Pennies into Dollars

Ever take a look into your wallet and wonder where that $20 disappeared to? Balance your checkbook at the end of the month and find you need to make a bigger-than-expected adjustment because of debit card spending you forgot about? We've become the Convenience Nation....everything is at our fingertips, including the means to spend money thoughtlessly on things we don't need or don't feel like waiting for. I found a pretty good article on MSN Money titled "10 little expenses that add up fast" - it brings to the forefront how much cash we throw away a little at a time, not realizing how fast it becomes a budget-breaker. Here are a few of my favorites:

Coffee
Kind of a no-brainer, but how often do we find the drive-thru calling our name? I am a personal fan of the Dunkin Donuts large hazelnut, milk and one sweet and low. But at $2 a pop, it quickly becomes a budget killer. I only work 4 days a week - but if I were to get just one a day, that's $32 a month - I spend less on groceries some weeks. On the flip side, a container of Folgers that makes about 200 8-oz cups of coffee will run me about $10 when it's not on sale. which works out to a NICKEL a cup. For the same size coffee I get at D&D (20 oz) that's still $0.12 per cup. Even if I get the expensive flavored creamer from the store I'm still saving over $15 a month by brewing at home. Plus I never have to worry about getting "greasy" coffee...you know what I mean!

Cigarrettes
Public service announcements aside, this is a woefully expensive habit. The national average cost for a pack is at $4.54 right now, so a pack-a-day smoker is shelling out over $200 a month. Quitting smoking isn't just a health benefit, it's a budget benefit in a huge way - and if you're serious about quitting your doctor can probably get you a prescription for the quit-aids (Nicorette, Chantix, smoking cessation programs) so that your insurance copay covers it. And you'll live a lot longer to enjoy your newfound stash of cash too.

Bottled water
Did you know that Evian spelled backwards is "naive"? I'm still convinced it's just some french dude's backyard hose water. Seriously, bottled water is the WORST convenience consumable ever. Most bottled waters are from municipal sources anyway, so other than being chemically "purified" a bit, they aren't much different than your local tap water anyway. And if, like me, you come from a city where the water is fluoridated, it's better for your kids' teeth to give them water from the faucet. The impact on your wallet? Bottled water is between $1.25 and $1.50 for 20 ounces - so just one a day will run you $37.50-$45 a month. But who gets just one? Actual spending is probably a lot closer to $60-75 a month. Even if you buy the pallets of Poland Spring at BJ's, it's still going to run you more than your tap water. If you're attached to a well or your house has old pipes, a Brita filter will clean up the water nicely and still be less expensive.

Weekday lunches out
Forget to pack yourself something for the office? Don't feel like yet ANOTHER ham sandwich and fruit cup? There's not many inexpensive options if you're breaking out the takeout menus at work. After tax (and tip if they deliver) your chinese food is going to run about $6-7 each time. Getting out of the cubicle instead? Plan on at least $10 for a sit-down lunch. Doing that just a couple of times a week will creep towards $80 a month. I make whole dinners for 4 that cost me less than 6 bucks - if sandwiches aren't cutting it anymore, make an extra portion or two of your dinner meal and pre-package for lunch later in the week. Stock up when the frozen dinner entrees are $2 each (yes it does happen). Or if you live close enough, go home for lunch and shop in your fridge. No matter what you choose, more of your money will land in your bank account at the end of the week.

Vending machine snacks
The 3 o'clock munchies....we've all had them. A few hours left in the workday but the body is calling for a little energy boost - and it's the M&Ms, Fritos, Smartfood, or Snickers from the machine in the hall that answers the call. I remember when a couple of quarters could get me a candy bar - but now they will run you between $0.75 and a dollar. Once a day, and it adds up to over $20 a month. My solution? Buy in bulk if you have a pet snack food and invest in 6-oz storage cups and ziploc bags. For a quarter of the cost, you can keep yourself in snackie goodness all month long.

Unused gym memberships
How long ago did you sign the auto-withdrawal form, and when is the last time you were there more than twice in a month? Regular gym users get their money's worth, but if you find yourself with an ever-growing list of reasons not to go, cancel it. Most gyms will offer "day" passes for about 10 bucks, so unless you are going at least once a week you will actually save money by NOT having a membership. Or take the truly frugal route - put on your sneakers and take a nice walk, run, or bike ride. If you want to build muscle, invest in some basic freeweights and find a corner of the basement to turn into a small home gym. It's not the fancy equipment that makes you fit (otherwise the Bowflex company would get a Nobel Prize) - it's the effort you put in. If Jack LaLane could do it without the help of Work Out World, so can you.

Little steps to save money add up fast - almost $300 a month with just these few tips. It might require a little more work on your part, but your own time and effort doesn't cost you a penny...and saves a LOT of dollars.




Add to Technorati Favorites
Blog Search Engine

A couple of good articles

It's Monday, and I find myself without much new to share - we had a rough week last week financially and I haven't been able to get to the store other than to hit the "need" list - I should be able to do a little shopping either Wednesday or Thursday, and I'll be sure to share my findings! It will be interesting to see how different the availability of sale items is later in the week - I usually shop within a day or two of the sale start date but I have read some sites that use late-week shopping as part of their saving strategy, so I'll see whether that changes anything. At least I know that I can get rain checks from the drugstores if they run out of things I want!

