You want to express your inner most feelings for your sweetie in the gift you choose, but doing so may require you break the bank. And that could be counter-productive. Who wants a penniless pauper as his or her main squeeze?

For men especially, this month-two, day-14 Catch-22 delivers such a load of anxiety that they may not recover until just before Sweetest Day, when it explodes in their faces all over again. I’m betting if they’re like me, many men would prefer having the decision taken out of their hands by an authority better versed on the topic of giving meaningful gifts while respecting a budget.

Enter Vicky Oliver

Fortunately, just such an authority exists to help you.

In fact, regardless of your gender, you have an ally and invaluable aide in Vickie Oliver, author of “The Millionaire’s Handbook: How to Look and Act Like a Millionaire, Even if You’re Not!”

Oliver is out with her list of “Valentine’s Day Gift Ideas for the Frugalista,” and we’re assuming though frugalistas would seem to be women, men can partake of a few of her Valentine gifting ideas themselves.

Writes Oliver: “If you’re watching your money (and these days, who isn’t?), the good news is we live in an era when the grand gesture can be more meaningful than a present costing hundreds of dollars. With a little forethought, yours will convey just the right amount of love.”

One option, Oliver says, is to create a drink personalized to the distinct nature of your sweetheart. If he’s from Florida, include orange juice. If she’s red-haired, make sure ginger is one of the ingredients. Create a name for the drink, and a recipe card your honey can carry home to make the drink any time.

Another is to design an I.O.U. for something you know your significant other would love, and wrap it with a ribbon from another gift. It might be a “free home-cooked meal,” or “one free backrub.” Writes Oliver: “Whatever the promissory message, it should be for something that you know your love interest greatly enjoys, but doesn’t have the chance to experience nearly often enough.”

One idea of Oliver’s I particularly like is to create a CD of the songs your honeybunch likes, or that will remind you and that special person of memorable moments during your time together, whether it be a season or a lifetime.

“If you have been dating for over a year, the songs might hearken back to the night you met,” Oliver writes. “Or the CD might include the melody that played when you first kissed. Sweet dreams are made of this.”

For the über tightwad

Inspired by Vicky Oliver, I compiled my own short list of Valentine gifting ideas, perfect for folks who would make a frugalista look like a philanthropist by comparison. Let’s see if a few of them don’t appeal to the cheapskate in you. I emphasize these are my ideas. No one else would have the gall to claim them.

Weekend in Paris. There’s no place more indelibly linked with romance than the City of Light. But you don’t have to travel to France to rub shoulders with Parisians. There’s a Paris, Oregon, a Paris, Texas and a Paris, Illinois, as well as towns called Paris in Missouri, Kentucky, and Tennessee, to name a few.

Greyhound can take you to these towns or within short distances of them, but you don’t have to live that extravagantly. Simply hang out your thumb on any highway headed toward a Paris, and if luck is with you, you and your sugar pie should get there. Thumbing a ride worked wonders for Claudette Colbert and Clark Gable in “It Happened One Night,” one of filmdom’s great romantic flicks.

Dinner next to the fire. Nothing says “I love you” like romantic chit-chat and dinner next to a crackling fire. At the city dump, you’re likely to be able to find an old metal barrel. Fill it with combustibles and set them ablaze.

Look around and you may be able to spot an ancient, beaten-up couch, or maybe a discarded loveseat. Draw it up to the fire, sit down with your heart-throb and get going on some serious turtle-doving, while digging into the sack of chalupas you brought from the nearest Mexican takeout.

Romance of the rails. Long ago, train travel took on a kind of romance it’s never shed, even after being supplanted by air travel in most folks’ plans. Great American songs like “Chattanooga Choo Choo” and “Atchison Topeka and the Santa Fe” did much to cement this mystique.

So plan to make this the year you take your darling on a very romantic train ride. There’s no need to pop for a ticket, though. Rail yards in any major city are filled with boxcars, and one with open doors could be the portal to adventure and romance for the two of you.

Nod off to sleep after the train that includes your personal car starts rolling, there’s no telling where you and schnookums might wake up.

Why, it could be Paris, Ohio.

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It’s been awhile since I published my list of 36 ways to save money on groceries, and it appears that the landscape has begun to change.

According to the WSJ, stores have been increasing the prices on their private-label foods faster than the prices of the equivalent national brands. By the numbers, the prices on store brand non-perishables increased 5.3% last year vs. 1.9% for national brands. And for perishables, the numbers were 12% vs. 8%.

The driving force behind these price increases? Oddly enough, it appears that the recession is to blame. Stores apparently wised up to the fact that consumers were increasingly choosing store brands over national brands to save a buck, so they have started narrowing the price gap.

At the same time, they have worked to improve their packaging, expand their product lines, and do a better job of branding their own products in hopes of building customer loyalty. Gone are the days of the plain old black & white packaging.

To be fair, you can still save upwards of 29% using store brands, but the gap is shrinking. But that’s a broad average. There are actually instances in which the store brand is the most expensive product in the category.

For their part, name brand food companies have started offering more coupons and discounts in an attempt to win back customers — in essence, they’re engaged in price targeting, which allows them to sell the same items to different consumers at different prices.

The bottom line here is that you shouldn’t blindly pick the store brand over the national brand. Rather, if you want to get the best deals, you’ll need to pay close attention to the price-per-unit and shop accordingly.

Source: WSJ via Time

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Are you looking forward to a nice Spring Break vacation? Or maybe a summer trip to visit family? If so, and if you’re planning on flying, then read on…

According to a study by Airlines Reporting Corp., which is company involved in ticket transactions between airlines and travel agents, the best time to buy a plane ticket is six weeks before your intended travel date.

This study, which was based on millions of transactions over the past four years, found that passengers buying tickets six weeks in advance paid roughly 6% less than the overall average fare.

The study also showed that ticket prices can rise dramatically about a week before the departure date, and can be as much as 40% higher if you try to buy the same day you travel.

This isn’t to say that you’ll always get the best deal by booking six weeks in advance but, all else being equal, that’s when you’re most likely to score the lowest price.

As an aside, a colleague once raved to me about the Bing travel predictor, which tells you whether you should by now or wait (along with a percent confidence indicator) based on whether they expect fares to rise or drop.

While this sounds great in theory, my experience has been that the predictions aren’t particularly accurate, even when their confidence is high.

As I’ve noted in the past, another good trick for saving money when you travel is to consider alternative airports. This won’t work for everyone, but some airports are consistently more expensive than others.

Source: LA Times via The Consumerist

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I have long contended that, at its most fundamental level, keeping a household’s finances in the black has much in common with operating a profitable business. In both cases, you have to try to generate the greatest revenues, while at the same time keeping expenses in check. It’s not rocket science or brain surgery. In both worlds, success boils down to making – and keeping – more money than you spend.

These thoughts were percolating in my mind last fall, when I covered one of the printing industry’s largest conventions, the Graph Expo Show at Chicago’s McCormick Place. The show is both a showcase for printer manufacturers and suppliers, and an opportunity for printing companies large and small to learn about the latest technology.

On day one, I sat down to take notes at a presentation billed as “Heidelberg Presents the State of the Industry with Andy Paparozzi.” As vice-president and chief economist for the National Association for Printing Leadership, Paparozzi had been called on by printer maker Heidelberg to offer attendees an hour of well-chosen economic illumination.

If you ever get a chance to witness a talk by Andy, don’t miss it. Knute Rockne could have taken lessons from Paparozzi in exhorting listeners to greater glory. As impressed as I was by Andy’s gifts at a microphone, however, I was even more taken by the universal nature of his insights.

While Andy’s talk was geared to an audience of printing company honchos, it could just as well have fit virtually any other industry. Beyond that, almost every lesson he imparted to business held some parallel for those trying to hold household budgets together.

Let’s take a look at a few of Andy’s key points, and see how effectively they translate to the American household of Joe and Jane Sixpack and their 2-1/2 precocious youngsters.

Managing uncertainty

Paparozzi started by noting that as he talked to printing industry professionals, he sensed an aura of uncertainty from each. They didn’t know what to expect next.

“I’ve never seen that in my 28 years in this great industry,” he said. “Recovery has been maddeningly slow, irritatingly sporadic and uneven. But recovery is nonetheless occurring. This recovery is not what we want it to be, but what we make it. That requires making smart investments, managing uncertainty, and learning from the last recession.”

Translation: We’re not happy with the bounce-back from the economic abyss of 2008, but why waste time and effort complaining about it? We can still exert some control over how we recover, and that in itself is energizing. We’re not helpless pawns in the recovery, but masters of our own ship. We can put extra time and consideration into what we spend, and manage uncertainty by husbanding our household savings and avoiding risky purchases. We can also avoid mistakes made last time, which for many centered on assuming good times would last.

“Nothing is more important to the future than getting capital investments correct,” Andy went on. “We can’t pass inefficiencies on to our clients. The industry’s too competitive.”

Translation: One of the “capital investments” any family can make is in education and training. Being good is no longer good enough in the workforce of 2011. A struggling economy may be the best time to invest in training, because as the economy improves, it stands to make us more marketable in an ever more competitive employment landscape.

“We must stay lean,” was Andy’s next message. “Recovery no longer provides a margin for error. And you can’t let being busy be an opportunity for not getting better. We’re getting better or falling behind. Retain multi-taskers and release those who can’t or won’t multi-task. And set up a cost-watch task force on the production floor.”

Translation: Let’s excise the fat from our household budgets, while also seeking an opportunity in our spare time to improve our financial circumstances. Let’s look at landing a second, part-time job, selling some unneeded camping equipment, clipping coupons or taking in a boarder. Let’s find a way to convert some of our relaxation time into productive use, and while we’re at it, set up a reward program for the kids when they identify places to cut costs.

“If we learn, we win,” Andy next exhorted his listeners. “If we don’t, the Recession wins. If you aren’t doing things differently, you’re not in business. You can lose it all quite easily if you aren’t prepared to change your business model. We can do more with less. We have to keep our costs light, even in the good times.”

Translation: There’s nothing like tough times to force agonizing appraisals on any household. This is probably one of those times for re-examining. Can we find a lower-cost place to buy groceries? A more cost-effective phone plan? Can we trade in our car on a more fuel-efficient model? Can we scan the Internet for Deal-of-the-Day offers? We can do more with less. We have to keep our costs light, even in the good times.

“Create a ‘Recovery Manifesto,’” Andy urged in conclusion. “Improve continuously. Challenge your own success. Never use being busy as an excuse for not improving. Be adaptable and flexible, because those who are get stronger.”

Translation: You may be tired of the slow recovery, but that’s no reason not to embrace principles that make businesses successful, in printing or any industry.

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The other night while on my way home from work, I was reminded of the high cost of convenience. We were in the mood for margaritas, so I stopped by the liquor store to pick up some tequila and mix. As it turns out, they were out of the mix I was after, but I made a mental note of the price.

I then stopped off at the grocery store (a bit out of my way, but not too far) to grab the mix there. When I arrived in the right aisle, I was quite surprised at the price difference… What had been $7.99 at the liquor store was $4.09 at the grocery store. This was for identical items — same brand and same size.

I always assumed that you’d pay a premium to buy the “extras” at the liquor store, but I’d never paid attention to how big the difference was. That extra $3.90 for a bottle of margarita mix equates to a 95% markup at the liquor store vs. the grocery store. Sure, there are instances when it might be worth the added cost, but with a bit of planning you can avoid these extra expenditures most of the time.

Of course, the same can be said of a huge number of items. For example, a gallon of milk costs at least 30% more at our nearest convenience store/gas station as compared to the grocery store. In other words, it (literally) pays to be organized and informed, and to plan ahead.

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Eating out is fun, relaxing, tasty…and darn expensive! The current tough economic times have forced a lot of people to trim their dining budgets, but it’s a hard thing to give up altogether. So in the spirit of indulgence — but within a budget — here are eight tips for saving money at the restaurant:

Split a meal

Most restaurants offer portions that are larger than a person would normally eat at home, so save the price of one whole meal by splitting an entree with your partner. Same goes for the kids — if you know neither little Sammy nor little Janey will eat a whole chicken fingers dinner, why buy two? Some restaurants charge a fee to split the meal, but it’s way less than another whole entree would cost.

Don’t split the bill

If you go out with a group, ask for your own bill. That way you won’t have to subsidize your buddy Buster’s six Dutch imports while you sip a Diet Coke. Everyone has a story about spending way more than planned because someone in the group overindulged (or worse yet, forgot her money). Even if everyone else in the group is sharing a bill, beg off by saying you need to leave early or something. You’ll be glad you did when you see the rest of the group struggle over that giant bill.

Drink wisely

Drinks can add up to a serious part of your dinner tab if you’re not careful. Four options: 1) certain restaurants, especially those without liquor licenses, allow patrons to BYOB. They may charge a “corkage” fee to open and serve the liquor you bring in, but you’ll still save a ton of money; 2) drink specials are often worth it — a bucket of Bud Light for $15 is a much better deal than buying six separate imports; 3) bottomless drinks? Yes please!; and 4) water is almost always free, and everyone knows how healthy it is, so drink up.

Stick with the specials

Restaurants promote specials, such as buy-one-get-one-free deals, to get you in the door. They hope you’ll buy drinks, appetizers, dessert, etc. to make your visit profitable. But they won’t complain if you just take the special without the extras (and guess what, they’re still making more money than if you didn’t show up at all). So take advantage of those deals. Same goes with Groupon and those other seemingly amazing “daily deals.” You’re saving money, the restaurant’s making a little money, and everyone is happy in the end.

Become a regular

Regulars are treated better, get the best tables, and generally have way more fun than the customer who shows up once a decade. But how do regulars save money? A couple of ways. First, no one cares if a regular comes and nurses one beer for two hours. So if you just want the restaurant experience without spending much money, go to your regular joint. Second, regulars get clued in on the best deals, get offered the most lucrative loyalty cards, and sometimes get free stuff. They get all this because the owner values loyalty, and if he gives you a free dessert tonight you’ll tell your friends how great it is tomorrow. So soak up the pleasures of being a regular, including a slightly fatter wallet.

Use the doggie bag

Don’t be embarrassed to take your leftovers home. You paid for them, right? If it was great for dinner tonight, it will be nice for lunch tomorrow.

Go for lunch instead of dinner

If your schedule allows, enjoy the restaurant experience at lunch rather than dinner. The prices are almost always lower…sometimes even on the same dishes! Plus many restaurants have quick lunch specials that beat any dinner special, because they know most workers on lunch break are on a tight budget and tight schedule.

Don’t stiff your server

No matter what you do, don’t think the tip is a place to save money. Servers work hard for you, so if the service is decent, give them the full 20 percent. Trying to save a buck by paying a measly tip will only bring you bad mojo. If you just can’t stomach paying the tip, go to a restaurant that doesn’t have table service. You’re not limited to fast food — every town has a decent cafeteria-style or counter-service restaurant.

Dining out is a major social event, and even the thriftiest tightwad wants to enjoy a restaurant now and then. If Scrooge follows these tips, he can have his fun and still have a fat wallet.

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Casinos, grocery stores, and shopping malls are no longer the consumer outlets that are trying to use psychology to make consumers stay longer and buy more merchandise. Now restaurants have gotten in on the action, going to great lengths in order to use consumer psychology, menu engineering, and behavioral tricks to help separate us from more of our hard earned money.

Whether it’s the setting at the restaurant or the layout of the menu, restaurants have been hard at work trying to understand what makes people spend more money on each visit. Understanding how consumer psychology plays a part in our shopping decisions can help you save money while eating at a restaurant.

Menu design and spending

No dollar signs on menus. There are very few dollar signs on menus in a restaurant. This is especially true for national chain restaurants. Using casino chips instead of real dollars makes you less cognizant of how much time you are actually spending at the casino. The same is true for the lack of dollar signs on the menu next to the items’ prices. Dollar signs can make you aware of how much these items are truly costing you. Leaving the dollar signs and often times even the decimal and cents off the restaurant menus help keep the prices more abstract and seem less threatening.

Descriptive names. The names of products on the menu also matter to consumers. Have you ever noticed patriotic or funny names for food on the menu? According to a Cornell University study, people are 27% more likely to purchase an item from a restaurant’s menu that has a descriptive or creative name than one with a more normal name. The study also found that restaurants typically charge a premium of 10% or more for these items.

Prices are staggered. Have you ever noticed that the price of items on a restaurant’s menu is often staggered as you look down the page? This menu trick is done on purpose by the folks who practice menu engineering. Restaurant owners don’t want to you to be able to simply look straight down the page and easily compare prices from one item to the next. Staggering the items breaks up the flow of your eyes as you look down the page.

Boxing money makers. The location on a restaurant’s menu for specific items can be a big influence on how often patrons will purchase an item. Restaurants tend to put their most profitable item in the upper right hand corner of the menu where our eyes have a natural tendency to be drawn to first. A box on the menu screams for our attention, as well. You will often see high profit margin items being called out in a box on the menu as well.

Restaurant setting and spending

Background music. The level of music that a store plays over its loudspeakers and how that affects customers’ shopping habits has been studied for decades. Reserch has shown that when slower music is played in grocery stores and restaurants, customers spend more time and money there. One study from Loyola University estimated that restaurants and stores which play slow music see a 38% increase in sales over stores that choose to play loud or fast paced music. Restaurants tend to see longer wait times at tables and higher bills when slower music is played.

Size of your drinking glass. According to studies conducted by the Food and Brand Lab at Cornell University, people consume a larger amount of a drink when they are given a short, wide glass instead of a tall, narrow glass. We have a vertical bias over horizontal objects which explain our tendency to focus on an object’s height. So, the illusion in a restaurant is that you receive more of a beverage when it is served in a tall glass. Bartenders have also been found to pour more than the set limit of drinks in a short, wide glass.

