This is a guest article by Willfrid, a fellow financial blogger that likes to find new frugal ideas. Check out his blog Your Finish Rich Plan, a blog that puts the emphasis on the personal in personal finance.

Why do power adapters have to be so bulky? On second thought, maybe I should be grateful that they are. See, I had to move a couple of them around the power strip in my room in order to plug in my laptop when I realized my cell phone charger was much warmer than usual, even though nothing was plugged into it. So I unplugged it, but after a while I found myself googling “hot cell phone charger”. The first result that came up was from TreeHugger: “Unplug Your Cell Phone Charger“. I was floored: only 5% of the power drawn by my cell phone charger is actually used to charge my phone? The other 95% is wasted when I leave it plugged into the wall, but not into your phone. This triggered another round of Google searches, the end result of which is this here post about standby power and how it translate into real dollars out of our pockets.

A surprisingly large number of electrical products — from air conditioners to VCRs — cannot be switched off completely without being unplugged. These products draw power 24 hours a day, often without our knowledge. Standby power, also called vampire power, refers to the electric power consumed by these appliances while they are switched off or in a standby mode. For any single appliance, the consumption is usually not much, but when we add up the power use of the billions of appliances in the U.S., the power consumption of appliances that are not being used is substantial.

Some Eye Opening Facts
Anything with an external power supply, remote control, or clock display require standby electricity. The typical American home has 20 electrical appliances that are constantly costing us money. With the above criteria in mind, I did a quick check around my house and counted 4 TVs, 2 cable receivers, 4 stereos, 6 cell phone chargers, 1 microwave, 1 stove, 2 DVD players, 1 PS3, 1 PS2, 1 desktop computer, and 2 alarm clocks. At that point I wasn’t even interested in making sure I didn’t miss anything, because all those appliances continue to suck electricity even when they’re off.

For example, your TV is actually turned on all the time even though it looks like it’s off. It is constantly preheating the picture tube and powering the receiver for the remote, just waiting to be “turned on”. According to a Cornell University energy expert, these so-called “vampire” appliances cost consumers an estimated $3 billion a year — or about $200 per household.

Electrical appliances use energy even when switched off in order to support features such as timers, clocks, memory and remote “on” and “off” switches. “Satellite receivers for televisions and VCRs, among other appliances, use almost as much electricity when they are switched off as when they are on”

Satellite TV systems and some DVD players, for example, each cost about $9 a year for standby power; an energy-thirsty TV can cost more than $10 a year.

The standby power of a computer monitor only costs about $3 a year when the computer is shut down nights and weekends. However, if the computer’s “sleep” function is used, the power costs $41 a year for those nights and weekends — almost as much as the $57 a year it costs to run the computer just on weekdays.

Worldwide, standby power consumes an average of 7 percent of a home’s total electricity bill, although that figure is as much as 25 percent in some homes. In Australia, standby power accounts for 13 percent of total energy use; in Japan it accounts for 12 percent; and in the United States, 5 percent.

According to America’s Department of Energy, national residential electricity consumption in 2004 was 1.29 billion megawatt hours (MWh)-5% of which is 64m MWh. The wasted energy, in other words, is equivalent to the output of 18 typical power stations.

Some studies have suggested that the total phantom load caused by the United States alone would provide enough power to handle the electric needs of Vietnam, Peru, and Greece.

Increasing the efficiency of appliances would cut standby power consumption by about 90 percent, according to a recent study by the International Energy Agency in France.

The vast majority of consumers aren’t even aware that electrical appliances continue to draw electricity when switched off. And even if they were aware, they would not be able to purchase more efficient alternative, because no regulation requires manufacturers to label how much electricity their appliances draw when off.

What can we, the consumers, do about this?

  • If timers and other features aren’t being used, turn off our most power-hungry appliances by plugging them into fuse-protected power strips, also known as surge protectors.
  • When choosing a new appliance, research if it uses less than 1 watt of standby power by accessing web sites such as this.
  • Encourage our U.S. representatives to support legislation that would require labeling of appliances with their standby energy requirements (that could be years off)

A couple power strips is a small price to pay for an estimated $200/year savings. Now if only I could find a way around the cable receiver’s 5 minute reboot cycle…

Saving more money, a goal we should all have. Sometimes, it is quite difficult to ignore our desire to want that new thing. We can all relate. Whether it is that golf club, new pair of shoes, or the TV, they all seem to reach out to us and say “You know you cannot live without me… Bring me home today”.

