Frugal vs. Cheap

In my mind, the difference between frugal and cheap is this:

Frugal is saving money by limiting spending on yourself; cheap is saving money by limiting spending at the expense of someone else.

For instance, when my husband and I go out to dinner, we don't spend a lot of money. We usually get one entree and perhaps an appetizer to share. We are water drinkers and dessert is usually something I prefer to have at home (because my list of desserts to make is so long that if we have dessert when we go out to eat, I'll never ever make a dent in this list). So, generally our bill is fairly small. I would call this frugal.

But the tip? We always leave a good tip. My husband's standard is to leave (he claims that if the service is really bad, he'll do 15% or if it is truly terrible, 10%, but I have never once seen him do this). And if our meal was so inexpensive that even a 20% tip would be less than five dollars, we generally round up to at least that. Trying to save money on eating out by shortchanging the waiter seems cheap to me.

Plus, I like the idea that the waiter might assume it'll be a pathetic 7% tip or something because we obviously aren't big spenders and then opening up the bill to see that we did right by him.

I think of cheap as trying to get other people to pay for things that you should be responsible for or trying and save money at the expense of someone else.

I always want to live frugally, but I try hard not to be cheap.

Trolling the Aisles of Your Super Market

Maybe coupon shopping just isn't your bag.  Maybe you hate even the idea of paging through the newspaper ads and cutting out coupons, or worse yet, printing out coupons online and using your valuable paper and ink!  If this is you, here is an easy way to still pick up some great deals at your grocery store without the scissors or newsprint stained fingers.

Each week during your weekly shopping trip, take an extra 10 minutes and slowly walk down a couple of aisles looking for those lovely $1.00 sale tags -- or 2/$1.00 is even better!  My personal favorites to comb on a regular basis are the personal hygiene and cleaning supplies aisles. You'll be amazed at often your favorite deodorant, toothpaste or window cleaning spray are on sale for only $1.00 (which is typically much less than half the regular price).

If I didn't walk down these aisle WHEN I DON'T NEED these items, I would end up paying full price just a few weeks later -- when I'm desperate.   We've all been there before!

My second little piece of advice is to buy 12 of these items when they are on sale for $1.00.  Instantly you have a year's supply of this product.  Easy Peasy.

Remember, the most expensive item is the one you HAVE to buy right now.  I think it's a cosmic law that nothing is ever on sale at that moment.

Free At Your Library (Carole)

If Ben Franklin did indeed invent the idea of a free public library, then I LOVE him!!   But libraries have come a long way since his day.  Today, most libraries offer much much more than books and the local newspaper.  Here's a list of the possible freebies you could be taking advantage of in your very own neighborhood.

Books (fiction, non-fiction, how-to, cookbooks, travel guides. . . )
Books on cassette and CD
Movies
How-to DVDs
Exercise DVDs
Music CDs
Online services
Download music and books directly to your iPod (often from home)
Toys
Puzzles
Board games
Video games
Wii games
Book Club back packs (a backpack containing multiple copies of the same book with discussion questions)
Specialty cake pans -- I love this one!!
Reading time for newborns, toddlers and young children
Summer reading programs for youth and adults
Movie Nights
Free WiFi
GED, SAT and other standardized tests
Youth and Adult book clubs
Cultural passes for local museums
Lectures
Author visits  and book signings
Bilingual reading time for children
Homework help
Genealogical research areas with specialists to assist you
Book sales
Seminars
Writing groups
Foreign films
Concerts
Magicians
Poetry readings
Computer classes
Themed help bags for parents (such as how to potty train a child)
Magazines
Local, national and international newspapers
A place for you to donate books you no longer need or want

The list is as creative as your branch librarian. . .

Heck, even with the occasional library fine, it's still a great deal!  If you've run across an unusual kind of service or check out that your library offers, we'd love to hear it!

Cooking Once a Month (Carole)

The title says it all.   This is a method of cooking that I've done off and on over the years.  It can also be done on a weekly basis quite successfully.

List out 28 meals that your family likes and that you're comfortable cooking.  Make up a shopping list so you make sure you have all your ingredients.  Then spend most of one day getting each main dish as close to the cooking stage as you can:

1.  All basic/raw ingredients mixed together and frozen in the baking dish
2.  All canned and/or dry ingredients assembled in a ziplock bag ready to be quickly assembled on the day you need them.
3.  A combination of #1 and #2

Take some time and figure out how much of each recipe can safely be prepared ahead of time, so that on the day you want to fix it, most of the work is done.  The goal is to have 28 recipes READY TO GO.  Just like last week's meal idea, this system allows you to buy items in bulk and use them up quickly.

