Guest Post by Philip Reed

Whether you’re feeling affected by recent economic troubles, or you’re just looking for a few ways to lessen the pinch on your pocketbook, here are some simple ways how to save money every day.

Transportation

Commuting can be a major expense! Not only do you have to pay for fuel, but there is also additional maintenance and even tolls in some areas. Depending on where you live, parking fees can add up quickly. Just owning a car is a major expense in itself, but a long, daily commute can multiple all of the expenses related to it.

If public transportation is an option, consider whether this would be a productive alternative to getting you where you need to go while trimming a few expenses related to driving an automobile. Still another option is carpooling. In some cites, such as Atlanta, High Occupancy Vehicle (HOV) lanes are dedicated to cars with multiple occupants and usually provide quicker routes that are less taxing on your vehicle.

Gym Memberships

We all have our preferences for how we prefer to stay fit. How often do you use your gym membership? If you don’t go that often, perhaps canceling your membership in favor of a run outdoors or a game of basketball at the park would be more in order for staying healthy.

Just by using a little imagination you can come up with a solid fitness routine for little or no money.

Plan Ahead for Expenses

If you head to the ATM frequently, watch out for withdrawal fees. Find time to go to your own bank to withdraw the cash you’ll need and avoid accumulating these little additional costs throughout the month.

If your own bank charges ATM fees, consider drawing the cash that you need with a personal check. You can take out as much money as you think you’ll need at the beginning of the month or week to avoid making multiple runs for smaller amounts. However you handle it, you can save money just by lowering the number of times you need to run to the ATM.

How many channels do you watch, anyway?

Enjoyable as they might be, you’re only watching one television station at a time. Is your cable bill worth it to you, or do you think you’d be able to do without? Many shows are even available online.

Look for Free or Lower-priced Entertainment

When you know where to look, you’ll likely find ample free entertainment possibilities where you live. Get to know the outdoors. Look for new parks, or find a recreational area you haven’t explored before. Stay in touch with your newspaper (check it online if you don’t want to buy a subscription) and see what free concerts, community theater events, or even high school sporting activities you’d like to enjoy. Hoping for a new book to read or movie to watch? Give your local library a try.

Plan for the Future

As you look to save your pennies now, consider that it will also be to your benefit to have a nest egg built for yourself in the future. Life insurance is a common method people chose to protect themselves and their families when they die. This offers a family a source of income in case of a tragedy, and is especially helpful if there are bills and other debts still to be paid. If you decide this is a smart investment for you, shop around carefully when looking for life insurance quotes.

It’s important to be truthful during this process, particularly when offering relevant health information. Otherwise, the life insurance rates you are quoted over the Internet, or that you receive from an agent in person, will not be accurate.

With a little effort and some time, the cost-cutting measure you use can add up into considerable savings. You will likely be grateful for the time you have spent improving your finances.

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What TV REALLY Costs Us

By Kevin M

Okay, the holidays are over—and the free spending with it! It’s time to clean up the mess before it becomes an even bigger one!

Despite everyone’s best intentions, overspending at the holidays is pretty standard. It isn’t until January when the bills come in that the extent of the damage is fully realized. There’s always an extra gift or two (or three or more) that we forget about, a holiday dinner out with friends or co-workers, some extra heavy travel expenses not budgeted for—it all adds up, but heck, we’re human. But not to worry, we have an entire year to get things back in order before…the next holiday crush.

And maybe we can even make some permanent changes for the better along the way.

Try a few of these in the next few months and see if they help…

1. Start a Christmas Club account in preparation for next year. It sounds a bit old-fashioned, but right now, while the concern over last Christmas’s extravagances are still fresh on your mind (and on your credit card statement!) set up and prepare to fund an account for next year. You’ve probably thought about this every now and again, but now is the best time to make next Christmas a financially less taxing event than this year.

2. Start saving a little bit of money in regular increments. If you can save just $20 per week, that will add up to over $1000 in one year. Sometimes a small step like that is all it takes to convert a spendthrift into a saver.

3. Get a part time job—at least for a little while. A year is like a hike up a mountain—it starts out quiet in the winter time, picks up speed in the spring and summer, really kicks in with school and sports in the fall, then hits it’s crescendo in November and December with the holidays. Well, now is the quiet time of the year when not much is going on; if you need some extra money, this is the best time of the year to go for it.

