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September 21

The Pros and Cons of the Share Economy

Posted by on September 21, 2014 at 8:00 PM

The Pros and Cons of the Share Economy

Recently, we did an article surveying what’s out there in the share economy and detailing how you can save money by taking advantage of services from TaskRabbit, Fiverr, Uber, Elance and more.

While it is certainly true that you can save money and time with these websites, there is a bit of a dark side to the share economy that everyone should be aware of before wading into these new waters. Bargainmoose is all about saving money, but sometimes you need to use caution when doing so and its important to get the full picture.

With that in mind, we present the advantages and disadvantages of the share economy. This list will hopefully mean you’ll always know what you’re getting into with this new way of making and spending money.

Pro

Freedom and Flexibility

These two tenants are often touted as reasons to become a tasker on TaskRabbit or to complete a job on Elance and they are very true. Working any job as part of the share economy largely means you can set your own hours and work with who you want, when you want — all while setting your schedule from the comfort of home. Plus, the extra money you earn can be put towards your own financial freedom.

Con

Unpredictable Wages at Unpredictable Hours

Along with that freedom and flexibility comes unpredictability. No one should try to make a living solely on gigs garnered from the share economy because often the wages are a mere pittance compared to what a worker would get for the same service if they worked for a professional company. This is because bidders often undercutting each other with bids well below minimum wage. In a recent New York Times article, author Natasha Singer pointed out that those with no stable full-time job are turning to the share economy and trying to cobble together some semblance of an income without much success.

“They often work seven-day weeks, trying to assemble a living wage from a series of one-off gigs. They have little recourse when the services for which they are on call change their business models or pay rates. To reduce the risks, many workers toggle among multiple services.”

One economist source told Singer: “If you did the calculations, many of these people would be earning less than minimum wage. You are getting people to self-exploit in ways we have regulations in place to prevent.”

Pro

Insurance and Peer-Review

One of the great things about the share economy is that most sites like TaskRabbit and RelayRides offer insurance to protect you against damage or theft when someone else is driving your car or inside your home doing a chore. Perhaps more integral to even the necessary insurance in the shared economy is the peer-review system that ranks and reviews tenants, guests, taskers, drivers and more after they do a job or stay in your home. Those who do well get recommended, promoted to the most viewed parts of the site and get more jobs or offers, while those who end up providing a bad experience are harshly reviewed and ostracized by their peers on the site. It’s the number one homegrown system of checks and balances in the share economy.

Con

The Share Economy is Largely Unregulated

Across North America the share economy means that millions are renting out their homes like hotels or using their cars as taxi cabs and still these practices remain largely unregulated, but lawmakers in the U.S. are trying to change that.

This particularly true in larger urban centres like New York City and Chicago. In New York, legislators are trying to regulate the operations of Airbnb by charging their in violation of New York’s Illegal Hotel Law, which makes it illegal for New Yorkers to rent out their homes for fewer than 30 days unless the resident is living in the apartment at the time. Car-Sharing service Lyft was also banned in New York for what regulators called “disruptive” and “personally dishonest” business practices.

Of course, these regulations look like they’re just in place to protect already entrenched industries like hotels and taxis, but Micah Lasher, New York Attorney General Eric Schneiderman’s Chief of Staff, told Freakonomics Radio that regulating the share economy actually protects people.

“One of the big issues is the question of externalities and external impacts. In other words, if my next-door neighbour is using their apartment as a hotel room, they’re not just running a risk of their apartment getting trashed, they’re having an impact on me. Similarly, in the case of Lyft, if one of those drivers gets into a car accident, doesn’t have appropriate insurance, that can have an impact on a whole bunch of folks who did not sign up for that.”

Pro

The Democratization of Luxury Services

One of the best things about the share economy is that services previously reserved for high class individuals like chauffeur services, maid services and professional consultation services are now available and affordable to the masses. Plus, now anyone can do them. If you have initiative and an entrepreneurial spirit, you to can be a hotelier by renting out your home for a few days or a taxi cab driver by driving people around in your car. In the past, it used to be that these services were only available to those who could afford it, but now these services are available from regular people at a variety of price points – most of them affordable to the average person. These services used to be extras reserved for special occasions, but now they could be affordable enough to be enjoyed on a regular basis.

Con

Limited Safety and Corporate Oversight

Whenever you’re sharing your personal belongings like your car and your home with a stranger you just met online, the question of safety is always an issue, especially for women. Sites like CouchSurfing.com offer safety tips, but many of the companies in the share economy put the onus on you, the individual user, to keep yourself safe and take very little responsibility for your safety as a business. For example, these companies could make background checks of participants mandatory instead of optional if they wanted to.