Try doing it with a week's worth of recipes first, to get the hang of it.  I remember the first time I did this, it took me about 7 hours to assemble everything for one month's worth of meals.  The second time (using the exact same recipes), I did it in a little over 2 hours.  You do get the hang of it, and you'll figure out some speedy tricks.  I also simplified many of the recipes.

If choosing  your own month's worth of recipes seems like too much effort, you can get the book, Once-a-Month Cooking, that gives you all the info you need -- that's what I did in the beginning.  She has good recipes and many good tips.

Check to see if your library has it in stock.  I bet they do!  You'll love yourself night after night when you quickly feed your family another healthy, home cooked meal.

Gifts That Make a Difference (Carole)

You'll remember a couple of weeks ago, I wrote about being able to spend your money on fun adventures occasionally, because you are usually frugal.

Well, right now I'm writing this post in the beautiful country of Honduras.  My husband, 14 year old son and I have been blessed to be part of a group of 100 doctors and dentists and their older children who have provided medical care and dental work for about 450 young men and women who could never afford it otherwise.  It has been a life-changing experience for all of us.  This is another reason to be frugal: so you can help others.  Possibly it's the best reason.

We've talked about being part of a group like this for over 20 years, and finally were able to make it a reality.  I hope one day each of you has an experience like this in your lives.  This has been a Thanksgiving we will never forget.  In fact, we hope to participate again next year.

It's been a busy 10 days of wonderful service where we truly received more than we gave.  In that same mode, I'm sharing a great post from Get Rich Slowly of truly thoughtful and helpful (and frugal) gifts that can be given during the holiday season.

I hope you enjoy these ideas as much as I did.   

Christmas Gifts That Make a Difference

Grandma probably doesn’t want another scented candle, but she could very well use a ride to the store. Your underemployed nephew would likely prefer a little help filling the pantry instead of a jokey T-shirt. And the sister who’s staying home with her kids may not be able to afford any extras just now. Instead of dropping $40 on a sweater, why not put that money toward a membership to the local museum?

You’ve still got a few weeks to think about Christmas gifts. Make this the year when you pick presents that actually help. I’ve put together a list of items that save the recipient money or fill a specific need. Prices range from as little as $5 to upwards of $50 or more — and some of the suggestions will cost you little except time. . .Read The Article Here

What Would You Do With a Windfall? (Carole)

Many years ago I had a good friend.  She and I lived in the same small town and had children who were just the same ages.  We became exercise partners and often spent entire days at each other's apartments while our children played.  After a year or so, we were both on the verge of buying our first homes.  I was aware that before she was married she had been involved in two accidents and had received two different insurance settlements adding up to a whopping $50,000!  In my mind, they had it made, since we were scrimping and saving to get our own down payment together.

But one day she mentioned that they were going to have to borrow most of their down payment from her parents.  She was unbelievably embarrassed to do so, because now her parents would know that she and her husband had blown the entire amount!   I don't know how they spent all that money.  I do recall they had a ski boat and an old truck to pull it with and their kids had a lot of cool toys, but beyond that I couldn't see where it had all gone.

I've often thought of my friend during these past 25 years.  What COULD they have done with that much money that would have been smart?  In reality, the possibilities were endless, but here are three super frugal choices.

1.  Bury it in their backyard or put it in a safety deposit box.  In 5 years they would still have had their $50,000.

2.  Put it in the bank.  In the mid 1980's an average money market account earned 7.71% (these were the high interest Jimmy Carter years -- great if you had money to invest, horrible if you needed to borrow it) and at the end of five years they would have had over $73,000.

3.  Buy a house.  In the 1980's, $50,000 would have been a hefty down payment on a starter home.

What would you do if you suddenly found yourself with a large amount of money right now?

Saving Tips for Travel (Carole)

This week we're going to respond to the request by Diana Banana to tell our favorite tips for saving money while traveling.

First, I've already written about how we fly free with Southwest Airlines by using their credit card through our office.  That is probably the biggest money saver we've ever done.  Check it out and see if it could work for you.

Second, because we live in a big city (and it happens to be a vacation destination) we have often headed downtown to a local hotel for a couple of days -- this works especially well for anniversaries.  Saves us both time and gasoline.  It's kinda' fun to play tourist in your own hometown.  Also, we can usually get a deal on a hotel and many shows because we are locals.  I don't know if that translates to other states, but it would be worth checking into.  Nevada residents can save up to 50% on many shows and hotels.  We also use personal contacts to get reduced hotel room prices or free upgrades and free show tickets.  We've seen Blue Man Group, Lord of the Dance, Mystere, Celine Dion, Lance Burton, Hans Klok, Donny and Marie Osmond, and Penn and Teller all for free because we knew someone who works behind the scenes.  These people usually get a few free tickets every month -- if you ask, they can be yours.

