Tuesday, January 20, 2009

Go to the library.

Do you really need to buy books for your home collection? You often just read books and then don't read them for a long time.

Have you considered going to the library? It's usually paid through your tax dollars, so taking out books is usually free.

There are some books that could be family heirlooms, but other books don't even make it to the radar. Those latter books you could just take out of the library.

Monday, January 19, 2009

penny pinching

Did you know that you can get instructional videos on how to cut hair (certain styles too), and how to sew zippers onto things?

I'm not ashamed to say that saved about $100 last week cutting my own hair and sewing my own diaper bag...and it looks pretty okay!


TV can be good for you!

When I have free time, I watch a show in the aforementioned post- 'Til debt do us part. It's actually a really clever show in which Gail Vaz-Oxlade helps people who are drowning in debt get their finances in a better shape. Some people are completely clueless and are spending an upwards of 70% over what they make every month, no savings for rainy days or retirement and they often have to resort to pay day loans or carry balances on their credit cards (read: really bad and ridiculous interest rates).

Anyway, having watched this show for about two years (it's on Global TV in the afternoons), she does have some recurring messages for her clients:

1. Budget so you know where your money is going. You can control and clamp down on variable expenses (clothing, transportation, food, leisure, others) but you need to know how much is going towards fixed expenses too (mortgage, debt repayments for car, credit cards, store cards)
2. Don't have the "buy now, pay later" mentality. Instead, save up for large purchases. You may find that, in the time that you take to save up the money, you really don't want what you are planning to buy as badly.
3. Use cash only and document where you are spending every cent in a budget book if you can't control your spending. Get rid of your credit cards!
4. If you have tons of debt in many different places, consolidate it and you may get yourself a lower overall interest rate.
5. DON'T use payday loans. The interest rates are incredulous.
6. Communicate with your spouse/significant other about your finances.
7. Call your credit card companies to see if they can lower your interest rates if you set up a repayment plan with them.
8. Find free family/leisure activities (ie picnics, games night, sports, walks)
9. Don't eat out- cook your own food (much cheaper and healthier)
10. Save up for home maintenance (and car maintenance also if you own one).
11. Make your own gifts. It's too easy and too costly to buy them. Homemade and handmade stuff is more meaningful.
12. If you want to purchase something outside of a tight budget, find other ways to make more money to pay for it (extra shifts, ask for increase in wages, look for odd jobs)
13. Pay attention to any useless fees that you are charged (ie bank withdrawals, ATMs that are not your banks, banking fees, overdraft fees, interact fees) and avoid them. There are some banks that have zero fees(pcfinancial, ING direct)...you may consider switching to banking with them.
14. Looking through your expenses will also allow you to know where you are leaking money and where you are spending ridiculous amounts of money towards stuff that you don't need (ie eating out, smokes, alcohol, cash on snacks, shopping, big tvs, lavish trips)

This is all I can think of off the top of my head. It's quite a sensible show. It's a bit of a rant but I hope this helps!

Saturday, January 10, 2009

Globe and Mail Update

Globe and Mail Update

With every penny spent taking on added significance as markets melt and jobs evaporate, saving has become the new spending. Here are some ways to cut expenses and tighten the belt until signs of a turnaround can be seen on the horizon.

Back to the barbershop

It's been 20 years (and more than two million copies sold) since David Chilton wrote The Wealthy Barber, but he's still willing to dish out the advice. While the book focuses on ways to obtain financial security, he insists it also provides guidance for those looking to cut back.

“The single biggest mistake people make in financial planning is buying more stuff,” he says. “Not convinced? Help a friend move – conspicuous consumption has overwhelmed us. It's difficult to save when you're always buying new televisions.”

He recommends throwing your bank card away, leaving your credit card at home and using cash for all of your transactions. It saves on ATM charges, which can add up at $1.50 (or more) a pop.

“I've always done that, and it has always felt very healthy,” he said. “Because, boy, is it ever easy to spend money when you've got a card in your pocket.”

