Living Without a Salary

How to reduce your expenses, so you can live without a salary!

Rent to Own Scam June 11, 2010

“You can have a house full of new furniture for X dollars per month!” says the commercial for rent to own companies. These commercials are usually shown during the times when those most likely to fall for this scam are watching TV. And if you notice, most of these stores are located in the poorer neighborhoods, where people do not have as much money and would be enticed by such deals. However, these deals are not the bargains they are made out to be, and if you have ever fallen for this scam, you will know what I am talking about.

Example

Say you want to buy a furniture set for your living room, and you see an ad that has what you want for $27.99 per week. After looking at your finances, you realize that you can indeed afford that, so you sign up to get the furniture. They deliver it and it looks so nice in your living room! You’re thinking, “Why did I wait so long before doing this? It’s perfect!”

Yeah, perfect. Let’s take an analytical look at your “perfect” deal. First of all, that price is per week, which makes your monthly expense about $112. That is almost a car payment, which if you are driving a beat up wreck, would it not make more sense to buy a different vehicle? Okay, so you know that you are spending over $100 per month on your furniture, and you justify that if you buy a furniture set elsewhere, you would have to make payments as well. Let’s take a look at that aspect.

A Different Example

Suppose you went to a different furniture store that offers a payment plan, and you find a a set that you like that costs $859, with total finance charges of about $100, making the total price $959. They want you to pay $100 per month, and you think, “But I can get the other set for $27.99 per week.” Of course, now you can see that they are really $12 cheaper per month than the rent to own place.

The Scam

Here’s where the scam really comes in…how many weeks are you obligated to pay that $27.99 per week? According to the fine print, you would be paying on your set for 91 weeks. $27.99 times 91 weeks is $2,547.09. This amount is a lot more than $959! You would actually be paying 3 times more for the same set. In that same fine print, they admit that the set is only worth $859, but the finance charges are over $1,200!! Talk about predatory lending–this is much worse than a payday loan! You would be better off saving your money in a high yield savings account until you have enough money to buy a furniture set outright.

Alternative Options

Of course, there are always alternatives when contemplating buying something. And to get to alternatives, you must ask yourself if you “need” or “want” that furniture set. Does it really matter in the larger scope of life that you have that set? What other things can you do for seating options in your living room? A few ideas come to mind:

  1. Get lawn chairs and place them in your living room. While this may not be the most comfortable option you have, it is a cheap option and if you do not have that much money to buy a furniture set, it can work for a while until you have enough money.
  2. Use blankets to make cushions, and sit on the floor. This could work for a while if you have no money whatsoever to buy anything.
  3. If you have a bit more money, you could buy a large beanbag-type item with foam in it. I personally have what is called a “sofa sac” and it is so comfortable! It cost about $359. But there are cheaper options for you to choose from.
  4. Hand-me-down furniture can work too. If you know someone else is getting a new furniture set, ask if you can have their old set. Chances are, they will be glad to get rid of it without having to pay to have it hauled away to the dump. You can also sift through the free listing on Craigslist for furniture.

Do Not Fall for the Scam

Many other rent to own items are set up in the same way. You will often end up paying 2-3 times more than what the item is worth, leaving you with even less cash in your pocket. Instead, put that money to good use by either saving it or investing it so that you can earn some money on your money. Look for inexpensive ways to get what you need (or want) without having to rent to own it. Or, choose to do without that item. If more people chose not to give these companies the business, they will eventually have to go out of business.

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I’m Back! May 29, 2010

Posting daily to a blog has not been one of my strengths. However, I have been kept busy working on other writing projects that brought in some money. One of those things involved writing for the Personal Money Store when their writers’ programs were up and running. Unfortunately, about every 4 months, they tend to stop all their programs except for the commissioned writing programs. Basically, that means writing articles and receiving a commission every time someone applies for a personal loan. Maybe not exactly honorable writing intentions, but at least it was some money coming in.

After a short sabbatical, I have re-worked my priorities and chosen to come back to consistently update this blog. Many people are having financial trouble these days and are looking for ways to make ends meet, and perhaps come out ahead. While I have not always followed my advice in the past, I have learned some valuable lessons along the way that you may be able to apply to your life. Therefore, the new purpose of this blog will to show you, not only how to save money, but how to make it as well.

