It’s easy to make your own fresh baked
cookies. They are better tasting and
often cheaper than the store bought
variety. However, the problem is you
often need them when company drops
in unexpectedly. There is a way to
impress your guests by pulling fresh
baked cookies out of the oven just 20
minutes after they arrive. Here is how
it’s done.
The secret is in having the cookie dough
prepared and rolled in a tube so all you
need to do is slice off disks, drop them
on a cookie sheet and pop them in the
oven.
Here’s how you prepare the dough -
enough to make 48 cookies:
You will need:
2 cups of butter (or margarine)
1-2/3 cups brown sugar
1-1/3 cups white granulated sugar
4 eggs
1-tablespoon vanilla extract
5-1/2 cups all purpose flour
2 teaspoons baking soda
2 teaspoons salt
2 cups chocolate chips
1 cup chopped nuts
In a bowl cream the butter and sugar
together. Beat in eggs until light and
fluffy. Add vanilla. Combine flour, baking
soda and salt and add to the butter,
sugar, egg mix. Stir until well blended,
and then add chocolate chips and
chopped nuts. Divide the dough in four
and shape each into a 10” long roll. Cut
four pieces of waxed paper or plastic
wrap approximately 12” x 14” and wrap
the rolls in them. Place the rolls in an
airtight freezer container and store in
the freezer. Use within 6 months.
When guests arrive:
Preheat oven to 350F (175C) and cut
the dough in ¼” slices. Place on an
ungreased cookie sheet 1-1/2” apart.
Bake until browned around the edges
– about 10 minutes.
Serve your astonished guests.
Scrooge
Wednesday, May 31, 2006
All about Sniping
(Potential savings: hundreds of dollars
each year)
There are a number of online auction
sniping tools available. In many cases
they will let you buy items for less,
or at least ensure that you are the
winning bidder. The following is a brief
description of the sniping tools.
What is Auction Sniping?
“Sniping” is a smart way to purchase
Internet auction items on sites like
eBay.com. It helps you avoid
competitive bidding that can drive the
final price higher. When you snipe your
bid remains hidden until the last few
seconds of an auction, then a bid is
placed at the last possible moment,
which makes it practically impossible for
other bidders to outbid you!
There are lots of reasons why should
you use an online sniping tool, including:
o It saves you money by avoiding
competitive bidding.
o The tool monitors your auctions so
you don’t need to.
o The tool is simple and easy to use.
o There are no special downloads or
software to install.
o Most have native support for all
operating systems and service providers
(AOL, MSN, etc.).
o You can cancel or change your bids at
any time.
o You can adjust your snipe delay from
1 to 30 seconds.
o You can view previous snipes
o Immediate outcome notices are sent
via email.
Why should I snipe?
Because you want to win and you want
the best price. The bottom line is that
sniping saves you money. Because
sniping eliminates competitive bidding,
your winning bid will be much lower than
if you used traditional bidding methods.
If I snipe, am I cheating?
Not at all. Sniping is not playing dirty -
it’s playing smart. eBay’s proxy bidding
system works the same regardless of
when a bid is placed. Any bid received
by eBay before the auction ends is
valid and legally binding. Seller’s on
eBay generally don’t discourage sniping
either, as long as their item sells they
are happy!
Why can’t I just snipe manually without
using an on-line sniping service?
You can try, but the people you are
bidding against may be using a sniping
service - and beat you. The sniping
service’s high-speed bidding servers are
often synchronized with eBay’s internal
clocks continually throughout the day,
so they know exactly when an auction is
going to end and can place the winning
bid faster than any human. If you really
want to win an auction, a sniping service
is your best bet.
Is it possible to lose an auction using a
sniping service?
It’s difficult to lose an auction with a
sniping service, but it is possible in three
cases:
1) Bidding too late on an auction:
Even though the servers’ clocks are
continually synchronized with eBay, if
you have scheduled your snipe delay
for less than two or three seconds,
there is a possibility that your bid might
not be placed in time due to a delay in
eBay’s servers or a connection between
the sniping service and eBay. You can
reduce this risk by setting your snipe
delay for at least 3 or 4 seconds before
the end of the auction.
2) Incorrect auction information: When
you set up your snipe, if you don’t enter
your correct eBay User ID or Password
or the correct eBay Item ID, they won’t
have the correct information to snipe
your auction.
3) Maxmium bid not high enough: Just
like with any auctions, if someone else
is willing to pay more than you, you’re
not going to win. Make sure you put the
maximum amount you’re willing to pay
for the item, and the service will get it
for the lowest possible price up to your
maximum bid.
Is a sniping service better than software
I can run on my own computer?
It’s better for a number of reasons. They
use a variety of custom programming
and system monitoring techniques
to make sure your snipes are placed
on time. They are connected to the
Internet through a multiple high-speed
connections, which is much more
reliable than any home connection could
ever be. Additionally, you do not need to
leave your computer on for the service
to place your bid.
What happens when multiple users are
sniping the same item?
It does not effect the rules of eBay
auctions. The person who places the
highest bid before the end of the auction
wins. For complete rules, please check
the eBay Buyer’s Guide.
My Maximum Bid was higher than the
ending price, but I didn’t win. Why?
The most common reason for this is that
your maximum bid wasn’t above the
required eBay Bid Increment. You can
check eBay’s Help site at: http://pages.
ebay.com/help/buy/bid-increments.html
for more information.
Scrooge
each year)
There are a number of online auction
sniping tools available. In many cases
they will let you buy items for less,
or at least ensure that you are the
winning bidder. The following is a brief
description of the sniping tools.
What is Auction Sniping?
“Sniping” is a smart way to purchase
Internet auction items on sites like
eBay.com. It helps you avoid
competitive bidding that can drive the
final price higher. When you snipe your
bid remains hidden until the last few
seconds of an auction, then a bid is
placed at the last possible moment,
which makes it practically impossible for
other bidders to outbid you!
There are lots of reasons why should
you use an online sniping tool, including:
o It saves you money by avoiding
competitive bidding.
o The tool monitors your auctions so
you don’t need to.
o The tool is simple and easy to use.
o There are no special downloads or
software to install.
o Most have native support for all
operating systems and service providers
(AOL, MSN, etc.).
o You can cancel or change your bids at
any time.
o You can adjust your snipe delay from
1 to 30 seconds.
o You can view previous snipes
o Immediate outcome notices are sent
via email.
Why should I snipe?
Because you want to win and you want
the best price. The bottom line is that
sniping saves you money. Because
sniping eliminates competitive bidding,
your winning bid will be much lower than
if you used traditional bidding methods.
If I snipe, am I cheating?
Not at all. Sniping is not playing dirty -
it’s playing smart. eBay’s proxy bidding
system works the same regardless of
when a bid is placed. Any bid received
by eBay before the auction ends is
valid and legally binding. Seller’s on
eBay generally don’t discourage sniping
either, as long as their item sells they
are happy!
Why can’t I just snipe manually without
using an on-line sniping service?
You can try, but the people you are
bidding against may be using a sniping
service - and beat you. The sniping
service’s high-speed bidding servers are
often synchronized with eBay’s internal
clocks continually throughout the day,
so they know exactly when an auction is
going to end and can place the winning
bid faster than any human. If you really
want to win an auction, a sniping service
is your best bet.
Is it possible to lose an auction using a
sniping service?
