Beating Broke

Personal Finance from the Broke Perspective

Flossing with Chest Hair

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Being a frugaler means making some sacrifices.  We sacrifice in order to save a few bucks.  Sometimes, it becomes a bit of an addiction.  We get a small high off of the act of saving.  While you can certainly have worse addictions, even an addiction to saving can be a bad thing at times.

Taking Frugal to Extremes.

Before you get any funny ideas, I really should let you off the hook.  This post isn’t really about flossing with chest hair.  (It’s a catchy title though, isn’t it?)  I don’t actually know of anyone ever having flossed with chest hair, nor would I suggest it.  But, it serves as a good example of a way that people could take saving to an extreme.  There’s a growing movement to do things in a sustainable manner, and using things that are renewable (like chest hair) is a big part of that.  But, there are extremes.  For instance, I’ve read about people who use a special kind of stick that is very fibrous, and they chew on it instead of brushing or flossing.  Some things, I’d just rather pay for.  Being frugal is good.  Being so frugal that you chew on sticks?  I’m not going to judge, but it seems a bit too extreme for me.

Finding a Happy Frugal Medium.

There is seldom a cure to any addiction.  Overcoming one usually entails years of counseling, and hard work on the part of the addicted.  Part of the treatment is usually to completely forgo whatever it is that you’re addicted to.  If you’re an alcoholic, drinking any alcohol at all is forbidden.  But, I can’t, and won’t, condone abstaining from frugality.  Overcoming an addiction to being frugal is just a matter of finding a happy medium where you can still save money, while still living in a way that doesn’t have to include extreme cutbacks.

Thinking..

The Cure to Extreme Frugality.

Without thinking about it too hard, come up with something that you spend money on that you can’t do without.  Again, I’m not going to judge.  For some, it will be their car.  For others, it will be their morning coffee.  Now, come up with something that you currently spend money on that you can do without.  For some reason, for most people, it’s harder to come up with something we can do without than it is something we can’t do without.  Why is that?  The answer is that it’s psychological.  As frugal people, we’ve thought long and hard on ways to save money and to pay off our debt.  In our minds, we’ve analyzed everything that we spend money on.  We then justified everything that we spend.  In some of those cases, we’ve created justification for ourselves so that we don’t have to get rid of something that we would rather not.  So, it’s harder to find something that we know we can do without because, in our minds, we’ve created a justification that makes it something we need.  The cure to finding a happy medium and avoiding the extreme frugal addiction is to take a close look at the things we’ve justified and find those things that we’ve created justifications for that really aren’t all that justified.  In short, stop lying to yourself.  Once you do, you’ll have found several things that you can cut back on, or remove entirely, that will save you money without going to extremes.

It’s just as hard to overcome the addiction of lying to yourself as any other addiction.  There should (and maybe is) be a 12-step program for it.  Until then, try and be truly honest wit yourself.  Understand that you’ll probably slip up once or twice.  That’s forgivable.  Just recognize that you’ve slipped, and get back on track.

photo credit: Just Add Light

Have a No Spend Month This Fall to Save for Holiday Gifts

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Have you ever watched your family open up Christmas gifts while mentally calculating how much each gift cost and comparing that against the amount you have in your checking?  Have you dreaded opening the bills in January because you know the credit card statement from holiday shopping will be coming soon and you do not have the money to pay the balance in full?
When my husband and I were newly married and dirt poor, we carefully planned our Christmas purchases to fit within our meager budget.  We didn’t buy many gifts, but the ones we bought were well thought out.  When we went to visit my mom over the holidays, she kept telling us about all of the presents she had bought for us.  There were so many under the tree!  Because we are the only people to buy gifts for my mom because my dad has passed, we started feeling guilty about the few presents we bought her.  Noticing that her bathroom towels were worn, we went out Christmas Eve night and bought her an entire set of 6 new bath towels including hand towels and washcloths with money we did not have.  Then we bought her some jewelry.  We charged everything knowing we didn’t have the money to pay.

