Photo courtesy of Michael Casey

After news began trickling out of Washington that we may be due another stimulus check, Pete from Bible Money Matters put together a great post asking why not just create your own stimulus check?  With news of the government (taxpayer) supported bailout plan dominating the news recently, I thought I would use Pete’s same logic by providing a few ways to create a personal bailout plan of our own.  After all, many of the problems on Wall Street could have been avoided if bankers and government regulators had applied the same common sense approach to money management that many of us out here in the real world apply every day.

• Don’t spend more than you earn.  Unlike the government, regular citizens cannot print more money or borrow it from foreign countries to sustain spending beyond what we are bringing in.  No, here on “Main Street” that behavior leads to debt, and not the kind that can be bailed out by taxpayers.  Create a household budget and stick to it.  If you don’t have the cash for something then you simply cannot afford it.

• Live frugal.  If more people lived well within their means there would be no need for this proposed bailout.  Just because opportunities abound to overspend, and there are people ready, willing and able to help you do it, doesn’t mean you have to take advantage of those opportunities.  Apply this logic to the housing market.  Just a couple decades ago people were perfectly content to live in homes with modest square footage, three bedrooms, and a small garage for knick-knacks and tools.  Now days everyone needs a bonus room, home office, double garage on a one acre lot.  To finance this “American Dream” many people leveraged their financial future borrowing over half of their income to support a house payment they really couldn’t afford.

• If you have debt, pay it off and fast.  There are various ways to pay off debt, but at the heart of all the plans is the basic idea that if you live on less than you earn you will create excess money that can be applied to your current debts.  That’s really all there is to it.  Some people line up their debts by interest rates, making larger payments on the higher interest debts first.  Others prefer the debt snowball method of paying balances off smallest to largest.  I don’t really care how you do it, just do it!  And don’t let people convince you that debt is good, or that if it is low-interest you are better off investing the money.  If you aspire to be debt free, tune out the naysayers and make it happen.

• Create an emergency fund.  With debts paid off, and living a frugal lifestyle, savings should be your next priority. Build a healthy emergency fund of 6-12 months of expenses–the more the better.  Many financial planners suggest 3-6 months of expenses saved, but I personally would sleep a lot better knowing my family could survive comfortably for a year in the event of a major emergency such as a layoff or illness.

• Don’t suffer a spending relapse. Often times when people reach this stage of their financial recovery they backslide into bad habits of excessive spending.  Think of times past when the government got control of spending, balanced a budget and shrunk the national debt, only to see spending increase as national events changed the political landscape.  The government does not get the idea of an emergency fund, because in their mind a surplus is simply money unclaimed by a new spending plan.  Do not repeat their mistake–keep money in your personal surplus set aside for emergencies and keep your spending in check so you don’t have to dip into these savings to finance bad habits.

In some cases the best form of education we can receive is to be provided examples of how not to do things.  The poor money management lessons from our Congress are a great example of this type of negative behavior modeling.  Whatever you do, don’t follow their lead with your own finances.

You can tell it is an election year because there is talk of the government passing out another taxpayer-funded economic stimulus check.  I mentioned a few weeks ago the possibility of receiving a second stimulus check, and it appears from recent rumblings in Washington that the prediction may come true.  We used our payment to stimulate credit card companies, and add to our savings account, while others are now the proud owners of plasma televisions and iPhones.

Teaching a Man to Fish

A great article over at Moolanomy pointed out the similarities in giving additional stimulus checks and a famous Chinese proverb:

“Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.”

I agree with Pinyo’s sentiments, and would add that by distributing two stimulus checks in the same year we are setting a bad precedent for rough economic times in the future.  Imagine five years from now, after years of economic expansion, we hit another snag.  Maybe this time it is the demise of the student loan industry, or maybe credit card debt finally reaches such epic proportion that borrowers en masse begin to struggle to meet minimum payments.  Citizens will once again be clamoring for another stimulus check, citing 2008 as the year the “government” sent out two stimulus checks to “help the economy.”

