Archives for Finances
The website She-Conomy (a site that focuses on the business of marketing to women) recently published the article “Men, Women Lead 4 Out of 5 Stages of the Buying Process.” This interesting article discusses Marti Barletta’s research in the book Marketing to Women and how when “men and women buy as partners, women control at least four out of five stages of the purchasing process.”
The five stages of the buying process are Kick-off, Research, Purchase, Ownership, and Word-of-Mouth. Barletta’s research found that the only stage of the purchasing process men dominate is the actual laying down of the cash, and that women are in control of the other four. Then, she implies that men don’t actually control the buying, even though they think they do.
The explanation about the Research stage of the buying process is eerily similar to how we plan purchases in our home, except it isn’t always me taking on this role:
Once the decision has been made to make a purchase, it is the woman who does research to develop the short list. She may begin with numerous options, but she is very detail oriented as she narrows the field … They consult with close friends and family, as well as experts, Web social networking, local news and magazines. Once she feels she has investigated all of her options thoroughly, she compiles the short list or makes a final decision.
It is this list or choice that she shares with the man. So if your product or service doesn’t make it on this list, it is very unlikely it will be considered when it comes time to make the purchase. After all of the research and time she has put into it, she typically knows exactly what she wants.
In my relationship with my husband, we usually alternate who is the researcher and who is the buyer based upon who is interested in the purchase. Having the researcher not being the person who is putting down the money for the product usually means that we’re spending more wisely than we do independently. We’re smarter consumers because there are two of us involved in the process.
Even if the research is true and the majority of women in relationships do control the five stages of the buying process, it doesn’t always have to be this way in your home. You can mix things up as a way to keep your spending in check and be smarter consumers. If you’re not in a relationship, you can use these five stages as a checklist to ensure that you’re being a smart consumer and not simply purchasing things on impulse.
Overall, I found this article to be a fascinating analysis on the buying process and how products find their way into our homes. The more we know about the science of buying, the better, more informed consumers we can be.
Thanks to reader Deb for introducing us to this research.
Michael Mandel, former chief economist at Business Week and current editor of Visible Economy, wrote yesterday about US consumer spending trends in a post on his website titled “Where Americans Are Spending More.” The post explains that since the recession began in 2007, personal consumption expenditures have actually increased:
Right there up at the top is America’s love affair with mobile devices, where spending has soared almost 17% since the recession started. Also supporting my thesis of a communications boom-spending on wired, wireless, and cable services have risen by 5%.
In addition, Americans still care about their pets, their children, their hair, and their guns.
Mandel’s post has a couple charts that show the actual numbers and percentage increases in spending as reported by the Bureau of Economic Analysis, so I highly recommend checking out the original article. In contrast to the areas of growth, it is interesting to note what segments of the market have experienced decreases:
Americans are spending a little bit less on clothing and hotels; a lot less on foreign travel, video and audio equipment (think televisions), and furniture. The big drop, though, has come in motor vehicles and associated goods and services, like gasoline.
During this recession, it’s not that consumers have stopped buying, it’s that they have stopped buying large, conspicuous, luxury goods, and have instead bought smaller, less flashy items. As a nation, we’re not really cutting back, we’re just giving the outward impression we are.
From a simple living perspective, I have mixed feelings about this report. I’m encouraged that the personal consumption increases seem to be on things that bring people together — communication, food, and caring for the people you love (child care, education, health care). However, it’s still an increase in spending. The media speaks incessantly about American society tightening their belts, but that is not really the case. Instead, it appears our consumer priorities have merely changed to smaller, less obvious purchases.
Articles we’ve been reading this week:
- In the comments to “Programs for reading online content off-line” a number of readers highly recommended Read It Later to the list of Evernote, Instapaper, and ToRead off-line viewers.
- J.D. Roth of GetRichSlowly.org has a thought-provoking piece on “The Rewards of Frugality and Thrift (or, Why We Scrimp and Save)” that I really enjoyed. It gets to the heart of what I believe is uncluttered spending.
- The London Times (a site you have to register to read) has an article in today’s issue about the Butter by Nadia dress. The dress is one piece of fabric that can be styled to wear 15 different ways. At the very least, I’m extremely curious!
- DIYlife has an inspiring post on “10 Uses for Leftover House Paint.”
- When money got tight, writer Kevin Mims found that uncluttering his home and selling the items at an antiques co-op made for good money. Check out his story “Out With The Old, In With The New Beginnings” on NPR.
