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6 Things I Buy at Dollar Stores to Save Money

11/28/2014

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Like many, I thought I was a smart shopper, comparing prices effectively and always securing the lowest price. After all, I could simply whip out my smartphone and price-check items in the store. If I found products cheaper elsewhere, I’d order them on the spot.

While I realize only a small majority of shoppers competitively price-check their items, I thought I was getting the best deals. Boy, was I wrong.

As an example, I would check Wal-Mart’s “everyday low prices” against other retailers, like Amazon, and go with the lowest cost. It never struck me that there was a better way. Well, one day I happened to be near a Dollar Tree in my neighborhood and figured I’d go in. I hadn’t been to a dollar store in years, and many of my friends won’t shop at dollar stores. They’re the type of people who shop at Target because it is “classier” than Wal-Mart. I’m the type of person who cares more about money in the bank. Anyway, when I went in, I was shocked! This place truly had low prices.

I couldn’t believe it – I saw a bottle of laundry detergent for $3. I price checked it with Amazon… $12. I thought Wal-Mart would save the day until I saw…$11.97. Astonished, I grabbed some more items. Shampoo was 75% cheaper, deodorant was 50% cheaper, and some cleaning supplies were 40% cheaper. Keep in mind, these were all checked against the same name brands and specifications. Generic brands were even cheaper.

I quickly crunched some numbers and realized that buying certain items at dollar stores could easily save $100-150 per month. Here’s what I recommend you buy at dollar stores:

Cleaning supplies. Did you know that the ingredients in most cleaning products are the same? If you pay more for any particular product, you’re just shelling out extra for the brand name. Dollar stores also have things like brooms and dustpans for rock-bottom prices too.

Greeting cards. Dollar store cards are usually one or two dollars each, while other places could run $5-7 a pop. If you’ve got a large family like me, this is a big burden on your wallet. Birthdays, Christmas, the list goes on and on. I do admit that the paper quality may not be the same, nor will a dollar store typically give you fancy designs. However, I am the type of person who prefers getting a card with more blank space to write a personal message.

Tupperware. Plastic Tupperware at the dollar store is usually 30% cheaper than Wal-Mart or Target. You can also pick up the containers in packs as well, leading to even more savings. Dollar stores also have mason jars and plastic bins to store even more stuff!

Personal hygiene products. I stated above that shampoo and deodorant were so much cheaper at the dollar store. This was the biggest shocker for me, especially since I believed Wal-Mart supplied the lowest prices. To find out that shampoos were even cheaper at Dollar Tree really surprised me. A bottle of Old Spice shampoo that was $5.97 at Wal-Mart was $3 at Dollar Tree.

Glassware. This is more for the people moving into their first home or an apartment. If this is the case, there’s no need to spend an exorbitant amount of money on a kitchen set. An entire set of plates, cups, mugs and glasses can be had for about $30-40, depending on how many you get. They’re not mix and match either – they’re actual sets with designs that go well together. They sure beat those red solo cups!

Movie candy. Now, you didn’t hear it from me, but dollar stores are just THE right choice for picking up movie candy. Why pay upwards of $7 per box when you get can a giant bag for $1? You just have to figure out how to sneak the candy inside the theater…

What else do you find is cheaper in dollar stores? Leave your thoughts in the comments below! 
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Our National Student Debt Crisis: Average Student Loan Debt Now $30K

11/14/2014

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Average student loan debt is causing a student debt crisis. Average student loan debt is around $30,000.
We have a national student debt crisis. 

The average college undergrad now leaves school with $30,000 in student loan debt.

Scary, isn't it? Factor in the Federal Stafford Loan interest rate of 4.66% and it means a student will take almost eleven years of $300 monthly payments to pay off that average student loan debt (yeah, just average!). The amount will be even more for those taking private loans, which charge much higher interest rates than federal loans. This is grim news, especially considering that tuition increases have been well beyond the rate of wage increases.

 As college students leave their dorms in search of jobs, many of them discover that their massive amount of debt probably wasn't worth the risk. After the standard six-month grace period, the first loan bill will come just in time for Christmas.

'Tis the season to be indebted! The opportunity cost of student loan debt is huge – that monthly payment is money that could be going into a mutual/index fund and delivering real returns. By missing out on the crucial early years of investing, graduates are missing the enormous power of compound interest, causing their retirement to suffer. They may go on to start a family and try to fund a child's college plan while still being shackled to their own debt. 

According to the Pew Research Center, the average college-educated household without student loan debt was worth approximately $65,000. For the student debt household, that number drops to about $9,000. Those without a college education actually have a higher net worth! The average person under 40 without a degree has a net worth of approximately $11,000. This is even more depressing when you understand that the $11,000 household didn’t require a four-year investment.

