Thursday, July 31, 2008

Frugal is as Frugal Does - Bargains and Rip Offs of July

Some breaks downs of the frugal, and not so frugal, purchases of July:

Toilet Repair Cost:
Kit = $19.99
Misc. Parts = $9.23
Additional = 3 trips to Lowe's, 9 hours of time, one home cooked dinner

As you know, my tenant complained that her toilet was running. Well, I had this great book on home repair and not a lot of money, so I decided to tackle the problem myself. After diagnosing the problem and purchasing a kit to replace essentially everything in the tank (plus the gasket and tank-to-bowl screws) I went to work. The instructions in my book were great and really helpful, as were the instructions that came in the parts package. However, neither could help me remove some of the old parts - especially the ones that were rusted on. (Trip number 2 was a run to get some new tools.) The only problem I had, that wasn't covered in the book or in the instructions, was that I had a metal feed line between the water shut off and the flow valve. It was ancient and wonky and kept leaking! I worked on it for a long time - trying everything under the sun. Not knowing I could just replace it, I was about ready to call a plumber. But before I did, I remembered my friend Randy, who is absolutely brilliant with all things mechanical. He came over the next night, pointed out the problem and we made that 3rd trip to the home improvement store. We picked up a new feeder line ($4.25) and installed it. After a couple other minor adjustments, it was fixed! I promised him a home cooked dinner for his help.

Result:
Utilities savings = Reset flush to manufacturer's suggested height, which will save me about a 1/2 gallon per flush!

Plumber Savings = At the minimum $70 per hour - more if it had taken him longer or if he had to use his own parts.

New Knowledge = Seriously, I now feel like I could tackle most toilet repair problems. I learned a lot! The way I figure it, as long as I have a home, I'll have a toilet, and this knowledge will undoubtedly come in handy again.

Happy Tenant = I have lived in apartments where the landlords didn't fix problems, and I know how frustrating that can be. On the other hand, happy tenants are more likely to stay longer, pay their rent on time, and keep the place in good repair. That's all good for me.

DIY Toilet Repair = Bargain!

Freezer Door Replacement Seal:
New Seal = $80.00
Hex Screwdriver = ?
Petroleum Jelly = $4.49

The tenant also was having problems with her refrigerator running all the time. A quick look told me that it was a seal on her freezer gone bad. Because of the age of her refrigerator I had to special order the part. I picked it up today and hope I can install it soon. According to the directions I have read online it looks fairly easy, but I will have to see if I have a hex screwdriver (I think I do) and get some petroleum jelly. Apparently it is a good idea to put the jelly on the hinge side to keep it from sticking.

Result:
Cheaper than a new 'fridge = A quick looking around showed me that similar size refrigerators were about $375 - $400. I might be able to get one for less, but still, $80 is a good deal if the refrigerator lasts for a few more years.

More knowledge = I haven't tackled this one yet, but once again, here is my opportunity to learn something new.

Happy tenant = we covered this one already. Plus, she should see a drop in her electric bill.

DIY Freezer Repair = Bargain!

New Reel Lawnmower:
Cost for new mower = $133.94
Lots of frustration

I did a lot of research online about mowers before I made a decision. I finally decided to go with a reel push lawnmower for a number of reasons: 1) I have a very small yard, more like a series of very small squares, 2) It would use no gas or electricity, making it a frugal choice, and 3) It was the environmentally friendly choice. I found an open box unit of the Scotts mower I chose on sale online. However, when it arrived the bolts to put the handle on were missing. Naturally I discovered this the day I was going to mow my lawn before the garage sale. (So I did it with a borrowed weed wacker instead - told you my yard was small.) I have made a couple calls to the company and several emails. Yesterday I got an email saying they would be happy to send me the parts. Today I got an email from a different employee saying they wouldn't. If they resolve the problem in the next couple of days I will still consider this a success. If not, I will have to return the mower. (And I will then try to find one locally.) I'd have to pay for shipping if I return it, so that would be a disappointment.

Result:
Reel Lawnmower = Jury is Still Out... Check Back for Decision

New Dining Room Rug
Rug = Free!
Carpet Cleaner = Free!
Coffee House Gift Certificate = $20

My mother found a beautiful rug on clearance at a sidewalk sale. They had marked it down to $100, then when she stopped by later to $50. She asked if they would take $40 for it. (My mother is brilliant at that. It is a skill I wish I was better at!) Great mom that she is, she gave it to me for free. It was used as a display so it was a little dirty, but I gave it a vacuum and it cleaned up nicely. My coworker also lent me his carpet cleaner so I can clean it up the rest of the way. This is the second time I have borrowed it from him, so I thought a thank you gift card was in order.

Result:
Free rug = how can you go wrong with that?

My dining room looks better = happy Dawn.

Better looking dining room = will show better when it is time to sell.

New Dining Room Rug = Bargain!

Shipping Envelopes
Envelopes = $5.19

I have quickly run through all my small boxes and shipping envelopes for small items, so I decided to bite the bullet and order some padded envelopes. I used ebates to purchase them so I could get a rebate on the deal. Before buying I compared the cost of getting them through OfficeMax or Office Depot. Office Depot was offering a 3% rebate on all purchases and they had large quantities of envelopes. OfficeMax only had smaller quantities, but was offering a 6% rebate. I assumed that larger quantity would equal smaller cost per unit (wouldn't you?) and was prepared to buy from Office Depot - until I did the math! Actually, the smaller packs at OfficeMax were cheaper per unit! Not by much, but hey, "out of pennies, dollars are made." Oh, and this was before the rebate.

Result:
The cost will be added to the S&H costs of my eBay items. I keep shipping at exactly what it costs me, but in the case where I have to pay for materials to ship in, that will be added in.

Buying online (and doing my research) = savings on gas money and frustration.

Because the eBay purchasers will be paying for the envelopes, but will I'll be getting my ebates rebate = free money.

Shipping Envelopes = Bargain!

Brassieres from Big Lots: (Now, that's just fun to say - go on, try it!)
3 bras @ $6.00 = $18.00
Gas to return them.

I don't usually shop at Big Lots, they just aren't on my typical route. But, the other day I was out to lunch and saw a Big Lots nearby and decided to stop in. Once and awhile you can find some nifty things. Well, I found bras.

That's right, bras. They had boxes of the Delta Burke brassieres on sale. Perhaps if I had seen this photo of Ms. Burke I would have been forewarned against buying them. Since I hadn't, I foolishly went ahead.

They were all marked with original tags at $24 - $26, but the sale price was measly $6. Since it is not easy to find undergarments in my size, I quickly picked out 3 of the finest and figured I'd give it a shot. Well.... I am not sure who Ms. Burke was designing for but ummmm, yeah, she should leave the designing up to others. While technically they "fit," they offered zero support. Despite the fact I was buying in the *ahem* larger sizes, these things would have made me look like I had cantaloupes in nylon stockings. Bad I tell you, bad! On top of that they gave me the weirdest Jane Mansfield bullet bra but far, far worse shape I have ever seen!! The awfulness actually cracked me up.

Result:
I had to return them, pronto. And you just knew it would be a guy working the return counter didn't you?

Lesson learned - don't by bras from Big Lots or Delta Burke.

Bras From Big Lots - Disaster!

Stay tuned - I am sure this will be a regular feature on my blog. Plus, you just know you want to find out how the saga of the lawn mower comes out, don't you? (I do!)


