Category Archives for Saving Money & Frugal Living

Getting Lifestyle Creep Under Control

Have you ever wondered why you are still short at the end of the month, in spite of that raise or promotion at work?  You may be suffering from lifestyle creep. Read more in this post!

Continue reading

Small Moves You Can Make That Will Add Up to Big Financial Changes

Often, it is the small changes that add up to big results. Here are seven small changes you can make in your life that will add up to a big improvement in your overall financial health…

Continue reading

Pros and Cons of Buying Used

Organize Your Financial Life With This Money Road Map

Are your finances in the shape you’d like them to be?  Or, are they a disaster that you’d like to clean up as soon as possible?

Continue reading

How to Help Your Kids Develop Respect for Money

How can we as parents help our kids to understand and value money so that they don’t head the way of so many who are deep in debt? This post explores some of my ideas!

Continue reading

Smart Money Management vs. Cheapness: The Eternal War

The following is a guest post by CM at Infinite Transcendence. Enjoy! 

Which Side Are You On?

People are often big on saving money since budgeting is a major part of life in your personal life and in business.  With poor money management, even the richest person can become poor very quickly.  There are countless stories of people with money going broke, and our country is a debtor nation.  Clearly, we need to spend and utilize our resources wisely.  The average person has student loans, car loans, mortgages, and a manner of other expenses.  Controlling these wisely is essential to living a life of freedom.

The difference comes down to how people choose to manage their money.  A few people manage their money from an overall cost evaluation while others simply cut down costs as much as possible no matter the expense.  Today, I’d like talk about the major difference between effective money management and being cheap.  This is something, when done properly, will make a major difference in how you live your life.  You will essentially increase your productivity while reducing costs.  That’s why smart money management is important.

What Is Cheapness?

Cheapness and effective money management are two different things.  Some prefer to use the word frugal to describe wiser money management.  I prefer the term smart money management because it looks at other factors outside of simple dollar and cents costs.  An individual who is cheap is someone who values monetary cost above all others.  They’ll waste immense amounts of time, comfort, energy, and sanity just to come ahead a few pennies.  They’ll drive clear shot across town to save a few pennies on gasoline.  Nothing is ever irrational if it’ll save them a few dollars, even if the cost is countless hours of frustration afterwards.

Have you ever:

1. Bought food that was expired just to save a few dollars?
2. Spent lots of time arguing over a minor price difference just to save a few dollars even if it meant burning a few bridges?
3. Sacrificed quality to an extreme level to get minor savings?
4. Massively inconvenienced yourself for a good deal: i.e. sleeping in front of a store for a weekend just to save on some item?
5. Gone without something you really need for a long time because you simply didn’t feel like paying the price?
6. Given up a lot of time, convenience, and quality in any other way in a disproportionate way compared to the cost?

These types of activities will only ensure that you end up further behind when it comes to building wealth and intelligent financial management.  People who want to succeed at not only managing money effectively but also in terms of building wealth will avoid this behavior like the plague because it only ensures that you’ll expend more time than what your money is worth.  Time is far more limited than money and people who want wealth are cheap with time.  Treat your time and your energy sacred.  You’ve already traded it once to make the money.  Don’t trade it again being cheap.  You’re then spending a multitude of time for a minor savings benefit.

The True Cost of Cheapness

People don’t look at the true overall cost of being cheap.  I have known many people who will indeed drive across town to save gas, or go through other extreme lengths to save a dollar.  One situation I remember with my own family was when we were moving.  Instead of paying for a larger U-Haul truck and hiring some extra help, they wanted to do it without help on a smaller truck.  It took around 7 trips and 4 trips on two smaller trucks to get it done.  What should have been a day or two job ended up taking several days.  This time could have been spent putting the items in the house or relaxing and using the time on something more fulfilling.

I had another friend who just used their cars instead of U-Haul and it took them an entire week!  They would have been better off hiring the help.  These things often come up in business where the time it would take to do something would be better off spent being subcontracted so that you can focus on the things that will generate you the most business.  It’s the principle of working “on” your business and not in it”.

