Weekly Roundup: College Football Kickoff Edition

by Frugal Dad · 1 comment

Just a simple question for you..are you ready for some football? I know I am. And what’s this rumor about extending the NFL season to 18 games? I don’t like it. As much as I love football, I don’t think extending the season would be popular. With 16 games, every game counts. With 18 games, each game counts a little less.

Besides, the season would drag well into the next year. Imagine Superbowl Sunday in March. Just doesn’t seem right.

The Frugal Roundup

It’s Still a Good Idea to Buy a House in this Economy. You should only be looking to buy if you are debt free with a solid emergency fund, and have a decent down payment. Record low interest rates are not enough to make up for poor financial footing. @Free From Broke)

12 Reasons Why You’ll Be Happier in a Smaller Home. One of the biggest early expenses of buying a much larger home is buying more furniture to fill it up. If I had more money to spend on real estate I’d buy more acreage, not more square footage. (@Becoming Minimalist)

My College Savings Plan, Look Out for #1. It’s fairly easy to convince people to save for their own retirement before savings for their kids’ college education. Perhaps other financial goals should come before college savings, too. (@Budgeting in the Fun Stuff)

Finding the Rhythm. I can certainly relate to this one. As soon as I get in a groove with anything (money, diet, etc.) I hit a speed bump and it completely derails me. (@The Simple Dollar)

7 Simple Ways to Say No. The word “No” continues to be one of the more difficult words to say in the English language. If you struggle saying no, to people, to stuff, to whatever, I suggest reading this one. (@Zen Habits)

Best of the Rest

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Do Your Kids Have Too Many Toys?

by Frugal Dad · 19 comments

When my son was little he had a mild addiction to Thomas the Train collectibles. Those things were everywhere (you may remember Harold the Helicopter’s flight to the bottom of our guest toilet and my mission to retrieve him)! Then it was monster trucks. Now, Legos are all the rage.

And what about these new Legos? When I was a kid you could buy a ton of plastic Legos blocks for cheap. They came in four colors – red, blue, green and yellow. Now, a larger Star Wars Lego set runs about $99, and includes hundreds of tiny pieces and 37-step instructions for assembly! I digress.

You see a pattern developing here? My son, like many kids, goes from one greatest thing to the next. Individually, these things are not that expensive (save the aforementioned Star Wars Lego sets), but collectively they can add up.

In addition to being expensive for parents, they do have a cost for kids, too. And I’m not just referring to toys’ way of eating into allowance savings.

Too many toys usually means too many distractions. Between the television, the Wii, the computer, the buckets of army men, trucks, Legos, etc, etc. there is little time to devote to things like books, and outside play.

I’m certainly not advocating getting rid of all toys. In fact, some toys can be quite educational. Others can be incorporated into outside play (my kids love the game Hyper Dash). But often toys are played with a while and then tossed aside, collecting dust and taking up space in the kids’ closets and toy boxes.

The number of toys accumulating never seems to diminish, nor does our kids’ appetite for more of them. Are kids born with a consumer gene?

Hey Mom and Dad – Make Sure You Don’t Own Too Many Toys

Kids learn much from the behavior modeled for them by their parents. Many parents are guilty of buying too many toys themselves. And many of us fall for the same toy fads that kids do, although our “toys” are often much more expensive.

Need evidence? Just hang out around a Best Buy store the morning Apple releases a new product – any product. I’m quite certain most people in line for the iPhone 4 already owned a phone – maybe even an iPhone 3. But they had to have the latest and greatest.

Kids notice this stuff. Maybe Dad buys a new pickup truck every two years. Mom picks up a new laptop with the first hint of a problem with the one she just bought 6 months ago. And both parents are always buying new shoes, new clothes, new jewelry and watches, etc.

Allow Kids to Buy Their Own Toys…At Least a Few of Them

At around age 5 we started giving our kids an allowance. Over the years we’ve gone back and forth on whether or not this allowance should be tied to chores. A final compromise was to identify a set of basic chores to be performed throughout the week that must be completed as a contributing member of the household. Additional chores could be performed to earn extra money, or not, depending on school schedules, motivation, etc.

We encourage the kids to use a portion of their allowance for spending, a portion for saving and some for giving. With their spending allotment, they usually pick up something small during weekly grocery/household supply trips – a magazine, a CD, a movie, a game, etc.

Of course, we still buy them a few things all along (I rarely turn down a request for a new book), and don’t expect them to pay for things like clothing (not yet, at least) and basic supplies. Eventually, as they mature, I’d like to increase their budget and include more spending categories for which they are responsible.

