Free Money Finance

The Key to Successful Negotiating

In this article on how to get rich, I found a very useful comment:

I absolutely promise you, in every serious negotiation, the man or woman who doesn't care is going to win.

I couldn't have said it better myself.

What he's really talking about is "walk away power" -- the ability of the potential buyer to simply walk away from the deal if it's not good enough. If you literally don't care about a deal/sale/whatever (or at least don't care so much that you HAVE to do the deal), you have a great advantage in negotiating terms, price, and so on.

So, how does this work in practical application? Here are a few examples:

• If you're willing to walk away from buying a car, you can get a great deal (worked for me TWICE within a six-month period in 2004 when I bought two cars).

• If you're willing to walk away, asking for a discount is much, much easier (check out how this works when negotiating cable rates).

• If you're willing to take/find a new job, it makes it way easier to get a raise (though you have to be careful with this one -- you don't want to appear to be holding them for ransom).

• For us, this is also playing out in the housing market as we look for a new home. Since we're emotionally detached during the buying experience, we have a great advantage when it comes to dictating price (though it hasn't gotten us that far yet.) :-)

How about you? Have you ever saved a ton by simply being willing to walk away from a deal?

Don't Let Shipping Fees Sour a Good Deal

Here's a reminder from Consumer Reports not to let shipping fees sour a good deal. He didn't go exactly where I thought he was when the piece started, but it made me think of a situation I ran into this past Christmas and how I almost let "high shipping fees" keep me from a good deal.

I was looking for a hard-to-find video game for my daughter. I saw it at a local store for $19.99 (a good price from what I found online up till then), but she was with me so I couldn't get it then. A few days later I went back and they didn't have it. It was a "classic" game and they rotate those in and out on a random basis. I'd missed my chance.

So I went to Amazon to see what they had to offer. To my surprise, they now had a copy of it online -- and for only $9.99!! Sweet!! However, there was a catch. The product wasn't from Amazon directly but from one of the many "stores" that sells through Amazon. As such, I couldn't get my free shipping for ordering over $25 -- I had to pay the store's shipping rates. And they were charging $7 to ship it to me (yes, this rate was the lowest-priced option.)

I was outraged! $7 of a $10 video game? No way! What crooks! They were trying to rip me off! There was no way I was buying from them, so I logged off and decided to look for other avenues to get the game.

Now at this point I'm sure you've already seen what it took me a couple days to figure out. Once I calmed down, I realized that the $9.99 plus $7 shipping was a better deal than what I was prepared to pay at the local store (especially when you consider I'd have to pay tax locally.) But I had gotten so worked up over them trying to rip me off with the high shipping fees that I lost perspective. I went back to Amazon, found the video, ordered it, and received it a few days later. My daughter loved it when we opened it on Christmas.

So here's a reminder of a basic shopping tip: consider total price of a purchase and don't let one out-of-whack component (like shipping) make you pass up a good deal.

Five Times Haggling is Likely to Pay

Following in the spirit of my post titled Six Times It's Easy to Ask for a Discount, Smart Money has a piece on five times haggling is likely to pay. Here's their list as well as how you can save in each area:

1. Medical bills

• Doctors, labs and other medical providers are often willing to negotiate, with both uninsured patients and those whose insurance only covers a portion of their health expenses.

• Pay cash upfront. Doctors may offer you the same low rate that they charge insurance companies, if not an even cheaper fee if you agree to pay them at the time of the appointment.

• Compare costs. Check your provider's rates against those of other doctors in the area.

2. Retail stores

• Point out flaws. Floor models, sale items and products with visible damage (like a scuff or missing button) are ripe for discounts.

• Be flexible. Substantial flat-out discounts aren't always possible, so ask about extras such as free shipping or an extended warranty.

3. Cars

• Incite dealer competition. If you're buying a new car, collect quotes from local dealers.

• Assess market value. Buyers should use sites like Kelley and Edmunds to estimate the used car's value, then talk up the factors they don't like (i.e., not the ideal color, too many miles) to work down the price.

4. Financial aid

• Leverage competing offers.

• Ask for a reassessment if you encounter financial hardship.

5. Tag sales

• Go late. Early on in a sale, vendors have little incentive to haggle.

• Bring small bills. Exact change makes it easier to enforce your maximum price.

Here are a few thoughts from me:

1. Overall, good ideas/tips.

2. Many of the suggestions are the same or similar to those I listed in Six Times It's Easy to Ask for a Discount.

3. For details on how to save a bundle on a car purchase, check out Buying a Car Using the Web.

4. For a larger list of how to save money (as well as how to earn more), read How to Make Money and Save Money.

5. #5 is hit and miss. Yeah, if you go late you can likely get a great deal, but oftentimes there's nothing left that you want.

Seven Ways to Avoid Buying a Used-Car Lemon

When we buy a car, here's what we do:

• Save up for it in advance -- starting when we buy the previous one for cash
• When our current car gets to the point where it's getting unreliable, a pain to fix, and/or costly to repair/maintain, we identify which models we might be interested in
• We check out Consumer Reports to see which of our favorite models have good reliability
• We test drive all of the cars from our list that Consumer Reports likes
• Once we decide on a model we want to buy, I head to the web to do any final research and start the buying process
• While negotiating, I use a variety of tactics to get the best price possible
• When I pick up the car, I make sure they don't try to tack on needless costs
• I pay cash for the car -- and start the savings process all over again
• I drive the car until problems/issues arise (which is usually 7-10 years), and then start the process all over again

Now I know that you can save a good amount by buying used cars, but I'm not mechanically minded and don't want the time, hassle, potential "lemon" problem associated with buying a used car. But I know many of you do buy used and many more would like to. For all of you, Bankrate offers some thoughts on how to avoid buying a used car that's a lemon as follows:

• Get a CarFax report.
• Beware of cars with out-of-state titles.
• If you're looking at a 4-year-old Ford, for example, copy the vehicle identification number and take it to a Ford dealer and ask if they will run the service record through their computer.
• Beware of cars with no records of oil changes and other routine service.
• Look for evidence of major body or paint work.
• Pull up some of the carpeting and look for sediment or signs of mildew.
• Here's an oldie but goodie: Check for excessive wear in the rubber brake pedal pad.

They end with another bit of useful advice:

Lastly, if a deal on a used car seems too good to be true, it probably is. Even in a bad economy, no one is going to give away a car that's worth $6,000 for $3,000.

Ok, all you used car buying experts out there -- anything else to add?

Generic Prescription Drugs Can Save You a Boatload of Money

I've talked a lot about using generic/store brand products instead of name brands in order to save a bundle of money. We do this all the time -- especially on over-the-counter medicine. Well, a new study shows that in at least some cases (it focused on heart issues), the same can be said about choosing generic prescription drugs versus their name-brand counter-parts. The summary of the study:

There is no evidence that brand-name drugs given to treat heart and other cardiovascular conditions work any better than their cheaper generic counterparts, U.S. researchers said on Tuesday.

Ok, so what does this mean to your pocketbook?

"Brand-name drugs for cardiovascular disease can be as much as a few dollars a pill, whereas generic drugs might be as little as a few cents a pill," Kesselheim said.

Let's say you take one pill a day. If the name brand is "a few dollars a pill", let's assume it's $3 per pill. And if the generic is "a few cents a pill", let's assume it's $0.10 per pill. So for a one-year period, the choice is to pay $1,095 or $36.50 for something that has the same level of effectiveness. Now, which one do you think is the better deal?

Should Vegetarians Pay Lower Insurance Premiums?

We've discussed how people at the right weight and non-smokers pay less in insurance premiums because they are generally more healthy than those over weight and people who smoke. Seems fair to me -- you have less of a chance of needing insurance, so you should pay less for it, right?

So when US News asks if vegetarians should pay lower insurance premiums, it's a valid question. Of course there are issues like how to enforce such options, but if it's true that vegetarians are less likely to need insurance, shouldn't they pay lower rates? Personally, I'm ok with it (though I'm not a vegetarian). What do you think?

BTW, I'm not going into it in this post, but the issue of people who choose to lead less-than-healthy lifestyles and the cost of their medical care/insurance is a HUGE issue to consider as the U.S. looks at national health care. I'm fine with people doing whatever they want to do (smoke, eat like pigs, etc.) as long as they're paying for it. But if I'm going to pay for it, I think it's reasonable to ask them to do their part and maintain their weight, stop smoking, etc. I'll talk more about this issue as Obama gets into office and we start seeing his specific proposals for health care reform.

An Easy Way to Save When Shopping?

I recently found this fact in Parade magazine:

People buy roughly 30% more items when they shop with a big cart than when they don't.

So, what's their suggestion? A simple one:

Avoid a shopping cart altogether and use a small basket with handles.

Now I'm not 100% sure that "having a big cart" causes you to buy more (maybe people with big lists simply select big cart because they know they'll need them.) That said, I know it's a LOT easier to slip a few extra items into a cart than it is to carry one more thing if you have no cart.

What do you think -- is this a real money saving tip or a case of stats gone bad?

Gas Savings of Smaller Cars Eaten Up by Higher Insurance Costs

Back when gas was $4 or more per gallon, everyone was clamoring for smaller cars that got great gas mileage. Now that gas prices have dropped big-time, the fickle American consumer will probably forget about the "crisis" and go back to buying big gas-guzzlers. But that's for a different post.

What I'd like to highlight is the fact that those people who moved from larger cars to smaller ones to save money might actually not save much (if any). The reason: insurance costs for smaller cars are much higher. Here are the highlights from a recent Wall Street Journal piece on the issue:

Small cars generally cost more to insure than larger ones because they're involved in more accidents and incur bigger claims, especially for injuries. That's true regardless of the driver profile, though younger and less-experienced drivers tend to buy smaller, cheaper cars.

A 40-year-old male driver would pay an average of $1,704 to insure a 2009 Mini Cooper that gets 37 miles per gallon on the highway, according to a study by Insure.com, an online insurance broker. That same driver would pay only $1,266 -- a difference of $438 -- to insure a Toyota Sienna Minivan, which gets 23 mpg.

Similarly, a Honda Civic compact that gets 36 mpg on the highway costs $412 more a year to insure than a Honda CR-V, a small sport-utility vehicle that gets 27 mpg.

After soaring earlier this year, retail gasoline prices have lately been tumbling, making the higher insurance costs for smaller cars even more of a consideration. Alternative-fuel vehicles in general are even more expensive to insure, though several insurers offer discounts for hybrids. In this case, the main culprit is higher repair costs.

Here are my comments on these thoughts:

1. I'm surprised I didn't see an article like this during the time when gas was going up. All we heard about was the cost of gas and how people were moving to more gas-efficient vehicles. Why didn't someone point out that smaller cars lost much (or all) of their cost advantage when insurance was factored into the equation?