Another negative is using cheap or inadequate tools.  This can easily run you in the red because you’ll have poorly done work or you’ll end up with sub-par equipment or machines that can fall apart on you.  This can even put you in risk in certain situations.  Many people have been harmed or killed due to machine malfunctions.  In most cases you’ll end up spending a lot of money fixing problems that could have been fixed the first time.  A $1000 job ends up costing $5000 because you tried to cheap out and spend $500.  Compounded with the time cost this is just not an effective way to manage your resources.

Avoiding Cheapness In The Future

Here are some ways to avoid cheap behavior in the future:

1. When making a purchase decision whether its’ a product or a service, analyze the true cost of everything. Time, money, frustration, and time spent fixing problems again should all be analyzed.
2. Think buying time instead of strictly saving money.
3. Hire people when you can. That time could be used to increase your productivity elsewhere. If you can hire someone for a job that’s $50 that takes them 7 hours, is it worth it to do it yourself when you make $20 an hour?  You’re paying yourself a low wage to do the work in this instance.
4. Use quality tools whenever you can. It saves time and you don’t have to replace them as often.
5. Use quality parts when doing repairs. Nothing is worse than nickel and diming yourself over cheapness.
6. Look at freeing yourself up. This means having the time to do the things you enjoy in life.

Following these tips should launch you ahead in managing your money and time resources adequately.  Simply remember with wealth management that time is a major factor as well as money.  Don’t squander your time for meager financial savings.  You’ll find that you end up digging yourself deeper into the hole.  Go out and start budgeting wisely today!

***Photo courtesy of https://www.flickr.com/photos/76657755@N04/7408506410/sizes/l

Berkshire Hathaway Shareholder Discounts

The following post is by MPFJ staff writer, Marie. You can read more of Marie’s articles over at her own blog, Family Money Values. Enjoy! 

After I started blogging at Family Money Values, my research led me to discover the “Woodstock for Capitalist” – the annual meeting of Warren Buffett’s Berkshire-Hathaway company.

The meeting.

To my knowledge, this is the only shareholder meeting that offers not only a chance to vote on proxy items in person, but also access to the ‘sage of Wall Street’ and his side kick Charlie Munger as well as a chance to glimpse some of the board members, including Bill Gates.  Buffett and Munger (he is a riot by the way) host a question answer period to a jam packed convention hall for most of the day.  The actual meeting typically lasts less than an hour.

There are dinners, a chance to mingle the night before with other shareholders, a 5k run, a huge exhibition hall and multiple shareholder discounts.

Eager to see the spectacle, I bought B shares of BRK stock in 2012.  Unlike the A shares (which as of 5/2/17 were valued at about a quarter of a million dollars per share), the B shares were only around $112 per share.

That first year, my spouse, my two grown sons and I drove to Omaha and spent the night so we could get to the meeting in time to see the movie.  The hotels were booked as early as January but we managed to get two rooms in a not so nice hotel at a price I could stomach.  We drove to the meeting in the morning and made it in time to see the starting movie – from the nosebleed section of the hall.  It was sort of a funny movie, with a lot of subtle and not so subtle advertising for Berkshire companies.

It was interesting seeing and listening to Buffett and Munger and hearing the questions folks came up with.

For lunch, the food vendor stalls in the hall are open and doing a brisk business.  We ate standing up as their were no empty seats.

Later, we strolled down to the exhibition hall and looked around.  There were some pretty good discounts (we bought a couple of knife sets) and then there were things that still seemed a bit too expensive (like the See’s Candy)

We didn’t take advantage of the 5k run, the reception on Friday at Borscheims, the steak dinner for shareholders (you still have to pay) at Gorat’s, or compete with Buffett in the Newspaper throwing challenge.  Nor did we get over to the Omaha Nebraska Furniture Mart or the Borscheims – where even more shareholder discounts were said to occur.  We did ride over to see the Netjets planes at the hanger.

Each year since, my spouse and I have attended the meeting – driving up the morning of it.

