One common frugal tip is that you should stock up on an item when it is on sale. Stores are starting to have their back to school sales. This is an excellent time to stock up on school or home office supplies. The large department stores and office supply stores have a variety of merchandise for extremely low prices.

For example, Staples currently has many items free after rebate, Wal-Mart is selling 70 sheet notebooks for .15 cents, and K-Mart is selling Elmer’s glue for .20 cents. That is just a few of the deals available and there will be new ones every week for the next few weeks.

About a decade ago I took advantage of a cheap notebook offer and I haven’t paid for paper yet. During my four years in law school I never purchased any school supplies. I either already had the items needed or was able to get them for free. With a little planning you can stock up on supplies as well and not have to buy them again for years.

I’ve been wanting to spruce up the design of this site for a while. A couple of months ago I got a quote from a web designer for the changes I wanted to make. The quote was $750. That was actually a reasonable quote but well out of my price range since this site probably won’t make much more than that this year.

I had also been hearing about the Thesis theme for a few months. It was supposed to be easily customizable and developed for SEO. The price of $87 had been keeping me from purchasing it though. I figured with all the free themes out there why should I purchase one. When compared to the cost of having my site redesigned though it looked pretty cheap.

I went ahead and bought the developer’s license for $164 so I could use the theme on several sites. I plan to keep using the theme on my sites as I develop more of them eventually making my cost per site quite small.

The Thesis theme does have a lot of options allowing you to make easy changes to your site. However, I discovered it wasn’t going to be quite as easy as I thought to make the changes I wanted to my site. To make the changes I wanted would still require me to FTP stuff and modify my CSS stylesheet. That was somewhat discouraging. A little more research though uncovered lots of helpful tutorial for the Thesis theme and the Open Hook plugin which allowed me to modify my CSS stylesheet right from Wordpress rather than having to FTP the changes.

I’ve slowly made most of the changes to my site that I wanted to do. I’m still thinking about changing the logo. There are also a few more things I discovered while reading tutorials that I’ve decided I want to implement as well. These are more functional changes than appearance changes. I think my site now looks much better. What do you think?

I’m probably not going to make many more changes than the ones I’ve discussed. I think the appearance is good enough. It is time now to spend more energy on things that make me money and improve the quality of the blog.

If you would like to purchase the Thesis Theme please support this site by doing so through one of the affiliate links.

There are a couple of reasons why the average annual stock return figures can be deceptive. The first regards how the average is calculated. If a simple average is used it can be quite different than your actual return. Here is an example of this idea. If you invested in a stock and it went up 100% one year and down 50% the next you would have an average return of 25% but your actual return would be zero because you would just have the same amount of money that you initially invested.

The 10% annual return figure is also deceptive. It takes a long time period before stock returns average out to around 10%. According to this article at Fool.com over the 40 year period from February 1969 to February 2009 stocks had an annual return of 5.3%. That is a pretty long period for stocks to not return the average 10%. The article is a discussion of a study by Rob Arnott showing bonds outperforming stocks over 40 years. It also shows that starting at any time from 1980 up to 2008, an investor in 20-year treasuries, rolling them over every year, beats the S&P 500 through January 2009. This data may have been cherry-picked to show bonds in the best possible light but it still shows that it is possible for bonds to beat stocks over the long term.

One other complaint I have about the average 10% stock return figure is that after writers have gone to great lengths to show how stocks average 10% over the long term they will state that past performance is no guarantee of future results. This seems a little disingenuous when their article implies the opposite.

My point isn’t that you shouldn’t invest in stocks or that you should invest in bonds over stocks. My point is that stocks are not quite as great an investment as they are made out to be and also that keeping a portion of your portfolio in a fixed-rate investment doesn’t guarantee lesser returns.

I do own stocks and I plan to continue to invest in them. However, if I could find a guaranteed investment of 8% or more I’d definitely invest in that.

