Frugal Hacks » Frugal Money Management

5 Good Habits for Gaining Financial Stability and Independence

guest — Tue, 28 Dec 2010 21:19:23 +0000

From the moment we are born we begin to learn those necessary skills to get us through life. But just because we have reached adulthood doesn't mean we are done with that development, and in the world of finances a lot of us have fallen well behind where we should be. Fiscal health is an important part of being independent and having security in your life. But to get there, you need to learn the habits required for achieving it.

There are dozens that you could use as as guideline to developing a good financial attitude and lifestyle. But these five habits are a great place to start from step one to make yourself a more stable, fiscally responsible you.

Be Honest - The first step is to take an honest look at your financial situation. If you have been overspending, you will know it by the look of your checking account about halfway through the month. But you might not be clear as to where that money is going. Taking some time to sit down, make a list of expenses and see how much is left over. Then take a look back at the last month of credit and debit card statements, cash withdraws and anything else you spend money on. Does is match up? How much have you gone over, and on what?
Create a Budget - Once you know where you are, you will be ready to do something about where your cash is landing. Take those expenses and once against deduct them. Deduct a set monthly amount for savings. Then, with what is left over, make a realistic set amount for indulgences like shopping, eating out or anything else you enjoy. The rest should go to debts or an account specifically for emergencies.
Make Debts a Priority - Never put off paying debts. You might be avoiding those collector calls, but that is the wrong thing to do. There is nothing worse than a debt going to court, as it will multiply the final amount by several times. Create a workable plan with the collectors based on your now drafted budget plan.
Think of the Future - Retirement isn't far off, whether you are 55 or 25. Investments now are a key factor to your lifestyle later, and that of your family. College funds, 401ks, high interest money market accounts or other investments should all be a factor in your life plan.
Get Life Insurance - No one wants to think that a loved one will die, it is a devastating experience. The last thing a family should have to worry about is making it day to day. Getting a good life insurance plan is crucial to protecting your family if you or your partner pass away.

These are only a few ways that you can take care of yourself and your family, and create a more financially stable life. But the habit you will most need to learn in control. It will take a real, concentrate effort to curb impulse spending, follow a budget and build savings, emergency funds and future investments. Just remember the ultimate payoff is much more important than that night at a restaurant or new pair of shoes. Even cutting out one of each per month will make a huge difference.

This is a guest post by Annie Wallace, a mommy blogger who prefers to save money by clicking coupons. Her favorite site to find best coupons online is Coupon Sherpa - check out this page listing Snapfish coupons as an example.

Earn free Amazon gift cards from Swagbucks!

Advertise here

How to negotiate a discount on medical bills

kimc — Thu, 11 Mar 2010 12:28:20 +0000

When I submitted my upcoming medical need to Samaritan Ministries*** I received a list of tips on how to negotiate a discount on hospital or other medical bills.

These tips can be used by anyone, regardless of whether they are members of Samaritan Ministries, so I'm sharing them here.

Suggested Procedure for Negotiating a Reduction in Medical Bills

Pray that God will help you to be a witness with each call you make, and that the bills will be reduced for His glory and the good of His Kingdom.
Ask for the supervisor in the Patients Accounts office for each provider. You must speak to the peron who has the authority to make the decision to reduce the bill. Don't be dismayed when the first person you talk to says, "We don't give discounts." If you can negotiate the price of a new or used car, you can negotiate the price of a medical bill.
Be sure that the provider understands you do not have insurance; you are a "self-pay" patient.
Many hospitals have a sliding fee scale based on your income level. Be sure to ask about this.
If you are a Christian worker, ask if the doctor or hospital has an automatic discount for clergy and Christian workers. Many do.
Say to them, "By what percentage would you consider reducing this bill?" Then wait for them to respond. There are no high-pressure tactics needed. Just simply ask.
If they still have not given a discount, they might if they're offered cash. Hospital and doctors often give discounts of up to 30% if the bills are paid promptly in cash.
Say to them, "If we can arrange to get 70% of this bill to you in cash within 30 days, will you accept that as payment in full?" Again, just wait for them to respond.
If you are still refused a discount, politely ask for that person's supervisor and repeat steps 1-8 with that supervisor. If you move up the chain of authority far enough and are politely persistent, the chances are very good that you will get a discount.

There are also services that will help you negotiate a discount on larger bills. Samaritan recommends The Karis Group, which seems to be a free service. The Karis Group has also partnered with Christian Financial Ministries to provide a service which is not free, but is guaranteed to save you significant money on larger bills, making it very worthwhile. We have no experience with either service, but Dave Ramsey thinks highly of them and his recommendation means a lot to money-smart people.

