Tuesday, July 27, 2010

Being called a tightwad isn't so bad anymore.

A few years ago a friend of mine teasing, said I could swim across the Ocean with money in my fist and it wouldn't get wet. Boy have the tides changed being frugal and thrifty is in. Families are searching the Internet and scouring over the coupon sections of newspapers in search for good deals. Being a long time frugalist (yes I made that up, I think it sounds better than being a tightwad)  hope this fad becomes a tradition. Despite harsh economic times saving account balances are on the rise. Many families are in the process of buying their first home, taking advantage of tax credits and low interest rates. Many Americans are searching for ways to cut back on expenses pay down debt and expand emergency funds.

Here are a few ideas on how to be more frugal.

1. Cut back on television costs. Make a record of the actual shows you watch and then see what channels you can do without. For most of us we have a few channels we watch on a regular basis and the rest we are paying for without use. Also look online and see which shows you can watch online. My wife and I have opted not to get cable or satellite because for the most part we can see everything we want online or via netflix.

2. Spend your summer vacation at home. Flying across or out of the country is extremely expensive. Take the week off and spend it doing things in your own area for less, here are a few great ideas.
     A. Spend a day at the lake, if you have a boat or access to one spend a day at the lake with the family. It is a ton of fun. If you don't have one renting one is a great option and if you are spending the night at home you can put the would be hotel costs towards the boat. Also finding a family member or friend to invite along can cut costs and be a great activity for everyone.
    B. If getting out of the house is a must, find a nice hotel nearby where you can go for a night or two for far less than a week in a shabby place.
   C. Enjoy the great outdoors, camping is a fantastic way to enjoy nature and spend time together. Camping is also very cheap compared to many other vacation opportunities. Hiking, fishing, and sitting around the fire are all low cost activities.

3. Utilize public transportation, unless you live in a large city I doubt you are using your public transportation. Next time you head to a local sporting event or just for a day at the Mall. Take the bus or train, enjoy the leisure of not having to worry about traffic and save on the gas money. If you are a student look to see if you can get a discounted yearly pass for public transportation. This can significantly lower your cost of living if you don't have to fund the up keep of a vehicle.

4. Only use coupons when going out to eat. If you can't use some kind of coupon don't go out. My wife and I do this and its great we eat for less and it forces us to try new places. We have found a few of our favorite places using this method.

Being frugal is a way of life that yields rewards for years and years. I want to know what you are doing to be more frugal??

Monday, July 12, 2010

How do you make every penny count?






Two winters ago a jar similar to this paid for a weekend trip to Denver with a friend. He and I went to watch one of our favorite college sports teams play. We were both currently in school and money was tight but my trip was funded by saving the leftover coins from purchases and money I found on the ground. It taught me a valuable lesson. Every penny counts and things do really add up. Now blowing it on a trip for the weekend may not have been the best use of it but you get the idea.

So $30.66 may not seem like a lot of money, but its $30.66 closer we are to financial freedom.
The $30.66 that is growing in my change jar is just a small simple thing we are doing to save a few extra dollars each month. More important than the five or six dollars that are put into the jar each month is the fact that every penny counts. Having respect for every penny shows dedication to the overall picture of our personal finances.

Every single day we let small amounts of money slip through our fingers. Here are just a few examples.

*Purchasing name brand products that often have the exact same ingredients as store brand

*Paying bills a day or two late leading to late fees. It may only be a few dollar late fee but it adds up.

*Passing coins on the ground as we walk by. No one will become financially free by scouring the sidewalk looking for change. But taking a second to pick it up shows that we recognize value whether great or small.

*Throwing away coupons for products that we use on a regular basis because we are too lazy to cut them out.

*Passing up odd jobs that may only yield a few extra dollars because we think it is not worth our time. For example several times I have been asked by neighbors to help lay sod for a few dollars an hour. Many of my friends didn't think it was worth their time. But activities like that create camaraderie and for me I would have helped for free, so the extra money is just pure bonus.

*Paying for sodas at a gas station, purchasing them from the store is much cheaper yet the convenience seems to catch our pocket book all to often.

*Leaving electricity on when we are out of the home.


I could go on for hours on simple things we could do to save and make a little bit more money. But the important thing to remember is every penny counts.

Sunday, July 4, 2010

Book Review: "The Money Book For The Young Fabulous & Broke"

Quick take: Great book for the personal finance illiterate, Suze Orman had some great advice on how to get  through the broke years and move toward financial freedom. Focusing mainly on:
1. Utilizing 401k plans
2. Getting out of Debt
3. Avoiding the temptation to purchase large ticket items


The Boring details
Suze encourages everyone to meet with their HR representative and find out about their companies 401k plans. Most importantly find if the company offers a 401k match. If they do, it is a must to contribute enough money to qualify for the maximum matching contribution. This is FREE money that your company is giving you. Learn what funds your 401k are investing in and look into the returns.


2. Get out of Debt. Having no money is your savings account is not a reason to put money in it instead of paying off debt. Why put money in a savings account that gives you 2% return when your credit card has a 22% interest rate. Pay all of your minimum balances each month to avoid paying fees. Pay any extra money on your card with the Highest interest rate not the highest balance. As soon as one card is paid off apply that monthly fee to the next highest interest card until all credit card debt is gone. This may take years to accomplish but is crucial to reach financial freedom.

3. Buying fancy cars or expensive clothes to impress people you don't really like is insane. When money is tight wasting precious dollars that could be used towards powerful retirement vehicles is financial suicide.

Overall I felt like the book had great advice if you had little knowledge about personal finance. It had no captivating chapters and was a drag to finish. However the advice within if followed would lead to financial freedom.

I still consider myself Young Fabulous and Broke, what helped you get passed the Broke part?