Archive for July 2016

5 Crazy Ways Frugality Can Go Too Far


frugalityBeing frugal (which is kind of a nice way of saying ?cheap?) is usually a great thing. Frugality can help you to get, and keep, your financial life in order. While it might not always be fun to choose saving or spending, the rewards are obvious when you live your life in a frugal state of mind.

Of course, taking the frugal path is not always the right choice. Sometimes, you are actually justified in your decision to spend money instead of always being frugal. The following are?five examples of times when you just might be better off spending rather than saving.

Buying a Cheap Car

The old saying that ?you get what you pay for? often applies to vehicles. That doesn?t mean that you have to buy the most expensive car on the lot, of course, but you probably shouldn?t buy the cheapest, either. Investing in a quality vehicle, and then servicing that vehicle regularly, is something that can pay off in the long run. If you do opt for a cheap car with minimal features and only a basic warranty, you could wind up paying for that decision with repair bills in the near future.

Buying Junk Food

You might have noticed that some of the ?junk? foods that many of us love to eat are rather inexpensive at your local grocery store. While that might be true, that doesn?t necessarily make them a good deal. For one thing, those foods are generally bad for your health, so they should be avoided. Also, you tend to eat more of those kinds of foods because they are high in salt and sugar, meaning you won?t really save money in the end.

Fixing Your House on the Cheap

For most people, a home is the most expensive purchase they will ever make ? and the biggest asset they will ever own. Therefore, it is a good idea to care for that asset by fixing it properly when something goes wrong. If you try to save money by only patching together a repair when something is wrong with your home, you will inevitably wind up spending more to fix it again down the line.

Buying Cheap Clothes

Clothes are a necessary expense, and there are garments on the market that range from extremely affordable to extremely expensive. Most likely, you will want to place the majority of your purchases in the middle of that range. While you don?t want to buy the most expensive shirts and pants in the store, you probably should steer clear of the cheapest ones as well. Cheap clothes usually don?t last long, meaning you will be back out buying more new clothes again in the near future.

Working Every Day

Part of being frugal, by extension, is working a lot in order to earn more money. While that is great, it would be a mistake to work every day in pursuit of the biggest possible paycheck at the end of each month. Money is great, but you can?t take it with you when you go. As long as your budget is in order, make sure to enjoy living by giving yourself some time off now and then.


Have you ever taken frugality too far and regretted it later? What are some things you shouldn’t be frugal (or ?cheap) about?


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Binary Options and the Novice Investor

novice investor

novice investorBinary options are also called digital options since there are two possible outcomes for each trade. It involves speculating the price movement of underlying assets which can be anything like stocks, equities, gold or currency pairs etc.

Since it is easily accessible through online trading platforms and has better risk/reward profile compared to other investments, it is the preferred trading method for many beginners. For a novice investor or young investor who does not know about technical analysis or fundamental analysis, it is difficult to invest in stocks, ETFs or commodities without having sound knowledge about them. Hence, binary options are gaining more popularly among such novice investors since it does not require much technical expertise or market knowledge to invest in binary options.

But beginners should be very careful about choosing the right broker who is licensed and regulated by a trading commission like SEC or CySEC before opening a trading account with them. Some beginners are not aware of the fraudulent brokers and scams prevalent in binary options and get stuck with such fake brokers. Some of these unregulated brokers attract beginners by alluring them with unrealistic payouts and free trading accounts with very low minimum deposits. Some beginners get fooled by such reward schemes and huge bonuses hoping that they can become a millionaire overnight. They tend to believe that making money is very easy with binary options and does not involve any risk. But the truth is any form of trading requires some dedication, hard work and continuous monitoring of the market trends in order to become successful.

Some beginners are too ambitious and start by taking big trading positions initially just to end up with huge losses. Since the payout in binary options is based on the outcome of the trade, there is always a 50/50 chance for a trader to win or lose the trade. You should never invest all your money in a single trade by taking huge positions which can only result in a big loss. You should start by investing small amounts and open trading positions with assets that you have better understanding about. You should open a trading account with a licensed broker by doing thorough research about them and reading testimonials of other experienced traders.

Don?t believe brokers who promote get-rich-quick schemes and suggest the use of automated robots to place trades without manual intervention. These brokers will use manipulated software to generate losing trades and will steal money from you. Also read the terms of the conditions of the broker thoroughly and get to know about any hidden fee or commissions involved. Try to understand and make use of various trading strategies like Hedging strategy, straddle strategy, risk-reversal strategy, correction strategy, Pinocchio strategy, Co-integration strategy etc. to minimize your losses and maximize your returns on investment.

