Still, for many of you sales tax holidays are second only to Black Friday in their opportunities to spend money. Funny the things that suddenly look affordable minus sales tax, when just a month or two ago they were way out of reach. Just imagine the number of people out there charging up balances on store credit cards at 24% interest rates to save 7% on sales tax.

Don’t get me wrong; I’m not totally against the idea of a sales tax holiday. Quite the opposite. I look forward to just about every opportunity to eliminate a tax from our lives. However, I consider it a spending trap because days like this often lead normally frugal people to lose their frugal minds and shop like crazy just to “save on taxes.” Spending $100 to save $7.00 rarely makes sense, unless you were going to spend the $100 anyway, and then it might.

Of course, it would be unfair for me to pick on sales tax holidays. There are plenty of spending traps put down for us these days. Many first-time homebuyers feel compelled to run out and a buy a home before they are financially ready because of the first-time homebuyers tax credit being offered. Others feel the tug of car fever driving them to car lots to trade in their clunkers for cash when their clunkers were getting them from A to B just fine.

All of these traps are designed with one purpose in mind: to increase spending. In some cases these programs offer excellent ways to save money. However, if you are not prepared to spend the money wisely you should not be tempted to spend it at all, regardless of the incentives to do so.

Since most states are offering sales tax holidays towards the end of this month and early August you still have a little time to prepare, assuming you are brave enough to fight the crowds. Start planning a back-to-school budget and set aside a little from each paycheck between now and your state’s tax holiday in a cash envelope. When the sales tax holiday is in effect you’ll have a cash budget to shop with, minimizing the risk of going over budget or resorting to credit cards to fund the shopping spree.

Will we participate in the sales tax holiday? Probably not. The only thing I might be interested in buying around that time would be a new computer, as ours is over eight years-old now. I’ve upgraded a few components over the years, but the processor and hard drive space is laughable compared to current models. Computers are the one thing that don’t usually fit into my, “if it ain’t broke, why replace it” mantra. If you want to stay fairly current, you have to upgrade every couple years at a minimum. As you can see, we are far from “current.”

By waiting until sales tax holiday weekend I could save up to $70 on a $1,000 computer purchase (I won’t spend that much, but to keep the math simple I rounded up). Retailers also typically plan sales around such holidays which could mean even higher savings.

It’s worth noting that this year’s recession, combined with severe budget shortfalls, have caused many states to cancel or postpone sales tax holidays. Be sure to check a current 2009 Sales Tax Holiday Schedule for your state before shopping.

Post from: Frugal Dad

The most important lesson I learned (or had reinforced) from the book is the idea that I just need to get started. Many of us are paralyzed by the investment choices so we sit around and do nothing. Suddenly, we’re fifty-five years old with barely anything in savings, and twenty years left on our mortgage. That puts you about as far away from financial independence as you could get!

Here I sit at almost 32 years-old, and not a lot of savings to show. But, we’ve had some big wins in the last several months. We’ve knocked out a lot of debt, paid off our car, and rebuilt our emergency fund after a family emergency took its toll. In the next year we’ll be debt free, except the mortgage, and can then really begin to focus on our dream of a semi-retirement before traditional retirement age.

Maybe I’ll continue writing in semi-retirement; maybe I’ll find some other side hustle I enjoy. Regardless, in 15-20 years I’d like to find myself doing more meaningful with my days than working in an office. I’d like to teach, mentor, and coach young people. I’d like to do more volunteer work. I’d like to do many of the things I’ve had to forgo to this point just to keep the family checkbook in the black. When we reach financial independence we will have the freedom to use our life energy for something more worthwhile to use than earning a paycheck.

In the coming weeks and months I’ll begin to share more about my strategy for achieving financial independence. Some big decisions will have to be made regarding our future plans. Will we invest in taxable accounts, or tax-advantaged retirement accounts (or both)? Will we go with mutual funds, high-dividend stocks, bonds, cash, or some combination?  How will real estate play into our plans? What will we do for health insurance? How does our kids attending college affect our plans?

Lots to sort out, but fortunately we have plenty of time. Our number one priority is becoming debt free. In the mean time we continue to save in retirement accounts, but soon we may add other investments to the mix. Of course, I’ll be seeking your input along the way as well. From the comments, I know many of you are now enjoying a semi-retired lifestyle and I deeply appreciate your input, as do other readers.