2. There are some reasons people may be ok with a break-even cost comparison -- like maybe they want a smaller car because it's better for the environment.

3. That said, there are also reasons people choose larger vehicles -- like safety and comfort.

4. In the Mini Cooper versus the Sienna comparison above, the Mini Cooper has a $438 disadvantage in insurance costs. If you drive 12k miles a year and gas is $2 per gallon, the Mini Cooper will save you $395, so it's a wash. Of course, if gas is $4 a gallon, the Mini Cooper is a much better deal (saving you almost $800 a year in gas.) Then again, this is a pretty broad range in gas mileages -- 37 mpg versus 23 mpg. It just shows you how much of a spread there needs to be and how high gas prices need to go before gas savings overcomes insurance costs (at least in this case.)

5. When the mileage difference isn't as large, it's even harder to re-coup the higher insurance costs. In the Civic versus the CR-V comparison above, the Civic has a $412 disadvantage in insurance costs. If you drive 12k miles a year and gas is $2 per gallon, the Civic will save you $222. Even at $4 per gallon, the Civic barely covers the insurance increase (it saves you $444 in gas.)

6. Of course, there may be some smaller, more gas-efficient cars that get decent mileage and don't have insurance costs that are that much higher.

7. The bottom line is that we need to consider ALL costs in operating any vehicle as part of the buying process (including expenses we haven't discussed here like maintenance costs).

Ten Ways to Save This Holiday Season

US News lists ten ways for retirees to downsize holiday spending, but most of these suggestions can be used by anyone (not just retirees). Here's their list:

• Frugal gifts.
• Hunt for deals.
• Fewer gifts.
• Travel digitally.
• Donate time.
• Regift.
• Downsize the party.
• Go gift free.
• Gifts for kids only.
• A gift pool.

There are some decent money saving suggestions here for those of you looking to save a bit this holiday season.

We're not really doing anything different from a spending standpoint this Christmas. Our budget has been about the same for the past four or five years, and we're sticking with it. Seems like we do always add one or two people to the list each year, but one or two drop off as well, so it's usually a wash.

How about you? Anyone cutting out gifts, making versus buying, limiting your list, or something similar?

The Oldest and Often Most Effective Way of Saving Money

What's the oldest and one of the most effective ways of saving money? Simply asking for a discount. US News reminds us of this and gives the following thoughts:

To get the best deal possible, we followed the golden rule of negotiating: Just ask. Simply saying "Could you give me a discount on that?" knocked a couple dollars off each purchase, from jewelry to food.

After buying a salmon dinner and two pairs of earrings for a total of $20, the camera crew and I visited a woman who was trying to get a better deal on her homeowners' insurance. It had gone up by about $20 from the previous year and she wanted to see if she could persuade Allstate to lower the price. So, once again, we called, she asked, and they said yes—they knocked $12 off right away, and offered a bigger discount if she also purchased her auto insurance through the company.

As most of you know, I'm a big fan of asking for a discount since it can save you a good amount of money on all sorts of goods and services. And for those of you nervous about asking a seller to take a bit off, start of with these six times it's easy to ask for a discount. They'll get you off to an easy start. Then you'll have some early success and build confidence, and before you know it, you'll be asking for discounts all over the place! ;-)

How to Save Money on a Digital Photo Frame

A reader left this great money saving idea on my post titled Thoughts on Digital Picture Frames:

I actually made one from a few laptops that my office was trashing. Great quality, high resolution, 10GB of pictures and a 17" screen to boot! All I did was disassemble the laptop, flip the screen around (like a tablet PC) and mount it in a shadow box with a custom matte. All-in-all I only spent about $15. A great use for that old laptop you have laying around. My wife, the decorator, even approved! There are a few DIY instructions out on the web and I would be happy to answer any questions if anyone wanted to give it a shot. I have a few pics of the finally product as well. Definitely the frugal alternative to a 9" $150 version.

Good idea, huh?

Does Everyone Really Have Cable TV?

Recently I saw that the BCS games were moving from Fox to ESPN. In commenting on this move, Sports Business Radio made a statement that caught my attention:

But for all of the people who are griping today about the fact these games won't be aired on free TV starting in 2011 I have three words for you - GET OVER IT.

I mean really. How many people out there don't have cable? Even basic cable with ESPN. The days of free TV and cable TV being different are over. If you don't have cable/satellite TV you are definitely in the minority.

Really? The way they write this makes it sound like three people out there don't have cable TV. So I went googling and found out the answer (basically) to their question -- 20 million fewer homes get ESPN than receive the major broadcast networks.

Ok, so it's a bit more than SBR seems to think. But this led me to start thinking -- is having cable TV a "basic service" in today's home? Does "everyone" have it (or will "everyone" soon have it)?

Then I got curious -- what does the average person spend on cable TV each year (PDF)? It's not a trivial amount:

Cable customers report spending $58 monthly—down $1 from 2005—while satellite subscribers report spending $61 per month for service—up $3 from a year ago.

In other words, the average cable subscriber forks over almost $700. Think it's a good deal? Oftentimes it's not. Why? Because many people don't actually watch that much TV and as a result, cable TV becomes as expensive as going to a movie when viewed on a per-hour-watched cost basis.

We're currently looking at basic cable (we currently have no cable TV, just rabbit ears) as part of a TV, phone, internet deal. It's pretty clear that we can get more phone time and a faster internet connect versus our current set up by bundling these two together. However, we're deciding whether or not to add the cable as part of the package. On the plus side, we'd get ESPN and similar channels. On the down side, do we really watch that much TV -- and do we want the extra expense?

Decisions, decisions.

Be Careful of Car Dealers Trying to Add on Needless Sales

I'm always fascinated by car buying stories, especially when a dealership tries to pull the wool over the eyes of a knowledgeable buyer. In this case a Bankrate writer specializing in car buying advice gets a new car for his wife and in the process the dealer tries to sell him:

• An extended warranty
• A four-year "service package''
• Wheel and tire insurance
• LoJack theft protection
• Paint protection
• Leather conditioning

Here are his thoughts and advice to those thinking of buying a new car now:

If I had given in on even half of these items it would have added thousands of dollars to my purchase price. In the end, I got the deal I wanted, but I had to endure a nearly three-hour process to close a deal that was essentially a cash transaction for the dealer.

The lesson here for other buyers is that with sales way down, dealers are going to be even more aggressive to bolster the bottom line with add-ons.

Buy an add-on if you see some value in it. But be aware that for most of these add-ons, the only person who benefits is the dealer.

My experiences have been similar to his. In general, dealers try to add on anything they can (much of which is a questionable purchase at best) in order to increase their profits (don't believe me, check this out.) Of course, many businesses try to do this. However in this case we're talking hundreds or thousands of dollars in added on expenses, so you have to be very cautious and diligent when these products and services are pushed on you.

I have an interesting, though different experience of a dealer trying to jack up costs on a buyer. When I bought my Subaru, I set the price with the salesman and then went in to close the deal. When I saw the paperwork, he had added a $300 "advertising fee." I asked what that was for. He said it was the advertising cost the dealership assigned to every new car and told me that "everyone pays this." I pointed out the irony of me having to pay for advertising that was designed to get me to buy from them, then told him I wasn't going to pay it. He said I had to. I said I didn't and either he'd remove it or I'd walk and buy elsewhere. He removed it. But if I hadn't been paying attention or if I'd been less firm, that would have been an easy $300 in his pocket.

Sheesh! The things we all have to go through just to buy a car!

How Americans Are Cutting Back

This Wall Street Journal article on store brands also contains a chart of how Americans are cutting back on their spending during this rough economy. Here's the list along with the percentage of people surveyed that said they were cutting back in each of these areas:

• Eat out less often -- 61%
• Buy fewer prepared meals at grocery stores -- 50%
• Try to make cleaning products last longer -- 49%
• Go to spas/hair salons less often -- 45%
• Buy fewer convenience foods/eat more from scratch -- 43%
• Do more at-home beauty treatments -- 32%
• Share more products across household members -- 25%

We've been on the "frugal" end of the spending spectrum for quite some time, so we never did much eating out, buying prepared meals, etc. As such, we're not really doing much different. That said, we are holding off on some purchases -- thinking that there will be sales galore in the months to come.

How about you? How are you cutting back (if at all) these days?

The Cost-of-Living in the Cities I've Lived In

As most of you know, I've suggested quite often that one way you can impact your net worth positively is to live in a lower cost-of-living city. So I thought it would be fun to look at the cities I've lived and worked in (I'm putting them in alphabetical, not chronological, order) including a couple internships I had that were on the "higher end" of internships.

So I went to Sperling's Best Places and used their cost of living calculator. A score of 100 is the national average -- that this particular city is equal in cost to an average US city. A score below 100 means that the city has a lower cost-of-living than average (for example, a score of 80 means the city's cost-of-living is 20% lower than the average US city) and a score above 100 means that the city has a higher cost-of-living than average (for example, a score of 120 means the city's cost-of-living is 20% higher than the average US city). With that said, here's a list of the cities I've lived in and their cost-of-living scores:

• Cincinnati, OH -- 80
• Grand Rapids, MI -- 83
• Indianapolis, IN -- 75
• Nashville, TN -- 89
• Pittsburgh, PA -- 84
• Washington, DC -- 166

A few thoughts on these:

1. See, I practice what I preach. ;-)

2. The most expensive I've ever lived in was DC -- but that was just for a summer (thank goodness.) I loved the city (lots to do) but it was very, very expensive. I paid more for a small apartment (with a roommate) back then (20 years ago) than I would now on a $300k mortgage! Yikes!

3. One of the arguments people have for living in more expensive cities is that they can make more money. I have two responses to this: A. Living in smaller cities hasn't stopped me from making a good income and B. Yes, on average, you'll make more money in larger, more expensive cities. But living there will cost you way more than you'll make in a higher salary.

4. Living in these cities has helped me save a BUNDLE throughout the years and, as such, helped me accumulate a decent net worth.

5. I'm sure many of you will hate this advice. ;-)

6. Obviously, you're free to live where you like (and doing so is one of the freedoms of choice we have in our finances.) I'm just pointing out the impact of these decisions and submit these thoughts for your consideration.

If you like, give your city a run-through of Sperling's cost-of-living calculator and see what it comes back with. Then come back and share your results in the comments below.

Six Ways to Save on Pet Costs

The following post is from Dr. Scott Line, associate editor of the The Merck/Merial Manual for Pet Health. Note: The following tips do not replace consultation with a licensed veterinary practitioner.

With economic pressures on the rise, consumers are looking for ways to tighten their belts while maintaining the best level of care they can for their pets. In the midst of the downturn, veterinarians around the country have observed a decline in visits and spending for recommended procedures.

