Cut Your Grocery Bills: Shop Online

Shopping and other errands are a quick way to burn through that tank of gas that you just filled up. Isn’t it worth your while to cut down all that running around if you can? The less time you spend in the car, after all, the less gas you need to buy. You might even free up some spare time that I’m sure you can find a better use for than shuttling groceries home.

There’s a simple way to cut down on your grocery shopping: surf the web. Many of us already go online to buy books, movies and clothes. Why not buy our food online?

High-Priced Myths

Every person I talk to assumes that buying food online is insanely expensive. That used to be the case: in the past, a lot of the food available online tended to obscure luxury items that companies could still make a good profit on after shipping. But Amazon and other retailers have ironed out some of the kinks in the shipping system, making it reasonable to buy at least some of your food online.

But what is worth buying online? Plenty of foods just aren’t practical to buy and have shipped — some, like milk, go bad. Others, like flour, have high enough shipping costs to make it less than worthwhile. But some items are ideal.

For the past year, I’ve bought all my spices online. Buying in batches allows me to get great deals on bulk amounts — and spices ship for practically nothing. Other good online buys are always non-perishable items. If you find an opportunity to buy with free shipping on anything, I always recommend stocking up. For instance, Amazon Prime members can often get free shipping on select items, making certain foods comparably priced to the stuff at your local grocery store.

The Coupon Game

There are some foods that will always remain impractical to buy online: milk and eggs need refrigeration and rapid transport, something that Amazon can’t exactly promise. But you can find coupons for just about every name brand online, if you’re willing to spend a few minutes at the computer. Even if you can’t time your coupon clipping to coincide with sales, you can still more than make up for the savings you might lose by shopping at only one grocery store. My grandmother used to shop on the basis on the sales papers. She’d go to one store for fruit, another for bread and a third for milk. Sure, she saved money that way, but I can save the same amount by going to just one store and not wasting gas. Coupons just make my food a little cheaper beyond that.

A Little Extra Help

If you’re willing to plan menus in advance and spend a little time thinking about where you’re going to buy your food, you can cut your grocery bill. Food costs trail only energy prices in how fast they’re rising these days. There are so many resources online for cutting your food costs, from online stores to inexpensive recipes that spending a few minutes in front of your computer is well worth your while.

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A Self-Imposed Waiting Period

There are plenty of tactics that financial experts recommend for getting your spending under control, such as tracking your spending. Personally, I’ve found tracking my spending very useful for small purchases, but less so for larger ones. With big purchases, I know where my money went and I know how I justified it. I often have an easier time justifying a large purchase to myself than a small one.

One technique that I’ve found works better for getting big spending under control is setting a buying period. I only allow myself to make purchases over a certain level two or three days a month. This is not an absolutely ironclad rule, of course. Expensive emergencies pop up occasionally. But I’ve found that if I’m fairly strict with myself about waiting to make a big purchase, I often wind up not making the purchase at all.

Purchasing impulsively: I often flat out forget that I ‘had’ to have that shiny new toy just a few minutes after I walk out of the store. Most stores are designed as sales machines — they’re set up to make you want stuff you may not even know exists. But if you make yourself wait before making a purchase, you may avoid making the purchase entirely.

Making do: If I have to wait to buy something, I often find a way to get the same affect for cheap. For instance, if I want to buy a bookshelf but I’m insistent on waiting until the end of the month, I might see what scrap wood and supports I can get my hands on. It’s very possible that I’ll come up with that bookshelf without paying a single cent.

Hitting the sales: Certain big purchases tend to go on sale almost every month for a holiday. This weekend, for instance, tons of stuff will be available for cheap just for the 4th of July. Making yourself wait a couple of weeks to make a purchase actually makes it easier to hit sales and collect coupons that can bring the overall price way down.

Going for availability: I’ve had the unfortunate experience of buying a new piece of computer equipment only to find out that I missed a price drop or an upgrade by only a few days. Adding in a self-imposed waiting period can provide you with the time to do a little research on your planned purchase and make sure you get the newest, cheapest version of whatever you’re after.

Putting off a purchase tends to work well for buying furniture, computer equipment and other durable goods. I try to stick to $100 as my limit, although I’ve been known to go much lower to help limit my purchases of DVDs, books and other small items. The actual dollar limit can be adjusted to whatever works with your lifestyle and your area. I know people who routinely spend $100 on groceries — that limit probably wouldn’t work so well for them.

The One-Car, One Week Experiment

Think back to the 1950s. We may be talking about your parents, but it’s more likely we’re looking at your grandparents. How many cars did they have? Go ahead and ask if you don’t know; I’ll wait.

Odds are very good that they had just one. And depending on where they lived, it’s entirely possible that they didn’t have an automobile at all. I asked my grandparents — and, if you count my step-father’s parents, I have three sets. Not a single one of the three had more than the one family car.

Behind our homes, our cars are our biggest expenses. Beyond the ever-growing cost of gas, we have to pay insurance, maintenance, parking and other assorted costs of owning a vehicle. Most households have doubled up on this expense and, if there’s a teenager in the house, may have even tripled it. I’m not suggesting that we should do away with all cars, of course. These days, it’s impossible to navigate most of the U.S. without one.

But ‘one’ might be the key. It’s certainly cheaper to gas up just one vehicle, rather than two. If you’re looking to cut costs, that second gas guzzler out in the driveway could be the easiest way to do so.

I’m sure you have plenty of reasons that you need it: maybe both members of your household work outside the home. Perhaps you’re worried about being able to take care of emergencies. But I’d like to suggest an experiment.