- Reader Megan tipped us off to an article in this week’s Chronicle of Higher Education that discusses how to prevent feeling overwhelmed and overloaded by your work. Like so many things in life, you need to “always keep in mind what it is that you want to do, to build, to create in the world, whether that’s through a course, an article, or a new administrative structure.” The article is written for college professors and administrators, but is easily adaptable to any profession.
- Lifehacker linked to a terrific post on Stepcase Lifehack discussing “How To Stay Organized When Life Throws You a Curveball.” It’s uncomfortable to read about what to do during a crisis, but very important if you’re in the situation.
One last thing, I accidentally switched the post order today and put up the Unitasker Wednesday post as the first one and this post in the 10:30 a.m. spot. I think this is a sign I need more coffee. Check out our 7:30 a.m. piece if you’re looking for today’s Unitasker.
Today’s guest post is from reader Alban Guillemot who writes in Australia for a personal finance and credit card advice site, creditcardfinder.com.au.
Families come in many shapes and sizes, but most of them have one thing in common — they want financial security. Simply adjusting your perspectives on money and spending and openly talking about your goals as a family can help to ensure successful and uncluttered finances:
- Be clear on your goals as a family. Open and honest communication with all family members is important because if one person is not convinced of the family’s financial plan, those plans can be sabotaged by overspending and ignoring the budget.
- Avoid social competition. As you make your budget for the extras your family would like, consider why you want what you want. Make sure you are not making spending choices based on what you think someone in your income bracket and your neighborhood should have, but choose extras you want and would enjoy. As soon as you start spending to keep up with your friends and neighbors, you have stopped focusing on your family’s needs and wants
- Consider your family before making a purchase. Always keep your family budget in mind before you make a purchase that has not been accommodated for in the budgeted. This also goes back to the previous point about why you are making the purchase — is it a purchase that is good for the whole family? Consider the impact of an impulse off-budget purchase on your family’s savings and goals.
- Hold regular family budget meetings. It is not enough to create a family budget, you have to also maintain and monitor it to make sure it is achievable and accurate. This can be done at a regular family meeting, where you also discuss how each member feels about the budget and the spending, and whether they can see room for improvement, or suggest a change of direction.
Discussing finances with your family with honesty and respect is the key to successful family finances, but while discussions are important, you also need to be able to implement the systems to follow through. Once you’ve completed the four tips from above, you’ll find ways to customize each system to your family’s needs and find a way to ensure your family is financially secure now and into the future.
A friend recently sent me the following confession in an e-mail:
I just cleaned out my storage unit that I have had for 7 years. (I think I opened it when I moved from the townhouse to my apartment.) What a bunch of crap! I saved a couple boxes of books I’d been missing, and some high school stuff I pulled out — medals, trophies and plaques.
So, I did the calculations on what this storage unit cost me. 7 years = 84 months times approximately $120 a month = over $10,000!!!!! I am flabbergasted I spent so much on storing what was basically crap. It’s just so easy when it’s $120 a month. Think of what I could have done with $10,000! That’s a costly uncluttering lesson!
I think that self storage is a good idea when used temporarily, such as for a few months when settling someone’s estate or if you’ve sold your house and are staying in a hotel while you’re waiting to settle on a new house. Once the word years is involved, though, it’s no longer temporary and uncluttering is in order.
Had she tossed out all of what was in her self storage unit seven years ago, my friend could have repurchased the box of books and even commissioned someone to remake her medals, trophies and plaques, and still had more than $9,000 left in her bank account. (I doubt my friend would have had someone remake her medals, though, I’m just saying she could have and it still would have been far less expensive.)
If you have a self-storage unit, consider taking the time to clear it out and save yourself a good amount of money. If the idea of cleaning out the space overwhelms you, hire a professional organizer to help you. The fee you’ll pay to the professional organizer will be less than what you would pay to continue storing your stuff.
More facts about self-storage:
J.D. Roth, who writes the educational and extremely valuable personal finance blog GetRichSlowly.org, just published Your Money: The missing manual with O’Reilly books. The book is filled with charts, graphs, checklists, guides, and explanations that explore the basics and advanced methods of personal finance — all with Roth’s simple ease and charm.
The book begins with a quote from George Mallory that aptly reflects the focus of the text:
“We do not live to eat and make money. We eat and make money to be able to live. That is what life means and what life is for.”
