10 Tips on More Efficient and Economic Use of Air-Conditioners

Air condition your home more cheaply and more efficiently

Surging oil and gas prices have generated a high increase in electricity costs as well. With the summer approaching rapidly I decided on taking a look at some options of cooling our homes cheaper and in a more energy efficient manner.

The air-conditioner is the most common way of cooling our homes and as such I’ve decided to focus on it this time. Here are the tips I’ve been able to gather through some research. As always, I’d appreciate any ideas you might have:


#1 Set the air-conditioner to no less than 77F or 25C

Apparently each couple of degrees less will cost about 5% more in increased electricity consumption. Setting the air-conditioner to lower levels will force it to constantly operate trying to reach lower temperature it can’t possibly reach.

#2 Use a thermometer to better adjust the temperature in the room

My air-conditioner comes with a built in thermometer in the remote control. This way I know what would be a realistic temperature to set the air-conditioner to in order for it to operate economically.

#3 Properly shade your home

Shading dramatically lowers the green house effect created from sun radiation heating your glass windows and, in turn, your house. Experts claim proper shading can reduce air-conditioning costs by up to 30%.

#4 In the summer vents should be directed up-wards

Cold air travels down towards the floor as it is heavier than air. Adjusting the vents up-wards would enable the cold air to travel better to the entire room.

#5 Clear any objects directly obstructing the flow of air

The space close to the air-conditioner’s vents should be clear of any objects obstructing the air-flow. A close sofa, for example, might significantly hinder cooling efforts. If a particular object gets really cold it’s in the way.

#6 Keep the air-conditioner’s filters clean

Over time dust accumulates on the filters and can significantly reduce the efficiency of the air-conditioner. Clean filters at least once a month for optimal results.

#7 Make sure the area conditioned is sealed

There’s really no point in air-conditioning the living room with all the doors open.

#8 Make sure the unit is properly installed and is not located next to heating sources

Many different parameters need to be considered when installing an air-conditioner. Among these is its location, its physical installment and its exposure to external heating sources (the sun, an oven, etc.).

#9 Install fluorescent lights

Fluorescent lights are much cheaper in the long run and also give out no heat. If you’ve ever stood under a regular bulb for more than a couple of seconds you know how much heat they generate.

#10 Relatively new Inverter technology

A relatively new air-conditioning technology called “inverter” increases the efficiency of air-conditioning units. Air-conditioners with an “inverter” tag essentially have the ability to continuously regulate their thermal power flow. While regular air-conditioners either turn their compressors on or off inverter air-conditioners can vary the speed of the compressor thus saving power and also keeping the temperature more leveled and comfortable.

Related Posts:

• The Perfect Home is a Financial Nightmare - Don’t Get Caught Up In the Costly Race
• Save Time and Money with These Tips for Organizing Your Personal and Financial Records
• How Shopping for Groceries Online can save you Money As well As Time
  

Data source: US Department of Energy
Image by: humanoide

How Shopping for Groceries Online can save you Money As well As Time

The advantages of shopping for groceries online significantly outweigh the disadvantages – 9 distinct money and time saving consideration

I personally dislike shopping for groceries. I usually have much better uses for my time than combing the length and breadth of a supermarket and standing in endless lines. I think every spare moment in my home is precious and shouldn’t be spent standing in line waiting for someone to decide whether she really wants that candy bar or why she was charged an additional 5c for something that used to cost a bit less.

Unfortunately shopping for groceries is a basic and essential need and activity which can’t be overlooked or neglected.

Although I truly try to avoid grocery shopping I do enjoy fresh fruit and vegetables, meats and cheese. I’ve been aware of the option of shopping for groceries online for some time now but I’ve also been worried about the quality of the products I’ll receive without choosing them myself. Obviously since I’m already shopping for those groceries there’s no point in paying higher prices online for boxed and stored goods and I buy those as well.

Recently I’ve been more and more interested in online grocery shopping as I’ve had enough of these endless journeys. I’ve decided on trying an online order a couple of times with high hopes of ridding myself of this annoyance without having to settle for stale and day old products.

