Finally Frugal's Weekend Roundup

I can't believe it's the weekend already! This short week just flew by! Meanwhile, there were loads of great posts at blogs I either read regularly, or just discovered recently.

With summer fast approaching, Being Frugal writes about ways we can decrease our water usage. I know my bill increases in the summer, what with yard watering and filling the pool, so I read this with interest.

For those of you who are digging out of debt, Cash Money Life has a wonderful series on how to improve your credit score. Amazingly, I have a pretty good credit score already, but there's always room for improvement!

Frugal Dad writes a great review of Dave Ramsey's Total Money Makeover, one of the books that changed my attitude about debt repayment and financial security. Follow these steps and you'll be out of debt faster than you'd imagine!

According to Can I Get Rich On A Salary, there are only two ways to save more money: spend less and save more. Along with this 'duh' statement, the blog includes a list of ways to achieve your earning/savings goals.

David, at David Makes Cents, gives us his opinion of why the gas tax should be raised, not lowered. I must say, I agree with this rather unpopular opinion. What do you think?

Since I'm currently questioning the value of paying a mortgage, I was particularly interested in a buy versus rent post at Greener Pastures. I'm going to spend a little more time researching this over the weekend.

So that's it for this week! Have a lovely weekend, everyone and I'll be blogging again on Monday!

Frugal support, part deux. . . .

Wednesday, I met with a small group of people in the Portland area who are also pursuing increasingly frugal habits, attempting to spend less, save more, and basically reduce our own contributions to a society filled with overconsumption and waste.

While the group was small, it was interesting and included the following (names and genders have been changed to protect the frugal):

John: recently moved to Portland, and while the transition has been a smooth one, he wants to learn how to live on less and save more. He shared some of his strategies, which include using coupons, lighting his home with candles in the winter to reduce energy usage (this sounds so cozy), and taking public transportation when he can.

Ann: has been living by the tenets of Your Money or Your Life for the past two years. As a result of insight gained from the book, she decided to sell her house and now rents an apartment. She is also a fan of the Tightwad Gazette, which is a wonderful (though giant) book of hundreds (possibly thousands) of frugal tips. This is someone I think I can learn from.

Jeff: Jeff is an entrepreneur, and was primarily interested in issues related to consumerism, greed, and more 'global' problems. The rest of the group, including myself, were more interested in discussing what we, as individuals, can do to live more frugally. Still, an interesting person.

Mike: Mike is married with a child, and, like John, also recently relocated to the Portland area. He is also a member of a "green parenting" group, which sounds interesting. Although he's been in the city for a short time, he's already made contact with other vegans and those interested in forming a food co-op.

This was our first meeting, and I sincerely hope we can manage to get together again. I'm definitely going to suggest meeting with one or more of the people who were there to discuss voluntary simplicity and frugal issues in more depth.

Frugal veggies. . . .

Apropos of my new interest in Urban Homesteading, I found an article today that discusses the concept of Community Supported Agriculture (CSA). This is a system in which community members work on a local farm for a specified amount of time (for example, two hours a week) in exchange for free produce.

This sounds like a great option for people who live in apartments---I have a small yard, big enough to grow tomatoes, zucchini, and lettuce (my beans are just about ready to put in the ground). I know people who don't have the luxury of a yard, though, and since I'm considering a move to a condo or apartment (I'll discuss this on the blog later when I've thought this through a bit), I felt sad at the 'loss' of space for vegetable growing.

I was curious about opportunities for this in my area, and just did a basic google search on CSA and Portland. It turns out there's a book called Sharing the Harvest, which is described by our local Powell's Bookstore as a must-read for people who are considering either growing their own backyard harvest, or joining a CSA. The authors came to Powell's and spoke on March 10 (darn, I missed it!).

Another valuable bit of information is a link to the Dancing Roots Farm, which offers memberships to individuals who want fresh produce grown locally. According to the website, the cost is $435 for 26 weeks of fresh vegetables (from late May through Thanksgiving). No work on the farm is required. Other benefits? Farm fresh eggs, food preserving workshops (I need this), free range meat orders, and u-pick blackberries. As evidence that the CSA movement is taking off, all the memberships for 2008 are sold out!

I encourage you to do a basic search in your own area. Do you have access to this type of membership through a local farm? What is the cost? Would it be worth it to you and your family to have locally grown, fresh produce available? Can you see yourself working 2 or 3 hours a week on a farm in exchange for produce?

Frugal support. . . .

Tonight, I'm getting together with a small group of strangers to discuss frugality, our definitions of simple living, and strategies we use to downsize our lives. I searched for months and months, beginning last fall, for a group in the Portland area that would help support my goals, people from whom I could learn, and to whom I could share the amazing changes I've been making in my life. I didn't find such a group until now.

We're meeting for coffee after work, and although I'm a bit nervous (I get a little shy when meeting new people), I'm also really excited to meet these fellow frugalers (is that a word? I guess it is now. . . ) and find out what makes them tick. Specifically, I'm interested in knowing if there was a defining moment that helped them make the change from consumers and spenders to savers.

It's possible that I'll be the only person to show up, in which case I'll have coffee with myself and discuss frugality with. . . myself (doing my little bit to 'keep Portland weird').

In the meantime, do YOU have a defining moment that helped you make the switch from spender to saver (even if you're not yet saving at the level you want to be?) Do you have a support group, whether friends, family, or online strangers, that helps you stay on track and learn new strategies?

Since I never found my 'human' group all those months ago, I turned to the internet, and have discovered so many people with the same struggles, ideas, and dreams. I hope I can supplement my blog friends with 'real life' frugal buddies. I'll let you know how it goes!

Festival of Frugality. . . .

This month's Festival of Frugality is hosted by Funny About Money, who was kind enough to include my post about saving money with Frugal Transportation.

Other posts highlighted in this Festival include Master Your Card's opinion of Dave Ramsey, Sound Money Matters' ideas about ways to entertain for free at home, and ideas about how to become wealthy by living within your means, at Slow Down Fast.

Sound interesting? Check out the Festival for links to these articles and more!

I used my Emergency Fund. . . .

Yesterday, I took $300 out of my Emergency Fund, and used it to have a stuck drain cleared out. I had been unable to shower or do laundry, and since my own methods (Drane-O) hadn't worked, I called the local plumbing company, and they came out on Memorial Day to do the job.

Although it was worth it (my laundry and I are now clean and fresh-smelling), I couldn't believe how expensive it was! The bill---even with a $30 coupon---came to $289! This is money I didn't have in my checking account, so I was ecstatic that my EF is as healthy as it is.

What would I have done eight months ago? That plumbing bill would have gone directly on my credit card, and I would have ended up paying double because I wouldn't have paid it off right away. Instead, I was able to pay cash! The satisfaction of this is immeasureable.

If you're thinking about starting an Emergency Fund, please do it. Putting even $50 a month away in a separate EF (I use ING savings subaccounts) can help out when those unexpected expenses arise. Need some tips on how to do this without feeling the pinch? Read on!

• Determine your 'latte factor' (dinners out, fancy coffee, soda from the machine, etc). Control this one aspect of your spending, and send the savings to your Emergency Fund account
• Treat your savings as a bill; I send my money to separate savings accounts at the beginning of the month, as I'm paying my other bills. I don't even miss it that way!
• Have you recently paid off a credit card or other regularly occurring bill? Don't let that money slip away! Send that 'payment' to your savings account instead!
• Round up the amount you spend on your debit card and create a cash 'cushion' in your checking account (i.e. if you spend $1.26, round that up to $2.00 in your register). At the end of the month, send the 'cushion' to savings.
• Empty your wallet at the end of each day---any change or cash can be put into a savings jar. When it adds up, take it to the bank and have it transferred into savings.
• If you're saving money on electricity or gas by turning off lights, turning down the water heater thermostat, or not using AC as regularly, send that savings to your Emergency Fund.

Even small amounts in an Emergency Fund can be useful---don't forget about the miracle of compounding interest! I'm going to work on building that $300 back into my EF using some of the strategies found above. I hope you will too!

Memorial Day roundup. . . .