While this post was about “financial independence,” it’s worth mentioning on Independence Day that many men and women around the globe are putting their lives on the line for our independence. Many others have come before them and paid the ultimate sacrifice. Take a moment today to remember those who serve their country, and their families. Without their sacrifices the idea of financial independence would be merely a dream.

Post from: Frugal Dad

In the scheme of healthcare costs, prescription drugs are generally considered one of the “good” expenses in healthcare.  It is cheaper to treat your high blood pressure than be affected by the consequences of it, for example.  Still, within the vast realm of prescription drugs, there are many variations of choices as well as costs.  Based on reader questions and forum posts at www.healthharbor.com, we’ve compiled a list of three questions that have been asked often as of late.  Below are the questions, along with some thoughts around each issue.

1)  How much do I save by using generics instead of brand name drugs? It varies greatly, and it shouldn’t be a financial decision alone.  Some patients find that they respond differently to a generic than a brand name drug, although it could be the placebo effect at work.  In general you’ll likely save at least 50% on generic drugs, and it isn’t rare to see savings of up to 80%, so it is definitely worth considering anytime it is an option.  In addition, a consumer-friendly trend has emerged in the past couple years - the deep discounting of certain generics by major pharmacy chains to as little as $4 per month - which may make the savings even greater.  The useful interactive Discount Generic Drug Radar at http://www.healthharbor.com/DiscountDrugRadar.php can help point you in the direction of the nearest discount generics in your area.

2)  If I have a prescription for a brand name drug, can my pharmacist prescribe me the generic equivalent instead? No.  Only if your doctor, on the prescription, wrote something to the effect of “Generic OK” can a generic be substituted for the brand name.  A pharmacist has to be very literal when they fill the prescription.   That is why it is so important that you have the discussion about generic alternatives when you are talkING Directly with your doctor.

3)  Can my doctor make me come in for an office visit just to get a new prescription of a recurring medicine I take? Yes.  Doctor’s have a responsibility to make sure your prescription is still the right one for you condition, given changes in your health, other drug interactions, or other factors.  If you have a prescription that enables you to get three refills, you should be able to get your three refills without another visit.  However, when that prescription is done and you need another month’s supply, the doctor has every right (and a responsibility, actually) to see you to make sure the prescription is still calibrated to your situation.

This guest column is from Paul at www.healthharbor.com.  HealthHarbor is a site devoted to helping people be smarter consumers of healthcare.  It provides ideas and guidance on saving money on healthcare, interactive tools for controlling healthcare costs, and hosts an online community devoted to healthcare spending topics.

Post from: Frugal Dad

I occasionally share small business (or side hustle, as I like to call them) ideas here with you, and found the following video inspiring. Remember when you were a kid? What did you want to be when you grew up? What got in your way? Yourself? It’s never too late to chase your dreams. And it is never too late for the spirit and ingenuity of the American entrepreneur to right this ship. It’s not up to the government; it’s up to us.

Video: Entrepreneurs Can Change the World

The Roundup

We’re In Debt: $150,679 To Be Exact. I admire the writer’s honesty by revealing their debt load, and after reading the post felt anxious for them. I, too, remember being deep in debt, thought not quite that bad. Still, anyone who has lived with significant amounts of debt knows the pressure it adds to every area of your life.   I tell people it’s like being pinned to the ocean floor by a two-ton anchor.  (@ Your Money Relationship)

The Pros and Cons of Joining a Local Food Co-Op. We never got around to starting our garden this year because of family issues and a hectic work schedule. Because of that we are missing our summer vegetables we enjoyed last year. This article presents some pros and cons of joining a co-op, something that can provide lots of local, fresh food, but at a cost. (@ Generation X Finance)

How to Combat Dread and Welcome Adventure Into Our Lives.  This is one I really need to work on. I tend to dread anything out of my routine, rather than looking at these new experiences as “adventures.” (@ My Super-Charged Life)

See How Far Your Salary Goes in Another City. Think you are paying too much for your home, or not earning enough to survive in your hometown? Check out this article which links to a CNNMoney.com tool where you can compare the cost of living in two cities. (@ Life Hacker)

