The Simple Dollar
Moving into a new house? You don't have to spend a fortune on furnishing the place, Hamm says. (Tony Avelar/The Christian Science Monitor/File)
New house, tight budget: How to make it work.
You’re moving into a house or into a large apartment for the first time. You take all of your stuff there, unpack everything… and you quickly realize how spartan it is. There are lots of things you need… or you at least think you need.
Silverware. Flatware. Tables. Furniture. Minor appliances. The list starts small and quickly gets big.
How are you going to get all of this stuff without breaking the bank?
I’ve been in this very situation at least three different times in my life. Each time, I’ve had this strong urge to acquire stuff that I was sure that I needed.
The first two times, I went on a big buying spree, loading up on all kinds of things. ( Continue… )
Don't waste your money squeezing out excess shampoo. Hamm shows you how to make the most out of your money. (Ron Harris/AP/File)
Say goodbye to wasting shampoo.
My hair is usually really short. When I wash my hair, I want to use just a little bit of shampoo – makes sense, right? It doesn’t take much to fully lather up my hair.
The problem is that shampoo virtually always comes in a squeeze bottle. When I grab that in the shower and turn it over to get just a little bit of shampoo, it’s incredibly easy to get way too much on my hands. I squeeze a little and nothing comes out, so I squeeze a bit harder and I wind up with four times as much shampoo on my hands as I want.
That’s simply wasteful. It means I’m going to wind up using far more shampoo than I need. If I use four times as much shampoo as I need every time I take a shower, a bottle is only going to last a quarter as long. My shampoo cost quadruples without any real additional benefit.
A while back, I noticed a nearly empty hand lotion container that was in the downstairs bathroom. There was just a tiny bit of it left. I used a small amount of it and realized that it perfectly delivered just a tiny amount of the lotion.
This made my wheels turn. ( Continue… )
A man walks past a shop with discount signs in Lisbon, Portugal last month. Frugal living doesn't have to mean going out of your way to save a few pennies in every situation. Hamm advises practicing frugality in moderation. (Jose Manuel Ribeiro/Reuters/File)
Moderation is key: 5 frugal things you don't have to do.
I’m pretty well known online for being very frugal about some things. A few people even like to toss jokes my way about my “extreme” frugality, as I’ve gone so far as to calculate the cost of a sheet of toilet paper.
It’s simple: I want to know the value of what I’m getting for every penny that I spend. If I can do a five second calculation once and it shows me that I can save ten cents every time I buy Brand Z toilet paper instead of Brand Y, I look at it as a success because I can use that calculation again and again.
I don’t mind washing freezer bags. I’ll happily try homemade solutions for almost every kind of cleaner. I love finding ways to reuse leftovers and buy in bulk.
RECOMMENDED: Can you manage your money? A personal finance quiz.
Still, there are some lines that I don’t like to cross, whether it’s due to personal beliefs or health concerns or introversion. There are just some frugal tactics I can’t bring myself to take on.
Here are five of them.
I don’t save condiment packages from restaurants. One of my friends always asks for extra condiment packets at restaurants and always grabs a fistful whenever they’re available. He then takes them home and, when he’s doing something like watching television, he opens them and puts them into the respective bottles. ( Continue… )
A man pulls out his credit card to make a purchase at a shop in June 2013. If you keep spending more money when your income increases, you will never get ahead, Hamm says. (Dinuka Liyanawatte/Reuters/File)
Secret to winning the personal finance game? Earn more, spend less.
I believe it is far easier to earn more money than it is to accumulate wealth, in America at least.
72% of Americans would find it somewhat difficult or very difficult to pay that month’s bills if they lost their job today. In simplest terms, that simple fact means that it’s the norm to spend everything that you bring in and not accumulate anything.
Add to that the fact that the average American household income is above $50,000 a year and you have a recipe for a society in which an awful lot of people are spending an awful lot of money without accumulating very much at all.
RECOMMENDED: Can you manage your money? A personal finance quiz.
You can come up with countless theories on why that is. My belief is that modern American society is simply consumption oriented, and when you live in a society that revolves around consumption as a positive value, it’s hard to choose not to consume and it’s hard to find value in saving money.
As I said at the start, I believe it is far easier to earn more money than it is to accumulate wealth, in America at least.
( Continue… )
A woman tosses weeds while preparing a plot in a community garden in Boston, Mass. Taking care of your own lawn can save you money — and energy bills — over the long term. (Mark Thomson/The Christian Science Monitor/File)
Maintain your own lawn. Save money.
While we’re not exactly the type to go out and pay for a professional service to treat and fertilize our lawn for us so that we have a glowing patch of perfect green outside of our home, we do like to have a decent lawn that’s at least alive enough so that our children can run around on it without scraping up their feet and hearing a constant “crunch crunch crunch” sound.
Here are several things we do to maintain a decent yard while still keeping costs low.
Maintain a compost bin. We put our vegetable scraps into a compost bin that sits out by our garden. We turn it regularly (it’s a barrel composter) and stop tossing in new stuff for a few weeks when it’s getting really full. After that, we have a ton of fresh compost. We put a bunch on our garden, but we also sprinkle some of it throughout our lawn.
RECOMMENDED: Can you manage your money? A personal finance quiz.
Use a mulching lawnmower. Our lawnmower takes grass and chops it up into tiny pieces, creating this fine green mulch that gets spread on the lawn as we go along. Typically, this mulch tends to vanish down into the grass within twenty four hours, meaning that we’re not left with a messy yard at all. This finely chopped grass quickly breaks down and provides nutrients for the existing grass. ( Continue… )
AndrŽe Collier Zaleska works in her garden in the Jamaica Plain neighborhood of Boston in 2011. Hamm recommends 'keeping up with the Smiths' – neighbors interested in community involvement and friendships, rather than flashy possessions. (Melanie Stetson Freeman)
Forget the Joneses. Keep up with the Smiths, their frugal neighbors.
