Sometimes, I get the urge to write articles on here that are so far removed from personal finance that it would likely drive away a big chunk of the people that come here for personal finance stuff. For example, I was strongly tempted yesterday to write a lengthy diatribe about the season finale of Lost, but I resisted the temptation and instead wrote about gardening tools. About a week ago, I thought about hammering out a lengthy paean to my favorite musical group of all time, but then I wrote about goals instead.

How To Calculate Your Net Worth I wrote about this a while back, but Flexo writes a great summary for those who want a different perspective. (@ consumerism commentary)

Almost Debt Free: Organize Finances With Goals and Simple Repeatable Systems This is a very smooth way to organize one’s finances. (@ queercents)

Will Future Stock Returns Be Less Than 8%? I don’t think they’ll be as strong as they have been the last decade or two as a whole, but I think 8% is a bit low, too. (@ my money blog)

The Simple Dollar Retro: Calculating Phil Town’s “Sticker Price” This is a real-world example, explained in detail, of how to analyze an individual stock and determine whether or not it’s a good buy.

From the day I left home shortly after my eighteenth birthday, I have never lived in any place that had a garage, had any reasonable storage space, or that didn’t have a landlord to fix problems. Thus, I never had much need for tools. I used to thoroughly enjoy doing small household tasks and working on cars with my father when I was younger and I plan on doing such things again after we are settled into the house, but I have no tools.

Thankfully, to remedy this, I have been hoarding a couple of Home Depot gift cards, and my father wants to go along to help me select the items after I move, so I’ve been working on an “essentials” list of things I would like to acquire for the home and garage to enable me to do most home repairs myself without panicking and calling a repairman when simple things go wrong. Quite honestly, for tiny things around our apartment, I mostly just use my pocket Leatherman and thus we don’t have any tools at all.

If you have any additional suggestions, please leave them in the comments.

A toolbox By this I mean a small, portable box to carry the things I need for most tasks around with me to where they’re needed. I already have one that will work for a while - it’s the one I had in high school for shop class that still resides in the loft at my parents’ house.

A tool chest Similarly, I’ll have more things than the toolbox will be able to hold, so the extras go in here. I already know where I can get one of these very inexpensively, so this isn’t a major expense, either.

A 16 or 20 foot tape measure I’ve actually longed for one of these many times in the apartment and now that we’re moving I can see countless uses for one.

A variety of screwdrivers I use the four options on my Leatherman most of the time, but having a few quality screwdrivers (and an Allen wrench that isn’t made out of aluminum and bendable by my bare hand) would be fantastic.

A pair of needlenose pliers Essential for any tight space or dealing with anything small.

A corded drill We have a cordless drill already that I hate with the fury of a thousand suns - it dies almost every time I start using it. Give me a corded drill - it’s lighter and doesn’t die on you.

An electronic stud finder We have one of these that’s very cheap and isn’t… reliable. I’ve long ago learned my lesson on this - find a good one that works and you’ll be far happier over the long run.

A short torpedo level Infinitely useful when leveling all sorts of things around the house. We have an enormous one that’s just unwieldy.

A wrench set A nice variety of sizes and of sturdy construction - I’ve bent cheap ones before.

A ratchet set Similarly, a variety of sizes and of sturdy construction.

A wire cutter and stripper I had one of these in my college dorm room when I was heavily into rewiring stereos and stuff - I can see lots of potential uses for one around the house.

An electrical tester Is this live? I need to know before I do anything stupid.

Vise grips I used to borrow my father’s small one all the time when doing different things in junior high and high school, especially related to fixing my bicycle.

A claw hammer We have one that I intensely dislike, so I’ll be replacing it with one with a smooth head, a steel shaft, a rip claw (not a curved one!), and a rubber grip.

A step ladder Our entryway has a twelve foot high ceiling with a light at the top. A step ladder will be required for that, if nothing else.

