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June 22 2010

Why Earning More Money is More Important than Frugality

Frugality doesn’t enable us to move forward--it’s mostly an effort to make living on our current incomes more tolerable. That’s a noble goal, but if you want more out of your life, being frugal alone isn’t the magic bullet that will take you there.

June 16 2010

8 Ways to Buy Your House For Less

Right now a lot of people are mistakenly believing that they’re getting a good deal on a home because they’re paying less for it than they would have 2 or 3 years ago. The real issue of getting a good deal isn’t merely paying less than you might have in the past, if less is now the current market. A good deal is paying less than the current market!

May 26 2010

May 12 2010

Giveaway! Rainy-Day Saver Turns 2

Great giveaway with $25 Amazon voucher, lot's of cool PF books and more

March 12 2010

Don't Beat Yourself Up Over Spending


A good friend of mine recently told me she felt guilty for spending money on a cute pair of shoes to go with a dress she was wearing to a wedding. She showed them to me -- they're the kind of heels that you can wear with anything!

My friend is not in debt. She's someone who is so responsible with her money that when it comes to spending it, she freaks out about whether she's doing the right thing. And I'll admit, I tend to get the same way about my purchases.

It's in my nature to save money in places where I can't bear to spend it -- groceries, clothes, manicures. Haircuts and manis? I'll skip them here and there. I don't totally skimp out when I go food or clothes shopping, but I always make sure I have coupons that coincide with a sale.

The few times I do buy something off-sale, like a purse, I get that twinge of guilt.

But I will spend it in other places. Sushi? Absolutely. A vacation here and there? Sure thing -- although the initial outlay to book it always gives me chills.

Right now, I can't bear to think about putting out the money for new kitchen countertops and the backsplash, even though we desperately need a new one (cracked white formica, anyone?). I really want a nice patio area for our yard, since there's nowhere to put a table and chairs besides on the grass. But I get paralyzed with fear when it comes to spending on major purchases.

We work hard for our money. I work a number of side gigs to keep extra income flowing in, and that money allows us to splurge once in a while. I think that's something we all should keep in mind.
Tags: spending

March 10 2010

Mortgage Interest Tax Deduction? No, Thanks


I'm going to make a statement that is bound to divide you, dear readers, into two camps: the "Are you crazy?" folks and the "Right on, (wo)man!" people.

Are you ready?

I think the mortgage interest tax deduction is a joke, and I'd rather not claim it on my taxes.

Whew. Glad I got that off my chest.


My Rationale
Yes, we chose to buy a home. We know that our 5% mortgage, while at a decent interest rate, is going to have us paying $268,000 in interest over the 30-year term of the loan. That's only $20K shy of the amount of the loan. And I think that's sickening.

As a loan amortization table demonstrates, you're paying the bulk of your interest in the beginning of the loan period. So our $1,550 mortgage payment is made up of $1,200 in interest. Sure, at the end of the year, that's a lot of $$$ to deduct if you itemize your mortgage interest. But think about what you could do with all that money if it were available for investment purposes. Right now, it's just money being paid to the bank, and for every $1 of that, you might get 35 cents back in a tax refund.

For our example, $1,200 in interest over 12 months is $14,440. The standard deduction for married filing jointly (that's me and Mr. Saver) is $11,400. Sure, it's $3,000 more to itemize the interest, but what we'll get back from that is just another $1,000 or so.

I don't think it's worth paying the bank just to get some cash back from the government. I'm a strong advocate of paying toward your mortgage principal and knocking down the amount of interest that the bank is getting. The lower the principal amount, the less you'll be paying in interest. 

I've broken down how just small monthly extra principal payments or yearly lump-sum payments can shorten our 30-year mortgage anywhere from 2 to 10 years, saving up to $50,000 in interest. That's nothing to sneeze at.

It may not be a fully sustainable plan -- I'm sure if and when kids come into the picture, it will cause us to reassess where our money goes -- but the beauty of it is that we can choose how and when we want to make those extra payments.

If our extra payments knock down the amount of interest we can claim on my taxes next year, so be it. I'll be laughing my way to the bank with the money we'll have saved down the line. And knowing our home will be paid off before our retirement will be an added bonus.