Roth’s financial philosophy is based on the premise that you have to spend less than you earn. Regular readers of this website know that this is also a fundamental rule of being an Unclutterer. If you spend more than you earn, your thoughts will consistently be focused on anxieties (clutter) about money instead of on what matters to you most. Roth details how to get out of debt, spend less than you earn, and save money for the future (saving also means that you alleviate worries about your financial future).
One of the highlights for me is on page 95 of Your Money: The missing manual. Here, Roth presents a flowchart created by April Dykman that she “created to help her stay on track while shopping.” I think all Unclutterers should have this chart tattooed on their forearms (I jest. Please don’t get a tattoo of this.):
I’m also fond of the section titled “The Tyranny of Stuff,” which is perfectly suited for Unclutterers. In short, Roth’s premise in this section is if you “own less stuff” you will spend less on new acquisitions as well as maintaining the stuff you choose to own — less clutter, less storage space, less to clean, and less wasted money on unnecessary purchases.
In addition to the book, if you aren’t familiar with Roth’s blog GetRichSlowly.org, I also recommend you check it out. Money Magazine named it one of the top two financial advice sites on the internet. Roth knows very well how to get rid of cluttered finances. I give his new book two thumbs up.
Since tax time is a little less than a month away, I wanted to nudge everyone to get their papers filed if you haven’t already done so. Especially if the government owes you money, it’s good to get this chore marked off your to-do list earlier than later.
Be sure to check out “Three year end tasks to take the edge off tax time” for tips on keeping your paperwork orderly before you file. Then, once you’ve filed your taxes, I highly recommend using the FreedomFiler system to help you maintain an organized filing cabinet. (And, just so we’re clear, FreedomFiler did not pay us to write that — I’m a true fan and user of the system.) If your files are already in decent shape, check out “How to store your tax returns” for a few tax-time reminders.
If the entire process gives you a headache and makes you nauseated, be sure to read this tax filing and organizing advice from the personal finance professionals I read daily:
- Man vs. Debt: “Random Lessons Learned While Preparing Taxes This Season“
- The Simple Dollar: “Nine Simple Things to Do to Get Ready for Tax Season Right Now!“
- Wise Bread on Taxes: “Taxes“
- The Motley Fool: “Avoid Tax Filing Mistakes“
- And, my favorite article on the subject — Get Rich Slowly: “Last Minute Tax Tips“
In tight economic times, getting rid of clutter can be a good way to cut your expenses and/or bring in extra cash. If you’re looking to save or earn a buck, consider these possibilities:
- Old hobbies. Most hobbies require equipment, supplies, and/or specialty tools that can easily be resold at near-cost prices. If you’re no longer participating in rock climbing, scrapbooking, or golf, consider selling the hobby’s accouterments. Sites like eBay and Craigslist are good options for selling the supplies, and so are sites where hobbyists visit (like Ravelry for knitters, crocheters, and spinners).
- Collections. If you’ve lost interest in a collection, consider putting it up for sale on eBay. Sell things as a single lot if you don’t want to spend the next couple weeks at the post office mailing each piece of your collection to far-flung locations around the globe. Look at other sales of similar items to see what kind of a bid to expect.
- Maintenance costs. The more stuff you have, the more you have to maintain — you have to pay for more square footage in your home, more money goes out to heat and cool your space, and even more is spent on things like painting, cleaning gutters, lawn mowing, etc. Typically, to get more square footage in a home, you also have to live further from your job, which increases commute times, travel expenses (fares, tolls, gasoline), and you have to service your car more often. All of it adds up, putting greater strain on your pocketbook. Living simply almost always means paying significantly less on maintenance costs.
Where have you found cash in your clutter? Share your suggestions in the comments.
Now that 2009 is over, don’t wait until April to start getting your taxes in order. Chicago Sun-Times columnist Terry Savage suggests three tasks that you can do now if you plan to itemize your deductions.
If you don’t currently have a system, don’t worry. All you need are a few plastic sandwich bags and a shoebox:
- Put all those deductible receipts in separate baggies — taxi receipts, dues and subscriptions, unreimbursed business expense receipts, and the letters you’ll receive certifying your charitable donations.
- If you’re banking online, print out your check register. Or download the year’s banking into a Quicken file. Take all your monthly statements, put an elastic band around them and throw them in the shoebox as well. If you’re still using a paper check register, ask your bank for a new one to start 2010. Put the old one in the shoebox.