Nails A wide variety of nails are essential, especially when you walk into an empty house and have a ton of stuff that you are going to hang.

A wheelbarrow We’re going to garden and compost. A wheelbarrow is basically a requirement for this. I also desperately want a compost bin, but it’s not quite a requirement, and also a small tiller.

A shovel Again, for the garden, but also for a few other uses, too. Amazingly, the place we’re moving to already has a boxed-in garden of pretty good size, which means we’re going to likely also need a few other garden implements to be determined later.

Pruning shears There’s an assortment of bushes and shrubs around the house that will have to be kept up.

A lawnmower Last but not least… *sigh*

Are there any major items that we’re overlooking that a homeowner might need or find strongly useful? Please let me know in the comments!

This weekend, my wife and I are traveling to see her younger sister graduate from college and also attend a small family reunion. We’ll have to drive at least seven hours this weekend and also spend three nights away from home, which in the end implies a lot of extra expenses.

Here are ten things that we do on such a family trip to save money. Some might seem obvious, but keeping them in mind will save you money on a trip like this one.

Pack meals for the road trip, at least when departing. This way, we avoid the need to stop and buy expensive and unhealthy roadside food. Homemade sandwiches, finger veggies and cheese curds, and a drink make for a much cheaper and healthier meal on the road for everyone.

Air up the car tires before we leave. Having properly inflated tires can significantly improve your gas mileage, and with gas at $3.24 a gallon right now, it’s worth the effort if you can save a few gallons of gas on a long road trip.

Plan your trip in advance. Make sure you know the route, and make sure you know which states along that route have the least expensive gas prices, then optimize things so you can fill up on the appropriate side of the state border to maximize your dollar. It takes only a minute or two to use Google Maps and check on gas prices online, but it can save you significant cash.

Stay with family if at all possible; otherwise, consider camping. Both options are much more thrifty than a hotel. We camp regularly on such visits, but this time we’re actually staying with relatives, which is even cheaper.

Eat communally with other family members if possible. We’ll do such things as order food together or even make meals together at the house we’re staying at. This cuts down greatly on food expenses per person for all involved. The more you can avoid eating out, the better. Even if you do something like ordering pizza, getting everyone involved and chipping in means a big savings.

Bring along homemade foods to share - and convince others to do the same. We often bring jars of our homemade salsa, and then we talk to others in advance and encourage them to bring things. The end result is cheap and delicious food for everyone: my mother-in-law’s tremendous dessert bars, her sister’s fantastic ethnic treats, and so on.

Drink lots of water. When I was younger, I was strongly tempted to start downing sodas and other beverages whenever we went on such a trip. Now I drink lots of water and maybe a hand-crafted beer or two in the evening. Why? Water is cheap, it hydrates you quite well, and it’s free of corn syrup and other additives. In fact, I tend to drink water more often when I’m traveling, perhaps because I’m conscious of it.

Carpool heavily once you’re all together. Don’t take four cars to transport nine people; instead, pack as many as you can into someone’s Suburban and have everyone chip in a dollar or two for gas. We have relatives with SUVs and minivans who just volunteer to haul everyone around at such events.

Suggest cheap and free activities over expensive ones. Play card games or frisbee or touch football. In order to open the door to such things, we bring the needed items along: our trunk has a deck of cards, a few frisbees, a football, a horseshoe kit, and a few other items that can get people to hang out and do something free rather than wanting to go out and burn a bunch of cash on a tourist-type situation. Quite often, we’ll get out frisbees and touch footballs for the children and teenagers, while the adults wind up playing card games.

If you feel an urge to get out, let the local host show you great free stuff to do - or research the area in advance. There’s always something culturally interesting in any area, even in northern Iowa and southern Minnesota. Instead of dropping $20 a head to go to an amusement park or going to a gigantic shopping mall, see if there are any free museums or historical sites to see or any cultural festivals going on. Many of my best memories are from doing things like visiting the twine ball in Arthur, Minnesota or checking out the Spam Museum, not going to the Mall of America or an amusement park. And guess which one is cheaper?