Get a part time job to save up some extra cash for debt payment or savings—you can quit in time for the warmer weather. Unless you’re deep into skiing, this time of the year is pretty boring, and nothing will prime the financial pump of your life more than a few extra bucks.

4. Payoff any bills built up over the holiday season. If you have a few bills hanging over from the holidays, now is the best time to pay them off. Debt is a funny thing—pay it off quickly and it’s no big deal, but let it hang around and it becomes more or less permanent. Take it out now.

5. Pick one small debt and pay it off. If you’re in the debtor class with so many millions of others, you probably have grandiose dreams of paying off all of your debts this year. Forget about it! Unless you’re prepared to live in a tent in the woods, bicycle to work and eat rice and beans three times a day, every day, it’s probably a pipe dream. Pick one debt—your smallest is best—and pay it off as quickly as you can. Once you get that little bugger off your books, you can hit the next smallest. Presto! Debt Snowball in progress.

6. Ditch one or two regular expenses. Do you really need all the services you pay for? Are there some magazine or internet subscriptions you really don’t need that you can cancel? Can you go without cable TV for at least a while? Do you have a membership at a health club you hardly go to? Cutting just one or two expenses can make a real difference in your budget over time.

7. Review your insurance coverage. If one of your plans for the new year is to build up your savings balance, you may be able to use it cover an increase in the deductibles on both your health and auto insurance plans. If you plan on increasing your savings account by $1000, you may be able to safely raise your health plan deductible by that much. You’ll have the money to cover the higher deductible, but you’ll come out ahead because your premiums will drop, sometimes substantially. And if you have no claims during the year, you’ll be even better off still.

8. Cut back on the amount of food you buy. This isn’t as ridiculous as it sounds on the surface. In fact, it nicely compliments another popular New Year’s resolution: losing weight! The best way to do this is to eat less; start by buying less, then take it from there. That’s taking out two birds with one stone.

9. Resolve to eat more meals at home. Much like cutting back on buying food to save money and loose weight, eating more meals at home works in two positive directions. Restaurant meals are fattening, even the alleged low calorie versions—the fewer of them you consume the easier it is to lose weight. And even though eating home more may increase your grocery budget, that increase will be more than offset by the money saved by not eating out.

10. Find a cost free (or at least low cost) past-time. Boredom is one of the most destructive elements affecting finances. When we’re bored we tend to spend money to fill the void. “Entertainment” is the generic word given to the practice, and it can get pretty expensive especially if you’re bored a lot. Take up reading, low impact exercise, gathering with friends over ONE cup of non-designer coffee, or any activity that fills your time, feeds your mind and doesn’t cost a lot of money. Or take on the above mentioned part-time job idea—anything that either doesn’t cost you money or has the potential to put some in your pocket is worthy of consideration.

You were looking for new years resolutions, weren’t you? Now you have ten to get you started.

What are some financial resolutions you’re making or can suggest to others?

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By Kevin M

There’s a “stealth expense” that chews through budgets and often leaves us with an empty bank account or even a little deeper in debt each month; its called entertainment expense, and at least part of the problem may lay in the fact that we’re usually reluctant to even view it as an “expense”.

Maybe this is the case because entertainment has a way of defining us—it’s often who we are, which has to be something more significant than just an ordinary expense, doesn’t it?

We can be meticulous about budgeting for housing, groceries, utilities and a host of other expenses, but entertainment is often—to borrow a political phrase—“off budget”.

Entertainment diverts our time into stimulating activities in ways that usually won’t happen through working at our occupations, managing our homes or many of the other more mundane tasks we participate in as a matter of survival. People have sought to do this since the beginning of humanity, but the one thing that’s changed radically is our contemporary willingness to break the bank to make it happen. That’s the part of it that we need to control!

The most basic purpose of entertainment is to have a good time; we need to get past the idea that we need to spend a lot of money, or even any money at all, in order to make that happen. We all have a need to be entertained but there are inexpensive ways to do it, and then there are the other ways—the ones that often lead to debt.

Entertainment as an addiction

I’m not a psychologist, but I’d be willing to wager that much of the spending on gold-plated forms of entertainment these days is an attempt to compensate for weaknesses in other areas of life, such as stress, lack of companionship, lack of community, or other voids. This goes beyond the realm of simply looking to have a good time, to the point that the planet is now crawling with entertainment addicts. And like all addictions, it must be controlled.