Spending Moratorium Starts Wednesday. I really wanted to join Bargain Babe on this one, but unfortunately July snuck up on me too quickly. It will be interesting following along to see just how many days she can go without spending and money, save the few essentials she mentions in the post. (@ Bargain Babe)

The Cheap Garbage Bag Dilemma. Spending a lot money on garbage bags is hard for me to do. I mean, after all we are simply using them to collect stuff to throw away. But my experiences with cheap bags ripping half way to the garbage cans, or leaking and leaving a trail of rotten food juices all the way through the kitchen and garage. Nope, I’ll pay for my name-brand garbage bags. (@ The Simple Dollar)

The Basics Behind a Budget That Works.  A budget that works in the best kind of budget, which means your options are fairly open.  We budget for major household expenses with every paycheck, but keep things pretty loose when it comes to tracking smaller expenses. (@ Simple Mom)

What Your Moving Company Won’t Tell You Until You Sign the Paperwork. About five years ago we completed an out-of-town move. After making a number of trips ourselves with boxes and small furniture, movers came in to haul away the big stuff. They loaded up the truck on afternoon, and the next morning the stuff was being moved into our new house. I couldn’t help but wonder where my stuff stayed overnight, and I can related to the worries over movers holding your stuff hostage. (@ My Two Dollars)

Post from: Frugal Dad

I consider myself a fairly patient dad when it comes to shopping. During most shopping excursions my son and I take up our post outside the girl’s dressing room and hold “buy” and “put back” merchandise as my wife scurries back and forth from the dressing room to the clothing racks.

During this particular visit I noticed a garbled announcement over the store’s intercom system every few minutes followed by a rowdy cheer from store employees. By the fourth of fifth time I was curious enough (and sufficiently annoyed by the irrational exuberance) to ask a nearby employee what the celebration was about. “We just signed up another credit card,” she replied enthusiastically. My sarcastic reply was, “And why are we celebrating?” She scowled and went back to folding new shirts to put on the store shelves.

After what seemed like half a day my wife and daughter emerged from the dressing room with a reasonable number of new outfits. We put back those that didn’t fit, or were a little too expensive, and made our way to the register. “Attention associates, Julie just signed up her sixth credit card. Only four more and Julie wins the referral contest!” The store immediately erupted with cheers from store associates. Had I entered the debt Twilight Zone or something?

“Would you like to sign up for a (store name shall remain anonymous to protect the not-so-innocent) card today?” No thanks, I replied. “But sir, you can save 10% off today’s purchases in addition to the sales price.” Again, I declined, and this time added, “I don’t shop with credit cards any more, and we’re paying off our remaining card.”

At this point I could see her preparing her final pitch to add another notch in her credit card sign up belt. It would probably sound something like, “If you are approved for the card you can save 10% and then pay if off when the bill arrives.” Sounds logical, I know. However, she failed to tell me if I was just one day late her department store would charge me 24.99% interest for the privilege of using their store card. No thanks.

While I am not totally “anti-credit card,” I’ve grown less and less fond of them over the last few months. It seems like every day there is a new story out about a credit card issuer raising interest rates, lowering credit limits, doubling minimum payment amounts, and other sleazy tactics. I’ve even experienced some of this myself.

Card issuer’s defense is that the impending credit card reform legislation will eat into their profits, so they are merely reacting months in advance to offset those losses. From a profit/loss perspective I get that, but I still believe a credit card company, or store, that wants to retain customers, should show them the same loyalty they ask for in return.

When I was younger I used to work at a variety of retail stores and had to push credit cards to customers. I didn’t particularly enjoy it, and I would would despise it today. There is nothing more annoying than a store employee greeting customers at the door with a clipboard filled with credit card applications. I respect stores rights to market their card, but a simple stack of applications at the register would suffice.

Post from: Frugal Dad

Hi, I’m Dan and I’m unemployed. But it wasn’t always this way…I used to be employed, borderline overworked, and well compensated for my effort and effectiveness.

One pleasant spring afternoon, while enjoying lunch with my then 4 year old son, I received a phone call from my boss. I was not alarmed, because my boss resides on the West coast and I in Texas, so the 2 hour time difference often led to calls at odd hours. After taking a sip of water, I answered the phone and my boss paused before talking. A pause is never good. When bosses call, they speak their minds quickly so they can get on to other business. I was soon to find out how bad this pause was.

