Yard Sale Tips for Success

Here lately I’ve really wanted to get things out of our house–I’m in full blown declutter mode.  Our closets, attic and garage are all packed full with things we rarely use. When you reach that point you know what’s coming next–a yard sale!  Here are a few yard sale tips for success our family has implemented over the years.

Advertising Your Yard Sale

• Join up with friends, neighbors and family members. Block yard sales, or multifamily sales, tend to bring a lot of foot traffic. Consider splitting the cost of advertising amongst all participants and use a portion of your sales to pay for it.
• Check out free advertising sources. Credit union bulletins and community websites are a great source to advertise your yard sale. Many people also list their yard sales on Craigslist.
• Use traditional advertising (newspapers, flyers, etc.) for larger sales. If you are planning to try and sell some high-end items, such as electronics, furniture, or a used car, consider paying to advertise in your local newspaper.

Yard Sale Signs

• Keep it simple. Nothing works better than poster board and Sharpie markers. If you have some old boxes lying around you can also gather up some pieces of cardboard to write “YARD SALE” on and include your address.
• Piggyback on neighboring yard sales. This is a trick I picked up as a teenager when my mom would send me around the neighborhood to hang up our signs. I looked in the newspaper Saturday morning to see if there were any other yard sales around our house. I would go to the end of the street these sales were on and hang a sign for our yardsale with a big arrow pointing in the direction of our house. As people left the advertised yard sales they would inevitably see my sign and then look for our yard sale, too.

Pricing at Yard Sales

• Leave sentimental value inside the house. People shop yard sales for one reason - to get a deal. Just because the change purse used to belong to your great, great Grandmother who brought it with her from Ireland, it doesn’t mean you should stick a $10 price sticker on it and call it antique. Remember, things are worth only as much as people are willing to pay for them.
• Sell kids or baby clothing from a big box or plastic bin. Based on the type of clothing, set a fair price for the entire bin and hang a sign made from a half-sheet of paper indicating the price of all items. For example, “BABY CLOTHES-$0.25 each.”
• If you don’t have enough folding tables, sawhorses and a sheet of plywood make a good table. If you have some old sheets, hang them over the plywood to protect against splinters. This also provides some space under the tables to hide your empty boxes, or additional inventory.

Scheduling a Yard Sale

• Schedule yard sales around the first of the month. Most people who are paid monthly, or bi-monthly, receive a paycheck around the 1st of the month (or the end of the previous month). For this reason, we try to schedule yard sales on the first Saturday of the month.
• Check the weather forecast. Nothing ruins a good yard sale faster than rain. Keep an eye on the 10-day forecast before submitting your advertisements and selecting a date. There are no guarantees, but significant weather patterns (fronts, tropical systems, etc.) are fairly predictable within a couple days.

The Day of the Yard Sale

• Plan on starting early!  Most hard-core yard sale scavengers will start looking around 7:00am (some as early as 6:00am).
• Consider a pre-sale the Friday night before and invite your friends and coworkers. If you don’t mind friends going through your belongings, ask them to come by the night before to look through things ahead of time. I’ve sold some larger items by doing this, including computer monitors, baby furniture, etc. A side benefit of a presale is the more you sale the night before, the less you have to put out on Saturday morning.
• Use a staging area the night before the sale. If you have a garage, or another enclosed space you can safely store things overnight, it helps to set up tables the night before. Our family backs the car out of the garage, sets up tables and throws out everything from the boxes the night before. At 6:30 the next morning all you need is some help walking the loaded tables out into your driveway or yard.
• Have plenty of change on hand. The day before the yard sale I usually make a run by the bank to get some smaller bills and rolled coins. $50 in quarters, ones and fives ought to do it.
• Consider getting a cash box. Make change from the cash box and place larger bills underneath the cash tray. If your yard sale becomes wildly successful, consider making a cash drop by withdrawing the larger bills from your cash box and taking them inside the house. This minimizes the chances of someone making off with all your cash.
• Be safe–remember to use the buddy system. The people I’ve encountered in my experience hosting yard sales have mostly been honest, hard-working folks and genuine collectors. However, the allure of electronics and cash sometimes brings unsavory guests. These types like to try to create a distraction so another one can make off with the cash box. Work in pairs and assign someone to always have an eye on the money.