In the interest of highlighting the sacrifices our troops---and their families---are making in Iraq, Afghanistan, and all over the world, I've created a roundup of blogs that discuss finance for servicemen and women, and their families.

Money for Military discusses debt avoidance (a great concept!) as well as finance issues relevant to those serving in the armed forces.

Active Duty Military Money and Matters is on active duty in the armed services, and discusses his own debt repayment and savings goals, as well as investment objectives while on active duty.

Military Finance Network, which is run by Patrick from Cash Money Life (which I read on a regular basis), is a great source of information about not only active duty issues, but also life as a civilian (Patrick isn't on active duty anymore).

The writer of Life Lessons of a Military Wife is a former army brat, and is now married to a military man. She's in the middle of a move to Germany, so may not be posting regularly until August, but keep her in your favorites and check back!

I'm sure there are many more military-finance focused blogs out there (if you have a favorite, send it to me; I might add it here). Whatever your opinion about the wars in Iraq and Afghanistan, the reality is that there are thousands of Americans fighting and dying, and thousands more family members waiting for them here at home.

Finally Frugal's Weekly Roundup. . . .

Another week has come and gone, and we're almost into June! How does the time pass so quickly? Luckily, I've been using my time wisely, reading some of my favorite blogs. Here are some of my picks for the past week:

Being Frugal wrote about ways newbies to frugal living can inch their way into saving money.

Pinyo, over at Moolanomy reprinted a post (which I hadn't caught the first time), addressing some of the excuses people use to avoid financial responsibility.

Frugal for Life presents a list of 10 great places to find coins! 'Found money' can really add up; I was in a meeting recently where I found 75 cents tucked into the folds of my chair!

While this post has more of an environmental bent, Brip Blap's list of small actions can also have a positive affect on your pocketbook. . . .

Another great list can be found at Prime Time Money, where PT put together a list of 10 behaviors that he believes has brought him financial success.

Finally, I've Paid For This Twice Already writes about ways we can get the family invested in spending less and saving more.

I hope you find these reads as interesting as I did! Have a wonderful weekend, everyone!

Frugal debt payment?

The last place I want frugality to play a part in my life is in my debt payment. However, lately I've been struggling with the idea of decreasing the amount of money I send to my credit card each month in order to beef up my emergency fund. I wouldn't normally do this, but with the possibility of a labor strike looming in the next six months, I really want to have a bit more padding in that EF account.

I've been going back and forth on this issue, unwilling to totally commit to the idea of paying just the minimum on my credit card---even if temporarily. The satisfaction of watching the balance shrink each month is just too compelling! I also just found an online calculator that illustrates just how long it will take to repay a credit card when paying just the minimum. Here's what the calculator told me:

"If you make only the minimum monthly payment suggested by your credit card statement, by the time you pay off your $2,899.00 balance, you will have made 141 payments (that's 11.75 years!) and you will have paid $656.64 in interest charges!

Plus, if you were investing the average monthly interest charge -- instead of sending it to the credit card company -- at only a 7% return, you could have earned roughly $1,025.08 during the same 11.75-year period. That represents a total cost of $1,681.72!!"

This particular calculator is unique in that it actually exposes the opportunity cost of paying that interest charge each month, rather than investing it. However, what it doesn't (and truthfully, can't) address are the people who do something beneficial with the money they would have sent to debt repayment. In my case, that extra money is going into a savings account earning 3%, which can be used later should I need it. Granted, I pay 4.99% on my credit card balance, so this is something of a losing proposition. But the emotional payback may be worth it. I hope I don't have to go on strike next fall. But if I do, I'll feel much more comfortable having money in the bank to pay bills while I'm on the picket line.

In the end, my gut tells me to continue adding money to my emergency fund. However, to assuage the side of myself that gets a kick out of watching the credit card balance shrink, I'll send more than the minimum to American Express---maybe I'll even go 50/50, as a frugal compromise. I haven't yet created my June zero-based budget, so we'll see how things shake out then. If you were me, what would you do?

Pay attention to the details. . . .

I cancelled my Verizon wireless plan last month, so that I could 'port' my phone number to a new phone with Virgin Mobile, using a plan that will cost me less than $20 every three months. I cancelled my wireless contract with three weeks left, assuming (my first mistake) that my 'early termination fee' would be pro-rated.

When I received the roughly $195 last bill, I was in shock. Verizon was charging me $175 for early termination, for ending a contract three weeks early! I assumed (my second mistake) that by calling and explaining myself, the charge would be removed from my bill, leaving me with my monthly plan fee. Nope. My 'customer service' representative explained that I had started my current two-year contract (after nearly ten years with Verizon) just a couple of months before the new 'pro-rate' policy went into effect, and therefore I would need to either pay the fee or port my phone number BACK to Verizon for TWO WEEKS, then port it BACK to Virgin Mobile when my entire contract was complete.

Ten phone calls and what seemed like several hundred hours later, I did just that. I could have saved myself the frustration and time had I simply called Verizon BEFORE terminating, to confirm whether my early termination fee would be pro-rated or not.

Luckily, the FCC is now working with wireless carriers to ensure that customers can, in the future, cancel their wireless plans without paying exhorbitant fees. The fees will be prorated, and may---hold onto your hats, folks---be tied to the actual costs incurred by the wireless company, rather than simply random amounts that serve to discourage customers from switching carriers.

The downside to this new proposal? IF the FCC accepts this proposal, angry customers who have sued Verizon and other companies for unjust termination fees would get nothing. Apparently, those lawsuits would be thrown out, as a 'reward' for the wireless companies agreeing to a more fair fee system.

The moral to this is: if you're trying to reduce your monthly costs by switching to a cheaper wireless service, that's great! But check with your company first, to make sure you're not going to be charged a fee that will negate all of that monthly savings. And if you sign up for a new contract (I am using pay-as-you-go, so am blissfully free of a contract) check the fine print; make sure you have a way out if you don't like the reception, the service, or the phone!

Gulp. I spent a lot of money last weekend. . . .

I've had a few setbacks since I began living a more frugal lifestyle, and each time I've felt regret and guilt afterward. This past weekend I purchased a used bike, with some related accessories. This purchase was budgeted, and actually I spent less than I gave myself 'permission' for, but for some reason I still feel uncomfortable. This might be because I'm so unused to dropping more than $50 on anything these days.

Also, once the money started flowing (budgeted or not), it became much easier to whip out the debit card and make some purchases I normally wouldn't have. Here's an accounting of my expenditures last weekend, along with a notation indicating whether the purchase was included in my budget---or not.

Granted, looking at my expenditures in this way, I can see that the total is only slightly more than what I budgeted for my bike expenses. So, my budget is safe for now; however, had I not spent extra money on pretty flowers and a bike rack, I could have sent that extra money to debt repayment or emergency fund savings instead.

Frugal side effects. . . . .

Pictured to the left is my accumulation of trash for the month of May. This bag represents the items that couldn't be composted or recycled, and as you can see, the bag is quite small---about the size of a full-grown cat---and it isn't even full yet! I estimate that I will get away with this one bag of trash, plus one from the bathroom, for the entire month!

About three months ago, I switched from weekly trash pickup to monthly service, saving myself about $12 a month--this made me nervous at first (I imagined smelly garbage overflowing from the trash can, raccoons and feral cats setting up shop outside my house, and neighbors picketing in my driveway in opposition), but soon I realized that I could probably get away with even less frequent trash pickup (unfortunately, there aren't any plans for service every two months. . . .)

Now, granted, I live alone, and when friends and family come to visit, they generally don't bring their garbage with them, but one of the reasons my trash accumulation has decreased so substantially is due to a frugal lifestyle.

I'm paying greater attention to the items I purchase: I buy in bulk, and often bring my own bags or re-use packaging (like Quaker oats tubs); I shun pre-packaged food or items that are individually wrapped (these are usually more expensive anyway); I compost tons of vegetable scraps and shredded paper; I fill my recycling tub religiously (this is still picked up weekly).

