Monthly Archives: August 2011

Finding Your Financial Motivation

Posted on by  at  9:09 am
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Before I began my financial turnaround, I knew only the basics about personal finance. In fact, to be honest, I probably didn’t even have a basic grasp on most things money. After all, I’d spent most of my 20s frittering away any earnings on junk, and had accumulated credit card debt acquiring even more stuff.

I figured since I didn’t have any money, there wasn’t much point in trying to learn advanced financial concepts. Fortunately, my attitude changed.

I’m not sure if it was the law of attraction, dumb luck, or divine intervention, but it seemed like once I started learning about money, I had more to practice with. Of course, I was working harder, too, recognizing that in the short term the only way to get more money was to work for it.

I started blogging about personal finances, with the realization that the best way to learn something is to try to teach it (or in this case, write about it).

I began reading books on the subject of money. I subscribed to our local newspaper and read the business section (something I usually passed over for the sports section). I began listening to some money shows on the radio – first a guy named Bruce Williams, then Clark Howard, then Dave Ramsey.

As the pieces began to come together it was obvious that winning at personal finance was a fairly simple equation – spend less than you earn, and save the rest. But it was putting this into practice that I found so challenging. It helped to surround myself with like-minded people – fellow bloggers, authors, talk show hosts, etc.

Four Ways to Find Financial Motivation

Find a mentor. My frugal mentor was my grandfather. He was a great teacher because he taught by example, not from some formal financial plan. He kept things simple, avoided going into debt, drove two vehicles for nearly 20 years each, lived in the same house for 33 years, and refused to try to keep up with the Joneses.

Join an online community. After finding Dave Ramsey on the radio, I learned of a community called My Total Money Makeover where I could download podcasts of the show, participate in forums with other listeners, and use some of their tools to track my debt snowball, budget, etc. It was money well spent, and I’ve been a member there for going on six years now. By the way, they’re currently offering a special discount to Frugal Dad readers if you sign up using the link above.

Read personal finance magazines. I used to think these were such a bore. However, I have acquired a taste for reading things like Kiplingers (my personal favorite), Money, and Smart Money.

Check out a few motivating personal finance books. My two favorites are Your Money or Your Life and The Total Money Makeover. Both are motivating, and both include step-by-step plans to help map your way out of debt and into wealth.

Where do you find motivation for personal finance? Bonus points if your answer includes FrugalDad.com!

Soup and Clocks: A Meditation on Frugality

Posted on by  at  11:26 am
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Today, as I was making a pot of chicken soup, I suddenly remembered a conversation I had over 15 years ago about a grandfather clock. At first blush, soup and clocks might not seem to have much in common, but to me, they help frame and define what it means to be frugal.

First of all, making homemade chicken soup is a tremendously rewarding exercise in frugality. After basing two dinners around the whole roasted chicken, amply rounded out with vegetable side dishes, the remainder is ready for the soup pot. I throw everything– bones, skin and all–into the pot.

Soon, the warm aroma of frugality fills the kitchen, and I am ready to start tossing in everything else I have lingering in the pantry and refrigerator. I start with a lonely potato, an onion and a less-than-perfect carrot. Then I throw in some dried barley, leftover tomato paste and some rosemary from the garden. After that, a few more herbs go in, as well as a handful of diced string beans that need to be used up.

As I was extracting the boiled-clean bones from the pot, the apparent non-sequitur of the grandfather clock popped into my mind. I wasn’t actively thinking about frugality at the time, but a few synapses deep in my thrift lobe must have made a connection. In a twinkling, the long-forgotten clock memory floated to surface.

Picking Sides

Years ago, I was working as a consultant for a large corporation with offices up and down the East Coast. I was doing some training in the Philadelphia office and was chatting with a clerical-level employee during a break. The woman was lamenting the fact that her mother wanted to buy a grandfather clock.

The woman had a low-level job, but had excellent benefits and job security. She was from an inner-city environment where she probably enjoyed more stability and financial well-being than many of her neighbors. In other words, she was dong fine but probably still saw poverty as a threat.

Her otherwise-thrifty mother was fixated on purchasing a grandfather clock. The whole idea exasperated her daughter, who saw the idea as a useless extravagance. Even though I am frugal by nature and shy away from showy purchases, my immediate gut-reaction was to side with the mother.

I could envision the mother as a child, growing up poor in a big city where opportunities were scarce. Did she visit a more successful relative with grandfather clock? Did she pass one in a shop window as a little girl? Did she see one in a movie? Whatever the origin of the desire, in her mind, the clock represented something much more significant that a simple timepiece.