You can also make use of paid signaling services and technical indicators to find out suitable trading positions. There are many technical indicators such as Bollinger bands, Relative strength index, Moving averages, MACD and candle-stick charts which can be useful to find out the correct trading positions and to predict market trends. Also you should do some fundamental analysis about the underlying asset before placing your bet on same. For instance, if you are trading against the stock of certain company as underlying asset, you should read the market news about that particular company and understand how it is performing currently in the market. This will help you to determine how the future price movement will be and enable you to make trading decisions wisely.

Another easier method for beginners to make money using binary options is the use of social trading platforms. Social trading involves copying the successful trades of other experienced traders which can be helpful for beginners without any market knowledge. There are some social trading platform which allows users to monitor the successful traders and ranks them based on their performance. Beginners can copy the trades of such successful traders and gain money without knowing about the market conditions.

As a novice investor, you should not take your losses personally and let your emotions control the trading decisions.? You should try to learn from your past mistakes and avoid them in future. You should maintain a trading journal to note down such important events and keep a watch on the economic calendar. Also you should read the market news and stay well-informed about the current trends in market.


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Is Renewable Energy Worth the Upfront Cost?

renewable energy

renewable energyEnergy efficiency, renewable energy and?going green,?are terms that have become more prevalent in everyone?s vocabulary these days.

It seems that everyone wants to live sustainably. Plus, green methods are perceived to be easier on your budget in the long-run. But are they really worth the upfront cost?

Here are some of the different types of renewable?energy, plus their costs and benefits, so you can decide if going green is worth the upfront cost for your budget.

Geothermal Heat Pumps

Geothermal energy uses geothermal springs or underground wells to heat or cool your?home. Geothermal heat pumps fuel source is water. It?s a renewable energy resource with no fuel requirements, but converting to geothermal heating is not something that you can easily DIY. You have to hire a professional contractor to install it, which greatly increases the upfront cost.

An average home of 2500 square feet, with heating and cooling loads of 60,000 BTU, will cost you anywhere from $20,000 to $25,000?to convert to geothermal heating.?This is more than double the cost to install a traditional heating/cooling system, but it can reduce your utility bills up to 60%, and you may also be able to utilize a federal tax credit to help with the cost installation.?The utility savings can be a significant over the course of a year, but it will likely take several years of living in your home in order to pay off the initial investment to convert to this renewal energy source.

Solar Power

Solar power converts?rays of the sun into electricity to power your home. This is done through [easyazon_link keywords=”solar panels” locale=”US” nw=”y” tag=”wisedollar-20″]solar panels[/easyazon_link] that are placed around your property to collect the sun.

The 2014 national average to install solar panels, once you subtract out?federal and local tax credits and subsidies, is around $17,000.?Converting to solar power has really become cheaper than it was in the past, which makes it more attractive to homeowners who wish to use renewable energy to power their homes. The savings from?using solar power averages around $69/month.?Converting to solar power could increase the value of your house value when it comes time to sell.

Wind Turbine Energy

Wind turbine energy harnesses the power of the wind to create energy. This system is one of the oldest ways of creating renewable energy. Windmills were used in mills to grind grain into flour and to pump water from wells on?farms. Modern wind?turbines don?t look quite like a traditional windmill but the idea is the same.

The average cost for installing and purchasing a wind turbine is $30,000, but prices can range from $10,000 to $70,000.?The cost for a small system is around $4,000-$9,000.?Energy cost savings for wind turbine systems?will vary depending if you are on or off-grid. If you are on-grid, when the wind doesn?t blow, the public utility company will provide the power for your home. Like many renewable energy sources, there are federal and state tax credits to help with costs of installing the system. It’s been estimated that wind turbine systems can lower your energy bill from 50% to 90%.

These are the three most popular types of renewable?energy, although there are others. Renewable energy systems?are all expensive to install, but once installed they may significantly lower your energy costs.

If you are going to convert your home to renewable energy, be sure to talk to a professional and look into all the rebates, tax credits, and incentives help with the initial costs. To assist in your decision of wether or not renewable energy is worth the cost, there are also numerous energy calculators that can?help you decide.


Do you use renewable energy for your home? Have you ever considered any of these sources of renewable energy?


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Financial Management Resources You Should Check Out Today

financial management

financial managementThe Internet offers an abundance of free information that you can use to improve a number of areas in your life, including your finances. Though many individuals and business owners struggle with managing their spending, creating budgets and monitoring their finances, there is help out there. From small business blogs to comprehensive personal finance apps, we have compiled a list great resources that you can turn to for consistent and quality information on managing spending and reducing debt for yourself and for your business.