Save One, Spend One

Full statistics are not yet available, but I would suspect a large percentage of households put the first economic stimulus check in savings accounts.  Many others probably used the check for debt repayment.  I personally find nothing unpatriotic about either one of these plans.  However, it was the hope of most politicians that recipients would take the checks and spend, spend, spend.  What they failed to count on was a majority of the citizenry is up to their eyeballs in debt, and without a dime in savings.

There were a few other factors that contributed to foiling politicians’ plans for increased consumer spending.  Rising gas and food prices ate up a large chunk of stimulus payments, reducing what people were willing to spend towards a television or new clothes.  The real estate debacle also spooked many homeowners, who decided to toss the check in their emergency fund as a hedge against future problems meeting their mortgage payments.

Perhaps a second stimulus payment would spur economic spending, but I’d rather “the invisible hand” allow this to happen naturally, and without the artificial inflation of disposable income from yet another economic stimulus check.

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It is becoming more and more difficult for me to watch any form of television news.  The other day I was in a doctor’s office and one of the 24-hour cable news channels was blaring from the waiting room television.  They cited an article from the Minneapolis Star Tribune that asked the rhetorical question, “Why are we so miserable?“  The commentators when on to cite gas prices, a down economy, the war in Iraq, inflationary fears, declining home values, and the rising costs of health care and food all as sources of our collective misery.  I surveyed the waiting room and several people were silently nodding their heads in agreement.

Over the next hour or so every single news segment presented had a negative slant.  They documented families passing up on vacation because of high gas prices.  They found a couple out and about who were all too happy to tell us about their mounting credit card debt, and falling home value.  I’m not naive to think that people are not really impacted by all these economic factors, but I can’t help but wonder if we shouldn’t be more responsible for our own happiness.  When did we turn the job of making ourselves happy over to politicians and media pundits?

The Pursuit of Happiness

Our founding fathers had it right when they documented our inalienable rights to “life, liberty and the pursuit of happiness” in the Declaration of Independence.  They did not guarantee our happiness, but guaranteed our freedom to go after the things that made us happy.  The execution of that plan would be up to us, but we now look to others to create happiness for us.

I am happy.  My family is happy.   There is little anyone in Washington, or in the media, could do or say to change that.  From a broader perspective, we are fortunate to live in an era of unprecedented personal wealth with high salaries, a healthy job market and access to one of the finest health care systems in the world.  That’s not to say our systems are without flaws, but when compared to other parts of the world, or other periods of history, we have it pretty well off.  I am free to move my family from one corner of the country to the other if we so desired.  I make a choice every morning about where I get up and go to work.  And if I find myself hating that job I am free to go look for another job that I love.  If I can’t find one I am free to work from home, be a full time parent, or start my own business.  I was provided public education through the 12th grade, and given all the opportunities that went along with it to learn and participate in extra-curricular clubs and sports.  I freely chose where to attend to college, who I married, where to buy a home, what type of car to drive, and what programming I watch on television (a shrinking list, these days).

I guess what I’m trying to say is that we as Americans take many of these freedoms and opportunities for granted.  As a society we’ve survived civil war, two world wars, a great depression, recessions, real estate bubbles, gas shortages, and terrorist attacks on our country and our interests worldwide.  We will survive these rough times as well.  We will persevere.  It may take a little longer to bounce back than the most impatient of us would like, but it will happen, eventually.

Are You Better Off than You Were Eight Years Ago?

The media likes to ask this question in the frame of a dig against the lame duck occupant in the oval office.  No one is spared, regardless of their political party affiliation.  But it is a ridiculous question when you think about it.  Are you better off now than you were eight years ago?  Yes, I am.  In eight years I’ve been blessed with two wonderful children, made a career change to a more enjoyable line of work, relocated to a new city, earned raises from my employer, returned to school to finish my undergraduate education, and enjoyed the development of new technologies. Those sources of my happiness had very little, if anything, to do with what is happening in Washington, D.C.

