Debt Free Adventure » Expenses

Benefits of Fixing my Own Vehicles

Matt Jabs — Wed, 01 Sep 2010 04:36:06 +0000

Tangible work for a change – whew!

I’m not a mechanic, I’m an IT guy – and a wannabe Personal Finance writer. That said, I do enjoy working with my hands and beholding a tangible job well done, especially since IT work and writing are thought jobs w/fewer material results.

Let’s consider the following example:

At work today I helped fix customer IT problems remotely for 8 hours. I accomplished my work, reduced my ticket load, and gained satisfaction from helping my customers. However, I was never able to behold or physically feel the benefit of my labor.
After work I set out to repair a faulty windshield washer pump and headlight dimming issue on my wife’s 2002 Pontiac Grand Prix. I completed the repairs successfully and was able to see and feel both the work… and the results. An awesome change of pace.

It’s not that I hate my day job… rather I love the several benefits of labor diversity.

We save money

A good mechanic is hard to come by; if you find one, hold onto that relationship as long as possible. My mechanic’s name is Sam Postema. Sam and I began as simple networking contacts but quickly became friends. Sam runs the best auto repair shop in Lansing, MI and I trust him with all automotive work I choose not to perform myself.

Here is a rough estimate of the cost for Sam to perform the repairs and earn a respectable profit:

Replace windshield washer pump = $110 (part – $40, labor – $63, fluid disposal & refill – $7)
Headlight dimming issue = $40 (labor & parts)
Total = $150

This is a pretty good price but doing it yourself always saves money. You should follow this route whenever feasible. I shopped for the part at my local CarQuest Parts Store.

Total = $22

A total savings of $128. Not too shabby.

I learn more about auto repair

I have replaced many parts on many automobiles but had never replaced a windshield washer pump. It was fun. In case you are wondering… here are the instructions.

How to replace a windshield washer pump on a 2002 Pontiac Grand Prix:

Pump resides under the washer fluid reservoir on the side closest the fender.
Jack front of car up and place on jack stands (optional, but makes job easier.)
Turn steering wheel all the way to the right.
Remove front wheel well liner on the passenger side… it’s under the battery.
Get a bucket and place it under your work.
Unplug the electrical connection to the pump.
Unplug bottom of pump from reservoir and drain into bucket (draining via pump hose takes too long.)
Unplug hose from pump, remove, then clean and dry the area housing the old pump.
Install bottom of new pump into reservoir, connect pump to pump hose, and connect electrical line.
Refill reservoir, test, and enjoy!

I also tested, cleaned, and lubricated the electrical connectors (and the ground) for the headlights. That did the trick. They are shining bright and functioning optimally once again.

My wife digs it

She pulled in the drive way, saw me wrenching, and thought she had a grease monkey under her car – turns out it was her husband. She was surprised and thought it was cool – which is always a bonus.

All in all it was a great learning and money saving experience.

Save Money on Gas – Buy a Scooter

Matt Jabs — Tue, 18 May 2010 10:00:00 +0000

Buy a scooter… don’t be afraid

While I’m fully aware that a lot of people think driving a scooter is wimpy or dorky or what have you, I’ll also assume those people entirely too concerned with what others think. That said, let’s give ‘em the benefit of the doubt by supposing their ability to think outside the box has been beaten out of them by our consumerism based culture obsessed with constant advertising.

Despite numerous benefits and few draw backs – unless you’re a college student – owning a scooter is relatively uncommon in most parts of the United States – not so in other parts of the world. When considering the pro et contra, buying a scooter can stack up quickly into an economically wise purchase.

Scooters, moped, and motorcycles

In the interest of this article, scooters are synonymous with mopeds and defined as follows: a 2-wheeled vehicle with a saddlelike seat mounted on the footboard and being propelled by a motor – and for the purpose of economy let’s focus specifically, but not entirely, on scooters of the 50cc motor variety (to be further explained later in the article.)

A scooter ≤ 50cc and a motorcycle ≥ 51cc. CC = cubic centimeters and refers to engine size (volume of air and fuel mixture intake in a cylinder bore.)

Although some states differ, most states consider any motorized bike 50cc or less to be a scooter and any bike 51cc or higher to be a motorcycle… a very important distinction because many of the benefits below do not apply to motorcycles.

Since scooter/moped laws differ from state to state be sure to check your applicable state laws pertaining to helmets, insurance, registration, etc.

Let’s take a look at some benefits, along with a few buying tips, as seen through the eyes of this fledgling scooter owner; but first, some helpful details about my scooter.

My scooter

My scooter is a 2009 JCL model MP50B. I purchased it in mid April 2010 for $600 despite a KBB value of $710 at the time of purchase – I love a good deal. The bike had been driven only 385 miles, was in pristine condition, and ran like a top. One month and 450 miles later… everything is on the up and up and I couldn’t be more pleased with my purchase.

Save money on gas

Driving a scooter will save you a boat-load of cash on gas. Let’s look at the specifics of how much I have saved in just one month.

Since purchasing my scooter one month ago (at time of writing) I have driven 450 miles on 4 tanks of gas. The tank is 1.32 gallons and the scooter gets 100 mpg, using an average gas price of $3.00/gallon I have spent $13.50 on gas compared to the $90 I would have spent driving my 2000 Jeep Cherokee Sport, which gets a mere 15 miles to the gallon.

Conclusion? My scooter gets 6.667x better gas mileage than my Jeep and should pay for itself in one driving season in gas savings alone.

Save money on vehicle maintenance

Every mile I drive the scooter means one less mile on my Jeep. Maintenance and parts for my Jeep are much more expensive than for my scooter. I can perform maintenance on the scooter myself and replacement parts are much less costly.

Save money on insurance and registration

Again, although some states may differ, in Michigan a 50cc scooter does not require insurance coverage. The only cost associated with driving my scooter, other than gas, maintenance, and repairs… is the registration tag. Michigan charges $15 for a 3 year registration sticker. That’s it folks, $5/year.

Save money on a helmet

In many states a 50cc scooter rider is not required to wear a helmet. While many choose to wear a helmet anyway, they are not required to by law. This could obviously draw a lot of comments, but putting aside all that debate, the fact remains… many state laws do not require a helmet on a 50cc scooter.

Buy a scooter used

Just as purchasing a slightly used vehicle is often a better decision than buying new, the same is true for scooters. Here are my tips for those looking to buy a scooter used:

Do not buy a scooter from a college student. No offense young’ens… but I was a in college a few years back, which is precisely why I’m telling people not to buy a scooter used from a college student. Sure, there are always exceptions to the rule but there is a reason their insurance premiums are high, so use common sense.
Buy a scooter from older folks. Many RV’ing retirees buy scooters for buzzing around RV parks and campgrounds while traveling. The truth of the matter? They don’t usually end up using them much and tend to take great care of their possessions. This means low miles, routine maintenance, fewer wipe outs, and no beating on the scooter. Find a good price and you have yourself a recipe for a good buy.
Use KBB to estimate buying price. Before you go test drive a scooter, be sure to check out the Kelly Blue Book Motorcycle Retail page to determine a solid buying price. Simply pick your year, make, model and size to reveal what a low-mile bike in excellent condition is worth. Print the page and take it with you as a bargaining chip (unless they’re asking less than the bike is worth of course.)
Use Craigslist. Beyond the obvious benefit of using Craigslist, I recommend using a CraigsList search/notification app. Said application will allow you to input a search term – like “scooter” – and set up alerts for all newly placed relevant ads so you can be the first to contact the seller. That is precisely how I found my, virtually brand new scooter for such a great price. I was the first to call, first to visit, first to make an offer, and it paid off.
DO NOT FINANCE. If you don’t have the money saved and previously budgeted… don’t buy anything. Period.

Wear a helmet

Yes, even if you don’t have to, and yes, even though I listed it as a possible money saving benefit above. If you’re not going to wear a helmet, consider purchasing a windshield, and a the very least be sure to wear some type of eye protection like eye glasses, sunglasses, or Dumb and Dumber scooter goggles.

Perform regular maintenance

To ensure optimal operation and to extend the life of your scooter be sure to follow the maintenance schedule supplied by the manufacturer. Most everything is routine like checking/replacing engine oil, gear oil, air filters, tire pressure, etc. You will not need to hire a mechanic unless you’re diametrically opposed to elementary mechanical maintenance.

Dress warm and carry extra clothing

Even in a northern state of Michigan, I can easily get 7 months of ride time each year, but not without proper winter gear. If you choose not to wear a helmet, when it’s chilly out you’re well advised to wear a winter cap; while you’re at it… don’t forget the gloves. Be sure to wear a jacket that seals off your neck and wrists, since failure to do so can turn a cool ride into a freezing cold ride really quick.

Scooters are cool

Don’t let anyone fool you. When you drive a scooter you save money hand over fist, you get to ride down the open road, and of course… chicks dig guys on scooters. Just ask my wife.

What are you waiting for? Go open an ING Direct savings account, label it “Sweet Scooter Fund,” and start saving for your soon purchase!

DFA Link Rally: I Bought a Scooter!

Matt Jabs — Sat, 01 May 2010 19:03:25 +0000

For those of you who do not follow me on Twitter… I bought a scooter!

She’s a 2009 JCL MP50B scooter with 49cc of raw power.

Why did I buy it? Many reasons actually… I will not divulge all of them today because I’ll be writing a detailed post on the matter sometime next week. For now, suffice to say that it saves me a lot of money in gas, and I love buzzing around town on two wheels.

*Update* Here is the post I promised – Save Money on Gas, Buy a Scooter!

And now, on to this weeks link rally… which actually includes all the links from the entire month of April (due to my blogging vacation.)

