Easy Savings Plan for the New Year

Woman Holding Jar full of money
 

Editor’s Note: This post was originally posted right after New Year’s Day

If you take only one financial step this year, you can make it a powerful one by setting up an automatic savings plan.

In his book, The Automatic Millionaire, author David Bach considers this a secret to getting rich.  After witnessing how it has enriched my clients’ financial well being and even my own finances, I have to agree.

An automatic savings plan is simply where you set up a method for money to automatically be deposited into a savings or investment account on a regular basis.  The deposit should ideally not require any further action by you once it is set up.  It will be made electronically on an automatic basis.

After the plan is set it, you should consider the account off-limits.  In fact, you should do your best to simply forget that it is even possible to make a withdrawal from your savings or investment account.  The more trouble it is to make a withdrawal the better.  If it is an investment account, do not add a “telephone withdrawal” feature.  If it is a savings account, set it up in an out-of-town bank, or any bank that takes some time and trouble to get to.

Once you have set up a method for the money to be transferred regularly to a savings or other investment account,  some magic begins to happen.

First, the pain of having a little less money to immediately spend begins to fade and you find that you have simply adjusted and likely do not even miss the money.  This one will really surprise you.  If you are like me, you will be shocked that you could adjust to a little less money each week.

Next, the account begins to build.  Not fast, but after a few months you suddenly realize that you now actually have an emergency savings account and you no longer have to be afraid of what would happen if, say, you were unable to work for a week.

As the months turn into a year, the savings quietly and without any effort on your part continues to grow.  You now realize that it really may be possible to do some of the things you’ve been dreaming about – like save enough for a down payment on a house, or to finish your college degree and change careers.

As you learn the discipline of regular savings, it becomes natural.  When you get a raise, a bonus, or some unexpected income, your first thought is ‘how much of it should I save?’ and not ‘whoo boy!!  Party! New shoes! Dinner out!’

Do not let a tight budget stop you from learning this habit.  At first, it is not the dollar amount, but the discipline of setting up the process, letting it continue, and keeping your hands off the savings account that is important.

I remember that years ago, when I first set up an automatic investment account, I had $5.00 deposited from each paycheck into a savings account.  At the time, I wasn’t sure I’d be able to afford it. After a month or so, I didn’t even miss it.

A year or so later, I got a large (for me) bonus at work.  I decided to invest in a mutual fund with most of the bonus money, mostly because I now had the experience of knowing that the pain of parting with the money would soon pass and that I would survive (and thrive).

Over the years, I increased the automatic savings and also started an automatic monthly investment into my mutual fund.  I slowly added other automatic investments.  I did not worry if the starting amounts were small.  I worried about maintaining a regular habit of saving and investing.  Those habits made a huge difference in my financial health today.

There are many ways you can set up an automatic investment and I highly recommend that you pick one and get started … even if you can only part with $5.00 or $10.00 and even if it is painful to part with those dollars.

Try one of these:

1.  If your employer offers such a program, have your employer automatically deposit from your paycheck to your savings account.

2.  Set up an automatic transfer from your checking account to your savings account.

3.  Set up an automatic transfer from your checking account to a brokerage account.  There are many brokerage firms that accept and encourage small automatic investments … try researching Fidelity, E*Trade, American Century, ING Direct, ShareBuilder, and many, many more. (Note this is not a recommendation or endorsement of any of these firms, just a list for you to start researching on your own.)

4.  Join your employer’s 401(k) (or similar) plan and have an amount invested with each paycheck.  This one often carries a bonus:  you will immediately double your money if your employer offers a matching investment plan.

5.  If your employer does not offer an automatic savings plan, then pick your dollar amount and each time you deposit or cash your paycheck, be certain that this amount goes into your savings account.

6.  If none of the above are feasible, then get a jar, cut a coin and bill sized opening in the lid, then glue the lid on the jar.  Now decide on a dollar amount, and a set day and time of the week to make your automatic investment.  For example, you may choose to put $5.00 in the jar every Friday at 5:30.  Then do it.

