Looking Ahead to 2009

There is an article on Verizon's website that nicely summarizes what I've been writing on this blog over the past few months. It talks about being frugal in 2009 as well as other ideas for saving money. If you get a moment, read what it has to say.

Share Your Financial Plans With Your Spouse

Tip #46 - Share Your Financial Plans With Your Spouse or Significant Other. This one can sometimes be tough. Some of us are savers. Some are spenders. Some are spenders who want to become savers. If you are single, then you have it easy. If you are married or living with a significant other then you both need to be on the same page financially. Easier said than done. I know. Trust me. I know.

If both parties are savers and are happy to cut back on extras, then great. If both parties are spenders, this is not good; but until one of them sees the light then there is nothing we can help them with here. If one of you wants to save money and cut back and the other still is spend-happy, then this topic is for you. What do you do if your family has been spending more than you earn? What do you do if you have some debt and you suddenly realize you need to change your ways but your spouse does not? You need to have a talk with your spouse. You cannot tell him/her what your family is going to do because no grown-up likes to be told what to do. But you can present to him or her a plan for your family to get out of debt or to start saving some of your money.

Let's start with your plan of action. First, write down all of your expected sources of income for the year. Then write up a monthly budget. Ideally, this is something you and your spouse would do together. But, if your spouse wants nothing to do with it, then do it yourself. We went over a budget in another post, but we'll summarize it here. Write down your fixed expenses - those you cannot change - such as your mortgage or rent. Write down any credit card or other debts you owe. Write down your utilities - gas, electricity, phone, etc. Write down your food and clothing expenses and your other expenses - vacation, gifts, miscellaneous. And don't forget the line for savings!

When your spouse is in a good mood, tell him/her that you wrote up a budget to see how much you have coming in and how much you have going out. When your spouse sees everything written down, it is hard to argue whether or not there is extra money for unnecessary expenses. It is this extra money that can be the source of problems. This might be money your spouse wants to spend on eating out or tools, or purses. And it's money you want to save toward retirement. Or perhaps your spouse justs wants to spend money freely without seeing how much you really have extra each month. You need to get across that the budget shows you what you have and how much you have to spend. If he or she is still not convinced, suggest following it for two or three months and seeing how it works.

If you have $4,000 coming in each month and your expenses total $3,600, then tell your spouse that there is an extra $400 per month to play with. Suggest splitting it. He/She can spend $200 each month however he/she wants. You can do the same. As someone who wants to save money, you can put it in a savings account or a CD. Or if you have debt, you can start paying it off with your half. You may not be able to change your spouse, but if you can control how much he or she spends, then you are still better off than if he/she is spending uncontrollably.

On top of that, you can still control the portion of the budget that you usually are in charge of. If you are the food shopper, in the house, you can cut back and save there. If you are in charge of buying the cell phones, you can look for a better deal. If you plan the vacations in the family, you can plan a frugal one. If your spouse is in charge of the cable, you may not be able to convince him or her of a better plan. If your spouse buys his/her own clothes, you may not be able to convince him or her to buy used. But do what you can. After two or three months, maybe you can show your spouse that you have $500 emergency money in your savings account or that you have paid off one of your credit cards. Or that your monthly food bill is now $100 less and you are putting it toward a vacation. Maybe your spouse will catch on at that point or maybe not.

If you are in it alone, then do what you can using what you know about budgets. And at least talk with your spouse about what you are doing. Don't berate him or her for his spending because that won't get you anywhere. All you can do is hope that he or she will eventually come around.

In Real Life (IRL) - I have said this many times in this blog. I am a saver. I always have been. I imagine I always will be. My husband, on the other hand, not so much. He likes to spend. He likes to shop. And I don't think he heard about saving until he met me. To be fair, his dad died when he was young, so he didn't have him to teach him. And to be frank, it was usually the dad who did the finances. So I'm not sure his mother knew how to teach him to save.

When we got married 9 years ago, my husband had $20,000 to his name from the sale of his home. And I think he had about $30,000 in a 401K from work. I had $70,000 I had saved that was earmarked for a home. And I had about $100,000 in retirement accounts. We used $70,000 toward a down payment on a home and we put $20,000 aside for money that could be used toward repairs, furniture, etc. Then I told my husband all I knew about saving for retirement. I told him that he should be putting away the maximum allowed by the law toward a retirement IRA, which he did. Then I told him he should be putting away the maximum allowed by the law toward his 401(k), which he did.

I was lucky because my husband trusted my financial advice. I have a degree in finance. I have a dad who taught me about savings. And I have a brother who is a financial planner. So I had some good sources for my information. He, on the other hand, admitted he didn't know much about finances. So all was good. I was in charge of the finances and he was fine with it. At the time, we both made good incomes. I put money away into savings each month. And we could still eat out when we wanted and shop as we wished.

But then I got pregnant and I wanted to stay home with my child. And that is when I wrote up a budget to see how we could live on his income. Fortunately, we could. It just meant eating out less, buying fewer things, taking fewer vacations, etc. My plan was to go back to work part-time after we had our children and become full-time once they got to be school age. It hasn't exactly happened that way so I am still at home. And now our budget is a bit stricter. But I cannot convince my husband to cut back on his shopping habits. I have a food budget of $400 per month. I brought home 20 yogurts that I bought on sale last week for 40 cents each. They were earmarked to be used for school and work lunches. He didn't care and ate them for snacks. Aaah, I screamed. Those are lunches! He goes to work and stops at the market on the way and picks up crab dip and bread. Luxeries in my food budget. Not so much for him. He likes to eat what he eats. And he likes to stop at Home Depot on the way home.

So what did I do? I adjusted the budget. I control the things I can. We eat dinners that I prepare with food I've bought on my food budget. We go on vacations that I plan using skills I've learned about purchasing train tickets and hotel roooms and cheap places to visit. I found cheaper ways to get our Internet, phone, and t.v. But I've added in a line to our budget for his lunches and his little purchases. I cannot control those. And I'm okay with it (just don't tell him!). We're still socking money away into his 401k and our IRAs and our children's college funds. And I will go back to work in the next couple of years. And because I've been a hyper saver, we are actually more than okay with our savings, so it really doesn't matter if my husband eats fancy supermarket food and buys the latest tool once in awhile.

So if your spouse isn't on board with you yet about savings and spending, write up a budget, present it to him or her. And then do what you can.

When the Going Gets Tough, Don't Go Shopping

Tip #45 - When the Going Gets Tough, Don't Go Shopping. Shopping has become an obsession for many people - not unlike gambling, drinking, or overeating. And as the economy goes downhill, there are those who are turning to the one thing that will make matters even worse for them - spending money. Your husband loses his job, so you go shopping to make you feel better. You can't afford to go on vacation, so you buy something to soften the blow. Your morgtage for your large house is higher than your income can really handle, but you buy things to fill the bare living room.

This madness has to stop. Our culture has become one obsessed with material things. And while it's bad enough that we've become so consumer oriented, it's even worse when people who can't afford things buy them anyway. And in this economy, that has become more common than ever. Especially because the people facing hard times were used to buying things on a whim. They need to change their ways.

I don't know when our society became out of control with the spending but I for one would like to see things change. Does anyone remember the Little House on the Prairie Books? The girls had two! dresses - one for everyday and one for Sundays. Can we look in our closets now and count the number of outfits we all have? I don't even like to shop and I'm sure I have more than 20! While I don't think 2 is necessarily enough, I wish we could go back to when things were simpler. Maybe we have too much leisure time on our hands. Mrs. Ingalls certainly didn't have time to shop with all of her chores. Not that she had too many shopping choices other than Nellie's father's store and the occasional traveling salesman. We have physical stores, Internet shopping, and shopping channels on television. And even with the few choices of shopping Mrs. Ingalls had, she did not spend money at them unless she actually had money to spend.

So while my first beef is that we all buy too much these days, my bigger problem is with people who buy things even when they cannot afford it. We need to make shopping what it is - an activity you do when you need something. Not a leisure activity to do when there is nothing else to do. We're bored, let's go shopping. We're feeling down, let's go shopping. And the worst of all, I can't deal with my family's money problems, let's go shopping. There are many positive activities we can do when we are bored or feeling blue. Taking a walk outside in the neighborhood or riding your bike on a bike path is better than walking in the mall. Baking bread or putting photos in an album is better than shopping online. And watching Little House on the Prairie is better than watching QVC.

If things aren't going well for you financially, then stop shopping. Stop going out to eat and stop spending money you don't have. You can probably find plenty of other things that will keep you busy.

In Real Life (IRL) - Other than going to the supermarket and thrift stores, I don't like to shop. I never did. I can't stand shopping malls. I hate driving to crowded shopping centers. And I don't really like to waste money. But I still have too many things. My closets can be pared down. I own too many books. My children have too many toys. And while most of the things we have were bought for less than retail and we can afford them, I still think we have too much.