It’s difficult to lose an auction with a
sniping service, but it is possible in three
cases:
1) Bidding too late on an auction:
Even though the servers’ clocks are
continually synchronized with eBay, if
you have scheduled your snipe delay
for less than two or three seconds,
there is a possibility that your bid might
not be placed in time due to a delay in
eBay’s servers or a connection between
the sniping service and eBay. You can
reduce this risk by setting your snipe
delay for at least 3 or 4 seconds before
the end of the auction.
2) Incorrect auction information: When
you set up your snipe, if you don’t enter
your correct eBay User ID or Password
or the correct eBay Item ID, they won’t
have the correct information to snipe
your auction.
3) Maxmium bid not high enough: Just
like with any auctions, if someone else
is willing to pay more than you, you’re
not going to win. Make sure you put the
maximum amount you’re willing to pay
for the item, and the service will get it
for the lowest possible price up to your
maximum bid.
Is a sniping service better than software
I can run on my own computer?
It’s better for a number of reasons. They
use a variety of custom programming
and system monitoring techniques
to make sure your snipes are placed
on time. They are connected to the
Internet through a multiple high-speed
connections, which is much more
reliable than any home connection could
ever be. Additionally, you do not need to
leave your computer on for the service
to place your bid.
What happens when multiple users are
sniping the same item?
It does not effect the rules of eBay
auctions. The person who places the
highest bid before the end of the auction
wins. For complete rules, please check
the eBay Buyer’s Guide.
My Maximum Bid was higher than the
ending price, but I didn’t win. Why?
The most common reason for this is that
your maximum bid wasn’t above the
required eBay Bid Increment. You can
check eBay’s Help site at: http://pages.
ebay.com/help/buy/bid-increments.html
for more information.
Scrooge
Basic Budgeting Techniques
The following article was written by
my father who is well acquainted
with frugality and budgeting. Even
after having lived through the
Great Depression of the 1930’s,
the rationing of World War II, the
shortages of the post war years, and
the high infl ation period of the 70’s
and 80’s, he and my mother were
always able to manage their money
properly.
Basic Budgeting Techniques
By John R. Lunan
Do you ever stop to think about how
many different things you spend
your money on? If you do, you also
realize that you have many options as
to how, or if, you should spend that
money. Some examples are: Is your
morning coffee brewed at home or
bought at a Café? Do you go to work (or
school or shopping ) by car or do you
use public transportation or a bicycle or
even walk? Do you “brown bag” your
lunch or buy it? If you buy your lunch,
is it at a hamburger stand, in a cafeteria
or an expensive restaurant? For home
heating and cooking, do you use gas
or oil or electricity? Maybe you use
something more exotic for heating like
solar, wood pellets or propane? When
it’s time to get a new vehicle do you buy
or lease? If you buy do you buy new
or used? Or maybe you’ve decided to
not replace it at all. There are so many
alternatives.
Each of these decisions has different
financial consequences - some are
more significant than others. Take
the case of heating fuel. The different
options may require different capital
costs of equipment, fuel delivery and
fuel cost per unit of heat (BTU). With
an accurate record of past costs
you have a baseline for comparing
alternate costs of operation when the
time comes to replace your old stove
or heating equipment. Making the right
decision could result in significant future
savings. Having an established budget
and records will help you to decide
when and how you can finance major
purchases such as these.
No doubt you may also want to keep
in mind ecological, moral, spiritual and
social consequences when choosing
where your resources are spent.
We have budgeted our finances for
50 years now, while raising a family of
four children on a modest income. We
have bought and sold four homes and
renovated a farm house as we moved
from one place to another and then
finally built our retirement home in the
country. Through it all budgeting has
played an important role in planning and
implementing these moves. One of the
most important benefits of budgeting,
especially when funds are tight, is the
ability to avoid financial pain when an
unexpected expenditure pops up. Then
there are other things like an annual
insurance premium, or property taxes
- you knew you would have to pay it
sometime, but you didn’t plan ahead to
have the extra funds available. Instead
you may only have enough for your
regular monthly expenses.
How To Budget
So how do we make a budget, and how
do we stick to it? To answer the latter
first .. by patience, determination and
good planning (budgeting). Making a
budget is simpler if you know where
and when you are now spending your
money. If you don’t know, you can start
by using your best guess, abetted by a
little research of your papers, records,
bills, checks, etc., that you may have
relating to past expenditures. It is also
necessary to know what funds (income)
will be available.
When you have gathered this
information, start to assemble it in
logical order. Keep in mind that this is
the start of a learning curve, as you
gain experience you will no doubt
make changes and corrections.
Using a Budget Planner, computer
spreadsheet, or simply a large sheet
of paper (columnar if available) list
in the left hand margin the months of
the year (or pay periods if you prefer
). Across the top of the sheet name
the different categories of expenses,
one per column, that you expect to
have during the coming periods. You
could also arrange the sheet with the
categories down the left side and the
months across the top - use whichever
method is most comfortable to you. Try
to use group names where practical,
such as UTILITIES (heating fuel,
electricity, telephone, etc.), or CAR
(gas, maintenance, license, insurance )
so that you don’t end up with too many
columns. Next enter your best guess
(budget) for each category on the lines
for each month (or other time period)
you entered in the margin of your
worksheet. Don’t forget to apply the
principles of Freeing Up Cash , shown
in the Premier edition of the Scrooge
Guide, when setting these budget
figures, i.e. anticipate future savings.
To make things easier you can use
separate worksheets to record and tally
the different items included in Group
Categories and carry the totals forward
to the main worksheet.
When all the budget items are on your
worksheet, make totals for each time
period and compare these with your
expected income. Due to the seasonal
nature of a few expenditures you should
find that in some periods you have
planned to spend more than in others.
To compensate for this determine your
annual average per period, (this should
be no more than your monthly income)
then for each time period enter the
positive or negative difference in a new
column of your worksheet. Ensure that
you have enough positives (excess
of income less expense) to cover the
following periods when income is less
than budgeted expense. If this is not
possible then adjust your periodic
planned discretionary expenses or
savings to accomplish it.
To complete the budgeting process you
must record your actual expenditures in
the same categories as the budgeted
items and compare the two each month.
The actual expenditures will provide
you with valuable information about
opportunities for savings and future
budgets.
You can also download a budget
worksheet from the TOOLS section of
the member’s area at:
www.scroogeguide.com. It makes some
of this easier by having lots or pre-set
categories and by doing all the totaling
automatically for you.
my father who is well acquainted
with frugality and budgeting. Even
after having lived through the
Great Depression of the 1930’s,
the rationing of World War II, the
shortages of the post war years, and
the high infl ation period of the 70’s
and 80’s, he and my mother were
always able to manage their money
properly.
Basic Budgeting Techniques
By John R. Lunan
Do you ever stop to think about how
many different things you spend
your money on? If you do, you also
realize that you have many options as
to how, or if, you should spend that
money. Some examples are: Is your
morning coffee brewed at home or
bought at a Café? Do you go to work (or
school or shopping ) by car or do you
use public transportation or a bicycle or
even walk? Do you “brown bag” your
lunch or buy it? If you buy your lunch,
is it at a hamburger stand, in a cafeteria
or an expensive restaurant? For home
heating and cooking, do you use gas
or oil or electricity? Maybe you use
something more exotic for heating like
solar, wood pellets or propane? When
it’s time to get a new vehicle do you buy
or lease? If you buy do you buy new
or used? Or maybe you’ve decided to
not replace it at all. There are so many
alternatives.