It is not rocket science.  It’s discipline.  And the more financial discipline you learn, the richer you will become.

Now that’s a nice way to begin the new year.  And that’s The Fat Dollar way.

Here’s to your growing wealth.  Happy New Year!

 

Jar of Money — Image by © Royalty-Free/Corbis

Lower Your Food Costs With Creative Recipes

Father and daughter looking at a recipe

Editor’s note:  this post has updated content and links were updated from the original post

According to the US Census Bureau, the average family of 4 with a moderate cost food plan will spend $185.50 to $221.00 per week on groceries, depending on the ages of the children.

Just cutting those costs by a mere 10% will save $18.55 to $22.10 per week, or up to $1149.20 a year!

If you are trimming your food budget, you have probably already made a shift from highly processed foods to homemade foods. This not only saves money, but is usually much healthier since your homemade dishes will not have the preservatives, food colorings, artificial flavorings, and added fat that so many processed foods have.

One way to further lower your food costs is to be willing to experiment with recipes. If you want to make a new recipe, first read it all the way through. Does it call for a specialized spice or have one expensive ingredient? Why not experiment with substitutions?

For example, does your recipe call for allspice? Try substituting cinnamon or a dash of nutmeg. Dry mustard? Substitute prepared mustard (use 1 Tbs prepared for each 1 tsp dry.)

Does your recipe call for shrimp? Experiment with substituting chicken (really!) or any variety of fish.

The new cookie recipe calls for butter? Experiment with butter-flavored shortening (get the kind that has zero trans fat for a healthier cookie.)

Is a cup of wine part of the recipe?  Try grape juice, apple juice, or even chicken stock. The NDSU link below even has a substitution using water, lemon juice and sugar.

You can also use the expensive ingredient, but cut back on the amount. For example, in a casserole, use 3/4 lb of meat instead of 1 lb. in the recipe. If this affects the volume of the dish, make up the difference with a vegetable, cheese or pasta.

Here is a very comprehensive list of ingredient substitutions from the North Dakota State University. Excellent resource – bookmark it for future use!

Learning to use tasty, yet less expensive, ingredients in your recipes can be a tremendous help with your food budget.

It can also help with your gasoline budget if learning to substitute will save you from making an emergency trips to the store to pick up missing ingredients.

What about you?  What substitutions or changes have you made to recipes that lower your food costs yet still make a delicious result?

 

Other resources:

Mayo Clinic Healthy Recipes: A guide to ingredient substitutions

All Recipes: Common Ingredient Substitutions

 

 

 

What To Do With That Turkey Carcass

Editor’s Note:  this post was originally posted right after Thanksgiving

Browned TurkeyYesterday, I was thrilled to serve my family simply the best turkey I’ve ever made. It was a brined turkey and it was tender, juicy, and had subtle spice tones and broth flavors. This was my first year to brine the turkey and I’m a convert. I’ll brine the turkey next year for sure.

Last night, Chris and I each spent time carving and scraping off every last bit of meat from the turkey carcass. We got as much as possible and even gave a few scraps to the dogs (much to their delight). Yet there still seemed to be good turkey meat left on the carcass and I was sorry that we had to throw it away.

Normally, we toss the carcass in the field behind our house for the racoons and who-knows-what other animals to feast on. This year we decided not to do this, because we’ve heard coyotes howling across the field and we did not want to attract them to our area.

This morning, I realized that there are delicious uses for the turkey carcass and all those tasty bits of meat that we could not cut off. A fellow personal finance blogger, Eyes on the Dollar, has a great recipe for making turkey soup from the carcass. How I wish I had read this a day or two ago! I’d be making turkey soup right now.

Here is the blog post Leftover Turkey Recipe just in case you can still make use of it.

Even if you don’t want to make turkey soup, you could make turkey stock.  (Why, oh, why didn’t I read this blog post yesterday!!)

