Smart shopping saves you money. And who wouldn’t want to save money when it seems like the cost of everything keeps going up. Some people believe the best way to save money is to grab the biggest size, family size or big ‘un for the lowest price.

But when you look a little closer you may be surprised to see you’re actually paying more money for the bigger size. Believe it or not, it’s true sometimes the smaller size is cheaper.

Just the other day I noticed a woman at the grocery store trying to decide what size of cheese to buy. They were both the same brand and on sale. The 16 oz. bag of cheddar cheese was $1.88 and the larger 32 oz. bag was $4.49. After a few moments she made her decision and grabbed the bigger bag.

Before she walked away, I stopped and asked her if she noticed the 16 oz. bag was only $1.88. She told me that she did, but decided to go with the larger bag. I then explained that if she bought two 16 oz. bags at the lower price, she would be paying less than $2 for each bag. That’s the same amount of cheese for less than $4 ($3.76 to be exact). She thanked me and put the larger bag back and got two of the smaller bags instead.

What’s a shopper to do to make sure you’re paying the lowest price? Well, some stores are nice enough to put the cost measurement below the item. So you can easily see if the bigger size is really the better value. For example, those chips may cost .027/oz. for the smaller size and .020/oz. for the larger size. Depending on your needs and the expiration date clearly the cheaper price per ounce is the bigger bag of chips.

Be careful if you decide to use the store’s calculation because sometimes the manufacturer will give you 20% more free and the store calculation may not take the additional amount free into account.

Is the biggest box the real deal? Show me the calculation…

I remember back when I used to shop for diapers. I’m glad those days are behind me. But back then I used my calculator (or should I say my cell phone) to find out which box of diapers was the least expensive. Now, I did not say the cheapest, because my husband and I only bought certain brands of diapers.

To calculate the cost per diaper, I took the price of a box of diapers divided by the number of diapers. If I had a coupon, I would simply take the price of diapers and subtract the coupon amount, then divide by the number of diapers.  That’s the easiest way to find out which size is the best value for your money. And it works whether you’re buying diapers or ketchup.

As mathematical equations:

• Price per Unit = Total Price / Unit of Measure
• Price per Unit = (Total Price – Coupon) / Unit of Measure

To calculate the price per oz. on the bags of cheese above, you’d use the price and unit of measure:

$1.88 / 16 oz. = $0.1175/oz. (the lowest price)

$4.49 / 32 oz. =  $0.1403/oz.

Here are a few helpful articles to walk you through calculations:

• Personal Finance 101: Grocery Store Math – This article breaks it down and walks you through step-by-step on how to enter the numbers in the calculator.
• How to Calculate Unit Price – This one takes you back to school with unit of measure conversions.

Do you have any other tips to add?

Photo: lyzadanger

Albert Einstein once said “Insanity: doing the same thing over and over again and expecting different results.” These words of wisdom can help you in any area of life.

The underlying meaning is you have to change what you’re doing to get better results. Whether you’re trying to lose weight, get out of debt or quit smoking—you can’t keep doing the same thing and expect another outcome.

To achieve success you have to take action and change what you’re doing. That’s what Thomas Edison did when he invented the first light bulb. And if you look back throughout history many of the greatest inventors kept trying in different ways until they got it right.

If you don’t like where you are today, I encourage you to look for new ways to achieve your goals. And put them into action to drive the results you desire. One more thing: never give up.

Photo: Mimsen

This year the Federal Reserve Bank of Chicago’s Money Smart Week® will run from April 21^st – 28^th. Do you have a Money Smart Kid? If so, your child may be able to enter the Money Smart Kid Essay Contest in Illinois, Indiana, Iowa or Michigan.

WANTED: Money Smart Kid 2012

REWARD: Money Smart Kids get a chance to win scholarships and savings bonds.

The 2012 Money Smart Kid Essay Question:

Give an example of when it is wise to borrow money and when it is not. What factors do you need to consider to help you make a responsible choice? Please be sure to discuss the concepts of decision making and opportunity cost in your answer.

So what does a winning essay really look like? Check out Chicago’s 2011 Money Smart Kid Charles Tiseo essay about The Curious Case of Benjamin Budget.

Click here for more information on the MSW Kid contest entry criteria and deadlines.

Last month my best friend flew to Chicago to attend my book launch party ­for “Get Your Money Right .” After shopping around for her ticket, I have to say—don’t let the low price fool you.

Especially when it comes to Spirit Airlines. On the surface it looks like you’re getting a real bargain. But once you start adding in the extra fees, you may be shocked to find out how much your trip really costs. I’m not talking about the standard fees like for security, facility and taxes either.

