Let’s be honest—money has no real value. When you strip away the power, the glamour and glitz, and the intrigue that is associated with owning some, it becomes nothing more than exactly what it is: a piece of green and white cotton paper with some jargon about trust, a photo of a dead president, and a few seals.

Am I in Love with Money?

One of my favorite retorts to the occasional person who feels that I am in love with money is, “I don’t love money. I love what money can do for me.” I say this with confidence because the actual value is not inherent in this piece of paper, but rather is captured in its owner’s ability to trade it for the things that do hold value for them—food, clothes, trips, jewelry, a home—all of which are tangible and gratifying.

There is nothing immediately gratifying about money. Why hang onto a green piece of paper when I can purchase a candy bar to satisfy my chocolate craving? Or a new HD television that is more pleasing to my eyes? Or a sporty car that will make me feel young and prosperous? Money cannot satisfy nor compete with any of these feelings of need and desire.

This is where the dilemma is for so many people, and perhaps one of their biggest obstacles to saving money rather than spending it. If money has no value and does not offer you gratification, whereas purchasing things with money can and has satisfied your needs and desires in the past, then each time an opportunity arises to spend money, you will. It just makes logical sense.

Give Your Money Value

If saving money seems like a futile exercise or perhaps saving money is a priority that you just cannot seem to keep, then you need to give money value. For me, money symbolizes independence and freedom. I value my personal life and my ability to live on my own and to make decisions based off of my needs and wants, not based off of others’ opinions. By saving money I can live by my own standards.

Case in point: I saved throughout college, and the week after graduation I was able to leave home and move into my own apartment. After I was laid off from my first job, I was able to move down to West Palm Beach, Florida and start a new job with the money I had saved. When it came time to move in with my fiancée in Houston, once again I paid to move me, my cat Lyla, and my belongings halfway across the country. These were my choices, and I was able to make them because of the money I had saved.

Find Clarity in Your Purchases

What are your basic values in life? Perhaps you want stability, independence, a new car, to purchase a house of your dreams, to travel the world. Whatever it is that you hold near and dear to you, attach this to your money. By giving your money value, you will find clarity and priority in the day to day purchases that you make because each dollar you spend is being taken from the blueprint of your principles and your dreams.  

Give your money value, and then bank that value. You will be amazed at how much more quickly your savings will grow.

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Posted October 27, 2009 in Savings by Amanda | 3 Comments

One of the money saving tips you’ll read about most often is to eat out less and cook more. But just like you need an overall spending plan to manage your income and expenses, you might need a good grocery shopping plan to make sure that cooking is actually cheaper for you.

Over the last two years, I’ve developed some decent strategies for keeping my grocery costs as low as possible – saving as much as 50% from my first grocery store experiences! Here are some of the tips I’ve used.

