Pay Bills Online and Save
(Re-Post: Original post date February 15, 2008)

These days, most companies (including banks and utility companies) have websites and online payment options. Those that don’t often accept payments by phone. If you are still using snail mail to pay your bills each month, you could be saving $60 or more, depending your number of bills, each year by switching to payments by internet or phone. Consider the following example

Our monthly household bills look something like this: electric, gas, water & sanitation, 2 mortgages, cell phone, home insurance, auto insurance, 2 credit cards – an average of 10 bills per month. The cost of a first-class postage stamp is $0.41 ($0.42 starting May 12, 2008), and the cost of a personal check for us is about $0.07. (Since the companies usually provide the envelopes, we won’t count the cost of an envelope.) So the cost of mailing one bill is $0.48. At 10 bills a month, that amounts to $4.80 a month, and a total savings of $57.60 each year. A larger household with children and more bills could save even more than this.

If the company doesn’t have a website, it usually has a toll-free number you can call to pay by phone. Some companies allow you to set up automatic monthly charges to your credit card or withdrawals from your bank account, which could save you a lot of time.

Another option is through your bank or credit union’s online banking program which often includes free bill paying service. You can set up one time or recurring payments and your bank will mail a check for you. The recipient can be a company or an individual such as a landlord or babysitter.

In the years that we’ve used online payment options, we have never had problems with security or errors and never have to worry about the check getting delayed, lost or stolen in the mail. And we always pay with a credit card whenever we can. To see how you can save more money by paying with a credit card, please refer to our previous post .

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Related posts:

• Pay Bills Online and Save
• Switching to Paperless Statements to Save Money, Time and the Planet
• Pecuniary Links ~ July 2009 #2
• Financial Lent: A Frugal Fast to See What You Can Live Without
• Shipping via USPS? Mail Your Packages Before May 12th

Our monthly household bills look something like this: electric, gas, water & sanitation, 2 mortgages, cell phone, home insurance, auto insurance, 2 credit cards – an average of 10 bills per month. The cost of a first-class postage stamp is $0.41 ($0.42 starting May 12, 2008), and the cost of a personal check for us is about $0.07. (Since the companies usually provide the envelopes, we won’t count the cost of an envelope.) So the cost of mailing one bill is $0.48. At 10 bills a month, that amounts to $4.80 a month, and a total savings of $57.60 each year. A larger household with children and more bills could save even more than this.

If the company doesn’t have a website, it usually has a toll-free number you can call to pay by phone. Some companies allow you to set up automatic monthly charges to your credit card or withdrawals from your bank account, which could save you a lot of time.

Another option is through your bank or credit union’s online banking program which often includes free bill paying service. You can set up one time or recurring payments and your bank will mail a check for you. The recipient can be a company or an individual such as a landlord or babysitter.

In the years that we’ve used online payment options, we have never had problems with security or errors and never have to worry about the check getting delayed, lost or stolen in the mail. And we always pay with a credit card whenever we can. To see how you can save more money by paying with a credit card, please refer to our previous post Credit Cards Really Aren’t So Bad.

Related posts:

• Pay Bills Online and Save (Re-Post)
• Switching to Paperless Statements to Save Money, Time and the Planet
• Pecuniary Links ~ July 2009 #2
• It Never Hurts to Ask: Getting Late Fees Removed
• Financial Lent: A Frugal Fast to See What You Can Live Without

While going through my piles of unopened mail (mostly bills) the other day, I decided I’d had enough and finally took the plunge into the world of Paperless Billing and Statements. Even though I’ve been fully online – shopping, selling, socializing, banking and bill paying – for years now, for some reason, I’d always felt hesitant about not receiving hard copies of my bills. But after years of accessing my accounts and paying bills online, and running out of places to stash all my account statements, I’ve decided that it’s probably a better system that will end up saving me money, time (which is also money), space and paper cuts.

The Benefits of Paperless Statements

• Saves Time
  Time is money, so the time you would spend organizing and filing your account statements would be cut down. Filing would just consist of logging into your account and downloading the statements to your computer. Most accounts will allow you access to several years’ worth of statements, so you don’t need to do this every month, but can wait and do all your filing at once a couple of times a year.
• Saves on filing equipment
  No need for file cabinets (which are very costly), folders, labels and organizers, and no need to upgrade to larger or additional file cabinets as your files increase in volume.
• Saves space
  Digital storage is becoming more affordable and space efficient so they take up considerably less space than file cabinets, making it easier to keep your home and office organized and clutter-free.

  For example, this Iomega Desktop Hard Drive, USB 2.0, 750GB – 33750 for just $110, costs considerably less than a file cabinet, takes up a fraction of the space of a file cabinet and has capacity for at least a decade’s worth of bills and statements. It also looks a lot nicer than a file cabinet, which often doesn’t look that great in a home environment.

• Saves money
  Some companies have already begun to charge for paper statements. When I enrolled in Paperless Billing for my T-Mobile account, I was informed that I will be charged $1.99 per month if I revert back to paper statements. Perhaps if companies can save on billing costs, they can pass the savings on to us consumers by offering lower fees for their services.

  Also, by paying bills online, not only do you save paper, but postage. Check out an earlier post of mine, Pay Bills Online and Save, on how we save about $70 a year by paying our bills online.

• Saves the Planet
  Obviously. Some companies, again T-Mobile for example, are promoting Paperless Billing by planting a tree for each customer that changes to paper statements, so you’re no only saving current trees but adding to them.
• Earn money
  This depends on the company. Certain companies such as my Chase Amazon Visa account, offered 500 reward points, the equivalent of $5.00, for switching to Paperless Statements. Not a bad deal for doing something that’s going to save me time and money.

So not only is this the smart choice for those with regular computer and internet access, but the green, environmentally-friendly choice. Most of our bills and bank statements received via snail mail remain unopened anyway because I usually just go online to check the amount and make the payments when the bills are due.

Of our 12 monthly bills and bank statements, we are able to receive Paperless Statements for 9 of them, which will reduce our annual mail volume by 108. This will be quite a relief as our file cabinet really can’t take anymore. I only wonder what took me so long.

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Related posts:

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• Pay Bills Online and Save
• Pay Bills Online and Save (Re-Post)

Originally posted 2008-09-11 10:00:05.

Our city’s water billing system is run by a tiny 2-person department that seems to send bills out when they can instead of on a set schedule. Our water billing cycles are 2-month periods, so logically we would have a bill due every 2 months. But our water department being so small, with more and more people moving into the area, those 2 poor ladies are swamped from 8-5. I tried all day yesterday to call them but always got a voicemail, and finally left a message around noon today and was surprised to get a call back in the afternoon (a first with this department.)

Anyways, this means that our bills come very irregularly and we sometimes don’t get a bill for 3 or 4 months, and then sometimes we receive a bill a month for 3 months in a row. It isn’t unusual for us to be paying a bill for services from fall of the previous year in the spring (i.e. paying for water used Oct 2007 – Dec 2007  in March 2008). Needless to say, this can get confusing and I often have little panics where I think I’ve missed a payment when I haven’t.

This week was one such instance. I had made a water payment on the due date of March 12, 2009 and so wasn’t expecting to have another bill due until mid-May. It turns out that they had sent out another bill some time in March or April, which I don’t recall receiving, and that I had a payment due April 24th. I honestly don’t know what happened with that bill but obviously somehow messed up.

When I spoke to one of the ladies from the water department today to ask about it, she told me that, yes, bills are due once every 2 months, but no, I did miss a payment on April 24th. I think because she saw the illogic of it, she was nice enough to waive the $15 penalty for me. I didn’t even have to ask (though I had been planning to) for this one-time courtesy.

So, it never hurts to call in and inquire when you have a billing discrepancy such as this. If the late fee is just $1 or $2, it might not be so bad, but a $15 late charge on a $68 bill not even a month overdue was a little too much for me to let slide by.

Just remember when you call in to be polite, don’t demand but ask nicely, and you will most likely have a positive result.

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• Early to Bed and Early to Rise Makes a Man [or Woman] Healthy, Wealthy and Wise
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• Simple Solutions to Staying Out of Debt
• Booking Flights Early Could End Up Costing More

I know everyone hates hearing these trite statements, but the reason they are so often repeated is because they are true. In fact, they are so basic they should be considered common sense. These principles work for both staying out of (and maybe even getting out of) debt.

The simple solutions to staying out of debt are:

• Spend less than you make
• Don’t waste money
• If your expenses are higher than your income
  • Cut back, and/or
  • Make more money

How to spend less than you make

Before you spend money on any treats for yourself, set aside what you need to pay your regular bills. If you aren’t able to keep from spending that money by only mentally setting it aside, try the following:

• Open a new bank account for your regular expenses (rent, utilities, etc.). Tip: Credit unions offer accounts without fees or minimum balances. Let’s call this account your “Expenses Account.”
• Add up all your bills and expenses at the beginning of each month and transfer that amount from your main account to your Expenses Account.
• If the bank or credit union issues you an ATM card and/or checks for that account, keep them in a safe place at home instead of carrying them in your wallet or purse.
• If you get paid every 2 weeks and your bills are due at the end of the month, try not to spend any money on luxuries with the first paycheck of the month. If your expenses are less than the amount of your paycheck, put all of that amount into your Expenses Account, plus a little extra padding just to be safe (to prevent overdraft charges in case you added wrong).
• After you have set aside all the money necessary to pay your bills, see how much you have left. Put as much into savings as possible, but if you feel like you need to treat yourself to a little something, do so at your own discretion.

How to not waste money

Money wasted is money you will never see again. And money is one of the easiest things to waste and justify (at least at the moment of the wasting). The easiest way to keep from wasting money is to ask yourself the simple, and again oft-repeated, question of “Do I really need to buy this [item]“? It is likely that 60% or more of the time, you will find that you really don’t need it after some thought. But if just asking yourself this question isn’t enough for you, try some or all of the following:

• When tempted with an impulse purchase, leave it and think about it a week later. Don’t go and look at the item, but just think about it. Looking at it might bring the impulse back. After a week, see if you still really want it. Chances are that you will no longer feel as strongly about it as you did before.
• When there is something you really want to buy, make a list of “Reasons why you need this item” and “Reasons why you should not buy this item”. Take a look at your reasons and see if they are good enough reasons to justify the expenditure.
• If you do need to buy something, spend some time to research the quality of what you buy. Many websites have consumer opinions on all sorts of products. If you do spend money, make sure you are spending it on something that will last you a good while. Don’t compromise your desire or need for something by settling for something cheap and of inferior quality that won’t last in usefulness or value.
• Think about the potential of that money. Check out my earlier article Prune Your Spending and Watch the Savings Grow and use the savings interest calculator to see how much a few dollars here and there can grow into a sizable nest egg in future years.

How to cut back on spending

If your expenses are higher than your income, then go through all your bills and see which ones you can do without or downgrade. Do you really need lightning speed internet on your personal computer? Do you really need 1000 minutes, internet and 200 text messages on your personal cell phone? Check out these previous articles I have written that deal with lowering expenses.