The One-Car, One Week Experiment

For just one week, try out this whole one car idea. Set aside the keys to that second car and see what happens. Even if you decide, at the end of the week, that you can’t possibly live with only one car, you’ve saved on a week’s worth of gas.

You may have to think harder about your transportation. Keep these ideas in mind:

• Plan errands for when you have the car.
• Ask friends for rides if you’ll be going to the same place.
• Explore the local public transportation options (bus, train, subway, etc.).
• Pull out your bike or your walking shoes.
• Check for shopping and entertainment options closer to your home.
• Carpool to work.
• Drop your partner off (and remember to come back).
• Ask to telecommute to work.
• Plan your week out.
• Pack along lunches and other things you won’t be able to run home for.
• Check private transportation companies: carpooling organizations, taxis, etc.
• Make some fun at home.

My husband and I became a one-car household over a year ago. We have yet to have a single issue that we couldn’t easily work around. Admittedly, there are some places where transportation is a little more difficult than the town we live in. Running a one-car household may not be for everyone. But, if you can go down to one car, it’s a smart money decision.

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Can You Walk Home?

The rising cost of gasoline is starting to hit home for even those people driving hybrids. Everybody’s starting to explore options like walking or biking, especially if they want to cut down on carbon emissions. But it can be hard to figure out just what stores, restaurants and other venues are within walking distance of your home, especially if you don’t live smack-dab in the middle of a big city. I spent a few months living in what amounted to the center of a metropolis once, and that really spoiled me for walking in the suburbs: the grocery market was no longer two buildings over and there wasn’t a library around the corner.

WalkScore is working on making it easier to find a walkable neighborhood. The site uses Google Maps to measure the walking distance to a variety of offerings and assign a score to your address. My address scores a 57, for instance. A 57 isn’t great — the most walkable neighborhoods score 90 to 100 — but it’s not too bad. WalkScore was even able to tell me the locations of the grocery stores, restaurants, coffee shops, bars, movie theaters, schools, parks, libraries, bookstores, fitness centers, drug stores, hardware stores and clothing and music stores in my area. While the method that WalkScore uses to compute their scores is top secret and patent-pending, it looks like their system deems anything under two miles away from your address as walkable.

There are some problems with WalkScore at the moment — and to the company’s credit, they identify the problems on their website and have promised to work on them. The score assigned to a given address doesn’t take into account how easy it is to be a pedestrian in a neighborhood: Are there steep hills? Busy streets? Sidewalks?

However, WalkScore is in the middle of rolling out a great tool for househunters. They’re slowly putting together scores for neighborhoods as a whole. They’ve already posted information on 77 neighborhoods in Seattle and WalkScore has started work on other neighborhoods around the U.S. As you are narrowing down neighborhoods in a search for a new house, it’s worth talking a look at the WalkScore and checking the amenities outside of the house. If you’re in the process of selling a house or renting an apartment, knowing what’s in the area can also come in handy for convincing prospective buyers or renters.

Even if you aren’t househunting, however, knowing your home’s WalkScore is still useful. As I looked at mine, I found several different stores within walking distance that I didn’t even know existed. And, if I’m going to be buying something, I might as well save gas money. I’ve also been inspired to just walk around the neighborhood a little more than I have in the past. It’s free entertainment, as well exercise without the expense of a gym membership. By walking, I manage to save money in all sorts of different ways.

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3 Plans That Won’t Help You Retire

You won’t ever get rich fetching someone else’s coffee. Heck, you probably won’t wind up with enough to retire. It’s time to take responsibility for our own retirement planning. The best starting point is realizing just what retirement planning isn’t.

Retirement planning isn’t waiting for an inheritance.

You can’t expect your parents to be responsible for your retirement — their life expectancy is getting longer everyday. Mom and Dad will be using more of their retirement savings themselves. I know more than a few people who are not necessarily waiting for their parents to fall into the grave, but who are expecting a few dollars down the road. This just isn’t a realistic expectation: even if your inheritance is in the hundreds of thousands of dollars range, you still probably won’t have enough to retire on.

Retirement planning isn’t a house.

Paying your mortgage should definitely be a priority. But, no matter how much equity you build up in your home, it’s unlikely that you’ll be able to pull enough cash out to cover your retirement — even if the housing market turns around and your house’s value skyrockets.

Retirement planning isn’t working for “the Man” for forty years.

Pension plans are rapidly becoming a thing of the past. Any guarantees that your employer will keep you on as long as you want are long gone. And, personally, I don’t think that I’ll make enough money punching a clock to cover years and years of retirement, health care costs and presents for the grandkids. It’s time to start thinking about other income streams. We can talk about real estate, stocks or even selling random junk on eBay. No matter what other income sources appeal to you, though, investing time and money in creating income streams is the real secret to retirement planning.

So, what is retirement planning?

There is, unfortunately, no perfect retirement plan that will work for every single one of us. We have to make the effort to find options that work for us — often going far beyond allowing our path to be guided just by eliminating options. Instead, we must set goals, decide our preferred methods for earning additional income and invest time, effort and even money to ensure that, in the long run, we wind up with more money. We have to do the research ourselves, instead of relying on what seems like a great deal. After all, if a retirement plan seems to be too good to be true, it probably is.

When Frugality Just Isn’t Enough

There’s no question that, financially speaking, things are a little rough right now. The prices of food, gas and other necessities are going up, raises aren’t exactly forthcoming and credit is getting hard to come by. Just about every financial guru seems to be telling us to tighten our belts.