As the meeting attendance has swelled over the years, straining the area resources (hotels, convention room etc), the Berkshire folks have made some adjustments.

Last year, they initiated a live stream of the Saturday meetings.  If you are interested you can view that on Yahoo Finance https://finance.yahoo.com/brklivestream/

The discounts.

This year, Berkshire-Hathaway opened up the shareholder discounts to include all locations of the Nebraska Furniture Mart – NFM –  (Omaha, Kansas City and Dallas-Fort Worth), instead of limiting the discounts to the Omaha store.

I was excited about this one as we live near one of the other stores and was hopeful that the discount amounts would be significant, since we had gotten some good deals in the exhibit hall.  So, as soon as our proxy material arrived, with the form to fill out to receive shareholder credentials (which you need to get into the meeting and to get the discounts), I sent it back and got our max of 4 credentials in the mail.

The discounts run for several days prior to and throughout the weekend of the annual meeting. Yesterday was the first day of the NFM discounts so I geared up and went shopping to check them out.

As I had never been and couldn’t find any information online, I had no idea about what to expect.  Would they be limited to certain items?  Would the discounts be a set percent?

As soon as I entered the store, I asked the first person encountered how the discounts worked.  Unfortunately, that person was a security guard and didn’t have much information.  But he did tell me that I should talk to a sales person.  The appliance section was near (NFM at this location is huge so distance mattered!) and I quickly found a salesman to help me out.  Here is what I found.

The discounts are embedded inside the store’s database, not displayed anywhere.  You have to find an item in which you are interested, scout out a salesperson (who is usually on commission), show him your credential and ask him what the discounted price is.

Alternately, if you are the actual shareholder, you are in that database too and you can call in to check on prices and make an order.

Examples of the underwhelming discounts

So, I checked out some of the items I’m interested in obtaining to see what kind of discount they had.

I was underwhelmed, to be honest.

• Samsung washer – manufacturer suggested retail price of $899, sale price to any shopper that day at NM of $643, and BRK shareholder discounted price of $630. Hmmm only $13 less than anyone else.
• Samsung matching dryer – same prices as the washer.
• GE black basic refrigerator freezer with ice maker – manufacturer suggested retail price of $994, no sale price to any shopper that day, BRK shareholder discounted price of $974.12 – only discounted $19.88.
• Wood swivel counter height stool – regular NFM price of $159, discounted for shareholders to $127. While this was a better percentage than the appliances I checked, it was nowhere near the 30% off I had dreamed about.
• Upholstered swivel counter height stool – regular NFM price of $369, discounted for shareholders to $295.

While it is nice to get a shareholder discount, the process used and the seemingly small percentage off what others pay was discouraging and time consuming.

Still if you are buying something anyway, and have access to shareholder credentials, it is worth checking out.  Who knows, maybe other merchandise was discounted at a higher percentage.

I have enjoyed going to the meetings and hearing first hand from the sage, but even better has been the growth in share price of BRK-B (which was at $166.65) as of the last quote – a rise of $54.65 per share – gee, which I had bought more!

Discounts aren’t everything. How about you all? Have you encountered any underwhelming discounts recently?

***Photo courtesy of https://www.flickr.com/photos/132053576@N03/17063139357/sizes/l

How to Throw a Fun Yet Affordable Graduation Party

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

Summer is around the corner, which means families everywhere will be getting ready to throw high school and college graduation parties. If you’re preparing to throw a graduation party and have been talking to parents of other grads, you’re likely beginning to prepare to spend a LOT of money – or panicking about how a graduation party will affect your family finances.

The good news is that a great graduation party doesn’t have to be super expensive. Abandon thoughts of catered dinners and expensive decorations, and consider these ideas for a fun yet affordable graduation party.

Share Your Party

If your graduate has a best friend, family member or significant other who is also graduating, consider doing a shared graduation party. Not only will you be able to split the costs with the other family, but many of your guests will probably know both graduates and will likely appreciate having to only attend one party as opposed to two.

