Frugality

I managed to buy all of this plus a little more for no money out of pocket at Staples yesterday. I posted before on how I save money with Staples ink cartridge recycling. The recycling program allows me to receive two dollars in rewards for cartridges that cost me about twenty cents. This amounts to a roughly 90% savings on everything I buy with the rewards. That is a pretty good deal but being a tight fisted miser I like to make the deal even better. I try to buy mainly stuff that is on sale and use coupons too. For the purchase above I used a $10 off $30 competitors coupon plus used a Staples 15% off coupon. I think the savings from this reward program are well worth the time it takes to recycle cartridges. We haven’t had to buy toilet paper or paper towels all year plus I’ve gotten lots of other stuff such as a router, ink, and lots of household and office supplies for almost free. Does anyone else out there get almost free stuff by using an office supply store’s ink cartridge recycling program?

I received a free review copy of the book, Red Alert: How China’s Growing Prosperity Threatens the American Way of Life. I was interested in this book because it discusses how the world’s diminishing amount of natural resources and growing population will lead to a crisis. The focus of the book is on China but it also discusses these issues in general.

The author makes clear in the book that he isn’t demonizing China. China is acting in its own best interest in accumulating commodities that will be in short supply in the future. The commodities that China has are resources that the United States and other countries will be scrambling to obtain. One can’t expect China to share the resources cheaply if at all.

The author states that China produces 97% of the world’s rare earth metals. This is important because these materials are used in the manufacture of cell phones, laptops, TVs, and other electronics. They are also needed for the production of wind energy, solar energy, and electric vehicles. It is somewhat ironic that part of the reason China is able to produce more of these metals needed to produce green energy is that they are willing to deal with the massive pollution that mining these metals causes.

It isn’t just rare earth metals that is the problem though. China is well ahead of the United States in procuring other metals such as copper and iron. Although the metals are plentiful today the author makes a compelling case that demand could outstrip supply in the future and China has taken steps to help ensure that they will have access to the metals they need.

There is another chapter on peak oil and peak coal. The author argues that peak oil has already arrived and that peak coal isn’t far behind. I’m not sure if peak oil has arrived although I do think it will happen in the near future. China’s increasing use of oil and coal will cause demand to accelerate and energy prices to soar. China is preparing for this by investing heavily in alternative energies.

Although China is preparing for scarce resources in the future they do face some problems. One problem is whether they can produce enough food and water for their growing population. Another problem is potential rebellion. One of the reasons that China is able to prepare for long range problems is because they don’t have to worry about getting re-elected. If the people of China face shortages of food and water it could lead to rebellion but that possibility seems unlikely to the author.

Unfortunately, it doesn’t seem like there is much the United States can do about the situation. Any attempts to remedy the situation would require that people make some sacrifice now so they can be better off in the future. The American people generally don’t want to do that and most politicians would be afraid to suggest any policies that would demand any sacrifices. You will need to make your own preparations to deal with the future. I’m not sure what those are but I am reading more about peak oil and permaculture and can hopefully come up with a few measures to better weather the future crisis.

David Bakke is a financial columnist for the personal finance website, Money Crashers. David lives in Atlanta, GA with his young son and actively works to improve his financial situation and build wealth.

Most experts say that you need a personal budget to improve your financial situation. While this can be extremely effective for many, there are other options out there to live a financially responsible lifestyle. Many years ago, I found myself broke with more than $20,000 in debt. When I finally decided to resolve my financial problems, I eliminated all of my debt in less than three years – without budgeting. To this day, I have never relied on a budget.

Getting on track financially and eliminating debt takes hard work, but you don’t necessarily need to make a budget to eliminate debt or to save money.

Five Reasons to Avoid Budgeting

1. You Need to Adjust Your Attitude

Work to adjust your attitude toward spending and saving money. Debt often accumulates because you spend more money than you make. To eliminate debt and to accumulate savings, you need to decrease your spending or increase your income. Decreasing your spending involves a shift in focus every time you prepare to spend money. Adjust your outlook to better understand how money enters and leaves your life, rather than focusing on creating a budget.

