Before today’s roundup I’d like to take care of a few housecleaning items – a few personal, and a few blog related. Here’s a look at what’s happening in the life of one frugal dad:

• My full time job has been busier than ever in October. That’s good for job security, but bad for blogging. I’m behind on emails, writing, etc, but am keeping my head above water. If you try to contact me, it might take a few days to get back to you. Thanks for your patience.

• The Frugal Dad Fan Page on Facebook I introduced last Thursday is humming along with 200 fans following. If you missed the announcement, please consider joining us. I try to post something to the wall or discussion board every day, and we’ve already had a few interesting discussions (check out yesterday’s post about the morality of taking hotel toiletries – good stuff!).

• I’m kicking around the idea of a weekly newsletter to be delivered on Saturday mornings, in lieu of weekend posts here at the blog. The newsletter would contain some special features not seen on the blog, along with a unique article or two, a “week in review” section, special deals for newsletter readers, etc. Any interest?

• Long-time readers will remember one of my blogging goals was to reach 7,500 readers. I hit that earlier this year and extended that goal to a big stretch goal of 10,000 readers. As of this writing I’m only a couple hundred away. Could you help me by signing up to follow Frugal Dad if you aren’t already?  Thanks to all who have already signed up!

Enough about me, let’s get on to some great articles from others!

The Frugal Roundup

Best Things to Buy in the Fall – Find the Biggest Discounts and Sales on These Items This Fall. Seasonal shoppers can get big discounts just by buying when retailers are looking to move that out of season inventory. (@Generation X Finance)

Dealing With Unemployment Like a Man. Unemployment is hard on anyone, but as this post points out, it’s traditionally been hardest on men. Read on for eleven tips to help you get through it like a man. (@Art of Manliness)

The Zero Hour Workweek. An inspiring ebook from someone who’s getting “paid to exist.” Hat tip to WC of The Writer’s Coin for leading me to this one. (@Illuminated Mind)

How to Have a Ghoulish Halloween for Less. From costumes to decorations (and yes, even frugal candy alternatives), this post covers it all. Frugal (Happy) Halloween! (@Coupon Sherpa)

Follow the Glow. Not sure what it is you should be doing with your life? Simply “follow the glow.” What an inspiring post! (@The Blog of Rick Smith)

10 Free Online Budgeting Applications. A nice run down of some of the more popular free online budgeting applications. I’ve given a number of these a try. (@Lazy Man and Money)

Best of the Rest

• Personal Budgeting Made Easy With the 60% Solution
• What Was the Best $100 You’ve Ever Spent?
• Everyone Is Special and Unique Just the Way They Are
• 10 Surprising Things You Can Turn Into Cash
• 2010 Quicken Deluxe Giveaway
• Why Don’t Most Financial Planners Plan Finances?

You probably weren’t expecting to hear Frugal Dad advocating getting rid of a budget. Well, I’m not, entirely. What I am advocating is that you take a look at your monthly budget with a critical eye to determine if your budgeting process is negatively effecting your life.

Yes, budgets can set you up to succeed, or set you up to fail. Make them too strict, and you’ll never stay within a spending category’s limits. Have too many budget categories, and you’ll spend too much life energy hunting and recording receipts. Like everything in life, try to find some balance when setting up your budget, but err on the side of simplicity. Here are a few reasons why.

1. Strict budgets are as successful as strict diets, they aren’t. Ever tried to lose weight by drastically cutting calories or eliminating all foods you enjoy from your diet? Let me guess – you lost weight the first two weeks, had a slice of cake at a party, and derailed your entire progress.

Humans just don’t like big changes. We are more successful over a longer period of time when we implement small changes that continue to put us on the path towards reaching a larger goal. Like the old saying goes, you have to eat an elephant in small bites. But hold the butter, or you’ll have to go right back on that diet!

2. Strict budgets create money micro-managers. A couple years ago we took the kids to the Smoky Mountains, their first trip to see a hill over 300 feet high. My wife and I were enjoying the vistas along the Blue Ridge Parkway, but noticed our kids had their heads buried in a book, or their Nintendo DS, and were missing the scenic views. I spent a great deal of the time reminding the kids to look up at the overlooks. Sometimes they did, most times they didn’t.

That’s how adults who are consumed by managing their money appear. Our heads are buried in spreadsheets, or Quicken, and we forget to stop and look up at the overlooks. Pretty soon, we were off the Parkway and realize we missed an opportunity to see the sights; to stop and smell the roses.