FDIC Chairwoman Questions the Deduction
What's even more interesting is that Foxbusiness.com is reporting that FDIC Chairwoman Shelia Bair has gone so far as to cite the mortgage interest tax deduction as one of the causes of the current banking crisis. Of the federal tax and credit subsidies, Bair said, "We must avoid policies that encourage such economic distortions."

So do the tax deductions and the First Time Homebuyer's Credit push more Americans into buying homes that they can't afford, all while causing the values to drop? I have to agree with this thinking -- to a point. Sure, getting back $8,000 for purchasing your first home is pushing some buyers into homes before they're ready, but shouldn't the banks also be held responsible for subprime lending practices?

March 08 2010

Prepare Your Finances For Vacation


Who doesn't like going on vacation? Although I'll admit that laying out money for something that doesn't last longer than the week you're away kind of irks me. But it's the memories and the immediate gratification that I enjoy every time, despite the money I have to pay to get to our travel destination.

It's important to consider your financial situation when booking a new trip. Perhaps you have a vacation fund and limit your spending that way. For us, it's more to do with how much cash we have free for the trip, and how much of it we're comfortable spending. We tend to stay at middle-of-the-road hotels -- not too cheap, and not full-on luxury. We're happy staying somewhere that offers a few amenities and is a comfortable, safe place to sleep.

I can't be away from home more than a week without getting homesick. Actually five days usually is plenty for me to get a taste of another state or culture. But even a week away from home can have financial implications: Your bills still need to get paid!

Going away at the end of the month? The rent or mortgage will be due on the 1st, and you have to be prepared to have it paid beforehand. The same goes for credit cards and utility bills. A missed payment can ding your credit score and raise your interest rates.

That's why it's essential that you have your financial house in order before embarking on the trip of a lifetime or a short vacation. Make sure all of your bills are paid before you leave, even if that means mailing out a check or scheduling payment online. Otherwise, you could return home to late fees and higher interest rates -- and that's not what you want to come back from vacation to confront.
Tags: bills vacation

March 07 2010

March 05 2010

Fix-It Friday: Know Your IRS Tax Forms



Fix-It Friday is an occasional series that details the projects I've done around the house. Check out some past posts here and here.

I'll admit that doing your taxes isn't exactly home improvement-related, but the "fixing" part does apply to the "Fix-It Friday" theme today.

My dad, who helped us with our federal taxes this year due to all the crazy forms we needed to fill out, told us the other day that he'd made a "mistake" on our tax return. "Uh-oh," I thought.

Using the words "mistake" and "tax return" in the same sentence never bodes well. I immediately had visions of getting audited by the IRS, which is a scary thought for anyone.

It turns out that we forgot to fill out and attach Schedule M for the Making Work Pay credit.

But this is a good thing, as it means money comes to US, rather than the other way around. Working couples whose gross adjusted income is less than $150,000 ($75,000 for singles) qualify for a simple $800 credit ($400 for singles). The amount of the credit is reduced if your income levels are higher than these stated thresholds, but that's not something we have to worry about, unfortunately!

While preparing your taxes yourself can, in theory, be a money-saver, it's not if you don't know all of the tax credits you qualify for. I thought I had done a good job of scouring the IRS web site and the Internet for information about what we qualified for, but I'd totally missed the Making Work Pay credit.

It's hard to keep up, as the tax laws change every year. So how can you ensure you have all of the forms you need to do your taxes and not miss any money-saving opportunities?

  • Check IRS.gov every year to see what's new in the world of tax forms and publications.
  • Mrs. Micah created a Mammoth List of 2009 Tax Credit and Deductions List, which is helpful for those who still need to file their taxes this year.
  • Use tax-preparation software -- but make sure it's current, so you're not getting old information and missing out on new tax laws.
  • Go to a professional tax preparer. There's a cost involved, but if you're missing out on credits by doing it yourself, the fee is worth it.
Tags: taxes

March 04 2010

Congratulations to My Pretty Pennies!


