Making small daily decisions to save money can help you afford for bigger, more important purchases and investments.
In
this Aug. 1 photo, Ann Brown and her daughter Julie Anne shop for
school supplies at a Staples store in Little Rock, Ark. Making small
frugal decisions, like waiting for a sale to shop, or turning down your
thermostat during the winter, can help you afford bigger, more
important purchases and investments.
Danny Johnston/AP/File
By
Trent Hamm, Guest blogger /
August 13, 2010
This
past weekend, I attended GenCon 2010, a gaming convention in
Indianapolis, IN, with a group of several friends. I had been saving up
to attend this convention for a while, and that savings consisted
largely of money saved in the way I described this morning: making lots of small choices that saved money and didn’t negatively impact my way of living.
The Simple Dollar is a blog for those of us who need both cents and
sense: people fighting debt and bad spending habits while building a
financially secure future and still affording a latte or two. Our busy
lives are crazy enough without having to compare five hundred mutual
funds – we just want simple ways to manage our finances and save a
little money.
During
the convention, I had many opportunities to chat with people and I
found that at least a few of them had done the exact same thing. They
didn’t have the income or resources to travel to such things regularly,
but they chose to cut back in other areas. Some of them didn’t own
televisions at home, for example. Some of them ran small side
businesses for income. Others simply did frugal things, like eating
meals at home and putting the savings away for their trip.
In each case, the rule of thumb is the same: they took money away from something of less importance to them to use the money on something of more importance to them.
Translate this to your own life for a moment. What things in your life would you love to be doing but you can’t because you can’t afford it? What do you sit around daydreaming about but never actually do because you don’t have the money?
Maybe you are deeply passionate about travel, but you can only travel once every few years.
Maybe
you dream about having the perfect home entertainment setup, but you
balk at the price of the television and other equipment.
Maybe
your idle thoughts focus on something like attending a convention
related to your hobby, but the trip and the expenses are just too much.
You spend years dreaming about these things, but they just keep being out of reach.
That’s where sensible frugality plays a role. The trick is to cut back – hard – in the areas that don’t matter as much to you and save
that money where you’ve cut back. This enables you to live your life
without misery. (Of course, there’s nothing saying you can’t also
choose to make sacrifices in specific areas important to you, too.) At
the end of the year, though, you find yourself with the money for that
trip or that television or that convention – and you can just do it.
I’ll give a very specific example.
I’ve
seen an absolutely gorgeous 60″ LED HDTV for sale at Sam’s Club for
about $2,400. It’s beautiful – I won’t deny that. If someone deeply
wanted an absolutely amazing home entertainment setup, they might very
well make this television the centerpiece of that room. I could see
someone who played a lot of video games and/or watched a lot of
television purchasing this flat screen and installing it happily in
their living room.
But they can’t afford it! What’s a solution to get there?
The person spends $300 a month on their energy bill. Installing a programmable thermostat
will cost about $40 up front, but the reduction in energy costs will be
about $50 a month or so if properly programmed. This adds up to a total
savings of $560 over the course of a year.
The person does three loads of laundry a week. Making their own detergent saves $0.20 a load. Over the course of a year, that adds up to $31.20.
The person drinks a couple bottles of soda a day. Switching to refillable bottles of water stored in the fridge eliminates about $1 a day in spending, giving you $52 more (and it’ll do wonders for your health).
The person commutes 20 miles to work every day for an 40 mile round trip. Setting up a car pool with just one other person four days a week eliminates 80 miles of driving a week. Using the government reimbursement rates, that simple switch will save you $1,040 a year.
The person eats out three times a week. Eating something inexpensive at home once a week instead of eating out saves the person $10 a week, adding up to another $520 over the year.
The person subscribes to a couple premium movie channels that he barely watches. Eliminating these subscriptions and joining Netflix instead reduces the monthly cost from $25 to $9, a savings of $192 a year.