There are some rays of sunshine, though! The average college grad is much more likely to be in his/her desired career and make more money than someone with just a high-school diploma. Yes, a degree will get you more money but you’ll have less in your pocket because of the loans. Plus, a millennial college grad’s chances of living in poverty are much lower – 5.8% versus the 21.8% of high-school graduates living in poverty. To many, a degree represents better job security. Without any college, unemployment is 12%. With a bachelor’s degree, unemployment is much lower at 4%.

Ultimately, it is up to the individual to make the decision, but a good option is a local college. Average in-state tuition runs about $15,000 where out-of-state and private college is over double. If you know you will have to take on some type of student loan, do whatever you can to get the cost down. Apply for scholarships, try to score grants, and be aware of how the debt will impact you later in life. A college education is still good (at least for now), but ultimately, financial literacy can help us navigate through the student debt crisis. 

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What Is Happiness? The Science of Happiness

11/3/2014

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What is happiness? The science behind happiness
What is happiness? The world would be a better place if there was a definitive answer to this question. Luckily, research has been done to discover the science of happiness and there are traits you can develop and enhance your authentic happiness. 

Happy people enjoy life more, practice positive habits and even have stronger immune systems. Everybody wants to be happy, and many people feel that if they got one more bonus or one more promotion, they would be much happier.

This isn’t necessarily true. Happiness research over the past decade has demonstrated that money DOES provide happiness. However, as we get used to a higher level of material wealth, it turns out to be a transitory happiness. Sure, you’re happy with the new flat-screen you got, but eventually it wears off and you’re left wanting more.

Experience purchases can leave much to be desired as well. Many people believe that if you spend money on life experiences, it will add to happiness. This doesn’t work for everyone, because the life experiences have to mesh with the buyer’s identity. If you’re a huge football fan, spending money on season tickets for your favorite team will probably make you happier. Spending money on art gallery tickets (an experience others regard as universally edifying) won’t do much for you.

As for that “one more promotion” theory, if you’re making more than $75,000, you may be chasing a false rabbit. A 2010 study by Daniel Kahneman and Angus Deaton found that at the national level, making more than $75,000 per year won’t significantly improve your happiness. This is based on your income/cost of living ratio and past this level, your emotional well-being doesn’t improve much with added income.

So what determines your happiness? According to American Psychologist, there are three attributes. Vanguard founder, John Bogle, talks about them in his book, Enough, emphasizing that money is not the answer to a fulfilling life. Without further ado, here they are:

Autonomy. This is the extent to which we have the ability to control our lives. If you feel that someone else controls your life, you won’t be very happy. You need to be able to do your own thing and feel responsible for your life’s outcomes. You are the captain of your own ship!

Maintaining connectedness with other human beings. This is through love of your family, friends and colleagues. Be open to everyone you meet in life – you never know when you’ll need them! The human element of life cannot be emphasized enough, because it is the foundation of expression and engagement of life’s experiences. You can have fun by yourself, but fulfillment comes from a life shared with other people.

Exercising competence. People want to do well for their community and fellow man. When you use your natural and self-motivated talents, you feel more fulfilled. Nobody wants to feel as if talent is wasted, so developing a lifestyle that allows adequate expression of these talents is crucial. If you are self-motivated to learn more and more about the finance industry, why not work in it? If you are a great baseball player, become a coach! Use your talents.

With these three attributes, you will be well on your way to a happier life. And isn’t that the goal?


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The Implications of Lower Gas Prices

11/2/2014

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With the average gasoline cost below $3/gallon, consumers can enjoy more money in their pockets.
The average price of gasoline has just fallen below $3 per gallon for the first time in four years. South Carolina and Tennessee are tied for lowest fuel costs, with an average of $2.75 per gallon. Virginia comes in close second at $2.78.

Even still, there’s optimism that gas prices will drop even further. Price is determined with basic economics – the demand for gasoline is relatively stable, but the supply is increasing. US output alone has increased 70% since 2008.

 What will these lower prices mean for the American economy?

For starters, gas prices typically decline in the fall but this year the fall has been exceptional. Last year’s average was around $3.50 per gallon, meaning the drop below $3.00 will save the typical American household around $50 a month. Shippers, airlines and delivery companies will enjoy boosted profits from the lower fuel costs. Retailers are hopeful that the savings at the pump will translate into increased spending as we near the holiday season. (This is something to think about if you’re investing in these stores!)

Due to the drop in oil prices, falling 25% since mid-June, savings for winter heat could total hundreds of dollars, especially in the northeast. This gives the average American household much more breathing room. According to Bank of America Merrill Lynch, families with income below $50,000 spent 21.4% of their income on energy.

In a nutshell, a drop in energy prices adds spending power to the consumer. However, consumers should be cautious with where they spend their dollars. People have a tendency to perform “mental accounting”, or subconsciously compartmentalizing spending into categories. If one usually spends $50 per fill-up and now only pays $40, he/she will place the extra $10 into a “discretionary” income category rather than save it.

Although Personal Finance Genius is definitely biased towards saving money, any savings at the pump should be placed promptly into a savings account. 

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