What will $9.99 get you these days? How about 30 days of advertising on an up-and-coming blog (yes, this one)?

The $9.99 sale actually accomplishes two things: exposure for YOUR web site, blog, business, etc., and also an experiment into the viability of having something other than Google AdSense on Savvy Frugality as a viable advertising model. The 30 days starts on the day your banner, button or text link goes live (which one you use is up to you, but you'll have to send the html code for your banner). I don't want to overrun my blog with advertising so I'm limiting exposure to just 6 advertising slots. I also reserve the right to refuse advertising (no porn or online gambling links. I'm not judging, but this is a family-friendly site).

During the past month, Savvy Frugality has had about 5,700 page views, and it's growing, so $9.99 is a pretty good deal! Of course, the rates go up when the 30 days is over, but you don't have to extend beyond the 30 days, that is...unless you want to! At that point, we can negotiate a different price or you can say "see ya later" with no hard feelings.

You have to admit, $9.99 banner or text link advertising is pretty frugal. I wouldn't have it any other way! If you have an interest in the $9.99 sale, just email me at savvyfrugality at hotmail.com.

Say what you will about Wal-Mart, but perhaps the best marketing move it ever made was lowering the price of several generic drugs at its pharmacy to just four dollars. Not only has this brought their pharmacy a lot of business. The sales of 30-day $4 generics account for just under 40 percent of Wal-Mart's pharmacy sales.

The expansion of the Wal-Mart $4 generics list adds 24 new drugs to the list, including drugs for ADD and ADHD. That's huge in my home because both of my sons have ADHD, and their medications are not cheap.

Not to be outdone, discount retailer Target is price-matching the generic drug prices at Wal-Mart. Certain pharmacy chains, such as CVS and Walgreens, may also match the prices of certain generic drugs. At least they do where I live.

You can find the list of Wal-Mart's $4 generic drugs here.

My oldest son is about to turn 18. He is a senior in high school this year and he is starting to think seriously about going to college. I'm sad to say that while he was growing up, my wife and I were unable to contribute any cash at all to a college fund.

That's not to say he isn't going to go to college, or that he can't afford to go. No, we are not going to mortgage the house or sink him deep into debt with student loans. There are other ways for him to rack up college credit and eventually earn his degree.

This year, my son has signed up for AP, or "advanced placement" courses. Once he finishes these courses and successfully passes his exams, he will earn high school AND college credit.

He is also looking not at four-year state universities, but two-year community colleges. Two-year colleges are too-often overlooked as a serious education option by high school seniors. My son can earn the first two years worth of college credit...about 60 credit hours..at our local community college for about $45 per credit hour. The four-year colleges in the area charge about $150 per credit hour...for the same type of courses that he would be taking during his first two years of school. Tuition savings: about $6,300.

He will also be testing out of the majority of his general education credits...about 30 credit hours...by taking the CLEP subject exams. Each exam costs about $80 each, so he stands to earn 30 credit hours for about $400. Total cost for tuition for the first two years of school: $1,750.

At this point, he will be able to transfer his credits to one of the state universities for the remaining 60 credit hours and receive a degree from a "name" university. Total tuition cost for the remaining credit hours: $9,000. Total tuition cost for a bachelor degree: $10,750.

For the past year, he and I have been contributing money to a state 529 account. This account allows students and parents to save some money for college, earn interest and then withdraw it and use it for college expenses. He will likely use this money for text books.

My son can further reduce his debt load of going to college by applying for grants and scholarships, but the bottom line is this is definitely doable. Even if he does take out a student loan for $10,750, the loan repayment should not exceed $200 a month if repaid over 5 years. A college education need not be out of reach for any family. There are always funding and study alternatives to help students reach their dream of receiving a college education.

(This post is also featured on The Dollar Stretcher.)

This week, the 93rd Festival of Frugality is hosted over at the Money and Values blog. Be sure to check out some great blog posts on the Top 100 Blogs to Help You Find Free Stuff, Dinner and a Movie That Doesn't Cost a Fortune, Fitness on a Budget, Reducing Your Car Insurance Bill and of course great advice that you can find here at Savvy Frugality!

This past weekend, I spent some time channel surfing on my TV and I came across a program about lottery winners.

The show featured interviews with people who had gone from rags to riches...to rags again. Despite winning millions of dollars, many of these lottery winners found themselves broke again after just a few years of living the high life.

What went wrong? How can people who are multi-millionaires go back to being poor again? In some cases, they had made bad investments, gave a lot of their money away, got socked with lawsuits and started businesses which failed. More often than not, they simply spent it all.

The lottery winners showed off pictures of mansions, car collections, expensive vacations and jewelry they had purchased with their millions. It's no wonder they had burned through their money so quickly.

What they failed to realize is that most millionaires...people who EARNED all of their money, or simply were born into rich families...don't actually live the lifestyle of the rich and famous. Most millionaires live below their means, and are frugal to a fault.

I personally know several millionaires, and with only one exception, you would never know they were millionaires unless they actually told you. They only told me because they know I will never ask them for money, and in other cases I know they own businesses which earn many millions of dollars.

Unlike the lottery millionaires, they don't buy car collections or live in mansions or wear Rolex watches. They look like the average Joe on the street. They buy used cars or trucks. They shop at Walmart. They live below their means.

That is how they STAY rich. They know that bad business moves can cost them money, and they hate to lose money. They don't spend money for the sake of spending money. They have to get value for their money, and they have to actually get something in return. They prefer to spend money on things which will in turn MAKE them even more money.

This was actually covered in a book called "The Millionaire Next Door". The average American millionaire...and there are many, many millionaires now living in the U.S., doesn't appear on the surface to look like what most Americans think a millionaire is. Our perception of millionaires has been warped by lottery winners, reality shows and Donald Trump.

Most millionaires are hard-working people who look for bargains and live frugally so they can keep more of their money. A good case in point is actress Sarah Michelle Gellar. Despite her success on the TV show "Buffy the Vampire Slayer", Gellar admits to being a tightwad. She clips coupons, rides a bike instead of driving an expensive car and brings her own grocery bags to the Whole Foods market so she can get a discount on groceries. She probably has plenty of money to live a rather lavish lifestyle, but she knows the way to stay rich is to save her money, and live below her means.

