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The house of Lutz Pingel, which is decorated with Christmas lights, in Dortmund , Germany. Hamm outlines tiny tactics to save money during the holidays. (Ina Fassbender/Reuters/File)

Eight little ways to save money during the holidays

By Guest blogger / 12.08.13

The month of December seems to always be a month of nickels and dimes slowly eating away at a family’s budget. There are always little expenses that need to be handled due to the holiday season, whether it’s related to gifts or to food or to travel or to … well, countless other little things.

Like many other things in my life, I try to keep a frugal eye on the holiday season and look for little ways to reduce or eliminate common expenses. Since this season is filled with so many little expenses, there are a lot of ways to reduce the cost without reducing the quality of the season.

Last month, I wrote about twenty tactics my family uses to save money during the holidays, but most of those tactics are what I would call “big” tactics. They require some planning, but they can usually save you significant money and most of them don’t relate to a holiday at home, as the list is rather travel-oriented.

On the flip side, here are eight “smaller” tactics my family uses to cut back on spending this time of the year, mostly around our own home.

We pull the bulk wrapping paper out of storage. Why is it in storage? We bought it last year on the 26th or 27th of December when stores mark that stuff way down to get it off the shelves. Then, we simply toss it into storage for next year in our “giftwrap” tub that we keep in the storage area under the stairs.

We re-use gift bags. If someone gives us a gift in a gift bag, we will fold up that bag and re-use it for a future gift. If they write on the tag, we snip the tag off then make another one using a bit of ribbon and a bit of card stock. It’s much harder to do this with wrapping paper, but as I mention above, we get cheap wrapping paper.

We make our own Christmas cards. If you have some spare time and send out your own cards, this can be really fulfilling. We do it some years, largely depending on our time constraints. Just get blank cards and a couple of reusable stamps or some Christmas images from a magazine and go crazy. This works really well with kids as it gets them into the project, too.

We make a gift list in advance of any shopping or gift-making. The first thing we do each year is make a list of the people we intend to buy gifts for. (We actually make this list not too long after the previous year’s Christmas.) Then, we try to brainstorm gift ideas for each person as well as a dollar limit. Ideally, we find good gifts for people that fall well under the dollar limit, but we do not shop for a gift without that list and we follow it to a tee. That list has kept us from overspending on many people every single year.

We make a huge batch of cookies for small gifts to acquaintances. We have a lot of friends that we like to give small gifts to each year, which could really add up. Instead, we just make a giant batch of homemade cookies. We will pack four or six of them in a square of cellophane, wrap that cellophane around it, and tie it off with a ribbon. It’s very attractive, very inexpensive, and works great as a small gift for an acquaintance. Doing this as one big batch makes the cost per cookie really low and adds up to only one afternoon of effort to make a lot of little cookie bundles.

We sometimes give “help” as a gift, too. We’ll do things like give an evening or two of babysitting to families with young children or offer errands for elderly friends and family. It doesn’t cost us anything, but it drastically reduces stress and helps the recipient with difficult aspects of life.

We use slow cookers for holiday meal prep. When you’re preparing a holiday meal, it’s pretty easy to mess things up and end up with too many things needing the oven at once. I know others who, in an effort to save time, buy items from the store that are already prepared as an expensive and usually mediocre substitute. Our solution to both problems is to prepare meal elements in crock pots. Mashed potatoes, for example, work great in the slow cooker. Cook them as normal an hour or two before the meal, then just put the mashed potatoes in a slow cooker on “warm” for an hour before the meal is served. It’s cheaper and tastier than using prepackaged food.

We make our own holiday decorations. I mentioned the 3-D snowflakes recently, but we also make lots of regular snowflakes and trees out of paper. We also turn old photographs into decorations, cutting snowflake shapes out of them or turning them into photo cubes.

Here’s hoping your holiday doesn’t overburden your wallet!

The post Eight Little Ways to Easily Save Money on Holiday Expenses appeared first on The Simple Dollar

Sonia Hernandez-Bridwell works in a Progressive car insurance office. Hamm explains the difference between liability and comprehensive car insurance. (Business Wire )

Car insurance: Liability or comprehensive coverage?

By Guest blogger / 12.06.13

When you’re shopping for car insurance – something that’s a legal requirement in most areas when you own a car – one of the biggest questions that comes your way is whether or not you should have liability coverage or comprehensive coverage on your automobile. Liability coverage is usually cheaper, but comprehensive coverage covers more. Which is the right answer?

First, let’s look at what each type covers.

RECOMMENDED: Car logos quiz

Liability coverage does not cover any damage to your own vehicle in the case of an accident. What it does cover is any damage done to other vehicles that you’re legally obligated to cover. For example, if you’re in a traffic accident where you are at fault and you damage another car, liability insurance kicks in. Liability coverage doesn’t typically have a deductible, meaning that if you have to use the insurance, nothing will come out of your pocket.