Each of these decisions has different
financial consequences - some are
more significant than others. Take
the case of heating fuel. The different
options may require different capital
costs of equipment, fuel delivery and
fuel cost per unit of heat (BTU). With
an accurate record of past costs
you have a baseline for comparing
alternate costs of operation when the
time comes to replace your old stove
or heating equipment. Making the right
decision could result in significant future
savings. Having an established budget
and records will help you to decide
when and how you can finance major
purchases such as these.
No doubt you may also want to keep
in mind ecological, moral, spiritual and
social consequences when choosing
where your resources are spent.
We have budgeted our finances for
50 years now, while raising a family of
four children on a modest income. We
have bought and sold four homes and
renovated a farm house as we moved
from one place to another and then
finally built our retirement home in the
country. Through it all budgeting has
played an important role in planning and
implementing these moves. One of the
most important benefits of budgeting,
especially when funds are tight, is the
ability to avoid financial pain when an
unexpected expenditure pops up. Then
there are other things like an annual
insurance premium, or property taxes
- you knew you would have to pay it
sometime, but you didn’t plan ahead to
have the extra funds available. Instead
you may only have enough for your
regular monthly expenses.
How To Budget
So how do we make a budget, and how
do we stick to it? To answer the latter
first .. by patience, determination and
good planning (budgeting). Making a
budget is simpler if you know where
and when you are now spending your
money. If you don’t know, you can start
by using your best guess, abetted by a
little research of your papers, records,
bills, checks, etc., that you may have
relating to past expenditures. It is also
necessary to know what funds (income)
will be available.
When you have gathered this
information, start to assemble it in
logical order. Keep in mind that this is
the start of a learning curve, as you
gain experience you will no doubt
make changes and corrections.
Using a Budget Planner, computer
spreadsheet, or simply a large sheet
of paper (columnar if available) list
in the left hand margin the months of
the year (or pay periods if you prefer
). Across the top of the sheet name
the different categories of expenses,
one per column, that you expect to
have during the coming periods. You
could also arrange the sheet with the
categories down the left side and the
months across the top - use whichever
method is most comfortable to you. Try
to use group names where practical,
such as UTILITIES (heating fuel,
electricity, telephone, etc.), or CAR
(gas, maintenance, license, insurance )
so that you don’t end up with too many
columns. Next enter your best guess
(budget) for each category on the lines
for each month (or other time period)
you entered in the margin of your
worksheet. Don’t forget to apply the
principles of Freeing Up Cash , shown
in the Premier edition of the Scrooge
Guide, when setting these budget
figures, i.e. anticipate future savings.
To make things easier you can use
separate worksheets to record and tally
the different items included in Group
Categories and carry the totals forward
to the main worksheet.
When all the budget items are on your
worksheet, make totals for each time
period and compare these with your
expected income. Due to the seasonal
nature of a few expenditures you should
find that in some periods you have
planned to spend more than in others.
To compensate for this determine your
annual average per period, (this should
be no more than your monthly income)
then for each time period enter the
positive or negative difference in a new
column of your worksheet. Ensure that
you have enough positives (excess
of income less expense) to cover the
following periods when income is less
than budgeted expense. If this is not
possible then adjust your periodic
planned discretionary expenses or
savings to accomplish it.
To complete the budgeting process you
must record your actual expenditures in
the same categories as the budgeted
items and compare the two each month.
The actual expenditures will provide
you with valuable information about
opportunities for savings and future
budgets.
You can also download a budget
worksheet from the TOOLS section of
the member’s area at:
www.scroogeguide.com. It makes some
of this easier by having lots or pre-set
categories and by doing all the totaling
automatically for you.
Grow it Yourself, Make it Yourself
(Potential savings: hundreds of dollars
each year)
Growing your own food and making
your own furniture are quickly
becoming lost arts. Many schools
no longer offer classes in shop or
horticulture and many people have
become so detached from hand work
skills that these techniques really are
becoming almost unknown in some
circles. Fortunately you don’t need a
lot of knowledge or tools to do basic
gardening or woodworking. The best
thing is, you can save a lot of money
growing your own food and making your
own things.
Gardening
Vegetable gardening is probably the
easiest of all types of gardening and
can be as simple as planting a seed
in the ground, watering it, weeding it
and harvesting the result. However to
make things turn out better we offer the
following points.
1) You don’t need many tools to start. To
prepare the soil you can rent a garden
tiller, or hand dig it in the spring with a
spade or large mattock. You will need
a soil rake to smooth out the soil and
remove the clumps of sod, rocks and
roots. You will need a hoe to make
furrows and to remove weeds during
the growing season. And you will need
a long handled shovel and fork for
harvest. A wheelbarrow also comes in
handy to move soil, rocks and fertilizer.
2) If the soil is high in sand or clay you
will need to add lots of organic matter
like peat moss, compost or composted
manure. Most plants really like to grow
in highly organic soils.
3) If your garden area is a bit wet, make
raised beds for the plants by shoveling
out walkways and piling up the soil in 3’
wide and 20’ long beds. This will drain
excess water from the growing area.
Don’t work the soil when it is too wet or
it will get all clumpy as it dries out.
4) Add some 7-7-7 all purpose fertilizer
to the growing area. Follow the
directions on the package and don’t
over fertilize or you will burn the plants.
5) Buy seeds and plant them according
to the directions on the package. Don’t
plant them too deep or too shallow.
Don’t plant seeds that like warm soil
(like squash or pumpkin) too early when
the soil is cold or they may rot before
they germinate. You can also borrow
the excess seed (what they don’t plant)
from your rich neighbors.
6) Keep the planting area well watered
until the seeds germinate. Then water
regularly if it isn’t raining enough.
7) Remove all weeds around the plants.
The weeds compete for water and
fertilizer and will adversely affect your
plants if allowed to grow. Weed every
other day. Weeds grow at tremendous
rates. Don’t wait a week or they may
take over the garden.
8) Watch out for bug infestations. Many
can be controlled by hand picking (like
potato bugs) or spraying with a mix of
water and vegetable oil (1 part oil to
50 parts water with a couple drops of
liquid dish soap to make the two mix
together).
9) You may need to put a small fence
around the garden if you have animal
pests like ground hogs or rabbits. 3’ high
chicken wire works well for this.
10) Harvest the vegetables at their peak
and then dry, pickle, freeze or put in cold
storage what you cannot eat.
Woodworking
Even simple woodworking skills will
save you a tremendous amount of
money. For woodworking you will need
to make a larger investment in tools
than your investment in gardening
tools. However most of these tools will
probably last your lifetime, depending
on the quality and the frequency of
use, and they will certainly pay for
themselves many times over.
Starting with the ultra basics:
1) Having a hammer, a set of
screwdrivers, and a drill lets you do
such things as hang pictures and mount
spice racks or shelves on the wall.
2) Add to that a hand saw (get two,
a large saw with coarse teeth to cut
fast and a smaller saw with fi ne teeth
for making smooth cuts when building
things. And get them with the fast
cutting Japanese tooth pattern), a tape
measure, a level and a square. These
will give you enough to repair the rotted
back stairs or build a simple dog house.
3) If you want to build furniture you
will need many more tools including a
router, a sander, clamps etc.
4) If you like rustic furniture and
structures you are in luck! With this you
don’t need many tools or as much skill.
Sometimes called greenwood building,
it is as simple as cutting branches in
the woods, and then bending them and
joining them with simple mortise and
tenon joints. One company (Lee Valley
Tools - www.leevalley.com ) even sells
tools specifically for this.