And if I had answered no, I am not better off today than I was eight years ago, who would I have to blame? I guess I could start with myself.  If I had not pursued the completion of my education I may not have been able to change jobs, move to a new city, and enjoy salary increases along the way.  If I had not married my soul mate I would not have been blessed with two wonderful kids.  These moves did not come without sacrifice.  We racked up some debt to cover the additional costs of my attending school.  I spent many nights away from my family sitting in a classroom (until I discovered the joys of online education).  I stuck it out at a job I didn’t like because I needed the benefits and earnings to pursue my education because I knew it was the path to something better.  I spent many weekends locked away in a study room at a local library preparing for tests, writing papers, and reading monotonous text books.  I could have simply given up.  I could have skipped all forms of reading and learning, and been content coming home from my dead-end job and parking myself in front of the television for six hours watching mindless television programs.  But I was too busy pursuing happiness, and thankfully I found it.

Over the last several weeks I’ve shared our plans to spend the economic stimulus check. Initially, we planned to divide the $1,800 three ways, saving some, spending some, and using the remaining amount to pay down debt. Then we leaned towards just putting it all in our emergency fund. In the end, we decided to scrap both plans. When I opened the mailbox last week and finally saw that check had arrived I made an impulsive decision, but not the kind I would have made ten years ago.

Debt Repayment is a Natural High

People who are clinically addicted to shopping often report a “natural high” experienced when they purchase something. The feeling is usually followed by post-purchase guilt over the expenditure, and is only remedied after buying something else. Well, I’m now addicted to the euphoric feelings produced by paying off debt. I took that $1,800 rebate check, drove right past Best Buy and Target, and immediately deposited it in the bank. The next morning I confirmed it had posted to our account and scheduled an online payment to my credit card in the amount of $1,800. And so after weeks of waiting for the check to arrive it was gone in a matter of hours.

Do I Regret the Decision to Pay Down Debt?

Not one bit. If I had used the stimulus check to buy a new sofa (something we do need), a 42″ plasma television (something we don’t need, but sure would be nice for football season!), or some other material purchase I would probably be writing a different article about buyer’s remorse and the dangers of impulse spending. However, I resisted the urge to spend the tax rebate check on such items, and was excited to see that credit card balance drop by $1,800 overnight.

It All Boils Down to Contentment

We are fairly content with our current possessions, and I would have to think long and hard to come up with something that I really want, or need, that I don’t already have. Sure, my vehicle is seventeen years-old, and the leg on our sofa is broken, and my computer was purchased around the turn of the century, but all those things still serve me well. The truck still runs, I repaired the sofa leg myself, and I’ve made some small upgrades to the computer to extend its useful life. No sense in replacing these things just for the sake of getting something new. So when that stimulus check arrived it was a relatively easy decision to simply drop it on our remaining credit card debt.

photo by: Daquella manera

How do you plan to spend (or how did you spend) your economic stimulus check?

“The best time to plant a tree was twenty years ago. The second best time is now.” Chinese Proverb

I won’t pretend to be happy about paying higher prices at the gas pump. I know there are many families that are really struggling and many industries, such as shipping and travel, that are being particularly hard hit. Politicians are using the opportunity to invent new catch-phrases that insult our understanding of basic economics in the name of getting votes.

Taxing “Big Oil” is a Big Mistake

I’ll attempt to keep this post mostly apolitical, but I can’t make any promises. One of the two remaining contenders for president recently said, “I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills.” Oh really? That sounds an awful lot like socialism to me. After all, it was Karl Marx himself who said, “From each according to his ability, to each according to his need.”

Besides, taxing oil companies to reduce profits only hurts the very constituency politicians claim to be protecting. 98% of these companies are owned by shareholders. The large majority of those shareholders are mutual fund investors belonging to the middle class (or institutional investors managing retirement wealth for that same class). If we begin taxing an oil company’s “windfall profits,” causing a decline in shareholder value, aren’t we simply cutting our noses off to spite our faces?

So What is the Answer?

The answer is buried beneath us in places like ANWR, the Gulf of Mexico and the Midwest. The answer is domestic drilling. It is the fastest way to increase supply and reduce our demand for foreign oil. Many of the same politicians who today demand an answer to our energy crisis are the very ones who for years blocked attempts to increase domestic drilling. Environmental concerns are real, but efforts have been made to improve drilling technology to lessen the effects on the environment.

Is It Enough?

No matter what we do as a country, world-wide demand for oil continues to skyrocket. It is this world-wide demand that is driving up the international price of oil. Places like China and India are consuming far greater amounts of oil, per capita* (see comments for correction), than the United States. So even after considerably reducing our consumption of oil domestically, we still may not see any easing in pricing as other countries continue to increase consumption.

*I’m including a banner below that links to the website, AmericanSolutions.com, which is sponsoring a grass roots effort to collect 1 million signatures to present to Congress demanding something be done to “further exploration of proven energy reserves to reduce our dependence on foreign energy sources from unstable countries.” At the time of this writing some 843,000 citizens have already signed their name.

photo by giblee

When I was a teenager I worked a diverse set of part time and summer jobs. My first job was at a pizza place taking orders and making pies. From there I moved on to various retail jobs including a couple stores in the mall, a GNC, a golf driving range, etc. I was lucky; back then there was plenty of work for teenagers looking for summer jobs. Sometimes you had to search a little harder, but if all else failed the traditional McDonalds jobs were always there. However, thanks to a rough economy and higher minimum wages, good summer jobs for teens are harder to find.

Should My Teenager Get a Job?

I have mixed emotions. Part of me recognizes the work ethic that can be developed at an early age by the added responsibility of holding a part time job. There is also some financial reward, and the opportunity to earn scholarships. However, there is a downside to teenagers working. Part time jobs take valuable time away from studies, and limit extra-curricular activities kids can be involved in at school, such as sports or after-school clubs. I remember having to quit my pizza job one summer when football camp started up, and I felt conflicted over which activity to continue. Part time jobs also interfere with the social aspects of being a teenager. When friends are hanging out at the mall, or a friend’s house, you might get stuck working until 9:00 or 10:00 at night.

Find Hard Work Before College

By “hard” work, I mean physically hard work. The summer before I left for college, and the summer after my freshman year, I worked for a landscaping company installing sprinkler systems, mowing lawns, and building retaining walls. Pushing a Ditch Witch through a 3/4 acre backyard in 100-degree heat will make you long for pulling all-nighters back at school. There was a time when I wanted to do that type of work, but I decided I would try to use my brain instead of my brawn (although I still enjoy doing this type of work, and even mowed lawns last summer for some extra cash). Continuing my education meant I could do landscaping if I wanted to, not because I had to. It was a good lesson.

Make Savings a Priority

If your teenager does decide to get a part time job, be sure to reinforce the importance of savings. In fact, anyone with an earned income can contribute to a Roth IRA (up to the income limits established by the IRS). Imagine if a sixteen year-old socked away $1,000 in a good, growth stock mutual fund inside a Roth IRA. Even if they never added another penny to the account they would have about $106,000 tax free at age 65. Now that’s a great head start on retirement savings!

photo by Randy Son of Robert

Regardless of how economists refer to this economy, recession or no recession, people are hurting, financially. Unemployment, flat wages and rising costs for food and gas have many hurting. Check out these great money saving tips to help your family survive these tough times.

Here are a few money saving ideas our family is using to get through the recession:

1. Switch to cloth napkins. I’m not sure why it took a down economy for this one to dawn on me, but cloth napkins are a great alternative to paper napkins, which increase waste and add to our non-food budget.
2. Diversify your income. Look for ways to increase your income outside of your full time job. Do you have a hobby that you could make a small business? Could you spend some time working online surveys (many of these survey companies are scams, but the one I’ve linked is not. I’ve been a CashCrate member for over a year now)? Could you add some freelance work in the same line of work you do full time?
3. Just say no to social events, or agree to meet after dinner. Peer pressure can wreak havoc on your financial plans. It’s never fun to turn down a chance to go out with friends, but there are ways to say yes without spending a fortune.
4. Scale back the cable. We’ve been living the last six months with only basic cable, and don’t miss any of the expanded cable channel offerings. Cable bill went down from $40 to $12 with this move alone.
5. Don’t pay a dime for banking privileges. There are too many free checking options out there to pay one penny in fees for the right to write a check or use a debit card. Many banks and credit unions simply require direct deposit or a minimum number of debit card uses per month to qualify for fee-free accounts. If you can’t find one, try ING Direct.
6. Look for a value internet package. While I was scaling back on cable service I asked our cable provider for a cheaper rate on internet service. They told me about a little-advertised “value package” which costs half the normal monthly rate for reduced speed. Since I mostly surf the web and check email I barely notice, but I saved about $20 a month on our internet service.
7. Skip the theater, subscribe to Netflix. Going to the movie theater is a great way to beat the heat, but it’s also expensive. Skip the theater, and sign up for an online DVD rental service. No late fees, and no gas used up traveling back and forth to the rental store.
8. Hang up the land line telephone service. If most of your calls are to other cell users in the same network, consider canceling the land line and using a cell phone exclusively.
9. Have a no-spend weekend. Sometimes it takes a break in the routine to get spending under control. Try to go an entire weekend without eating out, shopping, or ordering something online. It won’t solve all your spending problems, but it’s a start.
10. Carpool a few times a week. Take turns carpooling with a coworker, especially if they live close to you. Pick them up and take them home this week, and next week allow them to return the favor. You’ll both cut your driving time in half.
11. Raise insurance deductibles. Assuming you have a proper emergency fund in place, raise deductibles on insurance policies. The difference in a $500 deductible and a $1,000 deductible on your car insurance policy can help reduce your monthly or semi-annual premiums.
12. Check your vehicle’s tire pressure each time you fill up. Things like under-inflated tires and dirty air filters can reduce your gas mileage. Pick up an inexpensive tire gauge and check the pressure while filling up.
13. Change your driving habits to save on gas expenses. Cut out “jackrabbit” starts and heavy braking.
14. Do not buy new cars – Buy a used car, and drive it until the wheels fall off. My grandfather has driven two vehicles in 34 years! Sam Walton drove a twenty year-old pickup truck right up until the time he died. Don’t tell me it can’t be done. Remember, a new car is “used” the minute you drive it off the showroom floor.
15. Consolidate errands into one trip. If you have to get out try to consolidate all of your errands into one trip away from home, instead of driving back and forth several times from store to home.
16. Ride a bike for short commutes. I’m fortunate to live about 5 miles from my employer, so I occasionally commute by bike. If you happen to live close to stores, consider riding a bike for small errands. Take along a backpack, or put some panniers on your bike to carry things back home.
17. Figure out how to do things on your own, rather than paying an expert. This year I’ve managed to rescue a toy from the bottom of our guest bathroom toilet and unclog and empty an air conditioner drain line. With the help of the internet, or a good “how-to” book such as Save $20k With a Nail, you would be surprised how much you can do on your own and avoid expensive repair charges.
18. Unload the trunk, and remove unused cargo racks. Added weight in the trunk reduces gas mileage, as does the added wind drag from an unused cargo rack.
19. Look into 3-month supplies of prescriptions via mail order. Many employers now offer as part of the health insurance plan a 3-month mail order prescription plan. I only have one daily prescription for asthma/allergies, and the cost of a 30-day supply from a local pharmacy is $25. For the same cost, I can get a 90-day supply via mail-order.
20. Wash your own car. Our town has one of those automated car washes and for $9.00 you can get “the works.” Essentially, it is a wash, wax and application of tire shine. I’m pretty sure I can do it for less. Better yet, employ the kids and let them earn a little extra money this summer.
21. Bank “found” money in a separate account. With any income above your normal earnings, bank the amount in a separate checking or savings account and use the money to pay down debt, build up savings, or offset increased expenses. Overtime, tax refunds (and stimulus checks), gifts and similar windfalls belong here.
22. Eat like a kid again. Eat off the same plates your kids eat off, which will force you to eat smaller portions. Your wallet and your waistline will thank you.
23. Drink tap water. I don’t have the inclination to run a cost comparison between an ounce of Coca Cola and an ounce of tap water, but I’m fairly confident tap water is infinitely cheaper.
24. Eat less meat. I’m about as far from vegetarian as you can get, but I recognize that my carnivorous habits cost me big at the grocery store. We’ve recently started having breakfast for dinner (eggs instead of meat), and substituting things like pinto beans (a great source of non-meat protein) in meals instead of meats.
25. Look for manager meat specials. When you do buy meat, check the manager’s specials area for meat that is about to pass the “sell by” date. The meat is still perfectly good, but freeze it immediately if you don’t plan on cooking within the next day or two.
26. Look for a used freezer to stock up on meat specials. Many times people relocating can’t take the extra chest freezer with them and advertise it on Craigslist or the local newspaper. If you can find a good used one stock it full of manager meat specials to reduce your food budget.
27. Don’t be afraid to buy generic. Forget brand loyalty when trying to save money. When we buy ketchup, we look for the lowest unit price, regardless of brand. Same with other foods and household supplies. There are a few exceptions, but for the most part generic items are just as good as name brands.
28. When in the store, look high and low for deals, literally. Marketers know that eye-level is the place most people tend to shop, so they put the items with the highest margins right in front of you. Better deals are usually found on lower shelves.
29. Cherry-pick coupon deals. Combine coupons with store sales to maximize savings. Our local Kroger store recently had mayonnaise 2/$4. We found a coupon for $0.50/1 that doubled to $1.00, so we picked up a mayo for $1.00. Don’t use a coupon to buy something you don’t need.
30. Supplement pet food with meat scraps. Quality dog food is expensive. To make ours last a little longer we occasionally skip the dog food and give our dog meat scraps. Avoid meats with sauces or spices as it can upset their stomach, and be sure to remove any bones. Plain beef, chicken and turkey make for a great treat for our dog.
31. Water down juices. When we open a new apple juice for our kids we pour up half in the old container and add about 1/4 – 1/2 container of water to each bottle. This makes each new bottle last a little longer, and dilutes the grams of sugar and calories per serving.
32. Shop at a farmers market for in-season produce. Few things taste as good as fresh fruits and vegetables. Unfortunately, most of the produce you’ll find in a grocery store is grown elsewhere, particularly if it is out of season, locally. Figure out what’s in season and support local growers by visiting a farmers market.
33. Avoid using the oven during the summer. Ovens heat up a house faster than any other appliance, adding to the strain on air conditioner systems. Plan meals that don’t require baking, or bake in the late evening and microwave the next night.
34. When eating out, divide entrees in half and save the rest for a second meal. Ask for a to-go box as soon as your meal arrives and save half for tomorrow’s lunch. Restaurants are notorious for piling on portions, so this move will help you spread out the calories and cost of the meal.
35. Avoid pre-packaged foods. The little 100-calorie packs are convenient, but you can accomplish the same thing by buying a larger package of chips or cookies and then dividing into smaller portions using Ziploc bags. The unit cost savings are significant.
36. Grow your own vegetables. Unless you plan to dig up the entire yard to plant rows of food, you probably aren’t going to be able to grow enough to live off. However, a square foot garden can produce enough for some great summer salads without adding to your grocery bill.
37. Say no to fast food. Unless you hit the dollar menu exclusively, fast food can add up. Consider the cost of a combo meal for four people versus sandwiches, chips and drinks from home.
38. Properly insulate your home. Especially important in the summer and winter months, when the extreme temperatures outside can affect your temperature inside and cause utility bills to skyrocket.
39. Use a drying rack or line dry heavy clothing. Pick up a drying rack or install a clothesline to dry heavy garments and towels. When nearly dry, place items in dryer with a dryer sheet for just a few minutes to complete the drying cycle, remove wrinkles, and soften clothes.