Size of your plate. When restaurants offer two sizes of the same item, they often want you to purchase the smaller one contrary to typical thoughts. For example, many restaurants may hope that you purchase two small salads that costs $9 each instead of buying a large salad that costs $12 and splitting it between two people. The cost of extra ingredients for the larger salad is negligible, and the extra money spent on the wrong size item is pure profit for the restaurant though.

Take home lessons

So, what does this mean for you, the average consumer, who is trying to save his or her hard earned money? Like G.I. Joe used to during the Saturday morning cartoons, “Knowing is half the battle.” Now you know a few things to look for when you enter a restaurant. Simply walking into a restaurant and ordering without giving much thought is a recipe that could cost you a lot of money in the long run.

Now it’s up to you to use that knowledge and not to be fooled by simple psychological tricks that are designed to separate you from your money. By understanding a little of the consumer psychology used against you, you can be a much better shopper who enjoys a night out while still saving money.

Do you think that simple things such as leaving the dollar sign off a menu or staggering the prices make you spend more at a restaurant? What other psychological and behavioral tricks have you seen retailers use against consumers?

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Last night I saved $228 (plus tax) with a 10 minute phone call. How? Easy. I called our DSL provider and asked for a discount.

While poking around on their website, I noticed that they were offering their 6 Mbps DSL service (our current level) at a promo rate of $19.99/month for new customers. Given that we’ve been paying $43/month, I was annoyed. Annoyed enough that I called and asked for a better deal.

Actually, I started with their online chat, but that turned out to be a dead end. His recommendation was to call the “business office” and ask for their help. When I called the main number, I was told that the $19.99 was a promo for new customers only, but that they could transfer me to the retentions department who might be able to help.

Once I had the retentions rep on the line, I explained the situation — $19.99/month for new customers vs. our current $43/month rate, and the fact that cable companies regularly advertise similar promo rates. I then asked if there was anything they could do for us. She briefly put me on hold, and then came back with an offer…

She said that they could drop our rate to $34/month plus give us a temporary discount of $10/month for the next 12 months. Score! That works out to $24/month, a savings of $228 over the next year, not including taxes. Not quite $19.99/month, but it was apparently the best she could do.

I quickly agreed, mostly because the cable thing was a total bluff… We can’t actually get cable in our neighborhood (hence our love-hate relationship with Dish Network), though I would switch in a heartbeat if I could.

And before anyone gets self-righteous about how I handled this, please note that I didn’t actually lie. Rather, I just pointed out that cable companies regularly offer similar promos for new customers, and then I asked if they could help me out with a better deal.

Looking ahead, I’ll be calling again in 12 months to ask for another discount. And even if they refuse at that point, we’ll still be ahead of the game with a $34/month rate vs. our current $43/month.

And now… I’d love to hear about your discount-requesting successes. Have you cut your cable bill? Trimmed your telephone charges? Or saved on internet service? Please share the details in the comments section.

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This is a guest post from Jessica Ward.

It happens to many of us: we design a lean, mean budget, but over time, like a worn-out rubber band, it begins to lose its pull. Sure, it’s still there and still performing its duty, but it isn’t the well-tuned machine it used to be. You might have experienced some “lifestyle creep” — little things, which add up over time.

Is your budget doing its job? When was the last time it got a tune-up? Here are a few quick checkups to make sure your budget is running at peak efficiency.

1. Pull out your budget from last year, and, if you can, 2-3 years ago. If you don’t keep your budgets, check your bank statements. How is your spending compared to last year? One of my favorite books is Jim Collins’ “Good to Great” which explains that “success is a direct result of disciplined people, doing disciplined things, in disciplined ways.” How disciplined is your spending, especially in comparison to past results?
2. Review your most recent grocery receipts. Highlight the four or five most expensive things. Would you have purchased those items a year ago? What can you do to reduce or eliminate those? I discovered that a consistently large expense in my budget was laundry detergent, so I started making my own. It costs about $2.70 per year, versus my earlier $17 per month. Saving money on groceries can go a long way towards taming your budget.
3. Conduct a regular budget “performance review.” Managers review their employees. If your budget is not working for you, you need to know early on so you can spot and correct problem areas. At least twice a month, if not weekly, revisit your goals versus actual spending and see where you’re at. A monthly post-mortem on the budget is virtually useless, because you can’t fix the prior month — you can only budget smarter for the following month. Attacking your budget from both sides will be far more effective.
4. Have you added cable TV or other extraneous services back into your budget? Do you really need it? I cut my cable one summer in a fit of budgetary ambition. A few months later, ice hockey season started, and I really missed the games, so I succumbed and added the cable back in. After a couple of these cycles, I learned that some cable companies offer 3 or 6 month promotions without a penalty for canceling. Now, I add cable just for the winter at a short-term promotional rate. If you’ve elected to keep cable year-round, try calling and asking them to adjust your rates. Our cable/phone/internet services are “bundled” so we periodically call and ask to be “rebundled” (same services, new price structure). They can almost always drop our price — if they can’t, they can usually tell us when the next promotional rates begin, so we can call back at that time.
5. This is the season for outrageous energy bills. Call your energy company and find out the best ways to reduce your energy bills. Perhaps you could run the laundry and dishwasher at night during off-peak hours. The utility company may even provide free energy consultations. My water company noticed my high water usage and offered a consultation — they gave us free replacement showerheads which cut down on our water and electricity use (for hot water).
6. Check for “zombie” charges. Recurring charges on your bank account and credit cards can slip by us unnoticed. Double check for magazine subscriptions, newspapers, gym memberships, and other items that might be under the radar.
7. Ditch the storage unit. If you’re paying for offsite storage, you may think you’re saving money “just in case” you need that stuff again. But in reality, you’re buying it all again every month. Remember, the keystone to frugality is efficiency. Hold a garage sale, and stash that money in your emergency fund, just in case you do need some of that stuff again.
8. Call your home and auto insurance company and ask for a lower rate. If you can’t get one, call a qualified insurance broker and have them shop your policy around.
9. Eliminate “miscellaneous” from your budget. Be ruthless with unallocated spending. If it isn’t important enough to budget for, should you really be spending it?
10. Think before you renew! Many magazines and newspapers automatically send their renewal notices at year end. Let’s face it, we’re just trained to renew things at the end of the year. But the fact of the matter is, your renewal may not be up for many more months. I once canceled a magazine subscription and continued to get the magazine for a year. I called and asked why, and they explained that I was renewed for another two years — I’d just paid each time they billed me. Thankfully, they gave me a refund for the overpayment.

So those are my ten tips for giving your budget a tune-up. What tips and tricks do you use to keep your budget in line?

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Gourmet coffee is still one of the favorite villains of every financial expert looking for something to blame for Americans’ overspending or lack of retirement savings. Ever since David Bach introduced the concept of the Latte Factor in his bestselling book, “The Automatic Millionaire“, the public’s love of fancy coffee has become a favorite whipping boy of frugalistas everywhere.

While it has grown old and tired to continually beat up expensive coffee as a financial vice, the American public’s love for gourmet coffee hasn’t diminished. According to the National Coffee Association’s 2011 National Coffee Drinking Trends Study, 37% of all the coffee consumed in America is gourmet, with 24% of coffee drinkers getting their fix from a barista at the local coffee house instead of at home.

There is little denying that gourmet coffee can be expensive, but there are several ways that you can save money while still enjoying your favorite caffeinated beverage. Here are five ways to cut the cost of your coffee.

Reduce the size of your drink

If you simply have to purchase your favorite latte or coffee at your local coffee shop, you should consider downgrading to a smaller size cup. Reducing your purchase from a large cup of coffee to a small one can reduce your costs significantly. For example, a large regular cup of coffee can cost approximately $2.15 in some areas of the country, and a small cup of coffee at the same location can cost as much as $1.50.

Switching from drinking a large cup of coffee to a small can reduce your coffee costs by 30%. While the national average cost for a cup of coffee has recently risen to $1.38 and both national chains and small business owners have been announcing coffee price increases this year, reducing the size of your favorite beverage can be a great way to quickly reduce your coffee costs.

Skip the muffin

Your wallet already takes a hit when you stop at the local coffee shop each morning on your way to work. You only compound the problem when you add other things to your order at the counter. Skipping the muffin or bagel that you order with your coffee can cut your bill in half, and could save you $500 or more over the course of a year assuming you bought a $2.00 muffin on the way to work each day.

Go back to regular coffee

It may be a little hard to believe but, according to the company, a regular cup of coffee is the most popular drink that is ordered by Starbucks customers. It’s not the fancy lattes, iced coffees, and cappuccinos. If you are ordering the fancy stuff, you may want to consider joining the rest of the crowd and ordering a plain cup of coffee. This simple switch is an easy way to curb your caffeine craving while keeping more money in your wallet.

Sign up for rewards programs

Rewards programs seem to be extremely popular recently, whether they reward loyalty at restaurants, local stores, or even coffee shops. Punch cards that offer a free drink after a set number of cups purchased have been popular for years. Now, national coffee chains such as Starbucks are even getting into the act with their own rewards cards and loyalty programs.

Starbucks offers its customers a sophisticated program that includes a gold card with your name on it, free upgrades, a free drink on your birthday, and a free drink after every 15 cups of coffee you purchase. These reward programs can help you save up to 10% on the cost of your coffee that you drink at coffee shops.

Brew your own coffee

Finally, the easiest way to save money on your coffee is the tried and true method of brewing it at home. Typically, one pound of coffee bought in the grocery store will cost approximately $10 and brew 32 cups, for a cost of $0.32 cents per cup. Even the pod-style single serving coffee makers cost $10 to brew 18 cups of coffee for an equivalent of $0.56 per cup. Clearly, if you make your own, you can save a ton.

Coffee drinking has continued to see an incredible growth despite increased costs. According to the National Coffee Association study, the 18-24 age group has seen a 20% increase in daily coffee consumption over the past year, with 40% drinking coffee every day. And 54% of Americans between the ages of 25 and 39 drink coffee daily, which is a 25% increase from a year ago.

What about you? Are you a coffee drinker? If so, do you still buy gourmet coffee from a coffee shop? Or do you make it yourself? What is your favorite way to save money while enjoying coffee on the go?

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Over the weekend, I ran across a rather provocative article that argued that it’s now cheaper to eat at a restaurant than to eat at home. Apparently the frequency with which consumers are dining out has been on the rise since mid-2009, presumably since contracting during the worst part of the recession and stock market collapse, and the writers at The Fiscal Times think it may have something to do with cost.

The underlying argument is that, due to ever-increasing groceries prices, it’s gotten increasingly expensive to eat at home. At the same time, restaurants are better able to deal with such increases by buying in bulk and/or absorbing a portion of the cost in terms of reduced wages — especially if they can tranform their workforce using über-cheap teen labor.

In fact, supermarket prices have been increasing at 6%/year, roughly 2.5x faster than restaurant prices. But still… Cheaper to eat out? Doesn’t seem likely. They went on to provide a handful of specific comparisons to support their case, but their logic is a bit suspect.

For example, when comparing the cost of a steak dinner (complete with soup, salad, and aparagus) at Outback Steakhouse to eating at home, they figured in the cost of an entire bag of salad as well as an entire bunch of asparagus. And they ignored the cost of drinks, which are a huge profit center for restaurants — $2.50 for a Coke, anyone? And they also ignored the cost of leaving a tip.

So now tell me… Who amongst you eats an entire bag of salad with your dinner (assuming that you buy bagged salad in the first place). And who would sit and eat an entire bunch of asparagus alongside their 10 oz. ribeye and entire bag of salad? Clearly, such costs should be spread out over multiple meals (or multiple diners).

They then proceeded to make similar comparisons — with similarly flawed assumptions — at Olive Garden, Red Lobster, P.F. Chang’s, and the Cheesecake Factory. According to their math, eating at home was only cheaper in two of their six comparisons (Red Lobster and Cheesecake Factory).

Of course, these comparisons also ignore the convenience factor as well as the value of your time. That being said, there are so many ways to interpret those factors (e.g., some love to shop and cook, others view it as drudgery, some value the convenience of eating at home, others love the restaurant experience) so it’s probably safest to leave them out.

Another thing to consider is that your personal circumstances will also have a huge effect on the outcome. When cooking for a family, it’s much easier to take advantage of economies of scale and dramatically reduce the per-serving costs. And don’t forget about store and manufacturer coupons. Many bargain shoppers save tons of money with coupons.

With all of this said, I’m curious. How many of you think that eating out at a restaurant is cheaper than eating at home? Regardless of the cost, what’s your preference?

There was a time when we really enjoyed the convenience of a quick bite at a restaurant. But as our family has grown, we’ve increasingly come to value the convenience of not going out. After all, once you load everyone into the car, agree on a restaurant, wrangle the kids orders, etc. the convenience factor is wiped away. There are also lots of ways to save money on groceries as well.

And don’t forget about the health benefits… By eating at home, you avoid many the many temptations of that dastardly restaurant menu, menu that you will often eat more healthfully if you eat at home (see also GetRichSlowly’s article on how to keep eating healthy affordable). Or at least that’s been my experience.

What do you think?

Source: The Fiscal Times via Business Insider

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I’m not knocking your vices — we all have them — but many of us also make the mistake of not realizing just how much those vices actually cost us. Those packs of cigarettes and cups off coffee can really add up.

Adding up what your vices are costing you over the course of a year (or more) may help you put your habits into perspective.

Lattes… Everyone’s favorite expense to victimize

Ever since David Bach wrote about the Latte Factor in his bestselling book, The Automatic Millionaire, gourmet coffee has been vilified by everyone from financial planners to frugality zealots. The theory is that, instead of spending money on a daily latte, you could save a small fortune by brewing your coffee at home.

Granted, you’ll miss out on the ambiance, professional baristas, and other factors that go into your morning latte. But, with the high quality coffee makers that are on the market and the availability of an incredible array of coffees, home brewing has never been closer to the coffee shop experience. While purchasing a cappuccino at your favorite coffee shop will set you back about $4 on average, brewing it yourself at home can cost you significantly less than $1 per cup.

If you were to brew your own instead of buying a cup of coffee on your way to work, your savings could be about $700 per year, and that doesn’t even factor in the savings associated with not picking up that blueberry muffin on the side.

Energy drinks are the new lattes

Coffee is no longer the beverage of choice for today’s younger workers. Nowadays, young consumers are latching onto energy drinks, which seem to have enjoyed incredible growth in popularity since their introduction over a decade ago.

Despite having slowed to a modest 4% annual growth rate according to Beverage Spectrum Magazine, the energy drink industry has continued to grow into an industry with $4.8 billion in annual sales. Products in this niche now include energy shots and relaxation drinks, as well.

I never realized how much energy drinks cost until I saw the price of a case on the shelf at my local warehouse club. Energy drinks are far from cheap to purchase, with a typical price tag of $2 or more for a can. If you drink several cans throughout the day while at work, you’ll put a serious dent in your wallet — on the order of $1000-$1500/year.

Two packs a day really add up

When you do the math, the costs of smoking can really add up. A pack of cigarettes can cost $4-$5 (or more!) depending on where you live. So someone who has a two pack a day habit could easily be spending $240 per month, or $2,880 per year. Even cutting back to one pack per day can significantly increase your cash flow. If you were to quit smoking completely and invest that $2,880 per year and it grew at 8% annually for 20 years, you could amass over $104,000.

Putting your vices all together

These vices can have a real impact on your finances when viewed separately. So just think how much damage you could be doing if you add two or more of them together. For example, if you smoke two packs per day and stop for a drink at your local pub a couple nights per week, you could easily burn through several thousand extra dollars every year. The costs tend to sneak up on you before you realize it.

Do I really think that you’re going to give up on your morning coffee run? No, of course not. But I’m hopeful that you’ll at least be honest with yourself about how you spend your money. I know that I’m personally not saving enough for retirement, and I often justify it in my mind by saying that I simply don’t have enough money.

When it comes right down to it, the truth is that I’m choosing to spend my money on other things instead of saving it. Your vices can really add up and become a budget buster if you’re not careful with your spending.

What are your vices? And have you done anything to reign in your spending on these things? Or have you decided that they’re worth the cost?

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Face it, once you’re past Santa-believing age, Christmas gifts don’t hold quite the same thrill. The gift-giving aspects of the holidays are definitely for the kids. But that doesn’t mean your spouse doesn’t expect something — far from it!

But, especially if you’re on a tight budget that you are co-managing, your spouse may be happier with a gift that didn’t involve a major ATM withdrawal. Here are five gift ideas that will truly provide more holiday joy than Santa could bring:

Promise to do something: Imagine how thrilled you would be to find a gift-wrapped letter from your spouse saying that he promised to quit smoking cigars for a week, grow his hair long, visit your sister’s family without griping, or whatever else you’ve been nagging him to do for years? Or, men, how happy you would be to have the promise of a weekend with no honey-do list or 100 percent control of the remote one night per week? Even the most perfect couples have some gripes with each other, and they probably fester beneath the surface most of the year. Use the holidays to excise one of them — your spouse will be delighted, and your family finances will benefit from one less costly gift.

Family tree: Everyone’s curious, at least a little, about their past. Many people would love to get a detailed family tree that concludes with their own family. The tree could take the form of an actual drawn tree with all the appropriate branches (maybe one of your kids could paint a picture of a tree, and you could write in the names and glue in some photos), a photo album with family lineage noted, or some other depiction. Here’s how to make this gift better than your usual, sterile family tree: Add photos, newspaper clippings, letters, or any other family history items to the tree.

Tell me a story: This gift is related to the family tree idea. Instead of making a complete tree, research (or just remember) and write about one particular event in your family history. You don’t need to be Ernest Hemingway to write something worth reading — your spouse isn’t going to care if your grammar is imperfect. Do you have a favorite story from when your kids were little? Or some family lore (on your spouse’s side) that gets passed around? Take a couple of hours to write the story down as well as you know it, or even ask an in-law to add some details. Print it out and put it in one of those report folders your kids use in school. Guarantee: This gift will mean more than anything you could buy in a store, and it will be passed around your family and handed down. Imagine if you did this every year — eventually you’d have a priceless family history collection.

