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Sunday, April 2, 2017

Welcome to Penny Pincher Journal!

Welcome to Penny Pincher Journal!

Dr. Penny Pincher
 Dr. Penny Pincher 

Do you wish you had more money?  The easiest way to get more money is to spend less!

It's a vicious cycle: you spend more money to buy more stuff, only to find that you are still not satisfied.  All of that spending in pursuit of happiness is keeping you in debt and limiting your lifestyle options.  I have found that there will always be at least one more thing you want to buy in order to be happy...  The way to break this cycle and find happiness is to spend less money, not more!

If you are looking for easy ways to spend less money, you are in the right place!  Penny Pincher Journal is a blog loaded with FREE articles and advice to help you spend less money and enjoy life more.  You can even get a free eBook here with 101 tips to help you spend less money.

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Tightening The Belt


Tightening The Belt
Tightening The Belt

This morning, I ran into a problem-- the kind of problem it's nice to have.  I put on my belt and found that it didn't work...  I tightened it up all the way and buckled it, but it wasn't doing anything.  It was time to tighten the belt.

I stepped out into my woodshop and removed my belt.  My cordless drill was standing ready for just such a situation.  I popped a drill bit in and laid the belt on a scrap of 2x4.  I picked just the right spot for a new hole so I could tighten the belt, and after a slight hesitation, I pulled the trigger.

Here's How I Made My Belt Smaller With A Drill
Here's How I Made My Belt Smaller With A Drill

An interesting thing about tightening the belt:  you might think I have lost weight and this resulted in the need to tighten my belt.  But I weighed myself first thing this morning before I even put on the belt and my weight has not changed lately.  So why didn't my belt fit anymore?

Measuring weight and measuring your waist size are not measures of the same thing.  I have been riding my bike (both my free 1972 Schwinn Super Sport and my EVO CX indoor exercise bike).  I have been crawling around my attic working on some projects.  Last weekend, I dug up a tree and moved it around to the front of my house.  This weekend, I dug into the side of a hill to install some terraced landscape timbers.  With nice spring weather coming in, my dogs have been insisting on longer and faster walks every day.

The reason I needed to tighten my belt isn't that I lost weight, it is that I lost some fat and gained some muscle.  I still have the same amount of weight, it has just moved around a little bit.  So my belt size is telling me more about my fitness right now than the weight reading on my scale.

This made me think about ways that people measure money and the progress they are making.  People tend to pick a number and focus on improving that number.  For example, if you are attacking debt you will focus on your debt balance.  If you are trying to build an emergency fund, you will focus on your savings account balance.  If you are trying to hit an investment goal to reach retirement, you will focus on your investment account balance.  If you are trying to reduce expenses, you might focus on your spending totals.  The reason I was focused on weighing myself is that my doctor "helped" me set a goal for my weight.

The problem with picking one number to monitor and improve is that it may be a precise measure of something that doesn't tell the whole story.  That is why my smaller belt size confused me at first.  I was thinking that my weight on the scale was the metric that mattered.  Tightening the belt reminded me that there are lots of measures of my health and fitness that matter as well, even things that go beyond numbers at all.

The most revealing personal finance number to focus on is your net worth, which is a measure of your total assets minus your total liabilities.  But even a comprehensive number like this may not tell you everything you need to know about your financial health.  Focusing on a number may be keeping you from thinking about how you are really doing.

Are you stressed out, or is your life satisfying?  Are you growing and on a path to reach your goals, or are you just trying to survive until something changes?  No matter what scale you are using to measure progress in your financial life, financial success only really matters if you are successful in life, whatever that means.  "Success in life" is hard to measure, so people tend to measure and track financial success instead.

So when my doctor asks me to set a goal at my next physical exam, instead of throwing out an ambitious number for a weight goal, I'll tell him I want to take my dogs for walks so long and so fast that they can barely keep up.  I want to ride my bike to reach remote places that few people will ever see.  I want to do whatever landscaping projects that my wife dreams up without even thinking about hiring younger guys to do the hard work instead of doing it myself.  To me, these goals matter more than tracking a single number.

Tracking your net worth and other numbers can provide useful insights, but what are your financial goals that really mean something to you?


Copyright © 2017 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy



Sunday, March 26, 2017

Looking For Bargains at the Pawn Shop


Looking For Bargains At The Pawn Shop

The other day, my son and I took my wife to the fabric store.  After a few minutes, my son and I decided to leave my wife to shop in the fabric store (risky, I know...) while we went next door to check out the pawn shop.

High on my list of things to look at in the pawn shop was binocculars.   I have been looking for a good pair of binocculars for a few years, checking out every pair I could find at consignment shops and garage sales.