• Discerning Luxury from Necessity – This is a basic guide to get you started on figuring out what you need and don’t need
• 20 Minutes Can Save $180 & Tips for Receiving Better Customer Service – This is an article on how I saved some money just by contacting my ISP to ask about lower rates.
• Insurance Matters: The Cost of Complacency – The lesson I learned about assuming that my auto insurance company was still giving me the best rate after I relocated.
  

How to increase your income

There are many ways of increasing your income. It doesn’t have to be a major endeavor, but a little bit of extra money never hurts. Here are a just a few suggestions for what you can do to increase your income. Some are one-time solutions, and others are things that you can do continuously.

• Sell your stuff
  Go through your things and find some things you no longer need but are good enough to pass on. Hold a garage or yard sale, or offer them for sale on one of the many online trading sites. I know someone who always has to have the newest technology – computers, cell phones, MP3 Players, etc. I imagine he must have thousands of dollars’ worth of still good technology just sitting around his house.
• Sell your abilities
  Do you have a skill not possessed by everyone? If you speak a 2nd or 3rd language, play a musical instrument, or have some knowledge of a subject, you can tutor or teach from your home or create an informative website on to earn ad money. If you are good at crafts, fixing electronics, woodworking, minding children, or any other special skill, there are numerous ways to earn a little money here or there and you may even end up being a professional in a field you never considered seriously. Some people do not even know how to install software on their personal computers and will pay to have this common task done for them.
• Open a CafePress Store
  If you have photographic, artistic or graphics ability, open a CafePress shop. All you have to do is upload your images and create products with your artwork on them. Check out our store Mozartini, which we started in December 2007 and has begun to make more money each month. We love CafePress because once the artwork is up and products created, all you have to do is wait for the money to come it. CafePress takes care of customers, prints and ships the orders and sends you a check. I just love waking up in the morning and finding those “You’ve made a sale at CafePress” emails.
• Check out a few other suggestions by my fellow financial blogger, Jonathan from Master Your Card, who recently wrote a guest post for us: Five Ways to Make Some Extra Income on the Side.

Related posts:

• Welcome MSN Money Central Smart Spending Readers!
• June 2008 Finance and Frugality Blog Carnivals
• Resisting the Urge to Splurge
• Pecuniarities (Our Fourpence Worth) 1 Year Anniversary
• Under the Weather – Recommended Reading

Merriam-Webster defines the word “vacation” as “a respite or a time of respite from something”. Well, if that “something” from which one is taking a respite is “peace and quiet” then I would have to agree with the definer. Otherwise, gathering from my 2 recent “vacations” (one to Disneyland, one [working] vacation to Las Vegas from which I have just returned), vacation seems more like a respite from peace and quite to me.

Anyhow, I thought I would put together a pre-vacation checklist to help all you other poor vacationers prepare for your vacations, because if there is one thing I have learned, vacations are costly – and I am not just talking about transportation, lodging and amusements, but all the little everyday necessities – and the only way to travel frugally is to travel prepared. Also, the better prepared you are, the better the time you will have on your vacation; knowing that everything back home is taken care of and that you are prepared for most common travel mishaps will allow you to enjoy yourself to the utmost.

And yes, I am the extremest of Type A personalities, but admit it, sometimes it is handy to have someone who has the bases covered. You’ll certainly be glad to have one of us along when the unexpected happens because we’ve planned and prepared for it (or at least have given some thought to it beforehand so as not to be caught by surprise). This isn’t a list of what to pack (toothbrush, underwear, etc.) but rather more of a pre-departure to-do list to help prepare for your trip. I’m not saying you need to do everything suggested, but hopefully a few items will prove helpful or relevant to your circumstances.

Prevention is the best medicine

Just because you are on vacation, it doesn’t mean everyone else is. This goes for utility companies, burglars and your own plumbing and wiring. When you come home from vacation, you want to make sure you still have an intact home to come home to, and aren’t met with a mountain of additional expenses. Therefore before you leave, you might want to try some of the following:

(These checkboxes are check-able, so feel free to come back and use it.)

Home and Business

Travel Arrangements

Better to be Safe than Sorry

You never know what can happen on the road, and when it comes to health and safety, it is infinitely better to be over-prepared than under-prepared. Therefore,

Well, this may not have covered all the bases, as everyone has different situations, but hopefully this list proved helpful in some ways. Bon Voyage!

If you’re traveling with your pet, check out my next post, Guide to Safe and Smart Traveling with Pets,

Related posts:

• Welcome MSN Money Central Smart Spending Readers!
• Interesting Reads from Fellow Personal Finance Bloggers #4
• June 2008 Finance and Frugality Blog Carnivals
• Guide to Safe and Smart Traveling with Pets
• Resources

Credits Cards Really Aren’t So Bad
(Re-Post: Original post date February 14, 2008)

In every online discussion I have seen about credit cards, there are always at least a few contributors whose only comments are “Credit cards are evil” or “No credit card is best”, etc. This post is mostly for those people.

For several years, we also believed that credit cards were bad, having been thus informed by our stepfather, a compulsive spender who is constantly in debt. But over the past few years, we have learned that credit cards are actually a good thing and provide many benefits and advantages:

• Building Credit History
  If you plan on buying a car or house in future, chances are that you will need a loan, and if you have no credit history, it can be difficult to get a good interest rate on a loan. Interest rates make a huge difference in the amount you end up paying or saving. Credit cards, if used responsibly, are a good and easy way to build a good credit history, which can ultimately save you thousands of dollars.

• Tracking spending
  Credit card statements provide an good way to track and analyze your spending habits. By charging all your purchases, you will have a printed statement of where every dollar has gone, a useful too for budgeting.

• Safer than carrying cash
  If you carry a lot of cash and lose your wallet, you can usually assume that money gone forever. If you mostly use your credit card and carry very little cash though, all you have to do is call the credit card company as soon as you discover the loss and you won’t be liable for any unauthorized charges to the card.

• Backup for emergencies
  Credit cards can be a backup source of funds for emergencies when you don’t have cash on hand. Though these should be true emergencies and not things like “fashion emergencies”.

And best of all, the reason we use our credit cards whenever and wherever we can:

• Credit cards can earn you money
  Credit cards can “make” you money in 2 ways:
  • There are many cards out there that earn you cash back or rewards. Some earn you as much as 5% cash back on grocery, drugstore and gas purchases. If you get a card with no annual fee (there are many out there), use it responsibly for regular purchases (not cash advances), and pay your balance in full every month, you can earn money without paying a cent to the credit card company. We have an American Express Blue Cash Credit Card that earned us over $300 cash back last year.
  • In addition to the cash back, credit cards also earn you money by allowing you keep your money in the bank longer. Depending on your billing cycle, you can charge your purchases and bills to a credit card and your money can sit in the bank earning interest for up to 6 more weeks. For example, our propane bill was due on January 30, 2008. Our credit card billing cycle ends on the 28th of each month. If we charge our bill to our credit card on the Jan. 30, 2008, it goes on the new billing cycle which ends on February 28, 2008, and the due date for that billing cycle is in mid-March 2008. So the money for that propane bill that was due and paid on Jan. 30, 2008 won’t actually leave our bank account until 6 weeks later. That’s 6 extra weeks of interest on money that would have left your account immediately had you paid by cash or check.

These are just a few basic reasons we use and approve of credit cards. However, if you know that you won’t be able to control your spending, then perhaps it is better to not go this route. If you need advice on applying for credit cards, visit your bank or credit union and someone can usually recommend a good card for you and help you with the application.

Continue reading for tips on choosing the right card and a few tips for safe and responsible credit card use.

Choosing the right card for you

If you have no or very little credit history, a low income, or a blemish on your credit record, it is possible that you won’t be approved when applying for a credit card. If this is the case, don’t keep attempting to apply for different cards as each denied application will hurt your credit rating and lessen your chances of being approved. Instead, go to your bank or credit union where you have an account and ask to speak to someone who can help you with selecting and applying for a credit card.

You may have to start out with a secured account with a deposit held as collateral and a low credit limit. After a while, perhaps a year, if you have responsibly paid your balances on time each month, your bank will probably upgrade you to an unsecured card with higher credit limit. Make sure you read the terms and conditions of your new card when this happens and check for changes in rates and fees, including annual fees. When Bank of America offered my sister an unsecured card a year after she got her secured card, the card came with an annual fee. There are many cards out there that don’t have annual fees, so why settle for one with an annual fee if you can save that $30 or $100 a year?

Today, there are credit cards for all sorts of people with all sorts of interests and lifestyle. If you travel a lot, you’d be interested in cards that offer travel benefits and discounts and rewards for flights, hotel stays and car rentals. For families and households, cards that offer cash back for household purchases such as utilities, gas, grocery and drugstores can save you a lot of money.

Tips for safe and responsible credit card use

• Never spend money you don’t have. Just because you have a $5,000 credit limit doesn’t mean that you have to use it all. In fact, for best credit practices, try not go over 1/3 of your total credit. Therefore, if you have a $5,000 limit, you should try to keep the balance below $1,600.
• Always pay on time and in full, not just the minimum payment due. If your credit card company has automatic scheduled payments, it may be a good idea to use it. Just make sure your bank account has sufficient funds on the due date.
• If you’re concerned about security and unauthorized charges, sign up for online banking and check your online statement every so often for suspicious activity. (We’ve never had any problems. There was only one incident when someone made a suspicious charge on my card and my bank caught it and contacted me to check if I had authorized it, which I didn’t, so they immediately canceled my card and sent me a new one.)
• Don’t leave your wallet, cards or card information lying around.
• Never send credit card information over email, instant messengers, etc.
• When using a credit (or debit) card online, make sure the site is SSL protected. You can tell by the little lock icon in the browser window – usually around the bottom right-hand corner.

Related reading:
Closing Your Credit Cards Can Hurt Your FICO Score

Related posts:

• Pecuniarities (Our Fourpence Worth) 1 Year Anniversary
• Pay Bills Online and Save
• Closing Your Credit Cards Can Hurt Your FICO Score
• Why I Will Not Change My Mindset, Plus the Difference Between Justifying and Being Optimistic About Spending
• Credits Cards Really Aren’t So Bad

I emailed him back explaining our logic, and while it may be unconventional, for us it is a convention we have practiced with success for many years. Ever since our high school days when our parents would give each of us pocket money for lunch, the bus, pay phones, etc. we have always regarded our money as literally “our money.” When one of us didn’t have any cash and wanted to buy a drink or snack at school, we would just ask the other person for some. And to the shock of many of our friends, we would just give each other the money. We never had a distinction of “my money” and “your money”.

Perhaps this had to do with our always having been somewhat unconventional people, even as kids. While our friends went to the mall, movies or shopping, we preferred to go to the library, karate class, or stay at home and read or play with our pets (we had dogs, cats, 20-30 rabbits, guinea pigs, birds, fish, mice, etc.). So for us, money was never really a means for pleasure but living – taking the bus home from school, buying lunch or an occasional snack or buying pet supplies. Because we didn’t habitually spend money, our parents didn’t put us on allowances and would just give us money when we needed it. (This could explain why we still live on a No-Budget System.)