“Your position has been eliminated,” my boss said. Sure, there were some words before and after, but I don’t really remember them because these 5 words consumed my brain for the entire call-and for many weeks following. This was my first layoff, and although I am only 30 and the likelihood of another in the next 37 years is high, I hope it is my last.

After I calmed myself down, I thought about the best way to be laid off: the exit strategy that would be most beneficial to my future. I came up with these guidelines to help anyone else who faces a layoff, which seems to be everyone these days:

1. Ask for an explanation, but don’t expect or demand one. If you are laid off, you deserve a reason from your boss, but you often will not get one. Accept that fact quickly. If you belabor the point, you run the risk of harming the relationship with the person who will be your best reference to future employers-and you stand to gain little more than a vague excuse.
2. Maintain a professional image throughout the ordeal, only letting your guard down when you get home. The people you work with will also be references to give to future employers, and you need their last image of you to be as positive as possible. Crying and cursing as you’re escorted to the elevator would be a perfectly human response, but not a very strategic one.
3. Finally, let it go. Don’t spend your time over-analyzing what happened. A job search is tough, and exponentially so in this recession. You have too much work to do to waste your time thinking about the work you won’t be doing anymore.

As I read these words now, months after my downsizing, they seem simple. But at the time, there was nothing harder to do than suppress my emotions as much as I could and follow these steps. If you face it, this will be hard, but it will be the most advantageous thing you can do.

After all, telling your interviewer that she cannot contact your former employer or colleagues is a huge red flag, and with 14.5 million other unemployed people competing for the limited number of job openings, a red flag can mean elimination from the pool of applicants without even a chance to explain it.

Post from: Frugal Dad

In the first 25 pages of the book you are instantly reminded of what it is like to have nothing but the clothes on your back. Actually, I shouldn’t say “reminded” because many of us have never experienced that feeling before. I’m not talking about being down and out for a few weeks, or struggling to make ends meet, I’m talking about having absolutely nothing. No car, no home, no job, no money, no food, no health care, and no network of friends to help. And from this Shepard was to rise to the ranks for the fully employed, find a place to live and sock away a respectable about of money in savings.

Besides an engaging look at what it’s really like to be homeless in America, Scratch Beginnings made me aware of a couple things that I had forgotten since becoming accustomed to a steady paycheck and having all of my basic needs met without giving it much thought. There are many people out there wondering where they will get their next meal, or their next job, or their next opportunity for work. This is especially true in this time of prolonged recession with many people finding themselves unemployed.

Shepard describes his first big win after a day of hard labor netted him $28.61. Combined with the whopping $20.27 he had left over from his $25 starter fund, this left him with $48.88 to start building a personal supply of basic items.

From the book:

Before heading to her home on the north side of town, Cicely dropped me off up the street from the EasyLabor at Family Dollar, where I made my money count. All of it. I bought six pairs of underwear, a six-pack of socks, six white undershirts, a stick of deodorant, a toothbrush, an eight-pack of Ivory soap, shampoo and conditioner, a towel, a washcloth, a roll of toilet paper for emergencies, and a week-long supply of an assortment of potted meat and crackers that I would eat for lunch.

It’s probably safe to assume this list doesn’t represent what most of our lists looked like from our most recent shopping trip. Notice there were no CDs, no bottles of expensive wines, no home decorating items, and no expensive toys. Nope, just basic necessities. Shepard was satisfying those needs for shelter, clothing and food first. Later, he would go on to add transportation, a job, and his own place to stay by sticking to his initial plan of only spending money on things that were absolutely necessary to his survival.

Most reading this are probably in much better situations than those described in the book living in the Crisis Ministries shelter in Charleston, SC. However, that doesn’t mean we cannot apply these same lessons. Intellectually, we all know that savings in merely a function of spending less than you earn. But many people are convinced a requirement for building savings is earning a lot of money. Not true.

In fact, I know plenty of examples of people who earn a ton of money and have very little, if any, savings. Conversely, I know people who earn a modest amount of money, but have healthy emergency funds and long-term savings. Scratch Beginnings really drove that point home for me, and from a frugal living perspective was the major take away from following Shepard’s story.

