As many of you know, at the end of the month I’m moving to Brisbane, Australia, to live with my fiancee. Any Australians in the crowd likely know that interest rates in Australia are much higher than here (around 7% I believe) and most of the country also happens to be in a housing boom.

My fiancee’s lease expires at the end of June, and we’ve decided to move into something a little bit bigger with my arrival at that time. We’ve already started looking at places to rent which are currently available and one of the major things I’ve noticed is that a number of places will list the weekly price and in the description write “price to increase x number of dollars in July 2008″. This is incredibly frustrating, but so normal in the area. My fiancee’s rent went up $15/week recently, and he’s far from the only one.

I just find it horribly annoying that places are advertising the lower price then have listed that they’re increasing the rent $20-$30 in the next couple of months.

Apart from this rant, however, I will add in a lesson about renting: always search early. We are currently looking not only to see what’s generally on the market at the price we’re looking for, but also to pick out a few potential places we like. When we find one of these, we bookmark them. In a month or so, when we’re seriously ready to find a new place, we’ll be going back to these saved properties: if any are still on the market, our options for negotiation are much better. Even though the market is booming there is still a vacancy rate and some very nice places are in less desirable locations (such as near a major road) may not be filled. Since the owners want to be paid as soon as possible, if the place has been on the market for a while, they may accept a $20-$30/week discount in exchange for us moving in immediately. A $30 per week discount would save us $1500 on the year.

While it’s not always possible to know when you’ll be moving, if you do know and you’re looking to rent elsewhere, you should always look ahead of time in the hopes of finding a property that won’t be taken. It can save you a fair chunk of money every year! It’s tougher in markets like Brisbane’s, with a very high occupancy rate and virtually impossible in Vancouver, but there are a number of areas where searching ahead and then getting a discount is very feasible.

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I’ve seen a number of people in a variety of forums recently mention “well I could buy a house, the mortgage payment would only be a few hundred dollars more than my current rent”. Unfortunately, what many people don’t realise is the associated costs of home ownership. Here are some of these costs which you should consider in your pre-purchase budget:

Before you move:

• Down Payment: While it is very possible to get a home loan without a down payment these days, having one brings a number of advantages: first of all, you’ll pay less. If you purchase a house at $250 000 with no down payment, you’ll be paying $1600 per month (at 6% interest). However, with a $25 000 down payment, you’ll only be paying $1439 per month, saving almost $200. This will save you an enormous amount of money. Also, the bank is more likely to give you a better rate if you have a large down payment, which can reduce your costs. Having a down payment is definitely a good idea. I would strongly recommend having at least $5000 to put down.
• PMI: However, if you don’t have a 20% down payment, you’ll likely have to pay PMI Insurance, which essentially insures the loan for the bank if you are unable to make the repayments. This will have to be factored in to your budgeting as well.
• Closing costs. These are generally 2-7% of the value of the home you’ve purchased, and have to be paid before you move into the home. This includes taxes, title insurance, financing costs and other settlement costs.

While you move:

• Furniture. If you’re going from a bachelor apartment to a 2-or-3 bedroom house, chances are you’re not going to have enough furniture to fill the place. You will most likely end up in IKEA, trying to find some stuff to fill up the space, and it will cost you money. If you do have the willpower to not purchase anything else, that’s excellent! You’re part of the minority and you can ignore this part.
• Moving costs: If you’re moving across the country this can get expensive, especially if you’re not the type to rent a budget truck and hire actual movers.

After you move:

• Property taxes: Many people completely forget that they have to pay taxes on their property. Furthermore, as your home’s value increases, so do your property taxes. While there may not be a huge risk of that if you’re in the USA, in certain parts of Canada you can be paying a significantly larger amount of money in the future for your property taxes.
• Maintenance costs: Things break down in houses. Unfortunately, now that you own yours, it’s not up to your landlord to pay those costs anymore. You’ll need to be able to spend a little bit of money when something inevitably goes wrong, and you need to budget for that scenario.
• Insurance: you need fire insurance, flood insurance, etc. These costs can add up, and they are required. Be sure to shop around and make sure you do some research before purchasing any sort of home insurance.

