Saving Money Archives

Small House Living and Why You Should Do it

The Tiny House BlogSmall House Living is not a new concept, but with the recent global recession small housing is getting a lot more attention. There are many reasons to live in a small house, but why live in a small house? Here are some reasons to consider living in a small house.

1. It’s Cheap

It goes without saying that most likely, your small house is going to be cheaper. Who doesn’t like having a small payment each month.

2. Can open you up to opportunity

Owning a smaller house produces a lower commitment than a larger home, and with this lower commitment, there is more flexibility when it comes to relocating for potential opportunities. Imagine you are offered a career of a lifetime, but you are forced to relocate. Now imagine how much easier it would be to relocate if you had a $50k home versus a $200k home.  Let’s also not forget that you have to pay an estimated 6 to 7% to get out of most homes, which means it will cost you about 400% more in fees to sell your 200k home. If you aren’t able to sell right away, you also have much lower carrying costs in the smaller home.

3. Helps you Escape “Consumer Treadmill”

A lot of people can most likely relate to the idea of a “consumer treadmill.” By actively living below your means, you will much less likely to allow your lifestyle to creep up to a point where it consumes the majority of your income. Living in a small house will most likely give you better perspective of what is important when it comes to spending your money.

4. It Forces you to Downsize Possessions

If you have a 700 square foot apartment full of crap, there is a good chance you will have a 2500 square foot home full of crap. The idea of furnishing a large space can be daunting and expensive. Also with more storage room, usually comes more stored items that you don’t really need.

5. Less Hassle and More Time

Less time messing with a giant yard and home maintenance and more time for loved ones and activities that you enjoy.

6. Living more “Green”

Small house living also promotes smaller energy bills and less maintenance that results in waste.


For more information on small house living, check out “The Tiny House Blog” (one of my favorite blogs.)

 

imageSpeculation on the iPad 3 release date has caused a price drop of used iPads on amazon. I myself have been considering picking up an iPad 1st generation for reading, and it appears the time is near where iPads will touch $250 on amazon.

iPad 2 – 16gb Wifi is down to only $378 used.

iPad 1 – 16gb Wifi is down to only $259 used.

I have considered trying to get an even cheaper iPad via craigslist, but it is very hard to land an iPad for much less than these prices, and I just don’t think it is worth the time, gas, and effort. Also I can earn 4% back via credit cards and gas perks. Did I mention there was no tax on amazon?

Who knows though, prices might dip even more as it gets close to the suppose iPad Release Date (which apparently is now rumored to be March 16th?)

No Interest Savings Account

No Interest Savings AccountWith interest being as low as it is, no interest savings accounts almost make sense. Think about it, if you have $2500 balance in your saving account and you are earning .8% on it, that’s only $20 a year. It might not even be worth the tax paperwork!

I however have a no interest savings account, but not my choice. A while back when I refinanced my house I had to open an account to view my mortgage online (the one downfall of my bank). I was kind of bummed about it, but the bank teller told me “If you open an account today, you get $50 free.” So I opened an account with a dollar.

My $51 savings account just received it’s first interest adjustment, which is at .146% a year or about .0122% percent monthly.  My interest earned in the last month was $.006222. That is right,I didn’t even earn a single penny! This account does have checking by the way, but it was advertised to me as a dual savings/checking. I’m well aware that I could be getting about about .8 to 1% on a good online savings account, but I have no interest in taking the time to set it up, because I keep my savings and checking accounts very lean.

I wonder if I can ask my bank not to mail me a paper print out and just deposit the postal into my account. Stamps are going for $.45 which would be about 10.59% a year if they would just deposited the postage money into my account (since apparently they send these monthly). I also have to believe you can factor another $.10 in paper, ink, envelope,  and someone physically handling this paper. That puts us up to 12.94% APY return.

Now I realize they would never actually do something as stupid as deposit the ink, paper, postage, and handling money into my account – but do you think I will earn $.01 next period since I earned $.006 that wasn’t realized this period? Do I even want to earn it? I am potentially look at about $.07 in interest for the year. I can’t believe this bank doesn’t have a policy to not issue statements for accounts under a certain amount. What a waste of resources.  It is possible they are forced to send out statements by other regulation, but that’s just as sad.

