Managing your Personal Finances Wisely

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Archive for the ‘Expenses’


Should You Go for Price or Quality? 0

Posted on November 15, 2009 by admin

I wanted to write this short post as a reaction to a phenomenon I saw yesterday at a discount store: hundreds of people were running around in a discount store, which sold many items at extremely low prices. People were virtually falling over each other, just in order to get the cheapest item available. I got curious, and went in.

As soon as I saw the type of products being sold, I was seriously wondering: what is the benefit of buying a low-priced product, if you can throw it away after a month or two? I know, personal finance encourages to cut down expenses where possible, but does it make sense to buy 12 low-qulity items for 7 USD durig  year, or only one high-quality item for 25 USD, which will probably hold for more than a year.

Up to which extent does the low price of an item compensate for its quality? Think about it next time when you go shopping.

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The Top Reason Why I Postpone Buying Fashion 0

Posted on November 15, 2009 by admin

The fashion industry is a very fast-paced environment, continuously searching for new trends and endeavouring to anticipate what will, or should, be ‘in’ next season. Usually designers, manufacturers and retail are already looking at the next season before this season is over.

Personally, I am always being faced with the same problem: I can never get the winter clothing I need when it’s mid-winter, and I can never purchase the summer clothing I need in mid-summer. However, this hides a very good opportunity: As soon as retail shops are starting to exchange their collections, they will sell the existing collection often at a much lower price. In the end, they will not be able to sell the old collection otherwise, and they also can not keep it for next year.

I have had already many opportunities, where I save a lot of money: last summer, I bought a Diesel jacket for 120 Euros in stead of 220 Euros, I bought a G-Star jeans for 69 Euros in stead of 100 or so. And in some rare cases, you may find the finest shoes on the upper pricing scale, sold for only 50% of the original price.

From my experience, I have adopted the following rules for buying fashion, to which I usually stick:

  • I will continuously compare products and prices, even if I do not need them. This keeps me informed all the time, and I always know where I can get what product at which price. As soon as there is a sale, I will take a closer look at it.
  • I will wait with my purchase until I really need it. If I do not need an item, and it is unlikely I will need it in near future, I will not buy it, also not when there is a sale. If I do need an item or I might need it in near future, I will look at discounts first.
  • I will never buy something I do not like, simply becuase it’s cheap. I will not buy something of poor quality, simply becuase it’s cheap.
  • If I am not sure whether or not to buy a specific item, I will leave the shop and return back later, perhaps with a friend.

The above examples are based mainly on the European market, and sales might take place differently in other parts of the world. I would very much welcome your comments, experiences and tips.

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How Skype Lowered my Phone Bill 2

Posted on November 15, 2009 by admin

Skype has become increasingly popular over the past few years. I had been introduced to Skype through a friend om mine 4 years ago. In the beginning I had installed the program onto my PC and used it mainly as a program for instant messaging. Until I found that Skype offers many more additional services, such as voice over IP (VoIP), video chat, and for a small fee making phone calls to a real telephone, all at the touch of a button on my PC.

Since I live in Germany, but originally come from The Netherlands, I make quite some long-distance calls, which can add up quickly to my budget. So I decided to purchase a headset, and keep in touch with my relatives and friends abroad. Either I would be able to call them on Skype when they are online themselves, or I could actually punch in their phone number in Skype, and give them a call on their land line or mobile phone. For me, it pays out great; the much lower costs I pay via Skype had easily saved me 20 Euros (approx. 29 US Dollar) per month… that is 240 Euros per year.

Quite recently I made another discovery: sitting in front of my computer all the time while talking with my friends and relatives was quite different; I did not have the flexibility of walking through my home as I would normally do with a regular phone. I solved the problem by purchasing a bluetooth headset; I can now plugin the headset while I am talking with someone over Skype, and walk around within a distance of 10 meters around my laptop.

VoIP does of course not only involve Skype; there is a variety of software available offering this service. However, Skype works best for me: the interface is well structured, there are no advertising banners, and if the camera is not turned on the sound quality is very good. Additionally, there is not any service in my area I know of which offers such low pricing as skype for long-distance phone calls.

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Bargaining Might Pay Out 0

Posted on November 15, 2009 by admin

I remember being in Kenya in 1998. We were on Safari, and on our way to the Masaai we stopped a few times in some smaller villages to fuel up the car and get a bite to eat. Whenever we stopped, there were loads of small trader, trying to sell their good to those who made a stop-over, usually tourists. Most articles where typical souvenirs, and I spotted a small ashtray I liked, made out of pottery and painted nicely. I started talking to the man, and we engaged in a bit of small-talk. Finally, when I asked about the price, he told me he wanted 1,200 Shillings (approx. 12 Euros) for it. I thought for Kenyan standards, this was quite a lot, and I started bargaining with him just like I read in the Kenyan tourist guide. After another 15 mintues, we finally agreed on 200 Shillings (2 Euros). Now that is what I call a discount.