There are a number of costs involved in home ownership on top of the actual mortgage payment. You need to be sure that you had adequate savings to be able to afford a home and that you will be able to continue the repayments in the future. It’s entirely possible: millions of people have done it. You just need to step back, look at the big picture, and perhaps buy a townhouse instead of a house, or a smaller one which in ten years you can upgrade from. Just consider all of the costs, for your financial security’s sake.

Popularity: 10% [?]

I’m sure when we all created our budgets (and if you haven’t yet, you may want to learn how to create a budget) we were easily able to identify a number of major expenses, and get rid of them accordingly. However, we don’t often pay attention to the little specifics which can accumulate to a huge amount. Here are ten things which, while they may seem harmless, can really add up to quite a bit.

Coffee. Lets say you spend $2 on a coffee every weekday. Since there are about 260 weekdays in a year, you’re spending an extra $520 every year on coffee. Have you considered brewing at home and brining it in a travel mug to work to cut down on those costs? Or maybe consider cutting the habit altogether!

Take-out Breakfast. They’re so tempting, as they’re just sitting right there when you order your coffee and who wouldn’t like to enjoy a nice muffin along with the morning brew? You can add another $520 per year if you’re one who succumbs to these cravings! By making your coffee at home or cutting the habit entirely, you also reduce your chances of making one of those impulse breakfast buys.

Alcohol. If every weekend you’re spending $20 on a pack of beer, a bottle of Jim Bean, etc, you’re spending over $1000 per year. The price everybody spends on alcohol varies differently, but if you’re finding that you’re spending that much, try cutting back a little bit. Maybe cut down on the number of drinks you have on the weekend, or drink the same amount but every other weekend, or once per month.

Convenience Store Snacks. They’re named that way for a reason. They are very convenient. Unfortunately, they’re also quite pricey, especially compared to supermarket items or making snacks at home. If you spend $2 a week at a convenience store on food you really don’t need, there’s an extra $100 gone over the course of the year.

Bottled water. While I realize people do have their own reasons for drinking the stuff, you’re generally spending around $1 per bottle. If you’re drinking 2 bottles per day, that’s an extra $600. Try investing in a high quality water filter instead.

Unused gym memberships. The average membership for a gym is $40 per month. While intentions may have been noble in January, lets face it: a lot of us let our gym memberships go unused. Unfortunately, this is costing you $480 per year, so you should just cancel your membership. Your pride may take a small blow, but at least your wallet won’t!

These are just some of the examples of little things which cost us a lot. If you fall victim to all of the above, you’re spending over $3200 per year more than you could be if you cut the above out of your habits. By further analyzing your spending, you’ll find places where you spend more than you should and you’ll be able to save yourself a lot of money as well.

Popularity: 10% [?]

While the most frugal won’t get cable, won’t get internet, won’t get home or cell phones, in reality most of you reading this have internet (unless you’re at a cafe), and most probably also have cable and a phone or two. Well, with a quick phone call you can easily get your rate reduced, often by a fair amount. I did this myself for my cell phone service a year ago. Here’s how:

1) Explore the competition.  By finding a better deal from your competition, you’ve got the edge in negotiation. One thing to look at is deals with other companies. If your cable is with Rogers and your internet and cell phone with Bell, you would save money by moving to Bell, even if the initial plan were the same price, as Bell offers a discount if you have a number of products with them.

Look for “new customer” offers as well. These are often great deals which you can use to your advantage. Always find concrete proof of these deals, and save them.

2) Call your current company, armed with your new offers. Immediately call the cancellation line rather than dealing with customer service, citing the competition’s offers as your reasons for leaving your current company. Their job is to do their absolute best to keep you. Even if you have absolutely no intention whatsoever of leaving your current company, making them think you will is without a doubt the most efficient way to get a better deal.

