Finally Frugal's weekly roundup. . .

This week, I tried to read blog posts that were a little outside my usual 'comfort zone' themes of frugality, simple living, and debt repayment. Here are some of the ones I enjoyed (and hope you do too!):

Cash Money Life wrote a brilliant post about how to save money on your home insurance. This is one area that I have neglected. My home insurance is held by AAA, which (in my opinion) is one of the more expensive companies. Since half of my wiring is knob and tube (I think that's what it's called) instead of circuit breaker, finding home insurance was kind of a struggle. This is something that I can work on this year.

Meanwhile, Frugal Dad writes about people with massive credit card debt, and the odds that they would be able to 'itemize' their debt. In other words, he wonders whether someone with a $10,000 credit card balance (as I've had in the past) could figure out where all that money went! This would be an interesting exercise---I know that in my credit-card driven past, I wouldn't have been able to recall even half of what I had purchased with credit.

I love, love, LOVE this post by J.D. at Get Rich Slowly, about making your own luck. J.D. read an article in Newsweek about "how to survive" (anything, from a plane crash to an accidental knitting needle through the heart), which posits that some people are lucky, and some just aren't. J.D.'s argument (based on the research of a British professor) is that only about 10% of our lives can be attributed to luck. The other 90% is all about our attitude and the choices we make.

I've Paid for This Twice Already writes a moving post about the recent death of her father, and the financial aftermath following the death of a loved one. It's hard to remember that along with all of the emotional upheaval after a 'breadwinner' dies, there are financial details to sort out. Paid Twice lists some very helpful tips that can help the remaining spouse deal with the details more easily while grieving a loss.

No More Spending published a post entitled "Using a Spending Diary" that discusses the benefits of tracking expenditures, whether on paper in a journal or online (as I do) using Excel. I have to say, keeping track of where my money is going has been the absolute key to decreasing spending and increasing savings and debt repayment!

Finally, Cheap Healthy Good has a scrumptious looking recipe for Autumn Apple Salad on her website, that looks to-die-for (and cheap-ish, too). I know it's not autumn anymore, but I might need to buy a bag of organic apples this weekend and create this little jewel of a salad for myself.

And that's it for me, folks! Enjoy the rest of your weekend!

Finally Frugal one year anniversary!

One year ago today, I published my first blog post! My financial life was pretty different at that point. Although I had decided in November, 2007 that I needed to begin living within my means, it was a slow process. Not using my credit card was painful, and in January 2008 I still owed about $4,500 to various credit companies. I still craved new shoes and clothes every day (I continue to struggle with this), and paid little attention to the money that was leaving my life in dribs and drabs each day.

In that first blog post, I discussed the book that changed my attitude---Your Money or Your Life, by Joe Dominguez and Vicki Robin. I purchased that book in late 2007, and in 2008 I ended up purchasing a CD (used, on Ebay) that featured a workshop given by Joe before his death in 1997, to help jumpstart my motivation. A year later, I still believe that this book (as well as Dave Ramsey's The Total Money Makeover) has been instrumental in helping me begin getting my financial life in order. If any of you are struggling with your finances, either of these books make great investments.

After reading many, many books about debt, financial independence, and rampant consumerism during those first months of 2008, I eventually began taking a close look at all of my 'variable' expenses, such as cable, cell phone, gym membership, and auto insurance, and either made money-saving changes or canceled those services altogether. I began tracking each penny that left my life, and started using the zero-based budget, which I still use to this day.

All of you regular readers will know that I have a long way to go. I owe over $56,000 in student loans, and I don't yet have a plan to begin repayment of this. I own a house with two mortgages, and the combined monthly mortgage payments equal about 40% of my gross monthly income--not a great percentage for someone who also wants to increase savings and investments. I work two jobs, at 50 hours a week on average, just to keep my head above water. I also go to school on a part time basis, and I am contemplating, with some trepidation, the 2009/2010 academic year in which I'll be obligated to work less than full time in order to make time for a required internship.

Many challenges and seeming obstacles lie in my way on the road to financial independence. In reading other personal finance blogs, the one thing that I keep reminding myself is that the path to meeting my financial goals is a long one---I can't expect success overnight, as much as I might wish it.

In spite of the challenges, I also remind myself of my small successes over the past year: I've paid off my credit cards; I've learned about my spending habits by keeping an eye on each expenditure; I've begun the process of getting a handle on my bad spending 'vices', such as clothing and shoes; I've learned that I'm actually a pretty good cook, and that I can be satisfied with a .10 cent cup of home brewed coffee instead of craving a daily $3.40 mocha.

