Grocery Prices Rising

According to The Wall Street Journal, food prices rose 0.2% in March, adding to a 3.3% increase in average food prices year-over-year. This rise in prices can affect consumers in a variety of ways. Companies may scale back their sales, offering fewer items at sale prices or less meaningful discounts on sale items. Your favorite foods might go on sale less frequently, or not at all. Of course, “standard” prices may even rise as well. To combat rising prices, grocery stores and suppliers may also change packaging sizes. Instead of getting 10 snack bars in a box, you might only get 8, or 6 for the same price. There are lots of possibilities, but one thing seems certain: Your dollar is buying less food than it used to.

Even though buying groceries is unavoidable, there are several ways to negotiate these price increases and leave the supermarket without breaking your budget.

Extreme Couponing

You don’t have to be an extreme couponer to save money with coupons, but the more you clip, the more you’ll save. There are several websites out there that offer free coupon downloads for the big retailers (Wal-Mart, Target, K-Mart), as well as for grocery stores specifically. To make the most of your savings, organize your coupons in a way so you won’t forget what you have and where you can use it. If you’re truly being an extreme couponer, you’ll also be hopping from store-to-store, finding and following the best deals.

“Sherlock” The Shelves

Sherlock Holmes would save a fortune at the supermarket, if only because he would look every shelf up and down (and up and down again) to find the absolute best bargain. While this is often the only way to comparison shop by unit price, knocking off a dollar here or there by grabbing a nearly identical item, it’s also the only way to find the older, bigger packages. When package sizes get scaled back, stores may still stock the older packages. You just have to find them.

Buy in Bulk

At warehouse clubs like Costco’s or BJ’s, you might be able to do your grocery shopping for up to 30% less than at a supermarket. However, membership fees at these warehouse clubs can be steep: Costco recently raised its membership fee to $55 a year; BJ’s also recently raised its fee to $50 a year. While the savings on groceries over a year will likely offset this fee, people still debate whether buying in bulk is worth it or not. If you buy too much of a perishable item and let it go bad, that’s money down the drain. Before buying a lot of something, make sure you need it.

How do you get extreme about savings on groceries? What are some easy tips we’ve missed? Let us know in the comments section below!

Fight Food Price Increases With Extreme Grocery and Supermarket Savings is a post from: PerkStreet Blog

Keep Appliances Up to Date

Even if you only use a small portable air conditioner to cool certain rooms in the home, it can cost you a lot of money if it isn’t running efficiently. Have a certified technician come and check your air-conditioning system and ventilation to ensure that there are no leaks or other unnoticeable problems. If you run old, outdated appliances like refrigerators or washing machines in your home you should seriously consider replacing them for new energy-efficient models. At the very least, clean the coil in the back of the fridge to keep it operating at maximum efficiency.

Close the Blinds

Having the sun streaming through the windows may be attractive, but it also produces a lot of extra heat, causing your air-conditioner to work twice as hard as it needs to. Keeping your curtains or blinds closed during the hottest times of the day will keep the temperature in your home stable. If you are going out for the day, remember to close the curtains and turn your air-conditioner down. Using an automated thermostat can also save you a lot of money, as you can program it to turn down your cooling system during the times you are usually not at home.

Install Water Efficient Taps

During the warmer months you’ll naturally be using more water, so it makes sense to conserve as much water as possible. By installing water efficient taps throughout your home you can significantly cut down on the amount of water you use. The most important item to replace is your showerhead, as it is often where the most water is wasted. Low flow toilets are also a good idea, as toilets are known to use about 40% of your total water consumption. Other little ways to save water include not leaving water running while you brush your teeth and only watering your lawn when the sun is low.

Cook Outside More Often

Enjoying outdoor activities like barbeques and picnics during the summer months can actually save you money. Outdoor cooking helps you save gas or electricity that would otherwise be spent running an oven or stove, and you will be keeping your house cooler, giving your air-conditioner a break as well.

Use Smart Power Strips and Motion Sensors

You may not realize it, but leaving your appliances and electronics plugged in when you aren’t using them actually wastes a lot of electricity—as much as 20 percent of your total bill! By investing in a few smart strips for your home, you can reduce the amount of unnecessary electricity being used by appliances that aren’t even on. Motion sensors are great when you have kids, but not as much if you have pets home alone in the rooms where they are installed.

What are some things you do during the summer to keep your utility bills low? Are the summer months generally more or less expensive for you than the winter months? 

Jessica Bosari is a PerkStreet Customer Columnist, as well as the Site Manager and Editor for billeater a blog with money-saving tips to lower your bills. When she’s not gathering money-saving tips, Jessica is feeding her geeky side with sci-fi movies, tech gadgets, useful apps and productivity tricks, just to keep things interesting. Read more of Jessica’s great financial advice on Perkstreet’s blog, or view her other money-saving tips at billeater.com.

