frugal underground

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We’ve all heard both sides to the argument on being frugal vs being cheap.

While both can lead to cost savings for a household, the former is more about getting quality products at lower costs, while the latter is getting something simply because it has the lowest price (or comes free!) without much thought to its make, functionality, and how it could affect other people (not leaving a tip in a restaurant for instance IS cheap).

Adults can live without those unnecessary luxuries or make those small “sacrifices” in the name of frugal living and being eco-friendly. But just how much of our frugality should be applied to buying for our kids without crossing the line to cheapness? Here are some great ideas for frugal moms, which can bring in huge savings for you without sacrificing your young ones’ comfort and little pleasures.

Having at least three children or more will definitely make a dent on your clothing budget. When shopping for kids’ clothes, try the following:

A child’s birthday that’s just around the corner can be a stressful time for parents because birthdays are typically associated with costly parties. As frugal moms know, birthday treats don’t necessarily have to be bank-breaking. A few suggestions:

Now, I’d like to think that the ideas mentioned above were certainly within the bounds of frugality. So what for me would be ‘cheap mode’ for kids? Off the top of my head, just two:

As with everything else, it’s all a matter of perspective. What may be frugal for some, could be thought of as cheap by others.

As a parent, do you have these “frugal vs cheap” debates within yourself?

School will be out soon and while most of us are raring to go on that family vacation, sadly, not all of us can afford to. Or if we choose to go through with it anyway, some of the fun is taken out of the supposedly stress-free vacation because we have to compute and then re-compute the expenses as we go along.

I’ll let you in on a little-known secret: It’s possible to go on a great vacation even if you are on a budget. Don’t believe me? Try out these tips and see how you can still have a fabulous getaway without breaking the bank.

When to plan

We usually start planning our vacation months in advance. Not only does it translate to huge savings and the assurance that you can always secure that place in your intended hotel, the thrill of having something to look forward to is something that makes you feel good long before you start packing up those bags.

On a side note, I find a much-anticipated vacation an effective way to get the kids to calm down – “We won’t go on that trip to Disneyland (or wherever) if you guys won’t behave this very minute!” It hasn’t been Disneyland as yet, and sure, it’s pure bluffing but you get the picture.

Using travel sites

As soon as our destination is planned, or at least the choices have been narrowed down to a shortlist, here are some of the sites that we usually check first.

I love how these sites offer very friendly-user interface where you can just input the data for your impending getaway such as the proposed dates, destination, hotel amenities, and other specifics. Other sites worth checking out are Orbitz.com, BestFares.com, and Hotels.com.

To fly or to drive?

Contrary to what some vacationers may think, flying to get to places isn’t such an expensive option these days. A lot of airline companies now offer airfare costs of less than $100 depending on your base, destination, and your planned travel dates. Booking early can get you even bigger discounts.

When your destination isn’t that far out of state, and especially when you’re traveling with kids, driving can be the best option for you. Taking the car to your destination will not only let you save hundreds on travel costs, you can also make it part of your vacation fun especially for the young ones who would love the experience of taking in new sights along the way.

A home away from home

Hotels can give you some of the best amenities available when on vacation but if you want to save on dining costs as well, finding a hotel or apartelle that comes with a kitchenette will allow you to prepare budget-friendly, home cooked meals. Even if you choose to dine out occasionally, having your own small kitchen will make it easier for you to recycle leftover foods for the next meals.

Don’t forget your rewards points.

For many, going on vacation is also one way of using up all those rewards points accumulated from months of using your credit and/or debit cards. Depending on your cards, earned points can be converted to airline miles, hotel discounts, or cash credits for some souvenir shopping.

So, where are you going this year?

I have a confession to make:  money management doesn’t come naturally to me.

In fact, I’m one of those people who wants to go get a new book on payday whether I need it or not.  In the past this kind of spending has led to what I guess you could call ‘accidents’ where little transaction fees I had forgotten about added up and bit me on the backside and caused checks to bounce.

It’s no fun when a handful of $2.00 ATM fees cause your rent check to bounce:  No fun at all.

Just to add insult to injury, many banks process transactions from largest to smallest, rather than in the order they were presented.  If you’re smart, this shouldn’t mean anything, because you never spend more than you have available.  If you’re not, it means that instead of one fee, you’re paying eight - putting you $200 behind before you can blink.  This is what we financial professionals call bad.  Don’t do it.

Now that I’m older, and I hope wiser, I tend not to do those sorts of things.  It’s not so much because I have more self-control (although I hope I have) but because I’ve set myself up not to fail.

I don’t pay my rent out of my living expenses anymore.

Here’s how the system works:  I use three bank accounts.

Instead of just the standard checking and savings accounts I have two checking accounts (as well as the savings); I use a check card on one and write checks on the other.  The way it works is simple:

First, you figure out your budget:

Add up all your regular bills, the stuff you pay every month or two months and figure out how much you have to spend from each paycheck to cover those bills. That money, plus a little extra to cover things like your bank charges, goes into your check account.

I’m not going to talk about savings, because that’s assumed.  (How can you be frugal without saving money?  Inquiring minds want to know.)

The money that’s left over goes into your check card account.  This is the money you spend on anything from gas to groceries, to day-to-day living.  It’s not a free pass to overspending by any means; you still should be watching what you spend, how much and where you spend it.  It’s just a way to make sure that if you do miss something - or if your sp0use filled up the car right after gas prices went up (instead of before like you asked them to) it doesn’t cascade through all the checks you have outstanding.

This is particularly important if you have one of those landlords:  you know the ones, they fill your lease agreement with dire threats about what can happen if the rent is three minutes late - but then don’t cash the check for three weeks, leaving the money just sitting there.