Lastly, the most typical way we save money while traveling, is to eat lunch and dinner from the grocery store rather than at a restaurant.  We have a typical menu for both breakfast and lunch that includes cold cereal, milk, yogurt, bananas, sandwich fixings, chips, juice and cookies.  (All of the perishables are kept cold either in the hotel fridge or in a garbage can filled with ice kept covered in the tub.)  Saving the total cost of both breakfast and lunch each day makes going out for dinner not seem so expensive.  And since we could never be mistaken for "foodies," we tend to choose reasonable establishments for our late meals.

How do stretch your travel dollars??

Price Matching (Janssen)

Every week my mailbox is full of fliers from the various grocery stores and drugstores in my area, each proclaiming multiple items on huge sale (these are loss leaders, intended to lure you into the store where, hopefully, you will then buy a lot of non-sale items).

You could spend a lot of time driving around to each different store or you can ask one store to price match. If your store does price match, you can simply show them the mailer or ad and they'll give you the same product for the sale price.

All your shopping, with the best sales, in one store. Hard to argue with that.

Wal-Mart is particularly well known for price matching. I must admit that I cannot deal with shopping at Wal-Mart (invariably, I end up wishing to tear out my hair when there is only a single cashier for an entire Super Wal-Mart or I cannot find the products I want or the parking is horrendous), but it almost certainly would be the very cheapest way for me to do my grocery shopping as they would price match the sales from all three of the other local grocery stores in my area.

Other big chains that price match include Target, Staples, Best Buy, Toys R Us, Circuit City, Lowe's, Sears, and Office Max. It's particularly handy if specials are going on at stores that are not particularly close to you - you can save yourself money AND gas.  

And this isn't just for groceries or school supplies. When we bought our mattress a few weeks ago, the store price matched a mattress from a competitor, which brought the price down $150. Not to mention free delivery. 

Oh, I love price matching.

Automate Your Savings (Carole)

You've probably heard the oft-repeated phrase, "Pay Yourself First."  These just might be the most important words in the English language when it comes to your financial health.  If it's all you can do to pay the mortgage, utilities, groceries, car payment and insurance and you are not putting money aside in some kind of savings vehicle on a very regular basis, then you will never get ahead financially.

The only way to long term financial stability is to put money away somewhere for the future.  You can call this savings account whatever you want:  Emergency Fund, Rainy Day Money, Retirement. . .  Guaranteed the day will come when you will be glad it's there waiting.

If a personal savings plan (in addition to a 401k or IRA) is not part of your current budget and seems absolutely impossible, take heart.  Everyone feels this way!  It almost doesn't matter how much money you earn, you can easily spend it all.  We've all learned that if you make more money, then your bills automatically go up by at least that same amount.  I think it's one of Murphy's Laws.

To stem this tide, you need to set your personal savings plan like any other BILL THAT MUST BE PAID.  Pay yourself -- every month, or every paycheck.  My husband often tells of our first experience with this.  We decided (after being married for many years) to have $100 electronically removed from our checking account every month and put into a money market account.  We both almost hyperventilated after setting it up!  Could we really afford this???  Would we have to transfer it right back within seconds of having it taken out?  Maybe you feel those same fears.

But guess what?  The $100 came out the next month and we still paid all of our bills.  Whew.  And it happened again the next month and the next month.  It was magical.  And easy.  Unbelievably, we didn't really miss it.  Most budgets (even tight ones) have more wiggle room than you think.

After a few months, we sucked in our breath again and increased the amount to $200.  Same thing.  We didn't miss it.  But we did love watching that money market account grow bit by bit each month.  That gave us some serious endorphins to keep going.

After a year, we decided to really ramp things up and increased our auto-withdrawal amount to $1000!  Surely this would kill us.  But it didn't.  We survived and paid all our bills.

Start small.  But start.  I'm not saying you need to do the same amounts we did, but try something.  Call your bank or get online and set yourself up for an automatic withdrawal to some kind of safe savings vehicle (CD, money market, savings account. . .) and watch your stress level go down as your personal savings goes up.

This is what's called "Getting Ahead."

Substitutes (Merrick)

I think I would consider myself an adventurous cook. I'm not one of those people that tries a new recipe every night, but I do like to experiment every once in a while. Many times, these recipes call for ingredients that I don't typically use, and then, unfortunately, don't use again. For example, I tried some new recipe recently that called for cake flour. I bought a small-ish box, use a cup or two for the recipe, and since that time that box has sat in my pantry, untouched. Bad news.

