VA Loans

Apache is functioning normally

Like many of you, I’m a proponent of quality over quantity. I’d rather buy one good coat that will get me through three seasons and last for years than replace a poorly-made, cheap one every year.

But it’s important to consider that expense is not necessarily an indication of quality. And even when the more expensive item is of higher quality, it might not be the best buy.

The following are five examples that illustrate that the more expensive option isn’t always worth the extra expense.

Kitchen Gear

While researching this post, I happened upon countless articles advising to spend big on a quality chef’s knife. That’s exactly what I was planning to do a couple of years ago, until I read the Cook’s Illustrated review on chef’s knives. (For me, Cook’s Illustrated is the final word in cooking — they’ve never steered me wrong.) They tested brands that varied widely in price, giving the highest rating to a $30 Forschner Fibrox knife, noting that “knives costing four times as much would be hard pressed to match in performance.” I can attest that it’s a good one.

Food writer Mark Bittman says in most restaurant kitchens chefs use an eight-inch, plastic-handle stainless alloy chef’s knife that costs $10 at a restaurant supply store. Bittman also shows readers how they can equip a basic kitchen for $200.

It seems despite the standard advice of “investing” in a chef’s knife, the pros use and recommend the cheaper ones.

Prescriptions

There are a few exceptions to the rule, but in general, generic brand medications are equivalent to their brand-name counterparts. According to the U.S. Food and Drug Administration (FDA), generics can be sold at a substantial discount because generic manufacturers don’t have to pay investment costs to develop the drug. The FDA requires generic drugs to have identical purity, quality, strength, and stability as brand-name medications.

The prescription drug commercials we see on TV would have you believe that their brand-name drug is superior, but the FDA says it isn’t so.

Cameras

Haje Jan Kamps from Photocritic.org on why he wine tasters rated the same wine differently depending on what they thought it cost.

…when tasting the same wine, the participating wine tasters systematically reported superior taste for the wine that came out of the $90 bottle, in contrast to the wine that came from the $10 bottle.

The study suggests that we perceive the quality and likability of a wine relative to its price.

In the article Expensive Wines Doesn’t Always Mean They’re Better, wine critic and author Matt Kramer writes that a more expensive wine is better than a less expensive one to a degree, but not to an extreme degree, and price is determined by many factors:

…there’s no “right price” for a wine. If you can get people to pay a high price, because of quality, public relations, high scores, marketing muscle, or just plain luck, well then, you’ve found the right price. It’s that simple — and that complex.

My favorite wine is Brunello di Montalcino, but it’s expensive and therefore a rare treat. I have to wonder how I’d fare in a blind taste test, though. Is it truly the taste of the wine I enjoy, or the feeling of indulging myself and the memories of the little trattoria in Florence where I had my first glass?

Good News: Consumers Aren’t Morons

Even though consumers may perceive expensive products to be of higher quality, that doesn’t mean we’ll buy. A Cornell study found that although a more expensive product may generate a more favorable view, it doesn’t necessarily mean consumers will buy it.

Cornell behavioral economist Ori Heffetz was surprised by the results, expecting larger effects:

More expensive products might be perceived as more attractive — which could increase demand — but they are also more expensive, which our study showed decreased demand.

In other words, I may think a $1350 jar of moisturizer is superior to a tub of Crisco, but that doesn’t mean I’m blowing the rent on face cream. Score one for consumer sensibility.

What are some more examples of when the expensive product isn’t the best option or the highest quality? What is the cheaper solution that works better?

Source: getrichslowly.org

Apache is functioning normally

I struggle with weight. In fact, it’s a far more difficult issue for me than personal finance. Honestly, I’m not completely sure why, but it’s true.

There are many similarities between paying off debt and creating a healthy lifestyle. For starters:

    1. Correcting both issues starts with awareness. The key to turning around my financial life was realizing exactly how bad it was. After that, I was able to connect deeply with the burden that my lazy financial habits created in my life. While I understand that I’m unhealthy, I haven’t fully connected with the burden it brings into my life.
    2. Both issues have simple solutions. Notice I said simple, not easy. Personal finance can really be boiled down to “spend less than you earn“. There are plenty of details, techniques, and strategies, but it all comes back around to that one basic concept. Creating a healthier lifestyle is also simple: Eat fewer unhealthy foods, exercise more. Remembering these simple foundations can help us from distracting ourselves in a search for a mythical secret solution.
    3. Both issues require more motivation than “it’s good for you”. The vast majority of people who struggle with money realize that consumer debt is bad for them. Most people who carry credit card balances know “they shouldn’t”. But this doesn’t keep them from doing it or help them from being susceptible to credit card tricks which can increase their fees. I know my diet is poor and I’m not as active as I should be. Just because eating better and exercising is “good for me”, doesn’t mean I’m going to do it. Sadly, most of us need more motivation (and more specific motivation) to overcome either issue.

