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Repair Cafe: Bring Your Broken Doodads and Gadgets

This article was written by in Consumer. 10 comments.


We live in an era of cheap, disposable goods. My closet full of clothing, much of it rarely worn, even though I sort through my wardrobe about once a year to eliminate items I no longer need, is a good indicator of this situation. For a good period when I was a kid, I wore hand-me-down clothes — as the eldest child, I received clothing from a family friend — and when an item became damaged, my mother fixed it with her sewing machine.

Prices for clothes have certainly increased over the last few decades, but clothing is not expected to last. When a piece of clothing becomes damaged, it’s easier and cheap enough to replace.

Broken ToasterBroken kitchen appliances, lamps, and other household devices past their warranty periods can’t be fixed with a sewing machine. Many would need specialized care by a professional, and with today’s disposable consumer culture, many people just opt for replacement rather than finding a repair shop and paying nearly as much money as they would to buy a new item.

Additionally, retailers and manufacturers have embraced the concept of planned obsolescence. To keep manufacturing costs low and to maximize profits, there is little concern for making products that last as long as their owners. This is a primary feature of high technology — a house phone sold fifty years ago may still function properly today, but a cell phone purchased five years ago not only doesn’t keep up with the latest technology, but it likely doesn’t work at all. Furniture built in the eighteenth century was made to last in a family for generations; IKEA furniture might last a few years under regular stress of use.

In Amsterdam, there is a small movement in opposition to this disposable consumer culture. The community has come together to repair its members’ broken items. Volunteers bring their tools and sewing machines to an open building several times a month and offer to fix any broken item brought to the gathering. This Repair Café helps reduce waste by encouraging reuse of broken items, and makes fixing an affordable alternative to replacement.

The government in the Netherlands, private groups, and individual donors have helped the Repair Café Foundation raise $525,000 over the past few years, and these funds have helped the organization create these gatherings at various locations across the country. These Repair Cafés provide a chance for consumers to make better use of their goods and for volunteers, particularly those with repair skills that might no longer be in demand, use those skills for a good cause.

Would Repair Cafés; be welcome in the United States? It’s not exactly a profitable business venture, and as such, is unlikely to draw much attention. The model, however, could easily be recreated, perhaps in low socioeconomic neighborhoods, to provide a money-saving alternative for spending money to replace slightly damaged items. Strong marketing encouraging consumers to exist in a cycle of buying and replacing comes at a price to retailers and manufacturers. If these expenses were redirected towards making better, durable products without planned obsolescence, consumers might lose the desire to constantly have new items, and would be able to hold onto the same products for a longer period of time. There would be less waste. Companies and their shareholders would find they have more loyal, life-long customers. Customers would shop with a focus on the differentiation in quality rather than with their tunnel-vision focused solely on price. Companies that build their products to last would succeed while those focused on the short-term would fail.

Could Repair Cafés be an answer to the consumer culture of disposable products? Would the availability of free repairs in the United States change the way consumers buy goods, and thus force companies to build products that are made to last rather than go obsolete? Is the trend towards disposability reversible at all?

Photo: phozographer
New York Times

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Spring Cleaning Tips: Finding Items for Sale to Earn Money

This article was written by in Frugality. 8 comments.

This is a guest article by Jennifer Calonia, Junior Editor at GoBankingRates. In the article, the author offers suggestions for making spring cleaning work for you.

We are officially one week into spring, and many are shedding winter stagnation for more productive ways to save money — and earn money — using items around the home. Spring cleaning gives Americans an opportunity to revive their finances by playing salesman with forgotten and unwanted stuff.

Did you stumble upon a crock-pot from a Black Friday sale that you’ve yet to use? Turn impulse buys into cash in your pocket, instead of letting appliances and other belongings go obsolete or outdated. Finding items for sale in the garage or attic now can help you make as much back on your purchase as possible.

There are many ways to sell spring cleaning finds that are straightforward and take little time. Some of the most important decisions to make when selling your stuff is knowing what to sell, how to sell it and for how much — establishing these three critical factors can determine how much money ends up back in your bank account.

