Savvy Frugality

You'll Never Get Rich Working for Someone Else

noreply@blogger.com (T) — Sun, 19 Jul 2009 19:17:00 +0000

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 a Raise, so Why is the Economy Still Affecting Me?

noreply@blogger.com (T) — Thu, 16 Jul 2009 22:36:00 +0000

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.

Billy Mays 1958-2009

noreply@blogger.com (T) — Sun, 28 Jun 2009 18:28:00 +0000

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.

The Top 5 Unnecessary Expenses

noreply@blogger.com (T) — Thu, 18 Jun 2009 00:09:00 +0000

"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.

Does it Work? The Topsy Turvy Tomato Planter

noreply@blogger.com (T) — Thu, 11 Jun 2009 03:13:00 +0000

Every once in awhile, my wife and I will buy one of those "as seen on TV" items out of sheer curiosity. If the item we purchase works, great! Most of these items are relatively cheap, so it's not like we're losing a ton of money if the item doesn't work as advertised. Besides, it gives me another product to review here at Savvy Frugality. Remember, none of these folks give me a dime to review these items.

This week, we're going to turn our attention to an item that I thought was truly bizarre: The Topsy Turvey Tomato Planter. This is the planter that you can put tomatos or other vine-type plants inside of, and then hang upside down. The roots are supposed to grow up into the planter, while the plant grows downward. Since the plant doesn't touch the ground, there supposedly isn't any spoilage or waste of fruit (yes, a tomato is a fruit).

My wife actually bought this item, because she is the gardener in the family. She planted tomatoes in one Topsy Turvy, and herbs in another one (I'm not sure what kind). I mounted the screws under the overhang on the south side of our house, as directed. Then, we waited a couple of weeks.

The plants are definitely growing, although it is too early for tomatoes just yet. The plants are nice and green and bushy. The plants tend to still reach upward towards the sunlight, but I think once there are tomatoes on the plant that will weight them down and they will stretch downward toward the ground. Watering them through the hole in the top of the planter is easy.

Is there a benefit to hanging your tomato plants upside down rather than planting them in a regular old planter or in the ground? Probably not, but it sure looks interesting.

So, does the Topsy Turvey work? Sure, it does, but you probably don't really need it, either.

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!

What to Do When the Debt Collector Calls

noreply@blogger.com (T) — Tue, 09 Jun 2009 23:51:00 +0000

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.

Ultra-Cheap Car Coming to U.S.?

noreply@blogger.com (T) — Tue, 09 Jun 2009 04:29:00 +0000

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.

Restaurants Giving Food Away

noreply@blogger.com (T) — Sat, 06 Jun 2009 23:25:00 +0000

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.

My Best Garage Sale Finds So Far This Season

noreply@blogger.com (T) — Sun, 31 May 2009 18:16:00 +0000

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 Recession is Over!

noreply@blogger.com (T) — Mon, 25 May 2009 20:54:00 +0000

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.

Forced Frugality

noreply@blogger.com (T) — Thu, 14 May 2009 03:20:00 +0000

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?

10 Tips for Buying at Garage Sales

noreply@blogger.com (T) — Sun, 10 May 2009 19:42:00 +0000

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.

Dollar Store Deals and Duds

noreply@blogger.com (T) — Sun, 03 May 2009 19:46:00 +0000

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 Refuse to Participate in the Recession

noreply@blogger.com (T) — Sat, 25 Apr 2009 01:55:00 +0000

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.

Best Buy of the Week: Free Soda, Snacks and a Restaurant.Com Gift Certificate

noreply@blogger.com (T) — Sun, 19 Apr 2009 23:54:00 +0000

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.

How to Avoid Budget Burnout

noreply@blogger.com (T) — Thu, 16 Apr 2009 23:50:00 +0000

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.

Trisha Wagner is a freelance writer for DestroyDebt.com, a debt community featuring debt forums. Trisha writes regularly on the topics of getting out of debt and personal finance.

How To Get $100 Worth of Groceries for 25 Cents

noreply@blogger.com (T) — Sat, 21 Mar 2009 00:38:00 +0000

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.

Visit msnbc.com for Breaking News, World News, and News about the Economy

New Blog: Great Depression Recipes

noreply@blogger.com (T) — Sun, 15 Mar 2009 18:21:00 +0000

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.

Extended Families Living Together to Save Cash

noreply@blogger.com (T) — Sat, 14 Mar 2009 18:49:00 +0000

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:

Visit msnbc.com for Breaking News, World News, and News about the Economy

Savvy Frugality Recommended Reading: Bartering is Back!

