The Simple Dollar

Commuters emerge from the subway and walk to work down Wall Street near the NYSE in New York, New York. Using public transportation to get to work can save you from shelling out money on car insurance, vehicle registration, gas, and loans. (Melanie Stetson Freeman/The Christian Science Monitor/File)

Saving money in a big city? It's possible.

By Trent Hamm, Guest blogger / 06.24.13

I make no bones about the fact that I live in a rather rural area. I live on the very edge of a small town. The nearest grocery store is about ten miles away. This is a low cost-of-living area, in other words. It’s not the lowest in the country by any stretch of the imagination, but when I hear stories about New York and San Francisco, I almost choke.

Many of the things I talk about in terms of saving money tend to apply best in the area I live in, which is natural since the writing here is a reflection of my own experiences.

What about living frugally in one of those high-cost areas?

I have several friends and family members who live in large cities across the United States and I’ve exchanged money saving tips with many of them. Some of those tactics work really well in the areas where they live… but they don’t really work around here.

Here are some of the best ones, the tactics my city friends swear by. ( Continue… )

A worker counts US dollar bills inside a money changer in Manila in April. Hamm argues that the act of writing down what you spend can make you more mindful, and critical, of your finances. (Romeo Ranoco/Reuters/File)

Why you should write down every expense

By Trent Hamm, Guest blogger / 06.23.13

Megan wrote in recently with a long story that I’ll use in a future Reader Mailbag, but in a paragraph that didn’t have to do with her story, she asked a seemingly simple question.

What made you shift from not paying attention to what you spent to worrying about spending a nickel extra on toilet paper?

It would be easy to answer this with a broad answer of saying that it had to do with the realization of my responsibilities as a parent and with changes in my personal values and beliefs.

Looking back, though, I think it had to do with something much more “real” and practical than that.

For several months – just shy of a year, actually – I made a habit of writing down every penny that I spent. If I spent a quarter on a piece of gum, I wrote it down.

I kept track of this in my pocket notebook. It wasn’t really hard. I just had to make a routine of jotting down every single expenditure in that notebook. If I didn’t have time immediately, I jammed a receipt in there and wrote it down. ( Continue… )

Marilynn Burger folds baby clothes in her home on March 15, 2013 in Summit, Colo. Hamm recommends parents become part of a 'hand me down chain' to save money and build personal relationships. (Jessica Smith/Summit Daily/AP/File)

Making the most of hand me downs: Six tips

By Trent Hamm, Guest blogger / 06.22.13

A few years ago, the boys across the street gave a glove to my oldest son. It was a small baseball glove, one that they’d outgrown because it didn’t fit their hand well. It’s a pretty tiny glove. Anyway, recently, my oldest son has decided that this glove doesn’t fit him, so he’s passed it on to his youngest brother.

My children also have an older cousin that has constantly passed along clothes and other items to them as he’s outgrown them. My two oldest children will wear the items, and then they’ll pass the items down to their younger sibling. Lately, he’s been outgrowing some of the items, so we’ve taken the ones that are still in reasonably good shape, bundled them up, and passed them along to one of his younger cousins.

The girls that live next door to us had one of those little battery-powered cars that children sometimes have. The youngest girl had simply outgrown it, so she passed the vehicle along to our daughter, who happily spent two years driving up and down the sidewalk in that car. Now she’s a bit too big for it, so it’s become the possession of her younger sibling.

If you have children, the “hand me down” chain is an incredibly valuable one to tap into. It can result in tons of free clothes and toys for your children.

The best way to get this approach started is to simply maintain and strengthen relationships with family and friends with children older than your own.

If you’re thinking of having children and you are close to people who have recently had babies or have young children, dive in. Help them a bit with child care and other household tasks. Do some free babysitting every once in a while. Take their children to a park and give them a few hours of peace. Continue to spend time with friends even after they have children and their interests and attitudes change a bit. ( Continue… )

Walter Pugh, 83, of Belzoni, Miss., loads a case of his bottled water into his shopping cart in Jackson, Miss. earlier this year. When you buy bulk packs at the grocery store, you can save money — but it's important to organize your home so those bulk purchases don't clutter up space, Hamm says. (Rogelio V. Solis/AP/File)

Buy in bulk, minus the clutter

By Trent Hamm, Guest blogger / 06.21.13

I’m an enormous fan of buying many things in bulk. I make no bones about it. You can save a lot of money if you buy nonperishables in bulk as well as if you bulk buy perishables that you’re sure to use up.

The challenge is that if you’re buying quite a few different things in bulk, these things begin to take up serious space in your home. One four pack of toilet paper fits under the sink easily, but what if you buy a 36 pack of toilet paper? What if you do the same thing with paper towels, trash bags, shampoo, dishwashing detergent, soap, olive oil, black pepper, pasta, tomato sauce…. you get the idea?

We have a very large pantry, but we run into this issue all the time. Our pantry is full and sometimes a bit chaotic and we have more items that need to go into the pantry than we have space for.

This introduces another issue. When you need something specific and you open the pantry door to find it, only to discover that your pantry is stuffed to the brim with your bulk purchases, you can sometimes really struggle to find the thing you need. More than once, I’ve been convinced that we were out of a particular item, added that item to the list, only to have Sarah later find that item … or, at least a couple times, I’ve actually purchased the item again.

In the best case, you waste time looking for the item. In the worst case, you waste money buying something you already have, sometimes building up a backlog big enough that it goes to waste. ( Continue… )

A woman thumbs through a binder full of coupons that she carries on her grocery shopping trips at her home in Wilmington, N.C. If you have extra money on your hands, investing in stocks may be worthwhile, but otherwise, Hamm suggests turning your focus toward saving money through frugality. (Mike Spencer/The Star-News/AP/File)

Looking at frugality as an investment

By Trent Hamm, Guest blogger / 06.20.13

As we’ve discussed before, an average American family with two children – a seven year old and a ten year old – spends $1,252 a month on food according to the USDA’s liberal food plan.