For many of us, the best way to get out and stay out of debt is to focus on increasing our income. While this isn’t a quick-and-easy fix and requires a hard working attitude, you can accomplish this goal by switching jobs, changing careers, or finding ways to make money during your free time. There truly is nothing like starting your own side business to help you pay off your debt and save for the long term.

As an example of implementing this strategy, in the past few years, I have launched two side businesses that I run from home. Last year, I earned nearly $10,000 from these businesses. Identify your skills and turn them into profitable business ideas. Before you start earning extra money, allocate the additional income. If you know that you will make an additional $1,000 next month, plan to use this money to pay off a debt or to boost your savings.

Adjusting your attitude towards saving and spending money can help you eliminate your debt and increase your savings. If you can combine your efforts – decreasing your spending while earning more money – you can achieve your long-term financial goals more quickly.

2. You Can Eliminate All Unnecessary Purchases

Eliminating unnecessary purchases allowed me to emerge from my mountain of debt. Instead of following a monthly budget, take a good look at every single purchase that you make and determine what purchases you can eliminate from your shopping trips. Do you stop by a convenience store every morning for a cup of coffee? If so, invest in a coffeemaker and make your coffee at home. Do you eat out every day of the work week? Consider brown-bagging your lunches to save money. These small purchases add up, and may total hundreds of dollars every year.

In addition to eliminating unnecessary small purchases, carefully review your options when buying pricier items. Before you consider making any major purchase – including a new car, computer, or a flat screen TV – ask yourself some questions: Do I really need this item? Can I get by without owning this item? Have I researched this purchase to make sure I am getting the best deal?

Take extra time to thoroughly research consumer organizations’ reviews of the items you want to buy. Talk to friends and family members about their similar buying experiences, and conduct price comparisons. Oftentimes, if you shop around, you shouldn’t have to pay full price. When the time comes to make the purchase, you will know you’ve done your due diligence.

3. Budgeting Can Do More Harm Than Good

While seeking to ward off unnecessary expenses, you may create an unreasonably difficult budget to adhere to, unwittingly setting yourself up for failure.

For example, say you decide to eliminate a $100 monthly clothing expenditure. This part of your budget will theoretically save you $1,200 in 12 months – however, necessity may force you to make clothing purchases during the year. This can lead to guilt about your purchases, and budget-breaking activities can quickly devastate a financial plan. If you cannot follow your budget, you may give up entirely out of frustration and revert to your old spending habits.

Instead of eliminating clothing from your budget, try instead to buy only the clothes that you absolutely need, at the best prices. This mindset leads to financial victories and helps you build momentum to stay on track until you can emerge from your debt issues.

4. Budgeting Can Lead to Missed Opportunities

Budgeting can lead to missed opportunities. If you decide to slash your monthly $400 grocery budget to $350, you haven’t learned any lessons about frugality or comparison shopping. Instead, investigate every possible way to save on groceries, including using coupons, joining customer loyalty programs, shopping at farmers’ markets, and buying generic items instead of brand names. You could even learn how to extreme coupon. This approach may save you more than $50 per month.

Budget rigidity leads to another type of missed opportunity. If you have to replace your television this year, but don’t have the purchase budgeted until the end of the year, you might miss an opportunity to purchase a discounted television during the Thanksgiving weekend sales. Making a major purchase during an annual sale can save you a lot of money. If you have to stick to your budget, you may miss some excellent opportunities to get the best prices on your purchases.

5. Eliminating Your Budget Simplifies Your Finances

Eliminating a budget simplifies your finances, saving you valuable time every day. When you follow a budget, you frequently have to calculate expenses to see if you have stayed on track with your budget. You may have to regularly spend time using budgeting software.  If you stop following a budget, your finances are immediately simplified – you no longer have to spend time tracking and analyzing numbers, and can instead focus on adjusting your overall approach to spending as you reach your financial goals.