We can all learn lessons from the Millionares Next Door, even though we aren't millionaires. Live below your means, and you can lead a richer lifestyle.

I usually don't give out a lot of financial advice here because, well, I'm not a financial adviser. In fact, I'm constantly striving to get my own financial house in order. However, I am a student of history, and if history is any indicator, the U.S. is heading for some rough economic times for the next few years.

I'm not the only one who thinks so. People who are a lot smarter than me are predicting that the U.S. is headed for a recession, or worse. The last real recession that I recall, at the end of the 1980's/beginning of the 1990's, was bad enough. I was out of work at the time, and nobody in my city was hiring. I struggled through six months of unemployment. Food prices skyrocketed. The cost of housing went up as interest rates edged higher and higher. It took my family years to recover. It was a very rough time.

Apparently, with the housing bubble bursting and lending companies like Countrywide having major problems, we are headed down the same path. Food prices are already shooting up, as is the price of gold (usually a sign that investors are trying to safeguard their wealth) while the value of the U.S. dollar continues to plummet. In fact, the value of the Canadian Dollar actually exceeded the value of the U.S. Dollar a couple of days ago. That hasn't happened in more than 20 years.

What you do today could possibly help you weather the economic storm to come during the next couple of years. Of course, living a frugal lifestyle is a part of that strategy. This is the time to avoid accumulating any debt. You may want to put off taking out any home or car loans at this time until the U.S. economy is back on a more stable footing.

So, if we are headed toward a recession, what can we do about it? Here are a few ideas from some economic experts which I plan to implement myself, immediately.

1. If you don't have an emergency fund, start one...today. Save as much as you can, but three to six months worth of your take home pay is ideal.

2. Consider unemployment insurance on your car and home loans, if you don't have it already. I have this for the mini-van I bought a few months ago. If I find myself out of work, my monthly payments are covered and I won't have to worry about losing my vehicle.

3. Reduce your monthly expenses as much as possible. Transfer any credit card balances you have to cards with lower interest rates. Pay off your cards completely, if possible.

4. If you have investments, make sure they are diversified. You probably don't want to stash a bunch of cash in the stock market right now, but if you do have stocks, make sure they include foreign investments, utilities, oil companies, food suppliers...things that people need no matter what the economy is doing. Bonds and safer investments should also be a part of your portfolio.
Warren Buffet has been dumping a bunch of his investments right into cash. Why do you think he is doing that?

5. Diversify your income. If you lost your job today, would you have any other way of making money? I do some freelance writing on the side. While it would not replace the income from my job, it's better than not making any money at all.

6. Hoard. The Mormons teach that you should always keep 3 to 6 months worth of FOOD, dried and canned goods, in the home at all times, just in case of an emergency. This might strike some as a sort of Y2K mentality (remember Y2K?), but if you can take advantage of some truckload sales and stock up some food for a rainy day, why not?

Am I being an alarmist? Maybe. Like I said, I am not a financial expert, so you can take this advice...or not. But...what if I (and plenty of economists) are right...and worse financial times are ahead?

It certainly can't hurt to protect your finances, have an emergency fund and keep a few extra canned good around the house...just in case.

Versatile Vinegar

Posted by T | 7:01 PM | 1 comments »

When I go to the grocery store to do my bi-monthly food shopping for the household, I always make sure I include a bottle of vinegar. Oddly enough, we never use it for anything that is food-related.

Instead of plunking down big bucks for cleaning supplies such as Windex, 409, toilet cleaner, sink cleanser, etc., we just use our one jug of vinegar instead. I usually pay just over a dollar or so for half a gallon of white vinegar, and it lasts the whole two weeks or even longer.

Vinegar has a multitude of uses, it cleans great (you won't find a better window cleaner), the vinegar smell fades after a few minutes, and best of all...it's non-toxic! This is great if you have small animals or pets in the home.

You can find a TON of great uses for vinegar at the web site of The Vinegar Institute. Yes, there is a Vinegar Institute. There are also a lot of health uses for vinegar. By far, vinegar is one of the most useful things I include on my shopping list each month, and it does save quite a bit of money over purchasing separate cleaning products.

I have to admit, I like to take care of my hair. Although I was cursed with a high forehead at birth, I have always had a nice, thick mane.

Now that I'm in my 40's, like most men my hair is a little thinner and a lot shorter, but I still get compliments on my hair. The funny thing is I spend next to nothing to take care of it.

I cringe when I see people spend $15-20 on one bottle of shampoo. I go to the local beauty supply shop...the place that supplies the local hair salons...and purchase a gallon jug of shampoo for about $8. My last one lasted me nearly two years. I pour the shampoo from the gallon jug into smaller, empty Suave bottles that I have already used. When I don't buy the gallon-jug shampoo, I buy Suave when it is "buy one, get one free" at the grocery store or pharmacy.

I used to get my hair cut at Mastercuts at the mall. I went once a month and paid about $16, with tip. I thought that was a pretty good deal, but not as good as the deal I have now. My wife cuts my hair. Cost...free, of course!

My wife has long hair, but when she does have it cut she goes to the local beauty college in our town. There, students cut her hair under the watchful eye of the instructor. She paid $5 for a haircut that would cost her about $40 anywhere else. Men can also get their hair cut at the beauty college. I should also mention my wife got a pedicure at the beauty school, and she paid $10. Elsewhere, she would have paid about $30.

I used to use gel on my hair, but I now use something called hair glue or hair paste, which makes it look a lot thicker than it actually is. I usually find this at a dollar store, but if I can't find it there I can usually get it at Walmart for less than $4. Similar products at the salon cost more than $20.

I figure between shampoo and my styling products, I probably spend less than $20 a year on my hair...far less than most men spend on one haircut. I work as a professional, and my hair looks just as good, if not better, than that of other men I meet during the course of doing my job. I could spend more, I suppose...but why?

You can be stylish...AND frugal!

Worth a Mint?

Posted by T | 7:19 PM | 0 comments »

A new online personal finance management site called Mint rolled out its service today during a preview at TechCrunch 40. It bills itself as "the fresh, easy and intelligent way for people
to manage their money online."

