – Projects in the home almost always cost more than you plan. So, as with everything, we recommend saving for a project before starting it. Overestimating what you think the cost is going to be is the much safer route. It will eliminate delays because when something unexpected comes up, you will already have some money set aside. You won’t have to delay the project a few weeks (or months) while you save to finish it, and you definitely won’t have to turn to your credit card just so you can finish what you started. And if you still have money left over, apply it toward your next project.

 

These are the lessons I learned with my own experience in buying a fixer-upper. While I don’t regret buying the house, I do regret some of the things we did after, and I think it’s very easy to have buyer’s remorse while working on a fixer-upper. Hopefully my experience will help someone else who is thinking about going the same route!

When digital cameras first started becoming popular, the idea of not having to wait to see your photos was great. No more gathering rolls of 24 or 36 prints to take them in for processing only to find out that half of them are too blurry or too dark. But while digital cameras are useful for instantaneous review, maybe they’re too convenient and make getting those photos printed up more of a chore.

We know there are many options for what to do with digital photos. There are digital photo frames or you can just keep them on your computer for viewing. You can take them to a store to print up, which can get costly (sometimes 29¢ a print). You can print them yourself at home, but when you buy all the supplies and a printer with high enough quality for the job, will be just as costly if not more so.

Our favorite option is ordering prints online. The process is easy and convenient, the cost is reasonable, and there are many great options. There are a lot of different websites, but our favorite is www.snapfish.com. We’ve used this site for years, and it’s great. Uploading pictures is easy, and you get free online storage for photos so you don’t have to worry about losing them. 4×6 prints are only 9¢ apiece. While you do have to pay for shipping, there is usually some sort of deal going on that will usually knock some cost off your order (anything from free prints, to 50% off certain orders, to free shipping).

Another reason these types of sites are great are the options. You can make all sorts of different items with your photos, which can be great for gifts. Our favorites are the photo books; we’ve had great experience making and giving gifts with these. Also, if you have old photos and a scanner, you can make a photo book with all your old favorites. This is a little more work intensive but worth it, we know from experience!

So check it out. Some other sites that may be worth looking into are www.kodakgallery.com, www.shutterfly.com, and www.ritzpix.com (we’ve never used these sites, but they are all similar). There are many more as well, and we’re sure you can find one you like, that will likely save you some money in the long run and help you print your pictures!

As you know, we just went on a family vacation to Disney World. We travelled as a group of 8 people, 6 adults and 2 kids. And we thought we’d use our experience to give you some tips on how best to travel as a family.

  • Plan ahead – We know some people are planners while vacationing, and others would rather take it as it comes. It shouldn’t be a surprise that we’re planners. However, even if you aren’t, the more people you are travelling with, the more important planning becomes. Make sure everyone has an input on what they’d like to do and see. This will help eliminate wasted time and money while vacationing because you will already know what everyone wants to do ahead of time.
  • Save ahead – Estimate any potential expense you will have for your family vacation, plus extra, especially if you’re travelling with a larger group. Then, once you decide on your potential budget, save everything up before you go, or even before you book anything if you want to be completely safe. It’s too easy to plan and book a big vacation using credit to cover any short fall. Even if your intention is to pay if off right away, it can be dangerous territory. Also, if you go on the trip knowing that you still owe on it, your vacation won’t be as enjoyable.
  • Pay ahead – If possible, prepay for what you can (transportation, hotels, etc). Prepayment gives your vacation budget a better chance at being followed because it reduces some of the risk of unexpected expenses. Also, since food is such a major expense, if you happen to be going on a vacation to a place that allows you to prepay for food (like Disney or a cruise), look into taking advantage of the option.
  • Be flexible – We know we just told you to plan ahead, but that doesn’t preclude being flexible. When travelling with a group, there will be things that someone else wants to do that you won’t (especially when kids are involved). Just go along with it. You may not want to do it, but your overall vacation will be much more enjoyable because you won’t be at odds with other family members. There is probably something you want to do that the others don’t, so hopefully they will be flexible as well!

If you’re currently planning a family vacation or thinking about it, hopefully these ideas will give you a head start!