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Wednesday, July 30, 2008

End of the Month Reflections

Well, I have said it before, and I will say it again - July was one expensive month. I am glad I was able to hit over my goal. Some of my unexpected expenses were:

A New Lawn Mower
Toilet Repair Parts
New Freezer Seal
Ironing Board
Medical Expenses
Shipping Materials for eBay

Next month I am going to have to really buckle down. I am not going to use the overage amount from this month to carry it to the next. There was just too much going on. I am still sorting out my receipts, but I am fairly sure I blew through every budget.

My goal for next month is to get the majority of the items up on Amazon, eBay or Half.com. I was caught up, but after the garage sale I have a number of items, both my own and my friends', that I need to post. I also need to organize that room into something that makes sense so it works for easy of storage, mailing and posting.

I am also determined to get the third garage stall cleaned out. That could be a nice passive income rental for me. I got a lot cleaned out, but then had to move things back in for the sale. Basically what I need to do is organize my own two stall garage and move everything that has been stored out of the one stall. I think it should come together nicely and hopefully if I get it advertised next month someone with a boat or jetski will snatch it up before winter.



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House Painting

One of the good things that happened at the garage sale was that I met someone that I might hire to paint my house. He stopped by to check out the sale and we started chatting. I don't know if I have mentioned it before, but the house is in severe need of a paint job. My mother scathingly calls it an "eyesore."

The paint is peeling off the house like a Dutch girl with a severe sunburn. After talking with some of my neighbors, (who also happened to swing by the garage sale,) I found out why. Just before my ex and I bought the house it was owned by a young couple. His father was a teacher that painted houses in the summer months. Now, my ex and I knew when we bought the house that the paint job was bad, but we felt like it could hold up for a few years. We didn't realize how bad it really was... every windstorm our driveway would look like a light blue snow had fallen - the paint was just flaking off the house. As I hoped to prevent that problem in the future, I always wondered why. I knew they had used good quality paint, what did they do wrong? My neighbors were able to fill in the clues. Apparently they had spray washed the house and then two days later painted it - without priming it.

One of my neighbors said he warned them that you can't paint a house when it is still wet, but apparently they didn't listen. So now, this 5 year old paint job looks like it was put on 30 yeas ago. I have known since I took over the house that I would need to get it painted sometime before I sold it, I just wasn't looking forward to it - the last quote we got on painting it was $7,000. As you know, I am struggling each month as it is!

So, this gentleman and I got to talking and he offered to give me a quote. I told him to go ahead - but was very honest about my financial situation and that I just wasn't sure I could afford to get it done this year. His quote - $5,500. That included everything, scraping and painting by hand, the paint, the trim - all of it. Let me tell you, this is a big old house! You can see it in the photo on the right sidebar there. (No, that isn't it in the top photo - and I promise not to paint my house orange.) My house was built in 1847 and is 2,800 square feet. It is an old Victorian home, with all the frills and fancy trim that implies. The painter even offered to use as many different colors as I wanted. (I have several big sunburst wood designs, currently they are all red. He offered to paint them multi-colors if I wished, which is very popular in my neighborhood.) He even offered to quote me two ways - one getting the house completely painted, and two doing it two sides at a time - so I didn't have to come up with all the money at once. I appreciated him being willing to work with me. I also really liked that he lived in my neighborhood, he is someone who understands these big old wood homes.

While the last thing I want to do is take on more debt, I admit I am very tempted. I have a friend of mine who has done some house painting and I want to get his opinion. The question will be if I want to do it this summer or wait. This is the kind of investment I would feel good about doing - it would significantly improve my property value and make the home all that easier to sell. While I am still thinking about staying 3 years in the house, I would like to open up all possibilities - maybe I will stay there 10 years, maybe just one. To have this freedom would be a great thing.

I'm not going to make any decisions yet. I need to do some investigating on how I would want to finance this and really whether I can even do it at this time, but it is certainly something to think about!




Colorful photo by Big Grey Mare




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Tuesday, July 29, 2008

Garage Sales - Are They Worth It?

Friday and Saturday my best friends and I hosted a garage sale at my house. Our total take was over $600, mine was close to $200. Not bad, but the question remains: are garage sales worth it? And the answer is...

Yes and No.

I have a fairly good idea what my time is worth. Working hard all last week and then manning the sale from 7:00 a.m. to 6:00 p.m. for two days, plus spending money on snacks and other items - I know I did not make money in the long run. However, if you turn it around and consider the positives, I have to say I am really glad I did it. Here's why:

1. I got rid of a lot of stuff that was laying around the house - things that I didn't need or didn't want to look at anymore, like the topiaries I made for my wedding - gone! I went through the house from attic to basement, and now I can say with authority that while I may not need everything I have, I know what I have and made the choice to keep it. That's a pretty good feeling.

2. If I hadn't sold it, I would have given it to St. Vincent De Paul. It wasn't like these were things that I wanted to keep - selling it got me a few shekels and saved me the expense of driving it to the mission. In addition, there were some items that remained that I will be selling on eBay. I promised my friends I would split it 50/50 with them, so money will continue to trickle in.

3. The most important reason - I got to spend two days with my best friends in the world, sitting outside, enjoying the gorgeous weather, talking, laughing and generally enjoying ourselves. I don't know that we will have enough junk laying around to have a sale every year, but I could see this being a bi-annual thing, if only for the opportunity to spend time with hanging out!


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Thursday, July 24, 2008

Garage Sale

I am posting this in advance, since Thursday I am going to be spending the day prepping for my garage sale. That’s right - I am having a big sale! Several of my best girlfriends and I are getting together to hang out, enjoy each other’s company, and hopefully sell some junk! I found a fair amount of stuff I could let go while moving, and this will get me ahead for next month - especially after how expensive July has been!

My mother and sister have both chipped into the sale by offering several boxes of stuff. If I get it sold, they are letting me keep the loot. Family can be wonderful! I am looking forward to going through the boxes, since I may find a few treasures I can unload on eBay. I am especially excited about my sister’s stuff - she is a woman with cool stuff. I may find a few items for my sadly empty house. Free stuff is a very good thing!.

In addition mom brought over a whole pile of books I am going to be putting up on Half.com and Amazon. More and more I am loving book sales. While it isn’t as steady as eBay, it is far more relaxing. You put the books up... and wait. There is no photo taking or descriptions to write. The downside of course is that Half and Amazon’s commissions are far, far higher.




Photo by lantzilla



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Wednesday, July 23, 2008

Tips on Where to Find a Reliable Handyman in Your Area

One of the very exciting things I have been doing is taking home improvement classes each Saturday. There is a nonprofit organization in my neighborhood that offers free classes in home repair. So far I have taken classes in Porch Repair, Cement Repair, Roofing, Exterior Door Installation, Window Replacement, and Brick Walls and Walkways. They've been great! I have always been fairly handy, but I didn't feel like I knew how to make home repairs. Now I do.

In almost every class, the instructor has offered some tips for finding good contractors and handymen. I thought I would pass them on. Here they are:

Tips for Finding a Good Handyman or Contractor in Your Area

1. Ask friends, neighbors and coworkers for referrals. This is the best way to find someone. Ask around - people are always happy to share their success stories!

2. Don't know of anyone who has had remodeling done? In our area we have Habitat for Humanity and other non-profit home building groups. One of my instructors recommended calling places like this and asking them for a list of referrals. He said that many of the contractors that work for companies like these are semi-retired and looking to give back to their communities. If you live in the inner-city or an older home (like I do) these people will frequently know the area and the type of construction.

3. In my Installing Windows class the instructor suggested using Angie'sList.com. They are a website you can join to read reviews on contractors, handymen, landscapers and mechanics that other people have used. After your work is done, you can in turn rate them. They receive over 5,000 reviews a month!