Here are a few more sources for recipes:

Next Day Turkey Soup – Food Network

Homemade Turkey Soup Recipe 

Rescued Turkey Stock

The vegetables and seasonings may add as much as $1.00 to the cost of your stock. If you make a habit of collecting leftover veggies in a freezer bag in the freezer, you could use those for your stock, reducing the cost even more.

Keep in mind that you can use most any vegetable to make stock – be creative!

The 3-4 hours of heating on a gas stove will cost about $.35 *.

The cost of the vegetables, spices and energy for the heat would then make the turkey stock cost $1.35 or less for 6 -10 cups of stock.

Immediately make your turkey soup with the stock and then put the extra stock in containers in the freezer and use it for soups and other dishes. You could also make a large batch of turkey soup and put the extra soup in the freezer for ready-made dinners.

Mmmmm… I can hardly wait for my next turkey.  I may even watch the grocery store ads and pick up a turkey on any after-Thanksgiving clearance sales.

Do you have any recipes or ideas for that turkey carcass?  Share them with us in the comments below!

 

 

*estimated cost of energy from Duke Energy of Ohio Editor’

Junk That’s Really Treasure

Ok, maybe your old stuff isn’t worth a fortune, but it could be worth more than you expect. While I was clearing out some of my own clutter, I happened across a 2012 Woman’s Day magazine. (Yes, I did say I was clearing clutter.)

An article in the magazine intrigued me. It listed several items that “could fetch big bucks on places like eBay”. Hmmm.

Here are the things that were listed as possibly valuable items hiding in your home:

1. Small kitchen appliances – like bread machines, food dehydrators, espresso machines

2. Video Games – check gazelle.com

3. Tacky Sweaters – sweaters decorated with things like pictures, holiday themes, cats – the ones that Aunt Gertrude gave you that you would never, ever wear

4. 1950s Furniture

5. Vintage Electronics – pre-1980s stereo and hi-fi equipment – LP turntables, reel-to-reel tape decks, vacuum tube amplifiers, etc.

6. Lunchpails – vintage lunchboxes with TV show or celebrity images

7. Treasure Chest– old chains, earrings, broken bracelets

I’m on the lookout for tacky sweaters now. Did you know that you can search “tacky sweater” on e-Bay and a whole list of them will come up? It looks like you could sell one for at least $9.99. Not bad for something that you would love to get rid of!

Video games, I’m not so sure about. It must depend on the game. We’ve tried to sell some of our own games and sometimes the best offer was $1.00 per game. Sometimes it was $10.00.

 

Here are some other resources for finding potentially valuable items in your attic:

 

The Penny Hoarder – 7 Places to Find Hidden Cash .

Huffington Post – 15 Items in Your Home that May be Worth Money

Reader’s Digest – 9 Vintage Items That May be Worth Money

Mashable – 9 Valuable Things You Didn’t Know are Lying Around Your House

Cracked – 8 Insanely Valuable Items You Probably Owned and Threw Out

The Children’s Toys That Have Soared in Value

Bottom Line Personal – Don’t Throw Out These Old Electronics

BuzzFeed – 33 of your Childhood Toys that are Worth a Fortune Now

 

How to Sell Your Old Stuff

Once you find any collectible or valuable items in your home, selling them is the next step.  You can reach a broad market by selling on the internet. While selling your item on eBay is  a good way to consider, you should always first Google your item or do an internet search for your item to see if there are any collectors or specialized sites that might be easier and more profitable for selling your particular item.

One relatively new way to sell things on the internet is Facebook. Try searching “garage sale” and your city name on Facebook and you will likely be amazed at how many buy-sell-trade pages are operating in your area.

In my area the general procedure to sell something on Facebook is to first join the Facebook group for the online garage sale.  Then, following the rules of the group, post the item for sale with a photo and description.  The first person to comment that they are interested or want to buy must be given the opportunity to purchase.  Once the sale is agreed, then a public place is set for meeting and completing the sale.  If you break any of the rules of the group, then you are likely to be banned from the group

This is a good way to sell larger value items, but not necessarily items that will not sell for very much, especially since you will have to take the time and spend the gas money to drive somewhere and meet a prospective buyer.