Found something great in my blog reader this morning -- My Pretty Pennies is officially debt-free! She paid off $13,800 of debt in under three years. She proves that you can eliminate your debt with hard work and perseverance.

Check out her blog post at My Pretty Pennies!

March 02 2010

New Blog Look


Surely you've noticed that the entire look of Rainy-Day Saver has changed. I hope you're enjoying the cleaner layout and the new colors. I even redesigned the new header.

However, as my HTML coding skills leave much to be desired, it's taking longer than I expected to fix everything the way I want it. So if you have any major issues, feel free to email me at rainydaysaver[at]gmail.com.

I hope you like it!

- Nicole
Tags: blog

March 01 2010

The Yakezie Alexa Challenge -- I'm All In!


It's hard to believe, but Rainy-Day Saver will be celebrating its 2-year anniversary in June. I first started this blog as an outlet for my thoughts about finance and personal going-ons, but it's evolved into so much more -- a community of great readers and fellow bloggers. Thank you so much for reading -- I hope you enjoy reading these posts and much as I enjoy writing them!

Sam over at Financial Samurai has come up with an excellent promotional challenge to help us personal finance bloggers really move up in the rankings -- the Alexa rankings, to be exact. The Samurai Yakezie Challenge is a way for bloggers to go from average to extraordinary.

I decided to enter Rainy-Day Saver into the challenge, aiming to breach the 200,000 mark in Alexa rankings. Many other fantastic bloggers are in on the challenge; I hope to post a list mentioning each one individually by next weekend.

Since joining a few short weeks ago, Rainy-Day Saver was originally ranked 1,305,476 but has shot all the way up to 944,782! While these are still what my father would call "telephone numbers," I think it's a pretty good sign that RDS is moving up the charts and into people's hearts.

Much thanks to Daniel at Sweating the Big Stuff for tracking all of the stats in his nifty charts, Eliminate the Muda for creating the sweet Yakezie Challenge badges, and Sam at Financial Samurai for getting us all super-motivated!

February 27 2010

February 26 2010

Fix-It Friday: To-Do List Edition


Fix-It Friday is an occasional series that details the projects I've done around the house. Check out some past posts here and here.

Right now, the Northeast is again the grip of a snowstorm of epic proportions. We're going on 24 hours of a 48-hour storm, and I can't even see the street from the window, that's how insanely the wind is whipping around the snow. The phrases "paralyzing blizzard" and "snow hurricane" ("snowicane" for my Tweeps) have been bandied about. I know other parts of the country deal with this kind of weather every winter, but here in the NYC metro area, this is a cause for mass panic.

I've decided to take a vacation day today if we are indeed called in to the office; the commute was just too scary on Thursday. As a result of the long weekend, I'm hoping to get some more things done around the house, despite the busy social schedule we have (weather permitting) -- Mr. Saver's godson is turning 1 and his parents are throwing a party in his honor across town, and his aunt and cousin are driving in from Wisconsin, which means a dinner across the street at the in-laws.

But in between those events, there are some projects I want to finish/tackle:
  • Replace the thermostat. I bought a programmable, digital version (for $25), but this project is a bit intimidating. What if I screw it up? Will I be able to reinstall the old one?
  • Replace a light switch. It's stuck in the "ON" position, which means we have to turn off the lamp that's plugged into the corresponding outlet by hand. And since the switch is by the front door, it means there's no light to turn on when we walk in.
  • Finish painting the office. It's all taped up and has two coats of white semi-gloss paint on the trim; it needs another two coats to be complete. The minimal furniture in the room is all pulled away from the walls to accommodate the project, and it's driving me batty.


I haven't gotten too much done this week around the house, but I'm working on it. Are there any projects on your to-do list?

February 24 2010

Ever Feel Like You Can't Get Ahead?


Have you ever felt like you're treading water -- taking one step forward, only to fall two steps back? That's how I feel this week. I have yet to balance my checkbook, have a load of laundry I tossed in the washer earlier today that I've just now remembered has to go in the dryer (and other clothes to fold and put away), and our home office is a wreck because I started painting the trim today, after a few months' hiatus. Our upstairs room still needs drywall, but we're still sitting on our hands on that, too.