With Spirit Airlines she paid $16.99 just to buy her ticket online. They call it a “passenger usage fee” and you pay it each way. So it costs you about $34 roundtrip. Who buys tickets at the airport these days? The airfares are probably higher in person anyway.

Then she had to pay another $30 to carry on her luggage. Yes, you read that right. Spirit charges you for bringing on carry on bags. And there was no way around it because she needed clothes for the weekend. At least she saved $5 for paying in advance.

That’s close to $50 in extra charges on a one-way ticket. After using her $25 coupon code, Spirit was still the cheapest option for a one-way ticket. When shopping around, I encourage you to take into account any additional fees to find the best deal. For example, a round trip ticket on Spirit Airlines purchased online with carry on luggage both ways could cost you an additional $94.

The good news is that the government has made it easier to compare ticket prices across airlines. Starting on January 26^th, all airlines are now required to provide full fare advertising including taxes and mandatory fees (so you still have to check optional fees).

According to the Department of Transportation press release – January 23, 2012:

Also beginning this week, passengers will be able to hold a reservation without payment, or cancel a booking without penalty, for 24 hours after the reservation is made, if they make the reservation one week or more prior to a flight’s departure date.  In addition, airlines will be required to promptly notify passengers of flight delays of over 30 minutes, as well as flight cancellations and diversions, and they will generally be prohibited from increasing the price of passengers’ ticket after it is bought.

The new rules also will make it easier for passengers to determine the full price they will have to pay for air transportation prior to travel.  Currently, airlines and ticket agents are allowed to publish ads that list government-imposed taxes and fees separately from the advertised fare, as long as these taxes and fees are assessed on a per-passenger basis.  However, sometimes the notice of these taxes and fees is not obvious to consumers.  Under the new requirements, all mandatory taxes and fees must be included together in the advertised fare.  The advertising provision takes effect Jan. 26, 2012 while all of the other consumer protections go into effect on Jan. 24 of this year.

In addition, airlines and ticket agents will be required to disclose baggage fees to consumers when they book a flight online.

Check out the articles below for more information on the new airline rules:

New airline pricing rules: what it means for you

New rule on advertised airfares begins — and Spirit isn’t happy

New airline rules

Do you have any thoughts on the government’s new airline requirements?

This morning I heard on the news that IL gas prices are the highest ever for this time of year. That’s not surprising if you’ve been to the pump lately. Gas is averaging about $3.69 per gallon/regular. But what really got my attention was to hear Metra fares are increasing up to 30%, starting on Wednesday, February 1^st.

Up to 30% – that’s some increase!

Here’s the fare increases Metra riders can expect to pay starting on Wednesday:

Starting on Feb. 1, 2012, one-way tickets will increase an average of 15.7 percent across all fare zones, while 10-ride tickets will go up an average of 30 percent and monthly passes will increase an average of 29.4 percent. Reduced fare one-way tickets will increase an average of 10.3 percent, reduced fare 10-ride tickets will increase an average of 18.9 percent and reduced fare monthly passes will go up an average of 10.8 percent. Taken together, the overall average increase is 25.1 percent.

One more thing, if you were thinking of stockpiling those 10-ride tickets at today’s lower rate you can forget about it. I bought one of these a few weeks ago and there’s a big RED stamp that only makes it valid through February 29, 2012.

In addition, Metra is immediately changing the expiration dates of one-way and 10-ride tickets in an effort to deter the stockpiling of those tickets before the fare increase begins next year. One-way and 10-ride tickets purchased from Nov. 12, 2011, though January 31, 2012, will be valid only through Feb. 29, 2012. There is no price increase for those tickets during this temporary period. Unused tickets will be reimbursed at the refund policy in effect at the time of purchase.

For more information on Metra fare increases and policy changes starting Feb. 1 click here.

Photo: Ron Cogswell

How can an athlete go broke after earning millions of dollars? Some people might say it’s just the fast life. But when you look a little closer, you’ll see what’s really chipping away at their fortunes.

Keep An Eye On Your Money

“When it comes to personal finance, get personal, because it’s your money and no one will ever care more about it than YOU.”

Most athletes trust the people (friends, family, agents and others) around them for professional recommendations. And typically depend on others (financial advisors, accountants, lawyers) to manage their finances. After all, these people have the titles, so they must know what they are doing. Right? Not always.

That’s why you have to stay in control and involved with your finances. It’s important to know where your money is going. What do you owe? How’s your credit? Are bills being paid on time? Unfortunately, a friend of mine (former NFL player) discovered this principle a little late—after someone he trusted lost his money. He learned from his mistake and decided to take control of his money himself. And now he’s doing much better financially.

Live Below Your Means

“Be assured that it gives much more pain to the mind to be in debt, than to do without any article whatever which we may seem to want.” - Thomas Jefferson

Sounds like common sense to spend less than you make. However, many people struggle with this, even athletes earning millions. Believe it or not, during the NFL lockout it was reported that more than 20 percent of the players were living paycheck to paycheck.