Well if I'd been smart, I would have searched online for cake flour substitutes, because I would have found out that I could use all-purpose flour and cornstarch instead.

Although I don't spend a lot of money on ingredients that I'll never use again, I do spend some occasionally and looking back I feel like it's wasted money. Especially if there is a perfectly good substitute.

I have several cookbooks that have a page or two in the back dedicated to ingredient substitutions. I'm sure you do too. So next time you have a recipe that calls for some unusual recipe, don't waste your money; use a substitute.

Eating On a Dollar A Day (Carole & Janssen)

I'm out in Boston with Janssen and her sweet new baby.  Plus her little family is days away from a move across the country.  We're a bit busy, to say the least!  So, rather than writing a post today, we're sharing a very interesting Time Magazine article, and the accompanying  blog, about 2 people who are feeding themselves on $1 per day.  Maybe a bit extreme, but it will get you thinking about your own food budget in a whole new way!

You'll quickly notice that they eat vegan.  

Time Magazine Article
http://www.dollaradaybook.com/blog 


Hope you're having a happy, happy day!!

The Burden of Student Loans (Carole)

I ran across this video a few weeks ago on CNN.  Go ahead and watch it, and then I'll comment.



I've mentioned before on this blog, that my husband (and I, although the debts were not for my schooling) came out of graduate school with $60,000 in student loans.  This was back in 1986.  We lived extremely cheaply and only paid for tuition out of our student loans.  We were able to earn enough money during the summers and through my job (as a lowly secretary at the university -- so nothing amazing) to pay for our actual living expenses.  And, I might add, we never went on food stamps.  I'm troubled by this growing trend.  But that is another subject for another post.

It is easy to forget while buried in school and taking out student loans, that the day will come when all that money (with interest) has to be paid back.  Typically your re-payment begins 6 months after graduation.   This date arrives faster than you can imagine.   Most loan repayment amounts are several hundred dollars per month, but if you've got debt for graduate school they are often well over $1,000 per month.  That is a hefty portion of your brand new salary.  Can you really make enough money to live on after your student loan payments??  And most student loans stretch over at least 15 years.  That is a long time to be paying back this money.

Repaying student loans is no different than any other debt repayment.  Set up a debt snowball and pay it off as fast as possible!  But it is best to have a plan before getting into the student loan quagmire.  Here are a few ideas to contemplate:

*  Go to a local college or university.  As a state resident, your tuition is usually about half of what it would be if you are from out-of-state.

*  Become a state resident before you attend the school of your choice.  A friend of ours who was planning to attend the dental school in Las Vegas moved here a year early, got a job and established residency.  He saved himself $15,000/year or $60,000 total.

*  Get a bachelor's degree at a college that will not require you to live away from home or pay high tuition.  Save student loans for graduate degrees, not a basic college education.

* Apply for any and all scholarships possible.  Keep on top of these year to year so you don't lose them.  Many students lose these only because they didn't renew them on time.

*  Are any grants available for your program?  You never have to pay back grant or scholarship money.

* Do everything necessary to be at the top of your class.  Top students are often given research or teaching jobs that pay most or all of your tuition.

*  Choose your school wisely.  Do you really have to have your degree from Harvard??  Think about the debt you will incur (as this fellow in the CNN video  didn't).  Ask a mature adult who is good with money if this seems like too much money for your educatiaon.

* Determine if your chosen career path is worth the tuition money you will spend.  Last fall I heard a caller on the Dave Ramsey Show tell how she and her husband had over $200,000 in student loans for chiropractic school, and now he hadn't been able to find a decent job and they were getting very very frightened for their future.  Dave Ramsey informed her that (despite claims from chiropractic schools) these types of doctors do not make the same amount of money typically that an MD does.  He felt this couple had way too much debt for the earning potential of a chiropractor.  Do your research and make sure it is accurate.  Talk to people who are in your field to find out accurate salaries.

*Consider the location of your school.  Is it an expensive place to live?  Will your school debt be much, much greater because you have to live in New York City or Boston?  The mid-west is typically pretty inexpensive as are parts of the south.

I'm certainly not against education in any way!  In fact we tell our children that a bachelor's degree is a minimum and that a masters degree (at least) in their field will probably be necessary to compete in today's job market.  But don't fool yourself or "blue sky" these kinds of important decisions.  Student loans can add a significant financial burden that will follow you for half of your working life if you're not careful.

Like always, plan ahead and live frugally.  You'll always be glad you did.

