(This is one of my more tongue-in-cheek articles)

Everyone always wants to find ways to save money. Why? There are so many ways that it is easier to just throw money away, without even really thinking about it. Here are a few of those.

1. Never wash a full load of laundry. In fact wash only one or two pieces of clothing in a machine load. It is so much better that way, as not only do you waste power, water, and detergent, you can get the extra work in that it takes to wash clothes in several loads. Use lots of soap, so that you have to run them through the rinse cycle twice to get it all out. At least your clothes will be clean!
2. Wash your dishes with the water running all the time. Make sure it’s as hot as you can possibly stand it, too. With both of those, then you can waste water and gas at the same time!
3. Always take baths. Baths use more water, so that way you can throw money down the drain. Of course, that isn’t the case if you decide to have a shower that is so long that you run out of hot water. That would be even better. And make sure to do it every day, twice a day, if you can.
4. Water you lawn every day for the greenest grass in the neighbourhood. Heck, make sure that the water runs all over the sidewalk and is on full blast! Also do it at the hottest time of day, that way the water evaporates quicker, making it less efficient. And do it for at least two or three hours, just so that the lawn gets a really good soaking!
5. Use every light you can in the house. Never open curtains, as that lets in natural light that is better for your eyes. Always use the old style light bulbs, too. These bulbs take more power and don’t last as long, so that makes them even better for the electric company.
6. Keep your thermostat as low as you can in summer, so the A/C runs full blast. In winter, keep it as high as you can tolerate, so the heat works overtime. This will make sure that you use the maximum energy you can. Don’t ever change this for vacations or when you’re at work, either.
7. Use your gas fireplace at every opportunity, even in summer. Hey, it looks cool and makes for great conversation! If it gets too warm, you can always open a window.
8. Always buy brand name! This work for everything, from groceries to clothing. Everybody knows that generic products are usually brand names repackaged or something manufactured exactly the same way with the same ingredients (for drugs and food), but just to be sure you’re getting your brand buy the ones with the right labels. At least you know what you’re getting, then.
9. Always buy new! This is especially true with technology. Having the latest technology trends shows how cool you really are. It doesn’t matter if the price will drop in three months to 50% of what you pay, and then all the quirks and bugs will be fixed. You gotta get it now!
10. Wait on auto maintenance as long as you can. If the manual says 3000 miles / 5000 km for the oil change, then wait twice that, that way you know you’re getting your money’s worth. Of course if the engine seizes, that might be cool, too. Who has seen that? At least you’ll have something new to talk about! Same goes with tires. Don’t check them, ever. Just wait for the inevitable blow out, so that you can have a little adventure on the freeway when it happens.

What other wasters are there? I’d love to hear them!

Some houses that people buy have more space than they really need. Use this space to make money and decrease your cash worries.

Ever thought about turning that den into a spare bedroom? Is there already a bedroom that’s unused? This could be a great opportunity to bring in a little spare cash into the household. Renting a room out doesn’t have to be a chore, and with a few precautions getting a roommate (roomer) that doesn’t interfere with your lifestyle and is responsible is quite possible.

Upfront Preparation for Renting Out a Room

Look at your local legislation! Each state/province has different legislation in their landlord & tenant acts. These are important to know what your rights and responsibilities are. If you are unable to provide what is necessary, then don’t do it. Usually the most difficult thing is simply getting a lock for the room. There are several rental agreements available online, such as this one for Alberta. Read these carefully! While they meet the requirements of the law, it is always possible to alter them and add provisions that are legal as long as they are initialed by both parties (such as, “No smoking; smoking on premises subject to 24 hours eviction and loss of damage deposit.”).

Make sure the place is clean. If there is any damage, take a photograph of it and include it in any move-in report. Have that initialed by the person moving in! Quite often a very small piece of damage, such as a scratch on a wall will magically grow ( although there is no logical reason why it would) and the tenant will deny responsibility. Better to have it repaired before renting the room out. Then take photos of the clean room without damage and have it initialed.

Make Household Rules Clear Before Renting

Let any potential renters know ahead of time what any rules for the house are. If it’s a vegetarian household, then mixing foods can be an issue. Non-smoking, allergies, pets, and so-forth can also be issues. Make sure that these issues are all communicated ahead of time! It really sucks to let someone move in if you asthmatic, only to find afterwards that he is a smoker. Even if it’s kept outside, it can make someone sick just from being on the clothes and then brought into the house.

Make sure that chores and cleaning duties are clearly outlined. Leaving dishes in the sink, even for a day, can be a big inconvenience for anyone else. Be certain that all people living in the house are clear about this courtesy. Other issues can be taking out the garbage, floors, outdoors, and (especially) bathrooms and kitchens.

Terminating the Rental Agreement

It will eventually happen that one party or the other will want to terminate the rental agreement. In most places 30 days notice, given at the end of a month, is required for the renter leaving a premise. This means that if a renter gives notice on the 15th, it is effectively 45 days notice. And if that renter leaves on the 15th of the following month, and no replacement has been found, the full month’s rent is still payable. This holds true for any day that is not the last day of the month. It’s even harder for landlords, as most jurisdictions require 90 days notice to tenants. Of course most landlords who are renting out rooms just let the renter leave and never replace that person when they are finished with renting and want to use the room for something else.

Taxes and Renting Out a Room

Technically speaking renting a room is taxable income and should be reported on annual tax returns. There are people who don’t do it, but that’s a risk they take. In reporting this kind of income, make sure that the proper deductions are taken so that taxes are minimized. This includes any costs to advertise the room, a percentage of the utilities, cable, phone, property taxes and mortgage interest. Oh, cleaning supplies are also deductible, as long as it’s only the proper percentage of the whole house expense! And so are consumable maintenance expenses. What percentage is right? Consider the number of people in the house and divide by that. For example, if the roomer is one of four people in the house, then 20% is acceptable. Another method is to consider the square footage of all the bedrooms and then divide it that way. Personally, I find the first method easier.

[Note: Yes, this is something that I have done in order to make ends meet. It has helped a lot!]

Assigning the Objectives

What’s an objective? Well that’s the mini-goal that you want in order to meet you bigger financial goals. For example, you might have goal to get 3 months of savings in the bank so that you stop living from pay-period to pay-period. To meet that goal, you will have to come up with some smaller objectives that will help you meet that goal. An example might be that you make it your objective to cut down on eating out. You decide that you won’t eat out for lunch every day and instead will take your lunch. But that leaves you with money that you didn’t have before, because you were spending it on lunch. Now you have to give that money a task!

Picking an Appropriate Task for Your Money

Let’s say that you are now saving $2 a day from your lunch objective. That’s a measly $40 a month, right? Now, have a look at your overall finances. If you were so strapped that you couldn’t even go out to a movie once a month, perhaps you can give your money one task by allocating part of that (say $20 a month) to your entertainment only. And that $20 has to let you relax a little bit in some way, even once a month. Now you have the other $20 to assign another task to. If debt pay down is one of your goals, then that extra $20 can go towards the debt. And that will really help in the long run!

Whatever job you decide to give your money, you have to make sure that it meets the objectives you make to meet your overall goals. Straying can sometimes be hard, but if you make a list of your goals, then you are more likely to meet them. You can also then break each of those financial goals into steps that will really move you foreword and help you stay motivated. Remember, smaller steps are easier to take than big leaps. And the little steps end up covering the same distance. The small steps tend to get you towards your goal with less energy, worry and in an easier, safer manner. And that means you’re more likely to stick to your goals!