4 Top Cash-Back Cards
You hear about cash-back cards all the time—but which ones deliver the goods? These four cards deliver the most buck for your bang. But remember: As with most rewards cards, you MUST pay your balance in full and on time each month or get hit with steep late fees and interest rates. - Chase Freedom
You earn an unlimited 1% cash back on all purchases, and 5% cash back on rotating categories of purchases like gas, groceries, travel, and more (a quarterly maximum applies). No annual fee. - Discover More
This is a great cash back card—but it requires patience. You can earn 5% cash back (up to a maximum), but it does so in rotating categories (hence the need for patience). It also gives you up to 1% cash back on many other purchases—unlimited! Read the fine print. No annual fee. - Blue Cash from American Express
Hey, big spenders—this is the card for you! Charge less than $6,500 per year and Blue Cash offers 1% cash back on purchases at supermarkets, drug stores and gas stations and 0.5% cash back on all other items. Spend more than $6,500 in a year and earn 5% cash back on those three categories—and 1.25% on other items. Rewards are unlimited. No annual fee. - Capitol One No Hassle Cash Rewards
No hassle indeed: You get 2% cash back on gas and grocery purchases and 1% on all other purchases—and the rewards are unlimited. The card has an annual fee that varies according to your credit score.
Talk back. What's your favorite rewards card?
Catey Hill is the money editor for the New York Daily News online and the author of "Shoo, Jimmy Choo! The Modern Girl's Guide to Spending Less and Saving More."
To-Borrow... To-Borrow... We Love Ya, To-Borrow...
If only I had a...
You need a 20-foot ladder to paint your gutter, a jogging stroller while you work off baby weight, or a projector for outdoor-movie-night.
Why drop a $100 on something you'll only use briefly, when you can borrow or rent it instead?
Try NeighborGoods.
Unlike FreeCycle, the great giveaway site, NeighborGoods is all about the share:
- Sign up with your zip or connect with Facebook Connect
- List stuff you're willing to lend, rent or sell on the cheap (a cordless drill, baby shoes, lawnmower, etc.).
- NeighborGoods connects you with folks nearby who have what you need
While there are many cases where it does make sense to buy, when it doesn't, we vote to borrow.
(Note that they just launched a month ago, so there might not be a lot in your area—yet. Luckily, it's easy to invite friends to join.)
Check out NeighborGoods.
Chow Down, Spend Less
Catey Hill is the money editor for the New York Daily News online and the author of "Shoo, Jimmy Choo! The Modern Girl's Guide to Spending Less and Saving More."Snack before you shop
A new study suggests that hunger might hurt your financial decision-making, while a full belly could be better for your pocketbook.
In the study, researchers at University College London put participants on different diets, which influenced their metabolism. Then, they gave them the option of playing various lotteries, some riskier than others.
The results: study participants were more likely to choose the riskier option when they were hungry than when they weren't.
Eat, bubula, eat!
The researchers also observed “an immediate effect of a calorific load.” (In English: they saw changes in people’s risk-taking tendencies immediately upon feeding them).
So what might this mean for you? Increase that calorific load when you have some tough spending choices ahead:
- Carry PowerBars when entering Target. (Evidence: MP spent $332 @ T when she "ran in" for "a phone charger" before lunch.)
- Read catalogs after dinner, not before.
- Make investing decisions on a full stomach.
- Don't book your vacation during your lunch break.
- Save this post for the holidays and save a bundle!
Catey Hill is the money editor for the New York Daily News online and the author of "Shoo, Jimmy Choo! The Modern Girl's Guide to Spending Less and Saving More."
Holiday Weekend Spending Alert!
Holiday weekends wreak havoc with people's budgets. (Did you need another swimsuit? No. Did you buy one? Yes.)
But there's particular spending hazard to beware of during the Fourth of July weekend.
- Yard sales?
- Excessive flip flop purchases?
- Pedicures?
- Tiki torches?
Beer!
Starting Memorial Day weekend, beer sales start to soar, according to the 2009 Beverage Alcohol Review. Sales skyrocket to their peak during the week of July Fourth, to about $340 million.
We're not trying to be the buzz kill at your picnic—just sayin' that spending hazards lurk in funny places. So spend moderately (drink responsibly) and have a Happy Fourth!
Tell us how you're celebrating your independence.