When I started thinking about simple living, frugality, and downsizing my expenditures last year, I never considered the fact that I would also be minimizing my footprint on the earth. I was so focused on my debt, my income, my expenses (and the widening gap between those last two), that I didn't pause to consider the positive side effects of living a more frugal life. Now I can see that I'm not only bringing more 'green' to my bank account, I'm greening the environment too!

The Urban Homesteading movement. . . . .

One of my all-time favorite articles in the past couple of weeks was written by Lynnae, at Being Frugal. The reason I loved it so much is because it introduced me to a brand new term, called 'Urban Homesteading'.

Urban homesteading is the practice of growing one's own fruits and vegetables (and learning to preserve them), making do with what's around the house rather than running out to 7-Eleven or Target for an overpriced plastic doo-dad, and spending time on making food from scratch, rather than purchasing packaged food. In short, urban homesteading is about frugality!

More people than you think are probably already heading in the direction of urban homesteading. In fact, last week while eavesdropping (because that's the kind of person I am) on the bus, I listened to a very interesting conversation between two women, both of whom raised chickens---both for the meat and for the eggs. They talked about how much better tasting fresh eggs are, and also mentioned that they often sell the eggs they won't use themselves, thereby passing their bounty on to others in their neighborhoods.

Contrary to what you might think, an urban homesteader isn't someone who wants to 'live off the grid', sew all of her garments, or grow cotton to be made into fabric. These aren't tie-dyed hippies with unwashed hair (not that there's anything wrong with that. . .). Instead, urban homesteaders are like the two women I saw on the bus: they looked like they were heading off to respectable jobs downtown, they were well-dressed and well-spoken, and obviously knowledgeable about raising chickens.

In reading further about this growing phenomenon, I came across another website devoted to the topic, called Reality Sandwich, which says:

"We are not alone, and we didn't invent this idea. Urban homesteading is a movement, a quiet movement of sensible people making the smart choice of disconnecting ourselves in healthy ways from an increasingly untenable reality and creating our own culture from the ground up. We live better, we eat better, we're saving the planet. What's not to love?"

I would amend that last statement to: "we live better, we eat better, we're saving the planet, and we're saving money". This summer, in an effort to minimize my trips to the supermarket, I'm increasing my 'crop' of vegetables in my little garden. Last year, I feasted on the most amazing tomatoes, and by July I hope to be eating lettuce, zucchini, more tomatoes, and beans! According to this news story, I'm not alone in this; more and more Americans are growing their own food in urban settings.

By the way, if you think you can't grow amazing vegetables on a small lot, see this video, about a seriously green family who grew 6,000 pounds of food on a 1/5 acre lot! To read more about the Dervaes family, check out their blog, here.

I remain fascinated by this topic, for many reasons. It speaks to my growing commitment to frugality and simple living, while being inherently good for the environment. I'll be reading more about this as time permits, and will share any interesting ideas or tips that I discover! If you have any comments about urban homesteading, I'd love to hear them!

Finally Frugal Weekly Roundup. . . .

It's finally, wonderfully, beautifully, warm and sunny here in Portland! Since I have no desire to sit inside in the gloom in front of my computer, I've compiled my weekly roundup for your enjoyment. I certainly learned from each of these posts, and I hope that you do as well!

Moolanomy, one of my favorite bloggers, had a guest post this week about the difference between a budget mentality and a net worth mentality. In my mind, the budget is the shorter-term view, while net worth communicates a long-term goal or objective.

Mrs. Micah discusses the topic of how to dine out without stiffing your server. Having waitressed one summer, I have the utmost respect in the people who bring me my food, so this was a good read!

Now, I am not generally a fan of grocery coupons because I prefer to buy the generic brands and haunt the bulk section. But J.D. at Get Rich Slowly posted a story about the Coupon Queen, and her ability to pay as little as $10 a week (for a family of FIVE!) using coupons. Worth a read, whatever your opinion about coupons.

The Simple Dollar lists 16 ways to minimize your monthly bills. Many of these make perfect sense, especially the suggestion to ditch the cellphone plan and switch to a 'pay as you go' plan, as I recently did.

Now that the warm weather is upon us, I'm seeing signs for garage sales around the neighborhood. Since I'm in the market for a used bike, I'm keeping my eyes peeled. Luckily, Lynnae at Being Frugal wrote a post this week explaining the most efficient way to grab those yard sale bargains!

As I appear to be in the midst of my third or fourth midlife crisis (and I'm still in my 30's!), I was interested in Plonkee Money's post about why she likes her job.

That's it for me, folks! Have a lovely weekend!

Rebate dreamin'. . . . .

I received my $600 rebate check on May 9th. That same day, I transferred the money to my ING Emergency Fund account, where it joined its friends and is hopefully now making babies. I was curious about what others decided to do with their checks. I found a post on Wise Bread asking this same question, and here are some of the responses:

"I'm realizing I could use some new clothes for work"

"I'm using it to pay taxes. Haha. "

"I'll be putting it toward CC debt."

"I'm likely to spend it on an iphone."

"We put it aside in our home down payment savings."

"Any rebate I get is getting invested right along with the rest of my income."

If you still haven't figured out what to do with your money, I can help with that! Well, actually, the Debt Diva can help! She has a list of suggestions on her website that may trigger you to use your money in a myriad of different ways, like:

Pay Down Debt Paying down credit card debt is the first priority for many people. A significant payment can save you hundreds of dollars in interest fees. You should spend a large portion of a windfall on debt, especially credit cards. You can use your extra cash in a lump sum payment or double your regular monthly payment for several months. If you don't have credit cards, lowering any outstanding debt, such as a second mortgage, will help save you money in the long run.

Emergency Funds A windfall is the perfect opportunity to start your rainy day fund. Many financial experts suggest two to three months worth of living expenses put away for emergencies like medical expenses, major home repairs or a job loss. You can start a fund, feathering your nest with a portion of your rebate and continue to put a modest amount away each month. Something as simple as an unexpected car repair can be a huge financial hit for many Americans. This fund will help protect your finances.

Retirement Funds Open an individual retirement account with some of your money or add it to an existing account. This will allow for a solid nest egg when you retire.

Invest in Yourself Strengthen your physical health by taking preventative action. Schedule any overdue medical exams - annual physical, dental cleaning, eye exams or medical procedures you have put off. You'll save in the long run if you take care of your mind and body as you age.

Savings If you are already debt-free now is a great to invest in the stock market since prices are low. Stocks produce nice returns and even as little as a hundred dollars can get you off to a good start.

Splurge The stimulus is designed to encourage you to spend the money and help the economy thrive. You could plan to spend at least 10% of the windfall on something fun for your family. By limiting the amount you spend, you will still have money left over to pay down debt or invest in your future.

And if, after reading the Debt Diva's suggestions, you STILL can't figure out how to spend that $600 to $1200 'windfall', just let me know; I'd be happy to help you---for a small fee! I am curious, though, for those of you who have received your checks, what did (or will) you do with the money?

Frugal transportation. . . .

As I gazed out the window of the bus this morning, watching frustrated drivers jockeying for position on the road, I wondered to myself: "What's stopping these people from jumping on a bus or the light rail system? Don't they know how much money they could be saving"? Then I stopped to consider: I actually don't know whether I'm saving any money at all by taking public transportation to work---it's just something I've assumed.

I don't really question whether I'm saving money---I must be---I just don't know how much. And I want to know! So, I set about using my limited math skills to work out how much I'm saving by NOT driving my car in to work each day.

According to Yahoo maps, I live about 10 miles from work, so my daily round trip mileage would be in the 20 mile range. My car gets around 20 mpg in the city. Not great, but not bad either, especially for a 13 year old sedan. So basically, I'd be using one gallon of gas each day I drove to and from work. That would equal 20 gallons a month (1 gallon per day, five days per week, assuming four weeks in the month). At around $3.75 for a gallon of gas, I'd be spending a minimum of $75 a month just to gas up my car to get to work!

And I'm not done yet! Incredibly, a parking pass at my university costs $93 a month! A month!!! Now, that's just ridiculous. I'm up to $168 a month just for the privilege of fighting morning and afternoon traffic (also ridiculous) to get to work. This doesn't include money spent on auto maintenance associated with putting more miles on a car: tire replacement, more frequent oil changes and tuneups, for example. I can't even begin to estimate those costs.