Even though intellectually I can identify these similarities, I haven’t been able to bridge the strides in my financial life to my health. I need more awareness and a more specific type of motivation. I recently stumbled upon an interesting concept that may help me with the latter.

HealthyWage.com Pays You to Lose Weight!

Early last week, I was approached by a group of personal finance bloggers who were entering a team-based weight loss contest at HealthyWage.com. Unlike many of the free sites and competitions, this one was different. Teams of five had to cough up $100 total ($20 per member) to sign-up. As a result, there are some big prizes, including $10,000 to the winning team!

The winning team is defined as the team of five that has the highest average percentage weight loss. In order to compete, you have to have an official weigh-in at the beginning and end of the competition at an approved gym or doctor’s office.

In addition, there’s weekly accountability, casual weigh-ins, forums, and conference calls with former Biggest Loser participants and health professionals. The current competition starts May 15th and runs for 3 months.

Aside from this team-based competition, anyone can also attempt to achieve a healthy BMI in order to receive $100 from HealthyWage.com’s sponsors. In this case your physician has to actually phone HealthyWage at the beginning and end of your personal challenge.

For those who want to take it even further, you can pay $300 before you start. If you chose to fork over the money up front and are still able to hit your goal, you’ll receive $1000 back. If you fall short, though, you are out the $300!

I can’t believe I hadn’t bumped into this concept before! I find it extremely intriguing. On their website, HealthyWage points out two recent studies that suggest cash incentives can triple the success of a weight loss program:

For me, there are a couple of incentives beyond just the cash. I’m highly motivated by the accountability in a team-based competition. I won’t want to let my teammates down, especially if at least a couple are motivated themselves. This allows each member to stumble a little, without completely falling off the wagon.

Also, I’m a firm believer in changing your environment when attempting any lifestyle change. The added benefit of conference calls, forums, and the ability to track the progress of other teams lends itself to creating a powerful community interaction. Immersing yourself inside a community like this is a great way to maintain motivation (just like many active members of this community have done).

Potential Pitfalls of the Model

While I’m already signed up and eagerly awaiting the start of the competition, I do have a few reservations about the pay-for-weight-loss model. While HealthyWage makes an active effort to promote safe weight loss, the “competition” atmosphere may potentially encourage some to go to extremes.

Personally, I’m going to have to be careful about this. I’ll have to work extra hard to prevent burnout and/or risky weight loss results, especially early on. From what I’ve been able to tell, the website and competition provide plenty of resources for help with this.

I also wonder if there will be some amazing results that will turn out to be temporary lifestyle changes. Even if the rate of weight loss is healthy, what will happen to people when the monetary compensation and the competitive atmosphere are gone? I wonder what the success rate will be of those who are able to make lasting, long-term changes.

Even with these two reservations, I’m still excited take part in the competition. I’m going to do my best to play into the strengths, while being aware of the potential pitfalls. For me, if even a small portion of people are positively affected (long-term, positive health changes) then it’s worth it.

I have no affiliation with HealthyWage.com in any way; I’m just a new and eager competition participant. However, I’m interested if any of you have had experience with a similar competition or what your thoughts of the model are!

Who knows? Maybe I’ll be giving an update in three months on how my team (Jesse from Personal Finance Firewall, Brad from Enemy of Debt, and Paul from Fiscal Geek) will be spending our portions of the $10,000 (or more importantly how much better we feel being much more fit)!

J.D.’s note: I, too, have struggled with weight. And, like Adam, it’s actually been tougher for me to tackle than personal finance. I started Get Fit Slowly with my friend Mac, but haven’t written there much in the past year. However, I seem to finally be slowly turning the corner. I’m down 13 pounds this year, thanks to sensible food choices and discovering Crossfit.