Replace costly entertainment habits with less expensive ones, and we can do that simply by engaging in more participatory activities, and by increasing the amount of time we spend with people. Bigger picture, much of the reliance on entertainment might be replaced by reducing stress in your life, by increasing connections with family and friends and with involving yourself more with the community and the world around you.

Do these things, and you may find yourself craving fewer restaurant meals, amusement park visits, trips to bars, and all of the other entertainment activities that can suck a budget dry.

Instead of eating out, going to the movies, to the mall to shop or to costly amusement parks and other venues, come up with some inexpensive alternative activities you can engage in so that you can still keep yourself entertained but without spending a bunch of money to do it. Don’t be afraid to consult with family, friends and coworkers for more activities—see what others are doing for entertainment, especially those of a more frugal persuasion.

Compile a list to help you when you’re looking for something to do—this will help you to develop some new habits and attitudes toward entertainment, at least until it becomes set in your mind.

Eight activities for under $20

To help you get started, here is a list of activities which will get you out of the house and into the world without bleeding you dry:

1. Visit with friends and extended family—your house or theirs; we’re social creatures so people are the best source of entertainment
2. Head out to the local park or a nearby beach; pack a lunch, bring your bikes, in-line skates or a ball or two, and spend a couple of hours just taking it easy and enjoying the outdoors
3. Window shop at the mall; bring $10 with you and remove your credit and debit cards from your wallet; sometimes just being out and about is all we really need
4. Plan “Family Night In” with a home cooked dinner and a video, or cook a nice dinner at home, then go out for dessert afterward—which is just as much fun but much cheaper than a full restaurant meal
5. Go hiking in a state or national park—you don’t need to be an athlete to walk, and you can do it at your own pace and enjoy nature as you go
6. Pass some time in your local library, or at one of the chain mega book stores; you can browse or read for hours and no one will ask you to leave. Some large book stores also have coffee shops, and you can always get a cup for under a couple of dollars.
7. Hang out with family or friends at Starbucks or some other coffee house
8. Pack a lunch or some snacks and spend the afternoon or evening at your local neighborhood or community swimming pool. At our community pool, daily admission is $3 per person, $12 for a family of four, and there aren’t a whole lot of places you can go for less than that.

This is just a start—work on expanding the list, and I’ll bet you could come up with at least 20 activities you can engage in for less than $20 each and many of them free. A lot depends on your own personal preferences, but the more possible activities you can come up with, the less expensive your entertainment will become, so be purposeful in developing a list.

We’ve found over the years, that doing several low- or no-cost activities in combination can make for an enjoyable day. You can have a picnic in the park for dinner, window shop at the mall for a bit, hang out at the bookstore for a while, then go to Starbucks for coffee and dessert—an enjoyable evening for under $20.

The more options and combinations you can come up with, the less likely you’ll need to go to the movies or an amusement park.

What are some other ways you can think of—or have done yourself—that you can entertain yourself or your family for not a lot of money?

By Kevin M

Last Saturday night, we decided to go see Avatar, a highly acclaimed movie that lived up to its billing. It was the first time we’d been to the movies this year, and I’m almost embarrassed to admit that the reason we decided to go at all was that our daughter was at a weekend sleepover, which meant that only my wife, my son and myself would go, saving us money on the fare (OK, she wasn’t really excited about seeing the movie anyway).

Now we live in the Atlanta area, which is a region nearly famous for having a very reasonable cost of living. Despite this, here’s the run down of what it costs to take in a movie in these parts:

Movie ticket: $10.50 per person (seems to go up a dollar every year)
Medium popcorn: $7
Medium soft drink: $5
Box of candy: $5

I can only imagine what it costs to go to the movies in “high cost” areas.

If each person in the family goes for the “full package”—movie, popcorn, drink and candy, the cost is an astonishing $27.50 per person, or $110 for a family of four (a 12 year old is an “adult” at the ticket window)! And we haven’t even added dinner!

The movies weren’t always this expensive

My parents said that back in the 1940s, a quarter got them into a movie house where they would watch a double feature plus “shorts”—newsreels, cartoons and the like. Popcorn, Coke and candy could be had for a nickel or a dime each. A full afternoon or evening of entertainment—3, 4, 5 hours—for about 50 cents! Same deal today: $27.50 for the 1.5-2 hours for a typical single run movie—then we’re back out on the street looking for something to fill the rest of the time.