Pet health and quality of life don't have to become economic casualties. Through a not-for-profit pet health resource - The Merck/Merial Manual for Pet Health - Merck and Merial, leading global pharmaceutical and animal health companies, are teaming up to educate pet owners about the power of preventive measures as the cornerstone of a sound financial strategy for pet care. The book is an easy-to-read version of the manual veterinarians have been using for years, and it might be one of the most thoughtful and practical gifts you can give to the pet lover in your life this holiday season.

"We have known for a long time that early detection of ailments and proactive health maintenance can extend a pet's life by years, but it can also help your pocketbook as well," said Scott Line, DVM, associate editor, The Merck/Merial Manual for Pet Health. "In the long run, it is dramatically cheaper to prevent health problems than it is to treat them, and consumers need to keep this in mind when seeking ways to reduce costs in their pet care budget."

1. Be a Grooming DIYer: Grooming is an important part of maintaining your pet's health and condition, but it is a skill anyone can perform with practice. An added incentive for taking an active role in your pet's grooming is that you can identify problems early (e.g., bumps, lumps, changes in coat quality, etc.) that a groomer may not think to tell you about. Doing the grooming yourself can save as much as $400 to $1,000 per year, but to avoid a costly mistake be sure to use products, such as shampoos, that are designed for pets and not people.

2. Bulk Up: Resist the urge to buy pet food, heartworm and other preventatives in smaller quantities to cut immediate costs at the cash register. The reality is, as long as you're mindful of expiration dates, buying in bulk is generally cheaper.

3. Don't Wait to Vaccinate or Medicate: Making sure your pet is current on all recommended vaccinations will save you a bundle in the long run because you'll help ward off preventable diseases. Vaccinations such as one that prevents rabies, for example, are particularly critical and may save your animal's life. Similarly, routine medications such as heartworm preventives should be given every month. Skipping doses can be expensive, as treating heartworm costs as much as $800 - $1,000. In addition, treating the disease is risky and can be painful for your pet.

4. Spay and Save: For the average pet owner, spaying or neutering is a must. If you have a limited income, you may be able to save by taking advantage of low-cost clinics for these services. Keep in mind that spaying or neutering your pet can prevent the immediate expense of new pets in your family and the societal expense of unwanted pets being turned in to shelters. It also reduces the occurrence of some common diseases, such as breast cancer in pets.

5. An Ounce of Prevention: Prevent an unplanned, emergency vet visit this holiday by doing your part around the house. Many items that are a routine part of holiday celebrations could be toxic or harmful to your pet. Examples include:

• Mistletoe and even poinsettia, while beautiful, are highly toxic to dogs and cats

• Chocolate and macadamia nuts are toxic as well, and yeast-based bread dough can actually be fatal to your pet as it causes intestinal bloat

• Tinsel, if swallowed by a curious kitten or puppy, might cause intestinal blockage. Consult The Merck/Merial Manual for Pet Health for more in-depth guidance.

6. Brush Up: Proper dental care is an often-neglected component of the pet health regimen. Regular use of an inexpensive toothbrush and toothpaste designed for pets can delay or avoid a professional cleaning costing several hundred dollars. You also can purchase pet food designed to help eliminate tartar.

A Couple Reminders that Where You Live Can Cost You Dearly

I've talked quite a bit about the fact that where you live can make a big impact on your finances (in fact, moving to a lower cost-of-living city is one of my most-hated money saving tips.) And recently, I ran into a couple of articles that reminded me of this fact. Here are some highlights from each of them:

• Where Everyday U.S. Costs Are Cheapest and Priciest -- Yes, some cities are more expensive to live in (no surprise here.) These cities also generally have higher salaries, so some of the high costs are offset. But as I've shown, the higher salaries don't make up for the higher costs.

• The Best Places to Raise Your Kids -- Combines information to get "best" and "most affordable" all in one shot. Interesting piece.

Obviously there are tons of other reasons you might live in one place versus another (family, weather, enjoyment of city's entertainment opportunities, etc.), but if you have a choice, cost-of-living is certainly one factor you'll want to consider since it can make a HUGE impact on your net worth over the long haul.

Give Yourself Financial Peace This Holiday Season

The following is a guest post from Marotta Asset Management. The attitude he suggests and the tips he gives works not only for Christmas, but for anyone celebrating any holiday this season.

In Charles Dickens's "A Christmas Carol," Ebenezer Scrooge calls Christmas a "humbug" because of the foolish way people celebrate it. He asks his nephew, "What's Christmas time to you but a time for paying bills without money?"

Sadly, that sounds like Christmas for many American families binging on expensive gifts.

Every year, Americans seem determined to be more frugal than the year before because of the latest economic conditions. One year it is rising energy prices; another year it is rising interest rates. This year, of course, the drop in everyone's investments looms large. And so once again Americans will promise to cut back on presents, food and decorations and to fund their celebration from actual income instead of savings or credit cards.

But while the retailers worry, cut prices and may have an off year, the credit card companies are never concerned. One in every five families won't pay off their credit cards in January. They will pay exorbitant interest rates instead and begin the downward spiral into financial ruin. Many families, in fact, are still trying to pay off their credit card purchases from last Christmas.

We are a nation of consumers and debtors. Total U.S. credit market debt has reached an all-time high in 2008 at 350% of gross domestic product (GDP), up from 255% a decade ago. This increase over the past 10years is not due to the federal deficit. Only a paltry 37% of GDP is federal government debt, which is down from 46% a decade ago. The largest increase has been in financial institutions, whose debt rose from 64% to 114% of GDP. The second largest increase has been in household debt, which rose from 66% to 100% of GDP. Now the country is de-leveraging, and American families must do the same.

Christmas is an emotional time. Few families set a budget for spending, and consequently credit card debt spikes considerably. Our materialism urges us to show our love for friends and family members with big and expensive gifts. As a result, we often buy even more lavishly than the receiver would have wanted us to.

It's time to differentiate between the celebration of Christmas and the commercialization of Christmas. This year, give your family the gift of financial peace of mind. Celebrate the season simply.

Four decisions, if made together as a family, can help reduce the frenetic materialism of the season and bring back the holiday's warm fuzzy feelings: Cut back your gift list. Limit how much you spend. Decide to be charitable. Determine which activities bring you real joy.

We get into trouble when the number of people we buy for increases beyond our means. Make a list. Cull the list. Engage in a little honest financial talk among friends and family. Copy this article and highlight this section. They will understand that your retirement account is way down, finances are tight and you need to be saving more money to get back on track. Other family members may be equally relieved to cut back their own gift list.

For example, you might decide that only children 12 and younger among extended family members will get gifts. If that decision doesn't keep gift giving reasonable, ask each extended family member to draw the name of one child under 12 and buy a gift. These seem like sensible rules.

Limit how much you spend. All of your excess holiday spending should fit inside 1% of your annual take-home pay. So if your net income is $40,000, you have a $400 budget for Christmas. If you bring home $100,000, you can spend $1,000. If these amounts seem small, you are in good company. On average, people spend about $800 on gifts alone.

Try taking care of all of your friends with a single baking project. Cookies, homemade granola, Russian tea, or herb mixes are easy to make in quantity and always welcome during the holidays.

Family Christmas letters are a wonderful way to keep distant friends up to date on your life, but consider sending them via e-mail or posting them on a blog or website for free. It is better for the environment--and your budget.

For family members, consider buying gifts that are already part of your budget or that encourage your children to develop their inherent talents. My favorite Christmas gift idea comes from "The Homecoming," the first movie about the Waltons, in which the father buys John Boy paper and pencils. His gift, which affirms his son's choice of writing as a career, is the emotional climax of the story. Many parents' gifts at Christmas have changed the course of their children's lives or careers by inspiring them thoughtfully in one direction or exposing them to a new interest.

Decide to be charitable. We either choose to be the kind of people who take delight in giving generously or we are not generous. Jesus, whose birth we celebrate at Christmas, saw a poor widow putting two small coins worth only a fraction of a penny into the treasury. He called his disciples and said, "Truly I say to you, this poor widow put in more than all the others. They gave out of their wealth; but she gave out of her poverty."

Giving ungrudgingly can be an act of faith, a recollection of all we have been given. It is ultimately a declaration that we want to be generous people.

Finally, decide which activities bring you real joy. Dickens himself understood this. As his son explained, Christmas was "a great time, a really jovial time, and my father was always at his best, a splendid host, bright and jolly as a boy and throwing his heart and soul into everything that was going on. . . . And then the dance! There was no stopping him!"

Take a lesson from how the reformed Ebenezer Scrooge celebrates Christmas. He does six things, and only first two of them cost money.

First, Ebenezer buys the Cratchits a prize turkey anonymously. He decides to treat his employee Bob Cratchit like family. Sharing a festive meal together promotes community. Today less than 20% of family meals are eaten together. Even if all you did during the holidays was to share a meal, it would make the season unique and special.

Expensive food does not make a meal a feast. In fact, it is eating out at fast-food places and precooked convenience foods that burden our budgets. The leisurely pace of homemade family meals costs a fraction of our typical eating on the run. Fold the napkins fancy, and use the good china.

Second, Ebenezer gives generously to the portly gentleman who was collecting for the poor. Ebenezer decides he wants to be charitable, and so he includes a great many back payments in his donation.

Third, Ebenezer is kind and gracious to everyone he meets. This attitude costs so little, but it sometimes seems as scarce as the latest sold-out fad toy. Ebenezer smiles. He is pleasant. He says, "Good morning, sir! A merry Christmas to you!" When he previously would have responded with a gruff word, he reacts now as a shock absorber with forgiveness and forbearance. These simple gestures cost us nothing but are all too uncommon.

As Ebenezer's nephew Fred describes Christmas in the opening scene of Dickens's famous story, it is "a kind, forgiving, charitable, pleasant time: the only time I know of, in the long calendar of the year, when men and women seem by one consent to open their shut-up hearts freely, and to think of people below them as if they really were fellow-passengers to the grave, and not another race of creatures bound on other journeys."

The fourth action of the reformed Scrooge is going to church. Worship is an act of celebration that helps us remember with gratitude all that God has provided. Our community provides scores of opportunities for free celebration during the holiday season.

Fifth, Ebenezer walks about the streets of London enjoying the sights. Sometimes a celebration can be simply taking time out of our busy lives to notice what is noble and beautiful all around us. Pausing and reflecting gives us time to refresh our bodies and renew our minds. It allows us to see beyond the ordinary and routine and appreciate life to its fullest.

Perhaps you don't feel that way. All the more reason to stop and reflect. Feelings often follow thoughts. Having an attitude of gratitude, being mindful of others in the present and looking confidently and eagerly toward the future encourages us to be people who live life with more satisfaction.

