5 Areas in Your Life to Live Frugally
October 5, 2008
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This is part of our Financial Literacy Month Question and Answer series
Question: Cindy, can you give me some specific ideas for how to save money on everyday stuff? Thanks. ~ Janice
Answer: Sure, Janice, frugal living does not have to be about a life of deprivation. The frugal life is one of thrifty shopping, careful choices, and a saving mindset. Making just a few adjustments in five areas of your normal life will help you become a frugal person. Readers: if you have ideas, please add them to the comments below.
Groceries are one of the most expensive items on any budget.
- Be sure to take a list with you to the grocery store; this will help to cut back on impulse items. If you are still concerned, then why not take a friend shopping with you. Exchange lists at the store and each of you can gather up the other’s groceries, virtually eliminating all impulses.
- And don’t forget to cut out coupons. It may take some time, but it will add up in the end.
Frugal people still vacation, they just do it wisely.
- You can really stretch the vacation dollars by traveling during the shoulder season or off-season, although it’s a good idea to check to see if local attractions will be open if you want to attend.
- Since much of a vacation budget goes to housing, why not spend your vacation visiting family? There is the joy of bonding with relatives, but you also get to stay for free.
- Being frugal doesn’t mean that you have to stay home all the time. If you do a little looking around, you are sure to find that many of the museums, zoos, botanical gardens and other places offer free or discount days. For those that don’t offer the free days you can check to see if a group discount is available and then call up your other frugal friends for an outing.
- For movie nights, check with the local library to see if they have movies available to check out. There are lots for you to do, and you can do much of it without ever spending a dime.
Clothing is one of those items that civilized society has deemed necessary. The clothing manufacturers, who realize our dilemma, often charge outrageous prices.
- Buying out of season (buying winter clothes in the summer and vice versa) will help to cut this item in your budget.
- Instead of buying new, check out your local thrift store or second-hand store where prices are a fraction of the retail (and sometimes the clothes still have the original tags). Consignment stores in big cities often have lots of great bargains.
- An even better way is to just trade with friends. Hand-me-downs are the frugal person’s best friend.
One item that it is not always wise to buy new is the automobile.
- While there is nothing wrong with having a nice car, if you can’t pay for it with cash then it is probably not worth it. Drive what you have while you save up, and then purchase with cash. Just having the money in hand will give you a lot of negotiating power. Today, many of the used car dealers include some type of warranty with their cars, making the purchase even more secure.
The frugal lifestyle can be more enjoyable than any other. There is money for the things you truly want to do and there is no worry about how the bills will be paid each month. By being a little thrifty here and there, by thinking about your choices before you make them, and by developing a mindset of savings, you can live a fulfilled frugal life.
Are 0% Cards Still Available?
October 4, 2008
This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.
Question: Cindy, I have over the past few years been rolling over funds from one 0% credit card to the next. I now have one for $8K expiring in a few months and have not seen any offers come in for low interest rate credit cards. What do you recommend? My credit score is very good, around 750 last time I checked and I am not in a position to pay it off. BTW, you helped me restore my credit score, remember? ~ Lucy
Answer: Hi Lucy, I do remember and 750 is a terrific credit score. Unfortunately, it is going to be tougher and tougher to find those 0% credit cards. You can blame the sub-prime mess for it, too.
In many cases, the banks are going using their credit card division profits to prop up their other operations. That means less good deals for consumers.
Take a look at Card Ratings.com run by my friend Curtis Arnold and get the best card you can find even if it’s not at 0%, although Card Ratings.com is still showing a number of 0% cards out there. Hopefully those good deals will come back especially for those with great credit ratings like you!
Warmly, Cindy
P.S. Curtis has written a new book How You Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line.
Lower your Interest Rates? SCAM WARNING
October 3, 2008
This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.
The other day I got a call from “Mastercard and Visa” offering to lower my interest rates. “Yippee,” I thought.
But, I was immediately on guard because I know that Mastercard and Visa are separate companies and I didn’t think they’d be working together. Not that I know this for sure, but that’s what came up for me.
The guy told me that a lot of people are cancelling their credit cards because of high interest rates and the banks would rather lower the interest rates and keep the customers. He asked me if I had any cards with balances over $5000 and interest rates higher than 10%.
I laughed and said, “I don’t know.”
He said, “You don’t know if you have balances over $5,000?”
I said, “I don’t know if I have interest rates over 10%.”
Then I asked him if I would have to give him my credit card numbers.
Click.
I guess not.
Just a reminder to be aware of anyone who calls you looking for personal information. Legitimate companies, banks and the government DO NOT do that! Getting lower interest rates sounds like such a great thing that it’s easy to be taken advantage of.
It is OK to call your creditors and ask for lower rates. If you’re making the call to a verifiable phone number (such as the one on your credit card statement), go ahead and provide the information requested to identify you. They’ll probably ask a number of questions to verify that it really is you who’s calling.
Warmly, Cindy
P.S. Please pass this warning on to your friends and family.
P.S. Scam artists are also calling about the Economic Stimulus Money from the government.
NO ONE will call from the government about this check!
Credit Card Convenience Checks
October 2, 2008
This is part of our Pay Debt Quickly series sponsored by
PDQ Pay Debt Quickly kit.
Question: I am contemplating using a convenience check from my credit card company instead of taking out a personal loan from my credit union. The convenience checks carry a 3.99% interest rate for the life of the loan. However, a personal loan from my credit union would carry a 10.25% interest rate for the life of the loan which can be no longer than 5 years.
I am thinking about borrowing between $10,000 to $15,000. I have about a $400 balance on my credit card and would pay that balance off completely if I used the convenience check and resolve not to use the credit card again until the “convenience check” loan was paid.
I don´t have any debt obligations at the present time and was wondering which route would be the best route to go. Thanks in advance to any advice you could provide. ~ John
Answer: Hi John, excellent question. I can’t tell you exactly to do without knowing more info, but I can ask some questions that might get you thinking more broadly and lead to the answer that is best for your situation.
First, what will you be using the $10,000 - $15,000 for? How do you plan to pay it back?
If you pay it back using the minimum payments (15,000 loan at 4%), it will take you 209 months to be rid of your debt. In that time, you will pay $2,275.87 in interest. (play with it yourself at BankRate.com). This is a minimum payment of 2.5% of the balance or $375 per month.
If you take 5 years to pay it off (like the personal loan from the credit union) (found at BankRate.com), it will cost you $276.18 every month.
Interesting with the 2nd calculator: if you pay $375 per month, you’ll pay it off in 43 months.
Another thing to check is the fine print. Can they raise your rates if you are late on any other bill? This is a new “twist” many credit card issuers are adding (see previous article on Universal Default).
Just be sure what you are able to afford in terms of payback and the use of the money. Set aside reserves for the life’s usual “emergencies” like home/auto repair, medical expenses, job layoff or reduction, etc. Please don’t use the money to create additional lifestyle expenses like purchasing a boat or airplane or fancy car. These “toys” are far more expensive to keep up than the initial payment!
Hope this helps. Let me know if you need more info.
Warmly, Cindy Morus
Don’t Divorce Your Money teleclass
October 1, 2008
October 14, 2008
6:30 pm - 8:30 pm Pacific/9:30 pm -11:30 pm Eastern
Early Bird Registration $29 until October 9
$39 after October 9
Does Divorce Threaten Your Financial Future?
Come learn the 5 most important things you need to know BEFORE you sign on the dotted line.
Don’t let a lack of financial expertise stand in the way of negotiating a fair divorce settlement.
Q&A time included.
Class will be held on teleconference line to preserve your privacy (long distance charges apply).
