Simple Frugality

There is a lot of web-based and free word processors to choose from, out there in the world wide web. It is just that most aren't as slick as this one. The design is vista like and elegant, menu items slide in and out of place, and it's incredibly simple to use. It is not only about the bling. Buzzword has a lot of features, many of which I miss in Google Documents. Inserting tables and graphics is no problem, and the editor is true WYSIWYG and you can see the pagebreaks like you would do in Word. Give Buzzword a try.

Editors note: This is the first post in a series I have thought of in a while. The aim is to convey simething simple, free or at least frugal to you every friday. This is also a trial in posting on a more regular basis than I have been before.

* Simple Free Friday looks at free or frugal things for you every friday *

Sara @ On Simplicity has a post about what you wish you had known at 20. Mine have something to do with money and teeth...

1. Start saving for retirement (compound interests)
2. Keep your teeth perfect and you'll save money and agony
3. Do not collect anything - it is pointless, un-frugal and a clutter (I am still selling off stuff I have collected)
   

I think that these apply to most people.

Ridiculous consumption is one of the trademarks of the western world. We have the money, and spare time to make plain stupid purchases. We believe in consumption. It has become one of the new religions of the world. Trying to keep up with the Joneses is a never ending task, as there will always be someone with something better, bigger and newer.

One of the symptoms of this culture of consumptions is overfilled houses. You do not own things, they own you. Along comes the 100 Thing Challenge, a grass-roots movement in which otherwise seemingly normal folks are pledging to whittle down their possessions to a mere 100 items.

Bruno over at guynameddave.com is far in his own 100 Thing Challenge.

I am uncluttering myself, but taking it to just 100 things seems too extreme to me. So Bruno's efforts is inspiration not to let things pile up. An important point is to avoid purchase the stuff in the first place.

I can not set a number on the amount og things I need in order to function, but I have been digitalizing music and pictures so that most of the stuff is one thing - my computer.

A few days ago, on the very day I pledged to reduce my personal book buying budget to $0 for the coming year, a little surprise came in the mail: a $25 gift card.

To a bookstore.

Ordinarily, this kind of thing is just something to laugh off and not worry about, but the whole situation made me think seriously about gift cards, and it made me realize that there are a lot of interesting little problems related to them.

Should you use a gift card as soon as possible after receiving it? I’ve come to believe that this is the optimal strategy for gift card use. Why? First of all, if you don’t use it, you tend to forget about it (and potentially lose it). According to the Seattle Post-Intelligencer, “More than 10 percent of the $58.3 billion in gift cards bought [in 2006] won’t be used”. Why? Often, it’s because they’re simply lost or forgotten about in a desk drawer somewhere. I know that we had a spa gift certificate for years floating around - it finally got lost in the move.

A second factor to consider is inflation. Let’s say, hypothetically, that you have a gift certificate worth $100 to a health food store. With inflation at 9%, if you hold onto that card for a year, you’ll only get roughly $91 (in today’s dollars) worth of stuff when you finally use it. Our spa certificate was for $50 off a couple’s massage - when we received it, the couple’s massage at that spa was $89. Now it’s $129.

My advice? If you have a gift card, use it as soon as you can. This eliminates the risk of forgetting about it or losing it and also prevents inflation from eating away some of the value of the card.

How should you handle spending “over” the amount of the card? I know that if I walked into a bookstore with a $25 gift card, the likelihood is that I would spend some small amount over the value of the card just to make sure I used all of it. If not, I’d keep the card around in my pocket and then use it in such a way in the future.

In either case, the presence of a gift card often subtly encourages us to spend money we wouldn’t otherwise spend. I often use them as justification - I can now get this $29.99 item I don’t really need for only $4.99! - for completely unnecessary purchases.

What’s a good strategy to adopt here? Go with a friend or two and then spend less than the value of the gift card. Then, if your friend is also making a purchase anyway, slip them the remainder of your card. Not only will they appreciate it, you also won’t find yourself stumbling to spend the last little bit of that gift card.

What if you don’t want the gift card at all? Not too long ago, I won a gift card to Sephora. For those unaware, Sephora is a store that sells cosmetics. What use could I have for such a card, really? I’m a guy living in Iowa who prefers to dress in blue jeans and comfortable shirts.