Have items for sale? Here’s what to do

Your selling approach can impact how much you earn on a specific product, so following the right game plan is crucial:

  1. Selecting items to sell. When deciding on which items to sell, it is helpful to create three different piles for donations, yard sales and online sales. Just because you found an abandoned tea bag plate in the cupboard doesn’t mean it’s worth the time to post it on eBay and absorb packaging fees for a $5 sale. Items like a partially used spiral notebook, crayons and well-worn clothing are better served in the donations or yard sale bins, while big-ticket items like an iPhone, leather jacket, new running shoes or a coffee maker will bring higher sales online.

  2. Choosing your audience. There are many ways of communicating to buyers that you have items for sale. Each of the most popular resale options have their pros and cons, so determine which is a practical selling approach for you, depending on what you’re selling and your resources.

    • Yard sales: Like other selling avenues, yard sales are typically hit-or-miss. A benefit of hosting a yard sale is that you’re able to negotiate prices with buyers in-person and can showcase your merchandise in one location, on one day, to get the sale done at once (ideally). The big disadvantage to yard sales is that it eats up a lot of your time. Not only do you have to stand guard on your lawn for potential shoppers, but advertising your sale is a time-consuming, yet necessary, factor for success. This includes posting your yard sale to the classifieds or Craigslist, making street signs and creating price tags or signage for your items.
    • Craigslist: This community listing is a great place to sel big items like a snowboard or toaster oven, when you don’t want to spend money on shipping. To save the most money and keep the profits of the sale in your wallet, try dealing with buyers in your immediate location so you don’t lose money on gas. While Craigslist is a free service, sellers must be prepared for possible haggling (unless the post clearly states the price is “firm”) and be able to meet the buyer face-to-face in a public location.
    • eBay: For over a decade, eBay has been a common selling platform for those with either valuable items for sale, or are selling new items like unwanted gifts. For example, I purchased two new brake pads at $85 each, but sold my car before I got a chance to install them. eBay was a better audience for this type of sale because there’s a higher chance I could get close to my original purchase price, and shipping costs were not budget-blowing. When dealing on eBay, however, there are a few basics to keep in mind for a successful transaction and sale.

Name your price

Before setting up a yard sale or creating a post online of items for sale, conduct a quick search online to see how much similar items are being priced. Remember, there is a difference between being flexible and being hustled. By knowing the price range of each item you’re selling and the lowest amount you’re willing to accept to part with your goods, you are setting yourself up for a fair deal.

Keep in mind yard sales and Craigslist deals will likely present the most back-and-forth price negotiations, as eBay allows sellers to set a reserve price if necessary, which is why you need to have a lowest price-point established ahead of time.

All it takes is a free Saturday to get your spring cleaning underway. Start fresh this spring with a tidy home and a robust savings account by parting with the clutter in your life.

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Good Debt and Bad Debt

This article was written by in Debt Reduction. 16 comments.

Misuse of credit can destroy a family’s financial life. A household can crumble under the weight of debt, whether it has increased from a poor house-purchasing decision, a drastic change in the real estate market, a shopping addiction, an unexpected medical bill, or the lack of preparedness for an emergency. It’s no surprise people consider debt to be “bad.”

Is there any situation where debt can be “good?”

I have a problem with the good debt vs. bad debt argument. Good and bad are polar opposites, and most issues tend to sit somewhere on a spectrum between two extremes. In fact, issues don’t often sit; they can shift position. The requirement to declare anything, particularly “debt” as a concept, as either good or bad is oversimplification. There’s a tendency to want to make issues simple. Catchy soundbites reducing issues to the most basic terms attract people, and no one ever won a Presidential election while talking about nuances.

See-sawPeople who are looking to sell you something, like car salesmen, college recruiters, investment professionals, and real estate brokers, are more likely to be willing to point out how debt can be used effectively.