5 Easy Ways to Save Money on Summer Utilities is a post from: PerkStreet Blog

Consumer Confidence and Credit

Borrowing is generally considered to be a sign of a stable economy, indicative of consumer’s confidence in their ability to pay off the loans they’ve accrued. Of course, that’s not always the case, and falling into debt is often easier than you think.

After piling on debt in the midst of the Great Recession, consumers were less inclined to borrow. As the economy has slowly improved and stabilized, that’s changing. Either the lesson of the past has sunk in and spending on credit is being taken seriously and handled maturely, or the past is already forgotten and irresponsible borrowing and lending could threaten our economy again.

Student Loans and Savings

While job creation has been steady in the last several months, a decline in job production in March and April may have led to the observed increase in student loans. In a difficult and competitive job market, returning to school or continuing education might be the most sensible option. But taking on student loans can be a burden, both now and in the future.

In March, U.S. households saved 3.8% of their post-tax income, down from 4.7% in January. The trend seems to be to borrow more and save less, dangerous for everyone, and especially for students taking out loans fresh off unemployment.

Time will tell whether we’ve learned from our mistakes or are letting history repeat itself. What do you think? State your mind in the comments section below.

Americans Borrowing More and Saving Less: Confidence or Naivety? is a post from: PerkStreet Blog

Question 1: Fund an IRA or Pay off Debt?

Dear Clint and Katy,
My husband and I have been working hard and we’ve paid off all our credit card debt. We still have one student loan left at about $56,000, and our total combined income is about $144,000. We’re considering funding our IRAs while we finish paying off the college loans. What are your thoughts about this?

-Sabrina, NC

Dear Sabrina,

I wouldn’t recommend doing it that way. When you’re working the debt snowball and paying off debt, you should stop all saving and investing and do everything you can to dump that last debt… once and for all! I know where you’re coming from, though. Looking at that last student loan, it can be difficult to imagine the light at the end of the tunnel. Even with all the success you’ve had so far, a debt of that size can make you feel hopeless.

But, as the saying goes, how do you eat an elephant? One bite at a time. That’s what you need to do, Sabrina. When you spread your efforts and focus across several different priorities, you don’t make very much progress at any of them. We’ve seen that happen to a lot of people, and they end up paying off that last student loan for a decade or more.

You guys have made awesome progress, and you make great money. Don’t veer off course now. If you stay focused and relentless about becoming debt free, that student loan will be history in about 18 months. If you’re ticked off at this loan and you feel like it’s holding you back from investing and building wealth…GOOD! Get ticked off at it and attack!

I understand the desire to move forward, but I encourage you to stick to the plan. Become debt free, save your full emergency fund and then begin to invest heavily for your future. Great job so far, Sabrina! Thanks for the question.

-Clint

Question 2: Should I Co-Sign on a Loan?

Dear Clint and Katy,
My mother is planning to go to school to become a surgical technician after spending many years out of the workforce. I know her credit scores aren’t very good and today she asked if I would be willing to co-sign on her student loans. I’m happy that she’s going to school, but should I help her by co-signing? Thank you for your guidance.

-Debbie

Dear Debbie,
It’s fantastic that your mother is pursuing school and a new career. But any time someone contacts us for financial coaching and says, “I co-signed a loan…” the sentence always ends the same way: “…and now it’s on my credit report and I’m getting calls from a collector.”  When you take the Financial Coach’s Oath (which I’m completely making up), you promise to take a hard line on a few items:

• Always take your 401k match and never raid your 401k
• Never go without health or life insurance
• Never co-sign on a loan

Anytime someone asks you to co-sign on a loan, you need to ask yourself 2 questions:

1. Can I afford to pay off this debt if/when the other person can’t/doesn’t? (If the answer to this question is “No,” you can stop right here.)
2. What will it do to my relationship with this person if they stick me with the bill? At best, the relationship will be strained and you will feel betrayed. At worst, it will be the end of the relationship, you will be bitter and hurt about it for years, and the other person will be filled with shame and embarrassment.

It’s great that you want to help your mom, but do so in a way that will actually help, rather than putting your relationship and financial security in jeopardy. Help her explore her options with grants. Or, help her develop a plan to earn and save the money for her education before she starts the program.

You’ve been put in a difficult and awkward situation, and I’ve been there too. Lovingly let your mom know that you’d love to help her, explain why you don’t think co-signing is the best option, and discuss alternative ways you can help her complete her education. Thanks for the question, Debbie!