Link rally for this week

Views of Money – Part 2 by Dave Ozment by
Comparing Crown Ministries & Financial Peace by Lakita
Should You Use a Credit Card as an Emergency Fund? by Adam
44 Reasons Why I Want to Become an Entrepreneur by The Financial Blogger
Value Averaging: An Investment Strategy by Craig Ford
How To Get An Expensive College Education For 80% Less by Wealth Pilgrim
Roth IRA vs 401K: Which is Better for You? by PT
Avoiding The Upside Down Car Loan Trap by Kyle
What is Financial Literacy? The Final Segment by Tom @ Canadian Finance Blog
Lending Club Offers Good Returns If You Invest Wisely by Peter
Why Online Banking is Taking Over for Generation Y by MD
Harsh Reality On Student Loans + Some Valuable Help by MD
Tips For Selling a Home In a Down Market by Frugal Dad
Can Kids Open A Roth IRA? by Craig Ford
Debt Reduction Strategy Guide by Elle
Inherited IRAs – Please Avoid This Mistake by Wealth Pilgrim
Build Up Your Short-Term Savings: For Real This Time by PT
Index Investing: A Quickstart Guide by Kyle
Which Car is Right For Us? by Tom @ Canadian Finance Blog
Credit Card Cash Advance: Bad Financial Move or Good Emergency Plan? by PT
How to Hire a Lawyer by Ryan
Career Advice from Conan O’Brien by Elle
How to Declare Bankruptcy and Not Lose Your Home Equity by Wealth Pilgrim
Buying Health Insurance as a Self Employed Individual by PT
Virtual Credit Card: Use One to Shop Safely Online by PT
How Priceline Saved Us Money on Our Vacations by Elle
eHealthInsurance Review: Health Insurance for the Self-Employed by Junior Boomer
Don’t Be Scared: Get Started Improving Your Financial Life by Jeff Rose
Stop Identity Theft with a Security Freeze by Paul @ FiscalGeek
Finding The Balance Between a Sideline and a Day Job by Panda Mike
Home Security System Deal: Shopping for the Best Home Security System Reliance Protection by The Finance Blogger

Vacation Planning – Better memories are not bought with more dollars!

Robert Espe — Fri, 12 Mar 2010 16:29:31 +0000

Vacation on a Shoe String

“Better memories are not bought with more dollars!” – Robert Espe

Here at DFA we are always looking for new ways to cut back spending and save money. I know that lots of readers will probably go on vacation this year, and because vacations can cost so much, they are a great opportunity to save money. I am in fact, on vacation as I write this, so it seemed appropriate to discuss. This week I will present a strategy focusing on three key areas people should target to save money while still have an enjoyable vacation.

Back when I was younger (and poorer) following this strategy allowed me to plan a honeymoon for $300, and celebrate our first anniversary without breaking the bank. I may have more money now, but I still use this strategy to get the most bang for my buck while vacationing.

Vacation destinations

I know this article is about how to save money while actually ON vacation, but I would like to start by pointing out that the best way to save on vacations is not to go at all. Travel is expensive, and has gotten much more expensive in the last few years. For some people, it may be necessary to acknowledge that they just can not afford to take a vacation this year. However, that is too short for much of an article, and most people WILL plan to take a vacation no matter how hard I try to convince them it is an unnecessary luxury, so here are some thoughts about where you could go.

When choosing a destination, remember that closer is usually cheaper. For some reason, most people unconsciously believe they have to go somewhere else to have a good time. However, the more I travel, the more people I meet who think the places I used to live sound worth visiting. If you live in an area that bases ANY of its economy on seasonal tourism, chances are there is plenty of stuff worth seeing right in your back yard that you have never taken time to visit. This is especially true with some areas more than others… especially if there is a ton of tourism around your home. I have read that the average tourist in Chicago visits more in two weeks than one of its residents get around to seeing in their first year. If you feel you TRULY live in the middle of nowhere and there is absolutely nothing to see, I still think you could find some place new to visit a lot closer than you think. The difference in cost between a 2-3 hour drive to a locale near your home and plane tickets is considerable so give it some thought.

Fortunately, you don’t have to find these spots on your own. Every town that feels it is worth visiting already has an organization dedicated to helping people like you decide to come visit them. Hop on the Internet, and look up the Chamber of Commerce for your own town, and other nearby places you’ve never visited. They do a good job of making your own backyard look like a travel brochure, and may have some ideas on things to do you have never thought of before. Plus they have info on places to stay, eat, and shop while you are there. I did this in my own town, and the local chamber helped me find new things to do and see even after living there for 20 years.

Save on food

We all need to eat.. but eating is much more expensive once you are away from your kitchen, and since it often represents at least half the cost of a trip it is a great place to save.

First I would point out that while eating out is fun, nothing says you are not allowed to visit a grocery store while on vacation. While you may not be able to create the same type of meals you can with a full kitchen, eating simple meals even once a day on your trip could save you some big bucks. This is especially true the longer your trip is, and the more people you have with you. When travelling by car, I always keep a good cooler in the trunk, and I also look for a hotel that has at least a small refrigerator in the rooms. This not only allows me to keep groceries cool, but provides a place to store leftovers from when you do eat out, since most restaurants serve way more food than one person can eat. Speaking of hotels, I always choose one that serves breakfast, and on this trip am staying at a Marriot that serves dinner as well – 4 days a week. Depending on the number of persons you travel with, free meals may offset the more expensive room.

When you do eat out, consider drinking water with your meal. When most of us were growing up, drinks were a cheap part of eating out. These days it seems like a simple soda or lemonade will add $1.50-$3.00 to each persons bill. If that was for fresh, hand-squeezed lemonade, it might be worth it, but as it is usually the same syrup water you can get at the store for pennies on the dollar, I find it easy to pass. If I do buy something to drink, I always order the small size of something with free re-fills.

Be sure not to overlook dollar menus, or splitting entrees. Two dollar menu sandwiches are usually larger than their $4-$5 counterparts and since most entrees are too large for one person two people can split one, find room for desert, and still come out ahead. I also find that on days where I am not very active, say I spend all day driving a car, or sitting in the hotel watching TV, I can skip lunch all together, without getting truly hungry. If I am not thinking about whether I really need to eat, I may spend more just because it is lunch time.

Shopping

Most people love to shop. I am blessed with a wife who is not a big shopper, but when we go on vacation, we still like to go out to stores and see what is out there. This is one area where the tourist industry can be a negative, because it seems like the more “touristy” an area is, the less likely it is to actually have anything worth buying. Regardless, it is still fun to browse through shops that are not available where you live, and for me, that is usually as far as it needs to go. Window shopping can be a great saver, you get the enjoyment of the shopping experience, and a day of walking around… without the expense. Now if you are thinking that you can’t go shopping without spending, here are some tricks to help.

First, and this applies to when you are at home as well, separate shopping from buying. When you are out browsing, decide in advance that no matter what you find in a store, you will not buy… at least not right then. Simply go into the store, look around, enjoy yourself, try things on, make a note of anything you want to buy, then leave. Do this at all the stores you visit. At the end of the day, have a look at the list you made, and decide if there is anything on it worth going back to that store to buy. This eliminates impulse buying, and can save you bundles when you are surrounded by $26 T-shirts and other expensive nick-knacks you know you don’t need. Even if you decide to buy something, you will have had a chance to find the best deal.

Final Thoughts

The most important thing about any vacation are the memories of good times with family and friends, and better memories are not bought with more dollars. So pack the camera, and enjoy the time for what it is, a time to refresh and relax. You will be even more relaxed if you know that you will still have money in the bank when you return home. We would love to hear about any places you have visited that were off the beaten path, or any other creative ways you have found to save money while on vacation.

photo by epSos.de

How Student Loan Interest is Calculated and Why it Varies from Month to Month

Matt Jabs — Mon, 08 Feb 2010 19:27:23 +0000

How much debt costs

As you may know… I keep track of how much our debt costs each month – which is basically how much monthly interest we pay toward debt. Shortly after I began tracking these numbers I noticed the interest charged on our student loans varies quite a bit from month to month… so I set off to find out why.

How is student loan interest calculated?

Most student loans (including all federally guaranteed loans) use a method of interest accrual known as the Simplified Daily Interest Formula. The difference between simple interest and compound interest (the type of interest that accrues on most major credit cards) is that simple interest is only calculated on the principal balance, not on the previously accrued interest – this is a good thing.

Simplified Daily Interest Formula

This is the formula used to calculate all federally guaranteed student loans:

Daily interest amount = (Current Principal Balance x Interest Rate) ÷ 365.25
Monthly interest amount = (Daily Interest Amount x number of days in the month)

Here is an example of daily interest calculated out on a student loan of $10,000 at a 6% interest rate:

Daily interest amount: (10,000 x .06) / 365.25 = $1.6427
Monthly interest amount: $1.64 x 30 (typical month) = $49.28

The above example shows us that a student loan with a balance of $10,000 and an interest rate of 6% would cost $49.28 in interest in a typical 30 day month.

Interest Rate Factor

Some student loan issuing agencies will make mention of something called the Interest Rate Factor. IRF is simply your interest rate divided by 365.25. If IRF is used in their calculation, rest assured that they are calculating interest the same… they just use a different equation to reach the same number. Here is the equation using the Interest Rate Factor:

Monthly interest amount = (Number of days since last payment) x (Principal Balance Outstanding) x (Interest Rate Factor)

Let’s plug our example numbers into this equation (our example interest rate factor is .000164271047:)

30 x 10,000 x .000164271047 = $49.28

Notice that we received the same monthly interest amount regardless of whether we used the Interest Rate Factor or not… that is because the math is exactly the same, the equation is just structured differently.

Why does the amount fluctuate each month?

Between my student loan and my wife’s student loan we paid $277 in interest for January 2010. In December of 2009 we paid only $261 in interest and in November of 2009 it was $288. Our principal decreases every month, so what’s up with the large fluctuations and how could we have paid more in November of 2009 than in January of 2010 if the principal is less? Great question.

