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Items by Jason (Frugal Dad)

Gift Ideas for Frugal Graduates

Posted: May 22nd, 2012, 7:39pm MDT by Jason (Frugal Dad)

To get the best financial start in life, many new graduates try to be as frugal as possible. If you know a graduate who is trying to pinch every penny, it’s nice to get them a graduation present that makes it easier to do so.

You don’t have to buy cheap gifts to make a frugal graduate happy. Instead, you should choose gifts that make it easier to live frugally. It’s an important distinction, and you may be at a loss when it comes to finding the right gifts. The following ideas are sure to help.

Entertainment Subscriptions

The graduate in your life may have canceled his cable subscription in order to save money. He probably won’t turn down a one-year subscription to Netflix or another entertainment service, though.

If the graduate you know likes to watch movies or listen to music, you might consider paying for a yearly subscription. It’s something that he wouldn’t buy for himself, but it’s sure to be greatly appreciated.

Dehydrators and Canning Kits

Graduates who have vegetable gardens are always looking for ways to make the most out of the veggies they grow. Canning things like tomatoes is a great way to save money, and it’s a lot of fun too. There are several canning kits out there, so you might want to get one for the graduate in your life.

A dehydrator is another great option. It can be used to dehydrate fruits, veggies and meats so that they can be enjoyed later. When great deals on meats and produce hit the store, those items can be purchased and dehydrated for enjoyment later. It’s a practical and frugal gift that the grad in your life is sure to love.

Compost Buckets

To live as frugally as possible, it’s important not to waste a thing. Many frugal people enjoy composting their food scraps and using the compost in their gardens. A compost bucket is a nice option because it can be used to store scraps until they can be taken out to the compost pile. It’s also something that a frugal person probably wouldn’t buy for himself, so he is sure to be thrilled when he is presented with one.

Gas Station Gift Cards

There are no two ways about it: Gas is expensive. Many frugal people try to commute by bicycle whenever possible, but most people need vehicles at least some of the time.

You can do your part to reduce the cost of filling up by giving the grad in your life a gas station gift card. Just make sure to get a card for a gas station that’s convenient for her.

Coupon Book

Keep your eyes peeled for those large coupon books that make the rounds every year. They are typically packed with coupons for local restaurants, stores and movie theaters. Frugal graduates usually try to avoid going out as much as possible because it’s so expensive, but everyone needs to have fun from time to time.

With a nice coupon book, the graduate in your life will feel less stressed about enjoying an occasional night out on the town.

Do-it-Yourself Machines

Treats like ice cream and cappuccinos can really add up over time, so frugal types tend to steer clear of ice cream shops and cafes. Why not give your graduate a do-it-yourself machine? There are machines out there that make ice cream, yogurt and other delicious treats.

Espresso machines are somewhat expensive, but making cappuccinos and espressos with them isn’t. A bread machine is another worthwhile option to consider. With the right machine, a frugal graduate will be able to make a wide range of tasty treats at home.

Warehouse Store Membership

Warehouse stores like Costco are a frugal person’s dream come true. However, penny-pinching types are often reluctant to splurge on the yearly membership fees. If there’s a warehouse membership store near where your graduate lives, buy her a membership. She is sure to get plenty of use out of it, and he’ll save a lot of money too.

As you can see, gifts for frugal graduates aren’t necessarily cheap. They are simply designed to help people live as frugally as possible. The frugal grad in your life is sure to be tickled by any one of the preceding gifts, so consider buying him one.

How to Save Money on Moving

Posted: May 17th, 2012, 6:19am MDT by Jason (Frugal Dad)

There are no two ways about it: Moving is expensive. However, you don’t have to resign yourself to spending vast amounts of money during your move. By taking the appropriate steps, you can often get away with spending a lot less.

As with so many other things, enjoying a less expensive relocation is all about planning and patience. The willingness to do a lot of the work yourself helps too. Learn a few excellent strategies for saving money while moving below.

Sell or Donate Unneeded Things

The fewer belongings you have, the less expensive your move is going to be. With that in mind, you should do what you can to unload unneeded things in the weeks and months leading up to your move.

As far as nicer (unneeded) things go, you should try to sell them. You can use the money that you earn to finance your relocation. These strategies won’t just save you money; they will make your move easier and allow you to get a nice, fresh start at your new place.

Get Free Boxes

People are often taken aback by how expensive fresh, new cardboard boxes can be. After all, the only time they’re generally needed is during a big move. Before you fork over a bunch of money for moving boxes, try to find as many free ones as possible.

Solicit friends and relatives for unneeded boxes. Check with local stores to see if they have any handy, too. Don’t forget to check sites like Craigslist and FreeCycle. People are often anxious to unload their old boxes after moving. When your move is complete, you can return the favor.

Do Your Own Packing

As tempting as it may be to hire someone else to pack your belongings, it’s just one more thing that adds to the cost of moving. The key here is to start packing early. There are sure to be many things that can be packed long before moving day arrives.

Try to use inexpensive packing materials like old newspapers as much as possible. Things like bubble wrap can really add up over time. Be as organized as possible. Label each box so that you will have an easy time unpacking later.

Get Multiple Quotes

Do-it-yourself moves are the cheapest options. If you go that route, you’ll need to rent a moving truck. Don’t just go to the closest truck rental company and choose the first one you see. Request quotes from at least three different places. The same thing goes for moving companies.

If you need to hire movers, solicit quotes from at least three of them. You’re sure to be amazed by the huge pricing differences that you will encounter. Don’t just base your decision on pricing alone, though. Read the fine print to ensure that you get the level of quality that you need.

Hire Friends and Relatives to Help on Moving Day

As long as you’re willing to return the favor yourself someday, you should try to round up as many friends and relatives to help on moving day as possible. If cash is tight, you could always try bribing them with offers of icy cold beverages and nice meals.

Plan Ahead to Save Cash

The people who get away with spending the least amount of money on their moves are the ones who plan everything ahead of time. If you wait until the last minute to make the necessary arrangements, you are going to pay dearly for it. Furthermore, waiting too long puts you at risk of not having the help or equipment you need when the time comes. Moving trucks are often booked solid for weeks in advance, and hiring a moving company at the last minute is just about impossible. In addition to saving money, planning ahead will make the experience a lot less stressful. Before you know it, you’ll be settled into your new home with money to spare.

Saving Money By Skipping Extended Warranties

Posted: May 7th, 2012, 8:39pm MDT by Jason (Frugal Dad)

Whether you’re purchasing consumer electronics, appliances, or even a new car, someone is probably going to try to sell you an extended warranty. These warranties often seem like great deals, but looks can be deceiving.

Extended warranties are a booming business for one reason: They make money for the companies that sell them. That’s why it’s so important to crunch the numbers before purchasing any type of extended warranty. In many cases, you’ll be better off just putting that money in a savings account.

The Economics of Extended Warranties

Companies that sell extended warranties are in the business of making money. Some estimates put the yearly revenues of the extended warranty industry at over $25 billion. Since those revenues are built on the backs of warranties and service contracts that failed to pay out as much as consumers put into them, it’s pretty clear that buying an extended warranty is a losing proposition. There are some circumstances where it makes some sense to buy one, but you’re usually better off skipping the extended warranty and saving the money.

Examine the Warranty

Some big ticket purchases are incredibly expensive to repair, which can make an extended warranty seem like an attractive option. However, it’s vital to look at the factory warranty before pulling the trigger. A lot of consumer electronics and appliances have generous factory warranties that cover any problems that an item might develop early on. Statistics show that if an item is going to need repairs, it will typically fail within the time period allotted by the factory warranty.

It’s also vital to determine whether or not an extended warranty actually provides coverage that the factory warranty doesn’t already offer. This is especially important if you’re in the market for a new car because OEM factory warranties are usually quite comprehensive. Some automakers offer up to 10 years of coverage on vital powertrain components, and others provide free service for a specific amount of time.

Look at the Failure Rates

Different items have varying failure rates, so it’s a good idea to look at some hard numbers before paying for an extended warranty. Some major appliances and consumer electronics have remarkably low failure rates, but extended warranty companies are more than happy to sell you coverage that you’ll probably never need. According to Consumer Reports, only 10 percent of all dishwashers ever require service, and digital cameras are similarly unlikely to fail. The failure rates of most other consumer electronics are even lower.

Computers are more likely to break down at some point, but about 70 percent of them survive without ever requiring significant repairs. You’ll typically be better off saving the money you would have paid for the extended warranty because it will probably be time for an upgrade by the time your computer fails. At that point, you’ll be able to dip into your savings account and apply that money toward your next purchase.

The Cost of Self-insuring

The basic concept of extended warranty coverage is sound. Repairs are often costly, and it can be tough to fit an expensive repair bill into an already strapped budget. However, you’re typically better off skipping the extended warranty and self-insuring. If you take the money you would have paid for the warranty and put it in a savings account, you’ll enjoy multiple benefits. The money will earn interest, and it will be available if you ever need to pay for repairs. It will also be available if the item you purchase never needs repairs, which isn’t the case with extended warranty coverage. If you pay for a warranty and never need it, that money is gone forever.

Extended warranty companies operate just like insurance companies. Some of the warranties they sell actually pay off for consumers, but the majority don’t. As a single consumer, you don’t enjoy that protection. However, there is a way you can turn the odds in your favor. Every time you have the option to purchase an extended warranty, you can put the money into a dedicated savings account. Since it’s highly unlikely more than a few of the items will actually break, you should always have more than enough to cover repair costs.

How to Save Money on Entertainment

Posted: May 2nd, 2012, 4:20pm MDT by Jason (Frugal Dad)

You want to save money, but you also want to get out and have some fun. Traditional activities such as dining out, movies and concerts have become expensive.

Fortunately, you can enjoy a night out or an exciting weekend for little expense by exercising a little creativity. In fact, the times you remember most fondly will likely be those where you got together with family and friends and spent the least money.

Avoid soaring entertainment expenses and have more fun by taking advantage of the wealth of free or inexpensive activities in your own neighborhood.

Community Events

Sign up for a community newsletter that lists upcoming events. Many of these local events are inexpensive or free. Most communities feature indoor and outdoor festivities such as agricultural fairs, spring flings, craft fairs, music festivals and showcases of local heritage. Pack your own lunch or eat before you set out to save on food.

Potluck Dinners

Assemble a group of friends, and hold potluck dinners at a different house each week. Assign the main course to the host, and have guests bring side dishes and desserts. It is easier and cheaper to buy food in bulk, especially if you pay attention to sales.

Add an activity that interests all of the guests, such as an after-dinner board game.

Movie Nights

Spring for soft drinks and popcorn, and invite your friends over for a movie night. Watch a DVD you already own, or borrow one from a friend. Many libraries offer a good selection of DVDs. Consider classic films and new releases, which generally appeal to a variety of tastes. If you are feeling creative, choose a theme and ask your guests to bring related snacks.

Game Night

Invite your friends over after dinner to play card or board games. Games, unlike concerts and movies, are great for encouraging conversation and laughter. Ask your friends and family to bring some favorites to expand your selection.

Offer games that both kids and adults will enjoy. Search yard sales and second-hand stores to find board games at a fraction of their original price.

School Plays and Concerts

Support your schools and enjoy some great entertainment by attending plays and concerts put on by local kids. Go with a group of friends, and make an evening of it. Admission prices are much lower than those for professional plays and concerts.

While the performances may be less polished, the enthusiasm level is likely to be higher, and you will all feel good at the end of the evening.

Libraries

Public libraries offer free entertainment to children and adults alike. Most public libraries feature summer story hours for children to promote reading. Many of these programs offer prizes, which may include movies passes and tickets to sporting events.

Adults can take advantage of books, digital e-books, magazines, newspapers, music CDs and movies. See if your library offers culture passes, which allow families to attend science centers and museums for free.

Free Days at the Museum

Museum admission can be expensive, so take advantage of discounted and free days that are generally offered once a month. Museum websites will tell you when these days are scheduled.

Pick-Your-Own Farms

Take your kids to a pick-your-own farm to get fresh vegetables and fruit at bulk prices. Picking starts in March for asparagus and runs through September or October for apples. Larger farms may offer hayrides, face-painting, tractor rides, petting zoos, storytelling and corn mazes.

Time your visit for the morning when it is likely to be cooler, and remember to bring a stroller for the little ones.

Letterboxing

Try your hand at letterboxing, a high-tech treasure hunt requiring only a notebook and stamp. Visit the Letterboxing North America website to print out clues to the location of a box hidden in a public location. The box will hold a logbook and stamp. You will mark the logbook with your stamp to show that you have found the box and then imprint your own notebook with the letterbox stamp.

Eventually, you and your family will have a notebook filled with the stamps of letterboxes you have found. Kids will benefit from outdoor exercise while developing map-reading and puzzle-solving skills, and everyone will enjoy the thrill of a treasure hunt.

Square Foot Gardening: How to Get Started for $50 (Infographic)

Posted: April 30th, 2012, 8:43am MDT by Jason (Frugal Dad)

My 2008 post, How to Build a Square Foot Garden, was a big hit with other first time gardeners. Since spring is really just kicking into gear, I thought we’d revisit the square foot garden with a graphical step by step. Along with updated materials and construction diagrams, we’ve also added a plant list, extra tips, and some new options to try out. What’s great about square foot gardens is that they are such a warm and easy introduction to growing your own food. Here’s hoping our graphic brings out the gardener in you!

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Source: [frugaldad.com]

gardening infographic

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Source: [frugaldad.com]

How to Save Money on Your Wedding

Posted: April 25th, 2012, 3:00am MDT by Jason (Frugal Dad)

Most people regard their wedding day as one of the most important and meaningful of their lives. Many also believe they have to spend a fortune to create a truly special wedding. Fortunately, it is possible to create an elegant and tasteful event on a budget, allowing you to apply the savings to a car purchase or down payment on a house instead.

Read on for some ideas that will help make your big day memorable without requiring you to spend a bundle.

Scheduling

Consider planning your wedding during off-peak months when vendors are more open to negotiation for expensive items such as catering fees and the reception site. Generally, the months of November, January, February and March see less wedding activity. Because Saturday is the most popular day for weddings, you may save money by marrying on a Friday or Sunday.

Venue

Charges for traditional wedding venues can be exorbitant. If you live in a large city, look outside the city limits for better deals. Think beyond the traditional country club or reception hall. Consider an art gallery, park, beach, bed and breakfast, civic garden or zoo. Remember that you may have to rent tables and flatware. Do your homework first to make sure a non-traditional venue is the most cost-effective option for you.

Officiant

Some budget-conscious couples ask a friend or relative to perform the ceremony, adding a special, personal touch to the wedding and saving $200 or $300 at the same time. Some churches offer online ordination, sending credentials by email. Your county clerk’s office or marriage license bureau can tell you whether such an officiant has the legal status to officiate a marriage in your state.

Invitations

Engraved invitations are elegant, but they are also very expensive. Creative do-it-yourselfers will save substantially by printing invitations from their own computers. A number of websites offer original ideas and instructions for making invitations. You might also consider ordering plain invitations and using a hole-punch and ribbon to decorate them. Your invitations will be more memorable for the personal touches you give them.

Wedding Dress

Avoid traditional bridal salons, and consider buying the wedding dress at a department store or outlet. Other ideas include finding a vintage gown you love, buying through a discount gown retailer or online auction site or saving hundreds of dollars by renting a gown. You can make the occasion more meaningful by wearing a gown belonging to a dear friend or family member. Shop for shoes to match your dress in the summer when regular shoe stores stock a selection of white footwear, allowing you to bypass expensive bridal shops.

Flowers

Choosing to wed in an art museum, garden or tastefully furnished home will save money on flowers because these venues already feature attractive decorations. Silk flowers are a cost-effective option for centerpieces and decorations. If you must have fresh flowers, use those that are in season, and buy them from a local wholesaler. Use blooms with larger heads because they give the impression of more flowers using fewer stems. Inexpensive filler, such as hydrangea leaves and ferns, will boost the visual impact of your arrangements.

Food

Food is one of the most expensive wedding items you will buy. Remember that buffets are cheaper than sit-down meals. Holding a daytime reception and serving a brunch or lunch will save you even more money, as will choosing food that is in season. You might consider a potluck-style meal for a small, intimate wedding, saving money on food, preparation and service.

