Spring Cleaning Part 3: Sorting to Sell

So now that you have been cleaning out closets, cupboards and drawers.  It is time to create a sorting area in a dry corner of the house or garage.  Keep a box for clothing that does not fit or feels uncomfortable when you wear it.  Another for books and movies you have out grown.  And another for items you have not used in a long time or do not intend to use again. 

If you think there is enough items for a yard sale, start thinking of a date.  Maybe you have family or neighbors who would like to join you in this venture.  Advertising for multi-family yard sales often turn out more customers!

If you are shying away from a yard sale consider different possibilities for liquidating those spare items into extra cash. 
Look for: 

• Used bookstores that buy books. 
• Consignment shops that purchases clothing, furniture or house hold items.
• Mom2mom sales are very popular for selling (and buying) used children’s items.  Often you can google mom2mom sale and your city to pop up a list for your area.  There is a fee to rent space so you will want to have a lot of items to sell, or a friend to go in with. 

If you are tech savvy there is always ebay, Amazon used books and many other sites.  But make sure you understand the shipping costs and fee structure before you jump into online selling for the first time. 

And if you remember what we have been talking about, this is not windfall to go spend on more stuff.  Use it toward the financial goal you are working on diligently, like paying off a debt or saving up emergency savings.  (see January 31, 2012: Pick a Goal, for details). 

Seeing progress and results, will bring more peace of mind.  Happy Selling!

Spring Cleaning Part 2: Pay it forward

Have you ever noticed phrases like “what you put out there comes back to you” or “what you reap is what you sow,” tend to be true?  

So why not be givers?  Giving is part of a healthy financial plan.  Every unloved item in your house is an opportunity to bless others, and that action will come back to bless you. 

When doing your spring-cleaning, there are many ways to give.

• Pass it along:  Gather clothing of the same size and pass them along to someone you know that could benefit from them.  This works especially well with children’s clothing, but can sometimes work for adults.  Make sure the clothing is not stained, or torn first.  Then have a conversation to make sure the receiver is open to experienced clothing.

• Re-gifting: Keep a storage tote or drawer for items in excellent condition that you would feel comfortable giving as all or part of a gift (birthday, Christmas, mother’s day, etc).  These items could be books, music cd’s, movies, picture frames, knickknacks, or any unloved still in the box item you have no use for.  You will want to carefully choose a gift the receiver will like.  I often go into my storage tote for random thank you gifts.  It is a nice way to give back and not spend a lot of money.

• Donate: There are many places in your local area to give to others in need.  You may also want to pick up a tax write-off form, because giving to a charity is tax deductible. 

Church thrift shops

Salvation Army thrift shops

Clothing and shoe donation boxes around town

 Clothing closet charities that help people with employment

Remember giving is one aspect of a healthy life and healthy finances.  It feels good to help others and you can move unwanted clutter back into circulation to benefit others.  Try it today!

Spring Cleaning Part 1

The sun is shining and plants are poking out of the ground in the Midwest.  Many people start spring-cleaning to get winter’s dust out of the corners.  In addition to that, I like to look for hidden treasures and stagnant belongings.  Every unloved item is an opportunity in disguise.  You can turn it into cash for your financial goal or gift it to someone else.  For now we will focus on liquidating… I smell yard sale season coming soon!

Cleaning does not have to be a one day event, mine is often ongoing.  As I make my way room by room, through closets and shelves, I keep a jar and a box handy.  The jar is for found money.  Sorting through drawers and under the couch cushions is bound to turn up some loose change, maybe a forgotten gift card or check.  You may be surprised! 

The box is for everything I find that does not fit, does not work, that I do not like anymore, or the likelihood of it being used is very low.  Look for big items that you can list for sale in a local free ad or online for quick cash.  That is a good way to see reward for your efforts and gain momentum.  There are many things we can do with the small stuff.  

To be continued... 

Are You a Vending Machine Victim?

Hunger happens.  But are you prepared?  Are you the type of person who will end up in a drive through or pushing buttons at the nearest vending machine to combat hunger and thirst?  If so that lack of planning and that can add up to unnecessary financial drain and you may not even realize it.  Calculate the cost of that snack or bottled drink per week and compare it to the same item bought in a multi pack at a grocery store.  How much money could you re-route toward your financial goal per week? 

