frugal underground

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

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.

ShareThis

Photo by wild friday

First and foremost, plan well in advance. Survey a few different places to go, and do some quick online searching to get a feel for the costs. We went to Park City, Utah last summer because summer is their off-season, and had a great time in the sun. Check the hotel prices, look into other accommodations, and discount options. Plan the travel method (drive, plane, train, bus). Decide how long you will stay. Also plan what you will eat. Food is one thing people often forget to budget for.

The next step is budgeting the trip. How much will it cost to travel there and stay for x days? How much will the food cost? Will you need transportation to get around in the area? What about souvenirs? Finally, come up with a ball park figure, and set aside a small amount of money to start saving up.

Try to put in some extra hours at work, or cut some luxuries like eating out for several months in advance. Set aside money as “vacation cash” into an interest- bearing account, and don’t use any of it (unless there is a real emergency). You might have to make a couple sacrifices, but it will be worth it if you plan it well.

ShareThis

I’m writing this from an affordable vacation rental, which happily came with wi-fi—hence the reason I feel free to dole out advice on this subject. Here’s what worked for me:

• Be as flexible as possible. Originally we were thinking about going to Yellowstone. I’ve never been, and we were going to be in the general area for an obligatory trip, so we thought, why not extend it into an actual vacation?

  Good idea, but trying to find someplace we wanted to stay in the general Yellowstone area was downright depressing. First, it’s high season in Yellowstone. Mid-summer is when all the cool kids want to go there. Even the dive motels were relatively expensive and mostly booked solid.

  So what did we do? We considered other options. We consulted a map of to see what was in a reasonable distance of our route back home, and came across several good options. There were two areas that are well-known for their winter activities, and as a result, end up having abundant (and low-season-priced) accommodations in the summer. They’re still very nice areas in the summer, with lots of biking and nature attractions.

  Bottom line: being flexible means can help you find a nice location at low-season rates.

• Carefully consider your needs. Travelling with kids is a lot different than a “just the two of us” getaway. Attraction-centric trips are also very different than trips where the goal is to just lay low.

  Think about your schedule, and what you’ll need out of your accomodations. If you’ll be in or around your lodgings most of the time, it makes sense to find something with a kitchenette—you’ll be able to save on meals. If you’re going to be at Disneyland all day, or meeting friends and family members for meals out, then the extra cost of a kitchenette may be just that: an extra cost.

  Likewise, staying somewhere with a pool may or may not matter to a single guy or someone with a full agenda, but it can be a huge benefit on a family vacation—for the included cost, you have hours of fun and entertainment.

  Bottom line: being specific about your needs will save you time searching and money on your trip when you don’t pay for things you won’t use.

• Look for individuals. Property management companies can be a good resource to find lots of options, but in my experience, working with an individual can save a lot of money. Obviously this isn’t an issue with hotel/motel/lodge kinds of places, but when you’re looking for a house or a condo, you can sometimes find really excellent deals when you move away from the “standardized pricing” of a larger agent.
• Try alternate sources of information. This made the biggest difference for us out of all the tips here. It can be fast and easy to use Travelocity or its competitors to find a place to stay, but you’ll pay for it—especially if you’re looking for something other than a hotel.

  I mentioned our trip idea to my mom, and she told me that her sister has a cabin in the Yellowstone area. The timing didn’t work out (it was already rented for some of the days we were looking for) but it brings up an important point: you don’t know who your contacts know, and this could be a great resource. It’s easy enough to just mention that you’re thinking about taking a trip in such-and-such area, and see if anyone knows someone with an unrented vacation rental.

  The method that was successful for me was craigslist. It eventually occured to me that I use craigslist for all sorts of work-related things (finding freelance gigs, finding contractors to do work for me, that kind of thing) so why not use it for finding a place to stay on vacation? This ties into the “Look for individuals” tip since most listings on craigslist are from individuals.

  Once we’d narrowed our locations down to the two summer-is-low-season spots, I pulled up the respective craigslist sites and looked under vacation rentals. This involves a lot of sorting the wheat from the chaff, because there were all sorts of things listed that were out of our price range, but it wasn’t hard to find several properties in both locations that were within our budget and actually had a lot more features than we expected.

  In the end, we chose a craigslist-located condo that is much nicer than the standard hotel setup, and much cheaper. In fact, when we drove in yesterday, we passed a standard hotel, so I just looked up their rates: a full $60/night more for something comparable. Multiply that over our four-night stay and it really adds up!