Delivery days for my area are scheduled for Thursday, Friday and Monday and I’m very eager to give it a try. In the mean time, much like I always do, I sat down and tried to look at this experience from an economic and financial viewpoint. Online grocery prices are considered to be relatively higher and can amount to 15%-20% more than shopping at the supermarket itself. I came up with interesting results which just might justify paying higher prices for online grocery shopping.

The following are the main points I’ve given thought to regarding online grocery shopping. I’d love to hear more from your experiences with shopping online for groceries:

#1 See the total price of your shopping cart at any given moment

I think the number one advantage of shopping online is the ability to view the total cost of our purchase at any given moment. Think about how many times the total amount surprised you. “I just bought eggs, milk and a couple of more things… How did I get to $100!?” Sounds familiar?
With a total amount available at any given time you can really examine what you’re about to buy and maybe decide on settling for a cheaper brand this time.

#2 Really stick to your shopping list

Another distinct advantage is the ability to really stick to your original shopping list. You avoid the instant craving and sudden impulse and just pick what’s on your list.
In future purchases you’ve got your list all ready and you only need to make minor adjustments. What are the chances you’ll deviate from it and spend wildly on an attractive bottle of wine that just smiled to you from one of the isles?

#3 Check if you actually ran out of something

How many times have you asked yourself “did we run out of this and that?” and couldn’t remember. All you have to do is get up and take a peek at your refrigerator or pantry and find out. Avoiding unnecessary shopping might save significant amounts of money in the long term.

#4 Dramatically lower your exposure to supermarket marketing tricks

Much has been written on the cheap yet effective tricks supermarkets employ on us susceptive shoppers. I’ve written a post on cheap marketing tricks supermarkets employ and how to avoid overspending by being aware myself.

When you’re shopping from home you’re in a controlled environment unsusceptible to those tricks. I believe that save money. If those tricks hadn’t worked on us supermarkets wouldn’t employ them.


#5 Compare prices easily

No longer having to duck all the way down to the bottom shelf you can easily compare prices for similar products and save a bundle on good cheaper products.
In each session you can choose another niche to dig in to and buy cheaper products of the same quality thus lowering you grocery expenses on fixed basis.

#6 Add or remove items quickly and without hassle

Looking at the bottom line you suddenly decide to get rid of a certain product. Maybe you forgot something and you’re already in line. It’s very easy to add and more importantly remove products from your shopping cart when shopping on line.

#7 Get shopping done very quickly

By the third or fourth time I guess everyone has their own list of groceries to buy on a weekly basis. Log in, load the list, make minor adjustments and get exactly what you need. I’m guessing 30 minutes ought to be enough for the complete process.

#8 Choose the delivery time

Buy from work and have everything arrive 10 minutes after you get home, or maybe late at night if you’re insomniac. I believe this might also limit you a bit as you have to wait for the delivery sometimes but wouldn’t you have spent that time in the supermarket in the first place?

#9 Save on gas

With gas prices so high each 15 trip to the store is a waste of money. Shopping online helps us save on gas and car related expenses easily.

I’ll report back with my couple of first experiences and tell you how it’s been. I’m most worried about product quality and packaging. I do believe 15% higher prices just might be economically and financially sound as the advantages seem to outweigh the disadvantages significantly.

Related Posts:

• 10 Tips on How to Avoid Overspending In Supermarkets
• The Problem of Accounting and Budgeting For Cash Expenses

Images by: desiitaly, miss_jen

Budgeting As a Family Activity

Encouraging your family to take part in the budgeting process is crucial to its success

After a very short while budgeting actually becomes fun. You simply can’t wait to add up the numbers and see how you’re meeting your goal, how much money have you been able to save and how much debt you’ve been able to repay.

After another short period of time you begin visualizing you’re budget at every spending crossroad. You become dedicated and determined on meeting your goals at the price of postponing satisfactions and avoiding certain luxuries.

When the month ends you eagerly sum up expenses only to find your efforts have been foiled by seemingly uncooperative family members. “Don’t they know how hard I’ve been working to better our finances?” you ask yourself. Well, the most simple answer here, and the one I’ve obviously been aiming at, is no.