The two articles below are from CNN.com and Boston.com and were shared by a friend of mine who has been following my misadventures...they are good barometers for where you are in the frugality spectrum and do offer some additional saving ideas.

Stretching your food budget with healthy choices

A look at 3 households


Add to Technorati Favorites
Blog Search Engine

Maybe grandma knows best after all...

This whole food budgeting process has actually permeated into other areas of our life...it's hard to put so much effort into stemming one cash-bleed, and not see other areas that need major repairs as well. It's like a bad trip to the mechanic - you bring your car in for a broken headlight and suddenly find out that you have a rotted-this and a leaking-that.

I have kept the purse strings pretty tight, but if you were to ask me exactly where all of our hard-earned dollars went each month, I'd be hard-pressed for a complete answer. I am neither a financial planner nor a certified accountant, I am a master juggler. Unfortunately, as Ringling Brothers-worthy as that monthly performance may be, it's not going to help me have a more complete picture of where our money is going and how we can do better. I know the bills do get paid each month - we still have a place to live, hot water, electricity, and working phones....but it would be nice to reach the last paycheck without having to play Peter against Paul, and with no regrets about how money was spent earlier in the month.

What I have noticed as I've researched frugal living online (mostly looking for cheap recipes), is that almost all of the websites recommend the Envelope system, or some version of it. The basic concept is probably very familiar to your elder relatives:

• Figure out how much the monthly cost is for each of your necessary expenses (rent, utilities, food, insurance, etc.) and divide by the number of paychecks you get each month.
• Each expense gets its own envelope, and each week you CASH your check and divvy up the money to each envelope.
• When an expense comes up or bill comes due, you go to the corresponding envelope. If it's a fluctuating item like grocery, you can only spend what is in the envelope until the next paycheck.

My husband's grandmother swears by this system. But what to do in today's society, where we can carry plastic before we can legally drink, and marketing tells us that cash is a major inconvenience?

There are a few resources that have brought the envelope system to the digital age. For the uber-connected, I would recommend Mvelopes.com. They have combined expense management on the envelope system premise with on-line bill pay, automatic transaction retrieval (from bank and credit card info), and basic financial planning software. And the info is securely stored online, so you can access it anywhere without specially installed software. The cost is between $8 and $12 per month (depending on your service agreement) but if you're tracking spending and cash flow from several sources, it's worth the cost.

For those who prefer software without the expense of membership fees, I found MySpendingPlan.com. They also use the Envelope concept but in a self-contained budgeting tool. You will have to manually enter income and expenses, but the software will allow you to set up a virtual envelope system to manage where the money goes. It also has special tools for budget planning major one-time expenses (wedding, home remodel, vacation, etc), creating shopping lists, and lots of other extras to help organize your budget and work towards long term goals.

And finally, for those of us who just prefer the KISS principle but don't want to cash our checks each week, Excel is a tried and true tool. There are plenty of ready-made templates out there, like this template from MS Office. You can edit and customize these to suit your own budget, or use it as a guide to create your own from scratch.

Whatever system you choose, the real test is actually sticking to the limits you put on your finances. No matter how good any system is, the one thing none of them will do is prevent you from using money for things not on your budget, or overspending. But if you can commit to the budget you create, it won't be long before you can finally give Peter and Paul some much-needed rest...and maybe earn some peace of mind for yourself, too.


Add to Technorati Favorites
Blog Search Engine

Baby steps....

I think it was a combination of having to squeak through financially when the hubby was between jobs, and the news report about unleaded gas at $4.29 per gallon. WHAT??? My purse strings have always been pretty tight (case in point, I haven't bought new clothes in 6 years) but we are definitely going to be pushed to our limits as things get worse.

So I have put myself on a mission:

Reduce my monthly food bill to $200, or as close to it as I can get.

Now, I live in Massachusetts - not exactly the easiest place to reduce spending in general...there's some weird high price vortex that takes effect mid-New Jersey and doesn't let up until halfway through New Hampshire. The part of MA that I live in isn't quite as bad as the immediate Boston area, but it's still been tough to keep the food budget at $100 per week.

My happy band of misfits currently consists of myself, my husband (who is a type 1 diabetic with a voracious appetite), and my 1 year old son who has apparently inherited his father's stomach. So I have the added challenge of providing meals that are relatively low carb for DH, and healthy with plenty of fresh fruits and veggies for the li'l sprout. Can't fall back on Ramen, prepackaged convenience food, or too much pasta. We are also planning to start trying for another baby in the fall, so I would like to make sure that the extra diapers next year don't end up breaking the budget.

I don't expect to hit the magic number right off the bat, I know this will take a lot of practice, planning, and creative cooking...It's a huge challenge to rethink the way I spend money on grocery trips, and an equally daunting challenge to retrain myself in the kitchen and get away from the easy (tr: more expensive) shortcuts at mealtime. Just have to take baby steps!

Add to Technorati Favorites