Getting a bolstered emergency fund is a great idea now.  (It usually is, but now especially.)  One way to get to a decent cushion is to spend less so that the extra can go into savings.

Many kinds of expenses can be cut, but the easiest ones to eliminate are ones that you probably won’t miss anyway.  Expenses like the following:

• Seasonal expenses. Are you paying year-round for an activity that you only do in the summer (or winter)?
• Hobby-related expenses for a hobby you’ve lost interest in. Maybe you were gung-ho about scrapbooking, and the stamp of the month delivery just goes in a drawer now because other things have become more important.
• Job-related expenses that aren’t necessary anymore. Say your last job required membership in certain professional societies, or more likely, required a certain kind of dress or appearance.  Or perhaps you’ve moved from up-front sales to more of an office job, and the wardrobe that was necessary for dealing with customers all the time isn’t needed anymore.
• Any luxury that doesn’t deliver like it used to. It could be a monthly massage, a monthly trip to The Melting Pot, premium movie channels, etc.

The Frugal Lawyer saved money on some little things that she admitted weren’t that important, like eyebrow threading, open-toed shoes, and magazine subscriptions.  She observes:

These aren’t huge savings, but the little amounts will add up over time.  Particularly if I am putting the extra money into savings or toward paying off debt.  I’m still looking at my regular spending to find other things that I can trim from the budget.

Little things do add up. What irrelevant expenses can you cut out of your spending?

Update: Thanks to Amateur Asset Allocator for including this post in the Money Hacks Carnival!

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I tell you:  It just doesn’t pay to be human anymore.  Big or small.

I’m well aware of how being fat costs money.  But there are now rumblings on the possibility of the following:  If an individual, or family, can reasonably afford health insurance, but does not get it, they face the possibility of being fined: $950 for an individual, and up to $3,800 for a family.  (These are the current numbers as of 9/9/09.)

Presumably the people that would opt out of health coverage would be healthy people, right?  Those that take care of themselves and go to doctors for maintenance visits only?  Either that, or people who are rich enough that they not only don’t need health insurance, but can also pay out of pocket to get treated correctly, and immediately?

You’re fined if you do, and you’re fined if you don’t. You pay to play the game, and you pay to not play the game.  “Make your choice.”

Just in case this appears too lucrative for the insurance companies, with all of the extra business driven to them because consumers were made offers they couldn’t refuse, they’re not off the hook.  As of now (9/9/09), there’s a $6 billion tax that’s in the works for them.

When you hear “health care reform,” think of stuff like this.  Think about whether this is going to help things or hurt things, and for whom.  Think about who’s going to get soaked in the process.

Then, plan accordingly.

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Usually, a promotion at work is a good thing — more money and more prestige — but it’s not always welcome.  It could infringe on family time with extra hours, or take a toll on health and well-being with added stress.  Or, it could place people in hard ethical situations.

What should you do if you are offered a promotion at work, but aren’t really looking forward to it because it will be long hours and lots of tedium?  This article recommends saying “no” to the promotion.  Not only that, but making it pretty clear that you don’t want to be considered for similar opportunities when they come up.

Turning down a promotion just because it looks to be inconvenient isn’t wise. Maybe it made more sense when the economy was humming along and jobs were easy to come by, but not now, and not for a while.  A maneuver like this is a good way to get on the short list of people to be let go, and this is not the time to be let go from a job.  This is a time for keeping on top of your income streams.  A lot of other things fall apart if your income goes away.

This is a time to become more valuable, more flexible, more productive, more of a team player at work.  Turning down a promotion for personal convenience makes you less valuable, less flexible, and less of a team player.  So I wouldn’t do that.

Saying “no” to claims on your wallet are fine, though, and the article has a few good ones:

• Saying “no” to letting your third cousin’s date attend an expensive wedding reception
• Saying “no” to chipping in for a colleague’s birthday when you really aren’t friends with them
• Saying “no” to a friend asking for a loan
• Saying “no” to letting a friend borrow your car

Bottom line for hard times:  Keep the money coming in, and keep the money from going out.

