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Frugal Living for the Whole Family


I Just Got A 10% Raise; What Should I Do With The Money?


When it comes to money tips, a lot of attention should be given to your regular paycheck.

Knowing what to do with a raise may determine whether or not it even mattered. If all you do with a raise is to spend more money on eating out and entertainment, it won’t matter much to your family in the long run that you even got the raise. Being strategic with the money can have a big impact on your family’s lifestyle in the long run.


Consider which of these circumstances best describes your situation and follow the guidance to get the most out of your raise.


1. Awash in debt: if you can barely make ends meet each month because you’re over extended, with credit card debt, car loans and maybe even a payday loan or two that are eating away at every penny you bring home. Put the money from the raise toward the smallest debts—probably the payday loans—to quickly reduce the monthly outflow for debt payments.


2. Barely scraping by: if you’ve been frugal forever and have successfully stayed out of debt, but you haven’t accumulated much and don’t own a home, now is a great time to put your focus on buying a home. Put the raise toward a savings account for a down payment and get serious about putting your family in a stable, permanent situation.


3. House poor: if you just bought a home and haven’t been able to do much else and haven’t even been contributing to your 401k or saving for your kids’ college, now is the time to start contributing to the 401k and/or saving for your children’s college education.


4. Still driving the clunker: if you’ve been driving the same car for a decade it would be tempting to run out and buy a brand new car on credit. The dealer will make it easy for you. Don’t fall into that temptation. Save for six months, take the cash plus the clunker and upgrade to a car you’ll be happy to drive for a few more years while you continue saving for a car you’ll really be excited to drive. Make your car payment to yourself!


5. On top of the world: if you have everything under control, the cars are paid for, retirement savings and college savings are on track, consider how you can do some good with the money. When you have been blessed it is your great opportunity to become a blessing to others.


While none of these situations may describe yours perfectly, you may be able to get some ideas about how to use your raise. Making decisions that will benefit your family in the long run will ultimately bring the greatest happiness. A few extra basketball games or dinners at Applebee’s won’t provide stability that helps families build for the future. You want your kids to grow up in a stable home, get good grades, go to college and become healthy adults, grateful to their parents for the sacrifices they’ve made. Envision the future you really want and then go build it.


When Renting Rather Than Owning Makes Sense

For homes and cars, it generally makes more financial sense to buy them rather than rent them—over the long haul. Many rent-to-own programs help families double or triple the amount of money they need to spend on a computers, furniture, televisions and other home furnishing. Saving for and purchasing for cash your computers, furniture and televisions is much wiser than using a rent to own program. But sometimes renting makes sense.


Here are some examples.


1. Boats: Unless you live where you can boat every week and you’re sure you will boat regularly, it makes a lot of sense to rent a boat for a day or a week every year rather than buying a boat to display proudly in your driveway 355 days each year.


2. Motor homes: Unless you are going to live in your motor home (and if you do, I’m a little jealous—my wife won’t let me) you should think about renting one for your vacation rather than buying one and parking it for all but a few weeks each year.


3. ATVs: Unless you live in a rural area where you can—or need—to ride your ATV almost every day, it makes more sense to rent them once or twice a year for a weekend than to have them filling the garage, decorating the driveway or paying even more to have them stored off-site.


4. Hotel rooms, condos: For most people with average incomes, it makes much more sense to rent a few nights in a hotel or a vacation condo than to buy a time share. Those who have purchased and enjoyed time shares in my experience are folks with the money and time to travel extensively and take advantage of all of the expensive privileges. For the rest of us, it’s simply wiser to rent a few nights here and there.


There are two general rules that can guide you in making your rent v. buy decision. You may more reasonably consider a purchase if either of these conditions is true.


1. Frequency of use: If you reasonably plan to use an item frequently, the way you use your home, your car and your favorite socks, buying is likely much cheaper per use and much cheaper over time than renting each time. If you will only use it occasionally, you may be better off renting. To find out, rent it a few times before you decide to buy to make sure you want it and will use it as much as you hope.


2. Appreciation v. Depreciation: If the thing you’d like to buy is reasonably likely to appreciate—like a condo on the beach in Hawaii—it makes more sense to buy it than if it will depreciate like a car. You may only visit your condo in Hawaii once a year, but if it is going up in value and not costing a lot when you’re not there (and you have the resources to buy it for cash) it is hard to argue against the purchase.


Owning stuff provides a certain satisfaction. We’re proud of the things we own. But there are some things that it makes no sense to own. We can rent them instead and save thousands of dollars each year that we can use to buy things that it would actually make sense to buy.


Making Christmas Meaningful on a Budget


Christmas shouldn’t be all about presents, but in our modern culture, some people only know Christmas for gift giving. Throughout much of Asia, Christmas is celebrated enthusiastically. Christmas carols are played around China, where I lived for a year in 2011-2012, but no one there knows what the holiday originally celebrated. For many people, there is no meaning in Christmas.