-Katy

Have a tricky question Clint and Katy can answer about your finances?
Email it to Editors@PerkStreet.com

Davis Coaching is currently offering a special discount on their services to the first 50 PerkStreet customers who sign up!
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Clint and Katy Davis are PerkStreet Customer Columnists and founders of Davis Coaching. As financial coaches, their passion is helping people become and stay debt free! Their personalized coaching is designed to help you get your financial life where you want it to be. Like personal trainers for your finances, they can help you develop a specific plan to achieve your goals, and provide the expertise and accountability to get you there. If you’re ready to take control of your financial life, visit Davis Coaching online, check out the Davis Coaching blog, and connect with Clint and Katy on Twitter and Facebook.

Ask the Coach: Should I Fund an IRA or Finish Paying Off Loans? is a post from: PerkStreet Blog

1. Earned Income

Earned income is any income you work for. That may be from a full-time job with a salary, owning a small business, or freelancing. A huge benefit to earned income is that you generally don’t need any startup capital. It’s often a stable source of consistent income, making it a very popular choice among career-minded individuals, families, and those looking to save for the future.

Types of earned income include:

• A full or part-time job
• Owning a small business
• Freelance or self-employed work
• Other income you work for

There are however, a few downsides to earning your income. Primarily that once you stop working, money also stops coming in. In the United States, earned income is taxed at a higher rate than other types of income, making it the most expensive kind of income we can earn. This is one of the main reasons we are encouraged to diversify our income streams.

2. Investment Income

Investment income, also called portfolio income, is generated from buying and selling investments or assets. There are many different vehicles for investing, from simple savings accounts that earn a small interest rate, to stock market investing and acquiring real estate.

Types of investment income include:

• Stock market investing, like stocks or bonds
• Buying/selling real estate
• Purchasing other assets like art, antiques and collectibles

Investment income carries some amount of risk and requires a good bit of knowledge. You can choose a portfolio that’s more conservative or one that’s more volatile. Either way it’s a bit of a gamble and you won’t have as much control over your money. However, investments held long-term are often taxed at a much lower rate.

3. Passive Income

Passive income, or unearned income, is money you make passively or without much effort and time spent. Once the initial investment is made (whether it be time or money) the income continues to be produced with no other output.

Types of passive income include:

• Rental or royalty income
• Unearned business income
• Pensions or settlements
• Other income produced after an initial investment

Passive income allows for the most favorable tax treatment and is considered the holy grail of all types of income. Many people consider passive income as the key to long-term wealth and it’s something we should all ultimately strive for.

The importance of knowing your options

Most of us start off in the workforce expecting to earn an income our entire lives. Some of us might branch out and become our own bosses, but we shouldn’t limit our potential. There are many other options out there for earning an income. Some of them are riskier than others, but if you know what you’re doing, the risk might be worth the reward.

Carrie Smith is a PerkStreet Customer Columnist who has worked as a freelance Certified Bookkeeper for nine years and as a Tax Specialist for four. She specializes in small business and oil and gas accounting. She has written several finance and accounting articles at Hubpages.com, and also writes regularly on her own blog CarefulCents. Follow her on Twitter @applecsmith.

3 Types of Income That Will Grow Your Wealth is a post from: PerkStreet Blog

But smart and savvy consumers don’t play by the normal rules of retail. When you look at shoppers who are focused on saving money, spending wisely and getting the best deal possible, there are several key traits that set them apart. Here are the 7 Secrets of the Savvy, Money-Saving Shopper.

1. Savvy Shoppers Ask Questions

Savvy shoppers constantly ask, “Why?” They want to know why it’s made this way, why this is better than that, and what they’re really getting. They review the specs, the contract, and the warranty (standard, not extended). They know that the more questions they ask, the better equipped they are to make smart buying decisions.

2. Savvy Shoppers Are Patient

These money-saving deal finders know that a rushed buying decision usually means getting less than the best deal. They’re in no hurry and are willing to take the time to gather the pertinent information to make an informed choice.

3. Savvy Shoppers Compare Everything

Successful shoppers compare products incessantly. They judge one brand against another and one seller against another, both before and during the purchasing process. Just ask any junior high student who spends all their time on the web whether he’d buy something without first knowing what else was available. (Bet you can’t find one… I’ll wait.)

4. Savvy Shoppers Consume Information

Buyers who get the best deals and save the most money devour product reviews and information from mainstream and social media, and blogs like this one. (By the way, thanks for reading!). I can’t remember the last time I spent more than $100 on an item without first spending time online reading and comparing reviews and recommendations. It just makes sense!

5. Savvy Shoppers Obsess Over the Fine Print

The companies they deal with are fixated on it, so why shouldn’t they be too? Everything is easier for those who look closely and inspect before signing. They pay close attention to price, read the disclosures and end-user agreement, file every receipt, and document the name of the sales person or manager they deal with—smart to do, especially online or on the phone.

6. Savvy Shoppers Always Remember

If you sell one of these savvy consumers a dud, they’ll hold onto that memory for years to come. Bad service? They’ll tell the manager and may never come back. Crappy product? They’ll return it and never buy from you again. On the positive side, if they buy a product or service and love it, they’ll share that experience with everyone who’ll listen.

