Simplifying Your Life: Why Less Is More

We've done the binge thing for awhile; now it’s time to do the purge thing. Most of us have a tremendous amount of excess. Too many expenses, too much stuff, too many commitments and responsibilities. Do you dream of calm over chaos? Do you wish you could hit a button and be transformed to the tranquility of another era? You can create an oasis of peace for yourself and your family, but you’re going to have to relearn what it means to simplify as I bust the top three myths about the subject over the next month.

Myth #1 - Simplifying means having and doing less.

Wrong! Simplifying is not necessarily about less. It can be about more. More time. More enjoyment. More joy. More fulfillment. More of what enriches you.

If you do or have a lot of things that don’t bring you joy or support your long-term plan, then doing or having less of that kind of stuff makes sense. But you can’t eliminate everything. If you throw out, reduce, cut back, and cancel as much as you can, you’ll be left with a void. The purpose of simplifying — at least as I see it — is to chuck what’s not important and add what is.

To understand what should be removed and what should be added, try thinking of activities and things as either assets or liabilities.

Assets

An asset is something that is valuable or that may be worth something. Obvious examples are stocks, bonds, buildings, raw land, gold, etc., but I want you to think of an asset a little more broadly. An asset is anything that:

Gives
* Increases in value
* Provides something valuable such as money, joy, security, happiness, etc.
* Strengthens and empowers you
* Moves you closer to your goals
* Provides positive stress and healthful excitement
* Relaxes and calms
* Increases health and vitality

Liabilities

Liabilities are obligations, debts, and things that cost more money than they produce or are worth, but again, let’s think more broadly. A liability is anything that:

Takes from you
* Decreases in value
* Eliminates or reduces something valuable such as money, joy, security, happiness, etc.
* Weakens you
* Moves you farther from your goals
* Provides negative stress
* Creates anxiety or agitates
* Decreases health and vitality

Bottom line? Assets give. Liabilities take.

So how does this help you simplify? Create an inventory of everything in your life — from your friendships, projects, and commitments to your expenses, belongings, and goals. Since this is quite a task, make it easier by starting with just one area. For example, non-work commitments.

List all of your commitments, responsibilities, obligations, or whatever you call them. Take out your calendar and look back a few months and forward a few months to jog your memory. Make a big list. For example, your list may include a homeowner’s association meeting, mowing the lawn, paying bills, volunteering, being a greeter at church, driving the kids to school, planning a birthday party for a friend, etc.

Now, categorize each of these commitments as either an asset (A) or a liability (L). Does the activity or responsibility give or does it take? Does it get you closer to your goals or farther away? Does it create healthful excitement, or does it just stress you out?

The next step is determining if you can eliminate any of the Ls. You’ll never be able to eliminate all your liabilities, but your goal should be to get rid of as many as possible. The power of this exercise is becoming conscious of what gives and what takes, and then making some informed decisions about what A activities you can add and what L activities you can reduce or eliminate.

Again, simplifying is not about doing or having less. You can be running around from one project and commitment to another all day every day and be 100 percent content as long as you have filled your life with assets.

Source: Money Watch

Fannie Mae offers borrowers option to foreclosure

WASHINGTON – Can't pay the mortgage? You still might be able to stay in your home. Government-controlled mortgage company Fannie Mae is going to give borrowers on the verge of foreclosure the option of renting their homes for a year.

The change announced Thursday could give a temporary break to thousands of homeowners, but critics question whether it will only add to the mushrooming losses at the company, which has received billions in taxpayer money.

The new "Deed for Lease" program will allow homeowners to transfer title to Fannie Mae and sign a one-year lease, with potential month-to-month extensions after that. It also helps save money because the lender does not need to complete the often lengthy and time-consuming foreclosure process.

The program helps "eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities," Jay Ryan, a Fannie Mae vice president, said in a statement.

It also does less harm to the borrower's credit record.

"It shows that you put your best effort to work out a solution," said Gabe del Rio, director of homeownership at Community HousingWorks of San Diego.

However, Mike Himes, director of homeownership services at NeighborWorks Sacramento, said the industry should push harder to modify loans at lower monthly payments. "The preferred option is allowing people to retain ownership," he said.

Fannie Mae executives said the rental program is designed to help delinquent homeowners who don't qualify for a loan modification, but still want to stay in their homes.

To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. Rents are based on current market rates.

The plan is expected to be particularly attractive in places like Phoenix or Orange County, Calif., where homeowners are stuck paying large mortgage bills on properties that are now worth far less than they originally paid. At the same time, rents have been falling in those areas. So by renting the same house, former homeowners could wind up paying far less every month.

In Orange County, for example, the average monthly rent for all apartments was about $1,450 in September, down nearly 8 percent from a year earlier, according to research firm MPF Research. In Phoenix, the average renter paid about $720, also down about 8 percent from last year.

Still, the effort is likely to attract a relatively small number of homeowners.

In the first nine months of the year, Fannie Mae took ownership of nearly 2,000 properties through a process known as a deed-in-lieu of foreclosure. That pales in comparison to the 90,000 foreclosed properties the company repossessed in the period.

Deed-in-lieu works like the new program, allowing homeowners to turn over title to Fannie Mae, but rather than renting, the owners simply walk away.

While Fannie Mae executives say the company's motives are community-minded, critics say the company is simply gambling that the properties will eventually sell for a higher price. That's folly, says Peter Schiff, president of Euro Pacific Capital in Darien, Conn., and a longtime bearish investor.

"Taxpayers are now going to own all these houses that (Fannie Mae) should have unloaded," he said. "It's going to cost a fortune."

The announcement came as Fannie Mae asked for an additional $15 billion in government aid after posting another big loss in the third quarter. The mortgage finance company, seized by federal regulators in September 2008, posted a quarterly loss of $19.8 billion, including $883 million in dividends paid to the Treasury Department.

Pessimists like Schiff say the recent stability in the housing market is just temporary, and argue that there is a huge backlog of foreclosed homes that haven't gone on the market. Refusing to sell those homes, they say, only prolongs the problem.

But other experts say that Fannie Mae's new policy could make sense, even if prices don't rebound quickly. The company will get rental income while avoiding costly foreclosure expenses.

It will also help to safeguard the homes, which are less likely to be vandalized when occupied.

"There are a whole lot of costs you avoid," said Thomas Lawler, a former Fannie Mae economist. "You don't necessarily have to believe that home prices a year from now will be higher than today."

Fannie Mae's sibling company, Freddie Mac, launched a similar effort in March. That policy, however, requires the foreclosure to be completed and only allows month-to-month leases. Freddie Mac declined to detail how many borrowers have participated.

The two companies purchase loans from banks and sell them to investors. Together, they own or guarantee almost 31 million home loans worth about $5.5 trillion, about half of all U.S. mortgages. They have been badly hurt by the housing bust and have required $111 billion in federal aid since being seized by government regulators 14 months ago.

Source: Yahoo News

Our Journey To Debt Freedom: Cresting The Hill

The climb to debt freedom is just about complete in the Frugal household, and soon we’ll be enjoying the thrill of living free of the burdens of debt. While I recognize that roller coasters are an overused metaphor for life’s ups and downs, I can’t think of any other feeling to compare to almost being debt free. If you’ve ever ridden a tall coaster you already know what I’m referring to.

It is that feeling you get just before your car has crested the top of the roller coaster’s tallest hill. When everything opens up in front of you. When the long, anxiety-filled climb is almost behind you. It’s an exciting time, and oddly enough that euphoric feeling in the pit of your stomach is nearly identical to the one you feel just before sending in your final debt payment.

By the end of November, we will have crested that hill. A hill that has taken us over two years of blood, sweat and tears (well, at least a lot of sweat and tears) to climb. And as the landscape opens up in front of us, our only regret is that we didn’t get on the roller coaster sooner. We wasted nearly a decade when it came to finances. Yes, we accumulated some debt, but we committed no real financial sins. We just didn’t buckle down like we should have.

I’m not going to rehash how we wound up in debt, or the financial mistakes of the past, because I don’t want to miss the view from the top by looking back the entire ride. The point is, we are where we are, and how we got here has been important in shaping our personal finance belief system going forward.
That’s part of living with no regrets. You accept the mistakes you’ve made along the way as learning opportunities, and keep moving forward. So much of our lives is wasted rehashing over and over again the mistakes of the past, rather than living in the present, and planning for the future. Well, a couple years ago we decided enough was enough. We were sick of being in debt, and we wanted out. So we finally got busy making changes and stopped making excuses.

We developed a plan to boost my income. After dabbling in a number of part time job opportunities, and even resorting to mowing lawns on the weekends, I decided to try my hand at writing. Of the few people I shared this idea with, only my wife and my mom didn’t laugh out loud in response. They knew my passion for writing, and believed in me. One of the things I’m proudest of was that Frugal Dad did become a relative success before my mom passed away, so she was able to know that my perseverance paid off. I only wished she had lived to see us cresting the hill.

Getting the blog off the ground wasn’t easy. I had a $0 marketing budget, very little experience in the online world, and no friends or contacts in the field. I started with a brand new domain name, FrugalDad.com, rather than buying an established name with page rank and traffic. I bought a $5 theme, and had one of my new blogging buddies work up a logo (he’s gone on to become very successful at logo/graphics work for other bloggers. Check out his work at LogosforWebsites.com).

For the first year all I did was write an article every single day and comment on as many other blogs as possible. Some nights I stayed awake well past midnight writing the next day’s blog. Other days I woke up at 4:30am to answer emails, comment on other blogs, and try to network with others. It was an all-out guerrilla marketing assault! My plan was simply to out-hustle everyone else, both with my blog and at my full-time job – the two fastest ways I could increase my income short of selling my own plasma (believe me, I considered it).

In addition to boosting our income, we had to get control of the other side of our personal balance sheet. Our expenses were out of control. At the time we had two car payments, a small pile of credit card debt, student loans, and even medical debt left over from the birth of my daughter. We took vacations when we couldn’t afford them. We shopped when we didn’t have money. We were basically living paycheck to paycheck.

We decided to draw a line in the sand. No more increases to the monthly budget. If we signed up for a new membership, we’d have to cancel another one (or two) to offset the new expense. We started clipping coupons, and actually thinking about ways to save money on groceries. We stopped going to movies, and started using our previously underutilized Netflix account. I sold my beloved Chevy Silverado and drove a 19 year-old van. We basically committed ourselves to a frugal lifestyle at a time when living frugal was not yet very popular.


The result of all this hard work? We now find ourselves less than a month from being debt free. My wife and I have a new motto: “Never again.” Never again will we go back to owing money. Never again will we limit our opportunities, and our choices, by being servants to a lender. Never again will we be at the mercy of bankers’ whose whims exerted control over our lives with FICO threats, interest rate spikes and ridiculous practices such as universal default. We plan to make ourselves immune from such policies in the future.

Our hands are in the air. Our eyes are open wide. This is going to be a fun ride!

Source:Frugal Dad

Credit Card Management Services, Inc. d.b.a. Debthelper.com Becomes Licensed in Missouri to Provide Debt Management Services

Debthelper.com is now availble to help millions more in the state of Missouri regarding, debt managment, bankruptcy counseling, reverse mortgage counseling, as well as, other financial education and counseling services.


(PRWEB) November 3, 2009 -- During this economic crisis, with more people struggling to pay off their debt, Credit Card Management Services, Inc. Dba Debthelper.com is now able to service millions more.

Debthelper.com has become licensed in the State of Missouri through the Consumer Credit Section of the Missouri Division of Finance, under the Missouri Debt Adjusters and Collection Agencies Law (Chapter 425 RSMo) as a Debt Adjustment Company.

For consumers that are currently past due on their accounts, the debt management plan will provide the immediate benefits of lower payments, lower interest rates, late and over limit fee suspension and account re-ages.

Debthelper.com (www.debthelper.com) is an IRS Approved 501c3 Non-Profit Florida Corporation dedicated to our mission of providing consumers in the State of Missouri compassionate and professional, financial counseling and education in an ethical manner with efficient, timely and problem-solving support.

Since being formed in 1996, Debthelper.com has helped guide tens of thousands of people throughout the country out of financial difficulty. With this official recognition, Debthelper.com is now eligible to provide the following for Missouri Residents:

Debt Management Programs

Budgeting and Spending Plans

Credit Report Education

Pre-Filing Credit Counseling for Bankruptcy*

Pre-Discharge Debtor Education*

Debthelper.com counselors are certified by either the Center of Financial Certification (CFC), by the National Association of Certified Credit Counselors (NACCC), and/or are Exam-Qualified in the HUD-HECM Network. To locate Debthelper.com Reverse Mortgage Counselors in the HUD-HECM National Network go to www.hecmresources.org.

Credit Card Management Services, Inc. Dba Debthelper.com is accredited with the Better Business Bureau (BBB) and adheres to the organization's high standards of ethical business behavior.