5) If you want to try your hand at fine
furniture making, take a few night
courses in the subject to improve your
chances of success. Generally you can
make furniture for a fraction of what it
would cost in a retail store.
Scrooge
each year)
Growing your own food and making
your own furniture are quickly
becoming lost arts. Many schools
no longer offer classes in shop or
horticulture and many people have
become so detached from hand work
skills that these techniques really are
becoming almost unknown in some
circles. Fortunately you don’t need a
lot of knowledge or tools to do basic
gardening or woodworking. The best
thing is, you can save a lot of money
growing your own food and making your
own things.
Gardening
Vegetable gardening is probably the
easiest of all types of gardening and
can be as simple as planting a seed
in the ground, watering it, weeding it
and harvesting the result. However to
make things turn out better we offer the
following points.
1) You don’t need many tools to start. To
prepare the soil you can rent a garden
tiller, or hand dig it in the spring with a
spade or large mattock. You will need
a soil rake to smooth out the soil and
remove the clumps of sod, rocks and
roots. You will need a hoe to make
furrows and to remove weeds during
the growing season. And you will need
a long handled shovel and fork for
harvest. A wheelbarrow also comes in
handy to move soil, rocks and fertilizer.
2) If the soil is high in sand or clay you
will need to add lots of organic matter
like peat moss, compost or composted
manure. Most plants really like to grow
in highly organic soils.
3) If your garden area is a bit wet, make
raised beds for the plants by shoveling
out walkways and piling up the soil in 3’
wide and 20’ long beds. This will drain
excess water from the growing area.
Don’t work the soil when it is too wet or
it will get all clumpy as it dries out.
4) Add some 7-7-7 all purpose fertilizer
to the growing area. Follow the
directions on the package and don’t
over fertilize or you will burn the plants.
5) Buy seeds and plant them according
to the directions on the package. Don’t
plant them too deep or too shallow.
Don’t plant seeds that like warm soil
(like squash or pumpkin) too early when
the soil is cold or they may rot before
they germinate. You can also borrow
the excess seed (what they don’t plant)
from your rich neighbors.
6) Keep the planting area well watered
until the seeds germinate. Then water
regularly if it isn’t raining enough.
7) Remove all weeds around the plants.
The weeds compete for water and
fertilizer and will adversely affect your
plants if allowed to grow. Weed every
other day. Weeds grow at tremendous
rates. Don’t wait a week or they may
take over the garden.
8) Watch out for bug infestations. Many
can be controlled by hand picking (like
potato bugs) or spraying with a mix of
water and vegetable oil (1 part oil to
50 parts water with a couple drops of
liquid dish soap to make the two mix
together).
9) You may need to put a small fence
around the garden if you have animal
pests like ground hogs or rabbits. 3’ high
chicken wire works well for this.
10) Harvest the vegetables at their peak
and then dry, pickle, freeze or put in cold
storage what you cannot eat.
Woodworking
Even simple woodworking skills will
save you a tremendous amount of
money. For woodworking you will need
to make a larger investment in tools
than your investment in gardening
tools. However most of these tools will
probably last your lifetime, depending
on the quality and the frequency of
use, and they will certainly pay for
themselves many times over.
Starting with the ultra basics:
1) Having a hammer, a set of
screwdrivers, and a drill lets you do
such things as hang pictures and mount
spice racks or shelves on the wall.
2) Add to that a hand saw (get two,
a large saw with coarse teeth to cut
fast and a smaller saw with fi ne teeth
for making smooth cuts when building
things. And get them with the fast
cutting Japanese tooth pattern), a tape
measure, a level and a square. These
will give you enough to repair the rotted
back stairs or build a simple dog house.
3) If you want to build furniture you
will need many more tools including a
router, a sander, clamps etc.
4) If you like rustic furniture and
structures you are in luck! With this you
don’t need many tools or as much skill.
Sometimes called greenwood building,
it is as simple as cutting branches in
the woods, and then bending them and
joining them with simple mortise and
tenon joints. One company (Lee Valley
Tools - www.leevalley.com ) even sells
tools specifically for this.
5) If you want to try your hand at fine
furniture making, take a few night
courses in the subject to improve your
chances of success. Generally you can
make furniture for a fraction of what it
would cost in a retail store.
Scrooge
The Country Auction
(Estimated Savings: up to thousands of
dollars)
If you are looking for good deals on
furniture and household goods and
have more time than money, then an old
fashioned country auction could be the
best deal for you. If you haven’t been
to one recently you might be amazed
at what can be bought. The best prices
can be found at auctions at least an
hours drive from a city or large town. It
also helps if the weather is cold, too hot
or raining, and when the auction is held
in the middle of the week. The fewer
people at the auction, the lower the bid
prices are. The most people turn out to
weekend auctions on warm sunny days.
Here are a few tips to make
the most of the auction:
1) Get there early to register, look
the goods over and ask questions
2) Keep your eye on what you want
to bid on. Some dastardly bidders will
secretly move small treasures into
large boxes of junk that are sold off
at the end of the auction as box lots.
3) Watch for “plants” at the auction.
These people make comments to either
drive the price higher or lower. Many
years ago I watched this being played out
cleverly. An ornate commode (a glorifi ed
bed pan with a box around it) came on
the block. One fellow wanted to buy it
so he asked his friend to make some
degrading comments about it. The friend
started laughing out loud and said, “It’s a
toilet! Hey Mr. Auctioneer...show us how
to use it!” Everyone laughed but nobody
dared bid on it. Then the fellow who
wanted it said, “Oh, I’ll give you a dollar
for it.” And that was the price it sold for.
4) Decide on a price before you start
bidding, and stick to it. This will keep you
from getting caught up in bidding frenzy.
5) Keep an eye on the item on which you
won the bidding. Thieves are everywhere.
The best place to fi nd these country
auctions advertised is in weekly rural
newspapers. If the auction is also
advertised in the local city newspaper
then it probably won’t be worth
attending. There will be too many
people with too much money. Small
estate sales in remote communities
will almost always give the best prices.
Scrooge
dollars)
If you are looking for good deals on
furniture and household goods and
have more time than money, then an old
fashioned country auction could be the
best deal for you. If you haven’t been
to one recently you might be amazed
at what can be bought. The best prices
can be found at auctions at least an
hours drive from a city or large town. It
also helps if the weather is cold, too hot
or raining, and when the auction is held
in the middle of the week. The fewer
people at the auction, the lower the bid
prices are. The most people turn out to
weekend auctions on warm sunny days.
Here are a few tips to make
the most of the auction:
1) Get there early to register, look
the goods over and ask questions
2) Keep your eye on what you want
to bid on. Some dastardly bidders will
secretly move small treasures into
large boxes of junk that are sold off
at the end of the auction as box lots.
3) Watch for “plants” at the auction.
These people make comments to either
drive the price higher or lower. Many
years ago I watched this being played out
cleverly. An ornate commode (a glorifi ed
bed pan with a box around it) came on
the block. One fellow wanted to buy it
so he asked his friend to make some
degrading comments about it. The friend
started laughing out loud and said, “It’s a
toilet! Hey Mr. Auctioneer...show us how
to use it!” Everyone laughed but nobody
dared bid on it. Then the fellow who
wanted it said, “Oh, I’ll give you a dollar
for it.” And that was the price it sold for.
4) Decide on a price before you start
bidding, and stick to it. This will keep you
from getting caught up in bidding frenzy.
5) Keep an eye on the item on which you
won the bidding. Thieves are everywhere.