Source: getrichslowly.org

Apache is functioning normally

Over the holidays, we said good-bye to an old family member. It was definitely her time to go. She leaked, she conked out at odd times, and she stank. Of course, I’m talking about our old vehicle: a minivan with 182,000 miles on it. I didn’t let go of her easily; after all, we didn’t get rid of our previous car until it had 264,000 miles on it. I figured we could get the minivan to at least 200,000.

But while visiting relatives in Florida, we had the opportunity to buy a used minivan from my sister’s meticulous neighbor for a great price. So we took it. I have to admit, it’s been a huge upgrade. It has all kinds of luxury features that our old minivan didn’t have, such as:

  • When you turn it on, it stays on until you turn it off.
  • When it rains, the water stays out of the vehicle.
  • There’s an electrical device in the cigarette lighter that I can use to charge my cell phone, rather than just an empty hole where an electrical device used to be.
  • The speedometer is an accurate reflection of the speed I’m traveling, rather than a number to which I have to add five to 15 mph.
  • The brake light comes on only when the emergency brake is actually engaged.
  • It has this thing called “air conditioning.”
  • It doesn’t stink. (The smell in the old car came from water coming in and getting the carpets all moldy.)
  • It has a “keyless remote,” which is a device on the key ring with buttons that, when pushed, cause the side doors to slide open.

(Regarding that last feature, here’s a trick you can play on the uninitiated: I put the keyless remote in my pocket, and told my mom and my aunt that the doors were voice activated, but you had to use the secret word. In this van’s case, I told them, the secret word was “monkey _____.” Since this is a family website, I can’t print the actual word, but use your imagination and you’ll be close. So I got my 70-something mom and aunt to yell, “Monkey ____!” at the van, pressed the button in my pocket, and — voila! — the doors opened. They just couldn’t get over it. “I have to get me one of those!” my aunt exclaimed. I let them yell, “Monkey ___!” at the van for another 15 minutes, closing and opening the doors, until I told them the truth. If I had videotaped it, we’d all be YouTube heroes by now.)

Drive a Lemon, Save Some Cabbage

I take my share of barbs from family and friends for driving clunkers. But for me, there are two driving (no pun intended) factors: 1) money, and 2) safety. Let’s look at the first one.

At what point is repairing an old vehicle just throwing good money after bad? Here’s one way to look at it: According to Comerica Bank, creator of the Auto Affordability Index, the average cost of a light vehicle last year was $25,500. If you had to finance that total amount over four years at the going rate of 6.56% (according to Bankrate), it would cost you $605.44 a month. If you spend less than that on repairs of the old vehicle, then keeping it saves money…at least for the next four years. At that point, the newer car would be paid off, and the old car would be really old.

But in the meantime, if it cost you only $200 a month to maintain the old vehicle, you saved $405.44 a month, or $19,461.12 over four years. Not too shabby.

While that’s helpful as a way to begin to think about the question, it doesn’t really help with determining a bottom-line number for an actual person because it’s based on an average number, 100% financing, and the purchase of a new car. To help someone like you — who is non-average, who likely wouldn’t finance the entire purchase, and who might be buying a “pre-owned” car (which, to me, is an inappropriate term, since “pre-owned” should mean “before it was owned,” that is, new) — you’ll have to whip out a spreadsheet and factor in all the costs. That includes assuming higher maintenance costs for the older car, but also higher insurance, higher property tax (if you, like me, live in a state that charges such things), and transaction costs after replacing your jalopy. It’s not an exact science, since it involves forecasting future maintenance costs — an impossible task. But it will give you some numbers to think about. In most cases, I bet the analysis will show that keeping the old car is the way to go, financially.

But then There’s Safety

Did I do just such an analysis when I decided to replace our old minivan? Not exactly. We had reached a point where we were spending more than $2,000 a year on maintenance, and I had a rough idea of how much it would cost to fix the major problems with our van. Then this opportunity came up, to buy a van from one of those people who perform regular maintenance and have the records to prove it, at a price $2,000 to $5,000 below what it would have cost me to get the same vehicle from Craigslist or Carmax.

But what really got me was that the old van just didn’t feel safe anymore. Something was always going wrong, and I didn’t want something major to happen while my wife was on the highway with our kids. And I must admit, it’s nice to have a car that stays dry, has A/C, and doesn’t stink…yet. If I ran the numbers, I suspect my spreadsheet would have said, “Keep the old car.” But as readers of this website know, financial decisions don’t always come down to dollar and cents.

