Archive for the 'Frugal Living' Category
Now that we have our own home and backyard patio, we decided to buy our first propane grill and invite some people over. We had to schedule a convenient time to have my father-in-law come drive down with us since he has a truck, so we had pretty much decided to just buy whatever was cheap and in stock. No hours of research this time! Although some of our serious grilling friends told us to buy a high quality $400+ model, which is probably good advice, we really just wanted something simple to start out with. If we grilled often enough, then later we could upgrade to something that would last a long time.
We had our eye on a $199 Brinkmann grill with some decent BTU, grill space, and also shelf space. But when we got there, they were cleaned out except for one last box that was definitely a previous return. The box was opened, slightly ripped, and had the words “Returned - Missing Parts, Send to Dept #18577″ scrawled on the side with permanent marker. It had no special price tag.
All the other sub-$300 cheap grills were also sold out, even after spending 20 minutes searching through all the racks and the help of a Home Depot employee. Even neighboring stores were sold out. The next-cheapest one was $319 for a basic Weber grill, but we decided against it due to price and lack of shelf space.
We finally decided to rummage through the open box and see what was in there, and couldn’t find any obvious missing parts. So we asked the employee if we could buy the “open box”. Sure, he said. Can we get a discount? It says it’s missing parts. He replied that he could give us 10% off. I actually thought about taking it, but my father-in-law said that wasn’t worth the hassle. So we asked for more. How about 35% off? He said he couldn’t do that, and that he’d have to find his manager for such a reduction. Yes, please ask! He kindly tried, explained about the missing parts, and the manager approved.
Out the door with a $199 grill for $130 and the full standard return policy, not bad. We went home and assembled it with no problems at all. Either the parts were actually found or the last person simply lied when returning the grill. I’m not expert, but I think it’s a great starter grill for $130. All I know is that steaks taste better outdoors. 
So that’s how we walked in ready to pay full retail price, and yet ended up haggling at a big-box corporate store. While I still wouldn’t try and negotiate for new items at Home Depot, it’s definitely worth a try for “scratch and dent” items you may run across!
Update: Looks like the New York Times has more examples: Even at Megastores, Hagglers Find No Price Is Set in Stone.
Posted in Frugal Living | 46 Comments »
Now that we have a fixed monthly mortgage payment for the foreseeable future, we are looking ahead to our true mid-term goal of living on one income. Specifically, we’d like to live on two half-incomes when we have children. We live in one of the most expensive areas in the country. Can we do it?
Both of our incomes are somewhat comparable, so our plan is to actually pretend that only one of us is working, deposit that person’s paycheck into a checking account, and work only from that checking account. The mortgage note, utilities, food, gas, all expenses will be deducted from that account. A reasonable percentage (15%? 20%?) for retirement will still be taken out. I have no idea what a child will cost, but maybe we’ll take out an extra $500 a month for food and diapers as well? The second person’s income will still be dealt with, but just separately.
This way, we will get as close as we can to simulating living on one income. If the checking account starts to shrink too fast, we’ll have to think of ways to cut expenses further. I think this is an interesting idea that could be applied to anyone who wants to stretch into a new financial goal. You may think you can do it, but failure might be costly.
- Buying a new home. Can you afford a mortgage payment that is significantly higher than your rent? You should be sure, otherwise you might be joining the million other people in foreclosure.
- Kickstarting your retirement contributions. Maybe you’re afraid of putting too much in a 401(k) or IRA and not being able to take it out. Why not just use savings account and stick your imagined contributions in there for a while? That way you won’t have to deal with penalties.
- Increasing your debt payments. Some people are afraid to pay off too much debt in case they need the money for later. An emergency fund would help solve this, but also the “pretend” debt account might be a good temporary solution.
- Going back to school, switching careers, etc. Again basically the same idea - how will you react to living on less income?
Posted in Family, Frugal Living, Retirement | 42 Comments »
Last month one of our credit card statements spanned two pages because we had eaten out so often. Not only is it more expensive, I’m pretty sure it’s less healthy. So now we’re trying to limit ourselves to 2-3 times a week (minus the cafeteria at work), and making one of our outings to a new restaurant that we haven’t tried before.