Cut Down on Equipment Rental Costs

It can be expensive to rent party tents, chairs and tables. A cheaper idea may be to rent a local park pavilion or to hold the party at the home of a friend/family member who has a large garage where most guests can be indoors without the need for a tent. Borrowing tables and chairs from family and friends can help cut down on costs there. Since the tables will be covered with tablecloths anyway it doesn’t matter much if they don’t match.

Keep a Handle on the Food Budget

There are several ways you can make sure the food budget for your graduation party doesn’t get out of hand.

Choose Your Party Time Carefully

Know that time of day makes a difference. If you hold your party at lunch time (between 11 a.m. and 1 p.m.) or dinner time (between 4 p.m. and 6 p.m.) people will expect a full meal. However if you hold the party during midday hours, you can get away with serving a lighter assortment of finger foods and appetizers.

Don’t Do the Catering Thing

Catering is often the largest expense for graduation party holders, but it’s not always a necessary expense. Choosing foods that are inexpensive and easy to prepare, and asking for help from close friends and loved ones will help you save substantially on food costs. Here are some ideas for easy-to-prepare and serve, inexpensive foods.

• Go to the warehouse club for maximum savings. They have great specials on deli meat, or if you really want to save you can get pulled pork for about $2 a pound and throw some BBQ sauce on it.
• Inexpensive salads. Again, the warehouse club is your friend here. They sell pastas, lettuce and other veggies at amazingly low prices and huge quantities. Look online for salad recipes that are inexpensive yet delicious.
• Potato and other chips may not be an adult favorite but kids love them. Warehouse clubs and stores like Aldi sell chips for super cheap.
• Fruit and vegetable trays. Instead of buying already prepared fruit and veggie trays, shop at the warehouse club or Aldi and recruit a couple of friends to help you put together a nice array of fruits and veggies along with some store bought dips.
• Warehouse clubs such as Sam’s Club and Costco sell delicious half and whole sheet cakes for amazingly low prices. You can usually get a whole sheet cake for under $40. If you don’t want to go the cake route, have close friends and family members contribute a plate of bars or cookies and have a dessert buffet instead of cake.
• Lighter fare. If you’re doing a midday party you can get away with deli sandwiches cut into triangles and an assortment of veggies, fruits and chips.
• Instead of serving sodas, choose to make punch with any combination of lemonade or Koolaid and add in lemon lime soda or Ginger Ale. Much cheaper, and different too. People drink soda often but rarely get to indulge in punch.

Invitations

Technology has made it very easy to do your own graduation party invitations, either on your home computer system or at a DIY photo system like the ones at Walmart. With pre-made templates to choose from, creating your own invitations will be cheap and easy.

Decorations

Decorations don’t have to cost a lot of money. Consider these ideas for a beautiful but frugal graduation party.

Tablecloths

Buy tablecloths at the dollar store in your child’s school colors for a colorful but inexpensive addition to your party.

Table and other Decorations

Instead of buying table centerpieces, use photos laid on tables or arranged nicely around the area, or use other items from home that reflect your child’s interests and talents. Books arranged nicely with ribbons work well as decorations too.

You can also decorate using your food choices.  Check out this Pinterest board for fun but easy ideas such as Diploma Cookies and Graduation Hat Pops.

With a little creativity and work, your child’s graduation party can be fun without draining your bank account.

A Word about Your Home’s Appearance

If you’re having your child’s graduation party at home, you may feel like you’ve got to remodel and redecorate and have your home looking picture perfect for the party. Know that cleaning, decluttering and a few inexpensive home enhancement decisions like a fresh coat of paint and a few flowers can go a long way. No need to remodel your entire home to impress people for one day. On the other hand, if you’ve been meaning to remodel anyway and have the cash on hand, an upcoming graduation party can be a great excuse to finally get it done.

How about you all? What are your tips for saving money on graduation parties? Do you have any ideas for inventive graduation gifts? 

Share your experiences by commenting below!