When you go to purchase a home using a mortgage, one of the major expenses that you’ll have to pay at the close is the origination fee. Here’s a guide for navigating them and figuring out what the best deal is for you.

What’s an origination fee? The origination fee is an amount that you pay at closing to the group handling your mortgage. This fee varies a lot from mortgage handler to mortgage handler and is typically expressed in “points.”

What’s a “point”? A “point” is one percent of the total cost of the mortgage. So, for example, let’s say you have a $190,000 mortgage. A “point” is one percent of that, or $1,900.

So, aren’t less points better? It depends entirely on your financial situation. Quite often, when you get a mortgage, there will be multiple options with different origination fees. Let me give you an example that’s roughly similar to my own mortgage.

A loan officer is about to lock in your 30 year fixed rate loan for $200,000 and offers you three options:
A mortgage with no points and a 6.25% interest rate
A mortgage with one point and a 5.875% interest rate
A mortgage with two points and a 5.75% interest rate

The first thing to do is to calculate the actual payment you’ll have to make with each loan:
The 6.25% loan will have a monthly payment of $1,231.43 and over the life of the loan you’ll pay $243,316.38 in interest
The 5.875% loan will have a monthly payment of $1,183.71 and over the life of the loan you’ll pay $226.137.30 in interest
The 5.75% loan will have a monthly payment of $1,167.15 and over the life of the loan you’ll pay $220,172.46 in interest

Clearly, the lower interest rate loans will save significant money over the life of the mortgage. However, you’ll have to pay the following at time of close:
With the 6.25% loan, you’ll pay $0 at the close
With the 5.875% loan, you’ll pay $2,000 at the close
With the 5.75% loan, you’ll pay $4,000 at the close

How much is my payment reduced? Many people want to know how much they’ll save on monthly payments if they cough up the points. In this scenario, if you cough up one point, your monthly payment will be $47.72 less than if you coughed up no points. If you put up two points, your monthly payment will be $64.28 less than if you coughed up no points, and $16.56 less than if you coughed up a single point.

When do I break even with points? With that 5.875% loan, you’ll make back the $2,000 in reduced payments in 42 months; with the 5.75% loan, you’ll make back the $4,000 in reduced payments in 62 months. This calculation is easy - just take the origination fee and divide it by the difference between the large payment and the small payment.

Once you’ve done these numbers, the appropriate option for your finances will become pretty clear. For us, we took the maximum number of points offered to us because it was clear that in the long run we would pay significantly less to the bank and lower mortgage payments means more breathing room in our monthly budget. For others, it may make sense to take the middle road or perhaps to pay no points at all, but be sure you sit down and really calculate the numbers before you make the leap.

Our home closes in early July. I must learn patience.

Six Great Free Alternatives To Quicken and MS Money A good list, just be careful if you use a web-based tool to manage your finances. Read the privacy policy carefully and be sure you’re willing to give that company the financial information. (@ zen habits)

Are We Living Larger Or Living Differently? This is a pretty good debunking of most of the common statements about how Americans today “live larger” than they used to. Mostly, it’s a change in philosophy. (@ lazy man and money)

In Defense of Buying: Our Housing Situation Explained This person is just starting to get around to the idea of buying a home - they feel a lot like we did in about January or February. (@ my money blog)

The Simple Dollar Retro: How To Read A Mutual Fund Prospectus A solid little article about how to actually investigate a mutual fund without numbing your mind.

The last few days have been filled with lots of little lessons about the home-buying process. Here are five little anecdotes about things we learned:

Home inspections typically aren’t part of the closing costs. I had just assumed that they were part of typical closing costs, but in our situation, a home inspection is done at our discretion. Thus, when I set up the appointment to have the home inspected, I came off like a complete moron because I thought the bill would be sent to the seller. The pieces that the seller will pay for (as the seller is covering closing costs) are the various checks that will be written at the actual close of the home - we will basically just show up, sign some papers, and walk out with keys.