But what if you’ve already tightened your belt?

If you’re already living a fairly frugal life, it can be hard to find anywhere left to cut back. Maybe you’ve already cut back on all the luxuries, taken on a roommate and started brown bagging your lunch. Maybe you’ve gone over your budget, eliminating nights out, cable and new clothes. Maybe you feel like when it comes to cutting your expenses, you’ve hit a dead end.

Reducing your expenses is the fastest way to start saving money, admittedly, but it’s not the only way to get yourself out of a tough money situation. It’s time to explore other options.

Up your income

If lowering your expenses helps balance your budget, think about what raising your income can do for it! Assuming you like your job, the place to start is by asking for a raise: explain to your employer that you’re dealing with rising costs and you’re having trouble getting by. Many businesses are in tough spots as well, but if your boss likes your work, he or she will try to help, at least enough to keep you on the job. After all, it’s cheaper to give you a small raise than to hire an entirely new employee.

If your job isn’t so great, it may be time to go job hunting. You’re more experienced then when you took this position — you might be able to land something with a better paycheck. Taking on a second job might also be a possibility. Even a few hours stocking shelves can make the difference in your monthly budget. (And, if you’re working more hours, you aren’t out spending money.)

Consider striking out on your own, as well. You can start your own business after work — freelancing, crafting small items or anything else you can think of can be an opportunity. Entrepreneurship has the added benefit of flexibility. While a second job will require you to work specific hours, even when you really need a break after work, your own business can be run on your time.

Ask for help

There’s no shame in asking for help when you need it. Help doesn’t need to be monetary, either — maybe one of your biggest expenses is daycare. If you have help, like your parents, other family or even friends, you might be able to reduce the hours your children spend in daycare, and the money you spend on that service. This sort of help doesn’t need to be one-sided, either. You can trade all sorts of things, without bringing money into the equation. Either way, though, no one will help you out if you don’t ask.

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When Can I Stop Being Frugal?

Whether you’re saving up to buy your first house or working on eliminating some credit card debt, just about every financial guru will tell you to be frugal — to cut down on unnecessary expenditures. It’s such widespread advice because it works — brown bagged lunches, fewer Starbucks lattes and wearing clothing that doesn’t require dry cleaning can help free up a lot of money in our collective budgets.

But a new budget is like a new diet: after a few days or weeks, we start asking ourselves just how long we’re going to suffer. How long are we going to deprive ourselves of those nights out with friends or that new DVD that we really want? When can we stop being frugal?

Well, it depends on how we depend frugality. After a while, we get used to certain parts of living on a smaller amount of money each month, but that can be boiled down to simple budgeting. We really shouldn’t ever stop managing our money; there may not be another house in our future, but it’s surprisingly easy to slip into bad credit habits even if we’ve been down that route before.

Depriving ourselves of every little luxury, though — I don’t actually consider that frugal. Most of us start keeping an eye on our finances in order to make our lives more comfortable. And part of that comfort is those little luxuries. Even early on in the budget-making process, I recommend putting at least a few dollars aside each month with the intention of having a little fun.

I’m not recommending bringing those lattes back into the budget, unless good coffee really is one of your favorite things in life. Instead, consider your options. What really is the most enjoyable part of your day? What makes you want to get up in the morning, or grab a friend to talk about? That’s where your luxury budget should go. And don’t stick with the same thing every month — our wants and needs change. This month, I may be eying a particularly good book, but next month, I may want to go out for a night on the town with my friends.

And as I’ve become more comfortable with my financial situation — less debt, more savings — I’ve even increased the amount that I put towards the little comforts of life. I’ve made a point of keeping some money in savings, building towards bigger purchases like a new computer or another luxury item.

Removing every single luxury from your life may seem like a good idea if you’re trying to reduce your spending. But if you do, you’ll make yourself miserable. You may not be able to stick to it, either. I’ve got to go back to that diet metaphor: a lot of people go on diets and do pretty well the first week. Then they slip up, and go back to their old habits. It works the same way with budgets, unfortunately. The best thing you can do is make your budget a little more comfortable. Sure, it may take a little longer to save up for that house or to pay off that credit card bill, but you’ve got a better chance of making it.

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Set Some Aside: Rewards for Savings

You would never turn down free stuff, right? A free meal? A free car? What about free money? Every day you choose not to save money, you’re turning down free cash.

Admittedly, a lot of this free money is down the road — it’s available in tax incentives or interest. But there are significant reasons to save money while you can.

Retirement Accounts

If your employer offers a 401(k) plan with any sort of matching, there is absolutely no reason not to invest in that plan. Any matched funds really are free money — that’s money your employer won’t give you in any other situation. Even better, any money that you contribute to your 401(k) plan doesn’t show up on your taxes. If you earn $50,000 next year, but deposit $3,000 in your retirement account, you’ll only pay income taxes on $47,000. Most other retirement plans, such as IRAs, also provide tax incentives for saving.

College Funds

If you have any children, there are a whole list of college savings options — and there are plenty of rewards for using them. A 529 plan, for instance, can reduce your state income tax bill in some states. Money deposited in a 529 also grows tax-deferred and tax-exempt money can be withdrawn for college expenses. Basically, that means that you can avoid paying taxes on the money you earned to send your kids to college. Other college savings plans offer a variety of incentives, and many of them make it easy for your children to also save as well. Every dollar that your child can save for college before the fact is a dollar he or she won’t have to pay interest on after graduation.