****Photo courtesy https://www.flickr.com/photos/attercop311/3092138753/

Facing High Medical Debt? Here’s What You Should Do

The following is a post by MPFJ staff writer, Toi Williams, who is a professional finance blogger for MarketBeat. She has backgrounds in personal finance, sales, and real estate.

Medical debt is becoming a big problem for many in the United States. According to data from the Consumer Financial Protection Bureau, medical debt collections currently make up about 52 percent of collection accounts on credit reports, a much higher rate than other types of debt. About a quarter of adults ages 18 to 64 reported having past-due medical debt in 2015, compared with 10 percent of people over 65. An estimated 43 million consumers with a credit report at a nationwide consumer reporting agency have one or more medical accounts in collection.

Of the consumers with only medical collections accounts, 50 percent have otherwise “clean” credit reports. However, having a single collections item on a credit report can hurt a credit score severely. A person with a FICO score of 680 could see their credit score drop 45-65 points once a collections account has been added to the information. Someone with a score of 780 could see a decline of 105-125 points.

This makes it very important to act on the medical debt quickly before it is sent to collections. There is currently no set standard for when a medical debt will be sent to collections, so it could happen anywhere between 30 – 180 days past the billing date. Here are some steps to take that will make handling high medical debt a little easier.

Examine Medical Bills Carefully For Errors

Medical bills are complicated and are often full of codes and terms that you may not understand. Those with chronic conditions, medical emergencies, or lengthy hospital stays face even more challenges because their care often results in multiple bills from multiple providers. Requesting itemized bill from each provider will allow you to check how much you were charged for each service.

When reviewing your medical bills, make sure that you were not mistakenly charged for services you didn’t receive. If a provider listed is unfamiliar, check the date of service to see if you had a medical treatment that day. Some providers may be associated with a hospital where you were treated but chose to bill you directly for the services.

Review Circumstances Of Denied Coverage

Many cases of high medical debt are due to the patient’s insurer denying coverage for certain procedures. Unless it is a medical emergency, in most cases you will know what your insurance will cover before receiving treatment. If coverage is denied for something that you believe should have been covered, there are several things that you can do.

First, review your health insurance policy to see exactly what providers and procedures are covered under your plan. If the questionable items should be covered, make sure your provider has your correct insurance info and that they used the correct billing codes when submitting the claim to your insurance company. A small mistake can lead to expensive bills for procedures that your insurance should have covered.

Dispute Inaccurate Charges

If you have reviewed your medical bills and find that you have been charged incorrectly, it is important to dispute the bill as quickly as you can. The first step is to send a written notice to the provider detailing which portions of the bill you are disputing. Be sure to send copies of all relevant documents along with the written notice, including copies of the bills with the errors clearly indicated and copies of medical records related to your claim.

In many cases, the provider will revise the bill to correct the errors once this notification has been received. It is important to stay on top of the matter until you can confirm that the necessary changes have been made. Keep a record of contacts made with the provider in your efforts to correct the bill. This information can be valuable if the medical bill is sent to collections still containing errors.

Ask If Discounts, Payment Plans, Or Financial Assistance Is Available

Medical care providers know that many people have trouble paying high medical debt and many offer ways to make paying the debt easier. For example, some medical providers will offer a discount to those that can pay the discounted amount right away. Others will accept the Medicare rate for their services, which is typically lower than the rate charged by private insurers. It doesn’t hurt to ask.

Some hospitals and clinics have a financial-assistance program to help people that are unable to pay their bills, but there are typically income limitations on who can apply for these programs. The provider might also offer a monthly payment plan that enables you to pay off the debt in installments at little or no interest. You may also be able to negotiate the amount due directly with your health care provider. In many cases, they will be willing to work with you to come up with a plan that you can afford.

One of the worst things you can do is put large amounts of medical debt on your credit card. If you cannot pay off the balance right away, you will be subject to a much higher interest rate on the debt than the provider would have charged you. If the debt is sent to collections, it will look like any other credit card debt to creditors, severely harming your ability to obtain credit in the future. Explore other options for repayment first and only use your credit card if you can pay off the entire amount before the next billing cycle.

