Archive for Personal Finance

Why Your Cluttered Pantry is Costing You Money – And How To Fix it

Small PantryIs your pantry a hodge-podge of items in disarray? Could you quickly grab key ingredients to make a pasta dish or aren’t you sure you have any tomato sauce on the shelves? For me there is nothing more frustrating that not being able to locate certain items to make a meal when I know that I just purchased them. I also feel badly when I clean my pantry and discover that I have 5 bottles of oregano, all stuffed into different little corners. It costs money to keep buying ingredients only to have them become lost in the pantry abyss. Since I cook almost all our meals at home, I’ve had to be diligent on keeping my pantry in tip top shape and in making sure I can easily find what I’ve intended to cook.

I’ve used a simple organizational method for my pantry for a while now. It is not high tech and doesn’t cost a lot of money. So with the thought that an organized pantry will allow you to stretch your food dollar even further, here are some ideas that have worked for me:

1. Remove everything out of the pantry. I mean pull out all the stuff, even if you can’t tell what it is. I usually pull out everything and put it on the kitchen table. The next step involves checking expiration dates, spoiled items, etc.

2. Discard items that are out of date. Check every single expiration date and items that obviously look like they can’t be eaten. Canned goods usually have a very long shelf life. However, opened bags of cereal and chips may have gone stale. Likewise, if you have items that you know you are not going to eat but the expiration dates are still good, arrange to donate them to a local food bank who will gladly take them.

3. Before returning items to the panty, make a plan where they will go based on use. Either sketch it out on a sheet of paper or make a mental map of locations. I keep all the items I use the most on the shelf that is at eye level. These are the flours, spices, pasta noodles, etc. Cereals go up on the top shelf while snacks that the kids like go on the lowest shelf so everyone can reach them. On the very bottom of the pantry is where I store baggies, foil, paper plates, etc.

4. Group like items together. I don’t have labels on the shelves, although I do think that is a good idea. As I return items to the pantry based on the plan I developed, I place all like items together. Canned goods are located on one shelf, but grouped by type (i.e. canned vegetables are together, soups, tomato sauces). Breads and rolls are on another shelf. As I mentioned before, all cereals are on the top shelf. Staple items are on the middle shelf since I use them the most. I have all the flours together in one area, cooking oils in another, spices placed together in a clear bin which allows me to easily see what spices I have. This makes for a very visual pantry and it’s easy to see what ingredients you have for any given meal.

5. Train everyone who will be responsible for replacing or removing items where they should go. With my system of locating like items together, everyone knows where grocery items go. In fact, the kids help to put the groceries away after my weekly trip.

6. Perform periodic maintenance. I’ve found that about every 2 months I need to do a maintenance check that everything is where it needs to be. With a very busy family, sometimes things are not returned to their proper place so we really need that periodic maintenance.

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Your Budget Goals – Is It Time To Revise?

bgbudgetOdds are that you routinely re-evaluate the big choices that you make in your life all of the time. As you become more educated about the benefits of a healthy diet, you might make changes to the foods you eat. Completing a degree might make you reconsider your career choice. A change in your family situation might even make you rethink the house you own. As the circumstances around you change, it only makes sense to re-evaluate other parts of your life.

Re-evaluating your budget than re-evaluating any other part of your life. As you achieve your goals you will need to set new ones – and be sure to be on the lookout for anything that could be a budget helper. As you struggle to make some goals, you may realize that you might need to reconsider those goals. Whatever the outcome of your old budget goals, it’s always a good idea to assess them and determine which ones still work for you and which ones need replacing.

Savings Goals
Savings goals commonly need to be re-evaluated every time you meet your goal. For instance, if you were saving to pay for a winter vacation, you don’t want to simply stop saving after you have paid for you trip. Think ahead to your next vacation, or other major purchase, and start putting away the money you’ll need for it. If your income increases, you may want to consider putting all of that increase (or at least a good portion) towards your savings goal to fund it faster.

Debt Reduction Goals
Debt reduction goals are another type of goal that is in constant need of updating. If you set a goal to pay off one line of credit, maybe a consumer charge card like a Lowe’s card, you’ll need to set a new goal once you’ve paid that account in full. Tackle the next debt on your list of debts and make paying it off your new goal.