Health Savings Accounts

Health savings accounts have some major advantages, especially for people unable to obtain health insurance. That’s a pretty big chunk of the U.S. population, and if you’re included, you probably haven’t done too much planning for a health care emergency. An HSA, however, allows you to save money exclusively for the purpose of covering health expenses, from immunizations to surgeries, as long as you are enrolled in a high deductible health plan, which is fairly inexpensive. Deposits made to an HSA are tax-advantaged: depending on how you set it up, you can save either pre-tax or post-tax dollars. Either way, though, your taxes will go down.

Interest

While interest isn’t the coolest way to make money, it is steady. You’ll never get rich working a steady job, but if you can keep your money earning interest, it can build up surprisingly quickly. In fact, interest is one of the key methods for making retirement accounts and college funds worthwhile. Otherwise, I think most of us would keep our savings in a jar buried in the back yard (and off the books so that we could avoid taxes).

Get Crafty to Save Summer Dollars

Sometimes you have to get crafty to make big savings throughout the year. When it comes to personal finance, it’s the little things you do that add up to wealthy gains. Use your imagination this summer, and try out a few of these crafty ideas to help you stack some cash. In many cases, being crafty not only saves you money but it also cuts down on the waste and hassle of everyday life.

Sell Your Stuff

• Sell gently used clothing to resale or vintage stores for cash on the spot. Check with the stores in your city for the type of clothes they accept.
• Books - Sell back books you’ve already read or have no use for on Amazon or PaperBackSwap.
• Ebay/Craigslist- These are obvious choices, but they work. Spend a Saturday looking for items in your home that you don’t need anymore. Post them online and start selling immediately.

Food

• Scour your kitchen for ingredients you already have to make the next lunch or dinner. Visit Allrecipes.com and enter your ingredients to find out what you can make out of them.
• Take advantage of a craving and make a big batch of food to eat off all week. You’ll save on food costs. Try things like hummus, chili, and casseroles.
• Collect coupons and stash them in your wallet next to your credit or debit cards so you don’t forget to use them.

Homemade Gifts/Presents - Birthdays and special occasions can do a number on your budget if you’re not prepared or expecting them. Homemade presents can be great if you find some things that people actually use. Go for functional and personal. A few ideas:

• Sugar or salt body scrubs - Buy some glass jars in bulk (or reuse a food container), sea salt or sugar, almond or grapeseed oil, and one or two essential oils. They take only a few minutes to make using this easy recipe. Salt or sugar scrubs can run $20-$30 a pop in store. Once you buy these supplies, they come out to only a few bucks a piece. You can save your supplies for last-minute presents all year.
• Homemade gift wrap - Wrapping paper can be brutally expensive, so use old magazines to wrap presents in. You’d be surprised at how great a present can look once wrapped in the glossy pages and advertisements from magazines.
• Photographs - Download a picture of a friend’s favorite landmark or cityscape from Flickr or a free stock photography site. Print out the pictures at home or sign up with Kodak Gallery or Snapfish to order some prints. They offer 15-50 free prints for signing up. Find an interesting but affordable frame at Goodwill or The Salvation Army.

Get Free/Discounted Stuff

• Freecycle.com is a non-profit community group where people sell their unwanted stuff for free. You can find anything from chairs to bikes to TV trays.
• Sign up for email newsletters with coupons or samples of your favorite household products on company websites. A few I know of: Dove, Tide, Home Made Simple, Olay, Seventh Generation
• Check out slickdeals.net.  The site posts the very best sales of anything and everything on the web every day. I’m definitely saving this one as a daily bookmark.

Have money-saving crafty ideas of your own? Leave us a comment!

The Money Diet

Saving money is like being on a diet. And like most Americans, we’re pretty bad at sticking to them. What then, is the solution to being financially fit? The same techniques you use to get rid of that spare tire are the ones you can use to keep that spare change.

Saving money is difficult for most of us mainly because we don’t have a lot of it to begin with. So in order to put some cash away, we have to deny ourselves the little instant gratification purchases we get everyday. Being able to stop ourselves from grabbing that candy bar, coffee, or MP3 download is exactly the same kind of willpower that is required for staying away from Big Macs and cheesecake.

But saying you’re going to do something and doing it are, as we know, incredibly different things. Everyone makes that New Years resolution to lose a few pounds and put away a few bucks for vacation, but inevitably at the end of the year we’re heavier than we were and in debt. So I propose an interesting solution, one that will impact both your gut and your wallet: take all the money you’d spend on snacks and take-out, and save it. Here’s a breakdown:

Say you spend about $15 a day between lunch, snacks, and coffee in the morning. If you start eating healthy, make your coffee at home, and take other calorie and cost cutting measures, you can get down to $5 a day. Now that extra $10 you’ve been spending is suddenly in your pocket. What do you do with it? If you leave it alone it will become $300 at the end of the month. Not bad. But if you invested that $300 with a 5% rate of return, after five years you’re looking at $20,402. After ten years? $46,585. Not too shabby!

But this is where saying you’ll do something, and then actually doing it comes into play. After reading those numbers on paper the plan doesn’t seem so bad, in fact it seems fairly easy. But there will be mornings when you look at your carrot sticks and think “what I would give to have a bacon egg and cheese sandwich right now.” Stay strong. A little slip up now and then isn’t the end of the world, but it can be a slippery slope. Many people who have trained themselves to deny the easy and the quick did it by simply making it routine. Remind yourself why you’re doing this, you want that vacation, you want that new car. Put up pictures of something you want to use the money for, keep a ledger of how much money you’re earning each day and watch it grow. Seeing your balance get bigger (and hopefully your gut get smaller) will inspire you to keep going.