This means more grocery shopping. But did you know that grocery food prices jumped 5.3% in 2007? Milk, eggs, and bread all cost from 10-30% more than last year. This year looks to be even worse, especially with rising oil prices making transportation more expensive. In last weekend’s WSJ Sunday edition, there was an article titled Savvy Grocery Shopping that had some good money-saving tips. Here are a few of them along with some others I’ve also picked up elsewhere.
Stockpile and Hoard
Grocery stores constantly rotate the stuff that they have on sale, so that at any one time there is something new to attract you into their store. Then, while you’re already there, they expect you to buy other things at full price. The key is to know when something is at a great price, and then stockpile staples at that price. That way all your pasta, canned veggies, soups, broths, sugar, and all non-perishables are all bought 20-50% off retail.
Keep Track of Prices
The problem: How do you know what is a good price? I forget all the time. Some people keep what is called a “price book”, where you track the price of your commonly bought items so you can start to see the cycles and pricing patterns. There is even a website called TheGroceryGame that will track prices for you and let you know when to buy - for $10 every 8 weeks.
I’ve also noticed that you can also start to learn when they mark down meat, usually a day or so before the legal sell-by date. The meat is still good, I just stick it in the freezer right away until I need it.
Be a Coupon Ninja
There is an entire subculture of “couponers” out there that I call “coupon ninjas”. They find good coupons, then get 20 duplicates of them, go to a store that doubles them (instead of 25 cents off you’d get 50 cents off) and then stockpile like crazy. I’ve seen scans of grocery receipts that show $150 of food bought for $23.47. Sometimes they actually get negative! While I admire their drive, I just stink at using coupons. I’ll clip them, but I always forget to bring them along, or I wait until they are expired. My new store doesn’t double coupons anymore, so the incentive is also less. TheGroceryGame also helps point out good deals.
Buy Frozen and/or Generic
Many times frozen fruits and vegetables are even more nutritious or tasty when you buy them frozen, because they can wait longer before picking them. Also, there’s always store-brand or generics. The article shares that the manufacturer of Birds’ Eye veggies also makes store-label veggies. I love my Safeway frozen mixed vegetables! Did you know that produce even has brands now? I didn’t even notice. I like to buy generic on many things, but not all of them.
Posted in Budgeting, Frugal Living | 65 Comments »
I’m sure the foodies already know about this site, but I just learned about it recently so I figured I’d throw it out there for discussion… America’s Test Kitchen is a very popular PBS show that shares carefully tested recipes, review cooking gear, and even taste-test supermarket products. I figured this would fit in with the frugal theme since they can help you get the best value when buying knives, pots, pans, and even olive oil. I would describe it as a food-focused Consumer Reports.
You can access their recent reviews and articles online for free, but you must provide an e-mail and mailing address. They say they won’t sell your e-mail, but they will force you subscribe to their newsletter and try to get you to sign up for a subscription of Cook’s Illustrated. Let’s just say both can be fake, and you can still gain access… Note that many of the older articles are archived into a paid-only area that costs $24.95 annually.
Now, the most expensive models do often end up being rated the best. However, sometimes there is a surprise and the $30 pan matches or beats out the $100 pan. If not, there is usually a model that ranks nearly as well but is also significantly cheaper. Here’s a sampling of articles I found interesting. Note that these direct links will only work after you have logged in.
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Inexpensive Knife Sets. Scroll to the bottom to find their recommendation for how to build your own cheap but high-quality knife set for under $100. They really like the R .H. Forschner by Victorinox brank of knives (the Swiss Army knives people).
- The Little Nonstick Saucepan That Could: “You can spend $100 on a 2-quart nonstick saucepan–but should you?” I’m glad to see my Calphalon pans rated pretty well.
- Inexpensive Dutch Ovens. “Our favorite Dutch ovens cost more than $200. Ouch! Is there a cheaper version that performs almost as well? Yes. It costs $40.” I don’t own one of these, but I like how the Target brand kept up with fancy-pants Le Creuset.
- Drip Coffee Makers. “Does an Inexpensive Model Have to Feel Cheap?”
- Commuter Coffee Mugs. “We didn’t find perfection, but we came close.”
I can’t wait until Spring and we can grill in our own new backyard. Bobby Flay, watch out!