40. Plant a tree next to your outside air conditioning unit. By shading your outside unit you may improve the operating efficiency of the overall system by 20%. Take care not to plant to close to the unit to maintain proper airflow.
41. Replace home air conditioner filter every month when in use. Manufacturers suggest changing your filter every 90 days, but I’ve found systems work better when changed once a month, especially in peak times like summer. Instead of picking up a top-of-the-line air filter, go for a medium grade filter and just buy more of them.
42. Switch to CFL lighting inside, and solar lighting outside. CFL bulbs use much less energy than incandescent bulbs, and give off less heat. Solar lights used to line pathways around your home run off a rechargeable battery that is charged up during the day by the sun, and lasts for several hours after dark.
43. Half the number of days your lawn is being watered. An established lawn doesn’t really need to be watered every day. In fact, daily watering can cause a shallow root system because grass roots don’t have to work hard to find water. Water once or twice a week, for a slightly longer duration and let Mother Nature help fill in the schedule with the occasional rain.
44. Use bathroom exhaust fan during showers and for 10 minutes after. Exhaust fans help carry moisture out of the bathroom from a hot shower. Don’t believe it? Run the exhaust fan during your next shower and notice how the mirrors don’t fog up.
45. Take a “Navy” shower. Get in, soap up, rinse off and get out. And put a low-flow showerhead on there while your at it.
46. Reuse bath towels. Sounds gross at first, but think about it – you are clean when you get out of the shower. Hang up towels after each use to thoroughly dry, and only add them to the dirty clothes pile after every three or four uses.
47. Don’t run water when shaving or brushing teeth. While shaving pull up the sink stopper and pool a little water in the sink for rinsing your razor.
48. Skip baths. Even though they are relaxing, baths require a lot of H20 and drive up your water bill. They also drain your home’s supply of hot water, forcing your hot water heater to replenish the supply, further adding to your utility costs.
49. Bathe your own pets. Skip the pet grooming salon, pickup some shampoo at a pet supply store and wash them yourself.
50. Avoid stores. Stay out of stores unless you have a list (mental or otherwise) of specific things you need to buy. Shopping out of boredom leads to impulse buying and can quickly blow a budget.
51. Sunday paper only. Consider scaling back subscriptions such as newspapers to the bare minimum. If you are only going to get a paper once a week, opt for the Sunday paper, which usually includes coupons and weekly sales flyers from local grocery stores. Toss the other sales circulars – you may see something you want to buy!
52. Transfer existing debt using balance transfer offers. If you have debt, make becoming debt free a top priority. Moving existing balances to 0% interest plans helps more of your payment go towards repaying the balance, and less towards interest. Beware of high upfront fees and go-to rates when considering your options.
53. Don’t renew the gym membership. Being healthy can save you money, but exorbitant fees and inflexible contracts make gyms a dangerous proposition. Take the money you would have spent at the gym and try to build one at home with used equipment.
54. Make your own Play-Doh. Kids can find many hours of enjoyment from a homemade play-doh recipe, and it’s a cheaper than buying it from the store.
55. Try a home haircut. Mine is pretty easy since I buzz it short all over. Guys, you will still need someone to help you with the neckline, unless you are good with mirrors.
56. Rediscover a local library. To replace the time previously spent watching television develop a reading habit, and support your local library while you are at it. Can’t find the book you are looking for? Don’t rush out and buy it. Many times libraries are networked and can request a copy of a book from another library.
57. Start your own “keep the change” program. Several banks are now running “keep the change” promotions where they round up your purchases and put the difference in a savings account. Problem is, these accounts don’t pay a great interest rate, and the program encourages increased spending. Create your own program by spending only cash and dumping the change in a coin jar. Make deposits into your own high-yielding savings account at the end of the month.
58. Put away the credit cards. Save cash for large purchases by creating a dedicated savings account specifically for the next item on your list. Make regular contributions to the savings account with each paycheck, and when the balance is high enough to pay for the item, pay for it with cash.