And guess how much my monthly pass for the TriMet system costs me? $31. And, get this: it's taken out of my check pre-tax!! So, really, it probably costs me less than that when the tax savings is added in. Now, granted, my pass is subsidized by the university. For a comparable pass without an employer discount, a commuter would pay $76 a month. Still a great deal!

I have to admit, I do drive to the transit center closest to my house to park. This is about four miles roundtrip. So that's 20 miles (or one gallon of gas) a week. Which means that I should add $15 to my TriMet pass cost (4 gallons of gas for the month times $3.75 per gallon of gas) for a grand total of $46.

So, in summary, the "inconvenience" of taking public transportation (which really isn't much of an inconvenience at all) is saving me a grand total of $122 a month! More, if I were willing to add auto maintenance costs into the equation (I'm not). Even a driver paying the full $76 for a TriMet pass would save $92, assuming they also drive 10 miles each way in a vehicle that gets around 20 miles to the gallon.

Again, I'm no math whiz, so I can't vouch for the accuracy of my addition and subtraction (we won't even go into multiplication and division). If you see a glaring error, please let me know! If not, consider your own transportation costs---is there a way you could realize substantial savings by taking the bus, walking, or biking to work?

Update on Revolution Money Exchange. . . .

Almost exactly one month ago, I opened a Revolution Money Exchange account, and received a $25 'bonus' just for opening! I promised at the time to update you all on my experience with RME since then. I'm happy to report that my "free" $25 was deposited into my account almost immediately. I was able to link up to my ING online account quite easily (it took several days to validate the new account, which is pretty typical) and my $25 is now nestled comfortably in my Emergency Fund account!

More importantly, perhaps, is the fact that I've received NO spam from Revolution Money Exchange. I was careful to opt out of any email advertisements, and true to their word, RME has not sent me even one annoying email. In fact, the only correspondence I've received from this company has been entirely appropriate: letting me know my account had been credited with the $25 bonus, letting me know that my ING account needed validation, and letting me know when my $25 had successfully transferred to ING.

One of the reasons I started my Revolution account was so that I could have an alternative to PayPal, about which I had heard some negative comments, both from friends and from other bloggers.

I believe Revolution is still running its $25 bonus for opening an account---but this offer expires tomorrow, May 15th! If you're interested, click on the ad below to get started. Be sure to opt out of any extraneous communication (unless you're into that kind of thing).

Why can't the government be more frugal?

I just received a letter from the IRS--dated May 12--telling me that my rebate check was deposited in my account on May 9. As if I hadn't been checking my ING account on an hourly basis since May 5th. How much money did the government spend (and how many trees were killed) to tell me something I already knew?

I. Just. Don't. Get. It.
Why is it that ordinary Americans (like me, and probably you) are living frugally, economizing, buying generic groceries and taking public transportation in order to make ends meet, but my government feels that it's necessary to send me snail mail to inform me of an event that has already passed, and for which no action is required on my part?

In a general Yahoo search on government waste, I came across a website called Citizens Against Government Waste. According to the website,

"Citizens Against Government Waste (CAGW) is a private, non-partisan, non-profit organization representing more than one million members and supporters nationwide. CAGW's mission is to eliminate waste, mismanagement, and inefficiency in the federal government. Founded in 1984 by the late industrialist J. Peter Grace and syndicated columnist Jack Anderson, CAGW is the legacy of the President's Private Sector Survey on Cost Control, also known as the Grace Commission."

This site focuses primarily on government waste related to pork barrel projects, and even names the Porker of the Month (politicians who have shown a blatant disregard for American taxpayers).

Another website, called The Heritage Foundation (warning: I think this is a conservative site) has an interesting list of examples of government waste, including:

The Missing $25 Billion
The government knows that $25 billion was spent by someone, somewhere, on something, but auditors do not know who spent it, where it was spent, or on what it was spent. Blaming these unreconciled transactions on the failure of federal agencies to report their expenditures adequately, the Treasury report con­cludes that locating the money is “a priority.” The unreconciled $25 billion could have funded the entire Department of Justice for an entire year.

Unused Flight Tickets Totaling $100 Million
A recent audit revealed that between 1997 and 2003, the Defense Department purchased and then left unused approximately 270,000 commercial airline tickets at a total cost of $100 million. Even worse, the Pentagon never bothered to get a refund for these fully refundable tickets. The GAO blamed a system that relied on department personnel to notify the travel office when purchased tickets went unused. Auditors also found 27,000 transactions between 2001 and 2002 in which the Pentagon paid twice for the same ticket. These additional transactions cost taxpayers $8 million.

Embezzled Funds at the Department of Agriculture
A recent audit revealed that employees of the Department of Agriculture (USDA) diverted mil­lions of dollars to personal purchases through their government-issued credit cards. Sampling 300 employees’ purchases over six months, investigators estimated that 15 percent abused their government credit cards at a cost of $5.8 million. Taxpayer-funded purchases included Ozzy Osbourne concert tickets, tattoos, lingerie, bartender school tuition, car payments, and cash advances.

Credit Card Abuse at the Department of Defense
The Defense Department has uncovered its own credit card scandal. Over one recent 18-month period, Air Force and Navy personnel used govern­ment-funded credit cards to charge at least $102,400 for admission to entertainment events, $48,250 for gambling, $69,300 for cruises, and $73,950 for exotic dance clubs and prostitutes.

And this is just the tip of the iceberg! Have you noticed any abuses of government funds? Well, guess what? There's actually an eHow website letting you know how to report it! Unfortunately, the site advises us to contact our elected officials---isn't that kind of like warning the fox that we've noticed our chickens disappearing at an abnormally high rate?

Festival of Frugality. . . . .

Mike, a PF blogger in neighboring Canada, is the host of this week's Festival of Frugality, over at his site, Quest for Four Pillars. Thanks for including my post about keeping the grocery bills down, Mike!

I highly recommend you check this particular festival out; Mike's made it funny and helpful at the same time. . . .

Frugal planning. . . .

J.D. at Get Rich Slowly wrote a post yesterday about Mary Hunt's'Freedom Account' strategy, in which we estimate our average yearly costs for vacations, auto maintenance, Christmas and birthday gifts, and any other irregular costs. Then the idea is to set up a separate account and deposit 1/12 of those estimated costs into it each month---then those bills are covered with cash, rather than credit.

It's a great idea (although I would prefer to use ING subaccounts for this, instead of keeping track separately in an Excel spreadsheet). Actually, I already do this with my tuition, auto insurance bills, and have considered starting a 'fun money' account as well. However, J.D.'s post also reminded me of something I've been meaning to write for quite some time, about the importance of planning when attempting to increase frugality and decrease spending.

For example, last weekend I agreed to fly to California this summer to visit with family. At the same time, I know that my parents and a good friend (my former shopping buddy) are going to visit me near the end of August. Since I know these visits will increase my spending this summer, I'm going to budget for them NOW. I have three months to plan for these extra expenditures---so they'll be going into my zero based budget---and I'll create a new ING subaccount specifically for travel and summer guest costs. Looking to the future, estimating your expenditures, and planning for them are all essential to living within your means.

If you haven't created a budget yet, I encourage you to do so! It has made all the difference in finally turning my spendthrift ways into save-thrift ways. Here are some steps to ponder as you consider creating a budget:

Gather every financial statement you can. This includes bank statements, investment accounts, recent utility bills and any information regarding a source of income or expense. I looked back through six months of online bank and credit card statements (that was painful). The key is to create a monthly average, so the more information you can dig up the better.

Record all of your sources of income. If you are self-employed or have any outside sources of income be sure to record these as well. If your income is in the form of a regular paycheck where taxes are automatically deducted then using the net income, or take home pay, amount is fine.

Record this total income as a monthly amount. Create a list of monthly expenses. Write down a list of all the expected expenses you plan on incurring over the course of a month. This includes a mortgage payment, car payments, auto insurance, groceries, utilities, entertainment, dry cleaning, auto insurance, retirement or college savings and essentially everything you spend money on.

