Friday, July 20

Day Five The Frugal Parent

The Frugal Parent, this could be the toughest to become in our quest to live frugality defined. From clothing to toys, from ice cream and friends, and from sports to needing a car, our kids put a lot of pressure on us and our purse strings.

One way to make it easier on both you and your kids is to begin setting an example of frugality while they're young. Doing so will help your kids get away from the materialistic mentallity. While young, kids are prompted into materialism by television adds and the examples that they see around them. It should be part of the parents job to protect their kids from suffering from the dreaded and expensive "I want it and need it now" syndrome. This is a learned behavior, however it can be inherited.

Here are a couple of ideas that might help you on your path of living frugal defined while parenting.

-Shop for kids clothes at the second hand store. Start doing this early in your childs life. You might be able to get away with not having to purchase new, name brand until the kid hits 10 or 12 years old. The money that you save by shopping at the second hand store while they're young will help subsidize the financing of the name brand clothes when their older!

-Put a little money away every payday for college. It doesn't have to be a lot, just so long as you set aside something. $15 per week, every week will amount to nearly $18,000 (depending on interest earned, the type of account, etc.) by the time they turn 18 years old. Certainly a good start!

-Buy pre-owned electronics like the gameboy, ps2, etc., whenever you possibly can! Sure, the kids will want the latest and greatest, but let their friends parents buy it, and let the kid visit the friends house! I know its not quite the same as having your own, but the idea is to live within our means, not to keep up with the neighbors. If it is a MUST HAVE item, let the kid(s) work, save and EARN it.

-Minimize TV time. This does a couple of things. First, it keeps the advertisers away from your children. Second, it reduces your electric bill. Third, you won't need to subscribe to an expensive cable package. Fourth, and most importantly, it give you and your kids some time to really be together. Whether your doing household chores or just sitting next to each other while each of you read a book, having this time to interact is very important and missing in a lot of kids routines.

-Go on family outings that don't cost anything! A trip to the amusement park sure is fun, but it is expensive too! Instead, for the cost of a few gallons of gas, take a ride into the country and go on a hike. Find a pond or stream someplace and look for frogs or salamanders. Pack a lunch, food always taste better when you eat outside. Kids love to do this, especially looking for frogs and things around ponds and streams! Very low on the cost scale, and very high on the doing something special scale!

-Read and apply what you've learned from the Series Frugal posted this week on Money and Credit:

The Frugal Shopper The Frugal Home Owner Frugal Banking Frugal Motorist

-Regularly Visit the following blogs to learn more about frugal living;

Frugal For Life Frugal Living Frugal Simplicity Frugal Village Mighty Bargain Hunter

The Frugal Law Student The Secret to Saving Money Money and Credit

Thanks for reading and please comment if you found something that helped you

Thursday, July 19

Day Four Frugal Motorist

Becoming a frugal motorist can be difficult if your not one already. Just jumpin' in the car and driving around for something to do will be a hard habit to break! You'll need to find a replacement habit that is frugal, like reading used books, or walking around!

Tire pressure is one of the things a frugal motorist is going to monitor. Proper tire pressure will not only will it increase the life of your tires, it will dramatically improve your gas mileage.

Frugal motorists plan their trips, they don't just drive to the store, then back home, and then run out to hot dog joint, then back home to pick up the kid to bring to a friends house. Planning your trips, even the short ones, will save time, money and wear and tear on your vehicle.

And, speaking of wheels, specialty shops are where you should shop for wheels. If there is a place in your area that does nothing but sell, mount and balance tires, you'll get a better deal on the cost of the tires than you would if you went to your favorite general service center.

The same is true for oil changes and mufflers. It's less expensive to go to the quick lube place, or the muffler guy. Think of it like this. You wouldn't see a corporate lawyer if you needed to have a deed drawn up, nor would you see a dentist if your foot was bothering you. So, why go to a generalist when your tires need to be replaced?

Drive a steady speed whenever possible. Use cruise control if you have it (and when its safe, don't use it driving through the middle of town!). Doing so will help conserve gasoline.

Shop around for the best priced gasoline, and fill up your gas tank. Don't wait until you're on empty to get gas, because if you HAVE to buy gas because you're on 'E', you won't have the luxury of shopping for the best price in town. The best price around where I live is almost 14 miles away! Some would say that whatever I'm saving in the cost of gas, I'm spending on wear, tear and the drive to buy the gas. I disagree because I lump all of my trips into one, and besides, the drive to get the gas is into another state that doesn't charge a gas tax of .15 cents per gallon. It's like getting a gallon of gas for free!

Car pool if you can, and use public transportation if you can, especially for getting back and forth to work. If you could reduce your cost (gas, maintenance, tires, wear and tear) to get to and from work, it would be almost like getting a raise wouldn't it? If it costs $5 per day in total expense to get to and from work if you drive your car vs. a buck a day to car pool, that's like an $80 dollar per month raise (use this to pay down high rate credit cards, or add it to your retirement savings).