A couple other tips:

1, If you are hiring a contractor, make sure they have a license. In Michigan, a license is required. They get not only a copy to hang in their office, but also a small wallet sized one to carry with them. Be sure and ask if they are licensed.

2. Make sure they are insured. Especially if you are doing a big project, but even on the little ones. If something goes wrong, you want to know you are covered.

3. Ask them for references. Ask them for the phone numbers of people they have done work for. Every handyman, landscaper or contractor should have customers who will be happy to talk to you and tell you about their experience.

There are some jobs I can do myself, and some jobs I will need to hire out. I want to save money, but if the work isn't done right, then it is only going to cost me more in the long run.




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DIY Home Repair

Wow. July has been one expensive month! I am still sorting through receipts trying to figure it all out. I am glad I was over budget on income, because I am behind on savings!

In another post, I talked about the pros and cons of being a landlord. I had real life experience with that this weekend. The tenant emailed me last week to tell me that she was going to be out of town and would I check her refrigerator. It didn't seem to be keeping things cold anymore, despite the fact she had it on the coldest setting, and it was running constantly. She also mentioned that the toilet was running every hour or so. (Sometimes I wonder why she didn't bring this stuff up when my ex was her landlord. Did she have to save it for me??)

Frankly, I don’t know anything about refrigerator repair. So, I took a look on Google and found the Acme How To Web Site. It turned out to be really helpful! (I have bookmarked that site and will be going back often.) With the web site's help and going by the description of the problem the tenant had given me, I narrowed it down to three possible problems: Dirty condenser coils, a bad seal, or a bad switch. I printed off the instructions for each and headed up to her apartment.

I kind of assumed that the problem was the condenser coils - the refrigerator is older and I doubt the back of it has been cleaned in awhile. I quickly realized that they way it is built in, there was no way I could move it myself. I called Catie who said she’d come on over and give me a hand... but it turned out unnecessary. As I reached up to see if I could even move the refrigerator a little - I felt water. Looking at the side of the freezer I saw condensation, and instantly figured out the problem. The seal had gone bad. It was pulled and distorted out of shape letting freezing air out into the sweltering apartment. The web site had been right and the problem was not good! Using a flat headed screw driver I was able to push it back into place enough that it stopped the problem. Air still leaked a little, but finally the refrigerator stopped running. It was obvious though that I would have to replace the seal. Because it is an older unit and an odd brand, I had to special order the part - which will run me $80. Fortunately my quick fix should hold it until the new part comes in a few days, but I wish it had been dirty condenser coils - all that would have taken was some elbow grease.

Then it was on to the toilet.

Lifting the tank and watching the mechanism, the problem was once again pretty clear. Water was slowly leaking into the tank. Somehow the flapper valve had gone bad. I recently purchased a book on home repair, and felt willing to tackle the toilet issue.

Well... 7 hours later, 2 trips to Lowes, 1 trip to Home Depot, $30, several asprin and a “helpline” call and assist from my friend Randy later, and I now know more about the inner workings of toilets than I ever thought I would know. In many ways the experience was really good. I learned a lot. And actually, I was able to do 98% of the work myself. I would have been able to do the whole thing, had one step not been skipped in both my home improvement book and instruction manual.

It was a lot of work though. I replaced everything inside of the toilet, including putting in new screws and a new feed line from the water shut off. It probably wouldn’t be bad at all if I had to do it again, but it was a moderately challenging project considering I had never worked on a toilet before! On top of that some of the old parts were rather difficult to remove. Nonetheless the toilet is repaired and seems to be working well.

While, I know I saved a lot doing the work myself, still that $110 hurts a little - and that is just a small part of what I spent so far!


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Friday, July 18, 2008

8 Tips to Help You Fight Foreclosure

I started this blog in May to help me track and make some sense of my financial situation. What can I say? I have a mortgage I can't afford. If I could sell the house, I would, but it just won't sell in this market. My goal for Fighting Foreclosure was to document my own struggles as I pull myself out of my own "pit of despair." I know I am not alone out there, there are so, so many people dealing with the same thing I am. In fact, just recently I saw foreclosure rates are up 74.1% in my area!

Here are Eight Tips to Help Fight Foreclosure:

1. Track all your expenses.
Tracking every penny isn't easy (I still struggle with it,) but it can really help you see where your money is going. See if you are spending small amounts on frivolous purchases. I know sometimes it seems silly to save $1 here and $.50 there - and it is hard to see how that can make your house payment, but from pennies, dollars are made. Track everything - food, gas, cable, entertainment expenses, utilities, car payments - whatever you spend money on. Then look for ways to decrease these costs.

2. Use your assets.
Look around you - what do you have that can earn you extra income? Both your physical assets and your intellectual assets can earn you money.

Physical assets - the first question is, is there anything you can sell? I've been able to earn a bit each month by selling books on Amazon, Half and eBay. I am also having a garage sale in a week. But think outside the box - look for things that can give you a stream of money each month. For example, do you have a spare bedroom? I noticed on Craig's List lots of people, particularly college students, looking for rooms to rent. Not all of them needed a place for a full year, some just needed a place for a few months while they were between home and college. I really don't want roommates, but if I get to that point, these are the kinds I will be looking for. I have an extra garage stall I don't need, so I am looking to rent that out.

Intellectual assets - are there other things you can do? Can you earn extra money babysitting, tutoring, landscaping, sewing, cleaning, ghost writing? What do you know how to do that other people will pay you for? This may mean freelancing or perhaps getting a second job.

3. Make a To-Do List
Sit down in a quiet place with a piece of paper and pen and write down any way possible you can make money or save money - no matter how crazy, or how distasteful, it might be. Following up on that $20 you loaned a buddy 15 years ago in college or having to borrow money from mom may not actually make the cut, but write them down anyway. Then go through and rank them from easiest to do to least likely to do. For example, one of the easiest and "no-brainer" things for me was to simply follow up on a rebates I was owed but hadn't received. On the bottom of my list? Borrowing from relatives. Once you have made your list - go to it! Once you start you will be surprised at how fast things start to come together.

4. Get Informed
There are lots and lots of great Personal Finance blogs out there. Start reading them - many have great tips on subjects like earning extra income, frugal living and dealing with debt. I read the folks on my blog roll and I also check out the ones on pfbuzz. Reading personal finance blogs has given me tons of great ideas as well inspiration to keep going.

5. Speak to Your Other Billing Companies

I took a look at some of my bills and was able to reduce my insurance costs considerably. If you are already over your head and it looks like you can't make your payments - call them. Talk to your utility companies and credit card companies and explain the situation. Keep in contact with them. Explain this is a temporary situation and tell them what you are planning to do about it. This is why having The List is important.

6. Call Your Lender/s
Don't wait for them to visit you! Foreclosures aren't good for anyone - banks included. It is in their best interest to help you stay in your home, but not if you don't make the effort. Call them and tell them the situation and keep them informed every step of the way.

7. Consider getting a HUD Counselor to Help
I am not a financial expert, if I was, I wouldn't be in this situation myself! Get help from a pro. There is a map of HUD Approved Counseling Centers here.

8. Breathe
No one wants to go into foreclosure or lose their home. It is a horrible thing. Keep in mind though, it is happening to Americans everywhere - you are not alone. This will not kill you. It may make things harder for awhile, but it isn't the end of the world. You will survive even this!


Additional Reading:
For more tips and ideas, check these other reasources -

The Simple Dollar's Exploring The Latte Factor: What a Latte Really Costs You
Save, You Fool's 101 Ways I Saved Money This Year
Passive Family Income's New Ideas for Reducing Our Monthly Food Budget
Master Your Card's Do It Yourself Debt Settlement Plan
www. HUD.gov's Help for Homeowners Facing the Loss of Their Home

If you have other articles that would make great reading, please add them in the comments!