- Prepare a file for your year-end investment statements, which will start arriving in January. The ones from your 40l(k) or IRA won’t have an impact on your taxes, but it’s nice to keep them all together. That’s also where you’ll stash your W-2 from work, and any 1099 forms that arrive in January, showing interest or dividends or capital gains.
The best part about doing this now is that it serves two purposes. First, when April rolls around, you’ll be prepared. Second, you can start 2010 with drawers free of receipts.
Yesterday we came across this amazing YouTube video of a Good Morning America segment profiling Kathy Spencer, who runs How to Shop for Free. By using a few techniques highlighted in the video, she manages to feed her family of six for less money than you probably have in your sofa cushions right now.
Here at Unclutterer, we were wondering how much of Kathy Spencer’s shopping involves buying unneeded items just because of the savings, so we did a little digging and found this an eHow article by Spencer in which she addresses that particular issue:
People always say why get something if you don’t need it, or say I don’t need 10 jars of peanut butter. My answer to that is if you don’t need it someone else will. I did not need the 6 diabetes monitors that I picked up at CVS while shopping with Inside Edition but I got them because I will be donating them to my local Council on Aging, a lot of people have diabetes and don’t test regularly because they can’t afford the meter.
If you’re willing to actually make an effort to find a good home for such “deals,” then it’s probably not a bad thing. If not, you should probably be much more critical about whether you really need something that’s on special.
It’s actually quite surprising to see how much money you can save with a little planning and effort. We tried out some of Spencer’s tips yesterday at our local Harris Teeter and managed to save about 30% off our total bill.
And if you need a way to organize your coupons, check out this Unclutterer post from March on repurposing brag books.
A recent article in USA Today explores organization and how it can help keep expenses low in these tough economic times:
We have all heard about R.O.I. — Return on Investment. It’s a useful way to analyze whether you are receiving sufficient bang for your buck for your efforts.
But have you ever considered your R.O.O. — your Return on Organization?
Look, we all know that main two pain points for most small businesses are not enough time and not enough money. This is even more true in light of the current economic environment. But what if I told you there was a simple, affordable way to get more of both? After all, as we all know, time is money.
I have been doing some work with Office Depot recently in order to help small business owners understand how, with just a few smart changes, they can increase their R.O.O., and how that can have a significant impact on the bottom line. In fact, it is estimated that increased R.O.O. can yield up to an extra two hours of productive time a week and up to an additional 6% of revenue.
How? Well, think about it. It costs five times more to create a new customer than it does to keep a current one. The whole idea is that with some extra time you can take better care of your best customers. No, 20 minutes a day may not seem like much, but what if you used those 20 minutes a day to their maximum effectiveness? You could check in with customers, make some sales calls, send out some “checking-in” e-mails … that sort of thing.
His later suggestions for how to specifically be more organized at work aren’t too in-depth, but I think he makes a very good point in this first section of the article. Being efficient with your time can create more opportunities for profits. The implied flip-side, of course, is that being disorganized can cost you your job/client/opportunity.
I also like the phrase “R.O.O. — your Return on Organization.” I may have to use that in the future.
What do you think? Is there such as thing as R.O.O.? I’m interested in reading your opinions in the comments.
The state of the U.S. economy (and, realistically, the economy in most other nations throughout the world) has seen better days. Whether you need to or not, you are probably closely watching your money.
If you’re someone with “organize finances” at the top of your 2009 resolutions list, let me recommend a few products and services that might be able to help you keep better track of the money you earn, save, and spend:
- Online banking. Most banks and credit unions have websites that let you track your accounts online. If you aren’t already, I suggest signing up for these services.
- Online bill paying. To save money on postage, many utility companies and other service providers now allow you to pay your bills electronically. An automatic system can help you pay your bills on time, and also provide you with a second digital receipt of your money transfer.
- Quicken online. You can track all of your personal finances through a free Quicken account. The service allows you to import all of your financial information and display it in a manner that is useful.
- Mint online. If Quicken isn’t your style, you should definitely check out Mint. It’s also a free, online, personal finance program. Feel welcome to check out our review of an earlier version of Mint.
- Personal finance blogs. Websites like Get Rich Slowly, Awake at the Wheel, The Motley Fool, The Simple Dollar, and Wise Bread are fantastic sources for product reviews, strategies, and tips and tricks for managing your money wisely.
What services do you use to help you organize your finances? Let us know about any programs or services that work for you in the comments.