We’ve noticed that the kids are much more selective about what they buy, and often fret over “spending all their dollars” on a new game – leaving them with an empty wallet for another week.

I’m not unlike any other parent. I want my kids to have things better than I did. I want them to have more. I want them to have the best. But I also want them to grasp the connection between having nice things and the sacrifice required to earn them. I want them to be able to say “no” to themselves; to avoid the trappings of debt and consumerism as they grow older. Maybe they will avoid some of the mistakes I made along the way, or at least be prepared to learn from the ones they are bound to make themselves.

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I Want To Become a Minimalist, But I Could Never Give Up My…

by Frugal Dad · 41 comments

Have you ever wondered what it would be like to live a minimalist lifestyle? It’s a movement I’ve been an admirer of for some time, but unwilling to put into practice in my own life until now.

Recently, I began watching a new survival show on Discovery Channel called “Dual Survival.” One of the featured survivalists, Cody Lundin, is also a minimalist, and goes about surviving extreme situations barefoot, and without other forms of survival gear.

My feet are too tender to go around barefoot, so I think I’ll keep my shoes for now. However, I do admire this guy, and others like him. They may have adopted minimalism for environmental reasons, economic reasons, or maybe some combination. Either way, their level of commitment reminds me just how addicted to stuff I still am, and has inspired me to rethink that addiction.

“But I Could Never Give Up My…”

How did you finish that sentence above? Daily cup of Starbucks? CD collection? Season football tickets? All of us probably have one thing we aren’t willing to give up. And maybe that’s the first thing that should go.

On the other hand, life is to be enjoyed. I’m reminded of words of wisdom from my grandfather who often reminded me to, “Stop and smell the roses. Life is to be enjoyed.” Well, there are plenty of “roses” available to smell that don’t cost much, so I am trying to adopt his philosophy with a frugal approach.

How Many Things Do You Own? How Many of Those Things Own You?

As I’ve tried to learn more about the minimalist approach, I’ve discovered a number of new blogs on minimalism. I’ll be sharing a few of my favorites in upcoming editions of the weekly roundup.

Several of the authors behind these blogs have advocated taking an inventory of just how much stuff you own. And they mean that quite literally. If you have 20 DVDs, 30 CDs, an Xbox with 5 games, a house, a car, a bicycle, 10 pairs of shoes, and a 5-piece art collection, you have 74 things. At least I think that’s the idea.

Not sure how far to break down the count – do I count the dishwasher and refrigerator inside my house? Do I count the things inside my refrigerator and the dishes currently in the dishwasher? Probably. You get the idea.

The point is, even if we don’t think we own a lot of stuff, we do. And how many of those things are things we continue to accumulate without receiving much value from them after the initial shine wears off?

I am not much of a collector, and I have few hobbies, so I naturally don’t collect a lot of things. But I haven’t always been that way, and my inventory of stuff is still representative of former life as a spendthrift.

Letting Go of Stuff is Hard

Over the next few weeks, as the weather beings to cool, I plan to begin making a weekly effort to get rid of some number of “things.” My plan is a sort of incremental minimalism in steps. Maybe I’ll get rid of 10 things a week, or completely empty one desk drawer, or garage shelf.

One week I’ll pull ten shirts I no longer wear and donate them to a shelter. Next week I’ll round up 10 games (video games, old board games, etc) I no longer play and drop them off at the children’s hospital. The next week maybe I’ll contribute to a neighbor’s yard sale by adding 10 DVDs to their collection for sale.

I’m still not settled on what is a reasonable number to get rid of each week, or if I’ll even track it by week or specific number. But I am convinced this is something I want to do. Having too much stuff is costly. It costs money to store it. It takes too much time to find the few things that are really important. And of course if you have really expensive things, you might even have to pay to insure it, or operate it, or clean it, or whatever. That’s the point where things begin to own you, and I want to begin moving away from that point.

Traveling Light

Oddly enough, some people are comforted being surrounded by stuff. I am the complete opposite. For me, stuff is a distraction. There is a certain freedom that comes with owning less stuff. You feel less pinned down. You have less payments. You have more options. You more fully appreciate the few things you do have, and find yourself wanting less.

Over the next several weeks I’ll periodically update you on the things I’ve given away – maybe even share pictures of my collections on our Facebook page. I hope it will inspire a few of you to look around and free yourself of an addiction to things.

Look around the room you are in right now. Could you find 10 things to get rid of and barely even miss them? I see at least 10 in my already frugal home office (OK, I cheated a bit because my office doubles as our closet – and there are plenty of things to get rid of in here!). Off to grab a box and get on with round one.

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Read This Before You Spend The Big Bucks

by Frugal Dad · 12 comments

This is a guest post from MD of Studenomics– a personal finance blog that makes money talk fun for 20-somethings.