Be careful which inspector you use. I interviewed several inspectors. All of them seemed fine at first, but as I probed a little, it became clear which ones really had their stuff together. The ones that really separated the wheat from the chaff for me was a request for references, openness to me coming along for the inspection (one person actually said “no” - sorry, that doesn’t cut it), and the details of the report. Don’t just listen to their pitch and take whichever one sounds good - ask a few really probing questions. Here’s some more info on finding a home inspector.

Don’t just enter your contact information to get lots of house insurance quotes unless you want to be deluged with semi-desperate insurance salesmen. A friend of ours did this recently and is still being called about insurance quotes. Instead, just talk to a lot of your friends and acquaintances about their experiences with house insurance and go with the one that seems to come most highly recommended. For me, you’re paying for security, so I’m more interested in finding an insurer that will actually provide security and good customer service rather than one that shaves ten bucks off of the price or keeps calling you trying to sell things.

The whole process is not as scary as I thought it would be - just lots of little things. If you just take things slowly and calmly, the process of buying a home isn’t all that scary - everything largely makes sense. My wife and I talk things over carefully each evening and make sure we both understand everything - and do plenty of research when we don’t. We’re also both taking care of different pieces of the puzzle - she deals with the realtor on a daily basis, while I’ve been talking to the credit union and also scheduling the home inspection.

The anticipation is thick. Once the agreement has been reached and you’re moving through the steps (securing home insurance, having the house inspected, and so on), the anticipation gets ridiculous. My wife and I are almost in a daze with the sheer anticipation of moving into a home. For me, it’s particularly strange - the finished square footage of the home is more than two and a half times the finished square footage of any place I’ve lived in my entire life. It seems almost surreal to have that much space.

And here’s a bonus one:

Banks are wetting their pants over foreclosures right now. We were flat-out told by the mortgage specialist at our credit union that the mortgage market is “very weird” right now because there are so many foreclosures out there floating around and so many people are going “Oh my god refinance!” as their ballooning payments hit and such things. She seemed pretty negative about the short-term future nationwide, which almost shocked me considering we were actually engaged in the process of getting a mortgage.

In the recent past, I mentioned that our new home’s location has a Sam’s Club and a Costco almost the same distance apart, and now that we will finally have storage space, the opportunity to really take advantage of warehouse shopping became clear.

To decide which one we would go with (a significant decision, because both have membership fees in the $40 range), I took a trip to both stores in the last week, mostly to mill around, see what was available, check prices on some specific items I know we’ll buy in bulk, and then use that information to make a decision. Although Costco had some advantages (better electronics selection, somewhat nicer layout, and fresh produce while Sam’s had none), the advantages of Sam’s Club were too much to overcome. Here are seven reasons why I chose Sam’s Club over Costco.

Location, location, location Although the two stores are roughly equidistant from our future home, Sam’s Club is much closer to my daily commute. This is a significant advantage for Sam’s Club, though not a deal maker.

Diapers, diapers, diapers Sam’s Club has better diaper prices than Costco on the brand that we use (Pampers Swaddlers and Cruisers), but both are far better than the local department stores and also better than Amazon. Given that we have a child still in diapers and another one on the way in September, this is a very important factor for us.

Item selection I made a list of fifteen specific food items that we regularly buy that aren’t obvious common ones, ranging from specific fruit juices to our preferred brand of oats in bulk. Sam’s Club had a higher percentage of the specific items, and on the ones that they both had, the prices averaged out to be almost exactly even (Costco was cheaper by one cent on the total of seven items).

Help The help was highly variable in both places (depending on the person). I asked three questions of three separate people at each location. The best person at each one walked me straight to what I needed. The worst person at Sam’s Club got me to the right area quickly, then radioed for help. The worst person at Costco walked around in circles for a while, basically said that she couldn’t help me, then wandered away.

