Beating Broke

Personal Finance from the Broke Perspective

When Being Green Is Frugal

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Go GreenThe green industry is great for the planet, but it’s still an industry, and some argue an elitist one.  Switching to hybrids and shopping solely from Whole Foods are neither frugal nor often green options (if you’ve read The Omnivore’s Dilemma by Michael Pollan, you’ll know that Big Organic is a lie).

Concentrating wholly on frugality, however, can also be damaging both for our bodies and the planet.  Yes, the dollar menu is cheap, but it’s a first-class ticket to heart disease and perpetuates the evils of urban farming.  For those of us looking for a happy medium, read on.

  1. Support local farmers at your farmer’s market.
    Meat can be more expensive here, but most family farmers have healthier, happier animals than those in CAFOs (Concentrated Animal Feeding Operation), which means healthier final products.  Try also to buy whole chickens instead of just legs so you’ll get more for your money.  Vegetables are often cheaper at these markets than at local grocery stores.  You’ll save money and help boost your community’s economy.
  2. Cook your own meals. It’s hard to do with our busy schedules, but the payoff is worth it, since you’ll be saving money on produce you buy from the farmer’s market and getting less packaging, which means less trash.  Since basic supplies like flour, sugar, salt, and such are cheap and go a long way, you’ll find that you save money even by making your own pancakes in the morning rather than buying packaged ones from the store.  If you don’t have time in the morning, make the batter and keep it in the fridge overnight.  Even the kids can toss a batch on the frying pan by themselves, saving you cents and time.
  3. Cultivate your own garden.  Basic herbs like basil, rosemary, and thyme are low-maintenance and can be grown even on your apartment patio.  If you’ve got land, though, try your hand at tomatoes, garlic, onions, green onions, carrots, and the like.  It’s better to spend your time with the earth than with cable TV, anyway (as long as you wear that sunscreen).  This brings us to our next point:
  4. Get rid of your cable.  Most TV shows are online these days, anyway, and one HD cable can hook your laptop up to your TV.  Seeing as a monthly cable bill can cost anywhere from $30 to $70, you’ll make up for the cable in two to four months, tops.
  5. Stop going to see movies and renting them at Blockbuster.  There are plenty of movies on Netflix you can get for just over the price of one movie ticket a month.  You’ll save on gas money, too.
  6. Learn to sew and DIY.  Ripped your pants?  No need to go out and buy a new pair.  If you deem it irreparable, at least go to a thrift store first so as to limit waste.
  7. Go easy on the spray cleaners.  Most of the things in spray cleaners are horrible for the water system and the environment in general, not to mention your own lungs.  Varying mixtures of vinegar, baking soda, lemon juice, and essential oils do the trick in most cases and will cost you less.
  8. Use towels, not paper towels.  Americans have become obsessed with disposables.  Everything is disposable now.  Are we too good to use the same thing twice?  Throw a dish rag into the washer and use it again, and when it gets old, use it as a cleaning rag.  We’ve spoiled ourselves enough—isn’t that why we’re in a recession, anyway?

 

Photo Credit: http://www.sxc.hu/photo/1077158

Is Saving Money a Waste of Money

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Save! Be Frugal! A penny saved is a penny earned. There’s a plethora of maxims meant to encourage us all to save our money for a rainy day. To hoard our excess funds so that we can spend them at a later date and enjoy their usage. But, is saving our money a waste of our money?

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.  Not to mention the other ways to make extra money.  You can make money selling ebooks, or working some overtime, or consulting, or just about any second job, or make money on twitter, or even *ahem* blogging.  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!

Coupons: Are They Worth The Hassle?

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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!