Final Thoughts

If you continually struggle to solve your financial worries, budgeting may be your only option. Creating and following a budget does have its benefits, but if you can adjust your entire financial outlook and limit your spending, you may solve your financial issues in a more effective, efficient, and simpler manner.

Do you follow a personal budget, or do you avoid budgeting? What approach works best for you?

The following is a guest post by Lisa @ Frugalist, an Australian personal finance blog that promotes living well on a budget.

In the battle to save money and promote quality time, many families are forced to become creative in their down-time. Here are 7 ways to stick to a budget while entertaining the family.

1. Cookouts
Who needs to waste money on expensive restaurants, waiting for a table on a Friday night? For your immediate family, and perfect for when extended family is in town, consider a cookout – or a potluck type of idea when it’s not so nice outside. Add some games and you already have a good basis for such an event.

2. Did Someone Say Games?
Board games are a great family pastime, where you can certainly save money. Consider that Friday night dinner at your average restaurant – it would be fair to say that the board game (if you don’t have one/enough) would easily be cheaper than the meal (maybe half). Why not take advantage of that pizza special and see who will reign as board game champion in your family?

3. Cook Together
Food is certainly a pesky problem on a family budget, often when it comes to eating out. While not eating out that much is an obvious solution to sticking to a budget, you shouldn’t forget about the benefits of cooking at home. Let the children help as they are able; it can be a fun and education experience – for everyone!

4. Create a Stay-cation

It’s not necessary to leave home in order to allow your children to experience exotic locales. Plan a stay-at-home “trip” with meals, movies, travelogue films, and music based around the country of your choice. A stay-cation can be a fun way to spend some quality time together, while saving money. Granted, it’s not Disneyland, but it is a lot less expensive!

5. Entertainment Deals
When your family leaves the house to do something fun, take stock of adventures that are discounted. For instance, you might not like the normal bowling rates at your local lanes, but most places offer a myriad of specials on the weekend or during non-peak hours. You might be able to locate a great deal on bowling, miniature golf and a number of other fun family activities.

6. Free Outings
“Free” is better than “on sale,” and there are luckily many choices here as well. You could make the park a staple for your family, where sports and playgrounds offer plenty of options for all ages. Be on the lookout for free zoos or museums that are within driving distance, as well as free concerts and other family events nearby.

7. Movie Night
Sometimes the easiest way to save money is to stay in for the night. Designate one night each week as “movie night.” Rentals from your local Red Box or Blockbuster DVD kiosks are less than $2 per night. Purchase microwave popcorn and soda or juice, then let the kids haul out the sleeping bags and set up residence in front of the TV.
Consider cost-efficient options where you can stay in as a family. Trade the movie theater for a cheap rental. Have some of your children’s friends over for a home cooked meal, games, and whatever else you have planned. Maybe you could ride bikes around the neighborhood, play catch, and do some fun things outside. There is much to be said about the activities that can be enjoyed for very little money – that don’t require “going out.”

Lisa Kling is a freelance blogger for several personal finance sites, like Frugal Living, and on her own blog, Thriftability.com.

In order to increase productivity we have cut our cable from expanded basic to basic and rented an office. Cutting our cable from expanded basic to basic will save us about $33 a month. Our savings should be more than that since we will be losing most of our channels and no longer be able to watch on demand programs. We are paying a lot more per channel than we were before. I would cut cable out completely but we still have a tube TV and can’t receive over the air signals. We will likely get a new TV during the holiday season and if it is able to pick up the local channels we will completely cut the cable. That way our new TV could pay for itself. 🙂 We will also be staying in hotels two or three times a month and can get our cable fix then if we need it.

We also rented an office. I’m going to allocate 50% of the rent to my web business and 50% to our offline business. We don’t have to have an office but we are getting this for only $120 a month. It is basically just a 12×12 room but it is all we need. If I’m able to improve my productivity enough to make an extra $60 a month then the office will be worth it. I’m confident that the office will make me more productive. We will know for sure at the end of the month.