Location is everything in a grocery store

Which items at a grocery store are marked up a little higher than the rest?  Here is an easy way to tell.  if the item is on an end-cap.  that is the space at the end of each aisle, those items are marked up.  That is prime real estate in the grocery world since there are no other products distracting your attention from them. Sure, on occasion these items may be on sale.  Most likely not.  The manufacture of these items are paying more for that prime real estate.  Who actually pays for that real estate?  You do.

Here is another no-mans-land in the grocery store.  Any item place between knee and shoulder height are marked up.  These shelves are easy to see and reach.  Look for items above your shoulders and below your knees for the best prices.

Before You Add Additional Expenses

Some friends of ours came to a really good decision today.  Often they would tell us about their financial difficulties.  We listen compassionately, but also we know in the back of our minds that their financial decisions , and no one else's, is the cause of their financial stress.  Today they made a very wise decision.

For the last few weeks, they have been telling us about the new dog they were going to get.  Everybody who knows me know that I am an animal lover with a weakness for dogs.  There is one sitting on my lap right now.  We generally encourage all homes with love to give to go to their local shelter.  There is no love in the world like that given by a rescued dog or cat.  With our friends though, this would not have been a good decision.

Just one of my dogs cost $400 a year in medical expenses.  That does not include food and treats.  Our dogs are part of our family and they give far more than they take, but they do take fiscal responsibility.  Far to often I read on the Facebook page of our local Human Society about animals whose owners could not afford to keep them.  Cats and dogs that have been with the family for 10 years having to be given up.  It is very sad and the animals do not know why they have been separated from their pack.  They do go through depression.

In short, before you do anything to add to your monthly expenses, get your financial house in order.  If you struggle to pay the bills, do not add to them.  This will only increase the stress on you and your family. As for our friends, they decided to focus on getting their financial house in order, then add to the family.

What is price per unit?

My wife and I were at a home improvement store to buy some stain for our fence.  We like to maintain the assets that we buy so we wanted to make sure our fence looked new when we sold our house.  I knew that the fence would take between 4 and 5 gallons of stain to complete.

At the store we found the color we liked and noticed that the stain came in 1 gallon and 5 gallon cans.  Which on was cheaper?  Most of us have a smart phone with a calculator on it.  I simply pulled out my calculator and figured out the price per unit.  In other words, was it cheaper to buy five separate one gallon cans or a single five gallon can?

I took the price of the 5 gallon can and divided it by 5.  This told me to cost of the price per gallon.  I then compared the price I just calculated to the price of the 1 gallon cans.  The 1 gallon cans were saving me $.10 a can.  Not much, but it does add up over time.

If you do not have a calculator or paper and pencil on hand, just ask a store attendant.  In the home improvement stores, they have calculators everywhere.

A few Coupon tricks

Manufactures want you to buy their products, but they also know that we are creatures of habit.  Manufactures know that they must find a way to lure you away from your habits of purchasing someone else's brand of fish sticks to get you to buy theirs.  How do they do it?  With coupons.

I’m not suggesting that you start dumpster diving to get mountains of coupons for products that you will not even use.  I’ve seen those extreme shows where die hard compounders spend more time planning a shopping run than actually going to work. Just use the coupons for the products that need that pop up right in front of you.

As always, go to the grocery store with a list that you intend to stick to.  When you get to the store, pick up the in store flyer and see if there are any coupons for the products that you need.  Don’t stick to a specific brand, but be flexible.

When you get to the product that you need, look for two things.  Peelies and blinkie boxes.  A peelie is a coupon that is on the product that you peel off and present at the register.  A blinkie box are those coupon dispenses that hang on the shelf with the product.  compare the prices of all the brands, taking into consider any coupons from the store flyer, blinkie boxes, and peelies. 

You may like a particular brand, but you may also like a brand that you have not yet tried.  Do not develop a brand loyalty.  The manufactures are not loyal to you.  They only want your money.  Spend it wisely.

Planning Your Grocery List

Impulse buying is a wonderful way to lose money.  Impulse shopping runs rampant in grocery stores.  Before going to the store, make a list and stick to it.  If I find that if I need to go to the store for something, I run in, get the items and then quickly get out of there.  This is especially true if I am hungry.  Know what you are going to buy and avoid the rest.  If you need to reduce temptation, move through the safe aisles of the store.  Those are the aisles of cleaning supplies and dog food. Get in, get out, get done.

Use that Rebate!

A rebate is a discount that you have to apply for through the mail in order to get it.  A rebate is used to tempt you to purchase a product and lure you into a store.  The thing about a rebate is that it takes effort and time to get it.  Both of these play into the hands of the products manufacture. 

They rational is that if it takes effort, most people will not bother doing it.  Actual rebate rates are very hard to get information on.  I’m finding that rebates are claimed at the rate of 2% to 80%.  That is a wide range.  The reason for this wide range may be to obscure the fact that this is a profit stream for the manufactures. 