Most importantly, I've 'met' so many other people who are also on their own, similar but unique financial journeys. Just knowing that there are others out there in the blogosphere who are either just beginning, are well on their way, or have met with success, helps me to stay on track and believe that I, too, can find my way to financial independence.

A frugal meal. . . .

This month, I'm giving myself a total of $100 for grocery purchases; next month, I hope to decrease that to $85. With only $15 left in my grocery budget for the month of January, I've been casing my cupboards looking for items that can be combined into wonderful meals. Added bonus for meals that create leftovers that I can take to work and school.

Looking for inspiration, I delved into my trusty Tightwad Gazette
(written by the Queen of Frugal, Amy Dacyczyn), and found this gem:

Mix and Match Seafood Casserole (makes six servings)

4 to 5 ounces of pasta
1/2 cup dry white wine or milk
1/2 cup mayonnaise or salad dressing
1 cup American cheese, shredded (I used cheddar)
1 can condensed cream of celery, shrimp, or mushroom soup
1/2 tsp dill
6 to 8 ounce can of seafood (tuna, salmon, crab, etc)
Topping (stir two tbsp melted butter into one cup of soft bread crumbs. Can also try one cup of crushed corn chips, chow mein noodles, or french-fried onions, or 1/2 cup sliced almonds).

Preheat the oven to 350 degrees. Prepare the pasta, drain, and set it aside. Mix the white wine with the mayonnaise, add the cheese, soup, and dill. Gently combine the noodles and the seafood with the moist ingredients. Pour the mixture into a 1 1/2 quart casserole dish, cover and bake for 30 mins. Remove the cover, top with Topping, and bake for an additional five minutes. Serve hot.

Since I had all of these ingredients (although I used buttermilk in place of the milk), I decided to try it out. This ended up being a cheap, tasty meal. It was quite rich, but definitely a useful 'filler' when one doesn't want to go to the grocery store. Of course, the best thing was the two or three days of leftovers I had, meaning that I didn't have to purchase anything at work or before school.

In my opinion, this isn't the most healthy meal I could have made--however, I've been eating beans and rice, spaghetti, and stir fry regularly, so I think my body can stand some added cholesterol. Plus, this warm, rich dish is perfect on a cold January day.

20 ways to reduce your spending. . . .

At the beginning of my frugal journey, I took a good look at the money that was leaving my life each month on a regular basis, and made some difficult decisions. It was more important to me to pay off my credit cards (which I did in November of 2008!) than it was to live the way I was. With that in mind, I made some changes to my lifestyle that ended up helping me pay off my credits debt. I still have that $56,000+ in student loan debt staring me in the face, and after 2009, that will be my next challenge. These money-saving tips will help me on the next phase of my journey. . .

1. Cancel or downgrade cable channels
2. Sell unneeded or unwanted items on Ebay or at a yard sale
3. Turn off and unplug all unused appliances and electronics (DVD player, microwave, etc)
4. Turn the thermostat down five degrees (or whatever you're comfortable with) in the winter and up five degrees in the summer, if you have A/C
5. Grow your own vegetables
6. Walk, cycle or take public transportation to work
7. Start a compost pile to decrease your garbage bill (I have pickup just once a month now)
8. Never grocery shop when you're hungry
9. Turn lights off when you're not in a room
10. Switch to CFL's rather than energy hogging traditional lightbulbs
11. Wash clothing in cold water rather than hot
12. Air dry clothing and other laundry when at all possible
13. Use white vinegar in place of expensive chemical based cleaners
14. Invest in a crockpot, and use it!
15. Take leftovers to work and school instead of purchasing food
16. Communicate with far-away relatives and friends via email
17. Get a pay-as-you-go cellphone plan if you don't use your cellphone much
18. Cancel magazine subscriptions
19. Visit the library and borrow books rather than buying new
20. Create a zero-based budget before each month, and try to stick to it!

Even if you were to take only half of the suggestions on this list, think of the money you could save, which could go to either debt repayment, or investment!

Finally Frugal's weekly roundup. . .

It's been a historic week, full of change and inspiration. Through it all, my favorite bloggers (and a few new finds) continued to write relevant, thoughtful, motivational posts. Here were some of the best:

Blunt Money posted on a subject that I consider every day: how to stay motivated when you're living a frugal life and trying to save money. Visiting the PF blogosphere definitely keeps my mind limber. . . .

