Photo by Hamed Saber

Thanks again for all the thoughts, prayers and well-wishes you’ve shared over the last couple weeks.  My mom will soon be having surgery in an effort to resolve a very serious condition, and all signs point to a successful outcome.  I’ll be taking the weekend off from posting, but have a couple really good articles to share beginning Monday, along with a guest post or two.

I’m still not getting to all my favorites like I normally would, but I did manage to find a few gems from the past week, and I’ll share them with you now.  Have a great weekend, and don’t miss next week’s articles–should be a lot of fun!

The Roundup

Teaching Tweens Simplicity.   Leading off the roundup is the newest member of The Life Skills Network, Sara, from On Simplicity (one of my favorite sites on the subject).  This article really hit home for me as we prepare to move into the “tween” years with our oldest, and she is already struggling with the choice of living frugal and living simple.

Make Money Blogging:  Top Bloggers and How Much They Earn.  This was probably the most fun post to read from the past week, and in some ways, the most demoralizing!  My monetization efforts have fallen well short of these guys, but as they say, every little bit helps.

The Difference Between Good Debt and Bad Debt.  I used to be of the opinion that all debt was bad debt.  I now make a few exceptions, and they appear in this article under the good debt heading.  I still wish everyone would avoid debt if they can help it, even if it forces you to wait a little longer on a deal, or save up to pay cash.  The feeling that comes from debt freedom is invaluable.

30 Books Everyone Should Read Before Their 30th Birthday.  What a great list of literary classics.  From a financial perspective, I would add to that list Your Money or Your Life, which is one I wish I read before my 20th birthday!

How Your Education and Lifestyle Keep You From Changing.   An interesting post with an equally interesting video clip from Joe Vitale.  What “counter-beliefs” or “counter-intentions” are really holding you back from success?

Back to School - 17 Good Habits for a Successful Life.  This is a powerful list, but I think #4 really says it all.  How can we develop any other good habits, especially as it relates to money (contentment, philanthropy, etc.), without first being grateful for the things we have.

Reduce Your Holiday Stress by Saving and Planning Today.   After the budget debacle that was last Christmas’ shopping season we immediately opened an online savings account and started funneling $25 a paycheck (every two weeks) into the fund for this year’s Christmas list.  I’m proud to report that the fund has remained untouched and now has plenty of money for us to do a little stress-free early Christmas shopping.

How to be Disorganized and Unproductive, #1:  Don’t Enjoy Your Job.  How could I not like anything from Simple Mom, especially when she works in an Office Space reference!  Seriously, this was the capstone to a fine series on how to have a disorganized and unproductive day at home.

Extra Money for College Students-31 Ways You Can Make Money in College.  Some great money-making ideas here.  And many are not just for college students, but anyone short on cash or looking for a “side hustle.”

Unconventional Roth IRA Strategy to Lower Your Tax Bill.   An innovative three-step process to move tax free money to a tax deferred account, along with an illustrative example.

401(k) Debit Card is NOT a Good Idea.   The title alone sounds scary enough–a 401(k) debit card?!  Talk about an easy way to slow-drain your whole your retirement account.

Frugal But Regret It?  Ron asks the question all frugalists struggle with at some point.  After many months, or years, or frugal living sometimes we grow to resent that lifestyle.  That’s why I think it is so important to occasionally stop and smell the roses.

How to Start Getting Wealthy Right Now.   Of all the things I’ve put off over the years, this might just be the one thing that I most regret.  If you are reading this and haven’t started implementing the wealth-building steps in this article, do not delay any longer!

Photo by Hey Paul

With summer winding to a close many families are beginning the annual back-to-school trek with cars loaded down with dorm room goodies and eager college-bound students. College is one of the more exciting phases of young adulthood, but unfortunately it has also become one of the most expensive. Opportunities abound on college campuses to separate you and your money, and being a frugal college student can be potentially damaging to your social life. Here are a few strategies for getting off on the right frugal foot without being the resident party-pooper.