One of the data sets that I looked at stated that nearly half of the TiVo subscribers in 2005 did not redeem their $100 mail in rebates.  The result, TiVo pocketed approximately $5,000,000 dollars. 

If you are considering purchasing a product because it has a rebate, make sure you read the terms carefully.  Many rebates come with requirements to purchase additional services with a required period of time that you must retain that service.

Many rebates require a little effort on your part.  As proof of purchase, you generally need to send in a copy of your receipt, any rebate documentation, and cut out the UPC bar code attached to the product’s box.  Yes, the actual code, no pictures or photo copies.  It looks like this.

So, is it worth the effort?  Everybody's choices and situations are different.  If it is a simple mail in with no strings attached, go for it.  Let’s check the value of your investment in the time it takes to sign the form, cut the UPC code, and drop it in your mailbox.  That should consume no more than 10 minutes of your time.  To let you know how much money you are making, take a look at the table below.  It simply shows you the rebate amount and how much that time spent equates to a salary per year working 40 hours a week.

Amount of Rebate	Annual Salary Equivalent
$10	$124,800
$25	$312,000
$50	$624,000
$100	$1,248,000

So, for all you TiVo subscribers out there who did not mail in your $100 rebates, for a brief 10 minutes of time, you missed out on working a job that had the equivalent of a 1 million dollar a year salary.  In the process of not redeeming your rebate, you made some stock holders very happy.

Eat Before Getting Groceries

Have you ever noticed that if you go in a grocery store hungry, you come out with a lot more than you were planning.  Grocery stores love hungry shoppers.  Doing some online research, I've found the hungry shoppers spend an average of 15% more on food then non-hungry shoppers.  Take a look at the time of day you go shopping for groceries, change your grocery shopping time to just after a meal.  If you spend $200 a week on groceries while you are full, you will spend an extra $156 a year on food you do not need.

Be smart, shop full

Smart Choices

Today my wife and I decided that we need a new bed.  OK, we have known that for a long time.  We have been looking at the expensive memory foam mattresses and we found one that we liked.  Before buying we asked ourselves if we really needed such an expensive bed.  We went to a mattress store and started sampling.  It did not take long until we found something else that we liked just as much.  $6000 in savings later, we have a new bed. 

Don’t be afraid to shop around.  The $6000 that we did not spend because we looked around is staying in the bank and being put towards a down payment on a new home.  A much smarter investment.

Buy 2 for $3

If I go to the store to buy 1 avocado, I often see a deal for “Buy 2 for $3”.  I do not need two, I only need one. Very often you only need to buy one to get the savings.  Instead of costing you $1.75 for just one, you will only pay $1.50.  don’t fall for this trick.

So, You Got a Rebate.

So you took the time to send in your mail in rebate.  For the last 8 to 12 weeks you’ve been thinking about how you are going to spend that money.  It is going to come as a debit card that you can spend any way you like.  The excitement builds as the day approaches.  You cannot want to feel that cool piece of plastic in your fingers. You dream about sliding that card in the machine and buying something.

So what is the problem with that scenario?  The problem is you are thinking about wasting that money.  Many companies offer rebates to get you to buy their products.  If you are lucky enough to find for a product that you need without strings attached, get it!  Many companies offer rebates knowing that you will most likely not send in the rebate.  They anticipate increased profits based on laziness.  First off, get the rebate.  Second, spend it wisely.  Spend it as if it is already part of your budget.  You received a $50 rebate card and you have a monthly grocery budget of $400, apply the rebate to the grocery budget.  Let’s see, $400 budget plus $50 rebate = $400.  That is right, merge it into your budget not increase it.

Folks this is free money.  Do not blow it on items that you do not need and have not budgeted to purchase.  I’ve watched my shipmates in the Navy get thousands of dollars unexpectedly, only to blow it within days on garbage.  One person even purchased an expensive SUV, only to not be able to afford the monthly payments.  What a waste. Lost everything.

Be smart when free money comes around.

What to do with a Military Discount

A few weeks back, I posted an article for my brothers and sisters in the armed forces to encourage them to use their military discounts.  Here is a question, what do you do with the money that you save?  Here is one suggestion that I am doing….bank it.
For my personal retirement, I have a minimum contribution of $50. I take a look at each receipt that I have and keep a running total of my military discounts.  It may be $.50 here, a $1.25 there.  In the end, it will add up.  What you do with this discount is very important.  Let’s say my discount adds up to $50, three times a year.  Let’s also say that I put that in a mutual fund with a small, 5% annual growth rate.  Take a look at what you will get:

Starting Age	Years until you can collect a military retirement	Total
18	42	$28691
20	40	$23791
25	35	$15369
30	30	$11065
35	25	$7961
40	20	$5542
45	15	$3657
50	10	$2189

How much did this cost each member?

