Free Money Finance

A Budgeting Guide For The Burgeoning Entrepreneur

The following is a guest post from Financial Planning Tips.

About five months ago, some events transpired in my personal life that set the small flame of entrepreneurship - that I’ve had inside for years - into a raging fire.  My longstanding desire to get out of the corporate game and work for myself in some capacity has finally been set in motion after years of fears and doubts.  Given that I’ve worked a day job for most of my life, I knew that my mindset around my finances and budgeting - or lack thereof - had to shift completely.  I still am working my day job and moonlighting on nights and weekends, while I begin to make money in the world of blogging and online business.  I’m quickly seeing the fruits of my labors beginning to pay off, while concurrently locking down my finances to ensure success in the long term.

A Complete Shift In Financial Mindset

A seemingly small but important shift had to occur in my mind. As a worker, I’ve primarily been concerned with either saving or spending money for personal use.  As an entrepreneur, I’m now far more concerned with having capital that I can use to grow my business, and to actively generate cash flow every month.   When I think of spending money now, it’s on tools and resources to make more money for the business.  I’ll spend on something if it’s going to make me money, otherwise I guard my cash stash.  I also resist personal spending more than ever before.

From Carefree Spender To Budget Master

Not that you have to be poor by any means, but when starting out on the entrepreneurial path, I believe you must take a good, hard look at where you spend money, especially in terms of what you actually need to make you happiest in life.  Then you can ask “what are my monthly income goals for my business and dream lifestyle as an entreprenuer?”  Every last precious dollar that you save will be going into your business - you can count on that.

For three months I tracked all of my expenses, right down to the can opener I bought for $2.97 at the local drug store, when my old one broke. As a single working-class male in New York City, my expenses came to around $4000 per month – and I don’t spend my money unreasonably in any way, just perhaps a bit loosely. I definitely have friends that spend loads more.

After taking a look and deciding where to trim the fat, I was able to quickly crank my spending down to around roughly $2600/month.

Six Easy Areas To Reduce My Entrepreneurial Budget

Here’s what I did to cut my monthly budget by almost $1400/month in one-fell swoop:

• Entertainment: Cut out almost all entertainment expenses –meals out with friends, karaoke, drinks out and at home. This was not hard to do as I spend most of my time working now. Money saved: ~$350/month
• Housing: Going back from living alone to back to living with a roommate to cut rent by ~$600/month. If you own an apartment or home, this is a great place to consider renting out a room or two to cut back on monthly mortgage payments.
• Subscriptions: Cutting out non-essential subscriptions/memberships that I won’t have time to participate in or read. This also help keep down distractions when working from home, to increase business revenues. Money saved: ~$100/month.
• Over-Indulgent Luxuries: Dropping expensive little luxuries like Starbuck’s, dark chocolate bars. Also junky luxuries like late-night Doritos or gummy worm binges. I’ve noticed this is a double-whammy, as many consumer expenses also tend to be unhealthy – so you gain health benefits here as well.

I found this is really an easy thing to do.  Just ask yourself “what do I enjoy the most?” and order your list accordingly. Pick your top 3 things and cut out all the rest.  It’s most likely that as you go down the chain of your luxuries, so does your percentage of enjoyment in them.  I would also throw clothes/fashion into this category – though I’m not a big spender on clothing, and haven’t bought any clothes in many months.  You might even find you don’t need any of these luxury items for your happiness.  Money saved: ~$100/month.

• Cell phone: Plan dropped to minimum monthly minutes, but with unlimited text option. I’ve started using Skype regularly to talk with business associates, friends and family for free. I use text messaging for most all communication needed via cell phone. Money saved: ~$40/month
• Eating Out: Buying cheap, bulk food to make at home, replacing most meals that I used to eat out - that weren’t entertainment based. Once I began to see what I ate, and also how much nutritional value, how filling the meal was, etc, it was very easy to cut food expenses. This country sells an inordinate amount of junk food; most of it is worthless nutritionally and thus monetarily. Since I’m spending loads of time at home working, I’m also becoming a rather handy cook. Money saved: ~$200/month.

A Few Extra Tips

• If you are going to buy a tool or resource to grow your business, make sure you really need it. It’s easy to get caught up in all the gadgets and promo ideas other entrepreneurs sell to entrepreneurs. We don’t want these expenses replacing our Starbuck’s lattes for no reason. Although if you think it could benefit you in growing your business in any way, get it. Just don’t fall into the craze of buying a bunch of tools you won’t use, or playing around with them and you don’t get any work done.
• Get a free or low-fee rewards credit card and pay for both personal and business expenses on it. Since you’ll be spending plenty of money along the way for your new business, why not reap the rewards?
• Selling off old clothes you no longer wear, and household items you no longer use on eBay or Craigslist. It’s more seed money to use for growing the new business. Especially if you’re on the path of the “digital nomad” like I am, where traveling is a big part of the future, it pays to reduce one’s belongings. Heck, it just pays in general to have less stuff.

So that wraps up the budgeting guide. I find that becoming an entrepreneur really is an exciting mixture of fun, fright and worthwhile challenge.  Every day is a new adventure and I can’t believe how far I’ve come in only a few months time.  Can’t wait to see where it all leads.  Until then, remember to use budgeting as a tool to bring your entrepreneurial dreams to life!

10 Things to Buy in Bulk

After covering 15 things not to buy in bulk, I thought it was only fair to list 10 things to buy in bulk. Here's the list from MSN Money:

1. Cooking oil
2. Toothbrushes
3. Cereal
4. Antiseptic wipes
5. Vitamins
6. Soup
7. Dog food
8. Beer
9. Tuna
10. Diapers

Before I comment on these, let me point out that both the "do not buy in bulk" and "do buy in bulk" lists were from MSN Money -- the former from their Smart Spending blog and the latter from the main site. In addition, there were three items that made both lists. How does that happen? How can something be both a "do not buy" and a "do buy". They need better coordination of their recommendations.

Anyway, in case you're wondering, here are the three items on both lists:

• Vitamins
• Diapers
• Cereal

Now, here's what we do on the "do buy" list:

1. Cooking oil -- We don't use that much of it, though my wife does buy in larger sizes when we get it (but not the super-large sizes you find at Costco.)

2. Toothbrushes -- The last time I purchased a toothbrush was a couple decades ago. Don't people get them free at the dentist every six months?

3. Cereal -- We buy when they are on sale at the grocery store (usually with a coupon too.) Every once in awhile we get a box at Costco, but they generally don't have the best selection of cereals.

4. Antiseptic wipes -- Don't use them.

5. Vitamins -- We buy in bulk whenever we can. Costco runs coupons on the Kirkland brand of vitamins rather frequently, so that gives us some extra savings.

6. Soup -- Yep, we buy a ton of soup at Costco.

7. Dog food -- We don't have a dog. Dodged that bullet a couple years ago. ;-)

8. Beer -- We don't drink beer.

9. Tuna -- Yes, a GREAT bring-your-lunch-to-work staple. We buy a good amount of canned tuna in bulk and I eat it regularly for lunch.

10. Diapers -- No need for diapers, thank goodness.

Other items we buy regularly in bulk:

• Parmesan cheese
• Salsa
• Frozen broccoli, green beans, and fruit
• Canned pineapple

How about you? What do you buy in bulk?

Save Money by Purchasing Discounted Gift Cards

How would you like to save 20% on the cost of a movie? Or 12% when buying your favorite books? Or 10% on a new video game? Or 11% on fast food at Wendy's? Well, it can be done. These were all recent offers listed on Card Pool -- a website that allows people to buy and sell discount gift cards (similar offers can be found at a whole host of similar websites.)

The sites allow people to sell (at a discount) their unwanted/unneeded gift cards (like ones I have received) and turn them into cash. The people who buy them get a card they want at a price lower than face value, allowing them to lock in some potential savings.

Now combine your gift card savings with the traditional ways of saving on a purchase and the discounts can really add up. For instance:

• $100 - Retail price for item(s) you want
• - $20 - Item(s) is on sale for 20% off
• - $10 - You have a coupon(s) that saves you even more
• - $12 - Savings from buying a discounted gift card
•  $58 - net cost

You save 42%! Wow!!!!!!

You might also receive additional benefits like frequent buyer points/rewards that add to this, but those are spotty so I didn't include them.

Anyone do this on a regular basis? I'd be interested in hearing how you do it -- the pros, cons, etc. It's clear that you certainly need to plan ahead and buy from reputable sites -- but are there other tips the rest of us should know about?

One no-brainer I can see is to buy discounted grocery store gift cards. If we could save 10% on our food bill, that would be HUGE! Alas, I couldn't find any sites offering discounts to grocery stores. Maybe I missed them?

A Great, New Way to Save at the Library

I've talked before about how we can all save money by using the library (including getting access to Consumer Reports' website), but somehow I've managed to miss this tip. Anyway, here's a comment left on my post titled Eight Great Frugal Date Ideas that explains the idea:

Where I live you go to the library and "check out" memberships to local attractions like the local museums, zoo, and the local botanical gardens & sculpture park. Sometimes they also have tickets to performances (ballet, civic theater, etc) and sporting events (baseball, hockey...) as well. The attraction memberships admit up to six people; the performances are usually pairs of tickets. There are restrictions (like you can only visit each venue/event once per year) but there's no charge. You just check them out with your library card.

Wow! What a great idea! I'm not sure if my library offers this service or not, but I'll certainly check into it. We belong or already visit to several area attractions (botanical gardens, museum, minor league baseball team, etc.), but have some others we'd like to try out. And if the library can help us save on them (or even go for free), that would be sweet!

Any of you have the same sort of service at your library?

15 Things Not to Buy in Bulk

I've noted before that if you buy the right things, then warehouse club stores can save you a bundle. Much of these savings are generated because club stores allow you to buy in bulk, which usually (though not always -- do the math) reflects a lower price per unit than if you bought smaller sizes.

But there are some things you shouldn't buy in bulk according to Smart Spending. They are:

1. Brown rice
2. Candy
3. Paper towels
4. Toilet paper
5. Nuts
6. Mayonnaise and other condiments
7. Vitamins and nutritional supplements
8. Diapers
9. Bleach
10. Spices
11. Bread
12. Tilapia
13. Eggs
14. Frozen foods and meats
15. Cereal

Here's what we do when it comes to buying these items at a warehouse club (we shop at Costco specifically):

1. We don't need/want/use that much brown rice so we don't buy it in bulk.

2. Same with candy.

3. We just purchased a big bunch of Kirkland paper towels to see if we like them. The main objection Smart Spending has to doing this is that they are too bulky. We have a huge pantry with plenty of storage space that makes this a non-issue for us.

4. Same for toilet paper as with paper towels. The Kirkland brand is fine for us.

5. I do eat a few nuts (I try to focus on almonds, but every once in awhile get mixed nuts) every morning with breakfast, so I buy them in bulk. I never have to worry about them going bad.

6. We just bought three big bottles of ketchup awhile back and we're almost done with the first one. We'll see if we polish off the other two or not.