Tomorrow- The Frugal Parent

Wednesday, July 18

Day Three Frugal Banking

Before we discuss Frugal Banking, let's take another look at the definition of Frugal;

1. economical in use or expenditure; prudently saving or sparing; not wasteful: a frugal manager.
2. entailing little expense; requiring few resources; meager; scanty: a frugal meal.

With this definition of frugal in mind, let's go on!

Frugal banking is the art of managing you checking and savings accounts so that you entail little expense, require few resources and aren't wasteful. Some of the ways that you can be a frugal with your banking:

Open a free checking account, but beware of the fees (see Fee Schedules below)! If you can keep a small minimum balance and don't write a lot of checks, a free checking account could be your best choice. Do some homework to find out what other checking account options are available. Remember to read the fine print because free isn't always free!

Friendly ATM's are the ones that don't charge you for using them. Banks call these 'foreign transaction fees' and make muchos dinero from them! The least expensive ATM is the one owned by your bank or credit union; they won't charge you a fee for using their ATM's. If you know that you're going to need cash, and you must use an ATM that isn't in your bank or credit union's network, then make sure that you withdraw enough cash to get you by until you can visit your own institution.

Online Bill Payer is one of the most frugal banking steps that you can take! Not only are you saving the cost of postage and checks (remember free isn't always free, see free checking above) you can save your valuable time by setting up bill payer to pay your regular and routine bills on a schedule! But again, watch out for fees! Most bill payer services these days are free, but some banks and credit unions will impose a non-usage charge if you've signed up for bill payer but don't use it.

Dormant account fees are charged when an account, no matter what the balance on deposit might be, hasn't had any recent withdrawal or deposit activity. Why do banks charge a fee like this? Good question. I think the best answer (not necessarily the right answer) is because they can! Does your bank or credit union charge you for leaving money with them? If so, take your money out and run! Or, if you'd prefer to leave your money in the account, stop by and deposit a penny every couple of months!

Account maintenance fees what your friendly bankers might charge you for doing business with them. Here is a nice chart from that covers many of the fees that you could be charged, and what the fees are for.

Make sure that you have enough money in your checking account to cover the checks you write! This may seem obvious, but surprisingly, many people continue to rely on the float that really doesn't exist anymore. Instead, banks and credit unions have come up with a product called Overdraft Protection or Courtesy Pay. These products will cover your otherwise bad check and charge you a fee for doing so. These fees can be OUTRAGEOUSLY HIGH, but are probably still better than writing bad checks. The lesson here is don't try to float a check, make sure that you have the money in the account before writing the check!

You can avoid bank fees by being aware of what they are! Frugal Banking means not being wasteful. By knowing the rules, you can avoid the fouls! Read you account agreement and fee schedule, doing so could actually make you money! How? If you learned something by reading the agreement and schedule that helped you avoid paying a fee, then you kind of made money by not being wasteful with it! Your account agreement is the rule book; it sets out under what circumstances the financial institution will charge you a fee. Being Frugal is being smart. To be smart, you need to know! Read the account agreement so you can know!

Go where the money is! Even modest balance savings and checking accounts can earn really good interest rates if you shop around! The best places to earn interest income on modest balance checking and savings balances are online banking accounts. Recently, ING Direct paid 4% for a checking account with no minimum balance, FNBO Direct is paying 6% for a savings account with no minimum balance, and Capital One Direct was paying almost 5% for a no minimum balance money market account! Don't leave money in the banks and credit unions so that they can fee you for it! Move it to a place that appreciates your business and rewards you for it!

Tomorrow- Frugal Motorist.

Tuesday, July 17

Day Two- The Frugal Homeowner

It's easy to be a Frugal Homeowner. There is just so much that you can do to live less expensively, so here we go!

Don't buy too much home-

The first thing that you'll want to do is to make sure that the home that you're buying, or if you own a home now, is within your means. Your housing payment, including taxes and insurance, shouldn't exceed 28-30% of your gross monthly income. If buying a home, the price shouldn't be more than 2-2.5 times your gross annual income.

Properly Insulate

Whether you're in a warm or cold climate, insulation is a money saver! In a warm climate, it keeps the air cool are when it's hot out, and in the cold climate, it keeps it warm when it's cold! Insulation can be expensive, but PAYS BIG in the long run! You can save hundreds every year in heating and cooling expense!

Check the Temperature

I'm pretty frugal when it comes to heating in the winter. Me and my bank account are pretty comfortable at 68 degrees fahrenheit. Yes, this is cool for many when to them 72 degrees fahrenheit is right on the edge of freezing! Wear a sweater (see yesterdays post in this series about getting a generic brand sweater!)

Turn of the lights, please

It's a colossal waste of money and energy when lighting an unoccupied room. Turn off the lights, please!

Speaking of lights..