As a member of the Association of Independent Credit Counseling Agencies (AICCCA), Debthelper.com adheres to AICCCA's strict code of practice. Debthelper.com is ISO:9001 compliant as audited by Bureau Veritas of North America (BVI).

Credit Card Management Services, Inc. Dba Debthelper.com is approved by the (EOUST) United States Department of Trustees to issue certificates of completion of credit counseling or a personal financial management instructional course in compliance with the bankruptcy code. Approval does not guarantee or endorse the quality of a provider's services.

Credit Card Management Services, Inc. Dba Debthelper.com is approved by the Department of Housing and Urban Development (HUD) to provide comprehensive housing counseling services.

For additional information on freeing yourself from debt, contact Debthelper.com today. Debthelper.com complies with all state licensing requirements to ensure state mandated regulations be adhered to.

Contact:
Licensing and Compliance
Credit Card Management Services, Inc. Dba Debthelper.com
Community (at) debthelper (dot) com
800-920-2262

Source: PRWeb

8 Fundamental Money Lessons

Americans seem to have gotten religion when it comes to managing their money -- or at least they talk a good game. Three in four adults say they’re trying to increase their financial knowledge as a result of the economic crisis, according to a survey by Mintel Comperemedia.
But making consumers financially savvy is a challenging task. In a sobering study, Financial Literacy Among the Young, published by the National Bureau of Economic Research, authors Annamaria Lusardi, Olivia S. Mitchell and Vilsa Curto found that fewer than one-third of young adults in their twenties had a basic knowledge of interest rates, inflation and how to control investment risk. Asked whether the statement “Buying a single-company stock usually provides a safer return than a stock mutual fund” was true or false, only 47% answered correctly (“false”), and a whopping 38% didn’t know.

A whole library of books has been written on investing, not to mention other financial themes, such as buying a home or planning a secure retirement. But if I were to design a curriculum in financial literacy that would be both simple and practical and would put you on a firm footing, I’d include the following eight lessons.

LESSON #1: Know where your money goes

Create your own spending and savings plan at a budgeting Web site, such as Mint.com or Wesabe.com. Or simply track your expenses the old-fashioned way, by scouring your debit- and credit-card statements for a month to see where you’re leaking cash (you can use our budgeting worksheet and fill in the blanks).

Perform financial triage. Pay your bills in order of priority: health insurance, mortgage, high-interest credit-card debt. Then, pay off the lowest balances first; it will give you a feeling of accomplishment and free up cash for other uses.

Start an emergency fund. Aim to have enough in the bank to cover at least six months’ worth of expenses. If that’s too daunting, start with a more modest goal. Even being able to cover a month or two of expenses will help you feel more secure.

LESSON #2: Save, save, save

Have money taken right off the top from your paycheck so you’re not tempted to spend it. Regardless of how much you earn, the surest way to save is to have someone else do it for you.

Divvy up your savings among different pots, depending on your goals: a computer, a vacation, a new car or a house (see Why You Need Multiple Savings Accounts).

Use our compounding calculator to see how your savings will grow. Remember that inflation can take a big chunk out of your savings in the future. Even at a modest rate of 3% per year, rising prices can cut your buying power in half in 25 years.

LESSON #3: A credit card is not cash

Paying with plastic is the same as taking out a loan, for which you will often pay a steep rate of interest. Use our calculator to see how long it would take you to dig out of debt.

Get a free copy of your credit report every year at www.annualcreditreport.com (despite those clever commercials, other Web sites advertised on TV generally don’t provide free services). Your credit history, as compiled by the three major credit bureaus, is a record of all your credit transactions. Your credit score distills that history into a single number, generally your FICO score (calculated by the company Fair Isaac). Order it, along with your free credit report, from the credit bureau Equifax for $7.95.

Pay your bill in full each month, pay it on time, and keep your balances low -- say, less than 30% of your credit limit on each card. Those three simple steps will keep your credit record squeaky-clean. In a bind? Negotiate with your creditors, or get help at www.helpwithmycredit.org.

LESSON #4: Start early to plan for retirement

A Roth IRA is the best all-around retirement plan. It’s portable, flexible and gives you tax-free income in retirement (see Why You Need a Roth IRA).

Sign up for your employer’s 401(k) or other retirement plan as soon as you start working.

Try to contribute at least enough to get any company match -- which, after all, is free money. Start smaller if you can’t afford that much. No company match? Stick with a Roth IRA.

LESSON #5: Know what you’re getting into when buying a home

Don’t overstretch to buy a house. Blinded by prices that never seemed to stop rising, buyers lost sight of the basics in recent years. For example, it takes time to build equity -- the money that belongs to you after you sell the house and pay back the lender -- because during the first several years of your mortgage, you’re mostly paying back interest and very little principal (the loan amount).

Principal and interest aren’t everything. Your monthly mortgage payment probably also includes a slice of your property taxes, plus hazard insurance in case your home is damaged or destroyed. Factor that in when you’re figuring out how much house you can afford (use our calculator for help). And keep in mind the ongoing costs of homeownership and maintenance. For a comprehensive rundown on buying (and selling) a home, go to www.trulia.com.

Your total monthly payment, including taxes and insurance, shouldn’t exceed 28% to 31% of your gross income, and total debt shouldn’t exceed 30% to 40% of your income. Another number to remember: Home prices generally rise slowly -- on average, about 2% to 3% a year, tracking the rate of inflation.

LESSON #6: Be smart about paying for college

A state-sponsored 529 plan is the best way to save (see College: Keep on Saving). Stick with your state’s plan if you get a tax break for your contribution. Otherwise, use one of our favorite plans.

Don’t count out financial aid. Schools have stretched the definition of need to include families with higher incomes. Also, many schools give merit-based aid.

The best deals for borrowers are government-sponsored Perkins and Stafford loans for students, and PLUS loans for parents and graduate students (see www.studentaid.ed.gov). You need to fill out the Free Application for Federal Student Aid (FAFSA), even if you don’t expect to qualify for financial aid based on need and you want to borrow using just government-sponsored loans.

LESSON #7: Buy enough insurance coverage at a good price

Life insurance. You need life insurance if you have young children, or if your spouse or someone else depends on your income to pay the bills. Figure on buying enough to cover eight to ten times your annual income (use our calculator for a more precise estimate). After plummeting for a decade, premiums for term insurance -- pure coverage with no savings component -- have been rising recently. But you can probably still buy all the protection you need for only a few hundred dollars a year (get quotes at AccuQuote.com).

Car insurance. Shop frequently, because premiums can vary enormously by insurer (find quotes at www.insweb.com or www.insurance.com). And get all the discounts you deserve. Some are automatic, such as a price break if you have several cars or multiple policies with the same insurer. But some you may have to ask about, such as discounts for low mileage or carpooling.

Homeowners insurance. Don’t overinsure. Boosting your deductible from $250 to $1,000 and paying small claims out of pocket can lower your premiums by as much as 25%. You need enough insurance to replace the building and details inside, but not the land. To calculate rebuilding costs, go to www.accucoverage.com. (For more information on all types of insurance, see our Insurance page).

LESSON #8: Invest wisely

Don’t be afraid of stocks. The recent market plunge notwithstanding, stocks have delivered the highest investment return over the long term -- averaging about 10% per year for big-company stocks since 1926. The best way to invest without losing sleep is to use dollar-cost averaging, which means investing a set amount each month or quarter. Automatic transfers prevent you from letting your emotions or the latest news prompt you to buy high and sell low (see Be a Better Investor).

Know how much risk you can live with. One conservative rule of thumb is that the percentage of stocks you own should equal 100 minus your age, or 60% if you’re 40 years old. Spread your risk by investing in different kinds of assets, such as large and small U.S. companies and foreign firms.

Put your money in an index fund. This is the easiest -- and cheapest -- way to diversify your investments. An index fund pools the resources of many individuals to invest in a broad-based portfolio of stocks (or bonds). Index funds also charge very low fees -- and the surest way to boost your investment returns is to cut your costs.

Kiplinger

FTC Seeks Comment on Proposals to Amend “Free Credit Report” Rule

Written by: Andrew Bernstein


As I present Financial Literacy Awareness Seminars in South Florida, one of the topics I cover is “How to Obtain Your Free Credit Report.” Almost everyone present at each seminar shouts out a few different answers based on what they have seen on television. This generally brings me to a boil. Almost all of these folks never see or hear “THE FINE PRINT” in those advertisements.

I make very sure that each participant is supplied with the correct information on obtaining a free credit report.

NOW the Federal Trade Commission has taken action, for that, I applaud them. The information appears below and it's important for everyone to know.

FTC Seeks Comment on Proposals to Amend “Free Credit Report” Rule

The Federal Trade Commission is seeking public comment on proposed amendments to the Free Annual File Disclosures Rule, also known as the “Free Credit Report Rule.” The proposed amendments would implement a new law designed to prevent consumer confusion in advertisements for “free credit reports” The amendments also would address certain practices that may interfere with a consumer’s ability to obtain the credit report that credit reporting agencies must provide for free under federal law.

The Credit Card Act of 2009 requires the Commission to issue a rule by February 22, 2010 to prevent deceptive marketing of “free credit reports.” Specifically the Act requires that certain advertisements for “free credit reports” include prominent disclosures designed to prevent consumers from confusing these “free” offers with the federally mandated free annual credit reports available through the “centralized source,” which is AnnualCreditReport.com or 877-322-8228.

To implement this directive, the Commission is proposing disclosures for television, radio, print, internet, and other media in which “free credit report” advertising may occur, along with requirements to ensure that the disclosures are sufficiently prominent. For example, for any internet site offering free credit reports, the Commission proposed a requirement that, before the consumer may obtain a credit report from that website, such site must display a separate landing page with the required disclosure: “This is not the free credit report provided by Federal law. To get your free report, visit www.AnnualCreditReport.com orcall 877-322-8228.

In addition the Commission is proposing to amend the Free Annual File Disclosures Rule to restrict practices that may confuse or mislead consumers as they attempt to obtain their free credit reports through the centralized source. For example, consumers are subjected to substantial amounts of advertising from the nationwide consumer reporting agencies as the attempt to obtain their free annual credit reports. The Commission has received consumer complaints about promotions for products and services that confuse and frustrate consumers as they attempt to obtain their free credit reports. The Commission proposes to amend the Rule by delaying such advertising until after the consumer obtain their free annual credit reports, and by requiring other measures.

For more information you can contact www.FTC.gov

Is it Strange to be Frugal?

by Andrea Hermitt
I did an interview this morning on Living without credit cards. It was on The Take Away, an early morning National Radio Show. Myself, a man in Los Angeles, and a financial expert Beth Kobliner were interviewed on life without credit cards and how we cope with them.

During the radio interview and also during the pre-interview, I was introduced to the possibility that people look at the frugal, and especially those who live without credit cards as being a bit strange, and definitely off the mainstream. It never occurred to me that having good financial sense was odd.

I do know that when I was first introduced to the frugal lifestyle, that the books I read were a bit extreme. Amy Daczyn's books The Cheapskate Gazette suggested doing things that bordered on unsanitary in order to cut corners financially. I could never see myself recycling tin foil and plastic wrap... I just avoid using them. I would also never use a reusable Diva Cup, a tampon replacement. But outside of these things, most things us frugal people do aren't really that strange, are they?

I was really blown away by the notion that the interviewers asked if we (those who don't use credit cards) had received any social issues by not using credit. I couldn't imagine such a thing. It is not as if every time I go to pay something, wave my cash around and shout "I am paying cash now and you should too". I just plunk my cash or debit card on the counter when I shop and no one seems to give it a second thought. Sometimes I even write a check... but never in the supermarket... people get upset when you take more than 10 seconds to pay your grocery bill.

As for the one person on the radio interview who had never used credit, the interviewer joked about him living in a yert of the grid because he did not have credit. It was not the case. I guess that is what credit card companies want you to believe. You can however, survive, purchase a home, and rent a car without credit cards. All you have to do is save your money. If you plunk down a large enough down payment, you will get a car loan. If you have cash in the bank that can be put on hold, the car rental company will loan you a car. You can pay for dinner at that fancy restaurant with cash. Life will continue to go on as normal.

Source: Frugal Families

15 Ways to Eat Out More and Spend Less

Dining out is one of the great pleasures in life. Fine food, great drinks, a meal with friends and the next thing you know you’re loosening your belt. But with a troubled economy everyone is tightening their belts. You can still enjoy dining out, even on a budget. Do you know the best days and meals for making the most of your dollar? How to find a credit card that rewards you for restaurant dining? What site offers you rebate checks just for making reservations? Check out our smorgasbord of top tips for saving money when you do dine in restaurants.


1. Find discount deals. Sites like Restaurant.com offer gift certificates for less than face value. Just make sure you’re getting a discount somewhere you want to eat, otherwise it’s like those uncomfortable shoes you bought on sale and never wear. No bargain.

2. Use an online booking agent like OpenTable. You’ll get a rebate or thank you check for doing something you do anyway, making reservations. You’ll also find special promotions that will earn you rewards faster by dining at certain slower times.