Someday (maybe not soon, but definitely someday) I'll have some extra cash to invest. When that time comes, I want to be ready. Luckily, Dividend Guy posted his 20 all-time favorite investing books this month. I'm definitely bookmarking this one. . . .

And finally, a guest poster at Get Rich Slowly gives us some advice (and shares a frustrating story) on home appliance repair. Although my appliances are working right now (knock on wood), I have been having a devil of a time replacing a broken plastic doodad that attaches to a magnetic cat door, which my cats broke. Apparently, I must either purchase an entirely new cat door (at around $50) or send to the UK (!!) for a replacement part. . . . Grrrr. . .

So that's it! A rather anticlimactic end to an historic week. Enjoy the weekend!

Five easy ways to save money now. . . .

As I become better at saving my money rather than spending it, I continue to look for ways to improve my frugal habits. While I've already committed to some of these money-saving endeavors, others on the list I'm still contemplating. In any case, these may give you some food for thought as you whittle your own budget.

1. Stop buying bottled water. Tap water is (almost) free, and research has even shown that bottled water is no cleaner than the water that flows from the faucet, so invest in a Sigg aluminum bottle, and save your cash for debt repayment, your emergency fund or investment.
2. Cancel the cable. There are better things to do than sit on the couch watching TV. Read a book (borrowed from the library, of course); go for a walk with your kids or spouse; or, learn to cook.
3. Make your own coffee. A cup of coffee brewed at home costs just cents on the dollar, while even a regular coffee (nothing fancy) from Starbucks costs almost $1.50! If you're a regular coffee drinker, get yourself a thermos and enjoy your own brew---and keep that extra cash in your savings account.
4. Cancel the landline. Many younger adults are now relying entirely on their cellphones for telephone service. If you have access to wireless internet service (meaning, you don't need a landline) consider canceling that home phone service. In my case, I'd save upwards of $40 a month with this option.
   
5. Reconsider how much you spend on clothing. Marketers have created an environment in which 'last year's boots' are simply out of style because they have a square toe rather than a pointy one. Don't fall for the artificial need for newer, 'better' fashions. If you can't quite give up the clotheshorse gene, try shopping consignment and thrift stores, as I'll do this year.

Just these five changes could save as much as $150 a month, which would be $1,800 a year! That's like giving yourself a substantial (tax free) raise each month. If you're looking for ways to live beneath your means in order to meet other financial goals (like paying off debt), these tips could go a long way in helping you reach your objectives!

Festival of Frugality. . . .

My post was chosen as one of many in the latest Festival of Frugality, held over at Money Ning's great blog.

Be sure to check it out, as the festival is chock full of frugal tips!

A last trip to the grocery store. . . .

Several times in the past, I've attempted to use coupons to my benefit, but have always felt that I was purchasing more processed food than I wanted to, and spending more time than it was worth. I've resolved to try again.

Since I had $15.99 left in my grocery budget for the month, I purchased a Sunday paper, and found a few coupons that seemed to be of value; I also visited the library and clipped those coupons from the ads that are regularly left on the newspaper rack.

Later in the week I checked the grocery store ads, and found a deal for 'buy one get one free' on a particular pasta sauce for which I also had a .50 cents off (buy two). Since this particular deal was at Safeway, I could also double the coupon and would end up paying $1 each for pasta sauce (something I use often, although this wasn't my 'preferred' brand). I purchased four jars, along with some other items I needed for a recipe.

My bill ended up being $16.58, just a bit more than I had in my remaining grocery budget. But wait!!! Upon checking my receipt, I noticed that the checker had neglected to double my coupons---this gave me an additional dollar, bringing me just under my remaining 'allowance' of $15.99 for the month.

Of course, upon returning home (after running several other errands), I noticed that I paid $2.29 each for the pasta that was to have been two bags for $3!

Moral of this story? Coupons can be used to good benefit. But it pays to check the receipt much more carefully than I did BEFORE leaving the store! I'll remember this when I attempt more coupon savings in February.

Frugally attired. . . .

This past weekend, I purchased two outfits, and spent a total of $19.99!! I made an effort to go to several local thrift stores, to check them out for future reference. Since my goal this year is to purchase used whenever possible, I felt that I needed to get a better sense of the locations and conditions of some of the local stores. That way, when I need something in a rush or I'm looking for something specific, I'll have a better idea of which stores will have what I want.