Photo courtesy of evelynishere

Hot Coupon Deals at Kroger

I ran across a great post from Coupon Cravings who offered up some hot deals at Kroger grocery stores this week.  Now through 10/25 you can pick up some great freebies (with a coupon) for bagged salad, toothpaste, frozen vegetables, and several other goodies.  Be sure to roundup your coupons, and then visit the site for details. 

We plan to do a little stockpiling on the toothpaste, specifically, as we seem to go through the stuff pretty quickly!

The Cost of Braces Takes a Bite Out of Our Financial Plan

A recent visit to the orthodontist confirmed my fear–my daughter will need braces.  Actually, braces seem to be the norm for most kids these days.  Both my wife and I had them growing up, and many of my kids’ classmates have them.  The good news is there is no rush to put them on as my daughter has yet to lose all her “baby teeth.”  Once all the permanent teeth have come in we’ll plan to put braces on to hopefully correct an overbite, and give her an even more beautiful smile.  Obviously, the news doesn’t help my efforts to get out of debt and build a healthy emergency fund. Over the last day or two I’ve had time to digest the news and devise a plan of attack.

Our Plan of Attack

Fortunately, our dental insurance should pick up the first thousand dollars, leaving us another couple thousand dollars to save.  Since we have a few months to save for the expense, I immediately opened a subaccount at ING Direct to beginning funneling some money there from each paycheck.  Determining how much is the hard part.  If we have six months to save I could simply divide the total expense by 12 (since I’m making a deposit there with each biweekly paycheck), however I don’t know have a good feel for how long we may have to save.  So in this case I’ll take a more aggressive approach and save a little extra.  After all, we can always return the money to the debt snowball plan if we save too much.

We Could Use Our Flexible Spending Account

I participate in a flexible spending account (FSA) through my employer to account for copays, deductibles, etc.  However, the idea of dropping my yearly paycheck by $3,000 doesn’t really appeal to me because in the same time I may be able to simply save up the same amount of money in cash, and earn a little interest along the way. FSA’s are deducted from my pay on a pre-tax basis, which could lower my taxable income reported for tax purposes, but I’m not sure it is really worth the hassle factor.

Finance the Amount with Orthodontist

We could finance the cost of braces directly with the orthodontist. In our case, this isn’t really an option because we are committed to taking on no new debts, even for braces. Putting the braces on a credit card, taking out a personal loan, or using the orthodontists in-house financing just does not appeal to us.

In the end it appears saving biweekly amounts in our online savings account best aligns with our current financial strategies (keep it simple, no new debt!). Like other decisions we’ve made with money, it may not make the most sense mathematically, but it makes the most sense personally.

Photo courtesy of lanuiop

First Time Home Buyer, Make Your House a Blessing

My wife and I rented much of our first ten years of marriage.  We are currently in the process of looking for our first home, and have become sticker-shocked at housing prices (yes, even after they have lost some value recently).  The target amount we had in mind does not translate to enough house for our family, so I went back to the drawing board to determine how much house we could really afford. I discovered that mortgage lenders have their own set of rules, and if you followed their rules, it could leave you house poor.  After running the numbers, I’m starting to think there is nothing wrong with renting a house indefinitely (my wife may not agree)!

The 28/36 ratio - the 28% rule. Banks and mortgage companies would like for your new housing payment, including taxes and insurance, to be less than 28% of your gross monthly income. That means a family earning $50,000 a year should not spend more than $1,167 on housing. That number seems a bit high to me, considering after taxes the family is only bringing home around $3,300 a month. When you subtract other payroll deductions, such as health insurance, FSA contributions, etc. that does not leave much disposable income after an $1,100 mortgage each month.

The 28/36 ratio - the 36% rule. In addition to the 28% rule, mortgage providers also use a 36% debt-income ratio based on monthly income and debt expenses. Using the same $50,000 per year example family as before, their total debt payments each month (including the new mortgage) should not exceed 36% of their monthly gross income, or $4,167. If we family fully maximized the 28% rule and took out an $1,100 mortgage that would only leave $400 in additional allowable debt payments to stay under the 36% rule. A couple credit card payments and/or a large car payment could easily push us over the 36% rule.

The bottom line?  Mortgage companies offer the 28% rule and 36% rule as a guide for their own lending rules, but it does not mean you should fully take advantage of their offer if you don’t have to.  Some of the best advice I ever heard for young couples is to buy a starter house and stay there.  Do not give in to the pressure of buying more house than you can comfortably afford.