I was excited to see that the pawn shop had five pairs in a glass display case for sale ranging from $15 to $70.  I had the lady working in the shop come over and open the display case.  Unfortunately for her, she had to stay right there the whole time the case was unlocked.

I tried out the binocculars by looking out the window at nearby buildings and also by trying to read price signs across the store.  The binocculars I tried looked cool, but the optics were terrible- even the $70 pair produced blurry results.

The last pair in the case looked older than the rest and was a little beat up.  I figured I might as well try it since it was priced at $15 and it was the last one.

Much to my surprise, this pair of binocculars worked great!  It has an easy-to-use lever mechanism to adjust the focus.  I could read the price signs clearly from all the way across the store.  I could see bricks and small details in the building through the window.

My quest for a good pair of binocculars is over!

With spring fast approaching, there was a clearance rack of leather jackets displayed.  Some of the jackets looked really expensive, but were priced at $15.  My son tried one on and liked it, except it was a size too big.  He thought about getting it anyway, but I convinced him that it was just too big.

When we later met up with my other son and told him about the leather jacket deal, he said it is a bad idea to get the wrong size of something, "it's just not worth it."

They had lots of bikes for sale, but I thought the prices were too high.  This may be due to the spring season- I may check back around October 15 to see if they have any bargains.

They had a lot of power tools for sale, but these looked heavily used and well worn.  I would definitely want to try out the tools from the pawn shop to make sure they are in good working order before buying.  Some of the tools were battery powered, and I would worry about the battery being near the end of life and not being able to hold much charge.

The video game selection seemed to be for very old systems and seemed to be pretty well picked over.  They had a few old laptops, but they didn't look much better than the old laptop I already have, and these were priced at a couple hundred dollars.  I woud rather find a bargain laptop in the open box bargain area at Best Buy than take a chance on one from the pawn shop.  At least there would be some opportunity to return a laptop from Best Buy if there is a problem with it.

Here are some things I learned from my trip looking for bargains at the pawn shop:

1) You can't judge a book by its cover.  The oldest, most beat up binocculars were by far the best and quite a bargain at only $15.  I bet most people wouldn't have even tried them due to their rough appearance.

2) If you want cheap leather jackets, go to the pawn shop in mid-March.

3) If you want to buy a cheap bike at a pawn shop, don't go in the spring

4) I found power tools at the pawn shop, but they looked pretty well worn.  Maybe you could buy a cheap power tool at the pawn shop as an alternative to renting one for about the same money.

5) The good electronics and games get snapped up quickly, you would need to check frequently to find something decent.

6) If it doesn't fit, you must acquit...  This is a lesson I wish I had mastered long ago.  Many times, I have found a bargain coat or even shoes that didn't quite fit- but I bought them anyway because they were priced way down on clearance.  As son #2 said, "it's just not worth it."


Copyright © 2017 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy


Friday, March 17, 2017

Why People Are Now Drinking More Bottled Water than Soda?

But You Can Get Water at Home for Almost Free!

An article on Fortune.com a few days ago announced that Americans are now drinking more bottled water than soda.  Why!?


Americans Are Now Drinking More Bottled Water Than Soda
Americans Are Now Drinking More Bottled Water Than Soda

At least drinking water is healthier than drinking soda, but it is stunning to me that so many people are paying for water- something you can get for almost free!  Bottled water has a high cost not only in the price you pay at the convenience store or vending machine, but also in environmental impact.  It takes a lot of energy to transport a heavy product long distances to the store and keep it refrigerated.    Even if you recycle the plastic bottle every time, it still takes energy to produce the plastic bottle in the first place and then to melt it down to recycle the plastic, not to mention the energy to haul it to the recycling facility.

This seems like an unbelievable business model- package something that costs almost nothing that people can easily get at home, and sell it with a huge markup.  If someone came to me with a business plan like this, I would probably shoot it down.  Why would people pay for something they can get at home for almost free?    I decided to dig further into this psychological puzzle.

Why People Buy Bottled Water (When They Could Get It For Free)

When people buy bottled water, it must makes sense to them in terms of economic value.  That 20 oz bottle of water with less that 1 cent worth of water priced at $1.39 seems like a good deal.  Why?