I have to admit that even with my not liking shopping, I still find myself sometimes caught up in the excitement of buying. I bought each of my girls an American Girl doll for the holidays. One was bought several years ago and put away until this year and one was bought on Craigslist. And even though combined I spent under $200 for their two big holiday presents, I can feel myself getting caught up in the consumerism of it. I like the doll clothes. I like the furniture that go with the dolls. And I can see it getting out of control. I think we all have our weaknesses when it comes to shopping (even those of us who don't particularly enjoy it). So I'm going to make a vow to to cut down on our purchases in the coming year even if we can afford it. And I'd like to see others around me do the same thing.

My mom is a shopper. She says it makes her feel happy to be in the mall. She is not extravagant. She buys things on clearance - a shirt for $3 or a pair of earrings for $8. But she constantly tells me she has too many things. However, shopping is an outlet for her. I suspect that she may suffer from mild depression and shopping is her drug to keep her from feeling down. I wish she would stop buying because she buys things she doesn't need. And she could put her time to better use. Luckily, she does not have any financial issues but if she did, I don't think her shopping would stop. It has become a habit for her.

A friend of mine is not necessarily what I would call a shopper. But her family is facing tough times financially, and she won't change her spending habits. She only buys name brands for food. She buys her kids what they want because "everyone around her does." I don't know if her family has debt or how much they have, but it makes me very sad to see her family live high on the hog when they don't have the money to do so. Her husband just got laid off and I sincerely hope that they begin to cut back on their spending. It bothers me to no end that they buy my children presents for the holidays from specialty stores. First, because they cannot afford it. Second, because we don't need it and third because I don't want it. We have enough! We all do. Let's cut back on our spending!

I get upset when I see people I know and love buy things they cannot afford and don't need. I know there are many others out there in this situation. While I'm not happy that the economy has tanked, I am hopeful that people facing hard times will changes their ways so that even when the economy turns around we won't be so spend-happy. Gas prices this past year have certainly changed people's driving habits and car-buying habits. So maybe when the going gets tough, people won't go shopping. I can only hope.

Learn a Skill

Tip #44 - Learn a Skill - A great way to save money is to learn a skill or several skills. Skills such as sewing, cooking, cutting hair, fixing, building, etc. can save you money. In these modern times, information is everywhere. And much of it is free. If you are willing to devote some time to learning a new skill, you should be able to do it on your own and with little or no cost. Want to learn how to sew? Get a book out of the library. Want to learn how to cut hair? Look on the Internet. There are instructional videos and written text on many subjects available for you to watch or read whenever you want.

By learning a skill, you can handle tasks yourself rather than pay someone to do it for you. Sewing a button or learning to hem are simple tasks. But if you need to pay someone to do it, you will pay several dollars each time. Cooking is another skill that is worthwhile to learn. If you can cook, then you will not be eating out - again saving much money in the meantime. Other useful skills that can save money is cutting hair. Fixing cars or plumbing are harder skills to learn, but if you know them, they would save you quite a bit of money. Now of course not everyone can learn some more difficult skills. But there are easy fixes you can learn that will still save you money down the road.

In Real Life (IRL) - My husband is very handy. He can fix almost everything. He can open a clothes dryer and figure out what is wrong. He can look inside a car hood and figure out what's wrong. Some of these are skills he learned when he was younger. Other things are innate, I know. He has a mind that works that way. He can figure out what is wrong even if he has never seen the item before. When we were engaged to be married, my family jokingly said to me, "You can't divorce him; we need someone handy in the family." My husband has saved us thousands of dollars over the years. He put up gutters when a contractor wanted a couple grand. He put up a porch using materials from Home Depot. He fixed our washing machine, installed our dishwasher, fixed our cars, installed toilets, and the list goes on.

My skills are not as great in comparison. But since we have been married, I have taught myself how to cook many more things. I can sew basic things like buttons. Although truth be known, my mother-in-law is as good as a professional seamstress, so most of our sewing needs go to her. I have taught myself how to cut my daughters' hair. I contemplated teaching myself piano so I could teach my daughter, but I ultimately gave in to piano lessons. I learned how to do our taxes so we do not need a professional.

Of course we still bring things to a professional when we cannot do them ourselves. An electrician wired our new bedroom because my husband did not want to screw that up. And we leave higher-order tasks to professionals such as the dentist and doctors. But in general, the more skills we can do ourselves, the more money we save.

Being Frugal Without Being Cheap

Tip #43 - How to Be Frugal Without Being Cheap. Being frugal is different than being cheap. Being frugal is not going to restaurants because you are trying to save money. Being cheap is going to restaurants and not leaving a tip even though you got good service. Being frugal is giving a special birthday gift that you bought with coupons for a great price. Being cheap is giving a birthday gift from the dollar store when you can afford more. Being frugal is going to a party and giving a present that you can afford so you can enjoy in the celebration. Being cheap is going to a party so you can eat dinner there for free. You get the point. There is frugal and there is cheap. There is nothing wrong with being frugal. Cheap...well that's another story.

It's okay to try to save money. It's okay to cut back on eating out, to not buy drinks when you do eat out, to skip souvenirs when you travel, to give a birthday present that you bought on a great sale. It's not okay to try to stiff your eating companions with the bill or to eat out at a fancy restaurant at dinner time and share one appetizer. It's not acceptable to give your parents a dollar store present for their 50th wedding anniversary when you have $50,000 in the bank. It's not okay to chip in $10 for an office wedding gift when everyone else is chipping in $20 (unless you really cannot afford it).

There are times when you do just have to go along with the crowd. And if you don't have the money to do it, then you shouldn't be there.

In Real Life (IRL) - I am frugal. I try not to be cheap. I try to save money. I have shared with you many ways that I do that. I buy my children's birthday gifts on sale. I get them things at yard sales. But if someone comes to my daughter's birthday party and gives a $25 gift card, I cannot give them a $5 t-shirt that I bought on sale. I think that is cheap because I can afford to give a $25 gift. If you cannot afford $25 then I do not think it is cheap.

This week my daughter's class was collecting money for a Christmas present for the teacher. My daughter was sick and I never made it to school to put in any money. So I called the woman in charge and she told me that they gave $100 and signed the whole class's name to it so I shouldn't worry. I asked if she collected the full $100 or if she needed more money. She said they collected $100. Well, I could have gotten away with not giving my daughter's teacher a Christmas gift. After all, she'd never know since the whole class's name was signed to the group gift. But to me, that is cheap. So I gave her a separate monetary gift that I would have donated to the group gift and told her I wasn't able to contribute to the group gift. So it wasn't frugal, but it wasn't cheap either. Merry Christmas. Happy Hanukkah. Happy Kwaanza, and Happy Holidays.

How To Make It Rich Without Playing The Lottery

Tip #42 – How to Make it Rich Without Playing the Lottery – There are those out there who think the only way to make a million dollars is to play the lottery. And there are those of us who know better. Many ordinary people on a simple income can accumulate one million dollars in a lifetime. But not by winning the lottery. They can accumulate one million dollars by saving it s-l-o-w-l-y. If at age 20 you put away $400 a month every month until you are 65 and you earn 6% interest on that money, you will have accumulated over $1 million dollars. Even if you can only put away $200 per month, you will still earn over half of a million dollars by age 65. However, maybe you can’t earn 6% on your money. Suppose the best you can do is 4%. Again you will still earn over half of a million dollars by the time you are 65. That is a lot of money for saving only a few hundred dollars each month.

My point is that slow and steady wins the race when it comes to money. Those who win the lottery are very few and far between. And most of those who do can’t hold onto the money that they have won. But those who get into the habit of saving a few hundred dollars each month can end up with a million dollars.

What can you do without each month to save this kind of money? Your cable? Your coffeehouse coffee? Your lottery tickets? Your dinners out?

In Real Life (IRL) – I look forward to the day that I can say I’m a millionaire. I’m not there yet. But I do have several hundreds of thousands of dollars to my name. I did not win the lottery. I did not rob a bank. I did not inherit it, and I did not receive it as a gift. I saved it month after month after month until it accumulated into a big sum. It started when I was about 22 with my first job. I put a couple hundred dollars away each month in a mutual fund. At 23, I started adding money to a 401k account with an employer match. And about that time I also started a retirement account in the form of an IRA. By the time I was 35 I had several hundred thousand dollars to my name. Just from saving a few hundred dollars per month. That is all I did. You can, too.