3) Be firm, but polite. One of the key things to remember is that the person on the other end of the line deals with disgruntled customers yelling at them all day. Call centers are known to be hell for a reason, and working the customer retention line is especially so. In order to entice them to give you the best offer they can, treat them as you would like to be treated if you were in their position. Remember to be firm, but do be polite.

4) Don’t back down, but do negotiate. The representative will tell you the other company is offering inferior service and try to sell you on theirs. Let them know that you are happy with the value they are offering, and you don’t feel the service is inferior. However, you do need to compromise at some point, or you will end up with nothing. If they offer you money off, it’s money off. You could go with the competition if you want to, or if you’re happy with your current service enjoy the discount!  When I did it I didn’t get quite as good a deal as the competition was offering, but I did save over 10% on my bill, with a phone call that took just over 10 minutes.

This is a great way to reduce monthly expenses on TV, internet and phone usage. Competition is stiff in these industries; take advantage of that!

Popularity: 12% [?]

I’ve been an avid traveler for most of my life. I took my first plane trip when I was 6 months old, across the Atlantic to France, where my mom grew up and all of her family lives. Since then, I’ve been to most of Western Europe and Australia, and plan to eventually do a trip to Asia. Now, at 19 years old I’m planning on moving to Australia in May, and I thought that in the spirit of the trip I would reveal some of the frugal tips I learned in my years around the world:

1. Plan early. Plan very early! I am an impulse traveler. Last Sunday a friend of mine and I went to New York on literally one hour’s notice. However, when it comes to travel, planning early can save you a ton of cash. The discount airliners in Europe (such as RyanAir and EasyJet) will give you a bigger discount if you book early: in 2003, my parents booked a flight from Paris to Liverpool almost a year in advance, and it cost a mere 50 pence! Of course, we also had to pay 30 pounds in taxes, but it was still an extremely cheap flight. Book in advance and you’ll save some cash on flights.

2. Get your cash before you leave. Your local bank has much better exchange prices than mall kiosks and airports, no matter where you’re going. Order your cash at least two weeks before you leave, because even if you’re going to Mexico, there’s a good chance your bank won’t have Pesos on hand. They’ll have to be ordered and while they normally only take three or four business days to come in, it’s best to be on the safe side. At the bank I work at we don’t carry Euros on a regular basis and never have more than around 700 and the number of people who come in to try and buy some the day before their flight is absolutely phenomenal. Give yourself time and you’ll have a lower stress level as well.

3. When in Rome… We all complain about gas prices over here, but ours are nothing compared to the rest of the world. Renting a car is expensive, paying for gas is worse. Then you haven’t even factored in the fact that even taxi drivers in New York have absolutely nothing on European drivers. There’s a reason most Europeans take the subways and the train: they work. It’s relatively easy to find your way around all of the major city’s subway stations to find your end target. It will save you huge amounts of time and money, and there’s always that extra bonus of being able to tell your friends you experienced the “true” culture of London and Paris by traveling like the locals.

4. Bring your debit card. This isn’t so much a frugality tip as it is a safety one, but it’s important to mention. In 2003 my family was on a random island in Northern Norway when we ran out of cash. The ferry off the island only took cash, so when we spotted an ATM machine, my mom tried putting her Canadian debit card in and we were able to get cash. It’s important to keep your debit card on your for emergencies like that. Also, withdrawing directly from your chequings is a much better option than doing a cash advance.

5. Get local 800 numbers. When you’re outside of North America (or wherever you normally reside), 800 numbers don’t work. Make sure to get the local numbers for your credit card company, your health insurance provider and your bank. In case your cards are compromised while you’re overseas you’ll be able to contact them immediately and prevent losses. On the same note, call your credit card company and bank and make sure they know you’ll be overseas to avoid having your card frozen.