Neighborhood Spendonomics
Tara Gentile is the blogger behind ScoutieGirl and the founder of a boutique web design company.
Minding your money
It pays to consider where our money goes once it has left our wallets. What are we really buying?
Mindful spending is not about getting by with less, but about thinking about where your money goes when you purchase something.
Consider this next time you break out the bucks:
Who am I supporting with this money? The cash you spend goes back into the system created that item or service: the overhead, the equipment, the marketing. At the Red Wing Shoe (http://redwingshoes.com) factory in Minnesota, you can see money spent on boots and sneakers hard at work stitching seams, operating machinery, and providing local jobs.
Will my money benefit my community? Buying from a local business means that you're partly funding the payroll, sales and property taxes that then enrich your community's schools, libraries, and roads. Buy from local farms and you support the new and thriving alternative food economy, according to FoodRoutes (www.foodroutes.org).
What am I getting out of this purchase? Sometimes we consume simply because we think we should, without considering the true satisfaction quotient of what we're buying. Higher quality goods may cost more but they have often greater benefits. Repeated studies have shown that money spent on living life, not having stuff, is what makes us happiest.
Tell us about satisfying ways that you spend.
Tara Gentile is the blogger behind ScoutieGirl and the founder of a boutique web design company.
Help! My Spending is Boiling Over
Dr. April Lane Benson is a psychologist and author of "To Buy or Not to Buy: Why We Overshop and How To Stop."Dear DailyWorth,
I suffer from a phenomenon that I can only describe as my "boiling point." I scrimp and save until—BAM!—I can't take it anymore. Then I spend everything I've saved and then some—on steaks for five of my friends or a new cut and color—often landing in financial trouble (overdrafts or missed payments). Help!
—Sandra S., Madison, WI
Dear Sandra,
Since you know what you're likely to splurge on when you hit the "boiling point," I'd suggest that you strike while the iron is cold! By that I mean, PLAN for an occasional splurge, by earmarking money for it every month.
Also, whenever you reach the boiling point, ask yourself the following questions:
- Has something happened in my life that is making me feel vulnerable?
- What is it that I REALLY need right now?
- Do I need to make this purchase?
Dr. April Lane Benson is a psychologist and author of "To Buy or Not to Buy: Why We Overshop and How To Stop." Read more of Dr. Benson's work here, and Amanda's interview with her here.
The Fashionomics of Retail Begging
Caitlin O'Toole writes the Miss Jobless Chronicles for MediaBistro. When you're under- or un-employed for a long time, like me, you begin to dwell on all the material things you don't have. The catalogs that land in your mailbox seem to be sent by cruel merchants, insensitive to your plight.
In self-defense, I sometimes engage in what I call "shopping bulimia", which is the act of buying something—or a lot of things—that I can't afford, only to return everything the next day. That way, you psychologically experience the 'gain', but without the 'pain.'
Occasionally, I dabble in "retail begging."
Recently, I went to J. Crew to admire a chambray shirt.
I take it up to the most sensitive-looking saleswoman and bat my long lashes.
"Can I have this?"
"Can you 'have' it? You mean, like, can you buy it?"
"No, can I have it."
"It's $69.95."
"Oh, OK. Thank you."
Score: J. Crew-- 1; Me--Zip.
But wait, there's more, as Caitlin tries another store.
Sometimes, I'm a bit more aggressive. Like the day I hit up Lucky Brand Jeans on 22nd and 5th Ave. The manager, Muriel, was there. My bulimic strut had been fairly successful with her.
"Hi," I say, fondling a Triumph motorcycle t-shirt. "Can I have this?"
"What do you mean 'have it'? For free?"
"Yes. Can I have this."
"No, you can't have it."
"Seriously," I say. "Is my 'having' this one thing going to propel Lucky Brand into bankruptcy? We can barter. I'm a writer. I can write signs for you or something."
"I'm sorry," Muriel fakes a sympathetic look. "We're not in the business of giving away our clothes or bartering."
"Oh. Thanks."
At OMG Jeans on 7th Ave, I try a different approach.
"Hi," I tell the manager, clutching a pair of white 501s. "I'm unemployed and I need a nice pair of pants for business casual interviews. Can I have these?"
"No, but I'll tell you what! We're having a sale on jeans today — two for $79.95."