When we graduated from college and started working, we continued to share a home and a bank account. Perhaps this has to do with our mother passing away when I was 16 and Madoline 14, and having no other close relatives we just naturally stayed together. In the past 6-7 years we have shared a bank account, a family cell phone plan, utilities accounts, a car loan, credit cards, leases on apartments and then a mortgage starting 2005. And we also started 2 business ventures – Franga Designs and Mozartini – and this blog together.

Because we have the same financial goals and past (having witnessed firsthand the imprudence of shopaholism and extreme debt courtesy of our stepfather and biological father), there is no worry that the other person will go on a spending spree. We are so uptight about spending that we always run purchases by the other person and all expenditures are joint decisions.

Another reason we are not worried about the other person messing up our finances is that since we have no other close family, we regard our dogs Ludwig and Wolfgang as our family and we value them to the extent that we will not risk not being able to care for them properly due to lack of money.

Aside from all this, we also recognized other advantages to sharing our bank and credit card accounts:

• Higher Dividends
  Higher savings account balance means higher interest rates and therefore higher interest earnings. At our credit union, the current savings dividend rates are tiered for balances under $999; $1,000-$4,999; $5,000-$9,999; and over $10,000; so it is advantageous to keep our money together to earn higher dividends.
• Higher Cash Back Earnings
  With AMEX, we have to charge $6,500 before getting the 5% and 1.5% cash back rate. We spend quite little so it takes the 2 of us about 6 months just to reach the $6,500, and that is often with the “help” of a very large expenditure like replacing the transmission on our car.
• Higher Credit Scores
  By alternating credit card applications, we have fewer inquiries on our credit reports, meaning higher credit scores. For example, in 2006, we applied for the AMEX card in Madoline’s name because she didn’t have a credit card at that time. In January 2008, we applied for an Amazon Visa in my name because we shop there often for household things and many businesses in our area do not accept AMEX.
• Build 2 Credit Histories At Once
  When either of us gets a new credit card, we add the other on as an additional user and the account also appears on both of our credit histories. This helps to build 2 credit histories at once with every expenditure.
• Saving Money
  We had separate checking accounts for a short time in college, but this sometimes led overdrafts (and in overdraft charges) on one of our accounts, because even though we had enough money between the two of us, splitting our money into 2 accounts and alternately debiting our purchases from 2 checking accounts got confusing. We would sometimes lose track and charge too much on one account. (We did all our grocery shopping together because we lived together and our money was only spent on food, miscellaneous things for school, and our pets.)
• Saving Time
  This goes for credit cards as well as other bills. Having one account between the two of us decreases the number of bills we have to pay each month.

So, yes, it is unconventional, and probably wouldn’t work for most people, but it is also advantageous in many ways. However, we don’t recommend trying this unless it is with someone you can trust 110% and who shares your financial goals, way of life … and, well, life.

Related posts:

• May 2008 Finance and Frugality Blog Carnivals
• Who’s to Blame for Your Spending? You or You?
• Why Credit Unions Instead of Banks
• Prune Your Spending and Watch the Savings Grow
• Monopoly Game Expansion #1: Personal Savings Account

In every online discussion I have seen about credit cards, there are always at least a few contributors whose only comments are “Credit cards are evil” or “No credit card is best”, etc. This post is mostly for those people.

For several years, we also believed that credit cards were bad, having been thus informed by our stepfather, a compulsive spender who is constantly in debt. But over the past few years, we have learned that credit cards are actually a good thing and provide many benefits and advantages:

• Building Credit History
  If you plan on buying a car or house in future, chances are that you will need a loan, and if you have no credit history, it can be difficult to get a good interest rate on a loan. Interest rates make a huge difference in the amount you end up paying or saving. Credit cards, if used responsibly, are a good and easy way to build a good credit history, which can ultimately save you thousands of dollars.

• Tracking spending
  Credit card statements provide an good way to track and analyze your spending habits. By charging all your purchases, you will have a printed statement of where every dollar has gone, a useful too for budgeting.

• Safer than carrying cash
  If you carry a lot of cash and lose your wallet, you can usually assume that money gone forever. If you mostly use your credit card and carry very little cash though, all you have to do is call the credit card company as soon as you discover the loss and you won’t be liable for any unauthorized charges to the card.

• Backup for emergencies
  Credit cards can be a backup source of funds for emergencies when you don’t have cash on hand. Though these should be true emergencies and not things like “fashion emergencies”.

And best of all, the reason we use our credit cards whenever and wherever we can:

• Credit cards can earn you money
  Credit cards can “make” you money in 2 ways:
  • There are many cards out there that earn you cash back or rewards. Some earn you as much as 5% cash back on grocery, drugstore and gas purchases. If you get a card with no annual fee (there are many out there), use it responsibly for regular purchases (not cash advances), and pay your balance in full every month, you can earn money without paying a cent to the credit card company. We have an American Express Blue Cash Credit Card that earned us over $300 cash back last year.
  • In addition to the cash back, credit cards also earn you money by allowing you keep your money in the bank longer. Depending on your billing cycle, you can charge your purchases and bills to a credit card and your money can sit in the bank earning interest for up to 6 more weeks. For example, our propane bill was due on January 30, 2008. Our credit card billing cycle ends on the 28th of each month. If we charge our bill to our credit card on the Jan. 30, 2008, it goes on the new billing cycle which ends on February 28, 2008, and the due date for that billing cycle is in mid-March 2008. So the money for that propane bill that was due and paid on Jan. 30, 2008 won’t actually leave our bank account until 6 weeks later. That’s 6 extra weeks of interest on money that would have left your account immediately had you paid by cash or check.

These are just a few basic reasons we use and approve of credit cards. However, if you know that you won’t be able to control your spending, then perhaps it is better to not go this route. If you need advice on applying for credit cards, visit your bank or credit union and someone can usually recommend a good card for you and help you with the application.

Continue reading for tips on choosing the right card and a few tips for safe and responsible credit card use.

Choosing the right card for you

If you have no or very little credit history, a low income, or a blemish on your credit record, it is possible that you won’t be approved when applying for a credit card. If this is the case, don’t keep attempting to apply for different cards as each denied application will hurt your credit rating and lessen your chances of being approved. Instead, go to your bank or credit union where you have an account and ask to speak to someone who can help you with selecting and applying for a credit card.

You may have to start out with a secured account with a deposit held as collateral and a low credit limit. After a while, perhaps a year, if you have responsibly paid your balances on time each month, your bank will probably upgrade you to an unsecured card with higher credit limit. Make sure you read the terms and conditions of your new card when this happens and check for changes in rates and fees, including annual fees. When Bank of America offered my sister an unsecured card a year after she got her secured card, the card came with an annual fee. There are many cards out there that don’t have annual fees, so why settle for one with an annual fee if you can save that $30 or $100 a year?

Today, there are credit cards for all sorts of people with all sorts of interests and lifestyle. If you travel a lot, you’d be interested in cards that offer travel benefits and discounts and rewards for flights, hotel stays and car rentals. For families and households, cards that offer cash back for household purchases such as utilities, gas, grocery and drugstores can save you a lot of money.

Tips for safe and responsible credit card use

• Never spend money you don’t have. Just because you have a $5,000 credit limit doesn’t mean that you have to use it all. In fact, for best credit practices, try not go over 1/3 of your total credit. Therefore, if you have a $5,000 limit, you should try to keep the balance below $1,600.
• Always pay on time and in full, not just the minimum payment due. If your credit card company has automatic scheduled payments, it may be a good idea to use it. Just make sure your bank account has sufficient funds on the due date.
• If you’re concerned about security and unauthorized charges, sign up for online banking and check your online statement every so often for suspicious activity. (We’ve never had any problems. There was only one incident when someone made a suspicious charge on my card and my bank caught it and contacted me to check if I had authorized it, which I didn’t, so they immediately canceled my card and sent me a new one.)
• Don’t leave your wallet, cards or card information lying around.
• Never send credit card information over email, instant messengers, etc.
• When using a credit (or debit) card online, make sure the site is SSL protected. You can tell by the little lock icon in the browser window – usually around the bottom right-hand corner.

Related posts:

• Pay Bills Online and Save
• Credits Cards Really Aren’t So Bad (Re-Post)
• Closing Your Credit Cards Can Hurt Your FICO Score
• Why I Will Not Change My Mindset, Plus the Difference Between Justifying and Being Optimistic About Spending
• Pay Bills Online and Save (Re-Post)

The topic for this month’s PF Bloggers Group Writing Project, “Poorest Time of Your Life” which was decided about 5 months ago, comes at a somewhat inopportune time. When our group picked out these topics, whoever it was that suggested this topic must have thought that we must all be in a position where the poorest time of our lives were in the past and could serve as an inspirational story of financial achievement.

But with the recent and current economic developments (or should I say, deterioration?) and the rate of inflation, I really can’t say if the poorest times of our lives really are past. At first thought, I just assumed that the poorest time of my life was past, but upon further contemplation, I am beginning to question if NOW might not be the poorest time of my life.

When I sat down to write this essay, I had planned on writing about two brief periods in Madoline’s and my past when were quite poor. They were transition periods in our lives, however, which really didn’t last very long and probably didn’t really count as being poor.

Poor Period 1

The first was right after Madoline graduated from college which coincided with the ending of my first job, which was a 9-month contract position. We had had a falling out with our stepfather who, as trustee of our mother’s estate, was in possession of the income she had left us. For more about this, please refer to our Family Financial History.

While our rent was still being paid by our mother’s money, we had little left from my earnings and were living in a town where employment opportunities were scarce. For about a month, we made a little money here and there teaching piano lessons and singing at weddings of acquaintances, after which we managed to secure 2 out of 5 full-time positions that opened up at a new company in town.

Poor Period 2

The second poor period was after we quit that job and moved to California. We had saved up $10,000 after working 11 months and had also managed (with the help of an attorney) to persuade our stepfather to turn our mother’s income over to us as she had intended. While the monthly income wasn’t a lot, it was enough to pay the rent and some bills on a small place, and we felt the need to leave Hawaii and start afresh.

We spent $800 on 2 one-way airfares; $225 on airfare for our dog, cat and 22 mice ($75 per ticket – the mice counted as “one”); found a place to live for $650/mo. in Hayward, CA; and figured we had enough to cover the movers and sustain us for at least a couple of months while we looked for jobs.

But we underestimated the costs of the move which was based on the weight of items moved. Because we didn’t have a parents’ house where we could leave things, we had to take everything that had meaning to us, such as a an antique desk of our mother’s, our piano and mementos of childhood. We had no idea how much everything weighed and assumed it wouldn’t be more than 1,000 lbs., so we had estimated about $1,200, but when the movers’ invoice arrived in California stating a total of almost $3,500, I knew we were in trouble.

