Andy Hough

Save Money with Back to School Sales

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One common frugal tip is that you should stock up on an item when it is on sale. Stores are starting to have their back to school sales. This is an excellent time to stock up on school or home office supplies. The large department stores and office supply stores have a variety of merchandise for extremely low prices.

For example, Staples currently has many items free after rebate, Wal-Mart is selling 70 sheet notebooks for .15 cents, and K-Mart is selling Elmer’s glue for .20 cents. That is just a few of the deals available and there will be new ones every week for the next few weeks.

About a decade ago I took advantage of a cheap notebook offer and I haven’t paid for paper yet. During my four years in law school I never purchased any school supplies. I either already had the items needed or was able to get them for free. With a little planning you can stock up on supplies as well and not have to buy them again for years.

Frugality 101: Housing

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Housing is the area where most people can see their most significant savings. Most people live in too big of a house and spend more than necessary on housing. The average U.S. home size has gone from 1400 sq. ft. in 1970 to 2330 sq. ft. in 2004. Granted the average American has gotten larger during that time period too but it isn’t like they are taking up that much more space.

My housing cost has been around $400 the past few years. With a little effort I could reduce that and I probably will before the year is up. I think $400 a month is a reasonable target for your housing expense. It is much easier to do here in the Midwest than in other areas but it is possible in more areas than you would think. My best friend lived in the S.F. Bay area last year and paid $400 a month for a room in a house right by the ocean. Even in some high cost areas you can find reasonably priced housing if you are willing to be a little unconventional.

If you find the $400 amount too constricting you could consider keeping your housing expense at 20% of your income. That would still keep your housing cost below average and should allow you to save a significant percentage of your income.

If you still think it is impossible to do this in your area then you might consider moving to a different location. I’m going to do a separate post on location in regards to frugality.

If you need some ideas on how to lower your housing cost check out “Twelve ways to become rent or mortgage free” at Wise Bread or check out Jacob’s post on living in a RV at Early Retirement Extreme.

My Stock Portfolio

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photo credit: kevinzhengli

Some of you have expressed interest in what stocks I own. I’ve been reluctant to share this since I’m not a stock expert and I don’t want my portfolio to be seen as advice on what you should buy.

I currently have twelve stocks in my portfolio. It would be better to have more but this is what I can afford at the moment. These are the current holdings in my stock portfolio: Bemis (BMS), British Petroleum (BP),Consolidated Edison (ED), Great Southern Bank (GSBC),Johnson and Johnson (JNJ),Coca-Cola (KO),McDonald’s (MCD),Realty Income (O),Pitney Bowes (PBI),Power Shares International Dividend Achievers (PID),Ship Finance (SFL),Universal Health Realty Income Trust (UHT).

Most of these stocks were chosen because they had a consistent history of raising dividends or had a nice dividend yield. Ideally they would be like O and have both. An 8.4% yield and a consistent history of increasing their dividend since their listing on the NYSE in 1984. I don’t particularly like investing in funds but I have PID since I am under diversified and need more international exposure.

My return on investment since I started investing last October is 4.9% or 7.2% annualized. The actual ROI is higher than that since I didn’t invest all my money at once, I’ve been slowly adding to my portfolio since then. I just calculated this figure for this post and initially thought this wasn’t a very good performance. Considering the S&P 500 index lost 22.56% the last quarter of 2008 and is down 2.67% this year my performance looks pretty good.

This performance would be a lot better if I would have been quicker to unload GE. On the other other hand if I hadn’t bough GSBC, which more than doubled, my performance would be a lot worse. That is how diversification works. If one stock sucks, there should be some others that pick up the slack.

My initial plan for this portfolio was to eventually have enough dividend income to cover my monthly expenses. I’m no longer sure if I’m going to pursue that plan since I’m looking at having a wider variety of investments. I’ll still have stocks they will just be a smaller percentage of my investments overall.

One Month Appalachian Trail Hike Plan

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Here is the latest plan for my one month hike on the Appalachian Trail. I’ll start by flying out of Kansas City to Philadelphia on Tuesday the 14th. From there I’ll take the bus to Delaware Water Gap, PA to get on the A.T. This town is on the PA/NJ border so when I head south from there I will be hiking through all of PA. It will be about 7pm when I arrive in DWG so I’ll probably just stay at the hostel for the night and begin my actual hike the next morning.

My plan is to hike to somewhere around US 50 in Virginia, possibly all the way to Waynesboro, VA if I end up hiking really fast. I haven’t decided how I’m getting back home yet but I’ll figure that out as I’m hiking. I like to keep my options open and not plan ahead too much.

I will have a guidebook with me and I’ll stay in a town about once a week or so to shower and resupply. When I hike I make sure I have enough food to get to the next resupply and that is about the extent of my hiking.

I’m going to try to hike for the whole month on a budget of $200. That will break down to roughly $100 for food and $100 for everything else such as hostels, showers, laundry,replacement gear, etc. I won’t be including the cost of getting to the trail or getting back home. If this budget proves to be unrealistic I will adjust it rather than make myself miserable trying to stick to the budget. Based on my previous hiking though I believe this budget is at least reasonably close what I will spend.

I should be able to get on the internet about once a week to update the blog and moderate comments and such. I will also have daily tweets about my hike as long as I have cell coverage. If that interests you be sure to follow me on Twitter. I hope you all will stick around while I’m hiking.

Book Review and Giveaway: 10,001 Ways to Live Large on a Small Budget

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The writers at Wisebread have come out with a book titled 10,001 Ways to Live Large on a Small Budget. As you might guess from the title this book is chock full of useful tips on getting more for your dollar. These ideas will help you have a nice lifestyle while being frugal. Frugality is about making smarter choices with your money not sacrifice.

The book reads like a series of blog posts. Which isn’t too surprising since the tips are mainly from posts at Wisebread. If you like reading blogs posts – and since you’re here reading a blog, you probably do – you should enjoy reading this book. The tips have been organized into several categories such as travel, food, health and beauty, etc. to help you find tips.

With over 10,000 tips the book doesn’t go into much detail on any of them. Most of the ideas are pretty simple though and don’t require a lot of explanation in order for you to be able to utilize the ideas. This book would be an excellent resource for anyone who is just getting started with being frugal. Even if you have been frugal for a long time such as I have you will likely find a few helpful tips in this book.

I’m giving away a copy of this book. To enter simply leave a comment on this post. Only one entry per person. The book will be shipped via media mail so the winner must have a U.S. address. The contest will close on Friday and the winner of the random drawing will be announced at that time.