***Would you like to know more about Samaritan Ministries? We have been happy members for years. You can read about our experiences with Samaritan on my personal blog. If you decide to join Samaritan Ministries, please tell them KimC sent you.

Earn free Amazon gift cards from Swagbucks!

Advertise here

Should An Emergency Fund Always Be In Cash?

DL — Wed, 08 Apr 2009 14:20:29 +0000

Many economic counselors recommend having an emergency fund available for basic needs in case of a job lay-off or unforeseen emergency. With the recent economic downturn and the possibility of inflation within the next few years, I've been wondering if plumping up my emergency fund with more cash is the best method of preparation. In fact, I have even considered if I should take a bit of my "cash stash" and procure some basic necessities.

My family has been thinking about making some preparedness purchases, not in a spirit of fear, but with a desire to be better ready for any circumstances we might encounter. With the devaluing dollar, does it make sense to look at an emergency fund a little differently these days? If the cost of products continue to rise, would I be wise to use some of that fund for items on my list?

Here are some of the items I am considering purchasing with my emergency funds:

bulk food products such as wheat berries, oats and beans

generator

alternate cooking source

heirloom seeds

gold and/or silver

canned goods

supplies for canning produce

extra vitamin supplements and first aid supplies

What do you think? Given the times, should our emergency fund be diversified?

Earn free Amazon gift cards from Swagbucks!

Advertise here

Budgeting With A Purpose – Keeping Your Goal In Mind

guest — Thu, 26 Feb 2009 21:09:03 +0000

Even for seasoned budgeting pros, there can be times when the day to day aspects of keeping up with a budget can seem annoying, irritating, or even daunting. This has happened to me before, especially when times are rough, I'm emotionally upset, or I just seem too busy to keep up with anything.

At these times, my biggest help is making sure that I budget with a purpose - that I keep in mind my reason for spending and saving in the ways I choose. This is different for everyone - it may be to save for a new home, to be able to move to a different place, to provide for their kids, to have kids, to retire, or a multitude of other things.

This is where keeping that goal in mind helps me stick to tracking my spending and following a budget. if I feel like it is all too much, I remind myself of why we're doing what we're doing. If you need a little extra push, you can paste a picture of the "something" you are working towards. For us, it is being debt free. I have a little picture of a student loan balance (our last non-mortgage debt) of zero on my desktop, just in case I need a little push.

Does your budget have a goal? Does it need one?

Earn free Amazon gift cards from Swagbucks!

Advertise here

Pear Budget and other tools

Pc3 — Wed, 25 Feb 2009 22:50:07 +0000

by Pc3

Frugal hack reader April @Question the Culture wrote a great little post on my question “Are you teaching frugality or just being broke?”. Go check it out http://questiontheculture.blogspot.com/2009/02/mini-sermon-aimed-at-me.html

In the post she links to Meredith’s post on Pear Budget so I wandered over to Pear Budget and did some poking around. I gotta tell you it looks GREAT. I will be trying it for the next little while and see if it’s a good fit for us but I’m liking what I’m seeing. (BTW the Pear Budget blog looks like a keeper too – I am subscriber 172)

What about you? What budgeting tools and tips work for you? I’d love to know!

Earn free Amazon gift cards from Swagbucks!

Advertise here

Frugal Savings Options – Does An Interest Rate Really Matter?

guest — Thu, 05 Feb 2009 19:40:17 +0000

As a person who aspires to be frugal, I understand that spending less money is only part of the equation. Another piece of the frugal puzzle is to do more with what we already have, and that includes money. The why is easy enough to understand, but the how is another story altogether. Should I start sticking money under my mattress? Should I put it all into "growth" funds in the stock market? For me (and most people, I would suspect), the answer lies somewhere between these two extremes.

The key to making your own personal and frugal choices for what to do with the money you already have is to understand the concept of risk and how it relates to you. Everyone has their own unique perspective when it comes to risk and what kind of risk they are willing to put up with for potential return. My own risk tolerance is very... low. Because of that, many of my choices include strategies that guarantee some return, but the return is much lower than potential return on something with more risk. This is an individual decision, and I recommend that you consult with a financial planner that you trust in determining what your own risk tolerance is.