Certainly you can also use the traditional ways to sell:  letting others in your circles know you have a unique item for sale, advertising in local papers and newsletters, and placing an ad on craigslist.org.

A last resort would be a local pawn shop.  While you can quickly sell most moderately valuable items to a pawn shop, expect to sell for  much less than you would receive if you sold it yourself.

Finding treasures in your home and selling them has so many benefits:  it clears out items from your living space, it puts an item into the hands of someone who really values it, and it gives you some money for investing or paying bills.  Now that’s the Fat Dollar way!

Be sure and share with us any of your own found treasure stories!

 

Photo credit: freedigitalphotos.net & Stoonn

Getting Ready to Keep Cool This Summer

Melting Ice Cubes - keep cool this summer For years, we didn’t have central air conditioning in our old farm house. We depended on a variety of natural ways to keep our house cool. We now have mini-split air conditioning units installed, but we still work with natural methods to make the units more effective. Here are a few tips we use to keep cool without spending a fortune in energy costs:

1) If you have ceiling fans, now is the time to switch the fan’s rotation. Most ceiling fans have a switch that allows you to change the direction of the blades. For cooling in the summer, the blade should rotate counterclockwise.

Note that the ceiling fans don’t actually cool the room – they circulate air so that the air flow makes you feel cooler. If you have a ceiling fan running, you should be able to raise the thermostat 2 – 5 degrees and still feel quite comfortable.

According to the California Energy Commission Consumer Energy Center, you could save up to 2% in energy costs for every degree that you raise the thermostat during the air conditioning season.

2) During these transition days from pleasant spring to summer heat, let nature cool your house. Check to see if your windows have a feature that allows them to lock while partially open. If so leave your windows open a bit in the evenings to let the cool night air into your home.

In the mornings, one of the first things we do now is to open up many of the windows in the house to let the cool morning air in.

When opening windows, open at least one on each side of the house. This allows the air to flow through, creating lovely breezes. As the temperatures outside start to exceed the indoor temperature, it’s time to shut the windows. We open the windows again in the evening when the temperature outside falls below the indoor temperature.

3) Curtains and blinds are your powerful friends in the summer. Close the blinds or curtains to block out the rays of the hot summer sun. Open them once the direct sun has rotated away from the window. Opening the blinds is another of my daily routines.

If you have venetian blinds, you can set the blinds so that you still have a view and the room still gets natural light, but the hot sun rays are fully or partially blocked. Just turn the blind slats so that the bottom of the slats point down toward the window and the tops of the slats point up toward the room.

4) Set your dishwasher to air dry. That saves it from heating up your kitchen in the summer.

5) Run your heat-generating appliances, like your clothes dryer and your dishwasher, at night when it’s cooler.

6) Better yet, let your clothes dry in the dryer for about five minutes, then hang them up to air dry. The few minutes in the dryer will remove most of the wrinkles and most clothing will dry completely after being hung up overnight.

7) Clean the filters and vents on your air conditioners now, before you start using them for the summer. Most room air conditioner filters can just be rinsed out in the sink and air dried. Your air conditioners will have better air flow and therefore run more efficiently with clean air filters.

8) Get out your collection of slow cooker recipes so you can use your slow cooker instead of the oven. You can even use the slow cooker to bake a cake. I haven’t baked one yet, but I have a few slow cooker cake recipes that I’m planning to try. I’ll let you know how they turn out.

9) Turn off your TV, especially if it is a plasma TV. Those big screen TV’s can generate a lot of heat!

Do you have any secrets for keeping your house cool in the summer? Share them with us in the comments, please!

These tips should get you started on keeping cool this summer and will help you to save on your energy costs, too. Staying cool and saving money, too … now that’s The Fat Dollar way.