Penny Pincher Journal

Sunday, December 14, 2014

Dedication

To my sons who impress me all the time with their smart decisions with money. These guys really know how to save money and avoid wasteful spending. I wonder where they learned to do that?

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Introduction

Why would a guy who likes saving money write a free book? I once read there are only two reasons to write: to make money or to be read. Giving this book away free sort of eliminates the first reason... So I must be writing this book for the second reason- to be read.

I think the price of my first book published about 10 months ago at $3.99 has kept a lot of people from getting to read it. People looking to spend less money are not eager to spend money buying a book, even one that is a great value at $3.99... A free book about spending less money should be far more appealing to those trying to spend less money than a book that you have to pay to read.

I started writing this book on my cell phone on an airplane flight- with my phone in “airplane mode”, of course... While trapped in my seat for a couple hours I started typing a list of ways to spend less money and ended up with 101 tips. After I landed, I added some description, stories, and details to each tip to create a resource to help people spend less money.

The tips on saving money in this book can be used to save money, of course, but they can also help you think about money and spending in a different way. Things look different when you have your debt and spending under control. New possibilities open up. You have more freedom and less stress.

I currently use many of the tips provided in this book to save money. A few of the tips are good ideas that I am working to accomplish as I improve my penny pinching abilities. Sometimes life happens and I spend money that maybe I shouldn’t. Just this week I spent quite a bit of time and money at the vet’s office helping my sick dog. There is always a balance between trying to avoid spending money and doing what you really want to do. Use these 101 tips to help find and eliminate wasteful spending, leaving you with more money to do the meaningful things you want to accomplish and save for a bright future.

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Disclaimer

The information presented in the book is for informational and entertainment purposes only and does not constitute financial, accounting, medical or legal advice.

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Tip 1: Avoid sales tax on food

Buying food at a convenience store is rarely a good idea, but if you do, here is a tip to avoid paying sales tax on food items. Back in college, I would sometimes get a "grinder" burrito at a convenience store, not a bad lunch for about $1.00. If you paid for the burrito before microwaving it, it was considered a grocery item and there was no sales tax. If you microwaved it first and then paid for it, you were charged 6% sales tax since it was considered a prepared food item.

Of course, saving 6 cents on a burrito is not going to change your life, but if you can save 6 cents every time you get a burrito, savings can add up over time. The point is not to pay more than you need to pay for anything and hold on to the savings, no matter how small. Wasting money is a bad habit- I try to adopt a "zero-tolerance" policy for wasting money. I suppose some would say I could save even more money by either not buying the burrito, or by buying the burrito somewhere else- you can get a burrito for 79 cents at Taco John's on "Taco Tuesday", or probably make one at home for about 35 cents.

It is always a fuzzy line between "needs" and "wants". If you want to participate in the world, you need to spend some money. You have to find the right balance for yourself. On that particular day, buying the $1.00 burrito at a convenience store was just what I needed. I could have spent less on lunch that day, but it would have taken more time and I wanted to use my time for studying and other things. At least I spent the least I could on the burrito by avoiding paying sales tax.

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Tip 2: Save big at Kohl’s

Kohl’s is a national chain store that sells clothes and small appliances. They have lots of clearance sale items and also have great coupons. Kohl’s has coupons for 15%, 20%, and 30% off that apply to all items in the store, including clearance items. When I get a 30% coupon, I like to keep it in my wallet in case I need to buy something- 30% off is usually a pretty good deal. I have picked up some really cheap clothes at Kohl’s from the clearance rack and then 30% more off of the clearance price. Another benefit of shopping at Kohl’s is Kohl’s cash. You get $10 Kohl’s Cash for every $50 that can be used during a certain time window. I once got a nice polo shirt for free with Kohl’s cash I received from buying clearance items.

Believe it or not, I found the hat that I wear in all of my Dr. Penny Pincher photos in the clearance section at Kohl’s. With all of my coupons, I ended by paying less than $3 for my favorite hat. It seems really appropriate that Dr. Penny Pincher wears such a cheap hat!

One time, my brother was visiting from out of town and was interested in looking for a coat. He is particular about the design of the clothes he buys and also insists on spending very little money. We went to Kohl’s and went through their clearance racks of many, many coats. We found one that was just right, and not very expensive. Kohl’s was the right place to shop for clearance coats.

If you have Kohl’s in your area, check it out. Explore the store and look for the clearance racks and bargain areas- you might be able to find some cheap clothes and good deals there.

Stores give out coupons to make money for the store- how does that work? The coupons get shoppers into the store who otherwise would not be there. The store may lose some money on people who buy only items with coupons, but many people will buy other items as well and result in a profit for the store. The stores know what they are doing- be careful chasing bargains with coupons. Once you are in the buying mode, you may end up buying extra items and spending more money than you planned as a result of coupons.

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Tip 3: Save 10% on milk

My local independent grocery store has a punch card for milk. You get a punch for each gallon you buy. When you get 10 punches, you get a free gallon. This is a savings of 10% or about 30 cents per gallon. The savings on each gallon isn't much, but over time it adds up. See if you can find a store that is handy and has milk punch cards or other discount programs that you can use to save money.

Some people are not willing to bother carrying coupons or punch cards- it is too much trouble. I am not one of those people. I carry a few coupons and punch cards in my wallet all the time, and have probably saved hundreds of dollars over the years doing this. I have a small accordion file that I use to keep a larger collection of coupons. Much to the embarrassment of my family, I sometimes carry the accordion file with me in stores when shopping.

A little inconvenience can go a long way. Whenever I see a punch card or other discount program offered at a store, I check it out. Often, programs do not help me with items I already purchase, so I don't sign up. But sometimes I find one that works for me- like the milk punch card. See if you can find extra discounts that work for you on items you already buy. I would much rather keep that 30 cents per gallon of milk for myself instead of giving it to the store.

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Tip 4: Make coffee at home, save over $500 per year

This is one of my favorite ways to save money. I grind my own beans and make coffee at home. It costs about 60 cents to make a great 16 oz cup of coffee at home vs. about $2 at a coffee shop. I still get coffee at a coffee shop on occasion, but making it at home most of the time results in savings of about $45 per month. For me, this is worth doing.

In addition to saving money, I have learned to make better coffee at home than you can get at a coffee shop. I use fresh beans and grind them myself just before brewing. I use filtered water and brew the coffee using a cone filter in a coffee maker with a thermal carafe. When ready, I place the coffee in one of the best thermal coffee mugs that you can buy. All of the equipment I use may sound expensive, but costs very little compared to the cost of buying coffee at a coffee shop every day. My very nice coffee maker cost only $45, and my grinder about $30, and my thermal travel mug about $15.

Making your own coffee at home not only saves money, but saves time as well. It takes time to drive to the coffee shop, place your order, pay for your coffee, wait for your coffee, and drive to work. It only takes a few seconds to grind my beans and start my coffee brewing while I do other things. When I am ready to go, I just pour the hot, fresh, delicious coffee in my mug and go on my way. I wish it were morning so I could make some coffee now.

Making your own coffee is one of those ways to save money that depends on forming a new habit. If you are in the habit of walking to the coffee shop during a coffee break, or going through the drive-through window of a coffee shop on the way to work, it will take effort to break that habit and establish a new habit of making your own coffee at home. This is worth the effort, because you can save a lot of money over time.

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Sunday, December 14, 2014

Dedication

Introduction

Disclaimer

Tip 1: Avoid sales tax on food

Tip 2: Save big at Kohl’s

Tip 3: Save 10% on milk

Tip 4: Make coffee at home, save over $500 per year

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