Cake

Wedding cake specialists charge a great deal for their expertise, so look for cheaper suppliers. Get quotes from grocery store bakeries, which often offer considerable savings over traditional bakeries. Consider renting a show-cake for the cake table, and serve guests from inexpensive sheet cakes kept in the kitchen. There is nothing that says you have to serve cake if you prefer other desserts. Cheesecake, brownies and dessert buffets are always popular.

Photos

Photographs capture your wedding for posterity, so you want to make sure they are done well. Look among your friends and family for a talented amateur photographer. Consider hiring a photography student, but ask to see a portfolio first. If you do hire a professional, have the photographer take photos only at the ceremony, and let friends and relatives take care of the reception.

Ways to Reduce Costs on Paper Products

Posted: April 18th, 2012, 3:00am MDT by Jason (Frugal Dad)

Many people view paper products as essential household items. In truth, while paper products offer great convenience, their use harms the environment and depletes our pocketbooks.

If you have not thought much about your paper consumption, consider how many paper products you use during the course of a year and the amount of money you could save by cutting back.

Read on for some ways to cut down on paper product usage and boost your savings account.

Paper Towels

Paper towels are handy for quick clean-ups, particularly in the kitchen. They are often promoted as an effective way of eliminating the germs that grow in tradition cloth towels. Use a paper towel once, however, and it becomes just another piece of trash.

Try trading in your paper towels for traditional, easily laundered wash rags made from old T-shirts. Save paper towels for jobs that would render your wash rag unsuitable for laundering and reuse.

For glass cleaning, turn to dampened microfiber cloths, which effectively gather bacteria and dirt with their tiny fibers. These cloths possess the added benefit of not requiring the use of expensive, environmentally unsafe cleaners.

Facial Tissue

Handkerchiefs have fallen from fashion, and many people find the thought of using one distasteful. They are easily laundered, however, and soft cotton handkerchiefs are much kinder to red, raw noses than their paper counterparts.

Unlike tissues, a handkerchief will never leave messy bits of paper in your dryer when you forget to remove it from a pocket before laundering clothing. A good supply of handkerchiefs can be had for little expense, allowing you to replace each used handkerchief with a fresh one as needed.

Napkins

Use cloth napkins every day instead of saving them for special occasions. Cloth napkins are economical, durable and more absorbent than paper napkins. They take up little space in the washing machine and do not require laundering in hot water.

Barely used napkins can be kept at each family member’s place setting as they are in some European countries, cutting down on the need for washing.

Coffee Filters

Purchase reusable coffee filters, which are available for many coffee makers in muslin, cotton, hemp and metal versions. Some permanent mesh coffee filters cost only a few dollars and provide the benefit of extra sturdiness, meaning no more unwanted grounds spilling into your coffee.

Paper Plates

Paper plates offer convenience at a cost to your wallet and the environment. Take the extra time and effort to wash dishes instead of throwing your money away. For picnics and barbecues, reusable sturdy plastic plates are a better option than paper.

Do not make the mistake of buying flimsy plastic dishes, however. You will probably end up throwing them away, and they will not degrade in the landfill.

Writing or Printing Paper

Make a habit of hanging onto scratch paper consisting of incoming mail and printing mistakes. Keep this paper handy for quick notes and lists. Use both the front and back sides of any writing paper you use.

Before printing, proofread documents carefully, preview for formatting errors and print only the pages you need. Save on stamps, envelopes and mail clutter by signing up for e-statements and paying your bills online.

Wrapping Paper

Instead of spending money on gift wrap that will be viewed once and discarded, put your creativity to work and make use of cloth bags, stray scraps of fabric, planters, baskets, jars and cookie tins for gift-giving.

Old maps make a unique gift wrap that can be matched to the gift inside. You might use a marine chart to wrap a sailing-themed gift. The Sunday comic strips make colorful, fun wrapping paper for children’s gifts, and relatives will enjoy receiving gifts wrapped in kids’ artwork.

Toilet Paper

For those items most of us just cannot live without, such as toilet paper, buying in bulk makes sense. Surprisingly, bulk warehouses do not always offer the best deals.

Supermarket chains offer big savings on toilet paper, with most running sales twice a month. Discounts range anywhere from 20 to 40 percent. Look for two-for-one deals, and make use of the merchant ad circulars as well as manufacturer coupons from the Sunday newspaper.

The Case for Beer: Why You Should Enjoy it and Enjoy it Right (Infographic)

Posted: April 17th, 2012, 7:58am MDT by Jason (Frugal Dad)

There are times when learning a few key pieces of information about something can help you to maximize the value you get from it. For example, I always used to think beer was unequivocally at its best when served ice cold. However, I recently was surprised to learn that most experts say beers are best served a little bit warmer—between 40 and 55 degrees. Between these temperatures, the flavors and aromas that make the beer experience complete are preserved and protected.

Beer and wine both can be wholesome elements of a healthy lifestyle, but they can become decidedly unwholesome if drinking becomes excessive. Excessive drinking is not only detrimental to your health, it’s expensive, and can easily become a drain on your finances if you’re not careful. However, when enjoyed responsibly and in moderation, some studies are beginning to show that beer can be as heart healthy as wine, and bears some other potential health benefits as well. Read on to discover the case for responsible beer drinking, as well as some helpful tips on food pairing and optimal serving temperatures. In my opinion, if you slow down and enjoy it fully, at the right temperature and with some nicely complimentary food, you’ll be far less likely to enjoy it in excess, and far more likely then to reap the positive benefits of beer. Of course, you should always consult your doctor about what is most beneficial for your own health. Enjoy, I hope you find it informative.

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Source: FrugalDad.com

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Emergency Room Dentists: The High Costs of Life or Death Dental Care (Infographic)

Posted: April 10th, 2012, 11:46am MDT by Jason (Frugal Dad)

It’s hard to believe but we seem to have forgotten about our teeth. We’ve been looking into the costs of America’s famously straight, white smiles. Instead of facts on cosmetic dentistry, we’ve come up with some troubling statistics on rapidly rising trend: emergency room dental visits. It turns out that dental care is suffering right along with general healthcare.

Our latest graphic explains the costs and causes of this overall decline in preventative care. Dental care is really an investment against future costs, but we can’t blame the uninsured for avoiding costly cleanings and checkups. It’s a costly gamble to forego dental insurance. Routine checkups at the ER will get astronomical fast, not to mention the terrifying costs behind contracting a serious dental disease or injury.

Going along with the infographic, it comes down to reform. Insurance-wise, it seems that dental costs need to be reduced in order for more employers to provide coverage. On an individual scale, it seems a more extensive dental hygiene regimen could really help Americans with or without insurance.

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Source: FrugalDad.com

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How to Save Money on Summer Vacations

Posted: April 10th, 2012, 3:00am MDT by Jason (Frugal Dad)

Now that winter has retreated, you are probably looking forward to the family summer vacation. The summer vacation offers a relaxing break from the demanding schedules of both parents and children. It is a time to put away stress and slow down, allowing the family to connect in a fun and meaningful way.

In the face of a tough economy and rising gas prices, it can be difficult for many families to find a way to pay for that summer getaway. Read on for some budget-friendly tips to keep vacation costs under control.

Do Your Homework

Sign up for email newsletters. Many airlines and online travel sites offer updates featuring inexpensive family vacation packages and last-minute travel offers.

Stay flexible, and research several destinations to find the best deal. Traveling one or two days before or after your original schedule can pay off in the form of reduced airfare and hotel rates. When you see a good deal, jump on it. Prices will only drop so low, and you do not want to risk having the package sell out on you.

Opt for Vacation Rentals Over Hotel Rooms

If your family is large or you are traveling with another family, consider checking out a vacation rental. Dividing the cost of a rental with another group offers huge cost savings.

Having a full kitchen at your disposal will cut down on eating expenses, and the rental may offer free on-site entertainment opportunities, further slashing costs. Parents will enjoy the privacy offered by having their own rooms, making the vacation even more relaxing.

Get Off the Beaten Track

When you visit an area that does not list tourism as a main source of income, you stand to save vacation dollars. Check blogs and travel forums for unusual and interesting attractions.

Scout out free events that offer the opportunity to learn about another culture while you eat unfamiliar food, listen to lively music and explore unique crafts. Look for lesser-known historical sites that offer children the opportunity to learn at their own pace in a quiet environment.

Think about exploring a National Wildlife Refuge where your family can enjoy hunting, fishing and kayaking against a backdrop of spectacular scenery.

Cut Down on Eating Out

While much of the appeal of a vacation lies in the freedom from the drudgery of cooking and cleaning, eating out takes a large chunk of the typical family’s vacation budget. If you are staying in a hotel, try to find one that offers free breakfasts. Pack your own healthy lunches, and save your dining dollars for a nice evening dinner.

Keep the Little Costs Under Control

Steer the kids away from expensive T-shirts and stuffed animals that will mean little two weeks after vacation ends. Sit them down before the vacation even starts, and let them know just how much money they can spend on souvenirs. Decide on whether the kids will supplement this amount with savings from babysitting and chores. Try to defer souvenir shopping until the last portion of the trip to cut down on the number of purchases.

House Swap

Look into house swapping as a way to save money on dining and hotel room costs. A number of online agencies work to bring interested families together. For a small fee, you can list a description and photographs of your home. If you are comfortable with the prospect of having strangers sleeping in your beds, home swapping may be a cost-effective vacation option.

Decide on details, such as who pays utilities, whether smoking will be permitted and the number of people staying in the house. Put everything in writing. Consult your insurance policy, and make sure that it will cover injuries to guests and damages to the home.

Take a Vacation at Home

Skyrocketing gas prices are convincing many families to stay close to home this summer. Do not view a “staycation” as an inferior version of the real thing; instead, think of it as a relaxing alternative to a lengthy, expensive car trip.

Pick up your camera, and pretend to be a tourist in your own city. Leave the cell phones at home, and ignore the lure of the television and computer at the end of the day. Break out the board games instead, and enjoy some family together time. Because you will be cutting costs by vacationing at home, splurge on pricy restaurants you rarely visit.

The most important aspect of a summer vacation is spending quality time with your family, no matter how much, or how little, you spend doing it.

Beef 101: A Guide to What 25% of Americans Eat Everyday (Infographic)

Posted: April 9th, 2012, 8:04am MDT by Jason (Frugal Dad)

You may have seen the post back at the end of March about how you can lower meat costs by purchasing sides of beef. This infographic is along the same lines, but contains more information about the health benefits of beef, and offers a simple breakdown of the different types of cuts you can buy at the grocery store, and some easy guides to shopping for beef.

I find that guides like these can be really helpful for novice shoppers and seasoned pros alike when it comes to meat—I think it’s never a bad idea to reinforce best practices. Read on for a basic guide to buying beef. I hope you find it helpful.

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Beef Infographic

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Spring Lawn Care Tips for Your Lawn

Posted: April 4th, 2012, 3:00am MDT by Jason (Frugal Dad)

As the days lengthen and the temperature rises, homeowners’ thoughts inevitably turn to the condition of their lawns. Almost everyone longs for a rich, verdant expanse of luxurious grass; unfortunately, bringing a lawn up to country club standards can involve a considerable outlay of cash.

Fortunately, there are inexpensive ways to develop and maintain an attractive yard. This spring, follow some lawn-care tips that will help you grow a healthy, attractive lawn without breaking the bank.

Take Matters Into Your Own Hands

If you pay someone else to maintain your lawn, it is time to start thinking about getting your own hands dirty. Add up the cost of hiring other people to fertilize, mow and weed your lawn from spring to fall. The total may surprise you. Save that money, get some exercise and enjoy the sense of accomplishment that comes with keeping up your own property.

Aerate

Aerate your lawn in the spring and the fall to promote healthy root growth and reduce the need for water. Aeration facilitates absorption of food, air and water, encouraging deep root growth. Share the cost of an aerator machine with neighbors. It typically takes an hour to aerate an average-size yard, so several yards can be treated in an afternoon.

Overseed

Overseed in the early spring to encourage thick grass growth that will choke out weeds. Begin by cutting your grass short to give the new grass seeds access to plenty of sunlight.

Remove thatch by running a dethatcher behind your riding mower or by raking your lawn by hand. Use a broadcast lawn spreader to distribute grass seed that performs well in your growing area and that blends well with your existing grass.

Cut Down on Fertilizer

Many homeowners fertilize their lawns on a regular basis without knowing which nutrients their lawns are lacking. You may have been wasting money on fertilizer that contributes nothing to the health of your lawn.

Buy an inexpensive soil-testing kit to help you determine which fertilizer to buy, and keep in mind that most lawns require fertilizing only once or twice a year. Save more money and protect the environment by making your own organic fertilizer from compost.

Maintain Your Mower Blades

Sharpen your mower blades early in the spring to cut grass cleanly and avoid stressful pulling of grass from the turf. Instead of buying new blades when they become dull, take them in for professional sharpening, or save money by learning how to sharpen them yourself with a file.

Cut Grass Shorter in Spring

Mowing your grass shorter the first couple of cuts in the spring will help remove thatch, allowing for better aeration as it grows. A shorter cut will also help eliminate fungus that has accumulated over winter. Keep the initial cuts between 1 ¾ and 2 inches in height. Make later cuts at a height between 2 ¾ and 3 inches to reduce the stress of summer heat.

Use Your Grass Clippings

Many homeowners bag their grass clippings in the mistaken belief that they will cause thatch. Short grass clippings do not contribute to thatch development because microorganisms in the soil work to quickly break down the clippings, providing valuable nutrients to your lawn. Remove the mower collection bag, and let clippings scatter over the grass.

Make sure your mower has a safety flap that covers the chute opening before operating the mower without a bag.

Water Less Frequently in Larger Quantities

Root development is important during the spring. Consider watering your grass approximately ¼ to ½ inch twice a week to encourage deep root growth that can withstand hot summer sunlight. Shallow watering will only discourage roots from searching out the water it needs to grow.

Water requirements vary by region; however, no established lawn requires daily watering. During the summer, apply an inch of water, and let the lawn dry out completely before watering again.

Water Responsibly

Underground sprinkler systems can be great money-savers, but you must manage them properly. Do not think that you can set and forget. Consult the weather forecast, and water accordingly. Operating irrigation in the rain is wasteful, as is running the system so long that water pours into the street.

U.S. Tax Hackers: Cheating or Beating? (Infographic)

Posted: April 3rd, 2012, 7:31am MDT by Jason (Frugal Dad)

Tax time is stressful for everyone. It can be overwhelming collecting all the necessary forms and making sure everything is in order before that dreaded day in April hits. I thought that getting ready to make sure yearly dues are paid and accounted for was a universal experience—however, I was surprised to learn just how many legal tax havens are out there. Unfortunately, I learned that most of these are of no benefit to the average citizen. Only 1% of taxes on wages and salaries goes uncollected; however, it’s estimated that every year the U.S. Government loses $100 billion to legal tax havens employed by corporations and multi-millionaires. Read on to learn about some of the surprising crafty tax players. I think it’s a subject worth learning something about, regardless of income level or tax bracket.

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Gaming is Good for You (Infographic)

Posted: March 29th, 2012, 10:07am MDT by Jason (Frugal Dad)

My kids can’t seem to get enough of their video games. I can take away the Xbox 360’s power cord or tell the kids to go outside and play, but at the end of the day, they simply want to keep on playing. Fortunately, more and more research is coming out that distinguishes healthy, responsible gaming from the excessive, zoned out variety.

Our latest infographic goes over some really great things video games are responsible for. It’s pretty surprising to find that genre to genre, games can do some remarkable things for your brain and body. While I’m not thrilled to find my kids three hours in to a Halo session, I’m certainly relieved to learn that some real good can come out of their gaming.

The other useful thing I took away is that moderation is crucial to healthy gaming. It makes sense. Video games have very real benefits but too much of the same thing, day in, day out, actually ends up hurting you. As a dad, it’s a relief to hear that if I have to, I can still yank the plug and point to the door. Check out the inforgraphic and see what good gaming can do for you.

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Unsubscribe: A Quick Way to Resist the Temptation to Spend

Posted: March 29th, 2012, 3:00am MDT by Jason (Frugal Dad)

Each morning, I receive an email from Amazon.com inviting me to participate in their Deal of the Day – a low price offering only available for a short time. Most days I simply delete the email and move on.

