Toying with the World (Infographic)

Of course it’s important to treat kids occasionally with the newest toy or the latest game. But as the economy sinks and money gets tighter, it seems to me these types of purchases are also some of the first to cut back on. So I’m extremely surprised that even as families would reduce spending on groceries and school supplies, our toy budgets swell: Americans reduced average supermarket spending by about .5% from 2009 to 2010 while in the same period, toy industry sales grew by 2%.

I’m familiar with the temptation to overspend on kid’s toys. And I know the problem with buying for your kids is that usually the most popular game or specific remote controlled car is just the only thing that’ll do. It’s hard to keep your consumer sense in the midst of the trends that keep our kids and tweens primarily wanting all the same things.

My latest graphic on U.S. toy spending should remind you to check loose spending on that latest video game or too-frequently updating kids’ collections of non-necessities. Check out the surprising cost of our kids’ whims:

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Toys

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A Shift in Perspective: Micro-Budgeting to Big-Picture Finances

One of my New Year’s resolutions was to simplify the way I budget. Over the years I have grown consistently obsessive over every aspect of my finances. It was beginning to become a problem.

So after many months in a row of daily updates, fretting over the categorization of expenses (should paper towels purchased at the grocery store go under Household, or Food, or should I create a new Paper Products category – ugh!), I have decided on a new approach.

Using Two Checking Accounts to Manage Big-Picture Household Finances

From now on, I will simply have my paycheck split into two checking accounts. The majority of the money will go to a “Bills and Savings” account, where I will have regular expenses and savings contributions (Roth IRA, DRIP stocks, etc.) automatically deducted.

Things like the mortgage, utilities and any subscriptions of services we pay for on a monthly basis will come from this Bills and Savings account. What’s left in the primary checking account will be ours to spend – our “What’s Left” account. That’s it; that’s all there is to it.

Don’t worry too much over the “split” either. It doesn’t have to be exact because you can theoretically move money from one account to the other.

Add up all of your regular bills, plus your monthly savings contributions, and have roughly that amount taken out of your paycheck and moved to your Bills and Savings checking account. And when estimating for this account, round up just to be safe. 

For most people, that split might look like a 70/30 split between your “Bill and Savings” account and your “What’s Left” account. So if your take-home pay is $2,000 a paycheck, have 70%, or $1,400, transferred to your “Bills and Savings” account.

Then make it a goal to live off the remaining $600 left in your primary checking account. Things like gas and food and entertainment expenses are deducted here. If you run out of money in the “What’s Left” account, you better start searching the pantry for food and giving up on entertainment until your next paycheck replenishes the account.

Tracking the “What’s Left” Expenditures

I am no longer tracking every penny I spend on food, or gas, or paper towels, or books and movies. I will still try to spend as little as possible on those things, and have vowed to renew my interest in using coupons where possible. However, I am not going to invest my time in tracking all of our expenses to an infinite detail, because quite honestly, looking back I can’t see what we’ve gained from that exercise.

With several months of detailed tracking available at Mint.com, and in our household ledger, I can see that we spend more money on gas than we did a couple years ago. Duh, that’s because gas prices have gone up.

I can also see that we pay a little more each time at the grocery store, and that thanks to new fees, our cable provider has increased our services. But what can I do with this information?

Focus on “Big-Picture Finances”

More important to me is the fact that we have spent less than we’ve earned. We’ve increased savings. We’ve paid off our debts. We are saving for retirement, and college, and we are funding a few sinking funds to cover those once-or-twice-a-year expenses like car tags and vacations.

We are winning over the long term. We are winning the big picture. That’s what really matters – not how much I’m spending on dog food or fast food from one month to the next (no, it is not a coincidence those examples were found in the same sentence).

Now, I don’t mean to completely knock the process of tracking expenses. It can be a very important exercise, particularly if done on a short-term basis (for 30 days, for instance), to get a handle on where your money is going. However, it isn’t something I would spend a lot of time on every single month, or in my own previously obsessive example, every single day!

Life is short. You can spend it meticulously going through receipts to split costs from your last grocery store visit between paper products, baby food, and the Redbox rental you grabbed on the way home, or you can look back at the end of the month and reflect on your increase in savings, your reduction (or avoidance) of debt, and your time spent doing things other than updating your elaborate budgeting program.

America’s Pawn Empire (Infographic)

It’s hard for me to shake my prejudices against pawnshops. I can’t help but alternately associate them with George Lucas’ Watto and those Frontline episodes labeling pawnshops as your neighborhood drug money repository. Still, recession-era shifts in consumer attitudes are reinvigorating America’s formerly underground pawn economy and it’s worthwhile to take note of the swelling pawn empire: who’s borrowing, who’s buying and why?

