This Week's Recommended Reading List

Every once in awhile, I come across some great reading online, and feel compelled to share here on Savvy Frugality. I recommend articles and web sites that I think would be beneficial to Savvy Frugality's readers (thanks for reading this site, by the way!).

This week's list:

Trent at The Simple Dollar interviews Amy Dacyczyn, the author of The Tightwad Gazette. Amy's books are what got me living a life of Savvy Frugality, and they have definitely changed my life for the better. Good job, Trent!

If you are looking for recommendations for software or better ways of doing things on your computer or online, I recommend Lifehacker. I find at least one or two great suggestions on this site each and every week, and they pass along some great frugal tips once in awhile, too.

The Consumerist introduces us to Crissy, the High Priestess of the Coupon Clippers. I thought my wife was a master coupon clipper, but Crissy managed to buy more than $300 worth of stuff at Target for 2 cents. Two cents! That's hard to beat, unless the store gives you money for shopping there.

How would you like to get an MBA education without going to school (or actually earning a degree...but you'll have the knowledge in your noggin)? Check out The Personal MBA. It's actually a recommended reading list which will impart much of the same knowledge you would receive in an MBA program. Even if you have a business background, it's a good reading list. If you'd like to take actual courses from a top-notch business school, you can do so online from MIT Open Courseware. These are actual MIT courses, and they are free! The catch: you won't earn a degree taking the courses, but you will be smarter afterwards.

Enjoy!

How Five Minutes at the Bank Saved Me $250

I have to admit, I was pretty shocked when I logged in online to check my checking account statement. It said my account was overdrawn, and I had four overdraft charges totaling nearly $110. Huh? I had just transferred $500 from savings to checking the day before. This had to be a mistake. Besides, I told myself, I have overdraft protection on my checking account.

So, I drove to the bank (I prefer to handle matters like this face-to-face, not on the phone) and approached the teller. I explained the situation. It turns out the $500 transfer had not yet been credited, so indeed the account was overdrawn. "But, I have overdraft protection," I protested.

"Yes," I was told, "but that means we will pay the checks for you. You will still incur overdraft charges." I explained that this is not what I was told when I first opened my checking account five years ago, and that I was paying $12 a month for this overdraft protection. I had a "special" account. The teller then told me something that shocked me. "We have overdraft protection on our free accounts, too. The account you have gives you free checks."

Well, that doesn't mean much to me. I do most of my banking by debit card. I order checks perhaps twice a year. What a ripoff! I then turned to "super nice guy" mode. I explained that I had been a customer of the bank for five years, I have a car loan with the bank which I faithfully pay on time every month, and I had NEVER had an overdraft with this bank before, ever.

The teller called the manager over to his computer, described what a "great" customer I was, and asked if he could make the nearly $110 in overdraft charges disappear, as a courtesy. "Sure," said the manager, as if he was asked if he wanted extra ice in his Coke.

Just like that, $110 in overdraft charges disappeared. The teller also switched my checking account to free checking, with overdraft protection, which saved me an additional $12 per month. In less than five minutes time, I saved myself $250 in fees.

The lesson here is this: bank tellers listen to people complain all day long. If you encounter a problem, ask them for their help. Be nice. You may be surprised how far you'll get and how much money you may be able to save. You may have heard the saying, "you'll catch more flies with honey than vinegar." This is especially true at banks. Also, if your account is loaded with fees for services you don't use, ask for details about the bank's "free" account. Nearly every bank has one.

Down and Out on Craig's List

With gas and food prices on the rise, some people who are struggling to cope have turned to selling their worldly possessions on Craig's List and eBay...including some items of sentimental value. According to this article on MSN Money, some of the ads on the free bulletin board and online auctions site have taken on a decidedly desperate tone.

One woman put her engagement ring up for sale. Another sold her grandmother's valued tea kettle on eBay for $6 because her husband was injured on the job and they needed the money.

Of course, I don't know any of these people, but will $6 really help someone in dire financial straits? Probably not. Instead, a major lifestyle change might be in order, such as downsizing the household and eliminating or reducing many monthly bills.

Years ago, I found myself unemployed, and that bout of unemployment lasted for six months. Nothing was sacred. My wife and I eliminated day care, telephone service and cable television. The only monthly bills we paid were rent, utilities and food. Did the other bill collectors howl? You bet they did, but we had to eat. I told them I was out of work, and most of them understood and gave me an extension on the payments. I received unemployment compensation, so that did help, but at that point an extra $6 from eBay would not have made a difference to us at all. These days, that won't even get you 2 gallons of gasoline.

Acting BEFORE you find yourself in a tough financial spot is the key to avoiding turning to eBay or Craig's List as a means of obtaining emergency cash. Craig's List and eBay are NOT emergency funds, and they are certainly no means of guaranteed cash. Here are a few tips from the Savvy Frugality Recession Survival Guide which may help you avoid selling off a treasured heirloom if you get into a bind:

1. The first thing you want to do is insure your most basic needs: shelter and food. Stick any extra money in a high-interest savings account to help cover rent or mortgage payments if the worst should happen. In fact, your emergency fund should have three to six months worth of living expenses in it.

2. If you have a retirement account, make sure it's diversified. Don't have everything in stocks. you should have some savings in lower-risk investments, too...such as bonds, or cash.

