This is the time of year that stores roll out their "back to school" sales on everything from pencils and pens to jeans and sneakers. My oldest son is no longer in school, and my younger son is homeschooled, but that doesn't mean my family doesn't take advantage of back-to-school deals.
We use this time of year to stock up on clothing items in our wardrobe. It's not just kids' clothing that is on sale this time of year. You can find deals at practically any store, for almost any clothing item. For other deals, you have to look a little harder. The hidden sales I have found recently have been at the local thrift stores.
That's right, thrift stores have sales, too. Not to be outdone by the regular retailers, many of them have "back-to-school" sales, mainly to clear out their inventory and make room for fall fashions. Last weekend, my family descended on one of our favorite thrift stores and restocked on casual clothes.
The sale was "98 cents for anything in the store". Less than a dollar per item for clothing...count me in! My son got three pairs of shorts and 3 t-shirts. I got two Hawaiian shirts and a pair of shorts. My wife bought a few clothing items and three handbags. Two of them were designer handbags. Total price? A grand total of $14! I'm lucky if I can find one shirt for that price at the retail stores.
Don't forget, summer is winding down, and many people are throwing that "one last garage sale" while they still can. Great deals can be had, and they don't have to come from the retailers!
This is the time of year that stores roll out their "back to school" sales on everything from pencils and pens to jeans and sneakers. My oldest son is no longer in school, and my younger son is homeschooled, but that doesn't mean my family doesn't take advantage of back-to-school deals.
As a parent, I know that back-to-school time signals two things: an empty house during the day and an empty wallet after buying school supplies. Factor in a college student in the household and the expenses climb even more. The Today Show recently featured some back-to-school savings, which you can catch in the video below. One of my own recommended tips: get those pencils, pens and notebooks at the dollar store. Also, office supply stores usually have some great discounts on those items as well. If you have a college student and they are going to school close to home, they may want to consider living with mom and dad. It's not as cool as living on campus, but it will save a ton of cash.
It has been awhile, but Savvy Frugality is participating in this week's Festival of Frugality, hosted by It's Frugal Being Green. Savvy Frugality's post The Magic of Price-Matching was among this week's posts in the festival.
Among the other posts I liked:
Back-to-School Deals Aren't Just for Students. That's right, I use those sales to stock up on pens and other home office supplies.
Grocery Hacks: How to Save Money on Groceries. Common sense stuff here, but still good advice.
What's Worth the Money, and What's Not. Sometimes it doesn't pay to go frugal.
There is more great reading at the Festival of Frugality, so be sure to check it out!
If you've been thinking about doing some traveling before the summer officially grinds to an end, you might want to check out JetBlue's "All You Can Fly for $599" deal. For the price of $599, you can fly to any of JetBlue's destinations an unlimited number of times.
There are some caveats, of course, but it's still a really good deal. The sale ends August 21st, and each flight must be booked at least three days before departure. If you are a no-show for your flight, there is a $100 penalty, and you can't fly anywhere else on JetBlue until the fee is paid.
I recently purchased airfare for me and my family, and paid about $800 roundtrip for the three of us. That's about $267 per person. If we were taking similar flights with JetBlue, the $599 tickets would pay for themselves after about two flights. Go jet-setting two or three weekends in a row, and not only has your ticket more than paid for itself, but you have also done a decent amount of travel for the year.
Many times, when someone is having a difficult time making ends meet, there are one of two causes. They are either spending more than they make (living beyond their means), they earn too little to support their lifestyle, or both. This can usually be fixed with a little savvy frugality...coming up with a sensible spending plan to ensure that one isn't living beyond their means. However, sometimes...frugality just doesn't cut it.
Some people are on a fixed income. They have no means of making additional income, and they have already cut their spending to the bone. Some retirees may fall into this category, as well as disabled people living on Social Security. The hammering suffered by 401k accounts and the stock market certainly hasn't helped. When frugality isn't enough, what does one do then?
Other cultures have actually found a way to deal with situations like this. Extended families share the same home. The elderly move in with their kids. The parents cared for the kids when they were children, now it is time for the parents to be taken care of. Most Americans don't do this. They opt for their own space.
A friend of mine has recently encountered a situation like this. They are widowed, on a fixed income, and have no prospects of earning more money. Their home needs repairs, the kids are going back to school soon, and there is "too much month at the end of the money." The stress levels are high.
What to do when frugality isn't enough? Sometimes...people need to ask for help. If friends and family are unable to lend a helping hand, or if the needs extend beyond a loan of a few dollars and expenses like food and housing become unmanageable, it may be time to look at some of the community resources available, to see if there are "safety nets" that you may not be aware of.
These may include:
1. Food banks or community gardens. If getting enough food is an issue, there are organizations that can help. Food can be obtained from food banks, church pantries and other faith-based organizations, community gardens (where you can trade work in the garden for the food it produces) and programs like Angel Food Ministries. If you have low income, the food stamp program may be an option. The program doesn't really use "stamps" anymore. Now they use something that looks like a debit card.
2. Housing assistance. If you are having a problem paying the mortgage, consider refinancing, if possible. Otherwise, there are housing programs available at the local, state and federal level. Some of these offer rental assistance, while others offer low-cost, low-interest housing for sale.
3. Clothing. Many organizations offer free backpacks, school supplies and back-to-school clothing for kids. Usually, the family must meet certain income requirements and register with an organization like the Salvation Army. This is still yard sale season, so don't overlook the bargains that can be found there, as well as the new and used clothing that can be purchased at Goodwill.
If times really are tough, and there are no prospects for income of any kind, there are programs that can help. That is why they were established in the first place. Many people don't seek help due to one thing: pride. If it's a choice between my pride and feeding my kids, I will choose my kids every time. Start at GovBenefits.gov. Fill out the questionnaire available on the site. When you finish filling it out, it will list the specific programs for which you may be qualified, and how to apply for them.
Angel Food Ministries
SHARE Food Network
Federally-funded Health Centers
Dress for Success
Nobody likes to be in a position where they must ask others for help, but help is available if you do need it.
One of the questions I get from readers of Savvy Frugality from time to time is "sure, those tips LOOK good on paper, but you don't really do all of that frugal stuff, do you?" Well, sure I do. I wouldn't put a tip on Savvy Frugality that my family and I don't follow ourselves at home.
One of the things I don't consider Savvy Frugality to be is a financial advice blog. I don't know the first thing about giving somebody financial advice. I am certainly no expert. I spent several years making all the wrong money moves. If anything, Savvy Frugality is about giving readers advice about what NOT to do, because I did some really stupid things with my money over the years.
It all came to a head about six years ago. My family and I literally didn't have a place to call home, we had no savings, and we had a pile of bills that needed to be paid. I knew that we had to do something, and we had to do it fast, or we were headed for disaster.
You think I would have learned my lesson several years ago, when I was about 25 years old. My son needed multiple surgeries on his ears, and we had no health insurance. As a result, we were forced to file for bankruptcy. While that was bad news, the bright side to that story SHOULD have been that we had a clean slate from which to start. We could start over and start doing all the right things. But, we lapsed back into our same old bad financial habits.
So, yes...I do actually follow the tips I pass along on Savvy Frugality. I couldn't go back to handling my money the way I once did. That was disaster. Remember, frugality isn't about denying yourself of a good life. It's about making your life better, getting your financial house in order, and sleeping well at night. It's about living within your means, whether you earn $10,000 a year or $10 million dollars a year. Nobody can spend more money than they earn and live a prosperous and peaceful life.
There are many personal financial blogs out there, and I read many of them. There are a lot of good ones, and I mention them here often. There are also some that are written from the viewpoint of somebody who I suspect might be talking the frugal talk...but are they walking the frugal walk? Do they have a "rock bottom" story? You know, that moment of clarity when they realized there had to be a better way to live?
You've got to walk the walk.
I have noticed a disturbing trend with my checking account lately, something that I literally haven't experienced for years: overdraft fees. About ten years ago, these unnecessary fees were a regular part of my existence, because I didn't really keep track of how much money I was depositing, and how much I was spending.
Fast forward ten years: I am almost obsessive-compulsive about checking my bank balance, and I know how much is being spent in my household, down to the penny. So, what gives? Why on Earth is an OCD frugal guy like me getting hit with bank overdraft fees, to the tune of about $200 over the last couple of months? The answer lies within my bank itself.
The banks in my area have not been immune from the hard economic times afflicting the rest of the country. Housing starts are down about 30 percent around here, so there aren't nearly as many home loans being processed by the bank. People are buying fewer new cars, as evidenced by the desperate tone of the TV commercials being aired by the local car dealers. The bank has to get its money someplace, and they have turned to bank overdraft fees.
My paycheck is on direct deposit which means I only receive a check stub every payday. The money goes directly into my checking account. What I have noticed lately is this: the bank may receive checks (debits) roughly around the same time as my deposits. In some cases, they are showing up on the exact same day, but at other times the debits are actually coming in to the bank AFTER my deposit, but they are being subtracted BEFORE my deposit is credited. Just a year or two ago, this was NEVER the case. If deposits and debits appeared on my account on the same day, the deposit was always credited first, and then the debits were deducted from that amount.
The result of this change in banking practice is bank overdraft fees. When I wrote the checks or used my debit card, the money was in the account, but the bank is hoarding these debits until the checking account balance is low enough that when they process them, it will result in an overdraft fee...about $28 per transaction. Those fees add up quickly.
I challenged the teller at my local bank branch about these fees. "What are you people doing?" I asked, "Holding on to my deposits and running my debits until you get $28 out of me?" The teller just gave me a knowing nod and said he would eliminate the overdrafts from my account, saying he was "sorry" and that "many other people have complained about the same thing."
So, my bank is intentionally trying to overdraft my checking account. I have been a customer of this particular bank for about six years, but as soon as I locate a suitable alternative (most likely my local credit union, where I already have a savings account), I'll be giving my bank the boot. It's a sad commentary on the bank, really. They are going to lose a loyal customer (I got my car loan through them, and always pay on time) over $28 overdraft fees.
My question for them (and other banks participating in this despicable practice) is this: is it really worth it?
You may not have noticed the fine print at the bottom of the screen during the latest Walmart TV commercials. If you have, you know that it states something along the lines that Walmart will match the price of similar items available at competing stores.
What does this mean for you? Well, if you are shopping at one of the Super Walmart locations (the ones with the grocery stores inside) and you know that a food items is cheaper at another local grocery store, Walmart will match that price.
There are no locally-owned grocery stores in the town where I live. They are all part of a national grocery chain, so there is a lot of competition between the food stores in our area. As a result, food prices are already a bit lower where I live than in other parts of the country.
This past weekend, my wife and I combed through the local grocery store circulars, made note of the prices of the items we needed to buy, and headed for Walmart. We hit the meat isle first. My wife had a spreadsheet of how much various cuts of beef, chicken and pork sold for per-pound at other grocery stores in the area. She grabbed the similar cuts at Walmart (which happened to be more expensive). The real magic happened at the check-out counter.
The clerk matched the prices of all of the meats, produce and other grocery items to the prices at the other area grocery stores. We probably saved about $50 total on our grocery bill, just through price-matching alone.
Why is this a big deal? It saved us the time, trouble, effort and gas which would have been required to drive to three other grocery stores to get the same prices. We still visited a couple of other stores which had the items Walmart didn't offer, or to take advantage of double-coupons. All told, we got about $400 worth of groceries for $300 through price-matching, shopping around, and double-coupons. Who couldn't use an extra $100 in their pocket these days?
It required some pre-planning on our part, but an hour's worth of pre-planning saved us about $100 and resulted in more food on the table at home. Get inventive, take advantage of price-matching, and you will be amazed at how much you can save!
What would you do if you were in danger of losing your home? If you had to come up with $2,500 right now, could you do it?
That was the situation faced by Angela Logan. Her home was facing foreclosure and she had to come up with $2,500 a month for three months straight to avoid homelessness. Faced with dwindling income and no emergency savings, Angela turned to what she knew best: she baked cakes. At $40 a pop, she figured if she sold 100 cakes she could save her house...and it worked.
There is a lesson to be learned from Angela: desperate times call for desperate measures. What is the talent you could fall back on to earn quick cash if you really, REALLY needed to do it? I faced a similar situation myself about 7 years ago. I had been evicted, my family faced homelessness and I had no money, no savings and no job. On a leap of faith, I took a job halfway across the country in a city and a state I had never been to before. I didn't know anyone, and I didn't have a home waiting for me. I drove cross-country in two days, arrived in town with a couple hundred dollars in my pocket from an unemployment check and moved into a roach-infested apartment in a really crummy area of the city.
I'm much better off these days. In fact, I earn more money now than I ever have at any point in my life. But back then, seven years ago, I did what I had to do. Desperate times called for desperate measures.
About four years ago, my wife had to stop working. She became disabled and very ill. Unfortunately, she earned more money than I did a the time, and we lost all of her income. I was working at my dream job, but it didn't pay well. I certainly couldn't support my family on what I was earning at the time. I walked away from a career I had built over a period of 20 years, and started a new career doing something completely different, but which paid much better. I'm happy in my "new' career, but I did what I had to do. Desperate times called for desperate measures.
We all face hard choices at times. Sometimes we are forced into certain situations, such as when I had to move to a strange city. Other times, we turn to a "big idea" which utilizes our talents and can help generate some much-needed cash, such as baking cakes to pay a mortgage.
If you needed to...really needed to...do you have a "big idea" you could fall back upon, like Angela? Could you move away from friends and family to take a job in an unfamiliar city? The time to ask yourself those questions is before you actually need to consider taking such actions.
As Americans sink deeper into anxiety over the failing economy, some are taking drastic steps. One of the behaviors that some are developing involves stockpiling...food, water, emergency supplies, etc. I'm not talking about stocking an emergency pantry in case there is an actual emergency such as natural disasters or prolonged periods of unemployment. These folks are developing something of a bunker mentality...in much the same way as people who were freaking out over Y2K almost ten years ago.
Don't get me wrong: stocking up for emergencies is not a bad thing. I have recommended it myself, prior to the current economic recession. However, I recommended having a few weeks to a few months worth of food staples on hand in case one were to lose their job and need to put food on their table for their families. The people quoted in a story about hoarders on The Today Show earlier today are stocking enough food for two years or more.
Preparing for bad economic times is not about worrying that the supermarket won't have enough food to sell. They will. Even during the Great Depression, there was plenty of food available for people to purchase. The problem was there were many people who couldn't afford it. We're not at that point yet. In fact, we're not even close. Stocking an emergency pantry is about having some food on hand in case you don't have the money to buy food, usually due to prolonged periods of unemployment. I still recommend having anywhere from eight weeks to six months worth of canned and dry good on hand, just in case.
You don't have to go nuts and spend your kid's college fund to buy this extra food, either. Whenever you see a sale on canned or dry goods (I get mine at Big Lots), buy a few extra cans and stick them away in a basement or closet designated as your emergency pantry. Then, hope you won't ever have to use it, but do use it before it expires. That's where the contents of my emergency pantry went. I stocked up prior to the current recession, but with expiration dates approaching, I finally had to eat the stuff. I'll be stocking up again soon....but nothing like the folks featured on The Today Show.
Besides, that poppy seed cake does not look appetizing at all. Watch the video...you'll see what I mean.
I have worked nearly every day of my life since the age of 18, although I had some part-time jobs before that, so I actually started working when I was 13. All told, I have already worked, in some form or other, 31 years of my life.
When I first started working, I was earning two dollars an hour. My first job was pulling weeds in soybean fields, and after that I worked my way up to picking rocks out of farm fields, and then to shoveling and cleaning out pig pens and chicken coops...a very stinky job.
At the time, I thought two dollars an hour was a lot of money. This was back in the late 1970s, and two dollars went a lot further back then than it does now. I could see a movie at the local cinema for 50 cents, and a can of Coke was only a quarter.
As I got older, I started working a series of jobs which paid me a salary. No matter how many hours a week I worked, I was only going to make a certain amount of money, and it was the same amount every single week. The only way I could earn more money was to either beg the boss for a raise (a demeaning process) or work another job on the side. Since the industry I was working in had notoriously low pay, I usually ended up working another job on the side. That is when I made a crucial discovery.
I was making just as much, if not more money, by working for myself on the side. One of my first "side jobs" was working as a DJ at wedding receptions. I owned my own equipment and earned about $400 for four hours of work, about as much as I was making working all week at my "regular" job. Of course, I had expenses and had to split the money with a partner, but the money was still good.
The first time I was ever laid-off (fired) from my "regular" job, I was unemployed for six months. There were times I didn't know where my family was going to get its next meal. I no longer had my disc jockey equipment, so I couldn't even rely on a "side job". This was during the Recession of 1991. I vowed I would never again rely solely on an employer to give me money. I would always have another way of earning a living, even if I lost my full-time job. I have always had something going "on the side" ever since.
I learned something important working in my previous career. As I pulled into the parking lot of my job in my rust-bucket of a car for which I paid $500 at a used car lot, the boss had a BMW parked in his reserved spot. When I asked the boss for a raise, I would get the response that "times are tough" and the business "couldn't afford to give me a raise", yet he would buy himself a new car each year, and he lived in a large house on the lake. My family couldn't afford to buy a house, much less one on waterfront property. We rented an apartment.
Back then, I was a slow learner when it came to matters of money and personal finance, but the crucial discovery I made after working for years for someone else (who always had more money than me) was this: You'll Never Get Rich Working for Someone Else. Those who own their own businesses gain the most from their employees' labor. Employees earn more money for their employer than they earn for themselves.
You might point out that famous actors and sport personalities make a lot of money, and they do. However, the people they work for still earn more than they do. The celebrities are are the most well-off are those who have an entrepreneurial mindset and have created a "brand" from their name. The rapper P. Diddy is an example of this. He's not just a rapper collecting a paycheck from a record label. He's also a business man, and it's safe to say he is a business man first and foremost. He doesn't rely solely on his recordings to earn his money. He also produces other acts, and he has his own clothing line. Arnold Schwarzenegger is another example. You may think the Governator made all of his money from bodybuilding or acting, but the fact is he earned his business degree from a college in Wisconsin and became a self-made millionaire long before he became a famous bodybuilder. He made his money selling nutritional supplements and making investments in real estate.
Those with an entrepreneureal mindset are the people who make their own money, make more of it, and don't need to rely on an employer to earn a living. Very few people get rich working for a paycheck. Those people usually live paycheck to paycheck. That's what I was doing.
For the record, I am not rich, and I don't own my own business. I do work a regular, full-time job. However, a good chunk of the money I earn is based upon my performance. The more sales I make, the more money I earn. As a result, I approach my job as if my client list were my business. My ability to satisfy them and sell them more product directly affects my bottom line. On top of this, I still have my "side" ventures. A substantial portion of the money I earn comes from the freelance writing I do for my own blogs and for other web sites and blogs. The more I write, the more I earn. I determine how much I do, and when. It may not make me rich, but in a sense I am working for myself on my "side job" and earn more-per-hour/project than I would at my "regular" job.
At some point in time, I may completely work for myself. As I mentioned, I'll never get rich working for a paycheck from someone else. Not everyone can strike out on their own, of course, so there will always be "employers" and "employees", but everyone does have a talent that they own and possess. I believe that everyone has a skill set for which someone else will pay good money. What is yours? Do you have a hobby that would help you produce goods that someone else would buy? Do you possess knowledge, such as web site design, that you could use as the basis for your own business? What is your "brand?" What do you do really well? What would you do if you weren't chained to the "rat race?" Once you determine that, you have taken the first step toward developing a way of making your own money, rather than relying on someone else's salary.
I got some good new recently: I got a pay raise at work. It's not some little cost-of-living pay increase, either. It was a good, respectable multi-thousand-dollar-per-year raise. Considering the current state of the economy, that's pretty darned good. There should be lots of extra cash for saving and investing and living it up (just a little), right?
Well, not exactly. While my pay has recently increased, so have my bills. It's not that my family has created new monthly bills or made any new, large purchases. We certainly haven't. So why doesn't it seem like I'm rolling in the dough?
The bills that have increased are things over which we have no control. My gas and electric bills have increased because the utility services have increased their prices. Gasoline is more expensive. So is food. Also, medical bills and prescriptions seem to have gone up in price, too. These are things we must pay for, and we've been very careful about shopping for the best deals, when available.
Still, my family had a "business meeting" this week. We need to locate areas where we can cut back on expenses. My son's digital video recorder box, which has had for a year and is provided by the cable company, is going to be a casualty. "But it's only $11 per month," he protested. That's true, but that also adds up to $132 per year. Locate 5 or 6 other small expenses like that, and we're saving almost $800 per year. That's money I can apply toward my son's college fund. He seemed to like the sound of that.
Nobody in my home has lost a job. I have been the sole bread-winner for the past three years, and my wife homeschools our son. I make extra money on the side with freelance projects. My earning capacity has actually increased over the past year. However, climbing expenses have whittled away our spending power.
Sometimes, no matter how frugal we are, we still need to adjust our budgets to cope with outside economic forces which are beyond our control, such as climbing prices. We either need to earn more money, which I'm already doing, or cut costs, which is what we will need to do. Last year, I had predicted the economy may start to recover around September or October of this year. There are some early signs that it may be doing just that, but the recovery is going to be very slow, which I also predicted.
Even is you took steps before the recession to try and weather the storm (which we did), it's always a good idea to reassess your finances every couple of months, and identify areas of spending which can be cut eliminated altogether.
The lesson: no budget should be carved in stone. You must be able to react to market forces (what other people are doing that affects your bottom line) and adjust your budget accordingly.
Today is a sad day in the world of advertising, as-seen-on-TV products, and pitchmen. Billy Mays, known for his high-decibel sales pitches for products ranging from Kaboom! to Oxyclean, has passed away at the age of 50. He was found in his home, unresponsive. There were no signs of foul play.
I have always been a fan of Billy Mays and enjoyed watching his infomercials and his TV show, "Pitchmen" with Anthony Sullivan. I have purchased products pitched by Billy Mays and reviewed them here at Savvy Frugality. Each of the products I have tried which were endorsed by Billy worked as advertised. One of the things I learned while watching "Pitchmen" is that Billy Mays would not agree to advertise a product until he tried it himself and it worked as promised. That's a rare thing in the world of television advertising and infomercials. He personally put his stamp of approval on the products he endorsed. Billy Mays was also one of those celebrities who seemed genuinely nice.
I will miss the presence of Billy Mays on television. Even if you didn't purchase his products, he was entertaining and larger-than-life. There is no other pitchman like him, and there will be a great void on television during the two-minutes between some of my favorite programs.
He will be missed.
"Where did the money go?"
How many times have you had a conversation in your house that started with this sentence? I have to admit, my wife and I have that conversation on a few occasions, usually when one of us has spent some money and failed to notify the other person. When that happens, it's easy to lose track of your expenses, and then you wind up with unnecessary expenses which only drain your bank account and give you absolutely nothing in return. With a little communication and pre-planning, you can avoid these unnecessary expenses.
1. Overdraft charges. It's simple, really. Don't spend more than what is in your checking account, and you won't incur this unnecessary expense. At my bank, the fee per overdraft is $28. Rack up 5 or 6 of those, and that really adds up.
2. Late payment fees. Hey, stuff happens and sometime your late, right? C'mon....plan ahead and avoid paying more for your bills than you really need to. The late payment fee is a penalty. You aren't receiving anything from it, other than a lighter wallet. Repeat this mantra: pay all bills on time.
3. Credit card finance charges. If you must charge something to your credit card, only do so if you can pay off the balance at the end of the month. If not, you'll wind up paying finance charges, and some credit cards don't have very favorable rates. Once you get on the ten-year payment plan on those credit cards you could end up paying much more for the item you charged than what it was actually worth in the first place.
4. ATM fees. I will only use my debit card at machines where the transactions are free. Sometimes the fee is only a dollar, but make frequent transactions and that dollar starts to compound exponentially. Worse yet, some ATMs charge fees of up to $5 per transaction. What a waste of cash! If you really must get cash, try going to the teller at a bank (assuming your bank doesn't charge you for that service, too).
5. Extended warranties. Is it any secret that most extended warranties are just a way for businesses to get more cash out of the customer during a sale? Every time I buy a new appliance or TV, a salesman is always trying to sell me an "extended warranty." What does that say about the product? If the manufacturer's warranty is worthless, then you probably shouldn't buy that item in the first place. In the interest of full disclosure, I did purchase an extended "bumper to bumper" warranty on my then-new minivan. The cost of the warranty was minimal...a few dollars a month....and that warranty has more than paid for itself many times over. However, a vehicle is worth a lot more than a TV. Besides, a lot of appliance and electronics warranties have so many disclaimers that they are practically worthless.
Special Thanks to FrugalDad.com, for naming Savvy Frugality one of "The Top 50 Frugality Blogs That Will Help You Save Money." We love being recognized by our peers!
It happens to the best of us. An emergency comes up, and you've go unexpected expenses. Perhaps a bill payment slipped your mind. Perhaps your past payment record with a debt was less than...responsible. Now, the debt collector is calling, and they aren't playing nice. What do you do?
If this sounds like an experience you have had, you first need to know your rights as a creditor, and how to deal with debt collectors. The Fair Debt Collection Practices Act spells out these rights, and what debt collectors can and can't do. For example, debt collectors can't threaten to throw you in jail in you don't pay your debt (there is no debtor's prison in the U.S.). They can't threaten to sue you if they have no intention of doing so. They can't continue to call you if you have notified them in writing to stop. They cannot falsely claim they are attorneys or call you all hours of the day or night. The Federal Trade Commission has a pretty good overview of the Fair Debt Collection Practices Act on their website.
So now that you know your rights, how do you address this pesky debt and the collection calls?
1. Don't assume you owe the debt. You may not even actually owe the debt, or the amount the debt collector says you do. You have the right to request validation of the debt. Send the debt collector a letter (always do this in writing and always send the letter certified, return receipt requested, so they can't claim they didn't receive it) asking for validation of the debt. If they can't provide proof, they can't keep hounding you for the money. Don't admit the debt is yours until they can provide proof.
2. If you owe the debt, ask for a payment plan if you need one. Always get the details of this plan in writing, and never, ever give the debt collector your bank account information and let them do automatic debits. They can, and will, take out the amount of the entire debt if you've got the money in your account.
3. Find out the statute of limitations on the debt. Debt collectors can't chase you for years seeking payment for a debt. There is a statute of limitations on debt. Find out what it is for your state. Scavenger or "zombie" debt collectors will purchase old debts for pennies on the dollar and come after you for the full amount. If the debt is past the statue of limitations, don't even reply to them. The exceptions to this are tax payments, student loans, child support and civil judgments.
Keep in mind, not all debt collectors are unethical. They have a job to do, too. They just want to collect money for a debt that is owed. But, there are also some bad actors out there, and knowing your rights and how to deal with them is the best way to protect yourself and your credit score.
Last year, Savvy Frugality mentioned that Tata Motors in India was developing a brand new car that would sell for $2,500. Unfortunately (or maybe fortunately, depending upon how you look at it) the ultra-cheap car is only available in ultra-crowded India...until now.
Tata says it is looking at introducing the $2,500 car in the U.S. by 2012. It won't be the same version as the one sold in India, where crash and emission standards aren't as...shall we say, stringent...as they are in the U.S. Of course, that could drive up the price of the $2,500, which is really its main selling point.
The car is definitely not frills. It tops out at 75 miles per hour and has no radio or air bags. But hey...it's $2,500. GM is said to be working on smaller cars, now that is owned by the U.S. taxpayers and has filed for bankruptcy. It Tata enters the U.S. market, could this possibly spur a "micro car" battle amongst automakers?
I like the price...but I also like my radio and airbags.
In what may be a sign that restaurants are desperate to drum up business during a rough economy, some have begun resorting to doing something that seems to go agains their business plan: giving away food for free.
I suppose the hope is that if customers go to the restaurant for freebies, they also buy something to go along with the giveaway. Sonic Drive-In recently had a "free rootbeer float" night, something that I believe they have done in the past. Another restaurant, Shorty Small's, is giving away a free hambuger (one per table) if a customer tells the server "give me the burger, baby!" Each Wednesday throughout the summer, Arby's is giving away a free menu item with the purchase of a sandwich or a soft drink, depending upon the special of the week.
Most of these "free food" offers are found at fast-food or chain restaurants. Other restaurants aren't exactly giving food away, but they are making it much cheaper. Several fast food chains have expanded their "dollar menu" or "value menu" offerings in an effort to appeal to a wider customer base. Some restaurants/taverns are offering free food along with drink purchases during Happy Hour.
These lower prices are, of course, good for customers. However, keep in mind that most of them still require a purchase, and it can still be cheaper (and healthier) to just prepare your own food at home. But, if you plan to go out to eat anyway, go ahead and shop around. You just might be able to score some cheap (or free!) food.
I really look forward to the warm weather season. It's not so I can have backyard cookouts, go to the beach or go fishing, although those are also great benefits to the summer. No, I look forward to the warm weather because that marks the beginning of yard and garage sale season!
While most people scour the circulars in the Sunday paper to find their best bargains, I hold off until garage sale season and shop for the items I want second-hand. Sure, there are some people who overcharge for their garage sale items, so some shopping around is still necessary. However, the prices I pay for the items I want beat any sale that any of the retailers are offering, hands-down.
Garage sale season has really just kicked off where I live, but my family has already scored some great buys:
A bicycle for my wife. She has been wanted a bicycle for a couple of years now and finally found a nice used one. The seat needs to be replaced, but the bike cost her a whopping $5.
Assorted flower pots and planters. At my house, we grow herbs and tomatoes in large flower posts. These run $8 - $15 at Home Depot. We got them for 50 cents each.
Jeans for my son. These usually run $15 to $25 at the store, but we got some good second hand jeans for $2-$3 a pair. My son is just going to ruin them while he's camping and playing outside anyway, so why buy them new?
A charcoal grill/smoker. I've been wanting a smoker for my backyard barbecues for a long time now. We finally scored a Brinkman smoker at a yard sale. It retails for about $90. We got it for $5.
Those are just a few of the bargains we have found so far. We are on the lookout for a dining room table and chairs next, to replace the set we have that is several years old and falling apart. One benefit to the current state of the economy is that people are selling more of their belongings at yard sales to raise cash, and some good bargains can be had, and you're helping them out at the same time.
The next time you have a "want" instead of a "need", check out those yard and garage sales and save yourself a ton of cash!
The Great Recession of 2008-2009 is over, at least according to one expert. Economist Robert J. Gordon says the economy has hit rock bottom and that everything is uphill from here. Usually, these kinds of pronouncements are made after they have become painfully obvious, such as when the government pronounced the country was in a recession several months after everyone already knew we were. Gordon says things have gotten about as bad as they are going to get.
But, not so fast. Now, I'm not an economist, and Gordon is certainly smarter than I am when it comes to matters of the national economy, but I live in the "real" world. Even though I have chosen not to participate in the recession, it is still impacting all of us. We are all paying higher prices for everyday necessities, like food. The housing market is still in the dumper. My clients at work still complain about lower revenues.
So, how will we know when we are REALLY out of the recession? I think we should look at three indicators:
Employment will go up significantly. When we see jobs coming back in a real way, we'll know we're on our way out of the recession. Right now, unemployment is still climbing, and is expected to until 2010. I think we can see the beginning of the end of the recession sometime next year.
The housing market will rebound. I highly doubt we'll see the kind of housing speculation and investment we saw a couple of years ago for quite some time, when even reality shows were featuring "house flippers". But, if you see new housing construction start to increase and some of the houses that have been languishing on the market start to sell again, we'll be climbing out of the recession. Will banks and mortgage lenders have learned their lesson and not sell houses to those who are not qualified? One would hope so.
The stock market will recover. When the housing market starts to recover and banks stop failing, we should see the stock market start to make a comeback. When investors start trusting the market again, we'll see the stock market climb and businesses beginning to make investments and hiring workers.
Not everyone will enjoy a recovery. Some businesses will not recover. More banks may fail. Major employers, like General Motors, may not look the same as they did a few years ago. That's not necessarily a bad thing. In the business world, it's survival of the fittest. If businesses are operated lean and they have good management, they will weather the storm and possibly come out stronger than before. Other businesses and retailers may fail, and be replaced by something better. That's the way it has always been, and this recession is no different.
How much longer will the recession last? This one has already lasted longer than most recessions, and for that reason I suspect it won't go on much longer. Perhaps we'll start to see some real improvement and recovery in mid-to-late 2010, but of course it won't happen overnight. Recovery will be a process that may last the next few years.
We have entered an era that I honestly didn't think I would see during my lifetime. Millions of people across the U.S. are adopting a frugal lifestyle. All of a sudden, I don't feel like the "odd man out" anymore. My friends and family used to mock my frugal ways. Now, they ask me for tips on saving money.
The current state of the economy has something to do with this, I'm sure. Every day, we are subjected to news stories about how the economy is continuing its downward slide. Local and national newscasts have a money-saving feature almost every day. When times were good, few people cared about watching their spending and living frugally. Now, it's a necessity.
One of the questions I get a lot is "where should I put my money?" People don't know if they should invest it, put it in a savings account or stick it in a mayonaisse jar and bury it in their back yard. The answer is: it depends.
Here is my rule of thumb: Put money in your savings first, until you have 6-9 months worth of living expenses socked away. Start small if you have to, but save something. After that, whittle away at your high-interest debt. Then, tackle the rest of your debt. Once you are out of debt, then you can start sticking money in retirement accounts, college accounts, etc. I actually siphoned off quite a bit of my emergency savings earlier this year due to unexpected medical expenses, but I'm working to rebuild it again. That's why it's called "emergency savings", right?
I do see more people at my job packing lunch at home, rather than eating out. They buy new clothes less often. They go out on the weekends less often. They are hanging on to their money.
I have come to call this phenomenon "force frugality." People are being frugal because they feel they have to. The real question is when the economy improves, will this newfound feeling of frugality last?
Today's post is courtesy of The Dollar Stretcher:
1. There are two kinds of garage sales. There are the ones where people want to make money and the ones where people want to get rid of stuff. The object is to find the ones where people want to get rid of stuff.
2. Get a map and newspaper and map out your route. Photo copying maps from a phone book works great. Using this method, you can easily visit 25 sales an hour. If you're a beginner, you might hit neighborhoods you are familiar with first.
3. If at all possible, leave the kids at home. If you must take them, use a baby backpack or an umbrella stroller to make it easier. Give older children 25 or 50 cents and let them see what good deals they can get. Kids love picking out gifts for grandparents, siblings, parents and other family, and bargain hunting helps them learn about money. Bring snacks (animal crackers, cereal, and crackers in plastic bags work well) and cold water for everyone and plan ahead for potty breaks. If you have children with you, it's best only to plan on hitting about five sales until you see how they do.
4. Wear cool, comfortable clothes. Bring lots of change and one dollar bills. Put your money in your pockets so you don't have to worry about carrying your purse. Also bring a tote bag in which to carry your finds as you walk.
5. When you find something you're not sure you want, pick it up and carry it around while you continue looking. Otherwise, someone else may take it while you're trying to decide.
6. Always ask politely if they will come down on the price. Most of the time they will. Every once in a while, some things are so reasonable that I do not feel right asking for less. Finding women's sweaters at $1 each isn't bad, but I still ask if they will take 50 or 75 cents. If I find a name brand sweater in perfect shape for 25 cents, I don't ask for less.
7. If there is something you really want, but the seller is asking more than you want to pay, offer them a lower price. If they say no, leave your name and number and ask them to consider selling it to you at your price if they still have it at the end of the day.
8. Always check items well for hard to see tears, stains, or breakage. Remember it is a garage sale so everything won't be perfect.
9. It is best to go early, but don't panic if you can't. Sometimes you get the best buys after lunch when sellers are tired and don't want to have to drag everything back into the house. It's great to go on the last day of a sale because most sellers will almost pay you to take things so they don't have to keep them.
10. If you don't have success in one part of town, try somewhere else the next time. Sometimes the best garage sale neighborhoods are the ones you don't expect.
Don't be embarrassed about buying at garage sales. Some of the wealthiest women in the world love garage sales. Martha Stewart and Oprah are among them! When you're done, go home, put up your feet and have a nice glass of ice cold lemonade. Grab the phone and call someone who will share the excitement and appreciate your good buys. Garage sales are like old fishing stories. Die-hards always brag about the one that got away!
Jill Cooper and Tawra Kellam are the editors of LivingOnADime.com. Jill Cooper raised two teenagers alone on $500 a month income after becoming disabled with Chronic Fatigue Syndrome. In 5 years, Tawra and her husband paid off $20,000 personal debt on an average income of $22,000 per year. For free tips and recipes, visit LivingOnADime.com.
MSN Money recently featured an interesting slide show about "dollar store deals and duds". I purchase a lot of items from dollar stores, although I'm highly selective about what I purchase there. Some of the "deals" at dollar stores aren't deals at all, and you can actually find some items for less than a dollar, especially if you use coupons.
I agree with MSN Money's selection of the deals and duds at the dollar stores. Items listed as deals: household cleaners (I don't buy mine anywhere else), shampoos, spices, and kitchen utinsels. The duds: electrical products, batteries, toothpaste and vitamins and drugs. The duds made the list for safety reasons and because of prior recalls. I also buy plastic cups, office supplies, artificial sweeteners and gift wraps and gift bags at the dollar stores.
Although everything seems like a bargain at the dollar store, you need to exercise some good judgement, keep a price book, and determine if that "deal" at the dollar store is really a bargain.
I saw today's headline on a bumper sticker. "I refuse to participate in the recession", it said. That's funny...I've been saying that for months now.
There is a difference between being prepared for a recession, making smart money moves during a recession and throwing up your hands and admitting defeat to a recession. Every day, I see doom-and-gloom stories on the news about how we are currently in the worst economic downturn since the Great Depression. First of all, I don't think that is even true. The recessions of 1981-82 and 1991 were pretty bad. The one in 1991 was the worst for me, because I was out of work for six months. There was literally no work to be had. Yes, a lot of money has been lost during this recession, but that was due to a lot of bad decisions by a lot of people. Unfortunately, many innocent bystanders got caught up in that web.
I'm not saying that things aren't serious right now. They are. Unemployment continues to climb and the banking and housing sectors of the economy have been battered. But, what if you have a job, rent an apartment (or own your house free and clear) and didn't have a bunch of money socked away in the stock markets? Are you feeling any pain?
The answer is probably "no". I socked away some money before the recession really got into full swing, but I still buy stocks. I keep my eye out for other job opportunities "just in case", but I have also noticed that there are still jobs to be had where I live. The main difference I have noticed between now and a year ago is that some things cost more money now, especially food.
It does no one any good to stick your head in the sand and pretend the economy is just fine. It isn't. However, I think it does more harm than good to become mired in the belief that things won't get any better any time soon. Where is the optimism? As long as the populace remains pessimistic and refuses to make credit available, start businesses, invest in business (i.e. spend money), the recession will only be prolonged.
We need to regain our confidence not only in capitalism and our economy, but in ourselves. Despite the dire predictions by the International Monetary Fund that the recession will only get worse and could last another year, I remain hopeful that the housing industry will eventually flush out the toxic loans from its system, banks will return to common sense lending and consumers will take a more active role in managing their finances.
I am not participating in the recession. I will continue to work hard, save money for the future, and support my local businesses with my purchases. It is better than the alternative.
After recounting some of the great deals I have managed to get here at SavvyFrugality, you might be under the impression I am the Coupon Czar. The truth is: I'm not. My wife is. In this guest post, she reveals how she recently got free Coke products, snack foods and a $25 gift certificate from Restaurant.com:
With the cost of groceries going up luxury items such as soda and snack foods not to mention going out to eat are becoming a thing of the past. Personally, I miss being able to go out to eat without there being a special occasion to justify the expense. So my mind started to work in that cheap, domestic goddess way and I realized that I just needed to use my thrifty skills to get me what I want without going bankrupt.
It all started with one coupon: a Walgreens coupon that gives you a $25 gift card if you transfer a prescription. Since CVS and Walgreens are major competitors, CVS will now accept Walgreens transfer coupons just for filling your regular prescription with them. Some CVS stores will tell you that you need to transfer a prescription, but I simply tell them that I’d be happy to transfer my script to Walgreens if they don’t take the coupon. I have yet to have a CVS store turn me away after saying this. It also helps if you go to a CVS that is directly across from a Walgreens. Might I also suggest going into a Walgreens store and grabbing a stack of circulars whenever they run their $25 gift card coupon as they don’t do it too often, but when they do, their expiration dates are usually good for a couple of months.
Once I have my gift card in hand, I wait for a sale on Coke products. CVS will usually rotate which brand is on sale every week. If Pepsi is on sale one week, I know that next week it will be Coke. The majority of times CVS will run a special giving you their in-store Extra Bucks if you buy a certain amount of Coke, which can then be used on some snack foods.
You may be wondering why I’m partial to Coke, but the truth is I’m not. I simply collect the points that Coke offers and redeem them on their website: mycokerewards.com. Currently the Coca Cola Company is offering a restaurant.com certificate for a certain amount of points. What does this mean for us? Quite simply put, I now have a $25 gift certificate for a local restaurant that I’ve been dying to try, I’ve gotten an endless amount of free soda and snacks and all it cost me was the normal co-pay for my prescriptions. So this weekend I’ll be going out to dinner and it’ll hardly cost me a thing.