Keep Your Electric Bill Low This Summer

Over the last few months I have gleefully watched as my electric bill slowly but surely got cheaper and cheaper. While it’s sad that I am incredibly excited that my electric bill finally dropped below the one hundred dollar mark this month, I know that if I’m not careful it could climb back up again during the summer when I trade my wall heater for the portable air conditioner. Granted, with the weather just now starting to climb into the sixties where I live I’m not too worried, but I know that there are people who live outside of the Pacific Northwest who are already starting to feel the need for cooling devices.

The good news is this: there are plenty of ways that you can keep your home cool without spending a fortune on cooling costs. Here are just a few of them:

1. Install heat-reflecting film on all windows that get direct sunlight. This film is relatively inexpensive and can easily be installed yourself in an afternoon. The great thing about this film is that it lets the light in but absorbs the heat as it passes through the glass and keeps it from seeping into your home.

2. Plant some deciduous plants in front of windows. The best plan is to plant deciduous trees because, once the trees get tall, they will not only provide shade outside, but they will also help shade your windows and block the sun. If you choose deciduous trees, they will allow the sunlight through in the winter but block it in the summer!

3. Open the windows when it is cool out (evenings and mornings) and close them when the day heats up. This will allow the house to cool off and it will help keep the temperatures down during the heat of the day. You want to open windows and doors that face in different directions to keep the air flowing through your home.

4. Keep the air moving. Use the “fan only” setting on your cooling unit and couple it with portable fans. A still room is usually a few degrees warmer than a room in which the air is moving.

5. Try to keep your laundry, dish washing and showering confined to the mornings and evenings. Water use adds humidity to your home which can raise the temperature.

6. Keep the electricity use to a minimum. Because the days are longer, you won’t need to use your lamps as much. Turn off home electronics that aren’t being used. You will be amazed at how much heat gets pumped into your home simply by watching television or leaving a desktop computer on all day.

These are just a few hints to help you keep your home cool over the summer and conserve energy (and keep your electric bill low). Over the summer there will be more installments of this. After all, staying cool is important and there are plenty of ways to stay cool and save money at the same time!

Saving Money on Groceries

I have to admit — going to the grocery store is one of my favorite things to do. Many people view it as a chore, but I love cruising down the aisles and picking out all my food for the week. But lately the price of food is putting a damper on my grocery trips. After spending way over my budget a few weeks ago, I decided to look for a few strategies to help me save next time around. You’ll notice that these tips allow you to continue buying the food you like (it’s not practical or healthy to only buy the cheapest foods at the store). You can save some serious cash by following a few key strategies. Read on for seven tips that work for me.

1. Make a firm grocery list and don’t stray from it.
   Before you hit the store, take stock of what you already have in your refrigerator/cupboards and cross off those items. You’ll avoid buying extra items you don’t need.
2. Bring coupons.
   Check the newspaper and save coupons that come in the mail to bring to the store. Stick them to your refrigerator or put them right in your wallet so you don’t forget them. Also, read this Wealth Junkie post “Save Money with Coupons” to get some specific strategies.
3. Buy store brand items.
   Read the food labels and ingredient lists. Many store brand items have the exact same ingredients as the more expensive name brands. Definitely follow this rule for non-food items.
4. But toiletries elsewhere.
   Many toiletries and personal care items are overpriced at the grocery store (for example, toilet paper, shampoo, bar soap, dishwashing liquid). You can buy larger amounts for much cheaper at discount stores such as Walmart. Make the trip to the discount stores once a month and stock up on non-food items. You can also keep a look out for sales at CVS, Walgreens, or Rite-Aid. Their credit back reward cards can save you a significant amount of cash.
5. Don’t buy convenience items.
   Prepared vegetables or fruit, marinated or seasoned meats, and prepared sandwiches can all be traps for spending extra. I think the stores count on our culture to go for whatever is quick and easy. To save yourself some money, buy the separate, unprepared items and enjoy a little quality time in the kitchen.
6. Check quantities for the best price.
   Sometimes buying in bulk is cheaper, but not always. Stash a small calculator in your pocket or purse and take the time to look at prices for the amount of food you’re getting.
7. Pay attention to your food waste at home.
   One of my strategies is to buy organic milk. I’ve noticed that I only drink milk in small quantities, so if I buy conventional milk, half of it spoils before I’ve used it. Organic milk is more expensive, but it’s expiration date is much later than conventional milk because of the ultra-pasteurization process. For me, its actually cheaper to buy organic milk because I don’t waste it and it lasts much longer. Study your own refrigerator for items that go to waste on a regular basis.

Pinching Pennies

Let’s face it, our money is not looking good right now. Whispers of recession and reports of a weak dollar translate into higher gas prices and lower home sales. Investing in the stock market is a scary and dangerous endeavor, particularly for people who aren’t very wealthy. Some of us may have scoffed at our grandparents, how they scrimped and saved and hid their money under mattresses to achieve their financial goals. Now many of us are starting to see the wisdom of a piggy bank on the dresser. The problem, of course, is that we aren’t a country of savers, we’re a country of instant gratifiers. We want the latest greatest of the biggest best, and damn the consequences. It’s the American Way.

Now we’re reaping what we’ve sown. Debt is one of the major crises facing this nation, and irresponsible or ignorant spending is to blame. How do we counteract this cancer of the economy? By holding off on that triplegrandemochafrappewhatever, and stowing away a few bucks for rainy days. But just putting spare change in a jar isn’t good enough these days. We’re far behind in the savings race, and we need every edge we can to catch up and build our wealth. How do we do it? Smart financial decisions, and the first smart decision is a savings account.