3. Some credit cards give you a bonus or rebate on restaurant purchases, decide which ones make the most sense and then use them as much as you can. Mint.com can help you with unbiased recommendations based on your personal spending.

4. Go out for lunch. Sometimes the prices on the lunch menu are a fraction of what you’ll pay at dinner for almost the same thing.

5. Watch what you drink! Restaurants make a larger margin on beverages than they do on food. Do you really need that bottled water or cocktail?

6. Eat less. Smaller appetite? Try choosing a salad, side dish or appetizer. Let your waiter know you are looking for something on the light side, you just don’t want to end up with something so small that you end up ordering a huge dessert.

7. Share dessert. Speaking of huge desserts, you may have noticed that dessert prices and sizes have steadily grown larger. Find a partner and be sure to ask for two spoons.

8. Share a large entree or take half of it home for tomorrow’s lunch. The best way to do this is to visually divide your plate in portions before you start eating. If you plan on taking it home, order something that reheats well such as soup, stew or a braised dish and skip delicate foods like salad or seafood.

9. Have a snack! You know what happens if you go grocery shopping when you’re hungry. Likewise if you go out to dinner ravenous you’re likely to order too much. If you skip lunch, you’ll also be tempted to order too much.

10. Eat out on Tuesdays or Wednesdays, the slowest days of the week for restaurants. You’ll be much more likely to find special deals and offers, not to mention a quieter more relaxing dining experience.

11. Look for early bird or prix fixe specials. Now more than ever restaurants are looking for your business and offering special promotions. Often a three course meals is just a few dollars more than the cost of one expensive entree.

12. Use a coupon. Local coupon books like the Entertainment book offers hundreds of 2-for-1 and 50% off coupons for all kinds of restaurants. If you like fine dining, find a friend who likes fast food and share the cost of the book. The online version of this book may be a great deal if you are planning to travel. There is no long-term commitment, you can choose any location you wish, and the print the coupons you want for only $4.95 a month.

13. BYOB. If you have a nice bottle of wine at home, look for restaurants that offer reasonable corkage fees. Just be sure you are not bringing a bottle that is on the restaurant wine list. Some restaurants offer free corkage if you buy one bottle. With a group, this is a great way to save.

14. Cut a coupon. Don’t forget those coupons that come in the mail! Valpak offers coupons online as well. Be sure to do a quick search before heading off on vacation.

15. Eat at the bar. Dying to try that expensive new restaurant that just opened to rave reviews? See if they have a bar menu. You may be able to get a taste of what’s being served in the dining room for much less.
 
Source: Mint

3 Ways Paying Off Credit Cards Is Like Playing Beer Pong

I'll admit right away — I miss college. I miss the friends, the freedom, and especially the parties. What I don't miss is all that credit card debt that once accumulated!

I'm smart enough to stay away from those "free" t-shirt deals now, but it took me a while to get a good game plan down. And luckily, I can present it in a way our inner college student can appreciate — through a little game we like to call Beer Pong. Paying off your debt isn't as FUN as playing beer pong, of course, but it's a much better way to think about it than your old wrinkly neighbor would have it.

Here are three ways the rules of play are similar to paying off your debt.

1. You pick your partner (or credit card you want to start with).

Some say this is the most important part of the game. After all, if you pick the wrong partner it'll take you much longer to win! With beer pong, it's easy — you look for the guy (or hot girl) who has the best aim. You get them going, and BAM! You've knocked away all 6 of your competitor's cups and you win.

With credit cards, it's a bit trickier. Do you start with the one at the higher interest rate, or do you go with the card with the lowest balance to knock out quicker? Personally, I like the faster option as it gives you a better feeling of accomplishment and a little more momentum. Mathematically, it makes much more sense to start at the higher rate card though. Why pay off a card at 8% when you have one at 16%, right?

When it comes down to it, it's all about personal preference. There are no right or wrong answers here — just that you CHOOSE ONE and start. Begin paying down the lowest amount first, or get started on the biggest interest rates. Just pick one and get moving.

2. You set up the cups (aka you set up your gameplan).

For a second, I'll pretend you've never heard of beer pong before. To set up the game you place 6 cups opposite from each other on a long flat surface, fixed in triangular fashion (3 cups in the back, 2 in the middle, 1 at the tip), pour a few ounces of beer in them, grab yourself a few ping-pong balls, and voila! You're ready to go.

The game of wiping away credit cards, however, requires a little more calculation. First, how much money do you have to start paying this first card off? After all your bills are paid, do you have $100? $200? Do you just have to look at your budget?

If not, spend a few minutes going back and looking through the last 2 months of expenses and income. Don't trick yourself into thinking you can pay XXX amount every month if you know you can't do it. Instead, come up with a number you're comfortable with and feel confident about. Being honest with yourself makes it all go by much smoother, believe me. It also gets a lot easier once you're used to setting aside the same amount every month (on top of paying your minimum amounts on the other cards, of course).

3. You shoot until you've won the game (or until you've paid off the card)!

In beer pong, both teams take turns tossing their pong balls across the table until they've sunk all of their competitor's cups. Once you win the game (because you have a game plan and those debt mongers don't), you celebrate for a bit and then get right back to defend your crown!

The same goes for your credit card debt. Once you've scoured your finances and finally set up that budget, you now know you've got an extra $100 to play with (for example), even after paying off all the minimum requirements on the other cards.

Then you shoot, and you shoot, and you pay off that card by $100 every month until one day it's all gone! It may take 6 months, or it may take 16, but the point is that the more you knock away every month, the less interest you're accumulating and the better you feel. Over time you'll notice it gets much easier, and you might even find yourself with a few extra dollars laying around which you could ALSO apply to the debt! Life has a funny way of working out like that. And by "life" I mean "when you manage your money and know what you're playing with"!

And when you've finished paying that first card off? You celebrate (although, not by using that card again, or by drinking excessively). Then you start the whole process again with the next one in line — only this time, you've now got an extra $100 to use towards this 2nd card, on top of that minimum payment you've already been paying! This is called the debt snowball theory, and as you move from one card to the next, the amount you have to pay every card increases, and your overall debt DECREASES. It really is a most beautiful thing, and something you can easily put to use any time of the day.

So there you have it — 3 ways paying off credit cards is like playing beer pong! And unlike Beer Pong, there's no losing in this game, nor any messes to clean up. You stick with your game plan until it's all done, and if you have to take a month off as things come up, that's perfectly fine — but only if you start right back up again and you don't miss any minimum payments. You might not realize it now, but a $10 mistake can easily cost you $100 or more down the road. It's not worth it, believe me. Stick with your plan, and be proud of yourself.

Maybe, just maybe, you'll find yourself next to me at the next beer pong game. Only we'll be teammates instead of competitors, and we'll no longer be anywhere close to the college years anymore. And you know what? We'll be okay with that. We've had our fun, we've caused our trouble, and we'll now be ready to live like civilized adults. With $0 credit card debt!

Source: WiseBread

How to save money by kicking costly bad habits

By Sharon Harvey Rosenberg
One former smoker saved "hundreds of dollars" in just a few months by going tobacco-free, according to the folks at Consumer Credit Counseling Service. At the other extreme, a friend of mine has paid more than $500 so far this year in bounced check fees created by poor planning and other bad habits.

The message: Our vices and bad habits can tax our bank accounts. Procrastination, poor planning and impulse shopping often sabotage our financial goals. Here's a list of bad habits and money-saving solutions:

Take-out dinners. "Without a meal plan we constantly are scrounging the cupboards for easy-to-prepare (more expensive) food or going to the store last minute or to the quick-serve restaurants," said Jim Parfitt of www.ChangeJarSavings.com. In contrast, thoughtful meal planning saves money through several steps. A menu plan requires an organized shopping list, which saves time and money at the grocery story, Parfitt said. And finally, a well-stocked cabinet and a full freezer diminish our appetite for fast-food.

Disorganization: "One bad habit is not being prepared, which can cause a waste of time and money," said Sherry Stauffer, who teaches community classes about coupons. "I always start out by telling those who attend that the first thing in couponing is being prepared." Known as the coupon lady of Fort Myers, Fla., (http://fortmyerscouponlady.blogspot.com/), Stauffer spends four to five hours preparing for a shopping trip. Her research pays off. She spends only $160 a month on groceries, which represents a monthly savings of $300. Her preparation includes a review of store promotions, a hunt for coupons (online and in newspapers) and constant research about prices.

Laziness: Clothing stains and bounced checks have common ground, according to Holly Santiago. Failure to take proper action can lead to unnecessary expenses. For instance, if you don't repair your clothing or remove stains promptly, wardrobe replacement costs will increase. Likewise, when we're too lazy to balance the checkbook, bounced checks could lead to unnecessary and expensive bank fees, Santiago said.

Impulse shopping: In a recent e-mail, Natasha Maddox, a maven shopper, shared strategies for dealing with bad credit-card habits with me. "If you are having problems with debt, only bring your credit card with you when needed," Maddox said. Stashing away the credit card reduces the risk of identity theft and impulse purchases. With easy access to plastic, we're more likely to adopt a grab-and-go shopping strategy.

Sharon Harvey Rosenberg is the author of the "Frugal Duchess: How to Live Well and Save Money" — a coming-of-age memoir about money — and a contributing writer in Wise Bread's "10,0001 Ways to Live Large on a Small Budget," both available on Amazon.com.

Source: The Seattle Times

Little Smiles, Big Impact

Paul “Chip” Donohue, ’89 VSB, was on his way home from a successful fundraising event he’d organized for a local hospital when he got a call from a nurse on the pediatric ward.

Della, a young patient with a brain tumor, was having a rough night. Donohue had met Della previously on visits to the ward, and the nurse asked him to stop by.

Della, stabilized on an air mattress and unable to move, perked up at the sight of Donohue. He asked if he could do anything for her, and she told him she’d love to see the movie “Jumanji.”

“I went out to the nurses’ station and said, ‘Where are the videos?’” Donohue recalls. “The nurse answered, ‘Chip, we don’t have any.’ ”

He was shocked. “I said, ‘We just raised tens of millions of dollars for this hospital, and the kids have no videos?’”

He decided to do something about it —and the idea for “Little Smiles” was born.

“Anything for the kids”

With much of hospital fundraising slated for essential projects such as new medical wings, Donohue saw an equally important, unfulfilled need — making hospital stays and life more tolerable and more enjoyable for children facing serious health challenges.

He saw nurses reaching into their own pockets to provide children with small but necessary items such as socks, toothbrushes and books.

He and his best friend and roommate, Jeff Mullen ’88 VSB, came up with a way to work with nurses to cover these necessities and bring fun into the lives of sick children.

They founded Little Smiles, a nonprofit organization that provides for the entertainment, health care or family resource needs of children facing health-related challenges.They strive to offer anything that might make the children feel special — including games, videos, computers, special outings, sporting event tickets and more.

Philadelphia-based Mullen first got involved on a visit to Donohue, who lives in Florida. “I met him after work, and figured he was going to take me to a bar,” Mullen recalls with a laugh.

Instead, Donohue took him to a supermarket, instructing him to fill a cart with cookies, candy, crackers,
chips and “anything kids love.”

“I’m thinking, ‘What is he doing?’ ” Mullen remembers. “Then Chip gets on the phone and orders 20 pizzas. Twenty minutes later, we pull up to a hospital, where nurses load all the stuff onto gurneys.”

He and Mullen followed the nurses up to Pediatrics, where they distributed the treats and pizzas to delighted
kids. From that moment, Mullen was hooked. “I thought, ‘This is so cool, so easy. I’m in.’”

Today the volunteer driven organization is based in both south Florida and eastern Pennsylvania, with a
future goal of expanding nationwide. Their motto is “Anything for the kids.”

“The quieter you are, the louder you are heard”

The busy professionals — Donohue owns his own company, and Mullen is an executive with Apple Vacations — say their desire to serve others first blossomed at Villanova.

While their Villanova education helped make them successful in business, it was the University’s service element —doing good in a quiet, meaningful way — that inspires their work with Little Smiles. “We learned, the quieter you are, the louder you are heard,” Donohue says.

The children’s needs are identified by nurses, and Little Smiles delivers — often within 24 hours — the requested items or service. Nurses make requests for patients via www.littlesmiles.org. The form requires only the nurse’s name and affiliation, the age, gender and location of the child and the desired product or service.

Little Smiles’ work can only happen with the support of nurses. The Villanova Nursing Alumni Association (VNAA) has endorsed Little Smiles and encourages alumni to utilize its services. “We’re proud and excited to support this wonderful organization,” says VNAA president Margaret Hannan ’84 B.S.N., R.N., M.S.

Bethann Worster ’06 B.S.N., R.N. cares for patients at The Children’s Hospital of Philadelphia (CHOP) who have benefitted from Little Smiles. They’ve received Backyardigans concert tickets, Phillies and Eagles tickets and a laptop computer. Last year, Worster attended Little Smiles’ annual Stars Ball, a black tie fundraising event where kids are treated like stars.

