Saturday, February 11, 2012

Where to Spend Your Windfall

I remember early in my career how wonderful it felt to get a windfall. It seemed like free money and I told myself I'd do something smart with it. And then a few days later, I would have the sad realization that I had done nothing of the sort. I had some savings but it was never ever enough to cover the big things. Nothing spells trouble like a single girl needing an auto repair. Oh I'm pretty good with the engine knowledge but I was at the mercy of the mechanics who charged an arm and a leg to do the actual repair.  Those windfalls are still important and I still try to do something smart with them. Hopefully, I'm better at it now than when I was in college.

The recent sale of a vehicle gave my family a windfall. Larger than what you'd find in your average birthday card, it wasn't enough to retire on. Still, money is money and I wanted to be wise with it.

So, here's what we did. I sat on the money for about three days and during that time, my mind went from one thing to another: Pay off some bills, put it all in the bank, go buy stuff,  don't do anything. I just let those thoughts stew around and got my priorities straight. Really, I knew all along what I'd do but it was good to take the time to realize I was on the right track Let me just throw it out there that if I had something urgent, I would not have waited. For example, I would not let the electricity get turned off just so I could think about what to do. Common sense and safety need to prevail.

Like I always do with a windfall, I took my late father's advice and bought groceries first. According to him, you can solve more problems on a full stomach. First, I stockpiled basic supplies making sure I used sales and coupons to make the money stretch even further. Then a few days later I did my regular grocery shopping. Let me clarify that I did not go overboard. You won't find 50 jars of peanut butter but I've got young kids, so there's 5 jars. I just had to suit my own comfort level.

My comfort level is what guided my next decision. I could have put the rest of the windfall toward debt reduction but instead, I sent some right on over to savings. Sure, it's going to slow down the repayment process a bit, but for those of you who have had a layoff or pay cut, you know exactly where I'm coming from. That is just the worst, sick to your stomach kind of feeling. For me, the peace of mind of having a few dollars more in the bank 'just in case' helps me sleep a little better. Peace of mind is a precious thing.

Then I tackled the debt reduction using a snowball type approach. I lined up the bills smallest to largest and started knocking them out. They aren't all paid off, but I made some headway and that is a great ego boost.

And then a funny thing happened. Doing these simple and un-original things created a little bit of financial traction and I felt smart! So....what else could I do to keep the momentum going?
I set up an automatic transfer of the savings I'd be receiving from the insurance company due to the  vehicle's sale. I'm already used to doing without that money so I chose not to let it get sucked into some mysterious financial black hole. Then we set up another automatic withdrawal which equalled half of my husband's raise. It is a small amount, to be sure ,but dimes make dollars. Not only do we get to see a little increase in our budget every month, the savings can grow one small deposit at a time. All of this had me feeling like a rock star so we tackled something I'd dreaded forever: the mail in pharmacy our insurance company wanted us to use. I balked at this because I'm old school and I want to talk to a real live person that's going to smile and say thank you. But, and this is a big but, when I was told my $25 copay was going to $87 a month unless a prescription was filled my the mail in folks, I quit balking.  After checking some of our maintenance medications like allergy meds, I realized we could save something like $300-$400 a month. Yes, you read that right. A. Month.

I'm sure there are other corners to cut, both big and small, and I intend to keep searching. The point I'm making is  one thing leads to another and I wasn't satisfied with the blessing of a windfall. I wanted to use that windfall and turn it into an even bigger blessing.

My best advice would be to take your own windfall, rather tiny or tremendous, and prioritize your To Do List. Take care of what is urgent then move on to your important needs (an oil change, filling your pantry).  And don't forget debt repayment. No one ever looked back and said, "I am sooo glad I just blew through that whole wad of cash.'

Enjoy your windfall and your smart decisions.

Saturday, February 4, 2012

Update on Selling A Used Vehicle

As a follow-up to a previous post, Increasing Your Profits When Selling Your Vehicle, here is an update on what happened with my SUV.

It  was sold in about 14 hours.