Once in a while, we can temporary talk us out of the wish but let’s just say that we just cannot do it this time. We have decided that the new product is exactly what we need and we won’t be denied until we get one. Then what?

At this point, all is not lost. We just have to understand and appreciate our impulses and desires and still try to maximize our savings.

Take my desire to always want that cup of Starbucks coffee. There are many times this comes up and I would feel the burning desire to drive to the nearest coffee shop. In the old days, I would get a grande (medium) sized coffee, but I have come to realize that all I really need is a tall (small) cup because all it takes is the first 25 ml of liquid to calm my nerves. I learned to stop thinking about whether a medium or small cup is a better value because what’s the most important is how much I end up saving and ultimately keep in my pocket. I understand my desire (to want coffee), the product (Starbucks coffee size differences), and the solution just followed.

The key to saving more money

Here’s another example, my future purchase of a flat screen TV. I don’t own one right now, but I want one every time I go to Costco. I did some research over the past few months, and I know that the ones with 1080p are more expensive because it’s provides the best picture quality in the market today. For many of us, we want a flat screen TV because it is cool, not because it’s got 1080p. If we understand what it is that makes us happy and calm our impulses, then we won’t waste our money on the high end model that may cost $2,199 but instead get the lower end model that might be $1,399. Most people will be just as happy with purchasing either, but the ones that take the time to understand their desire would have saved an extra $800.

These are just two examples, but this actually applies to almost everything we purchase because there are always comparable products at different price ranges. The key is to understand our need and want, understand the product so we can make informed decisions, and the solution will soon follow.

Understanding is the key to saving more money.

Entrepreneurs sucks at investing

I really have a great appreciate for entrepreneurs. In fact, I work for one who’ve managed to built a 30 million dollar company from scratch in a short couple years with no funding. However, I was speaking with my boss the other day and I realized that many of the same traits that make entrepreneurs great actually keeps them from being a great investor. Let’s talk about these in more detail.

Optimism
Every entrepreneur is optimistic about the future. In a business environment, it is so important to think about the potential rewards because optimism is the only motivation tool at his/her disposal to weather the tough times.

An investor though should not be optimistic. The best investors are the ones that worry about the potential downside all the time. The number one objective of an investor should be to not lose money and the only way to do so is to assess the risk of the portfolio constantly.

Convicted in the Decision
In order to be successful, the entrepreneur has to be convicted in the decisions that are made. This is the only way to be able to lead other people to follow and execute his/her direction with confidence.

In an investing environment, being too convicted is going to hurt an investor. It’s good to make decisions, but if it doesn’t turn out the way we though it will, we shouldn’t convince ourselves that it was the right direction going forward.

Aggressive
Entrepreneurs are aggressive. There is no doubt that successful entrepreneurs made big bets at some point in their lives. Many entrepreneurs start off by leaving a good paying job and risking it all for something they truly believe in. Some fail, some succeed but they go with the mantra of “no guts, no glory”.

Never Give Up
Entrepreneurs never take no for an answer and they never give up. The only reason why my boss is successful is because he never gives up. There are business relationships that he saved because he never, ever gave up on winning the customer back. In a business world, this is one of the most admirable trait to have.

Investors better give up when things turn the other way. A famous quote related to this is “It’s not what you don’t know that hurts you the most, it’s the things you know for sure that turns out to be completely wrong that hurt you the most”. If an investment turns south, admit defeat and get out of it immediately.

Conclusion
I’m glad that there are many professionals that help these successful entrepreneurs handle their finances because it would otherwise distract them from doing what they do best – build their business.

I feel like I need to somehow separate investing and business before I can be successful in both. I’m a pretty good investor so far, so it will be interesting for me to see how I can become a successful business person also.