Although it is important to understand and make choices for savings over the long term, today I'm just going to talk about short term strategies. And by short term, I mean anything that isn't classified as "retirement". I have a three-tiered approach when looking at my immediate money in savings: my local (home) bank, a "high-interest" savings account, and certificates of deposit (commonly known as CDs).

The first is my local bank. This is the bank I have my checking account in. I have a savings account from the same bank directly linked to this account, and I can transfer money between them instantly. This is important to me, for I keep my emergency fund in it. This savings account doesn't pay a very high interest rate, but I have immediate access if needed.

The second tier is a high-interest savings account. I use ING Direct, but there are many different ones available (Jim at Bargaineering compiled a nice list with reviews here). This pays out more in interest, but I have slower access to my money (it takes a few days for transfers to my home checking account to go through). In this I put money I am saving for a specific purpose (like our new-to-us car fund) and eventually when I have a better emergency fund, part will go here.

The final tier is CDs. CDs can pay even more in interest, but are locked in for a specific period of time (this can be broken but you pay a penalty). I admit, this tier for me right now is still on paper. Once we have paid off all our debt and are establishing a large emergency fund, a portion of that will go into CDs to earn us more in interest. This carries the risk that we would need the money before the period of the CD is through, but can be mitigated through having multiple CDs or "laddered" on a schedule (where different ones expire at different times).

Consider your savings strategies - are you maximizing your reward with consideration to your own personal level of risk? You don't have to settle for the 0.25% interest rate common to many local "brick and mortar" banks if you don't want to. Even when your risk tolerance is admittedly very low.

Earn free Amazon gift cards from Swagbucks!

Advertise here

Creating A Price Book – Putting it into Use

guest — Thu, 15 Jan 2009 17:59:52 +0000

So you gathered up your receipts for the past month or two, and you've created the beginning of a price book from them to help with comparison shopping for groceries. Now what?

I use my price book every week to make sure I am paying the lowest price possible for every item I buy. I do this through comparing prices at the local grocery stores, knowing which store has the lowest regular price on common items I purchase, and planning stocking up around sale cycles.

My shopping list each week is divided into three categories. First is items that we need to purchase that week that we are running low on or have run out of completely. These are usually fresh items that need to be purchased on a weekly basis that I cannot freeze. (Ever had frozen lettuce? So not recommended.) The second list is items that are at the bottom of their sale cycle that we should stock up on. The third is items on special deals that I pair with coupons.

I construct my list by first, collecting all the sale flyers for a given week along with my price book. I look through the flyers, and when I spot an item we use, I compare the sale price to my price book, and add in any coupons I have. So, for example, if I see a sale on Raisin Bran for $2 a box, I look and see that $1.79 a box is the lowest price in the past two months. But since I have a $1 off that brand coupon, that makes it $1 a box, which is a good deal. So I add it to my list.

Next, I look at the list of items we need. If any of them were already on sale and have been added to my list, I cross them out. Then I compare prices on the remaining items, both with my flyers and with my price book, noting where the lowest regular price is as well as where it might be on sale this week (by looking at the price over time). I add those items to the appropriate lists.

My final step is to hit up coupon and bargain forums (my go-to forum is Hot Coupon World but there are many out there) and look at the posted sale flyers for my local stores, and compare the deals that others have come up with. Sometimes I miss a good deal, or don't notice I have a particular coupon that would be useful that week, so I double check myself. Then I shop.

Keep updating your price book from week to week with the items you buy, the unit prices you paid for each, the store purchased at, and any applicable coupons you used. Just like prices, some coupons also have cycles. You will build your knowledge and over time, have a clear idea of the rhythm of the grocery pricing cycle.

Earn free Amazon gift cards from Swagbucks!

Advertise here

First Steps To Creating A Price Book For Frugal Grocery Shopping

guest — Thu, 08 Jan 2009 17:10:32 +0000

The idea of a "price book", or a method of determining the best price of the items you shop for, is one that is frequently mentioned as a frugal strategy for making the most of your shopping dollars. But the idea can be intimidating, or even overwhelming, for someone who has never considered the idea seriously before. For me, it always seemed simpler to just shop at the store I knew generally had lower prices than the others, versus trying to predict when to stock up on different items at a variety of stores.

But once I decided to create my own price book, I found that by doing so, I really did spend a lot less money on the items I was already buying. So how did I get started?

The core of the price book is two things - price paid per some standard unit, and the location and date you paid that price. And for someone who has never used a price book before, you may be surprised to learn that you probably already have a lot of the information you need to do so, right in your own home.

The key is in the receipts.