The answer lies in 2 conditional variables that effect the “number of days since last payment” from month to month:

How many days are in the current month
Did the last day of the calculation period fall on a weekend or holiday

The number of days since the last payment will obviously differ from month to month based on these two variables.

If the month has 28 days the interest calculated will be less than in a month that has 31 days because 3 extra days were figured into that months calculation. Also, if the last day of the month falls on a weekend or holiday, the calculation will not be performed until the next business day thus increasing that months number of days since last payment.

Thus… regardless of the fluctuation in monthly amounts we will never be charged anymore than 365.25 days worth of interest on our student loans in a given year.

Star Trek and The Time Well Spent Continuum

Robert Espe — Fri, 29 Jan 2010 11:00:33 +0000

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Nerd Temptation

A friend recently pre-purchased Star Trek Online, the first MMO (for non-gamers, a game played on-line with other people) set in the Star Trek universe. Like most games of this type, it costs $15/month to play, after purchasing the game itself for $50. Normally I avoid anything that costs money every month, but I REALLY like Star Trek. I spent a couple hours combing the website, and the longer I looked at it, the better the deal seemed. After all… it only cost $15 and I make plenty of money, right?

Here are two things that discouraged this purchase.

I would need $500 in computer upgrades to allow my box to play the game.
They offer a lifetime subscription, something I had never seen for such a game.

A lifetime subscription sounds like a good deal, especially if you plan to play a long time. It would take 16 months of play to equal the $240 they want for the lifetime subscription. However, this made me realize how much this game could really cost. $790 (game + subscription + new computer) seems like a lot for a game (the other catch, you can only buy a lifetime subscription with a pre-order, in other words, you can’t try the game first if you want to lock in this “deal”). Without the lifetime subscription, it would cost $180/year for as long as I played. That might be ok if that was my entertainment for the year, but I started thinking about how much I would have to play, and whether I had the time.

Calculate your free time

“Teach us to number our days, that we may apply our hearts unto wisdom.” – Psalm 90:12

As I was pondering whether or not to purchase this game I began to wonder… How much free time do I actually have? I blocked out my day in 15-minute increments to get a better idea.

Blue: Time at work (assuming no extra overtime.)
Red: Time spent sleeping.
Green: Time preparing to work, commuting, or elsewhere. Slight flexibility here… but this is not free time.
Orange: The precious free time I have for life. Most of my free time is on weekends… on a workday I have just 4 hours.

There is even less if I include tasks of daily living (little things like showers, my toothbrush, and that exercise I should be getting). I would play this game for about 2 hours at a time, consuming my free time, which still might not matter if all entertainment was equal.

Wise free time management

“And do not be drunk with wine, in which is dissipation; but be filled with the Spirit.” – Ephesians 5:18

What does this passage have to do with my dilemma? It clearly addresses drunkenness but also delivers another subtle and often overlooked truth. Condemning drunkenness indirectly, Paul is primarily admonishing the Ephesians to avoid what is literally translated as “dissipation,” of which drunkenness is but one, obvious form.

Dissipation: A wasting by misuse; a process in which energy is used or lost without accomplishing useful work; mental distraction; amusement; diversion

God cares how well we steward our time. We should not waste it producing nothing with bottle in hand, or with long periods spent hypnotized by a flickering light. I can spend my time and money on an entertaining game that enriches my life very little, or on recreation that refreshes while producing something good (like writing articles for Debt Free Adventure.)

Final Thought

I will not purchase Star Trek Online, but I enjoy computer games so this is not a blanket condemnation of electronic entertainment. When a game has a monthly fee I feel somewhat obligated to play enough to get my money’s worth. If there is no monthly fee those feelings of obligation dissipate greatly. This concept can be attributed to any form of entertainment but today I figured I would focus on my weaknesses. The main point being to prevent frivolous distractions from crowding out time better spent in self-enrichment. Spending our time well not only saves us money, it helps ensure we are getting the most out of it.

What do you think?

We only have so much time… perhaps reevaluating our use of free time is in order. Do you wrestled with time spent on frivolous activities that could be put to better use elsewhere?

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Ways to Save Money on Heat and Electricity – Rebekah Answered

Matt Jabs — Sat, 23 Jan 2010 19:12:02 +0000

In case you haven’t heard, I am offering free personal finance advice.

Visit the Ask Matt Jabs page and fill in the form to ask your question… for free!

How to save money on heat and electricity?

DFA reader Rebekah asked:

What is the most efficient way to stay warm with electric heat that won’t break the bank? She thinks we should keep bedroom doors open during the day and I think we should close them. Also I’ve been going around trying to keep phone charges etc. unplugged because I’ve heard that they continue to use power even when they aren’t charging, however when I got online to today I came across some articles that said they didn’t really use that much… who should I believe? She also has heat lamps in the bathroom, does that use a lot of energy? What about space heaters?? Thanks Matt!

Lower your thermostat or go off the grid

Hi Rebekah, great question… and thanks for reading DFA.

Your desire to cut costs associated with heat and electricity mirror the same desires I had early in 2009. Back then I too was looking for ways to cut costs wherever and whenever possible. From your question I assume you are not looking for advice on large, costly home projects like improving basement insulation to increase energy efficiency, but rather frugal tricks you can employ right away.

Before I get into the tips, I’ll advise you not to use space heaters… they draw quite a bit of juice making them a less than frugal choice. Regarding the bedroom doors… I’m not sure it makes much of a difference since the furnace likely heats the house the same regardless.

Here are a few practices we adopted back then that are still saving us money today.

Turn your heat down – You may be used to a 72 degree home, but it is time to sacrifice in order to cut costs. Last winter my wife and I moved our thermostat from 70 down to 64. It seemed cold at first but our bodies acclimated much quicker than we suspected they would. Nowadays we slip into a cozy sweater, fleece, sweatshirt, or even our Slankets (not Snuggie) instead of turning up the heat. If your home is empty during the day, consider turning your thermostat down to around 58, then turning it back to 64 when you get home. If you can afford it consider installing a programmable thermostat to do this automatically – they are relatively inexpensive and easy to install.
Change furnace filters monthly – Depending on the type of filters you employ the can require changing as often as once per month. If you have a very dirty and clogged filter you could increase efficiency quickly and easily by simply replacing it. Filters are easy to change and cost very little.
Off the grid Saturdays – This was an article I wrote and had published on FiveCentNickel.com that lays out how we go “off the gird” on Saturdays by committing to no TV time and limited use of all other electronic devices. The benefits of this exercise go far beyond saving money… if you employ it you will read more, spend more time with family, and increase your productivity. Frugal Dad also wrote about ‘off the grid days‘ and the benefits they can bring.
Reduce standby power – The last tip I’ll give you is to simply encourage your idea to reduce your use of standby power. Read the article I published last May that gives my detailed write up of the concept.

Simply being aware of costs will help you be more likely to keep them down. Combine that awareness with the tips given above and you should see a noticeable difference in your monthly energy costs.

What do you think?

What are some tips I may have missed that Rebekah could use to cut her heating and electrical costs?

If you need personal finance advice… ask Matt Jabs.

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We accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. Our comments are an expression of opinion. While we believe our statements to be true, they always depend on the reliability of our own credible sources. Any advice taken from this site does not in any way establish a client/advisor relationship. We always recommend that you consult with a licensed, qualified professional before making any financial or investment decisions.

The Need to Rethink Retirement

Guest Author — Tue, 19 Jan 2010 11:00:36 +0000

This is a guest article by Flexo from Consumerism Commentary. Flexo has embarked on a ten-day, ten-venue tour.

Recently, our fearless host of Debt Free Adventure began investing for retirement. Even while still on the path of paying off debt, I think it’s a great idea to start planning for a time when he will be living without the income received as a reward for the time and effort spent working.

Here is one reason not to delay investing for retirement: the government, at least here in The United States, will most likely not be able to take care of you. To prove this, I opened my latest Social Security statement. According to the Social Security Administration’s tables, at the full retirement age of 67, I would qualify for payments of about $2,500 per month.

This is based on the assumption I would be earning the same salary I earned in 2009 each year until I reached full retirement age, and paying into Social Security on the taxable portion of that income each year. Today, a monthly income of $2,500 sounds like an excellent benefit, but retirement is 33 years from now. Even assuming a conservative 3% rate of inflation, that $2,500 looks more like $915 does today. That’s not going to go far and with reduced benefits likely, I may not even see half of that.

Besides taking responsibility for our financial future by investing in 401(k)s, Roth IRAs, and all the other choices available, it’s time to rethink what retirement is. The generation of workers following those in retirement now or retiring soon will be the first who needs to significantly adjust its expectations and challenge its assumptions.

Why retire at all?

The main reason to stop earning money in exchange for time and effort is because increasing age makes it difficult. Yes, spending more time with family and checking off “bucket list” items are good reasons too, but in general, we tire of work. Some of us might be lucky to earn our money doing something we are truly passionate about but most simply want to stop working because it’s difficult keeping it up while maintaining a healthy lifestyle.

Consider “semi-retirement.” Leave your job with appropriate fanfare but find a way to continue earning income doing something you are passionate about.

If you do retire, reduce expenses

Without making any changes, life in all aspects gets more expensive every year. Even if you assume you moderately increase your income every year for the next several decades and maximize your savings and investing, there is a chance that comfortable living will always be out of reach. Financial advisers promise returns of 8-12% in the stock market but aggressive predictions, inflation, and taxes make a real return of 4% seem more realistic.

I’m a strong believer of finding ways to increase income significantly rather than incrementally, but when this can’t be done the choice is to reduce the other side of the equation: expenses. No one likes to hear it, but the image of retirement pushed by the media, including 24 hours of free time, living in an expensive location, and enjoying a stress-free existence is just not likely. Most people will need to consider making a number of sacrifices.