  1. Convenience.  If you are thirsty now and don't have anything to drink, a cold bottle of water may be just what you want.  But is it really convenient to drive to a convenience store or find a vending machine...
  2. Soda Replacement.  People are replacing $2 soda with something healthier and perhaps less expensive and see it as a good deal relative to soda.  But this is a false choice if you are only selecting from what is available on the shelf at the convenience store...
  3. Spare Change.  Many people don't think a few dollars makes any difference to their finances and are not concerned about spending a few extra dollars.  But those small daily expenses add up to real money over time...
  4. Social Factors.  Some bottled water purchases are due to the force of habit of buying a drink when you are out and about, or if you are with friends who are all buying a drink then you want to buy one too.  But you don't have to be like everyone else, being efficient with money and reducing your impact on the environment is a respectable choice.
  5. Status Symbol.  People feel they deserve bottled water.  They are smart, work hard, and make good money, so they should be able to at least get a bottle of water when they feel like it.  This is a good example of "lifestyle inflation".
  6. Perceived Quality.  A product that is sold in a bottle in the store must be better than what you can get at home right?  Most bottled water is sourced from municipal water supplies- in other words, it is tap water just like you can get at home!

How To Get The Advantages of Bottled Water-- Without the High Price

If you are ready to skip the bottled water purchases and save some money, here are some tips to get the advantages of drinking bottled water, but without paying the high price:
  • Bring your own water from home in a reusable bottle.  
  • Get a water filter at home if needed to improve taste/quality.  I use the water filter in my refrigerator.
  • How to keep it cold?  Freeze your bottle (or freeze a 1/2 full bottle and top it with water before heading out), use a cooler, or put your bottle in the fridge at work. 
  • Or simply use a water fountain for drinking or filling a cup with free chilled drinking water from the water fountain. 

I even added some new items in the Penny Pincher Journal Store to help you save money by drinking your own water from home in refillable bottles for almost free instead of buying expensive bottled water.


Copyright © 2017 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Wednesday, March 1, 2017

Kill-A-Watt!



How much electricity- and money- does it waste to leave the TV on?  Too much!


Kill-A-Watt!

As a young child during the energy crisis of the mid-1970's, I remember seeing distinctive stickers encouraging people to save electricity.  The black sticker was sized to fit over a light switch and said "Kill-A-Watt" in bold white letters.  The stickers were meant to remind people to turn out lights when leaving a room.

I must say, I learned this lesson well.  I am quite good about turning off unneeded lights whether I am leaving a room or not.  My son once pointed out that he knew it was me coming down the stairway at night because I turned out the lights BEFORE coming down the stairway in the dark.  Who else would do that?

Tonight I was working on writing some new articles that are due in a few days.  I noticed that the TV was left on in the living room and no one was watching it.  I started thinking about how much energy- and money- that was wasting.  I knew from looking it up in the manual that the TV draws about 300W.  I also knew that the cost of electricity here is about 10 cents per kilowatt hour.  That is pretty good, the average in the USA is around 12 cents per killowatt hour.  If you are curious, you can find average electric rates for your state listed in this NPR article.

I figured it would take me about 15 minutes to finish the outline I was working on.  Since the TV was drawing about 1/3 of a kilowatt per hour, it would cost about 3 cents to run it for an hour.  This works out to about 0.75 cents if I were to leave it running 15 minutes while I finished my article outline.

But wait, there's more.  Not only does it waste energy to run the TV with no one watching it, it also burns up the useful life of the TV.  I could estimate the value of this by figuring out the typically lifespan of a TV.  But since the TV was only about 30 feet away, I simply walked over and turned off.  I pushed the "off" button by hand instead of using the remote control.  Might as well save some battery life in the remote control...

In this case I didn't save much electricity by turing the TV off right away, but I did save energy worrying about it.  Some people would say, why worry about wasting a few cents and a little bit of electricity.  I say, why waste any at all?

Kill-A-Watt!



Copyright © 2017 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy


Wednesday, February 8, 2017

Common Myths About Starting Your Own Business

Owning Your Own Business Can Be Great- Or Terrible!

  Better Drink That Coffee!
Better Drink That Coffee!

Many people dream of starting their own business.  If you own a business, you can be your own boss.  You can decide when to work.  And you get to keep the profits!  This sounds great, and it can be.  I ran a profitable business for 5 years and enjoyed all of these benefits-- and I learned some of the harsh realities of what it really takes to start and run a successful business.

It seems like people who are successful in business are happy to talk about the glamorous aspects of launching a business while downplaying the gritty reality of what it is really like to start with nothing but an idea and build something.

I started my first business as a college student.  I went into business with one of my engineering professors who had previously started a business in Silicon Valley.  What an experience that was!  One of the lessons I learned was that starting a business "for real" is not a hobby.  Let me just say that 100 hour work weeks for entrepreneurs is not a myth!  When you have even a small chance at a huge multi-million dollar payoff, working pretty much every waking hour can seem like something you need to do.

After selling this business, I started my own venture in an unfinished basement and ended up with an office downtown and even a few employees and subcontractors working for me.