What To Do When It's Not In Your Budget

Tip #41 - What To Do When It's Not In Your Budget. Sometimes when we're trying to save money, we feel like failures when something goes wrong in our plan. The car needs to get fixed. There's an emergency room visit at 3 AM. You fall ill and you order take-out for your family for a few days. Then there's that extra holiday gift you need to buy for the piano teacher. And the money your daughter's scouting troop is collecting for a family in need. And none of these things were in your budget and you start to feel like you are failing.

Take it in stride and do what you can! When these things come up, remember that we are not perfect and we cannot do it all. No budget can perfectly predict what life will send our way. And while you have a line in your budget for miscellaneous, who really knows how much a given month's expenses will be?

But remember, we all have these extra expenses that we didn't plan for - whether we have a budget or not. And those of us with a budget will be able to handle these extras a lot better than those without one. And while you may not have planned for the $200 emergency room visit, you know that you have $100 per month of miscellaneous money in your budget that can go toward it. And you know that you can cut down your food budget for next month by $30 and your entertainment budget by $35 over the next two months to pay for it. Those without a budget do not have any clue where this money is coming from.

So when you have those weeks where someone is asking for money everytime you turn around, take it in stride. Over time you will get a better idea of these unexpected expenses that come up - the gift for the mailman that you forgot to budget for, the extra cost of food when you are busy with activities, and the costly weekend visits at the doctor's that inevitably come up ever few months.

Remember also that it works the other way, too sometimes. Your husband gets that unexpected bonus at work. You receive a generous present from your parents for your special birthday. You get a monetary gift from your neighbors for watching their dog. And while it doesn't always all work out in the end, it works out much better when you have a budget.

In Real Life (IRL) - We've had a crazy month. Several things came up that were not in our budget. We had a couple of extra doctor's visits and a few expensive prescriptions we needed to get. We gave a little bit more toward charity this month than we usually do. I also forgot to budget in holiday parties that I do in my children's schools. Ten dollars here and $20 there. We had a colder than normal fall and our gas bill was awfully high. And we signed our daughter up for Kids In Action program where she will help the needy once a month with her religious school. It wasn't in our budget but we thought she would benefit from it. And the big doozy - a $2000 air conditioning unit that was. not. in. the. budget. Yikes.

On the other hand, gas prices have come down which has helped. And my husband got a small bonus at work that he wasn't expecting. And we've decided to sell a few extra things in our house that will bring in some extra funds.

So while we haven't budgeted for all of these things, we have a good handle on how much money we have available and where we can cut back in other places to pay for these extra expenses. And for next year's budget that I will be working on very soon, I will have to remember that a lot of expenses tend to come up at the end of the year. And I will hopefully be able to increase our miscellaneous line on our budget. All in all I still feel good about how we handled our expenses this year. And I hope we can better estimate our expenses next year

Stay Out of the Stores

Tip #40 - Stay Out of the Stores - If you want to save money, stay at home. There is less of a chance of using your money if you go to places where you can't buy things. Stay at home and you are away from the glittery lights of the stores, away from the subtle background music that entices you to buy, away from others who are gleefully turning over their hard-earned dollars to spend. Or to put it another way, the more you shop, the more you will buy.

How many times have you gone to a store just to look at what they have? You don't have a purpose in mind. You are not looking for a pair of pajamas, or a new wallet, or a specific book. You go just to look. And then when you are there you see a pretty pair of earrings or a neat electronic gadget or a pretty sweater. It is so easy to buy when you see that others are buying. It's also fun to be part of the action. It may even give you a little high every time you buy something new.

But if you are trying to save money, shopping for 'fun' is not allowed. It will tempt you and start you on a buying cycle that won't give up. Once you go shopping and buy something, you may see another item that you pass up. That item, however, will stay on your mind and may cause you to go back a second time to buy it. And then when you go back, there is a great sale on yet something else that entices it.

Take my advice and stay out of the stores. And you will spend less. Of course, there are ways to spend money at home, too. There are shopping networks on t.v., catalogs to order from, and internet shopping. And if any of those types of shopping tempt you, then stay away from those, too. If you don't need anything, there is no reason to go shopping. So just stay out of the stores.

In Real Life (IRL) - I am not a shopper. I do not find joy in going to malls. I don't have fun in crowds. And I generally don't like to part with my money. So, for the most part, I don't go shopping just to look. And I don't spend a lot of money on unnecessary things at stores. I do find, however, when I do go to mall I tend to get caught up in some of the excitement and it almost makes me want to purchase something.

I rarely go shopping, especially at the mall. But I went the other week to return a gift my daughter received for her birthday. And I will admit, that I was enticed. I received a gift card back for the return and I felt like I needed to buy something. I wanted to buy something with the card. So I looked around for something to buy even though I didn't really need anything at that store at this time. But I looked for something anyway - just to buy. And while I was at the mall, I felt the need to look at another store. After all, I don't go to the mall too often. And at the other store, I started looking at all of the merchandise that I don't ever see. And I began to feel how behind the times I am because I don't have so many of these latest things. And then I walked by the food court and I was tempted to buy a drink or a snack because everyone else looked like they were having fun eating there. I didn't give in, but I was tempted. And I don't even enjoy the mall.

For people who do enjoy shopping, going to the mall and not buying anything is a real challenge. I know because my mother loves to shop. She loves to be at the mall and in the stores. She is always looking for bargains. She doesn't buy expensive brands, but she does buy things she doesn't need. She will go with a friend and come home with a top that she couldn't resist because it was such a good deal. Or she'll come home with a necklace that will match her sweater even though she has a different necklace that matches it. And while my mom can afford her hobby since she and my dad saved so well, she does have a closet full of things she has only worn once or twice. And her shopping habits aren't even extreme. She has a friend who is ten times worse than she is. It can become an addiction, not unlike gambling or drinking. So don't even start, just stay out of the stores.

Get a Cell Phone For Under $100 Per Year

Tip #39 - Get A Cell Phone for Under $100 per year. If you are an occasional mobile phone user, you can get a cell phone plan for pretty cheap. T-Mobile offers a pre-paid "pay as you go" plan where you buy a GSM phone that can take a SIM card. All you have to do is buy a refill card once a year. First you have to buy a phone. Phones are pretty cheap or even FREE through T-Mobile. Or you can buy one at a retailer like Target or online on eBay. The phone comes with a SIM card with about 10 minutes and it is good for 90 days. You can then pick your area code and city for your new phone number, as T-Mobile covers most of the USA. Next you buy a $100 SIM card to add to your account. You then won't have to top up with another card for a whole year! So long as you refill just before the year is up you can carry all unused minutes forward for a whole year more. One hundred dollars will buy you about 1000 minutes. For someone who uses only about 90 minutes a month, this is perfect. And your monthly payment is under $10. Even better is that sometimes these SIM cards go on sale for under $100 at Target or you can often buy them online for under $100. Can't beat that for a yearly cell phone bill.

Another option is to buy a Pay As You Go Plan like Virgin Mobile. They have several different options. One option is to pay $6.99 per month and all minutes are 10 cents a minute. So essentially you get 70 minutes per month to use. And for the year you are only spending $84!

These types of plans are great for those of you who only want to use the phone to call your spouse to tell them you will be home late. Or to call a restaurant for directions when you're lost. Both types of plans allow you to rollover your minutes into the next months. So the minutes can potentially build up pretty quickly.

In Real Life (IRL) - I am not a huge cell phone user. I think they serve a purpose and to me that purpose is to make a phone call if you have to. I don't think their purpose is to be there for you to gab to your best friend while you drive. Or to text your boyfriend late at night. But that's just me. I use my phone occasionally. I call my husband from the store and ask him which kind of ice cream he wants. I call my friend if I see something at a thrift store that I think she might want. Or I call my husband when I see something at a yardsale that I think will potentially be a good moneymaker on eBay. Other than that, I barely use it. If I had to estimate, I'd guess I put about 30 minutes per month on my phone.

I have used both plans - Virgin Mobile and T-Mobile and I've liked both of them. The plan with Virgin Mobile was slightly different when I had it - we had to put $20 on every 90 days. Overall, I spent $80 per year on it and always had minutes left over to carry over. It was great. And they have great customer service. I switched plans when I went on my husband's work plan. When that ended we switched to T-Mobile because we had a SIM card with minutes on it. My husband bought another card at Target for a discount (something like $85 dollars for a $100 card). That carried me through a whole year. I use the phone whenever I want. I don't hold back and I still have tons of minutes on it.

We have gotten both Virgin Mobile and the T-Mobile plans for my parents who are also occasional phone users, and they have loved them, too.

So if you want a cell phone but you don't want to spend a lot of money, check out one of these plans. They are great!

Practice Moderate Frugality

Tip #38 - Practice Moderate Frugality. I think there is such a thing as being too frugal. There are millionaires who never buy themselves a new pair of pants. There are families who have created wealth who refuse to eat out - ever. There are people who try to save money and elimate everything. I don't think this is a wise way to practice frugality.