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Thursday, July 17, 2008

July Goal Made!

Can you hear my long slow sigh of relief?

So, how did I boost my income by $878.78 in two days? Simple - two windfalls for over $400 each.

Windfall One:

The security deposit from the apartment. I've been waiting on it, but afraid to count on it. On my last apartment my landlords nicked me for $125.00 in "cleaning fees" even though I left the place spotless. So this time, I wasn't sure what to expect. Granted, me and a friend cleaned this place top to bottom (even sitting on the refrigerator to clean the ceiling fan in the kitchen) but still, I hate to count chickens before they are hatched. Also, landlords here have 30 days to mail your deposit. I hoped I would get it in July, but there was always a possibility of it not hitting until the first part of August. I lucked out though, it came last night!

Windfall Two:

A very happy eBay sale! My mother had given me a Baker Furniture footstool she had purchased awhile back. She had told me that I could expect it to get around $100-$150.00. The auction just closed an hour ago or so and to my shock it actually sold for over $400!! I had to quick call and tell her! She told me she wished she had warehouse full of them for me to sell - hee! Me too!

Still as great as this is, windfalls certainly aren't something that I can count on. In fact, this month was not looking so good until today. That tells me that I can't rest on my laurels - I have to keep pushing. There may be times ahead where I won't come near my goal. If I can plan ahead, so much the better.

In fact, this month (all 17 days of it) was looking a bit rough for me for a number of reasons. For one thing, I have had a harder time tracking my spending than I did last month. Writing down everything that I spend is really hard for me and for some unknown reason, this month I haven't been able to do it at all. I am pretty good at collecting receipts, but when I am using cash it is a real problem. I have a little notebook just for the purpose, but somehow I find it easy to forget. Or worst yet - I think I will remember... then I forget. I have to do better over the next two weeks, just so I can get on track again.

My other issue is that I have finally come to the conclusion that I need to buy a lawnmower. I borrowed Catie's weedwacker the other day and was able to make my lawn much flatter - which is all I was really looking for. (As you can tell, my lawn is really small if I can do it with a weedwacker!) It looks a tad rough, but far better than it did with the weeds growing in it! I am looking at a couple of options, but in any case, I expect it will run me over $100. I hate spending that kind of money, but I don't want the mailman to get lost in my jungle of a front yard either!





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PFBuzz and Personal Finance Bloggers

Awhile back, about the time I first started blogging, I joined pfbuzz. I was looking for ways to connect with other folks out there, people who are doing what I am doing - or have already done it.

It is a neat site - a constantly changing compilation of articles by people like myself, who are writing about personal finances. The articles are sorted into categories like Credit and Debt, Making Money, Investing, and my personal favorite, Frugality. I love reading other people's financial blogs, and this gives me a way to get a sampling of other ones that are out there! I have even submitted a few articles myself. The nice part is (other than the fact it is free, which is always good) is that once you sign up you can rate other people's articles. I look for highly rated articles to read, but I also like being able to vote on how useful I personally found the article. If you are at all interested in reading more on the kinds of things I write about and whole lot more, I say - check it out!

Here are a couple of articles I came across today from poking around on there:

SavingAdvice.com wrote this interesting piece called How Much Cash Do You Keep at Home?

I had to read that, because frankly - I don't keep any, unless you count my bag full of recyclable pop cans and the change jar I have on my desk. This article makes some good points as to why it might be a good idea... and why it is not a good idea to hide it from burglars! After reading that, I also had to check out his other post, The Best Place to Hide Money: Conversation With a Burglar. Fun stuff - but useful too.

I have said before that Money Blogs Make Me Happy. Sometimes I get a bit depressed when I think about everything that is weighing on me. Reading other blogs help remind me that there are people who are in far worse situations than I am, and that there are people who have come out on top after it. It feels good, like being part of a community.

You know, I would recommend to anyone who is struggling with issues, whether they be financial or family or fixing up a house, that they should find bloggers out there who are writing about it. And I can almost guarantee that if you can think of a topic - there is someone out there writing about it!


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Selling X-Files Magazine Back Issues on eBay

I wrote awhile ago that a friend of mine offered to let me sell some of her things on eBay. She moved and left four large boxes full of items that need to be sold. We have a deal for a 50/50 split on whatever I am able to make from the sales.

Many of Jen's things are pop culture, and a lot of them are X-Files collectibles, particularly back issues of magazines. I guess I didn't realize that there was a market for what I would consider fairly recent back issues of magazines - but there is. Today I sold two issues of Rolling Stone and both issues of Spin magazine that I have posted have bids on them. These magazines are from 1994-1998, approximately.

While there is a variety of magazines on different topics in the boxes, my goal is to get all the X-Files ones up first. The new movie opens July 25th, and I am hoping that the upcoming interest will spark people's imagination on eBay as well! The magazines (and action figures) are in great condition. I am determined to photograph and list as many of these items over the next week that I can. I am not sure how many there are total - but there are quite a few!

My goal has been to list 3 things a day, whether books on Half.com and Amazon, or items on eBay. Because my goal for the month is looking a little light, and the impending deadline of the X-Files movie, I am bumping that up to "as many as possible, with 3 being the minimum."

Here are a four things I like about selling back issues of magazines online:

1. They are easy to ship. I am sending all of these Priority mail, in which case the US Post Office provides free shipping materials. Magazines fit neatly into their packaging.

2. They are easy to store. As I photograph and post the magazines, I am putting them on a table I am using only for Jen's stuff. Magazines stack nicely and don't take up a lot of room. (Which is more than I can say for some of my mom's antiques!)

3. Cheaper fees. eBay fees are lower on books, magazines and music than on other types of items. I suppose it is because they want to compete with Amazon and other websites like that. The difference isn't significant, but every penny counts!

4. Typically you only need one photo for the listing. eBay will let you have one photo for free, but after that it is $.15 a photo. Now that isn't much, but again - every penny counts! When I sell mom's antiques, I like to have a fair number of photos so people can really see what they are getting. Unless there is something particular about the magazine (like damage) that I feel I need to display, one photo seems plenty.

Three Things I have learned about selling magazines on eBay:

1. Like books, condition matters. The Rolling Stone that was still in the plastic went for twice as much as the Spin magazine that wasn't. I also try to be very careful about being honest on the condition. I want bidders to know what they are getting.

2. List all the main articles in each magazine if you can. That way not only will the magazines I am posting appeal to the X-Files collector, they may also appeal to someone who wants a different article within the magazine.

3. The type of magazine matters. I don't think it is coincidence that the cool Rolling Stones and Spin magazines are getting bid on and the Newsweek with the X-Files cover isn't.

If you are thinking about selling back issues, here are some great articles by Auction Rebel that have helped me:

Selling Magazines on eBay
Selling Taunton Press Magazines on eBay



Photo by Phreak 2.0


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Wednesday, July 16, 2008

Divorced - Financial Lessons Learned

A coworker recently pointed out this article to me in the New York Times about How to Choose The Right Husband. I am not exactly sure what they were implying - the ink on my divorce papers is barely dry. It is going to be a long, long time (if ever) before yours truly would get hitched again. It is a good article though, I liked what it had to say. Having been married, I wish I had read this article before the wedding day - there were several items mentioned in it I could relate to - that should have been warning signs. I would be interested in reading the follow up on How to Choose The Right Wife.