Time Well Spent (Carole)

We've all heard the saying, "Time is Money."  When it comes to saving money, nothing could be more true.  This is just a short little post to remind you that -

the faster you're living your life, the more money you're probably spending

Because it takes some time to:
 *  Write up a budget
 *  Plan a menu
 *  Cook your own  meals
 *  Look for and use coupons
 *  Become familiar with the usual prices of things
*   Comparison shop
*   Do your homework on the best brands
*   Shop at more than one grocery store
*   Try a DIY project
*   Home repairs

Are you living your life too fast to be frugal??

It's difficult to remove yourself from the frenzied pace of modern life.  But try to slow it down, think things through, consider your options before you buy something, take a few deep breaths and spend your hard-earned money wisely.  Your savings can be enormous.


Photo courtesy of FreeFoto.com  

Grocery Shopping (Janssen)

About a year ago, I wrote about grocery shopping on my personal blog and a bunch of people commented saying things like, "Um, you guys must not eat anything." I don't really know what to say to that - I feel like we eat a pretty normal amount. We have a full dinner nearly every night, we have people over for dinner, and we pack a lunch every day. I cook a lot. We eat primarily healthy food.

All of which is to say, you may read this post and think, "You only buy two items a week. No wonder your budget is low." And if you think that, I simply don't have an explanation.

Anyway . . . .

When I go grocery shopping, I make a list that looks like this (it's the same one my mom has done my whole life):

I star things I have coupons for and write the brand after it if it matters and if I'm going to two grocery stores, I write down what store I'll be buying things at. Very high-tech.

And then I just do not buy things that are not on my list. Period.

I cannot emphasize strongly enough how important it is to get to know your store (or stores). Ask friends or neighbors about any money savings tips they know - two of my favorite money-saving tips came from people I know.

One of my friends mentioned that if you used the self-scanner (a little hand held scanner that you can use to ring up your groceries as you go (I love this thing because I know my exact total before I even get to the checkout lane)), you got extra discounts that showed up only on the scanner (I also found out later that they are tailored to the things you buy, so I often am able to use those discounts).

My co-worker also told me about the reduced produce shelf and where to find it in the grocery store. I owe my $1.29 and delicious pineapple this past week to her. Not to mention all the times I've bought other ludicrously inexpensive produce from this cart. I do many of my side dishes this way - I just anticipate buying at least one or two items that I'll use from there.

Melanie asked about using coupons and how she's found them fairly unhelpful so far. Personally, I do not use a lot of coupons. I don't take the newspaper, but I  religiously check coupons.com and am able to make that work pretty well. I scan through it every few days and see if there is anything I'm interested in. The main ones I use are for meat (chicken sausage, pepperoni, etc), cheese, sour cream, yogurt, cold cereal, chocolate chips, diapers, and sugar.

Once I found out that my store doubles any coupon under a dollar automatically, I had a better feel for how coupons could save me some substantial money. I also watch for sales to correspond with my coupons. If cereal goes on sale and I have coupons for it, I'm suddenly paying less than half than I'd pay for a smaller box of the generic brand. That's hard to beat.

Here's a picture of my receipt from this past week - the only thing that's not listed on here that I bought in this is the gallon of milk I bought at BJ's (the east coast equivalent of Cosco) and the additional boxes of cereal I bought a few days later:

I got a discount on my chicken and cream cheese (thanks to the scanner), I had a dollar off coupon for being willing to do a blind taste test of fudgesicles (would YOU have said no?), my reusable bag coupons, a diaper coupon, coupons that doubled for chex mix (a little gift for Bart) and my four boxes of cereal and $1 coupons for both of my yogurt packs.

This was, of course, a particularly good week for me - I'm not usually saving more than 50% on my groceries. But this week chicken was on sale for $1.79 a pound (Sherry informs me that is not a sale, but, let me tell you, in Massachusetts, that is a freaking STEAL. I have never once seen it go that low in the year we've lived here), plus my scanner gave me an extra 10% off. Cereal was also on sale for $1.50 a box and with the coupons I'd printed off a few weeks earlier and was just holding on to, I got those boxes of cereal for 40 cents each.

This coming week, I know that the yogurt I like most is going on sale and so I'll buy more than I usually do (and I've been hoarding coupons for this product for several weeks anyway). When one of my stores sent out $1 doubler coupons a few weeks ago, I bought four boxes of it (each of which have 4 yogurt cups).

At the end of the day, my main strategy is to just not buy things I don't need and to take advantage of sales, coupons, and discounts whenever I can.

Other grocery shopping secrets?

