Financially Productive Summer

Summer vacation is a quintessentially American innovation. Nowhere else in the world do kids have months on end free from school or any other responsibility. On one hand, it’s great to spend more time with them. On the other, how do you keep them entertained without breaking the bank?

Fortunately, there are a few ways to have the kind of summer break that builds memories without building debt. You can use these months to teach your children valuable lessons about financial responsibility, spend quality time together as a family, and save (or make!) a little money along the way. Try activities like these 5 for a fun, financially responsible summer! 

1) Have a yard sale! 

If there’s one lesson to impart to children about saving, it’s that less is more. It can be hard to impart that lesson with toys from birthdays and Christmases past crowding the closet, collecting dust. Encourage them to find one or two things per day that they could contribute to a yard sale, then have it at the end of the month.

Involve your kids in as many aspects of the plan as possible. Ask them to help you advertise on Craigslist and other social media. Have them tell their friends or their friends’ parents about it. Show them how to do research to price items, and have them work the cash box. All of these are valuable skills that can help them with summer jobs in the future!

When the sale is done, have a conversation about what you can do with the money. It could go toward a family vacation, or into a savings account or college fund. Let them contribute ideas for fun things the family can do with the yard sale proceeds. This can be a chance to teach kids about budgeting while encouraging them not to hold on to things that don’t bring them joy. 

2) Start a (very) small business! 

One way children learn the value of hard work is to earn a wage for doing a job. Paying your kids an allowance to do a job is one way to do that, but certainly not the only one. Getting your kids to help with a very small business is a great way to let them see the rewards of hard work while making a little money on the side.

Business services will vary, but demand for many services is higher in the summer. Businesses need window washers. Elderly neighbors may need help with weeding, mowing, planting, or other landscaping projects. Many people clean house in the summer and list old furniture for sale, which can be rehabilitated and resold for a profit. Any of these small projects would make a fun way to spend some time together this summer.

The business doesn’t need to make a lot of money to be valuable. In addition to quality time, your children can gain an appreciation for the hard work that goes into making a successful business. This could be a great addition to a college application essay or a resume for a first job. 

3) Fix up the house! 

There are tons of great, simple projects that you can tackle as a family to improve the efficiency of your home. Some of the easiest, like installing a new front door, can be done in an afternoon and improve the aesthetic appeal and insulation of your house. These are great projects to tackle as a family.

Any repair or upgrade that you’ve been putting off can be a great summer project. Kids can earn a wage for their labor, or they can work in exchange for some privilege, like going to a sleepover at a friend’s house. Doing this kind of work can help them understand how much hard work goes into home ownership.

These little improvements can add up to significant savings. You’ll start feeling the benefits in lower electricity bills in the summer, and continue to feel them all year round. When you sell your house, these improvements will reflect in the higher value of your home. 

4) Plant a garden! 

Believe it or not, planting a garden is one of the most cost-effective things families can do together. For every dollar you spend in green bean seeds, you’ll get up to $75 back in fresh produce! You can pickle, dry, preserve or can the extras and sell them to friends and neighbors for an even better return!

There are many ways to squeeze additional savings out of a garden. Instead of costly fertilizers, you can compost kitchen waste. You can find reclaimed wood, especially from pallets and shipping containers, to make raised beds. Save seeds from produce, and water with rain collectors.

Planting a garden doesn’t just save money. It can also be a way to encourage your family to eat more vegetables. Tending and caring for a patch of vegetables can be a great way to build responsibility and have fun outdoors this summer! 

5) Plan a stay-cation! 

The average cost of a family vacation is creeping up. For a family of 4, a week of vacation, excluding travel, costs $1,700! Even if you’re taking a road trip in a reasonably efficient family vehicle, that could easily amount to $2,000 or more.

The best parts of a vacation are the shared experiences, and there’s no need to go too far to get those. Find a local festival or cultural event, and plan a vacation in your home town! Check out local historical sites and museums, eat out at nice restaurants, and come home to your own beds at night.

What’s more, a stay-cation can show your kids the rich culture of their surroundings. Use your stay-cation as a time to visit sites of personal interest, like where you and your partner met, or where their great grandparents went to school. They’ll appreciate the deeper knowledge of where they come from, and you can appreciate the togetherness… and the savings! 