Back in the 1970s I remember paying a dollar and change for admission, and maybe the same amount in total for popcorn, candy and soda. It would be even less expensive at a drive-in theater, where a car full of people could watch a movie for the single price of admission for one car. Another drive-in bonus was that you could bring in your own snacks to save even more. Are there even any more drive-ins around anymore?

Let’s take a closer look at a family of four today, at the above cost of $110 for one night at the movies. If the family heads to the movies at least once a month, in the course of a full year, the family has spent upwards of $1320 on a single entertainment category, and all for something which seems so normal.

How to save money at the movies

The most typical suggestion for fighting back against high movie prices is to rent DVDs through a local movie rental store, Netflix or some other in-home viewing option. But let’s be honest, there’s something special about going to see a movie at the movies, especially for a fresh-release blockbuster. Raising a family in an era of not-so-cheap movie outings, we’ve been forced to come up with ways to do the things we enjoy, but to do them for less money.

Employer theater discounts. Sometimes theater chains will offer discount packages to large employers to encourage attendance. My wife worked for such a company, but for some reason the company didn’t publicize it. We were able to save $2-$3 per ticket, and with four tickets per movie, it made a real difference. Bug a few people in the HR department; even if they don’t have such an arrangement, maybe you can contact local theaters and see if any are willing to create one.

Matinees. You can typically save $2-3 per person by attending afternoon matinees. For a family of four, this alone will save $8-12.

Avoid combo packages. Theaters usually offer some sort of combo packages on snacks, but if you do the math (and I have while standing in some very long lines) you’ll find that you’ll typically save only a dollar per order versus the same collection purchased a la carte. The kiddy packs are appealing to small kids, but are close to a bona fide rip off: $6 for two handfuls of popcorn, a SMALL drink and a candy strip that’s just enough to tick your child off. There are better ways to handle this…

Popcorn. We typically buy the biggest size popcorn and share it, rather than buying smaller individual servings for each person. Not only will this cut popcorn costs roughly in half, but at some theaters buying the biggest serving entitles you to free refills. Ask for small popcorn bags at the counter so you can fill them for your kids, or bring some bags from home. If you want to make it really fun for your kids, you can also buy a jumbo pack of movie theater popcorn bags at Sam’s Club, and use those to divvy up the main supply.

Drinks. Same idea here, buy the biggest drink you can, and get separate straws. Variety may be a problem, as it is with my family. Me, my wife and daughter like Diet Coke, but our son won’t drink it. But rather than buy him a separate drink of his choice, and because he’s the lone dissenter, we get him a bottle of his favorite soda at the grocery store for a fraction of the cost.

Candy. The same boxes of candy they sell for five dollars can be purchased at the grocery store, chain pharmacy store or big box discounter for around a dollar! If candy for four people is purchased at the store and brought into the theater, you’ll save an average of $4 per person, or $16 for a family of four.
 

The theater wants you to buy their concessions and may discourage bringing in food, so be careful how you do this. We always buy our popcorn at the theater (and usually a drink too), in part because the movies aren’t the movies without it, but also because we want the theater to make money—just not so much!

Of course the easiest and most obvious way to cut back on the cost of going to the movies is to reduce the number of times you go. Instead of going every month, go every other month, or only when a blockbuster movie that everyone wants to see comes out. It may be that you need to cut movie attendance back to special occasions only.

Breaking up that most traditional of nights out, dinner and a movie, is another way. With our kids being teens, a night at the movies means dinner in.

Incomes aren’t rising, but the cost of just about everything else is–how do we continue doing the things we enjoy, without spending a fortune doing them? Do we cut activities out entirely, do less of them or find less expensive ways?

The Local Watering Hole as a Financial Bottomless Pit

Kevin M

At the risk of personal safety I’m going to take aim today at an “expense” that may be sacrosanct for some, but that’s exactly why it needs to be discussed.

Jimmy Buffet’s 1977 sentimental favorite Margaritaville tells a tale of a carefree life lived on a warm beach in a perpetual state of inebriation. As appealing as that can be at times, when it’s romanticized into a regular activity at a local bar, the costs can be steep, and we aren’t just talking about money.