Making a Menu (Janssen)

When I sit down to make the menu for the week, I ask myself a few questions:

• What do I need to use up? I poke through my fridge to remind myself what I have that hasn't been used yet - half a bag of spinach, perhaps or two leftover chicken thighs in the freezer or ricotta cheese or buttermilk. The internet is brilliant for this kind of thing. There is no use buying a bunch of new food and throwing away your perfectly good food from last week.
• What is on sale? I will admit right here how deeply pathetic I am and say that Wednesday, the day the grocery store fliers come, is - I kid you not - a highlight of my week. I look through to see what's on sale and see if I can work those into my menu.
• What will we actually eat? Haley commented on my last post that she doesn't like to buy ho-hum foods just because they are on sale, or she'll be tempted to go out to eat instead. I absolutely agree - I never ever buy something just because it's on sale. I really enjoy cooking, so making new interesting things is a big part of my motivation to get dinner on the table and having it be something appealing is vital as well. We're not eating hot dogs just because they are on sale or I have a coupon (although, at nine months pregnant, I have to say hot dogs appeal to me in a way they never have before. . . .).

As I mentioned before, I use Google Docs to make my menu. I like it because it's free, it's accessible, and I have a running record of my menu. I can also copy and paste them each week into a new menu and reuse any meals I didn't get around to making. You can see below my running list of menus for the last six weeks or so (and my favorite document of all, "Dishes to Try").

Every week, my menu looks like this: one main dish, and two side dishes for seven nights of the week.

At the end of the week, as I'm making a new menu, I go to the previous week's menu and choose "Make a Copy" and save it with the dates for the coming week:

 
Then I delete the dinners I made, leaving any that I haven't made and still plan to and start filling the new one in:

And now I can start thinking about what to fill in with. If ground turkey is on sale, we might have meatloaf or spaghetti pie. If I have leftover croissants in the freezer, we might do some sort of sandwich. I check out my "Dishes to Try" document and see what's there that I've been wanting to make. I ask Bart if he has any requests. I Google recipes that use feta or artichokes or whatever ingredients are nearing death in the fridge.

And I make my grocery list as I choose meals, so I know that I have all the ingredients for every meal. 

The days of the week I have a meal for aren't necessarily very firm - I might make what it says on Tuesday on Friday, but if I do have an item that needs to be used up ASAP, I will generally put that early in the week so I think about it sooner, or if there is a day that I know will be particularly crazy, I will put an easy or crockpot meal on that day.

I also do very easy side dishes - I buy a lot of lettuce and we have salads many nights (as you will notice). I throw whatever vegetables or fruit we have sitting around in with it and make a salad dressing to go along. I often will write on my grocery list "Fruit" or "Vegetable" and then choose one of each off the reduced produce section (when I bought 6 oranges for $1.29 a few weeks ago, we had. . .a lot of oranges that week) depending on what's available.

Any suggestions? How do you do your menu planning?

Why You Want a 15 Year Mortgage (Carole)

There are 4 excellent reasons to have a 15 year mortgage:

1.  You will build equity in your house much faster, since each monthly payment has a larger percentage of your money going toward the principle.

2.  You will own your house (FREE AND CLEAR) in 15 years.  You'll be amazed at how quickly 15 years passes in your adult years.

3.  You will save tens of thousands of dollars in interest on a 15 year mortgage compared to a 30 year mortgage.  More about this in a minute.

4.  Interest rates are typically .5% lower on a 15 year mortgage.

Take a moment to visit a mortgage calculator .  Type in your own mortgage information (full amount of your loan and interest rate) using a 15 year time line and then do it again with a 30 year time line.  Have the calculator figure out your amortization schedule and scroll down to the bottom to see how much interest you will have paid to your lender over the life of your loan.  You'll see that even though your monthly house payment will go up a bit with the 15 year mortgage, you will save more than HALF of the interest $ you would have paid with a 30 year loan!

Here is an example:

30 year mortgage on $150,000 at 7% interest.  Your monthly payment would be $1097.75.    During the 30 years that you pay on your loan, you will pay your lender $209,263.35 in INTEREST.  (This means you will have paid way more than double the original price of your house).  Ugh.

15 year mortgage on $150,000 at 7% interest.  Your monthly payment would be $1348.24.  During the 15 years that you pay on your loan, you will pay your lender $92,683.63 in interest.  So even though your monthly payment went up by $250.49, your overall savings on this loan is $116,579.72.  Fantastic!

Yes, you can do this on your own by getting a 30 year mortgage (with the lower monthly payment), but paying at the 15 year payment rate.  This plan gives you wiggle room if you ever hit some hard times and need a lower monthly payment to fall back on.  Just make sure you're the kind of person who is very disciplined and will keep to the 15 year schedule.

Remember, housing is one place you want to be very, very careful with your money.  Your ability to save yourself hundreds of thousands of dollars is very real.  Take the time to do your homework -- and reap unbelievable rewards.