We all know that charging high interest rates on brokered loans allow pawnshops to cut great deals on just about anything, from high quality jewelry and sports equipment to consumer electronics. And just this year, stores here in Denver reported holiday sales spikes of 40% and the 3 publicly traded U.S. pawnshops reported net incomes up at least 25%. It makes sense that those of us looking for ways to save have found ourselves checking the pawnshops for our kids’ band instruments or anniversary gifts.

As always, I’d recommend staying aware of predatory lending whether it’s a bank or a pawnbroker. But check out my latest consumer infographic on the trend you might be missing out on:

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Pawn Shop Infographic

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The Anatomy of A Cupcake (Infographic)

When this gourmet cupcake boom took off a couple of years ago, I couldn’t believe it. The cupcakes I’m used to are home-baked, hastily frosted and pocked with thumbprints. And before my family discovered a local cupcake café, the idea of shelling $4 dollar for a lavender lemon verbena cupcake would have made all of us laugh. Now, we do occasionally find each other lingering on the Food Network’s “Cupcake Wars” (now into it’s 4th season). And I’ve only softened somewhat to the idea of cupcakes-for-purchase, but I’m definitely done holding my breathe for the cupcake bubble to burst.

It’s the ingenious image of the sweet and simple cupcake that propelled the treats into a $6 billion industry. We’ve all made cupcakes a thousand times. The ingredients are familiar, pronounceable items we always have on hand. Their authenticity helps us feel better about buying our kids and ourselves a $4 cupcake over a lot of other fast food snacks. But really, like most anything we eat nowadays, the cupcake represents global effort of laborers and products from places we don’t tend to think about. Check out this new graphic weighing the ingredients of this trendy personal treat:

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Food Infographic

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Save Money on Groceries by Being an Intentional Shopper

Over the weekend I stopped by the grocery store to pick up a few things. Since we were set on meats and produce, I found myself wandering the aisles more than usual – seeing what was on sale and checking prices of a few of our favorites.

Before I knew it, my shopping cart was half-full, and I knew my trip to the store to “pick up a couple things” would likely cost much more than the mission name implied. So it goes when shopping without a list.

$38! I spent $38 essentially on junk. Well, it wasn’t all junk, but the very large majority of it was junk. And by junk in this context I mean things that can’t generally be used to make a meal – sodas, chips, a couple dessert items, some frozen items from the “Snack” case, etc. No ingredients, no staples, no meats, no vegetables.

I loaded up the items in my truck and reflected a bit about the grocery trip, wondering how many times I’ve shopped like this in the past and thought nothing of it. I violated nearly every rule in the book of frugal grocery shopping – I didn’t have a list, I had not planned any meals, I was hungry, etc, etc.

I decided from now on I would try to be an “intentional grocery shopper.” That is, I would do a better job of planning before I went to the store. I would seek out only the things I needed to fit my meal plan and nothing more.

How to Become an Intentional Grocery Shopper

1. Plan meals a week (or two) in advance. One of the easiest ways to plan a shopping list is to work backwards. Start by planning a few meals you and your family would like to have over the next several days, then list the required ingredients for those meals. Check your pantry to see what you have on hand and add any missing items to your grocery list.

2. Always shop with a list. I can’t cite any official study, but experience tells me that when I shop with a list I save money. I also forget less things, which requires a return trip to the store which offers more opportunity to spend unintentionally.

3. Shop once a week. The enforcement of this rule alone will make you a more intentional grocery shopper. If you know this is your once-a-week visit to the grocery store you are more likely to plan and make a complete list so as to avoid a trip again later in the week.

4. Use coupons. I am not the best coupon sorter. Some people seem to have it down to a science – it comes naturally to them. Not me. Still, I could probably save $5 – $10 per trip to the grocery store without even trying just by using the coupons in the current Sunday paper. Imagine the damage I could if I actually invested the time to collect and sort them EVERY Sunday.

Speaking of coupons, have you checked out our Coupon Directory lately?

5. Stay away from the inside of the store. On my most recent trip to the store I did the exact opposite. I avoided produce, meats and dairy and instead wandered the chip and cookie aisles for half an hour. Big mistake – unless I was targeting something very specific. From now on I will stick to the perimeter of the store, for the most part, stocking up on meats and fish, dairy and produce.

What are some tips you use to save money on groceries?