For the purpose of full disclosure, I’m a light drinker. I’ll indulge in an occasional beer or glass of wine (or two or three), most frequently with dinner guests, but consumption of alcohol has never been a priority in my life. I can go for months without drinking or sit in a bar for three or four hours nursing soft drinks, surrounded by people drinking the hard stuff. I don’t know if that status disqualifies me or gives me the vantage point of an objective outsider, or if it even matters.

Bars—separating us from our money while we’re doing other things

The venerable “watering hole” has for thousands of years been a common meeting place for folks of all types, and in a society which is rapidly becoming starved for community and human interaction, that’s not a bad thing at all. But at least from a financial standpoint, there are few places worse than a bar!

If you’re going to a bar to literally have a drink—that’s singular, as in one drink–with one or more friends, that isn’t a problem; where else can go to a public venue and have a good time with other people for about five dollars? The problems come in when you get beyond one drink, a very easy thing to do when you’re in a group. Consider the following:

Bars are in the business of selling drinks. If no one in your party orders any after the first round, the bartender and management may not welcome your continued patronage. Purely from a financial standpoint, this could be the most favorable outcome.

Impaired judgment raises the tab. After two drinks, judgment becomes impaired and resistance to ordering more drinks or incurring other expenses weakens as the time in the bar increases. Two drinks can easily lead to three, and then to four and so on. At some point food may be added to your order and by then the finances are out of control. Then some of the boys (or girls) may also want some coffee to counteract the affects of the liquor; you get the picture. Four or five people sitting in a bar for a few hours can easily run a tab of several hundred dollars.

Paying for The Group. In a group setting with people drinking, one of the first things to go is anything which resembles an accounting function. After a few drinks, no one is keeping a record of who ordered what, and you can easily get stuck paying for part of your buddy’s eight drinks in addition to the two that you ordered for yourself.

You’re in a friendly group setting, so you’ll quietly pay your “fair share”—and part of everyone else’s–and smile while you’re doing it, because that’s the unofficial but universally recognized bar protocol. The point is that in a bar setting with other people, though you may carefully regulate your own consumption, you will have little control over how much money you will dole out by the end of the night. The last thing you need to do when you’re on a budget is to get yourself into a position of bankrolling the excesses of others!

The effects of going too far. Inebriation is always a distinct possibility in a group setting, which can lead you to do things you’ll later regret. We become bolder when we consume alcohol, so the likelihood of making unwanted advances or of picking a fight with someone who bumps into us or says the wrong thing are heightened considerably. In addition to the humiliation or injury you risk, there are also the longer term consequences of facing legal action or even criminal charges.

A few hours of letting loose can cost you for years or for a lifetime. If you’re already in a financially weakened position, and maybe drinking to release stress, you’re even more vulnerable to a bad outcome. This is because you will have fewer monetary resources available to clean up the mess you made on a drinking binge. There’s a good reason why poor people are more likely than rich people to go to jail and its spelled m-o-n-e-y, or more precisely, the lack of it. An attorney friend of mine used to say “never create a $1000 problem that’ll cost you $100,000 to fix.” Good advice?

Tell it to the judge. Finally, there’s the obvious threat of a DUI charge. Ever since DUI laws were put on the books, the blood alcohol level at which the charge applies has been getting progressively lower. In some jurisdictions, two drinks consumed are enough to put an adult man in trouble with the law, and as little as one drink for an adult woman (since women are typically lighter in weight). This isn’t something to be taken lightly.

We’ve now moved from dropping $50 or $100 at a bar, to potentially thousands in court. And in addition to fines and insurance surcharges, you could lose your license or even face jail time. In either case, your ability to earn a living would be impaired—can we even put a price on that?

Starbucks to the rescue

If getting together with friends or coworkers for camaraderie and conversation is the true objective, getting together at coffee shop will be far easier on the finances. Consider the advantages:

1. Coffee is a lot cheaper than liquor
2. It won’t impair your judgment
3. You can meet with the same friends and have a good time
4. No one will ask you to leave if no one in the group is buying more drinks
5. There’s zero chance of incurring a DUI when you drive home

Also, if you or your friends need the booze in order to enjoy one another’s company, you may not be as fond of each other as you think.

So which would we rather spend, $10 at Starbucks or $100 in a bar with the risk of $1000 in court?