Recently, I’ve been tempted by several of their deals. First, there was a complete collection of The Little Rascals. Then there was a 32GB memory card at a deep discount. I noticed it was becoming more and more difficult to resist the temptation to click “Add to Cart” and part ways with my money, so I unsubscribed.

In fact, over the last several weeks I have unsubscribed from a number of similar “Daily Deal” websites, paper catalogs, etc. When I receive a paper catalog in the mail, I call up the customer service number and ask that they remove me from their mailing list.

Yes, I may miss out on an occasional deal, but I’m OK with that. I am trying to be more intentional with my spending. When I need something, I will seek out coupons and deals, but I prefer not to receive a constant reminder to spend money in my inbox at 5:15am every day. It starts my day off on the wrong foot – especially when it is a no spend day!

To expand this exercise a bit, consider all the forms of advertisements we are faced with in a day. From billboards on the morning commute to internet ads to radio and television commercials to junk mail; the list could go on and on. It is becoming more and more difficult to insulate ourselves from the barrage of ads, but there are a few steps you can take.

Skip the Commercials

Our family doesn’t watch much television, but the programs we do watch are recorded on a DVR and played back minus commercials. I enjoy listening to talk radio during the day, but when commercials come on I find myself reaching for the mute button. I recognize people need to make a living selling ads, but I also recognize there are plenty of other willing participants.

Ad Filtering

A number of plug-ins exist for the most popular internet browsers available that work to suppress a variety of internet ads encountered on major websites.Simply Google “ad filtering” for a list of sites where you may download an add-on or plug-in compatible with your browser of choice.

Do Not Call Registration

I’ve noticed a big jump in the number of telemarketers contacting me via cell phone. Just a few years ago, this practice was unheard of, but with so many people now using their cell phone as their primary contact number, it seems the amount of cell numbers floating around marketing lists has increased significantly.

Naturally, the best resistance to over spending is a strong frugal willpower. However, if you are like me, that willpower occasionally needs reinforcements. For that reason, I try to intentionally make it hard to overspend by removing temptation.

How to Save Money On Tools

Posted: March 27th, 2012, 3:00am MDT by Jason (Frugal Dad)

One of my fondest memories from childhood was building a small car for the local Pinewood Derby race with my grandfather. Though I had helped him with a few small projects around the house, this was my first chance to use some of those mysterious tools I saw hanging in his garage.

My grandfather was the type that seemingly had a tool to solve every problem, no matter how exotic or obscure. As a kid, I wondered how in the world anyone could build such a collection, but as he explained, it took a lifetime to assemble such a collection.

The Best Birthday Present Ever

For my 10th birthday, my grandfather gave me what I still consider one of the greatest birthday presents I’ve ever received. The afternoon of my birthday I found a doubled-bagged brown paper sack rolled down and stapled closed (my grandfather didn’t believe in gift wrap) with a little “Happy Birthday” note written in pen on the side of the bag.

The message read something like, “Consider this a jump-start on your very own collection.” The bag was heavy, so I carefully removed it from the table and on to the floor where I excitedly tore open the top of the bag. Inside I found one of the most beautiful gifts I’ve ever received:

These are the things I remember from the contents of that bag:

Hammer
Wrench set
Socket set
Screwdrivers in various lengths
Tape measure
Pliers
Yankee Drill
Bits
Assortment of nails and screws

Sometime later he also gave me a small toolbox to hold my new collection. That box of tools became my most prized possession.

I used it to help my mom hang pictures when we moved to a new house.

I used the pliers to remove the aerator on our kitchen faucet when it became clogged after some dirt made it’s way into the plumbing line. Talk about feeling handy!

When I was a little older, I even changed the blades on our lawnmower one spring (with a little supervision from my grandfather).

Now that I am older, and have a son, I want to pass along a love of well-built tools and help start him off with his own collection. I also continually look to fill in gaps in my own collection.

However, being a “frugal dad,” I also recognize that tools are expensive. Fortunately, there are a number of ways to find them for less than full retail.

Pawn Shops

The other day I stopped by a local pawn shop, attracted by a large tool chest in front of the store. You’ve probably seen the ones with the ball-bearing lined drawers that stack over six feet tall for well over $1,000. The shop was asking $600, and it wasn’t a bad deal, but I wasn’t ready to invest that much into organizing my collection (though it sure was tempting)!

Inside the shop they also had a number of mechanic’s sets with a variety of tools for sale. They were used, but all appeared in good condition, and a number of sets I recognized carried a lifetime warranty (such as the Sears Craftsman brand).

Yard Sales/Estate Sales

Another great way to find used tools is yard sales and estate sales. I know of a recent estate sale in my area where an older gentleman passed away and left a large tool collection for his wife to contend with.

The couple had no children, and the wife had given away a few items to friends. The rest was being sold, along with their home, as she planned to downsize into an apartment community. I like to think that man would be happy to know his tools will continue their useful life as they are passed on to future generations.

Of course there is a lot competition from other buyers looking to add to their own tool collections. Just ask anyone who has recently held a yard sale; lots of folks come by only looking for tools.

I continue to keep an eye out for new tools, and will even pick up some in the stores or online at places like Amazon.com when they appear on sale. And I think now I’ve solved the problem of what to get my son for his next birthday.

About the Frugal Dad Site Redesign

Posted: March 25th, 2012, 2:49am MDT by Jason (Frugal Dad)

Frugal Dad has undergone a redesign in order to make reader experience simpler, easier to navigate, and more holistic. With these goals in mind, Frugal Dad has decided to deviate from the simple blog format and to re-construct the site in order to make the growing variety of content more accessible.

The redesign will help surface resources and posts currently lost in the blog roll. The homepage will now not only feature blog posts (an important aspect of the site that isn’t going to go away) but also infographics, deals, and clearer access to one of the biggest resources the site has to offer—its coupon directory, which is freshly expanded and now offers a more intuitive search process. The new format also enables us to highlight notable and popular deals that readers might be missing.

From Jason’s personal finance advice, consumer awareness infographics, and top retailer coupons, Frugal Dad strives to provide some of the best savings resources on the web. Whichever resource draws you to Frugal Dad, we’re hoping this redesign will make it easier to find what you’re looking for.

We’re also hoping that you’ll share your feedback on the redesign. Please send Jason@frugaldad.com your own ideas on how to make the site more useful and engaging.

Lower Meat Costs By Purchasing a Side of Beef

Posted: March 22nd, 2012, 4:51am MDT by Jason (Frugal Dad)

Beef lovers can save a significant amount of money by purchasing a side of beef instead of individual cuts of beef. Grocery stores put a considerable markup on sliced beef products.

Families can buy a side of beef instead and hire a butcher to cut the beef according to provided specifications. This process is more affordable and better for many families. Of course, there are many aspects to beef purchases that should be considered.

Advantages for Buying Beef in Bulk

Better Quality. Aged beef is typically considered better than standard cuts of beef. Not everyone prefers the taste of aged beef, but aged beef is considered premium. Beef purchased in bulk is usually aged from 14 to 21 days, while beef featured in stores is typically only aged five to seven days.

Lowers Risk of Contamination. Ground beef from a side comes from a single animal. This minimizes the risk of contamination from multiple sources. Commercial ground beef purchased in grocery stores comes from multiple cow sources instead of one.

Easy on the Budget.

When beef is purchased at one single time, it is easier to budget for an extended period of time.

Efficient Use of Time.

Families make fewer trips to the grocery store. This saves gas. Families on a budget do not have to plan their meals based upon what is on sale. This offers more variety and flexibility.

Beef Pre-Packaged for Freezing.

Beef is pre-packaged for freezing. If large quantities are purchased at a grocery store, the beef must be cleaned are re-packaged. When consumers buy a side of beef, re-packaging is not necessary.

Affordable Pricing.

Frugal families can save more when they buy a side of beef rather than individual cuts of beef. Some savvy shoppers can save more by buying beef on sale, but this involves waiting and watching the circulars. Many shoppers do not have the patience for this process.

Storage Considerations

Obviously, storage is a primary concern. Many people living in small apartments with a standard refrigerator will simply not have enough space for an entire side of beef. A deep freezer may be required for storage purposes.

Most homeowners have the space for a deep freezer in a garage or basement. An ample amount of storage space will be required.

When storing beef, people should store in containers or bags that will resist freezer burn. For the best results, remove the air from the bag prior to storage. These types of storage containers preserve beef the best.

Places to Purchase

Nearby cattle farms are the best places to find sides of beef. Local butchers may also give recommendations as to where to find a side of beef. Searches can begin online and expand beyond online searches until the perfect source is located.

Many families will combine their resources, buy an entire cow and split the beef among families. When beef is taken to various households, this solves the problem of storage and offsets some of the expenses.

Potential Costs

A side of beef typically weighs about 300 pounds. After the beef is cut, consumers will take home approximately 200 pounds of actual meat. The approximate cost of a 300 pound side of beef is $1116 at certain cattle farms or butchers.

For example, a couple may spend $300 for 83 pounds of beef. The beef was cut and packaged for freezing for this flat fee. This couple shared a single 560 pound cow with three other couples. The meat on average was $1.65 per pound. The cost to cut and wrap the beef was $0.40 per pound. An initial kill fee of $40 was also charged.

Each couple’s share was 140 pounds before cutting and packaging. After cutting and packaging, each couple took home 83 pounds of beef.

How Many Cuts to Expect

The couple in the previous example took home 21 packages of ground beef, five roasts, 15 packages of steak and two other cuts of beef. The average cost overall was $3.61 which is less than most supermarkets on average but not by much. This process is more convenient and also can be better quality than shopping in a grocery store.

Consider Buying a Side of Beef to Lower Costs

Frugal families should consider buying a side of beef to lower expenses. Many families prefer this better. The family always has beef ready to serve and never has to be concerned about having enough for an impromptu dinner party.

Save $100 a Month With Three Frugal Choices

Posted: March 16th, 2012, 6:14am MDT by Jason (Frugal Dad)

In an effort to offset rising costs in food and energy, many Americans are seeking ways to reduce their household expenses. We are no different.

During the past few months we have been reviewing our monthly budget and looking for areas to shave. Some categories can be reduced drastically with a radical change (such as canceling your home phone or cable service). Others choices are not quite as painful.

Reduce cable service to basic channel offerings. Monthly savings: $30. The idea of canceling cable altogether strikes fear in most couch potatoes. A good compromise is to cut back to basic cable service. You’ll still receive your local cable channels and will be able to use a TiVo or DVR to record network television shows.

Many cable providers offer this bare-bones package at $10-15 a month – compare that to what you are currently paying for 150 channels of things you barely watch.

I also see the use of internet television programming continuing to rise, and with a device such as a Roku player, or internet-enabled television, you can find plenty of offerings (some free, some not) for viewing pleasure.

I keep hoping this will one day satisfy my wish for a la carte programming where I only pay for the few shows that I watch, rather than a huge cable bill every month to receive the 145 channels I don’t watch.

Skip the bookstores and hit the library. Monthly savings: $30. Before I started making an attempt to live more frugally, I frequently picked up a book or two at the local bookstore to the tune of $25-30 a month (this is a conservative estimate as newly released hardcovers typically cost much more).

To satisfy my reading habit in a more frugal fashion I decided to visit a local library. I found the sections on personal finances, career development and personal productivity clustered in one area. I was in heaven!

These days, many libraries support various ereaders such as the Amazon Kindle which allow you to download the content electronically, furthering your savings and convenience factor.

Cancel your home phone service. Monthly savings: $40. I was late to the party on this front as several of our friends cut home phone service almost immediately when cell phones (and unlimited in-network and long distance packages) became so prevelant.

I was always a bit leery of doing away with my home phone, largely because I was concerned we would go over our out-of-network minutes making local calls, etc. However, these days so much correspondence takes place over email, Facebook, Twitter and text messages that there isn’t much need to make local phone calls. The few local calls we make generally fall well short of our out-of-network minute plan.

So you see, with a little creativity and some sacrifice, it is relatively easy to save $100 a month. What will you do with that $100? If you are in debt, I suggest putting the savings towards debt repayment. If you are out of debt, I suggest increasing your emergency fund to a full year’s worth of expenses.

The Radical Growth of the App Economy (Infographic)

Posted: March 12th, 2012, 7:15am MDT by Jason (Frugal Dad)

I’d say that one of the biggest values of a smartphone lies in the potential uses you get from apps. From financial trackers to calorie counters to tools that can help you find the cheapest gas nearby, apps have really changed the way people live their lives, and I think that’s fascinating to think about.

A recent study came out in which it was estimated that developing mobile applications accounted for nearly half a million new jobs on the market—a statistic I find absolutely staggering. It goes to show that seemingly small things can have an enormous impact on the economy.

This infographic lays out a few more statistics on the developing “app economy,” and also has some helpful tips on what apps can help readers with smartphones save money. My personal favorite is GasBuddy, which locates the where in your neighborhood gas prices are cheapest—something I’ve been finding more and more useful as gas prices climb. Check out the infographic in full below.

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App Economy Infographic

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America’s Billion Dollar Baby Scam (Infographic)

Posted: March 7th, 2012, 7:38am MST by Jason (Frugal Dad)

While I understand the impulse to invest in the highest quality products for your children, I think it’s important to meet your kid’s needs without going overboard. Marketing schemes can be very alluring, playing on parents’ eagerness to help foster their children’s physical and mental growth. It’s important to remember that what’s best is not simply what’s most expensive.

There are all kinds of amazing products out there to help new parents, and I am a strong proponent of using technology to assist with parenting. That being said, it’s interesting to know facts regarding the popularity of products that depart from expert recommendations. For instance, Disney’s series of “Baby Einstein” DVDs were owned by 1/3 of babies in the U.S in 2003 even though The American Academy of Pediatrics cautions against kids under two watching television. Without sounding overly sinister, I feel that there aren’t just financial concerns at play here.

Although it’s hard to always quantify the success of a given product, this infographic captures the trend of parental overspending, and the marketing ploys used to encourage it. It examines some of the most expensive products in terms of what the experts say, what the consumers say, and some general common sense observations. As a parent, it’s especially important to know what your money is buying, which products aren’t worth their cost, and which might be worth saving for.

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Babies Infographic

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How Are Gas Prices Affecting You?

Posted: March 6th, 2012, 2:16pm MST by Jason (Frugal Dad)

As predicted a couple of months ago, gas prices are on the march towards $5.00 a gallon, and in many places they are already there.

It’s funny how things like this work – it was just a couple summers ago we were practically crippled by $4.00 a gallon gas. This time, it took prices reaching over $3.60/gallon for anyone in the mainstream media to even mention it.

I guess that’s how price increases go – we sort of become immune to their effect as we absorb the increased costs into our daily lives.

We drive less.
We don’t idle while waiting for the kids to get out of school.
We eat less, or eat out less as food prices increase.
We also tend to eat cheaper food, which unfortunately isn’t always the healthiest choice.

I drive a full-sized truck, so I’m very aware of increases in gas prices. Hard to believe just a couple years ago I could fill up my truck for less than $50. Soon it will take more than $100 to fill it up.

While I’ve considered downsizing, I’m hesitant to go out and buy a new(er) vehicle to save money on gas. From purely a financial perspective, this doesn’t make a lot of sense considering my truck is paid for.

For example, assume I bought something smaller and realized a $200 a month savings on gas. Assuming that new something costs $15,000, it would take over 6 years for that purchase decision to break even.

What I have considered doing is purchasing an older small car for my short, daily commute, and for running errands, etc. I would drive my truck a couple days a week to work and make any stops by the home improvement store on one of those days in case I needed to haul something home.

But what amount of “smaller, older car” makes sense for this purpose? After all, I still want it to be somewhat reliable since I need it to get to work and back. But I don’t want anything too fancy or the increased costs to insure it, maintain it and keep the tag current will eat into any fuel savings. You can see why this is such a dilemma.

For now, I’ve decided to look for ways to consolidate trips and improve fuel efficiency by changing my driving habits. I’m much more conscious of long periods of idling and rarely do I ever “take off” from a red light. I’d rather ride with the windows down than the AC blasting (unless it is the dead of summer, in which case I make an exception).