Posted in Frugal Living | 14 Comments »
I’ve already shared my habit of trying to get bumped off of airline flights on purpose for the free tickets. I haven’t been bumped recently, but here’s another frugal travel quirk that most people don’t seem to do…
Sometimes even those us who like to pack light end up bringing a lot of bags or heavy boxes. At the baggage claim, you’re then faced with the prospect of paying $3 for a cart to hold your stuff for 8 minutes. The horror!
Your bags usually take several minutes to be loaded onto the carousel anyways. So instead of going straight to baggage claim, after I get off the plane I go directly to the check-in ticketing level. Usually, especially if there are baggage scanning stations, there are plenty of discarded carts. I grab one, take the elevator down one or two levels to baggage claim, and proceed to load my bags on my free luggage cart. I’ve wasted no extra time, and my success rate is around 90%.
Posted in Frugal Living, Travel | 29 Comments »
With the explosion of sites like Flickr, it seems like everyone is an amateur photography nut. I know I’ve talked about getting a SLR and taking a photography classes for oh… a decade?! Well, why not partake in a free online photography class this weekend. Photography 101: 12 Weeks To Better Photos includes everything from a course outline, weekly handouts, “homework” challenges, and a discussion group. I think they are currently in Week 6, although you can still jump in:
Course Outline
Week 1: Aperture Basic Training
Week 2: Advanced Aperture
Week 3: Light
Week 4: Flash
Week 5: Composition & Framing
Week 6: Shooting Indoors
Week 7: Shooting Outdoors
Week 8: On the Go
Week 9: Portraits
Week 10: Landscapes
Week 11: Your Daily Environment
Week 12: Lenses, Filters & Accessories
My current camera is the Canon Powershot S2. It’s not quite a digital SLR and is already a few generations behind with the S5 out now, but it has 12x zoom and plenty of buttons that just plain scare me. Now to find out what happens when I take it off the Auto mode…
Class info found via The Scottish Lamb.
Posted in Frugal Living | 14 Comments »
A few years ago I managed to nab a used Wenger Swiss Army watch off of eBay for $35. I really liked the watch since it was classic but not flashy (shown to the right) - and it didn’t hurt that it retailed for over $200! Recently it abruptly stopped working, and so I brought it in for a battery replacement. Unfortunately, it turned out the entire mechanism was burnt out and it would cost $50 to replace. Pay $50 to fix a $35 watch? Nah, I’d see what else was out there. I was actually considering buying a similar watch from Costco for $150 before I caught myself. I was being fooled by the sunken-cost fallacy!
What Are Sunken Costs?
A sunk or sunken cost is something that has been spent and cannot be recovered. Since this is the case, economists argue that such sunk costs should not be a factor in one’s decision making. The classic example is the movie ticket decision (adapted from this Wikipedia entry).
Let’s say you bought a non-refundable movie ticket, but you later decide that you no longer want to watch the movie. Do you watch the movie anyway since you already paid for it, even though you won’t enjoy it? Or do you simply walk away and do something better with your time? Since the ticket was a sunken cost, a rational decision maker would ignore the fact that you paid for it already. In fact, you should act as if the movie was free.
A few more examples:
- Clothes. You bought a pair of $100 shoes, but after wearing them around you find that they hurt your feet horribly. Do you continue to wear them anyway?
- Consumer Products. Sometimes companies will continue to plow money into a project even though they know it will be a failure, simply because millions have already been spent on it. It’s important to know when to cut your losses. A historical example is the Concorde jet.
- Investing. Many people hate selling their shares for less than they paid for it. However, once you’ve executed the trade, that shouldn’t matter anymore. All that should matter are the current prospects for the stock.
- Human lives. This idea has even been extended to the Vietnam War and more recently the Iraq War, when the loss of previous lives has been used as justification for continued fighting.
But back to my watch story. I realized that it shouldn’t matter what I paid for the watch. The fact was that I could still get a working watch for $50, while replacing it would cost me significantly more. Nothing similar was selling for less than $100 on eBay, and a new one would cost at least $200. I went ahead and told the jeweler to fix my watch for $50.
Have you caught yourself worrying about sunken costs as well? You can also read about other ways that our mind plays tricks on us in Mental Accounting: Is A Dollar Always A Dollar?