Photo courtesy of The Jamoker

Weekly Roundup: Inaugural Edition

The first week of Money Smart Marriage is in the books!  I hope you have enjoyed what you’ve seen so far.  I thought a good way to cap off the first week would be to link to some great articles I found across the web.  As the site picks up steam I’ll make this a weekend tradition.

I Saved Another $100 Per Month.  By now you know my feelings on the wasteland that is cable television.  Nice to see another family making the switch to life without TV!

12 Hot Tips to Save Water.  Fortunately, we are doing most of these, but I really liked the bonus tip for my leftover boiled egg water (we boil a lot of eggs). 

The Benefits of Raising Kids Cross-Culturally.  I don’t know that we will ever have the opportunity to raise kids in another culture, but that doesn’t mean we can’t learn more about them, and interact with diverse communities in our own country.

A Good Home Inspection is Worth the Money.  As Glbleguy’s moving day approaches he points out the benefits of getting a good home inspection.  When you think about it, $325 is relatively cheap for the peace of mind provided by a strong inspection.

Is a $5 Stock Cheaper than a $30 Stock?  It depends.  WC does a nice job here of pointing out that just because a stock’s price is cheaper doesn’t mean it is a great value.  You have to dig into the numbers a bit more before making that determination.

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Which Way Is Your Debt Clock Turning?

News out yesterday that the famous “National Debt Clock” keeping a running total of our nation’s debt has run out of spaces (obviously this photo is a little dated). The Time Square centerpiece chose a heck of a time to run out of room, just as the Dow tumbled below 9.000 for the first time in five years.

Fortunately, unlike the government our debt clock is turning the other direction.  We’ve managed to eliminate about 25% of our total debt since March of this year, but we still have a way to go to be completely debt free.  It is too bad the government hasn’t figured out what we figured out a couple years ago–you cannot continue spending more than you bring in.  It is a simple concept to understand, but it takes tons of discipline to implement.

For the first few months of our financial turnaround we basically treaded water, keeping expenses about even with our income. It took a while to adjust downward from there, but we made it work by eliminating expenses and boosting part-time earnings. Both moves increased our disposable cash available to pay towards debt reduction.  As we paid off one small credit card, we took the amount we used to pay on it and rolled it into the next smallest card’s payment, and so on.  Pretty soon we were eliminating a small credit card or medical bill every month!  Of course, eventually we ran into the heavy hitters–my left over expenses from school.  But, even those balances have been significantly reduces, so I believe we are on the right track.

How about you?  Have you had any success reducing your debts recently?

Photo courtesy of Lotzman Katzman

Five Reasons to Dump Expanded Cable Television

About nine months ago our family decided to give up expanded cable television. What started out as a way to reduce our monthly expenses brought about several other positive side effects. Looking back over the last several months we have determined the following five reasons why we would do it again in a heartbeat.

1. We live by our schedule, not T.V. Guide. If you are like us, you’ve probably hurried home from the grocery store on more than one occasion to make it home in time for an 8:00pm program. We started noticing this happening frequently as we skipped other events to be home for football games, season premieres and other time-wasting programming. To get back control of our own schedules, we decided to drop expanded cable programming because Disney Channel and ESPN seemed to be the major culprits in undermining our schedule flexibility.

2. We are exposed to less advertising. Now that the cable channels are gone we are exposed to far less advertising. This is particularly true in certain niches, which market specifically to a certain sex, or a age group. For instance, the Disney Channel constantly markets their own products and my daughter was on a never-ending cycle of wanting one Disney movie on DVD after another. When I watched football games on ESPN I noticed far more commercials for cars and electronic gadgets as advertisers targeted a predominantly male audience. By removing that type of programming from our channel lineup we’ve greatly reduced exposure to those types of ads.

3. Reduced monthly utility costs. As an added bonus we’ve managed to shave our monthly utilities by about $30 a month, or $360 per year. Our previous expanded cable package ran about $46 per month, and now we pay just $12 per month. A couple years ago we were paying nearly $80 for the high-end digital cable package with rented DVRs, etc. I would have a hard time ever justifying that again!

4. Less undesirable programming in our home. While the majority of the expanded cable channels were pretty tame, there were a couple I found downright distasteful. Now I don’t consider myself a prude, but I don’t particularly enjoy overly-sexualized content aimed at young viewers, and I especially don’t want my kids watching that trash. I remember when music channels actually played music. Now their programming is one salacious reality show after another, 24 hours a day.