About a year ago, I read about a thrift store called 'The Dig', which has two locations in the Portland area---one in Oregon City, and one in Milwaukie. I have also heard good things about a huge Goodwill store in the Lloyd Center area, but which I've never been able to locate before.

So, early Saturday morning, I looked up addresses and mapped my route on GoogleMaps. I decided to swing by the Oregon City location first, then head through Milwaukie before continuing back into Portland---this seemed to make the most sense as far as efficiency and saving time.

I'm happy to report that I scored!

At 'The Dig', I purchased:

• A suede skirt by J.Jill for $3

• A sheer, soft turtleneck sweater by Frenchi (a brand sold at Nordstroms) for $3

• A denim skirt that fits perfectly (by Bass), also for $3

• A tank top (to go under the sheer sweater) for $1

At Goodwill, I purchased:

• An almost new black turtleneck from Banana Republic, my most expensive item at $9.99.

I wanted a pair of designer jeans, which were selling for $39.99 ($75 to $85 new). However, the bottoms of the legs were frayed in the back, so I asked for a discount. Since they'd been put out on the floor within the week, I wasn't able to discount them, and therefore didn't buy them---$40 is pretty expensive even for NEW jeans, in my world.

What did I learn? I was surprised to see that there were clean, contemporary items that I liked, that I know I'll wear, for less than $5!!! I'll definitely be visiting The Dig again, as well as stopping by Goodwill from time to time(there's also a 'high end' Goodwill in downtown Portland, which is nice but more expensive).

When I made my mind up to follow a modified 'Compact' this year, I was a little anxious---I haven't thrift shopped regularly since high school (and at that time, we were all trying to look as if we were wearing used clothing!) I think I'll enjoy this endeavor more than I anticipated, if last weekend's foray is any indication.

Of note: I did purchase a used coffee carafe to replace my broken one several weeks ago, which, when jerry-rigged with another lid, can be used in my coffee maker. At the Goodwill, I found a Cuisinart coffee carafe that was PERFECT---except for a worrisome crack at the bottom. I left it there, but will keep looking.

Finally Frugal's weekly roundup. . . .

Wow! There were some great posts in the blogosphere this week, which is a great thing, because my motivation to live within my means, make the most of the income I have, and increase my savings remains high!

Frugal Dad wrote about emergency funds and the ever-present dilemma: how much to save? My EF stands at around $1,600 right now, and grows a bit each month due to interest earned. Frugal Dad is a proponent of creating a much large EF, with which I agree if there are spouses and children in the home.

Since I keep my thermostat at 58 degrees in the winter, I'm always looking for more and better ways to stay warm. I've Paid For This Twice Already writes a great post with some wonderful tips on keeping warm in frigid weather.

Frugal for Life has a very interesting 6-part BBC series on the fine line between 'tightwaddery', hoarding, and becoming a serious scrooge. The entire thing takes about an hour, but it's worth it; I really enjoy how the English approach comedy, drama, or even documentaries---very interesting. My favorite quote? "Sigmund Freud suggested that Tightwads were tight because they were badly potty trained". I'll have to ask my mother about this one. . . .

Finally, Leo at Zen Habits discusses a great concept called the 'Power of Gradual'. As someone who gets very impatient about reaching my financial objectives, this was a nice reminder to pay less attention to the 'immediate' and more to the power of time.

Have a great weekend, everyone!

America's 'Cheapest' Family. . .

While I was visiting family for the Christmas holiday, I had a chance to peruse a People magazine, which profiled the Economides family, billed as 'America's Cheapest Family'.

Although I couldn't find the story on People's online site, I did find this MSN video in which Ann Curry interviews the family about their frugal ways. It appears that this sudden onslaught of publicity is associated with the sale of the Economides' family's new book, entitled America's Cheapest Family Gets You Right on the Money.

Here's the video, which is quite interesting:

Visit msnbc.com for Breaking News, World News, and News about the Economy

It appears that this family doesn't mess around in the saving money department! Apparently, this family of SEVEN paid off a mortgage early on $35,000 a year (less than I make now, with only ONE mouth to feed). Since I'm starting the new year with a goal of shopping at thrift stores and buying primarily used goods, this was an intriguing look at this type of lifestyle and how it can benefit the bottom line.

5 frugal cold remedies. . .