Take me out: Dates keep any romance alive, but when the budget is tight and life is busy, it’s tempting to skip dates altogether. A gift that would make any spouse happy is the promise of a weekly (or monthly) night out. But dodge the financial guilt of date night by stipulating that the date be free (or mostly free). A walk in a scenic area, a free concert, a visit to a municipal museum, a drive in the country… The possibilities of free dates are endless. After all, the purpose of a date is to spend time together, not spend money!

Write to me: When is the last time you wrote your spouse a love letter? Probably when you were dating. But guess what, she or he would still be moved by a love letter from you. Take some time to tell your spouse why you married her, tell her how much you have enjoyed your lives together, and how much you look forward to the future. Or reminisce about some shared events, with enough detail to show him that you’ve actually thought deeply about it. You’re not a great writer? So what — it’s the thought that counts. Your spouse will cherish this gift, and you’ll both be pleased that it didn’t cost a penny.

Holiday gift giving is a wonderful tradition that’s never going to end, but it can be a serious drag on your finances. When you discuss this issue with your spouse this holiday season, don’t believe her when she says she doesn’t want anything. She does want something, but she doesn’t need something that will break your budget. Try one of these five ideas instead.

» Six Ways to Save Money this Holiday Season
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It’s Black Friday. Have you been braving the crowds in hopes of saving a few bucks? Or did you stay home (or go to work) instead? Either way, I wanted to share some tips for getting through the holiday shopping season without emptying your savings account or running up a huge credit card bill.

• Make a list and check it twice. For starters, you need to sit down and create a list of all the people that you’ll be shopping for this year. That way there won’t be any nasty surprises when you’ve spent your budget and then realize your forgot crazy Uncle Bob.
• Set a budget. Next, you’ll need to come up with a budget. I recommend setting a firm overall budget along with a target amount for each recipient. Remember… There’s nothing worse than waking up to monstrous credit card bill that you can’t pay once the holiday have passed.
• Make adjustments. If you’ve done the above and have discovered that your desired budget is more than you can comfortably afford, you’ll need to adjust. Either scale it back, cut costs in other areas of your life, or find a way to earn some extra money.
• Consider drawing names. Another possibility is to consider drawing names rather than having everyone buy gifts for everyone else. The initial conversation may be awkward, but trust me… In the long run, it will work out just fine. You might also consider setting a spending limit to avoid awkward situations in which one person spends far more than another.
• Check prices online. I’ve gotten in the habit of not only checking prices online before I go, but also in the aisles of the store using my smartphone. The Amazon app (or something like RedLaser) is your best friend when it comes to comparison shopping. In addition to checking prices, I’ve found that skimming customer reviews on the fly is a great way of preventing buyer’s remorse.
• Get a discount. If you do wind up shopping online, be sure to look for promo or coupon codes (just do a quick Google search or hit a site like RetailMeNot) before you check out. And consider shopping through an online mall to get extra cash back.
• Use a reward credit card. Speaking of getting cash back, be sure to use a cash back credit card. Both Chase and Citi are offering 5% cash back at department stores this fall, so those are excellent options.
• Make it yourself. Another great option is to give a thoughtful, homemade gift. Many times, such gifts are not only less expensive than their store-bought brethren, but they are also more appreciated by the recipient.

If you have any holiday shopping tips of your own, please don’t hesitate to share them in the comments. Happy Black Friday!

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As a followup to last weeks post about why I hate mail-in rebates, I wanted to highlight an article that a reader named Sun shared in the comments. It’s a few years old, but it captures the essence of why may of us hate rebates.

Due to a combination of procrastination (i.e., missing the deadlines), disorganization (i.e., losing a necessary document), and an inability to follow instructions, the redemption rate for rebates of $50 or more is estimated to be below 50%. And for smaller items with rebates under $10, redemption rates are in the single digits.

At the same time, consumer advocates argue that the poor redemption rates aren’t really the consumer’s fault. Rather, they say companies are deceiving customers into thinking they’ll redeem a rebate when odds are they won’t. Personally, I don’t have a lot of sympathy for this argument. Sure, the world of rebates is rife with hoops to jump through, but nobody’s forcing you to make the purchase.

Of course, as evidenced by my post last week, there are instances in which the blame can be squarely placed on the merchant (or the fulfillment house with which they contract). In other words, you may do everything right and still receive a rejection due to a clerical error. Talk about maddening.

And, of course, once the check arrives, you have to: (1) not mistake it for junk mail, and (2) get it to the bank without losing it. Minor points, perhaps, but these factors further reduce the expected value of a rebate.

From the merchant’s perspective, rebates are a double-edged sword. While rebates can dramatically increase sales, they also have the potential to alienate customers, even if a failed rebate is entirely the customer’s fault. Thus, some stores have phased out rebates almost entirely. But other have stuck with the practice.

According to Jim Wohlever of Young America, Corp. (a rebate fulfillment company), redemption rates below 100% are what allows companies to offer juicy discounts. And by requiring effort to get the discount, the companies can separate those customers who would buy only if there was a discount being offered from those who are willing to pay full price, thereby helping to maximize profits.

Not surprisingly, given all the discontent, a number of states have decided to intervene. For example, in North Carolina, companies are now required to give consumers a minimum of 30 days to submit their rebates, and some states have considered making the window as long as a year.

Interestingly, consumer research suggests that lengthening the allowable timeframe will actually reduce redemption rates because it will allow people to procrastinate, during which time they may forget or lose necessary documentation.

In Connecticut, if a merchant advertises the final price (after rebate), then they have to pay the customers the rebate amount at the time of purchase. Thus, a store can advertise something for $50 with a $50 rebate, but cannot say “Free After Rebate” unless they provide an instant rebate. Rhode Island has a similar law.

With Black Friday just around the corner, do yourself a favor…

If you take advantage of any offers with a mail-in rebate, make a mental note of everything that’s required, file the receipt safely away in your wallet or purse, and then spend a few minutes filling out the paperwork and sending it in immediately when you get home. You should also take pictures of (or photocopy) everything that you send in, and mark your calendar for when the rebate should show up.

And once that check arrives, be sure to get it to the bank before you lose it.

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When you think of the basics of a civilized family existence, a decent home is foundational. Doesn’t grace at your table frequently end with thanks for “the roof over our heads”? But not all home repair jobs are equally vital. The roof? Yes, you need a good roof. But, if you’re facing financial difficulties, a lot of other jobs can be dodged until thing improve.

Here are three home repair jobs that require immediate action, and three you can skip — for now.

Jobs that require action now

A leaky roof. You’ll notice a common theme in this short list of must-do house repair jobs — they all involve ways your house can be seriously damaged by water. A leaky roof tops the list.

You may think the ugly circle of mildew on your bedroom ceiling is harmless, but it is a clear sign that water is getting in somehow. Other signs of a leaky roof are sagging ceilings, a wet or moldy smell, and, obviously, water droplets anywhere on the ceiling, wall, or floor.

If you see any of these signs, call a roofer immediately! Water can wreck wood, plaster, drywall, and just about any other building material that it comes into contact with, so a leaking roof can do serious, expensive damage. However, you shouldn’t rush to accept the first bid you receive, no matter how panicked you are.

Roof replacement is not a complicated construction job, so a lower bidder will probably do about the same quality job as a higher bidder. Get multiple bids, ask for references, and then sign an agreement with the lowest bidder — as long as their references check out.

Leaking water heater. Again, water can be a killer. If your water heater springs a leak, you can be in for serious trouble (not to mention a lot of cold showers). Like the roof, replacing a water heater is not a complicated job. It does require a plumber (unless you’re quite handy), but it’s an everyday job for a residential plumber. Get three bids, and go online to see what a typical water heater would cost if you bought it yourself.

Obviously the professional installation will bump up the price a couple of hundred dollars, but if Home Depot is offering your type of water heater at $400 and the plumber wants $1,200 to put one in, you’re getting ripped off. Plumbers who make weekend calls sometimes charge more than they should, figuring you don’t want a cold shower on Sunday morning. Don’t do it — you can live until Monday without a shower.

If the water heater is leaking on Saturday night and it’s more than a pile of towels can absorb, you should be able to find the valve to turn off the water going into the heater. Then on Monday morning make some more calls and you’ll surely find a plumber offering a fair price.

Broken sump pump. Okay, for this one you might pay the emergency plumber weekend fee, especially if water is filling your basement. But if you’re reasonably handy and it’s not an emergency situation, you might try this one yourself. It’s going to be easier than either of the two jobs above.

Exact details are beyond the scope of this column, but here are two basic tips: (1) unplug the pump before you touch anything; and (2) when you go to the hardware store, try to buy precisely the same pump that just broke (as counterintuitive as this may sound, you’ll know you are getting the right pump). Whether you do this yourself or hire a plumber, get it taken care of before more damage is done!

Three Jobs You Can Put Off

Damaged siding. Yes, water can seep in through damaged siding, but not nearly as much as comes in through a leaky roof. There’s a reason you see houses with 30-year-old siding — rarely is there an urgent need to replace it. Most people replace their siding for one of two reasons: (1) it’s ugly and they want to update the house; or (2) they want to insulate their home, and adding new siding is a nice complement to that job.

Obviously, you’ll need to use your head with this one, but there is typically no need to panic over what might turn out to be cosmetic damage. You should also keep in mind that total replacement is not the only solution — if your siding is just damaged here and there, fix those pieces and you’ll be good to go.

Painting/patching/cracks. A fresh paint job is a great way to make your interior look great, but if money is tight, try simply cleaning the walls instead. Depending on the paint, you can usually wash your walls with mild detergent in warm water. Then fix nail holes with a bit of spackle and a dab of touch-up paint. A few hours work and your walls will look much better.

Of course, if you’re dealing with damaged or cracked paint (or caulk) on the exterior, you’ll need to assess the situation. Often times a quick touchup job can save major headaches down the line.

Broken dishwasher/washing machine/dryer. Yes, living with broken major appliances can be inconvenient, but you can certainly get by without all three of these. In fact, your great grandparents probably lived without any of them! Get your hands in that sink and go to work! Your wallet will thank you.

Build a cash cushion

These are, of course, just the tip of the iceberg when it comes to home repairs. The point here is that certain things need to be dealt with immediately, whereas others can be dealt with as time (and money) allows. In general terms, if there is a risk of water damage or fire, you’ll need to act quickly. But if not, you may be put things off for the time being.

But… It’s important to keep in mind that you’re really just delaying the inevitable. If you find yourself having to put off repairs for financial reasons, that’s a pretty clear sign that you need to do a better job of building a cash cushion. Dust off your monthly budget and multiply it by three (or six, or whatever multiple you’re comfortable with) and set that as your target.

From there, it’s simply a matter of tightening your belt and setting aside whatever you can afford in a dedicated savings account at your favorite bank. It may take awhile to get there, but once you build savings into your budget, it’s just a matter of time before these sorts of crises will be a thing of the past.

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Water is a precious commodity, and we use a lot of it. Don’t believe me? Just take a look at your monthly water bill. A typical family of four consumes 300 to 400 gallons of water per day, which means between 9,000 and 12,000 gallons flow through a household each month.

How much does that cost? Depending where you live in the country, water costs anywhere from $2 to over $20 per 1,000 gallons, so many consumers are paying well over $200 per month on water. Ouch!

Trimming your water bill doesn’t mean wearing dirty clothes or skipping showers, however. Here are four places to slow the flow:

In the bathroom

As you can imagine, the bathroom is where a family uses a large proportion of its daily water. A low-flow showerhead is an obvious idea, but sometimes they make it harder to get a good shower. Instead (or in addition), persuade your spouse and kids that a shower is a place to get clean, not a place to soak oneself.

If you were ever in boot camp, you probably remember being given four minutes to shower, shave, and, well, use the toilet. You can’t expect your family to be quite that speedy, but the truth is that washing yourself in a shower can easily be done in five minutes. Save your soaking for the swimming pool.

If your kids are young, have them take a bath or shower together. (And if you’re lucky, your spouse will want to take a shower with you — just to save water, mind you.) You probably already have a low-flow toilet, and if you have one made in the last decade, it probably does the job just fine (early low-flow toilets were simply too wimpy to take care of business).

If you want to upgrade the water efficiency of your toilet, seek a two-stage toilet, which uses even less water when there is no solid waste to dispose of. And if you notice a leak anywhere, fix it right away.

Finally, don’t let your kids run the water while they’re brushing their teeth!

On your lawn

First, plant native shrubs, grasses, and other plants rather than a giant, boring, green grass lawn. You might be able to avoid watering the lawn altogether if you do that. But if you do have grass, follow a few basic tips to save water:

• Don’t water the sidewalk or driveway (adjust your sprinkler to hit just grass).
• Go slow and let the water soak in, rather than spraying a lot of water on quickly and letting it flow off the lawn.
• Install a rain barrel under your downspout and use that water for your lawn and garden.
• Aerate your lawn so that the water soaks in better (so you can use less).
• Don’t water more than you need to (if your lawn feels spongy, you’re overwatering).
• Adjust your mower to a higher setting, because longer grass retains water better.
• Measure rainfall with a rain gauge or tin can, and adjust your lawn watering accordingly.
• Don’t water on windy days when much of the water evaporates.
• Use drip irrigation on trees and other large plants, so the water goes only where it is needed.

In the kitchen

Here are a handful of tips for saving water in the kitchen:

• Designate one water glass for each family member to use all day – that way, you won’t need to wash more glasses than necessary.
• Put a pitcher of water into the refrigerator so it’s always cold and you don’t have to run the water to let it cool down when you want a drink.
• If possible, try to cook multiple items in one pot of water (e.g., cook carrots in the same pot as the bag of instant rice).
• Some foods can be cooked in the microwave instead of a boiling pot of water (e.g., corn on the cob tastes great if you wrap it in plastic wrap and microwave it).
• If you wash dishes by hand, don’t run the water while you’re washing; instead, wash in one basin and rinse in the other basin.

In the laundry room

Don’t let your spouse or kids toss towels into the dirty laundry basket until they’ve been used at least a couple of times. The same goes for most items of clothing (pajamas, for example, do not need to be washed after each wearing). Use the lowest water level possible for the amount of clothes you’re washing. Use shorter cycles if you’re washing clothes that are not particularly soiled.

Another tip… If you ever have an unusually large amount of clothing to clean at once, consider using a coin laundry. These machines are often larger and more energy-efficient. You probably won’t save money, but you’ll be reducing water use in the big picture. Plus, you’ll get your big job done a lot sooner, since you can normally use as many machines at once as you need).

Following even a few of these tips can trim your water bill substantially. Perhaps more important, though, every gallon you save from the drain is another clean gallon that your kids and grandkids will have available to them in the future. Water is not only expensive, but clean water is becoming a scarce resource!

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A coworker of mine recently pulled into the parking lot at work in a brand new $30,000 pickup truck. I did a double take because he originally told me that he was taking his old car to a mechanic for a tune-up and to have a rattling sound checked out. When I asked him about the new purchase, he told me that he had been looking around on the dealership’s car lot while waiting on the service department to fix his old car when he fell in love with the new truck. That ended up being an incredibly expensive tune up in the end.

Impulse purchases add up

Even if you’re talking about smaller things, impromptu buying can wind up costing you hundreds of dollars (if not more) each year. Psychologist Paco Underhill estimated in his book, “Why We Buy: The Science of Shopping,” that almost 70% of all of our purchases are unplanned. Years later, University of Pennsylvania Wharton Business School professor David R. Bell conducted follow up research that refined the number of impulse purchases we make to closer to 20% of our total purchases throughout the year.

Even this lower number can add up to quite a substantial amount of money based on the sheer number of purchases that Americans make over the course of a year. One Consumer Reports poll of readers in 2009 found that 60% of the survey’s respondents admitted to buying things on a whim over the past year at a staggering average cost of $108 each time. If you made one impulse purchase per month at that rate over the course of an entire year, you would quickly bust your budget.

Compounding your problems

Bringing your car in for a simple tune up and buying a brand new truck on impulse may only be part of your problem. Many car buyers, like my coworker, compound their problem because they are upside down on their current car loan when they purchase the new car. So, they ultimately roll over the remainder of their old car’s note into their new loan.

If you do this, you’ll not only drive off the dealer’s lot with a car that is depreciating by the minute, but you’re also upside down on your new car from the very beginning. If you have get into a car accident, you could wind up having to pay for a portion of the repairs out of pocket unless you have “gap” insurance in place. Having to add new car insurance policies to protect poor purchasing decisions is not a good way to save on car insurance.

Avoiding temptation

If you know that you’re prone to impulsive purchasing, surrounding yourself with shiny and beautiful new cars is probably not the best idea. There are a few things that you can do to take your mind off of buying a new car when you hit the dealership for a tune-up. For starters, you should consider setting a spending limit with your spouse. To do this, simply define how much you can spend without first discussing the transaction.

If you don’t have a spouse or significant other to bounce the idea off beforehand, consider finding an accountability partner who can be your sounding board for important financial decisions. One of the best things that you can do is vow to sleep on any large purchase for a day or two before committing to it. Often, you will find that your desire for that shiny new whatever will cool off over time.

Finally, remove yourself from the situation before it even takes hold of you. There is nothing that says that you have to stay at the dealership and walk around while your car is getting serviced. Nor do you need to wander the mall for entertainment. If you keep yourself out of these situations in the first place, you’ll avoid the temptation to impulse spend and improve your wallet’s health in the end.

What is the largest purchase that you’ve ever made on an impulse? Looking back, what percentage of items that you buy everyday — at the grocery store for example — do you feel are impulse purchases? I’d love to hear your thoughts on this.

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Every family would like a little more money in the piggy bank at the end of the month, but sometimes it seems like trimming expenses is too painful or too much of a hassle. Well, here are six painless ways to save a few bucks on your transportation budget — and those few bucks can really add up by the end of the month!