7. We buy vitamins at Costco, but not flavored supplements that we might get sick of like the article suggests. Costco will often coupon their Kirkland brand of vitamins in their regular flyers, making them an even better deal.

8. We're not in the market for diapers, thank goodness.

9. We don't buy bleach at Costco -- I believe my wife buys it on sale elsewhere whenever she can find it on sale.

10. We bought a giant bottle of steak seasoning about eight months ago. I use it on steaks (of course), soups, eggs, fish, salads, and a few other things whenever I'm in the mood for it. We also gave a "regular-sized" bottle of it to my parents to use. And we still have enough left over for a year or so. Last time I buy spices in bulk.

11. My wife makes our (very delicious) bread.

12. We don't eat that much tilapia, but we do get salmon and tuna at Costco.

13. We get all of these at a grocery store. We don't eat enough of them to buy in bulk.

14. We do buy frozen fruit (for smoothies) and veggies at Costco, but that's it. We get meat there every once in awhile, but not often.

15. I think you can get cereal for less at a grocery store when it's on sale and has a coupon, so this is what we do.

What do you think of the list? Are they on target or missing it on some things?

Is Buying a Car through Costco a Good Deal?

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In the April issue of the Costco Connection, they tout their car buying service with the following facts and figures:

• 96.5% rated the professionalism of the authorized dealer contact as "good to excellent." (86.4% said "excellent)


• 96.4% would recommend the Costco Auto Program to others


• 96.3% rated the value of the Costco Auto Program "good to excellent" (84% rated it "excellent")


• 200,000 vehicles sold through the program last year (over 1 million in the last five years)


• 2,200 dealerships are part of the program


• Costco members save $200 million last year through the program

Here's the pitch for the Costco Auto Program (in my words, spoken by Costco):

• We're huge and as such, we can negotiate the best possible prices.


• We've done this with 2,200 dealers.


• All you need to do is let the dealerships know that you're a Costco member (not sure how this is done), and you'll get the cheap, pre-negotiated price.

I have thought about using Costco to buy a car, but I'm a bit leery of the program. I'm sure they do have the best price (or close to it) for a mass-negotiated program. But I'm not sure they can do better than I can using my tried-and-true method of buying a car (which involves the apparently successful method of using the web.)

My suspicions were reinforced when I saw this comment on my post titled How to Buy a Car the Same Way You Would Buy a Big Screen TV: 

I purchased a new car in 2007 doing just this. My comparison price was the so-called "no haggle" price available from the likes of Costco and AAA. I saved some $2,600 compared to those Costco/AAA prices, which were already discounted. A few observations:

1) I can only assume that whoever wrote that somehow this is a huge time commitment doesn't realize how much of a commitment it is to drive around to several dealerships and think you'll do better. If you do this right, you're only visiting ONE dealership, and that's just to do the paperwork.

2) I would make two alterations to the author's recommendation as written. In Step 2, you have to get dealers to give you an all inclusive quote to drive it off the lot. Dealers think that car buyers just want to brag about discounts below MSRP, so that's what they'll dangle if you let them. The problem with a price $X below MSRP or over dealer invoice is the double-secret sucker fee they tack on at the bottom of the invoice. Tell them you don't care about anything but the bottom line and not to bother impressing you with line item discounts.

3) In my approach there was no negotiation, really, not in my experience. Tell them up front what you're doing and that you don't intend to haggle, just to buy from the lowest bidder. One third will balk or won't reply and two-thirds will. For the ones who replied, the prices were great and nobody budged from their initial response, even when I told them they were underbid.

4) Two other things surprised me. 1) One guy actually tried to argue that the lowest price -- remember, this was the all inclusive price, calculated to the penny -- wasn't necessarily the "best price." He knowingly implied that there was some other, secret definition of "best price" that he knew and I didn't. Guess he showed me. 2) Before visiting the dealer who quoted the best price, I called a dealership close to my home (a dealer who never replied to my initial e-mail) to see if they'd match my best price. Over the phone they said they would and invited me in. When I visited they TWICE tried to bait/switch me with the paperwork. First they asked me to sign an invoice with a higher price, and then they asked me to acknowledge the options on a separate sheet, which was a blank sheet of paper. After I made them correct both, they gave up and gave it to me for a few dollars less than I asked.

So, have any of you used the Costco Auto Program to buy a car? Do you think you got a good deal? Why or why not?

If Shopping is Your Passion, then Get Another Hobby

The following is an excerpt from In The Trenches: Financial Survival During Times of Hardship. One suggestion to add to what's below: you may want to turn your hobby from an expense into an income producer.

There’s one thing we can agree on. Shopping costs money. Even if you go out with the best of intentions, a list, and a maximum limit it is oh so easy to spend more. As you bring home all your treasures and put them away the sense of accomplishment almost out shouts the small feeling that you spent more than you should have.

I for one am not much of a shopper but every few years I can go out and spend thousands. I guess I save up my shopping tendency and have occasional blowouts where I lose it and buy all the things I have thought of for the last 10 years.

Even though I am not a regular shopper I have known many people who are and these are my conclusions after many years of observation. Maybe you will see yourself and having once done so you can develop a plan for cutting down.

• Shopping is a social event. Malls are one of the few places that still welcome children and they don’t even have to behave well. As long as they think that you might spend money they invite you to come on in. Friends are also welcome. Just make a phone call and your best friend can join you for an evening of fun. And best of all, you can get all dressed up or come as you are.

• Regain your power. This sounds strange but I have seen it often. A break up with a boyfriend. A job lay-off. Even the rumor of a lay-off. All of these things make a person feel like they have lost some of the power over their lives. It causes a person to realize that despite all that we hear about taking charge of our lives there are some things outside of our control and the people who have control don’t always treat us the way we want or deserve to be treated. But since we cannot always change these events we shop to take charge of our lives and soothe our bruised or broken ego. Sometimes this is okay. A new haircut, a workout program at the gym, a new wardrobe, all of these things are good for us and maybe we should have done it long ago. But we can’t ignore the financial impact it has, especially if we pull out the charge card to do it. If we do come home and haven’t spent anything we can still pat ourselves on the back because we have held on to our money and we can tell ourselves that we exercised self-discipline.

• Compensate for our inability to achieve the other things. When we feel like or know that we can’t afford the more expensive things we need or want we try to compensate by finding something we like and get that instead to try and cover our feelings of hopelessness. An extreme example is those who live in deplorable housing conditions but have a beautiful new car. They feel they can’t afford to make a $1,500 month house payment but they can pay a $500 per month car payment. They drive the car proudly to show to themselves and the world that they are somebody. But that is the extreme. Maybe you can’t relate. How about when you can’t afford the house of your dreams so you lavish your apartment with dynamite furnishings? Getting closer? Or, how about the bills are too high so you go to a restaurant or the grocery store and find the best steak you can’t really afford? This last example is probably the most common because it is so easy to rationalize. But the more often you indulge this feeling the farther you will be from your long-term goals. Why is it indulgent? Because it is a substitute for your bigger goals and is out of balance with your overall financial situation.

• Boredom. Shopping provides some instant gratification and is a lot easier than sitting home every Friday night.

• Laziness. Sounds terrible and if this is you you’ll be tempted to say it’s not. But maybe after consideration you can name someone who falls in this category. Shopping really doesn’t require much creativity. The stores have worked hard to coordinate all the clothing, linens, and even the make-up. But the trick is that it is set up so that we feel creative as we pick up all the items and put them together. Another form of laziness is that most people I know that are avid shoppers don’t have any or few other interests that they pursue. Whether it is calligraphy, reading, sewing, or scuba diving, all of these things take effort and time to study and become good at. Shopping is easy. All you have to do is look, pick, and pull out your wallet.

• Creativity. I know that I said that little creativity is involved but by the same token it can be extremely creative to shop 100 stores just to find the exact right piece of furniture to go in that empty corner of the living room. So it is just as valid to say that people use shopping to explore and fulfill their creativity.

• To relieve tension. There are times when shopping can be a mental and emotional release from the problems and day to day routines we all have. A time to just look around. To remember our dreams and goals. A time to make some new goals and figure out what we will do with that awful kitchen. Even if our dream kitchen never comes to reality it was good just to have dreamed it and refreshes us to go back home to do the dishes.

These are the biggest reasons I have observed why people shop. None of them are bad. But in order to reach our financial goals we have to look at how we spend our money and decide if we are maximizing our assets, time, and resources.

If we want to cut down our spending or maximize our dollars we have to see why we are shopping and try to fulfill those emotional needs within our budget. But why now refer to them as emotional needs? Didn’t you notice how often I used the word “feel” when referring to why we shop. The word feel indicates that it is our emotions and not our actual physical needs or logic that drive us to the mall. That is why so often we have things that we hardly use, don’t need, and wonder why we bought it in the first place. The bright pink blouse that matches nothing – we needed to feel cheerful. The black dress we have worn twice? We may have felt bad and the dress expressed our feelings at the time. Or the jazzy party dress? We wish we went out more. These are just speculations but it is easy to see how we can buy things to express how we feel, compensate for how we feel, or show how we want to feel or who we wish we were. I have a pair of new ballet shoes that I bought, took one lesson, but can’t seem to get rid of because it would be really cool to be a ballerina. Go ahead and laugh then check your own closets and see what strange and wonderful things you have hidden away.

The reasons people are passionate about shopping are many. But there is one solution that applies to all: Get a hobby. The word itself is almost obsolete and comes from past generations. Therefore, we have to look to past generations to get some ideas of what a good hobby might be. The one criteria required for our purpose is that the hobby must require more time than money. Many modern day activities involve more money than time. The reason is simple. We are introduced to them by the companies selling the pieces, parts, and equipment to perform the hobby. Even Christmas now is primarily promoted by the stores.

Below are some ideas for lower cost hobbies. If they are totally new then consider it an adventure to shop for a hobby. Try them all on to see how they fit before deciding it’s not for you. Also, remember that many of these involve acquiring a skill. At first it will take some work and mistakes and maybe frustration before you get the hang of it. You probably won’t be good at it at first. Start with a minimum investment and set yourself a limit you can afford before you go hobby shopping. You don’t want a lot of half finished projects around the house but on the other hand if you spend $20 on your new test hobby and spend weeks of evenings at home before you decide you hate it and toss it aside you still have probably saved a lot of money by not going shopping.

So here are the ideas:

1. Read to your children. Let them read to you.
2. Embroidery.
3. Learn to play bridge and teach your best friends.
4. Knitting.
5. Yard work.
6. Crochet.
7. Play board games.
8. Paint-by-the-number. (You don’t have to create a masterpiece. Just have fun.)
9. Models.
10. Make doll clothes from scrap material.
11. Walk and keep track of how far you walk.
12. Bird Watching. Get a book and mark and date the ones you see.
13. Needlepoint.
14. Cooking.
15. 1000 piece puzzles.
16. Learn to play chess.
17. Take dance lessons.
18. Fishing.