Break expenses into two categories: fixed and variable. Fixed expenses are those that stay about the same each month and are required parts of your way of living, like mortgage or rent, car payments, cable and/or internet service, trash pickup, and so on. Variable expenses are the kind that will change from month to month and include items such as groceries, gasoline, entertainment, eating out, and gifts to name a few.

Total your monthly income and monthly expenses. If your end result shows more income than expenses you're off to a good start (I started last October by using 106% of my total income!) If you're spending lessthan you earn, this means you can prioritize the excess to areas of your budget such as retirement savings or paying more on credit cards to eliminate that debt faster. If you are showing a higher expense column than income it means some changes will have to be made.

Make adjustments to expenses. If you have accurately identified and listed all of your expenses the ultimate goal would be to have your income and expense columns to be equal. This means all of your income is accounted for and budgeted for a specific expense (this is the theory behind the zero-based budget, after all). If you are in a situation where expenses are higher than income you should look at your variable expenses to find areas to cut. For example, I cut cable, my gym membership, and my cellphone service drastically, saving over $100 a month.

Review your budget monthly. It is important to review your budget on a regular basis to make sure you are staying on track. After the first month take a minute to sit down and compare the actual expenses versus what you had created in the budget. This will show you where you did well and where you may need to improve. Each month you will remember new 'regular' but variable expenses, like your best friend's birthday or the average number of wedding gifts you're expected to purchase each year. Add these into your variable expenses (I like to have separate sub-accounts for things like this----meaning an extra line in the budget as well).

The point of all of this is, if you're willing to look 6 months or even a year into the future, you can effectively budget for all of those expenses that normally sneak up on you and generally result in a credit card moment. Planning is the key to frugality, whether it's at the grocery store, at the gas pump, or at the mall. It's those unplanned, last-minute expenditures that will ruin your budget in the end, so make sure they're accounted for months in advance!

Was this post helpful to you? Do you have a friend or family member who might benefit from the information presented here? If so, please use the email link below to share it!

Frugal eating. . . .

A few of my readers have commented on my rather anemic-looking grocery budget (ranging anywhere from $75 to $85 per month). In an effort to help you all visualize how I stay alive with such a small budget, I’ve kept track of my daily food intake for one week.

Please note that I am not suggesting that you eat the way I do! I know that many of my readers have families to feed and couldn’t shop or eat the way I do. I’m actually a bit nervous about putting this information out there; while I feel entirely comfortable letting you all know how much I make and where I spend my money, it’s somewhat different sharing my food choices! Oddly, I feel much more vulnerable and hesitant to put this on the blog. But, in the interest of staying honest and sharing with you all, here goes:

Monday

Breakfast: toast (with butter and cinnamon) and a banana, plus coffee
A.M. Snack: carrots
Lunch: peanut butter and jelly sandwich
P.M. Snack: crackers and cheddar cheese
Dinner: beans and rice with cheese

Tuesday

Breakfast: English muffin and a banana, plus coffee
A.M. Snack: carrots
Lunch: baked potato with cheese
P.M. Snack: peanut butter and apple
Dinner: out with friends: 2 drinks and appetizers (from ‘fun money’ budget)

Wednesday

Breakfast: banana and coffee
A.M. Snack: yogurt with flax seeds
Lunch: beans and rice (leftovers)
P.M. Snack: crackers (wheat and cheese-nips)
Dinner: roast beef sandwich, cherry tomatoes (leftovers, free from work function)

Thursday

Breakfast: instant oatmeal with blueberries plus coffee
A.M. Snack: carrots
Lunch: Turkey sandwich, cherry tomatoes (again, leftovers from work function)
P.M. Snack: cheese nips
Dinner: spaghetti with basil, garlic, and parmesan, plus asparagus

Friday

Breakfast: instant oatmeal with brown sugar and honey plus coffee
A.M. Snack: banana
Lunch: rice and beans with cheese (last of leftovers)
P.M. Snack: no snack
Dinner: roast beef sandwich with tomatoes (last of free office food)

Saturday

Breakfast: English muffins with cinnamon and butter, plus coffee
A.M. Snack: no snack
Lunch: grilled cheese sandwich with tomato soup
P.M. Snack: cookies
Dinner: curried chicken (leftovers in the freezer) with rice

Sunday

Breakfast: yogurt with blueberries and flax and coffee
A.M. Snack: no snack
Lunch: baked potato with cheese
P.M. Snack: cookies
Dinner: chow mein (ramen noodles with leftover asparagus, carrot slivers, onion, cabbage and tofu)

So, there you have it. That's what $75 - $85 a month for groceries can look like. Granted I rely on some common staples to get me through (rice, pasta, ramen, vegetables, bananas, and of course, coffee) but I don't mind eating leftovers as long as it's something I enjoy.

Note to self: check receipt before leaving store. . .

Today I walked to the local library (about a 10 minute walk) to scavenge the Sunday coupons. I made sure to get there early, as there is a little old lady who often beats me to 'em---she wasn't there today (maybe she was out for her Mother's Day brunch?)

I picked up two coupons, one for $1.00 and one for $2.00 for Pert shampoo. Now, I'm not a huge fan of Pert, but since I have long hair I go through the hair products like nobody's business. While I was perusing the weekly sales advertisements, I also noticed that KMart was having a sale on my particular brand of hair color.

After I had gone home, had some lunch, and called my mom to wish her a Happy Mother's Day, I drove out to KMart to purchase the hair color. While there, I noticed that the Pert shampoo for which I had two coupons were only $2.99! AND, they had a little sticker on them indicating that I could get one for free with a mail-in rebate! Yahoo! Up I went to the checkout stand with my hair color, my shampoo, and my coupons.

While stopped at a red light on the drive home, I happened to glance at my receipt and noticed that the salesgirl had entered both of my coupons at $1.00! So, instead of getting my two bottles of shampoo for .99, I paid $1.99 (assuming my rebate will only be $1.99, what I actually paid for my bottle of shampoo). Still a great deal. But also a reminder to check those receipts while in the store, or just outside, just in case there's a mistake. At the point I realized that my $2.00 coupon hadn't been entered correctly, I figured it would cost more in gas and my time to go back to the store to have it corrected.

Finally Frugal's Weekly Roundup: the Mother's Day edition. . . .

In honor of Mother's Day weekend, this week's roundup will include links to blogs either written by moms or with 'mom' somewhere in the title.

Money Saving Mom blogged on the topic of bargain shopping: what works and what doesn't. I do love a sale, and am always looking out for those good deals, so this was an interesting read.

Millionaire Mommy Next Door shares her cheap and green clean tips. I just started using white vinegar to clean various areas of my house, and I've found it to be an inexpensive and non-toxic alternative.

Mom Advice inspires us with her quest to de-clutter the house (and make a little cash on the side while doing it).

Lynnae at Being Frugal has a wonderful post reviewing a book about healthy eating on a budget. I'm definitely going to check this one out. . . .

For those of you thinking of relocating, Mommy Gets PAID writes about moving on a budget. Don't forget you may be able to deduct your moving costs on next year's tax return, too!

Happy Mother's Day!

A funny thing happened on the way to frugality. . . .

Frugality became a habit! Research shows that it takes between 21 and 28 days for a new behavior to become a habit. Last November, I began tracking my spending with the ultimate goal of decreasing it substantially in certain areas---I made a commitment to start thinking about what I purchased, considering whether it was a need or a want, and making informed decisions that would have a positive affect on my bottom line and financial security.

While it was difficult at first to avoid places like Target and Banana Republic, and I sometimes felt deprived of the fun and challenge of shopping, I have internalized my frugal habit to such a degree that it's become much easier to detour around dangerous stores and avoid making purchases that won't contribute to my new goals.

For example, I recently purchased a new cell phone (to go with my new, cheaper, pay-as-you-go wireless plan). The phone happened to be on sale, a happy surprise that saved me $20. The salesperson asked me if I wanted to add a car charger with my phone, and my automatic response was, "sure"! Then I stopped myself, and realized that I've done without a car charger for the last 8 months (mine was stolen from my car) and I've survived. Not only that, I'm so rarely in my car these days that spending $29 on a new charger (when a free wall charger came with the phone anyway) would be a waste of my money. Needless to say, I turned down the car charger. Six months ago, I would have made that purchase along with several other accessories I didn't need (this is how I ended up with a Bluetooth earpiece the last time I purchased a phone).