Comprehensive coverage goes beyond liability insurance. It covers the damage done to other vehicles, but it also covers damage done to your own vehicle, not just from traffic accidents, but from many natural sources. If your car is damaged in a storm, for example, comprehensive coverage kicks in. When you make a claim on comprehensive insurance, however, there is usually a deductible, meaning you have to pay for some of the damage out of pocket. Remember, though, that liability coverage is usually a part of comprehensive coverage – you get the liability coverage described above along with the coverage of your own vehicle.  ( Continue… )

Thoughtfulness has more value than a price tag when it comes to holiday giving, Hamm explains. Homemade cookies are a great gift for the holidays that can be delivered by hand or through the mail. (Melanie Stetson Freeman / The Christian Science Monitor/File)

Why thoughtful gifts always trump expensive ones

By Guest blogger / 12.04.13

When I was younger, I worried quite a bit about the gifts that I needed to get for some of the people I cared most about in my life. I’d worry and worry about picking out an item that would really show exactly how much I cared for them.

Inevitably, that meant spending quite a bit on an item. I was hung up on a sense that the price tag of an item was the surest way to indicate that you cared.

I remember spending hundreds on obscure DVD sets, signed first edition books, and other things for gifts for the people I cared most about. 

I especially remember buying my wife-to-be some incredible gifts while we were dating – gifts that I absolutely could not afford in any reasonable measure of my personal finances.  ( Continue… )

Men stand beside a broken down US.-made car on a street in Havana in October. In some cases, Hamm explains, waiting to replace an item until it is no longer usable could mean having to make an ill-timed purchase. (Desmond Boyland/Reuters/File)

Use it until it breaks? The pros and cons.

By Guest blogger / 12.03.13

Jerry writes in:

I was reading on another blog about replacing things that work with better versions of the same item like clothes hangers. To me, it makes more sense to just keep using something until it actually breaks, then replace it, but that’s just my sense of wanting to get every last drop out of something I put my money into. What do you think?"

Although Jerry didn’t mention the blog article he was referencing, I would guess that he was talking about “Does It Ever Make Sense To Replace Something That Is Functioning Properly?” over at One Frugal Girl.

Anyway, Jerry makes a valid point and asks a good question. At first glance, it makes good frugal sense to continue to use an item until it is no longer functional. Otherwise, as Jerry says, you’re not extracting the full value from that item. I am completely on board with using an item until it’s no longer usable.

The question, to me, really is about replacementI do not think that the best time to replace an item is when it is no longer functional. In that situation, you ideally need something to perform that task that is functional, which means that you have a pretty small timeframe to make a purchase.

Ideally, when you’re buying a new item, you’ll take advantage of two things.

First, you’ll have a research opportunity. You can spend at least a bit of time figuring out what the best version of the item is as well as perhaps the best “bang for the buck” version of the item is. You can figure out things like that from reading Consumer Reports or other reputable publications and asking around in your social network. ( Continue… )

A woman takes a deposit box out of a compartment in the safe room of an Austrian bank in Vienna. If you want to succeed in personal finance, Hamm writes, you need to be constantly looking at your own life, your own goals, and your own choices until that kind of reflection becomes second nature. (Heinz-Peter Bader/Reuters/File)

10 questions to ask yourself about personal finance

By Guest blogger / 12.02.13

My experience with money – going from mountains of debt to debt freedom – over the last decade has taught me one sure financial principle that simply repeats itself over and over in my life.

Personal finance is all about self-evaluation. The more consistent your self-evaluation, the better your grasp of your financial situation will become.

In other words, if you want to succeed at money, you need to be constantly looking at your own life, your own goals, and your own choices until that kind of reflection becomes second nature.

What if that type of reflection doesn’t come easy, though? I’ve found that when I’m struggling with money issues, the best way to start is with a question. I’ll ask myself a pointed question about my personal finance situation and make myself answer the question truthfully.  ( Continue… )

Holiday trimmings greet shoppers around the main entry of a Target last week in New York. Target is one of many retailers that will match prices with its major competitors, including Amazon and Walmart. (Bebeto Matthews/AP/File)

Holiday shopping? How to use price-matching policies effectively.

By Guest blogger / 11.30.13

This article first appeared at U.S. News and World Report Money.

The holiday shopping season is upon us and, for a lot of us, that means quite a lot of gift purchases. My holiday list is certainly long and, unfortunately, that means I’m going to be spending quite a bit of time and money fulfilling all of my gift-giving obligations.

I do quite a lot of my holiday shopping online, as do many of you, but I also find it quite useful to visit a few stores so that I can actually examine the items for myself, since online buying doesn’t allow you to actually hold an item in your hand before making the purchase.

If you have a smartphone with a data plan, this type of shopping becomes easy. You can quickly compare prices online for the item you’re holding and then buy from whichever retailer offers the best price. However, to do that, you have to already be spending a significant chunk of change on that data plan.

What about the rest of us? I’ve found a few techniques that work really well for this kind of comparison shopping, and the best tool of all is price matching.

