Personal Finance Tips.com » Frugal Living

Total Cost to Own

tim — Mon, 25 Jan 2010 05:37:24 +0000

When making a purchase, people typically only consider the upfront cost but for many items there are additional costs to consider. Below are some examples of costs that will be incurued after ownership.

Car: Fuel (need to consider type of fuel and its fuel efficiency), insurance rates, and maintenance costs.
House: Taxes, maintenance costs, insureance, mortgage.
Phone: Phone plan (If you buy a smartphone, you’ll likely need to buy a data plan in addition to a voice plan to utilize all of the features).
TV: Electricity (Typically the bigger the TV, the more electricity it’s going to take to power).

When looking at a big purchase, be sure to look at the total cost to own. Sometimes spending a little more money up front for a quality or more efficient product that will result in a lower total cost.

Benefits of a Recession

tim — Tue, 24 Nov 2009 11:43:02 +0000

When most people hear of a recession, they tend to think of it as a negative. Not everything about it is negative though. In recessions, people tend to make the most of their money.

For people who see a drop in their income due to the recession, they are forced to find ways to spend more efficiently because they have to.

For people who’s income level were not affected, they tend to spend more sparingly since there is a fear that their job may be next to go.

Will you maintain the frugal habits that are picked up during the recessionary times and use them when the good times come? If you start putting 10% of your paycheck into savings because you are scared that you may lose your job, then there is no reason why you can’t save 10% when your job stability improves.

Free DVDs, Books, and CDs

tim — Wed, 26 Aug 2009 05:03:12 +0000

My local library offers more than just books, they also offer DVD, CD rentals and many other amenities free of charge. While theoretically I pay for all this through taxes, it costs me nothing additional for items that I take out.

While my local library does not always carry everything at their site that I’d like, I can place a request for materials into the online catalog which draws from all the public libraries in my region. After I place the request online, the material(s) will be sent to my local library so that I can pick it up at my convenience.

The library is a great resource for me. For books/movies usually I’ll only read/watch it once and never look at it again, so it works out perfectly.

How Not to Get Rich

tim — Wed, 15 Jul 2009 12:22:56 +0000

The secret to not getting rich is to set your lifestyle around your income.

To simplify things, we’ll take a look at the following hypothetical scenario from a high level and assume no investment spending occurs. Bob earns $100,000 in a given year and spends $100,000 in that same year. Sue earns $50,000 in a given year and spends $40,000 in that same year. Sue is therefore able to build $10,000 more wealth than Bob despite earning significantly less than him.

Sue is able to build more wealth than Bob because she spends her money based on what she needs to live her modest lifestyle. If Sue gets a promotion and earns $60,000 next year, she won’t spend more to move her lifestyle up, instead she’ll still only spend $40,000 next year.

Bob however sets his lifestyle around his income. If Bob gets a promotion and earns $120,000 next year, he would increase his spending to $120,000 next year to live a more luxurious lifestyle.

If you emulate Bob and set your lifestyle around your income, you will never get rich.

Don’t Go Broke Saving Money

tim — Wed, 24 Jun 2009 06:10:32 +0000

Ever buy something in the clearence section just because it was cheap? Buying an item soely becuase it’s a good ”value” is a waste of your money. This includes buying items in bulk to receive a discount when you only have plans to use only a small portion of the items purchased.

It’s an entirely different story if you buy items on the cheap to resell them for a profit. There are many people that buy soely for the thrill of getting a good deal without a plan for their purchased goods. Buying without a plan is wasting money and not “saving” you any money.

Get the Lowest Price

tim — Wed, 17 Jun 2009 07:40:14 +0000

When shopping at the grocery store, there is a quck way to find the lowest price that you pay per unit in a few quick seconds that doesn’t involve any manual calculations. By simply comparing the unit price label (should be in most grocery stores) you can easily see which product has the best price per unit.

Below, you’ll see that there are many different choices of ketchup to choose from.

By taking a few seconds to scan the unit price (price in the orange box in the picture below), I was able to find the lowest price per a pound of ketchup. The best deal was only $0.66/pound!

Price per unit is just one factor to consider when buying a product. Other factors to consider are nutritional value, size and personal taste.

Don’t Pay for What You Don’t Use

tim — Wed, 10 Jun 2009 05:05:54 +0000

There are probably lots of bills that you pay monthly without giving a second thought to. If you take a few minutes to take study them, you may find that you can cut back on your expenses.

Cable
Do you have a cable package with premium channels that you don’t watch? Trade down to a cheaper package or consider cutting off cable completely and install an antenna instead if you only watch TV sparingly.

Phone
If you are paying for a land line and a cell phone, consider switching to just just a cell phone or take a look cheaper options such as a VOIP line.

Gym Membership
If you only go to the gym once or twice a month, cancel your montly membership. Many gyms give you the option of paying for each visit, instead of on a monthly basis.

TV/Magazines
Do you have piles of unread newspapers or magazines? Don’t renew your magazine/newspaper subscriptions at the renewal date. If you only read the newspaper on the weekend, consider subscribing to the weekend edition.