1. Park the car once per day

Gas prices won’t be returning to the sub-$3/gallon range anytime soon — if ever. If your car gets 20 miles per gallon in city driving, you’re probably spending $10/day on basic errands within a few miles of your home. The next time you’re about to slip behind the wheel, stop and think if you could walk or bike there instead. If you think it’s feasible, do it! Not only will that save you gas money and wear and tear on your car, but you’ll be getting exercise to boot! You obviously won’t be able to wipe out all driving, but even one trip per day will add up to serious savings before the end of the month.

2. Hang out a little

Remember that time you dropped Suzy off at the birthday party at the McDonald’s Playland, came home for an hour, then drove back to pick her up? Next time Suzy is invited to a party — or any other event that doesn’t directly involve you, other than for transportation — don’t be in such a rush to get home. Spend that hour or two reading a book. Or getting a cup of coffee and meeting the other parents. Or going for a jog in a different neighborhood. Pretty soon you’ll realize that those hours are bonus “me time,” and you won’t be at all tempted to waste gas driving home.

3. Go with a friend

Another great way to save gas money is carpooling, something that doesn’t only need to exist in the work world. Great places to carpool are to school or to sporting events. Why should you and your neighbor each drive your own cars to the high school for conferences? Share the ride and pocket the savings. Same goes for sports or other extracurricular events — going to the “away” games or contests with the family of a teammate will make the ride more fun for everyone, and gas costs will be cut in half.

4. Combine trips

Make a new family guideline — before you get in the car, determine if there are any other errands that can be handled on the same trip. Does Johnny want to go to the middle school to shoot hoops with his friends? Stop at the pharmacy on your way home to pick up that prescription you ordered, then swing by your sister’s house to return that serving dish she needs for the potluck tomorrow. Rather than making three trips, you’re making one.

5. Get on the bus

Public transportation can be an amazing money saver if you live in a community with a good system. You may not save money on any given ride — the price of one bus ride downtown may cost more than the gas to get there — but if you become familiar with the public transportation options in your community, you may be able to get rid of one of your cars. That would be a major money saver. Even if you can’t manage that, taking public transporation completely relieves you of the burden and cost of parking. And you’ll be able to do other things while en route.

6. Shop and park

No, that’s not backward — shop for the best value in a parking lot before you start shopping. Naturally, being further from the center of the city cost less, so park there if you’re willing to hoof it. If you need to be closer, choose lots that appear to cater to business people rather than tourists, as they’re usually less expensive. For example, the lot that serves the Palmer House Hilton in the Chicago Loop costs $61 per day for valet parking; a few blocks to the northwest, at 120 N. LaSalle, valet parking costs $36 per day. The bottom line: Shopping around for cheap parking can pay off. But if you have time, do some research before you go so you don’t waste all your time and money driving around the city looking for the best deal.

If you have any other tips, please don’t hesitate to share them in the comments.

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Do you like to shop online? If so, do you make a point of clicking through from an online “cash back mall” first? If you do, you’re saving a few extra percentage points. If not, you’re leaving some money on the table.

Not sure what I’m talking about? Well, there are a number of services out there that offer a bounty for shopping at an e-tailer after first clicking through from their own site. Here’s how it works (more or less)…

What’s a cash back mall?

Many online retailers have affiliate marketing programs, through which they pay other websites for bringing them business. These payments are typically in the form of a small percentage of the total purchase price — often in the 3-5% range. Over the past decade, as online shopping has grown, some savvy entrepreneurs have built businesses around referring customers and then passing on a slice of the savings.

Some of the best known businesses in this are include Upromise, FatWallet, and E-bates. In all cases, you’ll need an account (which is free) so they can track and pay out your cash back earnings. Once you have an account, simply click through from their cash back mall before shopping.

Which one is the best?

Let’s assume that you’ve decided to do this, but you’re not sure which site to use. If you’re anything like me, you value simplicity, so you don’t want multiple accounts. Rather, you want the best overall account. So let’s see what each has to offer.

For starters, Upromise has “over 600 stores,” FatWallet has just over 1,000 stores, and E-bates has around 1400 stores. While all three offer most of the same big names, there are some differences. For example, you can get cash back at Target through E-bates (3%) and Upromise (2%), but FatWallet doesn’t offer Target.

Next, what about earnings? Well, there are some differences here, but nothing completely consistent. For example, you can get 2% cash back on Walmart.com purchases with FatWallet and E-bates, compared to 1% from Upromise. At Kohl’s, it’s 4% from E-bates, 3% from Upromise, and 2% from FatWallet. For Sears, it’s FatWallet at 4% and both Upromise and E-bates at 2%.

Finally, what about convenience? One thing that Upromise has going for it is that it links up to your existing Upromise account (if you have one). And yes, you can withdraw your money from Upromise rather than directing it into a 529 plan, but that’s an extra hoop to jump through. For their part, FatWallet offers payment via PayPal whereas E-bates will pay either by check or PayPal.

Bonus offer: E-bates is currently offering a $10 gift card to Barnes & Noble, Target, Home Depot, or Magazines.com just for signing up and completing your first purchase ($25 minimum).

Pro tip: If you pay with a cash back credit card, you can stack the savings. For example, if you use a 1% cash back credit card on a FatWallet purchase with 3% cash back, you’ll get a combined total of 4% cash back. And if you use a Chase Freedom card at Kohl’s, you’ll get 5% + 5% cash back from Chase plus 2-4% from the cash back mall.

What about you? Do you use an online cash back mall? If so, which one? Why did you choose the one you use over the alternatives? And how much have you saved?

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Over the weekend, I went online to rent a car for an upcoming trip. As usual, I used a combination of Hotwire and Priceline to get the lowest possible rate, ultimately winding up with a reservation through Hotwire.

During the checkout process, I was offer rental car insurance. The policy that I was offered was through Hotwire, and it was significantly cheaper than what the car rental agencies offer, costing something like $35 for the whole rental term vs. $20-$30/day. Nonetheless, I declined.

Why decline rental car insurance? For starters, our regular car insurance policy extends to rentals as long as they’re being driven in place of our regular car. In addition, our Amex Delta Platinum card offers car rental insurance as long as: (1) you decline the rental agency’s insurance, and (2) you pay for the entire rental with that card.

Many other credit cards offer similar protections, though it’s always best to check the details yourself. Some credit card policies pick up where other coverages end, essentially covering your deductible, while others will cover the whole thing. And, of course, some cards don’t offer this sort of protection at all.

As I was about to click the “Rent Now” button, however, I got to wondering… Does credit card car rental insurance extend to rentals through third-parties like Priceline or Hotwire? Hmmmm. I wasn’t sure. I did a bit of Googling, but could find anything definitive. Thus, I decided to contact Amex directly to ask.

Here was their response:

“Good Morning! Yes, these would be covered as well, as long as the rental is charged on your card. You would need to waive their insurance.”

Excellent. Now I’m double covered, with our regular car insurance policy extending to the rental, and the Amex policy also covering the rental. No need to spend a bunch of extra money on that scammy loss and damage waiver (LDW) from the rental agency. And I got the rental itself for more than 30% below prevailing rates.

Obviously, you should double-check with your card issuer to be sure that they have a similar policy. But I would guess that most, if not all, card issuers treat rentals through third-part travel discounters in a similar fashion.

Now I just need to remember to return it with a full tank so I don’t get hit with that pesky fuel surcharge…

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Whether you purchase a new car, a washer or dryer, or the latest electronic gadget on the market, you have most likely been offered an extended warranty or an additional service plan to protect your purchase. Extended warranties are typically not cost beneficial for consumers, but they are a cash cow for retailers.

Because of the excellent profit margins on these extended warranty programs, more consumers than ever are being pushed to buy one with their purchase. In many cases, 50% of these extended warranty plans’ prices go straight to the retailers’ bottom line as profit.

Extended warranties aren’t worth it

Retailers have a legion of accountants and actuaries that calculate the cost of programs like extended warranties. They are very similar to an insurance policy for the retailer, and the odds of an extended warranty costing more than the premiums you pay are very low.

Consumer Reports has found that most products rarely break during the extended warranty period. And, if the item does break, the average repair cost has been found to be roughly the same as the extended warranty’s price. Moreover, some of the repairs that a consumer might need are already covered by the regular product warranty.

In light of the above, many retailers have changed the name of their extended warranty program in hopes of avoiding the bad press that these programs have received over the years. But, make no mistake about it, whether they are called an extended warranty, service plan, performance plan, or any other name, they still are not cost beneficial to consumers.

Fortunately, there are a few ways that you can have the benefits of an extended warranty without taking a bath on these plans. You can ultimately build your own plans through insurance, your own savings, or by using a credit card.

Use an insurance rider

One possible way to prevent having to purchase an extended warranty is to talk to your insurance company. Many items for which you might consider buying an extended warranty can be covered under your homeowner’s or renter’s insurance. For example, you could consider adding a specific rider on your insurance policy that covers a specific item, such as a high cost piece of electronics.

A low cost rider attached to your homeowner’s or renter’s insurance policy can cover a substantial amount in damage to items in your home, and may be a great alternative to paying for an extended warranty that may only cover you for a short period of time, and which you may never use.

Establish your own extended warranty fund

Another great way to save money on the expense of an extended warranty that you may never use is to create your own extended warranty fund. Since most extended warranties expire without you needing to cash them in, and since most extended warranty repairs cost about the same amount as the warranty, you could save the premiums and use them to repair or replace any items that break down.

Using a dedicated high interest savings account is a great way to set money aside for an extended warranty fund. As soon as you purchase the item, add the cost of the warranty that you didn’t buy to your dedicated savings account. Using the money that you would have paid for an extended warranty to fund a online savings account can hedge you against the costs of repairs and the high costs of an actual extended warranty.

Use a credit card that offers extended coverage

Some of the best credit cards offer extended warranties on items purchased with the card. Using credit cards that offer this sort of buyer’s assurance warranty program gives you an alternative to expensive extended warranties. Programs from companies such as American Express can at least double the manufacturer’s warranty on a wide variety of products.

While extended warranties can offer you a little peace of mind when you make large purchases, they are another example of unneeded insurance. Instead of wasting your money on one of these plans, you should consider the alternatives listed above. You’ll come out ahead in the end.

What about you? Are there situations in which buying the extended warranty makes you feel better? Do you mind overpaying for peace of mind? Or do you avoid these plans and pocket the difference?

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Perhaps I should file this under “obvious,” but canceling “zombie” charges — i.e., charges for services or subscriptions that you no longer use — is a great way to save money. If you’re not already doing so, get in the habit of reviewing your credit (or debit) card statements to find “zombie” charges that you’ve long since forgotten.

Here are a couple of quick examples…

Canceling Consumer Reports

About five years ago, when we moved into our current house, we signed up for an online subscription to Consumer Reports. At the time, we were planning on buying multiple big ticket items over the coming year, so we signed up for the “auto-renewing” annual subscription for around $25/year instead of paying $5/month for access.

Of course, I planned on canceling the subscription when we were done with it, but I never go around to it. Fast forward to now… We’re still signed up. Or at least we were until I clicked the button to cancel our subscription over the weekend. To be fair, we’ve used it several times since we signed up, but not in the past year or two, so we’ve wasted a decent amount of money on this.

Subtracting Hulu Plus

Also, over this past summer, I signed up for Hulu Plus to see what all the fuss was about. We have a Roku player, and I was drawn to the idea of being able to stream shows to our TV. On top of that, Netflix was in the process of jacking up their prices, so I wanted to check out the alternatives.

Well, guess what? We hardly watch it. And yet, we’re still signed up for it. Part of the problem is that I really like the idea of this service, even if we don’t use it enough to make it worth the $8/month fee. Thus, I’ve hung onto the subscription for a few months thinking… Hmmm, I’m not sure what I was thinking. That we’d eventually start using it, I guess.

The thing is, it’s dead easy to sign back up, so there’s no real risk to canceling. If I have second thoughts, I can just log back in and sign up again. As of now, we’re no longer Hulu Plus subscribers.

And there you have it… Two quick examples of zombie spending that were costing us over $120/year. If you want to avoid this sort of thing, all you need to do is pay close(r) attention to your bills and (this is the important part) take action when a charge pops up for something that you don’t really use.

Going forward, it’s probably not a bad idea to set an automated reminder to re-evaluate whatever it is that you just signed up for.

What about you? Do you have any examples of zombie that have been draining money out of your pocket? If so, please share them in the comments.

P.S. Yes, I know that you can access Consumer Reports online through many (but not all) libraries.

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The kids have been begging for a puppy for six months, and you finally decide a dog might just complete your family. Plus, the canine may teach your kids a few things about responsibility and caring for others, right? Those are good reasons to get a dog, but before you bring Spot home, take a few minutes to consider the finances.

With shots, vet care, food, toys, boarding, insurance…that pup’s expenses will add up fast. Here are six tips for trimming some of Fido’s bills:

Don’t buy from a pet store or breeder

There are several good reasons to avoid pet stores and breeders when you’re seeking a new dog, perhaps the least of which is that you’ll save money. Some commercial pet businesses such as dog breeders have been accused of mistreating their animals, and sometimes pure-bred dogs — which is what pet stores and breeders typically sell — have more medical issues than mixed-breed dogs.

A much better place to get a new dog is a shelter or canine rescue organization. These non-profit organizations take in animals that are abandoned, neglected, or abused, and try to find new homes for them. Many of these animals make great pets. They’re not free — you probably will need to pay for the first round of shots and other veterinary care — but they will cost substantially less than the typical pure-bed puppy at Pet Palace.

Your kids will love the animal no matter where it came from, and a mixed-breed canine will provide essentially the same dog experience as any full-breed.

Skip the vet

One of the most shocking expenses new dog owners encounter is the fat bill from the vet. An urban pet owner will be lucky to walk out of a routine visit with a bill smaller than $300. It’s highly likely that you’ll want your dog spayed or neutered — figure $300-$500 extra for that surgery. Yikes! That’s some serious dough. There are, however, some ways around those expenses.

First, have your animal spayed or neutered at the Humane Society or other shelter — these places will do them at-cost, which is more in the range of $50 to $100. Then, get your shots through organizations such as Luv My Pet. These businesses set up mini-clinics at major pet stores and provide all the necessary immunizations for about a third of the cost of your typical vet. Search under “low cost pet immunizations” to find an organization near you.

But there’s a catch: Neither the Humane Society nor Luv My Pet provides regular veterinary attention. You may decide you’d like the comfort of having a regular vet check your pet, keep its records, advise you on diet, etc. You can still visit your vet for those things, even if you do the other things at a low-cost clinic. Your vet won’t be happy about it, but she’ll still welcome your business.

Skip the kennel

Another chunky bill pet owners face is boarding when they take a dog-less vacation. Depending on location and services, boarding can easily run $25-$75 per night. That week at grandma’s suddenly got more expensive! Dodge that expense by hiring a neighborhood kid or nearby relative to walk and feed your dog twice a day. Pay that person $10 per day and everyone will be happy.

Nutrition matters, but you can save money on food

Sure, the ads are compelling: XYZ Super Dog Food will make your dog’s coat sleek and keep the pep in his step. But less expensive dog food isn’t going to poison Barky — buy him the normal-level stuff and pocket the savings. But don’t try to compensate by giving your dog human food — it’s not good for her and it will make her into a slobbering, jumpy beggar.

Keep your dog “toys” simple

Let’s be honest: Does your dog really need the $25 pet toy in his stocking at Christmas? No, he’ll be delighted and amazed that everyone is home an extra day. Give him a few old socks tied into knots and his eyes will bug out with joy.

Skip obedience school

How obedient do you need your dog to be? You can easily spend $150 for a group class or $100 per hour for private classes — crazy, right? Teach your dog a few key basics, such has coming when you call her name and not jumping on visitors, and you’re good to go.

Any elementary dog training book from the library can help you teach your pet those tricks and dozens more. Yeah, if you have a problem dog that barks all night, you may need to shell out for professional help. But most families are pleased when Fluffy simply sits on command.

The bottom line

Dogs can be amazing companions that improve the lives of you and your children. But they can also be money drains. Apply the above tips and those expenses won’t get between you and your enjoyment of Snowball.

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I was trying to dream up a topic for my latest personal finance column a couple days ago, when I suddenly found myself out of legal pads.

I use legal pads a lot, and I didn’t want to wait for a trip to the office supply superstore to pick up a fresh supply. I marched a half block to the neighborhood outpost of a national drug chain, sniffed out the school supplies section, picked up a two-pack of legal pads and ambled to the cashier for checkout.

With Illinois’ burdensome sales tax loaded on top, the price came to almost $5. That’s nearly a quintet of clams for two fifty-sheet pads of paper.

“Know why I own stock in this drug chain?” I asked the bored cashier. “It’s the only way I could avoid turning suicidal every time I have to pay these prices. But given these exorbitant pricetags, I know they must pay you very, very well.”

The minimum-wage clerk’s eyes rolled into the back of her head.

I could have put in a little effort, driven 10 minutes to Staples or Office Max, and likely paid something like half the price. But I didn’t. And I know I’m not alone in this kind of consumer mindlessness. That’s why, when we complain about the increasingly high cost of living, and cast about for someone to blame, the first place many of us ought to look is in the mirror.

Fact is, at many stores and services today, especially national chains, ownership doesn’t seem content to simply make a fair profit. They’re out to get into your pants, probe the depths of your pockets and extract as much cash as possible. In very basic terms, we’re being gouged. And we’re allowing it.

Not very super

In my neighborhood, there’s a chain supermarket owned by a major conglomerate. Many of my neighbors habitually shop there because it’s close and convenient. Only problem is, the always-high prices keep climbing skyward with the trajectory of a Saturn V rocket.

The attitude on the part of officials of the supermarket conglomerate appears to be, “If customers are stupid enough to shop here, if they can’t be bothered to comparison shop, then we’re fully in our rights to invade their wallets or purses and vacuum out every last dollar.”

In other words, they’re not just capitalists, but gougers as well.