  • In real estate transactions, debt allows more families to afford a house, and in some cases, that could mean a healthier environment for raising children. Leverage also helps you reflect a higher rate of return if your home value increases and you decide to sell.
  • If you can borrow money at a low interest rate and use that cash to invest at a higher rate of return, you are using someone else’s money to benefit yourself financially. You can pocket the difference in interest rates or rates of return.
  • Getting a college education increases your lifetime earning potential, and going into debt for a bachelor’s degree could pay off.
  • If you work in a career where image is important, a higher-priced and otherwise-unaffordable car could help you succeed in your business.

Risk makes debt dangerous. There’s a risk that house prices go down. Since the housing bubble burst, that risk should be more apparent. Leverage may amplify your return, but it also makes losses more severe. You could lose your house. If your hot investment doesn’t pan out, you might not be able to pay back your borrowed money. If you find yourself in a career not earning much money, you could struggle to pay off your student loan debt. Using debt to focus your image doesn’t always pay off.

You can only determine whether a risk, like borrowing, is worthwhile after the fact. Hindsight provides perspective. If borrowing allowed you to triumph financially, it was “good” debt. If the debt was unmanageable or caused financial ruin, it was “bad” debt. Taking on debt to purchase an asset that increases in value would always be “good,” while using debt to finance an asset that decreases in value would always be “bad.” The problem is being able to accurately predict the future. The assets we hope will increase would be a house, an investment portfolio, lifetime earning potential, and career opportunities.

The determination of whether debt is “good” or “bad” also depends on the individual or household involved. What could be a good use of debt for one family might not be a good use for another.

There are often other options rather than increasing debt. While it may be expensive to attend an out-of-state private college, you could save money by enrolling in an in-state public college or by taking advantage of grants and scholarships. The Consumerism Commentary Podcast interview with Zac Bissonnette, author of Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents, can offer more insights on how to obtain a valuable college degree without going into debt.

If you are able to postpone desires until you’ve diligently saved for a purchase, you can avoid debt and its possible pitfalls. Not everyone has the opportunity to save, though. A college graduate without any money might need to buy work-appropriate clothing in order to get a job. The credit card comes out, and she buys a week’s worth of outfits to get her to the first paycheck. This may not be “good” debt, but if she didn’t earn and save enough money while achieving her degree, it could be a short-term necessity.

Then again, another way to look at this need for credit to prepare for the first week in a professional environment is an excuse for not following a solid financial plan over the course of her higher education and the start of her life as an adult.

In another example, a savvy investor could use borrowed money to invest in a business that succeeds. Financial analysts can often determine whether a risk is acceptable, and individual investors can use the same approach. For example, if you could borrow a sum of money at an introductory rate of 0% APR on a credit card for 12 months with no fee, as new customers of this Discover More Card offer can do right now, deposit that in a savings account with 1% interest, you can keep the proceeds as long as you pay the credit card bill on time each month and in full by the end of the introductory period. Back when interest rates were higher, this “credit card balance arbitrage” was a more worthwhile endeavor.

Today, however, most investments that would make borrowing money from a 0% APR credit card worthwhile are riskier than a savings account. Even when the safe interest you could earn was more favorable, there was always a risk of missing a credit card payment and owing penalties and interest to the issuer. If you completed the arbitrage scheme and succeeded in increasing your bank account balance, you’d consider that debt to be good. If not, the debt would be bad.

Do you believe that all debt is bad debt, or are there some situations where it’s worthwhile to pay interest and accept the risk of defaulting?

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12 Alternative Financial Resolutions for 2012

This article was written by in Planning. 22 comments.

New Year’s resolutions have become so cliché that the process of making them has become a joke. People settle for mundane goals for the year like “losing weight,” “quitting smoking,” and “getting out of debt.” These are great goals, of course, but most who think about these only when the calendar changes soon forget their plans, continue their lives as before, and lament their failure when they reflect as next year approaches.