I would be remiss if I didn’t add a disclaimer for those interested in reading Shepard’s book. The language is raw and unedited from conversations he had with those in the shelter and at various jobs. It did not bother me, but it may not be suitable for young readers (pre-teen or younger). In a way I wish some of that had been left out of the book to expand the audience to younger people, but in the end I was glad Shepard left it in because it added to the authenticity of his experience. An experience that I hope more people will read and learn from in their struggle to lift themselves out of a life of poverty.

Post from: Frugal Dad

We were convinced our compromise of financial personalities was for the greater good of marital harmony.  However, over the years our natural tendencies were overridden by circumstances - circumstances we created for ourselves, but had to work through nonetheless.

Just a couple years into our marriage my wife quit working as we decided she would stay home with our children. It was a decision we made together, and reflected both of our desire for her to be home until the kids were school age. Neither of us downshifted our spending appropriately for living on one income, and soon we found ourselves in debt. Our growing debt had an interesting effect on our relationship. My wife became a saver, and I sobered up (financially) after a couple years of spending more freely than I was comfortable with.

These days we are both enjoying a more frugal lifestyle. Just the other day my wife went grocery shopping and picked up $273 worth of groceries and cleaning supplies for $186. For hardcore couponers out there that might not sound like a huge savings. But for us it is huge! We both resisted using coupons for years, dabbling with services like The Grocery Game and other coupon websites only half-heartedly.

The reason we weren’t gung ho was because we weren’t both enthusiastic about couponing. I would clip, she would forget. She’d clip and give to me for my after-work run by the store, and I’d forget to use them at the checkout. But when we both got on the same page we started realizing some serious savings.

This same synergy developed through shopping with coupons has carried over into other areas of our financial life. We both decided we were tired of being in debt and have been paying it off like crazy the last several months. We are now equally passionate about building our savings, our kids’ college savings plan and our own retirement.

How much do you and your significant other differ on finances? Has this changed since you first met?

Post from: Frugal Dad

When my wife and I purchased our first home a few years ago we needed a lawn mower for our small yard. I ended up buying an electric lawnmower that fit our needs.

Whether you use a traditional gas mower or an electric like me you will run into maintenance issues. With a traditional gas mower these include air filters, engine oil, topping off the gasoline, and mower blades.

Thankfully with an electric mower the maintenance issues are minimized. There is no oil. There is no gasoline. I need to look as I’m not sure if the thing even has an air filter (because there is no need for air to mix with gasoline in the engine).

However, we did run into one maintenance issue recently: mower blades. And that makes sense — all mowers have blades, right?

(Photo by somegeekintn)

Comparing Cost of Replacement Vs. Sharpening Mower Blades

Did you know you can have your lawn mower blades sharpened? A lawn mower blade is a piece of metal like a knife. Over time through continual use it becomes dull. Dull blades don’t cut grass as well as sharp blades. Cutting with a dull blade is also not great for your grass.

The cost of a new blade for my mower is $17 through Amazon. That’s not bad, and I actually plan to purchase a second blade. (More on that in a moment.)

I called around to a few lawn mower shops (Google: “lawn mower sharpen” and your city) and found a shop that would sharpen the blade for $8.

That’s an easy comparison: $17 for a new blade versus $8 for a “new” used blade. I could sharpen my current blade twice for every new blade I needed to buy.

Rotate Two Blades

As I mentioned above I plan to buy a second blade. At the end of the day having two blades makes life a lot easier than owning just one blade.

Take me, for example. I discovered my mower blade was quite dull the last time I mowed. I determined I needed it sharpened, but didn’t have a spare handy. This would seem like an easy fix: just go to the store and buy another blade, and get the original blade sharpened. Since I had purchased an electric mower online my properly sized replacement blades were only available online. (Just my luck.)

Having a second, sharp blade on hand makes life easy because you can take the old blade off and get it sharpened at your leisure. The new blade should last for quite a while giving you and I time to procrastinate on finding a sharpening shop while not sacrificing the quality of our mowing.

Unfortunately, I didn’t have this leisure and had to hurry to find a shop, get the blade off the mower, and have my wife take it down to the shop to get it sharpened. The sharpening took an hour and was back in our hands the same day.