Sadly, I don’t see much easing in gas prices in our near future. In fact, I think it will continue to get much worse with prices easily reaching $5.00 this summer. Better to be proactive by making changes now rather than waiting for prices to go up another 30% and being forced into painful changes.

6 Secret Multinational Giants (Infographic)

Posted: March 5th, 2012, 8:44am MST by Jason (Frugal Dad)

Living well on less isn’t just about spending less. It’s also understanding where your money is going and who is making the things you touch everyday. As I look into some of the biggest names I’ve never heard of I’m continually shocked. Check out our latest infographic on the multinational giants that just don’t care if you know their names or not. For me, the most impressive is the Taiwanese computer hardware producer, Quanta Computer. Quanta controls a huge marketshare and hauls in annual revenues higher than Amazon and Coca-Cola, but since they don’t carry many branded products, we simply don’t think of them as a sprawling multinational. Just consider that if you owned or gifted a Kindle Fire last year, it was manufactured at a Quanta plant in East Asia. And for those of you who follow my blog on a notebook by Apple, Compaq, Dell HP, or Lenovo, there’s a high chance that some component of your laptop came from Quanta.

I’m not worried that Quanta is cornering a market right under our nose, but I do feel embarrassed that a company I have probably supported with just about every personal tech purchase of the last five years is one that I never could’ve named before today. Understanding the market realities in which we’re spending and saving makes savvy customers more of a force to be reckoned with by even the largest companies. It’s worth all of our time to learn about the companies we’re spending our hard-earned money on. Check out this fascinating infographic on the six insanely large companies that (if you’re like me) you just aren’t thinking about.

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6 Secret Giants Infographic

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Giants Kneel to A Tweet: When Social Consumers Go Viral (Infographic)

Posted: February 29th, 2012, 6:01am MST by Jason (Frugal Dad)

Most everyone knows how impressive modern technology is, with so many groundbreaking gadgets and gizmos on the market and probes being sent to outer space. However, I think it’s easy to gloss over one of the most impressive outcomes of the internet age—social networking sites. When Facebook started, it was a small site reserved for Harvard students, and when Twitter started, I know a lot of people wrote it off as the poor man’s Facebook…You don’t need me to tell you how popular these sites are today.

Apart from their general entertainment value, and obvious benefits like keeping in touch with friends, and staying up to date on news, sites like Facebook and Twitter offer a united voice to the American consumer. When so many individuals express their opinions via these sites, they gain power as a collective. This infographic shows that companies will stand to attention if enough people post regarding one of their policies or practices.

If enough people post about a given company—an unpopular policy for instance—this infographic shows that a company is likely to stand at attention. From personal outrages, like those over the misleading Diet-Coke-like packaging of a Coca Cola to humanitarian concern, like that for the unfair working conditions of Armani and Versace’s Turkish denim workers, digital posting has made a difference. At the end of the day, I think it’s fantastic that consumers have the power sway the practices and alter the course of major corporations just by posting on their social networking pages. This infographic reports on some of the most incredible social consumer victories to date.

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Social Consumer

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Money Lessons Learned from Kids

Posted: February 28th, 2012, 6:12am MST by Jason (Frugal Dad)

The other day my son wanted to buy a “prize.” He had some allowance and gift money saved up, and all he needed from Dad was the transportation.

When he was much younger, Dad kept up with his allowance and gifted money and doled out just enough to pay for whatever toys he picked up in the store. However, these days I’m trying to shift that responsibility to him, and teach him to not only spend his money wisely, but manage it wisely (to include safely transferring it from wallet to cashier and back).

Spending Cash Hurts

It probably sounds elementary, and in a way it is, but I strongly believe in something I’ve dubbed “transactional pain.” That is, the twinge you feel when you hand over cash from your wallet to someone else who buries it in their cash register drawer and slams it shut, leaving your wallet a little thinner.

This transactional pain is hard to duplicate with plastic, and it is certainly hard to replicate when someone else handles the transaction for you. You need to see it, feel it and experience it for yourself.

Over time, I’ve noticed my son has become more frugal during these infrequent trips to the store for a “prize.” Just the other day he spent nearly 10 minutes in the toy aisle agonizing over buying one Lego set or two.

I explained that if he bought two it would leave him with $10, but if he bought one he would still have $30. I assured him that he could buy both if he wanted, since the bulk of this money was left over from Christmas. The choice was his, even though deep down I wanted to steer him in a certain direction.

He decided he wanted both toys and we headed for the checkout. He was quiet, and I knew what he was thinking. About half way through the store he said, “Dad, I don’t really need both of these. I want to put one back and save my money.” Naturally, I told him that was a smart move and we returned to the toy section to put back the second Lego set.

Future Frugal or Future Cheapskate?

I shared the story with my wife and we joked that he will probably grow up and have more money than all of us, but we also don’t want to raise a Scrooge, or a cheapskate. That’s why, if you will indulge my recounting another moment of parental pride, the next money decision from my son made me even more proud.

Over the weekend my daughter shared with us that a school fundraiser she had participated in didn’t do so well and the organization for which they were raising money was hurting. Her teacher asked students to take the forms back home and ask if anyone else might be interested in buying a discount card (local business sponsor this endeavor by offering discounts for holders of this card throughout the year).

The cards are $10, and nearly everyone we knew that wanted one bought one during the first round (yes, even Mom and Dad). Hearing my daughter’s passionate pitch my son responded, “I’ll buy a card from you. I can save money at Krispy Kreme!”

This drew laughter from the dinner table and I explained to my son that Mom and Dad already had a card, and really only one member of the family needed one to get a discount if we went out to eat (or bought a box of doughnuts). He frowned, insisting that he wanted to help his sister.

When You Can Afford to Give, Give Freely

I immediately backed down, recognizing a teachable moment, and told him if he wanted to support the cause with this own money he could give $10 to his sister in exchange for his own card. He excitedly ran off to get his wallet, not asking how much money he’d have left, and without agonizing over his giving decision.

It was one of the times when you look back over all the lessons you try to teach your kids and see that maybe, just maybe, one of those lessons stuck. If my son grows into a young man who continues to give to worthy causes without hesitation, to help his family, and to agonize over buying toys, well, I have to say my wife and I have succeeded as parents.

Let’s just hope these ideals survive the teenage years!

How Happy is the Meal You’re Paying For (Infographic)

Posted: February 27th, 2012, 8:09am MST by Jason (Frugal Dad)

I think most people in the world have probably spent money on a Happy Meal at one time or another. It’s a bastion of marketing success and stands as one of McDonald’s most recognizable and successful products.

With iconic products, especially food products that are marketed primarily to children, I think it’s beneficial to take a moment to investigate how products this recognizable and loved have become so iconic. 37% of children say McDonald’s is their fast food chain of choice, and no other company gets more than 10% of their vote.

This infographic lays out some of the details of the recent San Francisco Healthy Food Ordinance, and it also explores some of the facts behind how McDonald’s has become such a popular chain with children. I didn’t know before reading this, for example, that Happy Meal toys have made McDonalds is the world’s largest toy distributor. This infographic also lays how some of the backlash has inspired response from McDonald’s. I think it will be interesting to see how what they change and adapt to please both the customers that want more nutritious options, as well as the ones that want to be able to order one that may be less healthy.

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McDonalds

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Are You an Extreme Cheapskate?

Posted: February 23rd, 2012, 7:10am MST by Jason (Frugal Dad)

The other night I caught an episode of the new TLC show, Extreme Cheapskates. I was looking forward to the show because it seemed to tap into my frugal interests, although I knew ahead of time the advice would be most “extreme,” sensational even, in an effort to attract an audience.

I was right. Some of the tactics used to save money were quite extreme (in my opinion), such as a mother of six banning toilet paper from her home and instead using cloth scraps. The used scraps were tossed in a hamper and washed every couple days. Yuck.

Another show participant went around to fellow diners at restaurants with a to-go box in hand asking if they planned to finish the food on their plates. If they said no, he asked if he could take it.

I suppose he should be commended for attempting to reduce food waste, but I’m not sure how sanitary it is to share the meals of 20 strangers. At one point the show mentioned this family rescued dogs and provided them temporary shelter. Perhaps the scraps were for the dogs. I’ll give him the benefit of the doubt here.

Naturally, the show also featured a dumpster diver who thought it was classy to dig through the trash to look for his wife’s anniversary present. I say you don’t have to spend a lot of money to give or make a thoughtful gift, but digging something out of the garbage to give to someone you love says more about how little you think of this person than your frugal prowess.

The show did have some redeeming moments, such as Jeff Yeager’s feature (he’s a fellow frugal writer, in case you have never had the pleasure of reading his material such as his book, The Ultimate Cheapskate’s Road Map to True Riches). Jeff has some excellent ideas for saving money such as bicycling to town for short errands to minimize the expense of operating a car (particularly relevant given the recent run up in gas prices).

Jeff also mentioned something I whole-heartedly agree with, and something I have heard him mention in the past: avoid lifestyle creep.

Lifestyle creep is the phenomenon that occurs when people, over time, allow their lifestyle to “creep” higher and higher, costing them more and more money each month to maintain.

This “creep” is often motivated by a “must keep up with the Joneses” mentality. After all, when we see people driving nice cars, we want one. When our friends and family upgrade houses, we want to do it, too.

The problem is that all this “upgrading” causes our monthly expenses to creep ever higher, reducing the amount of free cash flow to divert towards savings (and often leads to the accumulation of debt).

It also means we have to work much longer than those who decide to draw a line in the sand and keep expenses in check as much as possible. Jeff and his wife were able to “retire” early by keeping their expenses flat and avoiding the accumulation of new debt.

So while I won’t be rinsing and reusing any Ziploc bags, or forgoing toilet paper, in the near future, I do plan to continue watching the series and learning small ways to apply new frugal tips.

To me, living frugal is all about avoiding extremes. Frugal people often do spend more money than extreme cheapskates, because we value the quality of items enough to spend a little more up front to get more use and enjoyment of things over the long run.

My fear with this new show is that it will portray “frugal” folks as extreme, in general, when in fact the large majority of truly frugal people I know are quite moderate and simply make small decisions throughout their day towards reducing their bottom line.

Dream On: Why Sleep is So Important (Infographic)

Posted: February 22nd, 2012, 1:30am MST by Jason (Frugal Dad)

I know plenty of people who think that sleep is unimportant. Or beyond that, they feel they maximize their productivity or value by sacrificing sleep. I’ve never held that this is true. In college I pulled my fair share of all-nighters and I’ve been known to keep a late night or two—but I’ve always held that sleep is far more important than most people think, and that sacrificing it can actually be fairly costly as far as productivity, and at worst, can actually be quite dangerous.

This infographic showcases some studies on just how dangerous—and costly—sacrificing sleep can be, and it concludes with some facts on how you can try and improve your sleep quality if it’s something you struggle with. I hope you find it informative and helpful, and I hope that it persuades any stubborn night owls out there to try to get a little bit more shut eye now and then.

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Infographic

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The 411 on Flower Ettiquette (Infographic)

Posted: February 13th, 2012, 5:59am MST by Jason (Frugal Dad)

Tomorrow, Americans will buy somewhere in the ballpark of 200 million roses for their Valentine’s sweethearts. Except for Feb. 14th, most of us don’t really think about flowers. I’ll buy the occasional bouquet for a birthday party or a school play, but I usually grab the most colorful, reasonably priced arrangement at the grocery store on my way to an event. We recently ordered flowers for a party and we spent a long time weighing more than cost and color; it turns out flowers are a tricky business. Different flower species and colors are meant for certain occasions and relationships and while guys like me don’t tend to think about it, putting more thought than money into the purchase can really make the gift more special.

Buyers just accept that flower prices increase tremendously around Valentine’s and Mother’s Day. And it’s funny that only 30% of annual flower purchases are made for “no special occasion” yet women surveyed say they prefer getting flowers unexpectedly or on non-holidays. For those of us who need to know how to make our floral gifts more meaningful and surprising, this latest infographic serves as a guide.

Check out this helpful guide to buying flowers if you’re in the market to buy some Valentine’s blooms:

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Source: [frugaldad.com]

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The “No-Spend Day” Challenge

Posted: February 9th, 2012, 9:58am MST by Jason (Frugal Dad)

The other day I was listening to some stock-picking gurus review several of their favorite picks. One of them mentioned Visa and Mastercard as one of their favorite companies given the “new, electronic economy.”

They went on to say, “I mean, think about it. Does a day go by that you don’t use your credit card four or five times a day? Coffee shop on the way to work, lunch, grocery store and gas station on the way home.”

I suppose they are right; we do seem to use our credit and debt cards several times a day. I guess we could just as easily use cash. Well, maybe not just as easily – after all, those card readers at the gas pump are pretty convenient.

The question is, would we spend cash so easily? The bigger question is, why are we consuming so many things every single day? Can we not go a day without buying something? That’s the question I’ve been asking myself lately, and I’ve made it sort of a challenge.

A “No-Spend” Wednesday

Yesterday was a good example. We had breakfast at home, as we typically do. No stops by Starbucks on the way to work. At work, I drank water and avoided the vending machine (not hard to do since I’m trying to eat better, but the occasional diet soda is still my weakness).

Lunch was a brown bag from home – a roast beef sandwich, a portion of cottage cheese and a water. After dinner at home I ignored the the blitz of “deals” that often hit my inbox – Amazon’s deal of the day (yeah, the 32BG thumb drive for $22 was tempting), a $1.99 movie rental opportunity, etc.

Fortunately, my wife agreed to a “No-Spend Day,” too, so her and the kids made it a point to avoid some of the infrequent treats they enjoy throughout the week like the once-a-week visit to Sonic after school to grab a half-priced drink. Sure, it would have only cost them a couple dollars, but we were making a point not to spend any money. Not even $1.00!

Lessons Learned from a No-Spend Day

The exercise has made us more aware of two things: we have a lot of little money leaks in the average day. And two, we need to find more activities that don’t cost money. My kids are ahead of the adults on this one – they have already asked about going to the library this weekend to stock up on some new reading material.

The weather has improved to the point where doing things like taking a picnic to the park once again sounds enjoyable. My son has asked me to start taking him fishing (a sneakily expensive hobby, but very low cost once you have the basic equipment).

We are also on the lookout for things to do nearby that don’t cost much, or are absolutely free. These may be community events or events sponsored by local businesses. Check the Living or Community section of your local newspaper to find out what’s happening in your area.

So, to wrap things up, I challenge you to schedule a no-spend day in the very near future. It’s sort of like a fast, but instead of giving up solid foods you’ll be giving up spending money, just for a day.

You may find that by stringing a few no-spend days together, or dedicating a day of the week as a “no-spend day” every week, helps you significantly reduce your monthly expenses.

Disclaimer: I own no stock in Visa or Mastercard

At the Heart of Valentines Day (Infographic)

Posted: February 8th, 2012, 8:11am MST by Jason (Frugal Dad)

Every year there’s a lot of talk about how commercial and consumer-oriented Valentine’s Day is. I have to admit, it’s certainly not my favorite holiday—I can echo the complaints of many that it puts undue pressure on couples to spend on one another and to show affection in very specific, commercial ways.
It is true that many of the traditions surrounding Valentine’s Day and similar holidays worldwide are directly linked to consumer industries scheming up ways to build business. And it’s clear from the US spending statistics that silly as some people may find it, Valentine’s Day is no laughing matter when it comes to the flower and candy industries. However, it’s interesting to see different ways this looks across the globe, and to explore some of the deeper legend and history behind it.

Commercial as it may have be, I have to admit that the general idea behind it isn’t exactly villainous. Giving gifts to those you love is never all bad, and as this infographic points out, may actually have health benefits.

Overall, I think giving is a good thing, as long as you keep it within reason, and don’t get too caught up in the consumer hype surrounding holidays like this. Check out this infographic to learn a little bit more about just how complex the construction of Valentine’s Day really is.