Here’s the trick: most major brick-and-mortar stores offer some sort of price-matching policy. If you can find a (non-Black Friday) price for an item from another retailer, they’ll match it, with some restrictions.

For example, Target matches prices from a relatively short list of retailers, including,,, and a few others. However, Target allows you to take your receipt back within seven days if you’ve found a lower price elsewhere and they’ll refund the difference.

Best Buy, on the other hand, offers price matches from a much longer line of retailers, including (which I’ve used within the past month, actually),,, and many others, but you must be able to show the price within the store. ( Continue… )

A money changer shows some one-hundred U.S. dollar bills at an exchange booth in Tokyo. Hamm outlines some of his favorite online resource for personal finance. (Issei Kato/Reuters/File)

Four great online personal finance resources

By Guest blogger / 11.26.13

Quite a few people enter adulthood without understanding the basics of personal finance.

That’s a sad statement – but it’s a true one. Personal finance is often a lesson that parents don’t feel comfortable teaching to their children and public schools rarely take a major role on this topic, either. It’s rarely included in state education curriculums.

While The Simple Dollar can and does play a role in fixing this problem, there are quite a few websites out there that do a spectacular job of handling the basics of personal finance, from the simplest baby steps of figuring out how to handle debt to explaining the details of how stocks work.

Over the years, I’ve viewed many of these resources, but I find that my recommendations to others often come down to just a small handful of sites.

If you’re looking to learn about personal finance from scratch, these are the four sites that I find myself recommending most of the time. All of them are wonderful resources. They each do a great job of spelling out the specifics of many basic personal finance issues and questions.

Yahoo! Finance Education 

Best for: written explanations of personal finance ideas

Whenever I want a clear and straightforward explanation of a personal finance term, this is usually the site I turn to first. ( Continue… )

A young Indian girl looks for gifts under a decorated Christmas tree, on the eve of Christmas, in Bombay. (Sherwin Crasto/Reuters/File)

20 ways to save money this holiday season

By Guest blogger / 11.25.13

Thanksgiving. Hanukkah. Christmas. The holiday season can be painfully expensive, with gifts and meals and beverages and snacks and lodging and travel revolving around many of us.

With all of those incidental expenses floating around, there are also a lot of ways to save money. Here are twenty ways that we’ll be saving money this holiday season, broken down into three different categories.

Travel and Lodging

Schedule holiday celebrations at an alternate time. Rather than trying to celebrate things on the actual holiday itself, talk to family and friends about celebrating the event a few days early or a few days late. Doing so can allow you to take advantage of less expensive flights.

The best thing to do is to fire up a travel website and try lots of alternative dates for your flight. Is it cheaper to fly on the Thursday before the holiday and fly back on the following Sunday? Look at different scenarios, particularly if you’re traveling as a family and particularly if you have lots of people flying for holiday events.  ( Continue… )

A cashier hands a customer his change and receipt during a transaction at a Sears store. Trent Hamm shares his personal finance wisdom with ten simple rules. (Julie Jacobson/AP Photo/File)

(Almost) everything useful I've learned about personal finance in 10 sentences

By Guest blogger / 11.25.13

It’s not really that complicated.

1. Spend less than you earn.

2. If you’re facing a pile of debts, make minimum payments on all of the debts but the one with the highest interest rate, then make the biggest payment you can each month on that high one.

3. Never expect that your “future self” or anyone else will bail you out of your dumb mistakes today and remember that only you can make better choices for yourself.  ( Continue… )

A bird used by a Chinese man, unseen, to perform, holds a yuan collected from a tourist as it prepares to drop it into a piggy bank, in Houhai district, in Beijing. Hamm argues that complete financial self-reliance is an attainable goal, but it takes a lot o hard work. (Muhammed Muheisen/AP/File)

Early retirement isn't a pipe dream

By Guest blogger / 11.23.13

Charlotte writes in with a reader mailbag question to which my answer ran a little long:

I understand the goal of financial independence. You want to reach a point where you live off of the interest of your investments. I don’t understand how it’s realistic for the average working person to get there before retirement and that’s if you view Social Security to be that kind of return on investment. I mean, I can see it if you win the lottery or something like that, but not as a path that any regular person can follow.

This is a path that anyone can follow. Ten years ago, I would have found the idea of this kind of financial independence completely ludicrous before the age of seventy. Right now? I think it’s totally realistic and I hope to arrive there within ten years or so.

There are a few keys to making this work that I think will illustrate the process for you.

First and foremost, you need to focus on maximizing the gap between your spending and your income. The “gap” is an idea I often talk about, but it’s a vital one. The larger that gap, the faster financial independence will come.

Obviously, there are two ways to increase that gap: spend less and earn more. If you spend less, then you have a larger chunk of your income left behind for saving and investing. If you earn more, than you have more total money to deal with.

Ideally, you’re tapping into both sides of this, and the stronger you push both sides – earning more and spending less – the larger your gap will be and the faster you’ll reach financial independence. ( Continue… )

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