Financial Management Blogs to Follow

If you?re reading this, there is a good chance that you are already interested in quality blogs that offer tips and strategies for effectively managing your money. In addition to Wise Dollar, here are some other blogs that offer additional information:

  • Wise Bread is a site that aims to help individuals ?live large on a small budget.? The site offers information on a variety of financial topics like saving for retirement as well as tips on living frugally and getting more out of your money.
  • Business Credit Blogger is run by blogger Marco Carbajo who works to show business owners ways to keep personal and business credit separate. He writes about business-friendly creditors and highlights some of the best credit cards and funding options for small business owners. He also offers information on consumer credit.
  • The NFIB Small Business Finance blog from the National Federation of Independent Businesses offers small businesses a variety of information on different financial topics. Articles range from information on startup capital to advice on borrowing or crowdfunding.

Personal & Business Finance Podcasts You Don?t Want to Miss

As podcasts increase in popularity, more and more business owners and individuals are tuning in to get the latest news and tips for financial management. We?ve listed a few of the best podcasts for personal and business financial management below.

  • So Money with Farnoosh Torabi is a podcast that features personal finance advice from Farnoosh Torabi, who is a financial expert, journalist, and television host. In her podcast, Torabi shares financial strategies and talks with some of today?s top business leaders and influencers to hear their philosophies and success stories.
  • Financial Conversation is a new podcast about business and money for millennials. It’s a great round table style podcast that offers several perspectives on different financial and business topics.
  • The Smart Passive Income Podcast is a great resource for those who want more guidance on ways to earn passive income. The podcast offers case studies, tools and tips for adding more passive income into your revenue stream.
  • SCORE Small Business Success Podcast offers a variety of great information for small businesses. The podcast covers a range of topics such as marketing and hiring. However, it also provides money-related advice such as strategies for business taxes and information on alternative financing.

Tools to Manage Your Personal & Business Finances

It seems like today there is an app for everything. Fortunately, this includes financial management. Below, we have put together a list of some of the best apps that help you manage both your personal and business finances:

  • Personal Capital not only lets you track your budget, but it can also help you better manage your investments. With this tool, you can connect your bank account to look at spending by category in real-time. You can also connect investment accounts across brokers to monitor your investment costs and returns.
  • Mint is a great app for managing your personal spending and budgeting. The app allows you to connect your bank, credit card, and investment accounts so that you can monitor income and spending in real time. You can also create and manage budgets as well as set and track progress for your personal financial goals. This tool also offers personalized tips and advice for money management.
  • QuickBooks is a great resource for small businesses that need help organizing their books and collaborating with accountants. You can connect QuickBooks to business apps that you are already using to track spending and expenses, making it easier to budget and complete your taxes when its time.

Whether you prefer blogs, podcasts or another medium of information, financial information is becoming more accessible every day. Taking a look at a variety of these resources can help you get your finances on track and can help you ensure that you are financially responsible as your business continues to grow and thrive.


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3 Easy Ways to Start Building an Emergency Fund

emergency fund

start building an emergency fundOne piece of the financial puzzle that many people fail to consider is a simple emergency fund.

This fund is nothing more than money in a savings account which is meant to be available in case of unexpected expenses. You can?t always plan for all of your costs in life, so having some money set aside in an account that is meant for a ?rainy day? is a great idea. The amount of money that you are going to keep in your emergency fund is up to you, but the first step is to build it up as quickly as possible.

If you need to start building an?emergency fund, here are three easy ways to get started.

Build It in to the Budget

Most people have a monthly budget that they use to keep track of their spending, but that budget often doesn?t include money that has been set aside for saving in an emergency fund. By adding a line to your budget that includes some amount of money to be put into the emergency fund, you can be sure that the fund will grow month after month. Even if it is something as small as $50 or $100, be consistent with your deposits into this fund and watch it grow as time goes by.

It’s best to automate this saving so it does the work for you, not to mention picking a bank that pays?something?in interest. Discover Bank, for example, allows you to automate saving and pays a decent interest rate.

Take Money from Somewhere Else

There is a good chance that there is at least one part of your budget that could be trimmed back in favor of adding to the emergency fund. For example, do you have any monthly expenses that you could simply get rid of without a problem? Many people carry a membership or two to things that they don?t actually use enough to justify the cost. Take a careful look over your monthly spending and pick out an item or two that can be eliminated in order to free up more money for adding to the fund.

Make Extra Money

This might seem like an obvious point, but it is something to consider on a short term basis. If you would like to build up an emergency fund but you just can?t seem to make it happen on your current income, consider a part time job or side hustle as a way of making extra money. You can plan on dedicating all of the money from this job to your fund, and you can quit the job once you have reached your savings goal.

The best thing you can do in order to grow your emergency fund is simply to make it a priority. You are inevitably going to have to make some sacrifices if you want to build up this fund in the near future, so commit yourself to the process and keep an eye on the big picture. It might mean that you don?t go out to the movies or to dinner quite as often in the months ahead, but that is a small sacrifice for the big gain that is seen when you have money set aside for unexpected costs.


Do you have an established emergency fund? What tips can you offer to help people start building an emergency fund?


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