Do People Never Learn?

Last week there was a news story stating that trucks outsold cars by the highest margin in five years in October. This is considered a sign that people are starting to spend again. If that is correct then I think it is an indication that people did not learn much from the recession.

Some people do actually need trucks for work or other reasons but my guess is that the vast majority of the people who own trucks do not actually need them. The fact that so many people are splurging on an unnecessary item might indicate that many people are going back to their free spending ways. It seems people have forgotten the high gas prices of just a few years ago. Gas prices will go up again but it seems that many people are in denial of that fact. Buying a new truck that you don’t actually need is not a financially or ecologically smart decision in my opinion.

The article states that personal savings rates decreased from a yearly high of 6.4 percent in June to 5.3 percent in September. Even at 6.4 percent personal savings rates were well below historical highs. I’m sure some people have learned to be more frugal due to the recession but my guess is that most people will ditch frugality as soon as they feel confident about the economy. What do you think?

Gambling and Frugality

Gambling is not a frugal activity. Earlier this year my gambling was going pretty well but since then the tables have turned and I have been steadily losing money. I have noted that I am not disclosing my gambling wins and losses on this blog. I have not kept exact track of my gambling but I would guess that I have lost about $300-$400 gambling this year. That is not a big amount but with my small income it is too much. Also it seems a little silly to be trying to save a few dollars with coupons and then blow a $100 in the casino. I am frugal in all areas of my life except gambling. There is a disconnect between my beliefs and actions when it comes to gambling. Gambling was the major contributor to my filing bankruptcy 14 years ago. I am in control of my gambling now but I can still feel that urge to bet more and more. From now on I will be disclosing my gambling wins and losses. Also I will only bet when I think I have favorable odds and until I have a significant increase in income my gambling will be limited.

A Frugal Engagement

It is possible to get engaged without spending a lot of money.  Being the frugal person I am I didn’t want to spend a lot of money on getting engaged.  The only money you really need to spend on getting engaged is the purchase of a ring.

In my case I proposed before I had a ring and we picked out our rings together on Amazon.  They didn’t cost much and I was able to mostly pay for them using gift cards I had purchased with Swag Bucks.   It is a lot easier to buy your rings for a reasonable price if you do not buy diamonds.  Besides the cost there are plenty of other reasons why you should not buy diamonds.

Even a tight fisted miser like me wants to be romantic but that doesn’t mean you need to spend a lot of money.  If you can’t come up with romantic proposal ideas that don’t cost a lot of money just Google “romantic proposals” and you will find plenty that can be done on a frugal budget.  My proposal wasn’t very romantic but I did get a do over.  Her engagement ring arrived while she was at work and when we went out to dinner that evening I surprised her by getting down on one knee and proposing.  Even though I had already asked her to marry me before the second proposal was an emotional moment and was much appreciated.

Money should not be an obstacle to getting engaged.  You can get engaged and still be frugal.

The Hazards of Cutting Your Own Hair

I’ve been cutting my own hair for several years. At a conservative estimate of $10 a month for a haircut, I save $120 a year by cutting my own hair. My only cost is a $10 pair of clippers (that I got for free). Being a frugal person I’m always looking at ways to cut my expenses. Before I got my clippers I was getting my hair cut to a short buzz cut anyway so I decided it would be easy to just cut my own hair. I usually just put the 1/2 inch guard on the clippers and buzz away. It doesn’t take any skill and it is pretty difficult to mess up.

Tonight I found a way to mess it up. I forgot to put the guard on before I started cutting my hair. I cut a stripe right down the middle of my head. My mistake was immediately obvious but it was too late, I couldn’t uncut my hair. At that point I had two options, I could either go for a reverse mohawk hairstyle or just cut it all off. I didn’t think I could pull off a reverse mohawk so I cut it all off. Hopefully, I won’t be mistaken for a skinhead while I’m waiting for my hair to grow out. On the plus side I shouldn’t need to cut my hair again for quite a while.

The New Necessities: Less is More

The following is a guest post from personal-finance expert Peter Dunn. He realized that he wanted to deal with money when he was in his sixth-grade math class. The teacher gave the class a stock-market project, and Pete was hooked. Pete hosts a popular radio show, “Skills Your Dad Never Taught You,” on WXNT Indianapolis (News Talk 1430) and appears regularly on FOX News and “Studio B with Shepard Smith.” Pete currently lives in Carmel, Indiana with his wife, Sarah, and his daughter, Olivia.  Pete’s second book, 60 Days to Change: A Daily How-To Guide with Actionable Tips for Improving Your Financial Life, is available in paperback for $14.95, at

Shelter, utilities, food. For hundreds of years, most people have found these to be necessary expenses and key categories of any budget. They know they must find a way to produce enough income to cover, at a bare minimum, these basics. Yet over time, this group of necessary expenses has continued to grow. And, as you might have guessed, it’s because the word “necessary” is subjective and relative.  This new, behemoth group of expenses is the “New Necessities” and now includes things such as mobile phone service, internet service, and cable or satellite tv. But are your New Necessities—and particularly your New Tech Necessities—keeping you in the red?

Controlling this type of expense is crucial to financial progress. As you hammer out a budget, you don’t necessarily need to scrap that category altogether, though. The most important tip? Make sure your usage matches your subscription plans. In my experience, most people overbuy and underuse these types of subscription plans—whether for mobile phones, internet, or cable/satellite. Here’s how to keep your costs in check: set aside an hour or two and call each one of your service providers to match up your usage with an appropriate plan. Doing this can easily save you hundreds of dollars per year.

Redefining your New Necessities requires taking a hard look at what you think you need but without which you can still survive and thrive. The fundamental questions to ask as you’re redefining are, “How much do I spend on this? And where can I cut back?” Do you really need the fastest Internet service available? What about those 400 satellite tv channels? You might not think eliminating or scaling back on services could save you that much—but once you start saving with a goal in mind, you’ve got a very powerful motivating force. With what you save by cutting your New Necessities list down to manageable size, you can contribute to your emergency fund, save for a vacation, or even sock away for college funds or retirement. It’s your decision: a year of the Handyman Channel—or a fund to someday start that handyman business you’ve always known you wanted to? Take a good, hard look at your monthly budget—and see where there’s room to save by dialing down.

What are your New Necessities? Where could you cut back if you had to—and what would you save for?