“It was a great event where patients from CHOP were able to get dressed up and arrive in limos and walk a red carpet. Little Smiles had family and friends of the patients take pictures as they walked, as if they were the paparazzi!”

This year’s Stars Ball will be held Saturday, November 14, 2009 at the Please Touch Museum in Philadelphia. Philadelphia’s mayor, Michael Nutter, will attend.

Keeping it fun

The Stars Ball is just one of the creative things Donohue, an exuberant new father, and Mullen, a seasoned father of four, are constantly dreaming up for the kids.

For example, kids fighting cancer now have Nerf gun fights in the room where they receive chemotherapy. “The kids all call it ‘the bad room.’ We decided to make it a ‘good room’ by having something fun happen there,” Donohue explains.

Surprise pizza deliveries go to the nurses’ station to encourage patients and parents to get to know each other. “Normally these parents and kids wouldn’t meet, but put 10 pizzas out at the station and there’s instant community spirit,” Mullen explains.

Donohue and Mullen are never short of ideas to bring smiles to kids’ faces.

“I was at the store today and saw these really cool remote control helicopters kids can launch right from their beds,” Donohue enthuses to Mullen. “We’ve got to get some!”

Start Investing Early

By Clarky Davis
When it comes to saving money and investing for your future, it's never too early to start. Investing, though, at any age can be intimidating. You don't have to be a financial expert to make the wisest investment choices, but you do need to take responsibility for your money and educate yourself.

The best investment decision you can make is to get going when you're young! If you're fresh out of school and have started a new job, your top priority should be enrolling in an employer-offered 401(k) plan. Even at age 21, you need to be thinking about your retirement. It's not how much money you have at this stage, rather its how much time you have to invest and grow.

What's your 401(k) all about?

A 401(k) allows you to select from several different investment vehicles, usually a choice of mutual funds that offer a mix of stocks, bonds and money market investments. In many cases, you also have the option to purchase the company's stock.

Just to clarify, a mutual fund brings together monies from thousands of small investors. A mutual fund manager uses that money to purchase stocks, bonds or other financial securities. Your contribution to a mutual fund buys a stake in all its investments.

A stock is a small portion of ownership in a company. A bond is a loan usually to the federal or state government, local municipality or corporation that is paid back on a particular date with interest.

When you first start to invest in your 401(k), your employer will likely offer workshops at your office to help you understand how to invest your money. Take advantage of this opportunity. You will also get a retirement investment kit at this time. Go through this information carefully to help you make the right investment decisions for your lifestyle.

How Should You Spend Your Money?

In addition to saving and investing, it's also important to be smart about how you spend money. While you're setting aside money in your 401(k), you also need to set aside funds in a short-term savings account. You'll want this to support unexpected expenses or life events (like a job loss). Hopefully, this will prevent you from dipping into your growing retirement account.

One of the worst financial moves you can make is withdrawing money from your 401(k). You will be required to pay a 10 percent tax penalty, as well as paying taxes on the balance. As you move up the career ladder and switch jobs, you can roll your current retirement savings into a new employer's plan or into an Individual Retirement Account.

Buying Stock Outside of 401(k)

If you're interested in purchasing stock outside of your 401(k) investments, there are two options to consider: a full service or discount broker. The full service broker is the pricier option, as they provide financial planning and advice. The discount brokers depend on the buyer to do their own research and have their own investment strategy for making purchases.

Keep in mind that you don't want to be swayed into purchasing a stock because it's being hyped in the media. Do your research. You want to make smart investing decisions.

Clarky Davis is the author of the Debt Diva Blog and the Debt Diva's 2008 Financial Guide.

He Did It....Should You Too?

A very interesting column by of our favorite bloggers over at No Credit Needed:

I once sent a credit card company $5 per day, every day, for a month. Seriously.

The year was 2005 and I was in full on debt reduction mode. Pumped up by the comments left by my readers – and ready to be debt free – I spent most of my waking-hours thinking about ways to reduce my debt.

Somehow, the thought struck me: What if I manage to save $5 a day – say by skipping my morning trip to the convenience store or brown-bagging lunch – how quickly could I put that $5 to work?

I decided, just to see if it would work, to use online bill-pay to send a series of $5 payments to the credit card company. I scheduled the payments, one right after the other, for each day of the month. Every other day or so, I would check my credit card balance (online) and, sure enough, my balance was going down, $5 a day.

At the end of the month, I managed to reduce my credit card balance by an “extra” $150. The silly little experiment worked!

Now, am I suggesting that anyone else do this? Not really. In fact, I’ve heard that some credit cards actually limit the number of payments that they’ll process during a billing period. Nevertheless, I do think that my silly little experiment was valuable, in that it taught me the power of micro-payments.

I’ve mentioned micro-payments before – those small payments, sent throughout the month, which help to reduce the average daily balance in your account. These payments are made after regular minimum payments and are in addition to the extra payment one might send while getting out of debt.

Not only did I learn the value of micro-payments, but I also learned that money management is about much more than just dollar signs, percentage points, and mathematical calculations. Money management is about keeping your head in the game and staying focused on specific goals. Each day, as I logged in to my checking account and scheduled another payment – that was one more day where I had successfully saved $5. This $5 was above and beyond my regularly budgeted-for debt reduction payment. This $5 required a change in my habits.

For thirty days, instead of focusing on the big-picture, I focused on the very, very small things. If I wanted a soda, I had to remember the $5. If I wanted a newspaper, I had to remember the $5. If I wanted to rent a movie, I had to remember the $5. This silly little experiment (which, in the end, wasn’t really all that sill), helped me learn the value of every dollar that comes in to my life.

If I had it to do all over again, here’s exactly what I would do – and it’s what I do when making micro-deposits to my savings account:

1. I would set a goal of saving $5 each day.

2. At the end of the week, I would send a micro-payment (or micro-deposit) of $35.

3. A couple of days after sending the micro-payment, I would check my credit card balance, just for that emotional boost that comes with seeing my debt reduced.

The month after my silly little experiment, I went back to my standard practice of making my minimum payments to all accounts, making an extra payment to the first account on my debt snowball, and then I made four micro-payment throughout the month.

Micro-payments rock and they really kept me motivated. Have you used micro-payments? If so, leave a comment and let us know about your experience!

One final note – All of these payments were initiated by me, using online bill-pay. I never game the credit card company access to my checking account. In other words, my bank was sending a payment to the credit card company. The credit card company was not “pulling” money from my checking account. And, obviously, this micro-payment thing probably won’t work if you are sending payments via paper check from your house. The postage cost would be too high.


Source: No Credit Needed

I Dare You....Go Cash Only

Whether you're a Dave Ramsay junkie or trying to learn from some big mistakes in your spending habits, it's no secret that using credit cards encourages more spending. But I have to assume that you have some clue about how important a budget is to curbing your spending before reading this. Both credit cards and cash have major benefits and drawbacks.

If you have a problem with over spending, deciding between cash only or credit/debit card exclusive systems is like trying to stick a Band-Aid on a gushing artery. You can't renovate what you don't own--so get a grip on a budget first. Once you're set with monthly expenditures, take a close look at your credit car bills and cash spending. Above all: to thine own self be true. Know your natural inclinations to spending and adjust to reduce it.

Once you're ready to take a stand, consider the following:





The Pros to Cash Only:

Cash is finite. Your credit card limit is too, but assuming an outrageous spending limit will only incur huge finance charges. Once you run out of dough for the month, you're done. This means no furtive, late-night dashes to the ATM. If your budget is up for the month, train yourself to not buy anything else. Just as with starting exercise, you'll have some soreness at first but the repetition and strength of habit will make it easier in the future.

Cash is accepted everywhere. Our card of choice, American Express, is not. Plus the swipe machines go down occasionally and you won't have an option then either.

Avoid late fees. Even if you pay off your credit card bill at the end of the month, quirky things happen. Bills don't arrive on time or get lost. If the unexpected can happen, it will. Credit card companies thrive off late fees and even one late payment can mess with your interest fees. When you pay with cash, the transaction is completed immediately.

Cash is convenient for random expenditures like tips and split bills at restaurants. No more worries about having an extra dollar or two on hand for cash only needs.

Source and Keep reading at: The Go Frugal Blog

Saving Again? Here's a Way to Do It Right

Pat yourself on the back.


Government data show that in the face of the financial crisis, we have reduced our debt, cut our spending and, by one measure, boosted personal savings to the highest level this decade.

So now that you're back on track, how are you going to make the most of your hard-won reserves? Will you rebuild your retirement accounts? The kids' college funds? Buy a new home? Or should you put it away for a generic rainy day—or the day the rain comes through that old roof?

No matter how hard you try, there never seems to be enough savings to cover everything, even if you put away the 10% to 20% of your income that many financial advisers recommend. And let's face it, many of us don't save anywhere near that.

David Laibson, a Harvard University economist, estimates that about 10% of Americans save too much, while perhaps 30% of us have a healthy savings habit. And the rest of us? "When there's money in the bank account, people go out and spend it," he says.

Stash It Away
- Getting the most from your savings:
- Establish a cash stash for everyday needs.
- Hoard some for retirement and capture tax savings and an employer match.
- Maintain an account for future needs, such as home repairs, cars and occasional splurges.
- Start saving for college to lessen the pain later on.
- Consider a vacation account, so that you don't have to turn to credit cards.

So let's try another tack: Think of your various savings needs as something like your bedroom dresser. How well you fill that chest of drawers will determine how much financial flexibility you have and what kinds of choices you can make later in life.

Just as you have to have that all-important underwear drawer, you need an emergency-cash drawer. This drawer will give you daily comfort and keep you out of trouble, allowing you to pay the bills for a few months if you lose your job, get sick or face a financial emergency. Unless you have stocks or bonds that you are willing to liquidate, you need enough cash to cover a few months of crucial expenses, such as the rent or mortgage, bills and groceries.

Just as you need a sock drawer, you also need a retirement drawer to keep you warm in your later years. If your company still provides a pension, that drawer may be filled for you. But most of us need to contribute to it, and the tax incentives and potential employer match of a 401(k) or a similar account make that an attractive place to put your savings.

You might also consider a vacation drawer, for funding your fun. For some of us, it's as crucial as a drawer for T-shirts and tops. "That's usually one of the top four or five biggest expenses for most families," after housing, cars and food, says Don Linzer, chief executive of Schneider Downs Wealth Management Advisors in Pittsburgh. But most people don't budget for vacations, running the risk of being caught short when the credit-card bills arrive.

To help you prioritize, here's a bedroom-dresser model for filling your savings drawers at various stages of your financial life:

When you're starting out. Saving money from a first-job salary is tough, but once you get in the habit, it will pay huge dividends. By transferring a little money to your savings drawer with every check, you will accumulate an emergency fund off the bat. If your debt drawer has lots of high-cost credit cards, you'll want to clean that out as well.

When those two drawers are in good shape, you can start filling that retirement drawer, which offers a tax break for your 401(k) contributions, a potential match from your employer plus the opportunity to benefit from many years of growth.

Your goal should be to contribute at least enough to capture your employer match, which is like adding to your financial wardrobe free. Ultimately, you will want to contribute about 10% of your pay toward retirement; if you contribute 6%, and your employer throws in a 3% match, you're nearly there.

Your next priority is to start building your other savings and reserves, the equivalent of your jeans drawer. This is the drawer that gives you options and helps you look good—money that allows you to buy a car and make a down payment on a house, or that gives you the flexibility to do things you really want to do.

.When you have a family. As if diapers and day care don't strain your budget enough, you will want to starting thinking about a college-savings drawer when your kids are still young and you have a lot of years to save. Consider this the equivalent of your workout-clothing drawer, for savings that will help your financial health later on.

Again, you should be tending to your cash fund and retirement savings first. But you'll then want to consider at least a small contribution to a 529 plan, which grows tax-free. You can increase your contributions as you get a better sense of what kind of student your child is.

College is expensive, but try not to get overwhelmed: It doesn't have to be fully funded before your child leaves high school. If you're also paying down a mortgage, that's a form of savings too.

Colleen Schon, senior vice president of the Barrett Group of Raymond James & Associates in Auburn Hills, Mich., calculated that hypothetical parents in their mid-30s, with two kids and $150,000 in income, should put about a quarter of their savings in their retirement funds, about a quarter in 529 accounts and the rest in other savings, to cover home repairs, vacations and other needs.

That isn't always what happens, though. In fact, families with incomes between $100,000 and $250,000 "are the worst at savings," Ms. Schon notes, because they have high expectations for their houses, cars and their kids' experiences. "Keeping them focused is really difficult," she says.

When the kids leave home. With the college drawer cleaned out, people in their 50s and 60s should focus on building up their retirement savings, aiming to contribute the maximum allowed, up to $16,500 annually—plus $5,500 in catch-up contributions each year—plus whatever they can save outside those accounts.

This "is one of the most challenging stages," says financial adviser Trudy Haussmann, president of Haussmann Financial Inc. in Newport Beach, Calif., "because children are much slower these days to leave the payroll." In addition, your own parents may need support.