When we really take interest in something suddenly is seems the whole world revolves around that same thing. It’s a natural phenomenon as we now divert our attention to that specific issue. We, ourselves, are often surprised by the wealth of information and occurrences we hadn’t noticed before. Still, try to remember how it was before you read your first personal finance article. You were probably oblivious to this entire world. So will your family member be should you not include them in the process taking place.

Since our families play an integral part in our “family budget” the process of setting goals and budgeting must take place at a family level. Cooperation and mutual understanding are required for this process and way of life to succeed.

What are the necessary elements of any successful family process?

No change and no process can succeed in any organizational unit without the people that make up that unit. The same goes for families. Families are social structures made up of people.

Change in a family requires the same elements as any organizational unit to succeed. I believe the following draw a good outline of the required elements and atmosphere:

1. Cooperation – Without cooperation even the most gifted manager can’t succeed. We are always co-dependent on other people and on their cooperation.

2. Mutual Understanding – There’d be no cooperation with our mutual understanding. Each person has to understand the process and its general goals in order to identify with it and take part in it wholeheartedly.

3. Thoughtfulness – Especially true in families, thoughtfulness is most important and required for success. We must try our best to understand the need of the other members of the family without casting aside what might seem trivial to us. Lack of thoughtfulness will eventually cause the other members of the family to abandon the process and disregard it.

4. Compromise – An integral part of any process between more than one people is compromise. Conflicting needs and wishes need to be settled by mutual compromises. Compromise is a direct result of the points discussed above.

5. Positive Feedback – Often overlooked positive feedback is the one mean in which we acknowledge the other family members’ efforts and cooperation. Positive feedback is probably the best mean of education and reaffirmation and is so important I can’t stress it enough.

How to construct a family budget and goal setting process?

Having in mind the aforementioned elements we now incorporate them into a process of setting goals and creating a family budget. The process itself should include the following steps:

1. Laying the ground and creating the framework – The first step should include constructing a general budget outline and general ideas and goals. These will serve as a framework for the first family gathering in which the process will be initiated.

2. Discussing the process and the general mission – Acknowledging the importance of our family members, the second phase should include a detailed discussion of the process and a general, clear mission statement.

Explaining the process and its goals will create the required atmosphere for change. There’s always a place for allowing each family member to make suggestions and remark on what’s happening. Being heard is very important to us all. A process we can influence is usually process we’d like to be a part of more.

3. Discussing specific numbers and constraints – After the ground has been set it’s time to dive into the details. This will probably be one of the more difficult stages where each family member will try to protect their own as they might believe they are being criticized and scrutinized.

It is very important to keep an open and relaxed atmosphere and try to keep judgmental arguments to a minimum. It is also important to stress and point out our own little cost drivers and luxuries.

Another important part of this stage is to agree money has a limit. This is a powerful constraint that cannot be argued with. Use this as an anchor for the rest of the discussion.

Each expenditure will have to be analyzed in order to agree on a conclusion and a path towards goals.

4. Setting specific goals for the entire household and each family member – After agreeing on select expenditure and future plans and wishes goals need to be set.

Again, it is very important each family member has at least a couple of personal goals in order to become an integral part of the process.

Goals should be measureable and obtainable even if a bit ambitious.

5. Creating timely family meetings to review budget and goals – Timely reviews, such as monthly meeting to analyze the past month’s budget and performance have a key role in the entire process.

They serve both as course correction and as a constant reminder we’re not there yet. Positive feedback is encouraged throughout these meetings. These are also a place to constantly review the budget and maybe shift focus should sufficient progress has been made in a certain expenditure item.

6. Celebrating success and milestones – Often overlooked, celebrating milestones is encouraged in project management literature and in life as a whole. The process itself is never ending and it is very important to celebrate success in order to instill a sense of capability and reward.

I believe that every member of the household needs to be aware, in some level, of the financial planning of the family and contribute to achieving the family’s goals.

Image by: Chris Gin

Privatization Is Not a Miracle Drug (Sometimes it’s Just a Drug)

Privatization does not automatically equal higher efficiency and better service despite common belief

The private sector is hailed for its efficiency and effectiveness. The bottom line is one of the best drives for a corporation to become just that: effective and efficient. The public sector is often thought to portray the exact opposite and is usually thought of as slow, inefficient and lacking proper motivation.

