This particular one-minute clip features four extreme cheapskate tactics:

• Cutting open toothpaste tubes to get at the last bit of toothpaste
• Sharpening the blades from disposable razors on the striking surface of a box of matches
• Pulling apart two-ply toilet paper to get two one-ply rolls
• Hanging up paper towels to dry

Life is a giant exercise in opportunity cost

Learning how to do more with less, and how to get by with less, is a great skill to learn.  What happens most of the time with doing more with less, though, is that it takes precious time to do more with less.

TLC ends this clip with Roy, the money saver featured in the clip, saying the following:

“Toilet paper is a lot like life in general.  The closer you get to the end, the faster it seems to go.”

I’ll give him clever points for that statement, but am I the only one who thinks that this statement drips with irony?  There is an opportunity cost associated with every activity we do.  The time that we spend doing one activity we can’t spend doing another.  The time we have is irreplaceable, and is consumed at the alarming rate of twenty-four hours each and every day, never to be consumed again.

Or, put another way:  You can make more money, but you can’t make more time.

To apply this to the activities in the clip, there’s a point of diminishing returns for these activities.  Cutting a tube of toothpaste open when the tube is almost empty is probably all right.  It takes two seconds to cut the tube and another ten to wash the toothpaste off of the scissors.  Sharpening a disposable razor on a matchbox is probably fine if you do it right.  Keeping it in a glass of mineral oil probably works too.  Splitting up a roll of two-ply toilet paper is borderline too much.  I mean, it works, but … ?

Reusing paper towels, though, seems way more trouble and time for the potential gain.  Roy says that he’s saved $2,000 over the past ten years on paper towels alone.  Let’s take this at face value and call it $200 per year.  First off, that’s a lot of paper towels anyway.  We buy maybe two big packages a year for $40 total.  Secondly, what about a package of shop rags?  Those would last for years and they’re meant to be re-used.  (Isn’t the purpose of paper towels to throw away the germs?)  Or go even cheaper and use old cut-up shirts.  Lastly, and most importantly, it looks like a part-time job wringing out and hanging that paperware on that makeshift drying line in the living room.  Just the time spent squeezing another three to five uses out of a paper towel means that he’s working for about 1.4 cents per hour.  (Approximately.)

“Making it do or do without” is fine, but doing so shouldn’t fly in the face of common sense, should it?

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It’s natural to want to put on a flashy looking meal that looks and tastes delicious, but by the time the big day rolls around, most of the budget has already been blown on filling little Johnny’s stocking with awesome electronics. The good news is that Christmas dinner can be done on the cheap, and none of it involves stealing or shooting the neighborhood pigeons.

It’s human nature to want to wrap the presents in sumptuous paper with a massive bow on top, but that type of packaging doesn’t come cheap. The same can be said for food makers, all of whom put their products in packages that are designed to catch your eye and make you buy. But the packaging is no indication of the quality of the food inside. You can save yourself a fair amount of cash, simply by ditching the gold trimmed paper, and buying a less extravagant looking package of the same food.

Oftentimes the dinner party gets started with some little snacks or finger food, and while most of those are available in the frozen, pre-packaged section of the supermarket, you can save a ton by just making them yourself. Canapes are a perfect example of a food that’s expensive to buy packaged, but cheap to make at home. Your dinner guests will love that you made the effort to do a little cooking DIY. It’s also smart to keep in mind that your guests will be doing a lot of eating throughout the course of the day, so keep the dinner fairly simple and stick with a couple of sides, rather than offering all the trimmings.

Try not to go too overboard when you are buying the food you need. Avoid pre-packaged food as much as possible, and don’t go for an ostrich-sized turkey when you know that a good portion of it will end up in the trash, or as permanently uneaten leftovers. It’s understandable to want to make sure that your guests get enough to eat, but allowing a Tiny-Tim-sized amount of common sense to prevail will leave your wallet thanking you for weeks to come. The same rule applies when it comes to drinks and desserts, as in most countries it’s expected that guests will bring a bottle of wine or some sort of candy treat with them. By all means pick up a couple of items, but let your guests do their share too.

Christmas is a time of giving and sharing, but you can easily do that without having to take out a second mortgage on your home. Guests are usually always friends and family, and they will be delighted with the effort that you have made to feed them, even if it means they don’t get both mashed and roasted potatoes.