I have written about my opinions as a divorce' on combining finances before. I was lucky, since our finances were already separate, I didn't have to worry about splitting up bank accounts or inheriting his debt. That doesn't mean however, that divorce isn't expensive, because it is. You've got the usual things that seem obvious, (like the cost of the lawyer,) but there is a lot more to it than that. First off, one of you is going to have to move out. That means expenses are going to get tricky. In my case, I moved, so suddenly I was paying my own utilities, rent, etc. on my own. That added up in a hurry! Then there is the re buying of items you have split. For example, the ex got both the dining room table and the lawnmower, so I am going to end up having to buy myself those at some point. It is those kinds of things you don't expect that gets you - let alone the money spent on kleenex, wine and Haagen Daas ice cream.

Master Your Card had a great article called 12 Things to Ask BEFORE the Wedding. If I did have the chance to do it again, I'd follow her advice plus do the following:

1. Ask what he makes a year. Then tell him what I make.
This has to be one of the biggest taboo questions I know. Couples will discuss politics, religion, favorite soda flavors* but they won't ask this one question. Look, the way I see it is this - this is the person you are entrusting to be there when you are old and craggy and need help wiping your butt. You seriously can't talk about how much your boss pays you? That's a problem.

2. Sometime before the wedding, each of us make a financial balance sheet - then show them to each other. There is a great article on beingfrugal.net about how to do it - and why. Basically, their contention is to do it in case someone gets sick or dies - especially the person who is in charge of the bills. I completely agree with that, but I also think it is really important for both people to know the financial situation. Just for my own knowledge I sat down and made my balance sheet. As the article said, it took me about an hour. I'll write more about the results in another post, but the important thing is that it quickly and clearly defined all my accounts in one easy page. Before I walked down the aisle again, I would want to know what I was getting into. Which leads me to #3 -

3. I wouldn't take anything for granted. In my situation, I assumed that my husband was making a very good wage, based on the way he acted. He seemed properly frugal, but at the same time, didn't mind indulging in extravagances like travel and dining out. He was a mature man, a small business owner who was very successful, and so, perhaps ashamed of my own foibles, I didn't ask. I should have. It wasn't until later that I found out he over 30 times the debt that I did... in credit cards alone! That is not to mention any other types of debt. How could I be so stupid? I was in love.

So many people end up going through divorce. It is sad. Maybe a few of them could be diverted if more people just talked to one another up front.




* What? You don't think soda flavors are personal? Try getting a Diet Coke drinker to see the beauty in a ice cold Pepsi.

Photo by Professor Frenchie


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Tuesday, July 15, 2008

Midweek Miscellany

Last month I was able to do some extra work to help raise funds. One of the jobs I did, (being an extra in a car commercial) I was paid on the spot for, but for the other (house managing,) I was mailed a check. I knew the check was supposed to be sent out sometime at the beginning of July, but I hadn't seen it yet. Since I have moved I was a bit concerned that it might have been lost in transit. So yesterday I contacted Shelly, the theatre manager, who sent me a form so I could have the check stopped and reissued... except that because they sent it to the correct address, it would cost me $20. I decided to wait a few more days to see if the post office would find me. Sure enough, last night I got home and there it was sitting in my mailbox. Hooray! That helped bump up my monthly goal, which I am glad of because I am looking a little light on income right now. I have a bunch more things to sell on eBay, so it looks like I had better be busy getting those posted.

Speaking of income, I have started work on cleaning out the extra garage stall. My garage has three stalls. Two are one unit with one door, but the third has a separate locking door. I am hoping to rent it out. It would be perfect storage space for someone with an antique car or a boat. It is going to take me a little while to do since there is a lot of miscellaneous junk in there right now - some of which is going to have to go to the dump, but I should have it ready to go by fall. This weekend I unscrewed some tool racks that were in there and rehung them in the 2 stall. Then I organized all my lawn equipment (shovels and what not) on them. It looks really nice. The next step will be sorting through all the assorted planting pots I have.

As another part of settling in, I am slowly changing my address on all my bills. I pay everything electronically, but the statements were still being mailed to my old address. As each one comes in I am evaluating whether I really even need my paper statements. In most cases, I don't. So, I am switching things over to email - it saves me a stamp to mail them the correct address and it saves in paper which is good for the environment! (By this method I saved myself $.84 today, and as we all know - out of pennies, dollars are made.)

One more quick thing on savings - recently I wrote about reevaluating my insurance - auto, home and life. Financial Ramblings has a neat article about car insurance and how the discounts are broken down. I found it interesting reading. Check it out if you get a chance.




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Remodeling for Resale


I've only been in the house 2 weeks and already I am ready to completely remodel. There are so many things I would like to change, (if I had an unlimited budget,) from the black and white splatter painted walls in the spare bedroom (though it does hide the fact the plaster is sagging) to the hardwood floors that need refinishing, to the garden fence that was put in wonky and now looks like a swayback mule. In every room I see things I would change, and being that I am broke and trying to earn more money a money, not spend it, this is very frustrating!

As I sat talking to a friend about it - and how I will have to do everything in my power to curb my urge to run to Lowes - he reminded me of something: My Three Year Plan. The Three Plan is fairly simple - live in the house and make it work for three years until I can build up equity and the housing market turns around. Then sell it for a smaller "Dawn sized" house, using additional profits to fund my plans to go back to school and get my Master's degree.

Duh! It was just the reminder I needed! I suppose all of us have an urge to make our "nests" the way we want them - to redo them to our liking. In my urge to make this house my own (and drive out the memories of my divorce,) I kind of had forgotten that.

So, now I am going to try to change my point of view. Whenever I feel the urge to grab the sawzall, I am going to take a breath and ask myself a few questions:

1. How much will this cost?
Then I will double my estimated cost, because projects always cost more (and take more time) than you think.

2. Will this help the resale value of the home?
Not every project has to help the value of the home. Putting in a few extra hooks in my closet won't effect the bottom line much, but it will make me happier. The cost will be under $20. Redoing the kitchen floor, which is in beautiful condition, but I hate, would pretty much be a waste of time and money.

3. Can I live with this for three years?
That's the biggie - is this something that I can wait out - knowing in a few years I won't have to look at it anymore? The next question then is, if I can't live with it for three years, how long can I live with it? That will help me prioritize projects. For example, the bedroom needs a new coat of paint. The cost will not be high and it will impact the resale value, since at the same time I will patch some drywall and make everything look clean and fresh. So, this is something I am going to do. Most of the rooms (including the splatter painted one) I can live with for three years, but because this is the same room my husband and I slept in, it is imperative to me to change it soon. After a divorce I think it is important to reclaim the space as your own. Even down to little things - like I currently have the bed facing another direction, anything to make it "mine."

As I move forward and start making choices on what projects I tackle (and which ones I reject) I'll try to write about them. I am going to try to think of myself as a tenant - as almost living here like a renter. If I know that this this only temporary, it may be easier to ignore this ugly duckling's flaws. I am also going to keep in mind my goal to sell it - so I will be looking at ways to make it more attractive to home buyers.

...especially ones who like splatter paint...



Photo by Jim Frazier





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Friday, July 11, 2008

Why I am a Lender at Kiva

Recently I noticed that the blog My Journey to Eliminate Debt had an advertisement for Kiva in the sidebar. It prompted me to go over there and hunt down their ad codes so I could add it to my own, since I've been a part of Kiva for quite awhile. I have made it my goal to only put ads for business I believe in and use myself on my blog,* and ever since my friend Tracey introduced me to Kiva I have tried to support this organization.

Kiva is a nonprofit that is doing work I believe in. The goal of the organization is not unlike Prosper.com - you bid on loans for people who are looking for assistance. The difference is Kiva allows you to lend to specific low-income entrepreneurs in the developing world.