Keeping Groceries from Eating Your Budget (Janssen)

There are some categories in your budget that you could cut out (you could live without a cell phone or without the Internet or without any entertainment category or go without buying new clothing for a year), but groceries, unfortunately, is not one of those categories, at least not in my experience.

And so, because I don't want lots and lots of my money going to groceries, I put forth a fair amount of effort to keeping my costs low. Our budget for groceries is $200 a month (just around $50 a week).

• I grocery shop every single week. I know some people (like Merrick) do two week trips, but that has not worked for me. It is easier and less stressful for me to go every week and know that if I can't afford something one week, it's only one week until I go again. Also, then I can get through my produce without throwing it away or running out of stuff too early. Figure out what works for you and then stick to it.
• Find out what kind of deals your grocery store offers. Shortly after we moved to Massachusetts, I started doing some reading about couponing and store specials and I was so sad not to live in Utah or other states where I was reading about these amazing deals or programs my stores didn't run. But over the last eight months, I've made a real effort to figure out what my store policies are and now I feel like I'm getting some good deals. I know that they double all coupons under $1.00. I know that there is a reduced produce section (a huge tray of various slightly bruised or very ripe produce for $1.29) back by the deli. I know that if something rings up for the wrong price, I get it free (if I ask). I keep learning ways to save at my grocery store that I was missing before.
• I am militant about that budget. If we run out of something, that's too. dang. bad. Bart can live for three days without eggs. I can do waffles for dinner if I suddenly realize my spinach for my quiche has gone bad. No syrup? Put some jam or applesauce or powdered sugar on your pancakes. Running out of something is not a reason to go to the grocery store. I make one midweek trip to the grocery store for bananas but I do not buy anything else. Nothing.
• Read your store circulars. I get the circulars for three different grocery stores, all of which are within about two miles of my house. I have one store that I generally shop at, one that I NEVER go to, and one that I go to on occasion if they have enough good items or coupons to make it worth my while. Use this to plan your menu.
• Make a menu. I cannot say this with enough emphasis. If you are not planning out what you'll be eating every night, you are very likely going to have a hard time sticking to a grocery budget. I make my menu in Google Docs so that I can access it from anywhere, so that it's on file for me, so that I can share it with Bart if he wants to know what I'm making for dinner, and so that I can copy it every week and copy the things I didn't make (I almost ALWAYS end up with one meal I didn't actually make because we had leftovers or decided to have waffles instead or Bart had a work dinner or something).

Next week I'll talk in more detail about how I make my menu and what my grocery shopping trips look like (complete with coupons). What do you do to keep your grocery costs low?

When is it Right to Refinance a Mortgage? (Carole)

First the disclaimer:  I am not an expert.  However, we have refinanced our mortgages a couple of times over the years and so I do have some experience with this subject.  At the end of this post, I'll link to some websites that explain things in much greater detail.

Here are the basics:

Pros of Refinancing your Mortgage:
1.  Lower your monthly payment
2.  Can shorten the length of your mortgage (changing from a 30 year loan to a 15 year loan)

Cons of Refinancing your Mortgage:
1.  You return to the BEGINNING of your mortgage cycle -- meaning that your are at Payment #1 again.
2.  Because you are on Payment #1 again, the portion of your monthly payment that goes toward paying the principle goes back to its smallest amount and your payment portion for interest goes back to its largest amount.
3.  The lender charges closing costs for lowering your interest rate.  You didn't think the bank was going to give you 10's of thousands of dollars for FREE, did you?  Expect to pay at least $2,000 in closing costs.  Obviously the more money you're borrowing, the higher your closing costs will be.
4.  There are many other fees (beyond closing costs) associated with refinancing.  To some degree, it is like you are buying your house all over again.  Remember how fun that was??  Taxes, insurance, and prorated insurance will most likely be due also.

Good Advice

Most experts agree that you need to be able to reduce your loan interest rate by at least 2.0% to make it worth all the fees you will be charged.

Don't refinance if you're selling the house soon.  Go to Bankrate refinancing calculator and see how much your monthly payment will be with your new loan.  Subtract that from your current monthly payment and see HOW MANY months it will take you to save the money you will have spent on closing costs, fees and taxes from your refinance.  Will you own your house long enough to make up this $ difference?

Be careful with ARMs (Adjustable Rate Mortgages) right now.  Home loan interest rates are currently so low, that the chances that your mortgage payment will adjust up in a year or two are very good.  With the economy where it is, this could be dangerous for your financial future.

If you do refinance, go for a shorter length mortgage:  15 year instead of 30.  You will save 10's of thousands of dollars over the life of your loan with just this one change.