You have several options here, but my favorite is to simply re-gift such a card. Find someone you know who might actually use the card and give it to them, either for a gift-giving occasion or just because you can. This either serves a purpose of giving you a very inexpensive gift for someone or else helps you cement a relationship with someone. In either case, it’s an added value for you.

In my opinion, gift cards only work as a gift if you know they fill a specific desire of a person. Give a book lover a gift certificate to a bookstore and they’ll love you for it (especially if you’ve slipped it inside a gift of a paperback you think they’ll love or one that holds special meaning for you). Give it to someone you don’t know well and they’ll probably just shrug their shoulders. If you’re in a situation where you’re giving someone something as generalized as a Target gift card - one that doesn’t match any sort of specific interest or attribute about the recipient - just give them cash. Cash is the gift card that works anywhere, after all.

As for my book store gift certificate, I’m going to hold onto it until the end of my pledge. Using it now seems like cheating - and a sure way to convince myself to spend a little more and completely destroy my pledge.

This has been a guest post from Trent Hamm who writes about personal finance at The Simple Dollar. Please visit his blog for even more articles like this one.

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Sometimes we all can use a little inspiration. I thought I’d share some of my favorite inspirational videos with you, hoping that it’ll help pick you up today.

Play these as needed. Warning: you might be inspired to greatness, so use with caution.

1. Randy Pausch’s Last Lecture: Achieving Your Childhood Dreams

Watched by over 6 million viewers, this video of a Carnegie Mellon professor who is dying of pancreatic cancer contains more inspiration and wisdom than almost anything else you can watch online. Watch it!

2. A Father’s Amazing Love

Unless you’re a cold-hearted bastard (and none of you who read this blog are, I know), you will get teary-eyed watching this video. You can’t help it. There is no more powerful demonstration of a father’s love than this.

3. Steve Jobs’s Stanford Commencement Speech

I admit, I’m a Steve Jobs fanboy — the guy invented the Mac, the iPod, and Pixar for goodness sake! He’s also a minimalist, like me, and in this speech he shows the power of pursuing your dreams, something I fervently believe in. And Steve, if by any chance you happen to read this blog, drop me a line! (I know, not much of a chance, but I had to give it a shot.) Correction: Steve didn’t invent Pixar, as one reader pointed out. He probably didn’t invent the iPod either, but he did lead both to prominence.

4. Will Smith - Running & Reading (The Key to Life)

Will Smith is right on in this speech. As an avid runner and reader myself, I’ve noticed these same phenomena have changed my life, and I recommend both to anyone I talk to.

5. Free Hugs Campaign

I’m a big fan of the Free Hugs campaign. Such a simple yet profound and revolutionary idea — offer free hugs to strangers and change their lives in small ways. I love it.

Have a favorite inspirational video? Share in the comments!

This is a guest post from Leo Babauta, the author of the great site Zen Habits. If you have not already done so, please visit his insightful blog.

My wife and I both like to press our creativity and see what money-saving tactics we can come up with that save a sizable amount of money and have a lot of fun along the way. Here are eight we’ve discovered over the last several months (yep, I’ve been saving these along the way).

1. Community festivals can be a very cheap way to spend a summer weekend, particularly ones near your home or ones that line up well with other planned summer trips. Just take along a sack lunch, watch a parade and the other activities (or even participate), and even sample some of the local fare by buying one and sharing it with the rest of your group. Even better, you can participate in events that push you a bit outside your comfort zone and let you try something a bit different than usual.

For example, this past weekend, my wife and children and I attended Nordic Fest in Decorah, Iowa, which happened to fall on the same weekend as a family event. We spent most of Saturday at the festival. We tried out some of the Norwegian food (abelskivers were my favorite - balls of a pancake-like pastry covered in jam and powdered sugar, and they were only $0.25 a pop). We watched the parade (free). Our children got their faces and arms painted (free). We even spent a couple hours in the afternoon watching a rock throwing contest in which I participated. In fact, here’s a video of one of my attempts, in which I chuck a hundred pound rock roughly nineteen feet.

A cheap weekend of fun for the whole family, indeed. (If you’re unable to see the video, check it out here.)

2. Prepare a meal before you go on a long trip. Before a recent weekend trip, we made eggplant lasagna and put it in the refrigerator. Three days later, when we returned mid-afternoon, worn out from a very active weekend, we just popped the lasagna in the oven and had a very inexpensive home-cooked meal.

