Home Disimprovement: Downgrade and Save Money

For Cheapskates Only...

Home Disimprovement Can Save Money

When I bought my house a couple years ago, it had two doorbell buttons near the front door.  The funny thing was that neither one worked.  Pushing the buttons did not make the doorbell ring.

Here's what I think happened: the original doorbell button installed when the house was new in 1981 stopped working at some point, so someone installed a second doorbell button.  The replacement was a wireless doorbell button, and was installed right next to the first one.

I didn't pay much attention to the doorbell button situation until Halloween.  Trick-or-Treaters were pushing the doorbell buttons, but nothing was happening and we didn't know anyone was there waiting outside.  Visitors did not know to knock since there were two doorbell buttons.  It was rather confusing.

So what to do?  I thought about putting up a sign that says "Please knock, doorbells don't work".  I decided against this because it would look sort of tacky to post a sign explaining that something doesn't work.  Plus, I thought the sign would get wet and fade over time and would require periodic replacement.  So I needed to figure out another solution to the doorbell situation.

Maybe I should fix the doorbell button?  Perhaps add a third doorbell button next to the existing two broken ones?  But then I would probably need to add a sign to indicate which button works.  Plus I would need to find and buy a doorbell button, install it and get it working.  This sounded like a lot of trouble.  I needed an easier solution, and I found it.

I decided to do a downgrade and save some money.  My dogs usually bark like maniacs whenever someone even thinks of approaching the house.  It would be hard to hear a doorbell ring over the barking of my dogs anyway.  Why not just remove the broken doorbell buttons?  This wouldn't cost anything, and then it would be obvious to visitors that they should knock without the need for signage to explain which doorbell button to press.

I disconnected the doorbell ringer from the transformer and removed both broken doorbell buttons next to the front door.  I used some caulk that matches the siding to fill in the hole.  Problem solved.  Cost: $0.  Time: about 10 minutes.

After "downgrade" I no longer have a doorbell...

In this case, I am better off with zero doorbell buttons than with three doorbell buttons.  Sometimes a downgrade is better than an upgrade, and you can save some money as well.

Penny Pincher Journal

Copyright © 2016 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Can You Really Buy Hope for $2.99?

Buy hope for $2.99?

Can You Buy Hope for $2.99?

Today I went shopping with my wife at the consignment shop.  She wanted to check out some used furniture and I wanted to check my balance to see if I had money waiting for me.

We found a nice old dresser for the bedroom, but we did not buy it.  It was a solid old unit, made with real wood and dovetail joints.  But I decided to get rid of some of my clothes that wouldn’t fit in the closet instead of buying a dresser for more storage.  This seemed like a good way to save some money and avoid buying yet another thing.

I picked up $3.88 for some old clothes that I sold.  Considering the decision to get rid of some clothes, I can look forward to more payouts like this.  I like shopping at a store where I can walk out with more money than when I walked in!

On the way out of the store, I saw something for sale at the check-out.  There were some impulse items for sale with a sign that read:

  “Hope $2.99”.

 I was intrigued.  For one thing, I had $3.88 in my wallet, so I could actually afford to buy what they were selling.  But how can you sell hope for $2.99?

I moved in closer to see what was in the packages that you could get for $2.99.  I was disappointed to see that it was a package of rope.  The sign actually said “Rope $2.99”.

Is There Still Hope?

Even though hope was not for sale as I had initially thought, I began to wonder... could you really buy hope for $2.99?

For this exercise, let’s assume that if you have some money that you have some hope for the future.  If you were completely broke and started saving $2.99 every day, would this be enough to provide hope for a stable financial future?

Saving $2.99 per day adds up to about $90 per month.  First, let’s look at how this would grow in a savings account.

If you put away $2.99 per day (round to $90 per month) you would have:
$5,400 after 5 years
$10,800 after 10 years
$21,600 after 20 years
$32,400 after 30 years

You would do a little better in a bank account at 0.85% interest:
$5,514 after 5 years
$11,268 after 10 years
$23,536 after 20 years
$36,891 after 30 years

If you really want to buy some hope for $2.99, let's try to find a better rate of return.

What if you invest the money in the stock market instead of a bank account?  The stock market can go up or it can go down.  Over the long term, the historical rate of return is around 8%.

Here's how your daily contribution of $2.99 would accumulate with a 8% rate of return:
$6,613 after 5 years
$16,465 after 10 years
$53,011 after 20 years
$134,132 after 30 years

You can check out these calculations yourself with my Saving Calculator.  Just put in a $0 starting investment amount, set the monthly investment amount to $90, and set the interest rate for your investment scenario.

It is starting to look like you can buy hope for $2.99 after all.  If you wanted to save up a million dollars assuming an 8% average return, it would take just over 54 years.

If you start buying hope soon enough, you could end up with some real money.

Not to dash your hopes, but there are some things we have not considered in the simple calculations above.  Inflation over time tends to reduce purchasing power of your money in the future, so what looks like a lot of money in these calculations may not buy as much as you would think in the future.

Also, you will have to deal with taxes.  One way to avoid paying taxes on a retirement investment is to contribute to a Roth IRA.  You do not have to pay capital gains taxes if you follow rules that apply to withdrawals.

Buying hope for $2.99 seems like a pretty good deal.  The best time to start buying hope was 54 years ago.  The second best time to start is right now.

Penny Pincher Journal

Copyright © 2016 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy