The most obvious way that saving money could be a waste of money is in lost opportunity cost.  If your money is tied up in some CD or savings account that you don’t have ready access to, what opportunity are you going to miss out on that could make you even more money.  If you can’t take advantage of an opportunity to make money, your savings is wasting those potential profits.

But, that isn’t the real issue.  Potential profits don’t necessarily mean lost profits.  Maybe that opportunity doesn’t perform as expected and you earn less than you would have in the CD or savings accounts?  No, I don’t think that theory holds up.  Sure, you might miss out on a potential profit boon, but I wouldn’t encourage not saving for that purpose.  In fact, having a readily accessible savings could make it easier to take advantage of an opportunity like that.

But, let’s think for a moment about what we do to save money.  The easiest way to do that is to just have it taken directly from your paycheck and into a 401(k) or to set up an automatic transfer from your paycheck to a savings account.  Easy.  A little bit of set up involved, but very little effort thereafter.  That’s hardly a waste of money!  But, let’s look at the opposite side of the spectrum.  You’re pinching your pennies, saving as much as you possibly can and then some.  You don’t want to miss out on an opportunity, or you want to pay your debt off super fast!  You go so far as to start collecting pop cans.  (assuming you live in a state that has a deposit.)  You walk down the street and throw the cans you find into a bag.  Maybe you even hit the parks and poke through the trash cans there.  Every week, you spend several hours looking for cans.

How much is your time worth?  If you’re spending several hours a week for a few bucks worth of cans, are you making a good use of your time?  Isn’t your effort to save a few bucks a waste of potential money doing something else?  Heck, you could deliver pizzas for a few hours a week and make much more than that.  Sure, the cans are an extreme example.  But, one used to put a spotlight on my point.  What saving practices are you employing that are a waste of money?  Which of them are worth your time, effort, and resources?  And which aren’t?

If we are going to attempt to create a super financial situation, we have to make our saving machine as efficient as possible. It doesn’t hurt to question your tactics.  Find the ones that are causing you to waste your money and find a better use of your time.  Not only will it make your money saving efforts more efficient, but I think it will free up some time to do things that you want to do.  Like spend time with your kids, or walk through the park and not look for cans!

Is Saving Money a Waste of Money is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

If I told you, I would give you $5000 for groceries every year, if you’ll spend an extra 30 minutes planning your shopping list, would you do it?

That’s exactly what the stores & manufacturers do every week with sale ads and coupons. Yet, nearly 90% of coupons go unredeemed each year and countless shoppers buy products without ever glancing at the sales ad or price tag. A little extra effort, a bit of advanced planning and mastering the art of couponing can go a long way towards reducing your monthly expenses.

Coupons are a multi-billion dollar industry – last year, over 500 billion dollars worth of coupons were distributed. Most of them landed in the garbage (or, hopefully, the recycle bin!). So, why are consumers throwing all that money away? The answers I hear when I ask readers, friends & family this question typically include “it takes too much time,” “it isn’t worth the effort” and “I can’t find coupons for the things I buy.”

Coupons take too much time.

I spend an average of 20-30 minutes clipping coupons each week. I spend about half an hour in the store doing the actual shopping. I don’t count the time I spend putting together grocery lists for Inexpensively, since there are literally hundreds of blogs dedicated to creating coupon ad matchups. The average shopper can completely skip that step (but, for the record, I spend about 30 minutes per store). Grand total? One hour for coupon clipping & shopping.

How much time do you spend wandering the aisles at the grocery store?

Coupons aren’t worth the effort.

We’ve already discussed the time spent, which I think is the bulk of the “effort” people refer to with a statement like this. Clipping coupons isn’t too taxing – I promise. I typically cut coupons in front of the television. I’ve even let my children help out now & then. If a 7-year-old can handle it, I think most adults could manage as well.

The question becomes one of time again – does the money you save really justify the extra time? My grocery bill typically shows a “total saved” (including sales & coupons) of around 50% – sometimes way more, sometimes less. I once tracked every penny saved & spent in Quicken. My monthly grocery budget was $400 per month. That year, I saved over $3000 in store sales & $2000 in coupons. It breaks down to about $95 per hour.

How much do you make for an hour of your time?

There are no coupons for {insert your favorite product here}.

Maybe not, but I promise it will eventually go on sale. Everything does – even the pricey gluten free foods my own family requires. Even if you don’t use coupons, pay attention to the weekly sale ad, check clearance racks and know where to find manager specials. You can find discounts on meat, produce, bakery goods, deli products and organic foods.

Plus, you’ll be surprised at the wide variety of coupons you can find if you start to look. Contact your favorite companies, and they may add you to their mailing list, send you loyalty offers or tell you where to print their coupons online. The store coupon machine (called a Catalina machine) will frequently spit out coupons for $2 off your next $25 purchase – you can buy anything you want!

Why would you throw away a coupon that’s good on anything in the store?

Getting Started with Coupons

Once you start to see the impact coupons have on your budget, it’s easy to dedicate an extra 30 minutes to planning a shopping trip. Here are a few quick tips to help you make the most of your time:

• Collect multiple coupons so you can really stock up on your favorite products.
• Don’t stress over clipping every coupon or missing an expiration date – it will cycle back around again soon enough.
• A sale is great and a coupon is awesome, but using a coupon on a sale item will cut your costs drastically!
• Google “your favorite store + weekly deals” to find a grocery deal site that covers the stores in your area – they match the weekly sales with coupons so all the hard work is done for you.
• Get into the habit of carrying your coupons everywhere you go – you’ll be prepared for spur of the moment trips and ready to take advantage of unadvertised specials & markdowns.
• Sort the coupons for your weekly grocery trip in order of the store aisle – you’ll save time, using the stack of coupons as your grocery list as you shop.

I have been using coupons for almost 15 years now, and I know they’ll be a part of our life no matter how far from broke we become. Hey – if it’s good enough for Warren Buffet, it’s good enough for me!

Heather Sokol is the married mother of 3 beautiful, active girls. While they do their best to keep her broke, she’s beating it with money saving tips, deals, coupons and grocery lists at Inexpensively.

Coupons: Are They Worth The Hassle? is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

Could we have lived with that for a couple of more years?  Probably.  But there’s a limit where saving, budgeting, and repaying debt become a true detriment to your happiness.  When you reach that limit, you can become truly miserable.  We could have used the money we spent on the kitchen on debt repayment.  That would have felt good, but not nearly as good as it is to not have that kitchen any more!  So, that just about covers the why of our kitchen remodel.  Let’s move on to the how.

We didn’t (obviously) want to spend a whole lot of money on the kitchen, but just merely update it.  We hit the not-so-local (100 miles) Menard’s and went about ordering the pieces for delivery.  Also, we managed to squeeze in a dishwasher that was on clearance.  It wasn’t really part of the original plan, but it was actually cheaper than the cabinet that would have had to go where it went.

Here’s how the cost on that broke down.

• Cabinets: ~$1700 (They are the budget models, but have solid Oak facing and doors and look quite nice.)
• Dishwasher: ~$180 (again, it was on clearance and was the last one they had.)
• Flooring: ~$450 (laminate that was on sale to replace the chipping linoleum and stained carpet.)
• Delivery: ~$180 (it’s a long ways, and it wouldn’t fit in our car.)

All told, that first trip cost us a shade over $2300.  I didn’t go out and compare, but I think that’s a pretty good deal.  Once all the parts and pieces were delivered, my dad came out to help out over a long weekend.  He lives about 950 miles away, so it was quite the trek for him.  And I must admit, the remodel would have likely turned into a small disaster had he not came.  He’s a contractor, so he’s done a few of these before. And there were a few unforeseen issues that would have caused me a huge problem without the knowledge and help.

In the end, the four day weekend turned into a 5 day weekend.  It was more like a 5 day workweek, but with far more physical labor than I normally do.  But, it got done.   There’s only a little bit of trim that I’ve got to put up, and it will be 100% finished.  I’m hoping that I can find the parts for that here in town this weekend and get that wrapped up.

And now, for the grand unveiling!  Here, in all it’s splendor, is our new kitchen.

What do you think?  Quite the change, isn’t it?  After it was all said and done, we added around $600 more to the bill with odds and ends that we needed throughout making the total bill come in at around $2900.  Of course, if we had had to pay for labor, it would have significantly raised the costs.  Yet another reason to at least try DIY.  You’ve got to know your limits of course.  I got lucky and my dad was able to come help, otherwise this would have easily turned into an example of what happens when you don’t know your limits.  But, it didn’t.  We’re extremely happy with the way it turned out and even though the space is still very small, the luxury of the new cabinets and drawers along with the dishwasher makes it all seem just a tad bigger.

Side note: While my dad was here, he was telling us a story about a remodel he recently worked on where the kitchen alone came in at about $100k.  Incredible.  The client put in solid granite counter-tops that cost $20k!  Even if I won the lottery, I don’t think I could bring myself to spend that much money on something like that.

The Great Kitchen Remodel is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

The stars of our show this week are the articles that deal with frugality and being green.