According to an article on Sharable.net, When a female Air BnB user identifying herself as EJ found her home ransacked and identity stolen by a renter named DJ, she noted that even though AirBnb responded swiftly and appropriately after the fact, (despite not having a 24-hour emergency helpline and not responding until 14 hours later) they made it difficult to research her potential tenant until the reservation was bought and paid for. She wrote the following in a blog post detailing her ordeal:

“By hindering my ability to research the person who will rent my home, there is an implication that airbnb.com has already done the research for me, and has eliminated the investigative work that Craigslist requires. In effect, the friendly, community-based site with its Golden Rules creates a reasonable expectation that some basic screening of its users has occurred, and speaks little to the risks involved, primarily within the very small print of the lengthy Terms of Service. Thus by the time this reservation was confirmed and I was given Dj’s email address and phone number, I was on a plane heading East, and he/she was armed with my welcoming instructions on where to pick up the keys to my apartment.”

Photo credit: Alex:

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September 15

Does Buying in Bulk Save Money?

Posted by on September 15, 2014 at 8:00 PM

Does Buying in Bulk Save Money?

We’re constantly told by big box stores like Costco and Walmart that buying in bulk will save us money, but is that really true or just clever marketing-speak?  Well, Bargainmoose Canada has always wondered that too, so we took it upon ourselves to investigate and we found that yes, buying in bulk can save you money, but it’s not a forgone conclusion that it will.  To make sure you don’t misstep on your quest to keep as many dollars as you can in your pocket, we’ve laid out this checklist of dos and don’ts to maximize your savings when buying in bulk.

 Do

Take advantage of sales and coupons – If it’s possible to stack coupons, (use multiple copies of the same coupon on one item or use different coupons that both apply to the same item) do so on bulk items the moment they go on sale. This way, you’re able to reduce the price your paying per item as far as it will go. Make sure you present your coupons before you pay. Also, make sure that the sales don’t have a limit and that the coupons can be combined with other offers.

Figure out the price per unit – The only way you’ll know for sure if you’re truly saving money is if the price per unit is favourable and you should only buy in bulk when the price per unit is low. A unit is an actual measurable amount or quantity of whatever you’re buying. All you need to do to figure out this crucial piece of information is to divide the cost of the item by the quantity. A reporter for CBN.com found that for the right price per unit you could save up to 31% by buying bulk at American big box store Sam’s Club. Think about it, saving 20 cents on a bowl of cereal or a can of soup may not sound like much, but, as CBN points out, it can amount to a savings of $208 a year for a family of four who eats cereal everyday.

Make sure you have the storage – There’s no point buying in bulk if you don’t have the storage to keep the many items you buy or if it will cost you more to store the item than you’ll save by buying it in bulk. If you do have the storage though, make sure you rotate the stock and check the dates on perishable items so that you’ll be able to eat them before they go bad. Remember, even canned goods have dates on them. If you’re storing things in the freezer, make sure you date them, so the older food gets eaten first and always separate the perishable items from the non-perishable ones. If you find an item you simply can’t pass up thanks to the price, but you don’t have enough room to store it, why not split it up between friends so that you can use it faster and you’re also able to share the wealth. For more tips on organizing your stockpile, see this Bargainmoose article from a few years back.

Don’t

Don’t buy an item in bulk that you’ve never used or had before – What if you buy lots of garbage bags in bulk, but every bag rips? What if a particular soap irritates your skin and what if that new foodstuff you thought sounded so good, tasted like dirt? Now, imagine buying those craptacular items in bulk and inadvertently sentencing yourself to having to use them for the next few months or worse, the next few years. This is why you should never buy items in bulk that you’ve never tried before and made sure they are what you really want. Anything else is just a waste of money.

Don’t bulk binge – When people start exploring the wonders of bulk buying, they usually can’t help, but go hog wild and buy everything they need in bulk in one trip. This is a good way to spend yourself to the poor house. Instead, Trent Hamm of The Simple Dollar recommends raising your grocery supply budget by 25% and using that extra 25% to by some bulk items when they go on sale. Eventually, your stockpile will mean you don’t need that 25% increase anymore and when you do buy more, you’ll simply be refilling your supply or taking advantage of the best discounts available, which means the grocery budget will be even better than before you started because you’ll be buying fewer items way less often.