The local community centers and senior centers have many low cost classes. For about $25 you can get an introduction to a whole new craft, skill, or activity. Through adventure and experimentation you may find a whole new outlet for your individuality and buried creativity. The diamond in the rough in this case is you.

The Annual 50%

The following is an excerpt from In The Trenches: Financial Survival During Times of Hardship. It goes nicely with my piece titled Make and Save Money by Getting Rid of Your Junk.

This will be fun, challenging, or almost impossible depending on your personality.

It is very easy to explain. Once a year go through every closet, every drawer, and every other storage area you have and try to get rid of 50% of everything you own. Sounds impossible but if you try it you will be shocked and surprised to find that you can actually do it. A friend and I did this together, we called ourselves essentialists.

I’m sure you’re asking why you would even consider doing this. Very simply, most of us have far more than we need or use. As a result we keep on spending more money on more things that we don’t need or use. Our houses get cluttered so we think we need a bigger house. Not only does it take money to buy, store, and maintain these items but it also takes time to buy, store and maintain these items.

The worst part about the whole situation is that if you go to sell these items, in most cases, and if you are lucky, you might get half of what you paid for it even if the item still has a price tag. At a garage sale the item often goes for pennies on the dollar. That, I think, is one of the main reasons we hate to get rid of extra stuff. We get internally outraged that no one wants to pay us “What it’s really worth”. So hidden in our closet we can keep on telling ourselves that it is hidden treasure and that we are lucky to have it.

The clothes closet is usually the easiest place to start with our 50% reduction. Usually it is easiest to start with someone else’s clothes other than our own. Don’t start with your spouse though. It can be a major issue if you get rid of their favorite shirt no matter how worn out or gross you think it is. So it’s either your own clothes or your younger kids.

Take everything out of the closet. Everything. Now count how many pair of shoes you have. 20? 50? Okay. What is half? Go through and get whatever is never worn, worn out or just a weird color that you love but never wear. Throw it all in a box. And move through everything until the whole closet is done. There will be some very easy decisions and some very hard ones. There is a common rule that says to get rid of everything you haven’t worn is a year. That works but for me some of the stuff I wear everyday is the stuff I most need to get rid of. Besides maybe you didn’t wear it for a year because you completely forgot you had it.

After all of the sorting it is time to put away everything you have kept. Wow. How did the closet get so spacious? This is also a good time to reorganize how you keep things. Shirts together, slacks, and jackets. Everything neat and organized. I go so far as to color arrange everything like the rainbow and it looks great. Color and type organizing also helps you to notice that you still have 10 pairs of slacks and 3 shirts or a beautiful red blouse with nothing to go with it. I once noticed that almost everything I owned was black. If you do need to go shopping you have a better idea of what you really need.

The sock drawer is always great fun. Small children love to help you work on this one. After going through all the pairs of mismatched and holes in the heels you might find you only have three really good pairs. Or conversely, someone once gave me a big garage bag of socks that I washed and sorted and got about 60 good pairs of socks. I was able to give them to someone who needed them.

It is also a good time to add a new bar or shelf to your closet if needed.

Now, having successfully gone through 1 closet or 1 drawer what are you going to do with the stuff you have decided you don’t need? Nothing. Just find a place to set it aside and out of the way for 3 months to 1 year. Sounds silly but a necessary part of the process. In two months you may find yourself digging through the box to get that winter scarf that you really shouldn’t have gotten rid of.

Just as an experiment select a few items you are planning to get rid of. How much did the item cost? How much is it now worth if you were to sell it at a garage sale? How many times did you wear it? This might surprise you. Let’s say you spend $100 on a dress you wore 4 times. That is $25 per each time you wore it. Now look at those favorite $7 sweatpants that you wore almost everyday after work and you are now getting rid of because they have been washed hundreds of times and are now an embarrassment.

So what is the point? The money spent is your investment dollars. Which item was the better investment? The question can be answered in two ways and it comes back to our needs, wants, and desires idea. The sweats were a much better investment from a usage standpoint so you might want to buy 3 more pairs just so they don’t get so worn out. The dress was maybe a waste of money unless it helped you land your great job or attend your son’s wedding. There is no right or wrong answer but by thinking about it you can make better decisions in the future.

After a few months have passed it’s time to do something with all the stuff. If you haven’t done so already, don’t forget to dispose of the items that are stained, ripped, or otherwise unusable. You could have a garage sale. You could donate it to a thrift store. Or, you could take the items to your favorite charity. You can get a receipt for a tax-deductible contribution. My personal favorite is the pass around club, which I’ll talk about in the next chapter.

I never finished answering the first question. Why would you want to do this?

1. Gives you more space for things you really do need or want to keep.

2. Someone else can use all the stuff you don’t want or need. They may even be delighted.

3. I hate to mention this one but having lots of stuff attracts mice and other pests.

4. By going through all of your stuff you can learn a lot about your weaknesses and spending habits. Do you have a weakness for buying shoes? Do you buy clothes on sale that don’t match anything else you own? Do you have clothes in your closet with price tags on? Or, do you love to buy fancy clothes that you never have anyplace to wear? Do you hate to mend and have many great clothes with missing buttons and hems coming out?

By taking the time to look at your spending habits you may come up with some better ways to use your money. This section has focused on clothes but the same methods and principles apply to all items in your house. Are your towels so worn out that they need to be replaced? Maybe having a garage sale will help you come up with the money to get some. Oh, and finally, check out the condition of your dishtowels and potholders. If you don’t know what I’m talking about then good for you.

Toys, Toys, Toys.

A special note about toys. With all the birthdays and Christmas’ that go by a child can end up with so many toys that they don’t want to play with any of them. A couple quick tips. Get rid of all the broken ones. Designate a specific place where the toys are to be kept that limits the space available like a toy chest or a bookshelf. Pick out the favorite toys and box up the rest. Rotate the toys every couple of months. Kids love it when they get a fresh supply. But just make sure not to try and hide the favorite stuffed animal or doll. We are not trying to break any hearts here.

Pass It On

After doing my first essential 50% sorting I was ready to do something. Some items went to the thrift store but we happened upon a great alternative. I took all my bags to a friend’s house and they sorted through, took what they wanted and passed it on. We continued the passing and friend after friend had a chance to go through it. They took what they wanted and added some more. Pretty soon we were passing everything from clothes, to drapes, to furniture. We all got blessed and it was surprising to find how often something we did not need was just the special thing that someone else needed and was glad to have. And we all were glad to get rid of stuff.

And that’s all it is. You can be the one to start your own pass it on circle. Depending on what you have pick a person you think might be interested. No strings attached. That’s the important part. Some people may take much and some just a little. Some may give much and some little. Don’t worry about it. Remember these are things you don’t want or need anyway.

If you don’t have anyone to give them to you can check with the school to see if there is a needy family.

And, of course there are other ways to pass on your unneeded items.

• Thrift stores – Many will give tax-deductible receipts.
• Garage Sales.
• Advertise in the newspaper or at the grocery store bulletin board.
• Swap meets.
• Craigslist.

Economy has People Eating More at Home, Survey Says It Will Continue

Here's a survey conducted by the N.G.A. (National Grocers Association?) and SupermarketGuru, and underwritten by ConAgra Foods. The basic summary is that the poor economy has most people eating at home and looking for value in their food options. A few of the highlights:

The research found that the overwhelming majority of consumers (89%) are eating most of their meals at home.

More than three-quarters of consumers are exercising efficiency by combining leftovers into new meals – 57% do this one to two times per week. Meanwhile, fewer than five percent of consumers are dining out multiple times a week – a slowdown felt across all income tiers. Thirty-three percent dine out less than once a month. Four percent never dine out.

Even seemingly cheaper, fast food establishments are taking a hit. Compared with just a year ago, the percentage of consumers ‘never’ visiting a fast food joint jumped by four points to 22%. Overall, 6 out of 10 consumers are avoiding fast food operations this year.

We're eating out just as much as we ever did -- which isn't really much (maybe once every other week.) My wife prefers the savings and "fresh food" that's offered by eating at home, so that's what we do most of the time. We spend maybe $60 a month on eating out.

When we do eat out, it's usually a fairly inexpensive restaurant like Papa John's, a local Chinese place, Panera Bread, or Logan's. Not fast food that often (though we'll hit Wendy's once in awhile on a soccer day), but just the next step up -- and certainly NOT anything that's considered expensive.

How about you? Have your eating patterns changed? How often do you eat out -- and how much do you spend doing so?

Eight Great Frugal Date Ideas

The following is a guest post by Ashley Jacobs from Green Sherpa.

The pressure associated with trying to impress someone and make sure they have a great time can take the fun out of planning a date.  Coming up with a great date idea is difficult enough.  Add to it the fact that you want to be frugal while making the date awesome makes it even more difficult. 

So how do you make sure you and your girlfriend/boyfriend or husband/wife have an awesome date night without breaking the bank?

Here are my eight favorite frugal date ideas:

• Get Moving! -- Get outside and get moving. Go on a bike ride, go for a hike, head to the beach and go for a swim. Not only will you be spending time with each other but you will be exercising which can be great if you spend a lot of time in the office or at home studying.

• Have a Picnic -- Get together about an hour before you want to eat, make your favorite sandwich, grab your favorite drink, then pack it in a cooler, grab a blanket, and head to a local park. Don’t forget the napkins and dessert!

• Dinner and a Movie at Home -- Whip up his or her favorite dinner and watch a movie at home. It is much more intimate than going out on a Friday night. Conversing will be easier because you won’t have to yell over the hustle and bustle of a busy restaurant and cuddling up on the couch to watch a movie sure beats sitting in your own seat.

• Watch the Sunset -- Grab a jacket and head to the beach or mountains to watch the sunset. As corny as it sounds, it is romantic and will always be one of those sweet, cheap things to do with your significant other.

• Lunch and a Movie -- Instead of spending twice as much on dinner and a movie, grab lunch and see a matinee. Lunch tends to be much cheaper than dinner and matinees will save you a few bucks as well.

• Go to an Arcade -- Grab $10 and head to a local arcade. Not only will you have lots of laughs trying to beat each other at ski ball and basketball but you will get to trade in the tickets you win for some cheesy arcade prizes (i.e. a stuffed animal) that you will inevitable hold on to for years to come.

• Go to a Playground -- Nothing is more fun than unleashing your inner kid. Find a playground in your area and have fun swinging on the swings, climbing on the jungle gym, and sliding down the slides. As immature and childish as it sounds, there is something so enjoyable about forgetting all your “adult” responsibilities and letting lose, kid style.

• Go to the Zoo (or Museum or Art Gallery) -- Zoos (and museums and art galleries) frequently have discount days. Find out when your local zoo is having it’s next discount admission day and go! At the very least it will be something new and different for you and your significant other to do.

With these ideas, there is no reason to not have an awesome date without spending a ton of money.  Chances are there are a few of these that you haven’t done yet, so try them out and keep things fresh and fun by having a new experience with your significant other!