Empty-nesters may also want to consider replacing that college drawer with one for long-term care, which covers home health aides or nursing-home care. Think of it as your woolly-sweater drawer for keeping you warm on the coldest days. If a family's assets are more than, say, $300,000 and less than $1 million to $2 million, long-term care insurance, while costly, may make sense.

When you retire. With your retirement drawers hopefully bulging, now it's time to rearrange your dresser altogether. Funds needed for the next five years or so should be in cash or short-term investments so they won't be subject to stock-market fluctuations. It may also make sense to keep funding that vacation drawer, if traveling during retirement is a priority.

Funds you won't need for five to 10 years should be treated as medium-term savings, while funds that you won't need for 20 years will be your long-term savings. And if you're in a position to do so, you might want to consider restocking that college drawer, to fund 529 accounts for the grandchildren.

—Email: familymoney@wsj.com

Source: WSJ

Frugal Halloween Costumes

Halloween costumes can be pricey. If you have more than one child, you can end up paying a small fortune. Kids wear them for a day and then hang them in the closet. Savvy shoppers buy costumes on clearance for the following year. Some costumes can be passed on to another child, swapped with friends or family, or used for dress-up boxes. But you can make unique and easy homemade costumes, too. It’ll cost much less than you’ll pay in retail stores. You might have some of the supplies already, and any remaining won’t break the bank. Sweat suits make a great foundation for a variety of fun costumes, so you don’t have to resort to a white-sheet ghost costume. One reader, Cheryl in North Carolina, shares: “Make a simple bunny costume: pink sweats with bought bunny ears. Paint whiskers on the face, and attach a cotton puff for the tail. Or a sheep costume: black or white sweats with cotton balls attached.”


What types of homemade costumes can you think of made from sweatpants and hoodies?

Here are a few ideas.

KERMIT THE FROG: Use a green sweat suit as the base for the costume. Use a set that has a hooded sweatshirt. Buy white and lime-green felt and peel-and-stick Velcro. Refer to a picture of Kermit for inspiration. Form rounded circles from the white felt. Stuff with batting. Using a permanent marker, draw eyes (circle with two lines extending out from both sides). Attach with Velcro onto the top of the hood. Cut triangles from the lime felt, and using Velcro, attach them around the neck of the hoodie.

CUPCAKE: Use a pink sweat suit (hooded top). You’ll need aluminum foil, a large red pompom or a Styrofoam ball and red spray paint (cherry), brown pipe cleaner (cherry stem), assorted colored felt and pompoms (sprinkles), pink ribbon (suspenders), batting and pink spray paint (frosting). Glue or peel and stick Velcro to attach cupcake decorations and a roundish laundry hamper (cupcake liner). Cut a hole into the bottom of the hamper. This is so it can be worn. Cover the hamper with aluminum foil. Tie the ribbon onto the hamper to make suspenders, and adjust to fit the child. Spray-paint the batting. Once dry, glue the batting around the top of the hamper. Attach pompoms and felt, cut to look like sprinkles. Attach the large red pompom or painted Styrofoam ball onto the top of the hood. Glue the pipe cleaner to it to form a stem. If you can’t find a hoodie, use a winter hat.

BUTTERFLY: Use a black sweat suit (hooded top). You’ll need a headband, black pipe cleaners and two small pompoms or Styrofoam balls painted black. You can buy the wings separately. Wrap the pipe cleaner around the headband. Glue one pompom to each pipe cleaner to form antennae. Or you can use a black winter hat and simply coil the pipe cleaners, poke through the hat, and bend to attach. Along the same lines, you can create a fairy costume by buying fairy wings instead of butterfly wings. Then make a no-sew tutu by using the directions at www.gophotography.com/tutu.

GRAPES: Use a purple sweat suit (hooded top). Attach purple balloons with safety pins to sweat suit (top and bottom). Cut a couple of grape-leaf shapes from green felt, and glue a couple of green pipe cleaners coiled to look like grapevine to the underside of the leaves. You can use small pieces of brown felt rolled to form a stem, too.

AUTUMN LEAVES: Use a red, brown or orange sweat suit (hooded top). Buy silk fall leaves. Glue (or attach using safety pins) leaves to entire sweat suit. Child can carry a small toy rake.

Source: Frugal Village

What does it mean to be frugal?

Here’s a definition by Merriam Webster Online:
Frugal - characterized by or reflecting economy in the use of resources

(…from Latin frugalis virtuous…)

For me being frugal and living frugally is all about the choices I make. It isn’t just saving as much as I can on every little item and never spending money on anything I want.

It’s spending smartly and saving where I can so I then have plenty of cash leftover for the things that are important to me.

Anyone can save money by not spending it. Misers and scrooges pinch their pennies and have a perfectly miserable life to show for it. The frugal life, however, is not just about saving money. It is about making choices to enhance your life.

There are always ways to spend your money – no matter how much you have. You can buy your lunch at work or you can buy groceries to make your lunch to take to work. The frugal person will make her lunch and then save the rest of the money for something else (a vacation, paying off the mortgage early, a spa day as a treat, or a new pre-owned car).

Income tax checks are a great chance to be frugal. You could use the money to put a down payment on a new car or to buy that surround sound system you always wanted. A frugal person will save a portion, pay off any outstanding debts with a portion, and use the rest for a treat that they have desired for a while (maybe a professional hairstylist or a new outfit for business meetings). The money will be used or spent, but it will go towards things that have lasting value. Splurges are allowed, but they are controlled.

Being frugal is about spending money the best way it can be spent. You learn to compare items and opportunities and decide which one is the best choice for you. It requires a willingness to do some research, a boldness to ask questions, and the ability to walk away until another day (or for good).

It takes a special mindset to live a frugal life. You have to understand the bigger picture and be willing to sacrifice a little now in order to gain a lot tomorrow. The trick is that you may not be able to see the gain for some time. It’s a walk of faith that in the end it will be better.

A great way to start on the frugal path is to meet some truly frugal people. They will be the happy people who have no hefty bills weighing them down because they have paid them off. Talk to them about their walk and see if they will help you along your own journey.
Learning to be frugal will help you to save money, but it is not just about the money. A frugal person learns to make the best choice in financial situations so that he can enjoy his life to the fullest.

Source: Hillbilly Housewife

I used to sneak cheeseburgers into my pockets all the time at the movie theaters

I love this guy! -debthelper.com

Monday, September 28, 2009
So What If People Make Fun Of Our Frugality!

There's been many a times I've been picked on for being frugal. Mostly during my prepubescent years, but even now I've been known to give a few of my friends a good laugh. I'm sure they were all just jealous (at least that's what our mothers always says, right?) but either way I say who cares.

Who cares if our frugality and craftiness distracts people? Are they the ones saving a few dollars? Anope - we are. And because of that I say keep on doing your thang! As long as you're happy and not breaking any rules (*ahem* Phil Varreal) who cares about these boring people and their spend-crazy lives. We like saving money and we're not afraid to admit it!

In fact, I'll even admit to some thriftiness right now: I used to sneak cheeseburgers into my pockets all the time at the movie theaters :) I'd swing by McDonald's 10 mins. before start time and pick up some double cheeseburgers right off the $1 menu! Not only was it cheap, but it was craaaazy filling. And when that didn't work out, I'd just raid the nearest 7-Eleven instead and grab myself 3 assorted candies back when they were 3/$1 (remember those days?). No way in hell was I spending $50+ on theater food.

And after thinking about this for a bit, I wondered how many others got made fun of for similar things? There's gotta be a lot of us, right? Oh yeah, DEFINITELY right. Check out all the responses I got back after dropping the following note around the web:

Anyone ever make fun of you for being frugal/crafty?

Via Twitter:

@SpendOnLife: "Allowing myself time to "sleep on it" when making large purchases has been a source of laughter for my friends."
@BudgetPulse: "Every now and then stay in on a weekend night to save money and get laughed at for it."
@ThomasJFox: "All the time. Some mock my frugality; however, I am able to save 32% of my income because of my choices while they save 0."
@MoneyManagement: "My daughter recently took a doll (Janet) she handmade to a tea party. All of the other girls had American Girl dolls."
@CreditGoddess: "Got teased once for pulling out a calculator at the grocery store to figure out savings on buying single vs. 4-pack."
@littlespace: "Heh. Yes, I get teased. Esp about how I tie environmentalism into it - eg. no paper plates cuz bad for earth & waste of $!"
@luciagia "I just im'd my boyfriend to remind him to bring home the ziplock bag his lunch was in. Perhaps I'm a little too frugal."

@mycesi: "Friends laughed at a coworker of mine for only having basic cable. He used that xtra money to invest in a rental property :)...All my friends make my fun of my use of coupons at restaurants!"
@CanadianFinance: "I always hear about it at work... "why do you always bring your lunch?", "do you ever buy anything at regular price?", etc."

@ModernTightwad: "Most embarrassing to me ever, some of my husband's family joke (hopefully) that I'm a lush because ... we go out to happy hour specials. The food specials are cheaper than I can cook, and I don't have to clean so ... it makes good sense ... (Although they do look @ me oddly when I order a coke) Probably doesn't help that when I do cook, I make a lot of beer roasts. (Chp Tndrizr)"
@MrsMicah: "your mom got teased for being frugaltastic last night, but they shut up when i told 'em she was with me. :)" (hey now, how'd this one sneak in?)

Via Facebook:

Nicole Canfora Lupo: "My friends rag on me because I patch my clothes, darn my socks, sew my own purses and make my own curtains."
Nicole Ouellette: "The newish boyfriend seems amused at my frugality (the man 'woots' daily) but boy, did he like my homemade enchiladas the other night! Frugality = tasty and clever...Yup, one person at a time, I'm trying to change people's minds about being financially responsible but cool..."
Jesse Michelsen: "Yea I've been called super cheap, etc. I just take it with a smile and shoot em a grin followed by a wink when they say "I have to wait till payday to buy laundry detergent""
Shelley Harrison: "This is the first year that I will be buying a tree in a loong time for the Holidays. We will be making ornaments since it is not in the budget this year."

Via the Money Blog Network Forums:

PT @ PT Money: "BA$, did your friends call you the Hamburgler? (Hah!) I was made fun of for going without cable TV for the last year. I had friends and family members who would focus on that like it was the end of the world. They seemed to believe I was trying to get rich by going without cable TV alone. When it was just more practical for me to use Hulu.com and over the air HD channels. Frugality is about spending smarter, not just spending less, I think. And spending smarter is just one piece of my overall plan for financial freedom."
Stephanie @ Poorer Than You "...a friend seriously told me to "grow up and stop getting free furniture off of Craigslist - you're not in college anymore."...I mean, come on, how is 22 (almost 23... birthday is Friday!) and just out of college too old for free furniture that's in good shape? Actually, why is there an age on that at all?"

Financia of Financial Freak Show: "My friend always gives me crap about not going on vacation with them last year...until I pulled up at his house several weeks ago after just paying cash for a sweet used Lexus SUV and parked next to his $588 a month new truck....he said he liked mine more :) I told him he couldn't ride in mine since he stunk like a filthy payment book"
Mr. Tough Money Live: "I have lots of liberals in my family. I wouldn't say I am frugal as much as I am fiscally conservative and strategic with money and, of course, write about it regularly. My liberal family members extrapolate my fiscal conservatism into a full-blown political label and then mock me as an alleged Bush/Chaney/Palin/etc. lover. Generally, it's those who don't have much money that mock the most. It's all in good fun but it is further proof that how you treat money in your own life can provoke interesting reactions from others."
Roger @ The Amateur Financier: "Not really; my girlfriend has teased me a bit, particularly about starting up a blog about money (for some reason, it seems to amuse her), but I haven't really taken any slack for saving/investing. Although, on the subject of sneaking food into movie theaters, I do that, as well; sneaking candy bars into the theater to avoid paying $3-5 for a box of Junior Mints. But, everyone does that, right? Right? RIGHT?"

Kevin @ No Debt Plan: "My friends do take little jabs at me for being frugal, but they also know it is paying off. I'll top both of you -- we don't go to the movies. Ever. Too expensive and I used to work at one in high school. No desire to go back which is good... saves us $20-30 on tickets and food."
Wife of My Journey To Millions: "Hello, This is My Journey's wife. He sent me over to this forum when he saw this because he knows I am constantly getting picked on for being frugal. Here is my outlook on why it's good to be frugal: The importance of things. It's funny because I almost got chosen to be on the Rachel Ray show for my frugality. I guess others were worse than me because I didn't get picked. But I certainly think you get farther in life being frugal than you do being a spender...and I also believe rich people stay rich...by being frugal (in their own way of course)

FFB from Free From Broke: "I've been called cheap from time to time but these were from people who spent freely. I've had lots of "come on it's only 20 bucks" type of replies from friends. Interestingly, when I respond that since it's only $20 why don't they pay they never take me up on it!"
So there you have it. We all get made fun of for saving money! And if you're reading this, chances are you TOO have been the source of these chuckles. But, as always, just brush that dirt of your shoulders and keep on pocketing them dollars. Life's hard enough to be worrying about these jokers - stand up and be proud.