I'd like to get ahead on blogging and bank a few posts, but I haven't had time to do that, either. I am jealous of bloggers who have a nice reserve, like Fabulously Broke in the City -- that girl says she's got a backload of posts that will last her through October, bless her.

Our bedroom looks like an adolescent boy's -- an unmade bed, pajamas on the floor, "stuff" littering the top of the dresser. The bathrooms could use more thorough scrubbing, and the floors need to be mopped. The leg of our 10-year-old coffee table broke and is being held together with duct tape. The cordless phone is crackling and on its last legs.

So I definitely feel like I can't get ahead lately. But being "ahead" sometimes comes at the expense of fun and relaxation. I've been able to enjoy my new laptop and catch up on reading and commenting on my favorite blogs, read a few books and hung out with friends. I've watched TV and movies with my husband -- those who know me well realize what an accomplishment it is for me to sit still in front of the boob tube for more than 15 minutes at a time.

I'm still going grocery shopping and making meals. The Mr. Saver and the cats are all getting much of my attention these days. I'm relaxed and in a good place.

The other things will get done in their own time. At least for now, I'm living in the moment.

February 22 2010

Do You Have to Give Up Convenience in Order to Save Money?



Making the initial decision to start saving money can be scary. After all, in order to save, you have to cut back on spending. It's fairly easy to not go on vacation or buy that 73" TV (I didn't even know they made them that big until I saw one in the Best Buy circular this week), but what about cutting back on current expenses?

This is where you may have to make sacrifices: drop the cleaning service, give up your car, stop the weekly manicure. That means you'll have to clean your home yourself, be at the mercy of the bus or train schedule, and do your own nailcare. But in the long run, you'll be saving the $100/week it cost to have the cleaning lady, the $500 in monthly lease, insurance costs and gasoline associated with owning a car, and the $50/week for the manicure. Right there? $1,100 back in your pocket, off the bat.

Foods can be convenient -- prepackaged foods tend to be cheaper than fresh, raw foods like vegetables and meats. But just because they're cheaper doesn't mean they're good for you. Fast food, something I swore off a few years ago, is a perfect example of cheap food with poor nutritional value. Sure, you can get a small cheeseburger and fries off the dollar menu, but you're also getting a lot of calories and fat. Instead, buy your own ingredients (cheaply and using coupons, where possible), and prepare your own meals from scratch. They're sure to be healthier and cheaper than convenience foods, and you may find you enjoy cooking, as I do.
 
You could take it one step further and give up the convenient location of your housing. Are you living IN a big city? I know around here, the expense of living in New York is insane. Rents are double or triple what they are in North Jersey (an already-expensive area), food and toiletries cost more. But those in  NYC are likely there because they're close to work. If they'd move to the suburbs and accept a longer commute, I'm willing to bet the monthly savings would be nearly $1,000-plus, despite the cost of taking mass transit into the city,

Do you have to give up convenience in order to save money? Yes, to a point. But if you're resilient, you'll quickly adapt to the changes and be thrilled with the cash you're saving.

Readers: Have you make any extreme sacrifices in order to save money? Do you miss the conveniences? Or have you cut expenses but only found it makes you miserable or causes you stress to do everything yourself?
Tags: money Saving

February 20 2010

Fix-It Friday: Cat Door


I've had my oldest cat, Krashy, for almost 12 years now. In all that time, the cat litter box has always been somewhere fairly conspicuous -- bathroom, bedroom, closet with the door cracked open, even in the dining room (away from the table, of course). So I've always wanted to be able to put the stinky box in the basement.

To that end, a friend suggested that I look into installing a cat flap on the basement door. "Sure, that seems like an easy idea!" I said to myself. "How hard could it be to cut a hole in a hollow interior door?"

First of all, I had to pick up a cat door. I headed to PetSmart and got a small cat-size door for $19.99, about the same it would have cost had I ordered it online and paid for shipping. It said it fit cats weighing 1-15 pounds. Our 2-year-old cat is 10 pounds, while Krashy is 15 pounds even. So it was a bit of a risk buying that size to begin with. The alternative was buying a doggie-size door, and I didn't want anything larger.