People who find themselves in credit card debt may take serious measures to prevent balances from creeping higher. Often this includes transferring large balances from older, high interest credit cards to a brand new credit card with a 0% or very low introductory interest rate.

To remove the possibility of ever using the original card with the big, bad interest rate, one may make the mistake of closing down the higher interest credit card(s) and just sticking with the new card.

While shifting the debt load to save interest is often a wise decision (provided you actually have a plan to pay off the majority of the balance within the introductory period), closing the original card is not. Here’s why:

Credit History
Even if it’s bad history, you don’t want to make it disappear. If you held a job for 10 years, even if you got fired, the work experience is relevant and valuable on your resume. You wouldn’t want to remove it from your resume, it could hurt your eligibility or attractiveness for future jobs.

Same goes for credit accounts – even if they have stains on the record, the record is still valuable.

Debt to Credit Ratio
Older accounts often have higher credit limits than new cards. Credit lenders will look at your debt to credit ratio (% of your total credit you are using) to assess your risk and what interest rate they should charge you. Closing an old account with a high limit can have a dramatic impact on your debt to credit ratio.

For example, if you “max out” a $15,000 limit on Credit Card A, your debt to credit (not counting other forms of credit) would be 100%. You are using 100% of your credit available.

You open Credit Card B with a low introductory rate and a limit of $15,000. You transfer $15,000 from A to B, and you have $15K to $30K debt to credit, or 50%.

Close Credit Card A and you’re back to 100% debt to credit.

Just Chop ‘Em Up
Instead of closing your credit card account, leave it open, and cut up your credit card. Don’t use the new card until it’s fully paid down, and keep reading MoneyNing to stay motivated on frugal living and debt freedom.

relationship

Families are great. They are the first ones to come help, and the last ones to leave us when we are in trouble. When we were young, we lived with our families, and we start our very own later on in our lives.

Families however, make money matters even more complicated. Let’s face it, money is important to us, and anything important can potentially create conflicts. Most people enjoy a very good relationship with their families because there is no money conflicts; for others, money (or the lack of) can become a sticky subject.

Most people believe that the lack of money creates conflicts, but having money is just as troublesome. When parents have money, sometimes their children will try to fight for the inheritance, directly or indirectly. This is one of those unfortunate events that we all dislike when we hear it, but we see people do this time and time again. Another example is when our family members are in trouble and we become the “defacto” go to person for free loans.

So, if having money and not having money both creates conflicts, what should we do?

Here’s what I suggest. Although we cannot eliminate conflicts completely, we can drastically reduce the possible fiction points by being able to sustain our own finances. If we cannot stop everyone else from asking us for money, at least we can stop asking others for it. This also means taking the appropriate risks with our finances, and doing our homework so we are prepared for the consequences.

For business owners, this means they expand at a controllable level. For the rest of us, this means that we be responsible and create an emergency fund. Not gambling excessively or buy a house that we never really could avoid (something far too many did the last few years) also comes to mind.

If we don’t need financial help from our family members, I bet our family life will improve too. Money matters, but family matters a great deal too. So create a happy financial situation, and relieve the potential stress it will have on our families relationships.

I get junk emails many times a day but this list of tax deductions is quite useful so I want to share it with you. Those that haven’t filed taxes yet should take a look and see if you’ve missed anything.

  1. Any expenses paid related to charity activities. This even includes the transportation costs.
  2. Any transportation cost or lodging expenses incurred during a medical crisis
  3. Legal fees you had to pay while obtaining or collecting alimony
  4. Gambling losses can be tax deducted too. Actually, it can only be offset with the gambling gains but do not forget this.
  5. Money spent looking for a new job in your current occupation, including fees for resume preparation and hiring a headhunter are tax deductible.
  6. Contraceptives, if bought with a prescription
  7. Any commissions and closing costs when you sell a property can be deducted
  8. Seller-paid points on the purchase of a home
  9. Education expenses are tax deductible if it is required by law or your employer. Also if it is needed to maintain or improve your skills
  10. Pre-payment penalties and late fees for a mortgage

Remember to take advantage of all the tax deductions we can get by not missing any of the above.  This useful list came from JKLasser.com so thank you for sharing that with us.