You choose who to lend to - whether a baker in Afghanistan, a goat herder in Uganda, a farmer in Peru, a restaurateur in Cambodia, or a tailor in Iraq - and as they repay their loan, you get your money back. It’s a powerful and sustainable way to empower someone right now to lift themselves out of poverty. Since I am a business person myself, I love the idea of lending to small business owners who are trying to get ahead. Here are the two loans I have over there now:

Loan 1:

Mrs. Sopheap Chea, age 36, and her husband have been married since 1991. They have five children, four sons and one daughter. Four of their children are studying in a local school, and the youngest one stays at home. Sopheap and her family live along National Road Number Two, about fifteen kilometers from Phnom Penh. She has been in the business of weaving cotton scarves since 1985. It’s a skill she learned from her neighbor. Her husband is a teacher.

Sopheap is requesting a loan for the first time, in the amount of $1,000. She will use this money to expand her scarf-weaving business.

As of 7/11/08 - Her $1,000 loan is 25% repaid.

Loan 2:

At Yamoransa station near Cape Coast is the well-known chop bar operator Madam Grace Cramson. She has lots of customers. Her customers are drivers, passengers who use the Accra – Cape Coast highway, and people in and around the Yamoransa area. She is married and has three children aged 22, 12 and 7 years. Her husband is a driver, and he has his own vehicle. Madam Cramson is a hardworking woman. She has a drinking spot, also. To help the finances of her family, she also sells all kinds of assorted drinks including minerals and some locally-made drinks such as kasapreko, oprim quansah, and schnapps.

One challenge that Madam Cramson faces is that she always runs out of drinks because she has to make an advance payment before she receives the shipment from her suppliers. Her suppliers include the Coca Cola company of Ghana and the Ghana Breweries.

She is therefore asking for a loan of US $1,000 to enable her to buy more crates of minerals (Malta Guinness, Coca Cola, Fanta, and Sprite) to fill her drinking spot attached to her chop bar.

As of 7/11/08 her $1,000 is 57% repaid.

This is why I invest in Kiva. I like these woman. Like Mrs. Chea I have made scarves, (though not commercially,) and how could I not like Madame Cramson? I just want to pull up to her stand and order a schnapps, don't you?

I loaned each of these ladies $25. (Bids are in $25 increments.) When their loans are repaid, I can get my money back, although far more likely I will reinvest the money into other loans for folks.

I write on here a lot about my personal financial woes, but let's face it, there are a lot of people out there who have it much harder than I do. I am going to try to make and effort to write about giving back as well as getting. Keeping a balance is always important.


* Just for the record, I don't get anything for talking about Kiva except the hope that some more people will go over there and check them out.


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Thursday, July 10, 2008

House Blues


I have been trying really hard to stay positive - stay focused on the silver linings of this whole situation I am in, but sometimes, I have to be honest here - I just want to throw in the towel. Between the gas turn off, the power being out, dealing with utility companies, huge storms, the tenant's toilet being problematic, and sorting my way out of the boxes from moving I find myself discouraged. Then you add in things like the fact my box spring mattress doesn't fit up the stairs so I am sleeping on my mattress on slats and yesterday I got a nasty case of the 24 hour stomach flu - it all starts to really get me down. Tonight I am meeting my mom, sister and brother in law for dinner to celebrate my brother-in-laws birthday. Afterwards I am going to pick up my ex's air conditioner from my sister. The ex lent it to me when I was in the apartment and when winter hit I stored it at my sister's place since I had no room for it. He wants it back - and I can't blame him, it has been pretty warm lately. But the thing is, the last thing I want to do is deal with it - or him.

I don't know how most people deal with divorce, how they face what happens afterwards. For me, I usually try not to think about the bad things, the pain and suffering. I've spent a lot of time in therapy dealing with what happened - and now I want to move on. I don't particularly want to see my ex or dwell in the past. The hard part is that lately every time I feel like I am going strong, it feels like the "fates" (or what-have-you) have had it in for me. Every time I start thinking I am getting it together, finding a way to make my life better, something bad happens. Now, intellectually I know that is rather silly. The universe doesn't revolve around me. A big storm doesn't hit my hometown to teach me a lesson. I know that, but... the sheer amount of rotten luck I have had lately is remarkable.

My therapist today challenged me on all this. She asked me why all this "stuff" was able to bring me down. Why does it make me feel sad. Yes, it is a rotten bit of luck, but why do I let such things effect me?

It's a good question, and part of the reason I am in therapy - to be asked questions like that. The obvious answer is that a bunch of crappy things have happened to me, so I've been in a crappy mood. But I know there is more to it than that.

In part I think that the reason these things can sway me so much is that my positive attitude is so thin - it is like a veneer over the anger I have. I don't want to be in this position, I don't want to be stuck in this house, struggling over every penny. Even when I was married I didn't want to live in this house. It is too big, too cold, and too old. I am rattling around inside of it like a lone penny in a child's piggy bank.

Still, being angry about it isn't going to change the situation. It is what it is. And one thing it is is temporary. I don't plan on living here forever. I have to keep in mind this is all part of a 3 year plan. By then I hope the market will have turned around and I can sell it to someone who will love it.

In the meantime I am not sure what I am going to do. Part of me thinks I still have to keep looking at the bright side and not let this angst bring me down. Giving into my hate isn't going to make it any easier to go home to... and frankly, why blame the house? It is just wood and nails, plaster and shingles - it isn't worthy of hate. I don't know that I can ever love it, but maybe somehow, the house and me can at least be friends.


Photo by Meanest Indian.


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Rentals as NonPassive Income - Being a Landlord


An article over at Passive Family Income inspired me to write a little about being a landlord. When my ex and I were married we had two rental properties - a house with three units and our house (the one I now live in) that has two units. My ex handled most, if not all, of the tenant problems. I assisted with cleaning and updating of the apartments between renters and doing yard work on both properties. I also helped him by creating flyers (we always had an "info box" in front of the house between tenants) and once and a great while meeting perspective renters at the property and showing them around.

My ex now lives in the three unit. As of July 1st, I took over the two unit. This will be my first time being a landlord on my own. For people thinking about being a landlord there are some really great things about it... but there are also problems.

Three Good Things About Being a Landlord

1. The obvious advantage is the income. When the three unit was completely rented it paid for itself and then some, so we had an investment property that was building equity, without our hard earned dollars going into it. In my two unit the tenant pays $550 a month, which goes directly to the mortgage.*

2. Good renters can improve your property. My ex had a renter who wanted to take over a weedy patch behind the house and turn it into a garden. How nice is that?

3. If the renter is in a owner occupied home, (like mine) you have a built in "eye" on your property. I would have no hesitation asking my renter to pick up my mail or keep a general eye on the place while I was gone on vacation. She has my cell phone number and would call if there were ever any problems.

Six Bad Things About Being a Landlord

1. Maintenance problems. This is the big obvious drawback, not only are you responsible for your own property, you are responsible for theirs. The day I moved in the tenant came down and told me that her toilet is having problems. That's something I am going to need to work on in the next week. Anything goes wrong - you are responsible for it, and I would really only recommend being a landlord to someone who is fairly handy, or who has the disposable income to hire a handyman.

2. Noise. If you have an owner occupied rental like mine, you will be hearing your tenant - and they will be hearing you! I am constantly aware of making noise at night - running the washing machine too late and so on. For a night owl like me, that is kind of hard. I hear her as well, I know when she comes home and when she leaves. Occasionally I can hear her tv in my bedroom. It's something I wouldn't have thought about before I became a landlord.