• The Homemaking Helper gives us the low-down and dirty on Cloth Diapers.
• Money Crush discusses How Much does our culture affect recycling and frugality.
• Cool to be Frugal gives us Baby Steps to a Sustainable, Self-Sufficient Lifestyle.
• Wisebread talks about the Work Exchange way to see the World.
• Yes I am Cheap is having an Earth Day Giveaway!
• Funny about Money wonders, Can Minimizing Go Too Far?
• Penniless Parenting made a Refrigerator Solar Cooker!
• Energy Saving Gadgets Saves Energy by using Motion Sensing Light Adapters.

A Few Articles that tickled me the right way:

• Live Real Now tells us What My Dog Taught me about Personal Finance.
• Suburban Dollar is Giving the Suburban Garden Experiment another year.
• Money Ning details 10 Situations in Which DIY is More Expensive.
• The Paycheck Chronicles Shares the Coupon Love with the Military overseas.

And here’s the rest!

• If you read, you’ll like this quick post by Money Help for Christians on saving money on books.
• Cheap, Healthy, Good has an excellent article on Couponing for people who hate couponing.
• The Saved Quarter tells us how to save on cell phones.
• Go Banking Rates lays out which are the Best Black Cards in the Business.
• Money Management International asks, What is your money personality?
• Personal Finance Analyst gives us Frugality vs. Deprivation: Does saving money damage your quality of life?
• Learn, Save, Invest remixed the Top 5 reasons to Invest your money.
• Free Money Finance discovered how a New Furnace Saved Thousands.
• Personal Finance Journey details 7 Cost Effective things you can do instead of watching TV.
• Wealth Pilgrim answers yet another Health Reform question with Is there an LTC Policy Provided by the Health Care Reform Act.
• Free from Broke asks us to Choose what expenses are important to us.
• Mad Kane provides us with a Tax Day Limerick.
• Consumer Boomer talks about Checking Your Credit Score.
• Bargaineering talks about How Much is Minimum Wage?
• Good Financial Cents talks about Secured Credit Cards and Navigating the Minefield & Building Back your Credit.
• Provident Plan details why Contentment is not Complacency.
• Joe Plemon talks about the Airstream Saga.
• Budgets are Sexy asks Where have you gotten the best financial advice.
• Dinks finance wonders Should you life on a Cash Budget?
• Balance Junkie gives us some pointers on What if you Budget Doesn’t Balance.
• PTMoney gives us 5 ways the Library can save you Money.
• Saving Money Today has The Movie Lovers Guide to Saving Money.
• The Digerati Life shows us How to Save Money on Food & Groceries.
• The Smarter Wallet tells us Where to Buy Cheap Treasures.
• Ask Mr. Credit Card answers How Does  a Hardship Program Affect my Credit?
• Miss Bankrupt posits that There is More than Money.
• The Sun’s Financial Diary Demands More from Previous Purchases.
• Magical Penny tells us Why I Became Interested in Personal Finance.
• Not Made of Money tells us How to Save Money When Buying Plane Tickets.
• The Debt Hawk explains Stock Splits.
• Frugal Family Examiner has some Easy Tips to trim your summer grocery expenses.
• Home Ec101 is Cutting Kitchen Waste and sparking creativity.
• Eventual Millionaire has some Q&A from a Frugal Blogger.

Festival of Frugality #226 – Earth Week 2010 Edition is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

Now, before I go on to tell you what it is we are doing with that money, I need to say something.  For the last several years, we have spent nearly every spare dime we have on paying off debt.  We still have debt that needs to be paid off.  However.  Despite my hate for debt, I’ve come to realize that you cannot let other things slide in order to pay off that debt.  With that in mind, here’s how we’re spending our refund.

We’re getting a new kitchen.  The cupboards in our kitchen are original to the house (circa 1950) and have been painted so many times that they no longer close.  The drawers grind against their frame and the resulting paint dust and wood dust falls down from them onto anything in the cupboards below them.  We have to wash our pans before we can use them because of the dust.  The linoleum on the floor is peeling up.  The carpet is ancient, smelly, and stained.  If you took just the kitchen from our house, it would fit right in with many of the run down slum rentals in town.  We want to move up to a newer (read bigger) house soon, so we need to make this house sellable.  In my opinion, with the kitchen in this condition, it would not sell for what it is worth.  So, we went and bought all new cupboards, countertop, and flooring. Oh, and a dishwasher.  That’s a certifiable luxury, but it helps that we bought it all on sale.  All of the supplies came in at about $2300.  There’s still a few odds and ends that we’ll need to purchase, but we should be able to keep it at about $2700 or less.