For those people who are trying to save money, cutting out your daily cup of coffee at your favorite coffee shop is very smart. At up to $3 per cup, you may be spending $90 per month on coffee. But cutting it out all together may mean that you can't keep up with your frugal lifestyle. It may be too much of a drastic change for you. How about becoming moderately frugal? Why not allow yourself a weekly cup of coffee at your coffee shop? Instead of spending $90 per month for your favorite java, you will be spending $12 per month. It's still a big savings, and you can still enjoy what you like. It becomes a treat, though, and not an everyday need.

For families who have already adopted a frugal lifestyle and have saved a lot of money, but still deny everything, I think you are going too far, especially if you have children. I am not one for keeping up with the Joneses, but I do think we can keep up with the Smiths. The Smiths are not overspenders. They don't belong to a country club that they cannot afford. They don't buy the latest designer labels. And they don't have their kids buy school lunches every day. But the Smiths are smart. They make wise financial choices and get good value for their money. They join the affordable swim club. They allow their children to buy one pair of designer jeans per school year. They allow their kids to buy school lunches once a week. They don't always take the cheapest choice, but they don't have to. They have saved and spent wisely in the past. It is okay for them to enjoy some of life's treats. Parents who have some money saved but deny their children from ever buying a school lunch or from ever wearing an expensive article of clothing have set their children up to become exactly opposite of them when they grow up. They may become people who buy everything in sight because they were denied so much as children, even though their parents could afford it.

And as for the millionaires who won't allow themselves to buy a new pair of pants. I say, what are you waiting for? It's okay to live frugally. That's probably how you became a millionaire. But you should live a little, too. Or your inheritors will do it for you.

In Real Life (IRL) - There was a woman I knew in college who was never allowed to eat sweetened cereal or Pop Tarts. Ever. They were denied in her household. It probably had more to do with the nutritional value of the items rather than the cost, but the concept is the same. When she was on her own in college, she went crazy every morning in the cafeteria for breakfast. She ate sugared cereal every day. When they had Pop Tarts, she would eat four at a time. "We were never allowed to eat these at home," she would say. Because she was denied them completely when she was younger, they became forbidden fruit to her and she had to have them when she was allowed to. I think the same thing can happen when you completely deny anything - no t.v., no candy, no designer clothes. I truly believe that being moderate when it comes to frugality is best. Of course, I'm not saying that you should buy your children a $50 pair of jeans if you can't afford to buy groceries. I'm just suggesting that when you cut back your lifestyle you should leave a little wiggle room in there for treats.

I know another family who were very frugal. They were my friend's family. Everything was budgeted out. They had a school clothes budget. Every year, they did their school clothes shopping and only spent the exact amount that was in their budget. If they bought something extra over budget, they had to decide what to return. They carpooled with neighbors to events. The agreement was that the person who drove would provide snack for all of the kids that week. Every other family would stop for ice cream. When it was my friend's family's turn, they would bring in a bag of pretzels for everyone. Ouch. I'm sure my friend was embarrassed. I'm not necessarily advocating that they should have bought the ice cream if they couldn't afford it or if it wasn't in their budget. But this family became known as being very cheap. If they couldn't keep up with the Smiths, then I think they should have gotten out of the carpool situation. Everything this family did was planned, written down, and organized. Play dates always started at 1:00 after lunch. Vacations were always for two weeks via a drive somewhere. Programming of the VCR was always done precisely.

I admire that this family had a budget. I know they lived within their means while still doing fun activities. But they went too far. They had to always be exact. They were never spontaneous. They never gave in. And you know what? When their daughters grew up, they both moved away - far away from their parents. They weren't moderate in their frugality and I think it affected their children.

My mother always said, "Everything in moderation." And I believe when you practice frugality, it applies, too.

Buy Edible Souvenirs

Tip #37 - Buy Edible Souvenirs. In earlier tips, we've talked about how to keep vacations cheap. One of the suggestions was to buy souvenirs in advance. If you travel to New England, maybe buying a book about that area. Or buying Disney stuff on sale at home before traveling to DisneyWorld. But another way to not spend a lot of money on souvenirs is to buy edible ones. Sure, everyone brings home a pineapple from Hawaii or oranges from Florida. And most people bring home salt water taffy from the beach, but you can be even more creative than that.

When you travel, check out the local supermarkets. Find things that they carry that your stores at home do not. In the south, you will find grits and corn fritter mixes. Up north you might find fresh maple syrup, maple cookies, or other variations of maple. Many places have local brands of food that you cannot find other places - such as a local brand of soda or cookies. In New Orleans, you can buy beignet mixes. Rural places may sell homemade jams or breads at local markets.

Going to a foreign country? Bringing home candy or cookies from the local supermarket is always fun - especially when there is writing on it in a foreign language. Go to the checkout aisle in any grocery store in Canada and you will see candy that is different than is sold in the US. *Please note that there are restrictions on what you can bring into a country. No fresh fruit and other products. Also, there are restrictions on what you can carry onto an airplane. *

Souvenir comes from the France word "To remember." But souvenirs do not have to last forever. We have pictures of our vacations for that. A week or month after you get home from a trip, it is fun to fry up some corn fritters for dinner and remember the special time you spent on a vacation in the south. These souvenirs are great for you, your children, the neighbors, friends, or coworkers. If bought at the supermarket, they are relatively cheap. And if it's for you, as food, it will take the place of something in your food budget anyway, so it actually does double duty.

In Real Life (IRL) - I love going to supermarkets. My husband does, too. When we travel we love to visit supermarkets to see different products that they sell in different regions of the country or outside the country. It was in these faraway supermarkets that we started buying some of our groceries to take home. In New England, where my husband grew up, we always buy a local brand of soda that they have that my husband loved in his childhood. In Richmond, Virginia too, there is a store brand of soda that we tried at a friend's house that we liked so now we buy that when we visit.

For our first anniversary we went to Quebec and Montreal. What fun! I studied French in high school and college. I loved to see all of the advertising in French. They sell a Nestle's version of M&Ms in Canada. They are not as good as M&M's but they were fun to bring home for souvenirs. The kids love them. And a little educational lesson can go along with them. When we went to Costa Rica on our honeymoon, we shopped in the local supermarket and bought boxes of cookies from there. When we went to the Outer Banks in North Carolina, we bought corn fritter mix. And when we went to the Smoky Mountains a few years ago, we bought ground wheat flour at a mill in the mountains. I still have some left in my fridge! Everytime I make muffins or cookies and throw a little wheat flour in the recipe, I think of the nice vacation we had in Tennessee. We have visited Lancaster, Pennsylvania - the home of a large Amish population. We brought back homemade apple butter. And when we visit Philadelphia - my hometown, we bring back soft pretzels. Always!

All of these food things make great gifts. We bring some of these edible presents home for our neighbor who watches our dog and for my husband's office. Our children love bringing home special candy that they cannot normally buy. People tend to get a kick out of seeing unusual food or food with foreign writing on it. And who doesn't like a gift you can eat?

Just Say No Thank You

Tip #36 - Just Say No Thank You. When you are trying to save money, there seem to be lots of obstacles in your way. There are the cute little Boy Scouts who knock on your door trying to get you to buy popcorn. And there are the cute little Girl Scouts who knock on your door trying to get you to buy cookies. There's the guy at work who is running a 10K for a worthy cause and wants sponsors. There are the ladies on the block who want to do a monthly girls' night out. And the list goes on and on and on. How do you save money without feeling like you are not supporting your community and your friends, and worthy charities?

You just say "No, thank you." And then you add "It's not in my budget." Remember, you now have a budget that shows where your hard-earned dollars are going to go. If it's not in your budget, then be honest and tell them so. No one can argue with that. And if you really want to feel like you are supporting your community and your friends and your favorite charities, then put them in your budget. Pick out your favorite charities in the beginning of the year and decide how much you will donate to them. Then add it as a line on your budget. If you want to buy two boxes of Girl Scout cookies each year, then make sure you put it as part of your grocery items the month you buy them or add it as part of your budget. If you want to support a friend or colleague of yours who runs races twice a year, then put it in your budget. You can also just do a one-line budget item for miscellaneous giving that may include causes such as these. If you don't have money to do this, then leave it out. But when the Boy Scouts come knocking on your door, remember to say, "No thank you. It's not in our budget."

In Real Life (IRL) - It's hard to say no - especially to children who are trying to earn money for a class trip or a friend who is raising money in memory of someone. I decide at the beginning of the year which charities I am planning on supporting and how much I will give to them. Then I add in an extra amount for miscellaneous causes. This line item comes in handy because we often have older relatives or friends who pass away and we like to make a donation in their name. We either donate to a charity of their choice or one of our favorite charities. When someone knocks at my door, I usually say "No thank you. It's not in our budget." Although sometimes I have a hard time not giving to our high school band since I was a bandmember and remember trying to raise money for our band trips. Sometimes rather than buy what they are selling, we may just give a small donation - such as $5. Then I feel like I am supporting them but I don't have to spend $20 or whatever it costs to buy what they are selling to do so.