According to the folks at Mint, the idea for the service came about when the company founder spent hours trying to set up his financial data on Quicken. Indeed, Mint is intended to be an easier, faster alternative to Quicken and online banking software. Mint's web site says it can be set up in five minutes, and it downloads information from your bank and credit card accounts nightly to keep up to date. It will also points out areas where you can save money, or even make money. Mint's tools point out how much money you have, and where it is going.

Mint also goes to great lengths to tell potential users that its service is anonymous and secure. The final selling point: unlike Quicken or similar software, Mint.com is a free service.

I haven't signed up for the service, and I'm not sure if I will . First of all, call me paranoid...but what if somebody DOES happen to hack into the site, no matter how unlikely? That's an awful lot of personal financial info to trust in the hands of a start-up online service.

Secondly, how does Mint make any money? If I'm going to hand over all of my personal financial info, I'd like to know they are going to be around for a long time. I'm sure that the "suggested savings" users can gain by moving their money to a higher-interest account elsewhere is sponsored by somebody (such as the bank they are suggesting).

I think I will take a "wait and see" approach with Mint. For now, I'll stick with my online banking and my checkbook register.

Festival of Frugality

Posted by T | 9:15 AM | 0 comments »

Savvy Frugality is a participant in this week's Festival of Frugality #92 - Ideas for Saving Money and Increasing Your Income. This is a collection of some great blog posts, including reducing the cost of electricity, giving inexpensive food as gifts, the hidden expenses in your home and more. Be sure to check it out!

Investing on a Dime

Posted by T | 8:52 PM | 0 comments »

I don't read a newspaper each day. Instead, I read my news online. By doing this, I save about 50 cents a day, and a tree. While reading article today on MSN.com, I came across a very interesting article called "Getting Rich on a $20,000 Salary".

This headline caught my eye because I make more than $20,000 a year, and I have been a bit remiss about investing my money. Right now, my investment cash is sitting in a simple rollover IRA.

Enter Earl Crawley. According to MSN.com, the 69-year-old parking lot attendant is now worth a cool $500,000, and he makes a salary of, yep, $20,000 a year. How did he do it?

Luckily, time was on Earl's side. He started investing whatever money he could scrape together, purchased stock in good, solid companies like IBM, and let compound interest do the rest. It took 44 years, but he now has half a million dollars. Earl could deposit his funds into a savings account which pays 4 percent a year, withdraw 4 percent a year, and continue to live on $20,000 a year if he chose to do so. He would also have Social Security to help supplement his income, so he could actually live on more cash than he currently does while working.

Earl has some good lessons to teach all of us:

1. Get started early. If you can't start early, start NOW.
2. Buy stock in good companies which pay dividends. These are companies which have been around a long time, and should be around for a long time to come. If you use a company's products every day and they are popular, that would be a good stock to hold.
3. You can get started for practically any amount of money. Some mutual funds will let you start investing for as little as $25.
4. Long term investments are just that...long term. Don't spend your long term savings on living expenses, vacations, cars, etc. This is money to help you live comfortably when you stop working.

As Earl has proved, you can live a frugal life AND still invest your money.

Just because I'm frugal does not mean that I don't enjoy shopping once in awhile, but the mall isn't really my scene. There are a few places at the mall where bargains CAN be had (the clearance rack at Old Navy and Steve & Barry's comes to mind). But, for the absolute best clothing and household item bargains, check out your local thrift store.

Thrift stores remind me of garage sales. You can find a lot of crap at them, but once in awhile you can find something used, but GOOD...and at a rock bottom price.

I have purchased many things at thrift stores...mostly jeans, sweaters, blazers and Halloween costumes for the kids. I have also found good used board games, books, light fixtures and CDs and DVDs. Apparently, some people have never heard of eBay, so they just unload their unwanted stuff at the local thrift store.

If you are unfamiliar with thrift store shopping or you don't know if you have a thrift store in your area, check out The Thrift Shopper.com. It's sort of a Google for thrift stores. I typed my zip code into the search function and found a couple of thrift stores near my home that I didn't even know existed. The search results also include store reviews from shoppers. This is definitely a web site worth bookmarking!

I remember about 10 years ago there was a major retailer (I'm thinking it was Sam's Club) that would let you buy "shares" of gasoline and lock in a price-per-gallon. The thinking was that you could lock in the price of gas at a lower price, and save money when the price of gas increased. I don't think that plan is around any longer, but it's too bad there isn't something similar around for groceries.

I have noticed that over the past year or so, the cost of basic food items has skyrocketed. I used to be able to buy a gallon of whole milk for $2.73, whole chicken for about 49 cents a pound and canned veggies were 3 for 99 cents. Now, milk is $4.00 a gallon, chicken is more than a dollar a pound and canned vegetables are about 69 cents a can.

Farm industry analysts are blaming a couple of different factors for the dramatic price increases: rising fuel costs and drought conditions in some parts of the U.S. Higher temperatures result in lower vegetable yields, cows produce less milk and that leads to higher prices. As more corn is being diverted to ethanol production to produce a more environmentally-friendly fuel, the cost of livestock feed is increasing, which leads to higher beef and chicken prices. I guess we can blame global warming for the high cost of food at the grocery store.

The U.S. Department of Agriculture acknowledges that the price increases at the grocery store are higher than normal. Food prices normally do increase about 2 percent a year. This year, they have increased about 4 percent.

My family has had to increase its food budget to keep keep pace with the rising prices. We used to spend about $100-$125 every two weeks for a family of four. We now pay about $200 every two weeks for groceries. Still, we try to shop smart in order to save money, and we buy items that can be used for several meals to help us stretch our food dollar. There are many tips on saving money on your grocery bill in my post Groceries on the Cheap.

Lately, we have started eating more meatless dishes, or dishes which require smaller amounts of meat. With these dishes, meat is more of a seasoning than it is a main course. For example, we have started eating more beans-and-rice dishes. Both can be purchases in bulk, and the price of each is still relatively low. It helps that my wife is a great cook. Last night, we had red beans and rice, and it was delicious.