If you are in a position where Christmas needs to be more modest than in the past, there is something you can do. If only so you can avoid the holiday credit card hangover, you can remake Christmas this year to be less expensive and more meaningful. By making Christmas more about giving than getting, you can save money and have a happier holiday.


Consider this plan to help you enjoy the Christmas season in a whole new way:


1. Plan as a family. As the holidays approach, gather the family and discuss your desire to have a more meaningful Christmas—one that won’t cost as much. Have everyone in the family contribute to a discussion about how you can do something kind for a significantly less fortunate family. You may want to discuss a one-time service project for a family you know, an evening serving meals at the homeless shelter during the Christmas season, or perhaps a twelve-days of Christmas anonymous surprise for a family in your neighborhood.


2. Involve everyone in service. Be sure to involve everyone in the family in doing the service. Youngest to oldest, everyone should participate. By including everyone in the plan, you can help each one of your children reframe the holiday season.


3. Be enthusiastic. As you plan, organize and execute your holiday service, do it with gusto. Behave as if you, personally, are enjoying every minute. Don’t ever give your children the impression that the service you’re doing is a chore or a bother to you. Anticipate joy and you will experience joy. If your children see you happy about this, they will catch the spirit of it as well.


4. Shop modestly. As you do your Christmas shopping, cut back from past years. Focus on buying the things that your children will need, like new clothes. Work strategically to acquire only things that your family will truly appreciate.


5. Don’t surprise them. If you are cutting back significantly on the Christmas shopping budget this year, don’t let your kids find out Christmas morning. Make sure that they understand that your service activity is related to cutting back on the extravagant Christmas spending.


6. Share your faith. Whatever your faith, share it with your children at Christmastime. Help them to understand your worldview. Give them the gift of your faith. They’ll never forget the lessons you teach them.


By framing your holiday with service to people who are truly less fortunate, you’ve given meaning to the holiday and satisfaction to your children, regardless of the scope or scale of what’s under the tree. You can, with less money, give your kids a happier and more meaningful holiday.


Most Powerful Money Tip: Tracking your spending empowers you

It doesn’t matter how you do it, but if you carefully track your spending and savings you’ll likely improve your results. There is an old adage in management theory: what gets measured gets done and what gets measured and reported gets done better.


If you carefully track your spending, it will allow you see how you’re spending your money and make strategic changes. Consider the following examples:


1. Credit card statements are not a substitute. Reviewing your credit card statements when they come is wise for a variety of reasons, including detecting fraud, but it isn’t a substitute for carefully tracking your spending by category. Just reviewing the statements won’t tell you how much you’ve spent dining out or on your favorite hobbies (even if the card statement can separate restaurant charges from grocery stores, it can’t tell whether you bought a new drive, a bag of groceries or baby clothes at Walmart).


2. Much of our spending is discretionary. Because we make choices about most of our spending each month, it is important to track it. We make hundreds of purchase decisions each month. Without tracking our spending, we have no practical way of knowing whether we’ve overspent in one area or not. This is especially true for the categories of spending that are the most flexible, like entertainment and dining out.


3. Income and spending is divided. The problem is compounded for families because there may be several people both earning money and spending it. How will you know what your spouse spent if you’re not tracking the spending and sharing the data?


4. Real time reporting is better than periodic reviews. The closer you can get to tracking spending as it happens the better. Optimally, you’d be able to update the reports daily so your spending for the 20th day of the month is guided by knowing what was spent the first 19 days. Even monthly reporting is better than nothing because understanding where you overspent last month can help bring spending under control next month.


5. Technology makes it easy. In this electronic world where much of your spending is being tracked by others anyway, it is relatively easy to track your own spending. Mint.com provides on-line software that tracks all of your spending in real time at no charge. You can customize reporting and planning tools to make everything simple and easy. Quicken also offers software, which you can download for a fee, with more robust capabilities and that can download data from the internet in real time to help you track your spending.


6. Tracking spending may lead to budgeting. Even if you never set up a formal budget, if you track your spending carefully and regularly, you’ll begin to adjust your spending to fit your long term goals. Eventually, tracking your spending guides your spending, having the effect of a budget and empowering you to accomplish what you want with your money.


Spending is easier and more natural than saving. If you want to do more of the latter and less of the former, tracking your spending is a powerful way to take control of finances. With today’s technology, it is almost effortless and it’s free. Just a few hours each month can help you take control.


Seven Ways Your Family Can Be Doubly “Eco” Minded (Economically and Ecologically)

There is growing social pressure on all of us to do our part for the environment, but some of the pressure we feel conflicts with the economic pressure on our families. Here are some ideas that are both ecologically and economically friendly.


1. Reuse and repurpose everything possible. Your younger children should certainly have some new things, but hand-me-downs from older siblings are a great tradition that families have used for generations. Before throwing just about anything in the trash or even in the recycle bin, consider for just a moment if there isn’t another immediate use for that item—especially one that would allow you to avoid making a purchase. But, don’t save junk on spec! That’s a recipe for hording!