Girl Scout cookies are part of our food budget. I used to buy 4 boxes per season - two from my niece and two from our neighbor. I just took it out of our grocery spending that month. Neither one is a Girl Scout anymore, but my daughter now is. So I will have to show a lot of willpower this year when cookie time rolls around. Remember, it's okay to give and to buy as long as it is in your budget to do so.

Teach Your Children Well

Tip #35 - Teach Your Children Well. If you are like many Americans, you learned the three "Rs" in School - Reading, Writing, and 'Rithmetic. You probably also learned social studies and science. You may have even learned how to sew or cook or type. What you didn't learn about was managing money. Very few schools teach money management. And many parents don't know how to manage their money. And even of those who do, very few pass on that knowledge to their kids.

So many children graduate high school and spend their allowances or their money from part-time jobs and don't save anything. Then they go on to college and go crazy with their spending or worse yet, rack up some debt. Then they get their first job and spend what they earn without saving anything. Then they get get into a marriage with debt or and or no savings. And whose fault is it? The child's? The school's? The credit card company's? Or the parents'?

The burden of teaching your children about money falls with the parent. And if the parent doesn't know how to manage money, then s/he should enroll the child in a class about how to manage money. One does not expect a child to know how to read until he is taught. Nor is one expected to know how to write unless he is taught. And one doesn't expect a child to know how to add unless he is taught. Well, how can a child manage money if he isn't taught?

If you don't know the first thing about money, then take a class. Many community colleges offer basic finance classes. Or listen to some radio shows about how to save or invest money. There are magazines such as Money Magazine or Kiplinger's which revolve around money. There are t.v. channels dedicated to money. There are radio stations that are dedicated to teaching about money. I just stumbled upon a guy named Dave Ramsey who teaches people how to get out of debt and to save money. While the books have a somewhat Christian bent to them, they are full of information about how to manage your money.

After you are confident in your ability to handle your money - how to spend it wisely, stay out of debt, and save for retirement, then you can pass that knowledge on to your children. Start the cycle of good money management in your family.

In Real Life (IRL) - My dad taught me plenty about money. He was and is a wise steward of his money - a great provider and a better saver. He grew up pretty poor. His father passed away when he 10 and his mother worked in Woolworth's to earn money for the family. I can't imagine they were living the good life on a drugstore income. My dad graduated in a vocational technical school for high school. And he did not go on to college. Just looking at that information on paper, it appears that he would not be one to "make it" financially. But then one day he heard about a trade where he could make decent money. So he went to school to learn the trade - it was court reporting or court stenography. He was decent at it - not the top of the class but good enough to get a job.

My dad found a job in court reporting in New York City where he was living and did okay. Then when a colleague of his moved to Suburban Philadelphia for a court reporting job that paid decent wages for a lower cost of living, my dad followed quickly behind him, taking his family with him. While the money wasn't extraordinary, it was above average wages and enough to live a nice middle-class life. With this job came the opportunity to do extra work at night at depositions and other things. By doing this extra work, my dad managed to save a fair amount of money. All the while my mother was a stay-at-home mom.

Growing up, we lived in a nice 4-bedroom house in an upper-middle class neighborhood. We never kept up with the Joneses, but we did have a nice life - the shore every summer, a trip to California in the late 1970's, and summer camp every year. But we did not have designer jeans or the latest clothing fads. We did not eat out extravagantly or buy fancy jewelrey or cars. Instead, my dad put savings away from all of his night work. He gave each of us three children an allowance and taught by example how to be responsible with our money. When we graduated high school, we were all given a car (with a cost up to $10,000). And he paid cash for all three of his children's college educations. By society's standards, we were better off than most. By our neighborhood's standards, we were maybe average.

My parents are now in their low 70's. While I haven't had a look at their finances lately, I am guessing that today my parents are millionaires. They live in a nice house and have a condo in Florida. But, they don't dress extravagantly, nor do they eat in fancy restaurants. It's just not their thing. They live comfortably and share their money with their family.

My father taught me well. I have always looked up to him and how he made himself out of nothing. With no father to teach him, he learned how to provide for his family. No college degree needed, thank you very much. He spent wisely and more importantly lived on less than he earned. I have since taken his example and applied it to my life. While I did go to college (thanks mom and dad!), I started off in a fairly low-paying job. Yet I still lived on less than I earned and put the rest away. I had a nice savings account to show for it when I got married several years later.

Because of this savings, my husband and I were therefore able to buy a nice but modest house in a nice neighborhood. And having this savings has allowed me to stay home with my young children while my husband provided for us. We have already saved over $20,000 for our kids' college fund and over $200,000 for our retirement. We aren't on any kind of list of America's wealthiest families. But we live comfortably and don't have to worry about where we will find the money to pay for a broken water heater. Sure it helped that I got a good start in life - college was paid for as well as a car and generous gifts. But my dad has proven that you don't need a good start in life to succeed financially. Learn to live on less than you earn and teach your children that. And if you get a chance, read "The Millionaire Next Door," you may be surprised at which people you know are the ones who can manage their money. And then try to become one of them. Thanks, Dad!

Calculate Your Cost Per Unit

Tip #34 - Calculate Your Cost Per Unit. When figuring out what things cost, it's important to look at the cost per unit (per pound, per ounce, etc.). Suppose you go to the grocery store and you see two boxes of cereal - Box A costs $3 and Box B costs $2. At first glance it would seem to make sense to grab the Box B since it's cheaper. It just has to be the better deal. Doesn't it? Not necessarily. Suppose Box A is 24 ounces and Box B is 12 ounces. That means for Box A costs only $1.50 for 12 ounces versus $2 for 12 ounces in Box B. Box A is actually the better deal.

When tryng to cut down on spending, it is important to look at cost breakdowns. If you can't do the math in your head, then bring a calculator along. It's important to be able to figure out the price per unit. It's simple math. Take the cost of the item and divide it by the number of units. For this example, we are using ounces. So if Box A is $3 and there are 24 ounces then we take $3 and divide it by 24. 3/24 is 12.5 or 12 1/2 cents per ounce. For box B, the math is 2/12 which is 16.7 or 16 2/3 cents per ounce. Clearly Box A is the better deal.

This is why buying in bulk is often, but not always, the better deal. The larger the package, the cost per unit unit usually goes down. BUT NOT ALWAYS. This is why you should carry a calculator or do the math in your head. Sometimes the smaller box is a better deal. This is often true when you have a coupon. Because the coupon value is a greater percentage of a lower-priced item, it may bring the cost per unit down on a smaller box versus a bigger box. Do the math. Figure out the cost per unit and in the long run, you will save money.

In Real Life (IRL) - I always calculate the cost per unit when I'm in the grocery store. Some of the grocery stores do it for me, which is nice. But some don't. Because I'm a numbers person, I don't have a calculator, but it's really not too hard to do. I will almost always buy the better deal as long as I can use the product before it expires. If it's something I will only use once and don't anticipating ever using again, then I will buy the smaller item for the greater cost per unit price. After all, it doesn't make sense to buy more than I need. But for things I use all the time, I go for the lower unit price all of the time. It just makes sense and saves me money in the long-term.

Give Thanks For What You Have

Tip #33 - Give Thanks For What You Have. During this holiday season, it is easy to overlook what we have and instead concentrate on what we don't have. We don't have a big-screen t.v. We don't have stainless steel appliances. We don't have a new car. We don't have designer clothes. Don't succomb to society's pressure to have the latest and greatest things. Be thankful for what you do have. So what if your television is only 27 inches. It's bigger than the one you had growing up, I'm sure. And your appliances are standard white? Be thankful they're not harvest gold or avocado. And your car has 100,000 miles on it? Be thankful that it works. And your clothes are last year's style or they came from a garage sale? Be thankful that they keep you warm.

At this time of year, it's easy to become greedy when you see what other people are getting or doing for the holidays. The new car. The cruise to the Caribbean. Instead turn it around and be thankful for what you do have - a loving family, a home that has beds in it, a car that works, and some money in your pocket. By being thankful for what you do have, you will not only appreciate your things more, but you will spend less. And you will forget about the things you don't have. By giving thanks for the things you do have, you will stick to your budget. And you will be very thankful at the end of the year when you do your financial check-up and you haven't gone over-budget.