"Yes, but I don't even have $9.95. Can't I just have them?" I try the eyelash trick.
"Well, what I can do is offer you my employee discount—if you keep it under your hat."
(I pray that doesn't really mean 'if you sleep with me.')
I'm so excited that I whip out my "only for emergencies" credit card and buy three pairs of jeans—a white pair, a shrink-to-fit pair, and a skinny black pair that I had absolutely no business buying (muffin top).
I smile at my semi-achievement and leave the store, having binged on jeans. Halfway home, I head back and purge: I return everything. Score: OMG Jeans—3; Me—0. But in a good way.
Fess up
Do you go faux shopping? Join the conversation.
Budget Extra for Feelings
DailyWorth recently reviewed Spent. The following is an exclusive post by Cardella for our readers. Sigh.
So often we focus on the dollars and cents necessary to get our financial life back on track—and fail to acknowledge the emotional currency required.
After years of struggling with a compulsive shopping disorder, I faced this issue when I had to grapple with my credit card debt. Obtaining the money to pay back my debts was one thing; creating a sustainable emotional budget was another.
No pain, no gain
I had been taxed by fear and loathing for far too long. I feared facing the numbers on my credit card statements, and loathed the idea of having to contact a credit-counseling agency.
I needed a strong dose of courage to help me take that first step and contact a credit counselor. I can’t remember how many times I picked up the phone, only to put it down without making the call.
Eventually, I did muscle-up some bravery and as soon as I heard the counselor’s voice, I knew I was doing the right thing.
I was carrying close to $9,000 in debt at that time, which may not sound monumental, but on my freelance writer’s salary, it was enormous. I wish I had budgeted more strength for the pain of revealing those cold, hard numbers to a total stranger—and for the bad news.
The counselor calculated that with payments of $175 a month, I could pay off most of my debt in forty-four months—nearly four years. I was stunned. It sounded like an eternity of paying for things that were probably gone, or never used. It took me while to cope with the shock.
As I adjusted, I realized that payback wasn’t going to be easy, and that I’d have to budget some stamina to stay with the program:
- Stop the shopping binges.
- Find healthier outlets.
- Live within my means.
- Make those monthly payments, without fail, for four years.
Now I also recognized that it was time for some budget cutbacks: I no longer could give myself the luxury of woe-is-me moments. I needed that energy to keep moving forward.
Instead, I focused on the windfall of extra energy that I got, as the relief slowly sank in. After years of high-priced denial, I was finally managing my debt—and my life. And being able to get a good night's sleep for a change went a long way toward restoring my emotional reserves.
Avis Cardella is the author of "Spent: Memoirs of a Shopping Addict."
Are Banks to Blame for Your Debt?
Two national debt debacles have been popping into the headlines lately:
- For the last 18 months, some 650,000 homeowners haven't paid their mortgages; many are using the money to get back on their feet.
- As 1.7 million students look toward college this fall, tens of thousands will take out loans they can ill afford—with the blessing of banks and financial aid officers.
Some homeowners argue that banks were trying to make a buck from bad loans, and extended way too much credit to innocent people, who now owe more than their homes are worth.
Now, they say, let the banks eat those overinflated mortgage payments.
This NY Times article argues that banks are on the verge of creating a similar, student loan crisis by lending far more than most students can afford to pay back.
Is it the lenders' fault if students borrow money that will keep them in debt for years?
Let's hear it
We've all been exposed to the ugly underbelly of the financial world in the last few years. It's clear that lenders can and have stooped to incredible lows to saddle their customers with debt.
And yet... in hindsight—the money spent, the diploma in hand—it's suspiciously easy to cry, "I can't afford it."
When people are in debt up to their necks, whose responsibility is it?
Join the debate here.
Skintastic Sunscreens
Soaking up the rays Given the amount of sunscreen you'll slather on this summer, it's important to know that you're getting the best SPF for the buck.
Just as summer is heating up, Consumer Reports has released their 2010 list of superior sunscreens. (News for northern readers: CR also rates Canadian products!)
And the CR survey says...