I nearly forgot about this experience after I got back to Europe, until one day I went with a friend of mine to buy some food for her dog recently. She took everything she wanted to the cashier, and I believe the total bill was 40 Euros. And she spoke the maginal words: “Can we bargain something off the price?” I was a bit stunned, since I had never tried this in Europe, nor have I heard from someone doing it. But the salesperson at the pet shop replied politely: “of course we can! After all, I am a trader”. Now the newly bargained price was not as low as it was in Kenya, but I believed she bought the food for 35 Euros; that is 5 Euros for one purchase… and some dogs eat a lot of food.

I tried following the same principle, and during a month I asked many different salespeopel whether he would bargain. I did receive a lot of “no’s”, but also a “yes” a couple of time. Even my favourite shop, where I buy shirts, gave me a 8 Euro discount on 2 shirts, provided I would buy two and not just one. Since I buy at least 10 shirts per year, that is a discount of 45 Euros per year. It might not seem much… but as they say, small amounts also count.

Bargaining practices might be very different according to where you live; bargaining is more common in developing countries, or those with a bargaining culture than in the western world. Bargaining is more difficult in large metropoles than in smaller towns. However, I had a lot of fun simply trying it, and additionally I now know some shops which are generally willing to bargain and I know which shops do not bargain at all.

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How to go Clubbing and Save Money 0

Posted on November 15, 2009 by admin

Surely you know the process: you arrive at a club with your friends, pay high entrance fees, and at the end of the night you spent another 100 Dollars and you try to compensate for the high costs during the rest of the week. However, clubbing does not need to be all that expensive.

A typical night out with your friends probably starts out at home; you have a few drinks, you dress up and take a taxi or the car to the club or a bar. In a club, you will usually pay rather high entrance fees in order to enjoy the privilege of too loud music and bad air. Once inside, you might drink one or two cocktails, go for a dance, talk with a few people, have some more cocktails or wine, and the same routine is repeated until the sun sets in the morning. You still remember having at least 100 Dollars in your wallet at the beginning of the night, and still only a 10 Dollar note left.

I find going out very important; it is a good chance to have fun with your friends, to socialise, and basically to have a good time. I believe it is essential to having a high-quality life. However, with the right mind-set, going a night out does not need to be that expensive, nor do you have to ask others to buy you drinks.

Do not pay entrance fees

I have never understood why clubs charge entrance fees just to ‘come in’. Clubs are virtually the same as bars, only that the music is louder and there is a dance floor. I personally avoid clubs which charge too high entrance fees. I might make an exception if an artist I want to see is performing, but else I have no business there. Alternatively, I will find low-budget clubs or I will simply go to a bar in stead. In my experience the people are somewhat more relaxed.

Stay away from cocktails, long-drinks and everything expensive

Cocktails, long-drinks, and everything which is rather expensive has become a fashion. In Europe, a cocktail can quickly cost 11 Euros (around 16 US Dollars). Drink three of those, and you have already spent half of your 100 Dollar budget. In stead, it makes much more sense to stick to either non-alcoholic drinks, or simply beer if you must drink alcohol. Not drinking alcohol by the way does not mean you can’t have all the fun. It is simply a matter of the right attitude, and you will also feel much better and vital the next day.

Avoid taking a taxi

Taxis are typically the expensive beginning and/or ending of a great night out. The typical reasons why people take taxis are either out of convenience, because they had too much to drink (and either they can’t drive or they want to get home quickly), or because no public transportation is running during the night. One remedy could be to simply drink less alcohol, this would allow you to drive your car during the night, or you could take public transport without feeling bad. Additionally, you may want to check when public transportation is running, and either take back the last option of the night, or take the first option in the next morning.

Give rounds, but don’t spend drinks

If I am on a night’s out with my friends, we usually give rounds. I am happy to do that, because I know that I am getting the drinks back. Additionally, I know that my friends will not order the most expensive drinks available. I trust them, and it is give-and-take. On the other side, I will never spend drinks on people I don’t know or I have just met. Especially particular women use this strategy, in order to have a free night’s out. Particularly men are subconsciously trained to spend women drinks as a part of the flirting process. Simply don’t do it, unless you really want to, and it is someone you trust.

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