In Real Life (IRL) - I truly try to appreciate what I have. I have a great family. I have a nice house. We take a vacation every year. And we have two cars to drive. It would be very easy for me to be ungrateful. My house is very modest - a 1950's ranch home. Our cars are 6 and 7 years old. One has over 100,000 miles on it. Our vacation is usually done by car within the country not to some exotic island. But really, I don't care. Because I have financial freedom. If my tooth breaks tomorrow, I have money to fix it. If I need to visit a family member I can afford to fly there if I have to. When my children go to college, I will be able to pay for it. By not looking at what I don't have, I am happy. I know that my choices are the right ones for me. By sticking to my budget and not buying the latest and greatest things, I have money in my pocket if I need it. And for that I am thankful. Happy Thanksgiving everyone!

Are You Ready For Retirement?

Tip #32 - Are you Ready for Retirement? If not, then get ready! Regardless of your age, you should be preparing for retirement. It's never too early. In your 40s? You should be preparing. 35? Not too early. You just turned 21? Perfect time to get started! The idea behind saving early for retirement is that the longer your money is in savings, the more time it has to grow. Also, if you work for 40 years of your life and save a little bit from each year, then you will be able to live on that savings when you're older and not working. If you wait to start saving, then you won't have enough or you will have to put away a lot each year. Start early and you can just put away a little each year. It's like spreading out the cost of retiring over your 40-year or so career.

I just received a brochure from my credit union, Navy Federal about how much I need to save for retirement. It was a real eye opener. I will share highlights of it with you so you can figure out approximately how much you need to retire and how much you should be saving each year. We'll go through an example. There were essentially five steps:

Step 1: Figure out how much income you need in retirement. If you live on $50,000 now, you figure out if you need to live on 75%, 85%, or 95% of your income in retirement. This depended mostly on where you expect to get your healthcare funds from in retirement. Of course these are only estimates. Let's assume 85%. That means you will need $42,500 each year in retirement ($50,000 *.85).

Step 2: Figure out what income you expect to receive in retirement. First calculate how much Social Security you will to get, based on how much you make. A person making $50,000 can expect to get $14,500 per year in retirement from Social Security. Yay, finally you get back some of that money you've been putting into the program all of your working years! You also figure out if you are getting a pension from your employer each year. We'll assume no for this example and whether you will have a part-time job in retirement. We'll assume no again. You can always change your mind on that one. Now we subtract the $14,500 from the $42,500 that we estimate we'll need in retirement. The result is $28,000. This is the amount we will need each year in retirement to live similarly as we do now.

Step 3: How much do we need to save now in order to get to this figure? The worksheet gave us different scenarios of when we expect to retire and how long we expect to live (as if we know!). The earlier you hope to retire and the longer you live means you will need to save more. The later you retire and the shorter you expect to live, the less you need. Let's err on the side of conservative. Better to have too much money than not enough. Let's assume we expect to retire at 65. If we are female and hope to live to the age of 92, we use a factor of 18.79 to calculate the savings we need. Take the $28,000 * 18.79 and we come up with $526,120. That is how much we need total for retirement.

Step 4: Figure out how much savings you have so far and how long you have until retirement. If you are 30 years old now, you have 35 years until retirement at 65. Using their chart you get a factor based on this number of years until retirement. In our example the factor is 2.4. Multipy 2.4 * the amount we have saved so far. Let's assume we haven't been too good about savings yet and we only have $20,000 saved for retirement so far. Multiply 2.4 * $20,000 and we get $48,000. We subtract this from our total needed for retirement in step 3. So we take $526,120 - $48,000 and come up with $478,120. This is our total savings goal. In other words, what we need for retirement.

Step 5: Figure out what our yearly savings should be from now on. We have 30 years until retirement. Using the factor they have in a chart, we multiply .020 * our total savings goal from the last step. So we take $478,120 * .020 and come up with $9,562.40. This is how much we should be saving each year for retirement.

I only gave bits and pieces of this retirement worksheet. But the source of it was the Choose To Save organization from the American Savings Education Council, a program of the Employee Benefit Research Institue Education and Research Fund. The full worksheet is at Choose To Save. Check it out and figure out how much you need to save for retirement.

So in this example we figured out that we need to save a bit over $9,500 per year for retirement. Sounds like a lot, doesn't it? It's essentially $800 per month. There are tax incentives to do this, though. You can save $5,000 per year in an IRA and you can put away the rest through a 401K at work if that's available to you. Regardless of how you save this money, you should keep this figure in mind when doing your budget. Retirement savings should always be a line item on your budget.

In Real Life (IRL) - I have been saving money for retirement since I turned 23. That was a year after I started my first real job out of college. My company offered a 401K plan and said the first 3% of my salary that I saved, they would match! So I saved 3% of my salary. At the time my salary was slightly less than $21,000. So I save about $600 and my company matched it. Altogether my first year of saving was about $1,200. A year or two after that, an older man at work advised me to put the maximum I could into my 401k. He said the money is taken out before you even see it so you don't miss it. So I took his advice and maxed out on my 401k which I believe was 13% of my salary. My company still matched dollar for dollar the first 3%. So essentially 16% of my salary was getting saved each year for retirement. I didn't see the money and I didn't miss it. Even though I was making under $30,000 in those first few years of my career, I was saving almost $3,000 for retirement annually. At some point in my 20's I started putting the maximum amount into an IRA, too.

When I met my husband, he too, had been putting money into his 401(k) at work. But he wasn't contributing to an IRA. I got him started on that and we've both been doing it faithfully since. I am now 41 years old so it is exactly 20 years since I started my first job. I haven't worked more than part-time in the last 7 years. Yet because I started early our retirement savings have accumulated about $300,000. We still expect to have 20 more years until retirement. Based on the worksheet, we still need to be putting away about $10,000 per year until retirement. That's okay. It's in our budget to do so. And retirement savings should be in your budget, too.

Saving Money During the Holidays

Tip #31- Saving Money During the Holidays. The holidays - Christmas, Hanukkah, Birthdays, Mother's Day, Anniversaries, etc. should not make you go broke. Let me repeat that. They should not make you go broke. First of all, there should be a line item in your budget for gifts. Figure out how much you would like to spend all year long on gifts including birthdays and Christmas and any extra special events that normally come up in the course of a year - new baby, wedding, anniversary celebration, graduations, etc. Then divide that number by 12 and that should be your monthly gift budget. If you only have $50 per month to spend on gifts then all gifts throughout the year should not total more than $600. Stick to it. I don't care if the neighbor down the street is getting a Coach Bag Mother's Day. If it will take half of your gifts' budget, then don't ask your husband for one.

To make it easier to see what you have, you can set up a "Gifts" enevelope in which you deposit your monthly gifts budget amount into. Then as a holiday approaches, you take the money you need out of the envelope. Make sure you leave enough in there for end-of-the-year holidays.

Speaking of end-of-the-year holidays, it is easy for gift-giving to get out of control that time of year. The advertisements are non-stop, the sales are great, and people are constantly asking what you want for Christmas. Try to cut down on the madness!

--Do a holiday exchange with family members by picking a name out of the hat so you are not buying a present for every person in your extended family.
--If you are a mom or a dad, cut down on the number of presents you buy. Buy one big one and a few little ones.
--Save things as you buy them throughout the year and give as gifts for the holidays or birthdays.
--Shop at yard sales and thrift stores. There are many unopened and unused things to be found at these places. Even some pre-owned toys are in good enough condition to give to your children. --Buy some practical things that you would have bought anyway. No child wants 5 pair of pajamas for Christmas. But a few toys along with necessary items such as cute pajamas or a hat work fine.
--Know how much you will spend in advance and stick to it. If you plan on spending $100 per child, then don't go beyond that limit.
--Keep a big box of things you've bought on clearance all year long. When holidays roll around, shop from that box.
--Make a gift - a box of homemade cookies are a treat for someone who doesn't have time to bake. Canned jams and jellies are unique and appreciated. If you can knit or crochet or paint, then use those skills to make gifts.

There is no reason that holidays should become a gift buying extravaganza. After all, the holidays are not about gifts. They are for celebrating the person, the religious event, or special lifecycle moments. Those are what make the holidays special.

In Real Life (IRL) - We have a budget of $100 per month for gifts. Which sounds like a lot. But it really isn't. We have 5 people in our family with 5 birthdays. We celebrate our anniversary, Valentine's Day, Mother's Day, and Father's Day, as well as Hanukkah and Passover. We also have aunts and uncles, cousins, and grandparents. The big gifts are for birthdays and Hanukkah. We spend about $100 per child for Hanukkah. For birthdays we spend about $25 for each of the children. For cousins, we give $25 each for birthdays and Hanukkah. That's $250 for both birthdays and Hanukkah. As a family we have agreed that adults don't exchange presents for birthdays and Hanukkah. So my sister and I don't exchange gifts, but we buy gifts for her children valued at $25 each. For holidays such as Valentine's Day, Mother's Day, or Father's day, we spend very little. I might find a book at a yard sale that my husband likes. So the cost may only be $1. I'm not a big fan of cut flowers so I tell my husband to forgo the flowers. He usually will buy me some chocolate instead. And since I like Hershey's over Godiva, his presents to me don't usually cost more than $5. For our anniversary, we don't usually exchange presents. We usually do a special dinner or evening out. That's part of our eating out or entertainment budget. So all told, we spend about $700 per year on regular holidays.