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The 4 Hidden Dangers Of Membership Club Shopping

If you’re feeding an army or just a hungry family, you’ve probably been considering the benefits of membership in a shopping club like Sam’s Club, Costco or BJ’s Wholesale. On the surface, the membership decision seems like a very simple calculus. You take your projected savings from buying in bulk and subtract from that the cost of a yearly membership ($45 for Sam’s Club, $50 for BJ’s, and $55 for Costco). If that works out to be positive number, you should sign up.

This simple math, though, overlooks some of the more serious hidden dangers in signing up for a club membership. The availability of bulk goods can encourage different spending habits that may not be in your financial best interest. Before you sign up, remember these hidden costs.
1.) The extra cost of impulses
One of the most tempting Costco items is a drum-sized container of peanut-butter pretzel bites. In most stores, this might be an impulse item. It would be the kind of snack you’d pick up because you’re a little hungry or because you might have company later in the week. At ordinary snack food quantities, this indulgence will cost you a dollar or so. Because you’re buying in bulk, though, this splurge could easily run you $5. It’s a savings if it’s something you need, but for extra items, it’s just extra cost. Add up those extra costs over a whole shopping trip and ordinary impulse buys could eat a significant part of your grocery bill.
If you’re not used to shopping with a list, the extra costs involved in ordinary impulse spending can add up quickly. More than in other stores, you need to make a list and be a diligent, informed shopper before you set foot in a wholesale store. Do your research, make a plan and stick to it.
2.) The extra cost of cheap goods
Most people wouldn’t buy a big-screen TV on impulse. Something changes in the brain, though, when one appears on an end cap for a bit cheaper than they are at a conventional retailer. After an entire shopping trip of saying no, the willpower gives up and the credit card comes out. Suddenly, there’s a TV in the car.
The wholesale club model is to get people in the door with savings on everyday goods, wear down their resolve with an incredible array of goods, and finally hit them with high-margin goods like clothes or electronics. It works surprisingly well, even on smaller-ticket items like giant candy bars and holiday decorations. It’s a technique psychologists call “confuse and reframe.” It works quite simply.
The confuse part of the operation is the volume and price of goods. Most people have no idea how to adequately value a 20-pound jar of mayonnaise or a pack of 35 frozen steaks. Nor do most people have easy ways to categorize the thousands of products available at these stores. The brain’s natural response to this confusion is to look for shortcuts and the store provides them: price tags offer comparisons to other brands, shops, and products, showing the considerable savings available if the shopper buys now. That’s the reframe part of the operation. Having convinced the shopper that the appropriate frame is amount saved, that becomes the decision-making procedure.
It’s easy to say that those tactics won’t work on you, but studies say differently. These companies have spent lots of money designing a retail experience that gets you to spend big. They wouldn’t keep doing it if it didn’t work.
3.) The cost of missed sales
It can be easy to see an item advertised in one of these stores and assume it’s the best price you will ever find for the item. It’s frustrating, then, to go back the next week and see the product on sale for $25 cheaper. Yet this is very common, particularly with seasonal goods that need to be sold by a certain date.
In many cases, these stores will be happy to honor the sale price and refund the difference — but only if you ask for it. Because all transactions are linked to a membership card, it’s far easier for the store to see that you purchased an item and issue a refund. They’re counting on the bulk effect to create less frequent trips so customers won’t see these new sale prices. Shopping at a conventional retailer means more chances to price-check goods.
4.) The cost of waste
If you’re trying to encourage your family to try new things, you know there are going to be some foods they just don’t like. If you’re shopping at a conventional retailer, you might waste a half-pound of asparagus when it turns out your youngest just can’t stand it. If you tried that same experiment while buying from a wholesale store, though, you might end up throwing out several pounds of fresh produce.
Even when buying tried and tested staples, beware the perishable item. If you’re buying something that can spoil in bulk, you’re taking the risk that you’ll have something to do with it before it goes bad. You can minimize this risk by having a plan in place to deal with the surplus. This plan can be as simple as putting it in the freezer or sharing excess with neighbors, friends, and family members.
You can also focus your stock-up efforts on non-perishable goods. Buying things like medications, spices and paper goods in bulk can let you take advantage of the economy of scale without worrying about spoilage. Many of these goods also offer the deepest discounts.
Wholesale stores offer the chance for incredible value, but they also invite some risk. Whether membership is worth it to you or not depends on the kind of shopper you are. If you’re a diligent planner and a seasoned researcher, you can save a lot on things you need. If you tend to make impulse buys, then let the buyer beware.
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http://finance.yahoo.com/news/6-rules-shopping-warehouse-stores-152550021.html

Buyer Beware: 4 Tips For Shopping At Going-Out-Of-Business Sales


It seems the mighty have fallen. Big-name retailers like Sears and Kmart are closing doors around the country, and niche shops like Delia’s are shutting down entirely. That means the newspapers will soon be littered with “going-out-of-business” ads. New products are going to be available at deep discounts!