5. More time for reading and playing outside. Since dropping the expanded cable television service we have noticed our kids are reading more, and so are we. Time we used to spend parked in front of a television we now spend playing games together, or playing outside. Sure, we could have simply turned the television off and done these things, but with the temptation removed it makes it far easier.

Photo courtesy of Mykl Roventine

How to React When Investments Lose Money

I used to be a little bit obsessive about checking account balances, including retirement plans.  At least three or four times a week I would log in my brokerage’s website and view my balance.  Here lately that has become a panic-inducing process.  After seeing 401k value disappearing before my very eyes day after day it is tempting to start moving things into more conservative investments, even though I have a while before worrying about retirement.  Others aren’t so lucky.  It is admittedly getting tougher and tougher to stomach the call to “stay the course,” but there are a couple strategies that make things a little easier.

Keep Your Head Down

I played a little football in high school, and one of our offensive coaches used to teach our running backs to put their head down, hide behind a big lineman, and drive his legs hard for a short yardage first down.  That’s what I feel like doing now!  I’m going to keep my head down (avoid taking in too much financial news, checking balances daily, etc.), find a big lineman to protect me (diversification) and keep driving towards our goal line–an early retirement.

What About College Savings?

College savings plans are a different animal because often times investors are dealing with a shorter time frame. That is the case with us.  Our oldest child is just ten years from college, and we were counting on some growth stock mutual funds to help us save for her future tuition.  With the way our economy is headed now, it may be a while before we enjoy much growth in the funds we have already invested in.  However, with only ten years until college it is too late to save only cash, and too early to go with an ultra-conservative portfolio.  Bottom line is we are just going to have to hope for some better returns in the near future.

Emergency Savings

There has never been a better time (in our life time) to have a healthy emergency fund in place.  Most financial experts agree families should sock away 3-6 months of expenses in a highly-accessible account.  We tend to lean towards the 6 month end of that scale as we are living on one income, and because we lack short term disability policies through my employer that could helps us ride out a short-term stop in pay due to health issues.  Add to that a shaky job market and unstable economic conditions, and six months worth of expenses in the bank sounds pretty good.

Photo courtesy of epicharmus

Secrets to Living On One Income

Nearly a full year into our marriage we found out my wife was expecting our first child. Since my wife relocated when we married it meant a job change for her, and for the first couple months we were married she struggled to find a job comparable to the one she left. She had only been working a few months when we found out she was pregnant. I remember the range of emotions I felt as a “soon-to-be-dad” - excitement, joy, and sheer terror! Not only did I have the normal doubts about my parenting ability, as any new parents would have, but I also wondered how we would manage on one just one income. Before marriage my wife and I agreed she would stay home with our kids, at least until they were school age.

Unfortunately, in hindsight I realize we failed to put in enough planning for this drop to a single income. I was low on the totem pole in my career, and was barely earning enough to take care of myself when we married. My wife’s added income made us comfortable, but we were not savers by nature, so any gains we made were squandered on newlywed purchases - a new car, new clothes, things around the house, etc. We should have been piling up cash like crazy in anticipation of her departure from full-time employment (well, paid full-time employment - being a mom is a full-time job!).

At five months pregnant my wife came home because the stress of her job was taking a toll. The last trimester of her pregnancy was difficult, as was the delivery (in fact, I almost lost both my wife and daughter that day). After an emergency cesarean delivery and a long recovery for mom and baby (neonatal ICU for daughter, long hospital stay for mom and daughter) we finally came home nearly a week after my daughter was born. It was an emotionally taxing time for everyone involved, and the last thing I wanted to think about was money. We spent the next few years spoiling our little girl, paying minimums on medical bills, eating out frequently, traveling to see the in-laws, and spending all of my salary (and then some). That salary didn’t change much those first few years as my company had maxed out growth and even began rounds of layoffs. Fortunately, I avoided getting a pink slip, but went two or three years in a row with no raise and no chance of promotion.

We finally broke out of the mess when I took a new job in a new industry and relocated, but the damage was done. We now owed credit cards, medical debts and left over student loans from my first two years of college. My wife was now expecting our second child, around the time our first child was heading to school full time. It was clear my wife wouldn’t be returning to the workforce anytime soon, and we would have to continue living on one income. It was a sobering wake up call, financially.