I’d shopped almost exclusively at that market for more than 15 years, when one day I decided to check out the nearby location of a locally-owned grocery chain I’d driven by scores of times without ever bothering to stop.

The locally-owned store had struck me as looking old, beaten down, and not very enticing. That didn’t seem appetizing, so I’d never darkened its doors.

But this day, I walked in, found the place clean, orderly and well-stocked, and then sized up the prices on a few of my most common purchases. My first thought was, “I’ve flushed $17,000 down the toilet over the years by choosing my regular store over this one.” That’s how much lower the prices were.

Subsequent visits made me grasp why my regular supermarket’s aisles were so empty you could bowl in them and never hit a soul, while in this grocery you needed the elbows of an NBA big man to get through produce or meats.

Signs of hope

The finding that the less expensive store was much better patronized is perhaps the best news I’ve experienced on the consumer price front for some time. It indicates at least some among us are doing an outstanding job of being open-minded comparison shoppers. And that gives me hope that if more of us took that approach, there would likely be a whole lot less gouging going on.

As high as the gouging gauge seems to be riding these days, the good news is that there ARE stores like the locally-owned grocery I mention above. And because we don’t owe our souls to the company store, we’re free to take our patronage to folks who aren’t out to pilfer our bank accounts.

I’m going to argue that we can collectively do something about the fat cats gorging on their own gouging. Maybe we can’t put them out of business, but we can make life more difficult for them by refusing to pay their stratospheric prices.

Not to name names, but there’s a donut chain whose next price increase will mean we’ll have to refinance our homes to buy a fritter and coffee.

Let’s avoid them and visit a nearby, family-owned bakery instead.

There are some pharmacy chains that will go unnamed whose stores have started popping up on every single corner in my town. I don’t imagine the elephantine prices they charge on every item, or the tendency of Americans to each be taking a dozen prescription medications, have anything to do with their sudden prevalence. No, and it don’t rain in Indianapolis in the summertime.

Their ubiquity doesn’t mean we can’t cut our purchases at those drug stores by 50 to 75 percent by stocking up at a local big box discounter instead.

There are some big name international fast food joints that charge $1.50 for 15 cents worth of soda. Let’s order free water instead. There are plenty of convenience store chains where you’ll pay through the nose but feel the pain in your gut when buying a snack. Let’s bring a sandwich from home instead.

Don’t complain about high prices, find a legal way around them. Only you can end the forest fire consuming your spending green.

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If you’ve been to a major professional sporting event lately, you know the accounting: tickets $50 each, parking $35, beer $8 per, hot dogs $5, ice cream $4, souvenirs $15 for the cheap ones… There’s simply no getting out of that stadium without spending several hundred dollars.

But wait! There is a solution! Read on about five ways you and your family can take in some excellent sports action without serious wallet damage.

High school sports

Remember the fun you had at Friday night football games when you were in high school? OK, so maybe you won’t be trying to show off for the cheerleaders anymore, but all the other fun stuff still applies. High school sports are some of the most spirit-filled events you’ll ever attend. And, in case you’ve forgotten, there is usually much more to a high school sporting event than just the game — there are marching bands and pep bands, cheerleaders, student cheering sections, over-zealous parents, and all sorts of spirited decorations.

Plus, the actual game can be highly competitive — the student athletes have none of the nonchalance of professional athletes and the great variety of talent means every play can produce amazing surprises. From a financial perspective nothing beats high school sports — many events are free, and others charge a nominal fee. Even the concessions are usually low-priced fundraisers. No $12 hamburgers here!

Small and medium college sports

Sure, Big Ten or SEC football games are great, but they’re not much less expensive than an NFL game. Next time you want some collegiate pigskin action but don’t have a bundle to blow, check out your local Division II or Division III team. You’ll get at least a semblance of the same spirit (depending on the teams, of course), probably a decent marching band or pep band, and some solid play (at least as good as a really good high school game).

If you go to a major rivalry game (e.g., the 120-year-old Monon Bell game between Depauw University and Wabash College) the excitement and crowd spirit ratchet up. If you prefer basketball or baseball, you can get much of the same experience, though with a little less pomp. In baseball, however, it’s not unusual to find a pro-ball prospect or two waiting to get drafted. If you enjoy the less-popular sports, such as volleyball or wrestling, expect lots of action and tiny crowds, even at Division I schools. Like at high school games, your wallet will hardly be dented at small college events.

Minor league sports

Everyone knows that many highly paid professional athletes act like they’re entitled to adulation and ignore their fans in return. This is rarely the case with minor league teams in any sport. These athletes, and the team officials, realize that fans pay the bills, and they treat them with the respect they deserve. Not only do the games feature much more entertainment (between the innings or periods), but they also generally allow fans to get autographs, run the base paths, and participate in various promotions.

In short, minor league teams cater to the fans, and the result is that the games are a blast. Sure, the play on the field or court is generally not as good as major league play, but it’s still solid. The best part: Tickets and concessions are a fraction of what they cost in the big leagues.

Serious amateur sports

If you watch ESPN regularly, you’ve probably noticed that amateur championships such as the Little League World Series have become big draws. That’s because the action is often stellar, and the atmosphere is always charged, at such important amateur events. So the next time you need a sports fix, go online and figure out where your local youth baseball, basketball, football, or other championship event is going on. You’ll love the spirit and the action, and you may even know some of the athletes. And, of course, you won’t even have to pull out your wallet.

Professional sports from a distance

If you are a major Cubs fan but can’t swing the tickets, try visiting Wrigleyville on game day. The atmosphere is electric, with music, vendors, crowds, and general merriment throughout the neighborhood. The same goes for the neighborhoods surrounding many other major professional sports venues. Heck, tailgating is half the fun of a pro or major college football game — just go the parking lot and soak up the atmosphere!

The next time you’re hankering for a sports fix, try one of these five events instead of the pros. You’ll discover a whole new world of sporting action, and your bank account will thank you.

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(click to enlarge)

This is funny (to me at least) in large part because it’s true. As a father of four, I can say with certainty that kids are expensive. Yes, there are lots of things that you can do to cut costs — and we do many of them. But there’s no avoiding the fact that it costs more to support more people. And that extra money spent takes away from what you could otherwise be adding to an investment portfolio.

Of course, this isn’t to say that kids aren’t worth the cost. That’s obviously a very personal decision. In our case, we’ve certainly had no regrets. But that doesn’t change the fact that there are a number of financial tradeoffs involved.

It’s been suggested that the cost of raising a child from birth to age 17 is well over $200k. I’ve never sat down and tabulated the cost, but here are just a few things that come to mind.

• Lost earnings (stay-at-home-parent) and/or childcare
• Baby stuff, toys, etc.
• Higher grocery bills for feeding more mouths
• More clothing for more bodies
• Larger house to accommodate more people
• More home furnishings to fill that house
• More expensive house from living in a better school district
• Higher property taxes from living in a better school district
• Private school tuition if you live in a bad school district
• Larger car (depending on how many kids you have)
• Gas money for all the extra errands, practices, etc.
• Piano lessons, taekwando, sports registrations, etc.
• Increased health insurance costs (premiums, copays, etc.)
• Increased life insurance costs (a bigger policy to support more people)
• Increased car insurance costs if/when you have a teenage driver
• Increased travel costs (e.g., airfare x family size)
• College education (if you choose to help them out)

And the list goes on…

Of course, you have to trade some of these things out against the costs you might incur in the absence of a family obligation. For example, due to the higher cost of traveling, you might opt for a relatively cheap summer camping trip or a trip to the beach rather than the trip to Europe that the couple next door just took.

And there are, of course, economies of scale… While some of these expenses increase linearly, others do not. The second (and third and fourth) kids don’t double (or triple or quadruple) your costs.

But the larger point still stands. Kids are costly, and you have to be comfortable with that (or at least aware of it) when deciding to start a family.

*Note: I actually discovered this article when reading JD’s article about the XKCD comic strip on compounding interest vs. earning more money. While some of JD’s numbers are suspect, he (and the comic strip) make an excellent point. While smart investing is great, you can’t ignore the power of increasing your earnings.

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To many, the holidays are a time of big spending and blown budgets. But to millions of households with children, mine included, back to school shopping can also wreak havoc on our finances.

Between the trendy clothes, new shoes, and endless amount of school supplies, it is not difficult to put a noticeably big dent in our savings.

As I contemplated the many needs of my children in the weeks before school starts, I wondered if there isn’t a way to get through it without spending a fortune.

Good news! It really is possible to get everything our children need for a successful school year without breaking the bank.

Yes, it takes discipline and perseverance. You may even need to leave the kids at home if they are overly persistent. But with a little planning, you can stick to an acceptable budget and still send the kids back to school with everything they need and even some things they actually want.

Here are some valuable tips to follow that can help you save you money, you’re your sanity, during the pricey back to school shopping season:

1. Before replenishing fall and winter clothes, take stock of what your kids already have. Do their jeans still fit? Is that jacket good for one more year? Also take advantage of hand-me-downs from an older sibling or cousin. My daughter has benefitted from many unworn clothes her older sister has handed down. Whatever is not yet worn is new again!
2. Yes, those adorable fall clothes are on display and your teen just has to have the newest sweater vest, but summer weather doesn’t stop for school. You can shop summer sales for back to school clothes, which kids can wear for a few more weeks. This is the one time I don’t mind that my kids like wearing short sleeves and camis year round.
3. Watch for office supply store coupons. You may have to wait until right before classes start, but if you hit it right, this could mean big savings.
4. Don’t veer from the school supply list. This also means stick to the cheaper, plain folders rather than the cool, trendy ones. Don’t grab the first spiral notebook you see. Be aware of prices, which can vary greatly, and shop around when out at different stores. This may be easier to do if the kids stay home.
5. Check with the kids to see if they brought home leftover supplies from the prior school year. This includes folders that are in decent condition and barely-used spiral notebooks, in addition to crayons, markers, pens and pencils. I always make a point of digging through last year’s backpack and usually come up with a bounty.
6. Plan to shop during tax holidays, which many states offer. This can be used for school-related shopping, such as clothes and shoes, in addition to school supplies. Last year, I was able to combine tax free shopping with valuable clothes coupons. You’ll be amazed at the savings!
7. Price shop online before heading to the stores. Sometimes it pays to hit more than one store for school supplies. Make sure you’re getting the best deal possible and the most for your money.
8. I tend to want to rush through school supply shopping. After all, pencils and paper are not complex purchases. However, it’s best to take your time and look around for the best deals. If you’re harried and hurried, the tendency is to grab the first binder you see. This is where mistakes happen. You pick up a 1.50 inch binder when you need a 1.75 inch size. Or the loose leaf paper is college ruled when your child needs wide ruled. Who said back to school shopping was easy?

Back to school shopping is not a science, but it could be. For those parents who plan ahead, shop around and do their homework, there are big savings that can be had.

And we all know too well how fast the holidays are upon us after the kids head back to school. By saving on back to school shopping, you can leave money in the coffer for Christmas gifts, including that trendy new sweater vest your child has been eyeing since August.

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As a followup to yesterday’s post on stupid money, I wanted to share some thoughts about the so-called price anchoring. I first ran across the concept of price anchoring while reading Dan Ariely’s Predictably Irrational.

In short, price anchoring refers to the practice of establishing a high reference point against which you’ll compare prices when evaluating a deal. The goal here is to make the current price seem small by comparison. And guess what? It’s not very hard to do this because we’re hard-wired to make relative comparisons in such situations.

If you’re paying attention, you’ll see price anchoring at work all around you. The MSRP on that shiny new car? Anchoring. That oddly expensive item on the restaurant menu that nobody would ever order? Anchoring. The price label at the store showing both the regular and sale price? Anchoring.

One of my favorite examples of this is the perpetual “sale” prices at mall jewelry stores. As I’ve noted in the past, some stores actually admit that “original prices may not have resulted in actual sales.” In other words, they effectively marked it up so they could immediately mark it back down and make it look like a deal.

In another case, I saw a commercial advertising a trinket for $299 alongside a “will be” price of $399. What’s that, you say? A “will be” price? What does that even mean? It means that they’re selling the item at full price, and using a theoretical future price increase to make you think it’s a great deal.

Of course, price anchoring can also work in reverse. When haggling over a price – especially if you’re dealing with an inexperienced (or motivated) seller – opening with a lowball offer can tip the scales in your favor. Yes, there’s a chance that you’ll offend the seller and they’ll simply walk away. If not, however, you’ll have established a low baseline for subsequent counteroffers.

The point here is simply that you need to be aware of the anchoring effect when making decisions. Will you be able to overcome it on a regular basis? Perhaps not – at least not entirely. No matter how rational you think you are, your brain is by nature susceptible to these sort of games. But you can use this knowledge to your advantage when the tables are turned.

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I’m currently engrossed in Peter Elkind’s entertaining 2010 book Rough Justice: The Rise and Fall of Eliot Spitzer. It’s a laugh-filled, fast-paced look at the life of the former New York attorney general and governor, whose swift rise to the top job in Albany was followed by an even swifter slalom out of elected office, after bombshell disclosures the “Luv Gov” had frolicked with ladies of the night.

Though the world of finance is laced through and through this story, one of the book’s particularly catchy references to cash snared my eye and led me to make a mental note — once I’d stopped chortling. The New York City business through which “Client No. 9″ (Spitzer) procured his ladies, Emperors Club VIP, was run by folks who, shall we say, were not exactly Phi Beta Kappa material.

But the booking agent who took calls from johns and linked them with “girls” was astute enough to pinpoint an intriguing tendency among some of the Wall Streeters patronizing the Emperor’s Club. It’s such a universally human tendency there’s likely no one reading this who hasn’t made a similar blunder.

See, the club had “escorts” priced at $1,000 an hour, and others noted on the club’s website as a higher caliber of call girl, at $5,500 an hour. But “girls” in the $1,000 strata were usually the same women populating the far higher tier.

The insistence on paying more

Many clients, however, not being privy to this secret, looked down on the $1,000-an-hour offers. Feeling they deserved better, they wanted to pay more. They insisted on paying more. And in fact, demanded to pay more, on what, unknown to them, they could have had for less than one fifth the price.

“These people wanted to pay more, because paying more gives exclusivity,” the book quotes booking agent Tammy Thomas as saying.

“There’s stupid money in New York — it’s almost the norm there.”

Now “stupid money” in this context likely has two components. One of them is that the money the johns earned was so extreme it was crazy (as in, “I really want to land a role on a prime time network sitcom,” the actress said. “That’s where the crazy money is.”). The second is that they had so much money it really didn’t matter if they spent it stupidly, such as purchasing a call girl priced at 5.5 times as much as a differently-named call girl who was the same person!

Of course, stupid money exists everywhere. It’s not solely a New York phenomenon. And who among us hasn’t done something like this? Not with prostitutes of course, but with any consumer purchase we know little about.

Finding we’re not sufficiently informed about which option is better, we choose the higher-priced product, the higher-priced store, the higher-priced service — because it must be better. The notion that it might not be better, or not sufficiently better to justify the incremental price, rarely dissuades us. That’s because we’ve made up our minds that by paying the higher price, we’ll achieve greater satisfaction and confidence in our purchase. After all, “you get what you pay for,” don’t you?

It all reminds me of a time I had an assignment to write about a legendary Chicago auto dealer whose North Shore luxury car dealership had done a land office business for decades. This dealer was touring me around his opulent showplace when I happened to ask him how his certified pre-owned vehicle program, where pristine pre-owned vehicles were sold at prices between new and used, was faring.

He stopped dead in his tracks. Turning to me, he said in confidential tones, “Let me tell you something. I have coming in here regularly North Shore attorneys so incredibly wealthy they could buy this dealership right out from under me. Few of those guys would even dream of buying a new car. They’re only interested in purchasing certified pre-owned vehicles.”

These guys weren’t dolts, was the dealer’s message. They weren’t the kind to indulge in the spending of stupid money. They knew that on a luxury car, perhaps five figures of value disappeared from the car the instant it was driven off the lot. Being smart, the barristers wanted to avoid that fate by buying certified pre-owned cars on which that depreciation had already been registered.

But for every certified pre-owned car on that lot, there was a buyer who’d purchased the same car new, in the process immolating perhaps $8,000 to $15,000 of his own money. Only by paying the heavily inflated price for that vehicle could he achieve the satisfaction he sought. He’d acquired new one of the world’s most coveted automobiles, and by God had paid a huge price for it!

Lessons for entrepreneurs

What can we learn? Two lessons, I suppose. First, we should research our options on major purchases, so that we don’t have to convince ourselves that only by paying the top price can we be satisfied with our purchase. It may be the case that the top-priced product is best, but it ain’t necessarily so. For example, when browsing for a new credit card, weigh the options against your spending needs. You might find that a 0% credit card meets your needs better than a more expensive rewards card.

The second lesson is for entrepreneurs, who should invariably include among their offerings one that’s stupendously high priced. Say they open a lemonade stand, offering a good, better, and best lemonade. Also offered should be a glass of uber-lemonade, touted as made from specially filtered waters, internationally-grown organic lemons and a few un-divulged secret ingredients.

There will surely be patrons willing to part with some stupid money to persuade themselves they’re among the few who can afford the very best.

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With summer in full swing and the price of oil hovering near $90-100 per barrel, everyone is feeling the pinch at the gas pump. High fuel costs affects us every summer, and this one is turning out to be no different.

Except this year, the high cost of filling up our gas tanks has been compounded by the economy’s continued slump, high unemployment, meager savings account rates, and other trouble spots in families’ finances.

Here are five ways to save some money this summer on your gas bill.

