Frugality is the New Normal

Being frugal is the new normal, as it is estimated that even after the recession is over, Americans will return to spending 86% of what they did prior to the downturn. While this has ominous economic implications, I don’t see it as a bad thing necessarily. The bubble economies we have experienced over the last decade (the tech-bubble, housing bubble, etc) have not been good for the long-term economy, and if we can become an economy that grows steadily based on innovation and hard work, as opposed to growing because of reckless spending, then I am on board.

My wife and I have been frugal since our marriage, and really, since we have dated. Why? Well, I have a bachelor’s degree in Psychology and a Master’s degree in religion, so it should come as no surprise that my income is not exactly six-figures. We have had to be frugal. Plus, for me it is a philosophical issue. Because I am independent and conservative, I don’t think the government should be bailing me out, and I believe that I should fix my own problems. I also think that outrageously high energy and other commodity prices are bad for our country for a variety of reasons, and I think conserving energy (which also saves me money) is essential for the common good. I am an old-fashioned conservative who has thought for years that the materialistic, “spend-what-you-don’t-have” lifestyle, is neither good for our country nor good for the individual. Thus, I go to extremes to keep my family costs down. I have spoken of this before and provided savings tips.

I am glad being frugal is the new normal. I don’t want to sound judgmental, but how in the world did spending money you don’t have for things you don’t need, or even want, ever become  “normal” to begin with?

Yet Another Good Supplement Company

Awhile back, I listed some supplement companies that I consider both inexpensive and high quality. I have found another that I will probably be ordering from in the future: Swanson. They seem to have a pretty wide selection, great prices, and a solid quality of guarantee.

Happy Earth Day

Today is Earth Day. I have mixed feelings about the holiday. As a Christian, I do not always agree with the way a lot of people celebrate earth day. I think it is important to place the earth in its context as part of God’s creation. However, because it is a part of creation, we have the responsibility to take care of it, and not destroy it.

I believe it is important to conserve our resources and our environment, as well as to reduce, reuse, and recycle. Jennifer and I have tried our hardest to “live simply” for the last five years or so, although I have to admit my main motivations are health and to save money, but if our efforts benefit the environment, that is great. Here are a few of the small things we do that help the environment (and our bottom line!):

– We turn the hot water heater down to low when we are gone for longer than a day, saving natural gas

– We keep the thermostat at 62-65 in the winter, and 75-78 in the summer

– We hypermile in our cars, squeezing an extra 32% fuel efficiency over what my relatives get in their cars

– We have placed a filled 2 liter bottle in our toilet tank, which saves 2 liters of water every time we flush.

– We are starting a garden

These are just a few of the small things we do. They are not necessarily trendy or massive, but just solid ways to live a little more simply…and we did it before the recession made it trendy ;).

Save Money, Go Open Source (Part II)

In a previous post, Save Money, Go Open Source, I listed various open source (and free) software programs I use regularly. I like the idea of open source software on a philosophical level, in that a variety of people can participate to make a program better. However, my main reason for loving them is that they are completely free! Using open source software really should be an important part of living frugally and embracing financial wellness. Below are a few more programs that I find useful that can save you a lot of money if you use them in place of costly proprietary software:

GnuCash – I posted on Getting to Know Gnucash, but I will summarize GnuCash here. GnuCash is the equivalent to software like Microsoft Money and Quicken. It handles things like mortgages, credit cards, bank accounts, expenses, etc. You can even import Quicken and Microsoft Money files, so you can just download your information directly from your online banking sites, and reconcile it. GnuCash isn’t quite as intuitive as Microsoft Money, and is more advanced software, since it uses double-entry accounting principles, while Money is a single entry system. The former is more thorough, but more difficult to understand. I use GnuCash for business and personal purposes. It can generate handy charts to show your income versus expenses, where your expenses are coming from, etc.

PDF Creator – This is a .pdf printer, which means that you can print any document, image, etc, on your computer as a .pdf file. If you install it, you will see it listed as an option on your list of printers. Once you choose to print with it, you are given a choice to name it, assign an author, etc, and then you can save the document in any folder that you like. This is a handy way to create .pdf files!

Free Mind – Free Mind is an idea mapping software, which reminds me of those “pre-writing” bubble-like diagrams we used to do in English class. It allows you to brainstorm and generate ideas. I haven’t played around with it too much, but it looks cool.

Inkscape – Inkscape is a nice vector graphics design program. It is like Adobe Illustrator or CorelDraw. You can make some pretty cool logos and art with it, and I haven’t even begun to utilize its many features. If you design art for bulletins, newspapers, e-books, etc, this software is essential, and could potentially save you hundreds on software costs.