The best place to fi nd these country
auctions advertised is in weekly rural
newspapers. If the auction is also
advertised in the local city newspaper
then it probably won’t be worth
attending. There will be too many
people with too much money. Small
estate sales in remote communities
will almost always give the best prices.
Scrooge
The Real Cost of Automobiles
(Potential Savings: several thousand
dollars per year)
Ahhh....the automobile. Certainly it’s
part of the North American dream. The
status, the freedom, the liberty; doesn’t
the automobile give us these? But what
is the cost? First there is the cost of
the automobile itself. This depends on
your taste. If you are just looking for
freedom and liberty then a $1500 junker
will do. If you want status too then you
might be willing to shell out $50,000 or
more. Then there are other costs: fuel,
insurance, registration, and repairs.
When all of this is added together you
probably spend several thousand dollars
a year on your automobile. Then there
is the cost to the environment. Nobody
has put together a convincing per capita
cost estimate on the environmental cost,
but it may be as much as the automobile
itself. It might even be more.
There are alternatives. If you live in an
area with a good public transportation
system, it may make more sense to
use it most the time and just rent a car
for long trips. Many frugal people use
public transportation or car pool to go
to work or school and then use an old
low-cost automobile for local trips like to
the grocery store. For long distance trips
they rent a car with unlimited milage.
But if you can get along with out the car
entirely, your costs radically drop and
your health radically increases (see the
cost comparison table). Using a bike or
your feet to get places is healthy, good
for the environment and the ultimate in
frugality.
Some other costs that could also be
associated with owning an automobile
are the cost of parking (might be as
much as $2000 per year) and the
foregone interest of the money used to
purchase a vehicle.
Scrooge
dollars per year)
Ahhh....the automobile. Certainly it’s
part of the North American dream. The
status, the freedom, the liberty; doesn’t
the automobile give us these? But what
is the cost? First there is the cost of
the automobile itself. This depends on
your taste. If you are just looking for
freedom and liberty then a $1500 junker
will do. If you want status too then you
might be willing to shell out $50,000 or
more. Then there are other costs: fuel,
insurance, registration, and repairs.
When all of this is added together you
probably spend several thousand dollars
a year on your automobile. Then there
is the cost to the environment. Nobody
has put together a convincing per capita
cost estimate on the environmental cost,
but it may be as much as the automobile
itself. It might even be more.
There are alternatives. If you live in an
area with a good public transportation
system, it may make more sense to
use it most the time and just rent a car
for long trips. Many frugal people use
public transportation or car pool to go
to work or school and then use an old
low-cost automobile for local trips like to
the grocery store. For long distance trips
they rent a car with unlimited milage.
But if you can get along with out the car
entirely, your costs radically drop and
your health radically increases (see the
cost comparison table). Using a bike or
your feet to get places is healthy, good
for the environment and the ultimate in
frugality.
Some other costs that could also be
associated with owning an automobile
are the cost of parking (might be as
much as $2000 per year) and the
foregone interest of the money used to
purchase a vehicle.
Scrooge
The Awesome Drain of Credit Card Debt
(Estimated savings: tens of thousands
of dollars, depending on your situation)
I have a rule that I only buy with credit
cards what I can pay off in a month. If I
didn’t follow this rule I would set myself
up for financial disaster. The main
reason it would lead to disaster is that:
1) credit cards have enormous
interest rates - sometimes 400%
more than a standard bank loan and,
2) credit cards only require that you
pay a small minimum off each month.
This combination of high interest and low
minimum payments means that you could
easily end up paying a huge amount of
interest over your lifetime if you didn’t
promptly pay off your card balance.
Here is an example. Let’s say you
have just purchased something with
your credit card that cost $10,000. The
interest rate on your card is 20% and
the minimum payment is 3% of the
outstanding balance. If you payed off this
purchase by only paying the minimum
payments each month then by the time
you paid it off completely (which, by the
way, will take you 41 years) you would
have paid $12,036 in interest. However
if you pay this off in one month by
transferring it to a low-interest (let’s say
6%) line-of-credit account and make
disciplined payments of $300 per month
then you will pay the entire loan off in
3 years and pay only $966 in interest.
Many people might argue that nobody
is foolish enough to keep a $10,000
purchase on a credit card for 41 years
and pay only the minimum balance even
when the outstanding balance becomes
small. They have a good point because
that balance eventually becomes small
enough to pay off in a lump sum. However
they miss two points. First, the bulk of the
interest is being paid when the balance
is too large to be paid off in a lump sum.
Second, as soon as the fi rst purchase
is paid off, another purchase is usually
made, starting all over again the cycle
of high interest rates and low payments.
Some people do much worse. It’s
not uncommon for someone to have
$50,000 in credit card debt. Here’s how
their numbers shake out. Assuming they
never buy another thing on their credit
cards and they only make minimum
payments - it would take them 51 years
to pay it off and over that time they would
pay $60,229 in interest. Even if they
only made the minimum payments until
the outstanding balance got down to
$10,000 and then paid it off in one lumppayment,
it still would take almost 10
years and would cost $48,270 in interest.
Large monthly payments are the
answer for many people trying to pay
off their debt. Let’s go back to the
fellow who had the $10,000 purchase
at 20% interest. If he made disciplined
payments of $300 per month (which is
roughly equivalent to his fi rst minimum
payment) he would still have that loan
paid off in 4 years - although he would
have paid $4,718 in interest. And, as
pointed out earlier, if he also had moved
it to a 6% interest line-of-credit account
then it would only have cost him $966 in
interest, and would be paid off in 3 years.
So to summarize - if you want
to get out of credit card debt:
1) Make every effort to move the debt
to a low interest account. A line-of-credit
account is ideal. Another choice is to
move it to another credit card that offers
low interest on transferred balances.
Just make sure you don’t use the new
card to make more purchases. Cut it
up, or lock it away at a relative’s house.
2) Make as large a monthly payment
as you can possibly muster.
Increase it until it really hurts!
3) If the debt was originally formed as
a result of an unrestrained and reckless
urge to shop - DESTROY THE CREDIT
CARDS and all records of the number and
expiry date. And don’t replace them again.
4) Plan your purchases, budget so you don’t
get surprises, and use cash when possible.
5) If you don’t have the means, don’t buy
it. You probably don’t need it anyway.
Scrooge
of dollars, depending on your situation)
I have a rule that I only buy with credit
cards what I can pay off in a month. If I
didn’t follow this rule I would set myself
up for financial disaster. The main
reason it would lead to disaster is that:
1) credit cards have enormous
interest rates - sometimes 400%
more than a standard bank loan and,
2) credit cards only require that you
pay a small minimum off each month.
This combination of high interest and low
minimum payments means that you could
easily end up paying a huge amount of
interest over your lifetime if you didn’t
promptly pay off your card balance.
Here is an example. Let’s say you
have just purchased something with
your credit card that cost $10,000. The
interest rate on your card is 20% and
the minimum payment is 3% of the
outstanding balance. If you payed off this
purchase by only paying the minimum
payments each month then by the time
you paid it off completely (which, by the
way, will take you 41 years) you would
have paid $12,036 in interest. However
if you pay this off in one month by
transferring it to a low-interest (let’s say
6%) line-of-credit account and make
disciplined payments of $300 per month
then you will pay the entire loan off in
3 years and pay only $966 in interest.