Now, this is the same day I bought my new laptop computer. I arrive home with both the laptop and the cat door, and what do I do first? I grab my brother's Sawszall, which is a motorized saw blade, and I also snag a very small hand saw used to cut sheetrock. Apparently, a shiny new gadget took a backseat to my need to install this new cat door.

After tracing around the frame of the cat door with a pencil, I power up the Sawszall, intending to just punch a hole through the door and use the little hand saw to precisely cut the rest of it. Punching through the one side of the door was a process, as the Sawszall kicked back on me a bit (my arms are super-weak). I then punched through the other side of the door. Using the little hand saw to cut the frame didn't work at all, so I went back to the heavy machinery. It was messy, and I chipped the door up a bit, but I finally got the hole cut. The cat door has two parts -- one for each side of the door, to cover the jagged edges. Here's what it looked like with just one side of the cat door installed.


I pushed the other side of the cat door on with the flap, and secured it with the provided screws. The flap swings open in both directions. I figured the cats would find it familiar, since it's the same idea as the flap on their cat litter box. 


I didn't immediately put the litter box in the basement, as I wanted the cats to get used to it. The younger cat, Misfit, again proved how smart he is by taking to the cat flap immediately. Krashy, the older cat -- not so much. I had to push him through the door a few times to give him the idea. And yes, even though he's 15 pounds, the maximum size accommodated by the flap, he fits fine. Also, both cats love the basement -- they'll follow me down there every chance they get. 

So I finally moved the cat litter box downstairs yesterday. I brought both cats down there to show them the box, and they appeared to get the gist of what was going on. This morning, I was awakened by Krashy's incessant meowing, which is funny, because he almost never makes a sound. I get up, take a shower and come downstairs, where I suddenly smell poop. And maybe pee. 

I look in the office room, where the litter box originally was, and the closet door has been opened. In the exact spot where the box had been is a cat-sized pile of poop. Oh, joy. I turn head, and I see the plastic bag of shredded paper I'd emptied from the shredder the other day, which I'd knotted closed. On top of the bag is a puddle of cat pee.

I have to give it to Krashy -- he did attempt to do his business where he was comfortable.

Tonight, I wound up taking the flap off the door, thinking that Krashy didn't like the opaqueness of the door. Now, he can at least see where he's jumping into -- there's a little landing before the basement stairs start. I also wonder if his eyesight is so bad that he won't go down there in the dark, so I might get a little battery-operated nightlight for the stairway.

So while installing the cat door wasn't too bad, training Krashy to go downstairs will be another story.

NOTE: I did forget to mention that after I found the poop/pee this morning, I went down to the basement to check the litter box -- and found that one of the cats left a big, gross puke/hairball in there. That may have put off Krashy from using the litter box properly. My poor cat can't take all of the changes!

February 18 2010

New Laptop: Paid for in Cash, Of Course


As I mentioned on Tuesday, I did go out to Best Buy to purchase a new computer -- a laptop, since my old 2003 Compaq Presario desktop had gotten so slow that it was killing my productivity (researching and writing for a freelance gig was taking FOREVER).

So I braved the mini snowstorm we were having and went to our local Best Buy store. Pretending I didn't know what I wanted, I asked the salesperson what his recommendations were. After talking about my needs and wants (in a computer, not in a relationship), he narrowed down the options to three models with the new Intel Core i3 processor: a Dell, a Toshiba, and an HP. Which was great, because my research had already led me to the Dell and HP models he pointed out. The Toshiba model was one I hadn't considered.

What I wanted
At least a 15" screen, 4 GB RAM, at least 320 GB in hard drive space, a numeric keypad, a webcam and a good processor. The Intel Core Duo processors, an earlier generation of Pentium processors, were featured in a lot of the laptops I'd looked at, but the new Intel Core i3 appeared to be faster in online technical reviews.