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Source: frugaldad.com

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What We Think vs. What We Do: America’s Nuitrition Evolution (Infographic)

Posted: February 1st, 2012, 1:30am MST by Jason (Frugal Dad)

One of the biggest sectors that families spend money on is groceries and food. Something I never used to think about and I have lately been giving a little more consideration is the fact that there may be more of a correlation than we’d really like to think between nutrition and spending on healthcare costs. Eating healthy is important, and I think it’s interesting to take note of the fact that as a country, we’ve been on a collective journey of figuring out what that looks like for quite some time. As the official story of what constitutes a healthy balanced diet has changed, so has our standard American diet and the statistics about the incidence of preventable diseases like diabetes and heart disease have climbed. I think it’s important to save money on your food, and to not overindulge by eating fast food for the sake of cheapness or convenience. Your health and the food you eat and your family eats are worth investing in—balance frugality with quality and conscientious choices. They aren’t mutually exclusive.

Our Infographic takes a look at some of the statistics about preventable diseases over the last few decades in the US, and a history of official food guides over time. It ends with some actionable pieces of advice for folks who find themselves in a less healthy state than they’d like or who simply want to maintain as healthy of a diet as they can. I thought it was very informative. I hope you find it helpful.

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Nutrition infographic

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The Day the Internet Stood Still (Infographic)

Posted: January 30th, 2012, 10:09am MST by Jason (Frugal Dad)

As a blogger, I’m deeply concerned about our rights to say and share what and how we please online. Now that SOPA and PIPA are tabled in Congress, it’s easy to forget how close we came to a government-controlled web. Consider the that bills seek to lay full copyright burden on site owners—this means sites unable to police enormous amounts of user generated content, sites like Facebook and Wikipedia, could be subject to infringement charges and government shut down.

The Jan. 18th protest was the largest in U.S. history; our new graphic recounts that momentous day for social media users in tweets, emails and calls. We invite you to pay respects to this online movement that inspired/pressured 13 SOPA-supporting senators (and 3 co-sponsors) to issue statements against overly-strict online privacy measures. And as exciting as the success of this online mobilization has been, our efforts only tabled two of the worst censorship bills to ever face the web.

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Source: frugaldad.com

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Source: frugaldad.com

Shopping at Warehouse Clubs: Frugal or Not?

Posted: January 30th, 2012, 6:06am MST by Jason (Frugal Dad)

Over the weekend we visited a nearby Sam’s Club, something we haven’t done in many months. My wife and I agreed it is something we should consider doing on a regular basis (maybe monthly) to stock up on a number of staple food items and paper products.

Naturally, we both wondered if shopping like this was really saving us money, or just saving us from more trips to the grocery store, which in turn would likely save us money.

The problem, for me, with shopping at places like Sam’s Club is that there are so many shiny things to distract you. If you manage to steer clear of the electronics section, bypass the rows of discounted books and outdoor equipment, you will eventually make your way to the food, where the occasional deal may be found.

We like to stock up on things like ground beef, which comes reasonably priced in big “family pack” packaging. Once home, we separate the ground beef into roughly 1 pound portions and freeze them for future use in various recipes and regular dishes (tacos, spaghetti, homemade burgers, etc).

We also typically like to stock up on certain non-food items – paper towels, toilet paper, kitchen trash bags, over-the-counter medicines and vitamins, etc. The bulk pricing is not always a deal here, and I’ve occasionally found that I can often save more by coupling a store sale with a manufacturer’s coupon.

Still, the idea of stocking up on paper products for the next month or two, and not having to contend with those items in your weekly grocery store trips is appealing.

Shopping at a warehouse club like Costco or Sam’s can drive down your unit costs for items you regularly use, but there is one thing to consider: storage space. I would not suggest shopping at a warehouse club if you are short on space, including plenty of freezer space.

For storing paper products, consider a closet shelf in an guest bedroom, or under-cabinet storage in a guest bath. Naturally, places like basements and garages make great storage locations, but consider fumes, humidity and temperature and only store items that may be safely exposed to those elements.

On the Way Out: Top Off the Tank

Before leaving Sam’s Club we typically top off our gas tank, as the cost of fuel is a good $0.05 per gallon cheaper than it is in our town. Obviously gas pricing is regional, and you may or may not experience similar results in your area. However, we have found the gas prices at warehouse clubs consistently beat those of surrounding stations.

Consider the Costs: Membership Fees

Though warehouse clubs do occasionally allow non-members to shop on special days, it does cost money to shop. Do a simple break-even analysis to make sure you aren’t giving away all of your savings in membership fees each year. Divide your annual membership costs by 12, and then estimate how much you are saving each visit over shopping at your local grocery store with coupons.

If the cost of the membership is more than the amount you are saving each monthly visit, then it probably doesn’t make sense to sign up. Remember, bulk shopping is not always cheaper shopping.

Toying with the World (Infographic)

Posted: January 26th, 2012, 11:23am MST by Jason (Frugal Dad)

Of course it’s important to treat kids occasionally with the newest toy or the latest game. But as the economy sinks and money gets tighter, it seems to me these types of purchases are also some of the first to cut back on. So I’m extremely surprised that even as families would reduce spending on groceries and school supplies, our toy budgets swell: Americans reduced average supermarket spending by about .5% from 2009 to 2010 while in the same period, toy industry sales grew by 2%.

I’m familiar with the temptation to overspend on kid’s toys. And I know the problem with buying for your kids is that usually the most popular game or specific remote controlled car is just the only thing that’ll do. It’s hard to keep your consumer sense in the midst of the trends that keep our kids and tweens primarily wanting all the same things.

My latest graphic on U.S. toy spending should remind you to check loose spending on that latest video game or too-frequently updating kids’ collections of non-necessities. Check out the surprising cost of our kids’ whims:

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Source: frugaldad.com

Toys

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America’s Pawn Empire (Infographic)

Posted: January 23rd, 2012, 12:15pm MST by Jason (Frugal Dad)

It’s hard for me to shake my prejudices against pawnshops. I can’t help but alternately associate them with George Lucas’ Watto and those Frontline episodes labeling pawnshops as your neighborhood drug money repository. Still, recession-era shifts in consumer attitudes are reinvigorating America’s formerly underground pawn economy and it’s worthwhile to take note of the swelling pawn empire: who’s borrowing, who’s buying and why?

We all know that charging high interest rates on brokered loans allow pawnshops to cut great deals on just about anything, from high quality jewelry and sports equipment to consumer electronics. And just this year, stores here in Denver reported holiday sales spikes of 40% and the 3 publicly traded U.S. pawnshops reported net incomes up at least 25%. It makes sense that those of us looking for ways to save have found ourselves checking the pawnshops for our kids’ band instruments or anniversary gifts.

As always, I’d recommend staying aware of predatory lending whether it’s a bank or a pawnbroker. But check out my latest consumer infographic on the trend you might be missing out on:

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Source: [frugaldad.com]

Pawn Shop Infographic

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Source: [frugaldad.com]

A Shift in Perspective: Micro-Budgeting to Big-Picture Finances

Posted: January 23rd, 2012, 12:15pm MST by Jason (Frugal Dad)

One of my New Year’s resolutions was to simplify the way I budget. Over the years I have grown consistently obsessive over every aspect of my finances. It was beginning to become a problem.

So after many months in a row of daily updates, fretting over the categorization of expenses (should paper towels purchased at the grocery store go under Household, or Food, or should I create a new Paper Products category – ugh!), I have decided on a new approach.

Using Two Checking Accounts to Manage Big-Picture Household Finances

From now on, I will simply have my paycheck split into two checking accounts. The majority of the money will go to a “Bills and Savings” account, where I will have regular expenses and savings contributions (Roth IRA, DRIP stocks, etc.) automatically deducted.

Things like the mortgage, utilities and any subscriptions of services we pay for on a monthly basis will come from this Bills and Savings account. What’s left in the primary checking account will be ours to spend – our “What’s Left” account. That’s it; that’s all there is to it.

Don’t worry too much over the “split” either. It doesn’t have to be exact because you can theoretically move money from one account to the other.

Add up all of your regular bills, plus your monthly savings contributions, and have roughly that amount taken out of your paycheck and moved to your Bills and Savings checking account. And when estimating for this account, round up just to be safe.

For most people, that split might look like a 70/30 split between your “Bill and Savings” account and your “What’s Left” account. So if your take-home pay is $2,000 a paycheck, have 70%, or $1,400, transferred to your “Bills and Savings” account.

Then make it a goal to live off the remaining $600 left in your primary checking account. Things like gas and food and entertainment expenses are deducted here. If you run out of money in the “What’s Left” account, you better start searching the pantry for food and giving up on entertainment until your next paycheck replenishes the account.

Tracking the “What’s Left” Expenditures

I am no longer tracking every penny I spend on food, or gas, or paper towels, or books and movies. I will still try to spend as little as possible on those things, and have vowed to renew my interest in using coupons where possible. However, I am not going to invest my time in tracking all of our expenses to an infinite detail, because quite honestly, looking back I can’t see what we’ve gained from that exercise.

With several months of detailed tracking available at Mint.com, and in our household ledger, I can see that we spend more money on gas than we did a couple years ago. Duh, that’s because gas prices have gone up.

I can also see that we pay a little more each time at the grocery store, and that thanks to new fees, our cable provider has increased our services. But what can I do with this information?

Focus on “Big-Picture Finances”

More important to me is the fact that we have spent less than we’ve earned. We’ve increased savings. We’ve paid off our debts. We are saving for retirement, and college, and we are funding a few sinking funds to cover those once-or-twice-a-year expenses like car tags and vacations.

We are winning over the long term. We are winning the big picture. That’s what really matters – not how much I’m spending on dog food or fast food from one month to the next (no, it is not a coincidence those examples were found in the same sentence).

Now, I don’t mean to completely knock the process of tracking expenses. It can be a very important exercise, particularly if done on a short-term basis (for 30 days, for instance), to get a handle on where your money is going. However, it isn’t something I would spend a lot of time on every single month, or in my own previously obsessive example, every single day!

Life is short. You can spend it meticulously going through receipts to split costs from your last grocery store visit between paper products, baby food, and the Redbox rental you grabbed on the way home, or you can look back at the end of the month and reflect on your increase in savings, your reduction (or avoidance) of debt, and your time spent doing things other than updating your elaborate budgeting program.

The Anatomy of A Cupcake (Infographic)

Posted: January 18th, 2012, 10:21am MST by Jason (Frugal Dad)

When this gourmet cupcake boom took off a couple of years ago, I couldn’t believe it. The cupcakes I’m used to are home-baked, hastily frosted and pocked with thumbprints. And before my family discovered a local cupcake café, the idea of shelling $4 dollar for a lavender lemon verbena cupcake would have made all of us laugh. Now, we do occasionally find each other lingering on the Food Network’s “Cupcake Wars” (now into it’s 4th season). And I’ve only softened somewhat to the idea of cupcakes-for-purchase, but I’m definitely done holding my breathe for the cupcake bubble to burst.

It’s the ingenious image of the sweet and simple cupcake that propelled the treats into a $6 billion industry. We’ve all made cupcakes a thousand times. The ingredients are familiar, pronounceable items we always have on hand. Their authenticity helps us feel better about buying our kids and ourselves a $4 cupcake over a lot of other fast food snacks. But really, like most anything we eat nowadays, the cupcake represents global effort of laborers and products from places we don’t tend to think about. Check out this new graphic weighing the ingredients of this trendy personal treat:

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Source: [frugaldad.com]

Food Infographic

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Source: [frugaldad.com]

Save Money on Groceries by Being an Intentional Shopper

Posted: January 17th, 2012, 6:11am MST by Jason (Frugal Dad)

Over the weekend I stopped by the grocery store to pick up a few things. Since we were set on meats and produce, I found myself wandering the aisles more than usual – seeing what was on sale and checking prices of a few of our favorites.

Before I knew it, my shopping cart was half-full, and I knew my trip to the store to “pick up a couple things” would likely cost much more than the mission name implied. So it goes when shopping without a list.

$38! I spent $38 essentially on junk. Well, it wasn’t all junk, but the very large majority of it was junk. And by junk in this context I mean things that can’t generally be used to make a meal – sodas, chips, a couple dessert items, some frozen items from the “Snack” case, etc. No ingredients, no staples, no meats, no vegetables.

I loaded up the items in my truck and reflected a bit about the grocery trip, wondering how many times I’ve shopped like this in the past and thought nothing of it. I violated nearly every rule in the book of frugal grocery shopping – I didn’t have a list, I had not planned any meals, I was hungry, etc, etc.

I decided from now on I would try to be an “intentional grocery shopper.” That is, I would do a better job of planning before I went to the store. I would seek out only the things I needed to fit my meal plan and nothing more.

How to Become an Intentional Grocery Shopper

1. Plan meals a week (or two) in advance. One of the easiest ways to plan a shopping list is to work backwards. Start by planning a few meals you and your family would like to have over the next several days, then list the required ingredients for those meals. Check your pantry to see what you have on hand and add any missing items to your grocery list.

2. Always shop with a list. I can’t cite any official study, but experience tells me that when I shop with a list I save money. I also forget less things, which requires a return trip to the store which offers more opportunity to spend unintentionally.

3. Shop once a week. The enforcement of this rule alone will make you a more intentional grocery shopper. If you know this is your once-a-week visit to the grocery store you are more likely to plan and make a complete list so as to avoid a trip again later in the week.

4. Use coupons. I am not the best coupon sorter. Some people seem to have it down to a science – it comes naturally to them. Not me. Still, I could probably save $5 – $10 per trip to the grocery store without even trying just by using the coupons in the current Sunday paper. Imagine the damage I could if I actually invested the time to collect and sort them EVERY Sunday.

Speaking of coupons, have you checked out our Coupon Directory lately?

5. Stay away from the inside of the store. On my most recent trip to the store I did the exact opposite. I avoided produce, meats and dairy and instead wandered the chip and cookie aisles for half an hour. Big mistake – unless I was targeting something very specific. From now on I will stick to the perimeter of the store, for the most part, stocking up on meats and fish, dairy and produce.

What are some tips you use to save money on groceries?

Why The Airlines Are Bankrupt (Infographic)

Posted: January 16th, 2012, 10:50am MST by Jason (Frugal Dad)

Like many of you, I often find the need to fly to see family, take vacation, or go on business trips. And each time I’m struck by how little I get on the flight and how much I end up paying for the pleasure. So when I saw that American Airlines was filing for bankruptcy, I was shocked. Turns out 20 airlines have filed for bankruptcy in the last 10 years, and the future doesn’t look any brighter for the remaining ones.

We put together this graphic looking at the airline industry and its struggles since deregulation in 1978. It may not be obvious to the average US domestic air traveler, but prices are A LOT better now than they were 30+ years ago. In 1974, a round-trip flight from New York to L.A. would have cost almost $1500 (adjusted for inflation). Today, that flight can cost under $300. Still, air service is worse in a lot of ways, with smaller seats, less in-flight food, and more delays and cancellations.

I hope you find this graphic as eye opening as I did. While it won’t make paying “baggage fees” any easier, it should help you understand exactly why airlines have decided to price gouge us – and what might happen if they didn’t.

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Source: [frugaldad.com]

Flight

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Source: [frugaldad.com]

Redefining Action Hero: Bill Gates is Better Than Batman (Infographic)

Posted: January 12th, 2012, 7:52am MST by Jason (Frugal Dad)

I have a lot of respect for Bill Gates. Not just because he’s been wildly successful, but because as far as I can understand, he’s kept a steady head about him in spite of his success. As one of the wealthiest men in the world, he’s also making a name for himself as one of the most philanthropic.

Obviously most of us don’t have the kind of capital that Bill Gates has to work with, but I feel that everyone could learn from his philosophy towards philanthropy. I admire that his approach is both compassionate and practical. He sees charitable endeavors as something well worth investing in, because ultimately everyone benefits from an overall better quality of life around the world. He sums it up himself pretty well: “[The] hybrid engine of self-interest and concern for others can serve a much wider circle of people than can be reached by self-interest or caring alone.” I feel like that’s a refreshingly balanced philosophy. Not only that, but as this Infographic shows, there are direct results that speak to just how powerful a well-informed and carefully invested philanthropist can be.

Read on to find out more about the powerful things happening at the hands of Bill Gates, the Bill and Melinda Gates Foundation, and the legacy of philanthropy started by some of America’s most successful and most innovative figures. It’s nice to remember that success doesn’t always create greed — it can enable a powerful force of giving and problem-solving.

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Source: frugaldad.com

Microsoft Infographic

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Source: frugaldad.com

Update Much thanks to Matthew Herper at Forbes for pointing out that the vaccine Bill Gates spent $200 million to rescue was in fact for malaria, and not for polio as the infographic previously stated.