For his sixth and final new way to celebrate Christmas, Ebenezer goes to his nephew Fred's party for fun, games and music. Christmas provides the unique opportunity for the bonding that comes from joyful laughter.

After a musical interlude, the partygoers play "Forfeits" because "it is good to be children sometimes." The commands are usually silly requests intended to get everyone at the party laughing, such as "dance a jig," "tell how to make a pie without talking," "yawn until you make someone else yawn" or "try to stand on your head."

Next they play the games "Blindman's Buff," "How, When and Where" and then "Yes and No." None of these pleasures cost a cent, which is a lesson Scrooge as well as many of us have forgotten. Your best holiday delights need not even show up as a line item in your budget.

This year, take the hype out of the holiday. Feast merrily, give generously, show kindness, worship thankfully, live mindfully and laugh playfully. Cut back your gift list. Limit how much you spend. Simplify your Christmas, and set your family on the road to a lasting peace about finances.

Help a Reader: Saving on Moving

Here's an email I recently received from a reader:

I'm leaving my job as a management consultant in Washington, DC to work as a teacher in the Los Angeles Public Schools.  I'm trying to move across the country with my wife over the summer and make it as cheap/painless as possible, especially because we're taking a 60% pay cut.

Here's what I've been thinking:

• Sell almost everything that's large that we own on Craigslist.
• Ship most of our clothes and hiking gear, should be 3-4 medium boxes for $50 a piece.
• Drive across the country with our books and kitchen stuff in our car.
• Buy new things on Craigslist in LA.

I'm trying to weight the costs/benefits of moving vs. selling and buying new things.  The items we own and I'd like to keep that won't fit in our tiny, old Mazda are:

• A $300 mattress from IKEA (special for wife's back problem).
• An oak kitchen table I got on Craigslist for $50, but have been told it's worth $300+ which I really like.
• An old bike that I love, my wife's bike which is not so great.
• A nice futon that I could potentially return to my parents, who live 4 hours east, more or less on the way to LA.
• Some IKEA lounge chairs, ~$100 a piece new.

What advice do you have for this reader? Do you like his plan or have any other suggestions/thoughts?

How to Save Money on Your Monthly Technology Bills

Here are some thoughts from Kevin Brand, EarthLink's SVP of product marketing on how to save on tech bills.

Assess your Needs

Look at the ways you use technology in your home. Take a week and monitor how often you are on the phone, watching television, or surfing the net. Once you see how much time you are using these services, compare it to your plan. Many people have access to high-speed Internet at work, making it unnecessary to pay for high-speed bells and whistles at home. The key is to avoid paying for excess.

Downgrade

Once you assess your needs, get rid of services that you aren’t fully using.  Are you downloading video and playing games or just checking email and sports scores on the Internet? If it’s the latter, it doesn’t make sense to pay for a high-end, super-fast Internet connection. A less expensive but safe and reliable service such as dial-up service – which some providers offer with a special Accelerator option – may be just what you need.

The same applies to your cable bill. Do you need the premium channels or DVR? Better yet, if you can watch most of your favorite shows online or you predominately watch shows on only a few channels, you may be able to downgrade your service to a cheaper plan. Be honest about what you really need, and don’t pay for services you aren’t using to their fullest potential.
       
Take Advantage of Freebies

Look for companies that offer free services. Some Internet providers offer free virus protection, which saves you from buying costly software yourself.  Others offer free spam protection and other security enhancements, a good bet if you’re looking to maximize savings and still surf safely.  Also, leverage your Web access by surfing special cost-savings sites, like www.pricegrabber.com, www.bizrate.com or www.thedailydeals.com.  Look for any special promotions your provider might offer on their home page.  A lot of Internet providers have partnerships with other online merchants to offer special savings to their subscribers. If yours doesn’t, consider looking for one that does. And sign-up for the email alerts from the companies that you already do business with to take advantage of special promotions.

Avoid Bundles

Advertisers may create a “need” that might not really exist for you. If you’re a cost- conscious consumer, look closely at how much you’re paying for popular, but often pricey, bundle packages that include phone, cable and Internet. It may be easier to pay all-on-one bill, but it doesn’t allow you the flexibility to choose the best individual services that fit your lifestyle. Nor will a bundle provide the flexibility to adapt your services based on lifestyle or location changes. Also, promotional pricing may exist initially, but the price may go up while you’re still locked into your bundle.  So, you may not need all the “bells and whistles” or restrictions of a high-cost bundle. In fact, if you opt for options like Freestanding DSL for your Internet access, you might be able to ditch your home phone altogether.

Study your Bill

Read the small print. Know what you are paying for and make sure you’re only paying for services that you actually use.  Also, be familiar with your contracts and look for changes to the Terms of Service. Know when your contract ends, so you don’t unwillingly default into another one. And be aware, not all Internet providers offer free, 24/7 customer support. If your provider doesn’t, you could be eating up dollars you don’t need to spend.

Pay Smart

Finally, make sure you are taking advantage of special deals and incentives. Some service providers offer discounts up to 40% for annually pre-paying. Others offer special pricing for a year’s commitment.  And always ask for what you want from your provider. A customer-service focused Internet provider may be willing to give you a credits if there’s been a serious issue involving your service or account.

Reminder: Keep a Sharp Eye on Medical Bills

Here's a reminder from NCN that you need to keep a close eye on your medical bills. He was being charged "out-of-network" prices even thought they were in network. After 30 minutes of sorting out the problem, he ended up saving $208.34. Not bad at all.

I have to say that medical bills are among the hardest to understand of almost any we receive. In fact, they may even be more difficult to sort through than taxes. That's why I turn them all over to my wife and let her handle them. ;-)

Anyway, NCN's post made me think of the various tips I've given to those looking to save money on medical bills/costs. Here's a quick review for those of you interested:

• How to Get an Incorrect Medical Bill Corrected

• Another Way to Get an Incorrect Medical Bill Corrected

• A Third Way to Get an Incorrect Medical Bill Corrected

• CPT Codes Can Save You Money on Medical Bills

Ideas on Winterizing

Here's a good piece on how you can winterize your home, car, and small gas-engine machines -- something that will both save you money and extend the life of your belongings. Here are a few of the tips I found especially interesting:

• Wallhangings. A quilt or decorative rug will insulate interior walls, keep your room cozier, and allow you to turn down the thermostat a few degrees in the winter without a noticeable difference.

• Cheap firewood. If you live near a national forest, you may be entitled to several cords of firewood for a small fee. Check with your regional office of the U.S. Forest Service. Warning: It is illegal to pick up firewood in a government-owned forest without a permit, so don’t skip that part.

• Fuel. Unless you live in the tropics, put a bottle of fuel de-icer in your tank once a month to help keep moisture from freezing in the fuel line. You can discourage moisture from forming in the gas tank in the winter if you keep your fuel tank full.

• Car locks. Dab a little petroleum jelly on your keys and move them in and out of the locks to keep them working smoothly during the winter months. Petroleum jelly doesn’t freeze.

My thoughts:

1. I never really thought about how wall hangings can help insulate a home, but it makes sense now that she brings it up.

2. We don't live near a national forest and don't have a wood-burning fireplace, but if you do this seems like a GREAT way to save money.

3. I use de-icer in my gas during the winter, but wonder if it's really necessary. Anyone have thoughts on this?

4. Another interesting idea. That said, does anyone use keys/locks on a car anymore? I always control my locks electronically.

Another Example

Here's another example of the fact that where you live can have a HUGE impact on your net worth:

In some places of the country, a $200k per year income isn't enough. In others, you can thrive on a teacher's salary.

;-)

How to Make Money and Save Money

I'm getting a lot of email lately from people who are going through tough financial times. They usually ask me for ideas on how to make money and/or save money, so I thought I'd do a post on the topic for everyone's benefit.

If you're coming to Free Money Finance and want some tips on how to make more/some extra money, here are a couple links for you:

• Pre-2008 money making ideas

• 2008 money making ideas

• 2009 money making ideas

And here are some tips (several hundred) on how to save money:

• Pre-2007 money saving ideas

• 2007 money saving ideas

• 2008 money saving ideas

• 2009 money saving ideas

Each of these links leads to a "category" here at FMF and contains a series of posts on either how to make or save money. If you want to see all the ideas (in reverse chronological order), simply scroll down and read as you go. It's that easy.

Obviously, not every idea is for everyone. But with over 300 posts on how to make money and almost 1,000 posts on how to save money, surely everyone can find at least a few ideas that they can use to improve their finances.

A Salesman Tells How to Negotiate for the Best Price on Electronics

As many of you know, I'm a big advocate for asking for a discount on items you are buying. And the higher the price on the items, the more important this is. So when I saw a comment by a reader about how to negotiate when buying electronics (which we all know can be expensive), I emailed him. Turns out he's a salesman at a major electronics retailer. I asked him to give us the "inside scoop" on how we can best negotiate savings on electronics and here's what he suggested:

• The best time to negotiate is end of the month.  I don't mean like two weeks before.  I mean like the 30th or 31st.  Sales managers are usually willing to take a lower amount because they have to "get stuff out the door" to make their bonus.  I'd also say for end of the pay period, but you never know when that is.

• If it's an entry-level TV (say a 720p or a manufacturer's low-end 1080p) or a TV below 42", don't expect much of a discount.  These items usually have the least markup percentage-wise.  If, however, you're going high-end, you'll find people more willing to work with you.

• Don't negotiate only on price.  Most managers don't want to just give away money, but if you're buying a TV and a home theater system, there may be some leeway when it comes to any accessories you need.  Maybe throw in the HDMI cable, or free delivery or setup.

• A local or regional store is more likely to be movable than a big-box like Best Buy or Sears.  Although, recently, Best Buy has been haggling more and Circuit City is DESPERATE, so who knows.

• Buy from a commissioned sales person.  We are professionals.  We know our stuff.  We want to make a deal with you.  We want your business.  We are there after the sale.  You think that part-timer that makes $9.00 an hour cares if you're happy with your purchase?  I sure care.  If you're not happy and return the TV, I don't get paid.  If your delivery gets screwed up, it comes partly out of my pocket.  Most of the commissioned sales people I've met over the years know this.  Some don't, treat their customers like crap, and don't last long because they have a 30% return rate (yes, we do track that).  We've always said at work that the reason Circuit City, CompUSA, and Sears went downhill was because they got rid of their commissioned sales staff (or seriously hindered their earning potential).

• Do price research.  If you see the TV on the Internet at a lower price, print the page out and take it with you.  Be wary, though, a lot of Internet retailers are not factory-authorized dealers, and we will tell you that if you buy from them, any manufacturer's warranty will be void (which is true).  We may not match it, but you may get a better deal from us.  Be prepared though, we WILL figure out your shipping charges (on a big TV, this can be as much as $200!) and adjust our quote.