Check out my latest article on Wise Bread to learn some of the hard realities I discovered about starting a business:  8 Common Myths About Starting A Small Business


Copyright © 2017 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy

Wednesday, January 25, 2017

How Hard Would You Work to Get a Refund?

Who Wants The Money More?

How hard would you work to get a refund?  I have $450 at stake, but so does the other party...

I recently made a big improvement to my kitchen- quartz countertops!  After a couple years of using some mismatched old laminate countertops, and even a bar area that "temporarily" used boards nailed down to make a sort of countertop, I finally got real countertops.  These fancy countertops should last a lifetime, and will improve the value of my house quite a bit.

Quartz Countertop, Awaiting Tile Backsplash
Quartz Countertop, Awaiting Tile Backsplash

We ordered the countertops through Lowes (I had an offer for 11% off!).  Lowes works with a subcontractor in the area who handles measuring, cutting, and installing the countertops.  The installation went great, except for one minor change of plan.  The quote we got included installing a backsplash made of the quartz countertop material across the nearly 9 foot length of the main countertop where the sink is located.  

Since this is a long run, the plan was to take measurements for the custom backsplash piece after the countertop was installed.  Then the piece would be cut, and another trip would be required to install it.  This all made sense, except when we saw what the countertop looked like, we decided to go with a tile backsplash instead of a giant piece of quartz countertop.

The quartz backsplash would have been nice, but it would have been a lot of the same color and pattern to look at.  So I called the installers right away and told them not to cut the custom backsplash piece and to cancel that part of the work order.

Now for the fun part- getting the money.  The cost for the backsplash quartz piece plus the extra labor for a second trip to bring it out and install it was around $450.  The problem with this situation is that both the subcontractor and Lowes are happier if this $450 is forgotten.  I am the only one who comes out ahead if the bill gets corrected.

On my call to the subcontractor to cancel the backsplash, I mentioned a price difference.  The initial response was that the backsplash wasn't included in the total, so no refund was in order.  But I knew it was.  I had the person pull up the quote to find the extra amount for the backsplash and verify that it WAS included in the total.  She finally agreed and said they would work on correcting the bill and would contact Lowes with an updated (reduced) bill.

About a week later, I called the design department at Lowes to make sure the $450 was actually being removed from the bill.  Guess what the initial response was...  they had not heard from the subcontractor, and the backspash was not part of the quote, so no refund was in order!   I got the person to actually look at the quote and she agreed that I should have around $450 coming back to me.  She said she would contact the subcontractor to talk about updating the billing...

I am pretty confident that after a few more calls I will get my $450.  I am the only one that is going to benefit from correcting the bill, and everyone else loses.  This means that the ball will be in my court to follow up and make sure that this does not get forgotten.

I am also pretty confident that I would not have gotten the $450 if I hadn't taken some initiative to track it down and go get it.  

Sometimes it comes down to who wants the money more.

Update 1:  After 6 weeks, I think the battle is nearly over...  I called Lowes a number of times to ask for a price adjustment, but nothing was happening.  The latest response I received stated that they didn't think the backsplash was included in the original total, so there would be no price adjustment!  Talk about frustrating!  I decided to stay calm and friendly though and handle this like a problem that needs to be solved in the most efficient way possible.

I called the countertop subcontractor (again).  I confirmed with them that the backsplash WAS included in the total (again).  I asked them to send a letter to me with the total.  This was a problem, however, since they say they have to keep their rates confidential since they are a subcontractor.  I asked if they could send a statement (again) to the person at Lowes stating that the backsplash was paid for, and what amount should be refunded.

Then I called the person at Lowes and let her know that the countertop company is sending the amount to be refunded.  About an hour later, she called back and said the refund was being processed.  This sounds promising, but I want to see the money before I am convinced that this really did work out.

I knew getting this refund would be a challenge since I was the only one who would benefit, and I was right!

Update 2:  So on Friday morning, the person at the kitchen design center said I would get a $380 refund since I did pay for a backsplash and we did not install it.  She said she was taking the sheet to the head cashier and would email a copy of the receipt.  That sounded great!  But it is Monday now, and I haven't received a receipt and my account hasn't been credited...  I'm going to have to call again.  Like I said, I am the only one who loses if the refund paperwork gets misplaced of forgotten...

Update 3:  After a quick reminder call, the kitchen designer at Lowes took the paperwork up to the cashier.  The refund was processed (I verified the transaction on my Lowes card account) and I even got a scan if the receipt via email.  Victory!  I think we found out who wanted the money more :-)

Copyright © 2017 by Dr. Penny Pincher.  All Rights Reserved.  Privacy Policy