Better Than the Average Man (Infographic)

Posted: January 10th, 2012, 7:53am MST by Jason (Frugal Dad)

I probably could have told you that American men were in bad shape (both financially and physically) but I didn’t realize just how bad until now. The average guy has almost $15k in debt and only $3k in savings, and 16% of guys rarely pay off their credit card bills. If this isn’t why Frugal Dad was founded back in 2007, then I don’t know what is.

But my blog has always been about how to improve with a few simple steps, and this graphic is no different. I’m excited about this one – it’s useful in looking at the average American guy, and it gives sound advice for improving your finances and getting active. Enjoy!

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Source: [frugaldad.com]

Average Man Infographic

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Source: [frugaldad.com]

Resisting the Urge to Step Up in House

Posted: January 9th, 2012, 12:09pm MST by Jason (Frugal Dad)

The other day I was talking with an old friend who I hadn’t seen in a few years. He shared with me that while things were going pretty well, he regretted the decision to buy a new house early last year.

I was puzzled too, because not long ago I remembered them buying a home, which at the time (maybe three or four years ago) was a major step up for them. It was a very nice home, and one that offered the space they needed for their growing family. I just assumed they would be there for years – maybe decades.

Somewhere along the way my friend got a promotion and his wife returned to work. They had some new-found cash flow, and felt some temptation to step up in house again. Rates were nearing an all-time low, and prices had been knocked down a bit in their area (though not quite as bad as in other parts of the country).

They decided to, in his words, “stretch a bit” to buy a much larger home (around 1,000 square feet larger), with a bigger lot and many more high-end features. They considered it a smart investment.

Fortunately, they sold their old house relatively quickly, and for the first couple of months they were tickled with the new place. Unfortunately, it didn’t last.

They soon realized that the new home came with larger bills. I guess they always knew that would be true, but now they were feeling it. They were paying more in utilities each month. Their payment was significantly higher thanks to higher taxes (they now owed city and county taxes since they moved closer to town).

My friend’s wife saw her hours cut at work, which was a mixed blessing since she missed spending more time at home with their kids. On the other hand, they counted on her earnings to help cover the mortgage. He said they were starting to feel “squeezed.” Looking back, he confesses, it would have made more sense for them to just stay put and find something else to “invest” in.

Finding Contentment

I can relate to what my friends are experiencing, and his story was a timely one for me. My wife and I often wish we could relocate to a different area. Houses in the area we desire are significantly more expensive than what we owe on our current home.

We feel like a move there would mean depleting our cash for a down payment on a larger debt. At the end of that trade we wind up owning less (savings) and owing more debt. That just doesn’t fit with our financial goals.

Since becoming debt free but the house our goal has been to acquire assets – things that go up in value, or add value to our lives, or create a passive income. While you could make the argument that real estate meets these qualifications, I don’t necessarily want to put all my eggs in my primary residence. I’d rather buy rental property, or land, or invest in REITs for real estate exposure. My home is my shelter; it’s not an investment.

When I start feeling a little house fever, I remind myself that all the granite countertops, square footage and stainless steel appliances in the world can’t change my fundamental feeling about new debt.

I don’t want to take on more debt. I want to pay off the remaining debt I have (the mortgage), and be free from debt altogether.

I don’t want to buy something that will cost me more to maintain, draining more money from future earnings.

I don’t want to buy a fancier roof over my head if I think one day I may not be able to pay for that roof, a roof that keeps the rain and the wind and the cold away from my family.

So for me, curing house fever is relatively easy. I take a walk around the outside of my home and think of the blessings I have inside, beginning with my family. Everything else is just stuff. And I don’t need a bigger box just to hold more stuff.

If I lost everything inside that house, but still had my wife and kids, I’d still be a blessed man. Anything else is just gravy.

As for my friend, he said they are looking to downsize, but are now having trouble selling their home – one of the larger ones in his neighborhood and significantly more expensive than the short sales happening around him.

As he put it, “We may never find someone dumb enough to take this house off our hands.” I told him to be positive, because after all, the previous owners did.

The 7 Reasons Nothing Leaves Las Vegas (Infographic)

Posted: January 6th, 2012, 9:08am MST by Jason (Frugal Dad)

Las Vegas is famed for its sin and sleeplessness. But really, the city remains one of America’s last affordable indulgences. Off-season rooms at Circus Circus drop to $23/night so it turns out cheaper to live on the strip than to rent a two-bedroom Vegas home! Affordability and convenience make Vegas a hotspot even during a recession.

Check out this Infographic scaling Sin City’s crazy tourism industry:

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Source: frugaldad.com

Las Vegas Infographic

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Source: frugaldad.com

The Problem With Patents (Infographic)

Posted: January 4th, 2012, 11:29am MST by Jason (Frugal Dad)

There’s no question that software and technology represent some of the fastest growing industries today. The internet has fundamentally changed the way we interact, do business, and spend money—without it, Frugaldad wouldn’t exist. That said, I always try and keep abreast of what’s happening in these sectors, and to be aware of how the online and tech industry makes its money.

I recently listened to an episode of This American Life called “When Patents Attack!”. Something that surprised me while listening was that while I think of patents as being mostly for gadgets and the kinds of products you see on infomercials, patents have become a huge factor in the software and online industries, to the tune of billions of dollars.

This infographic discusses some of the facts behind the patent industry and how it’s changed as software, technology, and the internet have developed at an incredible pace. I find the information to say a lot about the state of development and innovation; both how important it can be to everyday life, and the problems it can face on a larger scale.

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Source: [frugaldad.com]

Patent Infographic

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Source: [frugaldad.com]

Retirement: Are You Just Throwing Money at a Number?

Posted: January 4th, 2012, 6:03am MST by Jason (Frugal Dad)

Have you seen the commercial from ING where the guy is out walking his dog carrying a sign with something like $1,086,532 in cut-out numbers? A neighbor stops to ask him, “What you got there?”

The man explains it is his number – the amount he “needs to save to retire the way he wants.” He notices his neighbor has a sign of his own…”$ GAZILLION.” “Is that your number,” he asks.

“How do you plan for that?”

“Oh, I blindly throw money at it…hope something good happens.”

Here’s a look at the commercial:

While it is sort of humorous look at retirement planning, I suspect it represents the sort of planning most of us do when it comes to far off goals. I have sat down a time or two to attempt to arrive at my own ”number,” but it is rather difficult to predict what life may be like a few decades from now.

Save as Much as I Can

Up to this point my retirement strategy has been to “save as much as I can,” which reminds me a little of the gazillion guy. “Saving as much as I can” is not a viable strategy for retirement planning.

Instead, I should come up with a goal amount, a number, based on our current living expenses, project what our retirement income needs may be, and factor some unknowns like inflation, health care costs, etc. Now you see why arriving at a number is so difficult.

Then there is the daunting task of developing a savings strategy for reaching your number. The dog-walker in the video is a little older than me, so for simplicity I will double his number for example purposes.

Let’s pretend my number is $2 million. I’m roughly 25 years from traditional retirement age, so I’d need to save about $3,500 a month at 5% rate of return and 3% inflation, assuming I had no savings right now, to reach this retirement savings goal.

Just $3,500 a month, huh? No problem…just have to set aside a little after I pay the mortgage, the food, the utilities, put gas in the cars, etc, etc. Nothing to it. Yeah right.

You see why this gets overwhelming.

Now let’s assume I’ve been reading Frugal Dad the last four years and socking way a huge amount of savings. I have $100,000 saved towards retirement. With this starter savings amount in place, I only need to put away $2,800 a month to reach my goal.

That’s still a decent chunk of money, but I suppose if I pay off the mortgage early, take on a second job, and/or forgo things like eating and lights I might could scrounge up the money some years down the road.

By now I hope you understand the importance of starting early – particularly if you are reading this and your age begins with a 2!

This is how the exercise usually works for me. Rather than coming up with a goal number, I plug whatever seemingly small amount in I can afford to set aside each month for retirement, extrapolate out 25 years and see what the balance will be. The problem is, using this method I come up woefully short of my “number.” Sigh.

Determining Your Number

Much of the success or failure of this exercise comes from the first step – determining your number. There are plenty of retirement calculators out there that will help you arrive at this number. My suggestion is to use three or four of them and take the average. Most brokerage websites have calculators freely available, as do most major financial sites – Google is your friend here.

One drawback to these online calculators is that they make some pretty broad assumptions. It’s difficult to personalize the assumptions based on your lifestyle, your appetite for risk, your frugality, etc.

I often find the stated income needs in retirement to be much higher than what I really believe I could live on with no debt, no mortgage and a relatively simple lifestyle.

Take the results for what they are – a ballpark figure from which you can make adjustments to arrive at your “number,” or even better, your “Goal Retirement Range,” or GRR, an acronym I use to represent the range I’d be happy retiring on (and an acronym that adequately represents my feelings when trying to perform these retirement planning exercises – GRR!)

Your GRR may look like $600,000 – $800,000. Your neighbor may prefer a GRR of $1.2 – $1.4 million. It all depends on a variety of personal factors.

Just don’t let your GRR look like “oh, somewhere between $1 and $2 gazillion.” How do you plan for that?

You Are What You Tweet: 2011 in Review (Infographic)

Posted: December 29th, 2011, 7:49am MST by Jason (Frugal Dad)

If you asked me about the key figures of 2011, Justin Bieber and Charlie Sheen would be the last names to come out of my mouth. And yet, according to the 75% of us who use social media, these two are this year’s most important figures. Check out my new graphic illustrating our surprising social media addictions and what they say about us:

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Source: [frugaldad.com]

2011 In Review Infographic

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Source: [frugaldad.com]

How to Cure a Holiday Spending Hangover?

Posted: December 27th, 2011, 7:12am MST by Jason (Frugal Dad)

Did you indulge in a few too many purchases this Christmas? Between sales for pre-Black Friday, Black Friday, early-bird Christmas, and the day after Christmas, it was almost hard not to overspend, unless you possess an iron frugal will.

We made it through the spending season mostly within budget, but there are a couple areas I’ll need to review in planning next year’s budget, and the corresponding contributions to our Christmas sinking funds.

In years past, we often blew through the budget and financed the remainder of our gift purchases on a credit card. Judging from the amount of swipes I saw in the check-out lines, I can assume we were not alone. Even in what most consider to be a fragile economy, there didn’t seem to be a shortage of shoppers willing to finance Christmas on their credit cards this year.

Assess the Damage

I’ve found the best cure for a holiday spending hangover is to address the damage head-on. No avoiding the bills until January 30th. No pretending it didn’t happen.

Between now and January 1st, figure out where you stand – how much damage was done. Did you blow through your budget and now find yourself low on cash? Did you rack up more credit card debt than you intended? Maybe a little of both?

Use Mint.com, or even a homemade spreadsheet, to take an updated inventory of your household finances. If you are able to transfer some money from savings, without jeopardizing your emergency fund, consider paying off your credit card debt before the New Year – debt free is a great way to start a new year!

If you don’t have enough cash around to pay off debt in one fell swoop, now is the time to devise a debt repayment plan for the coming year. How much will you have to pay each month to be debt free by April? Don’t let holiday debt hang around; it winds up becoming permanent debt, and two years down the road you’ll find yourself still paying interest on Christmas 2011 purchases. Not fun.

Update Your Plan for Next Year

Once you have addressed the damage done this year, consider updating your holiday spending plan next year. We underestimated our budget a bit for presents to extended family members and friends for which we wanted to give a gift. We also underestimated our “giving” budget, as we felt compelled to help beyond that for which had saved.

I don’t regret either decision, but I do want to build it into next year’s budget, because the earlier you start planning for a big expense, the easier it is to save for it.

Consider the following example:

Let’s assume next year’s Christmas shopping budget will be $600. If we start saving now that looks like $50 a month for the next year. If we wait until July, we’ll need to save twice that amount, $100 a month, to hit our goal. That’s a big difference. And it isn’t like Christmas sneaks up on us; it comes around every December 25th.

If you haven’t already created a separate savings account for these types of annual (or nearly as infrequent) expenditures, I highly recommend it. We have an online savings account that allows us to create a sort of subaccount where we save for infrequent expenses like car tag renewals, Christmas shopping, quarterly estimated self employment taxes, etc.

The sinking funds are funded by small contributions all year long, and when the expense is due, we simply transfer the money to our checking account and pay for it with cash. This has a way of smoothing out large budget blips, and reducing the likelihood of a spending hangover the next time around.

Before the New Year has us back in “holiday mode,” take a few days to reflect on this year’s holiday season. Hopefully, gifts will play but a small role in those memories, and instead you have happy memories of time spent with loved ones.

5 Ways to Get Through College Without Debt (and a Scholarship Offer)

Posted: December 20th, 2011, 7:29am MST by Jason (Frugal Dad)

I accumulated a good bit of debt when I went to college. Initially, I attended a school I really couldn’t afford, but it was by far my favorite school, it was relatively close to home, and I went with my heart instead of my head.

Unfortunately, that emotional decision required me to get student loans for the first couple years so I could finance tuition costs. I scraped up enough other money for incidentals (books, utilities, pizza, football tickets – you know, the bare necessities), and my mom managed to cover my housing – even my apartment rent when I moved off campus my sophomore year.

I eventually returned home and bounced around some before finishing my degree online. Over the years I worked full time, took advantage of a tuition reimbursement program (which eventually went away in the months following 9/11, when the economy went south), and finally managed to graduate with minimal debt.

Upon graduation, one of my life goals became helping my kids finish college debt free. I knew I had to start planning, and saving, early. We have opened 529 plans for our kids and try to sock away some money as we can.

We also plan to use a combination of the following strategies to help them reach the goal of a debt-free education.

5 Ways to Minimize Debts While in School

1. Choose your school wisely. Unless you plan to study a very specific field with minimal offerings from most schools, it probably makes sense to consider an in-state school, where tuition is usually a fraction of that at an out-of-state school.

2. Consider a 2-year degree path at a local college for core requirements. Looking back, I wish I had stayed home the first couple years, attended a local school and worked to save towards my four-year degree costs. If you go this route, first verify that your ultimate school choice will accept transfer credits from the local college or university you plan to attend.

3. Work while in school. In a perfect world you would not have to work while in school. You could devote 100% of your efforts into getting your education. But let’s face it; this is not a perfect world. Few parents can afford to send their kids to school and cover 100% of the financing.

Your education is ultimately your responsibility, so if you want it bad enough, you can get a job and subsidize some of your costs. You’re building your resume and developing work ethic – two things you can’t get from school anyway.

4. Take a year off after high school. This is a controversial idea, and I know there is a risk if you take time off you may never return. I get that. However, I left for college when I was still 17 (had a late birthday). I still had lots of growing up to do, and looking back I probably would have benefited from another year to mature.

I also could have worked that year and cash-flowed my first year of college, giving me a head start towards a debt free education.

5. Take classes during the summer and graduate early. If you can swing it, plan to stay on campus during the summer and take a couple classes. You will graduate a semester or two early, which translates to less meal plans, less rent for that off campus apartment, etc. In my experience, I also found relaxed professors and graduate assistants and an overall more relaxed environment than the hustle and bustle of fall semester.

Three years ago I wrote about the coming bubble from student loan debt, and I still believe graduate indebtedness will be one of the larger financial problems for the next generation. In a small way, I’d like to help reverse that trend.

Introducing the Frugal Dad Scholarship 2012

That’s right; we’re offering a Frugal Dad Scholarship ($5,000) twice annually to a deserving student. For full details, requirements and an application, visit the Frugal Dad Scholarship page. I look forward to reviewing your submissions and awarding our first scholarship!

America’s Pet Frenzy (Infographic)

Posted: December 19th, 2011, 3:54pm MST by Jason (Frugal Dad)

It’s always strange to realize just how much we spend on things that we don’t consider regular, heavy expenses. American pet care is a $50 billion dollar industry and growing. As infrequently as vet visits seem to come up for my family, the bill for most any procedure is at least $200. Pets are a part of the family, and I’m certainly not one to cut corners, but some of our spending is very unnecessary.