Back to budgeting

Okay, everyone agrees the only thing worse than putting together a budget is trying to follow one. Well, too bad for you, says Gail Vaz-Oxlade, because budget you must.

“People are lazy, so they don't budget,” says Ms. Vaz-Oxlade, who dishes out financial advice to the hapless and indebted on the television show Til Debt Do Us Part. “The only way to know where you are is to know how much money you spent.”

Don't need a budget because you're good with money? Liar, she says – most of the people who argue with her about the irrelevance of hardcore budgeting don't even know how much they earn per cheque.

“I'll bet you dog to doughnuts that you're spending more than you think,” she said. “I challenge everyone to track their expenses for three months, and they'll see.”

There is an interactive tool on her website – gailvazoxlade.com – that can help people track and critique their own spending habits. There is one caveat, however.

“You need to read the instructions,” she says. “I can't stress that enough.”

Back to coupons

Linda Leatherdale knows a thing or two about personal finances and adjusting to difficult economic circumstances – she spent the last 23 years as a business editor and writer, but was handed a layoff notice last month. On her birthday.

She now dispenses free advice at lindaleatherdale.com, and says one of the most important things people need to do is splash their children with a cold dose of financial reality. After all, parents won't likely be able to tap into their home's equity if bank accounts start running low.

“Kids think money grows on trees, and this is a time when you need tough love,” she said. “Designer stuff has got to go out the window – if the kids feel they must have these things, then consider shopping at Goodwill.”

She said it's time to channel your grandparents – avoid using credit, and ask if stores have layaway plans for must-have items you can't afford. Coupons can also be useful.

“That's right, it's back to coupons if you can believe it,” she said. “But you need to be careful – it can be similar to points programs in that you buy things you don't need just because you have a coupon.”

Back to frugality

Squakfox.com – a blog that insists frugality can be “sexy, delicious and fun” – recently compiled a list of 50 painless ways to save money.

While some tips are predictable – bring your lunch to work, dine out less and buy used stuff – there are others that you don't hear a lot about. Like Tip #4: Raise your insurance deductibles.

“Get out your policy and raise the deductibles on your car and home insurance. You're not likely to claim the small stuff so choose a $5,000 over a $500 deductible to cut your insurance costs by about 40 per cent.”

Of course, not all of the site's suggestions are practical. Getting rid of your loveable, but hungry, dog could save you up to $1,100 a year – but you'll probably end up spending that much on Kleenex as you cry yourself to sleep each night.

Thursday, January 1, 2009

Residual heat cooking

We have been doing this and we had no idea. We're not even sure that the term is correct.

Anyhow, when you cook something like pancakes, cookies, or even a turkey, you inevitably turn on the stove element or the oven.

Once the item is nearly finished cooking (i.e. >95%), you can actually just turn off the stove or oven and let the residual heat cook the food.

We do this with pancakes - on the last pancake, we turn off the stove once one side is done, flip the pancake over and let the residual heat cook the remainder. It works every time!

We accidentally found this out when we had a power failure recently. We were baking biscuits in the oven, the power went out, and the biscuits finished baking beautifully. My guess is that the power cut off around 3 minutes to the end of the baking. We subsequently had biscuits during the 5 hours that the power was out.

If you do this as a habit, you will find that this adds up over time and you will undoubtedly save money. Experiementation, though, is key - different ranges have different temperature characteristics. Also, this assumes that the entire object has actually arrived at cooking temperature. If you have a blazing oven but a frozen turkey, don't expect the thing to cook if you turn off the oven!

Thinking on the same wavelength: frugality as a family

You can't be frugal unless everyone thinks the same way. As a family, we have developed a little culture around frugality. We make sure that our spending, saving, and consumption patterns are consistent and we have the same attitudes on consumption debt.

In a family, money is often an area of contention. It doesn't have to be if discussions are carried out openly and realistic expectations are hammered out.

So, think on the same wavelength and have a wonderful 2009! Best wishes from the Frugalistas!