Fluorescent bulbs are where its at! No, you won't find these at the dollar stores so shop around for the best price. While more expensive than regular incandescent light bulbs, they last much, much longer and use far less electricity.

Use renewable energy

You've seen the outdoor furnaces? Did you know that they can replace a oil fired heating system, and do so with a renewable energy source? These furnaces will heat your home with wood or corn. Both renewable, but far less expensive the petroleum products. And, burning corn is good for the farmers!

Whatever system you use, have it checked

Whether you're using oil, wood or corn to heat with, have your system checked at least annually. Doing so will keep it in good running order and help prevent expensive surprises! The same applies for those readers that don't heat, but instead cool; have your cooling system checked for the same reason.

Cable Television

Expensive and not necessary. Some argue that TV is a must, especially as a tool to stay on top of what is happening locally, nationally, and world-wide. If you're reading this, then you have access to the Internet and can keep on top of it pretty well by checking the news websites. Television is not good to those who want to live Frugal Defined. The cable bill is expensive, and the ongoing bombardment of advertising does nothing for anyone other than the advertisers. Unplug and disconnect from the cable or, at the very least, unsubscribe from the premium package that charges you for an impossible number of channels that you never seem to watch anyway!

What ways are you defining frugal in your home? Your comments are welcomed and appreciated!

Tomorrow, Frugal Banking.

Monday, July 16

More Frugality- An Excellent post on Grad Money Matters!

Excellent post on Grad Money Matters by ISPF. Here are the 10 Commandments of Frugality!

Commandment 1: Thou shalt cook at home instead of eating out.

Commandment 2: Thou shalt not buy a new vehicle if you can make do with an old one.

Commandment 3: Thou shalt switch off the lights, fan, TV etc when you exit the room.

Commandment 4: Thou shalt not pay for services that you are fit and healthy to do on your own.

Commandment 5: Thou shalt not pay full price for any item that will eventually be available on sale. Thou shalt not pay anything at all for what can be had for free through nature or public offerings.

Commandment 6: Thou shalt not covet thy neighbor Joneses belongings.

Commandment 7: Thou shalt not waste – be it money, leftovers or time.

Commandment 8: Thou shalt entertain yourself through inexpensive means.

Commandment 9: Thou shalt live by the 3 R’s – Reduce, Reuse or Recycle.

Commandment 10: Thou shalt not confuse frugality with cheapness.

Day One- The Series Frugal

Join me for the next five days while I write "Series Frugal". Each day I'll write thoughts and tips on how to live the definition of Frugal. Here we go!

Day One- The Frugal Shopper

We are constantly bombarded with advertising in newspaper and on tv which constantly encourages us to buy name-brand merchandise. Name-brand buying can be big money spending, not very frugal. Here a couple of thoughts to consider:

  • Purchase generic off-brand medicine- for example, Walmart's store brand Ibuprofen is a whole lot less expensive than name-brand Advil.
  • Instead of paying top dollar for name-brand food items (bread, peanut butter, etc.) buy the store brand. Even after manufacturers coupons, the store brand in many cases is less expensive. Unless you shop where they double or even triple coupons, stick to the store brand.
  • Off brand clothing can be a much better buy than branded. Example: Hanes athletic socks vs. the off brand competition. Who cares about the name brand of socks anyway? OK, maybe the name brand lasts longer, but by how much? Save buying name brand clothing to when you're shopping at the second hand store. Otherwise, buy off brand.
  • Shop the dollar stores for your non-food groceries like shampoo, razors, paper products, etc.

Tomorrow's Series Frugal- The Frugal Homeowner

Sunday, July 15

Frugal- What Is?

fru·gal [froo-guhl]
1. economical in use or expenditure; prudently saving or sparing; not wasteful: a frugal manager.

2. entailing little expense; requiring few resources; meager; scanty: a frugal meal.

Webster's Dictionary Frugal defined. That's what we'll strive for when it comes to money and credit. Expending money economically, making sure that we're getting the most bang for the buck!

Prudently saving so that we're not doing more than what we can afford while working towards our savings goals.

Not wasteful or expending money needlessly or wastefully.

A frugal manager knows how not to be wasteful, how to get the most bang for the buck, and how to pursue savings goals without impeding cash flow.

It doesn't make cents, but there are some who save more than what they should. How could this be? They put money aside while paying minimum credit card payments. The build up of the savings accounts sure looks good, but it is costing more than what it is saving. Its not a frugal manager who puts money away in savings earning 4 or 5 percent interest while paying 15-20 percent interest on credit card balances. The frugal manager would forgo the savings until the high rate credit cards where paid, perhaps making a minimum payment into their savings and a maximum payment on the credit card.

I especially like Websters definition #2. By 'being' this definition, you can become definition #1. It becomes almost easy
to be a frugal manager if you entail little expense and require few resources. With little expense and little resource requirement, your savings goals will be easily realized and obtained.

If you've read "The Millionaire Next Door", then you know that living below your means is really the answer and ultimate definition of Frugal.