Those
moves saves the person $2,395.20 over the course of a year. If he’s
socking that money away faithfully in an account bearing 2% interest,
he’ll wind up with $2,420 at the end of the year. Time to go buy that television.
Here’s the thing, though: none of those changes required much time investment and they didn’t affect that person’s quality of day-to-day life much at all.
He didn’t give up anything life-affirming, but at the end of the year,
he had enough cash in hand to make that daydream come true.
You can just substitute in your own “dream” and your own frugal methods of getting there right into this plan. Browse big lists of frugality tips and free things to do
and be selective with them, trying out only the things that work for
you. Keep track of what you actually save and sock away those savings.
Eventually,
you’ll find that you’ve built up some money for whatever it is you’re
dreaming of. Even better, you’ll find that this kind of savings is very
sustainable and it’ll help you keep building for whatever dream comes next after that.
You
can use it to pay off debts. You can use it to build an emergency fund.
You can use it to fly to Maui. You can use it to redo your kitchen.
Whatever it is you dream of, sensible frugality can do it.
You just need a goal – and you need to start taking the little steps to get there.
Are you ready to start today?
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Textbook rental services are on the rise as college students look for ways to save money when buying textbooks.
The
textbook rental market is taking off with more retailers adopting
rental services in response to book rental websites. In this photo
taken July 26, Brittany Wolfe, a University of California Los Angeles
graduate, checks old text books at the UCLA Powell Library Building.
Renting is a growingly popular choice for students looking to save
money on textbooks.
Damian Dovarganes/AP
By
Alissa Figueroa, Correspondent /
August 9, 2010
Textbook rental is becoming an increasingly popular choice for college students, who’ve seen book prices surge in recent years.
Students
can cut their upfront costs in half by renting, rather than buying a
textbook, according to the National Association of College Stores, a a
trade group for textbook vendors.
And retailers across the
country are responding, with local college bookstores opening their own
rental services to compete with online book rental sites, like bookrenter.com, which offers free shipping and access to some 3 million titles through a partnership with Amazon.
The
National Association of College Stores says about half of its 3,000
member stores will offer book rentals this year. That's some 1,500
independent college bookstores, up from only 200 to 300 last fall.
Barnes
& Noble announced on Monday that it, too, would expand its pilot
textbook rental program, started in January, to include all of its 637
college bookstores. Students can also rent textbooks from the company’s
website.
But aren't paper textbooks (whose cost has increase at
twice the rate of inflation over the last two decades, according to the
Government Accountability Office) a bit, well, last semester?
For
students looking for digitized alternatives, their options are growing
as well. Last week, Barnes & Noble announced its new NOOKstudy software package, which students can download for free to access the bookseller’s digital textbooks.
The
service allows students to tag, highlight, search, and take notes on
their e-textbooks, and offers the option to rent a digital book for the
semester at a reduced price.
Contrary to what its name suggests,
NOOKstudy is not accessible from Barnes & Noble’s e-reader, the
nook, or another mobile device – it can only be downloaded onto a PC or
a Mac. Smaller devices are not suitable for viewing textbooks’
graphic-heavy pages, says the booksellers’ website.
The makers
of Amazon’s Kindle e-reader thought they’d solved that problem with the
Kindle DX, a wider version of the original e-reader designed to make
reading academic texts easier.
Last year, the company gave students at seven universities access to the devices with their class materials preloaded onto them.
But
as the Village Voice reported last month, the experiment didn’t go very
well – several students given Kindles bought the physical textbooks for
their classes instead, citing difficulty in taking notes, navigating
the books, and reading the color graphics that were shown in black and
white.
Of course, there is also the cost of e-readers themselves,
which, at around $150 to $200 are a steep investment for any student on
a budget.
Another option could be open-source textbooks, as are available on curriki.org,
a nonprofit that seeks to provide "universal access to free curricula
and instructional materials for grades K-12," according to its website.