If you think about it, the real key to money management; as my co-bloggers and I are all saying in our own fashions is to stay organized and in control of your finances.

If you set your finances up properly you have to work at messing them up; and then you’ve got human laziness working for you instead of against you.

As the title of the post says, my name is Dave and I’ll be blogging for you today.

I’m a stay-at-home Dad and freelance writer.  My partner works outside the home and I stay home and look after the kids; her two teens and our daughter who will be seven next week.  It’s probably no surprise that no matter how much money comes in, somebody finds a need for it so we always try to make the most of our money.

That’s especially true when one of the teens had to to take his girlfriend to her junior prom last weekend and it’s his senior prom this weekend.

So today I want to talk about some things we did right, and some things we might have done better:

Before I go any further I should mention two factors that are very important to me:  value for money and absolute price.  While getting value for your money is always important, it’s the absolute price that always sets the final boundary.   It’s not very frugal to save money on one thing but then have to spend extra money on something else later because you blew your budget today.

Anyway - after the cut - on to the prom. Read the rest of this entry »

Photo by NURR

You should always have a plan when you are going to spend money. Consider just three areas where we regularly save by planning.

Groceries. Planning the meals to cover a week or two weeks will help you stick to a budget. Instead of buying food on impulse, you can plan each meal ahead and get the necessary ingredients. You should also make sure that you check the levels of household cleaners and toiletries. Avoiding an extra trip to the store will bring down the chances of an impulse purchase.

Entertainment. Everyone likes to get out and have fun. If you really need to get out once in a while, plan an inexpensive night out. Set the amount you will spend and stick to it. If you use cash only, you will be more inclined to stick to budget.

Major purchases. You can save a fortune if you explore your options. When looking for a car, furniture or major appliances, there is much room for error. Think about quality. It might not be the best choice to buy the cheapest thing out there, because it may not last as long. Check the consumer ratings on the brands you are considering. You don’t have to pay top dollar, but cheap isn’t the way to go with certain things.

Pay your savings account like a bill. The age old method of promising to put aside whatever is left over at the end of a month just doesn’t work well. When you get paid, the first thing you should do is put money away into savings.

Photo by Aytena

Budget a specific amount of your check to put aside every time you are paid. If over time, you think you can put aside more, go for it. Just be consistent.

Make sure you are earning interest. There are several excellent savings accounts that will earn you over 5% APY. I have accounts with HSBC, and ING Direct frequently offers good deals, too. This money will be liquid, meaning you can withdraw money any time, without penalty, if you really need to (the idea is to have a fixed amount that you can afford to set aside).

You should also make a deal with yourself that if you get extra money (gifts, tax returns, a bonus, and especially a raise) that you will use it to reach savings goals.

Photo by pt harriet

You should never underestimate the power of the coupon. You may think, “What difference will it make if I save $0.25 on bread this week?” When you are tight on funds and have numerous bills to pay, every little bit helps. Clipping coupons can really save you money in the long run.

Here are some coupon rules:

Don’t go out of your way to buy items that you don’t need just because you have a coupon. Unless it is free, you will save more by not buying it.

Wait until the item goes on sale to use the coupon. (Many stores also offer double or triple coupon weeks, and you can hang on to coupons until then and save even more)

Don’t be afraid to try a new brand. If it costs less, why not try it?

You can find coupons in your local Sunday paper, right in the store, or online. All you have to do is visit a reputable coupon site, like SmartSource.com or CoolSavings. There are many more sites that offer coupons. The best way to save is waiting until the item goes on sale at your local grocery store to use the coupon. You can save hundreds of dollars per year!

I am one of the many people who are better at “paying back” than “saving up” for bigger ticket purchases. That’s obviously not a good reason to use credit cards (or any other form of debt), but that’s my personality.

So what is a spender to do when faced with this dilemma? Anyone remember layaway?

For those who don’t, layaway was a service that many stores used to offer (but most have discontinued, thanks to the popularity of credit cards). Instead of buying something now and paying for it later (the credit card model), layaway let you pay for something over time for a small, fixed fee (if there was one), and have the product stored for you until you’d paid for it. Maybe not as fun as instant gratification, but much more responsible and frankly, more satisfying in the long run.

Well, as it turns out, the fabulous Internet has enabled layaway to make a comeback. Enter eLayaway, the online service that gives you the old layaway benefits with modern technology. There are some smart features, like auto draft from a checking account to make it easy to stay on top of it, and automatic shipping when the item is paid for.

The only downside is that there aren’t very many participating merchants at the moment. I expect this is a short-term problem, because they’ve made their pricing very attractive to merchants (much cheaper than credit card processing if there’s any sales volume at all) and merchants will be able to use this service to differentiate themselves and show they are thinking of their customers’ best interests.

Found via Springwise.

There are a limited number of good, free personal finance programs available, and less that are web-based and platform independent (meaning I can recommend them to anyone). So it was with great interest that I read a press release today announcing a new online personal finance budgeting application: MySpendingPlan.com.

A first glance at the site was promising: it’s attractive, simple, and provided some enticing information. Top on my list?

MySpendingPlan.com is budgeting software that uses a modernized version of the “envelope system” that fits today’s lifestyle and home budgets.

I am a big fan of the envelopes concept, just because it’s forward-thinking decision-making rather than after-the-fact “guess that’s where we spent it” reporting. We use envelopes-style budgeting in my household (though my husband insists on referring to it as “funds” and “accounts”). The only software out there that I’m aware of currently promoting this kind of system is Mvelopes, who annoyed me both with their crappy Java interface and their spendy, monthly payment plan. No thanks, I want to save money. So free seemed exciting.
Read the rest of this entry »