Downsize your living arrangement. Not every family is exactly the same, but it is safe to generalize that needs change over time. By the time you retire, you may have paid off your house. Your kids may be adults no longer in need of your financial support. You may be able to use proceeds from selling one house to buy a smaller house, perhaps in full without a mortgage, and have a sizable portion of cash remaining. Downsizing is one way to take advantage of an increase in real estate prices. If you don’t downsize, buying and selling at roughly the same time — being on both sides of the transaction — results in canceling your advantage.

Relocate to somewhere extreme. The dollars you’ve earned, saved, and invested will go farther when you move somewhere where the cost of living is low. I’m not suggesting retiring to Kansas or Oklahoma, though I am sure those are fine states full of beauty and enjoyment. I am suggesting looking into options outside of the United States.

Central and South America are the most obvious choices because they are still relatively close to the United States but, for now, often benefit from a significantly lower cost of living. There are places you can buy land and a large house for the equivalent of $150,000, and be within the culture of a city or an ocean.

This relocation comes with risks. You should do as much research as possible, including visiting the location ahead of time, understanding the local bureaucracy, and investing in the local currency. Liz Pulliam Weston explains how relocating outside the United States could allow you to retire like royalty while describing more of the risks.

Stay active and healthy. Aging is not always a friendly process, and health care costs can increase significantly due to increased needs and higher prices. While there are many unpreventable medical conditions that present themselves with age, some costs can be controlled by living a healthy lifestyle.

Other than the above, saving money in retirement is much like saving money at any other time in your life. Prioritize your expenses, move a few steps towards a frugal approach to life, and make the most of what you have. The retirement of the future would be unrecognizable to those in retirement today. It would be impossible to guarantee a stress-free multi-decade vacation, so the best approach is to start considering your options and your needs as soon as possible.

Save Money by Buying Sale Items in Bulk

Matt Jabs — Wed, 23 Dec 2009 15:28:33 +0000

Just a quick post today to help you save money on groceries.

As you know I am big into taking control of your own income/debt situation by focusing on giving yourself a raise. By this I simply mean slashing expenses, reducing your debt load, and saving some for emergencies as ways to increase cash flow on your terms.

In the spirit of these principles I wanted to offer you a specific example of yet another way we save money to give ourselves a raise…

Save money by buying bulk items while on sale

Although I don’t always do it, last night I accompanied my wife on her trip to the grocery store. We had our list and were only in need of a few items, although we always check our frequently purchased items to see if they are on sale or not. Well… they were.

Since changing our diet over a year ago now, we focus on eating healthy and have cut out virtually all junk foods. Prior to the change ate a ton of “snack foods” like Triscuits®, Cheez-Its®, Doritos®, etc. Knowing that we had to replace these snack foods with a healthier option we turned to organic blue corn chips and fresh salsa instead. *Note: Some may think of Triscuits® as healthy but remember that they are made with GMO wheat.

We did grow a garden this year and were able to make about 20 jars of homemade salsa, but that was consumed rather quickly and now we have to purchase that as well. Because we eat chips and salsa so often, we always buy it in bulk when it goes on sale… and last night was a perfect example.

Buying in bulk is fun…

My wife and I got a HUGE laugh out of stuffing 10 bags of chips and 14 containers of salsa into our cart. As a matter of fact, we had to go switch carts half way through shopping because the short cart we started off with was no match for the bulk sale we discovered half way through shopping.

We ended up clearing the store out of their stock of each item, and laughing as we walked through the store getting strange looks from other shoppers.

How much did we save?

Here is a break down of the savings from this purchase:

Chips: regular price = $5.69 | sale price = $4.49 | $1.20 savings per bag times 10 bags = $12.00 in savings
Salsa: regular price = $4.00 | sale price = $2.00 | $2.00 savings per salsa times 14 salsas = $28.00 in savings
Total money saved = $40.00

As you can see… buying staple items in bulk, while on sale, is just one more way for us to win at money!

We store all bulk item dry goods on shelves down in our basement, and we freeze refrigerated items… like salsa.

Money savings adds up fast

We adopted this way of thinking and have applied it to all areas of spending. As you can imagine, it builds upon itself and over time adds up to quite a bit of money saved.

Thinking like this and shopping like this is just one more example of how to take control of our own money situation and give ourselves a raise!

Save Money | Dining Out vs. Groceries Analyzed

Matt Jabs — Mon, 07 Dec 2009 09:08:35 +0000

It is amazing how powerful this is when you REALLY analyze it. I know it was for me.

The Temptation of Dining Out

The other day after church we had a moment of weakness. We were feeling lazy and wanton, and had no Sunday afternoon meal ready prepared… so when the preacher mentioned tacos in his sermon, it was all over. As we walked out to the car after the church service I knew we were destined for one place and one place only – The all-you-can-eat buffet at the local authentic Mexican restaurant. Mmmm.

Sounds honest enough right? Church couple goes out to eat after the service, you see it all the time. So what’s wrong with going out to eat once in awhile?

Well… because we are in debt!

Also… since we know how overpriced and unhealthy restaurant food is we normally go without and choose instead to eat at home. Many times if one of us gets lazy and wants to eat out, the other is there to quickly bring the situation back on track. But not this Sunday. For some reason both of us had lost our edge. The tacos were too much for us… so off we went.

Money Spent Dining Out

The food was great! I loved every minute of it… at least while I was eating anyway.

As soon as I was done eating, two things started to bother me.

The meal would cost much more than I wanted to pay. And I was right, it did. After leaving a tip the damage came to around $26.00, which may sound cheap to some reading… but to us that is a lot to spend on one meal.
We ate way more food than either of us needed. Overeating unhealthy restaurant food was a behavior we practiced often before adopting our frugal and sensible diet and weight loss mindset. Like most Americans, when we go to an all-you-can-eat buffet it is very hard not to get our fill – especially considering how much was being spent on one meal. In this situation most of us really want to make sure we get our money’s worth!

Now $26 poorer, for a meal that would sustain us for about 6 – 8 hours, we left the restaurant grossly full, hopped into the car and headed over to the grocery store to pick up a few things before heading home.

Money Spent on Groceries

This is the part that really helped set our priorities back in order!

At the grocery store we picked up the following groceries for a total of $20.49:

6 – 32oz. jars of organic applesauce (good for about 36+ servings)
10 organic apples (for use in 10 lunches)
4oz. of bread yeast (enough for at least 12 loaves of homemade bread)
75 sq. ft. of aluminum foil (should last at least 3-4 months)

The grocery items purchased would serve us many times over far into the future.

Save Money | Cost Analysis

So what is the moral of this story?

Dining out is much more expensive than purchasing groceries. Is this breaking news? No. But bringing the point up and analyzing the numbers so plainly gives us a very clear picture of the high cost of dining out!

We already have pretty strict rules in place for dining out… right now we loosely limit it to special occasions and business opportunities.

Do we miss dining out?

I would be lying if I said we are never tempted, but I can honestly say that since we began focusing our eating habits on healthy, frugal, homemade meals… most of the time we crave our own food more than restaurant food.

The less we eat out and the less junk we eat… the less we crave it!

Pushing Credit Card Reforms

Matt Jabs — Wed, 25 Nov 2009 15:27:33 +0000

This article is a joint post by Matt Jabs and guest author Kevin Bowen, a content writer for RESQdebt.com

Actual aid or just another form of welfare?

Should Congress speed up the credit card reform legislation that they passed earlier this year?

That’s a question under consideration on Capitol Hill at this time, with important implications for those in credit card debt. A bill dubbed the Credit Card Rate Freeze Act, introduced by Banking Committee Chairman Chris Dodd (D-CT) seeks to expedite the credit card reform legislation known as the CARD Act (of which he also authored.)

The bill was passed by the U.S. House of Representatives on a vote of 331-92.
The legislation has been blocked in the Senate, thereby keeping the sweeping credit card reforms passed in May from going into effect on December 1st, 2009.

Dodd was dumbfounded when the Senate froze his Freeze Act, saying this:

“Consumers obviously have a responsibility to spend within our means and to pay what we owe. We bear that responsibility. But the credit card industry as well has a responsibility to deal with their customers honorably. There is nothing honorable about what’s happened with these significant rate increases and fees. Most importantly, they don’t have a right to rip off American families, especially when the Congress has already gone on record opposing the very actions they’re engaging in,” Dodd said on the Senate floor.
This will provide us a window of about 12 weeks between now and around the first of February, during this holiday season, to just put a stop to these outrageous rates and fees being charged to people.
Ninety colleagues here voted for the bill this spring. Why wouldn’t you join us today?”

In the short term the legislation promised to:

stop random interest rate increases and universal default on present balances
tighten over-the-limit-fees
force banks to use proportional interest and penalty fees
mandated periodic reviews that can lead to rate reductions

These short term promises leave many wanting, and wondering if the bill will actually do more harm than good in the long run.

Why expedite the bill?

Advocates such as Rep. Carolyn Maloney, D-N.Y., pushed the bills accelerated passing as a way to cut down on some of the questionable policy changes credit card companies have adopted in preparation for the bill. According to news reports, some credit card companies are meeting the new legislation with higher fees, raised interest rates, account closures, and other measures taken by the banks to limit their exposure. According to a recent Rasmussen Reports survey, half of Americans have seen an interest rate hike in the past six months.

“Card companies have redoubled many of the abusive practices that brought Congress to pass my original reforms last spring. Rather than use the time – time they asked for – since the bill’s signing in May to prepare for the changes, they’ve raised rates and fees with absolutely no regard for the dire position of millions of their customers,” said Rep. Carolyn Maloney, D-N.Y., who sponsored the original legislation.

With passage, these provisions would have moved into effect Dec. 1, 2009. While some of the legislation is already in effect, there is evidence that some lending institutions are already having trouble meeting compliance deadlines as they exist in the original bill. An expedited procedure would simply increase pressure on institutions that are already struggling to get ready.