Have any frugal date ideas that aren’t listed here?  Share them in the comments section!

10 Great Money Saving Tips

Here's a list of 10 great money tips left by Old Limey on my post titled 21 Best Money Tips Ever:

Here are some of my money saving tips.

1) Decide on your education goals early on and work hard and diligently to meet them.

2) Get your career right the first time and stick with it.

3) Get your permanent relationship right the first time and be faithful - that can save a real bundle over a lifetime.

4) Marry a saver and not a spender.

5) Learn about investing rather than trusting it to others, design a financial plan, start investing as early as possible and make it a very high priority.

6) Live well within your means and encourage your spouse to do likewise.

7) Be the best employee you possibly can by being conscientious, diligent, and always striving for self improvement.

8) Avoid paying interest except for homes and cars.

9) Don't retire until you are debt free and have enough investments and income to maintain your lifestyle.

10) Avoid trying to keep up with the neighbors.

As you might imagine, I love these. ;-) I thought many of you would too.

Eight Money Saving Purchases You Won’t Regret

The following is a guest post from Green Sherpa.

I don’t know about you, but I am always looking for ways to cut back on my expenses.  However, making purchases in order to save sounds like an oxymoron to me.  Spending money to save money?  Is that even possible?

The answer is yes.  There are a few purchases that I have made that have helped me cut back on my expenses.  While making these purchases initially caused me to question whether or not it was really worth it, in the long run these purchases have saved me hundreds (if not thousands) of dollars.

Here are my top eight money saving purchases:

Brita Filter

Before this purchase, I would spend around $20 per month on bottled water.  The Brita filter costs around $11 and the cost for one replacement filter is $7.  Each filter lasts the equivalent of 300 bottles of water.  For me, this is the equivalent of almost half a year of water, which equates to a first year savings of over $200.

Coffee Maker

Most people desperately need their caffeine fix each morning.  Going to your local coffee shop can cost $3 per visit.  This equates to $15 per week, around $60 per month, and close to $800 per year.  A decent coffee maker can cost around $50.  A pound of coffee runs around $10 and makes about 32 cups of coffee.  That’s $.31 per cup!  If you want to factor in the coffee maker cost in those 32 cups, each cup of coffee you make costs around $1.88.  So, for the first 32 cups of coffee you make at home instead of going to the coffee shop, you save about $36.  After that, you save about $700 per year.

Panini Maker

Ok, so this is probably an item you won’t find on many great buy lists, but I LOVE my panini maker.  I am a huge fan of sandwiches and used to be a frequent Subway customer, but since acquiring my panini maker, Subway doesn’t get a dime of my money.  I used to spend $5 each trip to Subway.  You can get a decent panini maker for about $70 (the cost of 14 trips to Subway).  You can get enough cheese, bread, turkey, mayo, or whatever else you like on your sandwich to make at least 6 sandwiches for about the price of two trips to subway.  So let’s say you go to Subway once a week.  This equates to 52 Subway trips each year.  It takes 14 trips to pay off your panini maker, so right around what would have been your 15th trip, you start putting money back in your pocket.  After the initial cost of the panini maker, you save about $230 per year.

Toaster Oven

If you like to cook, chances are you use your oven daily.  Heating your oven to 350 degrees and running it for an hour each day costs around $90 per year.  A toaster oven run just as frequently costs $65 per year.  Yes, this is a $25 savings each year which may not seem like very much, but every little bit helps, especially when you consider that a decent toaster oven costs around $50 and an oven costs hundreds of dollars.

Blender

Like many people, I love smoothies.  I think Jamba Juice is awesome.  Sadly, $4 a drink isn’t so awesome.  The quick fix?  A blender!  A decent blender runs around $40, the equivalent of 10 trips to Jamba Juice.  And you can get the ingredients for 5 smoothies for the price of two Jamba Juice ones.  So, say you go to Jamba Juice once a week.  After your 11th week of not going, you have started putting money back into your pocket.  Your yearly savings after recovering the cost of the blender?  $124 in savings each year.

DVD Player

I love movies.  The price associated with going out to watch one in the theaters?  Not a fan.  You can get a cheap DVD player for the price of going to the movies three times.  And you can about three movies for the price of going to the theater to see one.  So let’s say you go to the movies every other week.  By buying a DVD player and renting movies instead, you can save around $139 each year.

Laptop

Better yet, skip the DVD player and go buy a laptop.  Laptops do it all, from playing DVDs to letting you watch your favorite shows online to keeping you in contact with everyone from your friends and family to your boss.  Laptops eliminate the need for cable or satellite services and for buying an expensive TV to watch those cable or satellite shows that you love.  You can get a decent laptop for around $700.  This is about the cost of one year of movie outings, a nice TV, and whatever you are paying for your cable or satellite service.  Yes, it takes a year to see that you are recouping your loses on this one, however if you factor in the fact that your laptop keeps you connected to everyone important to you and you can use it for work related things (i.e. projects or searching for a new job), this is a fantastic money saving purchase.

Bicycle

This is another purchase you won’t see on many good buy lists.  However, dropping $300 on a bike can be one of the best money saving purchases you can make.  If you live close to where you work, you can completely eliminate your need for a car and all the expenses associated with it (i.e. gas, maintenance, etc.).  Not to mention you get plenty of exercise, eliminating your need for a gym membership.  The savings from this purchase can be HUGE, if you factor in the price of a car (because let’s face it, you won’t need one if you can use a bike), you can save at least $11,000.

While some of these purchases may seem a little unorthodox, all of them are great purchases to make if you are trying to save money in the long run.

Do you have any money saving purchases you made that aren’t on this list?  Share them in the comments section!

The Three Best Times to Buy a New Car

Since I'm looking to buy a new car later this year, I was interested in seeing this piece listing the three best times to buy a new car. The summary:

1. End of the Calendar Year. According to TrueCar’s data, the absolute best day to buy a car in 2010 will be December 26. On that day, they predict dealers will offer new cars at an average of 6.85 percent below MSRP. The second best day to buy is November 26, the day after Thanksgiving, when dealers will discount cars by 6.76 percent. In fact, six of the 10 best days to buy a new car all year fall within the months of October, November and December.

2. End of Model Year. A car's model year doesn't always correspond with the calendar year (there are 2011 models on sale just three months into 2010), but it marks when car makers make changes to their models. Before a manufacturer releases the new model year, dealers want to get the previous years off their lots. New model-year cars are more desirable since they almost always command higher sticker prices than previous models. Having the old model years around for comparison isn't in the dealership's best interest. As a result, “The dealer wants to make the 2010 attractive enough so you’ll buy it over the shiny new 2011,” says Toprak.

3. End of the Month. Just as dealers have yearly quotas, they have monthly ones. “It is true that a lot of manufacturers offer dealers volume bonus incentives,” Toprak confirms. “They will say if you sell 20 Camrys this month we’ll give you $500.”

Personally, I've always used the "end of the month" method and it works out quite well. There's a sense of urgency (desperation?) in the dealer's words and actions that screams, "I'm begging you to let me sell you a car at almost any price you want." I like that type of buying environment. :-)

I've heard before that the "end of the calendar year" is a great time to buy. In fact, anytime between Thanksgiving and Christmas is supposed to be good too since shoppers are usually out buying items other than cars. I've never tried it out though -- I've always been out buying things besides cars.

As for the "end of the model year" method, that's a moving target (it varies by make and model), often selection is limited, and you probably will have to make some sort of compromise (like getting a red car when you want a black one.) For some it's worth it, for some it's not. There's also the fact that a newer model-year car with the same miles on it as a model from one year earlier will have a better resale value (i.e. a 2011 Forester with 50,000 miles on it will sell for more that a 2010 Forester with 50,000 miles on it -- of course, this would be several years down the road.) So if the spread is close enough, you may be better served buying the newest model year.

As you can see, I'm thinking about all the ways possible to save on buying a new car. I have a tried-and-true method that I feel pretty comfortable with, but I'm always up for improving it. ;-)

How about you? Anyone out there with any experience buying a car at any of these times? If so, did you save big or not?

How My New Furnace is on Track to Save Me Thousands

Last fall, we got a new furnace and AC unit. A couple months ago I asked how to compare cost savings from one furnace to another because I wanted to see if the new unit was a "good deal." There was some discussion as to whether or not I needed to account for temperature differences from year to year, then one reader added this:

I've got a better way if you're heating with DTE natural gas. Their web site has a "MyEnergy Analyzer" feature that you can use to compare your bills. You can only compare one month at a time to one other month, and once you pick a month you can only compare it to the previous month or the month about a year ago at roughly the same time. It won't let you select a range unfortunately.

It will compare the bills and note any rate changes, difference in days billed, weather differences (including showing you heating-degree days), and differences in gas volume usage. It even calculates CCF/heating degree day, which is really what you're looking for. No calculator required.

To use it you log into your account (or set one up if you don't have one - it only takes a copy of the paper bill and a minute or two) and then go to "Analyze My Bill" on the left side.

I do have DTE, so I decided it was worth a try.

The commenter was right -- it was a bit clunky because it only allowed month-to-month comparisons -- but it did give estimates (in ranges) for how much my bill went up or down because of weather-related factors (temperature.) So I combined this information with my historical usage and costs obtained from the site and here are my results for October 2009 through March 2010 compared to the prior year:

• I used 29.2% less gas (CCF)
• I had a decrease in costs of 24.8%
• This cost savings equated to $311.33
• Using the DTE analyzer, the weather alone saved me between $65 and $108.
• Assuming a weather-saving midpoint of $86.50, then I netted $224.83 in savings from the furnace alone.

I know, I'm sure I missed something. But it's close enough to give me a general feeling of how much I'm saving.

Taken out 15 years, this means the unit will repay me almost $3,400 in savings versus my old furnace. On top of that, I'm sure my AC will be more efficient and save me more this summer as well, so all told the two units may end up paying for themselves ($5,132 net cost) before all is said and done.

Ok, now's your chance to rain on my parade. :-)  Am I missing something critical? Is my analysis off in any way?

Are Used Cars Really Worth It?

The following is a guest post from Free Money Finance reader Spencer Mayes.

Financial experts everywhere constantly espouse the virtues of buying a late model used car because they’re the best way to avoid the huge hit of depreciation while still being new enough to provide peace of mind. After working at a car dealership for five years I’ve come to believe that this guideline isn’t always what it’s cracked up to be.  Here’s why.

• Used Cars Still Depreciate:  A 2008 Ford Fusion has a suggested retail value of $15,020, a trade in value of $10,850 and a private party value of $12,870. While most people don’t pay full price for a used car, most dealers don’t give people full trade in value. Dealerships can usually buy the same car at an auction for wholesale prices that are well below trade in values, this is especially true on domestic automobiles. So if you buy your “new” car from a dealership you will still lose value the instant you drive it off the lot. I can’t count how many people I saw come into the dealership upside down on the used car they bought.