Extreme Frugality: Reusable Toilet Wipes

noreply@blogger.com (T) — Sun, 08 Mar 2009 22:43:00 +0000

Frugal, stingy, penny pincher...all of those terms could be used to describe me. I don't like to part with my money, but at the same time I like to get good value for my money, too. However, sometimes I come across an idea that is even too frugal for me. Case in point: reusable toilet wipes.

Reusable toilet wipes are being promoted as a way of reducing the need for paper, and an economical alternative to toilet paper. Basically, it's a wash cloth. You do your business, wipe yourself with the soft, damp cloth, and then toss it into something that looks like the diaper bucket my mom used to toss my sister's cloth diapers into back in the 1960s.

Companies like Wallypop sell these cloths for about $11 for a dozen. I'm sure if you wanted to go this route you could buy some basic wash cloths at the local dollar store. Personally, this idea isn't for me.

First of all, when I...er, wipe...I don't ever want to see that wipe again. I have no problem flushing it away, never to be seen (or smelled) again. Also, with this method, you'll need to wash these cloths in you washing machine. I don't want something like this being washed in the same machine as my dress shirts and khakis. Eww.

At my house, we purchase the double roll-sized toilet paper. Scott makes a good double-roll toilet tissue, and it lasts a long time. I also buy baby wipes for my nether regions. If they are soft enough for a baby, I figure they should be just fine for me.

What did people do before the glorious invention of toilet tissue? Well, they made do. They used leaves, corn cobs, and pages from newspapers and catalogs (seriously). In some countries, toilet tissue is considered to be disgusting and unsanitary. In India for example, a cloth and some water is considered to be the way to go for many. In Middle Eastern countries, a cloth and/or the left hand is the acceptable means of cleaning after a Number Two. In those countries, the left hand is for wiping, the right hand is for eating, and those two are not interchangeable.

I will stick with my baby wipes.

Great Depression Cooking

noreply@blogger.com (T) — Sat, 07 Mar 2009 22:02:00 +0000

You have probably heard the old saying "everything old is new again." That has certainly become true during these tough economic times. People are turning to a lifestyle of Savvy Frugality not just out of some sense of trying to balance their budgets and save money, but as a matter of survival. Who better to ask for advice than someone's great-grandmother, who lived through the Great Depression?

That's where Clara Cannucciari comes in. For the past few years, 93-year-old Clara has been the star of her own Internet cooking show, Great Depression Cooking with Clara. The videos can be found at YouTube, and I have featured an episode here in this post. The show has its own web site and has even spawned a DVD, an upcoming cookbook and an appearance on the CBS Evening News.

The episodes of her online series are very interesting, not only for the simple fare that she cooks up based upon recipes her own mother used during the Great Depression, but also her stories of what it was like to live through that difficult period of American history. For example, we learn that people at lots of pasta and potatoes, and very little meat, during the Great Depresssion, and that one of Clara's neighbors rented their garage to some whiskey bootleggers to make extra money.

Whether you're trying to learn how to make your food dollars stretch, or you are just interested in hearing about what it was like to live during the Great Depression from someone who actually experienced it, Great Depression Cooking with Clara hits a home run on both counts. Besides, Clara is a very charming, likeable lady who is not only informative, but entertaining as well.

Check out an episode:

Your Bank Screwed You, Now What?

noreply@blogger.com (T) — Mon, 02 Mar 2009 17:43:00 +0000

If you are a regular reader of Savvy Frugality, you probably know my story well by now. If you are a new visitor, here it is in a nut shell:

For many years of my adult life, I mishandled my money. In truth, I really didn't know much about personal finance or how to be responsible with my money. Medical and other bills began to pile up, and instead of facing my problems head-on, I simply threw my bills on a stack on my kitchen table and ignored them. This led to my missing a crucial letter from my bank that I was severely overdrawn on my account. All of my bill payments had bounced. While I tried to fix the problems at my bank, I paid my bills with money orders. However, I lost all of my rent payment receipts and my landlord (who was trying to turn my apartment into a condo), used this as an opportunity to claim I had never paid my rent, and he evicted my family. With no proof that I had made my rent payments, the court sided with my landlord. My family was, in essence, homeless. There were a couple of nights that I slept in my car.

In actuality, what really caused the problem at my bank was this: I made my deposit, and then wrote checks to pay my bills. The bank held back my deposit and processed the checks I had written first, overdrawing my account. Then, they deposited my check, which evaporated due to all of the overdraft fees. I had no money, and sank even further into debt.