After the initial costs of moving in, buying necessities for our new place, putting a down payment on our car (read about that catastrophe here) we had just about $3,500 left for the movers. Our monthly inheritance income check had been delayed due to mail forwarding, and for a few weeks, we literally had no money in the bank. I have a memory of one night when we rummaged through all our pockets and purses for change. We gathered about $10 with which we then went to the grocery store to buy food.

We began job hunting as soon as we got a car, and took the first jobs offered to us at Togo’s Eatery (a sandwich shop similar to Subway). When we got our first paycheck, around $100, we took it to the bank and deposited it. The clerk told us the balance would be available immediately, so we went grocery shopping and put it on the debit card. We found out later that the clerk had misinformed us and that we had gotten an overdraft because it turned out the balance wasn’t immediately available after all.

But this only lasted a few weeks. Our mother’s income check eventually arrived and continued to arrive each month. After our scare of being poor, we saved like crazy. We continued working at Togo’s for the time being and got hired on to manage a new pizza restaurant that our boss opened a couple of months later.

So things were hairy for a while, but that brief brush with near poverty was an invaluable lesson and catalyst for our desire to live frugally.

Is Now the Poorest Time of Our Lives?

I am beginning to wonder if the present might not be the poorest time of our lives. While we still have money in the bank, I can’t but wonder how long it will last if this recession and rate of inflation keeps up. Our monthly grocery bill is almost double what it used to be (we only have one supermarket within 40 miles, which may mean higher rate of inflation). The cost of propane has increased at least 150% since we moved in 3 years ago. The list goes on. But our total income continues to decrease – both from our business, which was very promising and the reason we bought the house, and our inherited income.

While we are OK for now as far as having money for groceries, the mortgage and bills, I can’t help but worry that we’ll run out in a few months. It is truly scary because this is much more permanent than our previous “poor periods” which were nothing in comparison. We didn’t have mortgages back then. We were living in areas where we could find employment. We are again living in an area where employment opportunities are scarce to none, even when the economy is good. But this time we can’t move because we have a mortgage which we can’t refinance now or sell the house in this current market as our property’s market value has decreased by 40%.

Maybe I’m just being paranoid and worrying for nothing – I usually am. But what if I’m not?

* * *

About the PF Bloggers Group Writing Project

The Personal Finance Bloggers Network currently consists of 7 active personal finance and frugal living blogs. The Group Writing Project is a monthly project wherein each blog will write a post on a pre-determined topic and publish it on the same day of each month. Be sure to visit thePF Bloggers Group Writing Projectpage for the others!

Extended Group Writing Project Invitation

If you are a blogger, we would like to invite you to write your own post on this topic and submit it for listing with our entries on our Group Writing Project pages. Please visit the following page for details on how to participate in our Extended Group Writing Project

Related posts:

• Holidays Should Be Happy: Have a Party-Preparation Party to Reduce Stress
• Sewing: A Frugal and Fulfilling Hobby – Save Money by Sewing Your Own Clothes
• Is “Simple Living” Just Another Term for “Giving Up?”
• Does Thinking About Money Make You a Bad Person?
• Motivating Children to Practice Music (Part 2)

Originally posted 2008-11-19 07:00:01.

A few days ago, I happened on a post at How I Save Money where Lulugal tells how Lent has affected her budget. This got me thinking about how we could all hold a “financial fast” at some time as a test to find out what luxuries we can do without and how much money we can save by doing it.

Objectives of a Financial Fast

• To learn what we can live without
• To test and become aware of the cost of certain habits, activities or actions
• To learn how much money can be saved in your everyday life by cutting back or giving up certain habits
• To appreciate the commodities and conveniences of modern life

How to Hold a Financial Fast

1. Pick a date range

• It doesn’t have to be the actual time of Lent, but any time of year
• If 40 days seems daunting, try starting with a smaller goal – 1 week, 10 days, 2 weeks, etc.

2. Pick your fast

• Something that you do or use on a regular basis that costs money
• A habit or luxury that you might have considered giving up

Some suggestions for abstinence or cut-back:

• Recreational shopping (anything not a necessity) to save money
• Hot food or cooking to conserve energy (if you’ve considered trying the raw food diet, this would be a good time)
• Driving to save gas and money
• Entertainment that costs additional expenditure e.g. going to the movies, renting movies, concerts, etc. If you already pay for cable, then it wouldn’t count as an additional expenditure. That is, unless you’re considering cutting cable altogether, but your cable company might not let you skip for a month without charging you a new rate.
• Text messaging if you have a plan that charges per text message
• Heating or cooling to conserve energy. This would be a good time to work on weather-sealing your home.
• Eating out
• Purchased beverages such as coffee, soft drinks
• Minimizing utility useage to test the difference in your utility bills
  • Appliances – e.g. line-drying clothing
  • Limiting or cutting TV time
  • Taking cold showers if your constitution can take it
• Smoking if you are a smoker and have wondered how much you might save by quitting
• Drinking (same as smoking)

We don’t recommend:

• Skipping showers to save water
• Not flushing the toilet to save water
• Not brushing your teeth to save toothpaste
• Skipping medications to save money
  
• Not washing your clothes to save water and soap

3. Check Your Accounts or Bills

At the end of your fast period, check your credit card bill, bank statements or utilities bills and compare with a previous period to see if your fast has lowered your spending and bills.

4. Repeat, Extend or Try Another Fast

• See if you can go another x number of days without your chosen luxury
• Try a new fast with a different habit or activity
• Repeat your financial fast as often as you like or until you’re fully aware of all your expenditures

Related posts:

• Our Financial Lent: Giving up Chocolate and Ice Cream for a Month to Save $14
• Introducing Pecuniary Associates & Interesting Reads From Fellow Personal Finance Bloggers #17
• Fast & Frugal Recipe: Yakisoba (Japanese Chow Mein)
• Fast & Frugal Recipe: Super Easy Taco Salad
• Is “Simple Living” Just Another Term for “Giving Up?”

Bible Money Matters wrote yesterday on how credit card companies act like they’re your friends when they really just want your money. This is true, of course, but frankly it neither surprises nor bothers me. Credit card companies and banks are businesses – just like your health insurance carrier, supermarket and baby sitter.

The Business of Business

No one starts a business for the purpose of making friends. “Making friends” by providing cheerful service and offering “helpful” advice  is merely a means to an end. When a business advertisement says “Your satisfaction is our #1 priority,” the word “satisfaction” is really a metaphor and euphemism for “money.” Otherwise the business’s existence would be pointless.

So when a credit card company offers you “advice” to put all your purchases on your card to maximize your cash back or rewards earnings, they are in fact helping themselves. We all know that. There is nothing you can do about what they say to try to get you to wrack up a large debt. But just because they hope you’ll do it doesn’t mean that you have to.

Everything you have done and continue to do with regard to your credit card has been, and continues to be, 100% up to you.

• Can the credit card company strong-arm you into swiping your card at every store you see or enter?
• Can the credit card company force you to spend beyond your means?
• Can the credit card company make you not pay your balance in full every month?

A Grain of Salt and a Pinch of Brain

Just remember that any “advice” coming from someone whose goal is to make money from you should be taken with a grain of salt. Example —

Car salesman: That car looks great on you.

But neither do you need to be bitter about their attempt to sway you into debt. Laugh it off. Congratulate yourself on your ability to see through their ruse. Then take that grain of salt, add a pinch of noggin and think about how you can benefit from what they do offer.

(Talking points from Money Matters’ post in green with my added 2 cents in normal color.)

1. Use Your Card Wherever You Go
   Only on the things you need — groceries, gas and necessities.
   
2. Make Chase Rewards Plus Your Favorite Place To Shop
   Treat it as you would the mall. Only go there if you need something in particular. If their prices are competitive and you get 10% cash back, you just might save money. But remember to comparison shop.
   
3. Pay Bills Using Your Card
   This is something I actually do whenever I can. Automatic payments charged to the card means I can keep money in my savings longer, then transfer the total amount to checking when it’s time for the credit card payment. We received $75 in Amazon Gift Certificates last month thanks to the 10x points promotion on bills.
4. Add An Authorized User… At No Extra Cost!
   Madoline and I have been sharing credit card accounts for 5 years now because we share all our money. Together, we were able to earn over $500 in cash back on our on our AMEX Blue Cash Credit Card in the last 2 years, something we couldn’t have done with separate accounts because of the $6,500 threshold for the higher cash back percentage. Read more about how we Maximize Cash Back and Interest Earnings by sharing accounts.
5. Feel Secure With Your Upgraded Benefits
   We usually choose our cards for the cash back or other rewards and not for the added benefits. But we actually have saved money by using the rental car insurance from AMEX, and if you think about it, some identity protection, however narrow the policy, is better than none.

Now, I’m not saying everyone should use credit cards. They have their pros and cons. They work for some people but not others. If/when you apply for and use credit cards, be aware of the risks and take responsibility for them and for your actions. If you get ripped off by fine print you didn’t read, you’re not entirely blameless because you could have canceled the card immediately upon receiving and reading the terms. Yes, credit card companies are tricky, but so are many other businesses.

You Control Your Spending, Not the Other Way Around

Psychology aside and whether or not credit cards cause higher spending, it all still boils down to one thing: choice.

• Whether or not you are paying by cash or credit, you are still making an active, conscious choice to spend.
• You are the one in control of how much you spend.
• If you are in control, you can choose not to spend.

If you can’t control your impulse to spend, then you should cut up your credit card and keep your cash in a time-lock vault that releases set amounts of money at set times like those automatic pet feeders that release one compartment of food at a time when pet owners work late or go out of town.

Related posts:

• Introducing Pecuniary Associates & Interesting Reads From Fellow Personal Finance Bloggers #17
• Interesting Reads From Fellow Personal Finance Bloggers #12
• Finance and Frugality Blog Carnivals: Week of Unexpected Delays
• Car Trouble: Watch Out for Those Pesky Wabbits
• March 2008 Finance and Frugality Blog Carnivals

I am also hosting the Money Hacks Carnival tomorrow, so be sure and check back for more great reads! If this is your first time here, please look around and consider subscribing to our RSS feed.

Now on with the carnival!

(AP Photo/Mark J. Terrill)

Editor’s Picks

• Silicon Valley Blogger presents Lost Money: How Money Drains Add Up To $175,000 In 10 Years.
• MoneyNing presents Frugally and Happily Back to School 9 Different Ways.
• Kevin Brink presents “Sale” Can Sometimes be Just Another Four Letter Word.
• ISPF presents 10 Tips to Get Anyone into the Habit of Cooking at Home (Even if You Have Never Stepped into the Kitchen Before).
• Savingadvice presents Reached Financial Independence. Now What?

The Frugal Lifestyle

• David presents 25 Frugal Ways To Reuse Everyday Household Items.
• Kate presents Time Well Spent.
• HowToMe presents How To Make a Washing Stick to Pamper Ones’ Hands.
• RC presents Making the Conscious Choice to Get By With Less.
• Anna presents Not by Bread Alone.
• Kacie presents Frivolous or frugal to outsource tasks?