If that family adopted just a few frugal practices and were able to switch their food spending to the USDA’s low-cost plan, the family is now spending just $826.60 per month on food.

That simple shift results in a savings of $425.40 on food each month.

I certainly don’t have to tell most of you about the power of frugality, of course. Most of you know the mountains of savings a person can incur if they’re careful with their spending.

The challenge is that many people believe that a focus on investing means that you don’t have to worry much about frugality. After all, in the eyes of quite a few people out there, you simply can’t earn huge returns with frugality. ( Continue… )

To buy or not to buy? A customer stands at the cashier of a convenience store in Chicago, Ill., in May. It can be difficult to make smart financial decisions when you have multiple, conflicting sources of advice, but Hamm says there are five ways you can sort through the buzz to make the right choice. (Nam Y. Huh/AP/File)

Sifting through conflicting advice

By Trent Hamm, Guest blogger / 06.19.13

I generally don’t make a financial move unless I’ve researched the ins and outs of that move thoroughly. I want to understand exactly what I’m doing and why I’m doing it before I move any of my money around.

Understanding the ins and outs of the various financial options before us is a vital part of personal finance. Without that knowledge, it would be extremely easy to make poor choices that, while they probably won’t lead us to financial ruin, may lead us to poor returns or the unavailability of funds when we need them.

Naturally, that means research. It means finding several sources of information about an issue, reading them thoroughly, and studying up on any terms that you don’t know.

Much of the time, those sources you find will largely be in agreement on the course of action that you should take. It’s a good idea to pay off high interest debt, for example – most personal finance writers will completely agree on that statement.

Sometimes, though, the sources don’t agree. You’ll read one plan of action from one source and another plan from another sources. Sometimes you’ll even find three or four ideas out there floating around. You might find two or three articles or books that advocate one thing, then you’ll find two or three other sources that talk about something completely different. ( Continue… )

Technician Neil McInnes works on a recalled gas pedal for one of the rental cars in the fleet at Expressway Motors Toyota dealership in Dorchester, Mass. Although it is convenient for teenagers to bring cars to auto shops for repair, Hamm suggests teaching your child how to perform maintenance so he or she can save money. (Melanie Stetson/The Christian Science Monitor/File)

Buying your teen's first car? Split the expenses.

By Trent Hamm, Guest blogger / 06.18.13

Sometimes, I get questions that are perfect for the Reader Mailbag, except that when I actually start writing out the answer, it turns into a full post. This is one of those times.

Leslie writes in:

My daughter is turning sixteen this August. We’re going to buy her a used car as a gift, but we’re struggling with how much of the expense of the car we should handle versus how much we should require her to cover. Do you have any insights or books about this?

You and your wife are doing the right thing in terms of figuring out in advance what you should expect to cover when it comes to the cost of the car.

The first question you need to ask yourself is whether or not an after-school job is appropriate for your daughter. For some teenagers, it makes a lot of sense. For others – particularly those heavily involved in after-school activities – it can add even more burden to a heavily stacked life.

I think that a time-limited after school job is a good idea for most teenagers. Many local businesses will often find work for students in this type of position. Ten to twenty hours a week is a healthy number. ( Continue… )

Students in a Head Start class welcome Sen. Patty Murray, D-Wash., to their class on May 30, 2013 in Richland, Wash. Although it can be tempting to shell out your money buying your children brand-name things, applying frugality to parenting can teach your children important lessons, Hamm says. (Kai-Huei Yau/The Tri-City Herald/AP/File)

What frugality can teach children

By Trent Hamm, Guest blogger / 06.17.13

For breakfast this morning, our children had a bowl of plain generic Cheerios with milk and some strawberries from their garden. It was a pretty healthy breakfast, all around, and it was certainly cheap. All three of them finished their bowls, so they must have liked it.

They don’t think of breakfast as a time to eat a sugar-laden concoction that comes from a box with a bunch of cartoon characters on it. They think of breakfast as time to eat a quick meal before they head off to the day’s activities.

Right now, our three children are out in the yard playing. I have a window open so I can hear if there’s an extreme crisis, but they seem to be doing just fine on their own. In fact, as I glance out there, they seem to have turned a cardboard box they found into some sort of throne and are playing a game where someone is the “king” or “queen” and can give orders to the others. Honestly, it’s not too different than the games I used to play when I was their age.

It’s a nice summer day. They’re not inside where they would likely be playing with a toy or a game that someone bought for them and they’re not in the television room watching a show. They’re outside. Having fun. With a cardboard box. ( Continue… )

Soldiers shave during joint Georgian/U.S. military exercises at the Vaziani military base outside Tbilisi, Georgia, in March. According to Hamm, the key to cheap shaves is a sharpener for disposable razors. (Shakh Aivazov/AP/File)

The frugal shave: Which method is cheapest?

By Trent Hamm, Guest blogger / 06.15.13

As a clean-shaven adult male in his thirties, I’ve shaved my face literally thousands of times – it’s probably approaching the ten thousand shave mark at this point.

I’ve used all kinds of equipment to shave with, too – old-fashioned safety razors with individual blades, fully disposable razors, disposable razors with cartridge-based systems, and fully electric razors, too.

Some of these are far cheaper than others. Some of them work better than others, too.

What’s the best option for a frugal person? Here are my thoughts on each experience.

Skip fully electric razors unless they’re a gift.
 With a fully electric razor, you’re essentially paying a large up-front price for a lot of shaves. A good electric razor often costs $100 as a baseline and most of the highly recommended ones are now creeping toward the $200 mark. ( Continue… )