My Personal Finance Journey - Personal Finance, Intelligent Investing, And Frugal Living Tips

Friday, May 24, 2013

Are Expensive Professional Photographers Obsolete or Still Worthwhile?

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photographers, pictures, frugal living, frugality, saving money, wedding spending

Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following post is by MPFJ staff writer Travis. Travis is a customer blogger for CareOne Debt Relief Services, and also appears weekly at Enemy of Debt. Travis candidly shares his personal journey to pay off $109,000 of credit card debt and the tips he's learned along the way. As a father and husband, he provides a unique perspective on balancing debt, finances, and family.

My son was confirmed over the weekend, and as we were getting ready to leave for the church, my wife asked me if I had filled out the picture order form.

It was the last straw.

It started with the beginning of the new school year last fall. The kids put on their newly purchased school clothes for the first time. Both of my kids headed off to school picture day carrying an envelope with a check for $28 to pay for the the middle of the road package we normally buy. In October came the email with the opportunity to purchase pictures from the Twin Cities Marathon which I completed just a week prior. I really just wanted one picture, which would have cost me $25. No thank you. Spring time school pictures rolled around in March, which we usually skip.

How much does a kid change in six months anyway?

Things really picked up at the end of the school year with pictures for Dance ($24), baseball ($28), and Middle School Graduation Class Photo ($10). Luckily, we've moved on from thinking pictures with Santa Claus and the Easter Bunny are necessary as well.

There I stood looking at the choices available for confirmation pictures shaking my head.

Photography is big business because people want a record of their lives to look back and reflect upon. Kids grow up fast, and parents feel guilty not being able to perfectly remember everything about their child at every phase of their life.

Parents like to show other people their kids. Photo packages come with pictures of all shapes and sizes to be displayed in offices and end tables everywhere. Of course, there's also the wallet size pictures that parents exchange with each other like trading cards and the photo magnet to stick on the refrigerator.

But just how much use do you really get out of those pictures? For our family, the 8x10 of each kid goes in a frame next to the fireplace, a 5x7 goes in my office frame and some get given away to family. The rest stay in the envelope and get shoved in a drawer only to eventually settle to the bottom with the envelopes from previous years. The pictures we give away end up in a frame for some period of time, then they too either get shoved in a drawer. Or, they may be hidden behind the next year's picture pressed together with the pictures from previous years like a layered time capsule.

The insane thing is that pictures themselves are dirt cheap. I can take a picture and send it off to Walmart online and in an hour I can pick up as many 4x6 pictures as I want for 9 cents each. What you're really paying for is the photographer's talent, time, and the rental of his professional equipment.

Years ago, the concept of using a professional photographer made sense. Once upon a time, there was this thing called film that you put in a camera. When the roll was used up, you took it to a local drug store and crossed your fingers that at you kept your finger out of the lens for at least one picture. Hiring a photographer was essentially a guarantee that you would get decent pictures.

But does it really make sense today?

Times have certainly changed with digital cameras. A person can take a picture and view it instantly. If you don't like it, you just delete it and yell, “One more!” Technology makes getting a good shot so much easier especially with today's high resolution cameras that are light years ahead of cameras that even the professionals used just a few years ago. You can take dozens of rapid fire shots and be assured that you'll capture a keeper. Now that almost every phone includes a camera, digital photography is almost impossible to avoid.

If the purpose of taking photographs is to capture the stages and events of life, wouldn't you want to take you own pictures anyway? Let me ask you this: What offers a better remembrance of your child: A stranger snapping a picture of Johnny with his hair combed perfectly sitting in front of an artificial backdrop, or you capturing him looking at back over his shoulder at you excitedly, but with just a little bit of fear in his eyes as he climbs aboard the school bus for his very first day of kindergarten?

Pictures like that capture the very essence of life.

The pictures we did buy over the course of the last nine months cost $118 for about 40 pictures. In contrast, to physically print out pictures I took myself through Walmart, those 40 pictures would have cost less than $5.

Grab your phones and your digital cameras people. Take pictures. Lots of pictures. Capture those special events and those smiles.