With the benefit of 10 years of hindsight, I offer these tips for one-income families (or those considering a move to become a one-income family):

• Before making the move, pay off debts and stack up some cash. If we had it to do over again we would have made a stronger push to be debt free before my wife quit working, and we would have had a sizable emergency fund that could have helped with the labor and delivery expenses, and future emergencies thereafter.

• Stay away from new cars. Car dealers love new parents because they can usually sell them on safety, added space, and “convenience” features. Don’t be fooled. There are plenty of safe, roomy, convenient options in the used car market. Remember, you are living on one income - you can’t afford a new car!

• Do not underestimate expenses for the stay-home parent. With someone occupying the house more hours of the day, utilities will likely increase. It is no longer feasible to set the temperature to 80 in the summer and 60 in the winter during the day. The family pet will appreciate the gesture, but you will pay for it when the energy bills arrive. While employment expenses obviously decline, other expenses do go up.

• Do not attempt to keep up with two-income families. We made this mistake because several of our friends were two-income families, and they frequently bought new cars, new homes, new furniture, etc. We tried to keep up initially, but eventually realized they had more disposable income than we did and we had to adjust down.

• As a stay-home mom or dad, look for ways to be a “home economist.” Cook meals from scratch, clip coupons, make homemade crafts, or even start a garden. In other words, look for ways to save money that you probably wouldn’t have time for if working a full-time job.

Being a full-time parent can be a rewarding experience, for both the parent and their children. However, it does not come without sacrifice. Plan accordingly so you can enjoy the process, instead of resenting it because you are struggling with money.

Photo courtesy of wjhamilton4

The Envelope Budgeting System

When our family was having a hard time sticking to a budget, we went to a cash-only system using envelopes. Debit cards are convenient, and are certainly safer than credit cards, but they can wreck a budget pretty quickly if you aren’t careful.  Since debit cards allow you to swipe and go without forking over cash you don’t get that same emotional twinge you get when watching the cash actually leave your wallet.

Here’s how to get started with your own envelope budget system:

• Step 1: Determine which categories to include in your budget. Not everything in your household budget can fit into an envelope, literally. Things like utilities, subscriptions, and other recurring monthly bills are typically paid online or via bank draft. The real spending categories we are interested in are discretionary spending categories. For our family these are food, household products, gifts, entertainment, and clothing. In the beginning we also included gasoline, but the pay-at-the-pump feature is just too convenient to pass up on a cold, rainy day, so we still use our debit card at the pump. Who wants to carry kids into a convenience store to pay for $30 worth of gas in cash?
• Step 2: Use past spending to establish initial budget amount. Using Microsoft Excel and my online banking system’s export feature, I downloaded our last 90 days of transaction history. I identified which transactions fit into each of the five categories listed above. This is not an exact science as $45.90 spent at Walmart won’t help you remember the itemized list of transactions, and to which category they belong. If you still have some receipts, great. If not, just estimate your typical breakdown on a trip to Walmart. For us a $45 transaction at Walmart might look like: $20 on groceries, $10 on clothing, $15 on household products. Using your best estimate come up with an average monthly expenditure for each category.
• Step 3: Create an envelope for each spending category. Write the name of the category and the monthly amount budgeted on the outside of the envelope. You may not have enough float in your checking account to withdraw all the cash to fill all the envelopes with your first paycheck each month. That’s fine, just break down the monthly budget amount by the number of times you are paid in a month. In our family the “Food” envelope gets $200 every two weeks (I am paid biweekly), for a $400 monthly grocery budget.
• Step 4: When the envelope is empty, stop spending. The only way this budgeting system will work is if you make a pact up front not to move money between envelopes, and to not spend additional money in a category when the envelope runs dry. If the “Food” envelope is empty three days before payday then you better start searching the freezer for those two-year old corn dogs. If your “Clothing” envelope only has two dollars in it you have to pass up those “fabulous shoes” on sale at the mall.
• Step 5: Revise and repeat. No budget is going to be perfect from month-to-month, and envelope budgeting systems are certainly no exception. At the end of the month look back at your spending and determine where you could have allocated a little more, and where you assigned too much of your paycheck. We routinely have more in our clothing envelope than planned, but we simply leave the money in there because clothing purchases tend to come in waves when the weather changes, or as the kids outgrow their current wardrobe. We empty the other envelopes at the end of the month to make an extra contribution to our debt snowball. This gives us a little extra incentive to try to stay under budget in each category.

Photo courtesy of stopnlook

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