I do

Housing is the area where most people can see their most significant savings. Most people live in too big of a house and spend more than necessary on housing. The average U.S. home size has gone from 1400 sq. ft. in 1970 to 2330 sq. ft. in 2004. Granted the average American has gotten larger during that time period too but it isn’t like they are taking up that much more space.

My housing cost has been around $400 the past few years. With a little effort I could reduce that and I probably will before the year is up. I think $400 a month is a reasonable target for your housing expense. It is much easier to do here in the Midwest than in other areas but it is possible in more areas than you would think. My best friend lived in the S.F. Bay area last year and paid $400 a month for a room in a house right by the ocean. Even in some high cost areas you can find reasonably priced housing if you are willing to be a little unconventional.

If you find the $400 amount too constricting you could consider keeping your housing expense at 20% of your income. That would still keep your housing cost below average and should allow you to save a significant percentage of your income.

If you still think it is impossible to do this in your area then you might consider moving to a different location. I’m going to do a separate post on location in regards to frugality.

If you need some ideas on how to lower your housing cost check out “Twelve ways to become rent or mortgage free” at Wise Bread or check out Jacob’s post on living in a RV at Early Retirement Extreme.

My hike has been delayed once again. I woke up yesterday feeling terrible. I had a temperature of 101.4, had all over body aches, and was extremely fatigued. After sleeping about 18 out of 24 hours I feel much better today but I’m not back to normal yet. I didn’t feel like it would be smart to start my hike while still recuperating from an illness. Hiking 15 miles a day with a 30 pound pack will be enough of a shock to my sedentary body without adding an illness on top of it.

Since I booked my flight on Southwest it was easy to change my flight and I didn’t have to pay any change fees. Most major airlines charge $150 to change your flight which is one of the reasons I prefer Southwest over the other airlines. I went ahead and bought my departure and return flights. I used a Southwest gift card I earned from Swag Bucks to pay for part of the flight. I’m flying from Kansas City to Philadelphia on July 28 and returning to Kansas City from Washington (Dulles) on August 24. I would prefer to leave earlier but I couldn’t get a flight at my discounted rate earlier than that.

It is only a little over 200 miles from my starting point in PA to Harpers Ferry, WV where I will catch the commuter train into D.C. and then take the D.C. train to the airport. I’m thinking my pace will probably get me into Harpers Ferry a few days early. If that is the case I will spend the time exploring the area and possibly do some sightseeing in D.C. if it isn’t too expensive.

I am kind of bummed at delaying this hike once again. I was tempted to just go ahead and go but being impatient has cost me in the past and I don’t want to make that mistake again.

photo credit: kevinzhengli

Some of you have expressed interest in what stocks I own. I’ve been reluctant to share this since I’m not a stock expert and I don’t want my portfolio to be seen as advice on what you should buy.

I currently have twelve stocks in my portfolio. It would be better to have more but this is what I can afford at the moment. These are the current holdings in my stock portfolio: Bemis (BMS), British Petroleum (BP),Consolidated Edison (ED), Great Southern Bank (GSBC),Johnson and Johnson (JNJ),Coca-Cola (KO),McDonald’s (MCD),Realty Income (O),Pitney Bowes (PBI),Power Shares International Dividend Achievers (PID),Ship Finance (SFL),Universal Health Realty Income Trust (UHT).

Most of these stocks were chosen because they had a consistent history of raising dividends or had a nice dividend yield. Ideally they would be like O and have both. An 8.4% yield and a consistent history of increasing their dividend since their listing on the NYSE in 1984. I don’t particularly like investing in funds but I have PID since I am under diversified and need more international exposure.

My return on investment since I started investing last October is 4.9% or 7.2% annualized. The actual ROI is higher than that since I didn’t invest all my money at once, I’ve been slowly adding to my portfolio since then. I just calculated this figure for this post and initially thought this wasn’t a very good performance. Considering the S&P 500 index lost 22.56% the last quarter of 2008 and is down 2.67% this year my performance looks pretty good.