Why was it froze by the Senate?

Implementation is the hard part, according to Congressional testimony from Federal Reserve Chairman Ben Bernacke – companies must adopt new policies, systems, procedures and even new written language that it presents to customers. The chairman also noted that problems could fall particularly hard on small and local banks, which often are relying on the same companies to help them make the upgrades.

Creditors must make extensive changes to their systems and business models in order to comply with the Credit CARD Act,” he said.

In a Federal Reserve survey of 57 American credit institutions and 23 foreign-owned institutions with American operations, 75 percent of banks did not expect to reach compliance until February 2010. This possibly points to the troubles these institutions are facing in being ready, particularly if it were on an expedited December schedule.

John Carney of the New York Times had this to say:

At first glance, Dodd’s proposals look like pragmatic attempts to relieve the tough economic problems faced by ordinary Americans. Unfortunately, the unintended consequences of the proposals may wind up creating even worse problems.
Mr. Dodd’s new proposals are guided by good intentions. But he and other lawmakers need to look to the future and see where that particular road may lead.

Carney argues that Dodd’s CARD Act, Freeze Act, and other sweeping legislation are too meddling while simultaneously slowing economic recovery and allowing for fraud of the increased welfare programs.

Is the damage already done?

Is Dodd’s bill too little too late? If Congress was going to teach the banks a lesson, shouldn’t they have either froze rates in May with the original bill, or perhaps refused to grant so much bail out money to the industry?

Remember the Rasmussen Reports poll referenced earlier that said half of all U.S. cardholders have already seen their rates increase since the C.A.R.D. Act legislation was passed earlier this year?

“Knowing that the Credit CARD Act would finally protect consumers from these abuses, the industry has tried to make one last grab for their customers’ pocketbooks,” Dodd, D-Conn., told the Senate on Wednesday.

“The reason we allowed a gap period between the passage of the legislation and the imposition of the regulations or the statutory requirements was because the industry came to me and said, you know senator, we’re going to need some time to administer, to change how we provide these kinds of benefits to people. So would you give us a little window here to operate?” Dodd said.

What do you think?

While it appears to be beneficial, American’s have many reasons to be wary of more regulations. Is the damage already done? I mean… what more can the credit card banks do that they haven’t already done, with or without the passing of this Credit Card Rate Freeze Act?

Should the government further entangle themselves in matters of economics, or should they leave well enough alone?

Credit Card Reform: The End of Universal Default

Guest Author — Fri, 20 Nov 2009 07:52:42 +0000

photo credit to Ben Seidelman

This is a guest post from Kevin Bowen, a content writer for RESQdebt.com

There have been few more controversial credit card practices than the one known as Universal Default. With the arrival of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, it is thankfully expected to become a thing of the past.

What is Universal Default?

From Wikipedia:

“Universal default is the term for a practice in the financial services industry for a particular lender to change the terms of a loan from the normal terms to the default terms (i.e. the terms and rates given to those who have missed payments on a loan) when that lender is informed that their customer has defaulted with another lender, even though the customer has not defaulted with the first lender.”

Why we SHOULD care about it…

The elimination of universal default is one of the most important provisions of the sweeping federal legislation, signed in May and going into effect in stages through next August, that is expected to change the face of the credit industry, probably including ways that we do not yet expect.

Universal default provisions, often buried in credit card contract gobbledygook, have allowed the credit card companies to charge cardholders more interest for late payments that had nothing to do with that specific account. Simply put, this common provision has allowed the credit card companies to increase the interest rate when a consumer fails to make a payment on another unrelated account, be it another credit card account or some other type of credit account. Like a phone bill. Or a water bill.

The CARD Act would limit increases in interest rates to “a specific, material violation of the card agreement by the issuer,” according to a Senate Committee report on the bill. It also requires credit issuers to lower penalty rates after six months if the cardholder meets his obligations.

The dollar amounts involved in Universal Default can be significant. The finance website The Motley Fool calculated that an $8,000 balance could see an increase of $1,200 per year with an interest rate rise of 15 to 30 percent. If you are on the border of being able or not being able to pay your credit card bills, the default provision can make the difference, particularly when compounded over several cards.

Advocates and Critics…

Advocates of the universal default provisions would say that they are accepting the reality of a consumer’s overall credit profile. If a person fails to make a payment on another account, it could indicate that they will have a more difficult time making a payment on the subject credit card account when the time comes. Therefore the increase in interest rates can discourage further borrowing that cannot be met with payment. In addition, it keeps more reliable cardholders from having to pick up as much of the tab if in fact that person eventually defaults on the balance.

Critics of Universal Default, however, point out that having multiple creditors simultaneously raising the interest rates and charging the consumer more can create a credit card death spiral that would not have existed without the universal default provisions. In addition, they have questioned the fairness of altering a contract when the contract has not been violated. It is perfectly reasonable to think that a person can miss a payment on one card for a variety of reasons and still make the regular payments on another.

How will credit cards fight back?

Is Universal Default really dead, or will credit card companies simply figure out alternative ways to accomplish the same goals of separating us from out money? I suppose only time will tell.

What do you think?

I say we keep a keen eye on the whole situation!

How much Interest are YOU Paying? Get Mad at Debt!

Matt Jabs — Tue, 27 Oct 2009 08:59:34 +0000

Back in April I calculated how much money we were spending in interest on debt each month. I highly recommend you do it too – NOW. This post is my 6 month update to see how much less interest we’re paying now.

I was encouraged to write this “interest paid update” after reading that Matt Breed of FinancialMethods.com found calculating how much interest he was paying was also one of his great motivators. He agreed – as everyone seems to once they run this simple calculation – that figuring out exactly how much money you pay others in interest every month is one of the best motivators to help you move against your debt. Way to go Matt.

My Debt Costs Me $58 Less Now!

If you want to take a truly sobering look at just how much your debt really costs you, follow this simple guide to figure out what your monthly interest amount paid is. Once you complete the exercise you will have finally developed a proper relationship between you & your debt!

What I mean by Interest & How Destructive it is…

While there are several definitions of “interest”, for the purpose of this article we focus on the interest amount paid toward our debts and will define interest as a fee paid on borrowed assets; and/or the price paid for the use of borrowed money.

Simply put, interest destroys your ability to build wealth by taking your hard earned money and misappropriating it toward paying rich people (the people who loaned you the money.) I will demonstrate this fact by listing my interest amount paid from last month (March of 2009).

How Much Interest I Pay Each Month – compared to 6 months ago…

So here is my favorite part of the post because this is where I report how much less interest I am paying out now than I was six months ago. I have actually included both amounts side-by-side for easy comparison. Enjoy the interest shrinkage… I know I did!

I am paying $58 less interest to banks than I was 6 months ago! YES!

As you can see, I saved the largest amount by consolidating my debt through Lending Club. I consolidated my debt for two reasons: to simplify monthly payments, and to save money on interest payments. Well… it worked.

So what’s my advice? If you have high interest credit card or auto loan debt… consolidate it through Lending Club to save!

How I Arrived at the Above Amounts…

Follow these simple steps to find out your monthly interest amount paid:

Write down a list of all your loan amounts including your mortgages, student loans, auto loans, credit cards, etc.
Either look at the statement each account mailed you last month, or log into their associated web sites to find the amount of interest (a.k.a. finance charge) you paid over the past month.
Write down the numbers you find above next to the associated accounts
Calculate your very own monthly interest amount paid.

After completing the above steps, you will most likely be filled with anger! I was.

Anger Toward Debt Grows…

Going through the exercise of calculating your interest amounts paid on all debts shows you exactly how much money you pay to bankers each month. Does that make you angry? It should. The goal is to eventually make that money work for you instead of banks.

Seeing these numbers gives real meaning to Proverbs 22:7, “The rich ruleth over the poor, and the borrower is servant to the lender.”

Motivation and Encouragement to pay down debt faster…

This step is simple but crucial. If this is your first time calculating your interest amounts paid, don’t allow yourself to slip into the trap of becoming overwhelmed. Realize that you can turn this around, but you must stand up and fight. You must take control of your own financial destiny. You must work toward your own financial freedom.

Becoming overwhelmed will paralyze you, so instead focus on the fact that a journey of a thousand miles begins with a single step and start stepping now!

Real Steps to Reduce, Lower, and Eliminate Interest & Debt…

By using a focused, goal oriented approach, I was able to lower my monthly interest amount paid by $58/month in six short months. I will use this as motivation and will continue to keep track of how much I reduce my interest amount paid each month. You should do the same.

Hold on to the list of interest amounts paid you formulated above.
Call each creditor & attempt to get your interest rate lowered. This can give you a HUGE jump start in lowering that initial amount. DO NOT skip this step!
Each & every month record the interest amount paid for each debt.
Calculate your total interest amount paid every month.
Track your progress by listing your lowered amounts.
Place these monthly amounts somewhere you can see them every day, like your refrigerator.
Balance your focus by paying off both small debts & high interest debts. I use both methods in tandem.
Some would say reward yourself once a month by treating yourself to something you want, but for me the lowered amount of interest I’m paying is reward enough. Use what works for you.

The more we eliminate our interest amount paid each month, the more we can use toward paying ourselves. So what are you waiting for? Get started ASAP.

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DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.

photo credit to Éamonn

Non-Monthly Expenses – How to Budget for Lump Sum Payments

Matt Jabs — Mon, 26 Oct 2009 09:23:33 +0000

If you are trying to live on a budget and you have not planned for non-monthly expenses, it is just a matter of time before your budget is destroyed by one of these time bombs lurking just below the surface!

Anyone who has ever tried living on a budget knows that the biggest budget busters are not regular monthly expenses, but non-monthly expenses forgotten in the budget because they only come due periodically. Annual, semi-annual, quarterly, and occasional payments break the bank far to often… so today let’s explore how to get control over these common budget busters.