So I feel comfortable with the decision we made. As for our old van, my sister and brother-in-law got the major problems fixed and arranged to have it donated to a church they work with, so we’ll get a tax deduction out of the deal (another factor that would have gone into the spreadsheet) and the van will hopefully last long enough to do some good. My relatives in Florida approved of the trade-off, especially those who make jokes about the heaps we’ve driven, and believe that any car should be replaced once it reaches 100,000 miles.

Yet the math clearly shows that driving a car well beyond that point is the right thing to do for your net worth. According to Comerica Bank, the purchase of a new car costs 21.9 weeks of a median household’s income. That’s working 42% of the year just for a car. To me, acquiring a new vehicle before it’s necessary is a bunch of financial monkey _____.

Source: getrichslowly.org

Apache is functioning normally

As some of you know, Courtney and I recently spent just under a year traveling abroad with our two-year-old daughter. A couple of months ago, we returned home to Indiana and decided that we’d take a six month break from our mobile lifestyle. Our decision meant we needed to start looking for short-term rentals that would meet our temporary needs.

When we started to browse rental options, we created a list divided into Wants and Needs. Some of the Needs included things like two bedrooms, a safe neighborhood, flexible lease terms, and some sort of yard or grass.

Note: Technically, these aren’t raw Needs. While traveling we spent weeks in a tent, months in a spare bedroom of another family’s house, and dozens of nights in 100-square-foot single rooms. But these few items were basic enough conveniences that we felt comfortable labeling them Needs for our situation.

Under Wants we placed criteria like a standalone house, a fenced-in back yard, a one-car garage, and proximity to decent sidewalks or paths. Remember, we weren’t buying a permanent home: We were searching for a quick six-month stop.

As we started to comb through different properties on the market, I said to Courtney, “You know, it would be so nice to have a separate work area where I could go to write. I don’t need it, but it would be nice.”

This wasn’t the first time I’d voiced this desire. Courtney had to put up with my complaining for the last year about not having designated work space. It was primarily an excuse for procrastination or lack of motivation, but there was a part of me that wanted to see what it would be like to have a specific space for my work.

A Want Becomes a Need

After mentioning it a couple of more times, we agreed to expand our search to two bedrooms with bonus rooms, offices, or even large closets (yes, I’m serious). In general, a two bedroom home with a bonus room or office will be cheaper rent than a comparable three-bedroom place.

Even with a background in real estate, it can be hard to search for houses with extra rooms. Each owner, agent, or listing may refer to the space in a different way. Often these homes have unique floor plans, and it’s nearly impossible to understand them unless you visit each home individually. Finding matches was difficult.

Out of frustration at the lack of two-bedroom options that also included a bonus room, I allowed myself to do something that changed everything: I expanded our search to three-bedroom rentals. Suddenly, the flood gates were opened.

After a couple of days searching all of the new options, I called my friend/ex-partner in real estate and gave him several listings. I remember saying something like, “I know we could fit into two bedrooms, but we really need three bedrooms these days.”

It had happened. Of the five listings I sent to him to schedule showings, not a single one of them had only two bedrooms. Somehow over the course of just a few weeks, I’d managed to shift our Needs from two bedrooms to three bedrooms. My attitude had changed.

In our market, we could have easily found a two-bedroom rental in the $600/month range. Our current rent (on the three-bedroom rental we selected) is $900/month. For those of you counting, that’s a 50% increase — or around $300/month.

An Indulgence

For me, the issue isn’t the extra money per month. It’s a matter of perspective. We aren’t going to be financially ruined by this choice, and we’re paying for other benefits in that increase. But, I want to be sure that I view our rental for what it is: a Want. Heck, we could even label it a luxury for us.

If I continue to view this as a Need, it’s easy to focus on the negatives. For example, the air conditioner takes hours to cool anything, the lighting is terrible in the home, and the garage doesn’t have an automatic opener. If I were to take the situation for granted and focus on the negatives, it would be easy for my standard of living to creep even higher and higher.

In retrospect, if I see this home for what it really is — an indulgence — those little things lose their importance. I appreciate my little workspace so much more. I appreciate the fact the my daughter Milligan can play out back, and that we have space to host guests.

The truth is, for our family of three, anything more than a safe, one-bedroom home with a roof, heat, and simple kitchen is a luxury. It’s a Want, not a Need. By realizing that, we can stop taking things for granted, and start being thankful for what we have.