• Mention that you've been other places.  We're suckers for market share and taking you out of the market, so if we can get your business over the other guy, chances are, we'll do it.

• Don't go too far.  We have our limits of what we're willing to do.  If you're mean, pushy, bossy, or set ultimatums, you most likely won't get what you want.  We have pride too.

• Some brands will get you a better deal than others.  LG may have a deal with Joe's Electronics, Samsung may have given ABC Video a volume discount.  If you find a salesman pushing a brand that's questionable for odd reasons (Best Buy's notorious for this), chances are that's the brand they have the best margin with.

• If you do negotiate with us, be discreet.  It's because of people that don't negotiate that we can with you.  If the guy next to us hears you, he'll want a better deal.  That'll make that salesman hate me, which means I in turn won't like you as much.

• Don't expect too much right now.  Video margins are the lowest I've seen in the five years I've been in the industry.  There really aren't any "crazy" deals like there were last holiday season.  Sure, you'll find a 50" plasma for $899, but you can get that most of the time.  Now, if you want to buy audio with your TV (which you probably will once you hear the craptacular sound those 10 watt speakers on your new $2000 TV produce), then you can snatch a bargain.  You can usually haggle down to 30-45% off hang tag.

• Don't hold off for the "bottoming out" that newspeople are predicting.  Trust me, they can't go much lower.  You're talking about going from 45% margins to 13% in 18 months.  Thirteen Percent!!  That's the average margin in a flat-panel TV.  If anything, I think prices will head UP in 2009, and most retailers agree.

How to Get the Most Out of Holiday Sales

Smart Money tells us all how to get the most out of holiday sales including the following:

• Compare prices -- One easy way to find the best deal on the item you're eyeing is to use a price comparison site like PriceSpider, which tracks a product's price history for six months, or PriceGrabber.com, which lets users calculate and compare the total price of an item, including shipping and tax.

• Don't jump the gun -- “If you can wait three weeks [to do your shopping], you should wait because the deals are going to be a lot better than what they are now,” says Jon Vincent, owner of BlackFriday.info, one of several sites that publish Black Friday sale ads before the big day.

• Black Friday previews -- Black Friday deals are typically advertised on retailers’ web sites on Thanksgiving Day, says Vincent. Other sites, like Vincent's BlackFriday.info , bfads.net and blackfriday.gottadeal.com usually list deals at major retailers even earlier than that since they get the sale circulars in advance, scan the ads and post them online, says Dworsky.

• Check for price adjustments -- If you buy the Guitar Hero World Tour band kit and later see it advertised for less at another store or on sale at the store you bought it from, your credit card may refund the difference.

The tip I use the most is #1. I go online and find the various prices on items I want to buy. Then I either purchase them online or look and see if I can find them for comparable prices locally. If I can, I buy them here so that I 1.) support local stores and 2.) can return them easily if there's a problem.

And, of course, I'll get several calendars from Costco this year. My family loves them, they're inexpensive, and they are very easy to "make" online.

For the most part, I like to shop early and/or during the week if I can. I used to like the crowds in stores and the "excitement" of shopping season. Now I avoid it like the plague.

Americans Finally Getting a Clue

It seems that mainstream Americans are finally realizing that store brand products are often just as good as name brand items (or maybe they've known it all along and the press is just realizing it.) Anyway, here's a summary of a Wall Street Journal article on the issue:

When Summer Mills visited her local CVS drugstore recently, to save a few dollars she bought the store-brand facial scrub rather than the Olay version she normally uses. "I thought I'd be able to tell the difference, but I couldn't -- I looked at the ingredients and they seemed almost the same," says 30-year-old Ms. Mills, a stay-at-home mother of two in Ardmore, Okla. On her next shopping trip, "I'm going to buy the store-brand moisturizer and cleanser -- it's less money."

Retailers are also sensing more shopper experimentation. This fall, supermarkets Safeway Inc. and Kroger Co. noted that sales of their store brands are on the rise. "In this economy, customers are much more willing to try a private-label item, and we're seeing signs that this is happening more and more as the year progresses," Kroger CEO David Dillon said on a conference call.

To be sure, overall sales of name-brand goods are still higher than those of store brands. Still, about 40% of primary household shoppers said they started buying store-brand paper products because "they are cheaper than national brands," according to a September report by market-research company Mintel International, which interviewed 3,000 consumers. Nearly 25% of respondents reported that it is "really hard to tell the difference" between national brands and store brands of paper products. Store brands on average cost 46% less than name-brand versions, Mintel found.

Well, the word's finally getting out that store brands are:

• Much cheaper than brand-name products.
• Often as good as or better tasting/in effectiveness/etc.

And even if you're wary about store brand items, most stores offer a no risk guarantee. If you try one of their items and don't like it, bring it back for a full refund with no questions asked.

Given all of this, why not buy the store brand?

My prediction is that store brands will become a bigger and bigger part of total sales as people try them, see that they are as good as/better than brand name items, and that they cost less -- then keep buying them over name brands. After all, why pay more for the same thing?

We've purchased store brands for quite some time and LOVE them. They save a ton of money and are very good/effective. For details, see Generic and Store Brand Products -- Much Cheaper and Just as Good (Or Even the Same Thing!) as National Brands.

The Biggest Raise You'll Ever Get

I found this piece from Money magazine (and its funny title) to be quite an interesting take on a personal finance issue. So what do they say is the biggest raise you'll ever get? The summary:

The oldest of my three children started college this year, prompting me to flash forward to the day when my kids have all left home and the expenses of child rearing - from piano lessons to orthodontics, summer camp to undergrad tuition - are firmly behind me.

Yes, this time of life may be bittersweet. Reduced expenses will come with the emotional baggage of living in an empty nest and experiencing a few more aches and pains from aging. Financially, though, this turning point may amount to the biggest pay raise you or I will ever get.

Yes, kids are expensive and once they are off and on their own, it IS likely that your finances will be in a position to improve greatly. It's a wonderful time to kick the pay off all debt/save more/invest more plans into hyper-drive.

Then again, you don't need to wait so long to get a raise. Instead, plan to ask for raises at work on a regular basis. And when should you ask? When you can show that you deserve a raise.

Cheapest Methods of Shipping Packages

Consumer Reports recently compared various package shipping costs for FedEx, UPS, and the Postal Service. They first started by sending out 48 "next day" packages across the U.S. using the three shippers. The results:

Every package reached its destination the next day. But overnight shipping prices to the same place differed by as much as 281 percent. The Postal Service was the least expensive by far for local and long-distance deliveries.

Then, they checked prices to send a 5-pound package from New York to California regular next-day, two-day, and slower ground. The results:

The Postal Service won again in the first two categories and more or less tied in the third. And unlike the other carriers, the Postal Service doesn’t add a fuel surcharge, which is adjusted monthly by the other carriers. In September it was about 10 percent for domestic ground shipments and 27 percent for those sent by air. The Postal Service also offers discounts of 3 percent to 11 percent to customers who arrange their shipping online.

In other words, the Postal Service was MUCH cheaper and had just as good service. When asked how they could do this, a Postal Service representative said: "We have an infrastructure in place and letter carriers everywhere. We’re simply adding package delivery to a network that already exists."

However, if you need a letter or package delivered faster than next-day, "FedEx and UPS have the edge. Both offer same-day service and delivery first thing next morning. All the Postal Service can do is promise delivery by sometime the following business day, depending on destination and shipping time."

That said, here's the bottom line for Consumer Reports:

All three delivered next-day mail as promised, but the good old U.S. Postal Service is often cheapest by far.

So you can save a bundle with the U.S. Postal Service -- not a shocker there. What was surprising for me was that they were just as effective as the other two shippers. Makes sense I guess since there are letter carriers going to almost every building six days out of the week.

My problem with the U.S. Postal Service is that they do a terrible job of explaining their various shipping options. Ever go into a post office and try to determine which shipping method offers what terms, costs, etc.? Good luck with that one.

Anyway, if you can sort through the tangled mess, it looks as if the U.S. Postal Service is the way to go to save money and still make sure your package gets there on time.

Saving Money on a Tight Food Budget

MSNBC recently offered several tips for how to eat well on a budget. Here's the one answer I especially liked -- about how to maintain a healthy diet when times are tight:

You have to shop smart and be creative in your cooking. For example, a lot of people still think protein is such an important thing to have in large quantities and that’s not the case. If you want to save money, protein is an expensive part of the meal. But you can make dishes with a little less protein. Buy frozen, canned or fresh vegetables and add some protein to the vegetable dish, such as a cooked whole grain pasta. Or chunks of chicken. You'll have a combination dish that’s not only low in fat, full of vitamins and minerals, but it's really quite inexpensive and convenient to make.

Another inexpensive item people tend to under use is eggs. You could make a frittata for your family with lots of veggies and some low-fat cheese and two whole eggs. It’s low in calories, high in protein and really low in carbohydrates.

Also, people don't always have time to cook and prepare breakfast. In that case, have a turkey sandwich. Even a quick sandwich of something like that is a great healthy and inexpensive way to start your day. It’s certainly better than skipping breakfast and less expensive than buying a muffin, pastry or croissant outside. All you get from those items is carbohydrates and fat. They’re not going to nourish you through the day.

Lots of good ideas here. I'll add my own comments:

1. I agree with the "you don't have to have protein at every meal" comment. We often have pasta without any meat at all and it's both filling and tasty.

2. If you really want to save a bundle on food, stop eating out as much.

3. Stop by Costco at "sample time." I know, I'm a cheap-o, but if they have good samples (which they often do) all you'll need afterwards is maybe a light snack and the meal is covered.

How about you? Anyone have any great ways to save on food costs?

Save 16% to 279% on Snacks

Consumer Reports recently did a piece on 100-calorie snack packs -- those convenient, small, pre-packaged packets of chips, cookies, crackers, etc. designed to make it easy to have a snack and control your calories at the same time. But it turns out that such convenience has a pretty big price tag. The summary:

The price of those 100-calorie packs will certainly lighten your wallet. On average, they cost from 16 to 279 percent more per ounce than the versions in regular packages, according to a study conducted last year by the Center for Science in the Public Interest.

As such, here's what Consumer Reports gives as their bottom line on these snacks:

If you can buy snacks in their regular packages and use an ounce of willpower, your wallet will stay fatter.

Ha! ;-)

We don't eat that many snacks the way it is (our favorite is chips and salsa, and if we buy decent chips it's a fairly healthy treat), but when we do we always buy the big boxes and break them up into pouches if need be. I think the only time we've ever used the smaller bags was when we needed a bunch of pre-packaged snacks for the team after my son's soccer game.

Anyway, these products are just another example that convenience often has a higher price.