3. Budgeting is boring. I confess; I just don’t like budgeting. I don’t like creating them or updating them. I realize they are necessary for proper money management, so I create one each month. However, I make it as simple and painless as possible. I haven’t always been this way.

When I was younger I had dozens of budget categories. Instead of a simple “Food” category, I had a category for meals out, snacks from the vending machine, groceries, etc. I meticulously tracked debit card (and at the time, credit card) purchases, and receipts to be sure I put the expenditure in the correct category. Oddly enough, this was also the time when I accumulated the most debt. In my attempt to be sophisticated, I failed to recognize and adhere to one of the simplest personal finance principles around: spend less than you earn.

4. Strict budgets limit opportunities. By opportunities, I mean opportunities to experience something or save money by buying something at a deep discount. How many times have you passed on something you’d really like to do, or really like to own, because it “wasn’t in the budget.”

It is almost as if the budget is controlling us, rather than the other way around. Then again, for the most impulsive shopper, that’s probably how it should be. But for those who have displayed discipline with their finances, a strict budget feels more like a tight-fitting jacket than a useful tool. It restricts us, and keeps us boxed in from the chance to live a little.

5. Budgets cause money fights in relationships. I saved the best for last. My wife and I don’t see eye to eye on the concept of budgeting. She is the free spender, and I’m the nerd, at least when it comes to finances (though she would probably say the nerd label extends further!). Early in our relationship I tried to force my elaborate budget system on her. It didn’t work. For a period we scrapped the idea of budgeting altogether.

These days, we have compromised and met in the middle when it comes to budget categories. Instead of including infinite layers of budget granularity, we now separate our money into larger piles of logically separated categories. Here’s a sampling from our monthly budget (I’m leaving out the amounts because I don’t want to get hung up on the numbers):

• Mortgage
• Utilities
• Food
• Auto
• Household Supplies
• Savings
• Debt Repayment
• Insurance
• Clothing
• Medical
• Entertainment

Our goal was to keep the budget at ten categories or less, but we did add one for entertainment. It’s hard to think of an expense that doesn’t broadly fit into one of the categories. Last month, we thought we ran into one such example:  birthday presents for kids’ friends. We decided to just take it from “Entertainment” for now, rather than create a new category for infrequent purchases (although I made the argument that friends’ birthdays seemed to happen at least once a month!).

Another way to combat budget fatigue is to create a number of sinking funds for irregular expenses. We’ve done this in our household. Notice in the budget above I’ve simply listed “Savings” as a top-level category. That represents a single transfer to our ING Savings account, but from there the money is split into several “buckets,” or sinking funds.

We have a sinking fund established for things like the annual renewal of our car tag, the semi-annual payment of our auto insurance, Christmas shopping, vacations, and a couple others. When these expenses come up, we transfer the money from the sinking fund and write a check. No impact on the monthly budget.

I have written this post with sort of a negative spin on budgeting. I hope that’s not what you will take away. Rather, I’d like for you to take away the idea that by making your budget too complex you are setting yourself up for failure. I urge you to consider consolidating categories, or setting up sinking funds, or allowing yourself more “fun” categories so that you can enjoy life. And please, remember to look up at the overlooks!

Investing seems scary, and investing during a bear market is even scarier. Believe it or not bear markets are an important part of a healthy business cycle, corrections are needed to ensure prices are not overly inflated. It is true that market corrections put a little dent in our portfolios, however the big losses are due to our emotions and investment mistakes in a bear market where we try to reduce losses but actually are losing more. What are some of these mistakes?

Sell, Sell, Sell…

When markets tumble everyone gets freaked out and starts selling without any logical reasoning or attention to long-term goals. As the sell-off continues more investors jump on the train and sell their investments, often they all miss the fact that they are selling at the bottom to only repurchase them back at the top. Stop selling without a reason, only sell if the fundamentals have changed for the long term or the investment does not fit in your plan, not because everyone else is selling in the market.

Stop Investing

The only worse thing one can do than selling out in a bear market is stop investing during the bear market. People get scared and think the markets are falling apart and believe there is no point in investing. Would you stop shopping if retail prices dropped 30%? No. You would probably buy even more because everything is on sell now so you’ll take advantage of the good prices, same concept applies to investing. There is a huge sell going on in the financial markets during bear markets and you should take advantage of it and not hide from it. When you stop investing during a bear market you will miss out on many undervalued investment opportunities which can have great returns in the long run.

