How much do I need to save?

Question: I’m 36 and have saved only about $20,000 for retirement. How much per year should I try to save for the next 30 years to assure I’ll have a reasonable retirement? –Beth, Grove City, Ohio

Remodeling? It’s a waste of money

One of the big myths of homeownership is that upgrades are investments. In reality, renovating is consumption spending. But if you want to remodel anyway, do it right.

10 secrets of filing for bankruptcy

Worried you’re going to be left living in a cardboard box? If you know what to expect, you can avoid much of the pain — and embarrassment — of bankruptcy.

Daily Links: A Fool and His Money Edition

On April Fools’ Day 2007, I posted a tongue-in-cheek article describing the lifestyles of the rich and stupid. This list of the dumb things people do with money in one of the most popular posts I’ve ever shared.

I’ve softened a little since then. Yes, I think that people do some stupid things with money, but I’ve decided it’s not my place to judge them. I’ve done plenty of dumb things myself over the years. (Though certainly not on the scale as Dennis Kozlowski, who threw a $2 million birthday party for his wife, a party that featured an ice-sculpture of the Statue of David that pissed vodka.)

All of this is prelude to the first link in our daily roundup. (Why do I still call it a daily roundup? It hasn’t been daily since 2006. It’s weekly, at best!)

The Boston Globe reports that former Boston Celtics star Antoine Walker is broke and in debt. Walker has earned $110 million over the course of his career. According to the article, top professional athletes often have a “burn rate” of $2 to $4 million per year. The mind boggles. This is a fascinating story. (For more like this, check out this fantastic article about how and why athletes go broke.)

In happier news, I love this analysis from C.J. Gill that explains how he got a free Mac Mini. The computer wasn’t actually free, but it saves so much energy over his previous computer (an HP Pavilion) that he’s saving $20 a month! The computer pays for itself in energy efficiency. (I’m sure there are energy-efficient PCs, too. This story is neat not because it’s about a Mac, but because it’s about taking the time to analyze cost patterns.)

Finally, Matt at Debt-Free Adventure has drafted a list of ways to save money when dealing with customer service reps. “While some CSRs are trained to try and dissuade you from your dream of reduced expenses, others wouldn’t mind giving you a break at all…as long as you treated them right! Here are a few tried and true pointers that I use every nearly every day.”

Before I go, here’s a list of money carnivals from the past week. These are a great way to find more info about saving and investing:

• Fabulously Broke hosted the Carnival of Personal Finance #227.
• Tom from the Canadian Finance Blog shared the Best of Money Carnival #21.
• JLP at All Financial Matters hosted the tiny tiny tiny Carnival of Debt Reduction #214.
• The Financial Blogger was home to Carnival of Pecuniary Delights #29.

That’s it for today’s this week’s links round-up. Now it’s time for me to head home. I’m heading out for chicken wings with my wife and her sister. Yum! Have a good evening, everyone.

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Related Articles at Get Rich Slowly:

• links for 2007-05-16
• Return of the Daily Links
• Daily Links: Compound Interest, Web Income, and Happiness
• How to Get Out of Debt
• Daily Roundup: Bringing Home the Bacon Edition

Credit card hikes raise Congress’ blood pressure

As credit card companies continue raising rates and fees, lawmakers are considering bills to stop such hikes until new credit card laws take effect.

Unemployed tap their 401(k)s

Nearly half of U.S. workers who left their job last year cashed out their 401(k) accounts, according to a study released Wednesday, despite ongoing efforts to dissuade Americans from doing so.

LSD: A Cure for Headaches?

It seems psychedelic drugs like LSD, cannabis and Ecstasy just might really have some medicinal purposes after all. Scientists are looking to these drugs to help sufferers of anorexia nervosa, cluster headaches and chronic anxiety attacks.

Why Is BBQ So Cheap?

When it comes to cheap meals that satisfy our bellies, there’s nothing quite as fundamental, or as all-American, as barbecue. Despite its long preparation time and complicated and guarded seasoning methods, BBQ is also one of the most reliable budget meals available. WalletPop’s Jason Cochran takes a look at how that could be.

Good News for Retailers

CNBC shares five reasons why U.S. retailers may have a jollier holiday this year.

Sneak Peek: Toys R Us Big Toy Book

Toys R Us provided WalletPop with a sneak peak at the 2009 Toys R Us Big Toy Book, where we found the following deals for the kid inside of everyone.

The Pitfalls of Buying in Bulk

This is a guest post from Sierra Black, a long-time GRS reader and the author of ChildWild, a blog where she writes about frugality, sustainable living, and getting her kids to eat kale. Previously at Get Rich Slowly, Black told us about sweating the big stuff.

Buying in bulk is great, right? You get the things you want and need, and pay less for them. As an added bonus, you don’t have to shop as often (at least, this is a bonus for me, since I hate shopping).

