November 2013


We wish everyone a Happy Thanksgiving! We hope everyone enjoys the holiday. We’ll be back in two weeks with our regularly scheduled post.

We love a good money saving tip. When you’re living on a budget, saving a few dollars here and there can make a big difference. Some money saving tips are pretty sound (like research a product before buying and finding it for the lowest price). Other money saving tips can backfire and end up costing you more in the long run.

This week, April Dykman of Get Rich Slowly wrote about this topic: “7 Money-saving strategies that can cost you more.” While the strategies she discusses can certainly help to save you money, you have to be very careful how you utilize them.

“1. Buying a coupon to save money later.

A great example of this scenario is Groupon or LivingSocial. The deals hit your inbox, and one piques your interest. […] So you buy it, and then you forget about it. The expiration date comes and goes. This has happened to me a couple of times, so my new rule is to only buy Groupons for services that I’d use anyway or places that I already love. For instance, when I’ve bought Groupons to my favorite restaurant, I’ve always redeemed them.”

Groupon and LivingSocial are great. They have some amazing deals and can really save you money, but it will only save you money if you would have spent the money anyway. If you were going to go to a restaurant and spend money there regardless of the coupon, then yes, finding a deal to save you some money is great. But if you are spending money just to get a deal on something you never would have done if you had to pay full price, it’s better to skip.

“2. Buying more to get a discount.

A lot of online retailers will coax you into buying just a little bit more with their discount offers. For instance, if I just purchase $20 more, I can get 15 percent off or free shipping. […] But the problem is that you can spend more money than you would’ve spent without the coupon. For instance, if I need $20 more in my cart to get free shipping, and shipping costs $8, then I’m paying $20 to save $8, which is $12 more than I would’ve paid without the coupon. In fact, I didn’t save; I spent more.”

I (Dawn) am guilty of this one (in fact I just made a purchase last week where I bought two items more than I was planning to get free shipping). When shopping online, shipping can be a huge expense, so it makes sense to want to try to avoid it. But if you are just throwing stuff into your cart to reach that elusive “free shipping” threshold, you may want to stop and think of the cost (Would you really be saving money on the total order? Is the final cost for the items you actually need plus shipping going to be more or less than the “free shipping” amount?

“3. Paying more to invest in quality.

More expensive doesn’t always mean higher quality. […] Expensive isn’t always better. Unless you do a bit of research, you might think you’re paying more to invest in quality, when really, you’re just paying more.”

Do you research. You can more than likely find reviews of different products online that can help you decide what is actually the higher quality product, regardless of price.

“4. Paying less to save money now.

Sometimes it does make sense to pay more. If you’re trying to save money by going with the cheapest item, that can cost more in the long run.”

Again, do your research. While getting a quality item for cheapest price you can is often a good idea, getting the cheapest item available often is a bad idea.

“5. Buying extra to save over time.

Buying in bulk is a good way to save money, but only if you actually use it.”

This is especially important if you are buying perishable food in bulk. Be careful not to buy more than your family can eat before the food goes bad.

“6. Buying something that’s too good of a deal to pass up.

Sales and clearance racks can be deceptive. […] Even though I got a great discount, I wasn’t saving money. Those items would hang in my closet, unworn and unloved. Eventually, I ruthlessly cleaned out my closet and got rid of those sad reminders of how much I’d spent on those great ‘deals.’”

People often buy items off the sale or clearance rack that they didn’t set out for. You went to the store for a winter jacket and came home with a summer shirt because it was on the clearance rack. While not inherently a bad idea (I’ve bought clothes for a few dollars off the clearance rack that I wear all the time), make sure you are buying it because you really like it, not just because it’s cheap. I know from experience that if you don’t really love the item or it’s not very comfortable, it will go to waste, and even if it only cost you $5, that’s still $5 down the drain.

The above money saving tips can save you money if utilized correctly. Make sure to think things through before making a purchase!

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.

Many people have plans to retire away from where they are currently living and working. Some people already have vacation homes that they plan on moving to full time after they retire. Some people know exactly where they want to go, maybe some place they love to visit or where their family lives.

Still others have intentions to move, but aren’t quite sure where to start. Moving over long distances at any point in your life can be a big decision, one that can have a major impact on your future. This is even truer for entering retirement where your resources will be more limited and you have to concern yourself more with lifestyle needs like health care and transportation.

A few weeks ago at U.S. News – Money, Emily Brandon posted “10 Tips for Picking a Place to Retire.” If you are considering a move in your retirement, these tips can point you in the right direction on where to start.

  • Seek lower costs” – There are plenty of areas around the U.S. that have lower costs of living. Obviously, depending on where you live now, the difference in cost could be very extreme. Picking an area that has lower cost of living overall (especially if you are looking to buy a home), can have a major impact on lowering your retirement expenses.
  • “Look for great amenities” – You should look for a place that will allow you to stay active and productive in your retirement. When looking for a new place to live, make sure to keep the available amenities in mind. Whether is it an all-inclusive community, or the availability of amenities within short walking or driving distance.
  • Health care options are essential” – Healthcare will become more important as you age. You don’t want to retire to an area where the closest medical center or hospital is too far away for convenience. Also, make sure the available options that are close at hand are quality, with good doctors and technology at hand.
  • Calculate the tax impact” – Taxes can have a big negative impact on your retirement income, and it’s unfortunate that many people do not take the time to consider this impact before entering retirement. If you are looking to move to a new state, keep in mind the impact of the state taxes before you move. There is a wide variety of tax rates to choose from state by state, so don’t lose sight of how it will affect you and your potential move.
  • Aim for proximity to family and friends” – We’ve heard plenty of unfortunate stories of people who move to a location far from family and friends only to be unhappy there. Maybe it was to a place they loved vacationing to or a place they always dreamed of living. But it can get very lonely, and this can be especially true if you have kids and grandkids. In the long run, it’s important to consider how living near family and friends can positively impact your life.
  • Consider the political, religious and social climate” – This may not even be something you would think about during a move. There are plenty of areas around the country that are more highly charged than others politically, religiously, or socially. If you have a particular leaning, you may want to consider what views others in the community have. Otherwise, it may become difficult to make new friends with like-minded views.
  • Job opportunities” – If you are looking to work for at least some of your retirement years, as more and more people today are planning, make sure you look for a place that provides you with job opportunities. Otherwise, your plans to go back to work may not come to fruition, straining your retirement income.
  • Transportation options” – While driving yourself around may not be an issue now or for years to come, there may come a point where you no longer can drive yourself. Consider looking into what public transportation options are available where you are looking to move for future use.
  • Better weather” – This is often the reason people will give for wanting to move, especially if they live somewhere with extreme temperatures. But you have to do your research! Temperature can vary wildly by state and by season, and some people may not consider the extremes. If you are moving from Wisconsin and bitterly cold winters, you’ll probably love Florida’s winter temperatures. You may not love the summer temperature though! While nowhere is going to have your perfect weather, you have to decide what is most important to you and what kind of extremes you can tolerate.
  • Test it out first” – We’ve discussed this here before. When making a big move, you never want to jump into buying a house right away. You should always look into renting for a time to make sure that you really love where you’ve chosen. That way, if you find out six months down the road you haven’t chosen the right location, you are in a much better position to fix the issue than if you are tied down into homeownership.

We hope you found some helpful tips here if you are looking at moving when you retire. We thought Brandon’s list has many good thoughts to get you started.

 

  • Disclaimer: The information on this blog is not meant for specific financial advice. The ideas/opinions stated are not suited for everyone, and readers should use their own judgment in applying them in their financial lives.