2. Donate your used stuff to a thrift store like Goodwill so that it doesn’t end up in the landfill and you’re not paying to store stuff you don’t use. If you’re honest with yourself, you’ll find a lot of stuff in your home that you never ever use. Don’t blow it by filling the space with new junk—just enjoy the openness created by having less clutter around the house, fewer shirts in the drawers and toys that have all been outgrown.


3. Sell your valuable old stuff on eBay or Craigslist (use the former for things that you can easily ship and the latter for things that would be expensive or difficult to ship).


4. Walk to the grocery store. Not only will it save on gas and protect the environment, but you’ll find you can’t carry nearly as much, forcing you to make wise decisions in the store. If you have lots of kids or live too far from the store, try organizing your errands carefully to cut down on the miles you drive.


5. Buy groceries in bulk (if you’ll eat them). Buying in bulk not only tends to cut the cost per unit down, but often results in less packaging per unit, reducing the landfill pressure. A big jar of peanut butter, for instance, may cost half as much per ounce as the small jar. In the landfill or in the recycling process, the one big jar will end up doing less damage than the set of smaller jars required for an equivalent amount of peanut butter.


6. Use Skype or Zoom to see far away friends and family instead of going to see them. (You can do this for business, too.) The energy saved by avoiding travel can be huge!


7. Take a train instead of a plane. Be careful, it isn’t always cheaper, and in the U.S. it is rarely faster, but a train ride could be a real adventure and is much greener than air travel.


8 Monet Saving Tips for Looking Great on a Budget

Looking great on a budget takes time and patience, but you can do it. Here are some tips to help:


1. Have a budget! You can’t seriously talk about looking good on a budget if you don’t have a budget. Know how much you’ll spend on clothes each year, plan your spending carefully to get the most from it and stick to your limit.


2. Buy clothes that fit. No one looks good in clothes that are too small—or way too big for that matter, though that is rarely a problem. Generally, it costs no more to buy clothes in the right size than to buy clothes a size or two too small. Clothes that are the right size will last longer. Don’t buy clothes that are too small as an incentive to lose weight. Buy clothes that fit as a reward for losing weight!


3. Shop seasonal sales. Nordstrom, famous for great clothes and high prices has two sales each year for women and kids, two separate sales for men, and one for everyone each year. If you need to look professional for work, save your money for these sales. Many other fine stores also have sales with big discounts on a scheduled basis. Check the web sites for detail.


4. Buy a few nice things. For work, church and other occasions when you want to look your best, buy a few nice articles of clothing rather than having lots of things from discount stores. The higher quality clothes should last longer and make you look better than having lots of outfits from discount stores.


5. Buy versatile clothes. Don’t buy any item of clothing that you can only wear with one outfit; look for clothes that you can mix and match. Five shirts and five pants that you can wear only in match sets give you five outfits. Five shirts and five pants that you can wear interchangeably will give you 25 outfits.


6. Take care of your clothes. You don’t need expensive furniture and cedar wood hangers for your clothes, but they shouldn’t be tossed in piles on the floor. Wash, fold and hang your clothes so you can see what you have, find what you want and protect it all.


7. Two words: machine washable. If you build your wardrobe around clothes you can wash and dry at home, you’ll typically spend less on the clothes, and much less on caring for them. You’ll also avoid the temptation to wear the dry clean only clothes too often (showing up to work in a wrinkled suit with ketchup stains—not good).


8. Shop thrift stores and consignment shops. Don’t buy anything in a thrift store you won’t wear; you’re just wasting your money. You can often find clothes for about 20% of the retail price in thrift stores, saving you 80%. Remember, once you wear the clothes you buy new in a department store, they’re used, too.


Everyone can look good on a budget. You can also choose to spend a fortune and not look good. Follow these tips and you’ll always be pleased with your look and proud of your wallet.


Saving money on groceries won’t always save money in the long run

A family’s grocery budget represents a meaningful part of the monthly budget. Efforts to save money should include a thoughtful review of spending on groceries, but there are some traps. Some of the healthiest foods are more expensive than some of the least healthy; in the long run, poor health will cost your family more than a healthy diet.


Learn About Puppies


Consider the following:

Obesity: WebMD describes obesity as an “astronomical” epidemic. The resulting costs far outweigh any savings on groceries. Nearly one third of American adults are obese and about half that proportion of children and teens are overweight.


Diabetes is epidemic in America with nearly 26 million people (7 million of whom are undiagnosed) and is increasing around the world. More than 90% of cases are Type 2, which is “can be prevented through healthy food choices, physical activity, and weight loss,” according to the Centers for Disease Control. Diabetes care can be extremely expensive. More importantly, the impact of the disease on individuals and their families can be devastating; complications from diabetes include blindness and amputations.


Here are some tips to help you feed your family a healthy diet; they’ll save you money in the long run:


1. Skim Milk: skim milk has no empty calories, according to the U.S. Department of Agriculture; serve that as alternative to whole milk or even 2%.