I would rather not earn interest on this account, keep your $.07! I don’t want to have another form to report on my taxes. Also, please stop the earth from making a sadface and save a few trees.

Aldi Shopping Store, Is It Cheaper Than Kroger?

Aldi shopping store is chain of stores first started in Southeastern Iowa in 1976. They claim their prices are the lowest around, but I was not entirely convinced. I did a quick shopping comparison to put Aldi Shopping Store prices versus Kroger Prices.

How was study was done? Un-scientifically, of course. I went in the stores and wrote on paper various randomly spotted items and their prices in the Aldi shopping store, and then I went to Kroger to match that item. Because the products were not necessarily the same unit size, I boiled the information down to price per unit in the spreadsheet found further below.

I also discounted Kroger’s prices by 4%, because you are able to use a credit card (that pays 2%) and if you utilize their gas perks, you get approximately 2% back.  At Aldi shopping stores you must pay in cash or debit, and Aldi shopping stores offer no perks.  The results are below. I am sorry they are hard to read, if you want the excel file click here.

 

aldi shopping stores

aldi shopping store

Aldi vs KrogerI then took the average of the product sizes from both stores and multiplied it by the price per unit (for example if Aldi’s sold a 10lb bag and Kroger sold an 8lb bag, I made it appear as if you were buying 9lbs of their products at their unit prices). This was to ask, if you were to purchase one of each item, how would it compare? Results to the right.

As you can see, Aldi’s was cheaper in this non-scientific sampling by $10.35, but I want to take a closer look at these results.

There are some questions you need to ask yourself.

Does Aldi shopping store have the quality and selection that you want? Are you going to end up traveling to another store for certain items?

Are you traveling a long distance to get to your Aldi shopping store? If yes, factor in the gas and wear and tear on your car.

How big are your families needs for basic staples? Aldi shopping store had some items that were clearly price winners like bread, milk, sugar, flour, potatoes, onions, and peppers. If you are a larger family your savings might be much more relevant.

Are you good at reading labels?
On another financial blog I read, the blogger stated that the one of the better finds he found in Aldi was the frozen chicken breast in bag. If you look closely at the bags in Aldi, the bags was 2.5lbs versus a 3.0lb Kroger bag that was actually cheaper per unit (Note: this item was on sale).

Are you good at capitalizing on sales?
Kroger and other major chains can be close to the same and even better deals, but usually only if you are able to stock up during deal times. For example fresh chicken during this sampling was considerably cheaper at Kroger, but only because it was on sale.

Does Your Grocery Store Give Coupons?
I get coupons from grocery via mail that are often very good deals. The last time I received coupons I got a coupon for free peanut butter and free frozen fruit along with coupons on items that I already purchase. I would guess that I get them about once per quarter and they net me anywhere from $5 to $15 each time.

 


 

Ultimately I would argue that Aldi shopping store really is not that much better than Kroger, for me. Yes you might have to wait on sales and stock up on certain items at Kroger, but Aldi Shopping Store simply does not have the selection that I want in my grocery store and my time is valuable to me.  I do not want to make two trips to two different grocery stores. I know that Aldi shopping stores usually have fairly decent selection, and that it has gotten much better in recent years, but it still is not enough.

If I was to utilize the best prices from both Kroger and Aldi shopping store, I think I could save roughly $30 a month, but it just is not worth the hassle to me. I also think I could probably save about half of that estimated $30 a month just by taking an very infrequent trip (once every 2-3 months) to Aldi’s  to stock up on some of the really competitively priced items (Tortellini, Milk, Plastic Wrap, and Foil particularly) but when it comes to the normal grocery store trip, I plan on sticking to my Kroger.

I do however see that for very large families, Aldi shopping store has much more appeal. It ultimately comes down to you running the numbers and assessing what you and your family like and dislike about each grocery store. Just do not assume anything and be sure to run the numbers. Also don’t forget to not shop hungry!

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