CamStudio – CamStudio is a program that allows you to record your actions on your computer screen, which means you can make videos of what you do on your computer. You can also record audio while you do it. You can save the output as various video file formats, so you can post your efforts on You Tube, etc. This software is very helpful for individuals who are making software or computer-related video tutorials. I haven’t used it too much, except to test it, but there is a lot of potential here.

This round of Open Source programs isn’t quite as broadly useful as the last round. The last round included some major programs (like OpenOffice) that help us with common tasks (like word processing). However, these FREE programs I have just listed will help make your life easier!

Shower on Someone Else’s Dime (with Free Shampoo)

Water was included in the rent at my old apartment, which meant I didn’t really give much concern to my water usage. Now that we have a house, I am more aware of our water use, and how much it costs. We got our first bill today, and the price wasn’t too bad. Just recently, to save money (and wear and tear on our bathroom), Jennifer and I decided that we would try to shower on someone else’s dime whenever possible.

No, I am not referring to sneaking into the neighbors’ houses. I certainly don’t mean taking a bath in the rain barrel. And I am definitely not referring to avoiding showering all together.

What I am referring to is showering at the gym or at work. Jennifer and I go to the YMCA about 4 times per week, and we both need showers after we are finished. Considering that the average shower uses about 20 gallons of water, this means that showering at the YMCA we are saving 640 gallons of water a month.  This would typically be a second shower for me, since I shower at home before work. However, on days when I am off work, I typically wait until after finishing the YMCA to shower for the first time, which means that for most of the summer, and on weekends, I am not showering at all at home. Also, most schools have gyms, and locker rooms. I am sure, if you were really cheap (and the school understanding), you could use their showers in the morning before work, when nobody is around. I haven’t done it, except to use the shower in the coach’s office after playing basketball, but I know a teacher who did it every morning to save himself money.

You may be saying, “come on David, you pay for the Y! It isn’t free!” Yes I do pay. However, I pay my regular fee regardless of whether I use their water or not. I can either pay my YMCA fee, and pay for 640 gallons of extra water a month at home, or I can pay my YMCA fee, and let the Y absorb the cost of 640 gallons of water. You may also say, “but if everybody does this, then the Y will just raise prices, smart guy.” This is true, if a lot of people used it, and from my experience, they don’t. I have never observed anybody using the showers while I am showering. Never, except when my buddy would work out with me occasionally. Most people still prefer their own showers to saving the money. So the point of this paragraph: don’t join a gym just for the showers, but if you already pay the fee, take advantage of the showers.

Finally, I mentioned free shampoo. When I travel, I always take all the shampoo from the hotel room before I leave. We have quite a collection of tiny shampoo bottles now. What a better way to have free shampoo and body wash to keep in the gym bag to go with the “free water?” Oh, and I am aware that this shampoo often comes with a 100 dollar room, but like above, you are going to pay the 100 dollars anyway…so go ahead and take the shampoo (but leave the towels, that is stealing!).

Yes I am cheap, and with this suggestion, probably need cheapscates anonymous, but I do have extra money to show for it.

Making Money with Credit Cards??

Here is an idea that you won’t hear very often: you can make money from credit cards. In fact, standard wisdom is that you should only have one credit card for emergencies, and you should shred all old cards. This wisdom is probably good advice for many Americans, but nonetheless I make money from credit cards, and you can learn how to make money with credit cards. However, if you are responsible, you can actually make money from credit cards. Since I first got a credit card back in 2002, I have made over $1000 in rewards, and paid $0 in interest. So how is it that when thousands of Americans are paying way too much money to the credit card companies, I am making money from them?

Basically, it is a combination of rewards cards and responsibility. I have cards that get me 1% cash back on all purchases. Another gets me 5% cash back at grocery stories, gas stations, and  pharmacies. Yet another gets me 5% worth of reward points back on restaurants and movies. Still another gets me 2% cash back on utility bills, and 5%+ back at certain special merchants. I also have one that gets me 3% worth of rewards points at Amazon.com. Oh, and there are the business cards too: 3% back at restaurants, home improvement, and office stores, and 5% back on internet services purchases. Yes, I have a lot of credit cards, but contrary to popular belief, having a lot of credit cards doesn’t hurt your credit score. Now, if you carry high balances on your credit cards, that hurts your score.