These five sunscreens do a top-notch job of blocking both UVA and UVB rays. They stay on longer (even after 40 to 80 minutes in the water), rank low on the sticky residue scale (love)—and they're affordable.
 |
Up & Up (Target) Sport Continuous Spray |
 |
Walgreens Sport Continuous Spray |
 |
Banana Boat Sport Performance Continuous Spray |
 |
Aveeno Continuous Protection Spray |
 |
Coppertone Waterbabies Lotion |
The absolute best sun protection is a hat and a shirt, notes the Environmental Working Group, which rates sunscreens according to effectiveness and chemical safety.
But assuming you're baring some skin, use two to three tablespoons of lotion to cover your body. Sprays are harder to measure, but steady application over exposed areas should do it.
Your move
Summer budgeting starts this weekend. What are the spending hurdles on your horizon?
Tax-Saving Secrets of the Self-Employed
Nickels, dimes, quarters If you're self-employed, the not-quite quarterly tax payment deadlines can be a pain (Jan. 15, April 15, June 15, Sept. 15, what?).
You need a surefire system to keep your tax savings on track—so you don't end up owing penalties. Advice from our readers:
Make life less taxing
- Kat Halsey, an L.A. artist, started taking credit card payments through ProPay about a year ago. "Those charges go straight to an online account, and that it has become my savings for both my taxes and my sales tax fees. Though I'm not earning interest, this system keeps my tax money separate from my business account—which prevents me from spending it." Exactly.
- Sharon Mathis, a digital photo retoucher in NYC and Philadelphia, socks away 30% of each payment into a designated tax account. "Thirty percent plays it safe, and I usually have money left over." She also asked one client, who pays via direct deposit, to automatically deposit 30% of each check into that tax account for her. And they did. Sweet.
- Suzanne Grossman, who teaches Love Your Job Search classes in New York, has a two-part system: She set up a separate ING account for taxes, and then linked her PayPal account, where she accepts class fees, to the ING account. "Then I just transfer 20 percent of my revenue to ING. It's online, it's done and I never have to think about it." (Percentages vary, so check with your accountant.)
Tell us that you've set up at least one automatic transfer—for taxes, retirement or general savings—since you started reading DailyWorth and we'll take the weekend off.
On Becoming a Financial Grown-up
Amanda Steinberg is the founder of DailyWorth.When I was a kid, being raised by a single mom, money was tight. But I always believed that when I crossed a certain income threshold the money stress would evaporate. I'd be free of the need to be frugal—because I'd be able to buy whatever I wanted or needed.
One of the great, ongoing revelations of my adult life is that, for most people, myself included, that's not true. Despite having an excellent income—one year's earning usually surpassing the last—my husband and I still have financial stress and need to make mindful money decisions.
Coming to terms with the real cost of living means that I'm constantly overhauling that old list of "I thought I coulds" and "I should be able tos." A few examples, and how they're changing:
I thought I'd be able to afford a few new outfits every season.
Despite all the "save more" cheering that we do here on DailyWorth—oh, how I'd love to drop $500 every quarter on a few wardrobe refreshers. Truth is, that money belongs elsewhere, if we're going to stick to our goal and save 20% of our take-home pay.
I thought I'd be able to take maternity leave
As the CEO of two companies (DailyWorth and Soapbxx) that depend on my oversight, I wasn't able to take off even a week when either of my kids was born. With my second—my daughter—I finally mastered the art of breastfeeding while typing. Feet on stool, pillow on lap, baby on pillow, knees pulled up, feeding baby, and typing. Here's an ancient post about it.
I'd enjoy regular, womanly pampering.
Haircut-and-color, mani/pedis, waxing—I assumed these were a basic right of being female. These days as we look for more ways to cut, so that we can truly max out our retirement, I've said goodbye to mani/pedis (doing them to myself while watching "Modern Family" isn't so bad), and am toying with DIY hair color touch-ups. Got any product recommendations or tips? I'm all hair, I mean, ears.
I'd zoom around on the Acela.
As someone who travels weekly between NYC and Philadelphia for work, I used to be an Amtrak girl—happily nestled in the cafe car, laptop open. Last month, I traded in my $500 per month Amtrak habit for the Megabus—making that now an $80-a-month cost. In truth—other than the constant jerking—it's not that bad. I'm now a bus girl.
I'd have a weekly cleaning lady.
Had one, loved her, can't afford it right now.
It's painful to cross those old daydreams off my list. But I take pride in the new realities: smarter spending, steadier savings, a sense of control.