Eight Easy (and Cheap) Ways to Prevent Home Theft

Here are eight easy (and cheap) ways to prevent home theft from US News:

1. Sign up: While home security systems are great tools for preventing burglaries, they can be quite expensive. For a more affordable alternative, Houseworth recommends a little trickery: putting a home security sign in your yard without actually obtaining the service.

2. Beware of the garage: Garages are a common entry point for burglars, Houseworth says. Open garage doors serve to advertise your belongings to passersby, which increases the likelihood of theft.

3. Be a neighbor: Neighbors can play a key role in preventing home thefts. Homeowners on friendly terms with their neighbors are less likely to be victimized by other members of their community.

4. Keep valuables outside the bedroom: A burglar on the hunt for valuables in a home will make the master bedroom their first stop—since that's where the cash and jewelry are most commonly stored. So if you do keep such valuables on your property, find another room to store them.

5. No land escaping: Burglars prefer to target homes that have hiding spots and escape routes in the yards, and abundant bushes and trees make for great cover, Houseworth says. As a result, yards with less shrubbery and more open spaces aren't particularly appealing targets.

6. Install motion sensors: Light is a great deterrent for nighttime break-ins.

7. Radio running: Noise helps prevent burglaries as well. Houseworth leaves his radio on all day so that would-be burglars think that someone is at home. "Your home is more likely to be burglarized during the day because they think that nobody is home," he says.

8. Free police inventory: For homeowners looking to go a step further, Houseworth suggests contacting the local police department and having an officer stop by the house for a safety checkup.

Here's where we stand on each of these:

1. I've heard this idea before but never taken advantage of it. Any readers here do this? Where do you get the signs anyway?

2. First, if anyone wants anything in my garage, they can have it. Second, we NEVER leave the garage door open when we're gone (do people really do this?) Third, we keep the "regular" doors to the garage locked at all times and each night I lock the two doors that come from the garage to the house.

3. Our neighborhood has an association that's becoming more and more active -- and one reason is for security purposes. In addition, we know our closest neighbors well and do watch out for their places when they're gone -- and they do the same for us.

4. We don't really have that many valuables, but the stuff we do treasure (extra checks, passports, titles to the cars, credit cards not used, etc.) are kept outside of our bedroom.

5. We're in a neighborhood and there are that many places to hide. That said, our yard does have a "mini-woods" in back that's more dense than most.

6. Great idea. I think I'll be adding some of these lights.

7. My wife is at home most days, so we don't leave anything on. But I do know people who use the "radio method."

8. Ha! Really? I think my police department would tell me to pound sand. ;-)

Saving Money on Tipping

One of the subjects that always gets the readers here riled up a bit is that of tipping. There are strong opinions on both sides of the issue. So strap on your seat belts -- this could be a fun one.

With that said, I thought I'd share MSNBC's six ways to save on tipping this holiday season:

1. Focus on a few people. If you're scaling back on whom you tip, focus on those you see most often or are in your home, such as child-care providers. Also consider their financial situation.

2. Team up with others. Ask others to pool money for a gift. One nice present may be more appreciated than several small gifts anyway.

3. Make a donation. Many charitable organizations will send a note simply stating a donation has been made in the person's name, without specifying a dollar figure. Donations are also tax deductible.

4. Buy in bulk. If you've got a lot of people to tip or give gifts to, consider buying in bulk at a wholesale warehouse. For instance, you buy jams, biscuits and teas and put together small gift baskets yourself.

5. Cook up your gifts. Baked goods, whether made from scratch or from a pre-made mix, are popular, thoughtful and cheap. Just be sure you're aware of food allergies and restrictions.

6. Small gestures. Even if you can't afford to give any gifts this year, a card expressing your thanks lets people know how much you appreciate them. Small touches, such as adding a single flower, can go a long way, too.

I'll start by saying that our tipping is rather limited because we just don't have that many people who provide services to us. We don't have a house keeper, personal trainer, lawn maintenance company, etc. But for the few people we do tip (our babysitter, postman, etc.), we're not cutting back at all. We give them good tips (the postman has a $20 limit based on the law) and show our appreciation once a year in this way. Yes, we pay them already (either directly or through taxes), but a bit extra is a nice way to say thanks for the ways they often go the extra mile for us.

That said, some of you may need to cut back for financial reasons. I'll let all of you duke that issue out in the comments -- whether we all sacrifice enough ourselves to be able to tip those that serve us. For now, I'm going to comment on the six ideas above. Here goes:

1. Way do this anyway since we don't have that many service people in our lives.

2. Great idea. We do this for my son's basketball team -- we all donate something and get one big gift for the head coach.

3. Personally, I hate the "donation in your name" idea unless you're absolutely certain the person has a strong affinity for the charity. Most of the "gifts" I've ever received from people in this way are donations to organizations I wouldn't give to myself.

4. Another nice idea -- it combines the cost savings of "make it yourself" and "save by buying in bulk."

5. A great idea. I did this last year for the people at work. My wife makes the best homemade bread (she grinds the wheat herself -- the whole nine yards) and it is to die for. I gave everyone here a loaf for Christmas last year (along with a nice note.) It was a big hit.

6. Of course, something is better than nothing.

How about you? What are you doing tip-wise this holiday season?

The Best Way to Save Money On Eating Out (Plus Four Other Money-Saving Tips)

Like 90% of America these days (or at least it seems that way), we're cutting back on eating out. We never really ate out that much before the economy went into the toilet, but we're being a bit extra careful these days so we're watching the number of meals we eat out.

That said, we haven't totally eliminated eating out since it can often be a fun time for our family to get out and enjoy ourselves. In particular, we've hit on one very big money saving tip when it comes to eating out:

Buffets

Specifically, there's a Chinese all-you-can-eat buffet near our house where lunch is just $6.99. They not only have the traditional foods you'd expect in a Chinese restaurant, but they also have fried chicken, macaroni and cheese, and so on so even our daughter who doesn't like Chinese food has something to enjoy. And for $6.99, we can eat enough to cover both lunch and dinner for the day. (Yes, I know I'm a cheap-o. But the food really is very good.)

By the way, this tip also works with those all-you-can-eat meal offers (I think Applebee's has some of those going now.)

Besides the buffet suggestion, here are four other money saving tips we use when eating out: 

• Eat breakfast/lunch versus dinner. Ever notice how dinner costs are waaaaay more expensive than for the same thing at lunch? For example, the Chinese restaurant above charges $11.99 for "dinner" and IT'S THE SAME THING (an all-you-can-eat buffet.) And breakfast food itself is fairly inexpensive, so if you eat out then, you're bound to save more than if you go out for a large dinner.

• Use coupons. I eat at Logan's now and then and I ALWAYS have a coupon. My wife collects restaurant coupons, puts them in a folder, and when we decide to eat out, she goes to the file (we often take the file with us in the car when we go out on Saturdays). We save at least a few dollars every meal when we use a coupon.

• By a deal. The restaurants are offering all sorts of good deals out there -- usually combination offers that save you a couple bucks on each person's order. They're doing all they can to attract customers, so go with the flow and order the combo that gets you a good amount of food for a little bit of money.

• Skip drinks and desserts. Consider the following:

• 15 oz. drink at a restaurant = $1.25

• 2 liter bottle of pop at a grocery store = $0.99

• Dessert for one (maybe two) at a restaurant = $4.99

• Half gallon of ice cream on sale (and one's always on sale) at a grocery store = $3.99

Moral of the story: drink water and stop by the grocery store on the way home to pick up dessert.

How about you? Do you have any other tips for saving when eating out?

Six Ways to Save on Homeowners Insurance

Smart Money lists six ways to save on homeowners insurance as follows:

• Maintain a healthy credit score
• Inquire about discounts
• Increase your deductible
• Disaster-proof your home
• Monitor neighborhood changes
• Pay promptly

This is a good list IMO. Here's what we do on each of these suggestions:

1. Yep, you can save a bundle on your homeowner's insurance if you have a good credit score. We saved 44%.

2. I called my agent the other day just to make sure we were getting all the discounts possible. We were.

3. We keep our deductible VERY high (and have increased our emergency fund accordingly) and will only make a claim in case of a major problem. Any other (slight) amount of damage, we'll pay ourselves. Our perspective on insurance is that it's there to protect against catastrophic loss and everything else is to be paid by us.

4. I need to work on this. I check our fire alarms regularly, but I read somewhere that they should be replaced every 10 years or so. Anyone know anything about this? And we do have a fire extinguisher, but I'm not sure where it is -- not good at all!

5. Our neighborhood actually just started a neighborhood "association" that's designed to help us all get to know each other and work together to make our neighborhood a better place. My wife is a "section leader" in this new group.

6. This applies to ALL insurance -- pay on time. You risk being dropped if you pay late, so be sure you plan accordingly and pay before the due date.

How to Get Free Info on Home Repairs

A couple weeks ago, my wife attended an all day school event with my daughter, so I took the day off and spent it with my son (he's homeschooled and had worked ahead, so he had the day "off".) We decided we would do something he and I had been talking about doing for a long time. So we headed to Lowe's (closest to our house -- we also considered Home Depot and Menard's) and walked up and down EVERY aisle -- looking at the tools, equipment, Christmas decorations (yep, they're out), fixtures, and on and on and on.

I took tons of notes -- prices on various items we'd been looking for as well as some home improvement ideas I got out of the day. I was also surprised a bit. I have been to Lowe's hundreds of times, but they had aisles I had never been down, and they carried many things I'd never thought of buying there. I know, it's a very geeky way to spend a couple hours, but we both found it interesting and loads of fun. And in case you're wondering, no, we didn't buy anything.

But the thing that surprised me the most was the amount of free material Lowe's was giving away. I picked up booklets on how to stain a deck, the best way to pick out a new door, options for caring for wood cabinets and furniture, how to test the softness of your water, etc. -- about 15 booklets in all. Now granted, these were "sales-y" in nature since they were provided by manufacturers that wanted you to buy their products. But if you could get past that, there really was some good information in the booklets, much of which I used to kick-start my information-gathering phase for a few projects on my list. And the information was all free...

The Economics of Braces (And How to Save Money on Them)

My son just had his "phase 2" braces put on a couple weeks ago (am I mistaken, but didn't braces used to be a one-time event?) and I thought I'd share how we selected our orthodontist and saved some money on this fairly expensive procedure. Here goes:

• We started by getting second opinions (two extra opinions from recommended orthodontists) from what our main orthodontist suggested. No reason getting braces if he doesn't need them, right? Alas, both of the other doctors said he did need them (what was I expecting them to say?) BTW, both of these "consultations" were free.

• While my wife was getting the second opinions, she asked about pricing, insurance issues, discounts, etc. and also checked out both the professionalism and friendliness of the office/staff. This is a long-term effort and we wanted to be sure we thought the people were both good at what they do (they were recommended, so we had friends who liked both of the new offices) and easy to work with.