If you're thinking of changing a habit, whether financial or otherwise, it may be helpful to realize that all it takes is 21 days---maybe 28. And you can do anything for 28 days, right?

So, what are the steps to forming a new habit, anyway?

Form a goal. First you must know what you want! Last fall, I knew that my finances were out of control. I was rapidly increasing my credit card debt while my meager savings was dwindling. I knew that I didn't want to live paycheck to paycheck for the rest of my life. Financial security was my goal, and the way I wanted to meet that goal was to decrease spending and increase savings.

Make a list of the benefits of the new goal. I knew that living within my means would create less stress, eventually allow me to work less, and would possibly mean that I could retire sooner than my parents did. Ultimately, when I thought about financial security, I felt relief.

Make the goals public. Write them down and post them around your house, put a note in your wallet, tell your friends and family. Remind yourself every day that you have an important goal. I decided to create this blog as a way to publicize my objective and validate my frugal lifestyle (my family wasn't supportive).

Start slowly. Don't expect that you'll be able to achieve your goal overnight. I started last November, and it was a struggle at first. I wanted my credit card balances to shrink substantially right away; I wanted my spending to decrease to almost nothing---these weren't realistic expectations. I took baby steps at first. I began tracking my spending. Then I created a budget. I tried to work more hours at the second job, to create more income. I read a lot of personal finance books and blogs and magazines. Every month I added a new behavior and new knowledge to my arsenal.

No shame, no blame. You'll probably have setbacks. I know I did. I spent over $100 of my tax refund on clothing, before I came to my senses and realized that what I really wanted was to pay down my credit cards quicker. I had a moment of self-blame, until I considered the fact that last year, my entire tax refund was frittered away on who knows what (I was supposed to save it for a trip with a friend---by the time the trip came along, all of the money was gone). As long as you're consistent about your new behavior, those setbacks will become fewer and farther between. I still wish I could go out and buy some new spring clothes, but buying stuff isn't the insistent, nagging need that it used to be.

Don't stop. If you've survived the first 21 or 28 days, good for you! It just gets easier from there. You've formed a new habit, one which you'll want to continue for a very long time. It is possible to slide back into bad habits (see no shame, no blame above), but if you've followed the steps listed above, you probably realize that you have the power to change your own life. You can choose how to spend your money. You can decide not to live paycheck-to-paycheck anymore.

If you enjoyed this post and you know someone who might benefit from the information presented here, feel free to email it using the link located below.

Frugal progress. . . .

There was a fair bit of interest in my zero-based budget, which I wrote about in more detail last Monday. This type of budget, in which each dollar is given a 'home' before it ever reaches your checking account, has helped me live within my means, and also increased my savings (right now, I'm saving for 'regular' expenses like tuition, and the rest of my money goes toward credit card debt).

I created a spreadsheet below that shows the recent history of my spending and saving rate. You can see that in October of 2007, just before I really got serious about living within my means, I was spending 106% of my monthly income. In November, I began tracking every penny that left my life, and I managed to 'only' spend 103% of my income. As I continued cutting unnecessary expenses out of my life (cable, expensive auto insurance, and clothing, among other things), my expenses relative to my income shrank even further. December is a bit of an anomaly, as I somehow made much more money, but also spent more, for obvious reasons.

In February, I began using a zero-based (or zero-sum) budget, and you can see the result: I managed to spend 89% of my income! And, my savings increased from $0 to $181! During each month since then, I've experienced a decrease in my spending as a percentage of the money I bring in (plus, I've challenged myself to increase my income, which helps). At the same time, I've added new sub-accounts to my ING account, to which I send money before my grubby little hands can make a lunge for it.

I thought this might be interesting for those of you who are considering this type of budget for yourselves. As I mentioned in a previous post, it's wonderful to track your spending---but telling your money where to go before you get it is the crucial second step to increasing savings and becoming more financially secure. It's certainly worked for me.

Carnival of Living Cheaply. . . .

My post, End of Suburbia, was included in the Carnival of Living Cheaply, over at 2paupers.

Articles range from advice on allocating your paycheck to increase savings, to how to make $10 on the internet without jumping through hoops or selling your soul, to making meals on a budget (I'm definitely going to check this one out).

Thanks, 2paupers!

Falling off the frugal wagon. . .

I mentioned in my post yesterday that I'm not a big drinker. One beer or glass of wine, and I'm good. Two, and I'm looking for the closest place to take a nap. This helps keep my grocery costs down, and stretches my fun budget pretty far: often I can get away with a night out for less than $20.

For example, last night I went out for celebratory drinks with some classmates, after having taken a rather horrible midterm. I started with a peartini, which is already somewhat outside my comfort zone, as I usually just have a beer. The midterm was bad enough that a pear-flavored martini with sugar on the rim sounded heavenly. And it was!

Much chatting and laughter ensued, and before I knew it, we were ordering appetizers---fruit, cheese, and bread. Somewhere between the peartini and the appetizer, I made the muddled decision to order a sangria---after all, it was on the happy hour menu, and only $4! I do like a sale. . . .

By the end of the evening, we each realized that we had various commitments that required us to go our separate ways. Of course, when the bill came, we all reached for our wallets: two of us had our debit cards, the other two had cash. I offered, in a peartini/sangria-induced fog, to use my debit card, and the others could just give me cash. It worked out perfectly!

Except: now I'm walking around with what seems like a giant wad of cash in my wallet, and it's whispering "shoes, you need new shoes . . . . " So, my challenge is to make good use of that money (within my budget) without going completely overboard and falling off the frugal wagon. Next time, I'll overcome my laziness and stop by the ATM for my $20 'allowance' before going out for drinks. . . .

Festival of Frugality #124. . . .

Frugal for Life included my post, Frugal Envy in the 124th edition of the Festival of Frugality! This particular post is organized alphabetically, which is nice; it's easy to run down the list and pick blogs that look good. I hope you'll check it out; some of my favorite personal finance and frugality blogs are there!

Thanks, Frugal for Life!

18 ways I keep my grocery bill under $75 a month. . . .

A reader commented last week about my zero-based budget, but also wondered how in the world I can get away with spending just $75 a month on food (sometimes less).

"I would also really like you to post about how you get away with spending just $75.00 per month on groceries (amazing). I just don't get that, even for a single person with no kids. I just went to the store today, and even though I did not need stuff for actual meals (just "fill in stuff") and spent almost $60.00."

I’ve actually increased this item in my budget to $85, to (hopefully) make up for rising food prices. This week, I’m keeping track of what I’m actually eating (this should be interesting---I can’t even remember what I had for dinner last night) so readers can see what $75 in groceries means for a single, fairly active woman like myself.

Keep in mind that I’m not suggesting that anyone eat like I do, because I suppose I do crave lots of carbs and cheese, and don’t always get the protein and other nutrients that I probably should. Anyway, in advance of sharing my diet for a week (yikes! Why does this make me so nervous?) I’ll share some of the tactics I use to get the most for my dollar without starving or feeling deprived.