Possibly the simplest, and most overlooked method of building wealth is using the banking system to your advantage. Savings accounts have been around forever, and are still a solid way of putting some money aside. Here are some tips to make the most of your account:

• Save where you bank – It is a good idea to set up a savings account at the bank where you have your main checking account. Often banks will offer better rates or more attractive benefits to customers who have all their accounts with them. They aren’t as likely to do that for a customer who bounces around from bank to bank looking for the best deals.
• Don’t link your accounts – A savings account that links to your debit card is just asking to be tapped…don’t do it! You are your own worst enemy.
• Set up automatic transfers – When you receive your paycheck and deposit it in your checking account, have the bank automatically draft your checking for a certain amount and have it deposited into your savings. Personally, my direct deposit goes into my checking every other week. I set up a transfer to occur at the same time for $50. Essentially, I’m automatically saving money without even thinking about it.
• Go Online – Believe it or not, the best savings accounts are online. HSBC, ING Direct, and EmigrantDirect are all good examples that have extremely high interest rates. There are two catches however; you have to have an existing checking account at a physical, brick and mortar bank, and the interest rate is usually variable. As far as security goes they are usually very tight, so expect to have a lot of passwords. Here’s how it works: you sign up for an account online and enter your information. Then in order to fund the account, you have to provide your checking account information and sign/receive authorization via postal mail. The funds are then wired from your account (no fees) and deposited into the online account. And the best part? They’re FDIC insured, just like your local bank.

CDs: Are They Right For You?

Certificates of Deposit, or CDs as they are more commonly known, have long been the go-to savings product that people depended on to grow their cash reserves. With a guaranteed rate of return, CDs are considered one of the safest and most stable financial vehicles out there. But with interest rates so low, are they still a viable option?

CDs are essentially how banks are able to make money. When you deposit your money in a banks Certificate of Deposit, you are essentially loaning the bank your cash. The bank then takes this cash and uses it to make loans to other customers in the form of mortgages, auto, and personal loans. When those loan customers make payments, a certain amount of the interest (profit) the bank makes goes back to you, the CD customer. This is the interest you gain on your money during your CD term.

Pros and Cons

One thing that differentiates a CD from other accounts is the term. CDs are not transaction accounts, therefore once you put your money into a CD account, it’s locked in there for however long the CD is written for. Usually the longer you put your money into a CD, the higher the return interest rate. The point is to basically freeze the funds so the bank can then use them to write out loans. As the bank gets paid back, part of their profit goes to you. The longer you allow the bank to use your funds, the more they’re going to pay you in interest. They want to have as much of your money in their CDs as possible, for as long as possible, so they’re going to give you better rates to keep you interested.

So what’s the problem with this approach? Your money is stuck! If you open a ten year CD at a certain interest rate, and a better one comes out the next week, or even years later, you can’t take your money out and switch (well, you can, for a hefty fee. Usually this fee is more than you would earn by switching to the higher interest rate). You then have to sit and wait until the ten years is up to get your cash. Another thing to keep in mind is emergencies. If you suddenly have a medical expense or car repair, your money is stuck in that CD.

So why invest in CDs at all? They’re guaranteed. You will never lose any of your principle to market changes or botched stock trades. You will always walk away with more money than you started with. The question is, of course, how much more. Shopping for rates can be a tedious and frustrating experience, particularly if you’re investing in shorter term CDs. You might spend forever going from bank to bank to find the best rate of return, only to have to do it all over again in a year or two when it matures. However, if you’re saving for your kid’s college fund or your retirement, it would make sense to include several CDs in your portfolio. Even if more risky investments, like stocks don’t work out and lose you money, you’ll always have a safety net in the form of your CD. Another little perk is the fact that it stops you from those impulse buys. If you want that brand new plasma TV and have easy access to junior’s college fund, you might be tempted. CDs are not only secure in terms of return, but they also save you from your worst enemy: yourself.

Should You Have A Savings Account?

We all know how important it is to have a savings account. We’ve been told since we were little that saving money is important “for a rainy day.” For those of us who have encountered a “rainy day” or two, we understand just how helpful having a savings account can be. But…what if you really want to pay down your debt? Should you still invest in a savings account?

There are a couple of schools of thought on this. The first school (the “old” school, if you will) says that you should always save at least ten percent of every paycheck. Even when times are hard and that ten percent could spell the difference between top ramen and regular food for a month, you should suck it up and save as much as you can. This is largely a Depression-era mode of thinking. Of course, with the economy behaving the way it is, it can’t hurt to start thinking a little bit like our Grandparents, right?

The other school of thought is this: What good is a savings account if you are eyeball deep in debt? That’s money that could be used to pay down your debt and free up space on your credit cards (also known as: the “other” savings account). Save the saving for when you have extra money to save! Take that extra money and apply it to your debt—it will help you pay down your debt even faster!

So which do you choose?

I propose a compromise. Perhaps instead of the usual ten percent (or whatever percent you put away), you cut that amount in half. Use one half to pay extra on your debt and save the other half for those rainy days. Here’s why:

You never know when you are going to need that savings account. While you might not have saved as much as you like, it is always good to have a little money set aside for emergencies. While you could use it to pay down your debt, what happens if an emergency pops up while your debt is still high? You don’t want to be caught unprepared.

The best way to save money is to forget that it was ever there. This is when direct deposit becomes your best friend. Simply divide your deposit up into two amounts. Have one amount go into your savings account and have the other go into your checking account. Take the decision away from yourself.