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My wife and I rode up to New York State yesterday to visit my parents.  She asked me on the way up, “So what are your big plans for this long weekend?”  I didn’t really know but I knew it would involve (a) seeing my three-week-old niece (who is absolutely adorable by the way); (b) helping my father with some nagging computer issues, and (c) posting a few things for y’all.

This is also a trip back to my home town, and it reminded me of my sophomore year in high school (among other things).  I had a paper route through high school, and it brought in (maybe) $50/week at its best.  (Christmastime was a bonanza: something like $200 in gifts.)

Well, my sophomore year I got in the habit of stopping at the arcade most days after school, or having pizza, or something like that.  Most of the money I brought in went out.  At some point my mother asked how my savings account was going.  When it wasn’t much higher than it was at the beginning of the year, my mom made her point.  “Pretty much everything you earned is gone.”

At the time I just thought, “Oh well,” and I suppose in the grander scheme of things it’s a fairly cheap lesson to learn how easy it is to spend all the money you have at your disposal when there are no real consequences to other people at the time.  (The money was basically spending money; the real needs of my family were easily, and quite nicely, met.)

Fast forward twenty years.

Twenty years.  That’s a lot of time for compounding.   But I wasn’t thinking of things in those terms.  At best I was thinking about saving up for some big expense I was going to incur, but I didn’t really know what that was.  Later, when I was in graduate school and draining my savings account because my stipend barely paid for my dorm room, it might have been nice to have a little extra money then.

There is absolutely no time better to save money that when you’re young.  But this goes counter to what seemed important to me at the time, which was fitting in, hanging out and doing things with friends, buying CDs that I thought would make me cool, blowing off steam playing Gyruss, whatever.  I wasn’t comprehending that these activities would cost me more of my future earning power than they do now.  But time just marches on, and either my money’s working for me — and continues to work for me — or it works for the guy who enabled me to rot my brain a little bit more.

It’s true that we’re only young once, but eventually we’ll be too old to work, and it will make more things more comfortable, or at least more tolerable, if the money is already there when it can’t be earned anymore.

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Not necessarily the kinds that make them financially rich, but things like piano lessons, dance lessons, Tae Kwon Do, etc.

A good friend from church was recalling a story that their new piano teacher told them about another one of her students.  This particular teacher demands that her students practice on a real piano.  (Aside: I didn’t agree with this initially but I can see her point.  I’m not aware of any electronic piano that can substitute for the action of an authentic piano, since regardless of how good the sound coming out of the electronic piano is, without the action of the hammers and the dampers, it won’t feel and respond like a real piano.)

Anyway, the parents of this one student were pretty well-to-do, so they went all-out.  They bought a Steinway grand piano — which costs as much as a luxury car — and built an addition onto their house to display it properly.

The student quit piano lessons within two years.

This was an extreme example, and more than a bit sad for the parents, I bet.  My friend is running into the same issue, since they have an electronic piano and have about nine months before they have to go acoustic in order to keep going to this teacher.  So on top of the expense of the lessons (not cheap) they will need to get a different instrument (also not particularly cheap, though they can probably get by for a few hundred dollars if they find a decent upright piano used).

These next nine months give my friends the opportunity to see if their daughter will stick with piano.  She responded well to this teacher, and it may be true that all it takes is a good teacher that knows how to connect with the students and motivate them.  If their daughter sticks with it and responds well to the teacher, that’s great.  They’d be doing a wise thing by nurturing that talent.  If the interest falls off, that’s also good.  They’d be doing a wise thing to not spend money on an instrument that wouldn’t be used that much.

Parents: Here are a few questions to ask yourselves about whether to spend money on lessons for your kids:

• Do they practice without being nagged?  Being a self-starter is an indication of interest and a desire to get better.
• Do they forego other activities willingly to practice?  This also indicates desire to improve.
• Can the same instruction be gotten more cheaply?  If the child is a real self-starter, they may not even need private instruction.  There are DVD sets for guitar and piano (for example) that cater to students who want to teach themselves.  It’s about $250, once, for all of the DVDs, and if they’re followed properly the child will be a darn good guitar player.  (This is true about many other things, including mastering a subject.)

It’s certainly a good idea not to let your kids give up too early because they might just be in The Dip but when it’s time to quit, it’s time to quit.

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