1. Keep your car moving. I know that it may seem like a counterproductive idea to keep driving to save money on fuel costs, but stop and go traffic can play havoc on your fuel gauge. Depending on the amount of congestion that you encounter, you could be adding a lot to your fuel bill. Studies have shown that stop and go traffic can reduce mileage at least 5% to 10%. While living in the traffic-riddled city of Atlanta, my brother-in-law used to have a theory that you could save a lot of time on your daily commute by only making right-hand turns. Who would have thought that something so simple could save you money, as well.
2. Tune up your car. Studies have shown that tuning up your car can save you money on gas by improving your fuel economy. In fact, simple tune ups can save you approximately 4% on your gas costs. If you can avoid major mechanical problems with your car, you could also save on car repairs.
3. Clean out your trunk. Studies conducted by the U.S. Department of Energy found that your fuel consumption will be up to 2% higher if you drive around with an extra 100 pounds in your car’s trunk. So, for example, if you have a 15 gallon gas tank in your car that you fill up once a week, that extra 2% in fuel costs can add $50 onto the roughly $2,500 that you spend on fuel per year (assuming $3.50 per gallon gasoline). Instead, you could save money this money if you’d just stop carrying around needless gear and added weight in your car’s trunk.
4. Use gas reward credit card. You can earn up to a 5% rebate at certain national gas station chains by using a credit card like the Chase Freedom Visa when you fill up. While many of these credit cards have high interest rates, the savings or rebates may be well worth your time and effort in gas savings if you pay your credit card bills off every month instead of letting your balances carry over and accrue interest. The best credit cards can help you earn a rebate on your gas costs.
5. Carefully pick the day you fill up. I used to work at a gas station, and one of the tips that I learned was to not fill up your car while the fuel truck is there replenishing the gas station’s fuel tanks. Pumping in the new gas stirs up any sediment in the station’s large tanks and can be transferred to your car while you are filling up. Timing can also save you money on changing gas prices. Many gas station owners change their prices on Thursday mornings by 10AM. Beat the deadline if you think prices are rising, as they often do heading into the weekend when more people are on the road.

While many of these fuel (or cost) saving measures may not seem like much when you look at them individually, they can add up to some serious savings when you combine them. Saving 10% or 20% on your fuel costs can put hundreds of dollars back in your savings account every year. This can make a huge difference in your family’s budget when times are tough.

What about your fuel savings? Do you fill up your tank every week? What are some things you do to save money on gas? Did I miss any good tips?

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Ouch, that electric bill is gonna hurt this month! With temperatures soaring across the United States, power consumption has been soaring right along with it. Of course you’ve already turned up your thermostat and screwed in the CFLs, so here are some slightly different tips to trim the power bill.

1. Get your hands wet. Wash your dishes by hand once or twice a week instead of using your dishwasher. (The dishwasher manufacturers will have you believe that this wastes water; that’s only true if you crazily run the water the whole time you’re washing.) If you wash the dishes by hand one day out of five, you’ll cut your electricity consumption for the dishwasher by 20 percent (a standard dishwasher burns 355 kilowatt/hours per year, so that’s some nice savings).
2. Use the solar dryer. Admit it, the main reason you don’t hang your laundry on the line is because you don’t want the neighbors to gawk. Suck up that pride and start using the sun to dry your laundry. Not only will you save electricity (it costs about 50 cents a load to use your dryer) but you’ll burn some calories along the way. If you seriously don’t want your neighbors checking out your skivvies, go ahead and use the dryer for that, but use the clothesline for your less modest laundry.
3. Use the microwave. Your microwave efficiently cooks food — it uses a lot less electricity than your normal electric stove or oven — and it doesn’t heat up your kitchen the way those appliances do, so you’ll save air conditioning power, too. And admit it, you like those tasty and easy microwave meals!
4. Keep the fridge full. Ironically, the more stuff you have in your fridge, the more efficient it is (unless you jam it so full that you block the air flow). Here’s the idea: If your refrigerator or freezer is nearly empty, each time you open the door much of the cold rushes out with the air. Keep the fridge and freezer full, and the cold stays. Simple. However, you shouldn’t put hot stuff into the fridge or freezer until it cools down to room temperature or you’ll use more power than needed to cool it down. For health reasons you don’t want to leave food sitting out longer than necessary though; sometimes you can cool down hot food quickly with those icy things you put in coolers.
5. Zone your house. You don’t need to cool your bedroom if you’re not in it, and you probably never need to cool your closets. Once your family is out of bed, turn off the AC upstairs. Similarly, when they’re in bed, turn off the AC downstairs. If you happen to wake up in the wee hours to go to the bathroom, try turning off the AC completely. If doors and windows are shut, the bedrooms may remain cool until the sun rises. Regarding the closets, there is little need to keep your suits cool, so keep the doors to closets closed so that the cool air isn’t wasted there.
6. Skip the screensaver. You guessed it — using a screen saver consumes more electricity than just letting your computer screen go blank. Speaking of computers, turn them off at night and whenever else you’re not going to use them for two hours or more. “Sleep” mode isn’t good enough — even in sleep mode, a typical PC burns 15 watts. After you shut down the computer, turn off the power strip. That makes sure no energy is slowly being consumed by LED lights or other little power suckers.
7. Share the wealth. This might be your single best power-saving move. If you have kids, tell them that if they participate in your power-saving schemes, you’ll share some of the savings with them. Tell them about a few ways they can help keep the bills down — turning off lights, keeping doors closed, playing fewer video games. Then show them your power bill from last August and tell them that if they follow your suggestions and the amount of electricity is less this August, they will get a percentage of the money saved.

Do you have any creative ways of saving energy? If so, please don’t hesitate to share them in the comments.

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The other day, while chatting with an acquaintance, the topic of the economy came up. We talked a bit about the recent market turbulence, the debt ceiling debacle, the S&P credit downgrade, etc. He lamented that his 401(k) was taking a beating, and that this was coming on the heels of everything they dealt with in recent years.

He didn’t offer details, and I didn’t feel comfortable asking, but they apparently lost their house, at least one car, their boat, etc. He then said something interesting:

“It’s not like we were rich. We were just credit rich. I was young and stupid and made a lot of bad decisions because I thought we could afford that stuff. Turns out I was wrong.”

And in that one simple phrase – credit rich – he summed up what’s at the heart of our economic problems. In terms of both personal finance and government spending, we’ve been relying far too much on borrowed money. You’ve heard over and over that you should spend less than you earn, but many don’t. Even now, after the hard lessons that we’ve learned over the past few years.

It’s very easy to look around yourself and see people living in huge houses, driving fancy cars, and playing with all sorts of cool toys, and to think that you “deserve” the same. But the fact is that you deserve better. You work hard for your money. Don’t use it as a weak foundation for a massive house of (credit) cards.

This isn’t to say that you shouldn’t take out a mortgage to buy a house. We did. And we’ve since paid it off. Credit, when used responsibly, can be a powerful thing. But when it’s used recklessly, it can be even more powerful – in the opposite direction.

Sure, even without over-extending ourselves, our family could afford a larger house, a fancier car, or a nice boat. But we choose not to spend our money on such things, as we’d rather have a paid off mortgage and a growing investment portfolio.

Don’t get me wrong… We still live in a nice neighborhood, we travel, and we have decent cars. But we also try to live by the mantra that good enough is good enough. First and foremost, we take care of our savings and investment goals. Once those things are taken care of, we more or less let the chips fall where they may – but we never finance our purchases, or otherwise spend more than we earn. Ever.

Yes, this is a lot easier than it used to be, as our household income has risen over the years, and we have more leeway than we used to. But even when you’re just starting out, it is possible. Live cheap. Scrimp and save. Build up a small cash cushion to cover any short-term challenges, and don’t ever lose sight of the big picture.

You’ll thank yourself in the long run.

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The developed world has gone crazy for Groupon and other daily deal websites where consumers are offered one deal or coupon each day in their e-mail inbox. If enough people purchase the coupon, then the deal is active, thereby making the savings a social affair between friends.

But if you’re not on top of things, you could be wasting your money on Groupon, especially if you let your coupons sit idle or even expire. Groupon can be addictive, and you’re not alone. There are other ways to find deals if you feel you are wasting your money with Groupon.

Deal-a-day websites are a big business in America and abroad. According to Kiplinger’s Personal Finance, consumers spent more than $870 million on offers from social deal websites such as Groupon and Living Social in 2010. Groupon is preparing an initial public offering (IPO) so you’ll soon be able to buy shares of the company on the stock market, and spending on deal-a-day websites is expected to grow to over $4 billion annually in the next four years.

Up to 30 percent of all Groupons are never redeemed

According to research done for the Harvard Business Review on Groupon data, the average Groupon deal sells approximately 550 coupons at an average cost of $34 per user. It’s not uncommon for fans to buy two or more each month and to have several sitting unused in their accounts. In fact, according to Seeking Alpha, up to 30 percent of all Groupons purchased are never redeemed.

How many of these coupons do you purchase each month? And how likely are you to actually use them? Having an incredible offer appear in your e-mail inbox every morning can be a hard temptation to resist.

If you purchase two Groupons per month at an average cost of $34, you would purchase $816 in coupons per year. If you let 30 percent of them expire, that’s $244 down the drain. While this may not seem like a huge amount of money, it’s just one example of how frivolous impulse spending can eat away at your monthly budget.

Three ways to keep Groupon from being a waste of money

1. Sell your Groupons. There are several websites that have sprung up that let you sell your unwanted Groupons and other coupons. Some of the most popular websites that help you resell Groupons are Lifesta.com, DealsGoRound.com, CoupRecoup.com, and Dealigee.com.
2. Trade your Groupons. You can also consider trading your Groupons if you have coupons that will expire before you can use them. Consider listing your Groupons on Craigslist, Twitter, or even Facebook. You may find that one of your friends would like a Groupon that you cannot use.
3. Don’t buy them in the first place. Not buying the Groupon in the first place may be one of the hardest things to do if you find yourself addicted to the offerings. Resisting the temptation and unsubscribing to the daily e-mails may be one of the best ways to save your money from being wasted.

Everyone wants to save money and find a deal. In fact, almost 100 million adults use some type of coupon when purchasing items online. But, there is a real danger in having a carrot dangled in front of you every morning via e-mail to shop and spend money that may not be allocated in your budget. Groupons and other deal-a-day coupon website offerings are often budget busters, but it doesn’t have to be that way. There are ways to combat wasting your money with Groupons.

Do you have trouble turning down great deals that you receive through e-mail advertising from sites like Groupon? How many Groupons have you let expire? Do you have any other tips for handling the coupon craving?

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(click map to enlarge)

The biggest thing that jumped out at me from this map was the tendency for sales tax holidays to be limited to southern and southwestern states. Yes, there are a handful of outliers in the midwest and northeast, but the overall geographic pattern is unmistakable.

Another interesting tidbit is that, in a related article, the Tax Foundation argued that “sales tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform.” They go on to argue that if a state needs to offer a “holiday” from their tax system, then perhaps their tax system is “uncompetitive.”

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» Paying Sales Tax for Online Purchases
» 2010 Sales Tax Holidays
» Arizona to Audit Everyone Who Fails to Report Sales and Use Tax?

Have you ever bought or sold store gift cards through an online gift card exchange? I’ve never done this myself, but a reader named Chris recently wrote in to share his experiences, and it sounds like a great option if you’ve received a card that you don’t want, or if you’re looking to score a discount on an upcoming purchase.

According to Chris:

My wife, who is an avid Kohl’s shopper, found that you can pay your Kohl’s bill with Kohl’s gift cards. We then found that Gift Card Rescue regularly sells Kohl’s gift cards at a 15% discount. So, you can make your Kohl’s purchase (using your Kohl’s card for additional discounts; my wife often gets things at 75-85% off the regular price). Then, once you get your bill, you can buy the gift card(s) you need to pay the bill at an additional 15% discount. As long as it’s convenient for you to go to Kohl’s to pay your bill in person, this is a win-win.

Obviously, you don’t have to jump through the “pay your credit card with a gift card” hoop to get a good deal, but Chris is right – you can often score additional discounts at Kohl’s by using your store credit card.

After poking around a bit on both Gift Card Rescue and Plastic Jungle, I was impressed by the number of stores for which cards are available. The discounts vary, but you can save a decent amount – e.g., 7% for both Lowes and Home Depot, 10% for Auto Zone, 11% for Fandango, 13-15% for Barnes & Noble, 14% for JC Penney, 16% for Kohl’s, and so on.

In a followup message, Chris also pointed out the utility of these sites when it comes to unloading unwanted gift cards.

I also sold a $50 Bass Pro gift card that I won from a local radio station. While I could have found something to buy at Bass Pro, I really would have been spending it just to spend it. When I found that Plastic Jungle would give me $40 in cash or a $42.50 Amazon electronic gift card, I thought that was a better option. Because I was planning on buying something at Amazon, I went with the Amazon gift card and the transaction went very smoothly.

I’m not sure about you, but I’ve definitely received gift cards that I didn’t really want or need. While re-gifting these cards is one possible solution, re-selling them is another good option.

In general terms, gift card exchanges pay up to ~90% of the face value of your gift card, with the final amount depending on how much they can re-sell it for. Unlike buying or selling on eBay or Craigslist, your transactions are also guaranteed, and shipping (at least when buying) is typically free. It’s also worth noting that you can sell partially used gift cards in odd amounts.

If you’ve ever bought or sold gift cards using one of these services, I’d love to hear how it went. How much (percentage-wise) did you get when you sold? How much big of a discount did you get when you bought? Did you have any problems? Any tips to share? Please share your thoughts in the comments section.

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For kids, summer is a lovely long stretch of day camps, playing with friends, going to the pool, and generally having fun. But for parents, struggling to keep those little folks busy can get costly. Trips to amusement parks, sporting events, museums, and such can seriously stretch a budget. And that’s not even counting the family vacation!

But it doesn’t have to be that way. While some summer outlays cannot be avoided, many expensive activities can be replaced with cost-free alternatives. Here are seven cheap ways to keep junior busy.

Treasure hunt

Write clues on scraps of paper and hide them in your yard, house, garage, wherever, and have each clue direct your kid to the next clue. Make the clues as easy or hard as needed, depending on how clever you believe your child is. If your child is into math, make the clues involve some calculations. Make the last clue lead to some treat. You can do this game with a group of kids, too, by dividing them into teams and setting up multiple clue trails.

Scavenger hunt

An alternative to the treasure hunt is a scavenger hunt. Make a list of items your child (or each team) is required to find. As with the clues in the treasure hunt, make the items as easy or hard to find as needed depending on your child’s abilities.

Camera day

Remember when using a camera was an expensive proposition, with the cost of film, developing, and prints? That’s a thing of the past — your digital camera doesn’t cost anything to use… But your kids will still get a thrill out of being photographers for a day.

Take them to favorite places and let them shoot away. Get on the bus or train, visit the park or beach, anyplace you like going. They’ll get an extra thrill documenting every step of the way. Upload the photos to your computer and print out a select few to create a collage. It will be a day to remember, and your wallet will be just as thick as it was when the day started.

Magic show

Do you remember the fun you had the last time you saw a magic show? Let your kids in on the action by having them set up their own magic show for friends and family. Here are two easy tricks any kid can master:

1. Shuffle a deck of cards and quickly glance at the bottom card. Let someone pick a card, any card. Have the person put the card at the bottom of the deck. Lightly shuffle the deck again. Flip through the deck until you find the card that was originally on the bottom; the next card should be the card the person picked. Pull it out with a flourish!
2. Next hold a carrot under a handkerchief as if it’s your finger. Tell the crowd you’ve discovered a secret formula for resisting pain. Poke a pin deep into the carrot… The crowd will shudder while you coolly pull it back out without a wince.

You can find plenty of other easy tricks online.

Lemonade stand

Even if your kid’s not a budding entrepreneur, she’ll love the thrill of the first paying customer. A lemonade stand is an easy proposition — mix up some powdered drink, set up a table on the sidewalk, and make a sign. No one gets rich this way, but it does introduce your child to the basics of sales and profit, and keeps her occupied for a few summer hours.

Scrap paper poetry

Rainy day? No problem. Before you let the kids park in front of the idiot box — I mean TV — engage them in a game of scrap paper poetry. Each player writes ten random words on slips of paper. All the slips go into a hat, and each player draws ten out. The players then arrange the words, and no other words, into simple free-form poems.

This may sound a little silly, but kids have an innate sense of language and find great humor in atypical arrangements of words. This game won’t cost you a penny but could keep the little minds and hands occupied for an hour.

Super bubbles

Every kid likes to blow bubbles using those little wands. Do that traditional pastime one better by creating super bubble wands from old wire clothes hangers. Just bend them out into big circles or ovals, pour the bubble liquid (or dishwashing liquid) into a flat plate or pan, dip the wands in, and wave them in the air. Pennies spent, giant bubbles created!

If you have other ideas for frugal summer fun, please share them in the comments.

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You drive by the Salvation Army store every day, but you probably never stop in. Maybe you shop at Goodwill for some old clothes for a Halloween costume, but wouldn’t think of going there for anything else. Well, maybe it’s time to change your shopping habits and make thrift stores part of your routine. With today’s economy crawling out of its slump, shopping for the amazing deals on used goods simply makes sense.

According to the Association of Resale Professionals, there are more than 30,000 resale shops in the United States, and the industry is growing about 7% each year. Goodwill Industries generated $2.69 billion in retail revenue in 2010 – that’s a lot more than Halloween costumes!

Here’s the bottom line: A lot of stuff you can find at resale shops is perfectly good. It’s not new, but much of it is only “gently used.” From clothes to kitchen utensils to books to furniture, thrift stores carry a wide enough range of merchandise to stock an entire apartment or just satisfy your shopping jones.

To get your share of resale savings, it helps to know the range of possibilities. Some resale shops are like big garage sales, selling an uneven selection of goods at low prices. Many Salvation Army stores fall into this category. These stores are fun to shop in because you never know what gem you’re going to find.

At the other end of the spectrum are high-end consignment shops. The merchandise in these establishments is not donated; rather, it is provided to the business with the understanding that if it sells, the store will keep a percentage but the original owner of the item will get the rest. The original owners of this merchandise are often well-to-do individuals trying to make room in overflowing closets. Consignment shops often carry high-quality goods at remarkable prices.