The Black Sweater Syndrome
By Manisha Thakor, personal finance expert, speaker and author of "Get Financially Naked." Do you ever feel like your possessions are holding you hostage? Or you’ve bitten off more stuff than you can chew? If so, you may be suffering from... lifestyle creep.
Lifestyle creep is a bizarre distortion of reality, where the more you have, the more you think you need:
You get a new pair of pants. But they don’t go with your old shoes. So you buy matching shoes. Then you realize you could use a new top...
It's creepy (and expensive)
Lifestyle creep can sneak up on you. Three warning signs:
- You have a storage unit. A startling one in 10 Americans pay to store excess stuff. As of year-end 2009, there were 2.4 billion square feet of public storage space in the U.S. If you are storing stuff, it's likely that you have too much.
- You're over-wired. My grandmother’s house had one phone and one TV for 4 people. No one lost a life or limb. Look around your home—how many TVs, phones or computers do you really need?
- You come home from shopping, and realize that you just bought... something you already have. 'Nuff said. (Note: this is sometimes called the Black Sweater Syndrome).
If lifestyle creep is pervading your life, it's hitting your wallet. Think before you buy. Is this where I want my money to go? Tell us how you cope with lifestyle creep.
Your move
Invest in yourself, not another sweater, k?
A Shopping Addict Comes Clean
The end of shopping Despite its chic-lit sound, "Spent: Confessions of Shopping Addict," by Avis Cardella, is a fresh and gritty memoir of the financial and emotional devastation that can result from a shopping habit gone amok.
Unlike the fluffy depictions in a certain recent movie we won't name, Cardella's disturbingly detailed recollections of her thousands of purchases—and her painful return to sanity—are shocking, insightful and entertaining.
Buy, buy happiness
Cardella, a fashion writer who now lives in Paris, believes that about 6% of the U.S. population suffers from some form of compulsive shopping disorder.
As she recounts her intoxicated love affair with every brand, stitch and embellishment, many shopaholics will recognize their own destructive urges. She writes:
I used shopping to avoid myself. I used shopping to define myself. And at some point, I realized that I was no longer consuming; I was just being consumed. When I stood in the lingerie department of Barneys, flanked by rows of candy-colored Cosabella thongs and Ripcosa tank tops, and couldn't remember how I got there, I knew I was in trouble.Bottom line
This is a book for every woman—not just overspenders. In our hyper-consumption age most of us grapple with irrational desires to buy things we don't need. Cardella's cautionary tale, officially out May 14, can be ordered by clicking here.
How do you stop the shop? Tell us. And have a great weekend!
Impulse Shop No More - Try Wishpot
When wishes come true... It's 11:29 PM and you're still clicking around the web, in a fit of late-night (only vaguely satisfying) retail therapy. Look—click—add to cart—repeat.
If only there was some way to corral the gems you find so that a) you could mull over which would make sense to buy; and b) you'd never again have to mourn the lost link to the perfect pair of espadrilles.
Solution: Wishpot. This free service allows you to create multiple wish, gift and shopping lists—including bridal and baby registries—from products all over creation.
Add the Wishpot widget to your browser, and you can toss items onto your wish lists whenever you stumble across 'em.
Wish for the best
In case you're thinking, "Love ya, but this doesn't sound fiscally prudent," hang on.
How many impulse buys have you made, thinking, "Well, what the heck, I can always return it." Instead, it becomes your sister's birthday gift or fodder for a yard sale.
Wishpot allows you to build a wide range of choices without any pressure to spend. Meanwhile, read reviews, ask advice from other Wishpot members, or share (FB, tweet, etc.) your lists with friends—or not.
Bottom line
Think globally, act locally, shop responsibly. Try wishpot.
3-Minute Summer Budget
When spending heats up Warm weather seems to sweat the cash right out of your wallet. At least during the winter holidays, you get constant reminders to watch your budget.
All you hear now is that inner voice: "But I need a..."; "We should go to..."; "There's a picnic at..."; "OMG, my roots/nails/bikini..."
Solution: Build a quick summer budget right now.
Summer fun
Step 1: Take out a calendar, and list all upcoming summer expenses. Examples:
- Events: from weddings to conferences to, oops, your sister is due in September, so the baby shower will be in August.