Look at Alternative Investment

Some investors start to look at alternative investments because they believe somehow these will perform better than the equity markets. In this recession the focus has been gold investment, gold is reaching all time highs and investors believe gold is a great place to invest. Frugal Dad recently answered a readers question regarding gold, here are my reasons why gold is a bad investment. Although alternative investments have their place in a portfolio the excessive focus during bear markets makes them dangerous.

Timing the Market

Unless you have a crystal ball or have some psychic abilities just stop wasting your time and money trying to time the markets. Investors are more likely to time the markets during a bear market, as there are often big swings, which are seen as opportunities by investors, this strategy will only hurt your portfolio.

I know bear markets hurt, but you trying to “improve” things will only make things worse. Successful investing is not magic, just keep things simple and maybe follow few investing and money rules of thumb and you’ll be fine in the long run.

What were your investment mistakes during this bear market? What have you learned from them? You know anyone who made these mistakes?

Rachel writes in with the following question about investing in gold:

I enjoy reading your blog about wise spending. I have a question and I’m not sure who to go to. My husband is interested in investing in gold. What are your thoughts on investing in this direction? Do you have other sources that you lean on for investing advice?

Photo by Muffet

Rachel, your question comes at a good time. I spend a lot of my day listening to a variety of talk radio programs at work on subjects that range from sports to politics to personal finance. All three tend to run a lot of advertisements for investing in gold. While intrigued, I confess to not knowing much about investing in commodities, so to answer your question I decided to dig into some research while asking the Frugal Dad community for help with your question.

Why Invest in Gold?

A recent check of gold prices shows it is hovering around $1,000 an ounce. It seems like every week or so gold prices set another record. But in the world of economics, it is usually true that what goes up, must come down. That’s not always the case, but I wonder if gold prices will work the same way.

As the market moves ever-so-slowly towards recovery, will gold prices remain high? Who knows? Conventional investing wisdom says gold is a safe bet when times are tough (inflation, weakening dollar, etc.). We’ve certainly had tough times, but to this point it seems inflation has been kept in check. I’m not completely sold on the idea our government will be able to control devaluation of the dollar as more and more money is pumped into the system.

So the real question is, “Is now the right time to invest in gold, or would investors be getting in at the top only to see their investments disappear in a recovery?” I think the answer to this question is the same answer I give to others interested in any form of investing:  Invest for the long term, don’t try to time the market, and diversify.

If you’d like to pick up a few gold coins, or bullion, as a percentage of a broader long-term investment portfolio, that seems reasonable. If you dump your entire nest egg in gold, betting on the continuation of tough times, well, that just sounds too risky for my liking.

Ask the Readers: OK readers, I know there are plenty of you out there smarter than me on the subject of investing in gold. What more can you tell Rachel about gold investments? Is it better to invest in physical gold, mutual funds, etc? What are your thoughts on the timing of making new purchases of gold? Feel free to make any specific brokerage recommendations you may be familiar with as well.

Is there something that really makes you angry?  I mean, something or someone who completely steams your tea?

If so, consider yourself lucky.  You have an amazing opportunity.

I know this might sound crazy but (at least, in my case) an old resentment turned into a huge opportunity and one I never saw coming.

Before I go into the details, I have to give you some background.

When I was in college, I played snare drum in the school marching band.  Even though the drum weighed heavy on my shoulder and the drills took hours and hours of practice in the scorching sun, there were perks.

After all, who says “no” to dressing up like a complete moron and marching around in front of 30,000 people on Friday night?  Those other poor fellows who were busy guzzling beer at the fraternity house didn’t know what they were missing…..poor saps.

As thrilling as the marching band was, I started getting ticked off soon after football season began.  I was angry that the team got all the glory.  What did the lowly drummer boy get?  Nada.

As each game passed, I become more and more irritated.

The players got first-class treatment all the time.  They traveled to exotic places like Hawaii.  I went to Barstow.

They got their own special meals.  I ate Frosted Flakes.

They got special parking spots for their cool rides.  I bought a 10-speed.

And do I need to mention who met all the women?  Here’s a hint…..it wasn’t me.

I suffered through the football season and basketball season.  Then, I hung up my marching band uniform for good.

But while I turned in my sticks, I held on to my resentments.

As a matter of fact, I didn’t attend another college football game for 30 years.

That all changed last weekend and this is where I discovered a great opening.