Starting Age	Cost	Gain	Growth
18	$6300	$22391	78%
20	$6000	$17791	74%
25	$5250	$10119	65%
30	$4500	$6565	59%
35	$3750	$4211	54%
40	$3000	$2542	45%
45	$2250	$1407	38%
50	$1500	$689	31%

It clearly shows that the earlier you smartly invest your military discounts, the more money you will have at retirement.  Do not rely completely on this method.  Remember to contribute to your Thrift Savings Plan as much as you can.  The more you put in early in your career, the more you will be able to enjoy your military retirement benefits….like world travel.

Get the airlines to pay you to fly

Today I read that the airlines are reducing your legroom from 31 inches to 30 inches.  The other day I saw a guy who stood well over 6 feet tall on a flight.  I’m sure in high school he loved it.  Probably had a lot of girls on his arm.  Now, his 6 plus feet of hight means he cannot fit into an airline seat.  Those of us at 5’ 6” are still doing OK.

The airlines are doing this to either add another 6 seats in economy, or to add more premium seats.  The airlines are looking to make an additional $150 million dollars off of your discomfort each year.  Well then, if they are going to make me uncomfortable, let them pay for it.

I have a habit of trying to get my connecting flights through some of the busiest hubs in the US.  Some people think I am crazy.  As a matter of fact, I look for the most heavily booked flight that I can.  This is one that more than likely will be overbooked.  This is how you get the airlines to pay for your flight.

Before you do this, do not try it on the last flight of the night.  You still want to make it to your vacation destination. 

As the time for boarding approaches, stand close to the counter at the gate.  If the flight is overbooked, the airline will ask for volunteers to take a later flight and offer you a monetary reward for your troubles.  So, here is the deal.  If you can handle waiting one to three extra hours to take a latter flight, take the deal!  I’m getting $400 each time I give up a seat.  Also, if you are really patent and polite, they may even give you a $10 meal voucher so you can eat at the airport.  I saw a family of 4 each get $400 flight vouchers and $40 worth of meal vouchers.  If you can wait until the next day, you may even get a hotel for the night.

The important thing to remember is to be flexible in your travel.  If it looks like the airline is about to ask for volunteers, position yourself so you can quickly jump in on this opportunity.  When the call comes out an several people head for the counter in front of you, raise your hand and clear say, “I’ll do it!”  Most people tend to stay away from conflict and may stop to let you through.  Their loss.

Enjoy your flight and your extra $400.

Use that Military ID

As a member of the US Navy, my wife enjoy an extra benefit that is not provided by the Department of Defense.  Many businesses will provide a military discount upon request and presenting of your military ID. 

The freedoms that these companies enjoy are because of our form of government and those who are willing to protect and maintain the American way of life.  I once worked for an individual who grew up in Romania.  He was part of the popular uprising in that country that ended communist rule.  He then attempted to open a IT business in the free Romania.  He was not able to compete because he could not bribe the customs officials.  To get anything through customs, he had to pay the legally required fees, but then he also had to bribe the government workers to do their jobs of releasing the equipment.  His competitors had the funding to make the bribes.  He moved to America and now runs a successful business.  He has a successful business because of our strong military and form of government.

Many businesses will give a 10% discount.  All you need to do is ask for a “military discount” or “military pricing.”  Even if the business has not been asked this question before, the manager will often grant a discount.  Whether they do or not, always thank them.  These discounts are not required, should not be expected, and never should be abused. When given, they help military families who send loved ones into harms way, often for less pay then those of us who never serve our country.

Go Watch a Football Game

Seriously, It is football season.  I have the best seats in Lucas Oil Stadium.  Private bathroom, soft padded seats.  They even stop the game for me on demand.  My seats are in my living room.  I’m looking at Colts tickets for $25 a seat.  For a family of 4, that is $100.  You also need to add in the parking.  Around the Stadium you will pay $20.  You also have the food.   For a family of 4, expect at least $40 on food and drinks if you are lucky.  Grand total, approximately $160.  That is for the cheap seats with a coke and a pretzel for each member of the family.  Binoculars not included.

Some of you may have read about my awesome deal I got on my 60 inch plasma TV.  Well, guess what.  The view on my 60 inches of excited glowing gas in high definition gives me a better view of the game then my Dad’s 50 yard line tickets, even with the binoculars.  Let’s face it, an NFL game is a family game, but one that most families cannot afford.

For half that $140 you can have great seats, instant replays, fresh food, clean bathrooms, and not have to worry about crowds and traffic jams.  You can have friends over and enjoy the game in an environment where you are all not stretched in a line where you can only talk to the person next to you.

Watch the NFL, but do it from home.  Don’t worry, the quarterbacks will still make $200,000+ per game without you there.

Look for money saving perks at hotels

This week I set foot in Alabama for the first time in 21 years.  The last time I was here, I was in Space Camp.  I’m not quite in Huntsville, home of Space Camp, but in Montgomery.  I’m staying at a Homewood Suites by Hilton.  Neat thing about this place is the complimentary breakfast and dinner.  This saves me a lot of money. Now I only have to worry about lunch.

When you travel, look out of these neat little perks.  They can help you save some cash.