But shelter is just one area of our budget where this shift in thinking can happen. Luckily, this experience has helped me become more aware in other areas, such as Food, Clothing, and Transportation, where my definition of Need can easily grow beyond what is truly needed.

Indulgences in life are great. I’ve met very few people who want to live at the bare minimum level of their Needs. But taking steps to ensure we recognize our indulgences as indulgences allows us to appreciate how lucky we truly are!

Source: getrichslowly.org

Apache is functioning normally

About a year ago, at the advice of GRS readers, I started an experiment. I took all of the shirts and sweaters from my clothes closet and moved them into our spare room. Whenever I needed something to wear, I checked the clothes closet first. If what I needed wasn’t there (as was often the case at first), I went to the spare room to find it. After I’d worn a shirt or sweater once, it was allowed to return to its home in the main clothes closet.

The results of this experiment probably won’t be very surprising. After a couple of weeks during which I was reclaiming my favorite shirts, most of the rest remained unused. For an entire year.

On Tuesday, I gritted my teeth, grabbed the 37 shirts and sweaters still left in the spare room, and took them to a local thrift store. Some of the things I donated had never been worn (or had been worn just a couple of times). It hurt to part with those clothes. I probably spent more than $750 to purchase them (remember, I buy a lot of clothes at thrift stores), so in a way it felt like I was throwing away $750.

But it occurred to me that’s the wrong way to look at it. I’m not throwing that money away now. I threw away that $750 years ago when I bought the clothes I wasn’t ever going to wear. (Plus, I’ve managed to get rid of a bunch of Stuff, which was the whole point of this project in the first place.)

Over the past few weeks, I’ve bought a handful of new shirts to fill some gaps in my wardrobe. But I’ve made a vow to myself: I never want to buy clothes compulsively again. It used to be I’d go into Costco or Goodwill or wherever, and if I saw a shirt or sweater I liked, I’d buy it — even if I didn’t have a need for it. Now, though, I want to apply my new-found financial discipline to my wardrobe. Instead of buying lots of cheap stuff, I’m going to allow myself to purchase nice stuff (I like the clothes at REI), but only when I have a need for something.

Caveat: I’m losing weight right now. If all goes according to plan, I will have lost 50 pounds by the end of the year. There’s no way I’m going to pay full price for an entirely new wardrobe. As needed, I’ll build the foundation of my new skinnier wardrobe by shopping at thrift stores instead of paying full price at a department store.

Now that this project is over, it’s made me think:

    • I wonder if there’s a way to make this an ongoing thing. Is there a way for me to tag which clothes I’ve worn most recently, and which I haven’t? Maybe if I hang the freshly cleaned clothes at one end of the closet, then I’d know the clothes at the other end had gone the longest since being worn. In this way, I could be constantly getting rid of the items I no longer wear.
    • I also think it might be interesting to apply this method to other parts of my life. What about my CD and DVD collections? My books? The garden tools that are spilling out of our shed? In my war on Stuff, I’m always looking for new paths to victory, and this method could be one.

My guess is that of the things I own, probably 20% of the Stuff gets 80% of the use. While a part of me wants to be brave and simply pare down what I own to just the bare essentials, I haven’t reached that mental space yet. I’m too attached. But maybe I’ll get there in a few years. For now, I’m just happy to have trimmed my wardrobe down to a manageable size.

Source: getrichslowly.org

Apache is functioning normally

As much as I’ve learned about money in the past five years, and as much as I like to share what I’ve learned, there are still times when I fail to follow my own advice.

As I’ve mentioned, we live in a hundred-year-old house. This is a great and terrible thing. The house is beautiful and full of character, but it’s also a pain in the ass. In the six years we’ve lived here, one of the pains we’ve encountered repeatedly is the sewer line. About once a year, the thing clogs. But in the past year, it’s clogged more like once a quarter.

Generally, we’re able to handle the clogs on our own. We pour a little drain cleaner into the toilet or bathtub, and things magically work out on their own. But the recent clogs have been unresponsive to the magic of modern chemistry. In March, I finally broke down and called in a plumber. The plumber worked his magic, charged me 300 bucks, and asked if I wanted his boss to come give me a bid on repairing the sewer line.

“Sure,” I said.

The next day, a man named Jeremy showed up with his fancy equipment to scope out the problem with our line. Turns out the old concrete sewer pipe was probably laid in the 1940s or 1950s, and has never been repaired or replaced. There’s a section about 90 feet from the house (about 20 feet from the road) that has developed a “belly”: for several feet, the pipe has sunk below the rest of the line. Near this belly, there’s also a break in the line, and tree roots are encroaching. Basically, it’s a mess.