We all hate to be told that we can’t do something. Whenever I’ve discussed ways to save money in your everyday life, my readers would get turned off.

When I would discuss strategies on how to cut back without giving up, my readers responded favorably.

Today, I wanted to try something different with the younger readers of Frugal Dad. I wanted to tell you to go ahead and spend the big bucks...BUT. Yes there’s a catch. Actually there’s a few catches (isn’t there always?):

You need to make big money before you spend big money.

You need to ensure that you’re at a stage in life where you’re earning a decent chunk of change if you want to buy that new Infiniti G35. Many college graduates are guilty of extreme lifestyle inflation. If your big spending results in you saving less than you would like to, it’s still somewhat justifiable. If your big spending is paid for by credit card, then you’re headed towards a financial disaster. Even worse is when low-income earners want to spend the big bucks before they’ve even reached the stage where their income justifies it.

The other day I heard yet again another story of a friend that just graduated college, started making a little bit of money, and is already living an extravagant lifestyle. Instead of saving up a buffer in his savings account, he decided to spend 15 grand for two people to go to Australia. I’m all for long term travel and working abroad, but, I’m opposed to spending the big bucks before you’ve saved any bucks or have earned any money to justify your spending.

Where are you cutting back?

If you want to allocate a lot of your income towards one spending area, it’s advisable that you cut back in other areas. I love to go out with friends. Instead of forcing myself to stay in or making my life miserable, I find ways to cut back on other areas. I try to prepare as much of my own food as possible. I try not to indulge in the newest fashion trends. I truly believe that uniforms don’t win games. So I would rather not jump on the newest trends just so that I can have more money for going out with friends.

The key point here is that if you want to spend big money on a specific area, you need to try to cut back somewhere else. If you don’t then you’ll never have any money leftover. Even worse, you might end up in massive amounts of debt. The last thing you want to happen early on in your working career is to rack up debt. The debt will just prevent you from moving on with your life (moving out, getting married, etc.).

You must plan your spending

I’m not here to judge anyone. I’ve spent more money on trips the last few years than celebrities do on plastic surgery (well not really). The reason that I get away with spending the big bucks here is because I plan ahead FAR in advance. I recommend that you find the best online banking account for your situation. This way you can plan all of your expenditures and know where your money is going.

Instead of always stressing about your money and trying to figure out where your hard earned money is being spent, plan ahead. I try to keep a few sub-accounts in my online bank account with ING Direct. This way I can roughly plan my spending for the short term and the long term.

Admit your weak areas.

We all have areas where our spending is horrible. There’s no point to lie about it. Just admit to it and try to slowly work on it over time. The quick fix almost never works (just like dieting) and you end up worse off in the end. If you acknowledge that you spend too much money on eating out, you can begin to improve your spending in this area. There’s no point to deny or to seek a quick fix. Both options will hurt your financial future. If you get realistic and serious about your money management skills, then you’ll eventually notice a big difference in your bank account and your quality of life.

There you go guys. A personal finance article giving you permission to spend the big bucks. What do you think? Where do you spend the big bucks? How do you plan your spending?

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Weekly Roundup: Student Loan Debt Edition

by Frugal Dad · 8 comments

I believe student loan debt is a cancer attacking the financial futures of young people. While I do believe in the value of a college eduction, I wonder if taking on such exorbitant debt before earning an income is a smart thing.

I had a small student loan when I first entered college, and then racked up credit card debt when I returned to school several years later to finish. I joke that it took me 10 years to finish my degree and nearly as long to pay for it!

If you are already in college, and accumulating debt, consider other ways to pay for the remainder of school. If you are still a few years from college, or the parent of someone a few years from college, I hope the following graph will serve as a wake-up call of sorts. College is not getting any cheaper, and fewer of us are able to pay for it without going deep into debt.

Budget Planner from Mint.com

Frugal Roundup

How Living a Frugal Lifestyle Has Changed My Thought Process. I’ve noticed that my thought process has changed just like in the article. Things that we used to frequently spend money on are not even close to making the cut today. (@Being Frugal)

So You Want My Job: Magician. This isn’t really personal finance related but I still thought it was interesting. I think all of us wanted to be a magician at some point in our childhood. (@The Art of Manliness)

How To Replace Six Vital Documents. If you’ve ever lost an important document, you know how stressful it can make you life. Use this list to relieve some of that tension. (@Get Rich Slowly)

How Personal Finance Changes As You Begin to See Success. Trent shares some more insight into how things change once you begin to alter your financial life for the good. (@The Simple Dollar)

Best of the Rest

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