- Repairs: from repainting your deck to fixing the kiddie pool.
- Travel: long weekends, family reunions, vacations and guests!
- Looking hot. You know you want to. So plan for it.
Step 3: Plan ahead. If you're using our Save-to-Spend budget, you can cull some cash from your curveball fund or your fun money. Otherwise, set up a small summer saving account now, to offset costs.
Bottom line
Hose down the lawn chairs and chill out. With a ballpark summer budget, your spending won't get too hot to handle—and you'll stay on top of other goals. Which is good. We have BIG plans for you this year.
How does your summer budget look? Share it!
Sin Tax
Sneaky taxes Every time you buy a bottle of wine or a pack of cigarettes, you pay an added price for your vice in the form of a small, built-in sin tax. Gambling is also taxed. Soda is the next hot ticket.
(Some states have even considered taxing video games. Why not Mylie Cyrus? Or iPhone apps?)
This clever article on Plentii describes America's co-dependent need to both condemn vices—yet profit from them. Which got us thinking...
Big bucks
If cigarette taxes alone put about $15.8 billion in government coffers in 2007—alcohol taxes generated $5.6 billion, according to the Tax Policy Center—what are you and I paying for our sins?
As a non-partisan, non-moralizing organization, DailyWorth would never tell you to stick to the straight and narrow—even if it's cheaper.
But it might be worth doing some back-of-envelope calculations on the cost of your private indulgences. Addiction to Pirate Booty doesn't count; overconsumption of 1980s music compilations does.
Bottom Line
We want you to be happy. More than that, we want you to be rich. Make sure your money goes where you want it to.
Confess all: What's the price of your vices. Have you ever added it up?
Personal Account: My Brain on Sales
MP Dunleavey is DailyWorth's Editorial Director.Stress Spending
Last weekend was a hectic (but fun) time with family—but it was peppered with work, and followed by a high-pressure Monday morning meeting.
Worse, everywhere I went there was another store window with "SALE" plastered all over it. And... all I wanted to do was shop.
This Is Your Brain on Sales
It was as if some part of my brain took over, and said that it was OK to cut loose because I was stressed—not because I had any extra cash.
I write a lot about the psychology of money and spending, including this recent MSN column about stealth budgets. I know from long experience that I tend to be an emotional spender—and many studies show that for some people (ahem) spending releases happy chemicals in the brain.
Cashflow Control
So, there I was, staring at the mouth-watering Anthropologie window. I was smart enough to ask myself: Why are you giving yourself license to spend?
"Because I'm stressed! And then I'll feel better!" came the merry reply.
"You can't shop when you're all wound up," I told myself. And then, dear DW readers... I walked away.
Bottom Line
It's possible to triumph over long-held, unhealthy patterns—and I'm living, money-saving proof. Tell us about your financial victories here.
The Cons Are Pros
Scam Alert! You're hip to email phishing scams (an emerald mine in Nigeria? Who thought of that?)—and those phony calls saying that the warranty on your car is about to expire.
But con artists are going high-tech, so watch out.
Rip-offs on the Rise
- The Better Business Bureau recently released a list of top scams, including attempts to snare job hunters with a bogus credit check (the victim ends up paying).
- The Washington Post highlighted a $19 million con game that inserted fake fees into people's phone bills.
- And the IRS recently issued a list of their "Dirty Dozen" tax scams.
The name of the game is swiping your financial data and money, money, money. Never share your personal or account info over phone, email or text message unless you're 100% sure of who is collecting it. And, yes, if there's a weird "federal surcharge" on a utility bill, call to verify.
If you've spotted a scam recently—or had a close call—tell us about it.
Stretttccccch Your Food Dollar
Denise Schipani is a mother of two. She’s the Mom Advice columnist for American Baby, and blogs at www.ConfessionsofaMeanMommy.comSo many money tips these days strike me as obvious. Brew your own coffee! Borrow books from the library! Shop the clearance racks!
Golly, y'think?
Like my grandmothers before me, frugality is in my genes. I tear Brillo pads in half—and napkins. I wash Ziploc bags. I'll show you my $7 jeans if you show me yours! But in these credit crazy times, when a $5 coffee is normal and you can spend $3 on a box of frozen, crustless PB&J sandwiches, the temptation to overspend—especially on food—can be overwhelming. Here's how I keep grocery costs in check for a family of four:
- Make a no-budge budget. I get in and out of the grocery store on about $100/week. That means knowing what we have, what we need and never buying extras just because they're on sale. Something else will be on sale next week.