“It’s not a big deal,” Jeremy told me. “It’s easy to replace. Your sewer line is easy to access because it’s in the middle of the lawn. I can probably replace it in a day.” He quoted me a price of $1700.

Over the next couple of weeks, Jeremy called back twice to see if we wanted to spend the $1700 to repair the sewer line. “No,” I said. “Things seem to be okay for now.”

Well, things were okay for a while. Friday, however, the sewer line clogged again, and this time it was very very gross. Dirty water came flooding up into the bathtub. Yuck!

We called the plumber again. A different fellow came out and cleared the line. Because Kris and I were both home, he called us over to look when he’d finished his work. He had a camera 90 feet into the line, and he showed us the very damage that Jeremy had described. And then he said something that was very GRS-y.

“You can replace that five-foot section,” he told us, “but if I were you, I’d think about replacing everything from the sidewalk to the street. It’ll cost more, but if you save up for it, it’ll be more cost-effective in the long run. You’ve got other trees in that area, and they’re likely to cause trouble eventually if you don’t take steps to correct the problems now. And if you have us do all of it at once, it’ll cost less than if we have to repair it in pieces.”

A plumber with advice on budgeting for repairs — I like it!

The real lesson, of course, is not to defer home maintenance. I know this is one of the cardinal rules of home ownership, yet for some reason, I always procrastinate. I think it’s hard for me to spend on something that isn’t really an immediate problem. It’s May — my gutters aren’t overflowing. I just had the drain cleaned — the toilet isn’t clogging. And so on. But as we just learned, what would have cost me $1700 to repair in March will now cost me $2000 because I delayed. (That’s $1700 for the repair and $300 for the most recent visit by the plumber.)

After the plumber left, Kris and I had a chat.

“This is kind of a pattern for you, isn’t it?” she asked. She meant that I have a tendency to ignore warning signs and just hope that things will get better on their own. Last week, I wrote about ignoring warning signs from my computer as it began to fail. I’ve done the same many times in the past with cars, computers, clothing, home repairs, and (worst of all) my personal health. I don’t fix problems when they’re small; as a result, they often become big problems later on.

Basically, I should heed the advice I always give others. To quote Your Money: The Missing Manual:

Just as daily exercise and a sensible diet keep your body healthy and help you avoid costly medical bills, regular home maintenance keeps normal wear-and-tear from developing into problems, and problems from turning into emergencies.

[…]

When we bought our new house in 2004, the home inspector told us that for every dollar we spent on maintenance, we’d avoid roughly $100 in future repairs. He wrote in his inspection report, “In my experience as a professional home inspector, I have looked at hundreds of homes in all age ranges, and I have seen thousands of dollars of damage to homes that could have been avoided by spending $5 to $10 and just a few minutes of work.”

So, Kris and I are going to have some sewer work done.

Right now, we need to decide if we can afford to have the larger section replaced, or whether we’ll just go with the small patch. And if we do replace the longer section, do we tap into emergency savings to do so? I think we might.

It’s tough for me to accept that it’s not just okay, but it’s good to spend on solving small problems. It’s like self-insurance, or an investment in my future. My hope is that you can have the wisdom to learn from my mistakes. If you deal with a small problem before it becomes a big problem, you can save yourself time, money, and hassle.

Source: getrichslowly.org

Apache is functioning normally

Last Thursday, Ron Lieber (who writes the “Your Money” column for The New York Times) posted an innocuous little tweet:

This person will have book deal & Today show slot in 5 minutes. RT @marypilon Personal finance blogger eats on $1/day. http://www.grocerycouponguide.com/articles/eating-well-on-1-a-day/

To translate into plain English, Jeffrey from the Grocery Coupon Guide blog undertook a little experiment last month. In response to a challenge from his sister he “ate well” on just a buck a day, thanks largely to his awesome shopping skills and couponing prowess.

Because I love stories of extreme personal finance, and because I haven’t highlighted one in a long time, I decided to take a closer look; I spent an hour reading about his project. Holy cats! This fellow’s shopping abilities are insane.

If you don’t have time to read the entire series, at least check out day one, in which Jeffrey documents the things he bought to get the project started. He photographed everything he purchased and every receipt, and describes exactly how you might be able to find similar discounts. It’s great stuff. (Near the end of his introductory post, he gives a sort of table of contents for the project so that you can jump to the day you want.)

