Archive for the ‘Frugality’ Category

Fighting the Urge to Spend

If you are in the process of trying to get rid of debt and becoming financially stable, you have probably been tempted to spend your money on things that you don’t really need.  Even when you are already financially free, temptation can still hit you pretty hard.  I found myself in this scenario last week.

I love basketball.  Anybody who has a true passion for the sport knows that basketball sneakers and basketball itself go hand in hand.  That being said, basketball sneakers are what I call my kriptonite.  In other words, you put a pair of brand new sneakers in front of me, and the temptation to buy them becomes very irresistible.  When I was young and didn’t really think about saving or investing, a big part of my income was going into collecting shoes.  I amassed a collection of over 80 sneakers.  Many of this have gone unworn for years.  Flash forward to the present and I see the huge money error I committed.  Now that need to buy shoes has diminished, but I also make sure to stay away from stores and websites that sell or deal with the subject so I’m not tempted to go and buy another pair that I don’t need.

Now I am in the process of selling many of this shoes through eBay.  The good thing is that most of this shoes will make me a profit so I will have some extra cash to spend and save.  The bad thing is that to find out how much to charge for them I had to do some research on the very websites I’m trying to stay away from.  As I browse these websites, I found myself fighting the urge to buy more shoes!

So how can one fight temptation to spend money unnecessarily?  In the next post I will give some tips on how to do this.

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Taking the First Step Into Savings

Last week, a friend and I began talking about saving for the future.  I told him about my current plans and how I’m saving about 20% of my income annually for retirement.  He told me he really has not saved anything.  Personal circumstances had put him in a situation where he thinks he can’t save for himself right now.  As the conversation progressed, he asked me for some advice.  What should I invest on?  Where do I do it?  How do I start?  His focus was more on the investing side of the equation.  I told him that right now, that is not as important as taking action.  The last question was what I thought was the most important one-How do I start?

If you ever wanted to loose weight, change jobs, or any type of situation that might require some deep thinking, the most important thing you can do is to take action.  Taking that first step is what will help lay the road for the future.  This concept is no different when talking about personal finance.  Don’t worry about the schematics of investing.  Worry about doing something to get you started.

The first step you should take should be taking a closer look into what you spend your money on.  I had asked my friend if he new what his income was after expenses.  He didn’t know.  I told him to just take a look at where his money is actually going.  Then, he will notice  that either A) He needs to find a way to increase his income B) Decrease his expenses C) Both.

It does not matter how large or how small the amount of savings you put aside is.  The important thing is to do it.  When I first started saving for retirement, I could only save about 50 dollars a month, sometimes even less.  But that didn’t discourage me.  In fact, it motivated me into saving even more.  When you start to see your savings grow, you want to keep feeding it more and more.  You start to notice that you can maybe save a little bit more this month.  As the next month rolls around, you noticed that you can save a little bit more.  Soon, saving will become a habit.

As the saying goes “the journey of a thousand miles starts with the first step”.  So open a high yield savings accountlive more frugally, read about personal finance, do whatever it takes to get the ball rolling in savings. 

 

Hand Washing vs Dishwashers

When we first moved to the United States, I remembered asking my mother why she wouldn’t use the dishwasher. She would tell me that while it did save some time, it was expensive to use. The water and electricity that it consume was not worth the 15 to 20 minutes it might save you in time. But dishwashers have come along way since I had that conversation with my mother over ten years ago. So are you better off using a new dishwasher than washing the dishes by hand?

I did a little research and I found this:

The Bonn study proves that the dishwasher uses only half the energy and one-sixth of the water, less soap too. Even the most sparing and careful washers could not beat the modern dishwasher. The study also rated the cleanliness achieved, again in favor of the washing machine (sorry mom). There have been studies before, but this is one of the few that stands (wo)man against machine and it sets itself apart by including a thorough analysis of the effect of half-loads and the whole demand range from your cake plate to the grimiest pots. Surf to research under household technology at U. Bonn’s site for more. :: U. Bonn Household Technology.

Even with the study done, I still don’t know what side of the fence I am in. Here are some thoughts I had after reading this:

  • The study was done by dishwasher manufacturers. How much did they invest on this study? Is it really unbiased?
  • Remember that it is talking about newer dishwashers. Specifically energy star approved models. If you have an older model dishwasher, you are probably better off washing by hand.
  • Everyone has a different method to wash dishes by hand. I know that some people keep the water running while washing while others fill the sink and many other ways. Not all methods where used to compare with the study.

So what do you guys think about dishwashers? Take a look at the study and let me know what you think.

Discovering Your Local Library

 

books

I mentioned in a previous post my love for movies.Going to the movie theatre, or renting movies at a video store can become an expensive activity. While reading other personal finance blogs, I learned about using your local library to not just check out books, but to check out movies as well. So about two months ago, I decided to give it a try.

The last time I went to a library was about a year ago while I was still in college so I didn’t feel “out of place”. It was different though, because the library I was using was the one at the University, so the environment was somewhat altered. As I walked in, I noticed how busy it was. It was a Monday morning, so I didn’t think it would be too busy. There were kids from a local kinder-garden attending a workshop and a group from a retirement home checking out some books as well. The place was surely running.

 I went to the front desk and talked to one of the librarians. I asked her if they had DVDs to check out. She politely told me that they did and showed me to the area where they had them. I was surprised at how many DVDs they had. They had over 7 bookshelves filled with them. They even had them separated by category and alphabetically as well. The librarian told me that their collection keeps on growing and they keep on having to expand it. She said that she remember when they only had enough movies to just fill a bin and they didn’t even bother with sorting them. I looked around and grabbed two movies. I went back to the front and asked the librarian if she could give me the form to fill out so I could get a library card. She gladly did and in less than 10 minutes I was ready to check out.

The next day, I came back again to check out a book. I knew the exact book that I wanted but unfortunately they didn’t have it. I asked the librarian if there was anything we could do about it. She told me that they can order the book in an in about two weeks the book will be in for me to check out. I asked her if that can be done with their movie collection but she told me that not at this time. It was worth a shot.

For the last two months, I have been visiting the library about once a week.  I have become hooked to the library! I just love not having to spend money on books and certain DVDs as well.  At first, I was hesitant about going to the library.  Don’t ask me why, but I fell like it was better to buy a book than checking it out from the library.  How dumb was I.  I am saving money and not filling my bookshelves with books that I will only read once and never pick up again.

So give your local library a try.  Just be forewarned.  Once you checkout once, you may never stop.

Frugality:Dating and Money

As one tries to start to embrace the frugal lifestyle, one of the questions that I get is “how can I go out in a date and not look cheap?”. At a glance, it can be hard finding places and activities that won’t hurt your pocket book. A movie and a dinner date can be somewhat expensive. On average, going to the cinema for two in the afternoon will cost you about $19. If you want popcorn and a couple of drinks that would be another $15. Later that night you go out to a restaurant. I’m not talking a five start restaurant-just a regular chain restaurant. That will be a minimum of another $25 dollars. Total=$59.

Now, if you are doing well financially, this wouldn’t be too much of a problem. But remember that if the date goes well, you will probably go out on a second, and maybe a third. Little by little, it will start adding up to a higher cost. If you are starting to pay of your debt, this could really tighten your pocket book and might cause a possible set back with your financial plans. Here are some ideas one should use when dating:

  • Budget. Look at how much you can actually spend when you go out on a date, and make sure you stick to the figure you came up with. I suggest adding a little more than what you think you are going to spend. This will give you some wiggle room for unexpected expenses.
  • Customize your date with her interests. If you know some of the things he/she likes before you go out on a date, make it tailored to her. Maybe he/she likes reading-take her to a book fair. Likes to travel-check to see if there is a cultural festival going on. Think outside the box when planning. Also, make sure to check that pricing is reasonable.
  • Have a dinner at home. We know that eating at home will always be cheaper than eating at a restaurant. Plus, you can show her your culinary skills. If this is a first date, she might not feel comfortable coming over to your home. Tell her to bring a friend over. Just make sure not to burn the food.
  • Discover your city or town. Here at Houston, we have many different festivals going on all the time. Reading your local newspaper will give you great places to go without breaking the bank to do so. My fiancee Crystal and l do this all the time. We get to go to new places, meet interesting people, eat cheep but good food, and best of all the entrance is usually free
  • Know your museums and zoo. If both of you like animals and/or museums, why not go on a date to one of these places? Usually these institutions run specials throughout the week. Learn when they are and take advantage of them.
  • Be honest. At some point, let the person know your financial plans. They don’t need to know the details. Just that at this point in your life you are trying to take control of your finances.

Dating can be awkward at times, specially in the beginning. Money can be a touchy subject to talk about. During the time that you get to know that person, the subject will probably come up. As I mentioned before, be honest with them. If you two are becoming more and more in sync, she will most likely understand your opinion. This does not mean that you should try and convince her that your way of thinking is right. Her opinion about handling money could be way different than yours. Just remember that dating is the time when you get to learn more about a person. Don’t let money get in the way.

Dealing With The High Cost of Food

It feels like Murphy’s Law is kicking in full effect and the cost of food has taking it’s beating. Basic food products such as rice and pasta have almost doubled in the past year. Corn and sugar have also seeing substantial increases. Most of our food has seen some type of upward price change and it is starting to affect our pocket books. What is the cause of this? Well, a little of everything. According to Katherine Corcoran with the Boston Globe the rise in the cost of food is a combination of things.

“Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves, and growing consumer demand in China and India.”

Kimberly Palmer with U.S. News offers 6 great tips to eat better for less:

  1. Plan ahead. Planning your meals for the week can make it easier when grocery shopping. Remember that some of the ingredients you buy can be used for tons of different recipes. The more you cook from scratch the more money you will usually save.
  2. Do it yourself. Instead of buying things that are pre-made, start making them yourself. The best example would be buying grated cheese. Why not buy a block a cheese which will be cheaper and grated at home. How about making your own mayonnaise. Not only will you save a little cash, but you can add some flavor of your own to some of your creations that you can’t do if it’s already made.
  3. Rediscover eggs and beans. Eggs and beans are extremely versatile food staples. Not only that, they are still relatively cheap compared with meat. How about a quiche, or some beans and rice. A dinner for two of this will run you about $5 to make.
  4. Go meatless. Not spending money on meat can substantially save you money while helping promote a healthier lifestyle. Just remember to include protein in your diet in some other form. I don’t think I could do this 100% but I could trim down my meat intake.
  5. Leftovers. I love them. Remember that you can take them to work, eat them the next night, or use them to create a new meal. Left over ground meat from hamburger night-use it for spaghetti night.
  6. Use what’s on the fridge. How many times do we look in the fridge and say “there’s nothing in here”. Look again. Get creative with your ingredients. Look in the Internet for ideas and you will find that you have way more dish choices than you thought. I recommend using FoodNetwork or AllRecipes for ideas on what to make with the ingredients you have at home.

Food prices are expecteted to stabilize in the future. Unfortunately the prices will not go down. Adjusting our budget and our lifestyles will help us combat the rising food prices. What are some ways that you save on food?

Spring Cleaning Can Make You Money

Last weekend, my fiancee was doing some spring cleaning around her apartment.  As she dug through her closet, she was amazed at all the useless stuff she had been storing for years.  Some things where not even open or worn.  They still had the sale ticket on them!

About two years ago my fiancee was a BIG SPENDER.  She just love the sense of buying and couldn’t get enough of it.  As we began to save to start a new life together, she began to realize the foolishness of her spending.  She noticed that with or without the things she bought, she was still the same person.  Now that she has money in the bank and even extra to invest, she tells me she feels almost free.  Before, she felt like a slave to her credit payments (she at one time owed around $2000 which she paid in full about a month ago) and nothing to show for it in terms of savings.  After seeing both sides, she tells me that she will never go back.

As she began to separate the items that she wanted to keep and the ones she didn’t, she came up with a great idea.  “Why not make a little money out of this”.  As I mentioned earlier, much of the unused clothes she had in the closet still had their tags.  She also kept the receipts for them.  Depending of the store she had bought them from, she could return them and get her money back.  The ones she couldn’t return and get cash back, she would  either get store credit (if there is something she truly wants and needs), or they can be sold in an upcoming yard sale and still make a little bit of money.  So far this is what she has found:

  • Clothing.  Lots and lots of clothing.  Thankfully the store she bought them from has a lenient return policy so as long as the clothes were in good shape, and we had a receipt, we can get our original tender back.  Some of her purchases were done with a credit card, which she has already cancelled, so she received store credit.  The other purchases were done with cash so that is what she received back.  Total in cash:$100.27   Store Credit:$120.45
  • Old Furniture.  Two old bookshelves that were just collecting dust.  She talked to some of her coworkers and sold them to them.  Cash: $20
  • Dvds and cds.  Two full boxes of them.  We found dvds that we only watched once and music cds that we never listened two.  We made a list with the names of the movies and cds and sent them to all our friends and family.  They chose which ones they liked and bought them from us for a $1 each.  Cash:$33

Her grand total came up to be…drum roll $153.27 in cash and $120.45 in store credit.

I’m in the process of Cleaning my things as well so we can put our stuff together for a yard sale.  Any cash we can make will be a win for us.  Not only are we making money for our wedding, we are also getting rid of stuff that was just taking up space in our homes.  The things that end up not selling will go to charity.  I will let you guys know what treasures I uncover in a later post.  What our some of the things you have found while spring cleaning?

Saving on a Wedding



I woke up this morning, and I looked at the alarm clock next to me. I curiously noticed the date (my alarm clock displays the month and date). I am getting married in less than 6 months! The 2nd of August will be our civil ceremony here in Houston while our church wedding will take place the 20th of September in Mexico.

I know that it is somewhat hypocritical, that someone who preaches frugality, is having to separate ceremonies. The only thing that I can say is that we are sticking to our budget, everything is being paid in cash, and we are not scaling back on our long term savings.

So this got me thinking of ways that one can save money for a wedding. Here are some:

  • Have your family and friends to help out. If you happen to know somebody who works or owns a catering service, see if you could get a discount for it. Maybe a family member knows someone in the floral business. Start asking around. You will be surprised the amount of connections you will find that can lead you to great deals.
  • Don’t ask for quotes for a wedding. Places tend to charge more if you mention the word wedding, instead say a “large party”.
  • Think outside the box. Unfortunately, traditional weddings can be expensive. For example, we found out it was cheaper to higher a local ice cream merchant to come to the wedding and serve homemade ice cream to the guests than having a traditional wedding cake. It was something completely different and way more memorable than your classic cake.
  • Negotiate. Don’t be afraid to say no. If you feel that something is overpriced, let them know. Most businesses will try to work with you. Remember that you are paying them to work for you, not the other way around.

The only thing that I would not try to cut corners and save money on are your wedding photos. This is a once in a lifetime occasion and you do not want the memories you have of it captured poorly by a unprofessional photographer.

The Getrichslowly forums has a great post on this topic dealing with weddings and money.

The picutre you see is the actual church where we plan to get married.

Bringing Your Lunch to Work Can Save You $1000

One of my rituals before getting ready for work is to always prepare my lunch. 90% of the time it is always the same thing. It usually consists of two sandwiches, a piece of fruit, and some cookies. The other 10% of the time I bring leftovers from dinner. It only takes me five minutes to make, and I save around $1000 a year!!!

Lets say that on average someone spends $20 dollars a week on food at work. This can include soft drinks, candy, coffee, and anything purchased before and during working hours. That $20 a week ends up adding to $1000 at the end of the year (for this example we are using a 50 week work year) If you are trying to cut your expenses down, this is a great way to start doing so. I know that it is hard for some people to bring their own lunch if they have a job that requires taking clients out to eat, and for networking purposes. But for the most part this is not the case.

We tend to always be on a rush during lunch hours at work. So naturally, we end up going to fast food places or eating from the snack machine. By bringing your own food, you will increase your savings and your overall health. Once I began to bring my own food from home I began to have more energy after lunch because I was eating fruits and other things that didn’t make me feel bloated and like a need it to take a nap

Just Imagine what you can do with that money instead. I use this money for my vacations. Every week, I automatically draft 20$ from my checking account to a savings account. Then, when I’m ready for my yearly trip, I have a minimum of $20 ready for me to enjoy. Better yet, invest the money and watch compound interest work it’s magic.

Embracing the Frugal Lifestyle Part 2

At the beginning of the first entry on frugality, I had mentioned briefly how I sometimes had to deal with my coworkers and explaining to them the frugal lifestyle. The stigma behind frugality is that one is cheap. Because of this, many people feel almost the need to constantly buy the newest and greatest thing. It is natural that we want to feel hip and modern, but at what cost. While one may have the newest car, or the most expensive purse, they probably have little to no savings to speak of. I’m not preaching to never spend a dime. What I am saying is that use what you have already till it is not usable, and buy bargains.

I have a friend that loves fashion. The more expensive the article of clothing is, the better. I tell them that there only two things that seperate his clothes from mine. The brand, and the price. Thats it! The clothes have the same material for the most part, and are made with the same equipment. He thinks about it and agrees. The only answer he can give me as to why he needs to buy expensive clothing is that he would feel cheap, and that other people would look at him differently. My friend lives paycheck to paycheck and is drowing in a pool of credit card debt yet he can’t seem to fight the need to spend his money on things he does not need.

J.D in GetRichSlowly wrote a post about How to Live on Less and Love It and also Ask the Readers: How Do You Live Frugally Without Seeming Like a Looser. In it, he explores enjoying being frugal and his own personal struggles with his new frugal lifestyle. His readers give great advice into what to do at work, for fun, and even on dates. Who says you need money to have fun?