We also purchase powdered milk. We use the powdered milk for cooking and baking, and reserve the gallons of liquid milk we purchase for drinking and breakfast cereal. A lot of people don't like the taste of powdered milk, but when you use it for baking and cooking nobody can tell the difference.

We occasionally bake our own bread, thanks to a bread machine we received as a Christmas gift a few years ago. I don't know that we necessarily save a lot of money by baking our own, but we do save money on gas when we don't have to drive to the grocery store just to buy a loaf of store-bought bread. I know the homemade stuff certainly tastes better.

Processed foods, such as convenience foods in boxes, mixes and the frozen food section of the store always cost more. It takes a little more time, but try to cook more dishes from scratch using basic ingredients. It really does help us save a lot of money. Also, when you shop the grocery store, hit the perimeter (the outermost aisles of the store) first. These areas include fresh produce, dairy and meats. These are the basic staples you need on your grocery list and they are also the aisles which contain the "healthier" foods. The innermost aisles of the grocery store contain the convenience items such as cake mixes, Hamburger Helper, cookies, crackers, soda, etc. which cost more and will run up your food bill with unnecessary expenses.

You may not be able to do much about rising prices at the grocery store, but with a little pre-planning and smart shopping, you can do more to stretch your food dollar.

The end of summer always brings a flurry of gift-giving at my house. I have a son with a birthday in August, another with a birthday in September, my birthday is in October, my wife's birthday is in November and of course Christmas arrives in December. That's five months of parties, gifts, cards and pictures. Unless we plan it just right, it can become very expensive!

One way I cut down on the cost of gifts is to comparison shop online. I have written before about finding shopping bargains on eBay, but good deals can also be had elsewhere online.

For books, I usually check out Half.com or Amazon.com first. The prices almost always beat whatever I can find at a local bookstore. The only time I buy books locally is when I'm in a time crunch, so pre-planning is a must when it comes to gift-giving.

Another great service is Shopzilla. You can search for whatever you are looking for at Shopzilla, and it will do all of the online comparison shopping for you, returing several finds and letting you select the one that comes closest to the price you want to pay. Like eBay, it will let you arrange the search results from the lowest to the highest price. There is now a Shopzilla search portal at the bottom of this page.

Froogle.com...a division of Google, is also another great site to use for comparison shopping, and it is very thorough and even includes eBay and Amazon.com results.

Sometimes, we will also make gifts for each other. My kids love to make their own greeting cards, and my wife prints greeting cards on the computer. Why pay almost $5 for a piece of cardboard that someone is only going to read once? Some of the best gifts I have ever received have been the ones made for me by my children.

We used to take the kids to Chuck E. Cheese, Discovery Zone and places like that for birthdays, but honestly, some of the best parties we have had have been the ones we have had at home. If you don't want a bunch of screaming kids tearing up your home, check with your city's parks and recreation department and see if you can reserve a party space at one of the city's parks. There is a park near my home with a shaded picnic area which has a birthday party taking place there nearly every weekend. The cost is nominal, and you can bring your own food, drinks and games. We always make our own birthday cakes. The great thing is that in our town you can check availability and make reservations online.

If you like sporting events, taking the family out to a game is a good way to celebrate a big day, too. While the price of a ticket to a pro game can be outrageous, we have a minor-league baseball team in town with a great ball park, and tickets never cost more than $15. The tickets can even be purchased online and printed at home. No waiting in a ticket line!

No matter how you choose to celebrate the big days in your home, the main thing to remember is it really doesn't matter how expensive the gifts and parties are (or aren't). What really matters is that you celebrate those moments with friends and family.

Get a Free Month of Lingo

Posted by T | 10:58 PM | 0 comments »

I have written here before about the fact that I use a VOIP phone service called Lingo. The phone hooks up to a box that is connected to my computer. I pay $26 a month for my phone service. For that amount of money, I get local and long distance calls, voice mail, caller ID, call forwarding, etc. I also get unlimited long distance calling to anyplace in the U.S., Canada and Western Europe.

Tonight, I got an email from Lingo which offers a pretty good deal. Each person who signs up for Lingo and uses my email address as the person who referred them will get a free month of Lingo service (if you sign up for their Chatterbox plan), free equipment, all the advanced calling features and a 30-day money back guarantee. If you are looking for lower phone bills at home and don't want to totally cut the landline and use cell phones, I highly recommend Lingo.

If you are interested in saving some serious money on your phone bill each month, just leave a comment to this post with an email address where I can reach you. I'll forward the Lingo notice to your address and it will have instructions on what to do next.

Why am I doing this? Well, aside from being a helpful guy, I also get a $25 credit to my Lingo account for each person I refer. That means I could potentially have a few months of free phone service headed my way (and you save money, too!). It doesn't get much better than free, now does it?

The Debt Snowball

Posted by T | 8:01 PM | 2 comments »

One of the goals of living a frugal lifestyle is to avoid going into debt. Unfortunately, I have accumulated some debt over the past couple of years (my wife became disabled and is not able to work), but I also have a plan to get out, or I should say, Dave Ramsey has a plan to help me get out of debt.

I don't really have much in the way of credit card debt. I have about $450 to pay off on a Home Depot card, and I have to pay off about $500 on a secured Visa card I have with my credit union. Other than that, my main expenses are ongoing medical bills due to my wife's medical condition, with most of that going to prescription drugs.

You might be familiar with Dave Ramsey. He hosts a radio show and also has a web site which promotes his Financial Peace University. Dave says no matter how much money you make, you can pay off your debt and eventually become debt-free.

I read over Dave's web site and I have listened to his show many times. Dave promotes what he calls the "debt snowball", in which he says you make a list of your debts, pay off the smallest one first while making minimum monthly payments on the other debts and then roll that payment into the payment you need to make on the next-highest debt...and so on.