Source: Budgets Are Sexy
Labels: in the real world, money hacks, saving ideas

Clues You Live In A Frugal Home

photo by Mykl Roventine

Do you know a tightwad home when you’re inside one? For many people, penny-pinching strategies aren’t noticeable. However, if you’re frugal, you have an eagle’s eye. If you visited a fellow frugalista’s home, you could spot their frugal ways because you probably do them, too.

What in your home is a dead giveaway that you live a frugal life?

Source: Frugal Village

KITCHEN DRAWER: You might see saved rubber bands, free samples, pencil nubs (hey, they still have a point), bread twist ties, folded aluminum foil, used birthday candles, washed plastic baggies or saved bread bags to use for pet care.

FREEZER: What are all those baggies? They’re filled with overripe bananas, frozen pesto, broth, make-ahead meals, vegetables or leftovers, of course. You’ll see meat bought in bulk and divided into smaller meal-sized portions, too.

CUPBOARDS: There’s a full pantry. It often contains preserved foods from a home garden and a food stockpile bought when items were on sale. One reader, Polly in Pennsylvania, shares: “Homemade mixes line my pantry along with dried beans, rice, a 50-pound bag of potatoes and pecks of apples stored for winter. There’s a flyer on our icebox telling of the butcher’s latest chicken specials. It’s what you don’t see that’s more pronounced. No soda, no chips, no store-bought snack foods, no takeout containers, no bottled water, etc.” You would notice homemade cleaners in spray bottles and very few brand-name foods, too.

REFRIGERATOR: You would see reconstituted powdered milk, iced tea, water, block cheese to shred, bagged apples versus individual, and leftovers ready for lunch the following day. You would see seasonal fruits and vegetables (often pre-chopped), reusable containers, a few cartons of eggs bought on sale, homemade condiments, syrups and sauce, bulk yeast and maybe some chilling cookie dough.

SINK AND COUNTER AREA: You might see a spray bottle of dish liquid diluted with water to spritz dishes, a toothbrush for scrubbing, dishrags, knitted or crocheted pot scrubbers or dishcloths, microfiber cloths or washcloths versus paper towels. You would see a kitchen-counter composter (often a coffee container reused) and a change jar, too. Coffee drinkers will have a thermos or carafe to keep coffee hot throughout the day.

LAUNDRY ROOM: You would see the washing-machine water set to cold. You would see a drying rack or retractable clothesline and a laundry loot jar, too. Another reader, Mary in Texas, shares: “My laundry room is off the kitchen, and there are multiples of Zote soap, Borax and Super Washing Soda, plus a big plastic container of homemade laundry soap.”

APPLIANCES AND HELPFUL TOOLS: Most frugal homes have “tools of the trade” that help people save money. A few appliances that top the list are a food dehydrator, stand mixer and slow cooker. There’s a FoodSaver, food processor, grain mill or a spare freezer. Tools such as a calculator, canner, kitchen scale, manual can opener, box grater, rubber spatula, dry erase board, funnel, kitchen shears and cookbooks are incredibly helpful and are common to see in a frugal kitchen, too.

Environment for Frugal Behavior

A couple of months ago, my former colleague Alice asked me if I had any advice to help make her more disciplined to be better with her finances. I told her that I thought she was a reasonably disciplined person, but that she needed to change her environment to make it more saving and frugal-friendly. As someone who has spent months losing and keeping weight off, I asked Alice if she kept cookies and chips around all the time to tempt herself and test her willpower. She of course does not, and instead keeps an array of healthy foods around so that she can prepare healthy meals and snacks.
I see financial behavior in the same way. Too many people surround themselves with temptations for spending, splurging and wasting money; and then feel guilty because they gave into the temptations. When I left the corporate world and large corporate paychecks behind, I phased in a number of steps to create a frugal friendly environment. This is what I outlined for Alice:

–Stop using shopping as a hobby– Rather than tempt yourself, cultivate newer habits that don’t involve substantial spending such as hiking, going to public parks and museums and taking advantage of community concerts.

–Rid yourself of overwhelming temptations–catalogs with fancy clothes or swanky electronics or furniture can cause you to feel the urge to pull out the credit cards. Better to eliminate these altogether.

–Arrange group outings around activities that encourage lower spending levels — if you meet a group of friends regularly for a meal; go out for lunch or brunch instead of dinner; or better yet have a potluck.

–Set your savings and debt payment plans on automatic — rather than giving yourself the latitude to spend money before you have a chance to fund your savings or retirement, pay yourself first.

–Carry a limited amount of cash if you have problems staying within spending limits — many people find that not having the money is the best way to keep them from spending more

In recent weeks, Alice has done really well. She’s spent much less, especially on clothes and gifts, than before and has arranged to have retirement savings taken out of her bank account each month. She’s also managed to keep chocolate ice cream out of her freezer. Go Alice!

Source: Modern Gal

Ten habits for successful tightwads

photo by luminais

Frugalitarians have many small habits. Some of these strategies don’t necessarily save much money. They might seem silly or insignificant to others because of the time spent doing them, too. But the fact is that these decisions reflect the creativity and determination by penny pinchers (called this for a reason) to be less wasteful. The thought process of living gently carries over through all aspects of your daily life. How often have you been torn on whether or not to throw something away? Maybe it was a container, button, straight pin, rubber band or a juice lid. Keep in mind that tightwads aren’t hoarding hundreds of milk caps because they might find a use for them. They’ll save a handful of caps to make a memory game or ornaments or use the plastic ring to keep socks together or none at all if it’s not useful to them.





What types of things contribute little to your finances but are still worth your time?

Here are a few common habits that are simply what frugal folks will do.

SAVE PLASTIC BREAD TABS: They are great little scrapers for counters, floors and dishes. Use as bookmarks or to hold rubber bands. Or attach one to a roll of tape so it doesn’t fold over. They’re perfect for closing open plastic bags, such as rice or confectioners’ sugar.

REUSE ENVELOPES: Simply cover the address sections with new labels (cross out any bar codes) or simply use for scrap paper and you’re good to go.

CUT DRYER SHEETS IN HALF: This is the No. 1 tip submitted to me. Keep used sheets to clean your lint trap, wipe down your washing machine, dust, to help remove nail polish, line a trash can, or attach to a toilet-paper holder to give a fresh scent in the bathroom. Tuck them into a pillow or drawer, or attach them to a Swiffer mop.

REUSE GIFT WRAP: From saving bows to ironing tissue paper, it might only save a few cents but why throw away gift wrap that can be reused?

RENEWING: Melt items from scraps of crayons, soap or candles to make a full-size item again. Soap bits are often placed in a soap pump container with water to make liquid soap. Simply toss a marble into the container to help mix. One reader, Sandy C. in Minnesota, shares: “I use the little leftover hunks of bar soap and put them with some water in the toilet-brush container sitting by the toilets.”

TOILET-PAPER RATIONING: Some folks put themselves on a daily number of squares limit. While compulsive, it certainly tracks usage.

WASH FOOD WRAPPERS AND CONTAINERS: True tightwads know the value of a Pringles container. Rinse and reuse heavy-duty baggies (if not originally used for meat), foil and cereal bags, too. Disclaimer: Of course, some plastics will be reused in nonfood ways.

EMPTYING CONTAINERS: Cut open tubes (or completely flatten by using your toothbrush handle) and bottles, scrape jars or add water to sauce or condiment containers to get every last bit of product. Use every last bit of a lipstick. Scrape out the tube, and combine it with Vaseline to make a lip gloss or, if you have multiple broken lipsticks, create your own color palette.

FOOD SCRAPS: Save bread ends or “stale” bread for breadcrumbs, leftover vegetables for soup or flat pop or syrup from canned fruit to add to gelatin. Or reuse coffee grounds or tea bags. Another reader, Polly in Pennsylvania, shares: “I simmer orange, lemon and lime rinds on the stove before discarding to freshen the house.”

RESTAURANT TAKEAWAYS: Save all the condiment and seasoning packets, napkins and utensils. Read: Tightwads don’t intentionally take extras. They save any that were given but not used.

Source: Frugal Village

11 Dumb Ways to get in Debt

There are many reasons why people fall in debt, such as medical issues, school, starting a business and purchasing a home. Some situation you do not have much of choice and the debt is for a good reason, for example if you get in debt due to school it’s fine because in the long run you will be able to make up for it. However there are some bad reasons why many fall in debt, the list below illustrates the top 11 …well not so good reasons to fall in debt.


1. Leasing a Car – You are basically paying several hundred dollars per month in leasing only to return the car after a few years. After spending tens of thousands of dollars what do you have to show for it?

2. Purse and Shoes obsessions (or any other obsession for that matter) – Unless you are purchasing collectible items that increase in value, this is a pretty dumb way to get yourself in debt.

3. Financing a Car – If you can not afford that $50,000 car why do you think you can afford to finance it? A car loses about 25% of its value as soon as it is driven off the lot. You will be stuck making payments for the next 5 years or longer on something that is losing its value faster …than Wall Street came down.

4. Using Credit Cards – So you want something you can’t afford, you put it on the credit card only to pay 19.99% interest on the item. Now the $150 purchase ends up costing you over $300 in a year. Smart!

5. Financing latest gadgets – If you can not afford the newest Apple Macbooks and other electronic gadgets, not a problem, Best Buy will finance it for you! Now you can enjoy the latest gadgets for the next year and pay for it for the next five years. Three times what it was worth, GREAT DEAL!

6. Having expensive hobbies – Hobbies tend to become money traps. We can’t afford to blow money on all of our hobbies, so we usually pick our favorite one (at the time) and waste all of our money on that. (Collecting comic books, DVDs etc)

7. Spiraling debt – You decided to take the great Best Buy financing offer for the newest LCD HD 52” TV, since you are at it why not get the newest Blue ray player with that….oh and do not forget the home theatre system……oh and the DVDs….etc…and the debt keeps growing …the spiraling debt!

8. Giving family and friends a loan or co-signing for a loan – Want to ruin your relationship with a family member or friend? Just give them a loan or even better co-signing for a loan, not only will you get rid of them but you will be left with a nice chunk of debt as a thank you.

9. Upgrading stuff. Why don’t you just upsize your fries and drink for 58 cents? What’s another $2/month to get the VIP gym membership? If you are already going to spend $200 on a cell phone, what’s another $100 to upgrade to a better one? And another $5/month to get 100 more minutes on your cell phone plan? Little things add up!

10. Playing the lottery or gambling – You are more likely to get hit by a lightening than winning the lottery…and that’s all I have to say for this.

11. Rent-to-own furniture and appliances – You can’t afford a brand new leather couch? Just Rent-to-own it! You don’t have $1000 in cash but you can do $100/month for the next 3 years. What a great deal!

Source: Financial Highway

Everything You Ever Really Needed to Know About Personal Finance on the Back of Five Business Cards

A few days ago, I had lunch with an individual who is considering hiring me to give a multi-hour seminar to a business convention on personal finance. This person knows me from the local community and is a reader of The Simple Dollar and he felt that I might be the right person to give such a presentation.

During the lunch, out of the blue, he asked me to give a five minute nutshell version of what I would present to the group. I thought for a minute, pulled a pen out of my pocket, and asked him for five business cards. In those next five minutes, I summarized everything I know about personal finance in a pocket-friendly presentation.

I saved the business cards, scanned them in, and thus, for your enjoyment, is my presentation (with some extensive helper notes so you can know what I was actually saying while drawing these cards).

Keep reading at The Simple Dollar

3 Real Life Ways To Save Money Today

1. Become A Free Finder Expert: Everybody I know is missing two things: time and money. I started taking just 20 minutes a day to seek out anything that is free. Some are scams, yes. But some are real, saving me time, money or both! Free is good. Free helps. How would you like to ditch your home and/or cell phone and start talking for free? There’s a program that gives free phones to people who are on government assistance in any form. You get the phone and a full year of minutes…for free! Go to www.safelinkwireless.com to find out more





2. Counting To Ten Isn’t Just For Pre-School: Before you buy anything, and I mean anything at all, stop and count to ten. Do you really need it? Do you just ‘want’ it? Can you find it somewhere cheaper? Will it make a huge difference in your life if you don’t get it? Are you buying this thing right here and right now because it’s a must have necessity? Or are you buying it because it’s convenient and easy and you just want, want, and want? Ask yourself this question: will life as I know it change if I don’t buy this? Be honest. If you do this with every purchase in your life, and if you’re honest, you’ll stop wasting money today.

3. Real Food For Real Cheap: Did you know you could get a week worth of food, for a family of four, for only $30? Angel Food Ministries is an organization that uses the power of bulk shopping and extreme organization to help you eat real, and nutritious, food for cheap. Simply go to one of the many locations, or click online, and follow the easy to order steps. Another idea? Play with your food. At my house, I serve lots of ‘decoration’ foods. These are foods like tacos or pizzas where everyone makes their own with a slew of decoration foods like cheese and beans and whatever vegetables I have left over. This can be anything, really….from hamburgers to taco night to decorating spaghetti and baked potatoes. Get creative, save money and add some fun to dinner.