2. Extra Lean Ground Beef: extra lean ground beef also has no empty calories; regular ground beef gets about one quarter of its calories from fat.


3. Skinless Chicken Breast: A skinless chicken breast has no empty calories. Battered and fried chicken wings get almost 80 percent of their calories from fat.


4. Wheat Bread: Wheat bread, which should be a staple in virtually every home, has no empty calories; a croissant has almost 50 percent empty calories.


5. Junk Drinks: soda pop, beer, wine and distilled spirits all provide no nutritional value for their calories. Money spent here is simply wasted.


6. Toppings: Butter, margarine, cream cheese and whipped toppings are almost completely empty calories.


7. Water: water from the tap in America is generally safe to drink, virtually free and is the healthiest option for most people.


8. Eating at Home: At home, you have the opportunity to influence your family’s eating habits more than when you eat out. If you provide food they love to eat at home, you can save money by eating out less. If it’s healthy food at home, you’ll save more money in the long run.


By spending your grocery dollars wisely to buy healthier foods for your family, you can protect them from obesity and type 2 diabetes. You can also save money and help to keep your family healthy by providing healthy meals at home instead of eating out.


We’re not making it on two incomes; how can we make it on one? Smart Money Saving Tips.

Many families reach a point with the number of children at home that one spouse would like to stay home to care for the children or other dependents, including aging parents. If you are in that boat and trying to figure out how to make it work, consider the following:


Balance of Income: If you and your spouse earn similar amounts and one of you wants to quit, it will be difficult to make that work. Where you are sharing the financial load equally, it may be impossible for you to create an acceptable budget without both incomes. In order to make it work, the spouse who comes home may need to find a work from-home opportunity to close the budget gaps. If one of you earns less than half of the other, less than one-third of the total household income, you can make it work more easily than you might think.


Natural Helps: There are a few natural helps that will emerge. The obvious natural help is likely motivating your desire to make the change—day care costs will be eliminated. In addition, the taxes on the income that goes away will likely be larger than you expect. The marginal tax rate on that income is likely higher than the effective tax rate on your combined income, meaning that you’ll pay less tax on the income you keep than you may be expecting.


Cutting Back on Cars: You’ll need to make some other decisions to make your situation work. With two jobs, you have likely maintained two cars. Perhaps two nice cars. You may need to sell one of the cars. Cars eat up more money than you realize. Especially newer cars. Because they get good gas mileage and don’t have to go to the shop very often you may think of the newer car as the cheap one. The depreciation is silently eating you out of house and home. The insurance on the newer car is more than the insurance on an older car—it would cost more to replace. Look carefully at your cars to determine if one can go, and if so, which one should go. If you can get rid of a car payment, that will go a long way toward closing your budget gap.


Discretionary Spending: Look at your discretionary spending patterns. If you have been living right up against it every month, there may not be much there to cut, but if you just think you’ve been frugal, a thorough review may reveal opportunities to reduce spending.


College Savings: It may seem ironic to stay home with kids and have to decide to reduce your college savings each month, but in the long run your kids may be much happier to have a parent at home than to have a bigger college fund. The difference between a local college experience and going to an elite private school is primarily tuition and secondarily the fun of being away from home. There may be little surprisingly little difference in the value of the education.


Retirement Savings: If you’ve been saving well for retirement, the money you have in savings will continue to compound. If you need to cut back on retirement savings, do your best not to stop altogether. A little something will compound over the years much more than nothing!


Your Home: Moving is an expensive adjustment to make and should only be considered in extreme circumstances. If you really were struggling to make ends meet before because you are “house poor,” that is your budget is tight because you bought a home you could barely afford, it may be the only way to make things work with one income. You can raise a healthy family just as well in 2,000 square feet as you can in 4,000 square feet. The kids may even thank you for not having so many chores to do on the weekends. But don’t move unless you are really going to downsize significantly—otherwise the cost of the move will overwhelm the financial benefits from a smaller home and mortgage.


If you work at it seriously, you can almost certainly find a way to make life work on one income. Almost certainly, someone you know is living the lifestyle you want with one parent at home and one at work, living on the exact income you’ll have. Watch and learn.


What Does It Mean To Be “Tax Deductible” And Why Does It Matter?


As you go through life, you’ll often hear references to things being “tax deductible.” All kinds of different things are. Understanding what is tax deductible could save you hundreds or even thousands of dollars each year.


Being tax deductible means that you can deduct the expense (a charitable gift, your mortgage interest, business expenses, etc.) from your income on your tax return. If you give $100 to charity, that will not reduce your taxes by $100. It will reduce your taxable income by $100. If your marginal tax rate is 28% then you would save $28 on your taxes by donating $100—under certain circumstances. Many Americans have an effective tax rate of zero so a tax deduction is of no value.


Consider the following examples to illustrate how tax deductions work.