(AP Photo/Itsuo Inouye)

Frugal Family Activities

• Joanne presents Make Stuff Your Kids Can Play With.
• K presents Five Frugal Toys Using Food.
• Aryn presents 10 Frugal Anniversary Ideas (That Are Also Romantic).
• Ryan Suenaga presents Frugal, Fun, and Healthy: Five Outdoor Activities.
• DJ presents Camping on a Dime.
• Faron Benoit presents 10 Cheap Date Night Ideas.

Saving on Food: Groceries, Cooking & Dining

• Tiffanie presents 13 tips on how to maximize grocery shopping.
• FIRE Getters presents Top 5 Ways To Trim Our Grocery Bills!
• Jamie McIntosh presents Save Money With Organic Produce.
• Grey presents 5 Breakfast Ideas for Brown Rice.
• Todd presents Save 20% On Restaurant Meals.
• Adam Berry presents The Frugal Approach to Cooking.
• Megan presents Saving the Economy by Dieting?

(AP Photo/Mark Baker)

Shopping Tips: Sales and Coupons

• Karen presents Does a tax holiday really equal savings?
• Erin Gifford presents 5 Ways to Save Money While Shopping Online.
• Briana presents Surviving the Checkout Lane with your coupons is a breeze if you arm yourself with knowledge.
• Amy Hobbs presents Coupon Myths Debunked.
• Lisa Spinelli presents Six Money Saving Websites With Ongoing Big Fat Deals.

Spending and Budgeting

• Emily Starbuck Gerson presents Young British couple has ‘credit crunch wedding.’
• Rich Leverage presents How to Avoid Nickel and Diming Your Way to the Poorhouse.
• KCLau presents How a medium family can retire comfortably (Real Life Case Study).

(AP Photo/Mark J. Terrill)

Back to School Saving Tips

• Kris presents If I Had Known Then: Food and Financial Advice for the College-Bound (Also, a Story).
• Tom Tessin presents Shopping Tips for College Students.
• Madison presents Back to School Savings Challenge.
• Ben presents College Dorm Room Decor Ideas – How to Decorate Your Dorm on a Budget.
• squawkfox presents Printable Dorm Room Essentials Checklist.

Saving on Transportation

• Jim presents 547 Ways to be Fuel Smart by Roger Albright.
• Steve Faber presents Top 12 Cars With the Best Gas Mileage That are Actually Fun to Drive.
• Steward presents Bike Commuting Is Tough on the Tush.
• Curt presents How to Minimize Your Automobile Total Cost of Ownership.
• Penny Nickel presents The true costs of driving– how much could you save on transportation?
• Pamela Grundy presents Unbelievable Car Rental Deal! Thanks Alamo!

(AP Photo/Mark J. Terrill)

Personal Financial Journeys (Stories)

• Amanda Milne presents You Can Have Frugality and Quality of Life.
• NtJS presents What Is: The Smartest Advice You Ever Got – Mrs. NtJS’s Turn.
• The Happy Rock presents The little things…starting to trim the budget.
• APFB presents A Lifelong Money Lesson.

Miscellaneous Savings Tips

• J. Savings presents Avoid Overdraft Fees by Tying your Checking to your C/C.
• Chief Family Officer presents Money Saving Tip: Check the address for recurrent online payments.
• Amy presents 13 Uses for Vinegar.
• Shaula presents Finding Free WiFi.
• Livingalmostlarge presents Frugal Tip – Use CC to buy Gas.
• Randy presents 12 Free and Fantastic Windows Applications.
• Abby Freedman presents How to get something for nothing.
• Joseph presents Saving Money At Garage And Yard Sales.

(AP Photo/David J. Phillip)

Other

• Michael Geoffrey presents What Do You Believe About Money?
• Dorian Wales presents How to Invest Wisely In a Bear Market?
• Sandy Naidu presents Emergency Fund Savings – Emergency Fund Tips.
• Nina Smith presents Five Things Not Worth Repairing.
• Kevin presents Should You Invest in Visa? A 5 Month Update.
• Michael Cintolo presents In sickness and health (insurance).
• VH presents Is the Layoff Boom about to Fall?

(AP Photo)

That concludes this edition. Submit your blog article to the next edition of Festival of Frugality using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Related posts:

• Festival of Frugality #152: Affected by Recession Edition
• Festival of Frugality #140: The Frugal Quotes Edition
• Recent Blog Carnivals (February 2009)
• May 2008 Finance and Frugality Blog Carnivals
• August 2008 Finance and Frugality Blog Carnivals

I came across an interesting article on MSN Money last night titled Does money make you mean? which described a study conducted on a group of subjects who had been preconditioned to have money on their minds when various experiments were conducted. The study found that those with money on their minds tended to be more indifferent and less helpful toward others, preferring to do things on their own and waiting longer to ask for help when help was needed.

The Study

The “money primed” group was preconditioned by doing puzzles with money-related words, reading essays containing references to money, being shown posters of money and given play money and tokens to handle. This group was then combined with the control group (not preconditioned to think about money) in several staged situations. In one test, the group was assigned to complete a puzzle and told that help was available if asked for. Money-minded subjects waited longer to ask for help than the control subjects did. In another situation, a passer-by “accidentally” spilled a box of pencils on the floor and the test subjects were asked to help; those who had been “money primed” picked up fewer pencils. When asked to donate to a university student fund, “money primed” subjects gave less.

The researchers concluded that the money-minded subjects weren’t consciously being rude or selfish, but were simply indifferent, as if they didn’t know how to help out or couldn’t see themselves as having a role in someone else’s life.

This Sounds A Lot Like Me

When I read this, my first thought was that this sounded a lot like Madoline and me. Ever since moving to California and needing to live frugally, we have become very independent and tried to be as self-sufficient as possible. When something in our house breaks, we always try to fix it ourselves. When we find that we can’t do it on our own, we usually procrastinate a while before finally calling someone in to fix it. This is, of course, due to the fact that we are money-conscious and try to save whenever we possibly can. While we do not dislike being around other people, we also don’t actively seek to get involved socially.

At this time in our lives, most or all of our behavior is influenced by money. We do not have close family or friends whom we could go to for help if we needed it (because we have moved so much, we have lost touch with childhood friends and most of our classmates now live all over the world and have their own families). Because we don’t feel as if we can rely on people, money is the only thing that can guarantee our health and security.

Money Can Buy Happiness

My second thought after reading about this study was that this is natural survivalist behavior. In this day and age, one simply cannot survive without money. True, money can’t buy “Happiness” bottled and ready to go. But, money buys food, pays the mortgage and doctor’s bills. Money makes sure that our pets, who are our family, are well fed and taken care of. Money is what will keep us healthy and comfortable throughout our lives. And health and comfort play a big part in one’s happiness.

So, at this time, I’m afraid we are just as the research finds – indifferent and unhelpful (with the exception of this blog, hopefully) – not out of hate for others, but out of necessity to ensure our own future survival. As many others do, we dream of one day being financially free. We hope to one day be able to give to causes we believe in and even start charitable organizations of our own. But in order to be able to help others, we have to be able to help ourselves first.

Recommended reading: Does money make you mean?

Related posts:

• August 2008 Finance and Frugality Blog Carnivals
• It Saves to Be Nice Part 2: How to Be a Nice Customer
• Put Your Brain Where Your Money Is: Think to Save
• Blog Action Day: Poverty. Awareness is the First Step: The Next Time You …
• Dear Taxpayer: Good News! Your Property Tax Has Decreased … P.S. So Has Your Property Value

Every Little Bit Adds Up

First I will remind you, as I mentioned in my first official post “,” that every little bit adds up and makes difference in the long run. While one small action seems insignificant in the long scheme of things, if frequently repeated, it will have a long-term impact whether good or bad.

I will use smoking as an example: smoking a single cigarette may not harm you, but smoking cigarettes on a regular basis over the course of many years will significantly impact your health (even if not visible to the eye, there is a consequence.) Likewise, all things we do, no matter how small, will have a consequence of some sort. So now to my point.

As I said above, staying home is one of the best and easiest ways to save money. And again, as mentioned above, this is not about going out for special activities, but rather everyday activities and the importance of consolidating errands and activities because every single time you leave your house, whether or not you physically “spend” money, you are in fact spending money. I will start with the most obvious.

Driving is More than Gas

When you drive, you’re spending more than the cost of gas by putting wear and tear on your car. The IRS (for our foreign readers, this is the Internal Revenue Service, the United States government’s department of taxation) has determined a mileage allowance rate of 48.5¢ per mile for business purposes for the 2007 tax year. While tax-wise, this allowance only applies to business owners who use their vehicles in the course of business, it takes into account the cost of gas, wear and tear and maintenance on the vehicle. So a simple 1-mile one way trip (2-mile round trip) to the store has a cost value of $0.97.

Cost Begins with Use

There are many other ways you spend money by going out. These are in the number of things we need and use in order to go out. Everything costs money; just because you’ve already paid for something doesn’t mean that it is now “free” or “without cost.” A good example of this concept is, once again, the IRS. When a business purchases inventory or supplies, it cannot deduct the cost of those items until after those items have been sold or used.

For example, a business owner purchases a case of paper clips in May 2006. He only uses half the case of paper clips by the end of his tax year in December 2006. When he files his 2006 taxes, he can only deduct the cost of the half case of paper clips that he used in 2006. Only after he has used up the 2nd half of his case of paper clips in 2007 can he deduct the cost of those clips. This is an example of the theory that actual expenditure does not end with the purchase of an item, but with the use of it.

Being Presentable

Every time you go out, you must put on clothing that are presentable in public. These clothes are often nicer and more valuable than your regular home clothes. Though it is not always immediately visible, each time you wear your nice clothes, they get some … well … wear. That’s why they call it “wearing” clothes, is it not? Each wearing decreases the value and shortens the life of the garment, taking you that much closer to having to buy (or make) a replacement. This especially includes shoes, which suffer the most wear and tear.

After you wear your clothes, they will need to be washed. Not only does washing cause additional wear on the clothes, but it is accompanied by further expenditures in water use, detergent, and for many, electricity or gas for drying, anti-static dryer sheets, fabric softeners, etc.

Being presentable also often entails use of cosmetics (for women) and hair products – hair spray, mousse, gel, etc (men and women). For women who use make-up before going out, there is the cost of the make-up and all the other products used along with the make-up (toners, lotions, etc.). Every time you use these things, you are in theory, spending or “using” money.

Time is Money

It may be trite, but it is true, especially if you are self-employed or simply make a little extra money blogging. Think of the time spent in traffic or standing in line at the store for the purpose of buying a few items. You could have done some work or written an article that could potentially make money.

Unexpected Expenditures

Oftentimes when we go out for one purpose, we are often sidetracked and end up at originally unplanned places (perhaps attracted by a “ONE DAY SALE” sign at a favorite store) and making unplanned purchases (“Buy One Get One Free” even though you hadn’t even planned on buying One at all). It is true that had you never gone out that day, you might have missed out on a great bargain, but had you not ventured out of doors at all, you would be none-the-wiser and the richer for it. If you go out 3 times a week as opposed to once a week, the possibility (and probability) of unplanned expenditures is multiplied by 3.