Posted in Frugal Living | 43 Comments »
With all of this talk about recession and after watching too much History Channel, I’ve been reading up about the Great Depression of the 1930s. Check out this excerpt from a paper entitled Main Causes of the Great Depression:
One obvious solution to the problem of the vast majority of the population not having enough money to satisfy all their needs was to let those who wanted goods buy products on credit. The concept of buying now and paying later caught on quickly. By the end of the 1920’s 60% of cars and 80% of radios were bought on installment credit. Between 1925 and 1929 the total amount of outstanding installment credit more than doubled from $1.38 billion to around $3 billion. Installment credit allowed one to “telescope the future into the present”, as the President’s Committee on Social Trends noted.
This strategy created artificial demand for products which people could not ordinarily afford. It put off the day of reckoning, but it made the downfall worse when it came. By telescoping the future into the present, when “the future” arrived, there was little to buy that hadn’t already been bought. In addition, people could not longer use their regular wages to purchase whatever items they didn’t have yet, because so much of the wages went to paying back past purchases.
Sound familiar? Now add in a stock market slump:
This speculation and the resulting stock market crashes acted as a trigger to the already unstable U.S. economy. Due to the maldistribution of wealth, the economy of the 1920’s was one very much dependent upon confidence. The market crashes undermined this confidence. The rich stopped spending on luxury items, and slowed investments. The middle-class and poor stopped buying things with installment credit for fear of losing their jobs, and not being able to pay the interest. As a result industrial production fell by more than 9% between the market crashes in October and December 1929. As a result jobs were lost, and soon people starting defaulting on their interest payment.
So let’s see. First, people were spending too much. Then, people suddenly became afraid of losing their jobs, so they stopped spending. This meant businesses stopped making money, so… people lost their jobs.
Eighty years later, here we are getting mailed “economic stimulus” checks. But if people are truly scared, why wouldn’t they just hoard it as well? I still don’t understand macroeconomics for the life of me.
Posted in Frugal Living, Simple Living | 65 Comments »
For some reason, my friend received a postcard from Maserati offering him some Omaha Steaks if he came in for a test drive. You’d think buyers of $150,000 luxury vehicles couldn’t be convinced to do a test drive for $50 worth of meat, but I guess not. Anyways, I convinced him to go - and of course to let me tag along. 
I wasn’t really familiar with the car, but the Maserati Quattroporte does look sexy. You may have seen it on the HBO show Entourage. Designed by Pininfarina and engineered by Ferrari, with a base price of $110,000 it could almost be seen as a bargain… compared to the $250,000 F430 it was sitting next to in the showroom. Here’s a video review from the UK:
Deep Thoughts…
One realization I had while cruising down the road - caressed by supple leather and listening to the Ferrari engine - was that I was getting more comfortable in my own “financial skin”. Before, I might have felt self-conscious on going to this test drive. Now I don’t care what people think of me. If I really wanted to, I could probably buy such a car some day. But I already have my priorities and they are nothing to be ashamed of.
At the same time, I also started to understand that there is nothing wrong with someone who does buy such things. Sure, they might be mortgaging their future in order to look cool now. But they also might be successful people with a solid financial plan and also appreciate fine Italian cars. I asked the saleperson who the typical buyer of a Maserati was. While many people were business owners or corporate executives, he also said his last sale was to an 82-year-old government retiree who finally decided “what the hell” and bought something nice for himself. In other words, perhaps us frugal folks shouldn’t judge others either.
I know I’ve been guilty of this. To this day, whenever I see someone under 25 and driving a shiny new BMW, the words “paid for by the Bank of Mom and Dad” pop into my head!
Posted in Frugal Living | 36 Comments »
It seems that my car troubles aren’t over yet. So the only financial thing I learned today was that AAA Basic only pays for the first 5 miles of towing. After that, it’s $6 a mile. What’s up with that? I won’t complain though, as a family member had AAA and not me and I think I still saved some money using the service.
I don’t buy AAA because my general philosophy on insurance is that you should only buy insurance for financial hits you can’t weather. I can handle paying for an occasional tow - or I can ask if others have AAA 
Posted in Frugal Living | 73 Comments »
Most hardcore independent travelers will agree that you can pack for a year ’round the world in just one carry-on. Being able to fit your life into one backpack is almost a meditation exercise for me. It makes me feel free. But since this is a money blog, here are some financial benefits of packing light:
- More fun time. You don’t have to arrive to the airport as early, and you don’t waste time waiting around at the baggage claim after arriving. Now you have more time to soak in the culture!