Another good way to make sure that you don’t spend the money in your savings account is to not link it to your checking account. When it only takes a couple of taps on your keyboard to transfer money to yourself, you are less likely to leave it where it is—especially when week four of chicken flavored top ramen is staring you in the face.

Saving money is never as much fun as spending money, but that savings account will come in handy later. I guarantee it.

Online Savings Accounts

People looking to build and grow their money are finding it a bit difficult in the current American market. The stock market is more volatile than ever, and the impacts of those ups and downs don’t just affect our investment portfolios, but how much we pay for bread, milk, and gas every day. Investing the money we work so hard to earn in something like that is a frightening prospect, not to mention hard to do in the first place. Saving up enough money to buy stocks might take people a lot of time and effort, and when they finally have enough to buy a stock, it might plummet overnight and lose that person all their money.

While investments in stocks and international markets might be an option for people with a bit more “extra” cash lying about, most of us are saving a few dollars at a time, if at all. For people like us, these funds need to stay at least partially liquid (meaning we can spend it if we need to). We can’t wait for our CD to mature when emergencies occur suddenly and without warning. What then, is the solution?

A good ol’ savings account.

But not just any savings account. Online savings accounts, FDIC insured and high yield with limited to no prerequisites. These accounts are usually with large banks that can afford to give you much higher interest rates than so called “brick-and-mortar” institutions. But how do they work, are they safe, and where do you find them?

Is This a Scam?

Usually the first assumption made by jaded and cynical people like myself is that this is too good to be true. How can banks offer such high yield accounts with almost no minimums, and do it online? There’s a catch right? Upon further investigation, I learned there was nothing to fear. As a matter of fact, the more fine print I read, the more excited I got.

The banks that are offering these kinds of accounts are large banks, usually with very diversified interests in American markets. ING, HSBC, and Capital One to name a few. These banks have such a large asset base, they can afford to offer such high interest rates. Here is the current rundown of some online savings accounts:

• HSBC - 3.05%, no minimum balance, no fees
• E*Trade - 3.01%, no minimum balance, no fees
• ING Direct - 3.00%, no minimum balance, no fees
• Emigrant Direct - 2.75%, no minimum balance, no fees
• Countrywide Bank - 4.05%, $10,000 minimum balance, no fees
• Capitol One - 3.75%, $10,000 minimum balance, no fees

Is It Safe?

One of the first things you should look for when shopping for online savings accounts is the FDIC seal on the website. This is extremely important, as this delineates a real bank from an uninsured investment firm, or even worse, an outright scam. FDIC is insurance for your money, backed by the Federal Government. It gives you insurance on up to $100,000 for a deposit account in your name. More on FDIC insurance later.

You might ask, what about security? Most of these websites are very secure, with a lot of different password requirements. Also, in order to open one of these accounts, you will need an existing checking account at an existing brick and mortar bank. The online banks assume that your identity has been verified at your existing bank already, otherwise you wouldn’t have a checking account. In order to verify your checking account, the online bank will make two small deposits into it (a few cents each). You then need to respond back to the online bank with the exact amounts of the deposits. This is how they know your account is active and in your control (don’t get excited, they take the money back).

Sign Me Up!

Sound good to you? Shop around and see which account works best for your needs. Keep in mind the rates are variable, which means that as the markets change, so can your interest rate. Keep up to date on the latest offers so you don’t miss out.

4 Tips For Tightening Your Housing Budget

There’s no question that everyone is looking for ways to tighten their belts these days; even if you are on comfortable financial footing, you may have noticed that frugality and budgeting make for a simpler life style. One of the biggest expenses every person faces, month in and month out, is housing. Not only do you have to pay rent or a mortgage, you have to pay utilities (in a time of rising energy costs — ouch!) as well as at least a few maintenance costs. But, for most of us, there are a few spots that we can reduce the amount of money we need to budget for our monthly housing needs.

1. Reduce utilities. The majority of American homes have a passing familiarity with energy efficiency at best. The fastest bill that you can cut is your utilities: even without upgrading to energy efficient appliances, you can still make a significant dent in your bill. Start by turning off and unplugging appliances you aren’t using — and make an effort to use less appliances in general. Rather than running your dryer, hang up a load of laundry or two to dry. Little tricks like this can significantly cut an energy bill.
2. Choose a smaller space. Smaller homes (apartments or houses) are often cheaper in just about every way. Of course, choosing a smaller space can be expensive — if you need to actually move all your stuff to a smaller home. You can get a portion of the benefit, though, by using a smaller portion of your home. For instance, if you aren’t using your guest room on a regular basis, why bother to heat it or cool it — or even plug in the clock radio in there? Simply shutting down a room that you don’t actually use can save you a little bit of cash.
3. Get a roommate. If you really aren’t using that room, why not rent it out? Bringing a roommate into your home can cut some significant costs. If you, in turn, are renting your home, you may need to check that your lease allows you to do so, but if you own your home, you can bring in as many boarders are you want.
4. Get rid of storage units. Even if your storage unit is a room in your home, you’re still losing money on that space (hey! you could be renting it out to a roommate!). But it’s much worse if you’re renting a storage unit just to house all your junk. The majority of storage units are used to hold junk that you don’t need — I’ve seen people pull a dumpster up to their storage unit and just pitch everything numerous times. And you may even be able to make some money off your stuff — try eBay or Craigslist.

Save Money with Coupons

Before you get ready to head out for your weekend shopping trips, you might want to consider doing some research on the products you want to buy. There are plenty of ways to save money on the things you buy every week; you just need to know how to find them! Below is a list of ways to increase your “savings potential” as you shop this weekend.