I hope these tips help you the next time you plan a vacation… and now I’m off to go enjoy some more of mine!

Related Link: Car rental Malaga Cheap car rental Malaga Spain. All inclusive in Prices.

ShareThis

I’m curious: I’d expect the readers of this blog, as a rule, to be more financially savvy than the general public (not because I’m so brilliant, but because you obviously are interested in making good money choices or you wouldn’t be reading about personal finance). So here’s a poll, and I’m hoping you’ll weigh in. And by all means, feel free to leave comments, too.

ShareThis

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 »

ShareThis

I read somewhere (I think in the Early to Rise newsletter, which I heartily recommend despite the myriad ads) that it’s a good idea to write down your personal (or household) revenue targets for the next 7 years. I don’t remember the specific logic, but I imagine it follows the standard pattern: goals that are written down are more likely to be acheived; if you don’t know what you’re shooting for, you won’t know whether you’re hitting it; if you fail to plan, you plan to fail. Okay, yes, I’m slightly mocking, but that’s not to say I don’t believe in it. I’ve had the item “Figure out revenue targets for next 7 years” sitting on my to-do list for an embarrassingly long time, because it seemed daunting. I just did it in 5 minutes (which makes the to-do list residency even more ridiculous).

My revenue targets
2006: $20k
2007: $28k
2008: $39k
2009: $55k
2010: $77k
2011: $108k
2012: $150k

My logic
Some advice that I know came from Early to Rise regarding goal setting is this:

Make your goal specific. If possible, make it quantifiable.
Make your goal realistic. Then cut it in half.
Break it down into pieces.
Establish a timeline.
Allow room for setbacks and distractions.
Identify your support team.
Seek a mentor.
Make your goal (at least a little) public.
Establish a way to reward yourself at the end and on the way.

My first years are pretty conservative. This is for two reasons: first, I’ve only been full-time in business for myself since October. It’s kind of feast-or-famine at the moment, and realistically, it’ll probably be that way for a while. I am trying to establish multiple streams of income and make at least some of them passive, but until they’re really firmly planted, that means a fair amount of time up front, without a lot of money. I’m also trying to be realistic, a la the ETR advice, by cutting in half the amount I think I could make if I work hard.

This year’s amount is also not a matter of whim. I hold back half of what I make to cover taxes, social security, etc. (it’s a little excessive, perhaps, but I don’t like nasty surprises come tax time; besides, it’s in an Emigrant Direct account). $20k is slightly more than $1400 gross income each month. We’ve figured out that if I can consistently contribute $700/month towards the mortgage, we’ll meet our goal of paying off the house by my 30th birthday. So I’m figuring about $800/month post tax, most of which will go to debt.

For the rate of increase, I’m figuring about 40% revenue increase a year. I’m not sure if that’s overly optimistic but I think it’s reasonable, particularly considering the intentional investment of time now to make money later.

I haven’t taken all of the ETR advice yet, but I’ve just accomplished another piece: making it public.

Consider doing this exercise yourself (if you post it on a blog, by all means, trackback or leave a comment linking to your post).

ShareThis

My husband and I have long dreamed of being able to quit our respective jobs and spend time working on various open source projects and personal interests. (I know we’re not the only ones!) We’re on track to pay off our house in not too many more years, but one of the things we’ve been concerned about is health insurance. Subsidized by an employer (as it is now), the premiums are relatively low and all is well. But the rates we’ve seen when you go it alone are brutal. Good news, though! Recently I’ve discovered two potential solutions.

The first is eHealthInsurance. Using this free, online service, I can find out what plans are available to me as an individual and compare coverage, rates, and deductibles. I found one that would probably work well for my husband and I that runs just over $100/month. It has a high deductible but is an eligible plan for HSA (which I care a lot about). This makes sense for our family because we don’t go to the doctor very often, but when we really need medical care, it’s likely to soar well above the deductible (this is based on our lifestyle—prime example being the rock wall accident that broke my husband’s back and ended up costing $100k+—yay, insurance!).

The other option that interests me is Ebay’s Health Insurance Plan as reported by Jim. It’s a little more work (you have to do something to qualify for it) but as the time gets closer, I’ll definitely be looking into it to find out if it’s substantially better than my other options. It would be pretty simple to qualify (at least at the lower tiers), so this will certainly be something to consider.

Are you insured through an employeer or on your own? I’d love any tips you might have to offer, either way.

ShareThis