- No lost luggage. You don’t have to worry about lost or damaged checked luggage, and spending money replacing items in a foreign country.
- Increased airport flexibility. Being one unit allows you to easily be “bumped” onto another airline, or you might go standby on an earlier flight. Similarly, if you miss a connection, you don’t have to pray that your luggage will still show up.
- Cheaper transportation. You can take public transportation everywhere with ease - subways, crowded trains, even hanging off of a farmer’s truck. You can also walk longer distances without suffering.
So I thought I’d share some of the somewhat specialized gear that I actually don’t mind spending money on. I would have to say 75% of my stuff was bought at either the REI Outlet or Columbia Outlet stores.
Luggage - REI Tour Pack
I don’t think REI makes this anymore, but it’s a pretty simple bag and cost about $125. It’s basically a big squarish backpack exactly the size limit of a carry-on, with nice padded shoulder straps and compression straps too. Good quality, YKK zippers. There is also a small detachable daypack - perfect for carrying your rain jacket, maps, guidebooks, and bottle of water when out and about. A similar bag would be Rick Steves’ Classic Back Door Bag
Clothing
The general idea here to have it be lightweight, look casual, and be fast-drying. That way you can just hand wash them at night in the hotel room and have them ready to go in the morning. I love my REI Sahara Convertible Pants. They convert to shorts easily, so it’s one less thing to pack. You can also buy hiking or “travel” shirts, socks, and even underwear that can be hand-washed and will dry overnight. My next purchase will be some nice travel boxers of Ex Officio. Technically, you could simply buy one of each of these, and just wash as needed! I think I’ll spring for at least 3 of each.
I always bring a good fleece jacket, but since I own one already that isn’t an extra expense.
Silk Money Belt
This “personal lockbox” allows me to sleep in hostels and walk around busy areas while keeping my passports and credit cards safe. It’s highly unlikely someone will poke around there without me noticing. Besides, it’s actually pretty comfortable. Here’s an example for $13.
Extra Toiletries Kit
I basically bought some cheap travel-sized (and TSA approved) plastic bottles, and made a duplicate of all the personal products I use everyday. I don’t move things in and out of my toiletry bag, it’s always 100% packed. Contact lenses, toothbrush, toothpaste, deodorant, comb, whatever. So when I need to pack, I just grab it and go.
Electrical
I would like to say I have a sleek 3 lb. laptop and some nice GSM cell phone/internet hookup, but I actually don’t pack anything electrical with me besides my camera. Just about everything I need can be accessed by finding an internet cafe. I can post to blogs from anywhere, or even log into my computer remotely if desired.
More Links
Packing Light & Right - Rick Steves
Carrying off the art of one carry-on - SF Chronicle
The Travelite FAQ
Please share your own tips as well in the comments! Right now I’m trying to figure out how to fit in a week in Thailand in March or April. Gotta work on my mid-term goal
Posted in Frugal Living, Travel | 29 Comments »
Earn more. Save more. Those are the two ways to get out of debt or build wealth. I’m a big proponent of doing both, but I think for many people it is easier to cut back on some luxuries rather than look for a raise or more work. It’s also more effective, and here’s why: Let’s say you are single and your (taxable) gross income is $50,000 a year. If you were to go out and earn another additional $1 at as an employee, here’s how that $1 would get broken down:
You’d only keep 58 cents. On top of that, a lot of extra or freelance work is done as an independent contractor. That means you’re self-employed and get the happy task of paying another 7.65% of payroll taxes (the employer share), which brings your total tax hit to 49.6%! So in order to keep $1 in your pocket, you’d have to get someone to pay you $1.99. Then your choice becomes:
This fact helps me visualize the balance between spending and saving in my head. Now when you save $1, you can feel good knowing that you’d have to have earned $2 of income to equal that. But on the flip side, when I get a check from a project for $500, I know I’ll only keep $250. 
The Small Print
- This is a specific example, your tax situation may vary. Also note that this isn’t the average tax rate on all your income, but for the next $1 you might earn.