Because I hate shopping and love discounts, I buy most everything in bulk: toilet paper, frozen foods, light bulbs, even toys. But bulk buying has its risks too, and after years of practicing it, I’m learning to see them.

For me, the three key dangers in bulk buying are:

Making a bad investment in a good product that you need or love. I love a particular brand of gel pen, and I use them daily. They cost about $1 per pen in packs of ten, and about $0.50 per pen in packs of 100. I was at the store the other day, trying to decide how many pens to buy. The decision was made for me by the fact that I am on a cash diet at the moment and had only ten dollars in my purse. Yes, I’m paying more per pen. But the 100-pack of pens is an investment. It ties my dollars up in pens, and prevents me from earning interest on them in a savings account.

Here’s a Wall Street Journal article that makes this point about Forever Stamps (which are also a bad investment, but a fine purchase if you use a lot of stamps).

Buying something you might use but don’t need in bulk. My kids love Puffins cereal, so when I got the chance to buy an entire case of it on sale, I did so. This was in January. We just finished the last box of Puffins. Let me tell you, there have been some scenes around the breakfast table in the past six months.

It turns out no one likes Puffins that much. Buying the cereal in bulk might have saved me a few dollars, but it made my kids unhappy about breakfast. That did not improve our quality of life, which is what frugal living is all about for me.

This bulk-buying hazard is the one I fall for most, because I do “save money” doing it. But it creates a sunk cost. I now have 12 boxes of cereal in my cupboard, and I have to eat them or throw away the money I spent. If I’d “saved money” by buying one box and banking the rest of my dollars, I’d have more money available to buy food the kids and I really want to eat, instead of stoically plowing through another box of Puffins.

Buying things you don’t need or want, simply because they are cheap. The other day, I was biking past Harvard when I noticed a book sale going on in the Yard. I happened to have $20 in my pocket, and was strongly tempted to stop and buy $20 worth of books from their table.

Instead, I decided to take my $20 to a bookstore and buy one book from my 30-day list. I got a book I’d been waiting to buy and knew I would read and continue to use for reference, rather than going for the cheaper books I could buy in bulk. I got fewer books, but more value (and less clutter).

Costco, Target and the other big box stores know that people will buy things just because they’re cheap. When you walk into Target the first thing you see is a large section of items for $1. I used to have a habit of tossing $5 – $10 worth of stuff into my cart: novelty socks, pens, candles, stickers.

When I had a buying mindset, all of these things seemed like great deals. I was getting more stuff for less money. Now I try to avoid getting more Stuff, even when it’s cheap. I buy less in bulk — just like I buy less in boutiques — and I’m watching my savings grow because of it.

J.D.’s note: I’m stupid about buying things just because they’re cheap. Or free. I’m always dragging home free Stuff that becomes clutter. Also, Kris just reminded me that I bought a case of my favorite pens last spring. Photo by Listener42.

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Related Articles at Get Rich Slowly:

• Why Bother With Personal Finance?
• Buying Cheap Spices: Unit Pricing in Action
• How to Buy a Side of Beef
• Beat the Market with Lazy Portfolios
• Save Money with a Frugal Buyers Club

Pay less to stay warm this winter

This year you can score a rare recession-induced break on your energy bill: The combination of a weak economy and a production boom has dropped the cost of heating with natural gas to a six-year low and is keeping a lid on other heat sources as well. But you can still save more. These questions will help you figure out the most cost-effective ways to keep out the cold.

Health care reform: 15 key questions

A few things seem certain: A final bill won’t be bipartisan, it will require tax increases, and the political implications will be huge. The rest is harder to predict.

Economica: Women and the Global Economy

In his book Banker to the Poor: Micro-Lending and the Battle Against World Poverty [my review], Nobel Peace Prize-winner Muhammad Yunus argues that one of the most effective ways to reduce poverty and overpopulation is to boost the economic status of women. When you empower women — especially poor women — their communities are improved in many subtle ways.

The International Museum of Women has just launched their new global online exhibition, Economica: Women and the Global Economy. Economica features slideshows, interviews, podcasts, and more. Here’s a sample of what’s available:

• A slideshow highlighting microfinance in South America.
• An article about the food crisis in Egypt.
• A variety of topics, including business leadership, marriage and money, and family and fertility.

The exhibition includes lists of books and films that explore the role of women in the global economy. (There’s also a discussion forum, though it’s a little barren at the moment.) Finally, if you’d like to contribute to the Economica exhibition, you can. The Your Voices section allows visitors to share their stories with the community.

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Related Articles at Get Rich Slowly:

• Women’s Institute of Financial Education
• 12 Financial Tips for Women
• Daily Roundup: Christmas Eve Edition
• A Working Woman’s Guide to Financial Security
• Investing as a Couple: Draw on Your Differences