As I've been battling a cold for what seems like weeks now, I recently trolled the internet looking for low-cost ways I could make myself feel better. Since my grocery budget is so tight this month, I can't justify paying $6 to $10 for an assortment of cough syrups and pills. So what can I do, with items that I might have in my cupboards already?

• Drink ginger tea. Slicing some fresh ginger and boiling it in water makes for a unique tea that will also help reduce the pain of a headache. The natural properties in the ginger will relax the blood vessels in the head and activates natural pain relieving chemicals in the brain. Added benefit is that it can help with upset stomach. I don't have any fresh ginger, but I do have ginger and lemon tea, as well as some ginger in a jar that I use for stir fry.
  
• Drink honey and lemon. This one is as old as the hills; I've been drinking lemon tea with loads of honey for weeks, and the warmth of the tea helps open my sinuses, while the honey is soothing on my throat. I confess that I've also just eaten a spoonful of honey straight from the jar, it feels so good.
• Gargle with apple cider vinegar. I happen to have this in my cupboard already. I mixed one part apple cider vinegar with one part water, and gargled to my heart's content. Apparently, it's important to allow a bit of the cider to drip down the throat to reduce pain and inflammation.
• Take a hot bath. This one's easy for me; I love hot, steamy baths. This helps my aching muscles and the steam also helps with my congestion.
  
• Make some chicken soup. I did this a week or so ago, and surprisingly enough, researchers have found that this old remedy actually does some good! Apparently, it acts as an anti-inflammatory and it helps speed decongestion.

So there you have it, some budget-friendly ways to make yourself feel better when you're in the midst of a winter cold. Of course, the best advice of all is to simply prevent a cold---and prevention is even cheaper than the remedies listed above! In fact, many of them are free!

• Wash your hands.
• Get enough sleep.
• Eat lots of fresh vegetables. whole grains, and fruits.
• Try Vitamin C.
• Get some (reasonable, for you) exercise.

To invest or not to invest?

After having spent the last fifteen minutes going around the house recycling bits and pieces of mail that I have no need to file, I've just signed into my online 403(b) account to register for e-delivery of all prospectus materials. Every quarter I receive a giant packet of information that I never read---I rarely change my allocation, and lately I've not even looked at my statements. In fact, I haven't checked my balance in over six months.

Although all I wanted to do was indicate e-delivery for all correspondence, it was impossible not to take a quick glance at my statement while on the website. My 403(b) account has decreased a stunning 21% since last quarter (September of 2009) and before that, it lost about 9%!!! That's about a 30% loss over the past six months---I now have less in that account than I've actually put into it!

Now, in December, I raised my monthly contribution from 1% to 15%, something that I had promised myself I would do last spring, when I really ramped up my credit debt repayment plan. Now that the credit cards are finally paid off, I can begin sending money to my 403(b) account again. But should I?

The thought of sending around $450 each month to an account that might just shrink further and further seems pointless. However, when I think about it from a 'sale' point of view (and oh, do I love a sale!) my $450 dollars is probably buying more shares than it would have purchased in January, 2008 (assuming I were contributing as much as I am now). Although scary, I think the best thing to do is to take advantage of these historically low prices on stocks that will (hopefully, fingers crossed!) increase in value exponentially over the next ten to twenty years.

In looking for answers to my conundrum online, I didn't find much that contradicted my own instincts. I did, however, find this gem of a quote from Warren Buffet, one of the wealthiest men on earth:

“Investors should be brave when others are scared and scared when others are brave.”
–Warren Buffett

Finally Frugal's weekly roundup. . .

At the beginning of my blog journey, I used to do a 'weekly roundup' of other blogs that I found interesting, but as life got busier, I often didn't have time to take more than a cursory glance at what other PF bloggers were up to. I have to say, the next six months will be the busiest yet---so no guarantees the weekly roundup will be weekly (maybe monthly!) but I do love giving a 'shout-out' to bloggers and posts that really resonated with me. So here is the first roundup of 2009:

Lynnae at Being Frugal wrote a great post about what frugality is. And isn't. I have to say, I truly like her definition of the concept; she takes all of the negative connotations (such as 'miserly', and 'stingy') and turns 'em upside down!

With so many tasks and activities and obligations, sometimes I feel like I'm on autopilot. Leo from Zen Habits wrote a beautiful post about finding happiness on the journey, rather than expecting it at our destination (which always seems to be just over the horizon).