Here is a better plan.  Next time you are at the grocery store, purchase 2 different kinds of fruit, 5 pieces of each.  Pack one of each Monday through Friday on your way to work or school.  Now you have a morning and an afternoon snack.  I like Bananas because they are very inexpensive and come in their own wrapper.  For my afternoon snack, I alternate between crisp apples and juicy pears.  Bringing a beverage from home costs less as well.

Planning ahead will keep you away from vending machines, impulse buys and unhealthy snacks.   
It may not seem like much, but once you start putting a few of these tips together the savings can add up quickly.  A goal that seemed so far away comes into fruition much sooner than expected.  So the effort is worth it.

Money Fasting for Lent

Many people observe the season of Lent by giving up something during the time between Ash Wednesday and Easter Sunday.  It is a religious practice that has gained popularity even among non-religious people.  I only mention this because it can be the perfect time to go on a money fast.  Money fasting is not buying anything but basic necessities for a period of time.  After the monthly bills are paid, only purchase items that are absolutely needed.  This includes food and toiletries, first aid or medicine that you run out of. 

For this to be effective a household must commit for a period of time (a week, month, or longer).  The purpose here is to squeeze additional money out of your budget and put it all toward the goal you are working on.  When fasting is a mutual decision, it minimizes arguments.  Family members can keep each other accountable.  It can also lead to a lifestyle shift toward simplicity.

• Account for every dollar in your budget.  Put the excess on the goal your household is working on (emergency savings, debt pay down, saving for large purchase).  This amount is in addition to what you already pay.

• Start with a manageable amount of time.  The purpose is to allow an opportunity to think outside the box or break bad habits; not to torture people.  If a week is the agreed upon time, it can mutually be renewed for another week later.

• Do not go on a spending splurge as soon as the fast is over.  Resume a regular budget and continue to track spending.

This type of fasting can be done anytime through out the year, but Lent is an opportune time.  The sacrifice made carries with it the reward of progress.  If your family makes it through the 40 days, your Easter celebration will be even more joyful.

Is a Tax Refund Coming Your Way?

A tax refund can feel a bit like winning the lotto.  There is a rush of euphoria, followed by a shopping spree of ideas where that money could go.  If you expect a refund this year; instead of going on a cruise or buying a new TV, decide to create a more stable foundation with the windfall. 

• Plan where the money will go before it comes in.  This allows you to sleep on it for a while.  If something does not feel right, change your decision and sleep on it some more. 
• Use percentages.  If the actual refund amount is unknown, decide where the money will go based on rough percentages.  One year we decided to put 50% on debt, 25% in emergency savings and 25% toward all holiday gifts for the coming year.
• Do what feels comfortable to you.  Do not put all your money on a debt because it seems like the right thing, only to worry all year because there is no cash if a big medical or car bill were to happen.  Wait until your head and your gut (and your partner) are all in agreement before you act.

A tax refund is not free money.  It is money you worked for and loaned the government (interest free).  This irregular income is an excellent time to get ahead on a goal.  Investing in financial goals, rather than the newest gadget, will always lead to building a more secure future. 

What Can You Live Without?

Now that you have identified a financial goal, the easiest way to start funding it is to find something you can give up.  Maybe you have a membership you never use or a subscription you really don’t have time to read.  You can get rid of both, the expense and the guilt of not having time, by canceling it. 

If we all dig deep enough, we can find an expenses we pay for but get no real benefit from.  For us it was cable.  I gathered the family around the dinner table one evening.  We discussed other ways to get our entertainment needs met.  Then we took a family vote and decided we could all live without it.  That was over five years ago.  During that first football season I had to remind my husband that this decision was temporary.  But after seeing progress on our goals, even he is not ready to start paying for TV again.

Here’s the trick:  after the unnecessary items(s) are located, figure out how to move its monetary amount directly onto your goal before it disappears.

• Mail a check to the bill on payday.  Get it out of your account as soon as possible to avoid temptation.  Have a stack of envelopes addressed and ready to go.  Write the dates you want each payment to be mailed in corner where the stamp will be placed.  This helps to avoid confusion and is easier to keep track of.  You can set up months of payments in a short amount of time and then just cruise on autopilot.

• Set up direct deposit or automatic bill payments.  Most bills and savings accounts can be managed with out paying the stamp.  Make sure you account for these automatic transactions in your checkbook register, budget, or personal finance software to avoid a mathematical catastrophe.  Software makes it easy with the memorize transaction feature.

No matter what financial goal you are working on, keep your eyes open for a regular habitual expense you can live without.  Turn that money drain into an opportunity to get ahead.