Part of the problem is that these goals are not specific enough for anyone to take seriously. Gurus and bloggers write all the time that goals need to be “SMART” — specific, measurable, achievable, relevant, and time-based — as if it’s a new concept. This is a helpful way to look at your resolutions if you want to approach your life as a project manager. A better approach is to realize that time moves very fast, and with busy lives it’s better to make modest goals and focus on each small step that moves you in the right direction.

New year hatThe most popular New Year’s resolutions are tiresome. It’s no wonder people don’t keep them. Few people can be passionate about losing weight or getting out of debt, and even if they are, it will take a lot of work to change the behaviors (or medical conditions) that caused the circumstances needing improvement. These can be multi-year goals, and if your entire success relies on completion within 365 days (366 in a leap year) you’re setting yourself up for failure.

Here are some different ways at looking at financial resolutions that are not only achievable within the year but are more interesting than what you may typically resolve to do. While there are twelve listed here, consider you’re more likely suited for success if you focus on one. The year will be over before you know it, but your resolutions should always be aligned with long-term goals for yourself.

1. Spend money on things that are important.

Your spending habits reveal what is important to you. If you spend more money buying video games than you spend going out with your girlfriend or wife, you have decided on some level that you favor your time with a computer game more than your significant other. The higher value each dollar has to you, with the importance of one dollar related to your level of disposable income, the bigger the importance of whatever you choose to spend that dollar on.

Look where your money goes. You may need to track your spending if you’re not sure. You’ve defined what’s important to you by your expenses. Your shelter (rent or mortgage) and food are obviously important and form the basis of your expenses, but beyond that, you can rate how important any activity is to you by comparing your level of spending. If you don’t like what you see, resolve to spend your extra money — after you cover necessary expenses and saving — on the things you want to be important to you.

2. Create something every month.

FoodThe culture in this country is one of consumption. We consume food, media, and resources. In order to consume, we spend money. This year, change your role in society. Become a creator rather than just a consumer. You can create something that other people consume or something that you consume yourself.

  • Cook more often than preparing pre-created meals and dining out.
  • Create your own adventures instead of watching movies and television.
  • Write in a journal rather than reading a best-selling novel.
  • Engage your mind creatively, taking photographs, making art, or performing music.

3. Learn a new skill.

This could be the year you focus on trying new things. The best new skills to learn would be those that are related to your interests and passions. Here are a few examples, but think about the things that make you happy and decide on a skill that enhances your attitude.

  • If you’ve had a favorite vacation destination in mind in a foreign country, start learning the language and culture.
  • If you like running but haven’t taken this type of exercise seriously yet, train yourself for a 5K race.
  • Learn how to play the piano.

Many new skills can take more than a year to learn, but the idea is not to consider your year a failure if you don’t complete your mission. Keep taking small steps that move your life in the right direction, and whether you complete your goal within one year is less important.

4. Earn money from your hobby.

Coin CollectionTurning your hobby into a business is a tricky subject. Consumerism Commentary started as a hobby, but after a while, it became apparent that writing could also be a business that generated income. In some cases, though, turning a hobby into a business can turn an enjoyable activity into a chore. This has to be a personal decision. If you like collecting coins, do you want to be a coin dealer? If you’re particularly skilled at photography, do you want to market yourself and compete with professional photographers? Perhaps you can keep your marketing to a minimum and work just for your friends and friends of friends.

Not everyone wants to start a business, but keeping your activities small can keep the business aspect of your hobby to a minimum. Strike the right balance between hobby and business so you still gain a maximum amount of enjoyment from the activities you enjoy.

5. Start a blog to track your finances.

I have first-hand experience about how helpful it has been to publicly track my own finances. This is a great way to maintain focus on any goal. By making your progress public, you are holding yourself accountable for your success. And if your goals are interesting to others, even strangers, they can join you in your quest and offer support — and more often, criticism — when you need it.

