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November 2008 - Posts - The Dollar Stretcher
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The Dollar Stretcher

The Dollar Stretcher blog will explore people and money.

November 2008 - Posts

  • A Frugal Christmas Challenge

    Hello to all my Frugal Friends!

    This is the 13th year that The Dollar Stretcher has encouraged people to enjoy the holidays without unnecessary spending. But this year feels a little different than the other twelve. I'm not going to repeat 'the sky is falling' warnings that seem to appear on every nightly news program. Speaking frankly, most commentators are pretty clueless on the topic of economics. They just repeat what they heard from the last so-called expert.

    But, this is a time where caution could be very, very wise. Last year I saw reports that the average Christmas shopper who charged their gift purchases and didn't pay them off immediately were paying for them all the way into May of this year! In a good times that's foolish. But, if you happen to lose your job those debts could be enough to ruin your credit rating or cause you to miss making your house payment.

    It wouldn't be so bad if you didn't have a choice. But you do. We have literally dozens of articles with hundreds of gift ideas that won't bust your budget. Spending less won't ruin your holidays. In fact, it will actually make them better!

    In fact, I'd like to issue a challenge. I'm so sure that we can find ways to have a happier holiday by spending less we're going to create a thread in The Dollar Stretcher Community on that topic. Please come by and tell us how a frugal holiday was a better holiday. You can post your comments here  or send them by email to  gary @stretcher.com.  We'll share some of the best ideas in the weeks to come.

    Keep on Stretching those Dollars!

    Gary

  • Falling Gas Prices

     I guess everyone has noticed how much gas prices have fallen in the last few months. Seems only yesterday that every media outlet was screaming about $4 a gallon gas. Now that gas is back in the $2 a gallon range you don't hear much about it. And, that's a shame. Because lower gas prices create an opportunity for consumers.

    Back when prices were high we all made adjustments to our lifestyle to handle the extra money that was going to the oil companies. We drove fewer miles and paid more attention to auto maintenance. We cut back on other expenses. In short, we did whatever we needed to do to solve the problem.

    But, now the problem is gone. So we have a choice. We can go back to our old ways of doing things or we can take the money that's not going into our gas tank and put it to better use.

    If you go back to your old ways there's a good chance that you'll waste the money. It'll disappear leaving hardly a trace.

    On the other hand, you could continue with the changes that you made when gas prices were higher. If you're the average driver (about 11,000 miles per year) and your car gets 25 mpg that means you'll be buying 440 gallons of gas a year. And, at today's prices you'll be saving about $880 per year.

    What to do with that extra $70 a month? Here are some options.

    You could apply it to your credit card debt. Not only would you reduce your balance by $70, but you'd also reduce the amount of interest that you owed for this month (and every month thereafter). In effect adding that $70 to your minimum will save you way more than $70!

    Or you could add it to your mortgage payment. No one knows how tough the economy could get. But the less you owe on your home the better off you'll be no matter what the future holds. If things bounce back quickly more of every future mortgage payment will go to reducing principal so you'll have more equity (and more options available to you). If things get really tough and house prices continue to slide you'll be in better shape if you don't owe so much.

    You could take that extra money and invest it in your future. Take some classes that will make you more valuable in the job market. If unemployment increases you'll be happy to have more skills to offer potential employers. If you don't have a college or trade school nearby consider online courses.

    How about accumulating an emergency fund? We all know that we're going to have 'unexpected' expenses. We just don't know when they'll occur. Without an emergency fund they end up on your credit card. Wouldn't it be nice to have hundreds of dollars sitting in a bank waiting for the next 'expected' expense?

    Or you could put it in your retirement account (IRA or 401k). Yes, I know that your account hasn't been performing very well lately. In fact, you're thinking of trading your broker for a dartboard. But, if you have any faith in the U.S. economy, then you'd have to expect that some companies would do well in the future. So now could be a good time to buy in while prices are low.

    Or perhaps you have an even better way to use the money that's been freed up when gas prices fell. If so, we'd love to hear your ideas. After all the pain that higher gas prices caused, it only seems fitting that we turn lower prices into something good!

    Keep on Stretching those Dollars!

    Gary

  • Why I Like Thanksgiving

    I think that Thanksgiving is one of the most useful holidays of the year. The reason is simple. Thinking about the things that I'm thankful for is good for me. It reminds me of how fortunate I am. It reminds me of those that I love. The more I think about the things I'm thankful for the happier I get!

    And, the opposite is true, too. By focusing on the good things in my life I don't have time to think about the things that would add stress to my day.

    So I like Thanksgiving. It's almost guaranteed to be a happy day!

    Keep on Stretching those Dollars!

    Gary

  • Why the Waste?

    Recently I did an interview with Dana Dratch (Google her work. She's an excellent writer on personal finance and a wonderful human being, too!) We were talking about ways to reduce your grocery budget. One of the strategies that I mentioned was eliminating food waste. 