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Personal finance authors have it pretty tough these days.  With so many personal finance books on the market, it’s always a challenge to present a unique view on the topic.  Some of the (small number of) critical reviews (one- and two-star reviews) of this on Amazon mentioned that the advice given in parts of the book was nothing new.  But I don’t hold that against any personal finance author, because good personal finance advice truly is “nothing new.”  Spending less than you make will always be good financial advice, and it always has been.  Of course.

Approach a new finance book looking for that one good idea

Given that some of the stuff will be things that you’ve heard before — like “live within your means,” “pay off your debts,” “embrace the magic of compound interest,” etc. — treat the book as a treasure hunt.  Look for new spins on parts of the topic.  Look for that One Good Idea that will more than make up the cost of the book — maybe pay you back hundreds of times.

The book has eighteen chapters:

1. The Savvy Life Philosophy
2. The Golden Rule
3. Savvy Habits
4. You Can Afford It
5. Where We Spend Our Money
6. Home
7. Entertainment
8. Wardrobe
9. Beauty
10. Food
11. Money
12. What is Important to You?
13. Savvy Shopping
14. Celebrity Savvy Life Role Models
15. The Core of the Savvy Life
16. Tricks to Stay Motivated
17. Your Savvy Life
18. Favorite Resources

(I’ll let you in on a confession.  I didn’t spend a whole lot of time on the Beauty chapter.  Now that that’s out of the way …)

Different people will resonate with different chapters of the book.  For me, it was the chapter on food.  What hit me right between the eyes was this statement on page 138:

There is no longer an excuse of not knowing how to cook.

That knocked me back a couple of feet, because I really don’t know how to cook, and I know how easy it is to grab a sub at Sheetz, or grab Chinese at my favorite takeout place.  But knowing how to cook really does make a big difference.  My parents know how to cook — both of them.  And they both happen to be quite well off now.  I know there’s a connection between how much you eat in and what your net worth is.  So this chapter gave me several good ideas on tackling the problem of eating out too much.

The other “good idea treasure trove” was the chapter on Home.  One example related directly to the chapter on Food:

Keeping a clean home also helps save you money.  When the kitchen is clean and there are no dirty dishes in the sink, it’s much more inviting to cook.

So after reading this I try a little more to stay on top of the dishes — and the kitchen in general — to make it more inviting.  And it also brings a small improved sense of control, which feeds positively on other areas.

Overall, I enjoyed the book.  It doesn’t take a whole lot of new stuff in a book for it to be worth my while.  If I get a good idea out of the book — and I got several out of this book — then it’s worth my time.

And I think that Living the Savvy Life will be worth yours as well.

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Email-is-forever lessons aside, this suggestion from Ms. Bourne was interesting:

No-one gets married in a castle unless they own it. It is brash, celebrity style behaviour.  I understand your parents are unable to contribute very much towards the cost of your wedding . . . If this is the case, it would be most ladylike and gracious to lower your sights and have a modest wedding as befits both your incomes.

A couple of things I’ll say up front before I shoot off my mouth and live to regret it:

• I’m a guy. Even though two people are getting married and even though they both have to say “I will” at the appropriate time, let’s face it:  It’s about the bride, and getting things right is usually more important to the bride than to the groom.  The wedding day might have been a decade or more in the making emotionally for the bride.  Probably not so for the groom.  This may be a stereotype but I don’t think it’s terribly far off.
• I had very few opinions about how the wedding or the reception should play out. Probably more so that even an average guy I was very hands-off in planning my wedding.  My wife and her mom did almost all of the heavy lifting for planning the wedding and reception.  At the time, I honestly couldn’t have cared less what type of flowers were decorating the sanctuary, or whether the wedding invitations were written in 9-point or 10-point.  (I just knew that I wanted to exit that day married.)
• Money wasn’t an issue at the time. Neither side was strapped for cash, so we didn’t feel like we were

So, having said all of that, and even if every other statement in that email was completely out of line (hint: yes) … should they have considered skipping the castle and having a more modest wedding?

Weddings don’t have to cost anywhere near five (or six?!) figures

My mother told me about a couple that had gotten married in her church.  They were of very modest means, and had a very limited budget for their wedding.  All of the traditional ingredients of the wedding were there:  decorations, wedding dress, reception, etc.  These things were all done on a budget, and my mother (and perhaps others) saw this, but it mattered very little.  It was clear that the whole day was planned thoughtfully and with as much attention to detail that would have been put into a wedding that cost twenty times as much.