Want to Save Money? Lose the Weight

Last night I had a very long, drawn out tour of the taxi way at Charlotte Douglas International Airport.  Believe it or not, I actually like that airport.  This was an unexpectedly long wait once we left the gate.  As I sat there completely out of my own reading material, I picked up the Sky Mall magazine to see what the latest Harry Potter/Lord of the Rings “Made in China” scrap they are pedaling.  Mind you, I like all the movies in those franchises.

I came across a page for the Insta Slim Compression Shirt.  For $24.95 – $79.95 (3 pack), you can buy a tight t-shirt to help hide the flab. Of course the model wearing the sliming “wife beater” could have worn a normal t-shirt and looked the same.  Normally overweight people do not have muscular arms. So, let’s quantify this one out.  For a full work week, you would need 5 of these things.  That comes out to somewhere between $124.75 – $159.98 for just 5-6 t-shirts. I just checked out the membership rates for LA Fitness.  They are charging $40 a month.  That means you can pay for 3 – 4 months of a gym membership and get healthy, or keep buying sliming t-shirts.

Here is another observation that I made on my flight last night.  A gentleman who was vary overweight was going to be on the same plane as I was.  Traditionally, I am seated with individuals who, in there mind, fit in the real estate of their purchased seat.  Fortunately, this guy purchased a seat with extra leg room and an empty space for him to lean into where there would not be another seat passenger.  It looked like to me that if he lost the weight he could save in both air fare and embarrassment.  You can do it brother.  Just set a goal and go for it!

Coming of Age

Plastic Money!  Get your plastic money! Step right up.  Easy approval.  Buy now. Why wait for tomorrow.

This sounds like a sleazy used car salesman from the 70’s.  This is a message for you 20 something's out there and you 30 something’s who are still struggling.  It is time to start thinking about tomorrow.  I just hit 40 this year and I have a wealth of financial mistakes on my resume.  I’ve often told my Sailors in the military that it is easier to learn from someone else's mistakes than from your own.  Learning from someone else means you do not have consequences to pay.  Learning from your own mistakes, well get ready to pay.  Learn from mine and those I’ve learned from others.

• You will get old.  It will happen.  My aging moment happened at at 37 while training for a triathlon.  I am now only able to run about 2 miles.
• You will need to retire.  I know what you are thinking. ”I will never get old.”  I have a niece who says that.  She still cannot tell me how she plans on stopping from aging.  Start saving money early.  Many retirements plans allow you to contribute just $50 a month.  That first $50 in your 401K or IRA will be the money that does the most for you for the next 40 years.
• Pay now, not latter.  Credits cards should only be used for building good credit and emergencies.  I use mine, then on the same day I go to my online banking an pay it off.  If you cannot afford to pay for it in cash on the same day, wait until you can.
• Build a nest egg.  Nothing ruins a financial plan faster then an unexpected $1000 repair bill.  This nest egg is not for vacations, Justin Bieber tickets or a new pair of shoes.  Your goal is to never touch this money.  That way if something should happen, it will be there.  It is easier to rebuild the nest egg than to pay off debt.
• Save you a down payment.  Get out of your apartment and get a house.  Home ownership cost just a little bit more than rent.  Here is the difference…equity.  Equity is how much of your home you own.  With rent, you never own anything.  An apartment is like  a bad motel.  You pay to sleep there. There is no room service and you have to clean it.  Start saving with $10 a week.  Increase that by $1 a week until you get to at least $100 per week.  This will teach you to stay focused and to make good financial decisions.  At 5 years, you will have 20% down on a $100,000 home.
• Your education is your best insurance against financial hardship.  Educated people tend to make better decisions and enjoy a higher standard of living.  Many uneducated people want to live like they have a high standard of living, but drive themselves further in debt.  Focus on getting a new skill or certification to help you in your career.
• Once you hit retirement, if you do not have enough money to live on, you can go back to work.  Do not expect to be able to get a loan without placing a significant amount of your assets (like your home) as collateral.  The number of working years you have left will help lenders determine if you are a risky loan or a safe one.  It is best not to need a loan the closer to retirement you are.

Those are just a few lessons.  If you are struggling financially, take responsibility and get out.  The sooner you start, the sooner you will be free.

A little help with the credit card debt

Is you credit card debt a little high?  The government reported this past month the US credit card debt is down, but still high.  I can’t tell how to make that debt magically disappear.  Sorry, you are responsible for your own actions.   Here is a way to help.  Each day of the month, but $1 in a jar.  That is it.  $1 dollar.  Every month take those $1 bills to the bank in put them into your checking account.  As soon as you get home, send an extra payment to your credit card company.  believe me, they will hate you for it.  By reducing your spending by just $1 per day, you will pay off your credit card faster, and in the process keeping more of your money in your pocket.