- You might get a portion of your Social Security or Medicare taxes back in the future, even though your taxes aren’t being saved or invested anywhere; it’s being paid out immediately to current retirees. In any case, the return on investment certainly won’t be that great.
- Some states don’t have an income tax, but may have higher sales tax or property tax rates. But remember, a sales tax is basically a tax on income that you spend!
- You’re allowed to deduct half of your self-employment tax from your adjusted gross income, which saves you a bit in taxes.
Posted in Frugal Living, Taxes | 59 Comments »
Two, count ‘em two, of my old hard drives died last week. And this web site went haywire (multiple times). I had the major files backed up, but my need for a better backup system became apparent. Ideally, it would be free, automated, and online. So what’s out there? Here are the best options I found:
- Online Backup. The leader in automated, online backups seems to Mozy Online Backup. They have paid plans, but still give you 2 GB free with MozyHome Free. Another site, iDrive, also offers 2 GB free.. Transmission is encrypted, but security during storage may be a concern for very sensitive files. This isn’t really a concern for me, as I don’t have much sensitive stuff. Another downside is if this start-up dies, then so do your files. Recently, a similar site called Omnidrive shut down abruptly with little warning.
- Gmail via Gspace or Gmail Drive. - Use your 2GB+ of free storage with a Gmail account. Gmail Drive lets you use it as as drive within for Windows, and Gspace lets you transfer files using the Firefox browser. To automate transfers to Gmail is a bit trickier, but here is a guide at LifeHacker.
- FTP to existing server. If you have a web-hosting service, try combining that with Syncback Freeware to make an automatic backup system. You’re already paying for the hosting anyway, and most give you a ton more storage than you really need. (Another LifeHacker guide for Syncback)
Having good backups both directly and indirectly saves me money in the long run. I just need to invest the time to set things up now.
Posted in Frugal Living | 25 Comments »
Reader’s Digest has an article titled Secrets of Self-Made Millionaires. The “secrets” aren’t exactly groundbreaking:
- Set your sights on where you’re going
- Educate yourself
- Passion pays off
- Grow your money
- No guts, no glory
- Stop spending
… but I always enjoy reading such stories anyway. In addition, sprinkled throughout the article are several interesting quotes which hit home for me.
They are motivated by freedom
What motivates them isn’t material possessions but the choices that money can bring: “For the rich, it’s not about getting more stuff. It’s about having the freedom to make almost any decision you want,” says T. Harv Eker, author of Secrets of the Millionaire Mind. Wealth means you can send your child to any school or quit a job you don’t like.
Most did not start out rich
The reality is that 80 percent of Americans worth at least $5 million grew up in middle-class or lesser households.
They have a passion for what they do
According to research by Thomas J. Stanley, author of The Millionaire Mind, over 80 percent of millionaires say they never would have been successful if their vocation wasn’t something they cared about.
They don’t flaunt their wealth
But many modern millionaires live in middle-class neighborhoods, work full-time and shop in discount stores like the rest of us. […] According to the 2007 Annual Survey of Affluence & Wealth in America, some of the richest people “spend their money with a middle-class mind-set.” They clip coupons, wait for sales and buy luxury items at a discount.
All of these characteristics are ones that I aspire to have!
The idea that “millionaires are all around you but you just don’t notice them” reminds me of the popular book The Millionaire Next Door. In fact, Stanley above was a co-author. (Sadly, the other author Danko now speaks at get-rich-quick seminars.) The book has been bashed at times as being statistically flawed and simply telling people what they want to hear. Perhaps, but I think there is more than a little truth behind it as well.
Posted in Entrepreneurial, Frugal Living | 9 Comments »
Got your junk e-mail addresses ready? Unfortunately, no free razors to be found. First stop, free samples at Wal-mart. Currently available (refresh page as necessary):
- South Beach granola snacks
- Dove and Head and Shoulders shampoo
- Friskies dry cat food
- “Intimately Beckham” cologne/perfume
Also found in the Slickdeals Freebies area:
- Free 8-week membership to Bally fitness. (Be prepared to deal with the usual gym hard-sell.)
- Free Jamba Juice smoothie if you are a 24hour Fitness member.
- 5 free music downloads from Rhapsody (Are these any good?)
Posted in Bored Money, Frugal Living | No Comments »