Charitable Contributions: A donation to charity is deductible (subject to some limitations that rarely apply) so long as your total deductions for medical care, mortgage interest, and charitable contributions (along with a few other categories) total more than the standard deduction ($12,750 for 2011 for most married couples filing jointly). In other words, if your total mortgage interest, charitable donations and other eligible expenses total less than $12,750 for most couples, there is no benefit to having tax deductible expenses.


Mortgage Interest: Mortgage interest on your primary residence works just like charitable contributions to offset income if the sum of eligible deductions exceeds the standard deduction. Interest on a second home is generally not deductible. Mortgage interest on investment property is deductible on another form; it isn’t impacted by the standard deduction threshold.


Medical Expenses: Medical expenses are only deductible to the extent that they are more than 7.5% of your income; you can only deduct the portion that exceeds 7.5%. They, together with charitable contributions and mortgage interest must exceed the standard deduction in order to be deductible.


Business Expenses: If you have a small business you may deduct customary business expenses on your tax return. If you run a day care center in your home, for instance, you may be able to deduct food and other supplies used by the children in your care against the income you generate with the business. Under some circumstances, you can deduct depreciation on the space in your home devoted exclusively to the business. If the business loses money, you may be able to offset other income with the business losses (this won’t work if the IRS thinks your business is a hobby).


Understanding these basic concepts won’t make it easy for you to file your own tax return—especially if you have a business. Knowing how tax deductions work, however, may help you to make better spending decisions during the year. If you are in a situation where you can deduct your charitable contributions, for instance, you now understand that charitable contributions are effectively cheaper for you because of the tax savings.


Before you file your tax return, seek help form an experienced CPA.


Nine Tips For Selling Your Valuable “Junk” Online

For most household items that you can no longer use but that have some useful life remaining, donating them to charitable organization like a homeless shelter or thrift store can be much easier. For your valuable goods, however, you may want to take the time and effort to sell them online.

Here are some tips to help you maximize the sales proceeds for the items you sell:


1. Pricing: Before you sell it, look carefully for similar items for sale to determine what the fair and reasonable price is.


2. Big Items: If it is too big to ship, carry or move easily (like an old sofa or a bed) Craigslist.org works great. It is an online local classified advertising that is free for most listings. It is easy to use. (I generally price things low to get someone with a pickup truck to show up quickly with a friend to haul my old stuff away, saving me the trouble.)


3. Shipping Efficient Items: If your item is small and light enough to ship efficiently and especially if it is unlikely to break in transit, you can try eBay. eBay listings give you national and international reach for things that you can ship. What you can ship may surprise you.


4. Cars: There is quite a market for cars on eBay. If your car could be considered rare or collectible, you should certainly consider selling your car on eBay. If your car has graduated to clunker status, just trading it in may be your best bet. You can also list cars for sale on Craigslist.org (cheaper and easier than eBay).


5. Free Stuff: If you’re like me, there are some things that are so big and ugly you’d give them to anyone who’d show up to haul it away. You can list such things at Craigslist.org or Freecycle.org.


6. eBay: Because eBay tracks feedback and allows both buyers and sellers to rate one another, it is a good idea to buy a few things on-line before you try to sell something so that you can validate your good name. Buy cheap things; pay promptly. Request feedback if none is provided automatically. Give the seller feedback. Then, sell your least valuable things first and work up to something like a car where feedback would be key.


7. Craigslist: Craigslist is not eBay. There is no feedback mechanism. Do not accept anything other than cold, hard cash as payment from anyone from Craigslist. Ever. Do not hold things for Craigslist buyers; chances are very good you’d hold them forever. Tell everyone the same thing—the first one to show up with the cash gets the goods.


8. Good photos: Whether you are selling an item on Craigslist or eBay, you need good photos. You can get great photos with a cheap camera if you have great light. Try taking photos with and without flash, inside and outside and then choose the photos with the truest colors and the sharpest focus.


9. Don’t Lie: Don’t ever lie about your stuff. The cultural ethic on eBay will punish fibbers harshly. Provide complete and accurate descriptions of your stuff to avoid negative feedback. Remember, on Craigslist, someone who lives in your town will come to your home to give you cash; you’d hate to make a big guy with a pickup truck and a big friend mad because you weren’t honest about your stuff.


You can quickly and easily sell your old stuff on-line, converting old junk into cash. You can’t retire on the proceeds, but selling old junk for cash sure beats renting a storage unit for it!


15 Money Saving Tips to Help You Spend Less Than You Earn

Everyone understands the goal of living within their means, spending less than they earn and saving for a rainy day. Most people don’t do it. Here are some simple tips to help you break the pattern:


1) Live in a neighborhood where most people make a little less than you do so you won’t feel so much pressure to spend.


2) Contribute to your 401k at work so you don’t have a chance to spend the money you’re saving.


3) Use Mint.com, the free on-line budgeting system, to track your spending and help you manage your financial goals. (Don’t like Mint.com? Try another system.)


4) Give yourself an allowance for discretionary spending—in cash. When the cash is gone, stop spending—no credit cards!