What I Considered
Even though it was the cheapest of the three at $650, I immediately nixed the Dell, because it didn't have a numeric pad, the wireless card wasn't great, the screen seemed small at 15" and it "only" had a 320 GB hard drive. It was down to the HP and Toshiba models. I paced back and forth between the two, trying out the keyboards and mice, trying to determine which one would hold up best over time. Both had the numeric keypads, 500 GB hard drives and bigger displays than the Dell (the HP had a 15.6" screen; the Toshiba, 16"). They also both featured newer-generation Wireless N cards -- ideal because we have a wireless router as part of our Verizon FIOS TV & Internet package. I wanted something I could take into another room of the house when I felt like it.

What I Bought
After a good 20 minutes of consideration, I wound up with the Toshiba. The deciding factor? The mouse! It was easier to use -- it moved much more smoothly than the HP's version. The screen display seemed sharper, also. So I came home with the Toshiba Satellite A505-S6005 model. The price seems status quo for these models, and so far, I'm very happy with the purchase. I am getting used to the widescreen display and Windows 7 operating system, plus the laptop mouse is a bit tricky.

The Key
The purchase was made in cold, hard cash! Well, via debit card, but you get the idea. I spent $679, plus 7% state sales tax. The price was between those of the Dell ($650) and the HP ($699). My freelance income paid for the cost of the laptop, and it will be used for at-home gigs. So it wasn't purely a "pleasure purchase." I originally wanted to wait until we received our tax refund, but my old computer was barely hanging on, so I had to change my plan.

Warranty Concerns
The laptop came with a 1-year limited manufacturer warranty, and I declined the Best Buy extended coverage for the time being so I can do my research more thoroughly. I have up to 14 days to purchase a 2- or 3-year contract through the retailer, or up to 9 months to buy one directly from Toshiba. The additional cost is around $200 for either, and I'm not sure if it's worth it. It covers hardware only -- not software. Part of me thinks it's not worthwhile because surely I could get the laptop repaired for $200 or so if something were to happen, right? It's a game of chance -- spend the money on an extended warranty and never use it, or skip the warranty and wind up with a large repair bill should something major go wrong with the laptop. I'll make my decision in the next week.

Funny aside: I started to panic about making such a large purchase, and almost decided against leaving the house in the first place so I wouldn't spend the money! Then, my old computer started crapping out on my as I was typing, serving as the catalyst for me getting my butt out of the door.

How do you feel about extended computer warranties -- yea or nay? Are they worth the price?

February 16 2010

Laptop D-Day: Goodbye, Circa-2003 Compaq -- Hello, ???


Well, I've decided that today is the day I get a new computer. I'm tired of whining and dealing with this slow-as-a-turtle hunk of junk. Although I will admit, it did last me 6 1/2 years.

This desktop computer I've been typing away on throughout my Rainy-Day Saver blogging days (and years prior) is a Compaq Presario. It still has the specifications sticker on the hard drive: 2.08 GHZ AMD Athlon XP processor; 512 MB RAM, 80 GB of space, and a CD-RW drive and a DVD-ROM drive. It was good for its time, and came with a flat-screen monitor.

Now, I'm trying to figure out whether I get a dual-core processor or a more advanced one (Intel Core i3 or i5). Dell or HP? Is a 15.6" screen sufficient, or do I splurge on the 17"? I'd like one with a webcam, so I can try out this Skype thing everyone's talking about. Oooh, look, they come in different colors now!

I have a habit of starting out looking at lower-priced models (and really, this goes for anything: cars, computers, furniture) and talking myself into little "upgrades." This is where I will have to control myself.

I like this HP laptop, with an Intel Core i3-330M processor. It's a newer processor than the old dual-core processors, and I'm having a hard time figure out the difference between the two for my purposes, which are surfing the Internet and writing. Most laptops only come with Microsoft Works, too, so I might need to get a Microsoft Office upgrade -- but no way in hell am I paying $300 for that luxury. I'll have to see what my options are in-store.


Most likely, I'll be visiting our local Staples store because it's close by, and check out the laptops they have on display there. This way, I can get a feel for whether or not that 15.6" screen will suit me just fine. I will have to avoid walking out with extras, like a computer case, a newer printer or a new office chair!
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