For a variety of reasons, I found myself sitting in the old stadium watching my alma mater kick the tar out of New Mexico State.  I enjoyed it.

Oh….I’m not talking about the game.  I could have cared less about that. What I really loved seeing was the marching band again. There they were. The uniform design was exactly the same as it had been 30 years ago.

But I noticed something very strange.

Those uniforms looked beautiful to me.

These kids didn’t look dumb in their uniforms at all.  They were cool.  And they were having a great time – probably more fun than the players.  The band was rocking out, jumping around, laughing.

This was far different from what the players were going through.  Even though my team was winning, I could hear the crack of one helmet on another just like the sound my teeth used to make on those oh-so crunchy Frosted Flakes of yesterday.  Yikers.  That had to hurt.

Exactly at that moment, my resentments disappeared.   I realized how fortunate I was to have been in the marching band.

I remembered that I did have good times a plenty while I was marching around out there in the hot sun.  I made good friends and I got to play music.  Another bonus was that there weren’t any 300 pound gorillas chasing after me trying to turn me into a pancake.  And from a practical standpoint, I was able to graduate college in 4 years because of my participation in the band.

Besides all that, nobody forced me to play.  I could have quit anytime I wanted to.

Yes, I had a lot to be grateful for.  I never had any reason to resent anything about it.

Why didn’t I see this while I was in school?

What an opportunity I missed.  Rather than enjoy more of my time in the band, I resented the players for having the perks they got.  What a shame. What a waste.

I was a bit ashamed of myself.

What did my resentment cost me?

I wasted precious time in anger.  It cost me a lot of life.

As hard as I try, I can’t think of any way this rotten behavior cost me financially.  Yet it’s still relevant to you as a personal finance enthusiast.

Why?

Because, if you are like me…you aren’t after more money for money’s sake.  My guess is that you want to improve your financial life because you want to have…well….more life.

My guess is that you want more freedom and happiness.  That’s why money is interesting and important to you.

Well….what I’m talking about is a way for you to have that and it won’t cost you a penny. You don’t have to buy any books or tapes.  You won’t have to go to any weekend seminars either.  So what do you have to do?

It’s simple.  You have to get rid of your resentments.

While this may seem like a tall order, I think there are a few tools you can use to make this a simple task:

1. Write down all the things you resent.  What really ticks you off?
Your boss?
Your husband?  Kids?  In-Laws?
The Government?
That you don’t live in Malibu?
That the Beatles broke up 40 years ago?  What is it that boils your oil?  Write it down.

Now, as terrible as these things are, consider for a moment if there weren’t any silver linings in those dark clouds. Have any of the things you resent so much really been a blessing in disguise?  For example, let’s say you lost a great job several years ago because your boss, Eric Slick, was dishonest and blamed his mistakes on you.

Did anything good come out of it?  Did you find a better job?  Did you meet some great people?  Do you have a better working situation now?  Surely something good came out of it.  If you can’t come up with something, pretend you are interviewing a friend who went through what you did.  What silver lining would you point out to you friend?

2. Write it all down. It won’t do you much good if you only have this conversation in your head.  I’ve found that writing has some magical connection that allows me to really get value from these kinds of exercises.

3.  Write a thank you letter to the person, place or thing expressing gratitude for the new gifts you reaped. Don’t worry, you’re not going to mail this letter – ever.  It’s just a way for you to really bring the message home – to yourself.

This exercise helped me so much.  Living with anger is such a damn waste.  It’s a terrible way to live.  Have you held on to resentments too long?  Did it have a financial cost? What other ways did it cost you?  How did you finally overcome those old resentments?  How did it change your life?

I have finally taken the Facebook plunge! I created a personal account some time ago to reconnect with friends, but just this week I set up a fan page for FrugalDad.com. My goal for the fan page is to provide a place for readers to interact with me outside of the comments section, Twitter, etc. I enjoy chatting in those environments as well, but let’s face it – having a discussion is tough to do in 140 characters, or through the back-and-forth nature of blog comments.

Yesterday I tossed out a “Discussion” feature and a few questions to get things going. Since I removed the forums feature here at Frugal Dad, I’m hoping this can replace some of those features. Because many of the discussion topics are seeds for future posts, your feedback is greatly appreciated. Who knows, I might just mention one of your comments in the post and reference your blog.

Hope you’ll join me over at the new Frugal Dad fan page at Facebook! Click the banner below to join, and be sure to check out the roundup below.