You Have To Plan

If you do not keep a budget, then start. If you do not manage your money, your lack of money will manage you. Sick of living paycheck to paycheck? Sick of never having any money? Sick of using credit cards and wasting money on interest? Then start budgeting!

Once you start budgeting, one of the first problems you will face will be a non-monthly whammy that you forgot to plan for. I promise… don’t worry, it happened to us too. Here’s what we did to make sure it never happens again:

Make a list of non-monthly expenses. Brainstorm as many as you can remember and write them down. You may consider breaking your list into Fixed Non-Monthly Expenses and Variable Non-Monthly Expenses
Create a separate savings account for your non-monthly expenses. Scroll down to see why I use ING Direct and how I create my sub-accounts for this purpose.
Fund new account automatically each month. Hopefully your bank gives you some sort of automatic savings plan to disperse a certain amount into the new fund automatically each month – yet another great reason to use ING Direct for banking.

Make a List of Non-Monthly Expenses

Here is an example list of non-monthly expenses that are normally paid via lump sum payment – there are fixed and variable non-monthly expenses that you can plan for.

As I already mentioned, the list in the picture above is just an example of expenses others may have. I am providing it to help you brainstorm and remember all the non-monthly expenses you may have floating around. Remembering what all your expenses are is actually the hardest part of this entire exercise. You will undoubtedly forget an expense here or there, but you can adjust when the time comes – at least you have most of them planned for now, and eventually you’ll nail them all down.

For us, our personal list is made up mostly of auto expenses with a few others thrown in for good measure. We also limited ours to anticipated fixed non-monthly expenses for now. We’ll tackle the variable non-monthly expenses later.

Create a Separate Savings Account for your Non-Monthly Expenses

For many reasons that I often bring up, I am a HUGE fan of banking with ING Direct. They make saving easier because they allow you to easily create sub-accounts for all your separate savings goals. Budgeting for non-monthly expenses basically involves saving the money over the course of the year so you have it available and will not be taken off guard when the lump sum payment comes due.

If you do not bank with ING Direct, sign up here.

If you already have an account with them, follow these simple steps to create a sub-account for your non-monthly expenses account:

Click on “Open an Account.”
Under “Orange Savings” click “OPEN NOW.”
Select the type of account you wish to open – I always use “Orange Savings Account – Joint.”
If opening a joint account, enter the joint account holders information.
Name your account “Fixed Non-Monthly Exp”, choose the account you wish to fund from, and enter the amount you wish to open with and click “Continue.”
Review the info for accuracy, click the two check boxes, and click “Open Account.”

Fund New Account Automatically Each Month

Yet another reason to love ING Direct… their Automatic Savings Plan feature.

Now that you have your account your sub-account created go to your “My Accounts” tab and click “Automatic Savings Plan” and set up the amounts calculate above to fund your Fixed Non-Monthly Exp fund with the necessary amounts.

Now whenever a non-monthly lump sum expense rears it’s ugly head it will not be a budget buster! When it arrives simply log into your ING Direct account, do an “Instant Transfer” to move the money from you Fixed Non-Monthly Exp fund into your regular checking account and pay the bill accordingly.

It’s that simple!

Now you have no excuse to let lump sum payments sneak up and bust your budget.

What About You?

What non-monthly expenses do you have? Do you they take you by surprise? Let us know some of the strategies you use to handle these expenses so they don’t bust your budget!

Like this article? Here are 3 free ways to join the community and follow the progress – Sign up for email updates, Subscribe to my RSS feed, And/or follow me on Twitter.

DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.

Discretionary Spending & The Spending Journal

Matt Jabs — Wed, 21 Oct 2009 10:00:24 +0000

If you want to increase your success with budgeting and money management, start keeping a spending journal. Period.

Before starting our spending journals we could not get a solid handle on our budget. Discretionary spending is the silent killer looking to wreak havoc on your budget.

discretionary spending – (economics) The amount or portion of a person’s or group’s expenditures which is used for non-essential or voluntary disbursements; the amount or portion of one’s expenditures which one may make as one sees fit. – wikitionary

I sense a high degree of passion for debt freedom in most of you, but know the pitfalls we all face while trying to get there and have found our spending journals to be a cornerstone of financial success.

What is a spending journal?

A spending journal is a small notebook for recording your daily discretionary spending.

“A small leak can sink a great ship” – Benjamin Franklin

You do not have to record every penny! What? That’s right… despite what you may have heard, you do not need to record every penny that flows through your budget in your spending journal – you only need record expenditures that are not part of your regular monthly payments.

For example: You do not need to record your car payment, phone bill, rent/mortgage payment, insurance payments, etc. Instead you want to focus on the little “nickel and dime” purchases you make throughout each and every day. You know… the ones that drain your checking account each month and leave you asking, “where did that extra $400 go?”

Note: You do need to keep track of all your money, but your spending journal is only for keeping track of discretionary spending.

Why keep a spending journal?

It will help you control your money rather than you being controlled by your lack of money.

To track the small, everyday expenditures that are causing the small leak in your great ship!
To help you curb spending.
To help you prioritize your spending.
To make budgeting much, much, much easier.

Note: Budgets fail because people have a hard time controlling and tracking discretionary spending. That trouble ends with the proper implementation of the spending journal!

How to keep a spending journal

Keeping one is easy – don’t let anyone tell you otherwise.

You spend a dollar, you write it down. You spend $100, you write it down. Can’t write it down right this second? No worries – keep your receipt and write it down later – just make sure you write it down!

Keep it simple. You do not need to be über math geek. Simply record the date, the amount, the item, and the budget category. For example, if I purchased a coffee for $1.25 on the 2nd day of the month my entry would look like this: 2nd – $1.25 on coffee = dining & entertainment.
Keep it on your person. Ladies: carry it in your purse. Fellas: I carry a man bag (I swear I’ll write more about it someday) and keep my pocket-sized spending journal and pocketbook inside. I keep the bag with me most all the time. If you’re too manly to carry a bag then keep your spending journal somewhere you frequent daily like your kitchen counter, your vehicle, or at work.
Save receipts. If you cannot record the purchase right away, keep the receipt and record it when you get back to your journal.
Write down every discretionary penny spent. Not every penny that comes through your checkbook, just the random purchases not already accounted for in your budget.
Total it up each months end. You may hear others advising to total it up every day… don’t bother, that is too complicated. All you need to do is add up the overall total along with the total of each budget category.
Add the totals to your budget. Now that you have successfully tracked and categorized your discretionary spending, go add the numbers to your budget being careful to fill the proper amounts in for each category.
Adjust your budget accordingly. This is the really cool part. Adjust the amounts for next months projected budget based on the numbers you spent the previous month. Continue to do this each month, deriving averages in your monthly discretionary spending and always looking to “trim some fat” whenever possible.

Some say to do this for a month or two… I say do it for the rest of your life. Trust me, it’s easy and it makes all other financial planning/budgeting much easier and less overwhelming.

Note: I’m not talking about using Quicken, or Mint.com… I’m talking about good old fashioned pencil and paper record keeping kept on your person.

Challenge:

Try this for one month. I’ll bet it makes an enormous difference in your financial life – even if you thought you already had it in order!

What say you? Are you in?

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DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.

Save Money – How To Talk To Customer Service

Matt Jabs — Mon, 19 Oct 2009 10:00:30 +0000

It doesn’t take magic fairy dust to get customer service reps to give you a “good deal.” A lot of times all you have to do is practice the lost art of being nice!

STOP OVERPAYING for monthly services. STOP OVERPAYING at the store. LOWER YOUR BILLS with a simple phone call. GET SALE PRICES even when items are not on sale.

Most people overpay for just about everything these days – but usually lower bills and discounted prices are just a matter of employing a few simple, old fashioned tips!

Sound too good to be true? It’s not… A lot of times all you have to do is ask!

Proven Tips to Help Save You Money…

While some CSR’s (Customer Service Reps) are trained to try and dissuade you from your dream of reduced expenses, others wouldn’t mind giving you a break at all… as long as you treated them right! Here are a few tried and true pointers that I use every nearly every day. Enjoy!

You HAVE to ask – If you do not ask for a discount… no one is going to give it to you. Quit waiting for money to fall from the sky and go make something happen! This tip is the one that saves me the most money. I use it everywhere I go. Later on in the article I’ll share one of my bigger wins from using this priceless advice.
ALWAYS maintain an excellent spirit when dealing with the CSR – The old adage, “You catch more flies with honey than with vinegar” is quite true. Simply consider how you would want to be addressed then give the CSR the same respect and courtesy. After all… they probably catch flack all day so if talking to you is a pleasure for them, they are likely to do whatever they can for you.
Maintain separation between the CSR and the company itself – This is an awesome tactic that is CRUCIAL to your success in lowering costs. Basically you want to create a distinction between the CSR and the company they work for. This allows you to voice your displeasure with the company, while not attributing any of the displeasure to the person you’re talking to. For example instead of saying, “You are charging me too much for Internet”, say something like… “I am just really unhappy with how much Comcast is charging me for service, especially with all the other options out there.”
Get the CSR to empathize with your situation – Now that you have created that separation between them and the company… you can easily place them in your situation. Say something like, “What would you do if you were me?” Or simply, “How would you feel if you were in my shoes?“ Or, “you know what I mean right… you’re trying to make a living just like me right?”
Use the company’s competitor’s prices and services against them – If you use Comcast for Internet, talk about the low prices AT&T is offering on residential DSL service with similar speeds. Say to them, “I will stay with Comcast if they can match AT&T‘s prices, otherwise I‘m going to have cancel and go with AT&T. I mean, what would you do if you were in my shoes?“
Be willing to discontinue the service – Ultimately if you are not truly willing to leave your current provider, you will be less authoritative and they will be less likely to oblige you. Make sure before making this decision you discuss it with your wife and/or family. Be sure to explain the alternatives, and also key on possible benefits of canceling the service altogether.
Be confident and persistent – Just as you are much more likely to listen to someone who delivers a confident and meaningful argument, so the CSR will be too. Before you call, make a plan of action. Write down the reasons why you need the price reduced along with price quotes from several other providers. If you are prepared and resolved, the CSR will have a hard time denying your request…it worked for me!!