I am not saying that you should never go out and starve to death when you run out of groceries. The point I hope I have made is that every outing costs money and that one of the easiest ways to save money is by consolidating all your errands into one outing. This requires some planning and organizing, but is by no means difficult. Following are a few tips to get you started.

Tips for Saving Time and Money by Consolidating

• Groceries
  It is not necessary to shop for groceries every few days or even every week. Try to cut back to every 2-3 weeks, or even better, once a month. This requires some planning and adjustment to get the quantities right, but can save you a lot of time and money. (Check back soon for tips on shopping for groceries once a month.)
• Banking
  Yes, the sooner you deposit that paycheck in the bank, the sooner you begin earning interest. But, if the cost of making a special run to the bank (driving & time) exceeds the amount of interest you will earn, might it not be better to wait a few days until you have more reasons for going out?
• Post Office
  Save trips to the post office by keeping some stamps on hand. I like the Forever stamps that can still be used when postage rates go up. Consider using online shipping for mailing parcels. (Check back soon for information on how you can save time and money by using online shipping options.) Also, refer to my article “” and learn how you can possibly save $60 a year by not mailing your bills.
• Returning Library Books
  If you have a library book due on a day when you don’t have any other errands scheduled, you can renew the book by calling the library or logging onto the library website, and delay the trip to the library until you have another reason to go out.
• Shop Online
  Consider buying more online (from reputable and established businesses, of course). Online prices are often lower than in-store prices even including shipping, so you save time, money, and gas.

Again, it can take time and planning to get used to this idea, but you will soon begin to see how much money and time you save by waiting a few days to take care of all your business at once. This does not mean you should become a hermit and never leave the house. It is important to still go out for practical and social reasons (and work), but hopefully you will now be more aware of the cost behind every activity and therefore be even more successful in your frugal lifestyle.

Related posts:

• Thank you!
• Save Money, Make Money 30-Day Challenge @ iVillage
• Finance and Frugality Blog Carnivals: Week of Unexpected Delays
• Make Your January 1, 2009 Home Mortgage Payment Today to Cut Your 2008 Taxes
• Basics for the Young, Single and Frugal

When our A/C went out two Sundays ago, my first reaction was panic. We live in the desert where we have been experiencing triple digit temperatures and we have esteemed air conditioning as one of the dire necessities of life. So when our central air went out last weekend, my first thought was that we had to call the repair people first thing Monday morning and get it fixed ASAP to avoid extreme suffering.

By Sunday night, however, I began singing a different tune. Yes, it was hotter than h*** as we had a high of 104 that day and sweated a lot more than we would have liked. But the point was that we had survived it, and without any real harm to ourselves except for discomfort. I started fantasizing of the money that could be saved by going the rest of the summer without it.

I’ve also been thinking of how often we forget what we really could live without. We grew up in Hawaii where the average middle-class home doesn’t have air conditioning and many don’t even have insulation. I have memories of hot, humid summers when the entire house was unbearably hot and sweating was a normal part of life. In the winters (and trust me, it does get cold there) I would go to bed wearing at least 2 layers (one of which was sweatshirt and sweatpants), socks and occasionally a cap, under 3 layers of blankets.

But since moving to California in 2003, A/C has become a regular and expected part of life, and we got so used to the luxury that we would turn it on as soon as we felt hot. Of course, being the tropical beasts that we are, 82°-83° keep us sufficiently cool and happy.

So, while it has still been hot (we’ve still had highs in the 100°s), it has been begun getting a little cooler, so we have decided to postpone the A/C repair in the interest of saving and as a matter of discipline. We consider ourselves lucky that our A/C graciously waited until the latter part of summer to go on vacation.

Over this past week, we have learned a few things about how to keep cool without the A/C, but most importantly, that we have been overusing it by not taking advantage of cooler nighttime temperatures. In the past couple of months, we have sometimes kept the A/C on auto 24/7. Even though we set the thermostat around 82°-83°, the A/C still came on at night when outside temperatures were lower because the house was hot from being closed up. So here are a few tips for lowering and saving money on air conditioning use.

Tips for Going Without and/or Saving on Air Conditioning

• Turn on fans to keep the air circulating.
• Set ceiling fans to turn clockwise (counter-clockwise looking toward it).
• Keep curtains or blinds closed during the day.
• Use light colored curtains to deflect heat.
• Keep windows and doors closed tightly to keep the house cool.
• If there is a breeze or if outside air feels cooler than inside, open the window bringing in the cooler.
• Keep sunny windows closed if there is no breeze.
• In late afternoon, as soon as outside temperatures feel lower than inside temperatures, open all windows and doors.
• In the evening, when it’s cool outdoors but still hot indoors, place fans in front of open windows to draw in the cool air.
• Keep as many windows as possible open during night to take advantage of the cool night air to lower inside temperatures.
• In the morning, close windows as soon as the outside air begins feeling warmer than inside air.
• Limit strenuous physical activity until evening.
• Drink lots of cold water.
• When hot, use a water spritzer to spray yourself. The evaporating water will make you feel cool. (For fun, you can also spritz the water upwards and feel it fall down on you. The coldness can be quite shocking.)
• Tie a wet bandanna around your neck (this is something I do for my dog to prevent overheating and heatstroke during the summer).
• if you work for yourself and set your own schedule, you could take advantage of cooler temperatures to get work done at night as you might enjoy more clarity of mind and get more done without the heat.

What I’ve Learned From My Air Conditioning Breaking

• I’ve been spoiled by having A/C these past few years.
• A/C is a luxury.
• A little deprivation is good for you because it makes you appreciate the most basic things in life such as a cold drink and the slightest breeze.
• A warm breeze is better than none.
• Sweating may be unpleasant but it doesn’t hurt you (it may even be good for you).

Does this mean we’re just going to go indefinitely without our air conditioning? No, of course not, because we will be needing it when next summer rolls around and we start getting 105°-112° temperatures again. We are human after all, and as we work at home, we do need to be able to have a certain degree of comfort in order to fully concentrate and function at full capacity in our work.

On a similar note, our heater also went out last winter and we spent most of the winter without it. Outside temperatures were often in the 20s and 30s, and inside was in the 50s and low 60s. It was also uncomfortable, but we came through none the worse (well, maybe a little fatter because we might have eaten more to stay warm).

We will be getting both the A/C and heater repaired some time this fall, but now we that we’ve been reminded of our ability to do without, we will hopefully start to see lower electric and gas bills in the months and years to come.

Related posts:

• Interesting Reads from Fellow Personal Finance Bloggers #9
• No-Air Conditioning Summer Part 2 – How We Stayed Cool Without A/C
• Introducing Pecuniary Associates & Interesting Reads From Fellow Personal Finance Bloggers #17
• Basics for the Young, Single and Frugal
• No-Air Conditioning Summer Part 1 – How It Started: No-Heat Winters

Originally posted 2008-09-16 10:00:44.

But this morning, I went to the Charter site for an entirely different purpose: checking out the options on one of the most un-frugal things there are – cable TV. I know I shouldn’t be doing that because nobody really needs cable, but I recently got hooked on a few shows that I’ve discovered on Hulu (House M.D., The Office and Battlestar Galactica) and am itching to see the re-runs of all the past seasons I’ve missed. Of course, I was just looking, with no intention to buy because when it comes down to it, it really is a terrible waste of money. But anyways, when I clicked on Add/Upgrade Services, I saw that there were 3 High Speed Internet promotional plans available to my area – $19.99, $24.99, and $44.99 a month. I decided to get on customer service chat for some clarification on the plans available to my area, and 20 minutes later I had saved $180.

The plan was this: I could get on the 10 Meg High Speed plan (upgrade) at $24.99 a month for a promotional period of 6 months. There are no contracts so if I happen to have to move (which is a possibility but hopefully not – knock on wood), and there are no fees for upgrading or downgrading so I can just re-downgrade to the 5 Meg service at the end of the promotional period. While it’s not a permanent fix, it’s at least a 6-month fix, and one that’ll save us $30 a month which comes out to a total $180.

All I have to do is remember to contact them again in November and have them downgrade us to our original plan. Or maybe if we’re really lucky they’ll have another promotion for us then! So, if you think you might be paying too much for a service – any service – phone, cable, internet, insurance – do a little research and/or call your service provider (Further reading: Insurance Matters: The Cost of Complacency.) Companies are always running promotions to bring in new customers or keep old ones, so chances are probably good that you’ll be able to save somewhere. Even if it’s just a few dollars for a few months, it’ll add up.

If you are going to contact your service provider, here are a few tips for getting the best results:

Tips for Receiving Better Customer Service

Obviously, these are tips for when you have engaged a live customer service representative after bypassing the robots. In the interest of readability, I may sometimes use the impersonal pronoun “they” instead of typing out “he/she”. I know it is grammatically incorrect, but “he/she”, “him/her”, “his/her” can get old.

• Firstly, try to avoid dealing with customer service when you are: hungry, thirsty, tired or sleepy as these states can cause you to be less focused and coherent, and possibly cranky.
• Also, allow yourself plenty of time. If you try to squeeze a call into a short amount of time (i.e. while standing in line at the post office, the last 10 minutes of your lunch break, etc.) it is likely that you will not get the best out of your call. You will be in a hurry to get off the phone (or computer) and might lose out on an otherwise better option, or be impatient and lose your temper and making your customer service agent less willing to help you. Give yourself at least 20-30 minutes and try to make the call in a quiet place where you are least likely to be interrupted or bothered.
• Use Live Chat customer service whenever available for the following reasons:
  • It is easier to keep details straight when you can see them in front of you.
  • It is also easier if you are dealing with customer service that might be outsourced to another country, or even a customer service rep located in the U.S. but who has an accent or regional dialect that might be difficult to understand.
  • At the end of the chat, do a select all (ctrl+a), copy (ctrl+c) and paste (ctrl+v) the text from your entire chat session onto a word document file for later reference.
  • Make sure you note the customer service rep’s name or ID number, the date and time of your chat session. This might make it a little easier if you need additional customer service later one and you and refer to the session.
• Greet your customer service representative. A simple “hello” (and maybe even a “how are you”) will start the conversation or chat off on a friendly note.
• Remember that you are speaking to a real person who will respond to the way you speak to him/her. If you are nice, chances are they will be nice in return. If you’re not nice, chances are they will be too. Having worked in customer service, I know this for a fact.
• If using internet chat, try to use proper spelling, capitalization, grammar and punctuation. It may take a few seconds longer, but it will make your messages easier to read, which is important for both courtesy, accuracy and professionalism. Yes, even if you’re the customer, professionalism on your part will help them to take you seriously and encourage them to serve you better.
• Do a little prior research about the company’s current plans and promotions. If anyone you know has received a promotional deal from the same company, mention it to them and ask if you can also receive the same promotion or something similar.
• If you are looking for a plan that costs the lowest, be sure to mention it to them. They might sometimes only offer you a plan or package that sells you more service than you need. If you only want one specific service, be sure to mention it to them.
• When offered a promotion, make sure you get all the facts. Don’t just ask them if there is anything else you need to know, but rather ask them to clarify each point for you:
  • Are there any additional fees for switching plans permanently or temporarily (if you’ll be switching back at the end of a promotional period)?
  • Are there any contracts or obligations and for how long?
  • Is there an early cancellation fee? (In case you are dissatisfied with the new service, if you have to move etc.)
  • Are there any service limits different from your current plan?
• At the end of the conversation thank them for their help, say goodbye and even wish them a nice day. This ensures that both of you leave the conversation on a positive note which could affect the next time you deal with this company. Even if you never deal with the same rep again, if every customer was polite to every customer service rep, then customer service in general might be a lot more pleasant.
• Remember to make a note on your calender if you are receiving an offer that requires cancellation or downgrade at the end of a promotional period. If you use Google Calendar, Mozilla Sunbird or Microsoft Outlook, get on your calendar as soon as you get off the phone or chat and set yourself a reminder to alert you a few days before the end of the promotional period. Canceling on time (instead of canceling and re-switching after you have been permanently enrolled or charged for the new plan) will save you a lot of headache, time and money.