The Frugal Roundup

Want to Get Out of Debt? Become A Master at Instant Gratification. Sounds counter-intuitive, doesn’t it?  Read on to find out what Neal means about mastering instant gratification and using it to your advantage. (@Wealth Pilgrim)

Do You Need a Local Bank? We are fans of ING Direct, but also maintain a local checking and savings account. We keep a local emergency fund (the first couple thousand of our fully funded emergency fund) here just in case we need cash in a hurry. (@My Dollar Plan)

Finally Out of Debt? Here’s How to Stay Out. So many people fight for years to obtain debt freedom, only to fall right back in the trap of living beyond their means. (@Wisdom Journal)

Google Street View – Great For House Buyers. We have been entertaining the idea of relocating here lately and have found Google Street View to scope out a number of properties in other cities. (@Four Pillars)

Sneaky Ways Restaurants Use Menus to Entice You to Spend More. I’ve read a number of articles on the ways grocery stores use consumer psychology to make shoppers spend more. This is an interesting piece on similar strategies employed by restaurants. (@Wallet Pop)

Why Freelancing Benefits Your Day Job. Those who have read FD for a while now know I’m a big proponent of the “side hustle,” for exactly the reasons pointed out in this post. (@Fiscal Fizzle)

The “Local Store Premium” – How Much Is It Worth to You? This weekend I worked on a couple major household repair projects. Rather than going to the big box warehouse store, I decided to try our local hardware store for supplies. I paid a little more, and they had less product options, but I felt good about helping a local store this time around. (@The Simple Dollar)

Best of the Rest

• Become a Fan of Generation X Finance on Facebook
• Organizing Your Way to a Simple Christmas: Gift Lists
• What Kind of Spender Are You?
• How to Get Rid of $106,000 in Debt
  
• Price-Placebo Effect: Are You a Victim, Too?
• Trusting Your Intuition
  
• 3 Quick Tips to Make Your Life Better Today
• 7 Ways to Build & Maintain a Personal Network that Works for You
  
• Learn More About Lending Club Credit Rating and Collection Process
• How Alternative Minimum Tax (AMT) Works
• Loan Modification Companies vs The Fair Housing Authority

Hope everyone has a great end of the week. Just a heads up – only 10 weeks until Christmas. Don’t wait for the last minute and charge presents on a credit card. Start saving now and enjoy a cash-only Christmas!

I have always been a conscientious shopper. I never leave the house without my coupon folder, always use my club card and always comparison shop before I purchase. That’s why I’m a huge fan of shopping online. Bargain hunting and price comparison is quick and easy. So naturally I planned to purchase our Halloween costumes online this year.

This year, we have a costume party to attend and I thought it would be fun to dress in theme costumes like superhero or Disney characters. We weighed the options and finally settled on The Incredibles because they worked so well as a family costume.

I love the ease and convenience of online shopping and I know I had many online Halloween costume stores to peruse.  My goal was to find the costumes at the lowest price. I Googled “cheap costumes” and saw an ad for www.costumediscounters.com that offered “Guaranteed Lowest Prices Plus Free Shipping.” That had my name all over it.  I place my order and a week later I had my 3 costumes: Mr. Incredible, Mrs. Incredible Child Costume and….Another child costume? Where was my adult Mrs. Incredible costume? Apparently they made a mistake and sent two girl’s costumes instead of one girl’s costume and one women’s costume.

The only thing that makes shopping online a nuisance and expense is if you have to return something. But, when I called the customer service number for Costume Discounters, the exchange turned out to be easy, pleasant and best of all – FREE. I explained the problem. They were very apologetic and quick to act. They processed an order for the correct costume and I was directed to an online exchange site that allowed me to print a return UPS shipping label right from my own printer. The customer service rep walked me through the whole thing which only took a few minutes. I brought the package to my office the next day and dropped it in the UPS drop box in the parking lot and that was that. I didn’t cost anything extra, took almost no time and I had my costume in the correct size a few days later.

Nothing beats shopping online for bargains except maybe buying from a company that has low prices, great service and free exchanges. It couldn’t get any easier or inexpensive as it did with Costume Discounters.com

Note from Frugal Dad: For fun, feel free to share what you (or the kids) will be dressed up as this Halloween. Are you planning a homemade Halloween costume, or will you give an online discounter a try? Or, if you don’t recognize Halloween, what are your plans? We’ll be attending our kids’ school Fall Festival.