After the vehicle was cleaned until it was just about showroom new, it was placed in a safe, well lit parking lot near one of the busiest intersections in our area. The lot wasn't exactly at the intersection, but close enough so that when traffic stopped at the redlight drivers would have ample opportunity to see it. We parked it at a slight angle and used large For Sale signs to make it easier to see. The results were better than expected and we were receiving calls within 20 minutes.  One potential customer wanted to look at it right away!

As soon as we got home from parking the car near the intersection, I posted some photos with descriptions of features on a Social Network. Before I could get all five photos posted, people were messaging me with questions. Things were looking good!

While letting the potential customer do a test drive, someone called me and after a brief conversation said they'd be in touch.

The results?  The second buyer took it for a test drive and bought it on the spot paying the asking price.

What did I learn? As much as I could have used more money than I was asking, I believe if I had aked for a higher price, I would still be waiting on a buyer. As with houses, it must be priced just right. Too high, and people won't even negotiate; too low and you are losing money. By being reasonable in my expectations,  the transaction is now complete and everyone is happy.  I also learned advertising can be done cheaply. I only paid for two sale signs. A Social Network as well as as the Going Home traffic on a Friday afternoon provided me with the visibility I needed. Let me add, we also used a lot of word of mouth and if those things had not proved successful, we would have moved on to other web sites and paid advertising. I also learned that getting that puppy as clean as possible was a smart move. The potential buyers and the online viewers commented how well maintained it looked. Image is very important and it definitely adds value.

I am still shocked by how fast it sold and it reminds me of something I read once: \For a quick sale give your customer a great item for a great price.

Friday, February 3, 2012

Taking Advantage of Winter Savings

Even though prices on everything are going up, there are still ways to protect yourself against a painful drain on your wallet. By taking advantage of winter clearance and current sales you can create a buffer between you and those escalating prices.

The first step is to get a basic idea of what you are shopping for. Do you want to restock your pantry? Are you looking for end-of-season fashion bargains? What about your gift closet? Take five minutes to get an idea of what you need. Now is not the time to go off track, causing yourself to spend a fortune.

Next, quickly look through your coupons or discount codes. There's no need to make this an all day event; just get a good idea of what you have that you can use to increase your savings even more. Obviously, if you can purchase something for next to nothing, be my guest. Just don't work yourself into a tizzy.  Currently, one of our local stores is going out of business. Thankfully, they are allowing coupons. Here is my chance to stock up on some basic pantry items. Though the shelves were nearly empty, I still managed to get a few things including cereal, vitamins, coffee and canned goods. Here is where you don't want to go overboard. I'm not knocking her choices, but the lady that bought an entire cart full of chunky soup had me worried.

If it's clothing you're interested in, now is the time to get your winter gear ready for next year. For adults that won't likely change sizes, restocking gloves, winter socks or clothing in classic styles will be beneficial. Many stores are filling the shelves with summer wear and are desperate to get rid of the winter stock. Expect clearance sales of 75 percent off---or more. If you're looking for bargains for your youngster, try picking items that have a little 'give' if the sizing is a little too big or small. Things like pajama pants, scarves, socks, etc. will do the trick. Just remember to stock up on what you feel comfortable with.

Also remember to think outside the box. I won't be baking a turkey this week, but the clearance bag of cornbread stuffing can be crushed into  more flavorful breadcrumbs than my usual blend. Holiday candies are a good buy, also. We could care less about what color the wrapper on the mini chocolate bars are. But if you do, just open the bags and separate out what you need. Red and silver wrapped candies are perfect of Fourth of July. Eat the pink wrapped ones now. Or chop those little candy bars into toppings for sundaes and cupcakes.

If you're looking for household items, remember, just because it's holiday clearance items doesn't mean it's Christmas themed stuff. Snowflake covered flannel sheets would work all winter.

Now is a great time to build a little buffer between you and the economy. Use promotions and end of season clearance items to wisely get a jump start on next winter's needs.

 I guarantee you will not regret an attempt to get ahead and cut down on the stress of trying to meet your needs in advance.