5) Don’t shop when you don’t have money left in your budget; build your willpower by staying away.


6) Proudly drive the old car you’ve got and take care of it so it will last a long time. It may be that nothing hurts a budget more than buying a new car.


7) Walk to do errands that can be done by foot—stop laughing at yourself for driving two blocks for this or three blocks for that.


8) Eat out less; eat in more.


9) Have a meal preparation marathon once or twice a month, preparing meals in bulk that can be frozen and reheated later, saving money and time.


10) Look for cheaper hobbies or cheaper ways to enjoy the hobbies you have. Running is cheaper than biking (no bike, less gear). Golfing at the municipal course is cheaper than at the club.


11) Use coupons, watch sales, and shop smart to buy the things you need.


12) Don’t buy things you don’t need that don’t fit in your budget no matter how good the sale, no matter how big the discount! Define for yourself the difference between a “need” and a “want.”


13) Engage the entire family. Let everyone be a part of the plan to save money; everyone will benefit so let everyone share the sacrifice.


14) Don’t use credit cards, pay-day loans or other borrowed money to close the gaps in each paycheck. Borrowing will only make the next paycheck cycle harder.


15) ) Look for substitutes in the grocery store that save big dollars each month, but won’t impact your pleasure much. Think two-liter bottles of soda instead of cans, store brand products instead of the name brands. You end up with the same food and the same pleasure, but at a lower cost.


Applying even a handful of these ideas consistently, over time will have a big impact on your budget.


How to Use Mint.com to Help Control Your Spending

Perhaps you’ve heard of Mint.com or maybe you're just hearing of it now, but in either case you’re looking for help in controlling your spending.


case you’re looking for help in controlling your spending. Think of this as a quick, step by step guide to getting instant help with knowing where your money is going in real time! Wouldn’t it be great to get an email when you’ve spent your limit for the month on meals and entertainment? Mint can do just that!


Let’s get started:

1. Go to www.mint.com.


2. Complete the quick sign up process—it’s free.


3. You’ll then be prompted to set up all of your accounts. This will take a few minutes, but if you already do your banking and manage your credit cards on line, this should only take about one minute for each account. Mint.com will be doing the work before you know it.


4. Click on “Transactions” on the menu, which will display a list of your transactions going back about 90 days.


5. Sort by “category” by clicking on the column header for category.


6. Now, skim over the transactions looking for category errors. The big problems will be that many are labeled as “uncategorized.” Mint.com does this when it can’t figure out how to assign a category to a transaction. Depending on the number of transactions, this can take a while the first time. If you check back with Mint.com at least once a week (better daily) you’ll find it is no trouble at all to check and correct categories.


7. OK, click on “Budgets” to review suggested budgets for your discretionary spending. Mint.com makes budgeting easy and doesn’t require you to budget for every single category. It will prompt you to focus on your discretionary spending areas—those categories where you have the most control.


8. Just hover the mouse over each budget category and you can nudge the budget up or down to put it where you want it. When you exceed the limit, you’ll get an email from Mint.com alerting you. Hope that email doesn’t come before the middle of the month— that can make for a long few weeks trying to spend zero on, say, fast food for the last half of the month.


9. Next, click on “Goals” in the menu. You’ll be presented with a variety of goal templates, choose one to get started (if none of the canned goal templates fit your goal, click “Custom Goal.”


10. Follow the interview to set up your goal. In just a few moments, Mint.com will help you figure out how much you need to reach your goal, how much you’ll need to save each month and where to put the money you save!


11. Alright, click “Trends” on the menu and you can view graphs of your spending by category or over time. The longer you keep your information accurate, the more valuable the data becomes.


In just one hour, you can go from Mint.com neophyte to Mint.com mogul. If you don’t like it, you can try Quicken, which is software you install on your computer that is more powerful and, unlike Mint.com, it isn’t free.


Buy This, Not That! 16 Examples of Money Saving Tradeoffs

Every day we face purchase decisions that at the end of the month we’ll have to face in the form of a bank statement reminding us of how little money is left. Here are some ideas to help you spend less:


1. Buy cell phone service from a prepay vendor like Virgin Mobile rather than one of the big two cell phone providers who charge twice as much for the privilege of paying 30 days later.


2. Buy a $5 bucket of balls at the driving range rather than $300 on a new driver—it may have the same effect on your game.


3. Buy the store brand rather than the national brand (after you double check the price to be sure you actually save money).


4. Buy a bag of old school popcorn you pop on the stove or in a popcorn popper instead of microwave popcorn.


5. Go see the last matinee of the day and have dinner afterward rather than having dinner before the movie and then paying full price for the evening showing.


6. Better still, rent the DVD and fix a nice dinner at home rather than seeing the movie in the theater and eating out.


7. Buy a $199 Google Nexus instead of a $499 iPad. Don’t let anyone tell you you’re not cool enough.


8. Read ebooks rather than print books; many ebooks are available for free!


9. Golf municipal courses rather than private courses.


10. Run instead of riding a bike for fun and exercise—it’s much cheaper.


11. Buy a car that is a year or two old rather than a new one (be sure to keep it as long as you would have kept the new one to get the full benefit).