The emphasis was on the marriage, the celebration, and the people, rather than the bells and whistles. Ultimately, that’s what the main point is, right?  Isn’t everything else just a giant, heavily-marketed, often insanely-overpriced consumer good?  At least some thought should be given to reining in the cost.  Even more thought should go into not borrowing for it.

The mother-in-law is stressful enough.   Don’t add money issues to the mix if you don’t have to!

(Feel free to send this post to five of your closest friends. )

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“Since when?!” she piped up.  I had thought new paperbacks were $6.99 or $7.99.  I knew they were at one point, but that turned out to be ten years ago.  New paperbacks are usually well over $10 now.  (Shows you how often I pay attention to the prices of paperback fiction.)

That’s pricey, but that’s probably the highest price I’d pay: the list price on the back of the book.  Here’s a list of places to get books, ranging from highest to lowest price (approximately):

• Retail, in a chain bookstore. This is the Borders price for a new book that isn’t a recent release or otherwise on special.  It’s the price on the back of the book.
• A discount seller like Amazon.com. Usually you can get a better price here for a new release: 20% or 30% off of the list price.  If you buy the right amount of stuff, or have Amazon Prime, you can get free shipping as well.
• On an e-reader like the Kindle. Sometimes you can get a break on the price of a new book if you have an e-reader.  Unfortunately most of the very popular books aren’t much less expensive in electronic form than in print form.
• A used book store. You’re likely not going to get the newest books, but you can get fairly recent books for Amazon prices.  There may be a few dog ears on the pages, but the words are still there.
• Used on Amazon. Amazon.com also has links to sellers of used books.  The price might be fairly good but there’s not much way around the shipping: $3.99 for a book.  That takes a bit of the fun out of it.  For more expensive books this could be only a small difference, though.
• Library book sales.  My wife enjoys going to these.  Our local library culls its collection of duplicates and takes donations of books as well.  The prices are really good:  $2.00 for five paperbacks, slightly more for hardbacks.  During the last days of the sale they’ll sell you an entire bag of books for $1.
• Borrow from the library or from a friend. This is free (as long as you return it on time!)  You might be waiting a while for a popular book, though.  There’s where the price is: your time, both waiting for the book and getting it in the time frame allowed by the library’s wait list.

What the price boils down to is how fast you want to have the book. If you want it now, you pay more than if you want it later.  If you want it the second you see it in Borders, you’ll pay the most.  If you borrow it at the library months or years later, you’ll pay the least.

The choice is yours!

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Sounds fun?  Not in the slightest?  Yeah, it really doesn’t sound that much fun to listen to the radio instead of downloading MP3s, or heading to the library instead of heading to the bookstore.  Booorrrr-ing.

Frugality is like exercising … a pain in the gluties

Fitness icon Jack LaLanne died this January at age 96.  The odds of a male born today reaching 96 are well under 1%.  Considering he beat the odds so handily, and that he was fit through the day he died, you’d think Mr. LaLanne loved exercising, right?

Not so:

Mr. LaLanne said that working out was “a pain in the gluties. But you gotta do it. Dying is easy. Living is tough. I hate working out. Hate it. But I like the results.“

This realization is at the same time comforting (“Oh good!  He hated exercising too.”) and disheartening (“Oh darn it!  I probably won’t like exercising either.”)  It’s also why most people who struggle with their weight will probably do so for the rest of their lives.  The odds against people losing substantial weight (10% or more) and keeping it off for 5 years are 20 to 1.

Being frugal can be much the same way. It’s boring, and it’s not something that ever really needs to be enjoyed.  To make the analogy with what Mr. LaLanne said, getting into debt is easy, while living beneath one’s means is hard.  Just like exercising every day takes discipline, so does being frugal.  It can be a grind.  But most every thing that is worth doing is a grind.  Playing Guitar Hero is fun.  Learning to play guitar is a grind.

So be boring, be frugal, and enjoy the results!

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“What?!  Of course the Mighty Bargain Hunter is frugal!” was what I was thinking.  But he continues:

“Don’t get me wrong, we cheapskates like to get the best possible value for our money.  So yeah, when we shop, we do our best to scope out bargains.  But the difference between a cheapskate and a bargain hunter is that cheapskates generally don’t like to shop.”

(The emphasis in that quote from Jeff Yeager’s book is mine.)  I guess I fall somewhere in the middle.  There are times I enjoy shopping, and other times I don’t.  I enjoy shopping most in places that things are already very good deals:  thrift shops, garage sales, pawn shops, auctions, and the like.  I shop for clothes only when I absolutely have to.  (So maybe I’m a bargain cheapskater?)