1. Buy in bulk. I’ve discussed this before, and I’ll say it again: shop the bulk section of your least expensive grocery store first---then do the rest of your shopping. You WILL save money (and packaging) this way.
2. I religiously, religiously, check the per ounce or per pound price on the shelf stickers. If your store doesn’t provide this information, ask the store manager about it, or go to another store! By noting how much I’m paying per ounce, I know at a glance whether the 16 oz spaghetti sauce at $1.89 is cheaper than the 20 oz sauce for $2.05 (I should note that I am NOT a math whiz, so doing these kinds of calculations in my head is asking for a miracle).
3. Apropos of the first two tips, create a price book. It will take you some time in the beginning (you can also use old receipts, if you keep yours) but is worth it. There’s nothing more satisfying than being able to determine that the “sale” price in a weekly circular is no less expensive than the regular price at a low-cost grocery store.
4. I purchase food that is inexpensive, long lasting, and can be used in many different recipes. Example? Potatoes! “Boring, boring potatoes”, I hear you saying. Not so fast! There are literally hundreds of recipes online that incorporate potatoes: casseroles, soups, frittatas, and so on. I recently made a potato casserole with frozen diced spinach, cheese and garlic. It lasted for four or five meals, and probably cost a total of about $2.50 to make. I also eat a lot of beans and rice, in different incarnations. Black beans are a great source of protein, and are fairly inexpensive. I haven’t quite committed to actually cooking my own beans (I buy canned), but am inching my way in that direction.
5. I don’t buy much meat or poultry. It’s not that I don’t like beef and chicken; in fact, I love it. However, in the interest of saving money (as well as for environmental and animal rights reasons) I’ve cut my meat and poultry purchases to nearly nothing. I’ll still order meat dishes when I’m eating out with friends, but I don’t use it at home anymore. I make up for the protein loss through beans, cheese, tofu (I’m learning---slowly---to like this) and something called ‘Textured Vegetable Protein’ (TVP) which is a meat substitute for many recipes. See my ‘TVP meatloaf ' post for more information.
6. I buy store brands (generics) when I can. This includes sauces, sugar, bread, frozen vegetables, and many other items. There are some products that don’t appeal to me in the store brand (black beans, for one), but if the name brand costs only a few pennies more, I’ll buy it instead. For example, my store brand wheat bread costs .82¢ a loaf. And it’s larger than the name brand loaves that cost $1.99! Sometimes I wonder about the ingredient, possible preservative, and nutrient differences between the two, but for now, the lower priced bread is tasty and fits my budget. Note: a friend gave me her bread machine for Christmas---she and her husband never used it---and I’ve been making a lot of my own bread as well. Last week I made spinach-cheese bread—delicious!
7. I shop at a chain called the ‘Grocery Outlet’ for items like shampoo, conditioner, toilet paper, soaps, and cleaning supplies (sometime food, too). I rarely pay more than .99¢ or maybe $2.00 for these products. I’m also starting to use more natural cleaning supplies (which, coincidentally, are also cheaper). White vinegar is a wonder product!
8. Check Rite Aid (or CVS, if you’re on the east coast of the U.S.) for ‘buy one get one free’ or even ‘free after rebate’ deals for household items like toothbrushes, toothpaste, and shampoos. There are some great deals in the weekly circulars (which you can view online---Rite Aid even allows you to request your rebates online—no stamps needed). Just be sure that you only purchase the items that will save you money. I don’t know about you, but when I walk through the makeup section of Rite Aid on the way to the shampoo aisle, I have a hard time convincing myself that I don’t need a new lipstick or eyeliner.
9. I grew up in a home where dinners consisted of a meat or other protein dish, salad or cooked vegetables (or both!), and almost always bread of some kind. Basically your square meal, hitting all of the four food groups. Here’s where the dieticians are going to scream. I don’t do that. I work 50+ hours a week and take at least two graduate level classes each term---I have neither the time nor the money for a square meal like the kind my dad used to make. Instead, I try to find recipes that include all of these items (usually a casserole, stir fry, or soup of some kind) in one dish. If I can’t do that, then I’ll sometimes make a special purchase of asparagus, other seasonal vegetable, or salad fixings to round it out. Disclosure: I am not known for being a regular vegetable eater! I’m working on this, though, so don’t hate me.
10. Snacks for work and school consist of fruit (usually bananas), dried cranberries (from the bulk section), or crackers. Generally, I’m looking for snack food that is inexpensive, easy to carry in my bookbag, and not completely unhealthy.
11. Leftovers. I love them. I can eat the same thing for days and days if I’m craving it (like lasagne). Also, bringing food to work keeps me from spending $6.99 on a burrito at Chipotle every day. When I make a meal, I often ensure that there will be enough for leftovers or to freeze for later. Saves time and money!
12. “How can you afford to make lasagne”, you ask? I substitute expensive cheeses (like ricotta and mozzarella) with cottage and cheddar cheese. Also, I never, ever buy pre-shredded cheese. I buy a giant hunk of it and shred what I need using my Cuisinart. Yes, it’s a pain to clean up, but boy does it save money! Again, I don’t make meat lasagne—I just found a great recipe for spinach and cottage cheese lasagne that is phenomenal!
13. Coffee. I love it. I brew it at home and bring it to work in a thermos and a travel cup, so I never run out. I have a little four cup coffee maker under my desk so if I am desperate, I can heat up some water and have tea instead.
14. Free food. Bring it on! Okay, so I work at a university, where the free food is abundant. There are receptions and meetings where the muffins, bagels, coffee, tea, or even cold cuts and salad are available for those who are invited. When I’m at one of these functions, I take full advantage of the opportunity to eat on someone else’s dime. The university pays for this food whether we eat it or not, so I don’t feel bad about filling my plate and even going back for seconds. In fact, last week I was lucky enough to have a free breakfast (board meeting) and free lunch (labor union meeting). When our office was interviewing candidates for an open position a few weeks ago, we had both free coffee and cookies as well as the opportunity to go to lunch with the candidate (the office paid). Also, I work in an office where coworkers will bring in cookies and cakes and other goodies from time to time (I also contribute to this, so I’m not a total moocher)! Whenever I’m invited so some function or other, my second thought (after “hmmm, is this relevant to me?”) is: “will there be food”? Never turn down free food, I say!
15. Grow your own! Last summer I feasted on the most amazing tomatoes grown in my yard. This year, I’ve planted the tomatoes plus zucchini and lettuce, and I’m considering trying green beans as well. For other locally grown produce, I’m lucky that there are many, many farmer’s markets in Portland, and one is held every Wednesday (beginning at the end of this month) on my campus. I have to be honest, though: I’ve never actually compared prices between the farmer’s market and the grocery store, so this is something I think I’ll do when the opportunity presents itself.
16. I don’t drink much alcohol at home. This decreases my grocery budget substantially. I’ll have a drink or two when I’m out with friends, but this money comes out of my ‘fun’ budget, not from grocery money. If I were a regular at-home drinker, my grocery budget would have to increase. However, the warmer it gets, the more I crave a yummy microbrew on the back deck, so we’ll see how my budget develops through the summer.
17. I also don’t drink much soda. Although, in the interest of full disclosure, I am sitting on my back deck as I type this, drinking a diet Pepsi. In my defense, though, it’s from a leftover 24-pack from last summer, which has been stored in my garage all winter.
18. Top Ramen: not just for college students! This is a great, low cost base for other dishes. Lose the overly-salty seasoning packet and create your own chow mein using fresh vegetables and the protein of your choice!

Is that all? Probably not. There are so many ways to save money at the grocery store, if you’re willing to cook from scratch, buy in bulk, purchase store brands, and be creative.

Finally Frugal's zero-based budget approach. . . .

A commenter asked about the mechanics behind the zero-based budget, which has changed my life since I started using this system in February.

"Hi- could you explain a bit more about how to develop/follow a zero based budget? I don't quite understand! Thanks and I enjoy your blog!"

I learned about this type of budget from reading Dave Ramsey’s Total Money Makeover (TMM). According to Dave (we’re on a first name basis), the theory behind this type of budget is this:

"Every single dollar of your income should be allocated to some category on this form. When you’re done, your total income minus expenses should equal zero. If it doesn’t, then you need to adjust some categories (such as debt reduction, giving, or saving) so that it does equal zero. Use some common sense here, too. Do not leave things like clothes, car repairs, or home improvements off this list. If you don’t plan for these things, then you’re only setting yourself up for failure later."

I began keeping track of my expenditures in November of 2007. This was incredibly helpful to me---I finally had a clear picture of where my money was going each month! And it was surprising---I had no idea how much I was spending at places like Target and Banana Republic. Meanwhile, my credit card balances were continuing to grow.

After reading The Total Money Makeover, it finally dawned on me that my monthly expenditure budget (which I still use) was only the first step to gaining control over my finances. It was very well and good to know where my money was going, after it was gone--but that wasn't enough. The next step in reducing my expenditures was to actually tell my money where to go, before it went anywhere.