In between these two extremes lie many other resale businesses. Goodwill stores, for example, are generally larger, neater, and better organized than Salvation Army stores. The merchandise is clean and in generally good shape. Many not-for-profit organizations run resale shops that support their operations – some of these are elegant and well run, while others resemble yard sales.

Another breed of resale business is the flea market. These establishments usually feature dozens to hundreds of individual booths selling all kinds of merchandise, from used auto parts to antiques.

Speaking of antiques, many resale shops call themselves antique shops even though their merchandise rarely rises to that term. These can be great fun to explore, though, and sometimes real treasures turn up.

Regardless of which type of resale shop you patronize, here are some tips for getting the best deals.

1. Shop regularly. This may be the best tip – patronize the resale shops in your community frequently and you’ll learn the patterns. When do new shipments arrive? When do sales occur? When is the store not crowded? You’ll find much more good stuff, and probably get better deals, if you learn these basics.
2. Sometimes you can negotiate. Many shops, such as Goodwill, won’t haggle. But many others will. And it never hurts to try! Politely ask the owner or manager if he or she will consider an offer; you’ll probably have more luck if you’re willing to buy multiple items or more expensive items. And shops are more likely to deal on slow-moving merchandise. Speaking of dealing, bring cash, as many resale shops don’t take credit cards.
3. Don’t be afraid to travel. If you live in an urban area, you might discover that the thrift shops in your neighborhood get quickly picked over. Take a trip to a rural area and see what’s there — the mix of merchandise will probably differ, and you’ll have less competition.
4. Take your time. You’re not going to find much if you rush through the store. Relax, dig, enjoy the hunt. The real treasures only give themselves up with some effort!
5. Don’t go overboard. Yes, the CDs only cost a quarter, but resist the temptation to rebuild your entire 1985 collection during one visit. Shop carefully, keep your head, and choose wisely. Remember tip #1 – you’ll probably be back soon.

Do you have any thrift store tips? What about success stories? If so, please share them in the comments.

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It’s that time of the year again… Time to start thinking about back-to-school shopping. And you know what that means, don’t you? Time for a sales tax holiday! What follows is an alphabetical listing of states with sales tax holidays, along with a brief summary of what is included in each. Note that there are a few differences from last year, though the number of participating states (16) hasn’t changed.

Sales tax holidays, state-by-state

Alabama: August 5-7. Clothing up to $100/item, computers up to $750/item, school supplies up to $50/item, books up to $30/item. (link)

Arkansas: August 6-7. Clothing up to $100/item, school supplies. (link)

Connecticut: August 21-27. Clothing and footwear up to $300/item. (link)

Florida: August 12-14. School supplies up to $15/item, books and clothing up to $75/item. (link)

Iowa: August 5-6. Clothing up to $100/item. (link)

Louisiana: August 5-6. All “tangible personal property” up to $2500/item. (link)

Maryland: August 14-20. Clothing and footwear up to $100/item. (link)

Mississippi: July 29-30. Clothing and footwear up to $100/item. (link)

Missouri: August 5-7. Clothing up to $100/item, computers up to $3500/item, school supplies up to $50/item. (link)

New Mexico: August 5-7. Clothing up to $100/item, computers up to $1000/item, school supplies up to $15/item. (link)

North Carolina: August 5-7. Clothing and school supplies up to $100/item, instructional material up to $300/item, computers up to $3500/item, other computing supplies up to $250/item, sports equipment up to $50/item. (link)

Oklahoma: August 5-7. Clothing up to $100/item. (link)

South Carolina: August 5-7. Clothing, school supplies, computers, bedding, linens, etc. (link)

Tennessee: August 5-7. Clothing and school supplies up to $100/item, computers up to $1500/item. (link)

Texas: August 19-21. Clothing, school supplies, and backpacks up to $100/item. (link)

Virginia: August 5-7. Clothing up to $100/item, school supplies up to $20/item. (link)

This should be a fairly comprehensive list, but it’s always possible that I missed something. If so, please let me know and I’ll update it ASAP. Note that a few states – including Louisiana, Maryland, Missouri, Texas, and Virginia – have at least one other sales tax holiday during the year. These extra holidays cover things like Energy Star appliances, hurricane preparedness, and/or hunting supplies.

And now for some final words of wisdom… Just because you don’t have to pay sales tax doesn’t mean you’re getting a great deal. In fact, some stores may avoid running sales on certain items during the sales tax holiday in hopes of capitalizing on the holiday buzz. In other words, saving 6% (or whatever) on sales tax, but missing out on a 20% off sale the week before (or after) isn’t a very good deal.

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Not everyone can claim to be financially savvy. But many of us do try to sidestep chump status when it comes to consumer spending. That only makes sense. We want to keep more of our cash. But beyond that, we want to avoid being a sucker for every fast-talking pitchman coming down the pike.

I maintain there’s a simple way to keep more wampum in your jeans, while chortling at the masses tempted by gyp joints and money wasters. You can do it by simply being wise to the advertising you encounter every day.

A word about advertising: It’s an indispensable tool in many consumer and business-to-business categories, and done well it can be highly effective. But it doesn’t come cheap. Competitive marketplaces being what they are, those who sell advertising are getting top dollar for ad space and 30-second spots.

Despite that expense, some product categories seem to be advertised continually. For instance, it seems that the AM radio news and sports stations I catch are backed year after year by a comparative handful of prolific advertisers.

Let’s review. One, advertising costs a lot. Two, some industries tend to be continual hucksters. Put them together, and it makes sense that highly-advertised products are likely raking in giant profits, which in turn are partially funneled back into ad budgets to generate still more windfalls.

Is it far-fetched to suggest overly advertised products may not offer the best return on your dollar? To see, let’s examine a few industries notable for their perennially ubiquitous ads.

Odds you lose

There are, I think, eight casinos within a 90-minute drive of my home. In a typical day you can’t avoid being assaulted by ads for at least six of them, depicting beautiful people in near-orgasmic rhapsodies of joy, laughing like loons as they ecstatically shower in fountains of greenbacks.

Determined to see what I’d been missing, I stopped by one of the heavily-plugged casinos. In the parking garage elevator headed in, I chatted up a man with missing teeth who swore his luck was going to change. After strolling a casino floor whose ambience was far more funereal than depicted, I hopped a ‘vator garage-ward and heard a stooped-over gal, possibly a motel maid of 50 years, moaning she’d lost yet another chunk of life savings on this casino visit.

Where’s her lost cash gone? Likely into more casino ads.

New car smells

Media of all kinds are heavily supported by ads for new cars. The ads’ abundance suggests new car selling is a very lucrative business.

I often write stories about the auto industry, and find its experts aren’t shy in confiding that for many, a certified pre-owned rather than a new car is a wiser buy. A CPO vehicle starts as one of the best used cars available, then endures a 100-point inspection and gets a warranty. It’s past the moment where it sheds $5,000 in value simply by being driven off a dealer lot. While it costs more than a used car, it tends to be more cost-effective than buying a new car.

How do we know CPO cars are better buys? Because they’re advertised a lot less! There’s less profit for carmakers and dealers, and less windfall for ad budgets. That new car smell? It may be your goose being cooked.

Rude service

Appearing just about as often as new car ads are advertisements for vehicle maintenance and repair. Having been informed many times by pitchmen the only place to turn for service is right back to the dealer, I tried that with my 15-year-old, high-mileage, imported subcompact.

At the dealer, “technicians” looked over the car and pronounced it in need of repairs whose combined price virtually equaled the car’s total book value. I declined the repairs, and the car ran like a top for years. Along the way, I asked co-workers to name a reputable service shop, and wound up delighted with the work of a nearby, hard-working mechanical wizard. Support your local neighborhood mechanic, I say, rather than hoisting on your frail back the national ad budgets of dealers or coast-to-coast repair shop chains.

Bursting the bubble

Want one final example of relentless ad hype? Okay, here it is. Before the housing collapse, ads for mortgages were unavoidable. Hucksters assured us that low interest mortgages were a God-given right, even for those whose meager savings accounts entitled them to a home no more luxurious than a second-hand Maytag box.

Those ads have now been replaced by spots from… Many of the same people, revealing that for sizable payments, they will help extract us from the mess! The simple lesson: Under-patronize the over-hyped.

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This is a guest post from Ed Avis.

When most people plant a garden, visions of cornucopia overflowing with luscious vegetables fill their heads. They imagine feeding nutritious, delicious meals straight from the garden to their eager families. Skip the produce department at the supermarket, Honey, this summer we’re eating homegrown!

Yeah, right. The truth is a home garden rarely yields tasty, inexpensive meals. While the benefits of a home garden are numerous — exercise, earthy relaxation, maybe a few juicy tomatoes — gardening can be darn expensive. Those seeds, fertilizer, top soil and tools can really add up!

But this summer your garden doesn’t have to cost quite as much. Here are six tips for saving a few bucks on your agricultural hobby.

1. Choose the right plants

Get real. Growing sweet corn in your garden simply does not make economic sense! Home gardeners who want to get the most out of their garden need to grow plants that yield a lot of produce for a small amount of space. Salad greens, such as the many varieties of lettuce, are a top choice. Lettuce grows quickly and dependably, it grows back after you clip some leaves, and you probably already buy lettuce now – but the lettuce you grow at home will taste way better.

A fun choice, and one that you can grow indoors year around, is your favorite herb. Herbs, such as basil, cilantro, and mint, can be easily cultivated by an amateur – and imagine how impressed your friends will be when you snip your personal herbs as you make dinner! Another solid choice is pole beans; they are fairly reliable, and they grow up in a trellis, so they take up less space.

Stagger your crops

If you plant all of your lettuce and tomatoes on the same day, they’ll also all ripen on roughly the same day. This is not ideal. Instead, stagger your harvest times by planting some produce one weekend, some the next, and the rest on the third weekend. This way you’ll be picking perfectly ripe crops for nearly a month, rather than watching a bunch of beautiful veggies rot in your fridge.

Skip the commercial fertilizer

Yes, using MiracleGro will make your plants grow rapidly… But making some natural compost from your kitchen waste will be much more satisfying, and won’t cost a penny. Some useful fertilizers from your kitchen include ground up eggshells (this is virtually identical to commercial lime fertilizer), coffee grounds (loaded with nitrogen, magnesium, and potassium), and general organic waste (though you should compost it before you put it on your garden).

Save some seeds

Sometimes you can use the seeds from your mature plants and plant them again next season. This won’t work with all seeds – hybrid plants, for example, generally do not produce useful seeds. If you want to collect seeds for next year, let some of the vegetables grow to maturity (or beyond) on the vine, then select the best seeds from them. Let beans and peas dry on the vine. Store your seeds in a dry, cool place, like in an envelope on a closet shelf.

Shop late

Garden centers and big box home stores need to unload their plants once the planting season starts to wind down, so they often sell them at a discount. Your selection will be much smaller, but so will your investment. Same goes for seeds, tools, gloves, power equipment, and other garden accoutrements — all of this goes on sale once the growing season is over. Buy it and save it ’til next spring.

Start your garden indoors

It’s too late for this summer, but start making plans for next spring. This is not nearly as complicated as it sounds. Invest in a package of potting soil and a few packets of seeds. That’s really all you need — make the pots out of pop bottles that you cut in half, and use the natural light on your windowsills or a grow light in your basement. Follow the directions on the packet and by spring you’ll have a delightful crop of little plants waiting for your garden.

These tips won’t guarantee a bumper crop on your autumn table, but they will keep a few more bucks in your wallet while helping to reduce your grocery bill.

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One of the brilliant innovations of the last couple decades, I think, is the drive-thru pharmacy. Ponder the concept a minute and you’ll likely agree.

With the advent of TV prescription drug advertising, most Americans dutifully began turning their homes into mini apothecaries. But about the same time, studies started showing many ills requiring medications could be avoided altogether if we just got out and exercised a bit. These findings couldn’t have inspired bacchanalia at firms whose profits rested on prescription drug sales.

The genius solution, of course, was the drive-thru pharmacy. No longer would folks have to leave their cars and walk through a crowded store to the drug counter. No, now they could sidestep even that minimal exercise, thereby hiking the odds they’d go on needing medications, would eventually need even more, and sometime later still more Rxs to combat the side effects from the first pills.

Is that genius, or what?

Another marketing marvel

As a marketing masterstroke, the drive-thru drug window ranks right up there with big-screen TV. Of course, the big-screen is just the latest in a long series of stratagems by television makers, networks, and production companies.

Soon after the first TV sets arrived in U.S. homes, most folks realized not much worth viewing ever aired. What was true in 1951 with four channels wasn’t much different 60 years later with four hundred.

The sole entertaining exception in that span was the spot depicting the fun of popping a pill and then soaking in side-by-side, his-and-hers tubs.

If they couldn’t count on enjoying the TV experience, what would spur people to go on buying TVs? Answer: the opportunity to one-up their neighbors, naturally! So screens got larger. Color TVs arrived. Picture-in-picture dawned. Remotes requiring handbooks to comprehend were born. And finally came the TV big enough to fill a wall. Through it all, only one thing remained constant: that you’d be far better off doing almost anything other than watching TV.

And here’s the part that’s sheer marketing magic. What appears regularly amid commercial programming dreck on any big-screen? Why, ads trumpeting the next generation of super-colossal television sets, don’t ya know?!

No retiring this idea

If there’s any invention more ingenious than drive-thru pharmacies and big-screens, it’s the retirement planning field and the hubbub it spawns. Think about it. Insisting we all expend time, effort, and worry planning for retirement keeps vast industries humming and millions of people employed. The only ones suffering are the poor souls driven to early graves fretting they have no plan.

Retirement planning funds the existence of brokerages, mutual funds firms, financial advisors, estate planning lawyers, authors of books on retirement, and publications explaining how to save for retirement, to name just a few.

The idea that we all must retire, presumably so we can spend more time idling at drive-thru pharmacies and watching big-screen TV, is a given for most Americans. They take as gospel that around their mid-60s, they’ll shed that old job and the rest of their life will be spent hand-in-hand with their significant other, gazing at a sunset over a glorious beach. After sundown, they’ll be able to catch some tube while downing the meds they got earlier at the drive-thru.

All this certainty, despite the fact that the concept of retirement is really a fairly recent development, having sprung up after the dawn of the 20th Century. Until then, people didn’t have any choice but to keep working until they kicked the bucket.

That sounds like a dismal fate until you consider they had some things 21st Century retirees don’t. Because retirement planning is an inexact science, many now trade stressful jobs for the anxiety of worrying that their savings will expire before they do. They also have to find something to give them purpose, a reason to get up in the morning, and a challenge of the kind we all need. Earlier Americans who worked to their dying day didn’t face any of these issues.

Just think, if we didn’t have to retire, we’d suffer the fate of saving tons of cash on retirement planning advice and tools! We’d be forced to find something we loved doing, maybe the job we’d done all along or another we’d always had a passion for, and keep right on working and earning. We’d have to confront an absence of anxiety over whether our money would run out before our lives did.

With all the money saved not employing retirement gurus, plus the cash we’d earned working longer, plus savings we HADN’T withdrawn, we would have to endure genuine choice in what we did, where we traveled, how we lived.

Thank goodness the American Marketing Machine is always revved and ready to remove any stomach-churning choice we might opt to take on. Work out rather than pop pills? Read or pursue a hobby rather than stare at pap on a giant screen? Keep working longer at something you love promising a purposeful life, rather than doing nothing? “Balderdash!” the Machine informs us.

But psssssst! If you want to see what it feels like to have choice, you might do a search for high-yield savings accounts. Or possibly look for some zero-percent apr credit cards. Questioning the autocratic lectures of the Marketing Machine is a bit unusual these days. But doing so may be the single best innovation of all.

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For those that can’t (or don’t want to) check out the video, it’s a humorous piece from The Onion that advises taking a vacation entirely in your mind. While this is intended as a joke, it does bring up the possibility of taking a “staycation,” where you stay home and relax, visit local attractions, etc.

Not only can you save a good bit of money by taking a staycation, but you’ll probably return to work more relaxed and re-energized than if you had actually headed out of town for vacation. The key is to actually not work.

In the few cases where we’ve done a staycation, I’ve made a point of telling people at work that I’ll be away for the week, I’ve set up an auto-reply for my e-mail, etc. And guess what? It’s worked great. Have you ever done a staycation?

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As a quick followup to Ed’s recent post about how to save money on vacation, I wanted to point out an article from Fiscal Fizzle that lists even more ways to save on vacation.

1. Research ahead of time for low-cost things to do
2. Consider the cost of travel when selecting destinations
3. Use cash for your spending money
4. Book a place with kitchen facilities
5. Drive whenever possible
6. Plan repeat visits
7. Build packing lists
8. Use the experience of locals

Of course, Wojo expands on each of these tips in his article. My personal favorites from his list are #1, #2, #4, and #5.

We always look online for things to do before we leave for our trip. Not only does this help to ensure a jam-packed, super-fun trip, it’s also a great way to save money. You can often get discounts by buying tickets online ahead of time, and if reservations are required, you can make sure you get the time of your choice, freeing up the rest of your day(s) for other activities.

As a family of six, air travel really adds up, so we preferentially vacation in places that we can get to by car within a day or two. This great cuts the cost of travel to the destination, and also saves us the expense of renting a car on the other end. This also allows us to haul certain groceries to our destination (and to bring leftovers home with us) – which feeds into…

Booking a place with a kitchen. This is a huge one for us. When we go to the beach, we often find condos on VRBO.com that rent for little more than the cost of a hotel room, yet offer far more space and have fully-outfitted kitchens such that we can cook for ourselves and avoid spending a ton at restaurants.

One other tip, which sort of falls in line with #7, is to create a dedicated medicine bag that contains everything you’re likely to need. We use a small-ish wheelie duffel bag (remember, there are six of us!), and we never take things out of it when we’re at home. This makes it super easy to pack our toiletries, and ensures that we won’t have to run out and pay a premium for toothpaste, acetaminophen, etc.

What about you? Do you have any tips for saving money while on the road? If so, please share them in the comments.