• In talking about price, my wife made it clear that she was considering other doctors. Here's the pricing she received:

• From our current doctor: $4,250 less $1,000 discount less $1,200 insurance coverage = $2,050
• From new option #1: $3,000 (this was probably discounted from some higher amount) less $1,200 insurance coverage less 5% ($90) if we paid all of it when the procedure was done = $1,710
• From new option #2: $4,380 less $1,000 discount less $1,200 insurance coverage less $109 for one-time payment = $2,071

Obviously, new option #1 was the cheapest. In addition, they had a couple other factors in their favor that made choosing them easy:

• They were deemed "the best to work with" by my wife -- she loved the doctor and the staff. Conversely, our current doctor's office staff is less than friendly and he's retiring soon. Option #2 was too "slick" in their marketing approach for my wife.

• Option #1 was, by far, the closest to our home.

So, we went with new option #1. We paid at one time using our American Express card (1.5% cash rebate) and then reimbursed ourselves from our HSA.

Anyone else out there gone through the braces decision? Any suggestions?

How to Save $9k a Year

CNN Money has a piece on how you can save almost $9,000 a year. They list the following suggestions for ways to do this:

• Strategic shopping -- Potential annual savings: $5,200. Stephanie Nelson, founder of couponmom.com, a site that tracks deals at your local grocery store, says that shoppers can save an average of $50 to $100 a week on their groceries if they spend about 30 minutes once a week planning out their supermarket trip.

• Skip Starbucks -- Potential annual savings: $2,425. And brown bag your lunch too.

• Upgrade your appliances -- Potential annual savings: $150. Newer energy efficient appliances can save $50 to $150 a year in energy costs, according to Energy Star.

• Go generic -- Potential annual savings: $161.20. Generic brands of food and drugs can cost 20% to 50% less than the name brand and you're not likely to tell the difference.

• Pay an extra $1 on your credit cards -- Potential annual savings: $203.25.

• Sitter sharing -- Potential annual savings: $780. Families that pool together can still save between 20% to 50% off the cost of childcare while they enjoy their weekly date night.

Ok, so it's not a great list. Some of these are actually quite weak, but there are some nuggets of savings here that either work themselves or work with a twist or two. Here's my take on each of them:

• Strategic shopping -- My wife already does this, but I think we can save more by planning our meals ahead and making fewer trips to the store. We're working on this now.

• Skip Starbucks -- I don't drink coffee and I already take my lunch to work. ;-)

• Upgrade your appliances -- My take on this is that the cheapest appliance you will ever own is the one you already own. In other words, it's going to take a long time to make up for a $700 purchase by saving $50 per year -- not to mention the landfill issues of throwing away perfectly good appliances.

• Go generic -- Did this a long time ago. Most stores allow you to try their store brands at no risk (you don't like it, you bring it back and get your money, no questions asked), so that's what we do. We try items and if we like them, they become part of our future purchases (at a big savings versus name brands). If we don't like them, we return the products and get our money back. I'd guess that we like the store brand 80% of the time or so.

• Pay an extra $1 on your credit cards -- Weak idea. Pay it all off.

• Sitter sharing -- A better idea: trade baby-sitting with another family -- you watch their kids while they go out and they do the same for you. Let's face it, baby-sitting can cost a fortune, so this is a GREAT way to save money.

Why AAA is Worth the Annual Fee

We've belonged to AAA for years. My wife used to have a Honda Civic that didn't have any warning (a beep or anything) when you left the lights on. It was a regular occurrence (about twice a year) that we'd go somewhere, leave the lights on, and come back to a dead car (for example, on a foggy morning where we'd turn the lights on for safety but it was so light out when we parked that we didn't notice they were on.) So we regularly had AAA come out wherever we were and jump the car.

Then there was the time my car was flooded at our church (long story) and needed to be towed to the dealership. AAA came to the rescue.

But it wasn't until we moved to Michigan that we REALLY started to value our AAA membership. Here's how it specifically saves us money:

• We have AAA car, house, and umbrella insurance. They are the cheapest around (believe me, we know since we shop around regularly for car insurance.) I'm not 100% sure if you need to be a member to get their insurance, but I was under the impression you had to be. Maybe someone can set the record straight for me on this one.

• I save gobs of money on hotels each year. I travel several times each year on business and we usually stay at Hampton Inns. Hampton ALWAYS has a AAA rate that's lower than the "normal" rate. True, this savings is for my employer as I'm reimbursed for travel, but then again, helping the company save money benefits me in that it makes the company more profitable.

• We also save on personal hotel costs. While planning for our recent trip to Chicago (it was ultimately canceled), we checked a wide variety of hotels based on costs and locations. We found a Hampton Inn we liked for $239 a night (for a suite, so it wasn't bad.) We tried getting a price several ways -- calling the hotel directly, going online to check various sites, and so on. The cheapest option was using our AAA discount which saved us $24 a night or $72 total.

• For the same trip, we were planning on taking the train to Chicago (fun for the kids, cheaper than driving and parking, etc.) Amtrak was going to charge us $184 for four tickets, but with a AAA discount it was $157 -- another $27 saved!

• AAA has free travel materials -- maps, books, etc. -- that we always end up using every year. Even if we don't buy travel packages/services from them (which we never do), these materials help us get a lot of information that we ultimately use to get the best prices possible. For example, some information from AAA helped us save a good amount on our trip to Disney last year.

• And of course, there's the roadside assistance that AAA is known for. I guess it's a form of insurance -- and we pray we never need it -- but if we do it will be nice to know it's there for us.

I'm sure there are tons of other ways to save using AAA, and I'm anxious to hear them. Anyone out there have some ways to save with AAA?

How Cool Would This Be?

Check out this piece telling how coupons could be used in the future:

Electronic coupons are posted online. Shoppers point and click to select the ones they want, and link them with their loyalty cards from their grocery store. When their card is presented at check out, the coupon discounts get applied to the bill.

I would LOVE this!!!!

Looks like it's only being "tested" in a few places now, but I'm sure it will be a hit with the coupon-clipping crowd. Then again, maybe that group is too cheap to pay for web access in the first place, so maybe it won't help them.

One issue I'll face: my grocery store doesn't have a loyalty card. And they're such a big part of the market here that there's really no one forcing them to be more competitive. Plus, we're not in the biggest market in the world, so stores don't have as big of an incentive to invest here. Like usual, we'll probably get this service about ten years after everyone else.

On a separate note, we are getting movies much faster. "Raiders of the Lost Ark" just came to my hometown -- what a GREAT movie! ;-)

Five Memberships Worth Signing Up For

Yahoo lists five memberships worth signing up for as follows:

1. Zoos and Aquariums
2. AARP
3. Warehouse Clubs
4. AAA
5. Amusement Parks

This is a topic that I've been thinking about for awhile now (and I've posted on it some.) For now, here's my take on each of these:

1. We don't have a great zoo in my city, but we do have a very nice botanical garden and we've been members there for years. In the past, we've made four or five trips there as a family each year, plus a few more with friends when they come to visit, so it's been a "good deal" for us. In addition, we get to support something that makes our town a bit nicer. That said, as our kids get older we are going there much less frequently, so we may let our membership lapse this year.

2. Fortunately, I'm not old enough to join AARP yet, but when I get there, I'll certainly blog about it. ;-)

3. As I recently wrote, you can save a good amount at Costco just on buying gas. I've also saved big on tires there (and had some friends do the same.) And since my membership is paid by my employer, it's a no-brainer for us to "belong" to Costco.

4. I'm going to do a post on how much you can save using AAA, but it's a good amount if you travel (which I do). Simply getting the AAA rate at a hotel a few times a year can pay for your annual membership. In addition, we have our car and home insurance with AAA -- they have the cheapest rates around (we know because we shop out our insurance each year.)

5. We don't have an amusement park close by (or at least one I'd want to be a member at), so this isn't an option for us.

How about you? Do you have any memberships that are worth signing up for?

Five Things that Can Hurt Your Credit Score

I get questions all the time that go something like this:

"If I do such and such, will it hurt my credit score?"

So, in the interest of answering any current and future questions on this issue, I thought I'd share Smart Money's list of five things that can hurt your credit score. Here's their list:

• Too many inquiries
• Small, unpaid debts
• Store credit cards
• Authorized users
• Name changes

And if you're interested in getting a higher credit score, you can see their list of seven ways to boost your credit score.

Not much to add other than what I've already said. I have a great credit score and it's saved us a good amount of money, so this is an issue you'll want to pay some attention to for you're looking for an easy way to save money.

Five Things It's Cheaper to Do Yourself

MSN Money lists five things it's cheaper to do yourself as follows:

• Cooking meals at home
• Many home repairs and improvements
• Personal care (cutting/coloring your own hair)
• Clothing repair
• Lawn and home care

Here's how we stack up on these five:

• Cooking meals at home -- I always knew that eating out was much more expensive than eating at home, but I didn't know how much we were spending on eating out until I started classifying it as its own category in Quicken. Before that, I had it within the "food" and "entertainment" categories depending on where we ate out and with who. As such, the pure eating out costs got lumped in with the other expenses in those categories -- and it masked how much eating out was costing us. Now that it's its own category, I can see the expense and thus we're managing it much more effectively.

• Many home repairs and improvements -- We do lots of repairs ourselves, though we also know our limits and when to call in a professional. In many cases we wait until a few things need fixing before we call a repairman, so we can save on house calls by bundling repairs. For example, the last time we had an electrician out he fixed our attic fan, put in a new light, and did a bit of wiring. He's also a friend of ours who does work on the side, so he doesn't charge much at all.

• Personal care (cutting/coloring your own hair) -- I'm on my way to $2k savings by cutting my own hair (not to mention, it saves me a ton of time.) My wife colors her hair herself too. When she and/or the kids need a cut, they go to a friend of ours who gives us a "deal."

• Clothing repair -- We don't really have many buttons pop off, rips, tears, etc. But when we do, my wife is pretty handy.

• Lawn and home care -- No house keepers or lawn services for us -- we prefer to do it ourselves (the lawn work at least -- I enjoy it). I'd love to pass on the house work and I've offered to get a house keeper/cleaner to come in once a month or so, but my wife sees it as a total waste of money.

Anything you can add that you think is cheaper to do yourself?

Can You Save Money by Hunting?

In Michigan it seems like every other guy is a hunter (I'm not). They hunt deer mostly (or so it seems to me) but birds as well.

Anyway, I was wondering if hunting could be a money saving hobby. After all, if you get a deer, that's a TON of meat for your family.

Then again, the cost of equipment (guns, clothing, etc.) has got to be a pretty big outlay, so maybe it costs more than it saves. Yet wouldn't most of the costs be in Year 1 (you don't need to buy a new gun every year do you?)