Trent, from The Simple Dollar, writes a wonderful post about Frugality and Binge Buying, something that I am guilty of more often than not. This is the phenomenon of being really "good" at frugality, and then convincing oneself that one 'deserves' a new TV, a new car, or (usually in my case) a new pair of boots!

Mrs. Micah has a great post that reviews the steps to beginning and maintaining a debt snowball. With the new year upon us, I'm sure many of us have new financial goals that include paying down old debt. This post will help!

Income to Expense chart

Over the past year, I've kept track of my income, my spending, and how much I'm sending to savings and to my 403(b) account. I'm not much of a numbers gal, so I love anything that indicates statistics in a graphic format.

In the beginning of my frugal journey in November of 2007, I was spending more than 100% of my income (using credit cards, of course!). Slowly, my spending began to inch downwards, while my income inched upwards. Although I missed a few months this past fall, it's been gratifying to see my progress graphically. I recreated the chart I use below, as well as giving you the exact information in a spreadsheet below that.

I particularly love watching the percentage of my income that is going toward spending (which started at 106%!). In the beginning, the red line (expenses) was higher than the blue line (income). As the red line (expenses) has decreased, the yellow and green lines (savings and investment) increase.



And, here are the exact numbers used in the chart above:

Note that May 2008 was pretty amazing on the income and savings fronts, because that's the month I received my tax refund. Hopefully this year will bring the same tax 'gift'! I'm starting a brand new '2009' chart, since this has been such a satisfying project for me. . . .

A new strategy. . . .

Sunday, I posted my December zero-based budget results. Although I technically came out ahead, I have consistently spent more than allotted in the 'Fun' and the 'Grocery' categories. Specifically, last month I budgeted $200.87 for Fun (the .87 cents is added to make the end result of the entire budget equal to zero) and spent a whopping $377.03! In the Grocery category, I budgeted for $125, while I ended up spending $236.76. Granted, I spent more on groceries because I was stuck at home for about a week, and didn't have access to the cheaper stores I usually frequent.

Given that I'm now sending 15% of my gross salary to my 403b account, and that I've set a goal of saving at least $4500 by September of 2009, it's more important than ever that I get these categories under control. This month, I'm going to use the Cash Envelope System, which I've read about on other blogs, but first heard about in Dave Ramsey's book, The Total Money Makeover.

This is a system in which you create a budget, allocating amounts to each category (which I do each month already), and then use only cash for those categories. I'm going to modify this system, in that I'm only going to use cash for Fun and for Groceries. I should note that some pretty strange items fall under the 'Fun' category, since I use this for items that don't fit in any other category. For example, last month I thought I would need to buy a new tire for my car (I didn't---Les Scwhab kindly removed TWO screws from the tire at no cost). The expected tire purchase would have come out of the fun budget. . . . although new tire don't exactly fit my definition of fun!

In any case, for the month of January, I've allotted an extremely frugal $100 for groceries and $199.71 for fun. Now, as of today, January 5th, I've already spent $69.17 on groceries (!!!) which only leaves me $30.83 for the rest of the month. I guess now is as good a time as ever to lose that five pounds! I've only spent $5 on fun so far, which leaves me $194.71 (this feels like a fortune, compared to the grocery budget).

I'll be sending these amounts (I'm going to round down, just to make it easy) to my WAMU account, at which time I'll take the cash out of the account and that's what I'll have for the rest of the month. No using my debit card for groceries or for items that will fall into the 'fun' category, whatever those items may be.

It's a good thing I like a challenge, because I think this month is going to test my frugal skills like no other!

New Year, new frugal strategies. . .

I mentioned in my Finally Frugal 2009 Goals post that this year I would be following The Compact, which is an agreement to buy used rather than new items, in an effort to reduce waste and increase savings. I'm having difficulty with my 'vice', which is new clothes and shoes, and in an effort to get a handle on this area, I'm willing to go to great lengths.

You can learn more about The Compact by clicking on the video below, or by reading this article in the San Francisco Chronicle.

Learning To Be an Un-Consumer
What following The Compact will require is an intimate knowledge of my local thrift stores. Luckily, I came across another great blog, called The Thrifty Chicks, which is basically a primer to thrift shopping. Lots of great tips abound on this website, which I hope to check often over the next year.