You can easily fall into this trap if you have a hard time saying no or when you’re trying to keep up with the Joneses. Living the lavish lifestyle of $200,000+ fast cars, million dollar homes, expensive yachts and pricey jewelry can quickly shrink that multi-million dollar contract. Have you ever heard of the saying, “it’s not how much you make, but how you spend it”? In other words, no matter how much money you earn, you have to control your spending. A great way to do this is to create a financial plan and stick with a budget.

Invest Wisely

“An investment in knowledge always pays the best interest.” - Benjamin Franklin

Bad investment decisions are probably one of the biggest reasons athletes file for bankruptcy. Fortunes have disappeared because of ponzi schemes, real estate losses, con artist scams and poor business ventures.

Of course there’s always risk involved with any investment. But a good rule of thumb is “if it sounds too good to be true, it usually is.” It’s important to work with a financial professional you trust with a proven track record (i.e. employment history, licenses). You need to check his/her background (any violations?), experience and references. You must also understand any investments you make. Visit finra.org for more investing tips.

When it comes to business ventures, take the time to fully understand the business proposal upfront. How does the business work and make money? What experience does the leadership team have? Does it require a guaranteed loan investment? Be sure to do your research before investing.

Conclusion

Whether you’re an athlete or not, these three things could make a big difference in your financial future.

Photo: danielmoyle

At first glance, the mailer reads in big bold letters: “REQUEST FOR IMMEDIATE ACTION – TIME SENSITIVE MATERIAL ENCLOSED.” Then to peek your interest, the words “TO BE OPENED BY ADDRESSEE ONLY PLEASE RESPOND WITHIN FIVE DAYS.”

So I open it, just to find out what this sender is really up to. The message inside tells me that my car warranty is expiring and they can help. But of course, I must act now. Let’s see they have the right owner, car make and year too. Guess they have a little bit of credibility?

The solution to my problem seems to be just a call away. They give me their toll free number to extend my vehicle’s coverage. But as Lee Corso says, “Not so fast.” After all, my car warranty isn’t expiring for another year.

But the mailer clearly says it’s “URGENT AND TIME SENSITIVE.” Surely, this mailer is going right into the recycle bin. Pronto!

However, I must say knowing the specifics about your warranty can really save you money. For starters you won’t fall into warranty extension gimmicks. Now if you really need the additional coverage, I encourage you to make sure it’s a reputable company and confirm the coverage is worth paying for (what does it cover? how much does it cost?).

Warranty protection could definitely be a good thing! And it gets even better when retailers (i.e. Costco) or credit card companies automatically extend the manufacturer’s warranty on some purchases.Understanding the warranty protection you have can keep more money in your pocket. For example, we had to replace a bedroom door handle in our home. And I didn’t have any warranty information because we bought the house new. After shopping around, I decided to call the manufacturer.

To my surprise, I found out the door handle was covered under a lifetime warranty. The only thing they requested is a picture of the broken door handle and that I pay a reasonable shipping and handling charge. Then they sent me a brand new door handle for free (about $40 retail).

Have you ever purchased an extended warranty? If so, what’s been your experience?

With every passing year, we are given a chance to reflect on the past and start anew. As Oprah Winfrey once said “Cheers to a new year and another chance for us to get it right.”

That being said, have you set your New Year’s resolutions yet? Perhaps, there’s something you’d like to improve on this year. And the key to actually making your New Year’s resolutions a reality is how you go about it.

Here are 5 Steps to Make Your New Year’s Resolutions a Reality:

1. Make the Decision and Be Committed – Whether you want to lose weight, save money, quit smoking or anything else the first step is to make the decision. But making the decision alone is not enough, you must be committed to your goal. In other words, you have to be willing to do what it takes to achieve it.
2. Set Your New Year’s Resolutions – Now that you’ve decided what you want to achieve, it’s time to write it down. It’s important to be specific about what you want to achieve, make sure it’s realistic and set a target date. For example, instead of just writing I want to lose weight. You could be more specific and write “Lose 25 pounds by June 30, 2012.”  After you’ve written it down layout the actions (e.g. eat healthier, exercise) you’ll need to take to make it happen. Then capture the actions down on paper too.
3. Find an Accountability Partner – Do you know anyone you trust that you can share your New Year’s resolutions with? This person could be your accountability partner. Someone who will be there to encourage, motivate and hold you accountable for achieving your goals.
4. Track Your Progress – In order to achieve success you must keep your New Year’s Resolutions in front of you, stay positive about achieving them (better yet, visualize your success also) and track your progress. Tracking your progress will help you identify whether you need to change what you’re doing to get more desirable results.
5. Celebrate Your Successes – Be sure to do something to recognize your achievements. Keep it simple, but be sure to take the time and celebrate your accomplishments. This will keep you motivated and moving in the right direction!