Capture life.

How about you all? Do you think professional picture prices are out of control, or are they worth it? How much do you pay for pictures during a year?

Share your experiences by commenting below!

***Photo courtesy of Image courtesy of graur razvan ionut / FreeDigitalPhotos.net

Thursday, May 23, 2013

A Little Splurging is OK (It May Even Be Good for You)

budgeting, zero-based budget, extreme frugality, frugal living, frugal mindset, saving money

Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following post is by MPFJ staff writer, Kelly Gurnett. Kelly runs the blog Cordelia Calls It Quits, where she documents her attempts to rid her life of the things that don’t matter and focus more on the things that do. You can also follow her on Twitter and Facebook.

We’ve all heard of the “latte factor”— the idea that cutting back on regular luxuries, no matter how tiny (like that daily latte from Starbucks) can lead to big budget savings. And, it’s a good notion to keep in mind. Mindless splurges, big or small, have repercussions when we’re trying to live a financially smart life. It’s hard to pay down debt, build up savings, or meet any other money goal if you treat yourself too often.

But, being a miser and not treating yourself at all can be just as bad for your budget—and your happiness.

The Deprivation Factor

It isn’t always easy to be smart financially. We’re only human. As disciplined and goal-oriented as we may be, it can be tough to see our friends going out to eat, going to the movies, or grabbing that infamous latte and knowing we can’t afford to do the same. It puts our focus into a deprivation mentality—that in order to meet our money goals, we have to cut things out from our lives. Frugal living becomes a negative thing.

As anyone who’s ever been on a diet can attest, focusing on what you can’t have isn’t the best way to motivate yourself to stay on course. If anything, it just makes you want what you can’t have even more.

Yet that’s the way so many of us focus on making financial changes—by stripping away things we used to purchase, by denying ourselves things we want—and that often leads to a feeling of frustration. Sure, we know our long-term goals are smart, will bring us happiness, yada yada yada…but we live in the now, and right now, being so frugal all the time can make us kind of miserable.

Which is why treats—strategically and smartly granted (like one would do for children or pets)—can be exactly what we need to help us achieve our financial goals.

They infuse a little positive reward into the routine. They give us a much-needed break from all the striving and sacrificing. They give us something to look forward to now and again, so we don’t suddenly find ourselves blowing the bank on a super-pricey item because we just can’t take it anymore.

It Doesn’t Take Much

My husband and I are in a more frugal than usual situation at present. He recently lost his job due to disability, and we effectively had to cut our budget in half in the span of a month. Once you start moving past cutting the premium cable package and occasional massages and begin looking for ways to slash your grocery budget, you know you’ve gone beyond the point where the “latte factor” is even a consideration.

That said? We’re still finding ways to “treat” ourselves now and then. Because it makes it easier to be as stringent on a regular basis as we need to be.

Our treats aren’t nearly as grand as the ones we allowed ourselves before the job loss (a night at Dave & Buster’s seems like an unattainable luxury now), but they’re still treats in that they’re not strictly “necessary,” but they help take some of the pressure off. They give us a little reprieve from the stress of being a one-income household and let us just enjoy ourselves, even in the smallest of ways.

The fantastic luxuries we allow ourselves now? A movie at the dollar theater (with homemade popcorn snuck in). A container of the one-step-up-from-store-brand coffee. My occasional $3 box of hair color (typically 50 cents after couponing skills). They’re not huge, by any means, but they’re still treats. And, to be honest, I enjoy them every bit as much as I did our Dave & Buster’s outings, because I know how lucky we are to even be able to afford these little things.

So don’t starve yourself financially. Allow yourself a little treat now and then. Your budget will ultimately thank you for it (and so will your sanity).

How about you all? What special “treats” do you allow yourself, in spite of being on a budget?

Share your experiences by commenting below!