Credit card companies rely on you paying interest and monthly fees.  The larger the amount you own on your credit card, the more money you will be paying the lender.  If you are currently paying the minimum amount on your credit card, take a close look at your statement.  It will tell you if you pay “This amount, your card will be paid off in 20 years".”  Who wants to pay for a new toaster for the next 20 years?  If you must, continue to send in your monthly minimum payment.  Also, send in the extra $30 you saved.  This extra $30 will go to pay off your principal (the amount of money that you actually borrowed).  This will reduce the interest portion of your monthly payments.  In other words, you are taking money away from the lender and keeping it for your self, in the long term. 

Oh course for this to work, you have to stop using your credit card.  If you do use it, make sure you can send in an online payment that same day to cover what you just purchased.

How convenient is it?

Did you know that gas stations actually make very little on gas?  That is right.  Their cash cow is not on the outside, it is on the inside.  The convenience store is convenient, but you are going to pay for it.  Need a drink, swing into the grocery store.  Need coffee on your drive in? brew it at home.  Need anything, go anywhere but the  convenience  store. 
Have you ever notice how hard it is to pay for anything in the convenience store?  You have to go around the maze of product displays that neatly lines you up into the aisles that have a lot of high fat, high sugar, high priced craving food. Once you get to the cashier, you have to look to find the attendant.  They are hiding behind large piles of impulse buy items.  The stuff from the counter on up is to tempt Mom and Dad.  The stuff from the counter on down is to try and get the kids to beg Mom and Dad to buy for them.
Do yourself a favor….Stay out of the convenience store.

Save on Gas

This is one pain that just will not go away.  Years ago, I fought the $2.00 barrier with everything that I had.  I would coast into the gas station on fumes when I saw $1.99.  Unfortunately, I had to give in.  Soon it was $3 and then $4.  Will it ever end?  Not as long as people are making money off of gas (Speculators).  Here are a few ways to help get more gas with the dollars that you have.

• Buy gas early:  By 10 AM, most gas stations have checked their competitors and raise prices accordingly.
• Buy on Wednesday.  The pick pocketing at the pumps starts on Thursday.  Buy early on Wednesday.
• If you must get gas on the weekend, only get a couple gallons to hold you over until Wednesday.
• Drive smart.  That means coast to a traffic light.  When you break, you dissipate the energy the gas has given your car.  There is no way to get that back.  If you have to accelerate, then you are burning more gas.  If the light ahead is already red or yellow, coast.  If it changes before you get there, you just saved money.
• Do not accelerate fast.  Hitting the interstate? Use that down hill on the entrance ramp to help speed you up.  Take a few extra seconds to get up to speed.  If you tack 5 seconds to get up to speed and stop 15 times on your way to work, it will take you only 1 minute and 15 seconds longer to get to work. 
• If you are about to go down a hill right after a stop, save the bulk of your acceleration for the hill.
• Group small trips around town into one. 
• Make right hand turns.  You wait less making a right hand turn then waiting on traffic for a left.  Plot your errands around right hand turns.  The big shipping companies do this when plotting the delivery routes for their drivers.
• Clean out your car.  You put 40 pounds of water softener salt in your trunk for extra traction in winter.  It is now July.  The more mass in your car, the more energy (gas) it takes to move it.
• Reduce drag.  When going fast, use your air conditioner and roll up the windows.  Remove roof racks also.
• Do you really need to use 93 octane fuel or will your car run on 87?
• If you bought a car that needs any octane above 87, you bought the wrong car.  Buy smarter next time.
• Don’t just jump out there and get a hybrid.  The cost of a hybrid may not outweigh its savings.  Get an idea of how long you will need to have that car to get some financial savings in gas money.  Do not forget to look at the maintenance schedule and the cost of that maintenance compared to non-hybrid vehicles.
• Pick one day a week to car pool with co-workers.  Don’t forget to pitch in a buck or two for gas.  We all have errands to run.  Car pooling once a week saves gas but also forces you to do more errands at once which also saves gas.
• Consider public transportation.  Here in America, we are lacking public transportation.  This week I’m taking the Philadelphia subway to work and walking back to my hotel in the evening.  We need more monorails! (Sorry, off topic).  My other alternative would be a rental car.  I’m only a mile from work. Exercise is free.

Cheap Entertainment

As I travel, I often find myself bored out of my mind.  I know that many of my colleagues go our for a drink ($$) or a movie ($$$). Here is something that can help entertain you and your family while traveling, take in a movie.  Wait a second!  I thought going to the movies was expensive?  It is, but not my way.
I have my Android table with me on this trip.  I also have a HDMI cable.  I noticed that all the hotels that I stay in have a TV with an HDMI port so…I use it.  On Google Play, I simple select a movie that I want.  Usually for far less than a single movie ticket.  I start the download and then take care of a few things.  Once I’m ready, I sit down or lay back in bed and watch the movie.  Best of all, I do not have to deal with teenagers and their cell phones or have to drive back to the hotel.  So, for a family of 4 the cost of tickets alone is around $23.00.  Seeing a movie my way, $1.99 – $3.99.  Makes good financial sense to me and you still get to see a movie that you want to see.