We’ve all heard the phrase “keeping up with the Joneses.” I think it’s time to add a new but similar phrase to the lexicon.
The Smiths are the frugal family you know.
They don’t drive the new car. They drive an older one.
They don’t wear flashy new clothes. In fact, the husband seems to often be wearing the same suit. It’s a nice suit, but it’s not the latest, sharpest thing.
RECOMMENDED: Can you manage your money? A personal finance quiz.
They’re often at community events. Sometimes they seem to have some kind of role in helping put that event on.
They seem to know lots of people in the community. In fact, you know them because they introduced themselves to you one of the first times you ever saw them and they often say hello to you.
Their house is usually an older one that’s well maintained and, if you ask them, you’d be very unsurprised to find that it’s paid for. They usually have a garden, too. ( Continue… )
A Visa card is shown protruding out of a wallet. You don't need to spend your way into debt when you are in your twenties; a little bit of patience can save you thousands of dollars, Hamm says. (LM Otero/AP/File)
Debt isn't required: how to spend wisely in your twenties
Like a lot of people in my twenties, I spent much of that decade in a rush to saddle myself with a lot of debt. I owed money for my education. I owed money for my car. I owed money for my home, too.
I had this strong sense that I needed all of those things now to show the world and those around me that I had somehow arrived in adulthood. “Look at me,” I thought. “I have my own car. I have my own house. I have my own degree.”
The truth is that with the exception of my education (for which I drastically overspent), I didn’t need any of these things to show the people around me that I had arrived. I didn’t really need any of these things, period.
RECOMMENDED: Can you manage your money? A personal finance quiz.
All I needed was a place to live close enough to public transportation to get back and forth to work and a roof over my head (in the form of an apartment).
It’s absolutely true that I wanted those things. It’s also absolutely true that I simply bought into the idea that people in their twenties had to assume debt in order to get the things they wanted.
( Continue… )
Michael Hoffman, a 21st Century Insurance Senior Sales Representative, works at the University of Farmers Insurance Group offices in Caledonia, Mich. earlier this year. With limited time on our hands, getting to dry but necessary tasks — finding insurance, writing emails — can tempt you to procrastinate. Hamm advises readers on how to move ahead. (Paul Sancya/AP/File)
Think ahead. Get tasks done.
I’m a busy person and, as I’ve mentioned before, I’m only able to keep track of all of the stuff I need to get done and all of the projects I need to work on by externalizing them as much as possible. I jot down ideas and tasks as they come to mind and spend a bit of time each day organizing those jottings into something useful.
Most weekends, I spend an hour or two going through things left undone, re-evaluating projects, and figuring out what kind of things I want to accomplish in the next week.
It’s that last part that’s actually trickier than you might think.
RECOMMENDED: Can you manage your money? A personal finance quiz.
From my perspective, every task a person might take on falls into one of four areas. All tasks are either important or not important, and they’re also urgent or not urgent.
So, a given task might be important and urgent (those tasks get done quickly), while other tasks might be neither important nor urgent (those tasks generally get ignored). ( Continue… )
Children play on the swings at the Family Center of Washington County in Montpelier, Vt. When you are deciding how to give your children allowances, you might want to consider setting up a system where children exchange effort — doing chores around the house — for money, Hamm says. (Tony Talbot/AP/File)
Setting allowances for children
As I’ve mentioned before on The Simple Dollar, Sarah and I have a pretty straightforward policy when it comes to allowances for our children. To reiterate the highlights:
+ Our children get $0.50 times their age each week for allowance. This means that a six year old would get $3.00 per week under this system.
+ They’re required to split their allowance up among a few things. They have to give at least a portion of it to charity, they have to invest a portion of it, and they have to save some of it for a specific goal of their choosing. They can decide how much to put into each portion.
+ The allowance isn’t tied to any specific chores, but there are some chores they’re expected to do around the house. Allowance is not used as something that can be taken away for motivation.
RECOMMENDED: Can you manage your money? A personal finance quiz.
In other words, we use allowance as a tool for teaching money management above all else. We want them to learn and appreciate the basics of budgeting and saving.
This does leave a problem, though. They’re not learning anything about exchanging effort for money.
( Continue… )
Newlyweds Juanita and Neil Ross pose for wedding photos near the Bow River in Calgary, Alberta on June 22, 2013. Looking back on his own wedding, Hamm says he remembers the people he enjoyed the day with — parents, close friends, distant cousins — more than how much he spent. (Andy Clark/Reuters)
Wedding bells: Saving money on the big day
Sarah and I have been married for ten years. As our tenth anniversary has passed by, we’ve had a few conversations where we’ve reminisced about our wedding day.
Mostly, our memories seem to revolve around people. We remembered the unexpected old friend who showed up out of the blue even though we hadn’t seen him in years. We remembered the mixing of our extended families. We remembered the tears of our mothers and the wonderful toasts of our friends. We remembered the aunts and uncles and cousins who quietly took care of lots of little details. We even remembered one of my old family friends who had a bit too much to drink and made a few loud passes at various women in the room.
What things haven’t come up in our remembrances? We haven’t talked about the relative quality of the wedding hall. We haven’t talked about whether or not we got the right photographer. We haven’t talked about whether we should have spent more on the food.
RECOMMENDED: Can you manage your money? A personal finance quiz.
At the time of our wedding, we were pretty stressed out about these details. We wanted the perfect wedding and the perfect reception and the perfect food and so on.
Looking back on it now, all that really mattered then and all that really mattered now were the people. We had a couple hundred people we care about all gathered together in one place. ( Continue… )
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