My first order of business is to list my debts. I'm not going to list all of my wife's medical bills because that would make our list here unruly. Instead, I'm going to list debts that are bit more pressing because they carry interest and penalties. Here goes:

Car $15,000

Student Loan $4,500

Back federal taxes $2,600

Back state taxes $2,100

Secured Visa Card $500

Home Depot Card $350

These numbers are approximate, but you get the idea. According to Dave Ramsey's "debt snowball" method, I should make more than the minimum monthly payment on the Home Depot card first. My minimum monthly payment on that card is $17, so I'm going to pay more than that amount. I'll make $50 payments on the card every payday until I get it paid off. That should take about 4 ½ months. After that is paid off, I can apply the same payments to the next highest card, which is the secured Visa card. The other debts will have the minimum monthly payments applied, so my monthly payment plan will look like this:

Car: $350

Student Loan: $50

Back federal taxes: $50

Back state taxes: $100

Secured Visa: $20

Home Depot: $100

Once the Home Depot card is paid off, I will begin paying $120 per month to the secured Visa card account. So, by applying the "debt snowball" method, my payment schedule until I am virtually debt free (not counting monthly household expenses) will look like this:

Home Depot: 4 ½ months until paid off

Secured Visa: paid off 3 ½ months after Home Depot card at $120 per month

Back state taxes: paid off 11 months after secured Visa card at $220 per month

Back federal taxes: paid off 6 months after back state taxes at $270 per month

Car payment: paid off about 21 months after back state taxes at $620 per month

Using this "debt snowball" method, it should take me just under 4 years to become debt-free, assuming that I do not add any additional debt and I stick to this plan. While 4 years sounds like a long time, I must remember that it took me years to get into debt, and it will take time to dig myself out. Besides, I'm currently scheduled to be making car payments for the next 6 years. Paying off that car two years early will certainly feel good, and save me hundreds of dollars in interest payments. Also, by the time I am done I will have eliminated $720 of debt payments per month. An extra $720 per month in my pocket...or better yet...invested, sure sounds great. These amounts are rounded off and to some degree are estimates, but you get the idea.

Living frugally will help me stick to this plan, and go a long way toward helping me achieve my goal of being totally debt-free within the next five years.

Spending money to save money might seem like a self-defeating proposition, but there are times when spending a few dollars now will save you some money far into the future.

One purchase that immediately comes to mind is savings bonds. Buying savings bonds now may not seem like it's going to benefit you at all, but it's a safe investment and the money will always be there when you really need it. Just make sure you let the bonds mature before you cash them in.

Sometimes purchasing a car will help you save money. Here is a perfect case in point: the Saturn L-300 I owned for six years...the last two free and clear with no payments...was stalling for no good reason. Sometimes it would stop running while I was driving it down the highway. Not good. I'm a big proponent of buying used cars and letting somebody else take the depreciation, so I traded in my used Saturn for a used KIA mini-van. KIA is rated as one of the safest vehicles around, gets decent mileage, and the mini-van is the perfect size for my family. Sure, I have car payments now, but trying to maintain the Saturn would have turned into a money pit. I came across some message boards online which indicated the stalling problem was one which has plagued the Saturn L-300. I could either spend $10,000 trying to fix a six year old car...or spend the money on a nearly new used vehicle which runs perfectly. I chose to spend money to save some money.

I have also replaced nearly every incandescent light bulb in my house with compact fluorescent bulbs. The CF bulbs cost more...about five dollars each...but they save me about $20 a month on my electric bill. They were definitely a good investment.

Nicotine gum or patches are also an expense worth paying for if you are a smoker. A pack of cigarettes costs about $4 where I live. If you go through a pack every two days, that's about $700 a year. Nicotine gum or patches cost about $40 per package, and after a package or two you are (hopefully) smoke free. The savings don't just come from not having to purchase cigarettes anymore. You'll be healthier, which will save you money on doctor bills for years to come.

Once in awhile I will come across a great "10-pound meat sale" at one of our local grocery stores. The store sells 10-pound packages of meat at a very good discount because I'm buying it in bulk. The packages cost more than I would normally spend for chops or steaks or roast, but will last for much longer than the smaller packages I normally buy.

Paying for insurance, whether it's health, auto, or life, may not seem like it carries much of a benefit while you're paying the premiums, but it's much better to pay the premiums and get peace of mind than to have a real emergency and not have the insurance to fall back upon in case the worst should happen.

Buying something of quality that will last, instead of buying what is cheap, can sometimes save you plenty of money. I found this out when I went through a series of cheap frying pans I bought at Walmart. The non-stick surface would wear out after a month or two, and I'd have to buy another one. I finally caved and bought a much nicer frying pan from the Pampered Chef for about $80. It has lasted me about a year and it's still just as good as the day I bought it. I would have gone through a dozen $10 frying pans by now.

Those are just a few examples, but of course there are many more. Are there any instances in which spending some money helped you save money?

Say Goodbye to Starbucks

Posted by T | 7:13 PM | 3 comments »

I'm about to make a lot of Starbucks fans very angry.

In short, you're getting taken, had, fleeced....ripped off. Does anyone really...I mean REALLY need to pay $3 or more for one cup of coffee? I like flavored coffee drinks as much as the next guy, but between the high prices, too-strong coffee, waiters calling themselves "baristas" and the annoying names Starbucks uses in places of "small", "medium" and "large", I have to admit...I really don't get what the big deal is.

I have had a couple of specialty drinks from Starbucks over maybe the last year or so. That's about it. Some people that work with me in my office drink this stuff every day. They grab a cup on the way to work, and they stop at Starbucks again on the way home. That's six dollars every work day!

Let's do the math. There are 52 weeks in a year. Each week, there are five work days. We'll subtract four of these weeks for holidays, days off, sick days, etc. That's 48 weeks, times 5 days a week, for a total of 240 work days. If you were to spend $6 a day at Starbucks every workday, you are spending $1,440 a year....on coffee.

My son used to drink at Starbucks almost every day. One day, he asked me for some money. "Didn't you just get paid?" I asked.

"Well, yeah...but my money is already gone," he replied.

What did he spend it on? I asked him this question. He thought about it for a couple of minutes and then finally said "I have taken my girlfriend to Starbucks a few times this week." My 17 year old son was flat broke...because he bought his girls some coffee.

Now he knows better. He makes the coffee at home and uses flavored creamers to get the drinks he wants. But what if you want something fancier, more impressive, something more like....well, Starbucks?