These days, with all of the banking options available (I prefer online banks for savings, but still use local banks for checking), there is no need to live with high bank fees and nonsense like this bank pulled with me (this was about six years ago). But, what if the worst happens and you do face your own personal banking crisis? I started to think about this a couple of weeks ago at work when a client told me he would have to send me a money order for payment for his product. Without prompting, he told me his bank closed his checking account, for unspecified reasons. "I don't even have a debit card anymore," he moaned. That is when I gave him a few options, learned all those years ago when I got screwed by my bank.

1. Shop around for another institution. Banks like to tell you that since they closed your account, you can "never get another bank account again" until you pay them the fees they say you owe them. This isn't true. What they don't tell you is that you are free to open an account at a credit union. Credit unions operate a bit differently than banks. When you join a credit union, you become a "member". Basically, you own a very small share of that credit union. Credit unions aren't going to hose over their members. They want your business. When I had problems with my bank, I opened a checking and a savings account at a credit union. I used the savings account as a line of credit to get a secured credit card from the credit union. Basically, my credit limit is only as high as the amount of money in my savings account. I'm basically borrowing money from myself, and the credit union is making 9 percent interest off of my credit card balance.

2. Use money orders carefully. If you must send something resembling a check, I recommend using only U.S. Postal Service Money orders. Those money orders you buy at the gas station are provided by third parties, and trying to get your money back if a money order is lost or stolen is a nightmare. With a U.S. Postal Service Money order it is still a nightmare, but you'll eventually get your money back if the money order goes missing. Hint: ALWAYS save your receipts! Treat them like they are money, because they are. You will need these to file a claim for missing or stolen money orders, and they can be used as proof that you did purchase them to make a payment for a bill. Even better: buy a cashier's check from a bank to make large bill payments if you don't have your own checking account. It will cost you a couple of bucks, but nobody turns down a cashier's check and it is far easier to get your money back should the worst happen. Avoid: traveler's checks. Some businesses won't accept them at all.

3. Buy a pre-paid credit card. If your bank really hosed you good and you can't even get an account at a credit union, consider buying a pre-paid credit card. Usually, you have to purchase them for about ten bucks, and then you "load" them with your own cash. Some, like the Wal-mart pre-paid Visa, will even let you do direct deposit to load money onto the card. Use the card like a regular credit card. Benefits: You can't spend more than you have, because once the money on the card is used up, that's it. No more charging. Pros: Direct deposit, can withdraw cash from ATMs, no charge to get cash back at Wal-Mart stores. Cons: The cards cost $8.95, plus a $4.95 "maintenance fee" every time you load the card. However, the fee is waived if you deposit at least $1,000 a month on the card.

4. Cash is king. The pre-paid card is a good option when you must have a credit card to make certain payments (such as online payments for bills). However, don't forget that cash is still good, too. Nobody turns down cash. You can't overdraw an account when spending cash. When the cash is gone, it's gone. Cons: if you need proof of payment, you must get receipts for EVERYTHING when paying by cash.

Eventually, I got things straightened out and was able to open another banking account after some time had gone by. I even received a bank loan to buy a new car, and I have never missed or been late with one payment. Remember, your bank works for you, and you are the customer. If your bank isn't treating you right, there are plenty of other banks out there that would love your business.

Savvy Frugality Recommended Reading: The Case for Buying American

This post is featured in this weeks Carnival of Personal Finance. Check out this week's carnival for more great personal finance tips and information!

Don't Pay to File Your Taxes

noreply@blogger.com (T) — Fri, 27 Feb 2009 04:03:00 +0000

Each year, I wait until the last possible minute to prepare and file my income tax returns. Basically, I just don't like to do my taxes. First of all, I usually wind up paying additional taxes each year, so I'm in no hurry to pay them early. Second, it's just no fun. I have used various programs over the years to prepare and file my taxes: TaxAct, H&R Block, etc. Little did I know I probably could have done my taxes for free.

"Good Morning America" recently featured some tips on how to prepare and file income taxes for free. Among them:

1. File through the IRS web site. It features 20 different programs you can use to file your taxes at no charge. There are some income restrictions.

2. Let an IRS volunteer prepare your taxes for you. Again, there are income restrictions and they file only the most basic of returns.

3. Are you a senior? The AARP can help you prepare our taxes. Again, there are income restrictions, but it's free.

4. In the military? There are tax preparers available at your duty station, and again, the service is free.

5. If these situations don't apply, you can still contact the IRS for assistance for preparing your taxes. While you might feel a bit paranoid letting the IRS prepare your taxes, look at it this way: if they make a mistake, they have no one else but themselves to blame.

More detailed explanations are available in this video.