• Warranty Issues: The average American car sees about 12,000 miles per year; therefore the average 2008 model would have roughly 24,000 miles on the odometer. Most warranties are for 3 years, 36,000 miles. By buying used you only get 12,000 miles of warranty coverage, once that runs out you’ll be paying repairs on your own dime. It’s hard to predict reliability, but one expensive repair could easily wipe out the savings of buying used. Yes, there are certified pre-owned models that come with an extended factory warranty, but there is typically a premium charged for these models. Aftermarket extended warranties are another option, but that also adds to the price of the car.

• New May Be Cheaper:  When I worked at the dealership I was amazed to see the dealer asking and selling used cars for more money than new ones. Brand new “loss leaders” often advertised in the paper were often thousands less than better equipped used models. While these “loss leaders” were often base models that lacked many features, they offered an excellent value compared to a used model. If you can live without certain options these cars can be the way to go.

These are all just things I noticed while working at a car dealership and buying my first car. My examples may not apply to every situation, but I think it is silly to say that buying a late model used car is always the best bet. 

French Fries, Credit Cards, and Debt Psychology: The Behavioral Economics of Small Decisions

The following is a guest post from David Krueger MD who is an Executive Mentor Coach. 

The Tyranny of Small Decisions

How do two French fries weigh 40 pounds?

• Putting on 40 pounds over 10 years means gaining an average of four pounds per year

• 40 pounds divided by 10 years equals 4 pounds per year

• 4 pounds divided by 12 months equals .33 (1/3) of a pound per month.

• This is approximately 1/100th of a pound per day (1/3 pound divided by 30 days)

• One pound of stored fat represents 3500 calories

• 3500 times 1/100 equals 35

• To achieve the feat of gaining 40 pounds in 10 years, all you have to do is consume an extra 35 calories every day.

• 35 calories = two regular French fries

Little things count.

Economist Alfred Kahn described how we become trapped by the series of seemingly insignificant choices that we make – the tyranny of small decisions.    And, if we were able to see ahead to the end results of those small decisions, we may chart an entirely different course.

If you are burdened by credit card debt, it probably wasn’t one huge purchase that created the problem.  More likely, it was hundreds of small decisions, all along the way.  Some were necessary, some justified, some rationalized.  “It’s just a couple of French fries” thinking.  Internal bargaining took care of others: “Just this one time” or “I’ll pay it off next month.”  Segmentation of the pleasure of the purchase from the pain of payment obviated any lingering questions.

The Nobility of Small Decisions

Consider the inverse: the nobility of small decisions. 

We recognize in parenting, from the very beginning, that we really don’t know which interactions or words will be really important, or even remembered.  Knowing that we don’t know, we have to assume that everything we do is important.  Everything matters.

Consider the very small decision of stopping for a $4 coffee each day.  Calculate how much that is per year.  With interest, how much it would be in ten years.  In twenty years.

Epictetus asked twenty centuries ago: “What is a good person?”  The one, he reflected, who achieves tranquility by having formed the habit of asking on every occasion, “What is the right thing to do now?” 

You can be held hostage by small decisions.  Or, you can be effective, achieve mastery, and freedom by small decisions. 

All you have to do in life is the next right thing.

A Simple Trick to Stop Spending

Mary Hunt lists a simple trick to stop spending as follows:

Get into the habit of quickly calculating the annualized cost of things and you’ll achieve an effective way to get mindless spending under control.

So if you spend $20 a week on an item (coffee, soda, etc.), realize that those purchases are costing you $1,040 a year. When looked at from that perspective, maybe you think the costs are worth it and maybe you don't. Her take is that once you see how much some things cost over the course of the year, you'll decide that they aren't worth it and stop spending on them.

Case in point: eating out at lunch. If it costs you $10 a day to eat out, that's $2,500 a year (five days a week, 50 weeks, $10 a day). Obviously you can bring your lunch for much less than $10 a day, so there is significant savings to be had by simply changing your habits a bit.

Does anyone do this? I do (in addition to doing the "hours of work to pay for something" calculation) to see if something is really that costly. For instance, our cable TV costs us $19 a month or $228 per year. Is it worth it? It is to me since it is less than what we'd probably spend on other forms of entertainment if we didn't have it. Besides, it doesn't take me long to earn $228, so the work/cost ratio is good.

How about you? Do you look at annual costs when considering your spending?

Budgeting Pitfalls

The following is a guest post from Marotta Wealth Management. 

Thrift is having a sure hand that controls your spending so your spending doesn't control you. The goal isn't to be rich but rather thoughtful, industrious, content and thrifty.

We all know that impulse spending and unexpected emergencies can wreak havoc on your budget. But sometimes we make the mistake of deliberately budgeting the impossible. Unrealistic plans are like piano music requiring you to stretch your hand farther than humanly possible. If you purposefully set the required spending in one category too high, you won't be able to trim other categories to bring your overall spending into harmony. Here's where to look in your budget where you may be inadvertently planning for failure.

Too much house

You can't afford more house than your budget will allow. If you spend 50% of your lifestyle expenses on housing, you will not be able to live proportionally on the rest of your budget. Too much house is one of the most common mistakes a young family can make.

Try to keep your rent under 20% of your take-home pay after you graduate from college. Aim for all associated expenses (mortgage, insurance, taxes, etc.) to be less than 30% if you own property and some of the payments go toward the principal. And by no means let your housing costs exceed 38%, or your budget will be doomed before it even begins.

Despite smaller families, the size of American homes has been increasing exponentially. In 1940, the average home was only 750 square feet. The square footage rose to 983 by 1950, 1,100 in 1960, 1,500 in 1970, and 2,080 in 1990. Today the average house measures about 2,400 square feet.

In previous generations, several children typically shared a room. In today's family, kids get not only their own room but their own bathroom and home entertainment system as well. In addition to direct costs, owners of larger houses have greater associated costs such as landscaping, energy use, maintenance and repairs.

Most of us never saw our parents and grandparents in their younger days when they were struggling financially and lived in tight accommodations. It is as though we can't feel successful without immediately enjoying the lifestyle of our parents at the height of their careers. To decide how much house is enough, calculate how much house you can buy for 30% of your standard of living.

Transportation

Transportation costs should be under 15% of your lifestyle spending and include insurance and maintenance as well as saving for your next purchase. Only buy a car you can pay for with cash. Your first car may be a clunker. Immediately start saving for your next car and the inevitable costly repairs. This strategy will limit the number and quality of cars you can afford. Remember, there are families earning more than you who take public transportation or share rides to work.

Most people view gasoline costs as inevitable, but they are not. Living close to where you shop and work, even if you have to own a smaller house, has economic advantages. Alternatively, consolidate trips to reduce expenses.

Eating out and prepared foods

Starbucks has become the poster child for budget busters. Buying a $4.50 cappuccino when you are young costs you $450 in your retirement account. And spending $4.50 a day costs you $450,000 in your retirement!

It doesn't have to be a latte. You can generate amazing savings from any expense. But a pricey latte illustrates the huge markup on a dollar coffee.

Aim for food to be under 15% of your lifestyle spending. You would like your food to be inexpensive, healthy and convenient, but it can't be all three. You can only pick two.

Healthy food tends to be more expensive per calorie. So do convenience foods. One person eating out can often fund the entire family eating at home. And even when you purchase food in the grocery store, prepared foods can cost more than twice what you would pay for the individual ingredients.

By learning to cook with common staples such as rice, beans, flour, oats, potatoes, and chicken, you can drastically reduce the percentage of your budget spent on food. Save even more by making your own gourmet coffee.

If you aren't rich enough to afford eating every meal out, this is the best way to scale back your lifestyle. Your food can be both reasonable and nutritious, but some assembly is required.

Clothing

Clothing expenses can break the budget. Designer clothes can be 10 times as expensive as more modest attire. And keeping up with the latest fashions requires renewing your wardrobe regularly.

For many people, shopping for clothing is a social outing and hobby unto itself. The goal is to buy something truly wonderful that will make a specific event memorable. Such designer moments may be the norm on the red carpet of the Academy Awards, but they will destroy an ordinary family's budget.

Most people aim for clothes that are respectable but not ostentatious. If that isn't enough, reexamine your values. If you must keep up with what everyone else is wearing, you need to earn more than everyone else. If you express yourself wholly through your clothes, your financial security is going to suffer.

Average-size people can find some great buys at secondhand stores. Or you can learn to sew. Children's clothes do not require much fabric, and the savings can be tremendous.

Other regular expenses

Review monthly, quarterly or annual recurring charges. Research the cheapest basic service for your phone, cable, Internet, and insurance. Compare that to what you are paying now, and ask yourself if those seductive extra features are really worth the cost. A gym membership used regularly might be a wise choice, but if you haven't shown up there for weeks, it isn't. For each expense ask yourself, "Is this really a necessity?" Any way you can reduce your regular bills saves money every year.

Increased insurance expenses

Most families who get insurance are self-selecting. If you wait until you are a high risk, your premiums will be higher. People who have insurance and then become a high risk often cannot switch providers. As a result, the pool of people covered by insurance tends to get riskier over time. As it does, those who can't switch end up with significant policy increases.

But if you have not had much in the way of claims, shopping for new coverage can help you avoid costly insurance increases. Reviewing your policies and getting a couple of quotes can be a quick way to rein in expenses.

To make this work in practice, you need to collect the quotes quickly and painlessly. Rather than the anonymity of the Internet, I recommend a few phone calls. First decide if you want to change the terms of your policy. Then get a quote for the exact same coverage from each company.

After you have eliminated a company, tell them directly. Giving someone your phone number won't waste their time, but e-mail spam can seem eternal and Internet sites are often not reputable. Review your policies once a year. After you are satisfied with your current provider, once every two or three years is sufficient.

In summary, every category of your total budget must stay within a limited percentage. Careful planning and a courageous look at your lifestyle can help you identify those budget busters. Adjusting a few spending excesses could solve all of your spending problems.

Using Toyota's Problems to Get a Deal

I've mentioned previously that a new car is on my shopping list. I don't plan to buy until the fall, but I have already been checking out Consumer Reports and some car lots. I think I'm going to get a Honda Pilot, but that decision is still TBD.

Before the Toyota meltdown, a Toyota Highlander was #1 on my list. But there's NO WAY I'm buying a Toyota now. They've lost my trust and personally, I don't think they know what the problems are with their various vehicles under recall. Others may disagree and keep buying them and that's fine with me. Just try and steer clear from my car when yours suddenly accelerates.

Smart Spending suggests now is the time to get a good deal on a Toyota. Not for me. But they do say you might be able to get a deal on other cars by using Toyota's problems to your advantage. Their thoughts:

Other automakers have used Toyota’s woes to tout their own safety records and offer incentives. Honda, for example, is offering $750 dealer cash on the $19,800 Honda Insight hybrid, widening the gap against the $22,800 Prius (part of the braking-system recall). “If you tell them you were thinking about getting a Toyota but now you’re not sure, that might make them salivate,” Brock says.