The prime season for going-out-of-business sales is coming up. Struggling retailers will try to keep themselves afloat through the holiday season. Come January, they’ll be facing down a new set of bills without a major spending season until at least April. That’ll be the time they start shutting their doors and liquidating their merchandise.

It may seem like these sales represent a golden opportunity. Retailers have bills to pay and are desperate for cash. Meanwhile, consumers can buy stuff they need at a serious savings!

But it’s not that simple. The owner of a store that’s shutting its doors is still going to be responsible for the bills they owe. They’re trying to minimize their losses by selling goods as fast as possible. They’re also not counting on a lot of repeat customers, so they have little incentive to be truthful or honest. Watch out for the following tricks:

1.) ‘As-is’ merchandise

One of the first things most retailers do when they begin a liquidation sale is change their return policy. They’re trying to get inventory out the door, and having it come back in prevents them from doing so. They won’t take returns for any reason.

This little change can free them up to sell damaged, broken or otherwise defective merchandise at retail. Under ordinary circumstances, they’d never put the item on the shelf. Now, though, there’s no reason to keep it in the back.

If you’re buying fragile goods, like electronics or dinnerware, ask if you can open the box to make sure everything’s there. If a store employee seems unwilling, think twice. You might be on the verge of buying a lemon.

Beyond damaged goods, retailers may attempt to do the same thing with mislabeled products. At clothing sales, stores may counting on impulse decisions to drive volume. Since the price is so steeply discounted, many people will be tempted to purchase without trying on first. This is a great way to end up with a dress that doesn’t fit.

Also, don’t count on a warranty. Manufacturers will try to direct you to your retailer to honor your warranty. They’ll use this blame-shifting tactic to get out of paying for new merchandise. Expect the product you buy at a liquidation sale to receive no support.

2.) Discount gimmicks

There’s so much money to be made from going-out-of-business sales that a new kind of company has emerged. So-called professional liquidators run these sales on behalf of companies. The first thing they’ll do is mark up the prices of every item in the store by 20-30%.

Because of that, when you see “10% off everything in the store,” you should really be reading “5% increase on everything in the store.” The first weeks of a liquidation sale are an exercise in manipulative consumer psychology. The advertised discounts and the appearance of scarcity will drive consumer spending.

What keeps stores from running these kind of “mark-up/mark-down” sales all the time is reputation. When a store is going out of business, though, those concerns are the first thing out the door. “Everything must go” includes the brand and any integrity they’ve established with their customers.

While the discounts will come, they’ll come much later in the sale. They’ll also be on a much more limited selection of goods. Most of these firms increase their discounts weekly. By the second or third week of the sale, prices may be below retail.

3.) Buy now!

Liquidation sales rely on scarcity to create a sense of urgency. The limited time frame and small quantity of desirable goods can lead to impulsive decision-making. You can pay more for goods you don’t really need if you’re not careful.

Businesses may be desperate, but not quite in the way they’re portrayed. They’re desperate to make money now. The owners of these businesses have bills piling up and need cash. They’re not afraid to make long-shot claims about the features or effectiveness of their products.

This sense of urgency is most palpable during the first week or so of the sale. This is when most firms plan to make the most of their money. Holding off will mean less selection, but it will also mean less pushiness from salespeople.

4.) How you pay matters

Obviously, if you have gift cards, use them or lose them. Competitors aren’t going to honor those. Laws also provide little protection for gift card holders. Bankruptcy law treats them as creditors, meaning you’ll have to fight for repayment with credit card companies and other lenders. In general, once the merchandise is gone, the card is worthless.

Paying cash for large-ticket items to a desperate business can also be a poor choice. If you’re not leaving the store with your purchase, a cash deposit can leave you out of luck if they close before delivering your goods. You can sue, but the company doesn’t have assets to pay your damages.

Your best bet is to pay with a credit or debit card. These instruments frequently have refund policies that exist independent of retailers. If the goods never show up, you can get your deposit back by calling your issuer. Leave as small a deposit as the retailer will allow to protect yourself as much as possible.

Shop liquidation sales like you shop everything else: cautiously. Consider your options and shop around to find the best prices and make sure you actually need something before you buy it. Liquidation sales can be a great way to score some savings, but be cautious on the way.

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