1. If you know that you will be shopping for specific items at specific stores, take some time to visit the store’s website. Store websites (and manufacturer’s websites) are great places to find coupons that will help you save money on your purchases. You might even try doing a simple internet search for the item that you want to buy. It could be available through an online shopping portal at a very cheap price!

2. Visit coupon websites like coupons.com. These sites offer coupons on everything from chicken soup to hair dye and the coupons are universal—which means that you can use them anywhere! Often the expiration dates are a few weeks out, so if you see something that you will need to buy soon, go ahead and print it out! Coupon websites also have great plug-ins that, when installed, will search for deals for you while you surf the internet.

3. Always grab the “in store shopper” guide as you walk into a store. Department stores and grocery stores will have these sitting in racks near their entrances. In these guides you will learn about items that are currently on sale. These guides also usually have valuable coupons that you can use at checkout. These guides are especially helpful in grocery stores as they will clue you in to deals that you might have otherwise missed.

4. Many people keep their coupons in an envelope somewhere in their couch. Instead, carry your coupons with you whenever you leave the house. You are more likely to remember to use your coupons if they are already with you. Coupons that live in a drawer at home are more likely to expire. There is nothing more frustrating than buying something and taking it home only to realize that you had a money saving coupon for that exact item that you could have used had you only had it with you when you visited the store.

5. Resist the urge to buy something you ordinarily wouldn’t buy but are now considering purchasing simply because you have a coupon! You would be surprised at how many people suddenly decide they need something (that they would ordinarily never buy) when a “buy one get one free” coupon presents itself!

You might scoff at clipping coupons as something that “only old ladies do,” but the truth is that spending just a few minutes clipping those coupons is well worth the time. Even if your coupons only save you five dollars each week, that still adds up to a yearly savings of $260!

Going Green in the Wallet

Believe it or not, going “green” isn’t just good for the environment; it is great for your wallet as well. We’ve all heard about how we need to stop using so much gas, shrink our carbon footprints and a dozen other environmentally striking “buzz phrases.” While saving the environment one person at a time is certainly noble, have you ever looked into the money you would save by going green?

Here are some very popular “green” hints that also save you money:

1. Reuse tinfoil and Ziploc bags. Most generic sandwich bags sell for around two dollars per box. A two person household probably goes through a box per month. Even if you buy generic brand bags, by rinsing them out and reusing them, you are saving around twenty dollars a year. Tinfoil is even more expensive (especially if you use the heavy duty variety) and a single roll usually sells for around three dollars. If you reuse your tinfoil, you can save as much as $36 per year.

2. Use napkins instead of paper towels and Kleenex. Paper towels and tissues range in price, but napkins are close to free, especially if you know how to sew. Old clothing can be cut up and used for cleaning rags. If you are an adept sewer, you can probably turn old clothing into cloth napkins for fancy dinners as well! Cleaning them is a breeze; all you have to do is toss them in with your regular laundry loads.

3. Get crafty with your trash. Soup cans can be cleaned out and used as pen cups, toothbrush holders and small vases. They look fine plain but also work well when painted or decorated. Butter/margarine tubs, oatmeal cans, coffee cans, etc can all be washed out and used to store other dried goods. Cool whip and butter/margarine tubs also work well as containers for leftovers and as cereal bowls when you have company.

4. Whenever possible, buy in bulk. Not only does buying on bulk cut down on the amount of packaging that will get thrown away, but it is often cheaper. Instead of spending six or seven dollars per bottle on spices, buy your spices for a few cents an ounce from the bulk bin. Cereals, spices, baking products—these are all cheaper when bought in bulk—and you can store them in your washed out food containers!

5. I would be remiss if I didn’t take at least one hint to talk about saving money on gas. Gas prices are expected to reach four dollars per gallon this summer. With the weather getting nicer, wouldn’t it be better to walk to the grocery store or local market when you run out of something?

These are just five hints to help you save money (and the environment). I’m sure you can think of plenty that I haven’t mentioned. If you have your own hint or tip, please leave it in the comments section. This is something we would all appreciate learning more about.

Always Ask For A Discount

Most people don’t bother trying this, but it often works like a charm. Just asking a simple question like “is that the best price you can do”, or “can you take $50 off that if we pay in cash right now” often results in a 5-10% discount.

If you use your credit card, merchants pay around 5% in charges. If you pay cash they should always give at least 5% discount.

I agree that this type of strategy may not work well in larger stores such as Wal-Mart or anywhere else where the cashier is powerless to help close the deal. You might just need to ask someone else. If you can ask the department manager or store manager directly it would be worth trying for a better price whenever you are purchasing large quantities, clearance items or floor models.

Typical store employees will have no leverage and seldom care about the store’s bottom line, so this approach works best in two situations:

1. When you are dealing with store management/owner, i.e. someone who cares about the store’s bottom line and thus has a business interest in completing the sale, or

2. When you are dealing with a commissioned saleserson, i.e. someone who has a personal interest in completing the sale

I have had fantastic luck doing this at larger electronics stores such as Best Buy. It works particularly well when purchasing discounted open box items. It has worked so well for us over the years that whenever we are shopping for a bigger ticket item (laptops, televisions, stereos, iPods, etc.) we always check what sort of open box items are available before we even consider anything else.

Original idea for this post courtesy of Adventures in Money Making: Join an engineer in his search for passive cashflow and his quest to gain freedom from the 9-to-5 job.