Here is the way I look at it: if I spend $100 in groceries, paying with cash gives me $0 back, whereas if I pay with my Cash Plus Card (unfortunately, it is no longer offered for new customers), I get $5 back. It may not seem like a lot, but if you spend $100 on groceries a week, then using a credit card with rewards like this is able to earn you $260 a year.

Below is how to use credit cards to make money. Note that to get some of these cards you have to have established credit. Also, it is wise to not apply for all the cards you want at once, since applying for many lines of credit at once temporarily lowers your credit score (for about 6 months).

– Look for reward cards, and apply for the ones that you think you will use

– Only apply for cards that don’t have an annual fee

– Use the right credit card for the proper purchases (i.e. use the gas rewards card when you buy gas)

– Pay off your balance on-time, every month, so that you pay no interest or late fees

– Pay your credit card bills online. If you have 5 cards, paying for envelopes and stamps adds up.

Be responsible. This only works if you do not treat your credit cards as free money. If you don’t spend within your means, this is pointless.

– Look for offers of 0% introductory interest rates. This way you can pay off your balance slowly, keeping the money in a savings account until the end of the introductory period, earning even more money. Make sure you actually save the money and have it to pay off the balance after the introductory period is over.

– If you must carry a balance (emergencies, etc), apply for one low interest credit card (with no annual fee), and only carry balances on that card, but not on reward cards, which often have high interest rates.

Let me reiterate: this method is only for those who are extremely responsible with credit cards. If you pay interest, get levied late fees, or spend more than you otherwise would, you will actually be spending more money than you are going to make on rewards. Since the average American credit card debt is around $10,000 it is clear that this method is not for everyone. In fact, the best way you can save money if you currently have a lot of credit card debt is to pay off the debt you have; don’t even begin to use this method until you have paid off your other cards. Nonetheless, this method is effective if you can make it work.

Chunky Chicken Noodle…Cheap

This may sound like a weird title, but I try to take savings “to the next level” anytime I can. We try to shop at Aldi, cut coupons, and buy generic as a way to keep grocery expenses way down. However, I always try to save even more if possible. This is how chicken noodle soup comes into the equation.

I had been buying chunky chicken noodle soup, when it was on sale. I usually got it for about $1.50. I don’t like a lot of potatoes and carrots in my soups, so I usually took those out and added my own vegetables, usually an asparagus mix with broccoli, cauliflower, peppers, and peas. One day I realized, “why not just buy condensed chicken noodle and add the same vegetables??” So instead of paying $1.50 per can, I pay $.50 or less per can, and add the vegetables I was going to add anyway, which include broccoli, green beans, peas, and (now that we have a garden) fresh greens, like Collards and Romaine lettuce. I sometimes add tomato paste to turn it into a tomato based soup (which adds extra lycopene), and I always add cayenne powder. My wife knows full well that I add cayenne to just about everything. I love the taste. I even put it on my fries (as in, I sprinkle pure cayenne pepper over the fries to coat them).

So if I eat 3 bowls a week, in the course of the year this simple trick saves me $156. $156 buys 39 gallons of gas at current rates.  I suppose I could push the savings more by making my soup from scratch, with a boullion cube, chicken chunks, and pasta, and that is the next step!

Savings Tip: Hold the AC

Rising energy costs drive most of us crazy. Energy costs are going up while incomes stagnate. It makes it worse when temperatures skyrocket into the 90s. I have a little personal challenge, and that is to use the Air Conditioning as little as possible. I become proud when I hear my neighbors’ Air conditioning units kick on, and I know I don’t have to use mine. Here are my tips to save money on the Air Conditioning:

Sweat it out a little – You’re sitting in your house in jeans, shirt, and socks, and 74 is just too hot? Well, put on shorts and flip-flops (or even less…just make sure the windows are closed!), and you might not be as hot. I have found that I can generally tolerate about 78 degrees comfortably.

Open A Window or Three – I have found that when I open the door and a few windows, it creates suction, sending a nice breeze through the house. It won’t provide the same feeling as AC, but it will cool the house down a few degrees and make you feel cooler.

Use a Fan to Take Advantage of Cool Nights – During the hot parts of Spring, Fall, and some of summer, we get a lot of cooler nights (cooler than the day at least). One trick I have learned is to wait until the temperature drops for the night, put a fan in the window, turn it on high, and blow in air that is cooler than the house. My house usually holds in heat from the day, and this quickly cools it.

Challenge Yourself – See how many days you can avoid the AC. How many times does your AC kick on when you actually feel fine? Examine your AC usage, and challenge your family to reduce your AC usage, and see lower energy bills.

This photo is from the winter. Maybe it will make you feel a little cooler.