12. Buy your designer clothes in consignment shops not department stores.


13. Buy what you need but don’t want (a purple tie for your brother’s wedding) at a thrift store when you can.


14. Buy the McDouble off the dollar menu rather than a Quarter Pounder with Cheese; you get almost the same taste, fat, calories and cholesterol for less than half the price!


15. Drink water in restaurants where soda is grossly overpriced and drink soda at home from two-liter bottles you buy for a buck on sale at the grocery store.


16. Buy a few nice clothes for work rather than piles of new cheap clothes; your boss and your colleagues won’t care that you look familiar in your favorite outfit if you look nice and clean.


Ten Ways to Feel Richer by Wanting Less


No matter how much money we have, it never seems to be enough. This is true for the wealthiest people I know in the same way that it is true for most average folks. One thing I’ve seen, however, is that a few people are happy with what they have and as a result they manage it better. Those who are so focused on keeping up with the Joneses tend to frustrate their financial futures by buying too much stuff and spending too much on fancy vacations.

Here are some tips to help you live life wanting less and enjoying what you have a lot more!


1. Volunteer in a food pantry or homeless shelter where you will have the opportunity to interact with people who have a lot less than you.


2. Don’t ever move to a neighborhood where most of your neighbors have more money, drive nicer cars, travel to more exotic places for vacation and wear nicer clothes than you do.


3. Seek out friends who have less money than you have, who’ll be happy to go to dinner at less expensive restaurants, who’ll want to catch a matinee with you rather than pay full price for a movie.


4. Take good care of the things you have so that you don’t feel so much pressure to replace them, especially your car(s).


5. Make regular contributions to your savings account and focus on the progress you’re making there so you are less distracted by fake savings opportunities in department stores —buying something you don’t need at 20% off is an 80% waste of money.


6. Donate some of your hard-earned money to a cause that you are passionate about to help put your discretionary spending into a different context (think Oskar Schindler slowly evaporating his wealth to save his Jewish friends—though you don’t have to give away all of your money to gain a greater appreciation for what you do have).


7. Join an organization that includes people from all walks of life, including some who have much less than you; you’ll find that you don’t feel nearly so much pressure to pull up to an event with a diverse group of people in a brand new car if some of the folks in the group don’t even own cars.


8. When you buy a home, have two goals in mind: find a home where you can live “forever” and that you can easily afford so you won’t be immediately tempted to move and so your home doesn’t make you feel so poor.


9. Walk somewhere you normally drive (especially if the round trip is less than a mile) to save money and remind you what a luxury your car really is—most of the people in the world don’t own cars. 10. Plan your next vacation as a service vacation, building homes for Habitat for Humanity or, if you can easily afford it, in a desperately poor country on the other side of the world where you can see abject poverty, do something to relieve it, and come home with an even greater appreciation for things you have.


What You Expect May Determine Financial Contentedness

Everyone hopes to have a little more than they have now. It is human nature. Having reasonable expectations for your stage of life, for your retirement and your children’s education can have a big influence on how content you feel with what you have.


Consider the following examples:

1. Your home: If your parents live in a 6,000 square foot home on a half-acre lot in a gated community and you think that you should be able to start out with the same thing, you are likely to be disappointed and frustrated. Find out where your parents had their first home. Go see it if you can. Adjust your expectations for what a first home should be. If your parents were both MDs and you’re a school teacher married to an artist just launching a career, you may need further adjustment to your expectations. Take time to really understand what lifestyle you can afford and work to align your expectations with what’s real.


2. Your car: Cars are crazy. Some people would rather own a nice car and live in a tent than drive an old clunker and have a home with a garage to park (or hide) it in. That means that you can find some unusual reference points, like the kid delivering pizzas in a BMW. You need to set your expectations for your car in the context of your personal priorities. If you want to own a home and that’s a stretch, you’ll probably be driving a modest car for the next several years. Own your choices and don’t be ashamed to drive an affordable car.


3. Your kids’ college: You may want to send your kids to college at Cornell, but Ivy League tuition isn’t cheap. Even if you have an above average household income, tuition, books, room and board at an Ivy League school may be out of reach—at least without piling on the debt. On the other hand, attending a state school near home may provide a much more affordable education and one that still opens doors of opportunity. Many people have figured out that an undergraduate degree from a good state school can still qualify students for elite graduate school programs.


4. Your retirement: You may want to retire at 50 and live between the beach and the golf course in Hawaii, but unless you have extraordinary good fortune, retirement will come closer to 70 and you’ll find it wise to move to a smaller home or condominium when you do. If you plan and prepare well for the reasonable retirement plan, you’ll be more likely to enjoy it when it comes. If you have dreams of extraordinary luxury and an early retirement, you might coax yourself into taking investment risks that not only don’t achieve the goal of providing for an early retirement, they could instead leave you without the resources to have the reasonable retirement you deserve.