7. Savvy Shoppers Consider More than Just Price

The smartest shoppers among us know the difference between “cheap” and “inexpensive.” These customers look for quality, service and price—the triple threat—when making their buying decisions. They also do the math. Is it less expensive to buy 3 of a cheaper item or just 1 of a higher quality version?

When you develop these 7 basic savvy-shopper characteristics, you will be well prepared to enter the battle zone of the marketplace, make smart choices, find the best deals and save big time money!

What are some tips you have for the savvy shoppers out there? What are shopping habits you have that save you money? Share them in our comments section below!

Clint and Katy Davis are PerkStreet Customer Columnists and founders of Davis Coaching. As financial coaches, their passion is helping people become and stay debt free! Their personalized coaching is designed to help you get your financial life where you want it to be. Like personal trainers for your finances, they can help you develop a specific plan to achieve your goals, and provide the expertise and accountability to get you there. If you’re ready to take control of your financial life, visit Davis Coaching online, check out the Davis Coaching blog, and connect with Clint and Katy on Twitter and Facebook.

7 Secrets of Savvy, Money-Saving Shoppers is a post from: PerkStreet Blog

If you’re looking to cash in on your cut while helping your friends along the way, check out this little infographic we put together listing 12 top companies where you can make good money from your social network!

Below, you’ll find out how much Facebook is worth as a public company, as well as the unbelievable number of global users Facebook currently has. We’ll break down just how much money every user has “earned” for the social media giant. Finally, we’ll introduce you to 12 fantastic companies helping people cash in on their social networks while offering great products at an incredible value.

These are places where you can earn cash by sharing things your friends will actually appreciate. If that’s not something you can click “LIKE” on, we don’t know what is.

Facebook IPO Infographic: Cash in on Your Social Network is a post from: PerkStreet Blog

Common Budgeting Mistakes

There are a few primary budgeting mistakes people make that can lead to a budget’s eventual demise. First, they do not create a detailed budget, meaning the budget is too vague and it does not account for extra expenses and unforeseen costs. These kinds of unforeseen costs can ruin the whole budget. Second, they simply lack the necessary discipline to stick to their own budget. Third, they find that the budget is too tight and while it looks good on paper, it is simply not practical in reality. In order to create a detailed budget you can stick with, it is best to plan extensively, but also practically.

Mistake 1: Failure to Start from Scratch

The first step is to start from scratch. If you already have a budget, scrap it and start over. Take out a notepad or open up a document on the computer and write down every single bill you must pay, such as your mortgage, utility bills, and any loans you may have. Using old data or building from a budget that’s already failed will likely give you the wrong insights into your spending plan.

Mistake 2: Underestimating Expenses

Once bills are out of the way, turn your attention to other necessities, such as health care, food, and gas. It’s important not to underestimate how much you spend in these categories. Many people encounter problems in their budgets when they underestimate their spending. When creating a budget, you may think that you can cut down on your food and gas expenses, but it’s important to allot yourself a realistic amount of money for these bills. Otherwise, you’ll overspend and hurt other areas of your budget in turn.

Mistake 3: Forgetting Discretionary Spending

Expenses such as the mortgage and food costs simply cannot be avoided, but non-essential costs such as clothing, entertainment, or a night out are still important. Cutting out these types of expenses completely often seems like a good way to save money, but if you don’t treat yourself every once in a while you might end up struggling to stick with your budget. On the flip side, be happy, but don’t go overboard with discretionary costs. Keeping them to a minimum will help you to save some money and put you in a better financial situation.

Mistake 4: Forgetting Unforeseen Costs

Unforeseen costs can include home repair expenses, veterinary care (if you have pets), and auto-repair costs. Although you can never predict when these costs may arise, it is important to be prepared by planning for the unexpected. Failing to do so is a sure way to ruin your budget the moment one of these unexpected costs rears it’s ugly head. Ensure that each month you have some money within your budget to cover any of these unforeseen costs, or even better, keep a separate emergency fund to draw from whenever this happens.

Once you’ve gone through all of your expenses in detail, you can create a clear and detailed budget—one you can finally stick to.

How have you built a usable, successful budget? Are there other important mistakes you’ve made that should be included? Post them in the comments section below!

Jessica Bosari is a PerkStreet Customer Columnist, as well as the Site Manager and Editor for billeater a blog with money-saving tips to lower your bills. When she’s not gathering money-saving tips, Jessica is feeding her geeky side with sci-fi movies, tech gadgets, useful apps and productivity tricks, just to keep things interesting. Read more of Jessica’s great financial advice on Perkstreet’s blog, or view her other money-saving tips at billeater.com.

4 Common Mistakes Beginning Budgeters Make is a post from: PerkStreet Blog