Many people might argue that nobody
is foolish enough to keep a $10,000
purchase on a credit card for 41 years
and pay only the minimum balance even
when the outstanding balance becomes
small. They have a good point because
that balance eventually becomes small
enough to pay off in a lump sum. However
they miss two points. First, the bulk of the
interest is being paid when the balance
is too large to be paid off in a lump sum.
Second, as soon as the fi rst purchase
is paid off, another purchase is usually
made, starting all over again the cycle
of high interest rates and low payments.
Some people do much worse. It’s
not uncommon for someone to have
$50,000 in credit card debt. Here’s how
their numbers shake out. Assuming they
never buy another thing on their credit
cards and they only make minimum
payments - it would take them 51 years
to pay it off and over that time they would
pay $60,229 in interest. Even if they
only made the minimum payments until
the outstanding balance got down to
$10,000 and then paid it off in one lumppayment,
it still would take almost 10
years and would cost $48,270 in interest.
Large monthly payments are the
answer for many people trying to pay
off their debt. Let’s go back to the
fellow who had the $10,000 purchase
at 20% interest. If he made disciplined
payments of $300 per month (which is
roughly equivalent to his fi rst minimum
payment) he would still have that loan
paid off in 4 years - although he would
have paid $4,718 in interest. And, as
pointed out earlier, if he also had moved
it to a 6% interest line-of-credit account
then it would only have cost him $966 in
interest, and would be paid off in 3 years.
So to summarize - if you want
to get out of credit card debt:
1) Make every effort to move the debt
to a low interest account. A line-of-credit
account is ideal. Another choice is to
move it to another credit card that offers
low interest on transferred balances.
Just make sure you don’t use the new
card to make more purchases. Cut it
up, or lock it away at a relative’s house.
2) Make as large a monthly payment
as you can possibly muster.
Increase it until it really hurts!
3) If the debt was originally formed as
a result of an unrestrained and reckless
urge to shop - DESTROY THE CREDIT
CARDS and all records of the number and
expiry date. And don’t replace them again.
4) Plan your purchases, budget so you don’t
get surprises, and use cash when possible.
5) If you don’t have the means, don’t buy
it. You probably don’t need it anyway.
Scrooge
Freeing up Cash
(Potential savings: hundreds to
thousands of dollars per year)
There are literally thousands of ways
to save money. But the quickest way to
free up cash is to look at the following:
1) What do you currently buy or
subscribe to that you really don’t need?
2) What can you sell?
3) Can you increase your income?
4) Determine your biggest expenses.
For most people it’s food, housing,
clothing and transportation. Next
determine how you can decrease
your spending on each of these.
5) Look at all your expenses one by one
and determine how they can be reduced.
For instance you may be paying $20 per
month in banking fees when you could
move your bank account to a no-fee
account. This will save you $240 over
the year. (Also beware of bank overdraft
protection. This is just like credit and has
interest charges. Don’t use it unless it is
an emergency.) You may also be paying
$15 a month for an Internet service
provider when a $5 a month service will
be just as good for you. This will save you
another $120 dollars per year. Add this
to the savings on bank charges and you
have now saved $360 per year. Perhaps
you are spending $10 a day buying lunch
at work. However if you brought your own
lunch from home it would only cost you
$2 per day. This will save you $8 per day
or $2000 per year! And so on. Creatively
examine all your expenses and you will
be amazed how much money you can
save. But the most important thing is
to take action to reduce the expense.
Scrooge
thousands of dollars per year)
There are literally thousands of ways
to save money. But the quickest way to
free up cash is to look at the following:
1) What do you currently buy or
subscribe to that you really don’t need?
2) What can you sell?
3) Can you increase your income?
4) Determine your biggest expenses.
For most people it’s food, housing,
clothing and transportation. Next
determine how you can decrease
your spending on each of these.
5) Look at all your expenses one by one
and determine how they can be reduced.
For instance you may be paying $20 per
month in banking fees when you could
move your bank account to a no-fee
account. This will save you $240 over
the year. (Also beware of bank overdraft
protection. This is just like credit and has
interest charges. Don’t use it unless it is
an emergency.) You may also be paying
$15 a month for an Internet service
provider when a $5 a month service will
be just as good for you. This will save you
another $120 dollars per year. Add this
to the savings on bank charges and you
have now saved $360 per year. Perhaps
you are spending $10 a day buying lunch
at work. However if you brought your own
lunch from home it would only cost you
$2 per day. This will save you $8 per day
or $2000 per year! And so on. Creatively
examine all your expenses and you will
be amazed how much money you can
save. But the most important thing is
to take action to reduce the expense.
Scrooge
The Frugal Mind-Set
It’s not easy, or natural for everyone
to think like Scrooge. For most people,
frugality does not come without some
effort. But everyone can achieve it. It
really depends on how much you
want it. The rewards of frugality are
many: getting free of debt, paying off
a mortgage, having cash in the bank,
buying a car with cash, etc. It also
means you can be more certain of your
fi nancial future and less dependent
on the charity (or tolerance) of others.
For some people the frugal mind-set
is forced upon them at an early age
through family poverty. These people
are denied credit, have a diffi cult time
getting a proper education and are
often caught in the endless cycle of
poor education and poor wages.
Some of these people learn frugality
as a way of survival. Some others may
develop an “I want more” mind-set.
On the other side of things some are
born into affl uence and have so much
money that they could never be in want
unless they spend it like a total fool.
But the vast majority of people are born
into the middle class. They work for a
living, are moderately well educated and
employed at better than average wages.
They have easy access to credit. So easy
in fact that over the past few years they
may have been offered dozens of credit
cards, bank loans and credit accounts.
Their combined credit limits on the credit
instruments they were granted may be
in excess of $100,000. And most of
these people have never had a single
course, seminar, class or a “talk with dear
old Dad” about handling credit. Naturally
some of these people get in trouble by
buying too much and then having diffi culty
paying for it. Just like the very poor, they
too get caught in a trap, but this trap is a
consumerism-credit trap, and the misery
it brings can be as tormenting as poverty.
The answer is to change the mind-set. The
way one thinks must be changed to control
the spending urges and plan for the future.
In lieu of a talk with some favorite relative
or friend, I offer the following points:
1) Everyone really does need to plan
their income and expenses. Budgeting
is a dreadfully boring exercise. It
is also one of the exercises that
will make the difference between
poverty and riches in your later years.
2) Once you know what your income and
expenses are for a year, then you can plan
your purchases. Don’t forget to allocate
some of your money to charity. It might
sound odd for me to be recommending
giving away some of your money, but
believe me, the good you do to others will
always come back to you. Some charities
will even be able to give you tax receipts
so you can get some of this money
back when you fi le your tax return. (But
please don’t make the availability of a tax
receipt the determining factor for which
charity you choose - go with your heart.)
3) Don’t buy what you don’t need. If you
think you need something (other than
food, clothing, housing or medical care)
detach yourself mentally and have a good
long talk with yourself to fi nd out exactly
why you need it and determine where
the non-credit money is coming from.
4) Always pay with cash, check or a direct
bank debit. (But don’t use your debit card
like a credit card, spending now and
paying off the overdraft protection later. If
that’s what you tend to do it is better to go
and get the cash fi rst from a bank. At least
that way it forces you to have a cooling
off period when you can really think about
the purchase you are planning to make.)
5) Always look for ways to lower your
expenses.
6) If you must buy something look for the best
value (combination of price and quality).
7) Never own more than one credit card.
8) Never use the credit card unless
it is an emergency. If you think you
need it for online purchases try
using something else like PayPal
(www.paypal.com) and have the money
sent directly from your bank account.