There are inevitably special holidays or events that crop up throughout the year such as new babies or special anniversaries. This past year we had my husband's mother's 80th birthday, my niece's graduation, and a friend's son Bar Mitzvah. The remaining $300 is for these types of events. My mother-in-law got a sterling silver bracelet with her grandchildren's birthstones on it for her birthday at a cost of about $50 plus a special dinner at a restaurant. My niece got money put into her account to the tune of $100 plus a special picture for college that I found at a thrift store. And the Bar Mitzvah boy got a gift of $118 plus a small present that we found inexpensively. So we were pretty close to the $300 that we budgeted. Of course happy events are sometimes hard to know in advance. And our budget is just a guide. We actually spent $80 for my daughter's birthday present this year, which was a keyboard for her to use for piano lessons. It was something we'd been wanting to buy anyway, so it was in our budget. For Hanukkah she wants an American Girl doll. I convinced her that she needed to get rid of some older toys that she doesn't play with anymore if she were to get it. We were lucky two-fold: the toy I sold for her got over $100 on ebay and I bought a Kit doll on Craigslist for $60. (They are $90 new). So overall, we have stuck pretty close to our gift budget this year.

It's amazing how quickly gifts throughout the year can add up, so it's very important to budget for these. And even more important to stick to the budget. Happy Holidays everyone!

Frugal Isn't Always Frugal

Tip #30 - Sometimes Being Frugal Isn't Frugal. We all know the saying "Better an ounce of prevention than a pound of cure." Well, that is true in the frugal world, too. Sometimes you have to pay money today to save money down the road. To relate to the original quote would be flu shots. They cost about $25 or so. Someone might think it's frugal to skip the shot and save $25. But if the shot saves you from having the flu down the road, you are saving the cost of a doctor's visit, the cost of medicine, the cost of being sick, out of work, etc. by putting out $25 at first. Now, I know not everyone believes in flu shots, this is just an example. It's not frugal if you will have further costs down the road.

Suppose you try to save money by not changing the oil in your car. You save $14.95 by not changing the oil. But then your car's engine breaks because it has been using old oil and you have to buy a new engine. Well there goes a couple of hundred dollars. Being frugal and saving $14.95 wasn't really frugal. So, the main point here is to think about what you are doing to be frugal and whether is will really be worth it in the long run. Sometimes it isn't.

In Real Life (IRL) - I bought some thank you cards for my daughter's birthday party at a thrift store. They were only 50 cents! I was excited because they matched the theme of the party and they cost very little. After the party, my daughter started writing them out. We try to do a few per day. She did three the first day and I mailed them out. The next day we got them back in the mail with a request for more postage. Apparently square envelopes cost more - 20 cents more! - to mail than regular envelopes. Since there are 10 girls we need to send notes to, that will cost us an extra $2.00! Not so frugal after all. Luckily since my daughter didn't finish writing them out, we are going to save them for notes that we don't have to mail and use different cards that we have. Here I was trying to be frugal. I think I know why they were at the thrift store!

Replicate Your Favorite Foods

Tip #29 - Replicate Your Favorite Foods. We've talked about how cooking from scratch is much cheaper than buying prepared food or eating out. It's also healthier. Something that will save a lot of money is to make foods that you love from scratch such as meals you buy from a restaurant or a snack food or treat that they sell at the mall. You can often closely replicate these foods at home for a fraction of the cost. So if you are suddenly trying to cut back on spending but you crave a certain appetizer from your favorite chain restaurant, try to recreate it. There are several websites that have "copycat" recipes that you can use. And the general recipe sites have them such as RecipeZaar among others. If you or a family member have a favorite food, google the name of it and see if you can find a recipe or try to create one yourself. Once it is perfected, you will save a bundle on eating out.

In Real Life (IRL) - I love soft pretzels. I have to; I am from Philadelphia. I also like Amish-style pretzels like they make at Auntie Anne's in the mall. You have to know that pretzels are cheap to make. They are basically made from flour, yeast, sugar, and water. All of those items are inexpensive. So one day I got the idea to make pretzels from scratch. I had always wanted to. I found a couple different recipes online and ended up combining a few to get my own. There is no boiling, no bread machine, no egg. Just flour, sugar, yeast, salt, water and oil. They are absolutely delicious. My daughters beg me to make them all of the time. One batch makes 10 large pretzels or 15 smaller ones. The cost per batch? $1.50 or 15 cents per large pretzel. The cost for one pretzel at the mall? $2.29! These are great to freeze and use as snacks in school lunchboxes. I will add the recipe shortly. Gotta go check the pretzels in the oven! We just made a double batch of these delicious pretzels!

Recipe:

4 1/2 teaspoons of active yeast (2 packets)

1 tsp. sugar

1 1/4 cups warm water

4 cups flour

1/2 cup sugar

1 1/2 tsp. salt

1 TBS vegetable oil

1 TBS baking soda

2 cups hot water

1/4 cup kosher salt

2-4 TBS butter

Cinnamon Sugar

--In small bowl, dissolve yeast, 1 t sugar and water. Let stand for 10 minutes until creamy.

--In large bowl, mix flour, 1/2 cup sugar, and salt.

--Make well in center of large bowl and add yeast mixture.

--Knead dough until smooth about 7-8 minutes.

--Lightly oil large bowl and place dough in it. Turn to coat with oil.

--Cover with towel and let rise in warm place until double in size - about 1 hour.

--Preheat overn to 400 degrees.

--In a bowl dissolve baking soda in hot water.

--When risen, turn dough out onto a lightly floured surface and divide into 10-15 pieces.

--Roll each piece into a rope and form pretzel shape

--Dip each pretzel into baking soda bath and place on greased baking sheet

--Sprinkle with kosher salt (omit this step if you are making cinnamon sugar pretzels)

--Bake for 8 minutes at 400 degrees

--Let cool for 1 minute and remove with spatula

--You can leave pretzels as they are or dip in butter or dip in butter and coat with cinnamon sugar

Frugal Fast Food

Tip #28 - Frugal Fast Food. Fast Food is generally not healthy and it's more expensive than eating at home. But there are sometimes when nothing else will do. You can't be the perfect planner all of the time. Sometimes you have few other choices, and fast food is the best option. Or perhaps as in our family, fast food is a treat - planned to be eaten occasionally when on long car trips.

Even fast food can be expensive if you order the "wrong" way. With three kids, you can order 3 happy meals and a meal for yourself and your husband and easily spend $20. Or you can order frugally and spend half that. Almost all of the fast food places have a value menu or dollar menu in place. These are pretty good deals. It's generally a hamburger, cheeseburger, and chicken option for $1 or a little more. A side of fries and a small drink are usually the same. A few places such as McDonald's and Wendy's often have double cheeseburgers on the value menu or on special for $1. If you find yourself in need of eating fast food, then order from the dollar menus. If someone wants a cheeseburger, get the double cheeseburger for the same price. For the sides, buy the largest size fries for everyone to split. Get water to drink or get the largest drink for everyone to split. Both McDonald's and Wendy's have small "courtesy" cups that the children can use to have a drink poured into. For a family of five, the entrees off the dollar menu should cost $5 (or $6 if your husband likes to eat 2 of them like mine does). The largest fries and largest drink would cost about $2 each. So for $10 the whole family can eat a fast food meal. Of course it's not the healthiest or the cheapest meal, but if you find yourself needing to eat at a fast food place, you do the best you can.

Stay away from happy meals. The fun from those toys lasts less than a day. And by buying individual drinks and fries for your kids you end up spending more than necessary. If you are frugal to begin with and health conscious in any way, eating fast food should be the treat, not the toy at the restaurant.

Restaurants generally prohibit bringing in outside food. But I find that they are lenient with children. Most people bring food for a baby such as baby food, milk or formula, and cheerios. I have brought small sides into fast food places with no one ever having a problem with it. We generally have string cheese or yogurt or grapes with us in our small cooler in our car. This makes meals more complete, health-wise and filling wise as well as cheaper.

So next time you find yourself in need of fast food, don't blow your budget just because you're eating out anyway. Order wisely. Figure out the best value for your money. And eating fast food can be frugal.