Who is Benefitting from the Recession?

noreply@blogger.com (T) — Fri, 20 Feb 2009 01:17:00 +0000

In an economy in which thousands of jobs are evaporating each month, it is hard to imagine that any business is actually benefiting from the hard times. However, there are companies that are not only surviving, but thriving during what is being called "the worst economic crisis since the Great Depression."

Wal-mart is certainly doing alright for itself these days. As consumers look to save a buck on their household purchases, they are turning to the discount retail giant in droves. In fact, customers that avoided Wal-mart in the past are now finding the low prices suddenly appealing. Wal-mart ended the quarter on January 31st with a profit of $3.8 billion. Compare that to other blue-chip companies which are actually losing billions of dollars, and laying off tens of thousands of employees.

Hormel is another company that is doing quite well during the economic downturn. Hormel makes a product called Spam. Before its name was synonymous with unwanted junk email, it was best known at the pink, gelatenous ham-like substance that comes in a square can. Hormel cranks out millions of cans of the stuff every year. I actually like Spam, and I have always purchased it along my weekly groceries. I enjoy eating Spam and eggs for breakfast. It's one of the cheapest meat options you'll find anywhere. Sales of Spam have grown by double-digit percentage points recently, and the plant that produces the stuff has employees working around the clock to meet demand. Spam may get a bad rap amongst "foodies" but it is considered a downright delicacy in Hawaii, which got addicted to the faux ham during World War II.

Nestle is another food company which is reaching out to struggling consumers. It is said to be stepping up its marketing of its low-cost staples such as boullion cubes for making soup stock and its brands of instant coffees. It will also start offering its products in smaller packages at lower prices to reach consumers who are looking to pare back their food budget.

The companies that will prosper in the current economy are those who are willing to adapt to rapidly-changing conditions and serve their customers. The companies that will continue to do poorly are those who don't take the lighter wallets of their customers into account when pricing their products.

When to Cut Your Losses

noreply@blogger.com (T) — Tue, 17 Feb 2009 01:51:00 +0000

Americans hate to quit or give up at anything. I think it is something that is a part of our culture. To quit is to admit failure, to admit we didn't achieve our goal, and that we have lost something. We are taught that quitters never win and winners never quit. What this way of thinking doesn't take into account is that there are times when it is smart to quit.

While quitting is rarely the best possible outcome for a situation, when it comes to personal finances there are times when quitting will prevent you from losing more money and help set you on a better financial path.

My oldest son learned this lesson recently. He bought a car that I would have wanted when I was in high school: a red Camero. He didn't have any credit and I was not about to become a co-signer. I had urged him to work at his job for awhile and save enough money to buy the car in cash. Instead, he decided to purchase it from one of those "buy here, pay here" places.

The auto dealership did nothing wrong. In this situation, my son purchased a car before he had a driver's license, which he still doesn't have. As a result, he was making $300 per month car payments and $100 per month insurance payments on a car that sat in our driveway all day. After he moved out of the house, my son decided that this was too much money to pay for a car he could not drive.

He asked me what I thought he should do. "Take it back to the dealership," I said.

He protested, saying he would feel bad because he is putting the dealership in a bad spot, and because he failed at purchasing his own first car. I pointed out that this was the wrong way to look at it. There is no doubt he learned a costly lesson (mainly because he didn't listen to my advice. Go figure.) I told him he had the following choices:

A. Keep the car. Continue to make payments and pay car insurance, which was costing him $400 per month, or $4,800 per year....for a car he could not, and would not, drive.

B. Give the car back. The dealership has already received a $750 down payment, and $2,600 in car payments. The car wasn't driven anywhere, so it has almost no more miles than when the car was purchased, and it was purchased used. It hasn't depreciated anymore than when he bought the car a few months ago. The dealership gets the car back, they will be able to resell it (more people are buying used, not new, these days) and they made almost $3,500 for their trouble.

Basically, my son learned a $3,500 lesson. If he had stayed the course he would have cost himself more money, with no benefit to himself. By giving the car back, he was cutting his losses. It wasn't the best possible outcome for either party, but it was the next best move. The dealership said after my son gets his license he can always come back and purchase another car, and they will apply the $750 down payment he already made to a different vehicle.

Some people may have stubbornly held on to that car, determined they could make the situation work...while depleting their bank account and not driving the car. I'm not saying everyone should shirk their responsibilities and start returning their cars. However, if you have a choice between making rent payments or making payments on a car you can't afford (and this does happen), you need to be able to determine what your real priorities are, and know when to cut your losses.

This post was featured in this week's Carnival of Personal Finance. Check out this week's carnival for other great articles!