Frugal Living 
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Get A Stimulus Check Every Year!

With Presidential hopeful Barack Obama mentioning a potential second economic stimulus check, many folks are clamoring to know more. Unfortunately, there’s much else to say about it other than that he’d push for one in the short term.

I, however, offer a different solution. In order to find an additional $600, you only need to cut $50 a month. In reality, that comes out to only $11.54 a week. Reduce your spending by eleven dollars, fifty four cents a week and you will have created your own stimulus check. That’s it. Can you do it? I’m betting that you can and here are some recommendations of what you might want to trim.

Subscriptions

NetflixGet a list of all the subscriptions you have and really take a long hard look at what you really use. Do you have a $50/month (or more) gym membership that you don’t use? Do you have a $15/month Netflix membership but have had the same DVDs for the last three months? Do you get a copy of Good Housekeeping every month yet you never do anything except leave it on the coffee table? Trim it.

  • Gym memberships,
  • Video rentals memberships,
  • Magazines,
  • Cable television,
  • Internet,
  • there are plenty more…

Food & Fuel

Food and fuel are the two largest expenses for most families so it makes sense, after trimming that which we can live without, that we turn to these two categories to find further savings. (what doesn’t make sense is why they’re not included in “Core-CPI,” oh wait I remember, it’s so the number seems better! :) )

First, let’s tackle food.

Food:

Yellow SquashEvery Thursday there’s a farmers market within walking distance of my home in which fresh produce is sold at very low prices. I can get yellow squash for $1/lb. versus $1.49/lb. at the local Giant supermarket. That’s a 33% discount and while we don’t eat a ton of yellow squash, savings is savings.

Another recommendation I’ve heard, which I am trying to follow, is to eat more vegetables and less meat. Vegetables are healthier for you and far cheaper. Chicken breast, at it’s very cheapest, was $1.69/lb. and usually $2.99/lb. Beef? Forget it, you’re talking the north side of $4 a pound and sometimes much higher depending on the cut, grade, and whatever sale’s going on. Supplement your meals with more vegetables and some meat, for the various nutrients, but eat more leafy greens than fatty meats.

Lastly, be sure to review the circulars. You can see what’s on sale for the week ahead and plan your menu accordingly. We know that the front page of the Giant Food supermarket circular has the sales so we structure our meals according to what’s on sale. This week we had some shish-kabobs and will prepare some “crumby chicken” (it’s chicken breast coated with breadcrumbs, except it’s Ritz crackers) tonight. Chicken is on sale. :) (oh, and a leftover calendar helps reduce spoilage… still going strong with nothing going bad yet!)

Fuel:

I’m a huge proponent of car pooling, as it has the potential for the greatest savings. A second best option is to employ some techniques of realistic hypermiling. Don’t tailgate trucks, but consider easing off the gas if you see a red light and not slamming it when it turns green.

Everyone can tell you to car pool or hypermile, how about something no one else has said before? Go to Google Maps and plot out your daily commute. Google will often give you the fastest route but not necessarily the shortest one. What you can do is drag the path and investigate some alternative routes to see if it reduces your total mileage. While there are factors not illustrated on the map (rush hour zones, traffic lights, etc), it will give you an accurate count of the miles traveled. You will have to decide for yourself whether the trade-offs are wroth it.

In my case, I plotted my former commute and was able to reduce the trip from 16.1 miles to 15.5 miles. Qualitatively, the shorter commute had three more traffic lights, took smaller roads, but often missed a stretch of two highways that are usually clogged during rush hour. I felt the two were equal, except one route was shorter by 0.6 miles. 0.6 miles may seem inconsequential but it’s actually worth $40 a year! At $4/gallon gas and a 30MPG car, each mile costs 8 cents. If I make the twice a day for 250 days, the typical work year, then I save $40 by cutting out the 0.6 miles. This, of course, assumes both trips take the same amount of time.

So, plot your trip and any frequent trips you make (such as to the grocery store, doctor, dentist, etc.) to see if you can squeeze any efficiencies out of it.

There you go, some damn good suggestions on how to squeeze an extra stimulus check each year. :)

(Netflix image by Ross C., Yellow Squash image by tombarta)


 Personal Finance 
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Ten Fundamental Concepts in Personal Finance

The fundamentals of personal finance aren’t very complex and I doubt you’ll find anyone who can reasonably dispute that but it’s a lot like the law, the difficulty is in the various nuances and unique scenarios that always seem to crop up. I’d like to put these fundamental concepts up for critique and ask what you think of them, whether one should be replaced, one should be added, etc. so that we can reach a consensus on what the ten fundamental concepts of personal finance are.

1. Spend Less Than You Earn

Don’t eat more calories than you burn, don’t spend more dollars than you earn, it’s pretty simple and it’s the number one thing that you can do that can guarantee you’ll be financial prosperous. Heck, you can probably stop reading here if you follow #1 and do just fine.

2. Thinking About Money Sucks, But It Can Be Easy

Thinking about money and thinking about the future isn’t a lot of fun for most people. You probably don’t know what you’re doing this weekend, let alone what you’ll be doing when you retire in 20, 30, 40, or 50 years. That’s okay, the beauty of a lot of financial planning is that you can set it and forget it, Ronco style, enjoying the fruits of your smart decisions down the road with a minimum of pain now. For example, if you’re employed and have a 401(k), just drop 5% into it each month. You probably won’t feel the pain but you’ll enjoy seeing the balance when you retire.