As we go through our lives, pinching pennies by driving old cars, passing up the latest electronic gizmo, or making soup from a three-day-old chicken, we should remember the lesson of the grandfather clock.

Extravagant vs. Frugal vs. Spartan

We all carry within us some desires that are important in an elemental way, important to our idea of self. For the clerk’s mother, some significant ideal was represented by her desire for a grandfather clock. For you, the desire might be a trip to Paris, a piano, a huge fish tank or a beautiful piece of artwork for your home.

If you decide to spend money on a meaningful item that touches your soul and makes you happy in an enduring way, then it is not extravagance. Extravagance should be avoided, while keeping in mind the distinction between being frugal and being Spartan.

To be Spartan is to deprive yourself of things that nourish your sense of well-being.
To be extravagant is to see every new gadget as essential to your existence.
To be frugal is to know the difference and to act only when the item demonstrates its value, regardless of whether that value is emotional or practical.

As I stirred the soup, I weighed these concepts with a little smile. I don’t know if the clerk’s mother ever bought the grandfather clock. But I like to think that she did.

This article was written by contributing author Laurel Gray.

Up to 80% Off Your Next Meal Out?

Posted on by  at  2:35 pm
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A lot of us have signed up for daily emails from Groupon or LivingSocial where the discounts/deals sometimes make us waver back and for between ‘should I’ or ‘should I not’. Restaurant.com is currently offering a deal on 80% off  of restaurant specific gift certificates.

It’s worth focusing on what this means in terms of ‘is this a frugal choice?” All indicators point to this being a good offer to buy because it allows for a somewhat expensive meal, if you’re taking you’re family, or the ability to spend a little extra if you’re having a date night. And spending a little extra would not come close to what you would spend without the deal.

Here’s an example:

You decide to buy a gift certificate to Restaurant A for a “$100 for $35″. That is, you’re spending $35 to get $100 towards that restaurant.  In order to use $100,  however, you have to plan on spending a minimum of $35 for your purchase. (also, this does not include tip or couple with any other promotion). So, you can’t use this gift certificate on different occasions, it must be used all at once. There is also a $2-5 service fee as well. In all, you’re spending, at most, $55 (a very generous tip) on a $100 meal that could make a special frugal anniversary dinner or a rare night out with the entire family.

It seems daunting, but it really is a good deal. Each place is different and Restaurant.com does a great job of putting the fine print directly under the deals, which is a good move on their behalf.

You might be wondering, too, “But is this really frugal?” Of course, I’d say, because you are getting way more for what you paid and there are a lot of options to choose from. Frugal choices come in different forms and in the wave of the coupon craze, there’s always going to be a deal worth thinking about.

Explore away and see if there are any places you’ve wanted to eat that has an awesome deal just for you.

Save 80% on most Restaurant Gift Certificates. Use code TASTY at checkout now thru 8/31/11.

How Spending $8 on Netflix a Month Can Make You and Your Kids Happy

Posted on by  at  11:06 am
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Here’s a different/thoughtful take on how Netflix can be a cheaper source of entertainment for your family written by a fellow frugal dad trying to condense his family’s budget:

If you’re like me, downtime can look 3 ways: with the kids, with the wife or by myself. I appreciate them all equally, too. There’s been a bit of a buzz surrounding Netflix’s recent price change and I’m maybe going out on a limb here to say it’s a pretty good deal if you’re willing to stick with the stream only option, considering all the complaining about the prices. Here’s why this is a good and frugal choice:

For nearly double the price, you can have the availability of DVDs, but you should ask yourself, “Do I/we need this?” The beautiful thing about Netflix is that they always try hard to bring old and new content to their streaming section, making it good for all of the above downtimes.

Chances are, too, you may have a video game console of some type: Wii, Xbox or PS3. All of these allow you to stream Netflix to your TV (Xbox is the only console that makes you pay for their online services, Xbox Live). Added to that, perhaps, even the best of all, is you can add the free Netflix App to your Android or iPhones (or iTouch). If you have a laptop or computer, multiple items can be streamed at a time, another bonus for times when no choice can be made on what to watch and the quietness is sometimes welcoming.

Good so far? I think so.

This service pays for itself quickly each month. It’s often difficult to justify a trip to the movies more than once every 3 months with the entire family, with the average price of a movie outing at nearly $50 for a family of 4 just to get seats. And that’s not even the IMAX option, mind you. Or 3D, for that matter.

If you’re still uncertain, there’s a great website, streamingsoon.com, that updates all the new (and best!) streaming movies. This is good for making it easy to update your queue with research that’s already been done for you.