In Real Life (IRL). Fast food is a treat for my family. We do not eat it on a regular basis. It is not our everyday dinner or lunch ever. We save eating fast food for when we are on car trips. They are the perfect place to stop - there are relatively clean bathrooms, sometimes a play area for the kdis, and fairly cheap and fast food to eat.

We visit our parents a few times a year and do a car trip to Florida about every other year to visit family. And we go to the beach every summer for a week. This is when we eat fast food. It makes it a treat for our children and gives them somthing to look forward to on a long car ride. The only other time we eat it is if we visit my old place of employment which is about 30 minutes away from my home. About once or twice a year I visit my former co-workers and bring some of the kids. We often make an afternoon of it and go to a Burger King with a big play area near by. On average, I'd guess we eat fast food once per month at most based on how often we travel.

It is not usually a spur-of-the moment decision. And since we are usually eating it on long car rides, we often have other snacks including drinks in our car. Because of this, we don't usually order drinks in the restaurant. We stick to a main meal and fries.

This past weekend, we had to go to New Jersey for an event. We left on a Friday afternoon and knew that we'd be on the road for dinner. We stopped at a Wendy's to eat. Stressed out mommy forgot to pack drinks for the car (except for baby's bottle). I did have a yogurt for the baby to eat. We studied the menu. Hamburgers, cheeseburgers, and chicken nuggets were $1.29 each. A double cheeseburger was a special for 99 cents. My husband ordered two double cheeseburgers - one and 1/2 for him and 1/2 of one of our younger daughter. My older daughter got chicken nuggets. And I ordered a baked potato for $1.49. We bought the largest packet of fries for $1.99. (A small was $1.29) and we got the largest Frosty for $1.99. I asked for two courtesy cups. When we were almost finished, my girls wanted some more nuggets and my husband wanted another double cheeseburger since he gave some to the 15-month old. Baby and younger daughter also split the yogurt I brought. Overall, we spent about $11 for our dinner. Truthfully, that's not much more than we spend on some of our dinners at home. Plus, it's in our budget to eat out once a week. For the children it was fun even without a play area there. We got to all use the rest room and stretch our legs. After driving on I-95 on a dark, rainy heavily trafficed Friday evening, the meal was worth every penny!

Be Creative

Tip #27 - Be Creative When Trying To Save Money. There are the ways "everyone else" does things and there are the ways frugal people do things. It's easy to do things the way everyone else does - buy a new house, buy food at the store, send your kids to camp, have them take classes. And there are creative ways to do things in order to save money - buy a house that needs fixing up, make things yourself, create your own camp, or trade skills with friends for classes.

Being creative doesn't mean you need to be artistic or crafty. It really just means that you need to think of different ways to do things in order to save money. I gave a few examples but there are many more you or I could come up with.

1. Let's start with the first example of buying a new house. In the past few years everyone was buying a new house - usually the biggest house they could afford. Don't do it. Buy a house that needs some fixing up. Even if you are not handy - some houses just need cosmetic changes that any layperson can do - ripping down wallpaper or tearing up carpeting. If you've ever watched any of those home channels, you can get ideas for what people can do with little money to make a house look nice. You can often save a lot of money by buying a fixer-upper even just one that is outdated.

2. Buying food at the store. Easy enough and most people have to do it at least to some degree. But think about the things that can be made or grown. Food that can be made pretty simply at home include breads, waffles, pancakes, pizza, desserts, etc. These are all fairly simple. The more you make them, the more you will get better at it. Then you can expand into making other dishes. Food that can be grown pretty easily are tomatoes, cucumbers, peppers, squash, peas, and herbs. By just growing a few items in a vegetable garden, you can save money each year on your grocery bill. As you get better at it, you can try to grow even more vegetables and even fruits.

3. Sending your kids to camp. Most parents are looking for fun things for their kids to do in the summer. Camps are often on top of the list for many parents. There are general camps and specialty camps such as dance camps, sports camps, swim camps, and computer camps. Some of them are very pricy, while others are more reasonable. But all of them cost money. Did you ever think of doing a camp yourself? Pool together with a few other parents and take turns holding camp at your house? Or perhaps setting up a camp for a week or two to make some money? I'll explain how we did something similar in real life to avoid the cost of camp.

4. Teaching your children new things. We all want our kids to learn things that will teach them skills, allow them to have fun, and make them productive adults. Many of our children play soccer or softball, and take piano or dance, among many other activities. Of course each of these activities cost money. How about swapping skills with a friend? If you know how to sew or cook, maybe you can give sewing or cooking lessons to a friend's daughter while your friend's mom teaches you piano lessons. Or perhaps you can learn a skill such as piano or French and then teach it to your child. It's amazing what is available online for free. There is piano lessons at Piano Nanny. There are many books at the library teaching knitting or foreign languages. It won't work for soccer teams or softball but there are many skills you can learn for free.

In Real Life (IRL) - I don't consider myself creative as in crafty or good at art. I'm probably average. But I do like to use my imagination to do things cheaply. When I'm planning a party, I look for things we can use around the house rather than buy - plastic bowls instead of paper; paper we can turn into invitations instead of buying new, etc. If there is anything I am going to spend money on, I first think if there is an alternate and cheaper way to do it. I've talked about our house in other posts. Most of the houses in my neighborhood are from the 1950's and frankly a lot of people don't look here for that reason. They want a newer house. We loved the neighborhood so it didn't matter to us to have the latest gadgets in a home. And those things can always be changed anyway. When we got our 1953 house it had awful red walls in one room that surely turned off a lot of buyers. Hmmm...about $50 of primer and paint will cover that, we thought. The house only had 3 bedrooms but had the land to add on to, if necessary. It had an old, outdated 1950's kitchen. We bought the house for a good deal since no one else was interested. We painted the "red room" (after 7 years!). We turned a porch into a fourth bedroom when we needed the space for only $12,000. Moving to a house with 4 bedrooms would have cost us at least $50,000 more. And we made our kitchen a fun 1950's kitchen for $1,000. We bought black and white sticky tile for the floor, got a fun diner border for the walls, bought cute diner signs for the walls, vintage looking curtains for the windows, and displayed some of my grandmother's depression era bowls. A new kitchen remodel would have cost $25,000 or more.

2. Cooking creatively. I am an average cook and I like to bake. My daughter had her birthday last week. We had a party at home, cupcakes for school, and needed something for her actual birthdate for our family. I could have easily bought a cake at the market for the party, but I made cupcakes instead. I made cupcakes for her class and then when it came time for our birthday dinner at home, I thought she might be sick of cake. She agreed that she'd rather have brownies. Simple enough. By making sweets for all three events instead of buying at the grocery store, I saved at least $25. My favorite food to make to save money is croutons. We always have bread left over at the bottom of the package that doesn't get eaten. I save them in the freezer and make croutons out of them. Very simple - just melt butter and add parmesian cheese and garlic to the bread. Bake in the oven and voila - freshly made croutons. They're healthier than the boxed kind (have you ever seen the ingredients in croutons?) and they're quick and easy to make. Best of all, you use up bread that would have gotten tossed to the birds.

3. I created a summer camp with friends. When my daughter was 4 or 5, I was looking for fun things for her to do in the summer. Camps were expensive but I remember how much fun they were when I was a child. I decided to do an "at home" camp with friends. There were 8 of us the first year. We were all in a Mom's Club together and had known each other since our daughters were babies. For one day each week for 8 weeks, our girls went to camp. Each week one mom was in charge of the camp and one mom assisted. The person in charge came up with a theme and held camp at her home for three hours on a Monday. So each mom was in charge of one camp and assisted in one camp. The other weeks she was "off." It was great because each mom had different strengths and interests. One mom held a nature camp and had the girls look for birds in their backyard, learn about birds and did a bird craft. One mom held a cooking camp. We held a fun carnival camp. My daughter still talks about that fun camp and asks every summer if we can do it again. The following two years we did it on a smaller scale with just 5 moms. Last year we did it over just a week's time with each mom holding camp on a different day for one week since everyone was so busy. I know I spent less than $20 in materials and snacks for each camp I've held.

4. Taking classes. My girls like being in activities - dance, piano, Brownies, etc. To keep costs down, we have taken classes at the community center in our town. For dance there is a dance studio that is $55 per month for one class! Instead I found a woman who teaches dance out of her home for $25 per month. What a difference. Piano lessons are $35 per half hour at a local music school. I found a woman who teaches for $15 per half-hour. Of course none of these are too creative. But I do know people who have switched skills. My daughter's dance teacher gave lessons for free to someone's daughter who painted her dance studio. I know two women from my Mom's club who swapped talents. One mom taught the other mom's daughter piano while the second mom taught the first mom's daughter French. If you have skills in an area, you could easily teach them. You could even do something as simple as teaching baking. Many moms don't bake from scratch or have the time to teach their children. By being creative you can save or make money in this area.