This weekend, my father is coming to town to help me install it all.  With any luck, come Monday, it will be mostly finished and usable.

If the plan works, we’ll still have about $800 or so left over.  And with that, we’re buying a couch.  And maybe a loveseat.  Depends on the sale I suppose.   This could be classified as a luxury that we don’t need if it weren’t for the hole in the one cushion, the rips in the spring lining that allows everything to fall between the cushions and disappear into the couch, and the stitching that is coming out at all the seams.  The couches that we are replacing are in dire need of it.  We got them free and have used them for several years.  The couches we had before that were hand me downs and garage sale finds.  It’s time for something new.  And, yes, we could go to garage sales and find new used stuff, but we’ve been saying that for at least a year and haven’t done it, so we’re going to splurge a bit.

When we’re done with all of that, we’ll go back to trying to pay everything off.  My wife’s new business is growing well (that’s another post), and her income is leveling off some, so we can more properly budget for debt repayment.  We’re leaps and bounds from where we were when we got married, and with any luck, 2011 will be the last year we spend with any real debt aside from a mortgage.

What are you doing with your refund?

Tax Day: What We’re Doing With Our Refund is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

In the process of paying off our debt and saving money, many of us will be faced with a moral or ethical dilemma.  Perhaps you bought a bunch of things at a department store and the teller didn’t notice that one of the items rang up for less than it was supposed to be.  Or maybe the teller only rang up one item when there were really two.  Many of us have been faced with just such a situation.  And many of us, in our struggle to reduce our spending and debt, probably didn’t say a thing.  I know I have.  And I felt guilty about it.  Morally, and ethically, we have a responsibility to pay the correct price for an item, and to pay for the correct amount of items.  Even though I admit to not doing anything, I do try to keep myself honest.  Ill gotten gains are gains you’re likely to lose.  Call it karma, or whatever you like, you’ll feel the reverberations of your acts.

Perhaps more-so than in paying off debt and saving money, ethical and moral dilemmas can arise after we’ve paid it all off.  Suddenly, we find ourselves with an abundance of spendable money that we can save or do what we want with.  It’s not earmarked for any debt, and we’ve already paid ourselves.  The situation has changed, but we still have a moral and ethical obligation to do what is right.  If you’re investing your money, do you invest in so-called “sin stocks”?  The stocks of cigarette and alcohol and other indiscretions.  Again, I know I have.  I am still a shareholder in the parent companies of both Marlboro and Camel.  I’ve owned others in the past.  Depending on how you feel about those companies, a ethical dilemma could come up.  As a generality, those companies have rather solid stock and usually pay dividends.  If you feel that those companies are responsible for cancer and death, can you ethically allow yourself to support them by becoming a share owner of that company?

As debtors, we all despise the credit card companies who charge double digit interest rates and hide fees around every corner.  Banks too.  As someone who can now invest money rather than paying those credit card companies and banks, deciding how we feel about those rates and fees can be another dilemma.  If you’re one of the lucky ones  whose state has allowed access to the peer-to-peer lending companies, you have the ability to invest in loans that carry rates that are very much the same as what a credit card company or bank would charge.  The table has turned.  If you were against it when you were paying the rates and fees, can you ethically charge them?  Morally, should you?

I think that many of us look too closely at the technical aspects of personal finance.  We study amortizations schedules and debt snowballs.  We talk endlessly about our retirement funds and the ways that we are going to build them up.  And, while it is there as an undercurrent, we sometimes fail to see the moral and ethical currents that run in the background.  And sometimes, we allow our technical expertise and know-how overcome our moral and ethical compasses in order to make our debt snowball roll a bit faster.

If you truly want to win at personal finance, you have to find your moral and ethical limits and remain steadfast in their direction.  We all fail to do that occasionally, but, as the old saying goes, you’ve got to get back up and try again.

Ethics and Morality in Personal Finance is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

And, of course, since it’s Amazon, the most prominent part is the links to all the green products that they carry.  My wife uses a cleaning solution that is made with vinegar and swears by it.  Cleans better than most of the less green chemical cleaners that she’s used.

I, personally, do not believe that global warming is as dramatic as what some say it is.  I do believe, however, that we should do what we can to be good stewards of the Earth.  I’ve thought a lot about rainwater collection and composting, but our current location isn’t conducive to it.  Too many neighbors for stinky compost, and our house is at the bottom of our lot, so I’d have to have a pump or some way to get the rainwater to flow back up the hill in order to use it for watering.  We’ve made plenty of changes inside with our cleaners and many of the foods and other products that we buy to try and do our part.  It’s not nearly enough, and we need to do more, but we’re making attempts to improve.  And, I’m glad that places like Amazon (and Walmart) are making an attempt to make it easier to for us to make those changes.