Netflix is making a case for itself by way of offering a lot newer movies and cartoons and some classics you can share with your kids. Sure, they’ll roll their eyes at Duck Tails and Tom & Jerry, but for $8/month it’s surely worth the risk (with the possibility of the reward that they’ll like it).

Last thing to point out is that while Netflix discounts/specials are seldom, there is always a chance to get free months here and there when you have other families and friends sign up for a free trial using you as a reference, so your $96/year could look more like $72/year. Not a bad deal, I’d say.

Feel free to use the following links below to try Netflix for free:

Try Netflix for FREE! Get unlimited movies instantly streaming right to your TV.

Instantly watch from thousands of TV episodes & movies streaming from Netflix. Try Netflix for FREE!

 

How to Reduce Your Teenager’s Monthly Car Budget

Posted on by  at  11:45 am

I’m lucky; I have a few years to think (worry) about my kids driving. However, I know soon enough the time will come when they will want their own car, want to start driving themselves to school, and head out on the road alone.

Besides being a source of great dread for parents, having a teenage driver can also have a serious impact on parents’ budgets. Of course there is the obvious expense of buying that first car (hopefully a nice used one), but there are other significant expenses such as gas, maintenance, and most of all, insurance.

Car insurance for teenagers is often a deal breaker in many families. I remember when I started driving, my mom’s premiums went up significantly when she added me to her policy. Not because I was a fast-driving, irresponsible 16 year-old, but because I was a 16 year-old boy, and statistically, I was more likely to have a major accident.

We offset some of the costs because my first car was not necessarily a sexy choice – it was a 1985 Buick Century with silver faded paint. But, it had been my grandmother’s car and driven very little. It also had a big engine, and drove like a muscle car.

Fortunately, there are a few ways to save on car insurance for teenagers.

1. Buy a safe, reliable car not for looks, but for function. So many teens expect to see a brand new red sports car sitting in their driveway the morning they turn they 16. For most families, that is simply not realistic. What teens should hope for is a safe, reliable way to get from point A to point B. Besides, those shiny red sports cars often cost the most to insure.

2. Consider raising deductibles to offset an increase in premiums. There’s a big IF attached to this advice. Only increase deductibles IF you have an adequate emergency fund saved to easily cover the out-of-pocket expense of major repairs. If you are still paying off debt, or have yet to save a fully-funded emergency fund, it’s probably better to keep the deductible low and continue working towards your financial goals.

3. Sign up for a safe-driving course. Many insurers offer discounts to those who’ve successfully completed a safe-driving, or defensive-driving, course.

4. Keep your grades up. Many insurers also offer discounts for students who achieve and maintain a high grade point average.

5. Consider insuring your home, automobiles, and any other valuables with the same insurer. Insurance companies can often cover your home, your autos, and any other type of insurance required. Consumers can usually leverage some type of “multi-line” discount for having more than one type of insurance with the same company.

6. Add teens to your roadside assistance program. You will sleep better when kids head off to college, or off on a long road trip for their senior get away, if you know they have a quality roadside insurance plan. I’m partial to Allstate’s plan because you don’t have to have Allstate insurance to sign up, and you only pay for it when you use it. You can also register up to 5 drivers on your account (perfect for families with teen drivers).

You can sign up directly using the widget below if interested:

$50 Amazon Gift Card Giveaway

Now for the fun stuff. Allstate/Good Hands Roadside has donated one $50 Amazon gift card for me to give away to one lucky reader.

To enter, tell me what your first car was and feel free to share any memories of that first car. Leave the answer below in the comments section as your first, mandatory entry.

Bonus entries for extra chances to win:

2 entries

  • Register for the program and comment that you registered (you may register directly using the widget above)
  • Download the mobile app and comment that you downloaded it

1 entry

  • Tweet about the giveaway and comment that you tweeted the following message, “Just entered the Allstate #ghrgiftcardgiveaway via @FrugalDad. Could win a $50 Amazon Gift Card. Your turn!”
  • Share post to Facebook (through widget or copy and paste link) and comment that you shared it

Good luck!

No purchase necessary to enter or win. Odds of winning are not increased by a purchase.

Giveaway ends Monday, August 29, 2011 at 8:00 pm EST, and is open to US only. All entries must be properly recorded in the comments to count (i.e. Link to tweets, Facebook page, etc). Winner will be selected on August 31st, 2011. Winner will be notified via email and has 24 hours to respond. If winner does not respond, a new winner will be chosen and notified.

Disclosure: Allstate is providing the prizes for this program at no cost to me.  This program is not administered or sponsored by Allstate or its affiliates, but solely by me.