Don’t let your bulk stores get too scarce – Even a stockpile of bulk items can run out and suddenly, you may find yourself taking an emergency shopping trip and dropping lots of money to refill your stores when it’s not advantageous economically to do so. Instead of having to scramble at the last minute, when you see you’re running low on a particular item, start looking for sales, deals and discounts for that item. Some items go faster than others, so a good rule of thumb is making sure your good for the next month on every item you have. If you have too much of something, you can always donate it to friends or the local food bank.

 More bang for your bulk!

Follow these simple dos and don’ts and you’ll never get ripped off or overspend when buying bulk items. There’s a fine line between marketing and money saving so be smart and strategic about your bulk purchases.

Photo credit: Jonathan Dueck

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September 11

Pay Yourself First vs. Save What is Leftover

Posted by on September 11, 2014 at 8:00 PM

Pay Yourself First vs. Save What is Leftover

When it comes to personal money management, there are two main ways to save money, the traditional stalwart of Saving What’s Leftover and the newer method you’ll read many personal finance experts recommending – Pay Yourself First.

They usually explain how each method is done: Saving What’s Leftover requires you to wait until the end of the month, after you’ve paid all your bills and expenses, to save what’s leftover. Paying Yourself First means exactly that – putting money away at the beginning of the month when all your income is still in your account and you have not had to spend the money on bills yet.

What they do not tell you is which savings method is better, so trust Bargainmoose to settle this burning question so you don’t have to.

Saving What’s Leftover Takes Discipline

People have been saving the money left over after expenses for years — it is a common method for building a nest egg. The problem is, saving what is leftover takes discipline. Not many people have the self-control necessary to make sure there is actually anything left in their account at the end of the month. Our capitalist, consumer driven society plies us with too many temptations to spend our money on and there are always so many unexpected expenses that crop up that often you look at your balance sheet at month’s end and see a big fat zero, as all your money has been spent.

Paying Yourself First Makes Saving Your First Priority

Paying Yourself First changes your savings from a luxury to a necessity and calculates it as the first ‘expense’ you pay, thus ensuring that you do put aside money each month. It is a much more realistic strategy for growing your savings, according to Dan Sutton, managing editor of MoneySense Magazine. He says:

When things are automatically channeled away on payday, you’re less likely to miss or spend the money

Such a strategy also forces you to cut expenditures that are more frivolous in order to keep your savings growing when your budget is a little tighter. You can make sure the money goes into your account automatically, so you do not even have to think about doing it. All you need to do is tell your employer to take a certain amount off your pay cheque for your RRSP or transfer a designated amount into a high interest savings account every month. Some banks will even automatically transfer money from your chequing account to your savings account each month.

There is No Law against Doing Both

If you are super gung-ho about saving money and you consistently have money leftover at the end of every month anyway, why not employ both strategies to maximize your savings? Sutton recommends paying yourself first with whatever amount you can afford (perhaps $100 a month) and then, if there is any money left over, just sweep the remainder into a High Interest Savings Account.

Remember, it’s Your Money

Paying yourself first also makes logical sense as well as financial sense because you should remind yourself why you go to work every day. After all, you are not earning money for someone else – your money is yours. So, you should always make sure you get your money before anyone else gets it. This is why paying yourself first makes more sense than saving what’s leftover. However, you should avoid at all costs carrying a credit card debit. It does not make sense to pay 19.99% interest on the money you owe someone while only making a couple percent interest on the money you are saving. Pay off your debit first, and then start building a nest egg.

It’s Easier to Get Rich If You Pay Yourself First

It’s very hard to save and plan when there’s no guarantee that there will be any money at the end of the month to put away. But when a certain amount of money is deducted from your monthly income automatically, you’re basically saving money in your sleep. Think about it, if you have $200 from each of your biweekly paycheques deducted and put into your investment account from the time you are 25 to when you are 65 – you will have $1 million. You can get to $1 million with only 7% return on investment, according to MyMoneyCoach.ca. This means the average person can become a millionaire with this strategy without winning the lottery and with a little sacrifice when it comes to spending. With diligence, it is possible and all you have to do is arrange one automatic money transfer every so often.

Pay Yourself First Wins!

Everyone wants to make money in their sleep and when you pay yourself first, you ensure that process actually gets done. If you just save what is leftover, you are counting on leftover money that will not always be there. Money management can be stressful, so making a nest egg your first priority when you are paid instead of your last priority will help reduce the stress and ensure that your savings continues to grow even during the more difficult months.