How to Save Money on Groceries

1. Shop monthly: The absolute biggest way I cut my grocery bill is by making a maximum of one major grocery trip per month – sometimes I wait as long as 6 weeks! The only thing I buy between major trips is milk and produce. The big trip may take me up to 1.5 hours and cost $100 or more – but it gets both the time and money out of the way for weeks, and cuts down on those “extra” purchases that always manage to creep into my basket. If you shop weekly and add just $10 of unplanned or unnecessary items each time, that’s $520 per year. Shop monthly instead and cut that number down to $120 – a savings of $400!
2. Use coupons: I subscribed to the Sunday paper solely to get the coupons. The key is to cut coupons regularly (at least every week), keep them together, and pay attention to expiration dates. Only cut coupons for items you normally use or that you will substitute for items you normally buy (like one brand of toothpaste for another). Otherwise coupons will encourage you to spend more rather than save.  Many stores double coupons up to a certain amount.
3. Stock up on sale items: Go over your grocery store’s circular, or sign up for their e-mail list. Note the items that you usually buy that are on sale, and plan to purchase them. If anything is a particularly good deal buy as much as you can reasonably store before it goes bad. If you aren’t sure how to use a particular item, visit Supercook, where you can search for recipes by ingredient. Grocery stores put items on sale at least once every 12 weeks if not more often – hold on to your coupons until you can pair them with a sale to save even more.
4. Make a list: Before you shop, open your pantry, refrigerator, and freezer to see what you actually need. An even better way to keep a list is to leave a pad on the fridge and add to it as you run out of a certain item. Making a list and sticking to it will help you get everything you need (thus minimizing repeat trips) and also help you avoid buying extra items.
5. Buy in bulk – strategically: Look for savings on larger packages, but beware – the larger package is not always the best deal. If your store labels do not show unit price, calculate it yourself. Also make sure that you have room to store what you buy and that you can actually eat it before it expires – otherwise you lose your savings when you throw it away.
6. Make the freezer your friend: Buy large packs of meat (often cheaper per-pound) and freeze in meal-sized portions. You can also make a casserole or large batch of soup and freeze the excess in individual portions for an easy lunch or quick dinner. This allows you to eat a home-cooked meal even when you don’t have time to cook, and lets you buy items in larger quantities.
7. Use less meat: If you buy ten pounds of meat, you can make 10 meals with 1 lb of meat each or 11 meals with .9 lb each – you just increased the number of meals by 10%, and probably won’t notice the very small difference. Since meat is the most expensive portion of most meals, that can be a significant savings. You can reduce your portions even more and simply increase your veggies or other (cheaper) side items to make up the volume.
8. Purchase produce wisely: If an item is priced by the number of pieces, buy the largest/heaviest available to maximize your dollar. If an item is priced by weight, buy smaller or lighter pieces. Also remember that just because an item is packaged a certain way doesn’t mean you have to buy it that way – a former roommate taught me that you can indeed buy half a bundle of asparagus or pound of grapes! This is especially good if you live alone like I do. Get the best deals by purchasing in season – and when quality is truly lacking, turn to frozen veggies instead. Finally, recognize that different varieties of an item can vary widely in both size and price per pound. For instance, Honeycrisp apples can be as much as $2.00 per pound and weigh up to one pound each, while you can get 2-3 smaller apples per pound and pay as little as $1.00/lb. If the smaller apple will truly suffice, why pay the premium?
9. Go generic: A grocery store’s own brand is almost always cheaper than the national brand, without noticeable difference in taste or quality. I’ve tried generic items from pasta sauce to canned soup to cheese and more. Give generic items a try – and if you truly don’t like a certain item, then it is ok to switch back. Be practical – if a sale plus coupon combo makes the name brand cheaper, go for it.
10. Avoid convenience items – unless they make sense: If you can do it yourself, the grocery store will probably charge more to do it for you. So cook your own pinto beans instead of buying canned. Steam your own broccoli in a covered pot with an inch or two of boiling water instead of buying a microwavable package. But when it makes sense, go for the convenience: at my grocery store, pre-shredded cheese is the same price per ounce as the big block. So no hand grater for me!
11. Love leftovers: if you are cooking for one or two it can be hard to make the exact amount you will eat for dinner – it seems like recipes always make 4-6 servings! Stretch your grocery dollar further by eating dinner leftovers for lunch – this eliminates the need for sandwich or other lunch items and also stops you from throwing away excess food. If you don’t have a full meal left, repurpose pieces of different meals to create a whole new meal.

More Grocery Saving Tips

There are also a few grocery tips that other people recommend, though I haven’t used them. If you have, I’d love to hear your thoughts!

• Shop at discount grocery stores.
• Grow your own produce.
• Visit multiple grocery stores in one day or week to search out the best deals.
• Find deals using paid websites like The Grocery Game or free ones like A Full Cup.
• Keep a price book.
• Use canning techniques to preserve food.

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Posted October 26, 2009 in Savings by Jill | 5 Comments

Sprint customers get to cash in on this week’s Free Money Friday offer. Sprint is giving you $70 to renew your contract.

And why would you want to renew? Well, if you are a SERO customer, it’s a no brainer! Since there aren’t any plans around like it, I figured why not take the extra $70!

How to Get Your $70 Sprint Credit

1. Login to your account at Sprint once you are at least 22 months into your contract.
2. Use the contact us link, and select email us.
3. Search for renew contract to get to the web form.
4. Submit an email to ecare saying that you heard there is a $70 credit available to renew your contract and you’d like to do so.
5. Select Plans, features, and services for the topic and Plan inquires for the subtopic.
6. They will email you back within 24 hours to let you know if your account is eligible.

More About Sprint

SERO Customers. Almost two years ago, we signed up for the Sprint SERO service. You know, the irresistible one with unlimited data, texts, and 500 anytime minutes for $30 per month. It’s since been discontinued, but if you have it, you can renew your contract to keep it.

Phone Discount. Taking advantage of the $70 credit did not void our $150 available to get new phones. We’re still shopping for the phone since we missed out on the $199 Touch Pro 2 that was available last week. However, some people are now reporting that you might have to choose between the credit and the phone upgrade.

Credit for Each Line. My husband and I each got the credit for a total of $140 credited to our account. We only had to send one email.

Credit to slickdeals (via My Money Blog) for saving me $140 on something I was going to do anyways!