On that first day, he picks up two boxes of instant oatmeal, some cream cheese and some sour cream, ten apples, four boxes of wheat thins, a jar of peanut butter, two cans of pork and beans, a bag of rice, and two packages of tortillas. And he spent just $4.49 for all of this.

Here’s Jeffrey’s list of the ten things he learned while eating on $1 a day for a month:

  1. Grocery shopping is a game. If you’re willing to learn the rules of the game, you can save big bucks.
  2. You can eat more than junk food on a dollar a day. Yes, more money lets you make healthier choices, but you can still make good choices on a tight budget.
  3. Drugstores can be a great place to get free food. Because it’s so easy to save money playing the drugstore game, you can often score food for free.
  4. If you don’t know what a catalina coupon is, you don’t know about the most powerful discounts available. These coupons, which print at the cash register, can offer tremendous savings.
  5. Generic and store-brand items aren’t as cheap as you’d think. Their regular price may be less, but you’re not going to find coupons and discounts on them like you will on big national brands.
  6. Most people don’t know how to shop to save. They decide what they want and then go to the grocery store to buy those things. To truly save, you need to build your meals around what’s on sale (and what you have coupons for).
  7. It’s possible to donate a lot of food while only eating on a buck a day.
  8. It doesn’t take nearly as much time as you’d imagine. Yes, there’s a learning curve, but once you know what to do, it’s easy.
  9. Finding coupons is the key. The Sunday newspaper inserts are great, but Jeffrey says that the coupons you find in the stores themselves are often even better.
  10. Anyone can do it. And once you learn, you’ll save big bucks every time you shop.

On the final day of his project, Jeffrey summarized his purchases. During the month of May, he spent $27.08 to purchase $597.96 worth of food. And because of the goofy rules he agreed to with his sister, he ended up donating a bunch of stuff to his local food bank. (The last post is entertaining because of the mistake he makes and then corrects; it had me laughing out loud.)

I like that Jeffrey has a realistic attitude about this project. While he thinks that anyone can do the same thing he’s doing, he also recognizes that living on a tight food budget puts you in a precarious position: “The problem with eating on a limited budget, when the unexpected happens…is that you can’t just stop into a fast food joint and grab a bite.”

Jeffrey was so pleased with the challenge that he decided to continue it. For the past week, he’s been chronicling his continued efforts to eat well for less. (Though he’s loosened some of the arbitrary restrictions he agreed to when he was trying to prove a point to his sister.) I think it’s fun that his readers have started to give him tips and suggestions for finding other great bargains, which helps him keep his costs even lower!

Note: Here are some past GRS stories about extreme personal finance: One month as a freegan, How to pay off your mortgage in three years, The man without money, and the king of extremism, Don Schrader, who lives on $10 a day. Also welcome Lifehacker readers!

Source: getrichslowly.org

Apache is functioning normally

Dorothy was right: There is no place like home. Home is where we feel safe and relaxed in the familiarity of our surroundings — the sheets are just right, our favorite chair welcomes us, and we know, half-asleep and at 1 a.m., that we can get to the bathroom in exactly 10 steps.

But it turns out we might not be as safe as we think. According to the Home Safety Council (HSC), home-related injuries cause nearly 20,000 deaths and 21 million medical visits each year. HSC’s State of Home Safety in America report found that unintentional home injuries cost an average of at least $222 billion each year in medical costs between 1997 and 2001, far greater than costs from other home injuries such as violence ($98 billion) or suicidal acts ($96 billion).

Yet most of us, myself included, fail to take these numbers seriously. HSC polled Americans on the injury prevention actions they took in their homes and found that an alarming number failed to appreciate the risk and lacked either the motivation or knowledge to reduce it.

The good news is that most home injuries are avoidable with a few simple modifications, ranging in price from free to $40. Learn how easy and inexpensive it is to protect your family from the five leading causes of injury, as reported by the HSC.

Falls
Each year 5.1 million Americans are injured by falls that occur in and around the home. Falls are the leading cause of home injuries and account for one-third of unintentional home injury deaths.

Recommended actions:

  • Put a nonslip mat or safety treads on the tub floor and use grab bars when you get out of the shower: $4-$10.
  • Turn on area lights when using stairs, steps, and landings: $0.
  • Use handrails on both sides of stairs and steps, and shoo pets away from your path (I know, easier said than done): $0.
  • Use a proper ladder for climbing instead of a stool or furniture: $0-$30.