How retailers win half the battle

Deep down, the truly frugal realize the power that advertising has on people’s perception of needs and wants.  Deep down, they know that businesses have won half the battle the moment they walk in the store.  Because once they’re in the store, they get bombarded with scientifically researched end-caps, colorful signs, strategic product placement, helpful smiling employees offering you free samples.  (First one’s free, kid!)

Businesses have to hit people with both barrels the moment they walk in the store.  The capital investment tied up in these stores is enormous.  They have to work as hard as they can to get that credit card out of the wallet.

But what do they do to get people in the store in the first place?  Deals, and lots of them!  Coupons.  Special sales.  Preferred customer status.  These are cold calculating moves, too.  Businesses have already factored in the cost of coupons in their pricing.  They’re still doing just peachy even when they sell an item for 25% off.  Limited time special sales create a sense of scarcity and urgency.  (“One day only!  Don’t miss this blowout!”)  And if someone has reached preferred customer status, well, they’ve probably already spent a ton of money, so it’s a no-brained to throw them a bone to get them to spend even more.

In short, bargains are the retailers’ way to hook people, get them into the store, and get them to buy things they might not buy otherwise.  What’s more, they just appear to be bargains!

How the cheapskate can bargain hunt with a clear conscience

Again, Yeager says that cheapskates like to get bargains.  (Who doesn’t?)  I think the key is that they don’t let the marketing weasels cloud their judgment. They have a list of things that they want to buy, but (a) it’s usually a short list, (b) they stick to it, and (c) the purchases aren’t urgent ones.  Let’s look at each one of these:

• The list of to-buy items is short. If it were long, then that would mean more money out the door, and truth be told, frugal folks make do with a lot less than most, and they enjoy having less stuff to burden them.
• They don’t deviate from the list. Just like it’s a great idea to shop at the supermarket with a grocery list, it’s a good idea to have a list when going into other stores as well.  Unless something is a true screaming bargain that is something that they forgot they needed or could use — which is very different than not realizing that they needed it — they stick to buying what they came for.
• They can wait to buy the items. Retailers love people caught between a rock and a hard place.  Why else do the price of flowers double on Valentine’s Day?  They typically plan ahead enough that they can look around for the best deals.

Conclusion?  Bargain hunting and frugality can go hand-in-hand, but only if frugality is the stronger driving force for the purchase.

What are your thoughts?  How do you balance bargain hunting and frugal living?

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It’s always a challenge to put a unique spin on frugal living, because the ever-present theme of “living below your means” tends to be as exciting as watching a couple of pennies turn green.  Mr. Yeager wrote a book on frugal living that was fun to read.  Mr. Yeager is a lively writer with a delightfully corny sense of humor.  The bulk of the book is his conversations with various and sundry cheapskates across the nation and the lessons we can learn from them.  Throughout he’s peppered “Cheap Shots” — little money-saving tips to which he’s affixed a dollar amount for the savings that you, the reader, can realize by carrying through.

The book has sixteen chapters:

1. The Phrenology of Frugality: 16 Idiosyncrasies of the Cheapskate Mind
2. Good Habits Are Hard to Break
3. Money Management, Cheapskate Style
4. The Oxygen Mask Approach to Raising Kids (think airplanes here)
5. Thrift: The Greenest Shade of Green
6. Clean Your Plate . . . and Save $1,500 a Year
7. Come on and Take a FREE Ride
8. We Can’t Retire.  We Went out to Dinner Instead.
9. The Joys of Horse Trading
10. Break the Mortgage Chains that Bind Thee
11. Bon Appe-cheap! Come on into the Cheapskate’s Kitchen
12. Don’t Laugh.  It Gets Me There . . . and It’s Paid For.
13. Cheapskates Come out of the Closet
14. Insurance: Betting on Yourself
15. Cheapskates Just Wanna Have Fun
16. Back to the Future?