Rather than using a blog to track your success, allow the blog to be your success. Start a website using WordPress or Tumblr and write anonymously about the financial issues in your life. You don’t need to be a great writer, but if you continue, your writing will improve. Don’t be concerned about building an audience or earning money. Writing for its own sake helps clarify financial issues, particularly when you read what you’ve written over a period of time.

Tracking your finances in software like Mint.com or Quicken isn’t always enough. When you look at your finances with the intent of writing about them, your brain performs at least a minimum amount of analysis, and this is a step further than most people take with their finances.

6. Support local businesses.

Emily Guy Birken wrote recently about the 3/50 Project, an initiative that encourages consumers to spend $50 among three local businesses each month. Keeping your money local helps improve the economy in the community where you live, and it helps you build relationships with your neighbors near you and across your town.

Following an initiative can provide extra motivation for achieving a goal, but you can do this without an initiative as well. Supporting local businesses is a possible resolution that most people don’t consider. Usually, people resolve to save money, and that could mean shopping online or visiting big-box or warehouse stores. Spending money in these locations does not help a community thrive — at least, not directly.

The same is true about local community banks and credit unions. By moving your money away from big banks, you are taking a financial action that is more beneficial in the area where you live. This is a simple, achievable resolution for the new year.

7. Sell or give away your stuff.

ClothingThis could be the year you focus on decluttering your life. When I moved into my current apartment a few years ago, I seemed to have so much space available. I fell into the typical habit of expanding the way I live to fit into my new environment. If you look around your living space, you can probably find a number of things you don’t need. Here are just a few suggestions of where to start:

  • Look through your closet and give away the clothes you no longer wear.
  • Sell your old games, electronics, movies, and books on eBay or Amazon.com.
  • Organize your papers and shred old documents you no longer need to keep.

This sounds like a good weekend project rather than a New Year’s resolution, so to make this worthwhile, consider running through this process on the first Sunday of each month. Each time, you’ll find more to eliminate. If unchecked, “stuff” can take over your life. If you have so much it’s burdensome, your possessions can own you rather than the other way around. Reduce and eliminate your dependency on things that take up space.

8. Spend more time with activities that make you happy.

I mentioned above that you can determine what’s most important to you by following the money. The same thing is true about time. If you were to analyze every waking minute of my day, you’d see that I spend most of my time working on my business and most of the rest of that time with my girlfriend. Or that’s what I’d like to believe. I, for one, spend a good portion of time entertaining myself with movies and television. Productivity nerds would fairly criticize me, but I do find value in resting my brain by allowing a local grumpy doctor solve medical mysteries so I don’t need to or by watching a clever con game unfold.

But buy spending my time this way, I’ve traded my enjoyment in creativity, like photography and music, for sitting in front of a television. Decide what’s important to you and schedule time to dedicate to those activities. I’m not a fan of keeping a schedule, but when you can schedule activities you enjoy rather than scheduling corporate meetings, you will end the year happier and more fulfilled.

And the reason we make resolutions at all is because we are unhappy with something in our lives. If we can spend more time on enjoyable activities, we won’t be nearly as unhappy.

9. Volunteer with an organization that matches your values.

Until the government decides to offer a tax deduction for volunteer work, this potential resolution won’t have a direct effect on your finances, but it could inspire you in ways that do affect your money. The first step is creating a mission statement for your life. In fact, defining your mission can be a complete resolution itself for the year, as defining a meaningful mission requires thoughtful self-reflection that goes beyond the confines of a lunch break at work.

Once you have an accounting of your values and life goals, it’s easier to determine what organizations share your view of the world. Spending time with these organizations and the people who share your philosophies can be rewarding. Often, the reward is through personal satisfaction and pride but there can be a financial aspect, as well. You may decide that you want to use your wealth to improve life for a community, or you may decide that you would like to motivate yourself harder to build your own wealth to help you complete your life’s mission.