Personally, I'm skeptical that this will get me a better price. And besides, the last two times I've used my formula for buying a car, there wasn't much left for the dealer to give me. Then again, I'm not afraid to try it.

What do you all think? Is using Toyota's problems a good way to get a deal on non-Toyota cars? Or are so many people going elsewhere that other dealerships don't need to deal as much to get business?

Avoid Budget Busters by Curbing Your Worst Impulses

The following is a guest post from Marotta Wealth Management.

Frugality is the new status symbol, or at least it ought to be. It is green. It is compassionate. And it brings with it a financial margin for when life colors outside the lines. It helps bring us the priceless gift of serenity and contentment.

Bruce Waltke translates Proverbs 10:4 as "A poor person is made with a slack palm." To be wise financially, our hands must remain steady. Extend your hand toward an impulse purchase and with one weak flick of your credit card, all thoughtful budget planning can be hopelessly broken. And for many families, it's once on the charge, forever on the card. Excess spending slows our accumulation of capital to invest. When we are drowning in excess purchases, getting ahead is like trying to sprint through deep water.

Get control of the spending that breaks the bank. Certain purchases that are typically both unnecessary and unplanned are budget busters. Avoiding these financial slips requires hedging some of our worst impulses and constraining our desire for instant gratification. Only by saving enough in discretionary spending can we afford to put 10% of our budget toward those true and unavoidable emergencies.

Here are three rules that will help you and your spouse limit impulse buying and better align your spending with your thoughtful values.

First, limit the dollar amount you can spend unless you and your spouse both agree. You owe it to your partner not to undo months of frugality and sacrifice by acting on a whim. Honoring each other in this way helps avoid resentment and alienation that can bust your marriage as well as your budget.

Negotiate the dollar amount. I suggest setting a limit of 1% of your monthly budget. If your annual spending is $60,000 and your monthly budget is $5,000, you would need to confer on any purchase over $50.

The idea of setting a limit will seem more acceptable if you consider the millionaire mindset. Millionaires recognize that saving and investing just $100 a month over the course of your working career produces a million dollars at retirement. They watch their spending carefully. They recognize that frugality is just another way to describe deferred consumption, which is the definition of capital. And capital, once invested, is what produces an ongoing income stream.

Put another way, if the average budget should include 5% taxable savings each month, every time you mindlessly spend over 1% of your budget, you lose more than a fifth of what you should be saving and investing outside of retirement accounts. I've seen many financial affairs ruined by the repeated spending of amounts much less than $50 at a time.

If you are struggling financially and having trouble agreeing on your goals, you may want to set the limit lower. As you both begin to feel your spending is under control and your savings exceeds your targets, you can readjust the limit higher. Exceptions can be made for regular bills and necessary purchases such as utilities and groceries.

Talking with someone else about a possible purchase can clarify your thinking not just about the item but also about your other competing financial priorities. It changes the question from "Do I want to buy that?" to "What do I want to give up to buy that?"

The second rule limits the frequency of mistakes. Practically speaking, you can learn to postpone spending one purchase at a time. When our children were very young, they had to wait a week before spending money on a toy. After the seven days, they often wanted a different toy instead. Then they had to postpone the purchase again.

Children should be required to wait as many days as they are years old before being allowed to make a large purchase (that is, more than a week's allowance). You can use the same technique to strengthen your own slack palm.

When you're tempted to buy something, wait a week before acting. If you still aren't sure, wait another week. There is always tomorrow, and most of the time you won't remember what attracted you to it in the first place. Simply learning to delay and avoid impulse buying can cut your spending in half.

My wife and I sometimes wait years to be sure a purchase will further rather than impede our goals. The rule is simple. If you are not sure of a purchase, wait another week. This ensures that your hand will be confident, not slack, when it decides to act.

The goal isn't to be rich but instead to be thoughtful, industrious, content and thrifty. If you struggle with Madison Avenue's mantra of personal fulfillment through excessive spending, turn the image around. Nearly all of our spending is discretionary, and every spending delay can be a way to bring peace into your life.

The third rule is to recognize the categories where you make mistakes. Dieting works because you are forced to observe what you are eating and learn which foods tempt you to break your calorie budget. Creating a financial diet works similarly. It creates a system that makes spending money more painful. Simply keeping track of all your purchases in a small spiral notebook makes you more mindful.

Refrain from discretionary spending in any budget category that is under pressure. It might be eating out. It might be clothes. It might be household items. If you keep your budget in mind, it will help you not to spend more money than you intended.

Whatever your lifestyle, you probably think everything would be just fine if you had $10,000 more a year. That is the deceptive seduction of wealth. We don't realize there are people living off $10,000 less than we have who are saying the exact same thing.

Ask yourself, "What will I do when I run out of money?" Whatever you would do then, you should do now to keep your spending under control and live within your means. The best way to learn to be content is by taking money out of our spending categories and saving it. The less we spend, the better we will learn to be satisfied. Just as the harder we train, the better our endurance.

If you must satisfy frivolous spending, limit the amount and budget for it. Set aside a half of a percent each for husband and wife. For a family with a budget of $60,000 a year, this would be $25 a month each. If you wanted to buy a $300 item, you might have to save up for it for an entire year. But only put this in the budget if you are saving adequately for all your other big goals.

An even better way is to lovingly meet each other's desires through the portion of the budget allocated to giving gifts. Too often family members don't know what to purchase. Consequently, unwanted or inappropriate gifts represent a great deadweight loss of value. But when we leave our desires in the hands of others by offering, say, a gift certificate we can afford, we build family bonds rather than resentments.

In summary, to avoid impulse buying, set limits, wait a week, and watch out for those categories that entice you to break your budget. And when you must spend frivolously, limit those purchases to a small fraction of your budget.

Having a Bad Credit Score Can Cost You $200k

Here's a piece from MSN Money that says the lifetime cost of bad credit is over $200,000. They detail how they got to this number, but the short version is that if you have a bad credit score you end up paying more for all sorts of things -- mortgages (where half the $200k costs lie), auto loans, credit cards, home equity loans -- basically whenever you borrow money.

Of course, if you never have to borrow money, then you can avoid these costs anyway. But if you have a great credit score, you'll also save on many non-loan services that have nothing to do with borrowing money. An example: we save a bundle on our homeowner's insurance because of a good credit score.

So even if you're Dave Ramsey, you need a good credit score. That is, if you want to save money. Ok, maybe it's not $200k (and it may not even be the $100k you can save from using coupons) but even if it's "only" $50k, isn't it worth the effort?

How Do I Compare Costs from One Furnace to Another?

As you know, we got a new, high-efficiency furnace last fall. Once winter is over here (which is the end of April, unfortunately), I'd like to do a cost comparison to see if the new furnace saved us money versus the old on we had last year, and if it did, how much it saved us.

I'm assuming that the basic information I need to compare the two years is the cost of natural gas each year as well as how much we used. If the calculation was that simple, I think I could do it easily. But it's not that easy, is it? Don't I need to somehow adjust for the average outside temperature from one year to the next (we kept the inside temperature relatively the same each year, so I'm calling that a wash)? For instance, what if one year was a lot colder than the other (which I think last year was colder than this year)? Then the furnace would have used more simply because of the weather, not because it was less efficient. So how do I make the adjustment?

I looked around on the web and couldn't find a calculator that would help me out, so I thought I'd ask all of you for your thoughts. There are a lot of smart people that read this blog and I suspect a few of them can set me straight. Am I thinking about the way to compare the two correctly? And is there an online calculator or guide that can help me make the comparison with little effort?

Weddings Cost Much More than You Imagine

The Wall Street Journal says that weddings are much more expensive than people think, stating the following:

Your $18,000 wedding? It may really end up costing you between $90,000 and $200,000.

That's because the biggest cost of every dollar you spend is invisible. It's all the money you'd accumulate if you saved it instead. Over long periods, this cost dwarfs the mere sticker price, often by a factor of several times.

Do the math. The typical bride is just 26 at her first wedding, according to the U.S. Census. She has four decades or more to save.

If her savings earn 4% a year above inflation over the long haul, each dollar she spends now is actually taking $5—in today's terms—out of her lifetime savings. If her money earns 6% a year above inflation, an estimate that is challenging but not ridiculous, she is taking out $11. Per dollar spent.

Yes, this is real. Today millions are, of course, struggling to make ends meet. There is an unsung national crisis among those nearing retirement with very little set aside. Someone in their 50s today would have an extra $100,000 if they'd saved just $5,000 more 30 years ago.

Couldn't agree more! In fact, I said so almost two years ago (though my estimated savings was $500k or so -- the cost of weddings has actually dropped a ton since then.)

We all have to remember that every financial choice is a decision that impacts our lives in other ways. The decision to save now allows us to have more later, just like the decision to spend now robs us of potential savings in the future. Of course, it's your life to live and your money to spend, so do whatever you like. But remember that the more you spend now, the greater the impact will be on your financial future.

I think people are starting to realize this more and more and, in particular, decide that the cost of weddings is out-of-control and not worth it. That's why more people today are more willing to take the cash over the wedding.

Anyone Buy Coupons?

Here's a unique twist to add to our recent discussion about saving money with coupons. Sound Mind Investing talks about how some people actually BUY coupons to save themselves money. The author tells about how he bought a Home Depot coupon (which he used at Lowe's -- they honor competitive coupons) on eBay for $24 and proceeded to save a ton using it. His final tally:

$132 (siding discount) + $70 (dishwasher discount) - $24 (cost of coupon) = $178 savings

Ok, so if you could pay $24 and save $202 ($178 after counting the coupon cost), wouldn't you? I think anyone would.

But can't you find these for free on the web somewhere? Maybe not. Perhaps you more-sophisticated coupon users can enlighten me.

And one other thing to consider, the FTC says the following:

Selling or transferring coupons to a third party violates most manufacturers’ coupon redemption policies—and usually voids the coupon.

Anyone with experience buying coupons? If so, please share your knowledge with the rest of us.

Save Money! Get a College Degree In Three Years

The following is a guest post from Cheap Scholar.

As money gets tight and your budget for educational expenses is shrinking quicker than a used Arm & Hammer Magic Eraser, you start to think about different approaches to decreasing your costs for college.  This brings us to a widely used but under marketed practice of completing your undergraduate degree in three years instead of four (or ugh.. five).

It is not the easiest thing to do and it is certainly not for the academically challenged but it is very possible for a student to complete college a year early and under budget.

The first step is to take post-secondary courses while you are in high school. Most students can qualify to participate in this program in their junior year. Basically, you go to a couple of classes at your high school campus and then you go to a local college or university for FREE to take more "advanced" coursework to round out your schedule. I put advanced in quotes because a college course doesn't necessarily mean that it is going to be harder than a class you take in high school (it should be tougher but depending on the professor and curriculum you should be just fine..).

The silver lining to this program is that courses you take at your local college not only count toward your high school diploma but they also provide benefit in that they are actually college credits that you can transfer to the school of your choice. If you get started in the post-secondary program (sometimes referred to as High School Scholars) early enough, you should have no problem in having a semester or two worth of credit hours to get you started. Also, many states pick up your textbook expenses for these programs so that is extra savings that you can count on. Check with your guidance counselor if this is something in which you have interest.

