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.
5 Easy Ways to Save and Build Wealth
September 23, 2008
1. Pay off high-cost debt. The best investment most borrowers can make is to pay off consumer debt with double-digit interest rates. For example, if you have a $3,000 credit card balance at 19.8%, and you pay the required minimum balance of 2% of the balance or $15, whichever is greater, it will take 39 years to pay off the loan. And you will pay more than $10,000 in interest charges.
2. Buy a home and pay off the mortgage before you retire. The largest asset of most middle-income families is their home equity. Once these families have made their last mortgage payment, they have far lower housing expenses. They also have an asset that can be borrowed on in emergencies or converted into cash through sale of the home.
3. Participate in a work-related retirement program. Many employees turn down free money from their employer by not signing up for a work-related retirement program such as a 401(k) plan. If they did participate, with a dollar-for-dollar match they would likely receive an annual yield of greater than 100% on their investment.
4. Outside of work, save monthly through an automatic transfer from checking to savings. These savings will provide funds for emergencies, home purchase, school tuition, or even retirement. Almost all banking institutions will, on request, automatically transfer funds monthly from your checking account to a savings account, U.S. Savings Bond, or stock mutual fund. What you don’t see, you will probably not miss.
5. Calculate your risk and return. If you earn 4% interest, your money will double in less than 15 years; at 7% it will double in about 10 years and at 10% it will double in 7%. Use Asset Allocation to reduce your overall risk.
Foreclosures Caused by Rising Energy Costs
September 20, 2008
Almost daily, you hear news reports about the increasing numbers of homes in foreclosure. What you don’t hear reported is how increasing energy costs are so often the cause of this devastating problem.
Are you losing your home because you can’t afford to pay your energy bills and your mortgage? If you aren’t facing foreclosure can you afford temperature settings that keep you feeling comfortable inside your home?
During the recent U.S. housing boom, builders completed homes quickly. Interest rates were low and investors eager to cash in on high returns on investments. Unless you were knowledgeable about energy-efficient home features and made sure they were included during construction, chances are your new home wastes a lot of energy. It’s also likely you don’t feel comfortable in your home due to uneven room temperatures, drafts, cold floors, etc.
There was a time when home air conditioning was a luxury. Now it seems more like a necessity. Average temperatures in North America have risen over the last 20 years, remaining high for longer periods and forcing people to turn on air conditioners powered by electricity to survive excessive exposure to heat.
Rate caps that once held down electricity costs are ending countrywide. Maryland residents recently experienced the shock of a 70% electric rate increase. Pennsylvania residents will receive the first of several rate increases starting in 2008.
The mortgage industry facing huge losses from foreclosures is working with homeowners to reduce monthly mortgage costs. A reduction in mortgage costs may help, but this is only a temporary solution. Moving to another home, unless it is energy efficient will not solve the problem.
The best solution is to implement energy saving features in your home as quickly as possible. This will not only be good for you financially, it will also be good for the planet.
Siti Crook, 2007
Siti Crook and the Energy Efficient Homes Team are experts in the field of energy efficient homes since the 1980s. She has an insightful perspective on rising energy costs and their affect on the real estate industry. If youd like more information about current real estate trends visit Real Estate Investment Articles! Want to save energy? http://www.eehteam.com
Decorating On A Budget
August 16, 2008
If you love decorating and you love a challenge then you’ll love the challenge of decorating on a budget. There’s nothing quite like fighting your impulses to buy everything you see just so that you keep to your budget, and trying to get everything you need to decorate your house without breaking your budget. It is a losing battle I can tell you that much.
Sometimes the desire to buy the amazing things you see in the home improvement stores can be almost overwhelming. There isn’t too much that you can do about that except to move on as quickly as possible on to the next item on your list.
That said, decorating on a budget can be quite fun if you can manage to loosen up a bit and not drool all over the expensive items. There are many inexpensive items you can buy that will look like their expensive cousins if they’re displayed properly. And that’s really the challenge of decorating on a budge, the ability to take an inexpensive item and be able to disguise its true worth and make it look like a hundred bucks instead.
Then you also have the challenge of actually staying within your budget. For me now, that’s more of a challenge than anything else as I regularly tend to go overboard. Unfortunately if you’re decorating on a budget then the very last that you want to do is to go overboard.
If you do spend more than is feasible on one particular piece then you can be sure that everything else on your list is going to get thrown off and no matter how hard you try it will be difficult to get everything back on track.
The only way that you could even justify going way over budget for one piece of furnishing is if the quality is exceptional and you’re thinking of making it the key piece of the room. If that’s the case then you can always get away with something as your other pieces will necessarily be less expensive. In this case what you need to do is to highlight this expensive piece and use the other pieces to enhance it.
Decorating on a budget need not mean that you have to cut down on quality to get everything that you want. As you are decorating on a budget it can also be fun, and creatively undertaken, it can also be done with flair.
Is the Capital One No Hassle card for you?
August 4, 2008
The Capital One No Hassle Cash Rewards Card is one of the top rewards cards available right now. It has many features that will appeal to you without a doubt. First of all, it is a great gas rewards card, offering 2% cash back on gas purchases. It also still offers 1% cash back on everyday purchases.
Cash back on gasoline purchases is more important now than ever. Gas prices have skyrocketed over the past few years and we could use a discount wherever we can. With 2% cash back on a credit card, if you use your credit card when buying gas, you get an instant 2% discount.
In addition to these benefits, the Capital One No Hassle Card also offers no annual fee and a 25 day grace periods. As long as you pay off the balance on your card every month, you won’t have to pay anything in interest or fees. This means that all the cash back is yours.
If you have looked into any other cards, you may have noticed that some offer a higher cash back rate between 3 and 6%. So then why should you use the Capital One No Hassle Card with only 2% cash back? The best benefit of the No Hassle Card is that there are no limits to rewards.
This means that no matter how much you spend, you get 2% cash back on gas and 1% cash back on everyday purchases no matter what. With other cards you may only be able to get at most $15 per month. That means if you spent enough money to get $30 cash back, you will only get $15. If you spend enough money to get $30 cash back with the No Hassle Card, you will get the whole $30 back.
This no hassle, no limit feature is perfect for those who spend a lot of money on gas and other purchases. For example, let’s say you and your spouse both have a 1 hour commute 5 days a week and 2 kids that drive as well. If you have to fill up the tanks of 4 cars for a total of 6 times costing about $50 each, you’d be spending $300 a week getting $6 a week back and $24 a month. If you got 3% cash back limited to $15, it wouldn’t matter that 3% of $1200 a month is $36 because you would still only get $15 back.
If you want to save money on gas, this might be the way to go. The cash back could be a big help in a time of high gas prices. If you can save money, take advantage of it!
As always, use your credit cards wisely and responsibly. And remember, if you’re carrying a balance on the card, there’s no grace period.
For more information about the Capital One Rewards Cards and where you can sign up, go to BestGasCreditCards.info. Save money on gas and other purchases with no limit.