How about you all? Have you been struggling with high medical debt? How have you been coping? Tell us in the comments.

***Photo courtesy of https://www.flickr.com/photos/usarmyafrica/4567202913/sizes/l

Combating the “Wealth Equals Jerk” Perception

The following post is by MPFJ staff writer, Laurie Blank.  Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.

There’s a common perception among those struggling financially that all wealthy people are greedy, self-serving jerks who have made their fortune by trampling on others. Many of those living paycheck-to-paycheck lives gained this perspective from their parents or other authority figures in their lives. Entire books have been written on how the wealthy are responsible for all economic problems in the world.

I know our family sometimes talked this way when I was younger. In their minds, there were the haves and the have-nots and which group you fell into was simply luck of the draw. Besides, wealthy people were takers and not givers, and why would you want to be a part of such an uncharitable group of people anyway?

I believe a wrongly-held perception of the rich can have a subconscious impact on one’s ability to improve their financial situation. I know this was the case with my husband and me for many years. Because we viewed the rich as financial bullies, we were hesitant to improve our financial situation. We feared we would change if we became wealthy or financially secure and no longer be the compassionate, charitable people we were. While there are definitely rich people who step on the backs of others to pad their own pockets, studies have shown that the majority of wealthy people are in fact quite pleasant.

If you’re struggling with paying off debt and building wealth because you don’t want to become a “rich snob”, here are some tips that may help you change your perception of the wealthy.

Do Your Research

Thomas Corley, author of the book Rich Habits, found in his extensive research of the wealthy that they weren’t at all the horrible people that much of society makes them out to be. Contrary to popular perception, Corley found out some surprising statistics about the wealthy such as:

• Seventy-six percent of the millionaires in his study were self-made. In fact, thirty-one percent came from poor households and forty-five percent came from middle class households
• The wealthy in Corley’s study worked more hours, watched less television and spent more time networking than those struggling financially
• The top one percent of the wealthy are carrying forty-six percent of the tax burden in the U.S.
• Sixty-two percent of the wealthy gave 5-10% of their income to charity and seventy-two percent volunteered five hours or more per month at some type of charity

Often times the wealth-equals-jerk perception comes from a one-time experience a financially struggling person has with a wealthy person or from random media reports, but statistics show otherwise.

Remember that Money Doesn’t Change a Person

There’s an old saying that goes “Money doesn’t change one’s personality; it simply magnifies it.” In other words, if a rich person is a jerk, it’s likely that they were a jerk before they had money.

Pride, anger, low self-esteem and bitterness often come from years of self-centeredness, and those qualities can be adapted by people in all financial situations. If you look at the “jerks” you know, I’m willing to bet that they have a range of financial situations and aren’t limited to the wealthy only.

The Truly Wealthy vs the Appearance of Wealthy

One wealthy person I knew when I worked in the banking industry said that in her experience she had learned that while those pretending they had wealth were often angry, unhappy people, those who were truly wealthy were kind and charitable.

Often it’s the case that people appear to be wealthy due to the assets they own, when in reality they might just be highly indebted people who are extremely stressed by their financial situation. What comes off as “pompous jerk” might in reality be “I’ve been living this lie of having it all but I am being crushed under the weight of the monthly payments.”

I saw this regularly when I worked in banking. Nicely dressed people who owned fancy homes and drove fine cars would come into the bank, desperate for a consolidation loan or a plan to help them get out from the burden of heavy debt loads.

I also dealt with many wealthy people during my fifteen years in mortgage and traditional banking, and the majority of the truly wealthy people I worked with were indeed kind and compassionate.

Being a Jerk is a Choice

Don’t let false perceptions of wealth make you hesitant to build wealth for yourself and your family. Simply make a commitment that when you do become wealthy, you’ll use your fortune to make the world a better place. Being a jerk – or not being a jerk – is a choice.

How about you all? What has been your perception of wealthy people? Has it impacted how you’ve handled your money?

Share your experiences by commenting below! 

***Photo courtesy of https://www.flickr.com/photos/conskeptical/3319490592/sizes/l