Poisonings
The second leading cause of home injuries, more than 2 million poisonings are reported to the Poison Control Center each year, yet only 1% of respondents in the HSC survey considered it a top concern.

Recommended actions:

  • Lock poisons, cleaners, medications, and other dangerous substances away from a child’s reach: $0.
  • Keep all cleaners in their original containers, and do not mix them. Even better? Buy non-toxic all-purpose cleaners from brands like Method or Seventh Generation, or make your own: $2-$6 for 32 ounces of self-made or purchased cleaner solution.
  • Use medications carefully, following the directions. Use child-resistant bottles, but don’t rely on them: $0.
  • Install carbon monoxide detectors in bedrooms: $20-$30 per detector.*
  • If someone is unconscious, is having trouble breathing, or is having seizures, call 911, but if someone seems okay and you think they may have ingested poison or you have a question, call the National Poison Control Hotline. Put the number in your phone’s address book or near the home phone (only one-fifth of polled Americans reported doing so) — it’s 1-800-222-1222: $0.
  • Radon is a cancer-causing, radioactive gas that you can’t see, smell, or taste. The Surgeon General has warned that radon is the second only to smoking as the leading cause of lung cancer in the United States. Test your home at least every two years or when living patterns change: $15 (or free — some state programs offer low-cost or free kits, contact your state radon contact for more information).

Fires and burns
Of all fire- and burn-related injuries, 90% occur in the home. We know we should have a fire extinguisher and smoke detectors in the home (93% of the people polled did have smoke detectors installed), but most of us slack off on other precautions such as fire escape ladders (only 6% reported having one) and a family escape plan (just 26% had one).

Recommended actions:

  • Have working smoke alarms: about $3 to replace batteries, $20 per smoke detector.*
  • Create a family fire escape plan: $0.
  • Two story home? Keep a fire escape ladder near each upstairs bedroom window: $35+ per ladder.
  • Don’t leave the stove when cooking, especially when frying food, and consider keeping an easy-to-use fire extinguisher near the range: $0-$12.
  • Space heaters should be three or more feet away from anything flammable and turned off when you leave the room or go to sleep: $0.
  • If you smoke, smoke outside and put water in ashtrays before emptying. Lock matches and lighters away from a child’s reach: $0.
  • Blow out candles before leaving the room or going to sleep, or replace real candles with flameless ones — new battery-operated candles are made with scented wax and create a flickering glow: $0, or $10 for a 6-inch flameless candle.
  • Set the hot water heater at or below 120 degrees Fahrenheit to prevent burns, and test bathwater temperature before children climb in: $0.

Choking and suffocation
The easiest way to prevent most choking-related deaths? Sit, and require children to sit, while eating. Only 39% of adults require children to do so.

Recommended actions:

  • If an item can fit through a toilet paper tube, it can cause a young child to choke. Keep small items out of children’s reach: $0.
  • Don’t put pillows, comforters, or toys in a child’s crib: $0.
  • Tie or clip the loops in window cords up high where children can’t reach them: $0.
  • Read the labels on all toys, especially the recommended age: $0.
  • Cut food into small bites for kids, and both kids and adults should sit down when they eat and chew slowly: $0.

Drowning
Most drowning deaths at home are related to swimming pools and spa tubs, but there are easy ways to keep everyone safe this summer.

Recommended actions:

  • Sounds obvious, but stay within arm’s reach of children in and around water. This includes bathtubs, toilets, pools, and spas (more than half of the HSC survey respondents failed to do so): $0.
  • Keep the gate around your pool closed and locked: $0.
  • Empty large buckets and wading pools after use and store upside-down: $0.
  • To avoid suction entrapment, don’t use a pool or spa if there are broken or missing drain covers: $0, or $15+ for a drain cover replacement.
  • Research the safest pool cover for your type of pool: price varies.

*Rather than buying separate carbon monoxide detectors and smoke alarms, install a single unit that does both: $40-$50.

Is your safety to-do list as long as mine? Know any easy fixes that make your home a safer place for your family? I’m embarrassed to say that buying carbon monoxide detectors and testing for radon are two things I have always meant to do, but never got around to doing them. June is Home Safety Month, though, so it’s the perfect time to check it off my list!

Source: getrichslowly.org