I should note that I'm embarking on somewhat of a 'modified' Compact. Here are my modifications:

• I am allowing myself six 'freebies' during the year. These will be purchases of new clothing or other items that I cannot find used. I hope not to use all of my 'freebies', but just the thought that I can buy something new makes this endeavor a bit less scary;
  
• I am allowing myself to purchase items such as underwear and other personal garments (like socks) new;
• If safety is an issue, I'm allowing myself to purchase new (such as the tire I thought I was going to have to buy recently);
• I'm allowing myself to purchase gifts for others that are new. I just don't have the time to create something myself or to spend hours at the thrift stores finding something appropriate.
  

Although I've not yet truly 'begun' (there's nothing I need desperately at the moment), I have noticed one positive side-effect of The Compact. I'm becoming more aware of my 'consumer' thoughts. That is, I've caught myself several times thinking: "maybe I'll go to the mall and see what's on sale". It's a comfortable thought, to be honest. After so many years of frittering my money away at the mall, it feels right. But then the next moment I remember: "oh yeah, I'm not buying new right now." And the thought passes.

Ultimately, I'm hoping that challenging myself with The Compact will help change those automatic thoughts that have led to so many unnecessary purchases (and the credit card bills that followed).

Finally Frugal goals for 2009

I've never been one to make a resolution on New Year's Day, because that just seems to be inviting failure. However, this year, I'd like to create a list of goals so that when 2010 rolls around I can look back and really measure my progress.

Now that my credit card debt is paid off, my financial goals revolve around keeping to a frugal budget and saving a nest egg for the 2009-2010 academic year, when I won't be able to work full time due to school obligations.

So, here goes:

• Use the cash-envelope system for my 'fun money' and 'grocery money' in the zero-based budget; hopefully this will allow me to stay within my allotted amounts, as these two areas have been challenging for me in 2008.
• Engage in a modified 'Compact' to only buy used items. A reader suggested that I give myself three 'freebies', an idea that I like. However, I think I'll double that to six 'free' new items that I can purchase throughout the year. I'll continue to buy new items in the personal hygiene categories as well as for true needs that I'm unable to find used. I'm hoping that this goal will help me curb my desire for new shoes and clothes (of which I have more than enough already). Also, I'm giving myself permission to purchase new gifts for birthdays and other events (for other people) since my busy life doesn't allow for much creative crafting at this point.
  
• Increase my 'Internship Year' savings account from $365 to $4,500 by September of 2009, at which time I'll need to work less than full time. This money will help 'bridge the gap' during my internship year.
• Send 15% of my gross salary (from the day job) to my 403(b) account, at least until September of 2009. This will lower my tax liability as well as take advantage of currently low stock prices.

These goals will hopefully help me stay on track as I continue to work toward financial independence this year. What are your goals for 2009?

December 2008 zero based budget

My zero-based budget for December isn't perfect, but given the holidays, it could have been much, much worse! Note that I have yet to reimburse my brother $150 for a gift for our parents, which I'll take out of my January budget, unfortunately!

As you can see, I went way over my budget in the 'Fun' category, as well as in the 'Grocery' category. I have a strategy that I'm going to use starting in January that I'll discuss in a post later next week. Hopefully this will help me get a handle on those areas that tend to get out of control. Now, more than ever, I need to keep an eye on the money that is leaving my life, since I'm trying to increase my savings so that I can meet my goal of having $4,500 in my 'Internship Year' savings account by September of 2009.

Frugal incentive. . .

As a new year begins, with new goals and challenges, I'm finding it both more difficult and more important to track my expenditures. Living beneath my means is still a daily struggle, and I'd like to internalize my strategies enough that it simply becomes a habit.

In reading other blogs about frugality, simple living, and decreasing spending while increasing savings, I came across a recommendation for this online documentary, called 'IOUSA'. It's a 30-minute video that addresses the excesses of our own government, and the ramifications of the huge--and growing---national debt that we (the 'richest' country in the world) carry.

In short, the U.S. has become a debtor nation to such a degree that in thirty years, we may not have enough to cover basic services for senior citizens, let alone the infrastructure needs of our large and diverse nation. It appears, from the documentary, that our elected officials (from both sides of the ideological aisle) are hesitant to take the steps that will help mitigate the impact of our $8.4 trillion dollar debt. No politician wants to radically slash benefits while tripling the taxes that we pay---no politician these days would be reelected with that platform, regardless of the fact that in a generation we may be a bankrupt nation.

I reacted both negatively and positively to the fiscally terrifying information presented in this documentary.