Rent cars for Less

As a business owner, I need to be on the constant alert for potential money saving opportunities.  This is especially true while traveling. My travels times are usually set so it is difficult to use a bidding site for my flights.  Recently, I decided to start using Priceline for my rental cars. 

Priceline only uses the 5 major car vendors for their bidding process. Alamo, Avis, Budget, Hertz, and Enterprise.  For the airports that I frequent, these vendors are generally on the airport property which makes them convenient.  You get unlimited miles and road side assistance.

To get your starting bid, go to Hotwire.com and see what the going price is.  If you have at least a week to bid (You have to wait 24 hours to rebid on the same type of car) start your bid at 30% below Hotwire.  If not, start at 20% below hotwire. 

Unless you have a very specific need, there is little different between Mid-Size/Compact and Compact/Economy.  Each is usually a dollar a day apart.  I start with the Compact.  If that bid is refused, I will look more carefully at my travel needs and bid either on the Economy or the Mid-Size.  If not, I wait until the next day and bid a dollar higher.

These bids do not include insurance.  Check with you insurance provider to make sure your are properly covered.  Most insurance programs will not cover the extra panic insurance that they try to sell you.  Check with your insurance company to see what they cover.  Don’t worry, the car rental places have extra fees they will charge you that insurance will not cover.  Hence, the panic insurance they sell you.  I rent so often that if I were to pay “Loss-of-use” insurance on every rental, I would be out of business.  For the casual traveler, this may be something to consider.

Teach your kids how to use a credit card

One of the worst mistakes that you can do is to accidently convince your kids that a credit card is free money.  Here is what you can do to teach them the dangers of using a credit card.

Give them an allowance.  Make sure they earn it of course.  Then when they want something that they do not have the money for, explain to them how a credit card works and give them a credit card issued by the Bank of Mom and Dad.  Have a 15% annual interest rate and a $10 monthly fee for not paying off the card.  Set a reasonable credit limit.  Each month, hand them a bill with a 30 day grace period. 

Now, when they are late or cannot pay the bill off in full, charge them the penalties.  They will see that the more they charge, the less money they have.  The less money they have, the less they can buy or the further in debt they go.  When they hit their credit limit, cut them off.  Now they cannot afford anything and must focus on paying off their debt. Harsh lesson for a teen on a Friday night.

This will take will power from the parent.  Keep that credit limit to around $100.  If you are working with teen agers, make it a bit higher if you think it is appropriate. Once they go a year without missing a payment, offer them 12% APR.  If they go a year paying off their card in full each month, Give them a one time bonus in their allowance to help encourage them to spend their money wisely. The idea with the bonus is, do they spend it on garbage or think about how to invest it.

 

Do You Really Need It?

Here is a good question.  “Do you really need it?”
In our society, we are brainwashed into confusing needs and wants.  Let me clarify these two items.
Need:

• Shelter
• food
• clothing
• Reasonable transportation to work.

Want:

• 5,000 sq foot home for the two of you in Beverly Hills.
• Lobster 2 nights a week.
• The latest fashions from Paris
• $50,000 SUV that can transport 7 comfortably, and you only have 2 kids.

Do you see the difference?  I have a relative that cannot let go of luxury.  This individual wants everybody to see him as financially successful, despite drowning in 10 feet of debt.  So when it is time to buy the new car, they head for a Luxus dealer and buy new.  OK, so you can barely afford to pay your bills, but you buy a Lexus. I feel real bad for you.
Focus first on the real needs.  I would love a Lexus SUV. but I think I’ll settle for a more reasonably priced vehicle.  I would love to have a large home on the west coast, but I think we will settle for something inland and a bit smaller.  Your debt is a result of you deciding to give your hard earned money to somebody who absolutely does not care about you, as long as you come back and give them more money.
Need new clothes?  What is wrong with last years fashions?  Seriously?  How many people actually hang around social circles where they look at the labels on your clothes?  For those of you who do, are they really your friends?  Here is an idea, buy off the clearance rack.  I have a full bag of clothes for the fall that I have never worn.  I purchased them at 80% off at the end of winter.  I’ll start wearing them this November when it gets cold.  Try it, your friends will never know.
Once again, when you are about to purchase something ask yourself “Do I really need it?”

Start Investing

At what age should you start investing?  If you are asking this, you are already behind.  As a 20 something, I did not get serious about investing.  Once I hit 30, I had no idea what to do.  A good financial advisor would do you wonders.  The earlier you start, the better your retirement will be. 

Let’s say you invested in a mutual fund that gives to a 5% return annually.  Your initial investment is $2,000 and you are ago 20 with retirement at age 65.

 

Start Age	One time investment	Percentage rate	Total at age 65
20	$2,000	5%	$18868
30	$2,000	5%	$11583
40	$2,000	5%	$7111

 

Can you see how delaying your retirement can cost you big time?  The 20 year old would have $7285 dollars more than the 30 year old and $11757 more than the 40 year old.