Unaccomplished Goals
Sometimes, through no fault of your own, you just can’t make one of your goals happen. Maybe your goal was to pay off your credit card debt in 2010. Then you were laid off from your job in June and took three months to find a new job. It’s just not realistic to think you would still be able to pay off your credit card debt in the time you originally allotted. The important thing to do in these situations is to recognize that your original goal isn’t going to happen and set a new goal in its place. Instead, try something like not accumulating any additional credit card debt while you’re between jobs. You just need to make sure that you’re working towards something.

Re-evaluating your budget goals doesn’t have to be a monumental task. By simply keeping in touch with your financial situation, you won’t find it hard to recognize when you’ve met a goal or when a goal has been placed outside of your reach. Keeping your budget goals in line with your changing life is the best way to guarantee financial success.

Thinking of Investing in Bank Loan Funds? Here’s What You Need to Know

Investing

The following article is a guest post. Bank loan funds can be a good investment. They often have fairly high yields with less risk than some other high-yield investments. They can bring some stability to your portfolio as well as bring you the benefits of diversification. But just like any other investment, bank loan funds are not without their risks.

If you’re thinking of investing in bank loan funds, it’s important to understand what they are and what the potential risks are. Some investment professionals advise steering clear of bank loan funds altogether, especially in uncertain markets. But if you know what you’re doing, and you’re willing to assume the risk, bank loan funds can bring a stable rate of returns to your portfolio.

What Are Bank Loan Funds?

A bank loan fund is an investment vehicle that lets investors buy shares of corporate bank loans. Banks and insurance companies may make these loans to companies with less-than-perfect credit, but that in itself isn’t a reason to worry about not getting your money back. More than 80 percent of companies that have defaulted on their bank loans have been able to pay the investors that own shares in these loans. When the economy is doing well, you’re probably not going to need to worry about losing money on bank loan funds. Just like a lot of investments, the losses come when the economy tanks.

Upsides of Bank Loan Funds

One of the best things about bank loan funds is that they offer a higher rate of interest than you’ll get with CDs or savings bonds, but at what many consider to be a comparable level of risk. Bank loan funds offer returns as much as two percent better than those of CDS or Treasury securities. These funds offer floating rates, which change whenever short-term interest rates rise. Every 30, 60, or 90 days, bank loan fund yields will be reset. When interest rates are trending upward, that’s good news for your returns.

Bank loan funds also have a fairly stable share price. Though you might be worried about getting your money back if the company that took out the loan declares bankruptcy, you can rest assured that these funds invest in what are known as senior secured loans, which will be the first ones to be paid back in case the company in question declares bankruptcy. You’ll probably still get your money back even if a company defaults on its loans.

If you choose an investment vehicle such as a bank loan fund, you’re getting a diversified product, just like with a mutual fund. You won’t be buying just one company’s loan, so if one company defaults on its loan, it won’t affect the value of your investment much.

Downsides of Bank Loan Funds

So, what are the cons of investing in bank loan funds? For one thing, the floating rates discussed above can be less of a perk if overall interest rates go down. Furthermore, you can’t take your money in and out of a bank loan fund whenever you want; depending in the rules of the fund you choose, you’ll only be able to make withdrawals at designated times, like monthly, quarterly, or yearly. Many bank loan funds require investors to leave their money in the fund for the first year and there might be fees to pay if you remove your money from the fund within the first three years. Investing in these funds can also be expensive; high expense ratios as compared with bond funds, for example, can really cut into your profits.

Hand and CalculatorLike other investments, bank loan funds are hit hard during times of recession. While returns can be much higher than those of CDs or Treasury securities, they can also be significantly lower. In October 2008, bank loan funds saw returns drop by a whopping 13 percent. That’s a lot, considering an average fluctuation in returns is about 0.5 to 1.5 percent a month.

Bank loan funds also have a liquidity problem. Because the market for bank loan funds hasn’t been around long — about 20 years — there aren’t as many buyers and sellers in the market as there are for some other markets, so it can be hard to liquidate bank loan fund shares. If a bank wanted to sell off a large fund, prices across the industry would drop enormously.

Many investors are wary of bank loan funds, but they can be a good investment if used as part of a diversified portfolio. They’re especially good in prosperous times, but you should be aware that they do tend to drop in value quickly when the market goes down.