Distractions How many times did the store distract me into considering another item? This is mostly a way of seeing how the store’s layout convinces me to strongly consider items I wasn’t intending to buy or even look at when I came into the store, and the fewer such items, the better. Aside from the entrance area where I was distracted by a big screen television, I basically wasn’t distracted in Sam’s Cub - everything was spread out and open and sorted in an obvious enough fashion for the most part that I quickly found what I was looking for. In Costco, I was distracted several times - not good.

Checking out Since I was only in each store as a “guest,” I watched the checkouts for a bit and timed how long it took a few people to get through the line (I had time to burn when I made the visits, but when we have a house and another child, time will be important). The Sam’s Club checkouts were much busier (many more customers), but more checkouts opened quickly and the overall average time for both stores wound up being about the same.

Cleanliness Surprisingly (because I expected it to be the other way around), the Sam’s Club store seemed much cleaner than the Costco. Neither one was what I would describe as dirty, but the Sam’s Club had more of a “freshly-scrubbed warehouse” feel to it, whereas the Costco did not. Although this seems like an aesthetic choice, it does matter at a place where you may be buying foodstuffs.

While Costco did have a few specific advantages, Sam’s Club was the clear winner for me. Considering the membership fee is $40, the time spent figuring out which was better for me was worth the effort.

My wife and I have a son that’s nearing nineteen months of age. For those of you not intimately familiar with raising a child, this means he’s walking well, running a little bit, and has a vocabulary of about 75 to 100 real words with about that many more words he’s apparently made up himself. He eats the same table foods that we do (for the most part), but he also has very little grasp on what’s appropriate behavior and what is not. Everything is about playing and exploring and figuring out the world, all the time, and this means that meals are playing and baths are playing and attempting to be quiet and still during a church service is not going to happen.

Along the way, we’ve picked up a lot of techniques for not only allowing him to express himself and explore his world, but also save money in the process.

Odds and ends around the house make the best toys for him, not purchased toys. Most of the toys he’s received as gifts are largely forgotten in favor of playing with many of the types of objects we play with. He’d rather play with pots and pans on the kitchen floor or talk into an old cell phone or stack up canned vegetables than anything else. The only toys of his own that he plays with much at all are two small stuffed animals, his crayons (he loves drawing), his MagnaDoodle (which he plays with when emulating my laptop), and his books (he reads a lot, again, emulating us). The rest of the toys he has could probably go to the dumpster and he wouldn’t notice. The lesson here is don’t spend a bunch of money on new toys for a toddler, because most of them will be ignored while he emulates you and is creative with other things.

He has a select few “favorite” books that we read over and over and over and the rest scarcely get read. 90% of the time, if a book is read to him, it is Brown Bear, Brown Bear (which teaches color), From Head to Toe (which teaches body parts), or Go, Dog. Go! (which teaches colors, low numbers, and object relationships). He used to be really into My Many Colored Days, and there are a couple of new ones that he’s starting to like a lot. The real truth is don’t buy a lot of books for a toddler - just buy a few sturdy board books that teach basic concepts.

He’s learning dietary lessons from us, so we lead with the good stuff - and the relatively cheap stuff. Fruits and vegetables are inexpensive, especially in the quantity that he eats, so we make sure he stocks up on them. By doing this, he’s really learned to like most vegetables, especially carrots and green beans, instead of rejecting them. We usually feed him in courses, with the vegetables first, followed by something with protein (meat, eggs, cheese, etc.), then some fruit, but most of the volume is in the veggies and fruit. Really - we just get whatever’s on sale in the season. We almost always eat the same exact things as he does, though often his are more steamed or prepared a bit differently. In other words, don’t sweat what to feed your child - keep your own diet simple and eat the same things as him/her and lead with the healthiest portions of the meal.