9) If you must use the credit card, pay it
off in full before the statement due date.
Never, never, never carry a balance on a
credit card! The interest will suck you dry!
10) Force the bank to keep your
credit card spending limit low. Is
there any reason it should ever be
over $1000? The bank will want to
increase your limit. Don’t let them do it.
11) Each payday, as part of planning
your purchases, transfer money from
your checking account to a savings
account. The amount you transfer
should be what you determined you
need to save for future purchases.
12) Keep three running balances posted
in a prominent spot in your house (like on
the refrigerator door). The fi rst balance
is your checking account. The second
balance is your savings account. The
third balance is your credit card (which
99.9% of the time should be 0...right?).
Having these balances in plain view
several times a day will keep you mindful
of the importance of keeping your
fi nancial affairs in order. Money will mean
nothing the day you leave this earth...but
until then wise money management
will mean the difference between a
miserable and a comfortable existence.
13) Read point 3 over and over
and over again until it sinks in.
Scrooge
Signs Of Financial Trouble
There are clear signs that financial trouble is brewing.
Some of these indications of trouble are:
♦ Always being short of cash.
♦ Always carrying debt and paying interest on loans other than for a mortgage or automobile purchase.
♦ No idea where "it" all goes.
♦ No budget.
♦ No growth in investments.
♦ Uncontrolled or Impulse buying.
♦ Having trouble buying the necessities of life.
If you have one or more of these signs of trouble, there are some things you can do right now to put yourself back on the right path. Here are some things to look at:
1) Pay off high interest debts first. Focus on high percentage interest first rather
than high total interest.
2) Move all your high interest debts to lower interest accounts like a line of credit or a consolidated mortgage.
3) Pay more on your mortgage. Some mortgages let you pay more each month or once per year. Do it, because the extra payment goes directly against the principal.
4) Refinance your mortgage to a variable rate. This will give you the lowest interest rate. Use a mortgage broker to get the best interest rates for you. In most cases the mortgage broker will charge you nothing.
5) Look over the Money Saving Tips given in the Scrooge Guide, determine which are the top 10 for you and make a plan to implement them right away. This will increase your available cash.
6) Develop a budget and plan for excess to be available for investment.
7) Invest in ETF’s and high dividend yielding stocks. Exchange traded funds are tops for growth, safety, liquidity, and taxation. They track the market or a market segment and are the best vehicle to invest in. They may outperform mutual funds two to one in yearly growth. Dividends on good quality blue chip stocks will usually continue to be paid out even when the stock value doesn’t grow much. This ensures some income in all years regardless of stock value.
8) If you need help - get it! Don’t wait until you are in a desperate situation. A financial planner can help you develop a plan to get out of debt right now.
9) Immerse yourself in information about saving money. Surround yourself with
frugal friends. The concentration principal says that whatever you are focused on
will become the strongest force in your life.
10) Buy, beg or borrow these books & magazines:
♦ So You Want More Money, by George Caners
♦ The Millionaire Next Door, by Stanley & Danko
♦ The Scrooge Guide
Please remember we at the Scrooge Guide specialize in helping people get out of debt and offer a number of services in this area. Contact us for more information.
Scrooge
Some of these indications of trouble are:
♦ Always being short of cash.
♦ Always carrying debt and paying interest on loans other than for a mortgage or automobile purchase.
♦ No idea where "it" all goes.
♦ No budget.
♦ No growth in investments.
♦ Uncontrolled or Impulse buying.
♦ Having trouble buying the necessities of life.
If you have one or more of these signs of trouble, there are some things you can do right now to put yourself back on the right path. Here are some things to look at:
1) Pay off high interest debts first. Focus on high percentage interest first rather
than high total interest.
2) Move all your high interest debts to lower interest accounts like a line of credit or a consolidated mortgage.
3) Pay more on your mortgage. Some mortgages let you pay more each month or once per year. Do it, because the extra payment goes directly against the principal.
4) Refinance your mortgage to a variable rate. This will give you the lowest interest rate. Use a mortgage broker to get the best interest rates for you. In most cases the mortgage broker will charge you nothing.
5) Look over the Money Saving Tips given in the Scrooge Guide, determine which are the top 10 for you and make a plan to implement them right away. This will increase your available cash.
6) Develop a budget and plan for excess to be available for investment.
7) Invest in ETF’s and high dividend yielding stocks. Exchange traded funds are tops for growth, safety, liquidity, and taxation. They track the market or a market segment and are the best vehicle to invest in. They may outperform mutual funds two to one in yearly growth. Dividends on good quality blue chip stocks will usually continue to be paid out even when the stock value doesn’t grow much. This ensures some income in all years regardless of stock value.
8) If you need help - get it! Don’t wait until you are in a desperate situation. A financial planner can help you develop a plan to get out of debt right now.
9) Immerse yourself in information about saving money. Surround yourself with
frugal friends. The concentration principal says that whatever you are focused on
will become the strongest force in your life.
10) Buy, beg or borrow these books & magazines:
♦ So You Want More Money, by George Caners
♦ The Millionaire Next Door, by Stanley & Danko
♦ The Scrooge Guide
Please remember we at the Scrooge Guide specialize in helping people get out of debt and offer a number of services in this area. Contact us for more information.
Scrooge
Scrooge’s Top Secret Rapid Repayment Mortgage Plan
One of the biggest challenges homeowners face is paying off their mortgage. Many people realize that at the start of a mortgage they are paying mostly interest and the principal is really only paid down in the latter half of the mortgage. So if you have a 25-year mortgage much of the original mortgage value (called the principal) is still owing at the half way point (12 years). However there is a fairly painless way to pay off your mortgage in half the time and save tens of thousands of dollars in interest. Consider the following example.
Fred & Wilma have just taken out a mortgage for $100,000. The interest rate is 8% and the amortization term is 20 years. Payments are monthly and are $836. Principal portion is $170. Interest is $666. Fred & Wilma are happy they will pay off their mortgage in 20 years and know that they can easily make the payments. They decide to go for a walk that evening and when doing so meet Scrooge, their neighbor. They tell him about their new mortgage.Scrooge gasps in horror!“What did we do wrong?” Wilma asks.“Nothing that cannot be fixed.” Scrooge replies. And then he invites them into his house for a cup of tea and a quick lesson on how they can save $50,000.Scrooge shows them the numbers: Principal: $100,000 Interest: 8% Amortization: 20 years Payment: $836 per month of which the first payment is $666 interest and $170 principal. Total interest over 20 yrs: $101,582
“Did you not say you could easily afford these payments?” Scrooge asks.“Yes, of course. And we will even make some extra lump payments from time to time when we find the money and are not using it for other things” Fred answers. “Harrumph!” Scrooge says. “You will probably never do that unless you have a plan. Right now your plan is to make some unspecified payment sometime and in some amount.”“And we do need to spend some money on a new living room set, our old set feels like stone.” Says Wilma.“Exactly my point…you will always find other things to spend money on” says Scrooge. “Then what do you suggest?” Asks Fred?“It is quite simple, and very effective. It will cut your amortization time in half (to 10 years) and save you $50,000 in interest, and it won’t affect your standard of living.” Says Scrooge.Fred and Wilma cling to his every word…Scrooge continues, “All you have to do is Make an extra payment equal to the principal every month.Fred & Wilma gasp in delight!