As you can see, I'm clueless on this topic. Anyone out there have a more-informed opinion on whether or not you can save money by hunting?

Subnote: Please, let's leave the "whether it's right or not to kill animals" debate for someone else's blog.

Can You Pay for a Costco Membership by Saving on Gas Alone?

We get gas quite often at Costco since it's usually the cheapest place to buy it around here. The other day while filling up my car, I started to wonder whether or not you could pay for your annual Costco membership just by saving on gas alone. So I ran the numbers for our family. These are the facts/assumptions I used:

• I drive 15,000 miles per year and my wife drives 5,000.
• At our average miles per gallon, I estimate we consume 881 gallons of gas per year.
• I checked the gallon estimate against what we spend annually on gas (at an average cost per gallon) and it appears to be a good number.
• Costco is anywhere from $0.02 to $0.07 cheaper than most stations in our area. Most often it's about $0.05 cheaper, so this is the number I used.

Given these assumptions, by getting our gas at Costco versus other options, we save just over $44 per year. The cheapest Costco membership is $50 per year, so the answer for us is "no, saving on gas alone won't pay for a Costco membership."

BTW, if we saved $0.02 each time the savings would be $18 and if we saved $0.07 each time the savings would be $62.

Anyway, there are a TON of assumptions that HAVE to be true for us to even get this close to paying out the cost of membership. For instance:

• This analysis assumes that ALL gas is bought at Costco for the entire year. Has anyone ever purchased all their gas in one year from one station? (When you travel, how do you even know that station will be around?) I never have.

• This analysis assumes that Costco is ALWAYS a better price. Maybe sometimes it isn't. I've had comments here suggesting sometimes it's better and sometimes it's not. I'm sure this analysis would have different results in different parts of the country.

• This analysis assumes you don't drive any farther to Costco to get gas than you'd drive to get it elsewhere. If we were going just for gas, we'd have to drive 15 miles (round trip) farther to get to Costco than our nearest gas station. That's a money killer right there. We get gas at Costco when we're already in their neighborhood for other reasons, so we don't have any extra costs in getting to/from their station.

There are probably some more assumptions that I'm missing, but I think these are the major ones. The bottom-line for me is this: Even if the true savings is only $10 or so per year, that's a decent start on paying out the cost of a Costco annual membership.

Then again, my annual membership is paid by my employer, so it's all gravy for me. ;-)

Save Money by Having Your Heater Checked Every Year

After we discussed whether or not we do/should have our heaters checked every year, I found this Smart Money piece that addressed the same issue. Their thoughts:

"Heating systems fail most often because they're neglected," says Maria Vargas, a spokeswoman for the government's Energy Star program. A system that doesn't produce enough warm air, or loses much of it to leaks en route to your rooms, can tack up to 20% onto your bill. Hiring an inspector (at a cost of $50 to $100) to examine your HVAC system once a year will more than pay for itself in energy savings.

Then again, if you can do this yourself, why not get the benefits of a check-up AND the savings of self-work?

Here's what we did this year:

1. Got references from friends and neighbors on good heater service companies.

2. Called those companies and asked for a list of their services and prices. There was much more variation in price than what I would have guessed.

3. We discussed which one worked best for us, and we decided to use them. Ultimately, we went with a monthly "club" that checks our heater and AC as well as offers a few additional services for "free". A side benefit: they'll allow us to put our monthly bill on our credit card, earning us rewards (cash) along the way. I know it's not a fortune, but every little bit helps. ;-)

Pretty simple, but by doing this we saved $50 or so over the highest-priced alternative. Not a bad deal.

Five Ways to Save on Funeral Costs

Ok, how many posts can one person write about saving on funeral costs? I guess we're finding out. ;-)

Seriously, I think this will be my last post on this topic for awhile, but I did find this page that lists five tips to saving on funeral costs. They are:

• Choose lower-priced options -- By choosing certain types of funeral or cremation arrangements, you can eliminate many unnecessary funeral costs.  Choosing wisely will prevent you from being charged for lots of “extras” no one told you about.

• Make arrangements at a low-priced funeral home and cemetery -- As you probably already know, prices vary between funeral homes. Simply call funeral homes in your area and request their price information. 

• Buy merchandise and services from alternate sources -- Sometimes it makes more sense to buy certain funeral items from someone other than the funeral home handling your service.  These other suppliers usually offer more reasonable prices than the typical funeral home.

• Request or negotiate discounts from the funeral home and cemetery -- Contrary to popular belief, most funeral directors are willing to give discounts to families that ask in an appropriate manner. 

• Take advantage of any military benefits due the decedent -- Why pay for something the government is willing to provide for free?  – after all, the decedent has already earned it!

Saving money on a funeral is a fascinating topic that doesn't get a lot of coverage, that's why I think most people over-pay -- they don't know what to do to save money (and they are usually an emotional wreck anyway when making these sorts of decisions.)

Anyway, if you want even more advice on how to save money on a funeral, you can buy the Funeral $aver's Kit.

And finally, here are a couple thoughts I found on the FAQ page of Funeral Tips:

• While it’s true that the typical burial and funeral services cost between $7,000 and $10,000, it doesn’t have to cost that much. In fact, people that use the Funeral $aver’s Kit never end up paying anywhere near that much for funeral services or burial arrangements. Unfortunately, most families are not educated when it comes to planning funerals....those are the people that end up paying a lot of money.

• By using proven techniques you can realistically reduce the cost of burial and funeral services by 50% or more…..without “skimping” or having to worry about “looking cheap” in front of family and friends.

No, I don't receive any commission by pointing to this site (in case anyone was wondering) and I can't vouch for the accuracy of the information. But I do know that whenever people are forced to buy goods or services where they are 1. uninformed and 2. making emotional decisions, there's a good chance they will over-pay for them. It seems reasonable to me that with a few, simple tips, almost anyone could save a bundle on funeral services and products.

Couple More Tips to Help Save with a Freezer

Here's a comment left by a reader on my post titled Will a Freezer Save You Money?:

Watch the 'scratch and dent' sales, too. If it's just going into the basement, who cares if there is a flaw in the finish.

Even for a single, a small freezer is a good thing. Both my sister and I have one (hers is a chest, mine is an upright). We split a side of beef every year and it pays for itself twice over.

My best freezer tip is to make an inventory and keep your freezer organized and rotated. No 'mystery date' meat stuck to the bottom when you defrost, please.

Few comments from me:

• Scratch and dent sales are a great way to lower the initial cost of a freezer purchase -- making your payback time much shorter than without them.

• Yes! Yes! Yes! on the inventory suggestion. If you aren't at least somewhat organized, some stuff will get lost at the bottom for so long that it will go to waste (too much freezer burn, etc.) and your "savings" will evaporate.

More on How to Save on Funerals

Some good comments on my post about saving money on funerals. I asked readers for some tips and here are some worth posting for all to see:

People DO shop around for funerals. The FTC requires that each funeral home provide a list of prices which (by law) must be given out when someone inquires about a service. If you have a particular funeral home in mind, they may match the pricing from another competitor in the area based upon the price list. Additionally, Costco provides a low cost alternative for caskets.

Really? Do people really shop around for funerals? Anyway, I LOVED the Costco tip here. I'm sure they can save us all some big bucks.

I recently buried my father and my family appointed me to make most of the decisions, mostly because I am the only one that reads sites like this one. Because my dad had terminal cancer, I was able to do some research and make some decisions in advance. The funeral director said it all when he told me "There's no such thing as a cheap funeral". I had told him that I didn't want to be cheap but my dad only had $5700 in life insurance. My parents had about $12,000 in the bank and lived on Social Security so I didn't want to spend much of that. I learned a lot about the funeral business but unfortunately some of it too late to save me money. First I was able to get a casket from a dealer for $650. Not the cheapest she had but pretty close to it. I checked the prices of two funeral homes in my parent's neighborhood, the cheaper one was the one I wanted to go to anyway so that worked out. Cost for one day visitation, church service and graveside service about $6,000. Then there was the $1,000 to open the grave (dad had bought the grave site in 1960). The grave marker was $2,000 (I think I could have saved money here but I did this after dad died and my rational money mind was not working).

My dad had a nice funeral and I felt like we truly honored him. I could have spent thousands more but that wouldn't have made any difference. He would still be gone and all we have left are memories.

Good tips from someone who's had to deal with a tough death in the family.

I sell life insurance, so I have to deal with this on a daily basis. If you are a member of a church (especially one with a graveyard), you don't even have to involve the funeral home except maybe to rent the hearse and for the embalming (if that's necessary with your state laws). The funeral home charges extra to set everything up, like going to a travel agent instead of buying your plane tickets yourself.

Hmmm -- another advantage of going to church, huh? ;-)

I have 8 years in the funeral business.

First, I believe part of estate planning is funeral planning. You can pre-pay (which is essentially a term policy) or pre-plan. Funeral providers are happy to help with either one.

Advantages of pre-planning:

• Time to shop around (do you rally want to take six weeks examining all option while Mother decomposes?).

• Time to take family wishes into consideration (do they want a body to view or a grave? will a memorial service suffice?).

• Communicates to the family what your wishes REALLY are (ever sit in a room with six people who knew EXACTLY what Mother wanted, but six completely different ideas are espoused? every try to get a group of people to reach the same decision? yes, it is as bad as a jury deliberation).

• Takes financial stress off of survivors...a pre-paid funeral is paid for at time of death.

A few other things to keep in mind:

• Most funeral service providers have policies about embalming a body that is put out for viewing. There are health and ascetic aspects to this (bodies break down quickly after death, especially at room temperature. more so if the deceased was old or ill).

• You can compare prices, but it is hard to compare services. The firms I have worked for go out of their way to help families. I have heard horror stories of providers that do the absolute least...cheaper and it shows in the service they provide.

• Keep in mind that things such as pauper's caskets are not attractive. Going cheap is smart. Going tacky could be upsetting to those who survive.

• A firm I used to work for took on the competition from store front casket shops. They matched prices on their caskets and jacked up the price of services. They also increased the price of cremation to make up the loss.

• Finally, donation to a medical school or science lab is the least expensive way to go. Check the terms, but generally they cover transportation up to 100 mile, cremation, and placement in an unmarked memorial garden.

After this, direct cremation and direct burial are the least expensive.

With the above mentioned, usually your local church or place of worship can host a memorial service and visitation.

Some good tips in here. Anyone have anything else to add?

How to Save 80% on Your Air Travel

This post from Shoe Money tells how he saves 80% on air travel. The summary: he avoids direct flights into airline hubs because they charge more money for these. So instead he buys a ticket that includes an extra leg and just skips that leg. You can get a good feel for how he does it by reading the post, but the idea seems valid.

Anyone else tried anything like this?