This is the magic of compound interest.  Let’s take another look at the same scenario, but this time you invest and extra $100 per year.

 

Start Age	Initial Investment	Annual investment	Percentage Rate	Total at age 65
20	$2,000	$100	5%	$35737
30	$2,000	$100	5%	$21167
40	$2,000	$100	5%	$12222

The $20 year old make a total investment of $6,600.  The 30 year old would invest $5,600 and the 40 year old $4500.  The 20 year old would have $14570 more than the 30 year old and $23515 more than the 40 year old.

The sooner you start investing, the better.  Remember that the market is volatile.  That means you will have gains one day, and losses the next.  Investing is a long term practice.  Take a look at your investments every month, but not every day.  The myth of the day trader getting rich is nothing more than a myth. If anybody can do it, then all of us would be rich.  A steady consistent approach and good financial advice will set you off on the path to a rewarding retirement.  Just don’t wait any longer.

Save on Airport Food

Have you ever taken notice of the marketing efforts at the airport? Food,food, and more food.  I travel very frequently.  As a matter of fact, I'm sitting in the United airlines gate area in Indianapolis right now.  I took a look at the food establishments along the walk to the gate.  The biggest thing that I noticed is the markup in prices.  Some of the markups appear to be around $2 for counter service per entrée. 

Here is an idea.  Eat before you get to the airport. Have a good meal before leaving home.  My wife packed a couple of snacks for me before I left.  TSA allows small snacks to pass through security now.  My travel time with one 45 minute layover from when I left my house till I land is 6 hours.  By the time I'm ready for dinner, I'll already be checked into my hotel and looking for the grocery store.

How to Use Your Credit Card

That magical piece of plastic.  Once you get your first one, you are rich!!! You can go to the store and buy almost anything that you want.  Here is the big problem, you still have to pay for it.

Credit cards are like modern day slavery.  I know, that is a harsh word to use, but let’s take a look at this. The idea behind the credit card is to tempt you to buy something with money that you do not have, and then charge you for using the credit card.  Now that you have an extra bill to pay, chances are that you will not have money for something else, so you charge it.  You become a slave to the credit provider, constantly sending your hard earned cash to them, but getting less and less back from your purchases.

Here is a little bit of advice from my Grandpa.  If you cannot afford to pay for it today, don’t buy it.  We live in a society that demands that we spend money.  I once heard that the average American gets 37,000 advertisement impressions per day. You need to resist this urge to splurge.

Save enough money to purchase the item in cash.  Use your credit card for the purchase and then go online to your bank and pay it off.  You will avoid the extra charges from your credit card company for using their money to by your toy.  Another plus, this will help raise your credit score.

It is OK to use a credit card, just make sure that you can pay it off right away. If you cannot pay it off today, the toy can wait.

Save on Meals

We all love to go out to eat while on vacation.  Here in America, it is not uncommon for a meal served at a restaurant to exceed more than half the recommended calories for an adult.  Here is a way to eat out for half the price, half the calories, and still not feel deprived.  As soon as each course of the meal comes, ask for a take home box.  Most hotel rooms now have a refrigerator and a microwave.  By taking half off your plate, you will not be tempted to eat it. You are also cutting your dining bill for tonight and tomorrow night in half, yet still eating restaurant food each night.  Best of all, you will not ruin your night by being stuffed.

Here is another idea. Most American homes have a microwave and a fridge in each home.  Get the hint?

Who Needs to See it in the Theater?

Let me tell you about a place to go see movies where candy is $1 per person.  The movie (for the whole family) is $1.28 with tax.  The bathrooms are a lot cleaner (usually). Oh, and you do not need to pack everybody into the car. 

Take a look at Red Box. You can rent a movie online and then go to the store to pick it up.  While you are there, take a look at the Kroger $1.00 bags of candy.  If you do not want to step out, try Google Play.  I rent movies to my Android device for anywhere from $.99 to $4.99.  Yes, I watched a classic Disney flick the other night in my hotel room.  Much cheaper entertainment then hitting the theater. If you are watching from home, you do not need to go into a disgusting public restroom either.  I only had to wait about 30 seconds before starting the movie. Oh, and they pause the movie if you need to go to the fridge or the little boys room.

I stood in line on Black Friday at 5 am to get the 60 inch plasma TV that I had been waiting for for 8 years to come down in price.  Got a huge discount on it. $8000 off for waiting 8 years + another $800 Clack Friday special.  Now, we watch our movies from home on big cushy leather couches.  So what if I have to wait 3 months before they can be rented.  It’s worth it!

Save a Little on the Road

As we enter the peak of the summer driving season, here is a little tip from our house hold to help save you some dough.  No, it is not the latest fad in fuel savings gimmicks.  Pack your lunch.

Take a cooler and pack lunch for the family.  Just lunch, no snacks. That would lead to some unhealthy munching.  What is the price for a family of 5 to eat lunch at FatDonalds?  I mean besides the cost of diabetes and heart attacks.  What ever the cost, you can pack a good, healthy, and satisfying lunch for your family that will be cheaper than handing cash over to the clown. 