Scrooge shows them the new numbers: Principal: $100,000 Interest: 8% Amortization: 20 years but mortgage gets paid off in 10 years Payment: $836 per month of which the first payment is $666 interest and $170 principal plus another $170 per month against principal Total interest over the term has been reduced from $101,582 to $51,712 a savings of almost $50,000.
Some Things to Note. As the interest portion reduces each month, the principal part increases and so does the extra payment. This means that Fred & Wilma will be paying $1006 in the first month and it will increase to $1212 in year 5 and $1668 by year 10. Because the payments increase slowly each year they are manageable increases and are often in line with wage increases.This simple example shows how just a little extra paid each month on your mortgage goes a long way to saving you a lot of money and getting rid of your mortgage debt earlier.
Scrooge
Fred & Wilma have just taken out a mortgage for $100,000. The interest rate is 8% and the amortization term is 20 years. Payments are monthly and are $836. Principal portion is $170. Interest is $666. Fred & Wilma are happy they will pay off their mortgage in 20 years and know that they can easily make the payments. They decide to go for a walk that evening and when doing so meet Scrooge, their neighbor. They tell him about their new mortgage.Scrooge gasps in horror!“What did we do wrong?” Wilma asks.“Nothing that cannot be fixed.” Scrooge replies. And then he invites them into his house for a cup of tea and a quick lesson on how they can save $50,000.Scrooge shows them the numbers: Principal: $100,000 Interest: 8% Amortization: 20 years Payment: $836 per month of which the first payment is $666 interest and $170 principal. Total interest over 20 yrs: $101,582
“Did you not say you could easily afford these payments?” Scrooge asks.“Yes, of course. And we will even make some extra lump payments from time to time when we find the money and are not using it for other things” Fred answers. “Harrumph!” Scrooge says. “You will probably never do that unless you have a plan. Right now your plan is to make some unspecified payment sometime and in some amount.”“And we do need to spend some money on a new living room set, our old set feels like stone.” Says Wilma.“Exactly my point…you will always find other things to spend money on” says Scrooge. “Then what do you suggest?” Asks Fred?“It is quite simple, and very effective. It will cut your amortization time in half (to 10 years) and save you $50,000 in interest, and it won’t affect your standard of living.” Says Scrooge.Fred and Wilma cling to his every word…Scrooge continues, “All you have to do is Make an extra payment equal to the principal every month.Fred & Wilma gasp in delight!
Scrooge shows them the new numbers: Principal: $100,000 Interest: 8% Amortization: 20 years but mortgage gets paid off in 10 years Payment: $836 per month of which the first payment is $666 interest and $170 principal plus another $170 per month against principal Total interest over the term has been reduced from $101,582 to $51,712 a savings of almost $50,000.
Some Things to Note. As the interest portion reduces each month, the principal part increases and so does the extra payment. This means that Fred & Wilma will be paying $1006 in the first month and it will increase to $1212 in year 5 and $1668 by year 10. Because the payments increase slowly each year they are manageable increases and are often in line with wage increases.This simple example shows how just a little extra paid each month on your mortgage goes a long way to saving you a lot of money and getting rid of your mortgage debt earlier.
Scrooge
Building the Tiny House
During my formative years, I grew up in a rural area of the country settled by Scottish immigrants. Even though they had landed in the 1700’s the culture was, and still is, definitely Scottish and thoroughly ingrained. There are many jokes about the stereotypical stingy Scot. The fact is, it is more than just a joke – there is some truth in it. I think it was not so much a conscious effort to be stingy so much as a dogged determination to survive in impoverished conditions. They learned early on, both in their Scottish homeland and in the new world, that if they spent less and reused everything, then they needed much less to live. There was one man in particular that I remember, a bachelor, who lived in a simple and very small house - probably close to 150 sq. ft. in size. He lived less than 1 mile from the closest town, and rode his bicycle into town for food and supplies. In the winter he walked. He obviously had very little money. But he did have his own home, his own space and independence.
That was the first functional tiny house that I remember. The other very small house I saw in those days was a cabin in a forest at the back of my cousin’s farm. The cabin was somewhat remote, taking at least 40 minutes to get to regardless of the way you traveled. It was in the middle of a mature sugar maple forest and it was used during the sugaring season for overnight stays when they boiled down the maple sap into syrup. This cabin was probably 8’ x 10’, had a bed, a wood stove, a chair and table and a window. I loved it as soon as I laid eyes on it. What a great place of solitude it was!
For some reason, knowing about these small and inexpensive houses is a comfort to me. Perhaps it is an inner voice that always asks: "what would you do if you lost everything?" These tiny houses help to answer that question giving me a bit of comfort that I will probably not be living on the street even if the worst of circumstances come my way.
There are several resources for those interested in building a tiny house either for recreation or as a main dwelling. Most cities have minimum size regulations for housing
2005and they are usually bigger than these houses so you will need to locate a tiny house in the country or as a second building on someone else’s lot. The following books and websites have some good ideas for building small houses: The Tiny Book of Tiny Houses , By Lester Walker. The Cabin: Inspiration for the Classic American Getaway, by Dale Mulfinger, Susan E. Davis You can find both online and second-hand on www.Amazon.com .
Websites:http://www.coolhouseplans.com/index.html (see the small house plans section, but be warned, the plans aren’t cheap. The online floor plans may be all you need if you are an experienced builder.)
http://www.bcmountainhomes.com/homesearch.php?category_id=1(Nice plans here. Worth the visit.)
http://www.insitebuilders.com/ (Small steel houses.)http://www.peak.org/~skinncr/smallhouse/resource_small_house.html(Small house books.)http://www.tinyhouses.net/index.htm(Tiny houses inspiration.)www.minicabin.com(a cabin in process.)
Scrooge
That was the first functional tiny house that I remember. The other very small house I saw in those days was a cabin in a forest at the back of my cousin’s farm. The cabin was somewhat remote, taking at least 40 minutes to get to regardless of the way you traveled. It was in the middle of a mature sugar maple forest and it was used during the sugaring season for overnight stays when they boiled down the maple sap into syrup. This cabin was probably 8’ x 10’, had a bed, a wood stove, a chair and table and a window. I loved it as soon as I laid eyes on it. What a great place of solitude it was!
For some reason, knowing about these small and inexpensive houses is a comfort to me. Perhaps it is an inner voice that always asks: "what would you do if you lost everything?" These tiny houses help to answer that question giving me a bit of comfort that I will probably not be living on the street even if the worst of circumstances come my way.
There are several resources for those interested in building a tiny house either for recreation or as a main dwelling. Most cities have minimum size regulations for housing
2005and they are usually bigger than these houses so you will need to locate a tiny house in the country or as a second building on someone else’s lot. The following books and websites have some good ideas for building small houses: The Tiny Book of Tiny Houses , By Lester Walker. The Cabin: Inspiration for the Classic American Getaway, by Dale Mulfinger, Susan E. Davis You can find both online and second-hand on www.Amazon.com .
Websites:http://www.coolhouseplans.com/index.html (see the small house plans section, but be warned, the plans aren’t cheap. The online floor plans may be all you need if you are an experienced builder.)
http://www.bcmountainhomes.com/homesearch.php?category_id=1(Nice plans here. Worth the visit.)
http://www.insitebuilders.com/ (Small steel houses.)http://www.peak.org/~skinncr/smallhouse/resource_small_house.html(Small house books.)http://www.tinyhouses.net/index.htm(Tiny houses inspiration.)www.minicabin.com(a cabin in process.)
Scrooge
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