Looking for more ways to cut costs and save money? Visit www.debthelper.com today. We are a non profit financial education agency that can help you cut your credit card debt payment by almost 50% with one phone call. We offer counseling on: first time home buying, bankruptcy, foreclosure, credit card debt and more.

11 Ways to Spice Up Your Emergency Fund

A thriving emergency fund is an essential piece of a healthy financial picture.



You’ve heard this a million times before. The basics of emergency funds have been covered in depth. We’re used to hearing discussions on why they’re important and how large they should be.

But do you know what we don’t hear much about? How freakin’ boring they are!

Let’s be honest: There’s nothing sexy about building an emergency fund. Sure, it’s possible to get fired up for the initial push. You can take advantage of small, specific tips to create an early spark. But what about going from $1000 in savings to six months of expenses? Eventually the excitement fades.

Testing a fresh approach can change everything. Sometimes all it takes is a minor shift in mindset. Whether you’re just getting started or need a push towards the next major benchmark, here are eleven tips to help spice up your saving:

Treat your emergency fund as self-insurance. An emergency fund is just another way to spread risk. You’re spreading the risk that something unexpected pops up and wrecks your budget or causes you to fall into a cycle of borrowing. All too often, though, we’re worried about chasing 0.5% interest-rate increases or the lure of tying up our money in a bigger, better deal. Stop fretting. Find a high quality savings account with a decent return and plant your money there. It’s not part of your investment portfolio — it’s part of a diverse insurance plan.

Narrow your definition of an “emergency.” Having savings in the bank can cause us to justify some unusual behavior. Suddenly, every unplanned expense becomes an emergency. How can anyone be expected to build a robust emergency fund when they’re tapping into it every other month? Fight back by clearly defining what you will consider an emergency upfront. You’ll be shocked how fast your fund will prosper when you don’t constantly use it as a crutch.

Over-budget for miscellaneous expenses. So how do you deal with those unplanned expenses that aren’t valid emergencies? Expect the unexpected. Aim high on your miscellaneous budgeting category. You’ll break your budget less often and avoid the habit of reaching for your emergency fund. When these expenses do come up, take note, and add them into your budget. Eventually you’ll develop the ability to project nearly all non-emergency expenses ahead of time.

Live a pay raise behind. The next time you get a promotion, don’t fall victim to lifestyle inflation. Take the increase in monthly income and set up an automatic transfer to your emergency fund. When applied to retirement, this technique is often referred to as “pay yourself first.” As long as you can continue to live within your means, it works like magic. Looking for a place to start? Scale back one pay raise. Budget using your old income and start transferring the extra today!

Round up your budgeting categories. The simpler you make the budgeting process, the more likely you are to stick to it. One way Courtney and I have been able to simplify is by rounding our categories and expenses to convenient whole numbers. If your debt payment is $82.31 per month, budget $85. If your mortgage is $1368 per month, budget $1400. Not only will budgeting seem easier, but at the end of the month you’ll have a buffer in your account which you can sweep into your emergency fund.

“Snowflake” your unplanned income. The term snowflaking is a nickname given to the process of applying any amount of extra money (no matter how small) to your debt with the lowest balance. It’s a neat concept that can help quickly build momentum. There’s no reason this should be limited to paying off debt. Anytime you bump into a small windfall, immediately apply it to your emergency fund. Attack it with passion!

“Re-fund” your savings. You know what the perfect amount is for your first emergency fund is? Whatever the amount of your tax refund check! In a perfect world, we wouldn’t be loaning the government our money for the better part of a year - we’d be earning interest with savings accounts and certificates of deposits. But the truth is millions do. If you’re one of them this year, take the money and jump-start your emergency fund.

Save up for the knock-out punch. This technique starts with selecting a base level for your fund. Next, rather than paying extra on your debt or towards a savings goal, pour every extra penny into your emergency fund. Once the fund grows large enough to accomplish the goal and still leave you with the base amount…go for the knock-out. Pay off the debt, book your plane tickets, select a new goal and start the process over. If a true emergency does strike you, chances are you’ll have a little extra buffer.

Focus! Having serious trouble? Make your emergency fund your absolute number-one priority. Channel all of your energy. Pay the minimums on debt. Put your other savings goals on hiatus. (Some respected advisers even suggest halting your retirement savings for a short time!) Only you know for sure what level of intensity is right for you; however there’s a lot to be said for the power of concentrated focus. Put your head down, knock it out, and move on to your other more sexy goals.

Negotiate a “big win.” A broad tip, right? Here’s the point: Use your emergency fund as an excuse to tackle a high-impact project. Need $1000 to get started? Go for it all at once. Ask for a raise, sell one of your cars, or refinance your mortgage. Look at your largest monthly expenses and ask yourself if there is a way you can make a huge impact quickly. Use these opportunities to get comfortable with the basics of negotiation. It’s a skill that’ll pay dividends the rest of your life.

Sell your crap. Kill two birds with one stone. Have an emergency-fund dedicated spring-cleaning session. My suggestion is to create a list of everything you own. Every single item. Go room by room. Nothing has made me want to purge my stuff more than this process. Afterward, set a deadline to sell half of the items on the list. Get passionate and declare war on your stuff. Not only will you feel refreshed, but your emergency fund will be more healthy than ever.

What other ways have you found to spice up your emergency fund? How did you get started? Did you switch it up to maintain motivation? Share your personal experiences below!

Source: Get Rich Slowly

7 Life Lessons My 1-Year-Old Taught Me While Backpacking Abroad

14 months ago, my wife and I were destined for conformity. Courtney had just graduated college, and I was starting to see some early success in small business and real estate. We had just celebrated our first wedding anniversary and were looking forward to the birth of our first child. We had began looking for potential homes, complete with a wrap-around porch and a white picket fence. Soon we’d be just 1.5 kids, a minivan, and a over-sized mortgage away from true bliss.

I’m fairly sure the physical process of childbirth is God’s way of smacking us all across the face. Welcoming a sweaty bundle of joy into the world is nothing short of a miracle. For us, this event and the months that followed completely shattered even the most fundamental expectations for our lives.

We took a long hard look at our path and realized it wasn’t one that we had willingly signed up for. At least not yet. We realized that time was only going to be our friend for so long, and conformity was no longer desirable. Instead we cooked up the following plan:

Over the next twelve months, we’d aggressively eliminate our consumer debt, sell all of our possessions, and spend at least two years abroad.

How’s it working out? Pretty well, so far. We were able to take control of our financial life, sell all but two backpacks worth of crap, and recently wander through Australia and New Zealand looking for life. We knew we could use this adventure to help teach Milligan. However, neither of us realized the extent of what backpacking with our now 14-month-old daughter would end up teaching us:

1) Every Event In Life Is An Opportunity To Learn

Everyone knows that a young child’s mind is like a sponge. But you really don’t realize how quickly they are able to absorb, grow, and learn until you get to experience it first hand. The funny thing is you can actually see Milligan learning. If you watch closely, you literally see her mind putting the pieces together. I’d like to think that flying across the world, staying in hostels, riding buses, and strolling down beaches are all helping foster this sort of learning. Upon closer observation, though, I’ve noticed just these sort of things having the same effect on me.

2) Life Is More Fulfilling When You’re Constantly Testing Your Limits

Kids naturally test limits. It’s how they establish boundaries. In fact, usually this continues until somewhere between age 18-25. Milligan could care less about conforming to other people’s expectations right now. She takes great pleasure in pushing the envelope. I can often feel her little eyes, checking to see if I’m watching her, right before she commits to the action she knows could land her in hot water. For me it’s more important that she realizes that she’s not supposed to do something, than if she actually does it or not. Ironically, the whole process of selling our possessions and moving overseas felt eerily similar for us.

3) The Ability To Adapt Trumps All The Planning In The World

We planned for our trip for over a year. We researched where we’d like to go, the visa and job opportunities, and how we’d get there. We budgeted, paid down debt, and saved thousands. The end result? We ended up staying in our “destination” a grand total of 3 days before drastically changing plans. Don’t get me wrong, all the planning still saved us time, stress, and money. But it wasn’t nearly as valuable as the ability to adapt our situation. Milligan doesn’t plan, she just lives. Over 24 hours in the air? No problem. Staying over a week in a 10×10 hostel room? Sure thing. We haven’t been able to find anything Milligan hasn’t been able to easily adapt to yet. Honestly, it’s inspiring.

4) Modeling Others Is The Most Efficient Way To Learn A New Skill

I’m continually amazed at how quickly Milligan can learn something just by observing. I’ve derived great joy from watching her first attempt to put a sock on her foot, stick Q-tips in her ears, brush her teeth, or even throw away trash. Now that she’s a little older, it’s almost a daily occurrence that she’s tackling a new concept simply by watching us. I’ve had a lot of success with modeling in my adult life as well, and watching Milli is a constant reminder of the power of this process.

5) Don’t Be Afraid To Express Your Emotions

When Milli is happy, you can’t help but laugh with her. She’ll bounce around, smiling and giggling. She can’t skip yet, but I think it will soon be one of her favorite methods of getting around. On the other hand, when she’s angry or annoyed, she’s not afraid to clearly let you know. The same goes for feeling tired, excited, hungry, or sick. She’s not worried about what society will think of her or how she is supposed to act. At what point does it become acceptable for us to numb down all of our emotions? It feels much better to draw inspiration from Milligan.

6) Patience Is A Sign Of Strength, Not Weakness

I can admit it. I used to think patience was a sign of weakness. If you wanted to get a specific result, you needed to take immediate and massive action. You should take the bull by the horns, go out and kill it, drag it home, and eat it. I quickly learned that having a baby is a crash course in patience, whether you signed up for it or not.

This course rocked my world. No matter how proactive you are, there are going to be times where your child crosses the point of no return. They are going to scream for attention, no matter where you are in the world. You can fight, struggle, and stress all you want, but it’s not going to help. What will help? An over-sized portion of love and patience. The rest is out of your control.

7) Imagination Is More Valuable Than All The Possessions In The World

Before we sold everything, Milligan had a wide-variety of books, toys, whistles, lights, and other distractions. Not to mention her own bedroom, lots of different outfits, and plenty of room to get into trouble. Since the trip, she now has just one book, one stuffed animal, and one special blanket. What’s filled in the gaps? Whatever we have on hand– including cardboard boxes, kitchen spatulas, remote controls, and other exciting toys. Her brilliant imagination has turned out to be more valuable than anything money could buy. Once again, without realizing it Courtney and I have gone through the exact same process and realization with our own “toys.”

What The Future Holds

In the end, embarking on this journey has radically changed our lives. It would have been extremely easy for us to settle. We could have maintained a comfortable lifestyle surrounded with certainty. Instead, we chose to actively resist. We chose to blaze our own path in life, wherever it may lead us.

The most remarkable thing is that we assumed Milligan would be some sort of obstacle we’d have to overcome, but instead, she’s been an amazing source of empowerment throughout the trip.

I’m not sure what the next couple of years have in store for us. But I am looking forward to learning even more life lessons from the most effective teacher I’ve ever had, my 1-year-old daughter.

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Biography: Adam Baker, or just Baker, is a father, husband, traveler, blogger, and overall personal finance freak. You can follow his traveling adventures and more over at Man Vs. Debt or on Twitter – @ManVsDebt.

Sourc: The Art Of Nonconformity

What You Need to Know

Your ability to get future credit is based on your past and current experience.
• Do you pay your bills on time? On time payments represent 35% of your credit score, the largest single factor considered by the credit bureaus. The ability and willingness to pay on time tells any future creditor that you are responsible and serious about your debts.

• Do you carry too much debt? Your debt-to-income represents 30% of your credit score and is an important guage as to your spending habits. Simply put, the credit bureaus will determine what kind of spender they feel that you are based on how much debt you incur as opposed to what you earn. (Example: if your debt is $15,000 and your income is $30,000, your debt-to-income is 50%) What the credit bureau and creditors are looking for is a ratio of between 15 & 25% ideally, although in some cases creditors might allow a higher ratio.

• Do you have different types of credit? This represents 15% of your credit score. Creditors would rather that you have several different types of credit payments, as opposed to, let’s say all credit card debt. Most creditors are aware that credit card debt may fluctuate greatly according to use and can affect your debt-to-income ratio in a short time, while steady installment payments are a good test of your payment reliability over time.

• What is the length of your credit history? Your history is worth 10% of your score. The credit bureau and creditors want to know how long you’ve had credit. If you have no history they cannot judge how you might do in the future, leaving you as a “ghost debtor.” In reality, some creditors would rather see you with a bit of bad credit, rather than no credit history at all. That way, they can tell what you’ve done and if your past mistakes can be corrected.