Before figuring this out, we would often eat out at the end of a long trip because we were worn out after the trip. It was simply much easier to do that than to go home and prepare a meal, and that often meant $20 to $30 would be invested in the meal. By preparing the “welcome home” meal before we left, we trimmed the cost down to $3 or so.

3. Be inclusive with the neighbors as it can save you money and help forge powerful relationships. We have a swing set and a sandbox in our yard and as our son has grown older, he’s begun to interact quite a bit with other children nearby. With the recent arrival of a new family next door, with a youngest child just slightly older than our son, this has kicked up a notch.

We just made it very clear to the neighbors that their children were welcome to play in our yard and on our play equipment, no questions asked, the very day they moved in. Before long, they had invited other children in the neighborhood to play on the equipment and we welcomed all of them. Because of this, our son has had an army of children to play with all summer, we’ve become familiar with many more families on the block, and our son has been invited to play with many other children, improving his social skills. All with absolutely no cost to us (and often some savings, considering we’re playing in the yard instead of engaging in other activities).

4. Making your own beer and wine is very cost-effective if you prefer craft beers and solid wines. If you’re a “two buck Chuck” person or you prefer Busch Light to everything else, making your own beer isn’t very cost-effective. However, if your tastes run more towards craft beers and solid offerings from local vineyards, then making your own can be very cost-effective (and very tasty, to boot).

For example, my wife and I recently made a batch of oatmeal stout at home. Oatmeal stouts are rather intricate brews with a lot of ingredients and you can rarely find them in stores for less than $11 per six pack of bottles. We made forty two bottles of oatmeal stout for about $45, all told. This averaged out to about $6.50 per six pack of bottles. Now, if you compare that price to most mainstream beers (Busch, Budweiser, Miller), that’s not a particularly strong savings, but if you compare it to more craft-oriented beers (Sam Adams, Goose Island, Sierra Nevada, Rogue, etc.), it can be a serious bargain - and a lot of fun. If there’s interest, I’d be glad to post a walkthrough and a cost analysis of the next batch we make.

5. I’ve started to save my shredded paper because it makes spectacular campfire kindling. Whenever I have a pile of papers to shred, I just shred them up, then get them just a little wet. Then I squeeze the shredded moist paper down into a consistent but loose ball (mostly just making sure they stick together from the moisture), then let the ball dry out in the garage.

Before a camping trip, I grab a few of these dry balls of paper and pack them away. Then, when we build a campfire, I stack up the wood, put the dry paper ball at the bottom, and light the paper ball. It goes up in flames very quickly and usually has enough heat in a football-sized ball to get some smaller pieces of wood burning. This saves money on campfire starters and lets us actually utilize the shredded papers instead of just tossing them in the trash.

6. Another “hot” tip - campfire ashes make great fertilizer. Just scoop up the ashes when you’re done and save them in a container. When you get home, dump them out around the base of any bushes you have, in your garden, or even in your compost bin. Wood ash contains plenty of potassium, calcium, and magnesium and works well as a fertilizer if applied at a rate of about five pounds per hundred square feet.

It’s worthwhile to note that you shouldn’t do this if your soil is already very alkaline. If you garden, you probably already have some idea as to the pH of your soil - if you don’t, do a pH test. If the pH is above 7 or 8, don’t add wood ashes to your soil. However, if the pH is lower, wood ashes will be a nice benefit - and you can’t argue with the cost and environmental friendliness of the source.

7. Look for “mistinted” paint at your local hardware store if you’re about to paint a room and don’t have a need for an exact shade. You’ll often find gallons for just a dollar or two and the paint is just fine - it just happened to not perfectly color match someone else’s needs. Often, you can find enough for a room of the exact same shade and, if not, you can easily get more just by asking them to make more of that shade.

This works best if you’ve decided to re-paint a room but aren’t too worried about the exact color of the room. For example, we’re discussing repainting my office in a light green. Since I’m not too concerned about the exact shade, we’ll just dig through their “mistinted” paint until I find a “light green” that I like and get it for incredibly cheap. That’s how you redecorate for pennies.

8. Perennial vegetables are an incredibly cost-effective (and effort effective) way to garden. Take, for example, our asparagus patch. We started it this spring and have some shoots up out of the ground. For the next three years, we’ll not even touch this patch - nothing at all. After that, fresh asparagus every spring, like clockwork, with no effort.