As a result privatization has taken hold worldwide. Public services were entrusted in the hands of corporations with the hope and reason their efficiency and effectiveness will translate to better public services. Wouldn’t we all like to wait less, get better service from more experienced people at lower costs?

However, privatization is not a miracle drug. Public and government organizations face no bottom line. Even if layers of bureaucracy and thick-headedness may obscure it, these organization genuinely aspire to give us the best service possible under a given budget. Private corporations have only one objective: Profit.

The debate whether profit should be the only bottom line for corporations is long and was held at many other occasions. My argument is that without proper regulation and crafty contracts that tightly bind the service with the corporations reward outsourcing to private organizations might quickly become more expensive and much less favorable for us citizens.

De-Privatization of water services in Paris

A very recent example motivated me to write this post. After 100 years the city of Paris decided on a de-privatization of water services due to what seems to be poor and costly service. This could be a part of creative negotiations on the side of Paris city hall but I doubt it.

Apparently during the 1990’s a handful of private corporations and the International Monetary Fund led an effort to privatize water services throughout the world. During the last couple of years the number of cities to de-privatize the water service back their control has grown with Buenos Aires in Argentina, Hamilton in Canada and Uruguay as a state as examples.

Worldwide experience tells of corporations cutting back on personnel in the areas of water testing and maintenance. More extreme voices suggest companies cooked books to collect higher government incentives.

California’s troubled electric industry

The power industry in California was privatized back in 1996. Five years later citizens faced burnouts and skyrocketing rates. Every case of failed privatization is different and this specific crisis had reasons of its own.

First, regulation was faulty forcing suppliers to ration their electricity instead of manufacture more. Complicated relationships with the electricity market and rising demand literally left no incentive for the private corporations to produce more electricity. Remember how incentive looks like? Bottom line and profit.

The pros and cons of privatization are summed up in the following table (for deeper analysis see Wikipedia):

1. Performance - Higher Efficiency seen trough the bottom line only. What doesn’t generate profit gets cut off.
2. Improvements - Lack of financial incentive will guarantee no improvements.
3. Corruption - Less political corruption, higher corporate corruption.
4. Accountability - Financial reports or elections.
5. Goals - Economic vs. political or service vs. profit.
6. Natural monopolies - A natural monopoly is a dangerous thing to privatize. It is possible however.
7. Concentration of wealth - In the hands of the government or in the hands of private people.
8. Profits - The Bottom Line

It doesn’t matter whose fault it was California was left in the dark or Paris water quality deteriorated and became more expansive. The complicated relationship between public services, a regulator and private corporation is bound to guarantee problems.

Even an ultra-sophisticated regulatory environment cannot guarantee successful privatization efforts. Only a corporate environment that acknowledges it’s a part of a society will generate successful privatization efforts.

Modern forms of privatization

Increased problems in privatization efforts have created more creative privatization methods:

BOT or Build-Operate-Transfer Contracts

BOT contracts are a form of privatization where a government or public organization may grant a private organization a concession to finance, design, construct, and operate a facility for a specified period, often as long as 20 or 30 years. After the concession period ends, ownership is transferred back to the granting entity.

This is actually a form of project financing where the government takes advantage of the private organization’s effectiveness and efficiency in building and operating granting that organization profits to cover his investment and its return. At the end of the period the government has a new highway, water treatment center or anything else that comes to mind.

Municipalization

Even though a municipality is a public organization it is smaller and should be more efficient that the government itself. Municipalities see higher incentives for local services and are expected to maximize service and efficiency.

Partial Ownership

This form of privatization enables the government to “keep an eye” on the privatized organization by holding a certain “golden” or blocking share of stock. Countries often make use of partial ownerships in Telecom companies and defense companies whose business is highly sensitive for every government.

Privatization is here to stay whether we like it or not. The questions are: will the regulators learn from experience and will corporations finally develop a social conscience?

Teach Your Kids Basic Finance and Economics with Monopoly - 11 Valuable Lessons

11 lessons to teach our kids drawn from a monopoly game I just finished

I remember monopoly being one of my favorite games. I remember getting filled with anxiety before the first throw of dice hoping no one gets to my rail-roads before I do. I used to love winning and really hate losing in monopoly. There’s something really eternal about this game.