If you keep receipts, even if only for a short time, you can use them to determine what you paid for items, when, and where. When I first created my price book, I looked at my receipts for the last month, matched them up to items in my pantry and cold storage, and determined what I paid for each item and the unit price. To keep track of this, I created a spreadsheet in Open Office that had items and units measured along one side and dates across the top. In each cell, I put the price per the unit, and the store purchased at. Looking at this over a several week period, I could already see some trends developing, and I also had a baseline to look at what the best price would be for a specific item per unit.

And that was the beginning of my shopping revolution.

Next week I'll detail the specifics of my price book shopping strategy, and then finally, the development of the "best price" worksheet from it, which I use every week in planning my grocery trips.

Earn free Amazon gift cards from Swagbucks!

Advertise here

Start The New Year Off Right

guest — Thu, 01 Jan 2009 14:30:56 +0000

Welcome to 2009! I hope you are happy, healthy, fiscally sound, and enjoying the new year with your loved ones.

This is the time (if you have not already) to plan for the coming year. Prepare in your head, on paper, and commit to your frugal goals in the coming year - before half the year gets away from you. Does time pass faster the older we get? Of course it doesn't in actuality, but to me it really seems like it does. 2007 really doesn;t seem all that long ago to me - certainly not a full year ago.

In actuality, something in my gut feels like it is really still 2006 and someone is playing a big joke on me.

Don't wait until tomorrow. Don't wait until next week, or the end of the holiday, or the weekend. Take out a piece of paper and write down three actionable items right now. You can wait until tomorrow to do a full plan, but get your head in the game. You'll be happy you did.

Jaimie's three actionable items for 2009:

1. Eliminate final student loan debt.

2. Save $10000 for new to us car.

3. Build mini emergency fund to $2500.

To accomplish all three would be a crazy stretch for us in 2009 but goals will push us and motivate us to keep on course. Here's to a frugal new year!

Earn free Amazon gift cards from Swagbucks!

Advertise here

Buying Quality On A Dime

guest — Thu, 20 Nov 2008 15:29:07 +0000

Frugality, as readers of this blog know, isn't just about spending the least amount of money possible. While using your money wisely is a key component to being a frugal person, that doesn't mean that everything you own should be the cheapest version possible. Paying less for more is a useful mantra that can keep your costs down and give you items that will last in the long run. Here are 5 strategies I use to balance quality with cost.

1. Shop when no one else is. I don't mean the physical time you shop (like shopping at 3 am) but shop for items or services when they are not in demand. We saved a significant amount on labor when we had our new furnace installed by choosing to replace it in the "off-season". I also save money on clothing by shopping a season behind, buying winter clothes actually in winter instead of in the fall when they are most popular.

2. Is there a used alternative? Any time I need to make a purchase, large or small, I think about if it is something I can buy used. From Goodwill to the classified section to Criagslist to even eBay, if it is an item I can buy used instead of new, I try to do that. I've even purchased evening wear at Goodwill.

3. Even clearance items go on sale. I used to think the clearance rack was just a dumping place for unpopular items that was subsequently ignored by the staff until new items needed to be dumped. And that may be true, but in making room for new items, those items already there get marked down even more in an effort to make them sell. By keeping an eye on the clearance rack at stores with quality merchandise, I've been able to find items my family needs for a true fraction of the cost. The longer it hangs out in clearance, the less expensive it gets.

4. Research, research, research. How do I know when I should spend a little more? Part of that process is trial and error, but a key component in the internet age is research. If I am making a big purchase (or even a small purchase), I read anything I can find about it. I take the results with a grain of salt - sometimes the bad is overrepresented on the internet - but I can find out key information about the item and determine if it fits in with what I am looking for. Another way I do research is through free samples. I request free samples of items when I see them, and I also have tried many many items for free through survey websites. My spouse even found his favorite deodorant from being a product tester for a survey site I belong to.

5. Pay attention to sales, but stay focused. There are some name-brand grocery items my spouse is not flexible about. I can't just buy what's on sale for him. But I can pay attention to sales and find the item when it is at its least expensive price. Watching sales every week can backfire if you aren't careful, because you can start buying things just because they are on sale. Stay focused on what you are looking for.

Developing these strategies has helped me to keep from overspending but also not just opting for what costs the least by default. If I can make a purchase that will last for decades for a little more than a purchase that will only last a year, that is obviously the more frugal choice. I'm just beginning to really figure out how to make those choices possible.

Earn free Amazon gift cards from Swagbucks!

Advertise here