Further reading:
Noodling Over a Mortgage Refinance
When is it Right to Refinance Your Mortgage?
Refinancing Basics 

Easy Coupon-ing (Carole)

I've meant to share this easy way to coupon for quite awhile, but somehow other topics kept stealing my attention.  So here we go!

There are some wonderful websites out there that bring the world of coupons right to your door.  These are not crazy buy-coupons-on-Ebay sites.  (And isn't that illegal anyway??)  These are websites that keep track of what coupons are showing up in your mailbox and in your local Sunday newspaper and telling you when to use them at your local grocery stores for maximum savings.

Bless the men and women who scour the sale fliers and match up the weekly specials with your saved coupons.

I learned this easy system from my good friend Johanna.  She's a genius.

She suggests, to get the most bang for your buck:
1.  Sign up for as many local Sunday newspapers as there are people living in your home.  Remove from each paper the Super Shopper  (SS) ad section.  Write on the front of each SS the date with a large marker.  File these by month (June altogether, July altogether. . .)

2.  Remove the Red Plum (RP) ads that come in your mailbox usually on Tuesday.  Also mark these with the date with a large marker and file them with the SSs.  You can use a file drawer with hanging folders, or any other method that works easily for you that separates these 2 kinds of fliers by month.

Now just ignore all these collected fliers, until the website tells you to go find one of them.  They may sit filed away and un-used for a few weeks.

Now comes the fun part.

Go to the website The Obsessive Shopper.   Wednesday is the best day, because that's when the new deals come out for grocery stores.  This site is set up for Arizona, Idaho, Eastern Washington state, Las Vegas, Northern & Southern California and Utah stores.  The stores listed are the major grocery stores in those areas.  There is a National section too, for those of you who do not live in the above mentioned areas, but it only lists coupons and sales at Wal-Mart.  Not terrible, but not great.  So sorry.  I bet there are other websites out there for your corner of the globe that do this same thing, and you and I can continue trying to find them!!  Let us know if you locate such a site and we'll spread the word.

Now back to The Obsessive Shopper.

1.  Click on your location
2.  From the "Select Your Store" drop down menu, pick a store.
3.  Always begin by selecting the "Start" button at the top.
             *This will shade all the rows in the list gray; any rows shaded gray will NOT print.
4.  To automatically select only 4&5 star items (the best "stock up" items) click on the red star in the top left corner of the list.  This will pre-select all 4&5 star items, turning their rows white
            *When you find an item you want to put on your list, click directly on the row and the shading will return back to white.  All white rows WILL print.
5.  Be sure to click on the top row (where all the descriptions are) so it turns white and also prints (including any other row that includes specific information about a promo).
6.  When you are done, click on the "Shrink" button at the top of the screen.  This will "hide" any gray rows from your printer.  If you want to go back to the complete list, click "Un-Shrink" to have all rows return.
7.  When you are done, click "Print Now" at the top of the screen.
8.  After you print your list, go back and link to all your printable coupons to print (usually you can only print 2 copies of printable coupons from any one computer -- but if you have more than one computer in your house, you can print 2 from each computer)
9.  Now, looking at your printed list, go to your filed-away fliers and clip the suggested coupons (SS = Smart Shopper & RP = Red Plum) by the dates listed.

Most items in a store go on sale in a 7 - 15 week cycle.  The key of coupon-ing is to save the coupon until the item goes on sale.  This is what this system helps you with.  Best case scenario is to buy enough of the sale item to last until the product goes on sale again in a few weeks or month.  That's why you want multiple copies of the newspaper.  With the same reasoning, see if your neighbors or relatives will give you their unwanted copies of Red Plumb.

Give yourself time to walk through this system slowly.  The first time seems confusing, but it will become very, very simple in no time at all.  You'll be whizzing through in less than 10 minutes by the 2nd time.  Get out there and SAVE!



 

Cheaper Cleaning Products: Part 3 (Merrick)

Someone mentioned in the comments of the last post that white vinegar was a great cleaning product. I personally have never used vinegar to clean my house, but after a little google search I found out how great it is -- not only is it cheap, it's also non-toxic, and kills bacteria, mold, and germs!

My husband hates the smell of vinegar (while I love it -- reminds me of salt and vinegar chips...yum!), but apparently the smell goes away as soon as it dries. That's a good thing because I probably don't want my house smelling like potato chips.

From cleaning your counter tops to making your pennies sparkle like new, white vinegar has so many uses for cleaning. Check out this awesome list here.

Philip is gone this weekend, so I think I'll be testing it out on my shower...I'll let you all know how it goes!