Disclaimer: those are all affiliate links to Amazon.  It doesn’t influence my thoughts on the matter, but there’s no reason that I shouldn’t make a little money so I can go green for less!

Earth Day at Amazon is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

I think the answer is yes.  By it’s very definition, frugality is the rationing of resources and the careful spending or resources.  In being frugal, we carefully budget our money.  We carefully check over the fliers and find the best deal on groceries.  Eventually, as we continue doing these things, they become second nature.  We do them almost without consciously knowing that we are.  It becomes a way of life.

Fitness is very much the same.  In being fit, we ration our resources; eating only what our body needs.  We keep close track of how we are spending our resources and are constantly trying to find ways to improve our outcomes.  We want to run a faster mile.  Do more sit-ups, pull-ups, and bench press more.

So, it’s only natural I suppose that the two attract each other.  If you’re spending your time being frugal (and like it), there’s a pretty good chance you might either be fit, or should give it a try.

Do Fitness and Frugality go Together? is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

–adjective
1.wastefully or recklessly extravagant: prodigal expenditure.
2.giving or yielding profusely; lavish (usually fol. by of or with): prodigal of smiles; prodigal with money.
3.lavishly abundant; profuse: nature’s prodigal resources.

–noun
4.a person who spends, or has spent, his or her money or substance with wasteful extravagance; spendthrift.

You can be prodigal, or you can be a prodigal.  To me, there are several words that jump out from that definition.  Wastefully.  Extravagant. Lavish.  With the exception of wastefully, the others are words that we’ve been conditioned to think of as good.  We want our things extravagant and lavish.  It’s a sign of money, right?

And yet, day after day, we read and write articles on sites just like this one about the other end of the spectrum.  Frugality, Savings, and even Cheap are words that are valued.  Even so, I think that each of us could find an example or two in our lives where we are prodigal.  A pretty strong argument could be made that cable TV is a prodigal expenditure.  A third car.  Eating Out.  Leaving your computer on.  If we keep going, we could create a very long list!

What’s my point, you may be asking?  My point is that, despite all our practicing of frugal lifestyles and saving money, we might still find ways in which we are prodigal.  Rather than beating ourselves up over it, however, I would suggest that we use those things as motivation to eliminate them.  Or to offset them as a whole.  Maybe you’ve chosen to keep cable TV.  Find a way to reduce spending in another area to make up for that monthly charge.  The single expenditure may remain prodigal, but your overall spending does not.

Which brings me to a further point.  We often beat ourselves (and each other) up over spending too much here or there.  We miss the forest for the trees.  Being prodigal in one area does not make you prodigal overall.  And let’s not forget that being miserly or cheap can be just as poorly looked upon.

Added: It looks like I’m not the only one thinking about these things today.  Check out The Balance between splurger and miser at Get Rich Slowly.

Are You Prodigal? is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.

There is very little room for brand names in a frugal lifestyle.  The good news is that many of the non-brand name products are very similar products.  In some cases, they are the exact same product.  In other cases, they are not even close to the same thing.  In those cases, you have to weigh how much you want that exact product against your desire to save money and live frugally.  Is the extra $1 worth it?  Depending on the product, you might make an exception.

If you decide it is worth it, here are some things you can do to try and help cut that cost.

• Coupons!  Check the manufacturer’s website.  Many have customer loyalty programs that you can sign up for and get occasional coupons.  Look through the Sunday paper.  Or, see if you can find a coupon train to join up with.  Swap Mamas has one, and I’m sure many other sites do as well.  There are also coupon trading sites that you can make use of.
• Buy in bulk.  If you’ve just got to have it, buying in bulk can sometimes help cut the cost.  My favorites are Sam’s Club/Costco and Amazon.  If the item is perishable, maybe you can find a friend that will split it with you and you can still reap the frugal benefits.
• Cash back rebates.  If you have a credit card that gives cash back, you can use it to help cut the cost of the item.  Just make sure you’re paying off that card every month, or the interest will eliminate any benefit.
• Supermarket Loyalty programs.  Some supermarkets have a loyalty program.  Spend $XXX and get $X off!  It’s usually not anything spectacular, but every little bit helps.

Sometimes the brand name is worth it.  But, I encourage you to try the generic stuff too.  You just might be surprised to find that it is a very sufficient replacement.

Photo Credit: http://www.flickr.com/photos/thisisbossi/ / CC BY-SA 2.0

Frugality and Brand Names is a post from: Beating Broke, if you enjoy it, please visit us and subscribe to the Feed.