I wish you all the best in 2012 and beyond.

Feel free to share your thoughts or any other tips. Thanks for reading!

Yesterday my five-year old daughter went on her first shopping trip without us. In fact, Kiara and her classmates shopped without any parents. I gave her $5 and she came home with more than I would have expected. She bought slippers and a book for her sister, a picture frame for her dad, massaging slippers for me, and even got herself a new art set and markers. All of this for only five bucks.

How did she buy it all for just $5? Where did she go? Well, it was no shopping trip to the dollar store. That’s for sure.

She actually shopped at school. Her school has Shopping Day every year. It’s when the kindergarteners and first graders get a chance to put what they learned about money into action.

Shopping Day teaches students how to:

• Use money to buy things. They have to be able to identify and count their money.
• Think of others. I think it’s great that they are using the holiday season to help them learn the importance of caring for others. For example, Kiara bought something for everyone in her family.
• Giving. Parents and teachers donate items (new or “very slightly used”) for Shopping Day. And all of the cash proceeds are donated to those less fortunate.

Kiara absolutely loved shopping day and it showed on her face (all smiles). And she couldn’t stop talking about it. She told me some of her friends were really great shoppers. Kiara also noticed that a few of them were a little selfish because as she put it “they only bought things for themselves.”

I have to say I’m proud of Kiara. She learned a lot on Shopping Day. She was confident about using money, thoughtful and selected some really nice items (already has an eye for value ).

Kudos to her teacher Ms. Laine for doing such an awesome job putting this real-life experience together!!! Keep up the great work!

Shopping is one of the best opportunities to teach kids about money. And the lessons here go beyond your typical how to count money and receive change scenario. Do you have any other great ways to teach kids about money to share?

Photo: PublicPhoto.org

We all think about money in different ways. But there are some myths about money that need to be brought to the light. These myths can be misleading. And may even give you a false sense of security, or lead you to believe there’s a quick fix for the problems in your life.

Now, let’s explore them for what they are. Here’s 5 Myths About Money Shattered:

Money Buys Happiness

This is probably one of the most popular myths about money. Does money really buy you happiness? Last year, a study conducted by Princeton University found that most Americans (85%) were happy, despite their incomes. Sure, money gives you more financial security and comfort. But it doesn’t necessarily bring you happiness.

Rich People Only Buy the Most Luxurious and Expensive Things in Life

While it may be true that some rich people splurge on lavish and expensive things. And you may even see them featured on TV for purchasing ridiculously priced homes, cars, jewelry and more. But if you read The Millionaire Next Door you’d be surprised to learn that many millionaires are disciplined and thrifty spenders. Did you know that billionaire Warren Buffett chose to drive a reasonably priced Lincoln Town Car over more expensive options like a $380,000 Rolls-Royce Phantom?

If You Make Good Grades or Have a Higher Education – You Know How to Handle Money

This myth could not be further from the truth. Knowing how to manage money has nothing to do with the grades you made in school or a law degree. And just because you happen to be a doctor, teacher, or CPA does not mean you’re any better managing your money than a bus driver. Being financially literate, disciplined and having self-control are more important factors.

I Don’t Need to Know About Finances, Because My Husband Handles Everything

I remember when I shared a copy of my new personal finance book, Get Your Money Right: The 7 Keys to Unlocking a Better Financial Future, with a woman at the library.  After looking through my book, she told me that the content looked great. Then she said, “Well, I really don’t need to know anything about money, because my husband handles everything.” I could not believe my ears. What?

As a wife, I know the importance of understanding personal finance whether you’re married or not. Besides, what would happen if an unexpected event like her husband divorced her or died happened? If she’s clueless about managing money and does not know how to handle the household finances, it puts her in a challenging position during a difficult time.

However, if you’re proactive about learning about money, you’ll be in a better position to handle unexpected events. And having more financial understanding makes it easier for you to manage your finances. In her case, she could help her husband with the finances and have more insight into the household finances.

If I Win the Lottery, My Financial Worries are Over…

Some people believe that the only answer to money problems is more money. But a windfall of cash doesn’t guarantee that your financial problems are solved. In fact, many lottery winners end up financially worse off (owing high debt, claiming bankruptcy) after winning millions. Because if the root cause of the problem is not addressed, it will only magnify with more money.

Final Thoughts

There are many myths out there about money. But if you’re money smart, you’ll be able to separate fact from fiction. I’m convinced the more you know, the more your money will grow.

Do you have any other myths about money you’d like to share?