***Photo courtesy of http://farm5.staticflickr.com/4142/4936746457_eb22f010ca_o.jpg

Wednesday, May 22, 2013

Tips for Riding Out Stock Market Downturns

market ceiling, market performance, market timing, asset allocation, financial planning

Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following post is by MPFJ staff writer, Greg Johnson. Greg is a proud husband, father, and debt crusader who is in the process of becoming debt free. Along with his wife, Greg co-founded the personal finance blog, Club Thrifty, where they encourage readers to "Stop Spending. Start Living."

Unless you've been living under a rock, you have probably heard the news that the markets have been on a pretty sweet rally recently. At the time this was written, the Dow Jones Industrial Average was over 15,300, and the S&P 500 sat at almost 1,670 – both record highs.

Stock market rallies like these can make your financial year in only 6 months. Better yet, they build our confidence as investors. Heck, everybody feels like they are the next Warren Buffet when the market is going gangbusters. Yet, the smart investors realize that the market works in cycles.

Unfortunately, honeymoons don't last forever. Whenever there is an extended period of rampant growth and excitement, there is almost always a little trouble lurking right around the corner. Being prepared for the downturn can help you from giving back your gains and losing your sanity.

Here are a few tips to help you ride out the next short-term market storm.

1) Invest for the Long-Term

Long-term investing is one way to help stave off the fear of down markets.

When you are investing, time is almost always your best asset. Why? Because time allows you to wait out the short-term fluctuations of the market. Even with the abysmal performance of the stock market over the previous 5-10 years, the stock market's average annual rate of return over its history is still near 10%. Since we can not guarantee future performance, the best way to predict it is to look at past performance. Thus, if you invest over the long-term, past performance would indicate that it is likely that you will receive a near 10% return on your investment.

Investing with a short-term mindset makes you much more vulnerable to the short-term swings of the market. So, when it comes to purchasing a security, make a decision and stick with it. Fight your fear, and ride out the wave of discontent. While the belief that high markets will eventually come down usually is correct, remember that the inverse (markets that are down will usually go up) is also typical.

2) Don't Try to Time the Market

This goes hand in hand with investing for the long-term. You've heard the saying, "Buy low, sell high?" In my opinion, trying to time the swings of the market will only get you into trouble. Guessing what the markets are going to do will only cause you headaches and cost you money.

Essentially, trying to time the market is gambling. Luck plays a major part in the success of somebody with this investing mindset. What most of us should be doing is trying to eliminate luck from the equation as much as we possibly can. Unless you are a very experienced day trader, the fact is that you should probably be investing your money for the long-term. The "everyman" would be wise to only purchase securities that he plans to hold onto for at least 5 years, preferably 10. If you assume that attitude, you are bound to make money in the good times and ride out the valleys that the market will eventually throw at you.

3) Stick to Your Plan and Don't Panic

When the stock market is riding the tidal wave up, it is easy to get excited and want to invest all you have in stocks. Of course, the opposite is true as the wave crests and the market begins to come crashing downward. Terror can easily set in as you realize all of the gains you worked so hard for are slowly, or quickly, washing away. However, sticking to your plan in both the good times and the bad can help you to avoid those gut wrenching feelings of sheer panic.

By creating and maintaining a set asset allocation, you can rest easy knowing that your overall financial plan is suited to help you make money in the good times and minimize losses during the bad. Furthermore, keeping to a relatively strict asset allocation plan will help you to diversify your wealth so that you are not too heavily invested in only one type of investment - like stocks or real estate. You should meet with a financial professional to help you determine your specific plan based on your investment horizon (the length of time you plan on investing) and your personal risk tolerance. Once you have your plan, stick with it. Keeping with a well thought out program will protect you from getting greedy during the upturns and self-defeatist during the rough times.

How about you all? What are your tips for staying sane through the ups and downs of the market? How do you protect your assets from market fluctuations?

Share your experiences by commenting below!

***Photo courtesy of http://commons.wikimedia.org/wiki/File:MICEX_Index_graph.png

Tuesday, May 21, 2013

How To Save Money When Setting Up A New Home

home buying, home costs, home expenses, home decorating, new homes, saving money, frugal living

Click here to enter my free $65.84 giveaway for a chance to win 5% of My Personal Finance Journey blog income and give another 5% to charity! Deadline to enter is May 31st, 2013.