The next step in getting through college in three years is to take as many classes as you can each semester. Many colleges have a standard rate(cost) of tuition each semester regardless of whether you take 12 credit hours or 19. If you take the basic 12 credit hours, you are not maximizing your tuition dollars and may even prolong your stay at the college. However, if you take the maximum of 19 credit hours each semester, you are sure to cut off at least one semester on the back-end of your program. Again, this is not for the academically challenged. If you struggle in the classroom, you will have a very difficult time keeping up with 19 credit hours each semester. Not to mention that your social life may take a huge hit as well.

Lastly.. consider summer college.  Students take advantage of classes in the summer to catch up on course work that they could not complete during the year or in the sequence that is required by their program. Since summer college courses are usually offered at a discount rate by most traditional colleges and universities, you could save some cash by loading up on these classes. If you take enough summer courses you could easily shave a semester or two off your stay.

Based upon all the steps above, it seems like you could get your bachelors degree in two years let alone three. However, I don't recommend a student to make use of all these opportunities during your college experience. Going to college is an educational process in and out of the classroom and it is a time when you learn to take on more responsibility and become a true adult. If you short change yourself from this experience, it could impact your accomplishments later in life.

So... 4 is good, 3 is better, but be very cautious about getting your bachelors degree any quicker. However, if you are really anxious. I know of a diploma mill in Florida that will give you your degree in two weeks (enough time for your $180 check to clear the bank!) ;)

How to Earn $100 an Hour (Or Save $100,000 in Your Lifetime)

Would you like to earn $100 an hour (or more)? Probably, since the average American earns about $20 an hour.

But how can you do this? The Wall Street Journal gives us the answer -- clipping and using coupons.

Yep, you read that correctly. Here's their thinking:

• The average saving per coupon was $1.44 according to a recent report.

• The WSJ assumed you spend a minute per coupon.

• Therefore, saving $1.44 for a minute's effort is the equivalent of saving $14.40 for 10 minutes -- which equates to an hourly rate of $86.40

• Since the savings is tax free, at a 20% marginal tax rate you would have to earn $108 before tax to take home $86.40. If your marginal tax rate were 30%, you'd have to earn $123.

They go on to say that because the amounts are small -- 50 cents here and a dollar there -- that many people ignore coupons because they don't think they are worth the financial trouble. But just like small spending can kill you financially, small savings can help you out in a big way (and no, I'm not saying you should ignore big savings -- you should pay attention to all spending.) Just how much can using coupons (or cutting any sort of small spending that adds up to similar amounts) save you? Here's what the Journal says:

The individual amounts of money may seem small, but they prove the old adage about tiny acorns and mighty oaks. Someone who saves $25 a week will save $100 a month, and $1,200 a year. Over a lifetime that can easily grow to $100,000 or more–even after accounting for inflation.

Time is often the biggest excuse for not clipping coupons (the "hassle" of them is another one). Here's how the Journal addresses that objection:

If motivation is an issue, the next time you find yourself facing a stack of coupon booklets and flyers don't ask yourself if you can be bothered. Try asking yourself if you'd like to earn more than $100 an hour for a job you can do, at home, while sitting on the sofa watching TV.

A few comments on this line of thinking:

• I am a big believer that you need to control all spending, large and small. And in many cases, small savings here and there can really add up. I think using coupons is one of those ways that makes sense to "save small".

• Using coupons is not the end all to saving on groceries. IMO, you need to use combined savings strategies of buying store brands, buying in bulk, shopping sales, and using coupons to save the most amount of money. My wife is an expert at doing all of these.

• We get the Sunday paper just so we can get the coupons (actually having the paper to read is a nice side benefit.) My wife spends some time on the drive to church and back home clipping them as well as about 30 minutes Sunday afternoon finishing up the process. She sorts them in a coupon book, then pulls them out in the car as we're driving to go shopping. Between sales, coupons, and rebates, we hardly ever pay full price (unless it's for a store brand or in bulk at Costco -- which are cheaper alternatives anyway.) Oftentimes she'll combine a coupon with a sale to really make the item cheap (or free)!

• That said, she's not hard-core like some of those women you see on the news who get $200 of groceries for 15 cents every week. I think that might be a bit of an overkill on the time required to get those results. We try to hit the sweet spot -- the best savings for the least amount of time invested.

• They have a good point about doing something else while you watch TV. I can't tell you the number of times our family has been watching a show that I'm not really interested in. I stay in the room and "watch" it with them, but also pull out a book, skim it, make notes, and highlight areas I might want to post on. Takes me about 30 minutes to "read" a book this way. It makes the time more productive. Same can be done with coupons.

• Still think cutting coupons is not worth it for you? Here's a quote from a Smart Money piece that might change your mind: "Affluent households, including those with income above $100,000, tend to be heavier coupon users than those with lower incomes, according to a 2009 study by Nielsen and market research firm Inmar." :-)

How about you? Anyone out there use coupons regularly to save loads of money?

Thousands of Ways to Make and Save Money

If you've been reading Free Money Finance for more than 15 seconds, you know that my basic philosophy is this:

The way to become well off is to make more money, save a good portion of it, and do this over a long period of time. (If you want more details, see How to Get Rich in Three Easy Steps.)

To this end, I often write about how to make more money (both with your career as well as with other activities) and how to save money. But you may not realize where you can find the posts related to these topics. Well have no fear, because this post will lead you to them all!

Growing Your Career Ideas

Let's start with making more money. I have several career categories -- one for before 2008, another for 2008, one for 2009, and a final one for this year). Simply click on any of the preceding links and scroll down to read all of the ways you can make more money by growing your career. There are 550 posts in all, surely enough for everyone to find some suggestions they can use.

Money Making Ideas

If you're looking for money making ideas outside of your career, check out my money making posts for before 2008, 2008, 2009, and 2010. There are over 340 ideas listed, so you're bound to find at least a few ways to make an extra buck or two.

How to Save Money Ideas

And if you're interested in how to save money, you have a lot of options here at Free Money Finance. As of now I have over 1,100 posts on have to save money listed in the following categories: prior to 2007, 2007, 2008, 2009, and 2010. Click on any of these links and start making your list of ways to save a bundle of money.

And, of course, there are many other ways you can grow your net worth here at Free Money Finance. You can write to me and ask a "help a reader" question, you can sign up to win some freebies, and, of course, you can always subscribe to the site using your feedreader so you can get new ideas for how to grow your net worth every day. Click any of the preceding links to take advantage of any of these options.

Please feel free to pass this post along to those you may know who can also benefit from these ideas. I'd like to see more and more people taking advantage of the simple steps it takes to grow their net worths.

FMF Reader Asks for a Discount and Saves $1,200 a Year!

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

Thanks to you and your website, I have a recent positive experience that I thought you might appreciate.  I have lived in the same duplex and have been a very good tenant for about the last 2 years. I was looking at my budget for ways to cut expenses and decided to call my landlord and ask for a discount (considering I was doing just about everything else I could in other areas). I figured he could only say no.  But, he called back and said he would take $50 off per month for a month-to-month or $100 if I signed a year contract! Yippee. I don't think I ever would have thought of doing something like that before I started reading your website...so, thank you!

Good for her!!!

Yep, I love asking for a discount as a money-saving tip. Like she said, the worst they can say is no. But the best they can say could save you a bundle.

For more posts along this line, check out these:

• Six Times It's Easy to Ask for a Discount 
• How to Ask for and Get a Discount at a Chain Store 
• Save on Comcast Cable, DirecTV and a HDTV: Two More Examples of Saving Money by Asking for a Discount
• Two Examples of Saving Money by Asking for a Discount
• Asking for Discount Nets Guy $40k 
• Save Money by Asking for a Discount and Paying in Cash

Save Money by Shipping Your Luggage

Kiplinger suggests you can save money by shipping your luggage (versus paying for the bag fees many airlines are charging these days.) Their thoughts:

You may be able to save money by shipping your luggage rather than checking it in the next time you fly. The idea might sound absurd. But if you do the math you’ll see that it would cost you less in some cases to send your bags to your destination by FedEx, UPS or U.S. Postal Service ground shipping.

Passengers who have luggage that exceeds airlines’ size and weight limits will score the biggest savings. They’ll spend about $50 less by shipping one overweight suitcase than checking it in -- and up to $200 by shipping two overweight bags.

Even if the cost is the same for shipping and checking bags, you get so much more from FedEx and UPS, says Airfarewatchdog.com founder George Hobica, who ships his luggage. They have better delivery records than the airlines, they provide tracking numbers so you can follow your shipment online and they let you insure items that the airlines don’t, he says. Plus, you’re more likely to get a refund from a shipping company than an airline if your luggage is damaged or lost.

They also note that if you ship your bags you won’t have to wait in long lines at the airport to check them.

This, of course, can require some coordination (you want to plan and ship the bags out early so they are there when you arrive.) But if we're talking $200 here, it's probably worth a little effort, wouldn't you say?

I don't travel that much by air anymore and when I do, I travel pretty light, so this isn't really an idea I'll be implementing myself. But how about you? Anyone out there like this idea? Anyone tried it? What were your results?

Top Six Mindless Money Wasters

Yahoo lists the top six mindless money wasters as follows:

1. Convenience Stores
2. Cell Phone Plans
3. Soft Drinks
4. Unnecessary Bank Fees
5. Magazines
6. Annual Credit Card Fees

I guess I must be doing pretty well -- I don't spend money on any of these. At least not much money. here's where I stack up on the list:

1. Don't know when the last time I bought a non-business item in a convenience store. I have stopped while on a business trip and gotten a quick bite when there was no other option (got a snack and gas at the same time), but I have been reimbursed. Unless they count that as a "gas station" and not a "convenience store." When was the last time I was in a non-gas station convenience store? Probably 1982.

2. My cell phone is paid for by my employer and my wife has a TracFone.

3. We get free soft drinks in the office, but I gave them up for New Year's. As far as buying one at a restaurant -- never for me or my wife and only occasionally with a meal/discount option for the kids. But we do this rarely because soda isn't really that good for you.

4. Haven't had a banks fee since 1982. Must have had it the same day I went into that convenience store...

5. I subscribe to only two magazines at the moment -- Consumer Reports and Family Handyman. Everything else I can read online. At the height of my subscriptions, I had 10 to 12 magazines. They were too costly and too time consuming to keep going. I never buy one-off magazines at the store unless it's as a gift (once a year or so I'll get my son a $7 soccer magazine he likes. Yikes!)

6. Nope, haven't had any since...want to guess? ;-)

How about you? Where do you stack up on this list?

Top 10 Items You Probably Waste Money On

The following is an excerpt from Shoo, Jimmy Choo!: The Modern Girl's Guide to Spending Less and Saving More, reprinted with permission from SHOO, Jimmy Choo!, © 2010 by Catey Hill, Sterling Publishing Co., Inc.

