Penny Pincher Journal

Sunday, December 14, 2014

Tip 43: Cut down on coffee

Even though I was brewing my own coffee, I was drinking about 32 oz each morning. That is a lot of coffee and a lot of caffeine. I would carry a 16 oz mug and a thermos with another 16 oz of coffee. I would stop half way to work to fill my cup on my drive to work. I remember my doctor’s eyebrows going up when I told him how much coffee I was drinking.

I gradually cut back to 16 oz of coffee a day. Since coffee has caffeine, changing the amount you consume can cause headaches and other symptoms. I gradually reduced the amount I was drinking until I could get by on a 16 oz cup. This reduced my coffee expense from $1.20 per day to 60 cents per day. If you are buying coffee at a coffee shop, you could save $2 per day by dropping form 2 cups per day to one cup per day.

The “gradually cutting back” part is important if you want to reduce the amount of coffee you are drinking. I have tried at times to suddenly cut back. I get headaches and then go back to my usual amount. What works will for me is gradually cut back on the amount of regular coffee grounds. You can either just drink less coffee, or use some decaf coffee grounds and reduce the ratio of regular coffee to decaf coffee over time.

Since I have cut back to one 16 oz cup of coffee per day, I get decaf when I want to have a second cup to warm up. I think this is about the right amount of coffee for me, and I can handle the 60 cents per day cost.

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Tip 44: Pay off high interest credit cards first

You can save money on interest by paying down credit cards with high interest first. Some credit cards have interest rates over 20%- these are the ones to pay down first. Consider a balance transfer to a card with a lower interest rate. This will help you pay off your debt faster.

Some financial planners recommend a "snowball" approach to pay off credit cards by starting with the cards with the smallest balance first. When you get a card paid off, you apply its payment amount to the next card. I think this can work for some people, although you would spend a bit more on interest than if you attacked the cards with highest interest first. One advantage to paying off the cards with small balances first is that you get rid of a minimum payment every time you pay off a card, which gives you more money to pay down other cards.

I would say that as long as you are paying off credit cards, the order is not that important. If you have to choose which card to pay off first, choose the one with the highest interest rate.

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Tip 45: Negotiate on hotel rates

I have been able to get a lower price on hotel rates by negotiating. Here's how it works: at the front desk, ask for their best rate on a room. Even if you already have a reservation, ask for their best rate. If they are trying to fill their rooms, they may offer you a good deal. If the price they offer is the same as your reservation price, ask if they have discounts for AAA. If they do offer a better deal than your reservation, they can easily update the price for you.

I have signed up for several hotel points programs. These programs let me accumulate points on personal and business travel. I have been able to use points to stay free in some pretty nice places such as downtown Chicago and Washington DC. If you stay in a hotel, you might as well sign up for the points program and start collecting points. It doesn't hurt anything and you might end up getting some points you can use for free hotel stays. I hesitated to sign up at first since I didn't think I would travel enough to get many points, but over time I racked up enough points to get some free stays.

Obviously, the best way to save money on hotels is not to stay in one. Buy if you are staying in a hotel, you might as well try to get the best deal you can.

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Tip 46: Take advantage of kids eat free nights

When I had young kids under 10 years old, I knew a place where kids could eat free almost every night of the week. Eating out is not the cheapest way to go, but if you are going to eat out with kids, you might as well go somewhere where kids eat free. This will save you at least $5 per kid at most places.

If you don’t have kids, another idea to save is to carry good coupons. I had good coupons from a nearby Bennegans, but that restaurant closed. I carry a pizza coupon in my wallet all the time that is good for $5 off pizza.

The idea is to use information and planning to save money. If you know where kids eat free on any given night, it makes it easier to save money if you do end up eating out. If you have some good coupons with you, it makes it easier to save a few dollars that way as well.

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Tip 47: Inexpensive foods that are healthy

There are a few foods that are not only really cheap, but are also healthy. Some great cheap foods are:
* Peanuts
* Bananas
* Rolled Oats
* Popcorn
* Tea

Some slightly more expensive and healthy foods are:
* Chicken
* Oranges
* Broccoli
* Greek Yogurt

Some other cheap foods that are not as good for you include:
* Potatoes
* Eggs
* Bread

Any food you grow in your garden is cheap and good for you. I think coffee is good for you and it is cheap if you make it at home. Try to keep cheap, healthy foods in mind when grocery shopping and planning meals.

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Tip 48: Free stuff

You can find all sorts of things for free. Sometimes people what to get rid of something that is not worth selling, but is too good to just throw away. I once got a bunch of wheat from a neighbor to feed my sheep. The wheat was stale and he didn't have a use for it, but my sheep liked it just fine. It kept them fed for months. During late summer, you can usually find people who are giving away tomatoes, zucchini, and other garden produce that they have in overabundant amounts. I once picked up some nice fence panels along the road with a sign that said “Free” on the pile. My wife spotted a basketball hoop with a sign that said “Free” on it. We ended up painting it and it looked great installed next to our driveway.

Sometimes you get can get lucky and find free things just walking or driving around. Something about a sign that says “Free” always gets my attention for at least a moment. You can check the free section on craigslist or frecycle to find free building materials and odds and end that may be useful.

Free is hard to beat, but can cause clutter. I don't take free stuff unless I need it. It is easy to accumulate too much stuff when it is free.

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Tip 49: Buy fewer things, but better quality

For me, shoes are a good example of where I can benefit from buying fewer items of higher quality. I normally buy cheap shoes that wear out in a year or so. Since the shoes are cheaply constructed, they can't really be repaired and get thrown away. A smarter approach is to spend more buying quality shoes that will last a few years. I have an old pair of black wing tip dress shoes that probably cost around $100- but I have been wearing them for 25 years. I recently got a new pair of brown leather shoes that were a lot more than I usually pay. These were purchased to replace a pair of shoes that I got for $8, but was throwing away because they were falling off my feet. I tried stuffing crumpled up tissue paper in the toes, but I could not get them to fit right.

Another example of buying something of high quality that lasted a long time is the brown leather coat I bought back in college. I still wear it today 20 years later. It is a very warm winter coat and I bought it on clearance one spring for $65. I have bought cheap coats that have only lasted a couple years before developing large holes or having the zipper fail.

Sometimes the cheapest option is not the best option. Sometimes spending a little more money can get you something that will last much longer and provide a better value over the life of the product. Try to balance being cheap with being frugal.

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Penny Pincher Journal

Sunday, December 14, 2014

Tip 43: Cut down on coffee

Tip 44: Pay off high interest credit cards first

Tip 45: Negotiate on hotel rates

Tip 46: Take advantage of kids eat free nights

Tip 47: Inexpensive foods that are healthy

Tip 48: Free stuff

Tip 49: Buy fewer things, but better quality

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