3. You Don’t Have To Follow The Crowd

If you see the latest stock or investment start climbing in value, you may feel tempted to jump on the bandwagon so you aren’t “left behind.” This is as true in other aspects of life as it is in investing and it’s something that you have to come to grips with. Not moving forward is not the same as not moving back, you have to remember to pick your spots and remember your fundamentals, whether its your moral code or your investing decisions. Sometimes the boat sails with you on it and sometimes that boat hits an iceberg and sinks to the bottom of the sea, remember your fundamentals and you’ll end up doing just fine not chasing the latest fads.

4. Retirement Savings Order – 401k With Match, Roth, 401K, Everything Else

When it comes to saving for retirement, nothing can beat a 401(k) plan where your employer kicks in a few dollars to match your own contribution. Nothing in life is free but this is pretty darn close. Once you maximize that, start funneling money into a Roth IRA until you max that out. Then, polish off the 401K. If you still have money you want to save, put it in an investment fund but remember to enjoy life.

5. Avoid Debt Unless It’s For A House, Car, or Education

There are three things in life that you should be willing to go into debt for – your house, your car, and your education. Heck, the government even gives you a tax break for financing your house and your education, so you should take advantage of it while you can. As for the car, it’s probably necessary if you want to get anywhere in most places of the United States. With all three, don’t go all out, only buy that which you think you’ll reasonably need and you’ll do fine. That also means don’t get deep deep into debt if you can avoid it, so don’t buy too much house and too much car – ultimately no one else will care (or they will take advantage of you, which is even worse).

6. Showing Off Breeds Either Jealousy or Annoyance

You know that whole keeping up with the Joneses concept? Think about the last time you saw someone drive around in a flashy car, you probably thought he or she was overcompensating for something. How about that big television they were showing off to you? How about that gynormous house? You probably were either jealous of them or you were annoyed at them showing it off, either way the feeling is negative. So, why would you want to try to keep up and have other people be jealous of you or annoyed at you? Either way they won’t like you!

7. Scrap The Latte Factor

This is a term coined by David Bach and it’s the idea that if you cut out small unnecessary spending, like a cup of Starbucks, you can put that money away and it can grow tremendously. Think of all the little dinky crap things you buy, maybe from impulse, maybe from habit, and try to cut them out because you could save yourself some serious money.

8. If It’s Too Good To Be True, It Is

There will come a time when someone will come to you with an offer that seems unbelievable, whether it’s a hot stock tip or a great investment or some other scheme – don’t buy it. The true path to financial prosperity takes hard work and diligence, not sending envelopes of money or cashing a check for a guy in Nigeria. Your brain can sniff out a scam, don’t let your greed block out the scent of a bad deal.

9. Life Is About Enjoyment, Not Money

You can’t buy love and the best things in life are free. Think about all the lottery winners who end up dead in a ditch, or the star athletes getting into domestic disputes and thrown in jail, or the powerful executive that missed his or her children growing up – life isn’t about the cash. Life is about enjoying the time you have here with your loved ones, not about getting more and more money. Money can’t buy you time and time is precious.

10. Always Act Morally, Ethically, Truthfully & Legally

No matter what you believe in spiritually, the judge of your actions here on Earth will ultimately have his, her, or their say and money carries no weight there. And if you don’t believe in anything past this life, always remember that your Mom is watching.


 Frugal Living 
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Understanding “Trimmables,” or, Purposeful Saving

What is a trimmable? It’s something you’re paying for on a monthly basis that you could remove and it would not negatively impact your life. A gym membership is not a trimmable, unless you don’t actually go to the gym. A Netflix account is a trimmable. A gym membership you don’t actually use is a trimmable. And guess what? You only need to cut your trimmable temporarily until you earn enough money to achieve your goal. Understanding your trimmables can be the secret to buying whatever you want.

I know this sounds like a very basic idea – that’s because it is. The beauty of it is that you can cut a trimmable temporarily to save up enough to buy what you want. Do you want one of those new iPod nano’s? Let’s say you have a $15 Netflix membership… all you need to do is to cut it for 17 months and that iPod nano could be yours. Seventeen months sounds too long? Find yourself another trimmable of $5 and you cut down that time to twelve and a half. If you scrounge up $40 in trimmables, you get that iPod nano in six months. Find $50? You get it in five.

List all your monthly payments and see what you can do without for a few months. Don’t cut out things that drastically improve your quality of life (cell phones, gym memberships) but look for things you can really do without (most will be entertainment related) such as an Netflix membership and you will be able to buy whatever it is your heart desires. Remember, you will only need to suspend that trimmable temporarily and it’s for a purpose, such as buying a widget or going on a vacation.

You’ll find it’s easier to cut that trimmable when you’re working towards something. Want to go on a cruise? Save a little extra, trim a little extra, and you’ll see that vacation getting a little closer. Add on the fact that you can use a credit card and get a 1 month grace period and that little goal is that much closer. Set your sights and trim something!


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