Thursday, February 2, 2012

Increasing Your Profits When Selling Your Vehicle

It is long overdue. The ole SUV has got to go. It really wasn't a difficult decision; it needs a few repairs we don't want to bother with and it eats gas like I breathe air.

How can I get the most profit from  a fuel sucking SUV in a tough economy, especially when the price of gas is literally going up on a daily basis? Can I sell it and make a fair profit at the same time?

Try these steps:

1) ASSESS WHAT YOU HAVE... I took a very realistic look at the vehicle. It's 12 years old, it needs a repair I don't want to bother with and there are condition issues that come with a vehicle of this age. On the positive side, the leather upholstery is beautiful and in great condition, it is fully loaded and the little nitpicky things are easily fixed. You have to have a neutral eye when assessing your vehicle. To the prospective buyer, the car you bought when you 'made it' will just be one of many used cars out there to look at. Do not take it personal.

2) RESEARCH....Gather your vehicle's mileage, make and model information and hit the internet. The most common sites to use are  and  Pick one or maybe both and use an average of the two values if you prefer. Be very realistic regarding the condition of your vehicle. Try to look at it as if you're the buyer, not the seller.

3) SET YOUR PRICE..... I used the prices from my research and realistically chose the mid range price. Too high and you run off people. Too low and there's no room for negotiation. If you don't know where to start, look through your local advertisements and newpapers for a general starting point.

4). CLEAN, CLEAN, CLEAN....As in squeaky clean. As in QTip clean. The first day I removed all the trash, receipts, cup lids, toys and goldfish crackers (I'm  blaming the kids).  Next, I cleaned out all the storage cubbies and glove box as well as removed all personal items such as ear buds, first aid kit and the like. I cleaned every single surface and then began putting protectant on all appropriate surfaces and, finally, used a leather conditioner on the upholstery. This continued into the second day. I wasn't kidding about the QTips. I used those for cleaning inside the air vents,  hex nuts, grooves, nooks and crannies. Interestingly enough, once you start cleaning air vents and vacuuming upholstery, some of those, um, 'smells,' will dissipate.  Just like no one wants to buy the 'cat pee house,' a buyer will be turned off by a vehicle that smells like onion rings or cigars. Don't forget to clean windows and mirrors. Your car should shine as if it were brand new.

5)ADVERTISE... Tell friends, use Social Media, the noteboard in the breakroom and local newspapers are all excellent ways to get the word out. Ebay and Craig's List are also good choices.  Be a little creative. Perhaps you could briefly park your vehicle somewhere during peak time to maximize your exposure. How about near a high school during the hour the students are getting out of school. Or maybe in a parking lot near a busy intersection during Friday Going Home traffic. Just be sure you aren't breaking any ordinances. Place a sign with basic info and a contact phone number and cross your fingers.

6) NEGOTIATION IS YOUR FRIEND.,,, Here's what I mean. Our vehicle is valued at $4200. That isn't a fortune but it is definitely not pocket change. My rock bottom price is $3000. I know it needs a repair for about $650, for which I do have a written estimate and I will disclose to any buyer. We decided a fair price would be $3500. That covers the cost of the repair and there is still room for negotiation. If I get a buyer that is definitely interested and wants to do some bargaining, I can still drop the price by $1000 to cover the known repair and any incidentals while still selling it for $3200. I get the money I want and the buyer feels like they've negotiated a fair amount below the original asking price. I will admit I want the full $4200 but it ain't gonna happen. Would you pay full price then turn around and pay for a repair? Me neither. Be knowledgeable about what is a reasonable amount to ask for and be willing to negotiate. I'm not going to let all that cash walk away because I'm being hard headed over a few hundred dollars. Look at it this way: I need $3500 but $3000 is better than NO thousand.

6) GET YOUR DOCUMENTS...Have your auto title, copies of the book values and anything you think you will need to sell your vehicle and keep in in one handy spot. You may also want to do a Google search on an easy and proper Bill of Sale as well as what your State requires for private auto sales.

Now that I've spent four days cleaning, scrubbing and organizing the paperwork, I will be placing a FOR SALE sign on the old girl.

I'll keep you posted.