3. Tenants eventually move out. When they do, you may be left with a month (or more!) without a renter - which will significantly hurt your bottom line. I am lucky, when I moved in, my ex had already gotten a tenant who wanted a year lease. That means I should have someone until May. However, leases have been broken before.

4. When the tenants move out you will most likely have some out of pocket expenses. I am a firm believer in good apartments = good tenants. If you act like a slumlord you will get slummy renters. Offer a good apartment, get good renters. When a tenant moves out, this is a time to look through the place for improvements that can be made, walls that need painting, faucets that need fixing, etc. No matter how well a former tenant cleans, there are still going to be little things you can fix to make the place nice for the next person. Even if you choose not to do a darn thing - you will still have expenses. Advertising the apartment can run money, as well as covering the utility bills while you are sans renter.

5. Speaking of utility bills... renters use utilities and you will have to decide how to handle that. If you are renting a house, perhaps the renter will pay for everything, but when you are renting apartments it gets trickier. Water is typically not included in rental fees, so you will have to take that into consideration. On my house the tenant and I have different electrical meters, but we share gas meters. I also have to have a larger trash cart than I would need if it was just me. It is certainly all things to consider.

6. The last fear, and it is a big one, is bad tenants. Knock on wood, I've never had to deal with one. I am not going to write about it, because I am sure you can imagine the nightmare that can be.

I'm not saying it isn't worth it, but I would recommend putting a lot of thought into it before you leap. I would also highly recommend getting the advice of a lawyer and asking them to help you write up the lease.


* This $550, does not count towards the $900 more I need a month to make my bills. Or rather I should say the $900 is after the $550 is paid.

Photo by Bohman.


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Wednesday, July 9, 2008

Selling Loot on eBay, some Pros and Cons

First off - The Simple Dollar has a great post up on Ten Tactics for Improving Your Luck. I love articles like this - they make me smile. Check it out if you get a chance - there is some good stuff in there.

So, last night my friend David brought over our friend Jen's eBay stuff. He had four big boxes of things she left with him to sell when she moved. He didn't get around to it, so the bundle has been passed off to me. The deal is simple - I do the work of selling them on eBay, we split the profit 50/50.

It is an incredibly generous offer and I am so, so happy she offered it to me!! However, this is going to be a little trickier than selling mom's stuff. For one thing, mom can't get online and see my listings. She just hands me the stuff and it is out of site, out of mind. Especially since all the profits go to me. So, while I try to put together good listings, I know that I am the only one who will gain (or lose) from what I do. With Jen, I want to make sure I am doing this the best that I can. I am going to go a little further in researching the items and taking the photos. Her stuff falls into a lot of that pop culture collectibles stuff, that frankly, I don't know a lot about.

The other thing that is hard for items like these is the difference between "worth" and "sales price." This is a concept that I deal with a lot, since I work for a company that does appraisals on homes. Ok, say you have a $80,000 home, then you put $25,000 into it fixing up the kitchen. How much is the home worth? The answer - whatever people will pay for it.

If in your area homes are only selling for $80,000 then you could put $180,000 into it - the home is still "worth" $80,000. However, say similar homes in your area are selling for $250,000. Well then, your home is worth that. Something is worth what the market will pay.

The tricky part is when it comes to emotion. You love your house, you love your kitchen - it is that perfect shade of pale green that makes your bleary eyes still look good in the morning. You know how much you spent, you know how great it is - it should be worth more. But it is isn't.

And the same thing goes with eBay, but on a much more concentrated, quick paced level. An item on eBay is only worth what people who have seen your auction during those 7 days are willing to pay. Sure, you can look up and see in some collector's book that it should be worth $100s of dollars, but that does you absolutely no good if you can't find a buyer for it. In fact, it costs you money, because each time you list something, eBay charges a fee. (And the higher the price, the higher the fee.)

My goal is to somehow walk the line between pricing the items at a level someone would reasonably bid on, but high enough that Jen and I both make a profit. I put three of her magazines up today as a test and will try a variety of items over the next couple of weeks. Naturally, I will post about it here.




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Tuesday, July 8, 2008

Book Selling Online

Over the weekend I sold three books on Amazon and one Half.com. A couple of weeks ago I wrote about the differences between selling on Half.com vs Amazon vs eBay and what sort of success I've been having. However, one thing I haven't been doing very well is tracking which website has been selling the most for me - especially between Amazon and Half.com, since those sites are so similar. I have started doing that today and will continue to track it. My gut intuition says that of the 11 books and 2 dvds I have sold so far, most of those sales have been off Amazon, although, I still think both sites have their advantages. I have also sold 2 books and 1 album through eBay, but those were vintage items.

This weekend I boxed up several more books to add to my bookstores. I will be posting those today. My goal has been to try and post 3 items a business day in one fashion or another. With the water heater troubles and holiday weekend I didn't hit that goal, so I am hoping to make up for lost time. As I continue to unpack I am hoping to find more and more items to sell to keep the momentum going.

As for eBay, my mother gave me a few more items from her basement to sell and my friend David is bringing over some boxes of items that his friend Jen had left him to sell on eBay. Mom lets me keep the profit and Jen and I will split the profit 50/50, so that will be great! Good thing David also provided packing peanuts! Now I just have to figure out which box I put the cords for my digital camera in......

EDIT: Looking for more information on online book selling? I am compiling all my articles about my experiences in one place. Check them out at The Online Bookseller.





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Monday, July 7, 2008

Flexible Savings Account Mistakes... or what not to do with your FSA refund check

At my office we offer a Flexible Spending Plan for medical and dependent care expenses.* An FSA takes pre-tax money out of my paycheck and puts in an account for me. Then when I have medical expenses, I simply submit the receipts and I am reimbursed. Basically, my plan works like this:

At the end of the year I look at how much I spent in medical expenses. (I don't have dependents, so I only use it for medical expenses.) My plan covers things like the doctor and prescription co-pays that aren't covered by my insurance, over the counter drugs, and medical expenses I don't have insurance for - like dentist visits or a pair of new prescription glasses. It even covers my therapy. So, what I do is try any figure out how much I am going to spend based on last year's numbers and looking ahead at what I might need for the next year. It is kind of a tricky business because once I've set it up, I can't change it (unless I have something major happens - like I get fired, disabled or have a kid. Hopefully none of which will happen!!) Then there is the "use it or lose it" part of the plan - if I don't use it, I lose the money I have set aside. So, if I put aside $500 and only use $300, then that $200 left in the account is gone. Have I ever had that happen to me? Nope!

I always run out before the year is through. It seems like there is always an extra expense or two that I wasn't expecting. For example, this March I ended up in the emergency room and forehead full of stitches - there was absolutely no way I could have planned for that! I tend to set my account conservatively anyway and with the extra expenses - I never have money left over. Only once did I come close and then I got myself a new pair of prescription sunglasses, which I needed anyway and more than made up the difference.

So, so far so good. My FSA is set up through my employer. A bit comes out of my check each pay period, and since it is before taxes I don't even notice it. (If I don't see it, it ain't there.) I pick up my prescription for Advair which runs me $45. I send the receipt into my flex plan administrators and they shoot me a check. All is right with the world. Until I get my checks...

This is where I have been known to screw up. So, in the mail I get this un-budgeted $45 check. How cool! It is like free money!

Wrong!

To be honest I didn't usually take that money out and buy $800 Christian Dior shoes.** Usually the money would go towards something really productive - something worthy, like paying down my credit card debt. It seemed like such a noble cause, such a good intention - yet it backfired like Ford Pinto. Why?