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This is a guest post from Ed Avis.

There are lots of well-known ways to save money on your vacation, such as booking flights and hotels online, cashing in credit card rewards, or eating the free breakfast in your motel. But here are some less-obvious ways to save money on your family vacay that you might not have considered.

Keep track

This is a surprisingly effective way to save money. Keep a notebook and write down how every dollar is spent, immediately after it is spent. This practice does two things. First, it helps you stay on your budget, because you will no longer be estimating how much money is left in your wallet. Second, you will quickly see how much money you’re frittering away on worthless claptrap. These two effects are purely psychological, but you’ll be amazed at how well they work.

Put the kids on a souvenir budget

You probably enjoy indulging your kids when you’re on vacation. But rather than whipping our your wallet every time they whine, give them a daily budget for souvenirs. It will force them to make better choices, and it will limit the nick on your budget. Let them “save up” the budget if they want something big on the last day of your trip, of if they’d rather carry the cash home.

Go for the free souvenirs

Completely eliminate the souvenir budget by collecting the countless free souvenirs you can find on nearly every vacation – restaurant menus, ticket stubs, brochures, hotel room key cards, hotel soap, foreign currency, drink coasters, labels from local foods, receipts, seashells, and other local flora and fauna, etc. These little things will carry much more meaning than that cheapy roadside t-shirt anyway. And imagine how fun it will be to stick these mementos next to your vacation photos in your scrapbook or on your dresser.

Pack a lunch

Yes, when you’re on vacation, you’re going to eat out. But not for every meal! If you pack sandwiches for just one meal a day, you can cut your food budget by a quarter. Even if you’re staying in a hotel room without a refrigerator, pack one daily meal of fruit, granola bars and other non-perishables. You’ll save money, and each restaurant meal will be more special.

Save at the restaurant

Most restaurant meals are big. When you eat a big restaurant meal in your home town, you take the leftovers home in a doggy bag. You can’t always do that on vacation! With that in mind, here are two money-saving restaurant tips. First, consider eating just two meals – a big breakfast and dinner. You’ll be plenty full, and on vacation you’re busy enough that you probably won’t even miss lunch. Second, consider splitting those giant entrees. Growing teens will clean their plates, but most younger kids and adults would be perfectly content with half a meal, especially when they eat the bread and other stuff that precedes the meal.

The best things are free

What do your kids remember most from your last vacation, the $250 visit to the run-down amusement park, or the day you spent on the beach for free? And how many times have you heard about the kid who remembers the hotel pool way more fondly than the endless museum? The bottom line: Sometimes the best things about a vacation cost you nothing. If you’re in a big city, check out free cultural events such as parades, art festivals and concerts in the park. Or just walk through the funky neighborhoods or ethnic areas. If you’re in a resort community, take advantage of public beaches, state park hiking trails and hotel ping-pong tables. You’ll have fun, and your wallet will be fatter on the return trip.

Think minor

Major League baseball games are expensive. Minor league games are not, and they can be loads more fun. Similarly, Broadway shows can break your budget, but storefront theaters produce some of the most fascinating, cutting-edge drama anywhere, for way less money. Wanna hear a concert? Skip the big-name reunion tour at $250 a ticket and hear the best local garage band in an intimate atmosphere for a $10 cover. Unlike the owners of major sports teams and theaters, the owners of minor league sports teams, small theaters, local music venues, and similar cultural institutions know that they need to treat the customers well in order to win their business.

Pay in advance

There’s no better feeling when you’re checking out of the hotel than to hear the clerk say the bill is already covered. And you will almost certainly get a better deal on anything you order if you pay in advance. Best of all, if you pay for your car and hotel room from the comfort of your home six weeks before your trip, you are much less likely to get hit with surprise budget-killing extra fees.

These are just a few ideas to get the conversation started. What’s the best low or no-cost deal you’ve found on a family vacation?

For the money you do spend on vacation, make sure you’re using a great travel rewards card to start earning points for your next holiday:

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A few weeks ago, gas prices at our local gas station were flirting with the $4 mark. Today, they’re about $0.30 lower, but still high. I thus thought it would be worth sharing this list of the ten ways to save money on gas from the Consumer Federation of America.

Note that I’ve sorted these ideas from the most to least effective, and that the estimated savings (on a per gallon basis) are based on gas priced at $3.85/gallon. This is sort of a strange way of calculating things, but I’ll run with it since that’s how it was presented.

1. Don’t ride your brakes. Driving with your foot on the brake not only wears out your brakes, but can also reduce fuel efficiency by 35%. Take your foot off the brake, and you can save the equivalent of $1.35/gallon.
2. Drive more smoothly. By accelerating and decelerating smoothly, you can improve your mileage by 33% on the highway and 5% around town. This works out to an equivalent of $0.68/gallon. See “Hack Your MPG” for my experience with driving smarter to save gas.
3. (tie) Check your air filter. Having a clean air filter can improve mileage by as much as 10%, or an equivalent of $0.39/gallon.
4. (tie) Check your alignment. A poor alignment not only wears out your tires ahead of schedule, it also reduces mileage by as much as 10%. Straighten things out and you can save the equivalent of $0.39/gallon.
5. Don’t speed. Did you know that for every 5 mph you reduce your highway speed, you can reduce fuel consumption by as much as 7%? Slow down from 70 to 65, and you can save the equivalent of $0.27/gallon.
6. Tune up your engine. A properly tuned engine can be as much as 4% more efficient, resulting in an effective savings of $0.15/gallon.
7. Check your tire pressure. Improper tire inflation isn’t just dangerous – it can also be expensive. On average, car tires are 7.5% underinflated, resulting in a 2.8% loss in fuel efficiency. Inflate your tires and save the equivalent of $0.11/gallon.
8. Lose (or remove) weight. For every 100 extra pounds that you carry around you can lose as much as 1-2% in fuel efficiency. Get rid of that junk in your trunk (or in your car’s trunk) and save the equivalent of $0.03/gallon.
9. Check your fuel cap. A broken or missing gas cap can reduce mileage by as much as 1% and also harm the environment. Fix or replace it and save the equivalent of $0.03/mile.
10. Don’t idle. For every two minutes of idling that you avoid, you can save the equivalent $0.01/gallon. It’s not a lot, but if you idle a lot (or spend a lot of time warming up your car) it can add up. After all, you’re burning gas and going nowhere for a grand total of 0 mpg.

To these, I would add: Drive less. Walking, biking, combining trips, telecommuting, and just plain old staying home are by far the most effective ways to reduce your fuel costs. After all, if you’re not driving, you’re not using gas. Period.

You can further reduce your fuel costs by using a gas credit card that pays rewards each time you fill up. Compare credit card offers to find the one that’s the best fit for your lifestyle.

Source: Consumer Federation of America

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I recently ran across an interesting article over on CardRatings.com about whether or not credit cards are addictive. The article highlighted a recent academic study by Marsha Richins of the University of Missouri that focused on the relationship between materialism and overspending.

The study was based on a survey of 400 consumers of various ages and income levels, and the central thesis was that “transformation expectations” – the idea that consumers expect products to have transformative powers on their life – are the mechanism through which materialism drives credit card abuse. Unfortunately, these transformations (assuming that they occur) are short-lived, leaving the consumer looking for another fix.

Richins was able to identify four major types of transformations that are especially prevalent in people with debt problems:

• Self improvement: Over-spenders often believe that their purchase will make them a better person – like the woman who thought cosmetic dental surgery would make her more confident and successful.
• Improved relationships: Over-spenders often believe that their purchase will make it easier for them to connect with others – like the man who thought installing a swimming pool would improve his relationship with his daughter.
• Sense of fun/adventure: Over-spenders often believe that their purchase will make them more fun and/or fulfilled – like the expectation of fun that might come from an ATV or boat purchase.
• Greater effectiveness: Over-spenders often believe that their purchase will make them more effective/efficient – like the idea that a new car will make you more self-reliant, or than an iPad will make you more efficient.

In other words, certain consumers (typically those with mountains of debt) have a tendency to think that the products make the person – as if a purchase will help to re-define you, or change your standing in society. This isn’t to say that the rest of the world doesn’t fall prey to these expectations. It’s just that these tendencies are far less prevalent in “average” consumers.

Richins also believes that people are “hard-wired” to want new things that promise to make your life better. She chalks this up to the fact that primitive people who had better tools were more likely to survive, and thus passed on an innate sense of attraction to things that make survival (or life in general) easier.

The good news is that most people realize (sooner or later) that, while some tools are important, others are a waste of money. Unfortunately, others don’t make that realization, and wind up on the hedonic treadmill.

So… The next time that you’re considering a purchase, stop and think. Ask yourself why you’re interested in making the purchase, and take a very critical look at your answer. Are you looking for a quick fix? Are you expectations too high? Or is this something that you truly want or need?

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Over the past year or so, we’ve seen a lot of debate over the definition of wealthy. Much of this discussion has centered on whether or not individuals (or families) earning $250k or more per year are “rich” and should see their tax rates rise.

Without getting into the underlying politics, I think that one thing that most of us can agree on is that people with that kind of earning power are definitely not poor. Or are they? I recently ran across a story over on MSN Money that questioned whether or not $250k is enough to make ends meet.

For starters, I’ll just say this: Yes, $250k/year is clearly enough to make ends meet. As evidence, I offer the fact that less than 3% of American households earn that much, but most of use are getting by. I’d go so far as to say that if you’re earning that much and struggling, then you must be making some really bad decisions when it comes to managing your money.

And yet… When BDO USA, a national tax accounting firm, analyzed the finances of a hypothetical family of four (Mr. and Mrs. Jones and their two lovely children) living one of eight different locales, they concluded something entirely different:

It’s not exactly Easy Street for our $250,000-a-year family, especially when they live in high-tax areas on either coast. Even with an additional $3,000 in investment income, they end up in the red — after taxes, saving for retirement and their children’s education, and a middle-of-the-road cost of living — in seven out of the eight communities in the analysis.

They attribute these difficulties in large part to high levels of student loan debt, a pair of car loans, and a mortgage for 80% of the value of a “typical” home for a family of four. This “typical” home was a huge variable, as real estate prices varied widely across communities.

Taxes also take a big bite, and can vary widely based on where you live. And taxes aren’t the only thing that varies amongst locations. Other components of the cost-of-living vary widely from one locale to another, with groceries cost 72% more in New York vs. Idaho (for example). And those sorts of differences occur across the board in most spending categories.

Overall, the worst scenario included in the analysis was Glendale, CA, where Mr. and Mrs. Jones would wind up over $23k in the hole. Of course, this is a bit overblown, as the number crunching included $33k per year going into retirement accounts, and $8k per year in college savings. The best case scenario was Plano, TX, where the Jones family would nearly $5k left over at the end of the year.

Is $250k/year enough?

What do you think about all of this? Is $250k enough to make ends meet? If anything, I’d say that this is a perfect example of why it’s so dangerous to try to keep up with the proverbial Jones’.

Don’t break the bank paying for college, scale back on your house to reduce your mortgage payment (not to mention property taxes and maintenance), resist the temptation to borrow money for new cars (much less two of them), and so on.

Like I said above, if you can’t make ends meet on $250k/year, then you’re doing something very, very wrong.

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This is a guest post from Jennifer Rose Hale.

You filed your taxes 12 days ago, and the “ding!” from your computer is an e-mail alert from your bank. You’ve got money! Sure enough, it’s your tax refund. If you got one, you’re not alone: the most recent figures from the Internal Revenue Service show that over 111 million individuals received refunds in 2010, with the average amount close to $3,000.

Your refund, whether it’s close to the average or just big bucks in your life, is calling to you to spend, spend, spend. So, to borrow from Dennis Hopper in “Speed,” what are you gonna do?

Let’s look at some common ways you could blow that money, and some alternatives to increase your savings rates — and improve your life — instead.

Big vacation… Or a better job?

If things are going rough at work, it’s tempting to use your refund on a getaway, to buy yourself a week (or even two) to forget your projects, your boss… Heck, even the name of your company, if you do it right.

In the long run, though, a bad job situation will just boomerang back to you as soon as your plane’s wheels touch down again at home. Maybe it’s time to pick up some online training or buy a copy of “48 Days to the Work You Love” or “What Color Is Your Parachute?” Aim yourself in a better direction with a small purchase, and put the remaining savings to work for you in your retirement fund — that big getaway at the end of your career.

Eventually, you’ll get the chance to say goodbye to your boss altogether, but you might as well enjoy your job while you get there.

New wardrobe… Or a new you?

You’ve been waiting for those hundreds — maybe thousands — of dollars to refresh your wardrobe, and you’re planning a big run at Macy’s (if you expect hundreds) or Anthropologie (more likely thousands) to get a whole new look.

Instead of a new wardrobe, focus on a happier, healthier you. Join the Y and pick up a cookbook with healthy recipes. The money you save cooking at home could be tucked into a high interest savings account, and a fully-stocked emergency fund will lower your stress levels.

HDTV… Or high-def relationships?

Electronics are often at the top of the shopping list when the refund comes. Staying at home with a movie on a widescreen HDTV — with 3D, even — is a big temptation. But as weeks and months pass, you may find yourself seeing your friends less and less, and your couch more and more.

Spend a few dollars on a bottle of wine and some ingredients for dinner, and invite your friends or family over for a game night. You can take the savings and put it toward a down payment on a home loan with good mortgage rates, for a more comfortable setting to host your parties in the future.

If your friends complain about the size of your TV screen, tell them you’ll happily accept an early housewarming present.

Car down payment… Or a payment-free future?

That $500, $1,000 or $3,000 may seem like the perfect amount to put down on a new car purchase or lease. It may feel pretty tired to schlep around town in the hatchback that took you through college and beyond, and it seems like everyone you know has a hybrid — or at least something without French fries mashed into the rug.

That lease or six-year loan, however, will cost you a fortune in interest or balloon payments — and you’re signing up for a big bill for years into the future. Instead, shop around for online savings accounts, CDs or money market accounts with high interest rates. These FDIC-insured accounts are low-risk enough to hold your money’s value for the near future and will build enough interest to sweeten the deal. Add to it steadily, and within a couple of years you may have enough to buy a respectable used car outright.

The ground-in French fries? They add character.

Fritter it away… Or build new habits?

The easiest way to spend your refund is to just… Spend it. Dinners out, a game console, a new set of wine glasses, movie tickets and season passes. Before you know it, your hundreds or thousands are all gone, the party’s over, and you have nothing much to show for it.

Instead, you could look at this as an opportunity for a great new habit: paying yourself first. Follow the core advice from personal-finance tomes such as “The Wealthy Barber” and start investing for your future — not just for retirement, but for all the wonderful wants and needs you’ll have 10, 20 or 30 years down the line. With this new habit, and a little patience, all the rest of your wants can be achieved — comfortable home, fun toys, cool cars — and a life with a little less stress.

So that “ding!” from your e-mail alert could be the path to short-term spending… Or long-term contentment.

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It wasn’t the Ritz, but we enjoyed our time there and have some happy memories. We spent a decent amount of time finding this apartment, and it was well worth the effort. While many of our friends were confused that we purposely chose a small place based on only one of our incomes, we found it was a great start for our marriage. If you’re trying to decide on your first place as a couple, here are some factors to consider.

Big pros for our small space

I want to share some of the immediate and longer-term benefits we’ve had from renting a small apartment.

• Lower rent: Our rent was very reasonable for the area, and we had a great location across the street from the beach. That gave us more money in our pockets and a bigger buffer for our monthly cash flow. An added bonus with our small apartment was that the building had a laundry room. We had to schedule our laundry times with neighbors occasionally, but it was less than 30 feet from our front door.
• Less stuff to buy: The temptation to fill your apartment with stuff just isn’t there with a small apartment – there’s no space for it! Given our limited budget, this was a huge benefit.
• Encouraged us to explore: A smaller place encouraged me to get out of the house to stretch my legs and explore the world around me. Our location was convenient to many free and low-cost activities, and we discovered a number of ways to have fun without spending a ton of money.

I know some people would say that we lacked some convenient features in our apartment, and they’re right. After all, our little place didn’t have a dishwasher, and the layout was a bit odd. But these minor issues didn’t stop us form enjoying our home.

Why we chose a smaller apartment

At the time of our wedding, I was a full-time college student and starting an internship. The pay was good for the area, and even better for a student, but there was a long commute. Living in an area with a lot of traffic, I had to be smart about when I left for work and when I headed back home. My goal was to complete the internship assignment for the semester – there were no guarantees that it would continue, and I didn’t know how quickly I’d be able to find comparable work and pay if/when it ended.

At the same time, my husband was a recent college graduate who had been working for his new employer for less than a year. We looked at our budget and decided to focus only on apartments that we could afford with my husband’s salary.

We had specific goals that we wanted to reach, and keeping our housing costs down would help us get there sooner. One financial goal was to pay off our car loan. It was a good chunk of our monthly expenses, and the car was rapidly depreciating in value. We also wanted to build up our savings for the long term goal of buying a house. Having lower housing expenses allowed us to meet both goals and build our credit score as well.

When we moved out-of-state, we rented a larger apartment, but we still based it on one income. With no car payments at this point, the money that we saved was going toward our savings, and we eventually started house hunting.

Big help for us on house hunting

Being patient and keeping our housing expenses relatively low was beneficial for a few reasons. When were were preparing for the house hunting stage, we knew what we wanted in our first place based on our previous experience and that of our friends with their own places.

We also were used to resisting the pressure of buying a bigger space and moving out of the comfort zone of our budget. Believe it or not, it was the financial “experts” at the banks that were pushing us to looking at bigger mortgages. Buying a house was only one of our goals, and we knew that getting the biggest house we could afford would hurt us in the long run.

Thoughts on living in a small space

Have you ever made a conscious decision to live in a relatively small space? If so, what were some of the benefits and drawbacks that you experienced? Is there anything in particular that people should watch out for? And do you have any tips for finding a great deal on an apartment?

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