As you look at your circumstances, it is healthy to aspire to have a little more, to work and save and plan for the future. You may doom yourself to a perpetual state of disappointment if you expect things to be much better than you can reasonably expect. If fortune smiles on you, it will be easy to adjust to having more money; plan and prepare for less and you’ll enjoy life more.


Seven Ways Honesty Is Key to Frugal Living

You and your family would like to live more comfortably and more frugally. One of the keys to successful frugality is honesty. These are just a few specific examples.


1. Honest with yourself: in order to live frugally, you need to live within a budget. This requires that you are honest with yourself about your spending. You can call a haircut “groceries” but you can’t feed your kids a haircut.


2. Honest with your spouse: successful frugality requires peace at home, which requires honesty between spouses. If you decide that you won’t spend more than $100 without the approval of your spouse, you have to be honest about it and hold yourself accountable just as you will hold your spouse accountable.


3. Honest with your employer: earning a living is vitally important to your lifestyle. Nothing will get an employee fired faster than a breach of trust. Whether it be petty things like not working a full shift, “borrowing” office supplies, fudging on a expense report or lying about who drained the coffee pot without putting a new one on, any of these can violate a trust that leaves your job in jeopardy. Be scrupulous.


4. Honest with creditors: when you borrow money, you need to accept that obligation as a literal, moral obligation to repay the money—not just eventually—but on the agreed upon terms. All your obligations are tracked carefully by those whom you owe and failure to pay on time and as agreed can have long lasting and painful implications. Don’t borrow money you can’t afford to repay.


5. Honest with merchants: as you go through your day making purchases of all sorts, you demand absolute integrity and honesty from the merchants where you shop. If the price tag says $19.99, you expect to pay $19.99. If the system pulls it up at $24.99, you’ll call them on the error. Let the street run both ways. If the merchant makes an error in your favor, let them know. Not because your kids are watching, or even because it’s good karma. Do it because it’s the right thing to do.


6. Honest with your children: kids have a difficult time understanding money and limits. They may not understand why you don’t have $10 for milkshakes on the way to the grocery store where you’ll spend $100 on groceries. Don’t lie to them. Explain honestly that as a family you have to have priorities and that in order to be able to afford important things, sometimes giving up less important things is required. Honest dialog with your kids will make them your allies in saving money.


7. Honest in reporting: as you seek to live frugally, to save for the future and maintain a happy home, you need to measure your progress. Be honest in the preparation of your reports. Keep track of where the money goes, how much you have in savings and what your assets are worth compared to what you owe. Keep track in an honest way so that you and your spouse can use the reports to better plan and organize for the future.


Being honest with yourself and others regarding money will contribute meaningfully to having a successful home and family. Working as a family, communicating honestly with one another about money, and treating your employer and merchants with integrity will tip the scales in your favor in the long run.


29 Keys to Financial Happiness


1. Having enough money does make people happier than not having enough; having more money doesn’t make people even happier.


2. The key to financial happiness may be wanting less rather than having more.


3. Don’t spend more than you earn.


4. Don’t be afraid of hard work.


5. A college education is imperative in today’s “knowledge” economy.


6. Remember to save for the future; it will be here soon enough.


7. Teach your children the value of money; let them want something badly enough to buy it themselves.


8. Buy a house you can afford and that you’ll want to live in for a long time.


9. Don’t let what other people think of your car dictate what you drive; you really don’t care what someone thinks who would judge your worth by the price of your car.


10. Take care of your stuff.


11. Don’t be afraid of public transportation.


12. People who understand interest collect more than they pay.


13. Paying off your mortgage really is cause for celebration.


14. Credit cards are a convenient way to pay for things you want, but only if you actually have the money to pay the credit card bill.


15. Saving 20% on something you don’t need is an 80% waste of money.


16. Don’t torture yourself; shopping is torture when you don’t have the money to buy what you want.


17. Work is supposed to be work; that’s why they pay you to do it.


18. If it’s not raining, you better be saving, because the rain will come.


19. You’ve got to work for money until you can get money to work for you; keep saving and investing.


20. Make getting out of debt something you do and not just something you dream about.


21. Stop borrowing and start saving; you’ll thank yourself someday.


22. Family finances are a family affair; let everyone help to conserve and save.


23. You can be eco-wise by being environmentally friendly and economically minded.


24. You really will die without food and shelter; you really won’t die without Prada.


25. A new $300 driver may not do nearly as much for your drive as a $5 bucket of balls at the driving range.


26. Quality family time can happen just as easily camping in a National Park as at Disney World; choose the vacation that fits your budget best.


27. Did you babysit, deliver papers or mow lawns as a teenager? Do your kids?


28. Don’t compare your first home to the home your parents own now; compare your first home to their first home.


29. Money’s only real value is the good you can do with it.

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