Student Loans

With rising tuition costs making a college degree as expensive as a small home, many families are turning to student loans to finance education. I’ve heard many families express that student loans are the “only option,” and when I was heading off to school I felt the same way. However, hindsight has helped to change my views on student loans, and recognize that there are other options.

First of all, loans may not be required if you opt to attend an in-state, public institution. It may not be the college you dreamed of attending as a kid, but chances are it is more than adequate in terms of the educational opportunities offered. I chose to go out of state myself, and that single decision added thousands to my tuition that could have been avoided by staying closer to home.

Room and Board

College dorms are not exactly known for four-star lodging, but are often much cheaper than off-campus housing and typically include a meal plan. Speaking of meal plans, if you are the type who just refuses to eat anything cooked in a cafeteria you may do better to skip the meal plan and load up on Ramen noodles. Just remember, there is a trade off for eating on the cheap–your health. Unless you want to experience the “Freshman Fifteen,” or worse, I’d recommend sticking to the meal plan and eating a variety of fruits and vegetables with each meal, as a rule. Easier said than done with no less than seventeen pizza places within five miles of campus! And believe me, I made my share of late-night runs to Taco Bell!

Later in your matriculation you may find that joining up with roommates to split the costs of an off-campus apartment is cheaper than staying alone. If you go this route, be sure to fully investigate individual college housing contracts so you aren’t on the hook for a roommate who has a change of heart and goes home half way through the semester.

A Word About Credit Cards

Next to football fans, the loudest group you will find on your campus may be those soliciting credit card applications. If I should ever be in charge of a school one day (not likely) one of the first things I would do is end the agreement than allows credit card companies to sign up students on my campus in exchange for a free t-shirt. I don’t think credit cards are evil, but I do think they should be avoided in college. Don’t fall for the “you need to build your credit” sales pitch–there will be plenty of time for that later when you have a solid job and can afford to repay your debts. Because I was strapped for cash while away at school I accepted a credit card to fund “life expenses” such as groceries, gas, and occasionally the utility bill! I left school with a free t-shirt and a pile of debt as souvenirs.

Entertainment

One of the perks of being around a college campus is that there are no shortages of opportunities for free or low-cost entertainment. Check out bulletin boards and websites at student unions or near the campus bookstore to stay up on the entertainment offerings around campus. Many times schools will offer free outdoor movies, or guest speakers. When my wife (then girlfriend) and I were in college our first date was attending a motivational talk by the real life subject of the movie Rudy, Dan “Rudy” Ruettiger. As a football junkie, and a sucker for a motivational talk, this was right up my alley. I knew my wife was “the one” when she agreed to wait nearly two hours for a chance to meet “Rudy” and get my book autographed.

Keep your college ID on you when out and about your college town. Many stores and restaurants offer a nice discount to college students, especially around back to school shopping times when students are loading up on textbooks and other supplies.

Start a Savings Plan

One of my favorite lines from a great Chinese proverb reads, “The best time to plant a tree is twenty years ago.” As I sit here some thirteen years after my freshman year of college it is easy to play the “what if” game. What if I had started saving a little money all those years ago. I spent most of my college years broke, and working just to keep the lights in my apartment on and gas in my tank. At the time the last thing on my mind was trying to save money. After all, how much could I have really saved? Open a savings account and try to save 10% of any earnings, or $5 a week, or $25 a month. Don’t be overly concerned with the amount you are saving, just start saving something, consistently, to reinforce the idea that saving money is a good habit to develop at a young age.

Early Frugal Living

It is difficult when you are young to fully appreciate the benefits of living frugal. However, many special life events will likely occur in the decade after graduation. Most of you will get married, start a family and a new career, and maybe even buy your first home. Resist the temptation to saddle yourself with debt during your college years so you can enjoy these life experiences debt free.