The following article is by MPFJ staff writer, Miss T from Prairie Eco-Thrifter. If you want to learn how to live your dream life in a sustainable, healthy, and money savvy way, check out her site here.

There are so many things to consider when setting up a new home, especially if it is your first home. There’s lots of stuff to buy, redecorating to be done, maybe even some renovating, and it all seems so very expensive.

Well, read on, because here are some great ideas to help you save money when setting up a new home.

Get Organized

Organization is the key when taking on any big project, as it helps you understand what has to be done and what order it all needs to be completed. This can save you money right there; when you have a time-plan, everything flows smoothly and you don’t waste money having to do things more than once. Make lists for everything so nothing is forgotten. You need a list for what to buy, what to do and when to do it.

Consider which things on your list are necessary to have straight away and which can wait.

I found the best way to sort this out was to ask myself if the item was a need or a want. A ‘need’ is something you can’t live comfortably without, like a refrigerator. A ‘want’ is something that would be nice to have but you could live without it, like a second TV or artwork for the walls. Focus on the ‘needs’ when just starting out and you will save money by spreading the expense; when you are settled in a bit you can save up for or manage to pay for the ‘wants’.

The next step, after you’ve made your lists, is to do some research.

Don’t be tempted to just rush out and start buying; there are much more money-saving methods for getting the many things you need, when setting up house for the first time. First of all, ask around your family and friends to see if anyone has a spare/old/no-longer-used refrigerator, TV, vacuum cleaner, microwave oven, washing machine and whatever else you need. You might be pleasantly surprised at what people have stored away that they don’t use anymore and would be happy to let you have. It’s fine to have second-hand goods when you’re starting out; it cuts costs dramatically at the time and then spreads the expenses of getting new things over time. As these second-hand goods wear out or you find you have the cash, you can then replace them gradually, in your own time. This also reduces your stress levels!

Take Advantage of Thrift Stores

I’m sure you will have crossed several items off your list with this strategy and saved hundreds, if not thousands, of dollars. The next step is to scour the thrift stores, auction houses and second hand shops to see if you can find a few more things at amazingly low prices. These outlets are a great place to find sofas, dining tables and chairs. If you are little bit of a handy person, like me, you can restore older furniture to make it look like new; this is a great way to co-ordinate pieces with your new décor. I bought a beautiful old oak dining table that had seen better days but was solid and sound. I sanded it off, filled a few dents in the surface and then re-polished it. It only took me a couple of weekends and our friends thought it was a new piece of furniture! It cost me under $50 for the table and the reno, plus a bit of my time.

Now you will be left with items you might need to buy new.

Again, research will save you money when setting up a new home. Go online to compare prices and check out your local stores to find where the best deals are. Be prepared to negotiate; you ‘ll be surprised how many stores are happy to drop their price. Look at different models and don’t be temped to buy more than you need. You are just starting out; there is just you or maybe a partner as well; do you really need a 12 seat dining table or a huge family-sized refrigerator? This is what I mean when I say don’t buy more than you need. Later on, when you are able to spread your expenses, and the need arises, you can upgrade to the bigger, better pieces. Right now, it’s more about getting yourself set up without going into huge amounts of debt to do it.

Another tip about saving money when setting up a new home is not to rush into buying lots of decorating ‘extras’. Take some time to settle in and get to know your new place. If you’re anything like me, you’ll probably move the furniture around numerous times before you are happy with the placement. Wait until you’ve lived with your stuff before deciding on a firm decorating scheme. This will save you money because you won’t buy something that doesn’t fit in.

Setting up house is so much fun, whether it’s for the first time or the tenth. There’s going to be lots to do and even more you need to buy, but by using some of these ideas, you will certainly save some money in the process.

How about you all? How have you saved yourself money when getting a new house/apartment set up after a move?

Share your experiences by commenting below!

***Photo courtesy of http://prairieecothrifter.com/wp-content/uploads/2011/10/iStock_000016696172XSmall-300x198.jpg

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