Check out my latest infographic to see where you fall on America’s spectrum of pet obsession:

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Source: frugaldad.com

Pets Infographic

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Source: frugaldad.com

Why I Stopped Contributing to My 401k

Posted: December 13th, 2011, 7:33am MST by Jason (Frugal Dad)

One of the major benefits of a 401k is it allows you to divert taxes on today’s income to your retirement years, when ideally you will find yourself in a lower tax bracket.

Of course, that benefit is not always a given. Tax rates could increase, or your income needs could increase in retirement. Either way, you might find yourself paying more in taxes than you planned on earlier in life.

For me, the tax advantages do not outweigh the other problems/limitations of a 401k. Of course, much of this is very personal, as the company I work for chooses the plan administrator, and the administrator controls the investment options. Your options may or may not be significantly better.

Your employer may also offer a match to your contributions, which would be very hard to pass up as it essentially “free money” towards your retirement.

Having said all that, I chose to not participate in my employer’s 401k for a variety of reasons, but it largely comes down to freedom.

I prefer to invest in things that give me the most freedom – freedom of investment choice, freedom to tap my money if necessary, and freedom to have more control over taxable events now and in the future (sale of stock, withdrawals, etc.).

Roth IRA – An Alternative to the 401k

My wife and I both invest in a Roth IRA. Here, our contributions can always be withdrawn for any reason without penalty, which in effect makes this an extension of our emergency funds – not necessarily a dedicated emergency fund, but additional dollars we could withdraw if it really hits the fan.

The earnings will grow in our Roth IRA accounts and may be withdrawn tax free upon reaching retirement age (59 1/2). If we need money from the Roth before that, we can withdraw contributions without penalty.

Contributing to a Roth IRA also allows us to have more choice with our investments. Rather than being limited to a few mutual fund options with what I believe to be questionable allocations to particular segments, regions, etc, I can invest in something I feel reasonably sure will do well over the next three or four decades. I can speculate with some of my retirement money, or be ultra-conservative, whatever my appetite for risk happens to be at a particular life stage.

Outside of the Roth IRA I prefer to invest in taxable investments, again where I can control taxable events, income, withdrawals, etc. I’ve previously mentioned my strategy to build a portfolio of dividend growth stocks. I would like to eventually own real estate that produces rental income.

I also plan to tap investments before the government-scheduled retirement age of 59 1/2. I don’t know exactly when that will be, but I imagine I will stop working for full-time pay well before 60. I may work part-time, or start my own business, or change careers – who knows. But I’d like to be able to use some of my own money according to my own time table.

Potential Drawbacks to Stopping Your 401k

I am not advocating people stop contributing to their 401k without strong consideration, I’m just sharing my personal strategy. This is how I would allocate funds after getting out of debt:

1. Invest in a 401k up to an employer match. If no match, go to step 2a.
2a. Save a one-year emergency fund in all cash.
2b. Max out Roth IRA contributions.
3. Invest in taxable investments with a low turnover, including single stocks (don’t forget diversity), tax-advantaged mutual funds, hard assets (gold, silver, real estate), certain types of tax-friendly bonds or Treasuries, etc.

One of the benefits of a payroll deduction to a 401k is that the money is siphoned directly out of your paycheck and into your investment accounts. It’s like putting retirement savings on auto-pilot.

Those lacking the discipline to save on their own may benefit from the level of automation a 401k plan provides. I prefer to take a more hands-on approach with our investments, but that doesn’t mean everyone else does (or should).

I’m not one to put out a lot of disclaimers, but I would remind you that you should never do something, or not do something, with your money just because someone on a blog, or TV, or the radio, advocates it. Do your own homework. Talk with a professional. Make your own informed decision.

I’m interested to hear more from readers on this subject. Do you currently invest in a 401k?

A Fruitful Search for a Frugal Computer

Posted: December 8th, 2011, 3:54pm MST by Jason (Frugal Dad)

I’ve been meaning to buy a new laptop for a while now, but I’m as hesitant as anyone else is to throw down thousands of dollars on something that might be outdated in a year or two. I’ve already considered tablets and in my case, only a laptop will do. In my search for the perfect laptop, I arrived at an epiphany: there is no perfect laptop. But there are cost-effective laptops—laptops that will serve a purpose, are devoid of the kind of glitches that attack a lot of the (apparently) most-heralded and innovative technology, and aren’t going to break my bank. In other words, I need to find a computer that will function, here and now, and won’t force me to lose too much money if it does, indeed, become less relevant in the tech world in two or three years. Here’s where Dell comes in.

Dell doesn’t just carry an extensive inventory of laptops and desktop computers. In addition, it provides a wide array of computer software and accessories, the latter of which includes batteries, cameras and laptop bags. When you’re browsing Dell’s website, you can even find a great selection of printers and home theater equipment. If you’re unlike me, and you’ve already found yourself with your ideal laptop, then you can still find a frugal accessory or two to supplement the computer.

To be honest, I don’t need a lot of the extras that I encounter on their site. Instead, I’m leaning toward purchasing the Inspiron 15R. This innovative laptop features 2nd Gen Intel Core processing, and comes replete with a switch lid, which allows you to dress your computer according to mood and style preference. The laptop can be purchased in its 14”, 15” and 17” incarnations, but the 15” seems to be the perfect size for me. It’s also quite helpful to check out Dell computer reviews from resources like consumer reports, amazon, and other shopping sites with helpful advice.

I’ll be purchasing my Inspiron 15R for just $549.99, even though its market price is listed at $837.99. For a product that consistently receives 4 out of 5 stars in its reviews, I consider that a steal. Also, there’s a promotion on the site that promises the first 500 people to buy the Inspiron 15R will get an extra $50 off by utilizing a coupon code. I’m not sure how long that deal will last, but, at the very least, it’s a signature of Dell’s generosity, and it’ll keep me returning to their store in the future.

I can’t tell you what the perfect computer is, and I certainly can’t tell you what’s ideal for you and your family. But I’m not interested in a lot of extra functions being featured on my laptop. I simply want technology that will help me get by without cutting into my budget too deeply. If you’re in the same frugal boat, I suggest checking into Dell and their Inspiron line.

Implementing a Mortgage Sinking Fund

Posted: December 8th, 2011, 12:30pm MST by Jason (Frugal Dad)

Over the years I have addressed the issue of whether or not to pay off your mortgage early numerous times. It seems the decision to do so, not to not do so, is very much like most financial decisions – it’s personal.

Sure, there are a few mathematical advantages to doing it one way or the other. And yes, those advantages may be magnified depending on your current mortgage’s interest rate. However, if you leave math out of the equation (not easy), the decision to put extra money towards a mortgage is largely an emotional decision.

More Cash or a Paid-for Home?

Imagine you had a savings account with the exact balance of your mortgage. The savings account earned 1% interest (I know I said to leave math out of it, but we’ll get to that), and your mortgage rate is 5%. Would you write a check and be mortgage-debt free, and cash poor?

My guess is you would not. I tend to agree. Again, there are mathematical advantages to paying off your morgage early. In our scenario, you are essentially paying 4 more percentage points than you are earning every year for the right to continue to borrow money from the bank to live in your home.

But by writing a check to pay off your mortgage you have essentially wiped out all of your cash. What will you do when the hot water heater breaks, or someone gets sick, or you lose your job (trust me, one of these things will likely happen if you spend 100% of your cash). Yes, there are credit cards and home equity lines (maybe) to finance smaller emergencies, but when this happens you will sure miss that cash reserve.

The Mortgage Sinking Fund Concept

Being the overly conservative person I am, unwilling to take huge risks and being quite content with a healthy emergency fund, I would probably opt to create a sort of mortgage sinking fund.

I would essentially have my mortgage payments withdrawn from that large savings account each month. I would continue to put a little extra towards the principal balance as my monthly cash flow allowed. And I would continue to build savings in other areas – a dedicated emergency fund, investments, retirement, etc.

When my other savings were sufficiently in place to handle emergencies, and my mortgage balance had been whittled down a bit through a few extra payments, then I might be comfortable writing a single check.

The main advantage to this plan is that I get to hang onto my cash reserve for a rainy day (and I mean, really pouring). I think that is a good idea with economic uncertainty becoming the new normal and probably continuing for the foreseeable future.

Tobacco Smokes the World (Infographic)

Posted: December 7th, 2011, 3:43pm MST by Jason (Frugal Dad)

As I’ve mentioned in a number of earlier posts, smoking is a costly habit. Besides being unhealthy, cigarettes can cost a pack-a-day smoker over $2500 a year, and we could all use that money to pay down debt, take a vacation, or just have some insurance money left in the bank.

It’s also shocking to realize that Big Tobacco – the same industry we thought we got rid of years ago – is quietly raking in some serious profits. A lot of these profits are coming from overseas markets, but Big Tobacco is still advertising here at home. After 40 years of decline, the smoking rate in the US has flat-lined for the last five years.

I’ve heard plenty of feedback this week on my recent spate of infographics, so take what you will from this one. I personally am floored by the lot of the statistics and I think that, like the other infographics I’ve posted, this one should help expose just how large the Tobacco industry is and how much it affects you and your family. Enjoy!

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Source: [frugaldad.com]

Tobacco Smoking Infographic

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Source: [frugaldad.com]

And the Winner of the Amazon Kindle Fire Contest Is…

Posted: December 7th, 2011, 10:47am MST by Jason (Frugal Dad)

Penny Harris!

Thanks to each and every one of the 983 people who entered and made this the most successful giveaway I have run so far.

I’d like to run another giveaway starting December 12th. What would you like to win?

Please let me know in the comments below or via Twitter or Facebook.

Top Frugality Blogs of 2011

Posted: December 5th, 2011, 3:55pm MST by Jason (Frugal Dad)

It’s been over two years since I published the Top 50 Frugality Blogs that Will Help You Save Money and during that period of time, while the recession hasn’t shown any signs of “being over”, the resources available to help you live a more frugal and financially secure life have grown. I’m still a huge fan of the sites previously listed, but I want to focus on new sites so that you guys have over 75 incredibly useful sites to turn to for both personal and professional development and how to live frugally.

So, in no particular order, I present my 35 favorite personal finance/frugal living sites of this year. If you haven’t already, I highly recommend that you add them to your “to read” list. And because I know all of you are busy, I’ve included an interesting post from each site. I hope that you not only find new gems, but rediscover old favorites.

Feel free to share this list with your family and friends or put the Frugal Dad badge up on your site for your readers to know about the recognition – and of course, let me know what you think in the comments!

1. Dumb Little Man offers a wide array of tips that will help readers save money, become more productive, and enjoy life a little more each day.
Favorite Post: 7 Warning Signs That You’ve Given Up on Your Dreams

2. Get Rich Slowly does what its title implies: it offers personal finance advice and contextualizes the larger financial landscape for those who are unfamiliar with this realm. The site features home and mortgage advice, as well as debt relief info.
Favorite Post: The Road to Wealth is Paved with Goals

3. Zen Habits offers advice on simplicity, health, and inspiration all while promoting frugality and developing a path towards a more zen future.
Favorite Post: 6 Money lessons for My College-Aged Daughter

4. Debt-Proof Living offers its readers a custom-made plan for getting out of debt, alongside a substantial archive of blog posts that lend prime financial insights. You can utilize tools and calculators on-site in order to get started.
Favorite Post: When Wants Become Needs

5. Surviving and Thriving demonstrates, through smart writing and relevant backstories, how frugality is less about denial and more about mindfulness. The site encourages its readers to make the most of what they have, however much that is.
Favorite Post: Think You’re Broke? You Probably Aren’t.

6. The Art of Manliness aims to rediscover the quintessential elements of a healthy and virtuous man. The blog encourages men to reclaim the positive traits that make them a functioning, responsible and proud member of society.
Favorite Post: A Young Man’s Guide to Understanding Retirement Accounts: IRAs

7. Consumerism Commentary is a sobering but informative and encouraging personal finance blog. Many of the posts tap into current events, and reflect an ever-changing financial landscape.
Favorite Post: Is Following Your Passion a Luxury?

8. Generation X Finance caters its financial advice to those born between 1965-1980. The news and suggestions aren’t exclusive, however, and other generations can still learn how to control debt and establish a successful career.
Favorite Post: Top 5 Ways to Become a Millionaire

9. My Dollar Plan explores the difficult-to-navigate world of college savings, retirement planning and tax strategies. On top of finance tips, readers can receive deals and discounts to help them save more money.
Favorite Post: 5 Alternative & Creative Gift Giving Ideas

10. StopBuyingCrap.com isn’t your run-of-the-mill personal finance site. Not only does it offer advice, but its tone is exceptional–the whole site is devoted to making saving fun and excited, instead of tedious and humdrum.
Favorite Post: 10 Simple Ways to Feel Rich Without Materialistic Means

11. The Digerati Life keeps its readers up-to-date on the latest investment studies and financial forecasts. The site is especially tech-savvy.
Favorite Post: 14 Staycation Ideas & Ways to Save Money with Local Travel

12. Afford Anything suggests that time is more important than money. The blog encourages readers to invest wisely, live your wildest dreams, and maximize each moment on their way to a life that is richer in every way.
Favorite Post: Stop Crying That There Are No Jobs. Create One.

13. Enemy of Debt takes an aggressive stance against debt and helps its readers find and then maintain a debt-free lifestyle. Self-reliance is the name of the game – the ultimate goal – on this site.
Favorite Post: Stop Spending Money – It All Depends on Your Definition of STOP!

14. I Will Teach You to Be Rich takes a hard-nosed approach to ensuring that its readers’ financial lives are advanced and enriched. Strategies are shared through books and other media, and the exploration of psychology is a huge component to the site’s success.
Favorite Post: 7 Lies We Tell Ourselves About Money

15. The Diary of a Frugal Family is devoted to sharing recipes, thoughts, and tips on parenting. The tone is friendly and conversational – a perfect site to ease your way into the world that is frugal literature.
Favorite Post: Homemade Nutella Cookies

16. Bad Money Advice is home to the often bitter but entertaining and informative rants of a Boston resident. Frank shares his financial thoughts with readers “because mainstream personal advice is not what it should be.”
Favorite Post: A Tax on People Who Can’t Do Math

17. Pick The Brain is a web site that aims to motivate readers on toward a more productive, healthy and better-educated lifestyle. Self-improvement is the name of the game here, meaning psychology and philosophy are prominent features.
Favorite Post: Time is All We Have: 3 Ways to Increase ROI

18. Clever Dude is a smart blog that offers advice on family, marriage and finances. Any and all advice stems from the very mistakes “Clever Dude” has made himself – his family has reduced their debt by at least $200k over a 4-year period; it’s this first-hand experience with debt that makes this site such a great resource.
Favorite Post: Frugal Lunch by Clever Dudette

19. Kiplinger doesn’t just give exceptional personal finance advice. Going a step further, the site features business forecasts, and helps readers anticipate and therefore secure their financial future.
Favorite Post: The Most Overlooked Tax Deductions

20. Five Cent Nickel is a forum in which money matters, and the proper management of it matters more. The site discusses credit card usage, savings and CD rates, as well as mortgages and insurance policies.
Favorite Post: How Much Life Insurance Do You Need?

21. Man Versus Debt is an encouraging website that advices its readers to sell unnecessary belongings (remove the barriers), pay off debt (remove the chains) and then live the adventurous lives they dream of.
Favorite Post: Tyler Durden’s Guide to Personal Finance

22. Shoestring is devoted to encouraging and maintaining a healthy, cheap and environmentally sound lifestyle. The site offers money-saving tips, as well as a collection of advise on vintage/thrift shopping and swapping.
Favorite Post: Homemade Condiments: Just Like Grandma Made

23. Suddenly Frugal is a warm, inspiring and humane site that offers coupons and savings advice to mothers and families. Leah has years of experience, having been raised from childhood that being frugal is a lifestyle, not a whim.
Favorite Post: 4 Tips for Charitable Contributions at the Holidays

24. On the Financial Samurai, personal finances are explored and discussed in-depth. Possibilities for a more secure future are provided to the readers, and are done so with a tone that’s informal/safe yet informative.
Favorite Post: Don’t Have Children if You Can’t Take Care of Yourself

25. Budgeting in the Fun Stuff provides readers with a savvy lineup of personal financing advice. The owner posts her monthly budget and leads the way to a more frugal life by example.
Favorite Post: Tipping After a Bad Experience

26. 20 Something Finance provides advice on reducing clutter, casting debt away, and finding the career that’s most suitable for you. This site is particularly geared towards those in their twenties, as the title suggest. As their tagline states, “Get a Head Start on Your Freedom” – great advice.
Favorite Post: The US is the Most Overworked Developed Nation in the World – When Do We Draw the Line?