• Are you applying for too much credit? This is worth 10% of your score. Every time you fill out an application for credit, it is considered an Inquiry and takes between 8-12 points from your credit score. The more inquiries you have the lower your score becomes and the less credit will be extended to you. You need to be cautious about the offers that come in the mail or you see online, as they are usually too good to be true. We advise that you read the fine print of the contract before you sign anything or respond in any way.

• You should do better financially if you have a budget and financial goals. Goals that you set should be attainable, measurable and flexible.

• You have recourse when it comes to situations such as incorrect reporting on your credit report and harassment from creditors

• You are entitled to a free credit report once a year, which you can obtain at: annualcreditreport.com.

While there are sometimes circumstances that can affect your credit, in general good credit can be controlled by you.

6 Old-School Savings Tricks Are Back

It’s no secret that consumers have grown more frugal: Excessive spending is out and saving is in. “It’s become chic to talk value,” says Julie Winskie, the chief client officer at marketing firm Porter Novelli, which tracks consumer behavior for retailers.

Like fashion, spending trends often cycle in and out, but what’s interesting about this go-round at frugality is how it’s playing out. Old savings strategies are seeing a resurgence, and some of the most popular tactics – couponing, layaway and haggling – date back to prior recessions.

Will those practices someday go the way of padded shoulders and track suits? It may take years or even decades, but the larger population will eventually end up back in the “greed is good” mentality, says Scott Testa, an assistant professor of business administration at Calibri College in Radnor, Pa. Forty-five percent of adults now spending less than they were a year ago say that if their financial situation were to improve over the next year, they would go back to their old spending habits, according to the National Foundation for Credit Counseling’s 2009 Financial Literacy Survey.

Still, consumers looking to develop good savings habits for the long haul can jump on the bandwagon now with these six old-school thrifty behaviors:

Clipping coupons
Americans avidly clipped coupons through the 1980s, but by the '90s, their popularity began to wane. Last year was the first year since 1992 that coupon use didn’t decline. And so far this year, shoppers have used 20% more of issued manufacturers’ coupons, according to the Promotion Marketing Association, which tracks coupon redemption. This trend is likely to persist because of efforts by manufacturers and retailers to make coupons more easily available online, says Stephanie Nelson, the founder of CouponMom.com, which tracks deals. (For a list of some of our favorite coupon sites, click here.)

Haggling
In recent years, bargaining for a lower price has been relegated to yard sales and flea markets, but that’s beginning to change. “Now, consumers are much more creative and frankly, much more aggressive about asking for a better price,” Testa says. To retain customers amid slowing sales, even mainstream retailers are open to negotiation on prices -- especially if you can point to better deals at a competitor. (For more prime haggling opportunities, click here.)

Another expense worth haggling over is rent. According to a summer survey from property listing site Rent.com, 68% of landlords are now offering free or reduced rent to tenants. (For tips, click here.)

Price comparison
“A portion of the population has always done this, but now it’s across all income levels,” says Ann Mack, the director of trend-spotting at brand-building agency JWT. It’s a strategy so ingrained that many shoppers compare prices without thinking, whether online or in person. But now more of those shoppers are taking their findings to heart. Some are even splitting their grocery shopping up to take advantage of more rotating weekly specials at local stores, Mack says. (For the best online price comparison sites, click here.)

Bartering
The Internet has expanded opportunities for consumers who want to trade goods and services without money. Craigslist reports that the number of posts in its barter section has more than tripled over the last 24 months. The company declined to provide more specific current figures. (For tips to effectively barter, click here.)

Group buying
Many frugal consumers not only share deals with their peers, but also band together to get a better value, Winskie says. “It’s mothers, neighbors, buying in bulk and splitting the cost to save,” she says. New sites like Groupon also offer shoppers the opportunity to get discounts by collaborating with strangers. (For details, click here.)

Layaway and Christmas clubs
Thanks to the credit crunch, retailers and consumers are looking at these old options, which had faded with disco. “They went away as people bought things on credit and found other ways to pay,” Testa says. Last year, Sears (SHLD: 66.53*, +0.35, +0.52%) and Kmart heavily promoted their longstanding layaway programs. This year, they introduced a new Christmas Club that matches 3% of consumers’ savings.

Source: SmartMoney

4 Signs Your Home Is About to Lose Value

Despite signs that the real estate market is bottoming out, millions of homeowners are likely to find themselves in worse shape within the next two years.

Nearly half of the nation's 52 million mortgage borrowers will have negative equity by the end of the first quarter of 2011, up from the 14 million at the end of this year's first quarter, according to estimates in an Aug. 5 report by Deutsche Bank. With so many borrowers underwater -- or owing more on their home than it's worth -- the risk is high that they'll default and their homes will go into foreclosure, says Mark Zandi, the chief economist at Moody's Economy.com. (Moody's Economy.com estimates that 17.5 million mortgage borrowers will be underwater by early 2010.)

Negative equity is the product of several factors. The most significant weight is the broad and persistent decline in home values. A Zillow.com index of home values fell 12.1% year-over-year during the second quarter, resulting in a total drop of 22.3% since the market peaked in mid-2006, according to an Aug. 11 report by the online real estate marketplace. Many buyers who bought their home around the peak with a 20% down payment have lost that dollar amount.

"The continued decline of U.S. home prices will contribute to rapidly rising rates of negative equity," Karen Weaver, a Deutsche Bank research analyst, wrote in the report. "The most obvious implication is for mortgage defaults."

Current homeowners, or those shopping for a home and who are concerned that they'll end up underwater, should consider how long they expect to live in their house. Being underwater doesn't affect homeowners unless they plan to sell, Zandi says.

Individuals who are staying put for at least the next five to seven years will likely recoup the lost value of their home, says Amy Bohutinsky, a Zillow.com spokeswoman. In addition, homeowners should refrain from borrowing against their mortgage, she says.

Those who find themselves underwater can turn to the federal Making Home Affordable plan, which can help you refinance or do a loan modification. You'll have to meet the eligibility requirements listed here.

Whether you're at risk for falling behind may have more to do with the economy and your neighborhood than your job, your credit or your income. Here are four warning signs that you're heading underwater.

Foreclosures in your neighborhood
The quickest way to end up underwater is to live in a neighborhood that's plagued by foreclosures.

When one home on your block goes into foreclosure, your home's value drops by 1%, Zandi says. But that isn't a one-to-one relationship. If two homes on a block go into foreclosure, your home's value will drop by more than 2%.

As homes go into foreclosure, they create a domino effect, lowering home values throughout a neighborhood in a cascade beyond homeowners' control. (For more on factors that reduce a home's value, read our story.)

Homes lingering on the market
When "For Sale" signs linger in a neighborhood for three or more months, that may mean buyers and sellers can't agree on a price. In that environment, homes are unlikely to sell unless the seller lowers their asking price.

"The time on the market is always a good barometer of demand for homes and for the price homes are transacting at," Zandi says. "The longer it appears that neighbors are taking to sell their home the more likely it is they're not getting the price they want and that prices are falling."

Compare the time it took for homes to sell in your neighborhood three years ago vs. today; if it's taking weeks or months longer to sell, the prices homes can fetch are dropping, Zandi says.

Increasing unemployment
In most cases, the cities where homes have lost the most value during the past year also possess the highest unemployment rates.

Homes in Merced, Calif., have lost 40.2% of their value year-over-year, the biggest loss of home values in the nation, according to Zillow.com. The city's unemployment rate is the fifth-worst among 372 metropolitan areas at 17.6%, according to June data from the Labor Department. El Centro, Calif., where home values plunged 37.6% year-over-year (the second-biggest drop in the country), has the worst unemployment rate at 27.5%.

Individuals living in areas battered by high unemployment are likely to see their home values drop further, especially if they live in areas dependent on dwindling industries -- like Central Valley, Calif., and the mortgage lending business or Detroit and the auto industry, Zandi says.

Homes in disrepair
Dented siding, peeling paint and broken porches could be signs that neighbors are having trouble making ends meet and can no longer pay to take care of their home, Zandi says. Or they may have gotten an appraisal and discovered their homes have dropped in value and are no longer worth the cost of repairs. Inevitably, as the condition of homes in your neighborhood worsens, home values are likely to drop.

"The mere fact that they're not investing in their homes will affect you too," Zandi says.


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What Underwater Borrowers Have Common
Risky mortgages
Some 77% of option-ARM borrowers and 50% of subprime mortgage borrowers were estimated to be underwater as of the first quarter of 2009, according to the Deutsche Bank report. With option-ARMs, borrowers could make minimum monthly payments that didn't even cover the loan's interest. As the market declined, these balances grew over time. With subprime mortgages, borrowers often had poor credit scores and little documentation of their financial situation. In both cases, borrowers often ended up with a large motgage relative to the house's price.

Date of purchase
Individuals who bought their home between 2003 and 2008 are at risk of being underwater because they bought while prices were rising, Zandi says. The risk is greater for those who bought between 2005 and 2006, as the market approached its peak.

Excessive borrowing
Many individuals borrowed against their home when it appreciated in value during the bubble by taking out a second mortgage or tapping into a home equity line of credit or home equity loan. This borrowing left their home with less equity to weather the drop in home values.

Home's location
The areas that have been hit the hardest by plunging home values include the "sand states" of Arizona, California, Florida and Nevada because they brought the most speculation, easy credit and overbuilding during the bubble, Zandi says. Also hurt: the states where unemployment is especially high and manufacturing jobs have been eliminated like Michigan, Ohio and Indiana, Zandi says.

Source: SmartMoney.com via AOL

Does Cooking At Home Really Beat The McDonalds $1 Double Cheeseburger?

This is a question I had from a reader (we’ll get to the double cheeseburger in a minute):

My question is about budgeting for food. I’ll be starting my first real job soon so I’m setting up a list of monthly expenses. I haven’t yet lived on my own, so I don’t have a good basis for estimating monthly food expenses. Could you shed some light on the matter?

My rule of thumb is this: for one month, save the receipts on every food item that you buy, whether it’s at the grocery store, eating out, or anywhere else. Then add 10% to that. That should be your food budget for a month.

Why add 10%? I find that almost every budget works better with a bit of breathing room in it. Most months, you’re better off coming in under budget so that you can put the excess away for debt repayment or savings. Also, this allows you to easily handle small emergencies within your monthly budget – you already have the slack in place to handle a blown tire, for instance.

On that note, I’ve read many of your articles about the advantages of preparing food at home. I’ve always been told that this option is less expensive than eating out, but intuitively it seems like the cheapest fast food options might be less expensive. For example, is there any way I can prepare an item – even assuming I buy ingredients on sale or in bulk – and have it cost less per serving than a $1 cheeseburger from McDonald’s? Negative externalities notwithstanding, is it a better option financially? Can you provide a cost-per-serving analysis for some of your recipes to better answer this question?

Okay, let’s break it down. I can get a double cheeseburger from my local McDonalds for $1.07. It weighs 5.8 ounces, has 440 calories, and has 23 grams of fat (here’s more nutrition facts on the item), which is 35% of the daily recommended allowance of fat (three McDonalds dollar menu double cheeseburgers add up to more than 100% of your daily fat intake). I will say that in terms of caloric content, it is a pretty good deal, but the calories you get are pretty unhealthy – I can certainly see why people with limited budgets and growing children might go for such things, even though it’s far from the best choice.

Anyway, there’s roughly three ounces of meat on the burger, plus cheese, ketchup, and a bun, meaning you can make 16 burgers of equivalent size from 3 pounds of hamburger meat.

Using the global grocery list and other online sources, I obtained some prices for the materials you would need to construct 16 such cheeseburgers.

3 pounds hamburger @ $1.99 lb. = $5.97
16 slices cheese, store brand = $1.99
16 hamburger buns, actually 2 packs of 8 = $3.98
1 small bottle ketchup = $1.50
… for a total of $13.44. One doesn’t have to pay sales tax on these products as they’re staple foods. 16 McDonalds double cheeseburgers, on the other hand, cost $17.12.

If you want to do this in bulk, just grill all of the burgers, then freeze them, separating them with pieces of wax paper. Pull out however many you want per meal, warm them up, then assemble them with the bun and whatever items you want on it.

Isn’t that meat price a bit cheap? For making burgers, especially if grilling them, you don’t want the cheapest meat unless you want a very dry burger. Part of the cooking process cooks out the fats, leaving water behind as the fats denature and come out of the meat.

There are other benefits here as well. If you make your own burgers, you can grill them yourself, making them taste fantastic and allowing a lot of the fat to drip out of the meat, making for a leaner, healthier burger. You can also choose the exact condiments you want on it – I myself like just a hint of mayonnaise on mine. You can also choose to include other elements which make it healthier or tastier – lettuce, tomato, etc. – at your discretion.

In other words, you can make a healthier, tastier version of the McDonalds $1 double cheeseburger at home for less than $1 per sandwich. And if you can beat the lowest common denominator in fast food, you can easily beat the price point of most anything else you would eat out.

Source: The Simple Dollar