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Posted October 23, 2009 in Quick Money by Madison | 2 Comments

I recently highlighted our mortgage refinance with Pentagon Federal Credit Union. A reader, Vic, wanted to know more about joining the credit union.

Not only do they have some incredibly good mortgage rates, but they also have good balance transfer rates from time to time (which we used on our rental property), and decent car loans if you’re in the market for a used car. Finally, they have CD sales, where they offer fantastic CD rates. However, they go quickly, so you usually need to have your membership established ahead of time.

The best part about Penfed, is that anyone can join. If you don’t qualify for one of the main criteria, you just make a $20 donation to the National Military Family Association. It’s a membership fee that I’ve earned back many times over with all their great products.

Real Estate

• 7 Lessons Learned from a Failed Attempt to Refinance a Mortgage
• What are Mortgage Points and Should You Buy Them?
• Use a Lease Option to Lock in Low Home Prices

Investing

• Successful Investing-Not Magic
• Dow Closed Above 10,000 for First Time in a Year – Chart of the Day
• Strong 2009 Market Returns So Far: Time To Rebalance?

Savings

• Fall Maintenance Tips for Your Home That Can Save You Money and Protect Your Family
• No Costco Membership? Shopping At Costco Still Saves Money
• 15 Surprising Places You Can Trim Your Budget

By the Numbers

• 3 Quick Tips to Make Your Life Better Today
• 27 Ways To Save Money On Your Utility Bills
• 7 Ways to Build & Maintain a Personal Network that Works for You

And More!

• Returning the Pleasure to Meal Preparation
• To Wed or Not to Wed
• Who Pays? The Delicate Balance of Dating and Money
• What Kind of Spender Are You?
• Carnival of Pecuniary Delights
• Carnival of Personal Finance

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Posted October 22, 2009 in Roundups by Madison | 3 Comments

Yesterday we determined what is an ETF?

In the overview, Jill mentioned that ETFs usually have lower expense ratios and are ideal for a one-time small investment that you will hold for a long time. They’re also good for trading a large group of assets at once. However, you have to account for the trading commissions both when you buy and adding money in the future.

That’s great… but just how do we actually figure out which one will have the lower cost in any given situation?

ETF and Index Fund Calculator

Luckily, Vanguard makes it really easy for us to compare the costs of an ETF or an index fund with their ETF calculator.

For example, I mentioned that I was moving a chunk of an old 401k to Vanguard this week. It’s $50,000 and I’d like to put some of it into the Vanguard Emerging Markets Index (VEIEX). Let’s compare it to the Vanguard Emerging Markets ETF (VWO).

The index has a 0.39% expense ratio and 0.25% purchase and redemption fees. The ETF has a 0.27% expense ratio and I would normally pay $7 per trade using Scottrade.

ETF and Index Fund Comparison

Compare a $50,000 investment over 20 years adding $5,000 per year, in the example outlined above, and the ETF is lower cost option, saving $5747. Here’s what the calculation looks like:

More ETF Factors

When you use the calculator, you’ll have to account for the following variables:

Free Trades. In the example, I used Scottrade. However, there are lower cost broker options like TradeKing and Zecco. Depending on which broker you are using, your results will vary.

Rebalancing Your Portfolio. One of the things that the calculator doesn’t take into account is the need to rebalance your portfolio. You’re going to have to determine how often you do this and the effect it will have on the expenses in your portfolio if you are using ETFs.

Admiral Shares. Once you have $100,000 in a Vanguard fund, you get admiral shares with lower expenses. You’ll have to compare the admiral shares to the ETF too, to make sure you’re still getting the lowest cost.

In the example with the emerging markets index, even if you compare the admiral share class (VEMAX), which has a lower expense ratio of 0.27%, the ETF still is the lower cost option, in large part to the purchase and redemption fees.

However, when you look at the total stock market, like when I started a young family member in a Vanguard ETF for her Roth IRA, the ETF is lower cost for the same example above, but the Total Stock Market Index Fund Admiral Shares (VTSAX) is the lower cost option using the admiral shares. This is mainly due to the difference in expense ratios. The total stock market index fund (VTSMX) has an expense ratio of 0.18% compared to the ETF (VTI) at 0.09% and the admiral share class at 0.09%.

Action Plan

Right now, I’m still using index funds for the majority of our portfolio. However, after doing some research with the emerging markets ETF, I’m considering using the ETF for a portion of our portfolio going forward.

Do you use index funds, ETFs, or a combination of both in your portfolio?

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Posted October 21, 2009 in Investing by Madison | Comments?