Employing these tips has saved me thousands of dollars over the course of the last few years!

Don’t Limit These Stratagem to Phone Calls…

One of my “biggest wins” experienced from these strategies happened earlier this year when I was installing my back yard paver patio.

We went to our local home improvement store (Menards) to purchase our supplies
We sized out our patio using their friendly computer system (I got the CSR to help me so I could “buddy up” with him)
We picked out all the patio stones and peripherals we needed for installation
We went to the desk to have the CSR price out our goods
After he gave me the price I said, “Hey man… since I’m spending so much here (it was around $1,800) do you think I could get some sort of discount?” Almost without hesitation he replied, “Sure. Let me go ask my supervisor what we can do for you.” He came back and offered to give me the last sale price on every item I was purchasing. When it was all said and done we saved over $300 just like that!

What are you waiting for?

Go try this out and let us know what happened in the comments below.

Like this article? Here are 3 free ways to join the community and follow the progress – Sign up for email updates, Subscribe to my RSS feed, And/or follow me on Twitter.

DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.

Photo credit to Kennedy Garrett

Debt Testimonials – Al Hernandez Looks to the Ant

Matt Jabs — Wed, 30 Sep 2009 19:57:49 +0000

photo by NeilsPhotography

Today I received an email from Al Hernandez – a fellow debt fighter and frequent reader of DFA – I figured many of you would love reading about his story so here it is…

“Go to the ant, thou sluggard; consider her ways, and be wise” ~ Proverbs 6:6

Al has been a debt freedom fighter for 8 years now and has finally reached financial freedom. Like I always say – it is awesome to read testimonies from people who have been living frugally for years and have already reached the sweet land of debt freedom. I gained a lot of encouragement from Al’s story and I know you will too.

Enjoy!

Al Hernandez’s Debt Free Testimonial

Dear Matt:
I’d just like to say (write?) thanks to you for your efforts to help people like me live a more frugal life. 8 years ago I was technically bankrupt. I had over $56,000 in debt and $2,000 in the bank. I had no retirement account. Changes were needed.
I got a better job.
I cut up the credit cards (all of them).
I used Quicken’s debt reduction calculator and started paying off my highest-interest debts and paid extra on each payment. When one debt was paid, I added the money to the next debt payment. The payments just kept getting bigger and bigger, and the amount I owed kept getting smaller and smaller.
I re-financed my mortgage to half the interest and a 7 year note (yeah, I was pushing it).
I kept my old car and drove it until it had over 250,000 miles. Then I bought a good, solid, USED car.
Most importantly, I examined every aspect of my life to figure out ways to save money and pay off debt.
It’s now 8 years later and I have paid off every debt, paid off my mortgage, my car is paid for, and I have over $25,000 in the bank. If I add my retirement accounts, and conservatively value my 3 bedroom house at $50,000, I have a net worth of close to $250,000, and ZERO debts!
So, am I going to the Bahamas?
Are you kidding? Heck, no!!!
I’m going to continue being frugal, save more money for retirement, and let everyone keep thinking that I’m a pauper. Who cares! I know that I’ll be doing well when I retire while the “Jones’s” might still be struggling.
Being the Ant is better than being the Grasshopper, I can tell you that from personal experience! The peace of mind of being debt free is wonderful. And… I get to help out my relatives when I can (and they really need help, not just “want” something). I also get to donate to charities and help out in other ways.
Being solvent is wonderful! It’s a good life. Thanks for your help.
Sincerely,
Al Hernandez

What About You?

What are you waiting for? If Al can do it… you can do it! All you have to do is find the resolve. Now roll up your sleeves, get motivated, and get ready to destroy some debt!

Like this article? Here are 3 free ways to join the community and follow the progress – Sign up for email updates, Subscribe to my RSS feed, And/or follow me on Twitter.

DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.

More Reasons to Pay Off Credit Card Debt

Matt Jabs — Wed, 23 Sep 2009 12:15:11 +0000

Credit Card Debt

Many people not only avoid credit card debt like the plague, they actually view it as debt slavery. If you are suffering from massive credit card debt and are looking for a s0lution read the credit card debt reduction handbook.

As a credit card holder, it’s pretty much a given that you need to be on the lookout for increasingly deceitful practices from your credit card bank. I slipped up & just the other day was hit with a $29 “fine print bingo.”

Consumers are cutting back, and credit card companies are striking back! With more and more Americans saving more and spending less the credit card banks are really starting to take a hit – but… they are not taking the hit lying down!

Cutting back on spending and use of credit cards

Are you like me? In case this is your first visit to DebtFreeAdventure.com, I am in a raging battle against debt. Not just high interest debt, but all debt – yes… even mortgage and student loan debt. My goal is to be completely debt free as soon as possible – so it only makes sense that we should curtail our spending and use of credit. Sound like something you’re interested in?

Steps to reduce credit card and other debt

Reduce Expenses – Ummm… yeah, my wife and I have gotten mighty creative and resourceful over the last 10 months.
Curb Spending – Spending less than you earn is a cornerstone of gaining monetary wealth – we are proudly standing upon that cornerstone.
Consolidate High Interest Debt – Tread lightly here because this only applies if you can secure a loan to consolidate your debts at an interest rate that is lower than the rates of all the loans you plan to consolidate, all while limiting the loan origination fee. Sound impossible? We found an awesome opportunity to “stick it to da man” by taking a Lending Club consolidation loan to do just that. If you want to figure out exactly how we did it check out my Lending Club review, it’s packed with good stuff.

As you can see, we have cut back on spending and use of credit. How do the credit card banks feel about this? Why they hate it of course… and I’m not the only one. Tons of Americans are suddenly waking up and becoming “debt wise.” It’s almost as if someone through a bucket of cold water on the whole country – and that is a good thing.

How are the banks responding to the decrease in consumer credit use? Here is what recently happened to me…

Ways credit card banks are striking back…

Watching this “frugality movement” must be making their blood boil, and to be completely honest… I love the thought of that! Can’t you just see the execs of Capital One, Citibank, etc. sitting around in a board room coming up with new ways to screw us out of our money? I love picturing them squirming in reaction to the wise daily decisions more and more Americans are making lately. BUT… they are no dummies. Every day they strive to find increasingly deceitful ways to separate us from our money. Here are some popular schemes to watch out for:

Raising Interest Rates – It already makes me sick when I consider the amount of interest I pay each month… so what do the credit card banks do? Raise them higher of course. A few months back all three of our credit card banks sent us letters to inform us that they were doing just that. It was the straw that broke MY back – so I consolidated with Lending Club and haven’t looked back since. I’m loving the fact that while I still have to pay interest, I’m paying it to individuals rather than corporate credit card banks.
Instituting Annual Fees and burying the evidence – About a week ago I received a Capital One statement in the mail saying I now owed them $29. I was like… “WHAT? I just paid that off like two months ago!” Well… the letter they sent me a few months back about raising my rates ALSO said – in fine print of course – they were instituting an annual fee on my card. It never had an annual fee before, and I had to dig back through my letters to find this little nugget. They just slipped it in on me. Chances are if they had sent a letter specifically about the annual fee I may have closed the account… so they buried it in the fine print. This raises another point – should we cancel a credit card account that we recently paid off if it is going to cost us an annual fee? Is the positive affect it has on our credit score worth the annual fee? You be the judge. The only reason I left the account open was because it bodes well for my credit score… now I am just inclined to close all the cards I recently paid off.
Planned “Mistakes” – Yeah you read that right… “planned mistakes.” This occurs when the credit card banks mail your statements late, giving you less time to pay your bill before the due date. Another example is when you pay the bill on Friday, but they – very conveniently for their pocketbooks – do not process the payment until the following Monday… making your payment “late” and thus whopping you with a $36 late fee.

I guess what I am saying is…

I am mad that Capital One charged me $29 for a brand new annual fee, and I don’t want the same thing to happen to you!

Make sure you read all the fine print, and if it is too much of a hassle… just close the darn account – that way you are no longer subject to all the random deceitfulness of these tirelessly greedy credit card banks.

MAN I CAN’T WAIT TO BE DEBT FREE!

This article was featured in the 84th Edition of the Money Hacks Carnival over at MilitaryFinanceNetwork.com

Like this article? Here are 3 free ways to join the community and follow the progress – Sign up for email updates, Subscribe to my RSS feed, And/or follow me on Twitter.

DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.

The Debt Steamroller – I WILL FIGHT to reach my goals!

Matt Jabs — Tue, 25 Aug 2009 16:57:06 +0000

This post was featured in the Carnival of Pecuniary Delights at AlmostFrugal.com.

The non-blogging life of Matt Jabs…

For the past two weeks I have been preoccupied with two very different things. The one… has been a very calming and fun adventure, while the plain dreadfulness of the other has brought me continual feelings of stress and anger. These two polar opposite events have been… camping and conficker (the virus), respectively.

While I have not been able to update Debt Free Adventure as much as I would have liked, the good news is… I still HATE MY DEBT!

And THAT, Ladies and gentlemen, is why it is time to fire up…

The Debt Steamroller

Simply put… I am on a mission!

A week from now My debt free adventure will enter its 9th month! Although I have not been able to pay down my debt as fast as I would have liked, things are looking very positive from here forward and I am confident the goals can still be reached. Why so optimistic? Because my passion does not wane, and because DebtFreeAdventure.com has begun earning a very nice side hustle income!