59. Ask creditors to lower your interest rate. Creditors are feeling the crunch, too, and they recognize it takes more money to find a new customer than to retain a current one. If you are a profitable customer (pay interest), call creditors and ask for a lower rate. Tell them about all the 0% transfer offers you’ve been shredding for your garden!
60. Divide credit card minimum payments in half and pay that amount twice a month. Interest is calculated based on the average daily balance of your account for the entire month. By making a payment every couple weeks you are reducing that average balance and therefore reducing the finance charges assessed, as opposed to waiting until the end of the month to make a single payment.
61. Brown bag it. Can you believe how much a combo meal is at a fast food restaurant? And don’t get me started on dine-in restaurant tabs for lunch. You’re lucky to get out of there for less than $10-$12 including the tip. Multiply that times four or five times a week and we’re talking $200 added to your food budget each month.
62. Adjust your W-4 at work. The fastest way to give yourself a raise is to reduce the amount of taxes withheld from your paycheck. If you received a huge refund this year, increase the number of exemptions on your W-4 to reduce withholdings. Check the IRS website to calculate the number of exemptions required to break even.
63. Sign up for budget billing with utility company. This won’t necessarily save you money, but it certainly helps the budgeting process by smoothing out highs and lows in your utility bills. Most companies offer this “levelized billing” service after you have 12 months of history to compute an average.
64. Use shredded credit card invitations as mulch in the garden. What a great way to put junk mail to good use! Run the mail through a shredder and use the clippings to mulch around your garden.
65. Buy generic ink cartridges for your printer. Ever stopped to calculate the cost per gallon of printer ink? Me neither, but I hate when my printer runs out of ink because it seems impossible to spend less than $30 or $40 to replace the black and color cartridges. Check out a generic cartridge reseller. The quality of ink is comparable to manufacturer’s ink, and many offer a dollar or two off if you recycle the old cartridge.
66. Use a power strip to power down unused electronics. Electronics continue to use power even when they are turned off for LED displays, stop/start memory, etc. Reduce this “phantom power” drain by unplugging devices, or plugging them into a central power strip which can be powered down with the flip of a switch.
67. Find new uses for old things. Not long ago my car’s check engine oil light came on, and the dip stick revealed I was seriously low on oil. I found a new use for an old milk jug by cutting away the bottom half and using the remaining top as a funnel to reduce spillage. This saved me a trip to the auto supply store to buy a funnel.
68. Cross train at work to make yourself more valuable. Make yourself more layoff-proof by taking on a new challenge, and adding to your skill set.
69. Sign up for medical flexible spending account (FSA) at work. Estimate carefully as unused portions of FSAs are not refundable. At a minimum, account for the amount of your family’s health care plan deductibles plus any over-the-counter medical supplies you must purchase during the year. As an added bonus, FSA contributions are pre-tax, which lowers your taxable income for the year.
70. Quit smoking. Besides being an incredibly unhealthy habit, smoking is expensive! Many pack-a-day smoker could easily trim $200 from their budget by kicking the habit. If you can’t find any other motivation to quit, use finances.
71. Shop for clothes on eBay. Add”NWT” to your search query and find many clothing items listed as “new with tag.” These items can be purchased for a fraction of their retail cost.
72. Buy wrinkle-free clothes to avoid dry cleaning bill. I have a golden rule about clothing purchases. I don’t buy anything that requires ironing. In some cases this means I pay a little more for “wrinkle-free” materials, but I save in the long run on the time and money spent ironing or dry cleaning.
73. Look for kids clothes at yard sales and thrift shops. Kids have a way of outgrowing most of their clothes before they “out use” them. For this reason, many times you can find excellent buys on clothing at thrift shops and yard sales.
74. Look for furniture on Craigslist or Freecycle. Many times people buy a new sofa or coffee table and don’t have a way to get rid of the old one. They will list it on Craigslist for a reduced price, or on Freecycle for free in exchange for picking it up and hauling it off. If you need a piece of furniture, but are short on cash, check out one of these sites before even thinking of going to a furniture store.
75. Give IOUs and homemade coupons rather than expensive gifts. In tough times there is nothing wrong with a homemade card and an IOU as a substitute for expensive presents. One Valentine’s Day my wife gave me a decorative jar with little scraps of paper where she hand-wrote “50 Reasons Why I Love You.” It was one of the best gifts I’ve ever received, and cost less than $5.00 to make.