Thank you for your patience while I was gone, and I hope to continue to see you all as we start this new phase together. Now, according to that Vulcan saying, “Live long and prosper!”

 

It’s 2009–What are Your Goals? January 1, 2009

Around this time of the year, many people make resolutions to improve their lives, and others’ lives around them. And while it’s a lofty goal to resolve to be better, what is usually the outcome of these “New Year’s Resolutions”? You got it–most, if not all, fall by the wayside and people go back to doing what they have always done, and reaped the rewards they have always gotten. (Rewards, punishments, etc…whatever the consequences of your habits–it’s all the same thing.) Nothing new ever happens, because no one is doing nothing new, at least in the long term. For example, if your resolution this year is to lose weight and be more fit, what are your long term plans to acheive this? For most people, they would say, “Cut down on sweets, exercise more, and eat more healthy foods.” While this is all well and good, there is not a real plan in the former sentence. What happens when the first temptation comes along, and you give in to have more sweets than you plan on? Most people give up by this time, and abandon all their well-intended resolutions. Same thing for finances–wanting to save money, and spend less, is all well and good. But this too will fall away without a definite plan.

The point to all this is that resolutions are fine as a wish list, but they won’t work in the long term. The reason is that if you don’t have a plan to implement them, along with a contingency plan to use when you fail, then all you are doing is making a wish list. Sounds harsh? Wait–it gets better. (Or worse, depending how you see things…) Say you want to increase your savings this year, but you have a hard time with your spending habits. You can’t have both. Either you spend or you save…not a hard point to understand. Unfortunately, this is what people keep thinking, and what a certain credit card company wants you to believe with their card where they put in a certain amount of money every time you use their card to spend money. The problem with this is–how much interest are you paying to save that money? Stop spending and start saving. Besides, you should be paid interest to save money, not the other way around!

So before you can start saving, you must decrease your spending. (Like with weight loss–less calories in, plus more calories spent equals weight loss.) This can be acheived by cutting down on the little things you spend money on, such as buying coffee on your way to work and bringing your own in a travel mug. Doing this little habit change could save you at least $3-$4 per cup, or more! If you were buying coffee every work day for a year, think of how much money you were spending just on your coffee per year! Let’s see…$4 per cup X 5 days per week X 4 weeks a month X 12 months = $960 per year you could save just by not buying a cup of coffee every day and bringing your own in a travel mug. I am sure that you could do that every day, right? And the money you were spending, you could put into a savings account. If you were to tally up every convenience option that you spend money on, and come up with a less expensive plan, I bet you could save a few thousand dollars every year just with very simple habit changes.

Or, say you wanted to lose weight this year. How are you going to do that? Popular diets don’t work, as you may have seen over the past two decades. Well, actually nothing will work if you don’t make a conscious choice to make it work for you. Fact is, if you implement very simple changes here as well, you could lose weight almost as effortlessly as you can save money. Maybe not as fast as you would like, but it will happen. Simple lifestyle changes, such as putting a bit less food on your plate at meal times, work better in the long run than the diet fads will. The other reason that diets don’t work is because human beings do not like feeling deprived of anything. Why do you think that the more impoverished a person is, the more stuff they tend to collect in their homes? The more stuff they have, the less deprived they feel. Same with weight loss…if you feel deprived, you will crave more food to the point of overstuffing yourself each and every time you eat. That’s why you shouldn’t cut yourself off completely from sweets…eat what you like, only in moderation. Nor should you cut yourself off from fatty animal foods, or delicious potlucks. The less deprived you feel, the less food you will eat, and the more weight you will lose.

Everything I have written today is all about choices–you make choices every single moment of every single day. If the choice you make doesn’t fit with the goals you create, then make different choices. You haven’t failed just because you made a choice that isn’t congruent to your goals. You just made a different choice is all…choose differently next time.

New Year’s Resolutions are stupid…only because people don’t put the effort to make those resolutions into reality. Every day is a new day…every moment is a new moment. You don’t have to wait until New Year’s Day to choose to spend your life differently. Choose each moment that your life will be powerful, full and as wonderful as you want it to be!