Other “Back to School” Series Articles from The Life Skills Network:

• College Housing Contract Basics
• Back to School Savings Challenge
• 17 Good Habits for Successful Life
• Back to School Season Already? Keep the Family a Priority

Other “Back to School” Series Articles from The Money Writers:

• 10 College Money Myths
• How To Be A Frugal College Student
• College Student Money Guide: Financial Tips For Student Success
• Going Back to School? Here Are Some Tips That Helped Me
• College Student Finance Tips
• Upromise Survey: Saving For College, Getting Tougher?

Photo by ninjapoodles

Consumer Alert:  Many of your favorite brands are drastically reducing product sizes without a corresponding drop in price.  In some cases, the price has even gone up while the quantities have gone down.  This has been going on for some time, but the latest reductions in product size has been more drastic, and come at a time when consumers are already feeling the pinch of rising food and gas prices.

Last week I received an email from someone who works in the food industry (they asked to remain anonymous).  In the email they cited several examples of brands that are reducing their quantity per package:

• Starkist Tuna
• El Paso Seasoning Mixes
• Folgers Coffee

Obviously, this is not a exhaustive list, but I wanted to share the specific examples provided so you would be more aware during your next grocery shopping trip.

What Can We Do About Rising Prices and Falling Quantities?

Not much.  But, it is a good time to remind consumers to check out unit prices when comparing various product sizes.  Often times bulk packaging is more expensive per unit than smaller counterparts.  Marketing departments are banking on the popular misconception that bulk packaging is always cheaper.  Take along a calculator during your shopping trip, or use the calculator utility on your cell phone to compute the unit costs of the product your are interested in.  Here’s a real-life example from one of my past shopping trips for laundry supplies:

• $10.99 for 120 loads - $.0916 per load
• $6.84 for 90 loads - $0.076 per load

The 1.5 cent difference doesn’t sound like much, but if the larger container was offered in a 90-load size at the same unit price it would cost about $8.24 - a $1.40 premium over the smaller package.  If you go through a bottle a month that adds up to nearly $17 over the course of a year.  Multiply those savings by four or five similar products and you can easily see how checking unit prices can save you a couple hundred dollars a year.

Have you noticed any of your favorite brands reducing product sizes to reduce costs?

The following guest post is from Ben of Money Smart Life.  He graciously sent over this post when he learned of our family emergency in an effort to give me a breather.  Enjoy the post, and then head over to his site to sign up for more articles like this one.

Photo by theritters

Money makes the world go round but people are what make the world worth living in.

It’s easy to get caught up in the daily rush of making a living and forget that each day we spend rushing around is a blessing. The opportunity to spend time with the ones we care about is something that I overlook all too often.

Sure, money is important but it’s only a means to an end.  The relationships we build in our lives and the people we spend them with are what it’s all about.

It’s amazing how a simple reminder of our mortality can change our perspective and bring things back into focus.  I constantly think of my grandfather’s passing away when I find myself slipping into the “busy life syndrome”.

When our young son wants “Daddy” to help or play, I remind myself of how precious our time together is, regardless of how busy I am.  I’m not perfect; sometimes I tell him to go ask mom but most of the time I’ll stop what I’m doing, put him on my knee, and enjoy being part of his life.

Hopefully it doesn’t take a scary or sad event to remind you how fortunate you are to be alive.  Life’s too short to spend it too busy to enjoy it.

Editor’s note:  The past couple weeks have really put things in perspective for me in terms of what is most important in life, and how we spend our remaining life energy.  I’ve had a growing list of things I want to do one day–sort of an early “bucket list”–and I fully intend to get started checking off a few items soon!

 
photo by Lee Coursey

These days there are a lot of arguments being waged on the benefits of paying down debt, buying used cars, paying off mortgages early, and building savings.  All of these are noble financial goals, and generally receive positive reinforcement from financial planners in the media.  However, there is an element that disagrees with this logic, and they are quick to point out where the mathematics don’t support these life-simplifying steps.  This post is aimed primarily at that audience, and for the rest of you, perhaps it will provide some comfort when dealing with these types.

Excess Material Possessions + Excess Financial Worries = Stress

Since I know how much you “financial nerds” love formulas, I’ve provided one for you to chew on.  I once wrote a post about homeowners paying off their mortgage early, and it was generally well-received.  However, I received a number of emails from “financial experts” out there who disagreed with the idea.  They were all-too-eager to tell me about the various ways that same money could be earning more in the markets.  Maybe so.  But their fancy formulas didn’t account for the one variable most important to me at this stage in my life–simplicity.

How to Live More Simply

That stress I referred to in the equation above is the result of constant worry over reconciling balances, watching payment schedules, and fretting over the never-ending accumulation of interest, which has a way of cheapening future earnings at a rate faster than inflation.   Add to this financial stress the worry of excess things and their storage, protection and maintenance, and you can easily see how too much stuff and too many accounts can lead to an ulcer.  So how does one prevent such complication in their lives?

• Learn to be content.  Contentment is a powerful ally of the frugal-minded individual.  When we are truly content we have very little that we desire, in terms of material possessions.  This contentment keeps us away from stores, catalogs and advertisements.

• Stop trying to impress other people.   Millions of dollars are wasted each year by those trying to play up to the ideals of others. Those who incorrectly believe that material possessions are a symbol of true wealth are on a never-ending quest for something bigger and better, and more expensive.  They constantly upgrade their cars, homes, jewelry and clothing in an effort to impress strangers at a red light, many whom they will never meet again, and are likely trying equally hard to impress them.

• Rid yourself of things acquired merely for status.  So you’ve made a decision to live more simply, but what about that Jaguar in the driveway and the “his and hers” Rolex in your sock drawer that are contradicting your new way of life?  Get rid of them.  I don’t care how you do it.  Sell them, give them away as gifts, or donate them to a charity.  Just get rid of them.  You will be amazed how freeing the experience can be.  While I’ve never had a Jag or Rolex to give away, I’ve eliminated some “extras” from my own life and feel much better for it.

• Consolidate your lifestyle.   Do you have six Roth IRA accounts with five different brokerages?  Are your insurance policies scattered around three or four different carriers?  While there is some benefit in diversification, by going overboard you are adding stress to your life just from the effort required to manage all the various accounts and policies.  Consolidate a couple of those accounts, and move your insurance policies to the same provider (assuming you have researched the provider and are confident in their stability).  As an added benefit you may find discounts waiting for having multiple policies with the same carrier.

• Recognize the difference in stockpiling and hoarding.   It is prudent to stockpile necessities, particularly when you find a good deal, or receive a discount when buying bulk quantities.  However, too much of a good thing becomes problematic when you have to spend time, money and energy just to store the items.  After I returned home from school to live with my grandfather we stored a bunch of our stuff for $50-$60 per month in a storage unit.  After several months went by it occurred to us that we had not used anything from the storage facility.  We saved $600 a year by simply getting rid of the stuff.  One less bill and a lot less worry!

Excess Material Possessions - Ego = Simplicity

Much has been written about wars with our own egos–I know I’ve lost my share of battles.  But when I stop and think about the real reason why I want something I often find that I am simply feeding my own ego.  I want others to know that I am successful.  I don’t want others to think I am struggling.  I fall into the “I work hard, so I deserve it” line of thinking that is a recipe for financial disaster.  However, once you are aware of this condition you can begin to take steps to resist the urge to give into your egotistical desires.  Try to find the same joy that you once found in things in other areas of your life.  Learn to appreciate the beauty that surrounds us and is freely available to anyone willing to look.  Go for a walk in the woods, or a barefoot walk in your own backyard.  Read a great book.  Spend time playing with your children.  Volunteer your time to a cause you believe in.  Seek out some of life’s many other simple pleasures. All of these things will fill your life in ways things used to, and they can all be done for next to nothing.

A challenge:  Find one thing you’ve been holding on to because it is a status symbol, or a luxury item that you don’t really need.  Give it away to a loved one, or a complete stranger, and enjoy the freedom of a simpler life.