Now go and save yourself some money.

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Related posts:

• It Saves to Be Nice Part 2: How to Be a Nice Customer
• May 2008 Finance and Frugality Blog Carnivals
• It Saves to Be Nice Part 1: It’s Business But It’s Also Personal
• Simple Solutions to Staying Out of Debt
• It Saves to Be Nice Part 3: How Being Nice Pays Off

Originally posted 2008-05-06 16:00:29.

Just a reminder for our American readers that new and increased USPS (United States Postal Service) postage rates take effect this coming Monday May 12th, 2008. If you are planning to ship any packages via USPS, now is the time to do so – today Friday May 9th or tomorrow Saturday May 10th – especially if you will be shipping a lot of items.

Below is a quick overview and reference for the various shipping options taken from a prior article I wrote back in February, Save by Knowing Your Shipping & Mailing Options, but with added info and updated rates that will take effect May 12th. (If you are new to this blog, be sure to check out the above referenced post for tips on how to save on shipping and why you should be aware of your shipping options rather than relying solely on postal clerks to advise you.)

A few items of note:

• Express Mail is switching to a zone-based system with lower rates for closer destinations, so the new rates for some weights and destinations may be lower than current rates.
• Printing postage online can save you time and money; Priority Mail postage printed online can save you about 3.5% and Express Mail 3%.
• Purchase your Forever Stamps before Monday if you do a lot of mailing to save one cent per stamp. However, if you don’t do all that much mailing – i.e. by paying all your bills online (we’ve only used about half of a 20-pack I purchased last May) – it might be wiser to not stock up on a lot of stamps if you have a tendency to misplace them.

USPS Package Shipping Options

• First-Class Mail
  • Time: 2-5 business days
  • Cost: Starts at $1.17 for 1 oz. up to $3.21 for 13 oz.
  • Description: This is a good option for small and light-weight items including a single book or DVD with a total weight (envelope + item) up to 7 oz. as it would only cost you $2.19 as opposed to the 1 lb. Media Mail Rate of $2.23, and is faster than Media Mail. Using a padded envelope is highly recommended to prevent damage to the book or DVD.
• Media Mail (Book Rate)
  • Time: 2-9 business days
  • Cost: Starts at $2.23 for 1 lb. up to $26.38 for 70 lbs.
  • Description: Can be used for “books, film, manuscripts, printed music, printed test materials, sound recordings, play scripts, printed educational charts, loose-leaf pages and binders consisting of medical information, videotapes, and computer-recorded media like CDs and diskettes”, but cannot contain advertising.
• Parcel Post*
  • Time: 2-9 business days
  • Cost: Starts at $4.55 for 1 lb. and increases with weight and distance (zones)
  • Description: Can be used for general shipments of gifts, merchandise, etc. You will need to use your own packaging (free Priority and Express Mail boxes cannot be used for Parcel Post).
• Priority Mail*
  • Time: 2-3 business days
  • Cost: Starts at $4.80 for 1 lb. and increases with weight and distance (zone)
  • Description: Can be used for general shipments of gifts, merchandise, etc. You can also mail small, non-fragile parcels that will fit in the Flat Rate Envelope for $4.80 regardless of weight. While the 2-3 days estimated delivery time isn’t guaranteed, in my experience, Priority Mail is almost as fast as Express Mail. A package from California to most destinations is 3 business days, but some packages to New York City have been delivered in as quickly as 2 business days, delivery to Texas is almost always 2 days. Occasionally a package to destinations such as Georgia may take 4 days, and only one package in the past 3 years took 1 week.
• Express Mail*
  • Time: 1-2 business days
  • Cost: Starts at $12.50 for 1/2 lb. and increased with weight and distance (zone)
  • Description: Guaranteed on-time delivery by USPS. If your package isn’t delivered by the guaranteed date and time, you are entitled to a refund of the postage you paid. Also includes up to $100 of insurance against loss or damage. I only suggest using Express Mail if the delivery date is of vital importance. Otherwise, I have found Priority Mail to be almost as fast and much less expensive. If you live in more outlying and remote areas, Express Mail usually takes 2 business days.

*Zone-based. Go to http://postcalc.usps.gov/Zonecharts/ and enter in your zip code to get a Postal Zone Chart based on your zip code.

A Note About the Priority Mail Flat Rate Box

USPS is always trying to promote the Priority Mail flat rate box and telling us how much time and money we can save by using it. In my opinion: Time – possibly. But money – not necessarily (again, refer to this article). Be sure you check the full rate chart and compare the actual cost of mailing your package via regular Priority Mail if you are really interested in saving money.

For example, you can still mail a 12 lb. regular Priority Mail package to a local zip code for $9.75. You can mail a 4 lb. package to a zone 3 zip code for $7.85. So spend a couple of minutes checking the actual regular rate before packing up the Flat Rate Box and you could save a few dollars.

In order to figure out the rates, go to:

1. Postal Zone Charts and figure out what zone your recipient’s zip code is in
2. Prices and Fees and see what the rate for regular Priority Mail (or even Parcel Post) is

The rates for the Flat Rate Priority Mail Boxes are as follows:

• $9.80 for regular size (11″ X 8.5″ X 5.5″)
• $12.95 for large box (12” x 12” x 5-1/2”)

More info:
New Prices Coming May 12, 2008
International Shipping Rates

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Related posts:

• Save by Knowing Your Shipping & Mailing Options
• Our Favorite Sources for Affordable Fabrics
• Beware of Fake IRS (Internal Revenue Service) Phishing Email Scams
• Frugal Travel Begins Before the Trip: Vacation Preparation Checklist
• Giveaway: TurboTax Premier Online (Free Federal, State Preparation & e-File – $85 value) to 2 Winners

Originally posted 2008-05-09 05:32:27.

I received the following comment today from a reader about my earlier post Simple Solutions to Staying Out of Debt:

“All good advice – sadly, it is harder than it sounds. But then again, the more you make the more you can spend, so figuring out how to live within your means is a lesson we should all learn at an early age!”

Yes, it is harder than it sounds; almost everything is. But what it all boils down to is common sense, self-discipline and keeping your priorities in mind. It is true that it would be ideal to learn such lessons at an early age, but there is no reason why an adult can’t learn to control his spending and live within his means if he truly wants to.

Don’t get me wrong. I am human and I know how hard it can be to resist spending on things you want. For example, here is just a snippet of some of the things I have been coveting for a long time – some for years.

• A laptop computer
• My favorite TV shows on DVD (Friends, X-Files and many more)
• Subscription to cable (which we haven’t had since 2001)
• A cushy armchair for reading in my bedroom
• The complete British and French editions of the Harry Potter books (I collect foreign editions of Harry Potter books)

These are just a few of the things that cross my mind at the moment, but I know there are more. Over the years, I have been tempted more than once to buy some or all of these things, but I know the danger of giving in to the urge to splurge, because spending or getting what you want is addictive. Oftentimes, when you get one thing, you want or need to get more things to go with it.

I know it’s annoying to hear these words because they’re so “self-help-ish” (I myself can’t stand self-helpers and trite inspirational “don’t underestimate the power of the mind” stuff), but -

The tools for fighting the urge to spend are:

• Recognizing your priorities
• Rational thinking (not rationalizing)
• Self-discipline/self-control
• Will power
• Rewarding yourself

Recognizing Your Priorities

For most of us, our main goal is simply to “save money” or “save as much money as possible,” and that works well enough. But maybe for some of us, that goal simply isn’t enough. If you have a strong penchant for spending, you may need more clearcut reasons than “to save money” in order to curb your spending. So you will need to contemplate the following question.

Why do you want or need to save money?

Is it …

• To save for a down payment on a house of your own?
• To save for a replacement car?
• To save for marriage and a family?
• To save for a personal or family emergency?
• To stay out of debt?
• To get out of debt?
• To achieve financial freedom?
• To make sure your loved ones are provided for?
• To make sure you have enough to live on should you lose your job?
• To be able to retire when you want or need to?
• To make sure you have enough to last through your retirement?

Knowing and reminding yourself of your priorities at all times will help make achieving your goals easier.

Rational Thinking

Rational thought is necessary in order to succeed at anything including spending and saving money. When tempted to spend on something you don’t need or can’t really afford -

Try to look at the item in question with objectivity (without emotion) and ask yourself the following questions (The “it” in the following questions can apply to any kind of expenditure. Buying a tangible item, a service, eating out, etc.):

• Do you really need it?
• If yes, why do you need it?
• Are your reasons for needing it valid?
• Can you really afford it?
• What do you already have that can be used instead?
• What will its value be 6 months down the road? 1 year? 5 years?
• If it is a tangible item will you still be using it?
• If it is an intangible or transient item, is it really worth spending money on it that you would otherwise never see again?

Also consider:

• The potential value of the money saved from not spending it and saving or investing it. Use the savings calculator on Prune Your Spending and Watch the Savings Grow to see how much a little money saved over time can become.
• If you really think you have enough money saved for your future or financial goals.

Self-Discipline/Self-Control

No one likes hearing about discipline. It implies strictness, lack of freedom, and unpleasant tasks. But without self-discipline, one can never achieve success or financial freedom. So when confronted with a tempting expenditure:

• Plan A: Walk Away
  The best way to exercise your self-discipline when confronted with temptation is to simply walk away – or close the browser window (and clear your browsing history and cache to make it harder to accidentally happen on it again.)
• Plan B: If you can’t walk away, then wait.
  If you have a hard time walking away from the temptation, then at least wait. Convince yourself that you are not flat-out denying yourself what you want, but rather waiting for a sale or a price reduction. You will often find that by the time the price has decreased, so has your desire for the item.

  If it turns out you do still want the item, at least you will be spending less on it. Also, by delaying your expenditure, you can earn a little more interest on the money to be spent.

Will Power

You will find that as you practice self-discipline, your will power will grow. There will come a time when you can see something you really like and simply be able to admire it and move on without a struggle.