Here is a breakdown of those earnings along with a few other reasons why I am still faithful that The Debt Steamroller will roll over the Jabs family debt by my goal date of 12/31/2009!

I’m Earning Extra Money – DebtFreeAdventure.com is quickly becoming an awesome side hustle that is allowing me to earn extra income. One of the goals of this website is to help me earn more money to put toward my debt repayment. Up until July of 2009 the amounts I had been earning were negligible, but over the last 2 months have grown into something worth mentioning… and then some. All told, from all my online writing endeavors I brought in around $300 for the month of July and am looking to bring in around $600 for the month of August. Up until now I have not used any of this income to repay my debt, i have simply stashed it away in my ING Direct “Side Hustle” savings account for safe keeping. That my friends… is about to change!
Dwindling Unplanned Expenses – The unforeseen expenses that we have been hit with are nearly a thing of the past. I have about another $1,700 to pay toward the original $6,100 (Jeep accident among other things) and will then be able to return all my available resources to debt repayment and emergency fund savings. Although unplanned expenses are always unplanned… I am placing my hope in the fact that I will not have much more of them before the end of the year! Keep your fingers crossed.
Continued Expense Reduction – We have successfully lowered our monthly bills by hundreds of dollars. Some of the ways we have done this include:
- Canceling our satellite TV service which has been saving us $76/month every month since May of this year.
- Reducing our grocery costs by employing our now famous “Grocery Hacks.”
- Making our own dishwasher and laundry detergents saves us more and more every time we use them.
- My wife has been cutting my hair since the end of April. The clippers have already paid for themselves so we are saving around $20 every cut now.
- I reduced my trash bill from $15/month down to around $1/month by going to a “per bag” payment method.
Honestly, I could go on and on with the ways we have cut costs but will simply state the truth: we continually look to reduce our living expenses in every way possible. Contrary to popular belief, this is not grievous but is actually quite liberating. S implifying your life is something many people view as a huge “sacrifice”, but something others view as a blessing in disguise.
Maintaining Discipline – Sure, it may be easy to cut expenses and curb spending for awhile, but maintaining those disciplines for the long haul is another story entirely. We have been able to stay on track and do not see that changing anytime soon. Why? The fact is… we enjoy our lives more now than when we were spending more than we earned! There are a lot of reasons we prefer the changes but I’ll narrow it down to the joy received by getting our financial house in order, by implementing a giving strategy, and by shifting our focus to being good stewards of what God blesses us with. These three things in particular have helped us realize the err of our old ways and make maintaining our new lifestyle not only a cinch… but actually a blessing in and of itself!

Excitement is in the air folks!

In light of the former information, my wife and I are very excited. The alluring taste of being free from our high interest debt has entered into our mouths and has caused us to salivate copiously in anticipation of the incredible satisfaction it will deliver once supper time arrives!

I don’t know exactly how it will happen, but I stand firm in my confidence that our debt will be gone by the end of this year. According to the scriptures, I can see that God does not desire us to be in debt, and in light of these truths, I believe He will be faithful in helping us reach the desires of our heart. Is it possible that it may take longer? Yes, of course… but at this point I will remain faithful and confident that the “debt elimination graph” in my sidebar will be at 100% by 12/31/2009!

If you like this article please remember to sign up for email updates, subscribe to my RSS feed, and/or follow me on Twitter.

DFA is passionately dedicated to helping people break the bondage of debt & work toward financial freedom using biblical principles.

Grocery Hacks – How To Save Money on Groceries

Matt Jabs — Fri, 07 Aug 2009 10:00:31 +0000

How we save money on groceries

This is the story of how we reduced our grocery budget from $400/month down to less than $250/month!

My wife and I have very different personality types… and what a blessing that is!

I am the eternal optimist – the visionary – the idea guy – the spontaneous one – the encourager – the free spirit.
My wife is the responsible one – the realist – the finisher – always keeping things on track – always grounded.

Our different personality types definitely combine to make us into a better whole, and we have learned that each of us is particularly strong in certain aspects of every project.

For example, when we need to go grocery shopping we sit down together and combine our gifts to come up with our best grocery shopping plan. If it wasn’t for my wife, there would be no plan! If it were not for me, we would not be eating nearly as healthy. If it were not for her, we would spend more money due to not planning a menu. If it were not for me, we would not have a specific budgeted amount of money for groceries to stick to each month.

As you can see, both of us have different gifts and we work to combine our gifts to yield the most beneficial result for our family (which is currently just her & I.)

The other night we sat down — together — and compiled a list of ways we have successfully reduced our grocery bill over the last 7 months.

Jabs Grocery Hacks

I am including this awesome list of Jabs Grocery Hacks in a printable .pdf format that you can print and keep in your purse and/or stick on your fridge. Enjoy and happy hacking!

Plan a menu – 2-3 dinners for the week and eat leftovers the other nights. Base meals on what needs to be used up in the refrigerator.
Make a list – only purchase items you will need to add to the recipes you’re making from #1 Plan a Menu.
Stick to the list – once at the store, DO NOT deviate from the list.
Use coupons – when available use coupons… but ONLY for the items on your list! Do not buy things just because you have a coupon.
Stock up – on your favorite/frequently used items when they are on sale. Clear out space in your cupboards, pantry, basement to store overflow.
Grow a garden – use your own produce in all of your recipes and if it is harvest season – plan your recipes around what you are harvesting.
Pick your own – when it comes to fruit and veggies, pick your own and preserve them by freezing, canning, etc. Use these frozen goodies to make your own jam, add to muffins, ice cream, breakfasts, etc. We picked strawberries and we picked blueberries, we saved a boat load on both.
Make your own – use fruits and veggies you grew/picked to make homemade jam, tomato sauce, salsa, etc. You can also make your own bread, crackers, cleaners, etc. We decided to use up a lot of what we already have in our pantry, then when we run out of something we decide if it is something we can make ourselves instead of purchasing new.
Preserve food – Even if it is not something you grew, buy large amounts of in-season produce then go home and preserve it. I have already made mention of this in a few of the other tips, that’s how important it is… this tip permeates so many of the other tips. You can freeze, can, dry, smoke, cure, etc. The predominate methods are freezing and canning.
Use more beans – this has been a HUGE change and a HUGE benefit for us. You should definitely increase the amount you use. Beans are cheap, healthy and delicious. They are much healthier and less expensive than meat.
Frequent local farmer’s markets – my wife and I have switched to a predominately fresh, healthy, and organic diet. We have found a farmer at our local market who sells organic produce, honey, maple syrup, butter, cheese, meats, etc. for cheaper than the grocery stores!
Check “price per unit” – despite popular belief, when at grocery stores sometimes it’s actually cheaper per unit to buy 2 smaller items than it is to buy one larger portion.
Pack breakfasts and lunches – do this everyday so you are not tempted to buy these meals “on the run”. Make this part of your nightly routine every night so it becomes habit. My wife & I pack our healthy delicious breakfast idea every week day.
Pack healthy snacks – place these in small containers early in the week. Keep some in your car, purse, office, man bag, etc. This will keep you from purchasing unhealthy and expensive snacks form vending machines, gas stations, or other places.
Do more baking – this kind of fits in with #8, but deserves it’s own description. Set aside a little time each month to bake bread and healthy cookies then freeze them for the consumption throughout the month. The ingredient to bake cost much less and will go much further than purchasing pre-packaged cookies and breads.
Make fruit salad – using some of your pick-your-own fruits from number #7, combine delicious, fresh, snackable fruits into a Tupperware as a “salad”. This is a great way to keep family members from purchasing and eating unhealthy/expensive snack foods.
Eat more nuts – another great snack food. We get an organic trail mix blend from our health food store for $3.79/pound. This is another healthy and cheap alternative to expensive snack foods.
Test generic brands – persistent and clever advertising has tricked us into thinking we need certain brand name foods. Make sure you try generic brands at least once — with an open mind — before you decide how much you dislike them! My wife and I eat predominately generic/store brand foods. Also, generic health and beauty items, along with medicines, are often made up of the exact same ingredients as name-brand items.
Organize your pantry – this is VERY important. Most people waste a lot of food and money because it simply gets lost in the black hole that is their pantry! I’m lucky because my wife and I are both pretty organized when it comes to our food stuffs, so we excel in this area and it is a blessing.
Work together – like my wife always says… “Teamwork makes the dream work!” Just like any other good thing in marriage/family life — saving money on groceries is much easier if both spouses are working together to reach the common goals of physical and financial health!

I am including this awesome list of Jabs Grocery Hacks in a printable .pdf format that you can print and keep in your purse and/or stick on your fridge. Enjoy and happy hacking!

Using these tips and principles me and my wife have been able to cut our grocery budget from $400/month down to less than $250/month on average! We have also lost a combined 60+ pounds and have never felt better.

This post was featured in the following Blog Carnivals:

Editor’s Pick: Carnival of Money Stories – “Back from the Beach!” ed.
Editor’s Pick: Carnival of Personal Finance #217: The French Money Quotes Edition
Editor’s Pick: Money Hacks Carnival- By the Book Edition
Carnival of Twenty Something Finances: Personal Finance Communities Edition
Carnival of Debt Reduction – August 10th Edition
Carnival of Pecuniary Delights Edition #20

Like this article? Here are 3 free ways to join the community and follow the progress – Sign up for email updates, Subscribe to my RSS feed, And/or follow me on Twitter.

DFA is passionately dedicated to helping people break the bondage of debt and work toward financial freedom using biblical principles.

Debt Free Adventure » Expenses

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Actual aid or just another form of welfare?

Should Congress speed up the credit card reform legislation that they passed earlier this year?

Dodd was dumbfounded when the Senate froze his Freeze Act, saying this:

In the short term the legislation promised to:

Why expedite the bill?