Luckily, there are a ton of great coffee recipe webs sites online. Some of these recipes produce drinks every bit as good...if not better...than Starbucks. My new personal favorite is I Need Coffee. The great thing about this sites is that a lot of the recipes found here are submitted by people who make coffee drinks for a living.

Sure, you won't have a barista making you your coffee...but making it is half the fun, right?

My routine every morning is the same. I wake up, make coffee and turn on the TV. I watch the same show every morning: The Today Show. It's more out of habit than anything else. But, in between cooking segments and Al Roker's bad jokes, you can occasionally catch some good financial advice from Money Magazine editor Jean Chatzky.

Today, Jean was interviewed by Matt Lauer about Money Magazine's latest issue, which shows you 15 ways of making and saving money in 35 minutes or less. You can't accomplish everything in 35 minutes or less...it's each tip in 35 minutes or less...but you get the idea.

Most of the tips cover things like raising your credit score, getting overdraft protection on your bank account, negotiating lower rates on your credit cards and raising the deductible on your auto insurance. I especially like the tips about slashing recurring charges and shopping around online.

This article looks very similar to one that I wrote for this blog not too long ago. Check out my Top 10 Frugal Living Tips You Can Use NOW! entry for more money-saving ideas.

When to Buy Electronics

Posted by T | 8:29 PM | 0 comments »

The IPod...the IPhone...HDTV...Playstation 3....these electronic gizmos aren't just the latest toys on a wish list. They have actually become a part of our culture. "What's on your IPod?" has become a frequently-asked question, and each Christmas the latest video game system becomes the must-have gift for the kids.

The thing is, these devices are expensive. I like to be on the cutting edge of "what's hot" as much as anybody, but how does one buy these items and still live a life of frugality? When is a good time to buy electronics?

If history is any indicator, the answer is "wait a year or two". From the time Americans first started pressing an ear to the radio, electronics have always followed a pattern of selling at an extremely high price when they are first offered, and then coming down in price substantially as they move through the natural product life cycle and are replaced by the next "in" device.

When radios first started selling in the U.S., they looked like pieces of furniture...encased in wood, with a speaker covered in fabric. Some of the first, crude radio sets were sold to consumers for about $8.75 in 1915...about $180 in today's money. Obviously, basic radios have really declined in in price since then.

The same holds true for television. When TV's first went on sale in the U.S. they cost a couple of thousand dollars...at a time when little, if any, programming was available. That was about a year's salary back then.

So what does this tell us? It pays to wait! Purchasers of the IPhone found this out the hard way.
Just a couple of months after the much anticipated launch of the IPhone, Apple slashed the price from $600 to $400. The backlash by consumers who ponied up the big bucks was immediate, causing Steve Jobs to offer up an apology and a $100 store credit to those who has paid $600 for a fancy telephone.

I was one of the first people to jump on the compact disc craze. Back in the 1980's, I forked over about $600 for a CD player, at a time when few albums were available on CD, and CD's cost about $35 each. Now you can find a portable CD player for about $10, and CDs for even less.

I now have my eye on a widescreen HDTV, perhaps a plasma or LCD. But, the old tube version I have now, which I have had for more than 10 years, is still working great. I am in no hurry to run out and spend hundreds of dollars just for the sake of a clearer picture. One day, the tube on my TV will fail, and at that time plasma or LCD TVs will probably cost less than $200. Those TVs have already come down in price substantially since they were first offered just a few years ago. HDTVs first came on the market at a price of thousands of dollars. I saw one today in the paper for about $500...and that price is sure to fall even more.

Patience is a virtue...especially when it comes to electronics. If you can "make due" with the TV, phone or game system you currently have, big bargains are on your way a couple of years down the road.

"There is nothing to do."
"I'm bored!"
"Can't we go to the mall?"

If you have kids at home, you have probably heard these questions, or some variation of them. Your kids want to go out and do something...and that something usually costs money. Well, there is no need to plunk down cash at Chuck E. Cheese or spend money you otherwise don't have. Try these free low or no-cost ideas. We do this at my house, and the kids have had just as much fun, if not more, than if we had gone out and bought them something they really didn't need in the first place.

1. Go outside and play. Do kids actually do this anymore? When I was a kids, my mom would send us outside at 9 am and tell us to come home when it was time for lunch. Of course, it was a different time back then. My sisters and I spent hours at the local park, and that's where most of the kids in the neighborhood hung out. The parks now are much cooler, in my opinion. Many of them have a water park area, or a skate board park.

2. Go bicycle riding. It's a lot of fun, great exercise, and free (if you already have bicycles). If the kids are old enough, try taking a day trip by bicycle.

3. Go for a drive. With the rising price of gas, this certainly isn't free, but is still cheaper than the mall. Last summer, my family and I drove a section of Route 66 near our home. We printed some information we found on the Internet and looked for some of the old roadside attractions that still dot the Mother Road. We went to the Route 66 museum, which was inexpensive, and we even saw a motel where Elvis once stayed.

4. The library. My kids love the library. They always find a book or a movie that interests them, and they could spend hours there.

5. Play a board game. We have a big selection of board games, including many we picked up for next to nothing at thrift stores and garage sales. One of our favorites is Monopoly. It teaches kids to count money and the games can go on for hours.

6. Local museums. The museums in our area always have a new exhibit. Some charge an entry fee, others ask for donations, but compared to the price of a day or night on the town it's still a bargain and the kids will learn something new.

7. Movie day. Find a good movie at the library, or one that is already playing on TV, or one that is on clearance at the video store (I get a lot of cheap movies this way). Pop up some popcorn and have a "movie day". This is great for rainy days.

Do you have low or no-cost activities you do with your family? Leave a comment and let us know about them!

Saving vs. Charging

Posted by T | 8:35 PM | 0 comments »

As I have mentioned before, my late grandmother was the most frugal person I have ever known. She lived on nothing more than Social Security income, yet always had new clothes, plenty to eat, cooked and baked for the whole extended family and even purchased a new car once in awhile.

How did she do it? Well, she did two different things: she lived below her means, and she saved for things that she wanted. Sounds simple, right?

It turns out that many of us don't live like my grandmother did. Back in her day, people didn't use credit cards. If they didn't have the money to pay for something, they saved their extra money until they had enough to buy what they wanted. My grandmother cut back on her monthly expenses and deposited the money she saved in the bank. After about 2 years, she had enough money to buy a car that was only a couple of years old...and she paid with cash.