Rewarding Yourself

Living a life devoid of treats and denying yourself everything you want is not living. So it is alright to reward yourself on occasion. Only you can decide how often and how much you should treat yourself to, but here are a few suggestions for how to figure out what works for you.

Start by setting a goal for yourself. It is important to make it a reasonable goal. Goals can be measured in time, amount of money, achievement or any other way that suits your lifestyle. When you achieve your goal, reward yourself with a little treat within reason.

Setting a goal

• Time
  Set a timeframe in which you decide you will not make unnecessary expenditures. If you have a regular habit of spending money everyday or every few days, you might want to start with a shorter goal and work your way up to the ideal timeframe.
• Amount of money saved
  Instead of putting all your money in your checking account, open a savings account (if you don’t already have one.) Put all your non-regular-expense money (anything not for necessities such as rent, bills, groceries, gas, etc.) into this savings account. When you have saved up to a certain pre-determined amount – $500, $1,000, etc. – then you can allow yourself a little treat.
• Achievement
  This could be for achievement in any area of your life – career, personal, weight-loss, etc.

As time passes and you achieve your goals you might find the success of achieving your goals to be more rewarding than spending money. In an ideal world, that would probably be enough. But for most of us human beings, it probably isn’t.

So remember, it is important to treat yourself once in a while. It doesn’t have to be a big treat. It could be as little as an ice cream cone, a reasonable item of clothing, a new CD, etc. But if you find yourself treating yourself every other day, something is wrong. I can’t tell you exactly how long and how much your goals should be. It is different for everyone and something you need to figure out for yourself. That’s why it’s called personal finance.

In closing, I will share

How I rational thought my way out of the items on my wish list (mentioned above)

• A laptop computer
  Reason I don’t need it: I already have a desktop computer.
• My favorite TV shows on DVD
  Reason I don’t need it: For now, I can watch what DVDs I have and TV shows online. I know I’ll eventually get them, but what’s the hurry?
• Subscription to cable
  Reason I don’t need it: An occasional DVD purchase is cheaper than subscribing to cable and I’ll end up with an asset instead of just putting money down the drain.
• A cushy armchair for reading in my room
  Reason I don’t need it: I can read on my bed. Someday I will get an armchair when the time is right and when I can afford a nice one.
• The complete British and French editions of the Harry Potter books
  Reason I don’t need it: The fun of book collecting is acquiring each edition book by book over time. If I got all the books at one time, I’d need to find a new hobby.

Treating Myself

On the other hand, I did treat myself to a rather expensive gift last fall. I have been a musician since I was 5 years old, and have wanted to learn to play the violin since I was a teenager. Last fall, I purchased myself a Suzuki Student Violin for $170. Being more expensive than most of our regular purchases, I considered it a late birthday/early Christmas/early next birthday present for myself. My violin is and will be one of my most favored possessions for a long time to come.

Related posts:

• Pecuniary Links ~ July 2009 #2
• July 2008 Finance and Frugality Blog Carnivals
• Welcome MSN Money Central Smart Spending Readers!
• Pecuniarities (Our Fourpence Worth) 1 Year Anniversary
• Frugality to the Extreme: Would You Eat Out of the Dumpster?

Originally posted 2008-06-27 06:00:38.

As I mentioned in my previous post, Frugal Travel Begins Before the Trip: Vacation Preparation Checklist, it is the preparation that determines how much fun you will have; the better prepared, the more you will be able to enjoy your trip. And again, the way to travel frugally is to travel prepared. So to follow up that post, I wanted to share some tips for helping your entire family enjoy your summer vacation. Most of these suggestions will help save you money by avoiding costly situations such as tips for staying in a hotel with your pet, keeping your dog healthy and safe to prevent costly vet bills (either immediate or future), and also just maintain your pet’s general well-being.

Safe and Smart Pet Travel

• Finding Pet Friendly Lodgings
  Hotels are becoming more and more dog-friendly as businesses realize how many people consider their pets a part of the family and wish to travel with them. Do a search for Pet Friendly Hotels (or Discount Pet Friendly Hotels) to find lodgings at your destination. However, do not rely solely on the word of the pet friendly referral site; even if you will be booking your hotel stay through a referral site such as Expedia, which allows you to search for pet-friendly hotels, always double check the hotel’s pet policy on its official website. Some referral websites contain outdated, incomplete or simply wrong information on hotel pet policies. Some hotels may have accepted pets at one time but no longer, or have pet type, breed or weight restrictions. Sometimes, the easiest thing to do is to just call the hotel and ask.

  When calling a pet-friendly hotel, be sure to:

  • Ask if they accept the type, breed and weight of your pet
  • Ask if there is a non-refundable pet fee (some hotels do not charge a non-refundable pet fee, something called a “cleaning fee”, and others charge as much a $150 per stay)
  • Ask about daily fees – per pet, per stay, etc. (most hotels charge per pet, per day)
  • If you are bringing more than one pet, be sure to check that they allow more than one pet per room
  • Any other pet policies you need to know about

• What to Pack when Traveling with Pets

  • If traveling by car, I highly suggest a doggie seat belt. This is both for your pet’s protection as well as your own protection. In fact, regardless of distance traveled, dogs should always be buckled in. This makes sure they do not disturb or distract the driver in any way, and prevents them from being flung out of the car in the event of an accident. A 30-mph collision with a 30-lb. dog creates a 900 lb. force that can severely or fatally injure both dog and human passengers.
  • To avoid extra hotel cleaning charges, I suggest bringing:
    • An upholstery cleaner
    • Baby wipes to clean your pet’s feet after playing outdoors
    • Paper towels
    • To clean up after any accidents, an pet safe cleaner so that the pet doesn’t get ill from stepping in it and ingesting it by licking its paws
  • Identification and license with your cell phone number printed on the ID in case your pet gets lost. Include emergency contact information for a relative, friend or neighbor who can care for your pet in the event something happens to you.
  • Food and water dish.
  • Dry and not messy food.
  • Non-greasy treats for keeping your dog from being bored and misbehaving. Non-greasy to prevent carsickness and vomiting. We like carrot sticks which are healthy and be be cool and juicy.
  • When packing your own drinks, make sure you bring enough drinking water for your pet. Dogs get very thirsty when riding in cars.
  • Consider a pair of doggie sunglasses to protect from corneal sunburn. Long term exposure to the sun can result in blindness in old age.
  • If your dog is an indoor dog and will be walking outside, consider a pair of doggie boots to prevent injury from hot pavement, broken glass, rough road surfaces and sharp rocks. Dogs who live indoors tend to have softer paw pads that are more sensitive to outdoor surfaces.
  • If staying in a place with hardwood flooring, bring a pair of doggie shoes to prevent damaging wood flooring with nails.
  • If your dog will be staying indoors a lot, you might consider bringing some housebreaking pads (large sizes are available for large dogs) and encourage them to use it if confined indoors for long periods of time.
  • If your dog is used to playing outdoors and doing his business outdoors, look up the locations of a few dog friendly parks in the area before you leave. Some hotels object to letting your dog do his business on hotel property. A dog park might be more amenable to such transactions.

• Pet Health and Safety While Traveling

  • Preventing heat stroke
    Remember that dogs are naturally warmer than we are; even when we are comfortable with temperatures in the 80s, they can be hot, especially if they have longer hair. Heat stroke can cause permanent brain damage, so monitor your dog very carefully. If he is panting, that means he is hot.
    • If driving during summer, freeze a container of drinking water, which will be ice by the time you depart. Bring it in the car and allow your dog an occasional sip as it melts. Don’t let them have too much ice-cold water at one time.
    • 
    • A wet bandanna tied around the neck can help keep cool.
    • Consider a dog cooling jacket as pictured to the right. (Click on the picture to see details.) There are also cooling mats for hot dogs to lie on. These are good for staying at home during warm weather as well.
    • Keep your dog in the shade as much as possible. When parking, look for shady spots.
    • Never leave your dog in the car by itself or with young children. Have at least one older child or an adult remain in the car and keep the air conditioning on.
  • Don’t let your dog ride with his head out the car window. As much as they love it, it is very dangerous. My windshield was recently cracked by a flying pebble while driving 50 mph.
  • Never let your dog off leash unless in an enclosed area intended for dogs, such as a dog park or until inside your lodgings. Leave his collar and ID on even when indoors.
  • Don’t have young children hold the leash. The gentlest dog can get excited or frightened in unfamiliar surroundings. Even small dogs can be very strong when excited, which can be dangerous for both dog and child.
  • Don’t forget prescription medication such as heartworm preventatives. Don’t administer medication early for convenience; pack the necessary dosage and give it when it is due.
  • Don’t change your pet’s diet for the trip. Bring the same foods as he would eat at home. Tip: Pets who subsist on a varied home-cooked diet are less prone to diarrhea with diet changes. For more information, check out our article on Cooking for Your Pet at our Franga Designs website.
  • If you are traveling to an area with pests such as mosquitoes, fleas and ticks and diseases not found in your home area, be sure to prepare for it. Ask your vet for disease prevention advice.

• At the hotel

  Pets get very nervous when away from home. Even if they are normally very calm and friendly at home, this may change when in unfamiliar surroundings.

  • Never leave your pet unattended in the hotel room. Nervousness and stress can cause them to make messes, damage property and make noise that might disturb other guests.
  • Hang the “do not disturb” sign on the door to prevent housekeeping from accidentally letting your pet out and either party from injury.
  • Bring a familiar toy from home, and set out your pets things such as food and water dish.
  • If your dog is crate trained, setting up the crate in the room might make him feel more secure.
  • To reduce barking at sounds of other guests outside your room at night, keep him active during the day so that he sleeps better.
  • Clean up after accidents immediately to prevent stains and odors from soaking in. Use an upholstery cleaner on beds, rugs and chairs. Wipe your pets paws and other dirty parts to prevent soiling the room.

Boarding Your Pet

Traveling with pets is a big responsibility, but when done right, it can be very fun. If you feel like it’s too much work, consider boarding your pet at a reputable boarding facility. When looking for a boarder, don’t choose the least expensive one. Ask your veterinarian, friends and/or relatives for recommendations of reputable boarders with whom they have had good experiences.

A veterinary clinic that offers boarding isn’t necessary the best choice. A facility dedicated for the purpose may be better as the employees’ main focus is taking care of boarded animals, while a veterinary clinic (especially a small one), has ill animals to see to. You don’t want to scrimp when it comes to the health and safety of your pet; you want to make sure that you can enjoy yourself on your vacation without anxiety about your pet. Of course, there will still be some worry, but knowing that he/she is well taken care of will help a great deal.

If you do board your pet, take a few familiar items from home such as a bed and toys to help your pet feel more at home at the boarding facility.

Well, I hope some of these suggestions help you and your pet to have a nice summer vacation. Buon viaggio!

Related posts:

• Welcome MSN Money Central Smart Spending Readers!
• June 2008 Finance and Frugality Blog Carnivals
• Under the Weather – Recommended Reading
• Frugal Travel Begins Before the Trip: Vacation Preparation Checklist
• Booking Flights Early Could End Up Costing More

Originally posted 2008-06-02 12:29:17.