6. Make sure you have zipped (or buttonable) pockets.  As safe as you might feel walking through the cities in your own country, you need to remember that you’re not at home. Ladies, make sure your purse is zipped up with nothing exposed, and men be sure to carry your wallets and other important items in something closeable as well. Pickpockets are extremely common in most major cities in Europe, Asia and South America. Avoid this potential emergency by ensuring that everything you need is kept safe and on your person at all times. Being careless can cost you hundreds of dollars and a lot of stress!

7.  If you withdraw cash from an ATM, withdraw a lot. My card charges me $5 every time I withdraw money from an international ATM machine. This fee stays the same no matter how much I withdraw. As such, being as frugal as I am, I always withdraw as much as I possiby can in one shot. This can save you a significant amount of money if you use a lot of cash.

8. Get a money belt. Yes, they look lame. Yes, if you’re traveling with friends they will make fun of you. However, they will keep your cash, as well as any other items you carry with you, safe. When I went to Australia for the first time my mom bought me a money belt and as soon as I left her at the airport I took it off, never to wear it again. That was all good and fine until my passport fell out of my purse on the plane on the way back, and I found myself in Los Angeles airport, going through customs, without having a passport. A stewardess found it on the plane and brought it to me, but a money belt would have saved all sorts of problems.

9. If you go to an internet cafe, always change all of your passwords after. A HUGE number of internet cafes have keyloggers installed, and if you want your information to be safe, don’t log in at all, or change your passwords as soon as you can for everything you have accessed. Do not under any circumstances log in to online banking. This is why you have the phone numbers written down: so that you can call to find out this information. It’s much safer this way.

10. Quite frankly, there is no number 10, but it made the alliteration in the title work. I’ll finish off with some random tips: if you’re planning your trip last minute, find a good hotel deal with Wotif.com. Always be at the airport 3 hours before an international flight, especially if you’re flying Air Canada. Most importantly, planning ahead means you’ll have much more fun on your trip!!

Popularity: 24% [?]

When you speak with a financial advisor about your debt, most will recommend that it be paid off in a specific order: the highest interest rate to lowest interest rate. This obviously makes sense, as the debt which you are paying back the most on will be gone as quickly as possible. Assume you are in the following debt:

• Student loan of $15 000 at 6% interest
• Credit card debt of $9 000 at 19% interest
• Line of credit with a $2 000 balance at 11% interest
• Car loan of $6 000 at 5% interest.

Yes, you would be saving the most money by paying the credit card, then the line of credit, then the student loan and finally the car loan. This system works wonders with the people who have the self-discipline to stick to such a system and eliminates the debt as quickly as possible.

However, a large number of people don’t have the self-discipline to pay off this debt in this manner simply due to the fact that when you’re paying off a large debt, it looks like you’re making virtually no progress. The credit card debt in the above example is the debt at the highest interest rate, which would be best to pay off first, mathematically.

However, when you look at the numbers, $9 000 and $7 000 are still two enormous numbers. Psychologically, paying off the credit cards first is the most difficult as progress is much more difficult to physically get a grasp of.

This is when the system recommended by Dave Ramsey in the book The Total Money Makeover comes in: he recommends organizing the debt, not according to interest rate but according to total balance:

• $2 000 line of credit at 11%
• $6 000 car loan at 5%
• $9 000 credit card debt at 19%
• $15 000 student loan at 6%

Dave’s recommendation is to pay the minimum payments on all of the debts, but to put every extra dollar you can gather towards the smallest debt, the line of credit. Once the line of credit is paid off, move onto the car loan. Mentally, you’ll feel as though you’re making much more progress than you would if you were paying the credit card debt off first. This method of debt elimination is known as the snowball method.

You will end up paying more interest if you do this method as opposed to the traditional method to eliminate your debt. However, if you’re the type of person who is likely to give up paying your debt entirely if you can’t physically see results, this is definitely a better option. You may pay slightly more, but you will end up paying off your debt entirely, which is the end goal.

Popularity: 14% [?]