Hear is another option for those of you who rent places with a kitchen.  We will make things like taco meat and all the sides.  We may even make a big serving of pot roast.  We freeze it the night before and pack it in a cooler with with ice.  After traveling all day, it is still rock solid frozen.  No need to go pay the big bucks for dinner every night.

Yes, go out to eat every once and a while.  You are on vacation.  Just remember that your urge to go out dinning will go away once your belly is fully of home cooking.

Save a Little at the Grocery Store

Here is a neat exercise.  Write down what you are getting from the grocery store before you go, then take a look at what you purchased.  A grocery store is a business.  They need to sell you things.  They will sell you anything they can convince you to buy.  Where is the milk at?  On the other side of the store from the front door.  You have to walk past and look at a lot of products before you get there. 

The grocery store is trying to get you to do a spontaneous purchase.  Here are a few tips to save you some cash.

• Know why you are going to the grocery store and focus on just those items.
• Get in and out as fast as you can.
• While you are moving through the store, use the “safe aisles.” These are the aisles that have light bulbs, toilet bowl cleaner, paper plates and dog food.  Very little temptation there.
• If you bring the kids, let them know that you will not buy anything they pick up, beg for, or otherwise hint at.  Get in and get out before your kids get targeted by advertisers.  Your children are an income stream for the store as well. It will take a few visits for them to adjust, but they will get used to it.
• Coupons!  Use them.  When I was growing up, I was told coupons were for poor people.  Hey, if they make your everyday products cheaper, use them.  We only use coupons for items that we were going to buy anyway.

Be vigilant and watch your grocery expenses drop.

Pay Ahead

A little more than 10 years ago, I was recalled to Active duty in the US Navy after the attacks of September 11th.  I used that opportunity when I would not have any rent or utility bills to pay off a lot of debt.  Upon my return, I hatched a plan to make sure that I never financially struggle again.

Once I returned home and started getting utility bills again, I decided to pay ahead on them.  I took a looked at each of my bills (from my previous apartment) and determined what my average for each bill was over the course of 12 months.  I then set a month automatic payment to each utility at that amount plus $5.00 so the payment would arrive a week early.  This ensured that I would make my payment and never be hit be a late fee.

For seasonally changing bills, you will need to check each month to make sure you sent enough to cover the bill.  For example, when I did this, we were heading into winter.  I would have to sometimes pay $50 extra dollars to cover my electric bill each month.  Once summer came around, I did not have to do that.  Make sure you check your bills every month for a minimum of 18 months.  At that point you should be far enough ahead that you will be safe.

One of those bills should be your “Focus Utility". This one you will pay $10 a month above your average to get ahead faster.  You also need to decide how far ahead you want to be.  It is a good idea to have 6 months of cash reserves on hand.  Personally I have most of my bills 24 months ahead.  That means if I have a financial disruption, I can go 24 months without my power, water, or other utilities turned off. 

Once you get ahead at the level that you want (Say 12 months) on a bill, reduce your over pay from $5 to $2.  This will help to cover cost increases due to inflation.  Take that extra $3 and add it to your “Focus Bill”.  Remember at the end of each year to review your bills for the last 12 months.  Average the Charges (Not the amount owed) and adjust your automatic payments accordingly.

This is a long term process.  I said that I am almost 24 months ahead.  It has been 10 years since I started.  This process provides minimal disruption to your finances, but once in place it will be there if you need it. 

I was once told “I can’t do that.  I have to have money in the bank to do that.”  That is the point of doing this.  So you will have to have money in the bank.  You have to make a change somewhere.  For many, this means paying an additional $35 to $45 a month.  You can find ways to do it if you are willing to look.

Summary:

• Set up online banking.
• Determine the 12 month average for each bill.
• Set up an automatic payment for each bill so they will be paid a week early.
• Set each bill to pay its average plus $5.
• Focus on one bill by overpaying by $10.
• Determine how many months ahead you want to be.
• Once you are ahead, reduce the monthly overpay to $2.  Add $3 to your “Focus Bill”
• Check your bills for the 1st 18 months and do an extra online payment to cover seasonal highs.

Store Brand vs. Brand Name

I was raised on brand named foods.  Store brand.  That was not for us.  Well, thank God I married the woman that I did.  She showed me the light.  With store brand items, you get two big advantages.  1st off, they cost less.  2nd, they are more likely to have discounts if you have the stores frequent customer card.  double savings!!!

A relative of mine refuses to try store brand.  “It taste different” is their response.  OK, in some cases that may be true.  If so, it may taste better.  After a short period of time, you may even realize that store brand taste much better.  Trust me, it does.

Save your money.  Get the free frequent customer card from your local grocery store and take a look at all the store brand items next to your usual brand name items.  Try them out. Both you, and your wallet, may be pleasantly surprised.