27. Love Money keeps their readers abreast with an ever current roll of articles, blogs, and news from pertinent media outlets. Love Money focuses primarily on a British population, but the financial tips and psychology is transferrable.
Favorite Post: The UK’s Cheapest Ever Meal

28. Sweating The Big Stuff is unique in that it is operated by a recent college grad. He wants to help others spend wisely as he goes through his own fiscal maturation.
Favorite Post: The Different Types of Student Loans

29. The Budget Fashionista embarks on the mission to find quality yet affordable clothing and apparel. She enthusiastically invites all of her readers to join in on the process.
Favorite Post: How to Sell Your Gift Cards

30. The Frugal Cook is a compelling food blog, replete with astounding recipes and ideas for affordable but tasty meals and beverages. Fancy, difficult sounding recipes become a possibility – both in the kitchen and on your wallet.
Favorite Post: How to Entertain on a Budget

31. Frugal-RV-Travel is a fun, unique site that encourages readers to see life as an adventure. The bloggers document their affordable RV travels, and offer advice on how to follow suit.
Favorite Post: 17 Tips to Find Free Overnight RV Parking Anywhere

32. Million Dollar Journey offers an empirical glimpse at today’s financial situation. The writer lives through and manages the same issues we all do, and most of the the advice given comes from personal experience. There are also a lot of educational articles written on mature investments.
Favorite Post: How Investing Taxes Work; Part 1

33. Doughroller is a site about making, saving, giving and spending money. The site regularly posts advice on real estate investing, on gaining and using insurance, and on the mastery of credit card debt.
Favorite Post: 55 Painless Money Saving Tips

34. Entrepreneur.com is a community forum in which today’s top technological and financial developments are discussed. A special focus is placed on what it takes to establish a startup, franchise, or other business.
Favorite Post: Scrambling to Build a Business on a Viral Trend

35. Smart Spending combines the best monetary advice from MSN Money and other blogs/sites. Retirement, loans, and taxes are heavily featured. Articles are posted quite frequently and are great for those testing out the financial waters.
Favorite Post: Should You Raid Your 401k?

Check out these other great sites that made the previous best frugal living list.

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The Weight of Walmart (Infographic)

Posted: December 1st, 2011, 10:50am MST by Jason (Frugal Dad)

After reading your comments about the Amazon Infographic that we released two weeks ago (check it out here if you haven’t seen it), it got me thinking about just how big Walmart could be. So I started researching Walmart and found the information to be unbelievable…but, it makes sense since this Black Friday shoppers turned out to Walmart in record breaking droves. Within hours of Thanksgiving night opening, thousands uploaded videos online of the spectacular struggles over cheap TVs, waffle makers and baby clothes.

In the heat of the holiday shopping season, I’m taking a moment to consider where I spend my hard earned money. You might be familiar with the status: Walmart’s the largest grocery store in the U.S., the largest retailer in the world, the leader in global corporate revenue and the largest employer in existence. Still, these facts don’t do much to demonstrate the reach of this superpower.

Check out our graphic demonstrating the Weight of Walmart, and if you find the statistics as shocking as we do, please share it with everyone you know:

Please share this graphic by embedding it on your site

Source: [frugaldad.com]

Walmart Infographic

Please share my graphic by embedding it on your site

Source: [frugaldad.com]

The Four Phases of Frugality

Posted: November 29th, 2011, 6:33am MST by Jason (Frugal Dad)

I have not always been frugal. In fact, there are times now where I often feel less than frugal, as I occasionally make an impulse purchase or indulge in something that isn’t exactly frugal. But hey, I’m human.

What I have noticed over the years is that our frugality has gone through very distinct phases, nearly coming full circle (but not quite).

We’re Deep In Debt – Time to Cut ALL Spending

A few years ago we found ourselves deep in debt, and decided we’d had enough of sending our paycheck to banks and credit card issuers. I returned to my frugal roots (which I’d lost for much of my 20s, or as I like to call them, my “Spendthrift Years”).

We instantly recognized that to reduce our debts we had to work on both sides of the equation – income and outgo. I also recognized that I couldn’t instantly boost the income side of that equation, but we could make a significant dent in expenses. And make a dent we did.

We canceled the cable. We stopped eating out. We stayed out of stores, movie theaters, and anywhere else that might try to separate us from our money. To us, that money represented something very precious – a debt payment – one step closer to debt freedom.

OK, We Still Have to Have SOME Luxuries

That first phase lasted a good six months. We made significant progress towards debt freedom in that time. Then life happened. My mom had a devastating illness that rattled our family, and after a year of grueling rehabilitation following a stroke, she died at the age of 53. Relatively healthy one week; then in the hospital for 102 days, and rehabilitation for months to follow.

It was a life-altering event for all of us. For me, it was a reminder that life was short. I began to question our radical spending cuts. We weren’t having much fun. The kids missed their favorite television channel. My wife and I missed the occasional dinner out as a break from the routine of cooking and cleaning. We all missed taking an annual vacation (which we had skipped a couple years in a row throughout the ultra-frugal phase).

I felt like a big, mean, financial ogre ruling over the household with an unyielding zeal for frugality.

So, we decided to loosen the tight grip on our finances, just a bit. We did ultimately reach debt freedom, but it probably took a little longer than it would had we continued our Spartan existence.

Debt Freedom – Ready to Spend Again

Once we reached debt freedom, we went a little bit nuts. Seriously. We made up for our lack of vacations with a trip to Disney World – the first for our kids. There wasn’t very much frugal about that trip, but we decided our first visit would be a fun one without much consideration to costs. Admittedly, this strategy was not financially smart in hindsight.

In the coming months we also did a little clothes shopping, and spent money on a few other things that had been put off for months (even years). I’m not proud of that time, because looking back, it was sort of antithetical to everything I’ve written here at Frugal Dad. Again, what can I say, I’m human.

That Was Fun, Now Back to Frugality

I guess the major difference in the old me and the new me was that this time around it was much easier to recognize my spendthrift ways and get control of them. Rather than putting everything on a credit card (which has a way of really adding up), we decided to go back to an all-cash basis, with the occasional debit card purchase.

We took a more frugal vacation this fall, spending a week in the mountains and enjoying the peace and quiet (a much different setting than Disney). We clip the occasional coupon, order water with our meals and split the occasional entree. We’d rather stay in and watch a movie than go to the theater. We look for sales to proactively buy seasonal clothing for the kids. You know, the little frugal moves that don’t cause much pain, but still help keep that expense side of the equation from creeping up to high.

I’ve learned many lessons over the last few years, but this last one was the most important. Being able to recognize when you are off track and make small course corrections is really a key to financial success.

The old me would have never recognized I was off track, and if I did, I would have just floored the accelerator into the nearest wall. I lacked the financial maturity (and I’m not referring to age) to keep myself in check.

So I’d encourage you to celebrate milestones, like reaching debt freedom, with a little spending splurge. Do something you’ve been longing to do, but put off because you were in debt. Upgrade an item or two around your home that adds value to your life.

Should that spending slope begin to feel like a slippery one, remember what it felt like to be in debt and adopt our family motto, “Never again!”

Enter to win TWO Amazon Kindle Fire Tablets!

Posted: November 29th, 2011, 12:10am MST by Jason (Frugal Dad)

To commemorate Cyber Monday, we’re giving away TWO Amazon Kindle Fire tablets! For those of you in the dark, the Kindle Fire is currently the number one selling product on Amazon. And for good reason- it’s easy to use, it’s durable and it has all of your favorite apps, books and movies, music and TV shows. We know that you’re going to love your new Kindle Fire tablet, so we are giving away two! Take one for yourself and give the other to a friend or family member.

You have five different ways to enter! Be sure to take advantage of all the ways to win!

How to Enter:
• Follow Frugal Dad on Twitter @FrugalDad
• Tweet @FrugalDad and say who you’re going to give your second Kindle Fire to!
• Like Frugal Dad on Facebook [FrugalDad.com]
• Plus 1 Frugal Dad through the button in the sidebar!
• Comment on our Facebook page!

To Increase your chances 3x:
• Tweet at three friends and tell them “I just entered to win TWO @Amazon Kindle Fire tablets @FrugalDad! Find out how you can win [FrugalDad.com]

Giveaway starts Tuesday, November 29, 2011 at 12:01 AM PST and ends Tuesday, December 6, 2011 at 11:59 PM PST.

The winner will be selected by random.org and notified by email or Twitter DM and will have 48 hours to claim their TWO Kindle Fire tablets or a new winner will be selected.

Good luck!

RafflecopterSettings = { raffleID: 'OGE4YmRkYjBhMTZlYzA2ZGI3MDk3MmZiODM0NDFjOjI=' };

Official Guidelines: No purchase necessary to win two Amazon Kindle Fire tablets. The giveaway begins Tuesday, November 29, 2011 at 12:01 AM PST and ends Tuesday, December 6, 2011 at 11:59 PM PST. Go to [FrugalDad.com] and complete and submit the entry form pursuant to the onscreen instructions. One winner will receive two Amazon Kindle Fire tablets with the approximate retail value of $398.00. Odds of winning will depend upon the total number of eligible entries received. The giveaway is open to legal residents of the 50 United States and DC who are 18 years or older. Void in Puerto Rico and where prohibited by law. Giveaway subject to complete official rules. You have until 11:59 PM PST on December 6, 2011 to enter this giveaway. You are limited to one (1) entry per day per entry option per person/email address/Twitter handle for the duration of the entry period. One (1) potential winner will be selected in a random drawing on December 7, 2011 at 12:01 AM PST from all entries made before midnight PST on December 6, 2011.

$50 Amazon Gift Card Giveaway Winners!

Posted: November 27th, 2011, 3:23pm MST by Jason (Frugal Dad)

Thanks to all of you who entered Frugal Dad’s $50 Amazon gift card giveaway. Congratulations to the winners, who have already been contacted via email!

$50 Amazon Gift Card (5 winners from 950 entrants):

1. Ann Parker

2. Thomas Steele

3. Donald Cox

4. Chris Bradley

5. Kyle James

Stay Tuned for Another Giveaway to Be Announced on Cyber Monday!

Conglomer-ATE: The Consolidation of American Food (Infographic)

Posted: November 23rd, 2011, 9:39am MST by Jason (Frugal Dad)

Take a look at this infographic from the Frugal Dad team. I’ve said it a million times – you get what you pay for, and cheap food is no exception. The amount of consolidation in the industry is shocking, and it’s not getting better any time soon.

If you’ve been following the news, you know that Big Food successfully lobbied this week to have pizza sauce considered a vegetable under school lunch rules. The industry also managed to block most of the nutritional changes that to school lunches that doctors and dieticians had been recommending for years, virtually guaranteeing that America’s schools will continue to serve processed, unhealthy garbage to our children. If you didn’t know that Big Food wields disproportionate influence in America today, reading this infographic will be a great wakeup call.

Oh, and don’t blame me if your Turkey doesn’t taste quite as good on Thursday…

Feel free to embed this graphic on your site

Source: Frugal dad

Feel free to embed this graphic on your site

Source: Frugal dad

Media Consolidation: The Illusion of Choice (Infographic)

Posted: November 21st, 2011, 11:15pm MST by Jason (Frugal Dad)

As a dad (and blogger) I’m concerned with the integrity of the news and entertainment my family and I consume every day. Who really produces, owns and airs the shows my kids are glued to every evening and which companies select the stories I read with such loyalty each morning? I’ve always advocated for critical consumption, and what could be more important than an awareness of the sources of our families’ daily info and entertainment diets? And today, most of our media is controlled by one of six companies. Check out Frugaldad’s infographic on the state of media consolidation in the U.S.:

Feel free to embed this graphic on your site

Source: Frugal dad

Media Consolidation Infographic

Feel free to embed this graphic on your site

Source: Frugal dad

Update: Thanks to Mike for the heads up about the AOL/Time Warner error. The graphic has been fixed.

Can I Afford It?

Posted: November 21st, 2011, 7:26am MST by Jason (Frugal Dad)

With holiday shopping in full swing, I suspect over the next few days and weeks many people will be standing in store checkout lines asking themselves, “Can I Afford It?”

The “It” could be a Christmast gift, a new car, or a gift for themselves. Regardless, there will be a lot of mental number-crunching going on.

Some Thoughts on Affordability

Over the years I have come to loathe the very question of affordability. 99 times out of 100, if you have to stop and ask if you can afford something, you probably cannot afford it. Why do I say that?

Because affordability has been so mangled by marketers and creative financing that few actually stop to do a logical calculation.

Think about it…if I asked you if you could afford a new $40,000 car, what would your response be? What if I asked if you could “afford” a $500 monthly car payment. Chances are more would respond in the affirmative to the second question.

The new car deal offered is really the same. What you don’t consider is that by taking on the 84-month payment plan, the car will really cost you $43,000 when you add interest payments (even at today’s low financing rates).

People have been conditioned to think in monthly terms. Subscription fees, membership dues, car payments, and a host of other expenses are presented in monthly terms.

If you have a gym membership and they sent a letter reminding you it was time to renew with a bill for $359.40 you would probably call to cancel. But what about $29.95 per month? Sounds more palatable, doesn’t it?

One of the best exercises I can recommend to help gain control of your spending is to convert monthly expenses to a yearly cost. It will immediately help you gain perspective that a monthly bill just doesn’t provide.

Here are a few examples from my own household pre-financial turnaround. You can guess the things I immediately cut to help jump-start our get-out-of-debt plan.

Gym membership. $29.95 per month. $359.40 annual cost.
Lawn treatments. $42.50 per month. $510.00 annual cost.
Expanded cable package. $80.00 per month. $960.00 annual cost.

Rather than guessing, I’ll just tell you that we cut all three of these items, and in the process saved over $1,800 that year – which just happened to be the lowest balance on one of our credit cards. In theory, we eliminated that debt simply by eliminating those three expenses, and our lifestyle didn’t really change that much.

Signing Up for Lifestyle Servitude

In addition to considering financial costs when questioning affordability, there should be other considerations when evaluating large purchases.

The fantastic book by MJ DeMarco, The Millionaire Fastlane, refers to a phenomenon called Lifestyle Servitude, whereby we erase more and more of our freedom by creating lifestyle debt.

Here’s how DeMarco describe the vicious cycle of Lifestyle Servitude:

1. Work creates income.
2. Income creates lifestyle/debt (cars, boats, designer clothes).
3. Lifestyle/debt forces work.
4. Repeat…

Sound familiar? How many of you have traded freedom for affordability? Yeah, me too. But part of maturing, financially, is being able to recognize that giving up our freedom for affordable payments is not a game worth playing, long term.

I don’t often wish for financial mulligans (except for the opportunity to go back and save half my income), because I am who I am largely due to how I’ve managed (or mismanaged) my finances in the past. The best lessons are often learned the way. However, if I had it to do over again, I’d love to start with a clean slate – no income, no payments, no debt.

As my income increased, I would not burden it by adding payments for things I really could not afford. I would save, pay cash, and continue to enjoy the freedom to move from place to place, or job to job, without worry over continuing to make payments for my stuff.

I would carry this philosophy into car and home purchases, and any other large expense in my household. If I couldn’t afford to pay cash for a new home, I would rent. If I couldn’t afford a new car, I’d buy a cheap, used one.

If I could not easily afford to cover a year of expenses, I wouldn’t add any new ones (cable, XM radio, gym memberships, etc.). How much different would life be had we taken that path when just starting out?

Sounds radical doesn’t it? Not quite normal. But what is normal? I’ll leave you with yet another great quote from The Millionaire Fastlane:

“Normal is waking up at 6am, fighting traffic, and working eight hours. Normal is to slave at a job Monday through Friday, save 10%, and repeat for 50 years. Normal is to buy everything on credit. Normal is to believe the illusion that the stock market will make you rich. Normal is to believe that a faster car and a bigger house will make you happy.”

Well, when you put it that way, I’m quite happy not being normal.

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