Precisely because that $45 was un-budgeted money. It wasn't planned as income or as an expense. So, the money paid to the pharmacy was not on my budget as an expense, since I knew I would be immediately reimbursed, but when I got the check, instead of treating it like a reimbursement and putting it back in my checking account like I should have, I was spending it like income. Basically it was the equivalent of taking $45 out of my checking account and randomly sending it to my Mastercard - no wonder my budgets weren't working out! On top of that usually I have more than one medical expense a month - a couple of prescriptions, some therapy, a visit to a doctor later, and it was a couple hundred bucks that were missing from my account. Without realizing it my good intentions were forcing me to come up short at the end of each month!

Starting in June I began using my FSA reimbursement checks for what they really were - reimbursements. When they came in the mail, I put them directly into my checking account. And you know what? It worked. Last month I didn't get that "end of the month" crunch that I have usually felt. It kept me from dipping into emergency funds to try and cover it (another bad habit I had) and generally made me feel better. Knowing bills will be paid each month, generally makes Dawn a very happy gal.







*I am not in any position to be offering financial advice, I'm just talking about my own experiences. If you want more information about FSAs in general, Wikipedia has a neat article on them here. If you want more information about your personal situation see your employer's Human Resources person or your tax attorney.

** Ok, ever. I don't own Christian Dior shoes, but I have tried them on and thought about it!

Photo by trp0.



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Water Heater Blues, pt 2

Well, it has been quite a weekend, fortunately not a very expensive one, however. Last week I mentioned that I was having hot water problems - the solution was both simpler and more complicated then I thought -

Tuesday night I was in quite a funk. Here I had barely moved into the house and I was already having problems - first, the tenant tells me her toilet is filling slowly and now the hot water is out. I called everyone I knew who I thought could help, but no luck. So out of options, I decided to bite the bullet and call the plumber in the morning.

On Wednesday I arranged for the plumber to come out sometime during the mid-afternoon. They said be between 3:00 and 5:00. Around 2:00 my little town got hit with a huge storm - the worst I can remember in I don't know how long. I kept waiting for the plumber to call, knowing that they were probably busy with the storm but also concerned about my own lack of hot water. Having not heard from them by 4:00. I called to make sure I was still on the schedule.

I was, but sure enough, they were running behind. They said it would be another hour or so. Though normally I work until 7:00, that night I left early - afraid that I would miss them and have to wait another day. As I drove home, I couldn't believe it - my neighborhood looked like a war zone; trees were down everywhere, emergency vehicles on practically every corner. One of my normal routes home was so flooded with water that the whole area was blocked with firetrucks, a huge catalpa tree came down across my street blocking another corner. I wasn't surprised when I found that I was without power.

That's when I realized I was also without gas. A long, tedious and painful phone call to the gas company later and I found out my hot water heater would probably be fine - if the gas had been turned on. A savvy homeowner or one who had dealt with hot water heaters before would have probably picked that up immediately, but I didn't know. I hadn't used the stove lately and it never occurred to me that the gas would be out. Apparently something went awry when my ex transfered the gas into my name, so they shut it off.

Dealing with the gas company is like some mad story out of Brother's Grimm. Naturally they don't come out the day you call. Instead they punish you and test your mental fortitude by making you to sit home by the phone
hoping that the gas man may come, from 8:00 a.m. to 11:00 p.m. (when they "usually"are done for the day.) At some point they may grant you with their presence. Dare not ask what time! They will determine that - you lowly schmo who had your gas turned off - you are not worthy of being told when! You just sit there and pray they will come at all! And should you falter, even for only a moment, you are out of luck!! Miss their all powerful phone call, fail to hear their all important knock and your request will be denied! They will leave you in your cold shower wasteland, for that is what you deserve. You can then get on your knees and beg the gas warlord to please, please give another chance. ... and the all mighty DTE may deign to consider it.

It is ridiculous, but what could I do? I agreed to their conditions - and while I was on the phone with them, the plumber showed up. I obviously didn't need him to help with the water heater anymore, so I weakly showed him to the tenant's toilet. Which he fixed, in about 3.5 minutes. (Wouldn't it be nice if they charged by the minute?)

After the plumber left I sat staring out the window at the rain continuing to come down and the light on my neighbors porch. Slowly I realized the light on my neighbor's porch... was on.... I quickly called Consumer's Power. If the gas had gotten shut off, wasn't it feasible that the electricity had been shut off too?

As it turns out, no. Another long and tedious phone call later I was relived to find out that the power was just plain out due to the storm. My neighbor being on a different grid, just got the luck of the draw. Knowing that nothing more was going to happen that night, I followed the advice of a dear friend and went out pamper myself. I took myself out for Indian food and a bit of wine. It may hurt my dining out budget for this month, but it was necessary for my sanity.

So, Thursday I woke early and called my office to let them know that I was sitting at home awaiting on the gas man. Then I went back to sleep - cell phone snuggled close by my ear. Later I woke up and tried to do some things around the house, unpacking and whatnot. I admit though, I had a hard time, I was feeling depressed about the whole situation. It was all just so frustrating! I know that the universe does not revolve around me - I know the water and the gas and the toilet and everything else had nothing to do with me; it was all coincidence, and yet it felt like things were all crashing in the moment I tried to move into this house with my hopeful attitude. I did manage to get a few things done, despite my case of the blues. I called Catie and she came over and got my frozen food and put it in her freezer so I didn't lose some very expensive meat and I got a handful of boxes unpacked and the front porch swept of storm debris. The gas guy arrived late afternoon, so I could finally leave the house and get lunch at 4:00.

The power didn't come on until Saturday, but as of now I have both hot water and electricity - though there is another storm brewing and it is making me nervous....


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Wednesday, July 2, 2008

Savings - My Second Favorite Way to Make More Money

It seems obvious, but occasionally I need to be reminded of the easiest way to have more money each month. It's simple:

Spend Less.

Spending less is something we can do every day - not buying that King Sized Snickers Bar (even though it was on sale and I've had a really rotten day 48 hours and, dang it, I wanted one.*) or regularly looking at the big, fixed bills and seeing if those can be affected.

A lot of blogs talk about calling up credit card companies and asking them for better rates. I have never had one lick of luck dealing with credit card companies, so I keep my rates low by having good credit. I did, however, have luck with my mortgage. Having my taxes drop was just lucky a windfall, but paying the escrow shortage was by choice. All together it means that each month I pay $80 less - which is more money in my bank account.

This month I tackled my insurance. (Ok, I actually did the work last month, but my rates change on the 7th so I am calling it part of July's plan.) As I mentioned earlier, I have been working with my brother-in-law to drop my insurance rates. By making some changes to my policies (and paying some of them up front) I was able to cut the costs down by $31.44 a month. With this new system, I am not funding my life insurance plan as well as I would like to, but this plan keeps everything in place and me secured until times are a little less tight. I will re-evaluate these decisions on a quarterly basis to make sure they are doing what I need them to do, and as soon as I can change things around, I will.

By far the best thing I did though, is realize that I had a really bad spending habit when it came to my emergency funds. I was not keeping my checking account at a comfortable level and then having to use my emergency funds to cover it - it made for a mess! Especially since I wasn't doing a good job of replacing the funds. Since that light bulb moment I have changed my pattern of behavior - now when I get reimbursement checks, they are are used as reimbursement checks and the money goes straight back into checking. I noticed the difference in June! My checking account seemed much, much healthier - and I was able to fund my emergency savings with one check and then stop monthly payments into it. Of course now that I am having water heater problems, I may have to dip into it, but that is what it is there for - not for frittering away, like I was doing.

Total monthly savings - $161.44

*Yes, I bought it anyway. And it was gooooooood.



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