Looking back at it I can’t say I remember monopoly creating or changing my perception of money as a child. Then again, money has always been a personal favorite of mine and maybe monopoly had something to do with it. Anyway, I do think parents can leverage monopoly for some fun education and basic finance and money teaching to kids.

I’ve just finished a round of computer monopoly (I actually won with my secret rail-road orange property technique!). During the game I’ve written down 11 important lessons the game teaches and imbeds as intuitive in the player’s mind (I believe that the younger the player the more powerful the influence of the game is). I thought It would be fun writing a post about it:

#1 Money doesn’t grow on trees

The most powerful lesson, in my opinion, is of the value of money. You have to think carefully and constantly evaluate how much money you have and how long it will take you to pass go and collect a bit more.

You simply can’t buy everything you desire and you must accept the tradeoffs that go hand in hand with limited funds.

#2 You need luck

You can’t escape it. Luck has a key role in success. It may seem unfair but that’s the way it is. You might have had the best of strategies, your properties lined with bright and shiny hotels but no landed on them for three rounds. Then, after your friend just finished building his first couple of houses you decide to visit them every turn.

Learning to live in peace with the random factor in life is essential to reduce frustrations (you can never really avoid them).

#3 You need other people

With good monopoly players you’re chances of landing three properties or four railroads is slim to none. Often times the game leads to a sort of stale-mate in which the first two to strike a deal will surely cause the downfall of the rest of the players.

Learning to cooperate with other people and learning that where ever you go you need other people is a valuable lesson for life.

#4 There are win-win situations

Learning to think of deals as a sort of win-win situation is essential for good business understanding. Some people think of deals as closed system where one gains at the others expense. Seldom is that the case (even though in stocks that’s usually the case).
Almost any deal can be put in terms of win-win situations and can be marketed as such. This view is necessary for progress and deal closure.

Teaching our kids to create win-win situations and to be able to express a certain value to other people is priceless.

#5 Shortcuts can lead to jail

I’ve never really understood why three double rolls in a row result in jail. After I’ve written it down as a lesson it suddenly hit me this might be the reason. No such things as shortcuts in life (or very few of them anyway). Shortcuts will usually result in getting thrown back and held for some time.

Hard work and good planning is always a sound lesson.


#6 Life holds good and nasty surprises

I love the little drawings on chance and community chest cards. I take pride in the creativity of this lesson. There are both good and bad surprises in life and we must accept them as they are.

Taking each surprise as an experience and learning to live with uncertainties is an integral part of life.

#7 Even small things can influence the greater scheme

I love J.R.R Tolkien’s ‘Hobbit’ and ‘Lord of the Rings’. I always enjoy the lessons of the massive impact small things can have. I’ve won my share of monopoly games by buying Baltic and Mediterranean Avenue and laying two $450 traps for innocent players. $2 rent properties should not be trifled with.

Teaching our children to respect what appears as small and weak is very important.

#8 Patience is a virtue

Someone will eventually hit that certain square. Patience is all that’s needed. They mass pas it 5 rounds in a row but eventually they’ll land on it. I always enjoy the long wait before someone is tackled by 4 menacing green houses.
Patience is not something kinds excel in. Monopoly is another opportunity to strengthen this trait.

#9 Investing early pays higher dividends

My favorite players to play against are the ones that hog their money afraid to spend it on the less valuable properties. They’re usually the first to go having been left with no real chance of leveraging their properties into winnings. Money can only be enough to land on Baltic 3-4 times. Bankruptcy follows.
Parents should really take this lesson to heart and invest early for their children’s financial sake.

#10 Loans only go so far

We all know mortgaging our assets will only take us a couple of more rounds at best. Why do we insist on rolling debt in life?

#11 Economies of scale

For the more advanced kids the lesson on economies of scale is a powerful one. You own all the rail-roads? Now you can really start charging those fees. Own both utilities? Start multiplying by ten.

I love this game! I’d love to hear your monopoly experience and ideas on more lessons to draw.

Images by: izzie_whizzie, d0bb0, coffeegeek