Safety First When Changing Lawn Mower Blades

I can’t finish this article without clarifying some safety issues. As a general rule mowers are dangerous and have full capabilities to remove an unhealthy chunk of your body from you.

Safety first:

• Disable your mower in as many ways as possible. With gasoline mowers make sure you disconnect the spark plug. With plug-in electric mowers make sure the mower is not plugged in. (For battery mower users, I can’t help you. No idea how they work.)
• Blades are sharp. Be careful. Wear gloves or use a towel to hold the blade while you are loosening/tightening the socket that holds it in place. And make sure that when it comes loose that you haven’t been pushing too hard with your arm — you could push the blade into your hand as it comes loose.
• Always use a proper sized and balanced blade. If your mower takes a 19″ blade, get a 19″ blade. If you get the blade sharpened make sure that it is still in balance. To do this just balance it on your finger or some other device to insure one side isn’t higher than the other — an unbalanced blade will shake the mower and generally isn’t a good thing to operate with.

You also have the option of sharpening the blades yourself with tool files. While I’m sure this is a relatively easy skill to learn I’d rather not deal with the hassle of doing it wrong or ending up with an unbalanced blade. The $8 spent is already a savings of $9 over the regular blade cost. That’s frugal enough for me.

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Post from: Frugal Dad

A post at the Consumer report blog explains how poorly designed caps on laundry detergents can lead consumers to add too much detergent to their washing machine. Not only is this wasteful (and costly), it can lead to soap and lint build up inside machines. It can also cause some newer machines to work harder than necessary to remove extra soap suds.

Bottom line? Be sure to check for the fill line to properly measure your detergent.

The Fab Five

Should You Stay At Your Cushy Job. This article presents an interesting dilemma. Do you stay at a “cushy” job which doesn’t require much mental, physical and emotional energy (and overtime) or move on to one that does provide those things, along with more challenge? I agree that the only way I’d stay in such a job is to pursue a side hustle that could one day become my primary hustle! (@ My Wife Quit Her Job)

7 Secrets to Raising a Happy Child. Great ideas here on raising happy kids. And guess what you won’t find on the list? Spending a ton of money buying things for them. (@Zen Habits)

Breaking Bad Financial Habits - Impulse Purchases.  We are guilty of making impulse purchases, but I make a lot less than I used to.  There are a number of excellent strategies for fighting the urge to make impulse purchases, but I particularly liked the $100-a-day rule.  Read on to find out what it means. (@No Credit Needed)

30 Days of Disney.  A couple weekends ago I mentioned that we might be gearing up for a Disney vacation within the next year. I asked for tips and resources, and received tons of comments with excellent ways to make the vacation special without breaking our vacation fund. One of the best tips was to visit The Happy Housewife, who is in the middle of a “30 Days of Disney” series herself.  Excellent resource! (@The Happy Housewife)

Powerful Advantages of Renting a Home Before You Buy. Everything seems to go in cycles. A few years ago the idea of renting was met with laughter with sophisticated real estate types. Now, people generally recognize that renting isn’t so bad after all.  I agree with the author that it can be a great way to “test drive” a home before buying. (@Debt Free Adventure)

Frugal Finds

• 99 Painless Ways to Save Money The Dough Roller just released this eBook to subscribers, and there are some real gems in there!
• Dry Cleaner’s Secret. The folks at Woolite were nice enough to send us a few samples of Dry Cleaner’s Secret, a new alternative to traditional dry cleaning (something I hate because of the bill). I tried it on a number of dress shirts and was pleased with the results. Best of all; no bag required.

What’s On My Nightstand

I’m making an effort to get back into a reading routine, and have selected two books I’ve had on my wish list. I don’t know that I’ll create full-length book reviews when I’m finished reading, but I plan to mention them here, and I’ll probably incorporate stuff I read into a post or two each week.

• Scratch Beginnings by Adam Shepard
• Work Less, Live More: The Way to Semi-Retirement by Robert Clyatt

You might have noticed the “Best of the Rest” feature is missing. I plan to include those in a separate post over the weekends to break up what was becoming a very crowded weekly roundup post. Look for those familiar favorites as part of my Sunday schedule.

Post from: Frugal Dad