50mm HBWOn Christmas morning, she delighted in her presents.  When we opened ours, we were in for a surprise.  She too had bought a few well thought out gifts for us.  But all those extra gifts we found under the tree?  They were leftover t-shirts from a conference some of the professors had hosted at the university where she works.  She bought them for a $1 each.  Each time I or my husband opened another one of those presents that contained a t-shirt, I felt sick.  We had put ourselves in debt to try to make sure our presents were equal to hers, but she had stuck to her financial budget by giving us “filler” presents.  There had been no need to buy those extra gifts on Christmas Eve. . .

We worked like crazy selling off things in our apartment such as textbooks we no longer used so that we could pay off those credit cards used to buy the extra gifts.  On our meager salary, it took us until March.  Thankfully, we have learned our lesson.

If you don’t want to spend the months after Christmas worrying how you will pay off the new debt you just acquired, consider having a no spend month now.  We still have nearly three months until Christmas.  Pick a month such as October or November to drastically reduce your spending.

If you normally spend $1000 a month on groceries, gas, entertainment, eating out, toiletries, etc., decide how much you want to cut that amount.  Maybe you will decide that in October you will only spend $500 a month.  To make up the difference, perhaps you won’t eat out or you will eat from the pantry to use up those groceries that have been on the shelf for awhile.  Maybe you will do something for free as a family rather than catching the latest movie.

By reducing your spending for just 4 weeks, you will be able to come up with a good amount for your holiday gift giving.  If you normally spend $1000, but only spend $500 of that in October, you now have $500 saved for holiday gift buying.  Yes, you sacrifice now, but it will be well worth it when you know that every present under the tree has been paid for.  Best of all, there is no reason to dread the bills in January.  Isn’t that a great way to start the new year?

photo credit: kevin dooley

Ways to Save with Banking and Recurring Payments

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If you are new to saving money and cutting expenses, you may search the internet where you will find such tips as “Skip your daily coffee fix” and “Buy store brand foods instead of name brand foods.”  While this advice is good, it only offers a superficial way to cut expenses.  You may need to look beyond this generic advice to find other ways to trim costs.  My family is in this situation currently; our income does not add up to the equivalent of our expenses.  Not only are we making less than we spend, we are not able to add to our savings.  This situation is temporary, until my husband finishes his post-doc, but obviously it is not sustainable for the two years he will be in a post-doc position.  Here are some of the extra ways we have found to trim our budget:

-Stop writing checks.  We have automated our bill paying online.  At first I was resistant to do this, but when I added up how much I was spending on checks ($38.12 for a year’s worth) and stamps ($52.80 a year) for a total of $90.92, I decided to do it.  I can’t eliminate all check usage, but automating our bills has reduced our check usage by 3/4s, which will save because I won’t have to buy checks as frequently.

607 - Money Whirlpool - Texture-Cancel automatic payments for services you no longer use.  One downside of automating payments online is that you may stop using a service and yet forget to stop the auto payment.  I recently closed an eBay store that I had.  As part of my eBay business, I had automated payments to a template service (that basically made my auctions look prettier by putting a design in the background) at $12 a month and to a selling newsletter for $8 a month.  I was annoyed when, a month after I closed the eBay store, I discovered I was still billed the $20.  I forgot to cancel the subscriptions.

You may find that some companies make it difficult to cancel online subscriptions.  (Remember the old Friends episode where Chandler wants to cancel his gym membership, and every time he tries he is instead convinced to stay?)  While it may be very easy to sign up for recurrent payments on your credit card, when cancelling you may need to call the company and listen to them try to upsell you.  Persist because it is not worth paying monthly for a service you are no longer using.

-Change to online bank statements.  My bank recently began charging $3.00 per month for paper statements.  That adds up to $36 per year per account.  Because I have 3 accounts with them, it adds up to $108 a year wasted.  Yes, I prefer to have physical copies of my statement, but not at a cost of $108 a year.

-Consider changing banks if the fees get too high.  Last January, my bank started charging me $9.99 per month for my eBay business checking account.  That is $119.88 a year just for the joy of banking with them.  I have since cancelled the account.  I am now in the market for a new business account for my writing and blogging service, and you can bet I won’t be going with my current bank, and I’ll be looking at well reviewed banks that maybe have good new account promos.

There are plenty of ways to save money if you look carefully.  These are just a few ways you can save at your bank and online, but they clearly add up.  Making these small changes has saved my family $230 a year!

What other ways do you use to save money?

photo credit: Patrick Hoesly