That’s where my simplified version of Dave’s rather complicated ‘Cash Flow' budget comes in. I created an Excel spreadsheet with three columns: Expenditures (mortgage, utilities, savings, etc); Estimated Income and Estimated Expenditures (where I estimated how much I would bring in as well as how much I would and should spend in certain areas); and Actual Income and Expenditures (to be updated throughout the month as pay and bills arrive).

A few days before the beginning of every month, I enter the amounts I think I’ll spend on my mortgage, utilities, groceries, and so on. My Excel document includes formulas in the ‘Remaining’ rows that show how much money I’ll have left after each expenditure. When I enter $1556 for my total mortgage payment, that is automatically deducted from my total Estimated Income for that month---my Excel formula does it for me. I simply go down the line of Estimated Expenditures and enter the guesstimate of how much I’ll spend.

Some are easy: for example, I know exactly how much I’ll spend on my mortgage, usually. Some are more difficult: my utilities vary from month to month. I logged onto my electric and gas accounts online and was able to view bills going back 13 months. This allowed me to estimate how much I would probably spend on my utilities for the month of May, based on last year and the fact that I’m trying to conserve energy. Others are more like limits. Under ‘fun money’, I don’t want to go over a certain amount (I’ve not once succeeded in this area, however). That’s usually the last row I fill in, after everything else---including money sent to savings and credit reduction---has been entered.

At the end, the number at the very bottom should be equal to zero. That means each and every dollar of your estimated income has been given a home. When you have an unexpected expense, you’ll need to go back to the budget and see where you can decrease another amount (usually fun money, unfortunately) so the new payment can be entered.

It’s helpful to have a couple of months of record keeping detailing your expenses---like my monthly expenditures spreadsheet---so you are familiar with regular expenses, including quarterly expenses like auto insurance, trash pickup, or water and sewer payments.

If you’re already a good record keeper, you can just go back to your online checking/savings account (or a check register---does anyone use these anymore?) and see where your money went for the last two or three months, whether it was a regular expenditure, or whether it can be averaged out over the year or quarter so you can start a savings account to cover it.

Note to my commenter and anyone else reading this: I'd be happy to send you an email 'vanilla' version of my Excel budget sheet, with the formulas included, so you can play around with it.

Carnival of financial planning. . . . .

My post on some of my peers in Generation X and their weird belief that they won't be able to retire was included in the Carnival of Financial Planning, over at The Skilled Investor.

There are some great links to articles about budgeting, investing, financing a home, general financial planning, and all sorts of finance-related issues, so I hope you'll check it out.

Thanks, Skilled Investor!

Finally Frugal's Weekly Roundup . . .

It's been a great week! I've had some really interesting and encouraging comments from readers (keep 'em coming, folks, I love hearing from you), the sun is finally starting to peek through the rain and clouds here in Portland, and there have been some amazing posts out there in the blogosphere. Some of them were at:

Get Rich Slowly, who posted about Kris at the Cheap Healthy Good site, and her 60 minute plan to save money on food.

Mrs. Micah blogged about getting out of debt and the problem of world hunger. The message? Even one person can make a difference!

Pinyo over at Moolanomy, explains why he's glad the economic stimulus checks are coming a week early. I will admit that I check my ING account about every two hours, even though I'm not scheduled to receive my rebate until next week.

My Two Dollars tells us how to clean the entire house the natural way, for mere pennies. Note to self: buy vinegar.

I've Paid For This Twice Already told us about her wise financial decisions in college. Ahhh, if only I'd been wise enough to ignore my credit cards and turn down the student loan offers. . . If you're in college (or soon to be in college) please read this!!

Frugal Dad discussed the question of whether one should stop contributing to a retirement account if one is still repaying debt. This is a decision I recently had to make (I lowered my contribution to 1% of my gross salary), so it was interesting to hear someone else's take on it.

And last but not least, Be Thrifty Like Us has an awesome post about home energy wasters (did you know, for example, that your cable box---if you have one---costs $27 a year to run?)

Have a lovely weekend, everyone!

Zero based budget: May 2008 . . .

Voilà! Here is my zero based budget for the month of May! Before you scroll down, let me tell you how wonderful this budgeting system has been for me. I learned about it from Dave Ramsey's The Total Money Makeover book, and it has changed my life.

Before I started creating a zero-based budget, I saved exactly ZERO dollars each month. Although I religiously kept track of my expenditures, I wasn't 'telling' my money where to go---and accordingly, it just went! Here's the difference in savings between January (no budget) and May (projected) as far as the amount of money being diverted into savings:

January: $0 to savings
February: $181 to savings
March: $213 to savings
April: $263 to savings
May (projected): $901 to savings

Now, keep in mind that in May I'm receiving my tax rebate, 100% of which is going into my emergency fund---that's why my savings rate will (hopefully) be so high this month. But to go from $0 saved in January to $263 for April is phenomenal, and I couldn't have done it without the zero-based budget system (this is a system where you give each dollar a 'home' before payday, resulting with a remainder of $0---every dollar is told where to go before you have a chance to fritter it away).

Also, keep in mind that my income didn't increase substantially in February, March or April. In fact, in March, it was lower than usual, because I went on vacation and didn't work my second job for a whole week.

Another thing that's unusual about this particular budget is that I'm receiving three checks in the month of May, from my second job---that's just the way the calendar worked out, and I'm ecstatic about it! With an extra check from the night job and the tax rebate check, I am able to both pay down my credit card, AND pad my emergency fund, instead of choosing one or the other. June won't be quite as terrific in terms of income, so I'm just going to enjoy it for now!

Finally Frugal May goals. . . .

In a continuing effort to keep myself honest and work on current and new goals, I'm putting it out there for May in black and white. Granted, these goals are neither earth-shattering or unique; in fact, they're probably similar to goals you all make for yourselves!

Financial:

• Increase emergency fund in preparation for possible strike
• Send more than the minimum to American Express
• Keep grocery bill to less than $85 for the month (this might be difficult, as I've already spent over $50 refilling the cupboards. . . )
• Use no more than half of tax rebate to purchase used bike, to ride to transit center in good weather, thus saving on gas
• Finally (!!!) close Verizon wireless account, thereby saving $23.50 each month

Blog-related:

• Continue to research and write posts that interest and inspire myself and others
• Submit articles to at least five carnivals this month
• Increase monthly readership---I'd like to double this in May, which means I'll need over 2,000 visits this month---will you help? If you like this blog, use the link below to email the URL to a friend or family member!

Personal:

• Remember to be grateful for what I already have.
  Chase after money and security,
  And your heart will never unclench.
  Care about people's approval,
  and you will be their prisoner.
  Do your work, and then step back.
  The only path to serenity.
  Lao Tzu
  

April budget update. . . .

I updated my April zero-based budget, and it appears that I came out ahead this month! Although the final 'remainder' shows that I should have a balance of $55 in my checking account, $20 went missing somewhere, and I ended up with $35. That money has been transferred into my Emergency Fund!

There are a couple of other things to note:

1. I made less money with Job #1, because I hadn't realized that my 403b contributions would be decreased with my May check rather than my April check (I decreased this investment to 1% of my gross income until my credit card debt is paid off and my emergency fund is healthier)


2. I made more money with Job #2, Check #2---I worked more hours, once I realized that my 'big' check was smaller than expected


3. I 'earned' my "free" $25 from Revolution Money Exchange, which I transferred easily into my ING Direct account! If you want yours, click on the link to the right---it's the easiest $25 you'll ever make. Be sure to opt out of email announcements----I've not received the tiniest bit of spam from Revolution since opening my account.


4. I only sent $350 to my credit card last month, not the $550 I was hoping for. Still, my credit balance is now less than $3,000! That feels so good!
   

Tomorrow, I'll post my May zero-based budget, along with a list of goals for the month. My situation has changed a bit, since I may be going on strike by next September, so I'm not sure I'll have much to send to my credit card company in May---we'll see how it looks tomorrow!

Note: my February and March zero based budgets are posted as well, if you'd like to take a look.