How many times have you found yourself the day before payday, and your bank account is at least $10 in the hole? That's not living below your means. Having extra money in the bank at the end of a pay period is living below your means.

My family takes one vacation each year. This year, we are going to San Diego, and the trip is coming up next month. It will actually be cheaper for us to fly to San Diego than it will be to fill our minivan with gas multiple times during a road trip, so I'll need to purchase three airline tickets. I'll also need money for food and entertainment expenses while we are in California. I figure I'll need about $1,200 to make all of this happen. So, I have about 45 days to save $1,200. Can I do it? Well, I guess I'm going to find out.

My wife and I plan to hold a garage sale to raise money for our trip. We also plan to sell some items on eBay, and I'll make about $400 extra this month from freelance writing. I have the possibility of making another $400 next month, but I don't know if I'll get that check before we leave for our trip so I'm not counting on that.

That leaves another $800 we must raise. A garage sale and some eBay sales may not total anything near that, so we are also going to have to cut back on some of our monthly expenses and save the extra money, just like my grandmother would have. I recently got a raise at my job which will give me an extra $200 per paycheck. Instead of using that money for household expenses, I plan to act like I never got the raise and stick the extra money in my trip account. I have two more pay checks before our trip next month, so that's an extra $400. Between the raise and the freelance earnings, I am now up to $800 for my trip. That leaves another $400 I need to raise for our vacation. Between the garage sale and eBay, I think that is doable.

And I won't need to charge any of my vacation expenses. Sure, the vacation will be great, but do I really want to spend the next year paying for it...with interest?

By following the teachings of my grandmother, I won't need to.

One of the biggest expenses in my household is prescription drugs. My wife, my kids and I all take prescription medications. The drugs my wife takes are the most expensive. She has diabetes. Until recently, we had no health insurance at all. With prescription drug bills totaling more than $1,000 a month, we were in serious trouble.

A lot of families in the U.S. find themselves in a similar situation. How did we survive on one income and still manage to get our medications? I don't want to say we did it easily, because it certainly was not easy, but we did find some ways to save money on prescription drugs.

1. Buy generics whenever possible. Ask your doctor if there is a generic equivalent for your medications.

2. Bargain shop. The price difference from store to store can be huge. In fact, Wal-mart recently lowered the price of many of the most common generic drugs to just four dollars.
Making a few phone calls can save you a lot of money.

3. Shop online...but only on reputable sites. Drugstore.com is a good option and it can save you some cash.

4. Mail order. If your health plan offers drugs by mail order, take them up on it. You can usually get three month's worth of medications at a time, and it comes at a cost savings.

5. Check out your state's prescription assistance programs. Many of these are based upon your income, but you may qualify.

6. Check out the web site of the company that makes your medications. Many pharmaceutical companies have their own prescription assistance programs. These are also income-based, but you could qualify for low priced or free drugs.

7. Partnership for Prescription Assistance. This site is a clearinghouse for prescription assistance programs.

A post entitled "How to Become a Millionaire" might seem out of place on a blog about frugality, but it's really not. A Canadian man who calls himself "Frugal Trader" is on a quest to become a millionaire by the time he is 35 years old. He's 28 now.

He hopes to accomplish this financial goal by investing wisely and living below his means. In other words, he is living a life of frugality to accomplish his goal of becoming wealthy.

Mind you, Frugal Trader and his wife earn about $105,000 a year, so their income certainly makes it possible for them to become millionaires one day. Can they do it within 7 years? That is the focus of Frugal Trader's blog, Million Dollar Journey.

Frugal trader maintains his anonymity while disclosing financial details such as the amount he has in savings, stocks he has purchased and Net Worth Updates.

I'm not that forthcoming, but from the information I have gathered from sites like Million Dollar Journey, this seems to be the formula for becoming a millionaire:

1. Live below your means.
2. Invest your disposable income in a mix of stocks and bonds. Do not sink all of your money into one investment.
3. Pay yourself first. That means taking 10 or 20 percent of your take home pay and investing it or saving it. Make it automatic through payroll deduction and you won't miss it.
4. Have an emergency fund. Emergencies can kill your finances. Be prepared.

That's it. Give it 10 or 20 years or even more and you too can become a millionaire. That doesn't seem like very exciting advice, and it's not. You won't become a millionaire overnight with this method, but that's not the point. The advice also seems a bit simplistic, and it is. However, how many people actually follow the four steps listed above? Not many...and that's why they are not millionaires...nor are they in a positive financial situation.

Live a life of Savvy Frugality and you CAN become a millionaire...someday.

Just one day after my post on AuctionAds they have sweetened the deal for new publishers. If you have a blog or web site of your own, you can now sign up for AuctionAds and they will deposit $25 into your account to get you started. The payout amount has been raised to $50, but with this new promotion you're halfway there! All you have to do to get started is click on AuctionAds and fill out a form to get your account. Also, for six months after you sign up, you will make 5 percent of the sales from every additional AuctionAds account you refer. For example, if five people sign up for AuctionAds from your site, and they generate sales from their ads, you get five percent of all their sales for six months. Sweet! Joining AuctionAds is free, and they'll give you $25! Not bad!

Thoughts on AuctionAds

Posted by T | 9:35 PM | 0 comments »

A couple of days ago, I decided to try out a new sponsor for this blog... AuctionAds. AuctionAds features live eBay auctions and displays items that might be of interest of visitors to the blog, but I believe you can also click on the banner and search for other items or register on eBay if you don't already have an account. My attempt to monetize this blog is twofold: I'm doing an experiment to see if it's possible to actually generate any kind of income with a blog and I'm giving a "test run" to different sponsors and affiliate programs to determine which are the most effective.

So far, AuctionAds has been pretty good. They deposited $5 into my account just for becoming an affiliate. Unlike some other affiliate programs, which require you to hit $25 or $100 in income before payout, the payout at AuctionAds is just $10, and they'll deposit the funds directly into your PayPal account. If you are interested in trying AuctionAds for yourself, just click on any of the AuctionAds links or on the banner and get signed up. It takes only a couple of minutes to fill in the form.