Everyone picks out different nuggets from books with a lot of good ideas in them, and this book is no exception.  Here are a few that rang true with me:

• Buying things made out of 93% post-consumer waste isn’t green. Not buying the stuff in the first place is.  Daniel Newman, a person Yeager quotes in the book in Chapter 5, page 103, said: “Cheap equals green.  I’d go a step further and say that cheap is the only green.  It’s not about consuming green products.  It’s about consuming less.”
• “Don’t sell yourself short by naming a price.” (Chapter 9, page 139) This is in reference to haggling, and hearkens back to when I read Roger Dawson’s Secrets of Power Negotiating: The first person who speaks loses.  I recently bought a drum set from a pawn shop.  The marked price was $450.  If push came to shove I’d probably have paid $425, but I asked the guy what he could do on the set.  He came in at $325.  I would have paid $100 more than I needed to if I had offered my price first.
• “Shopping isn’t a cheapskate sport.” (Chapter 1, page 25-26)  This one hit me at my core presents on The Interwebs:  “There’s a common perception — a misperception, in my experience — that “cheapskate” is synonymous with “bargain hunter.”  Ouch, that hurts a little bit.   But the point is well-taken: The drive to not shop at all is more cheapskate-ly than the drive to shop for the best price.

I recommend Jeff Yeager’s book The Cheapskate Next Door.  No doubt just one good idea that hits your thrifty bone in the book will pay for the book many times over.

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At our other house, we were charged a flat fee for usage under a certain number of gallons every two months.  We never hit that amount, so our water bill was always the same, and we didn’t have to be super-careful with what we used.  Not that we went out of our way to waste it, but water conservation was off of our radar because it didn’t impact us financially.

Now, though, the sewer charge is based directly on our monthly usage: the more we use, the more we pay.  Being a bit more careful with water is back on the radar again.

Enter Sesame Street with a water conservation message

My daughter and I watch little clips on YouTube.  Sesame Street has officially put a bunch of their clips up, and one of them was this one dealing with water conservation. It’s pretty cute (if a little bit exaggerated).  Basic idea is that a kid leaves the water running while he brushes his teeth and washes his face.  While the water goes down the drain, the water level in a lake goes down, threatening the fish that lives there.  The fish calls the boy up on the phone and asks him not to waste water.

Now, when I catch my daughter leaving the water running, I tell her to “remember the fish” and she knows exactly what I’m talking about.  Hopefully it won’t be too long before she remembers the fish all by herself.

Time spent getting kids to be more mindful of conserving rather than wasting is time well spent.

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Here are some of the types of things I bring, and do, to avoid trips to the fast-food restaurant or the snack room.

• Rice and beans. This dish is super-easy to prepare.  I have a rice cooker that is pretty much set and (almost) forget.  The (dried) beans I let soak for a day or so and then cook the night before.  I have a pepper grinder at work that adds flavor to this dish.  All told, each meal cost maybe a dime, and I can eat this regularly.  I pop the two containers (the rice, and the beans) in the refrigerator, and microwave it as I need.
• Corningware 20-ounce French White mug with lid. I love this thing. It’s big enough to heat up a decent-sized serving of just about anything I’d want, and it has the lid to keep stuff from spattering all over the microwave.
• “Costco-size” containers of nuts, cranberries, dried soybeans, etc. I’m probably shooting myself in the foot (weight-wise) a little bit by having this much food at work, but the food itself is healthier than a candy bar, and it’s cheaper per serving as well.  If I buckle down with the calorie counts, I can scoop out a few servings and bring them into work with me so I don’t have quite so much food in front of me.
• A couple of bananas. Bringing in a full bunch of bananas is problematic because fruit flies come around very quickly.  But a couple is a reasonable amount to eat in a day.
• Oatmeal. I’ve talked about this one before. This stuff is less than a buck a pound, and “sticks to my ribs” pretty well.  Add some cinnamon (11 ounces for $4 at Costco) and brown sugar ($5 for a 7-lb bag at Costco), and it’s great.
• A 12-pack of canned soda from the grocery store. Even a 12-pack at full price (I’ve seen them nearly $5) is still half the price of a soda out of the vending machine.  It’s not that difficult to find them for half that.  I don’t mind the generic brand, so it’s cheaper still.
• Brewed coffee in my Stanley vacuum bottle. I recently had to change buildings, and had to leave my killer of a coffee club:  $2/month, all I could drink.  That was a sad moment.  So, when I can remember, I brew a pot of coffee at home and take most of it to work.
• A gallon or two of water from the Pur filter from home. The tap water isn’t the best around here, so I bring my own, either to drink straight or to make instant coffee.

You’re welcome to take or leave these; I’m sure my tastes aren’t the same as others’ tastes.   If you have something else that works, what do you do to combat the munchies and avoid the vending machines at the same time?

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