3. Stop spending on non-essential items. Put that money in your emergency fund.

4. A new tip I'm adding here: be fully insured. This includes short-term and long-term care insurance. If you became disabled today, how would you pay your bills? Your employer won't keep paying you, and don't depend on Social Security disability. My wife hasn't been able to work for two years due to complications of diabetes, and she has been denied disability benefits through Social Security at least three times. Bottom line: if she weren't married to someone who has a job, she would have been in big, big trouble. Also,

5. Don't depend on your job as your sold means of income. Adopt a "Kramer Philosphy" (you know, the pesky neighbor on Seinfeld)...ALWAYS be looking for some other means of earning income. That might very well include selling some items on eBay or Craig's List, but treat it like a business and sell items you don't mind parting with. Don't post items out of desperation. Buyers can sense this, and you likely won't make much money on your sales.

I have been down and out before. I know what it's like to not know where your family's next meal will come from. It is a horrible feeling. Be proactive. Take steps now to ensure that won't be you in the future.

Best Buy of the Week: Membership to the American Legion

Savvy Frugality is a big proponent of service to the community. My personal mantra is to give "time or money" back to the community. I have volunteered for the Juvenile Diabetes Research Foundation, which funds research to find a cure for diabetes. I also make regular donations to the Salvation Army, which does a great job of helping low-income people in the community.

I am also a military veteran, and I happened to have served during a time which qualifies me for membership to the American Legion. So, exactly 20 years after leaving the military, I have finally joined. I knew that the American Legion has always done great work on behalf of U.S. military veterans. The American Legion helped the current G.I. Bill become reality. The G.I. Bill has helped education millions of military service members and veterans. The American Legion was also a big proponent of the government lending aid and giving treatment to military veterans who had been exposed to Agent Orange during the Vietnam War.

After filling out an online form and paying my $25 membership dues, I received a membership packet in the mail, which informed me of the benefits of being a member of the American Legions. What do I get for my $25? It includes:

1. A one-year subscription to the American Legion's magazine.
2. Group rates on health, life and dental insurance.
3. Travel discounts for hotels, air fare and car rentals.
4. Discounts for eyeglasses.
5. Discounts on the purchase of a new computer from Dell.
6. Discounts on prescription drugs from CVS.
7. Access to American Legion certificates of deposit and money market savings accounts.
8. Discounts on moving and relocation services.
9. Free cell phone and discount wireless service.

That's not bad for $25 a year! I didn't retire from the military, so I'm not eligible for many military benefits, but my membership in a service organization like the American Legion is a way for me to gain something for my service, and help support other military veterans and service members.

You don't have to be a military service member to join some type of service organization. Look into giving back to your community by joining an organization such as Kiwanis, Rotary, Lions Club, Elk, Moose, Eagles or similar groups. Some of them not only offer a chance to serve your community and meet new people, they also include a few perks just for being a member.

There's A Reason It's Called "The Idiot Box"

"I never have enough time to do everything!"

Do you find yourself saying the above sentence frequently? There never seems to be enough time to do the things you want to do. Never enough time to spend with family, pursue a hobby, work on your investments, study for a degree, read or do the homework you need to be better at your job. Or is there? Perhaps you DO have the time, but something is sucking it away from you and making your time less productive. It's something that is probably sitting in a prominent place in your living room right now. It's your television set.

Now, I have to admit, I'm a bit of a couch potato. I watch a LOT of television...not as much as I used to, but it is still a lot. I usually come home from work and watch a few hours of TV every night. It's my way of unwinding. I especially enjoy watching CNBC, BBC America and The History Channel. At least I'm learning something while I'm watching TV. But, all that TV watching that I thought was making me smarter is actually pretty dumb.

A couple of weeks ago I purchased a book called "The Little Red Book of Selling" by Jeffrey Gitomer. I purchased it on Half.com (of course) because I wanted to give myself an edge at work. I work in a sales-driven environment, and this book came highly recommended by a co-worker. There was good, common sense sales advice in the book, but there was another piece of info I found that really had nothing to do with sales that made the most sense to me. That is, successful people watch very little TV.

It's not that successful people find TV is beneath them or that they are "too good" to be bothered to watch TV. Their priorities are just different. They view TV as being a big time-suck. Time is money, or an opportunity to spend on things that are more important, and therefore TV interferes with those opportunities. While most people are zoned out in front of their TV sets watching another episode of "Lost", successful people are preparing for the next day at work...reading emails, checking appointments, laying out their clothes for the next day, reading trade journals, reading enlightening books, taking a distance education course, networking with friends and clients via email, working on their household spending plans, doing volunteer work, etc. They are simply being more efficient with their time.

You might be wondering what this has to do with the subject of Savvy Frugality, but isn't your time worth something to you? What would you do with an extra hour or two each day? That is an extra 14 hours every week. If you had that much extra time each week, and decided to apply it toward something productive...either professionally or personally...how much do you think you could accomplish?

I'm not advocating dumping your TV altogether. I have a DVR, so I can just record the shows I really want to see, or watch them later on my computer. I am just putting off my TV viewing to a later time each night, so I can spend those two hours after I get home from work to do all of the things I can never seem to find the time to do. I currently take online marketing courses, so I'll certainly have more time for homework. I'll have more time to read good books and fill my head with something more useful than what I would find on The Food Network. My son will have a play buddy instead of some guy who sits on the couch next to him to watch The Simpsons. What can I do with an extra two hours a day...two hours I used to spend sitting in front of the TV? A lot.

There's a reason it's called "The Idiot Box". Take back your time. You'll be a better person for it.