Top 10 items you probably waste money on:

1. Clothes. Where do I begin? Just because the DVF wrap dress was on sale does not mean that you could afford it. And you might not even be able to afford the on-sale Forever 21 dress you bought either.

2. Shoes and accessories. Why on earth did you need $400 red patent leather Mary Janes that match nothing in your closet? And for that matter, did you need to buy yourself starter diamond studs? The only thing those starter diamonds did for you is start your immense credit card debt.

3. Food. You read that the Perricone Prescription was the only way to lose weight. So you ditched all the bad foods in your cabinet and replaced them with salmon and veggies. Then, at 3 am on day 3 of your diet, you begged the greasy Chinese place to deliver you $40 of dumplings.  After that, your diet was shot, so you had to refill your entire fridge and pantry with food you would actually eat. Does this money-draining scenario sound familiar?

4. Alcohol. Girl, I’m sure this doesn’t need an explanation. You just paid to feel like crap the next morning. And you can’t even remember if the previous night was fun. You slept in your clothes, so you now have to pay to get them dry-cleaned. Need I go on?

5. Makeup. Now, I’m not saying you should go without, but I am saying that you do not need fifteen shades of designer lip-gloss. I mean, Fiery Midnight? Even Gisele couldn’t make that shade look good.

6. Beauty Treatments. Shaving was too annoying, so you got laser. You heard that the Intraceuticals facial keeps skin glowing, so you ran out and got one (then got pressured into buying all of their other products). Between the waxing, facials, laser, massages, manicures, and the gazillions of products bursting out of your medicine cabinet, your credit card has gotten quite a workout.

7. Your Hair. It all started many years ago when you were chasing Jennifer Aniston’s perfectly highlighted buttery blonde. Now you’re over that, but you’ve moved onto needing the gorgeous biscotti-almond of J Lo’s hair or the rich chestnut color that Rachael Bilson has been sporting. And so here you are, thousands of dollars later…

8. Cable TV. Because if you don’t watch The City, how will you be able to keep up with the gossip over lunch at work? And god forbid you don’t stay up-to-date with Dexter, because then what will you use as your conversation starter with the hot bartender? Ladies, will the latest scoop on Dex really land you the bartender?

9. The Gym. Now this doesn’t apply to those of you who go regularly, but to the rest of us who have to turn away when they pass the gym so they don’t pass out from the guilt of never going, it’s time to assess whether you really need that membership.

10. Gas. You love zipping around town in your little convertible, wind flying through your hair, a hottie by your side. Unfortunately, your bank account doesn’t share this enthusiasm (though the friendly men that run OPEC sure do).

How to Save Money When Traveling to Europe

The following is a guest post by Simon Migliano of VoucherCodes.

Being a tourist in Europe is one of the toughest challenges anyone committed to the frugal life will endure. Even for locals, it’s dispiritingly easy to fritter away cash in tourist hotspots that seem to go out of their way to empty to your pockets at every opportunity.

As always, planning is the key, otherwise you risk losing control of your spending. With a little inside knowledge and an internet connection, you could save up to 50% at top restaurants, get cheap theatre tickets, save on takeout pizza and ride the subway for half price.

Before eating out, take the time to search for restaurant vouchers. Faced with a recession, European restaurants and attractions are resorting in droves to money-off vouchers to attract new customers. Savvy Europeans search online for restaurant vouchers (also known as printable vouchers), these coupons are downloaded from voucher codes websites printed out at home then handed over in the restaurant. Download a coupon for the eatery that most whets your appetite, print it out then hand it over when you get there. These can be found at RestaurantVouchers for the UK, PlanReduc for France, and Gutschein-Codes for Germany.

Typical offers include two main meals for the price of one; half price food bills and kids eat free. The potential savings are huge, particularly for families.

A family of four dining at Pizza Express, a stylish and family-friendly pizza restaurant chain, could easily spend $125. With a two-for-one printable voucher, this could be slashed by almost $35. An even better deal can be had at La Tasca, a popular Spanish restaurant chain. La Tasca's 50% off food voucher would save the same family almost $50 on a typical bill of $125 that included drinks.

Even if you don’t have an internet connection in your hotel, you can always nip into one of Europe’s many internet cafes and print out your coupon. The cost of doing so will only be a fraction of what you save.

Another great way to avoid being stung at the end of a meal is to log on to the Time Out restaurant guides which are available for most major cities. As online bibles for food-loving Europeans, these sites have all the latest independent reviews and even lists all restaurants where you can dine for under $15 a head.

Transport can also drain the cash from the holiday fund. A mistake that can often be made by families is to leave the bikes at home.  While not right for all holidays many sunny and picturesque destinations can provide the perfect setting for a group bike ride. This can form a fun part of the holiday while avoiding the overpriced trains operating on tourist routes.

In terms of accommodation it’s always best to book in advance with cheap hotel chains. While in Britain Travelodge, Holiday Inn and several others are leading the way in low cost accommodation. In France similar chains can offer three person rooms for under $30 a night, while still being close to major attractions.

A tip that cannot be stressed enough is to check with your provider before using your credit card abroad. Most companies will charge a huge commission of around 2.75% every time you use your card – a sting that can be easily avoided with some forward planning.

U.S. tourists made 2.96 million visits to the UK last year, according to the International Passenger Survey. While more French and Germans came to Britain in that time, no-one spent more than Americans, who handed over $3.66 billion in total. With London being consistently voted the most expensive European city it is worth being extra savvy when visiting the Big Smoke.

Taking in a show in London’s West End is likely to be high on your to-do list but it is very expensive. Avoiding paying full price usually means running the gauntlet of ticket touts or wasting an afternoon queuing up for hours for a cut-price ticket. But there is an alternative. Check out lastminute.com for some amazing deals. Originally a highly successful online travel agent, lastminute.com has branched out to offer cheap deals on just about every form of entertainment. It’s a double whammy:  save money on tickets and have more time to enjoy yourself.

One final tip for visitors to London: get an Oyster travel card at the tube station at the airport. Costing less than $5, this pay-as-you-go travel card will save you 50% on all underground and bus travel.

Given that a single tube ticket for just central London stations costs more than $6, it’s daft not to get an Oyster card. Just top it up with cash or credit card at tube stations or newsagents then swipe it as you pass the tube turnstiles or hop on a bus, happy in the knowledge you’re not being robbed blind like all the other tourists.

Where You Live Has a Big Impact on Your Finances

One of my 10 most-hated money saving tips is to move from an expensive city to a less expensive one. Yes, it's likely that you'll make more in a more expensive city, but the numbers show that the increased cost of living far exceeds those gains. From a purely financial standpoint, it's a bad idea to live in a costly location (I know there are many non-financial reasons -- including personal preference -- for living almost anywhere, but I'm focusing on the financial side of the issue here.)

Since the topic gets so many people worked up and since I've covered it quite extensively, I don't post on it much. But I ran into a series of articles in December -- all on this topic -- that made me HAVE to post on it. Here are the highlights of each:

• MSNBC says that New York is the most costly city in the US. No shocker there, huh? But it's an interesting read because of the trouble they went through to determine the real/total cost of living one place versus another. They not only looked at housing costs (which are a major piece of the pie), but all sorts of consumer-goods costs as well. Intriguing. A broad summary:

California led with six cities on the list, four that make our top 10. Texas follows closely behind with four cities: in addition to Austin, San Antonio, Houston and Dallas appeared.

While East and West Coast cities grabbed most of the top spots, the rest of the country is well represented. Chicago (No. 14), Las Vegas (No. 18), Phoenix (No. 25) and St. Louis, Mo., (No. 35) all make this year's list.

• The San Francisco Chronicle asks if a more affordable life, away from the Bay Area, actually be better. The author is coming to the realization that it's going to be tough (if not impossible) for him to buy a home in San Francisco (much less live in a quality neighborhood, finding great schools, etc.). The heart of the issue is simply "Is living here worth the cost?" Or, as he puts it, "I had wondered whether the costs of living in the Bay Area were equal to its considerable pleasures." So he talked to two people that had made the move from the big city to a smaller one to see if maybe it was something he wanted to do. It's an interesting read.

• Yahoo lists the best bang-for-the-buck cities which they define as "buying an affordable home in a city with a stable housing market, among other pluses like reasonable property taxes and minimal travel time to work, is the new definition of bang for the buck." Their top 10:

1 Omaha-Council Bluffs, NE-IA
2 Little Rock-North Little Rock-Conway, AR
3 Jackson, MS
4 Des Moines-West Des Moines, IA
5 Augusta-Richmond County, GA-SC
6 Wichita, KS
7 McAllen-Edinburg-Mission, TX
8 Chattanooga, TN-GA
9 Colorado Springs, CO
10 Ogden-Clearfield, UT

The ones listed at the bottom of the pack were:

90 San Francisco-Oakland-Fremont, CA
91 Sacramento--Arden-Arcade--Roseville, CA
92 San Jose-Sunnyvale-Santa Clara, CA
92 Las Vegas-Paradise, NV
94 Providence-New Bedford-Fall River, RI-MA
95 Detroit-Warren-Livonia, MI
96 Riverside-San Bernardino-Ontario, CA
97 Chicago-Naperville-Joliet, IL-IN-WI
98 New York-Northern New Jersey-Long Island, NY-NJ-PA
99 Miami-Fort Lauderdale-Pompano Beach, FL
100 Los Angeles-Long Beach-Santa Ana, CA

Looks like the same list as the MSNBC article, huh?

Many of the cities I've lived in did fairly well including Pittsburgh at # 22, Indy at #40, Grand Rapids at #49, and Nashville at #58.

I know some of you are probably thinking "who would want to live in Omaha, Little Rock, Jackson, or Des Moines anyway?" And for you, maybe you wouldn't. But I've been to all those places, have enjoyed them, and wouldn't give a second thought to living in any of them. And to be saving a good amount of money while doing so (versus living in a more-expensive city) would just be icing on the cake for me.

More Couples Taking the Money Over the Wedding

Here's a pleasant trend I didn't know about from the NY Times:

According to a Brides magazine survey of about 1,000 engaged women conducted this summer and released Monday, more than half of the respondents said they would take money from their parents in lieu of contributions to the [wedding].

Wow! Really? More than half would take the money instead of the wedding? That's pretty cool IMO.

The piece goes on to list ways to save on weddings with the best bang-for-your-buck ideas being the following:

• Schedule your wedding during the off season.
• During the high season, plan your event for a Friday or Sunday.
• Trim the guest list.
• Reserve a site that’s fully furnished, like a hotel or restaurant.
• Choose local, seasonal blooms instead of those requiring shipment.

Maybe this recession will have a lasting impact after all. If people are rethinking their wedding plans, what's next -- giving up cell phones or cable? ;-)

To be fair, this is the first year that the magazine asked the question, so maybe there's been no shift in thinking at all. Maybe couples have always preferred to take the cash over the wedding. Who knew?