The effects of the slowing economy can be seen and felt nationwide. Living through a recession has brought many people back to what is really important in their life. Living a simpler life, appreciating the things that really matter and being held accountable for our actions are just a few of the lessons learned during tough economic times. Families are adopting frugal lifestyles in part due to necessity, in part because it is the now the “in” thing. For individuals that have not had to live on a budget, the adjustment can be a bit rough at first. Here are a few tips that can help anyone survive budget burn out.
- Focus on your goals- It is not unusual to feel frustrated and resentful at some point when you just want to throw caution to the wind and spend your paycheck without worrying about the consequences. Clearly this is both unrealistic and irresponsible so most people continue on the right path by paying down debt, saving money or working toward financial goals. It is important to remember why you are making adjustments in your lifestyle today and remain focused on the goals you are working toward.
- Indulge yourself- Living on a budget is similar to going on a diet. In both cases you have to change your lifestyle in order to find success. You also have to realize that it is unrealistic to give up everything you love so remember you can eat that piece of chocolate cake or get a manicure. The key is moderation, in your previous life you might not have stopped at one piece of cake or perhaps you just had to have the manicure and pedicure. Living on a budget shouldn't mean depriving yourself or your family of everything you find enjoyable, rather it involves making a conscious decision to stop spending money wastefully.
- Get creative- Many people don't realize how much money they spend entertaining themselves or their kids. When you eliminate these expenses from your budget you may find yourself with a lot more time on your hands. This is a great opportunity to get reconnected with your spouse and kids. Use your imagination to think of new activities you can share together or dig out the old board games for a walk down memory lane. It is important to not view your downtime as a punishment but instead use the time to slow down and enjoy the simpler things in life.
People who live on a budget or practice frugal habits historically have been thought of as either poor or penny pinchers The fact is people who live on a budget and choose to not spend every cent they earn have far more control over their finances than folks who spend now and later worry about the consequences.
This headline over at MSNBC.com caught my attention. I'm pretty good at saving money on groceries. In fact, I once got well over $100 worth of groceries for about $15. I thought that was excellent, but it pales in comparison to what Stephanie Nelson rakes in. How about $100 worth of groceries for 25 cents? Yep, Stephanie has me beaten by a mile.
Stephanie is otherwise known as the Coupon Mom, and runs the Coupon Mom website. The Today Show recently featured her and went along on a shopping trip. She passed along the usual information we feature here at Savvy Frugality:
1. Set aside brand loyalty. Don't be tied to one brand when buying groceries.
2. Make a list of the things you need. Stick to it.
3. Use those coupons, including online coupons.
4. Wait until items go on sale to use the coupon.
5. Use in-store coupons, too.
I would also add a few of Savvy Frugality's tried-and-true tips:
1. Don't overlook store brands or generic items. They're fine.
2. Don't use coupons to get things you normally wouldn't buy.
3. Stay away from the snack and soda aisles. They're expensive, and let's face it, they're not really groceries.
4. Take advantage of the store loyalty cards.
5. Look for those stores which offer "double coupon" days.
Watch how the Coupon Mom bought $100 worth of groceries for 25 cents, and then check for more food saving tips at The Dollar Stretcher and Savvy Frugality.
Savvy Frugality is branching out and has spun off a brand new blog: Great Depression Recipes.
This blog grew from a blog post about Great Depression Recipes here at Savvy Frugality, and it really took on a life of its own. It is one of the most popular posts at Savvy Frugality, and I thought that since there is so much interest it is probably a subject that should have its own blog.
My grandmother lived through the Great Depression, and when I was a young boy I grew up listening to her stories about how difficult it was to live during that time. She would usually tell me about the difficulties of the Great Depression, and what her family ate to survive during that time. I remember her stories about baking bread with oatmeal because there was no flour, and feeding thistle and weeds to the cattle on her farm because there was no money for livestock feed.
Unfortunately, I never thought to write down her stories, or many of her wonderful recipes. My grandmother is no longer with us. It is my hope that others can share their parent's, grandparent's or great-grandparent's stories and recipes so that we can keep these memories alive, preserve a piece of history, and cook some tasty dishes from yesteryear.
So, please share your Great Depression-era recipes, and your family's stories from that era, and together we will all probably learn some very valuable (and delicious) lessons.
Email your Great Depression-era recipes and family stories to: savvyfrugality at hotmail.com (replace the word "at" with a @...just trying to thwart the spammers), and we'll feature them at Great Depression Recipes, giving you full credit, of course.
As foreclosures increase, so do the number of extended families who are sharing the same house to save their homes and their cash.
Large extended families living together in the same house is nothing new. In many countries, this is the norm. In some African nations, when a young woman marries, she moves into the home of her husband's family. Many Italian families all share the same roof, as do many Asian and Hispanic families. In these cultures, family unity is extremely important and grown children moving out of the house as soon as they marry or hit the age of 18 is not as widespread as it is here in the U.S.
Now this practice is spreading in the U.S. as the cost of rental housing increases and older Americans struggle with rising mortgages. Saving on housing costs isn't the only benefit. Sharing a house also saves families on the cost of:
Food: It's cheaper per-person to stock up on food and serve one-dish meals than it is to cook individual portions for one or two people.
Utilities: With family members sharing one house, they are only paying one utility bill.
Child care: Why send the kids to a day care if you have family members available willing to watch each others children?
Transportation: Now that the family all lives together, they save on the cost of traveling to visit each other. Also, they have more opportunities to carpool.
Of course, shacking up with your whole family and their spouses and children isn't for everyone. Not all family members get along, whether they are related or not. Also, zoning laws in some communities may limit the number of people who live together, and rental properties set limits on the number of people who can share a home or apartment, so be sure to check those leases.
The Today Show also spotlighted the trend of extended families living together:
Savvy Frugality Recommended Reading: Bartering is Back!