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August 29

Crowdsourcing To Save Money

Posted by on August 29, 2014 at 8:00 PM

Crowdsourcing To Save Money

You know the old saying, “Two heads are better than one?” It has always been more true than not, which makes us think, what happens when you get three heads, four heads, five heads or more? Then you really could get things done.

That’s the magic of crowdsourcing. It’s soliciting services, goods, ideas and more from the brain trust of a large group of people and you can use it to save money through the following websites.

Crowdsourcing To Save Money

Fiverr

On Fiverr people with various skills, — writers, artists, graphic designers and more – tell you what they’re willing to do for a mere $5.00. As the potential customer you can see the seller’s rating, look at their average time frame from the job and decide if you want to make an offer. At only $5.00 a job it’s hard to go wrong, especially when professional creatives normally charge hundreds of dollars for some of the jobs on this site.

Crowdsourcing To Save Money

TaskRabbit

TaskRabbit allows you to outsource those necessary but menial tasks to people in your community, so you don’t have to do those things you don’t want to and can reserve your time for something more important. Simply post a task and TaskRabbit will show you their most professional taskers in your area for what you need done and what they charge per hour. Often, you’ll find that taskers offer cheaper rates for tasks like landscaping than a professional lawn care services even with the company’s own 20% service fee. Plus, its safe to trust your tasks to a stranger because every task is insured to $1 million and every tasker must follow TaskRabbit’s strict marketplace guidelines or risk being barred from ever working through the site.

Crowdsourcing To Save Money

RelayRides

RelayRides takes the carpool to the next level by allowing regular people in your community to rent out their car for you to drive for as long as you book it. As a potential renter, all you have to do is pick the perfect car for you, make a reservation, pick up the keys from the owner, refill the tank, return the car at the scheduled time and review the experience. Car owners don’t have to worry because the car is insured by RelayRides while it’s in use. As a consumer, everything but gas is included and all prices and requirements are self-explanatory, so there are no surprises like there are when it comes to dealing with a rental company. On RelayRides, 24 hours with a 2010 Toyota Prius that traveled 150 miles cost $38.00, ($3.80 per mile) plus premium insurance protection for $15.20 for a grand total of $47.00. I have to say, that’s pretty reasonable.

Crowdsourcing To Save Money

Elance and Odesk

Like Fiverr and TaskRabbit, Elance and Odesk use crowdsourcing to help you get things done at a reasonable price. However, on Elance and Odesk you’re not buying a specific job or outsourcing a specific task, you’re hiring freelancers and those freelancers are applying for your job on spec. Of course, you’ll want to offer the lowest price possible, (hence, the money saving) but don’t undercut. Among the grossly unqualified applicants that do exist on these sites, there are some truly professional diamonds in the rough who know what a particular job is really worth, which means if you offer too little, you won’t get quality work from the people who truly know what they’re doing. We recommend doing a little research on typical industry rates for the position you are trying to fill, so the freelancer you hire is not insulted by the rate you offer and actually does the job to the best of their capabilities.

Crowdsourcing To Save Money

99Designs

Say you want a logo, but you’re not a very good artist. No problem, at 99designs you simply write a description of what you want and your assignment gets turned into a design contest where you provide the prize money. The bigger the prize, the more designs you can choose from drawn by professional designers. As the designs come in, you can provide feedback on the designs you like, so they can be refined, but after seven days, you must pick a winner. Once you crown a champion, 99Designs gives out the prize money to the winning designer and you get your logo that you can use (copyright included) for whatever you want. It’s great for the consumer because you can get from 30 to 60 designs to choose from for relatively little effort on your part. Prices range from $299 for the Bronze Package of 30 designs to $1,199 for the Platinum Package of 60 designs from the best designers on the site. So, if you can afford it, 99Designs might be your best option for a professional illustration.

Crowdsourcing To Save Money

Airbnb

Perhaps the original destination for crowdsourced accommodation, Airbnb still makes it easy to rent a room in someone else’s house or apartment in most countries you could be traveling in. Cheaper than a hotel and, at its best, a more local perspective than you can get as a traditional tourist, Airbnb is still the go to for many who utilize the share economy.

Crowdsourcing To Save Money

DesignCrowd

DesignCrowd works similarly to 99Designs without the design contest aspect. Instead you simply have access to a certain number of designs to choose from depending on the tiered pricing model you select. There is still that aspect of designers competing to win your business but it isn’t overtly modelled like a contest. Plus, as a Bargainmoose reader, you have access to an exclusive offer giving you access to 50 free designs within five days as soon as you post a project. Oh, and if you don’t like the designs, you receive your money back for the initial design package you purchased. Use the offer code BMEXCLUSIVE for this deal.