For college professors, though, who are generally very specific about
which textbook their students work from, it could be a long time before
open-source curricula are adopted widely.
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Friday, 30th April 2010 (by J.D. Roth) Exerpt
Last week I gave a talk at Powell’s bookstore here in
Portland. During the question-and-answers session, one woman posed an
interesting question. (I’ve forgotten her name, so let’s call her Kim
to make things easy.)
Kim has been aggressively paying down her debt, and is pleased with
her progress. However, her boyfriend thinks she’s doing it wrong. If I
understand correctly, Kim’s boyfriend believes she should pay down each
debt part way (perhaps a half or a third) so that none of her
obligations is near its limit. He believes that this will increase
Kim’s credit score. Kim wanted to know if this was a good idea.
Too much control
Obviously, it’s difficult to give a complete answer without knowing
more about the situation. Still, I think this is a great example of how
financial decisions are often about more than just the math involved.
There are three basic approaches to debt here:
- Tackle the debts in order of interest rate, knocking off the
high-interest debts first. Mathematically, this is the best option
because — if you follow through — you’ll pay less interest in the long
run.
- Tackle the debts in order of balance, starting with the debts you
owe least on first. Psychologically, this is usually the best option
because you can get some quick wins, knocking off several debts in a
short amount of time. This is the method Dave Ramsey recommends. (And
so do I.)
- Or, as Kim’s boyfriend recommends, try to coordinate payments so
that each debt is paid down to a certain level before focusing on a
specific obligation. For various esoteric reasons, this method should have the greatest impact on your credit score.
My recommendation during the question-and-answer period? No
surprise: I told Kim that she should use the approach that makes her
most comfortable, the approach that actually leads her to pay off her
debts most quickly. I think it’s great that her boyfriend is eager for
her to improve her credit score, but I think it’s dangerous to be
dogmatic, especially if it involved becoming controlling about another person’s financial situation.
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I love stories like these! This is a couple who delayed their instant gratifacation (debt bearing) honeymoon, waited, and paid for it in cash.
Click Here to see video.
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Cure poisen ivy, repel insects-and clean you house....all with vodka!
Click Here
I have actually used some of these and they work. I can't wait (with the exception of poisen ivy) to try the others.
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This Saturday Night Live Skit is the funniest thing I have seen in a long time.
http://www.hulu.com/watch/1389/saturday-night-live-dont-buy-stuff
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From Mark Zaifman's Blog
www.spiritusfinancial.com
"When it comes to managing your personal finances, spending,
particularly overspending is one of the most challenging aspects of
living within your means. It’s not that you don’t have good intentions,
because most people really do want to stay on a spending plan, it’s
more complex than that. Spending money causes an emotional rush in our
bodies. It’s a natural high. It’s short term pleasure for what could
turn out to be long term debt. It’s the nexus between money and your
emotional intelligence (EQ) that often creates the problem of
overspending.
Create a speed bump on the road to spending
Each time you wake up and go to work, you’re making a conscious
decision to trade your precious life energy, the limited time you have
on this planet; and trade that time for money. That’s a powerful
decision with huge impacts on your lifestyle. Are you receiving the
highest amount of compensation possible for the exchange of your
precious life energy?
Now take it one step further. You’re hearing about the new 3D TV’s
that are about to hit the consumer outlets later this year. Let’s say
these new TV’s are going to sell for $4,200 each. Gulp! is your first
reaction. Second reaction is how cool it would be to have that TV to
watch movies on. Then you think about the cost. Well, you say to
yourself, I just received that 1.99% 6 month interest offer on my
credit card, I’ll put it on my card and pay that sucker off in 6
months-no doubt about it. Next comes the purchase and the amazing
“sugar high” you feel throughout your entire body when you sign on the
dotted line. And the finale is the hangover that occurs later when
buyer’s remorse kicks in and you wonder why you just spent that kind of
money on a consumer item.