    Wasting food is particularly hard on a food budget. Think about it. You've already spent the money. And you get zero benefit from it when it hits the trash. Can't get much worse than that if you're a Dollar Stretcher.

    How much do we waste? Good question. And, not an easy one to answer. I'm aware of two studies on the subject. In 2004 The University of Arizona in Tucson found that an incredible 40 to 50% of all food produced in this country goes to waste. But, the study included food that was produced and not sold to the consumer. It included farmers speculating on crops and other sources of waste.

    The second study is from the U.S. Dept. of Agriculture in 1997. So it's a little old, but still interesting. Their data suggests that 27% of all food is wasted.

    And the waste isn't limited to the U.S. A British study quoted in the NY Times indicated England wastes 1/3 of it's food. Sweden joins in with 1/4 of it's food going to waste. It appears to be a problem in all prosperous and complex societies.

    Fortunately for us (the Dollar Stretching consumers), much of the problem can be eliminated. It's not terribly hard to do and doesn't cost a bunch of money. Just adopt a few simple tools to your lifestyle and you could reduce your grocery budget by 25%.

    Begin at the grocery store. Recognize that food has a shelf life. Sure there are some canned goods that will probably survive a nuclear attack. But, most of the items we buy will go bad if not eaten. Some in weeks or months. Others in a matter of days. Do you have a plan to eat whatever you buy before it goes bad? Many of us don't like to do a weekly meal plan. OK. But be smart enough to not buy more tomatoes than you can use before they get overripe. 

    Once you get your groceries home, do a quick inventory of the things that will go bad quickly (like raw fruits and veggies). Make sure that you store them properly. Check the settings on your vegetable keeper in the refridge. Consider using the 'green bags' for storing fruits and veggies. Read up on how best to store produce. For instance, we have an article on The Dollar Stretcher on just that subject. 

    Manage your pantry or wherever you store your groceries at home. Know what you have. It's easy to push items that you don't often use into the back of the shelf and forget about them. But that's not frugal! Keep a list of the unusual items in your pantry. Look for recipes that would consume them. There are many sites on the web that will let you search their recipe database for a specific ingredient(s). One of my favorites is Recipezaar.com. You're bound to find a recipe that will be a family adventure. And, if you can't find a recipe for your family, instead of letting the item go bad on your shelf, give it to a friend or neighbor. Let them use it. Hopefully they'll return the favor some day.

    Rotate your pantry. If you want to be able to grab the can at the front, you'll need to put new purchases in the back. Some go so far as to mark on the package when they bought an item so they can be sure to take the oldest one first. 

    Don't forget to rotate your freezer, too. Most fresh meats will last for months in your freezer. Other items have their own limit for time in the freezer. Know what's in cold storage and look for recipes that will use the older items. 

    Use your leftovers creatively. I'm not sure when 'leftover' became a dirty word. For the most part they're just as nutritious, just as filling and tasty as the first time out. If your family hates leftovers you're going to need to become an expert in portion control or you'll waste a lot of food.

    Fortunately the freezer and the microwave can transform leftovers into a real asset. Not only will you reduce your grocery bill, but you'llspend less time in the kitchen or the drive-thru line at the fast food joint.

    At the end of the meal store your leftovers so that they'll be convenient to use. Many families are using leftovers to create their own frozen entrees. They'll take a paper plate and add a portion of each of the items served that night. No need to buy expensive frozen entries from the store. Now you have great meals waiting for you in your own freezer. Smart families stick an inventory of meals under a fridge magnet on the freezer door. Each item lists what's in the meal and when it was prepared. Makes it easy to 'shop' for just the meal you want. 

    Other families find that leftovers make great lunches. They'll package leftovers to make it easy to put them in school or work lunchboxes. Many lunchrooms have microwaves so it's easy to reheat that special lunch you've brought from home.

    Limit the use of restraurants and when you do eat out make use of 'doggie bags'. Most restraurant portions are too big. So unless you want to see your waistline grow, it's foolish to eat everything on your plate (regardless of what your Momma may have told you). But just because you don't want that food to go to your waist, doesn't mean that it has to go to waste! Plan on taking it home. There's nothing high class about wasting food. And, nothing to be ashamed of if you ask for a box to take it home. Just don't forget that it's in your refrigerator and needs to be eaten soon.

    So there you have it. Most families can reduce their food bill by 10% or more. Without doing anything drastic. Without depriving themselves. All that's necessary is creating a few new habits. And, that's something that I know you can do.

    Keep on Stretching those Dollars!

    Gary 

     

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Gary is a former financial planner and purchasing manager who edits The Dollar Stretcher website <www.stretcher.com> and newsletters. You can follow Gary on Twitter.com/gary_foreman
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