My negative reaction was disgust and fear. Disgust that we've allowed ourselves to get into this situation when tough choices by our leaders could have avoided it, and fear that in 30 years, when I'm a senior citizen, my country won't be able to meet the promises it has made to me during all the years I've paid (and will pay) social security and medicare taxes.

Here's the positive, though. Knowing that my country has---in essence---brought itself to the brink of bankruptcy (like many Americans over the past ten years) makes me more likely to stick with my own objective of living within my means, increasing my savings exponentially as I continue to improve my own finances, and securing my future by preparing to take care of myself, rather than relying on social security or medicare to provide a chunk of my support in my later years.

I urge you to take 30 minutes to watch the 'IOUSA' video. Although it's economics-based (NEVER my favorite topic) it's presented in layman's terms with easy to follow graphics and interesting commentary. If you ever needed a frugal incentive, this is it. And I also urge you to click on the link at the top left of the page, entitled 'Take Action'. You can send an emailed letter to our elected officials, asking them to consider the seriousness of our country's financial situation.

Frugal soup. . . .

I apologize for the blog silence over the past week, folks. I'm battling a cold, and so far the cold is winning! While stuck with the sniffles, I've been putting together my December zero-based budget results, and it's not pretty. Although it appears that I've managed to stay within my budget somehow, as you'll see tomorrow when I post it, I seem to have had a little too much fun last month!

In the meantime, I've been thinking of ways I can further reduce my grocery bills (another area that is a bit out of control these days). A few days ago, I decided to attempt homemade chicken soup, since I've been paying $1.48 a can for low-sodium Campbell's chicken noodle. I found that I did save a bit of money by preparing my own, added to the fact that I feel that my own soup is probably more nutritious, and definitely lacking in preservatives. . .

Here's the breakdown:

Store-bought soup:
Approximately 2 cups of Campbell's soup costs $1.48 (.74 cents a cup)

Homemade:
Approximately 14 cups of chicken noodle soup cost me a total of $7.34 (.52 cents a cup)

The ingredients I used were:

'All natural' (i.e. a bit more expensive) chicken breast: $1.50
Organic celery: .50
Onion: .10
Half a carton of organic (again, more expensive) chicken broth: $1.50
Egg noodles: $2.99
Organic carrots: .75
Herbs and seasonings: already in the cupboard
Butter: already in the refrigerator

So, was it worth .22 cents a cup to make my own chicken noodle soup? Basically, two cups of my homemeade soup would have cost me $1.04, compared to $1.48 for store-bought. Had I been at the grocery store, I definitely would have chosen the lower-priced chicken soup, especially if it had been all-natural as mine was. So in the end, I think it was worth it. There are ways I could have lowered the total cost for this soup, however.

For example, I shopped for most of my ingredients at New Seasons Market, which is definitely much more expensive than my usual Winco or Grocery Outlet. For items like the egg noodles, I know I could have found these at a lower price at my usual grocery store. Also, had I purchased a whole chicken and made the broth myself, also using the meat for the soup, I probably could have saved a bit on my chicken breasts and carton of organic broth. As for the organic vegetables, the obvious solution here is to grow my own! Next year, if I'm still living in my house (maybe the real estate gods will be kind, and I'll be able to sell), I intend to plant more vegetables to see if I can bring my grocery bill down even more.

All in all, this was a good exercise, and one I hope to duplicate a few more times if I can, preferably with other types of homemade recipes versus store-bought products. I'm also looking for recipes that can be frozen and also easily carried to work for low-cost lunches. If you have any suggestions, feel free to leave them in the comment section!

In the meantime, here's the recipe I used for my 'quick and easy' chicken noodle soup:

INGREDIENTS

• 1 tablespoon butter
• 1/2 cup chopped onion
• 1/2 cup chopped celery
• 4 (14.5 ounce) cans chicken broth
• 1 (14.5 ounce) can vegetable broth
• 1/2 pound chopped cooked chicken breast
• 1 1/2 cups egg noodles
• 1 cup sliced carrots
• 1/2 teaspoon dried basil
• 1/2 teaspoon dried oregano
• salt and pepper to taste

DIRECTIONS

1. In a large pot over medium heat, melt butter. Cook onion and celery in butter until just tender, 5 minutes. Pour in chicken and vegetable broths and stir in chicken, noodles, carrots, basil, oregano, salt and pepper. Bring to a boil, then reduce heat and simmer 20 minutes before serving.