Final Thoughts

Before we conclude, it should be noted that as much as crowdsourcing could be cheaper for the consumer, it relies on a great deal of trust between the parties involved and some people aren’t going to want a stranger traipsing around their house or using their car no matter what safeguards are put in place. It should also be said that many of these sites that outsource jobs, while cheaper for the consumer, take advantage of the service provider by cheapening their skills and putting the economic bar so low that other professionals in the field are unable to compete or make a proper living. So, when you use services like Elance, Odesk and 99designs, think about what is fair, not just what is cheap.

(banner image credit: Dvya Thakur)

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August 23

Top 10 Life Hacks that will Save You Money

Posted by on August 23, 2014 at 8:00 PM

Top 10 Life Hacks that will Save You Money

A life hack is any trick, shortcut, skill or unorthodox way to increase productivity and efficiency in any part of your daily life. Instead of finding a work around in a computer program like a traditional hacker.  A life hacker does the same thing for their everyday life. Online you’ll find a large number of life hacks for anything you can think of, including saving money.  Below you’ll find some of our favourites in no particular order:

1. Pay with Cash – It’s so simple, but most people never give it a second thought. Next time you go out, leave the debit or credit card on the kitchen table and only bring cash. A Dunn & Bradsheet study showed that people spend 12% to 18% more when using credit cards compared to using cash. The fact you can see what’s being spent makes people consider more seriously what they’re doing before they part with their hard-earned money.

2. Buy Cars at the End of the Month – If you’re tired of being given the run around by sly car salesmen and feel like you’re overpaying, then may we suggest buying a car at the end of the month? This is when a car dealer is trying to make their quota and according to AutoTrader, it’s the best time to get the best deals because dealers are trying to meet their monthly sales goals and get their bonuses.

3. Put a Brick in Your Toilet Tank – When your water bill is too high, or your community is asking you to conserve water, don’t sweat it and just put a brick in your toilet tank. It sounds bizarre, but it will save you a brick’s worth of water and your toilet will still flush normally.

4. Use a Banana to Fix Scratches on Cds, DVDs and Blu-Rays – Anytime a product lasts longer and you don’t have to replace it, you’re saving money. Try this banana trick for minor scratches or smudges on your discs. It won’t work for multiple scratches, but for one scratch you can rub the banana on the disc and then rub the inside of the peal over it. Clean it with water, dry it with a soft cloth and voila! It should be good as new.

5. Use an Old Chapstick Case as a Clandestine Money Pouch – Hiding money in your sock is so last year. Besides, most thieves know it’s a common hiding spot and will look there or demand you empty them. To make sure you don’t lose it all, hide your emergency fund cash in your empty chapstick container. Pop off the bottom, clean out the excess and then glue the bottom back on before rolling up your cash and stuffing it inside and putting on the cap.

6. Paint Your Roof White to Expel Heat – Some people go to extreme lengths to save money and if you painted your roof white to save on your heating bill, you’d be one of them. However, all the people who were laughing  when you were climbing up the ladder will eat their words the moment you show them all the money you saved.

7. Clear Your Browser History When Booking Flights – Airlines know when you’ve been searching for the cheapest flight, thanks to the cookies that monitor your browsing history, and they’ll actually charge you more on the flights listed (They smell fear!) So wipe the slate clean before you start doing your research because that will make your options all the more inexpensive.

8. Hit the Library for Free Stuff – Nothing beats all the money you save at the library. Just ask Bargain Moose contributor Avigayil Morris, she told us the money-saving wonders that come with owning a library card. These include, but are not limited to, free internet, free movies, free tv shows and of course, free books.

9. Save on Prescription Drugs with Honey – Not only do you catch more flies with honey, but you save money too. Toast is not the only thing it’s good for, you can also use it as a topical ointment for burns and as a disinfectant that kills bacteria. So, next time you have a zit, burn or infection, hit the hive.

10. Reduce Your Cell Phone Data with an App – Say goodbye to data overage charges. That’s because there’s an app out there that will reduce your data plan consumption without reducing how often you actually use the phone. It’s called Onavo Extended and it will compress your data usage by running in the background of your phone. (Another version, Onavo Count, simply tracks how much data you use.) So, when you’re browsing the internet, watching a video or streaming audio on your phone, Onavo makes sure you never take up more data than you have to by making the file smaller. This means you can do twice as much with the same amount of data, which translates into big savings on your cellphone plan.

Photo credit: Auto Trader

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