This performance would be a lot better if I would have been quicker to unload GE. On the other other hand if I hadn’t bough GSBC, which more than doubled, my performance would be a lot worse. That is how diversification works. If one stock sucks, there should be some others that pick up the slack.

My initial plan for this portfolio was to eventually have enough dividend income to cover my monthly expenses. I’m no longer sure if I’m going to pursue that plan since I’m looking at having a wider variety of investments. I’ll still have stocks they will just be a smaller percentage of my investments overall.

The random winner of the 10,001 Ways to Live Large on a Small Budget book giveaway is Janet Carpenter who left comment 34. Thanks to everyone who entered and I hope you will continue to come back even when I don’t have a contest. A big thanks to my fellow bloggers as well for helping me promote this giveaway. There were 84 entrants making this my most successful giveaway by quite a bit.

If you didn’t win the book you can buy it on Amazon for about 10 bucks (cheap). Also, if you do buy it I would appreciate it if you use one of my affiliate links to do so.

10,001 Ways to Live Large on a Small Budget

Here is the latest plan for my one month hike on the Appalachian Trail. I’ll start by flying out of Kansas City to Philadelphia on Tuesday the 14th. From there I’ll take the bus to Delaware Water Gap, PA to get on the A.T. This town is on the PA/NJ border so when I head south from there I will be hiking through all of PA. It will be about 7pm when I arrive in DWG so I’ll probably just stay at the hostel for the night and begin my actual hike the next morning.

My plan is to hike to somewhere around US 50 in Virginia, possibly all the way to Waynesboro, VA if I end up hiking really fast. I haven’t decided how I’m getting back home yet but I’ll figure that out as I’m hiking. I like to keep my options open and not plan ahead too much.

I will have a guidebook with me and I’ll stay in a town about once a week or so to shower and resupply. When I hike I make sure I have enough food to get to the next resupply and that is about the extent of my hiking.

I’m going to try to hike for the whole month on a budget of $200. That will break down to roughly $100 for food and $100 for everything else such as hostels, showers, laundry,replacement gear, etc. I won’t be including the cost of getting to the trail or getting back home. If this budget proves to be unrealistic I will adjust it rather than make myself miserable trying to stick to the budget. Based on my previous hiking though I believe this budget is at least reasonably close what I will spend.

I should be able to get on the internet about once a week to update the blog and moderate comments and such. I will also have daily tweets about my hike as long as I have cell coverage. If that interests you be sure to follow me on Twitter. I hope you all will stick around while I’m hiking.

My approximately one month long hike on the Appalachian Trail will begin next Tuesday, July 14. I’ll really be hiking, not flying to Argentina. I have scheduled a couple of posts to appear during that time and will update the blog once a week or so depending on when I have access to the internet. To fill the gap between my posts I would like to have some posts from guest bloggers. The posts can be on any topic related to personal finance as long as it fits this blog. If you are interested in submitting a guest post please send me an email. My email address is this blog’s name @ gmail.com. Thanks.

The writers at Wisebread have come out with a book titled 10,001 Ways to Live Large on a Small Budget. As you might guess from the title this book is chock full of useful tips on getting more for your dollar. These ideas will help you have a nice lifestyle while being frugal. Frugality is about making smarter choices with your money not sacrifice.

The book reads like a series of blog posts. Which isn’t too surprising since the tips are mainly from posts at Wisebread. If you like reading blogs posts – and since you’re here reading a blog, you probably do – you should enjoy reading this book. The tips have been organized into several categories such as travel, food, health and beauty, etc. to help you find tips.

With over 10,000 tips the book doesn’t go into much detail on any of them. Most of the ideas are pretty simple though and don’t require a lot of explanation in order for you to be able to utilize the ideas. This book would be an excellent resource for anyone who is just getting started with being frugal. Even if you have been frugal for a long time such as I have you will likely find a few helpful tips in this book.

I’m giving away a copy of this book. To enter simply leave a comment on this post. Only one entry per person. The book will be shipped via media mail so the winner must have a U.S. address. The contest will close on Friday and the winner of the random drawing will be announced at that time.