10. Be happy with what you have.

The drive to want more for ourselves creates motivation to move forward, to earn more money, and to improve our financial habits. When there’s a mission behind this drive, a purpose in life, it makes that motivation more meaningful. Your should also stop wanting for a moment to consider that if you are reading this article, you were most likely lucky to be born in a situation or community where wealth-building, education, and even sanitation are possible. The “pursuit of happiness,” along with life and liberty, concerned the founders of the United States, but happiness is easily within reach.

Resolve to consider all the positive things in your life: your family, your wealth (no matter how bad your financial situation is, it could be worse), your friends. Consider the opportunities you’ve been given that helped you achieve what you have so far as well as the work you’ve put into shaping your life.

11. Don’t settle for low-quality relationships.

Unfortunately, there are often people in your life who bring you down. You don’t want to surround yourself with yes men, but if you look at your extended circle of friends, chances are you have a few with whom spending time makes you feel good and a few who often dampen your mood. While you don’t want to eliminate relationships with people from whom you can receive kind criticism, it is beneficial to reduce time with people who consistently have a negative attitude.

I’ve discovered this over a long period of time. I’ve always held onto friendships, regardless of the quality, because I believed that every close connection was as important as another. Perhaps I grew up, or perhaps I just had less time to spend with people. Perhaps there have been a few events where I had placed faith in a friend and had been disappointed, and another friend advised me I shouldn’t have such “high” expectations for my relationships. There are enough great people in the world not to have to settle for mediocre people in your life. If you feel you are consistently lowering your expectations, it may be time to spend time with others — as long as you are doing as much as possible to be a good person, yourself, in your inter-personal relationships.

This is the age of Facebook. People brag about how many “friends” they have, and it’s more of a thrill of collection than an enjoyment of real connections. Resolve to enhance the quality of your relationships rather than quantity. Although this goes against most “networking” advice for professionals who want to advance their career, it’s an approach for people who want to advance their life.

12. Let go of your grudges.

Just like it will benefit you to reduce your exposure to people with negative attitudes, consider expelling the negative feelings you’re harboring towards others. I don’t believe that positivity in itself brings about wealth — you can’t increase your bank account by just thinking about how nice it would be to have a bigger bank account, regardless of what New Age aficionados tell you — but letting go of thoughts that prevent you from accepting opportunities and greeting the world optimistically will help put you in a better position to take advantage of good things that come your way.

The above resolutions are not specific. You can use them — or better, just one or two — to guide your thoughts and attitude for the coming year, or you can use them to create a basis for measurable targets that come December 31 you can say you reached. Some tie directly into your finances, and others are related laterally. All of them can help you go beyond the typical neglected resolutions like “losing weight” and “saving money.”

Do something worthwhile and meaningful with your self in 2012.

Photos: L. Marie, Ancient Art, LizMarie_AK

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Could You Survive at the Poverty Line?

by Your Finances Simplified
Thrift store

This guest article is written by YFS, owner and author of Your Finances Simplified. YFS was born and raised in west Philadelphia and is now a financial adviser, IT contractor, landlord, and treasurer of a non-profit. If you and your family of four received an annual income of $22,350, could you survive? You would be ... Continue reading this article…

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Saving $300,000 By Age Eighteen

by Flexo
Eighteen

CNN Money is featuring stories from six young Americans, all of whom have managed to save substantial amounts of money as kids. When I was a teenager, saving money was never a priority for me. I understood the concepts, but I was more concerned with other things in my life: my hobbies, activities, school, and ... Continue reading this article…

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How to Spend Money on Fun

by Flexo
Fun Snowboarding

The point of accumulating and saving money is not to die with the most money in the bank. Yes, it can be helpful to your heirs to leave a fortune for the next generation, but not at the expense of living a fulfilled life yourself. There are many opinions about what it means to live ... Continue reading this article…

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How Much Money Did You Spend This Weekend?

by Flexo

From a retail perspective, this holiday weekend was successful. The National Retail Federation — an organization that represents retailers and is always happy to report good news in the industry — says that total spending over the four-day weekend from Thanksgiving to Sunday increased 16 percent over the same time period in 2010 when measured ... Continue reading this article…

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