Here are some suggestions on creating a speed bump to at least slow
down the momentum on your potential road to purchasing an item. First,
make sure you avoid impulse purchases. These are usually emotionally
driven and tend to be the reason most people suffer buyer’s remorse.
Stop yourself before making the purchase, and give yourself a cooling
off period for at least 24-48 hours. If, after that time, your purchase
still feels right, at least you’ve given yourself time to really think
it through.
Second suggestion is to calculate how many hours of work it will
take to make this purchase. Don’t use your gross hourly rate, instead
be honest and use your net hourly wage, taking out taxes, cost of
commuting, clothes, etc. Then say to yourself, is it worth trading x
amount of hours of my life energy for this purchase? This exercise has
usually stopped me dead in my tracks when I’ve been tempted to exceed
my spending plan.
Keeping yourself honest
Making a new year’s resolution to stop overspending or even creating
a “budget” are all good things on the road to living within your means.
But even with the best intentions, it’s harder than most people think.
The only true solution to the problem of overspending is to develop the
discipline to stay within a spending plan. Otherwise, consumption
quite naturally becomes excessive, and the rude awakening arrives with
the monthly statement.
To guard against overspending, I recommend creating and maintaining
a credit card expense journal, which is similar to the check stubs in a
checking account. Keep a weekly running total of credit card expenses
and deduct the end-of-week total from your checking account balance.
Then when your credit card bill arrives, you have already deducted the
expenses out of your checking account and you’re able to pay your
balance in full that month. If you’re unable to pay the full balance
off each month, that’s ok short-term, but realize that month you
borrowed money and you didn’t live within your means. If this occurs
for more than 3 months, you have a trend that needs to be looked at
closely.
Increase your money consciousness
Awareness into your relationship with money is one of the greatest
gifts you can ever give to yourself. Does it take courage to look
inside and understand what’s causing the fear, anxiety, overspending,
under saving, under earning, conflicts with your spouse/partner,
etc-you bet it does. Yet at the end of the day, what most of us truly
want, is not the house up on the hill, or the latest sports car or
other material possessions, and yes, many of us desire these items, but
at our core, what I would argue we’re all really in search of is peace
of mind.
It’s the feeling that your financial house is in order and you feel
at peace with your money and your life, you feel secure about your
future. And security in regards to your finances is a big thing. When
you feel out of sorts with your money, and especially about your
financial security, you’re causing yourself undue stress, which can
ultimately lead to illness and even disease. Nothing can be more
important than your health.
If money has often caused you stress and anxiety, tell yourself this
year will be different. Become fearless. Summon the courage and look
inside at what’s causing you to feel the way you do. Monitor your
thoughts carefully. Remember, as you think, so shall you be.
As you embark on this journey of self-discovery, know that what’s
waiting for you on the other side is financial freedom. This feeling of
liberation is worth its weight in gold."
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I was hosting our lovely Easter family party and found that non-sliced ham is not only much tastier, but also a ton cheaper.
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Instead of buying processed food for snacks, buy produce. It is not only healthier, but it is better for the environment and less expensive.
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5 More Easy Ways to Reduce Food Waste
O the price of food has gone up about 8% in the past year, according to the federal Bureau of Labor Statistics. Stop your complaining! As my mother always told me, "I like my whine in a glass, but not at the dinner table."
I'd have more sympathy for a lot of Americans who are upset about
soaring food costs if it weren't for the fact that most of them can
reduce what they spend on food by about 25% if they'd only do as my
mother also told me: "Shut your yap and clean your plate!" (Now you
know where I get my gifts for both language and tact.).
Prepare for shock and awe (and national embarrassment): According to
government sources, roughly 25% of the food Americans buy goes to
waste. That's about one pound of food, per American, per day -- thrown
in the trash. Sadly we've crossed the line from Land of Plenty, to Land
of Waste.
Click Here for the full article and ways to cut down waste and save money.
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