To pay or not to pay? Extra principal that is.

Here's the dilemna. I have a mortgage that month after month, I ask the question if I should be making additional principal payments toward it. Sure, it will be nice to get on the fast track of paying off the house. But that money could go to better use right, say.. investing it in a high return stock, but that's uncertain. Also if I do pay down the principal, my following regular payments would increase the principal portion that much more. That means my subsequent regular payment would have a lesser percentage riding on interest. This is good and bad.. Good, because I'm that much close to complete home ownership. Bad, there's less interest payment to write off on your taxes. There's differing opinions on the web, so I go schizo every month when staring at my mortgage bill..

Why doesn't Microsoft Windows drop its price over time?

Looks like pricing information and release date has been announced. Intentionally or not, the info's out there. The purchasing price for operating system software, especially those from Microsoft, doesn't seem to decline with time. This is one of those rare technology purchases you can get in on early without having the price cut in half a year late. Jumping on the new OS bandwagon early can be cost effective because your ownership time to the next major release is that much longer when purchased early on. Be warned though, be prepared to download patches like crazy if you are one of those getting it on January 30, 2007. Here's the information from PC World:

According to Amazon.com, Windows Vista Home Basic will cost $199 for a new copy and $100 for an upgrade. Windows Vista Home Premium, a step above Home Basic in functionality, will sell for $239 for a new version and $159 for an upgrade. And Windows Vista Ultimate, the highest-end version of Vista for consumers, will cost $399 for a new copy and $259 for an upgrade, according to Amazon.com. Windows Vista Business will cost $299 for a new copy, while an upgrade will sell for $199.

Wholesale clubs can save you money, but beware!

I have been a long time customer of Costco, even back when they were called Price Club. Yes, they charge a membership fee at this wholesale chain but if used advantageously you can come out ahead. But saving is not just a matter of buying all you can buy at these wholesale marts that can sometimes look like airplane hangars.

The key to long term saving using Costco is to limit most of your buying to everyday items that are used frequently (soap, detergent, etc.) or items with a long shelf life that you use regularly (sugar, vinegar, etc.) You reap a tremedous cost savings in buying these types of items in bulk because you will always be buying them for everyday use. So why not buying them in a large quantity and save while you are at it. This way, you will always have the item on hand and end up making less trips to the supermarket which brings you extra savings on time and gas. Over time these targeted purchases can save you tremendously over retail prices at supermarkets and department stores.

Now buying everything in bulk that you can buy at wholesale prices is not always a good idea. Items that are quick to perish or spoil can end up being budget busters. For a family of 5, it might make sense to buy eggs in 3 or 4 dozen packs. For a couple of 2, a lot of those eggs will see the trash bin before they're cracked open. Now that would be wasteful. I've known many people who make this mistake of buying in bulk when they should be buying regular portions. Heck, I've made this mistake. So you have to watch yourself to determine what items will help you save from buying in bulk and others that'll do nothing more than deplete your funds. So think twice before picking up that 5 gallon tub of mayo while happily pondering about all those dollars you'll save.

Credit cards can be your friend!

Welcome. This is my first post in what I hope will be many on how to save money. There are so many outlets for our hard earned cash these days that we lose track how to manage it. The mentality of keeping up with the Joneses does not help either. In this world filled with gadgets and gizmos dying for our attention, it is becoming increasingly difficult to manage our wealth. This blog will be a personal reminder for myself to take back control of my finances in a healthy way and hopefully learn of others struggle to maintain wealth in this increasingly materialistic society.

The first tip I would like to share with everyone is the obvious. Let's get rid of credit card debt.. easier said then done. There are so many resources on how to do this, I will not rehash them. What I do want to say is that once you have debt under some control, credit cards can be your everyday friend. Yes, don't cut up the credit cards after you've paid off the debt. Keep the good ones! Just resist the urge to pretend that it's free money, it is not. It's money that's more expensive than actual money... On average, 18%-25% more expensive than regular money if you know what I mean. The interest is the killer here.

But let's say you treat credit cards like debit cards. This is where the perks are abound. There are a lot of cards of there now with rewards programs without annual fees. Yes, we've seen them a plenty and I would like to present a sample use case for everyday life. You shop for groceries, you pump up gas, you buy stuff online, you dine out, etc. You can save away some money here and some money there if you align up the right cards for yourself. Here we go...

You pump gas... get Citibank Shell card (or any other gas rebate card). 3%-5% savings on gas! When everyone pays $3/gallon with cash, you get the convenience of card at around $2.88/gallon. This is such a win/win situation.

You buy groceries... get a Chase Rewards with the 5% off groceries / drug store purchases. Just go to their site and check it out. Buying groceries over eating out can be extremely budget friendly. Now imagine getting 5% back on top of what is a cheaper alternative. You save!!

Now if you have to eat out.. There are some American Express cards out there that rewards you 3% back. That's nothing to laugh at over time because dining out can become a huge expense fast. That's why a 5% grocery can really make a much bigger difference.

I'm not endorsing any company or card but there are plenty of rewards out there willing to be had with a credit card. The key is to have a few card that can you give you the best rewards for your most frequent activities. The only struggle is resisting in running up the bill. For those with the willpower, credit cards can be a friend in reducing your daily expenses significantly over time. Hey, maybe in 5 years, you can save enough to not feel bad about treating yourself to that 50" plasma! Just my first tip to saving for everyday!