After all, writing about saving money and actually MAKING some money while doing it would have to be the ultimate in savvy frugality!

Getting Stuff for Free

Posted by T | 7:18 PM | 0 comments »

One of the best ways to sample new products without actually forking over the cash for it is to request free samples directly from the manufacturer. I have tried this over the past couple of weeks, and I have just started receiving the free samples I requested.

In order to receive the samples, you usually have to fill out an online survey of your impressions of the product. Other times, you simply fill out an order form with your name, address and information like gender and age. This is not to be confused with companies which promise you IPods for filling out long surveys and requiring you to sign up for other "participating" offers, like a credit card or a magazine subscription. These free samples really are free.

There are some great links to companies offering free samples over at Free Stuff Times. So far, I filled out a few offers there, and so far I have received a free sample of Dunkin' Donuts coffee (it brewed one pot, and it was delicious!) and some Listerine Whitening Strips. I have completed many others, but those are the only two I have received so far. It usually takes 6-8 weeks to receive your free samples.

Free Stuff Times also has some good suggestions for requesting free stuff, such as not using your phone number (unless you really want telemarketers to call you) and creating a "junk" email account on Yahoo or Hotmail to use when you sign up for the offers, so you don't flood your "regular" email with a bunch of SPAM and other marketing offers.

Another site I have visited to request free stuff is Totally Free Stuff. You have to be kind of choosy here, because they do include those "participating offer" deals I mentioned earlier, but they also include plenty of truly free stuff.

Another way of requesting free stuff is to contact the manufacturer directly through their own web site or by actually calling the number listed on the product packaging. I recently bought a Pur water filter for my kitchen faucet, but it wasn't working properly. It wasn't switching between filtered water and "faucet water" the way it was supposed to. My wife called the customer service number from the packaging, and they promised to send a replacement right away. Total savings: about $24.

There is plenty of free stuff out there...you just have to ask!

One of the biggest expenses in my home, after rent and my car payment, is cable TV. Yes, I hate to say it, but until recently my monthly cable bill was about $130 per month. I have recently trimmed that back to $80 per month.

How? Well, I realized there were plenty of cable channels I just wasn't watching, yet I was paying for them. So, I called my company and asked for "expanded basic cable". This gives me all of the local broadcast stations, along with news channels like CNN and Fox News Channel, as well as channels I do like to wach, such as the Food Network and the History Channel. My monthly cable bill also includes broadband Internet access, which I use for work purposes. I also have VOIP telephone service with Lingo, which also requires broadband Internet service.

But, this broadband connection also allows me access to some great television viewing which is available for free on my computer. If I wanted to cut back on my cable TV service even more, or altogether, I could. However, my kids also have TVs in their rooms, and I think they would revolt if I forced them to use antennae on their TVs (although that is quickly becoming the preferred choice for people with High Definition TVs who use High-Def antenna to pick up the High-Def signals from their local broadcast stations).

For example, most of the major broadcast networks now stream their programs online. These include CBS's Innertube service, NBC, ABC, FOX On Demand, and the CW.

AOL makes episodes of classic TV shows available on its In2TV service. The kids can also watch full episodes of TV shows from The Disney Channel online. You can watch TV channels from around the world at the Web TV List.

If you are a movie fan, you can check out old cheesy B movies that are now in the public domain at Public Domain Movies. Has your favorite TV show been cancelled? You might find it at Brilliant But Cancelled.com. They even have episodes of Roar, with a young Heath Ledger!

For documentaries and shorter video shows and clips, there is of course Google Video, YouTube, and Blinkx.com, which bills itself as the world's largest video search engine with more than 14 million hours of content. That should keep you busy!

All this TV rotting your brain? Find something educational at Science Daily, the History Channel (just clips, unfortunately), or PBS's Frontline, Nova, or Learner.org.

There's a lot of free TV to watch out there...and it's all on your computer!

I had received an email from another user of Freecycle that they had a twin bed frame they were willing to give me just to get rid of it. However, later in the day she emailed back and said her husband had already given it away.

But there was another email in my inbox from another Freecycle user who had something even better. It was a wooden captain's bed with two drawers underneath, and it was made for an extra long twin mattress and box spring, just like the set I purchased for $50 from somebody on Craig's List.

My son and I went and picked it up today. It's a decent piece of furniture, is going to give my younger son some much-needed storage in his room, and best of all...it was free!

The downside: the thing weighs about 300 pounds, but with some help we should be able to carry it into the house. I guess you can't complain about an item when it's free!

If you are looking for furniture or household items, I can't recommend Craig's List or Freecyle enough!

My Best Buy of the Week

Posted by T | 12:24 AM | 0 comments »

Every now and then, you just have to break down and spend money for the things you need. I'm talking about expenses other than monthly bills like rent, electricity, food, etc. This week, my youngest son needed a new bed.

He had worn out the futon we got him a few months ago, which we actually got off a curb. It was actually two futon mattresses with a sign on them which read "free - take me!". I knocked on the door and talked to the owner of the futons to ask why she was getting rid of them. She said she was moving and just didn't want to take them with her to her new place. So...free futons!

But, the mattresses had gotten dirty and a bit flat, so we decided to put them on the curb ourselves. My son has been sleeping on a camping cot for the past month or so, and it was definitely time to get him an actual bed. The camping experience got old real quick.

Enter Craig's List. My wife found a twin bed listed on the web site for $50...a much better price than the $129 we would have to spend to get it new. We drove over to the owner's house, and the mattress and box spring looked brand new. No stains, no odors...they didn't look like they had ever been used. My wife tried to haggle but the owner stuck to his $50 asking price, which I was happy to pay. It was good deal.

I then clicked over to Freecycle.com and posted a want ad for a twin bed frame. Within a couple of hours, I received an email from someone who said they had one they wanted to get rid of. Cost: free, of course! Total cost of a twin bed for my son, including mattress, box spring and frame: $50.

I supposed I could have picked up a mattress and box spring for free on Freecyle as well, but I didn't want a dirty or stained used mattress, so I was happy to pay the $50. It was steal a great deal...and my Best Buy of the Week!

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