- Buy only what you'll eat. A 2008 study by the Environmental Protection Agency found that Americans waste about 30 million tons of food each year. That's like throwing money in the garbage. I get a quarter of a pound of deli ham, exactly enough for three or four sandwiches for my sons on weekdays. It's PB&J—with crusts—after that.
- Forget brand loyalty. I’ll buy anyone’s bread, crackers, corn, jam, etc. (within reason)—as long as the price is right.
- Browse the just-past-sell-by rack. If you’re going to stir-fry peppers, who cares if they’re yesterday’s bruised ones?
- Convert the kids. Precious frugal mom moment? When your seven-year-old says, “Mom, if the Fruity Cheerios are on sale and you have a coupon, can you get some?”
Denise Schipani is a mother of two. She’s the Mom Advice columnist for American Baby, and blogs at www.ConfessionsofaMeanMommy.com
Your Budgeting Questions—Answered
A post last week on the "Save-to-Spend" budget sparked numerous questions from readers.
Here, our best answers:
My monthly income is so low I can barely pay the bills. How can I budget to save?
Don't think of the saving part of your budget as a loss (as in: "I don't have the money"); think of it as a gain. When you're broke, squirreling away even the spare change at the bottom of your purse is a plus. Establishing the habit is more important than the amount, for now. Even a few bucks stashed away builds optimism.
I'm a freelancer and my income is erratic. How can I set up a regular budget like this?
Your bills are monthly, even if your income isn't. Start there. What's your monthly total for basic living expenses? Let's say it's $2,000 for housing, utilities, food, etc. Aim to save a percentage of that (e.g. 5% = $100) in each budget category, or aim to save a percentage of each freelance paycheck.
How do you set up savings for four different categories? Do I need four different accounts?
The value of having separate accounts is that you're less likely to abscond with your own money. If you earmark the funds in each account for that purpose, you won't spend the money until that specific need arises.
I live in an area of the country with higher-than-average housing costs. I don't think this budget makes sense.
The save-to-spend system is based on target amounts. If your basic living expenses are more like 65%, adjust accordingly (or scale back).
I'm Spent - Confessions of One Tired Mom
As the founder of DailyWorth, I have, perhaps, an abnormally obsessive determination to improve my financial standing. To me, that means growing my net worth.
On one front I've made significant progress:
Since resolving my Money Coma drama, I've made a serious shift in my life to build our "curveball account", i.e. savings to cover unexpected items like broken iPhones and split crowns.
This year alone, my husband and I have transferred a whopping $1,200 into that account, and I'm far less worried about money. Credit cards are no longer our back-up plan—our curveball account is. Thank you DailyWorth! (You're welcome.)
But lately I've realized that there's another barrier standing in the way of us taking our saving to the next level:
Our three-year-old son.
While I'm not blaming my child for my money problems, the truth is that my darling son knows how to push my financial buttons.
Here's how a typical conversation goes with my three-year-old:
Him: Mommy, I want a new yellow Power Ranger.
Me: You lost your yellow Power Ranger. Just because you lost it doesn't mean you have the right to buy a new one.
Him: Whyyyyyy?
Me: Because Power Rangers cost money. We don't have money for a new yellow Power Ranger.
Him: But Mommy. You go to work to make money so that we can go to Target and buy Power Rangers.
(Yes, dear readers, the explanation I gave him about why I work is coming back to bite me in the ass.) Now, at this point, all reason is lost:
Him: But I want a yellow Power Ranger. I NEED a yellow Power Ranger!!!!!!!!
Here's my confession. Rather than teach my three-year-old lessons in self-control—lessons in budgeting even—I often buy him things to quiet him, and calm myself.
From gummy candies at the supermarket to Power Rangers, I bet I spend about $30 a week to get him to just STOP THE WHINING. Is indulging him the best way to help him learn patience? No. Is spending a smart way to ease my frustration with him? No, it's a short-cut and not a cost-effective one, and I'm actively seeking a personal transformation.
Do you spend money to quell your anxiety (or prevent tantrums)—money that you could be saving? Leave your comment, insight or thoughts.