If you like fresh garden fare but hate planting and dealing with gardening and you also don’t like the cost of replenishment each year, look into planting perennials, which grow up automatically each spring. Many herbs are perennials, as are asparagus, Pacific spinach, sweet potatoes, strawberries, and countless others. Just plant them once and they come back every year with very little tending required, just harvesting. That’s cost-effective gardening.

This has been a guest post from Trent Hamm who writes about personal finance at The Simple Dollar. Please visit his blog for even more articles like this one.

One major theme I’ve observed in a large number of recent personal finance books and articles is the idea of valuing experiences over things. For example, it’s more financially sensible to lead a spartan life filled with many memorable experiences than it is to subscribe to the consumer lifestyle. I’ve hinted at this concept several times recently, in my discussion of saving to splurge as well as my review of The 4-Hour Workweek.

On one level, this makes a lot of sense. In your final years, you won’t want to look back on a life that was spent accumulating stuff. Instead, you’ll want to look back on a life well lived, one filled with all kinds of interesting and valuable experiences. Life isn’t about the stuff you have, it’s about the things you do.

There’s only one problem with this philosophy. It’s just as prone to overspending as accumulation of stuff is.

I think back to the amazing honeymoon I had with my wife in the summer of 2003. We went to London, stayed in a hotel room overlooking Hyde Park for a week, and strolled to everything we wanted to see in the city. Then we stayed in Manchester for a few days, then a few days in Inverness, then a final night in London. It was unforgettable, but we spent money like it was water on the whole trip - the total bill ended up being in the low five figures. The summer after that, we spent about a week and a half in the Seattle and Victoria, B.C. areas, spending about $4,000 on a very memorable trip.

In short, the “experience”-based lifestyle is just as prone to overspending as the “stuff”-based lifestyle. You can just as easily blow thousands of dollars on your home entertainment center as you can on a memorable trip.

The key to keeping the experience-oriented lifestyle within reason is the same as keeping the item-oriented lifestyle in reason - frugality. Just as with shopping for the best deals on items, you can also do some careful planning and get the maximum value for your dollar when it comes to memorable experiences. Here are some ideas.

Don’t set the bar for enjoyment beyond what’s reasonable. My wife and I were in great danger of doing this with our London trip - we set the bar for memorable experiences pretty high with that one and we tried to compete with it for the next two summers. While it’s great to occasionally have a truly monumental experience, don’t try to make every other experience match up to it.

What really worked for us was spending three straight summers since then with only extremely modest trips - a camping trip to the Great Lakes in 2006, nothing at all in 2007, and a week along the shores of a nearby lake in 2008. Those experiences were highly enjoyable but didn’t break our finances, either.

Use the peak-end rule to your advantage. The peak-end rule states that your later judgment of an experience is mostly made up of the peak of the experience as well as how you felt at the end of the experience. That means that a trip where you jam every day full of activities isn’t really going to build a ton of great memories. Instead, make the days more leisurely and focus on having two great experiences - one in the middle of the trip and one at the end.

This actually works. My memories of the Seattle trip are really defined by two experiences - visiting Butchart Gardens (peak) and visiting an amazing bonsai garden (end). My memories of our London trip are mostly defined by visiting Parliament (peak) and a long train ride from Inverness to London where my wife slept on my shoulder and I looked at the countryside (end).

Fill your life with lots of enjoyable smaller experiences. Instead of blowing huge amounts on jaw-dropping experiences, fill your spare time with experiences that fulfill you deeply without emptying your bank account. Spend more time with your kids. Explore the nature near you. Go on shorter trips and discover the beauty and activities available in your own state that you’ve never discovered. Try some new activities that are outside of your comfort zone wherever you are.

For me, the most memorable experiences of this summer are ones that cost very little: playing Calvinball with my son, rolling over and over in the grass with my infant daughter, going to dozens of little community festivals and participating in the cultural activities, biking to the park regularly for family picnics, and so on. These things didn’t have much cost at all, but they’ll be what I remember from this summer and they’ll be very happy memories, right along that top shelf with visiting Parliament with my wife.

Why? The real key to making memorable experiences isn’t in blowing wads of cash on amazing peak experiences. It’s in figuring out what truly makes you happy and making that central in your life. I can name on one hand the things that make me the happiest - writing, playing with my kids, cooking and enjoying good food, and reading. Those things make me happier than anything else, and when I surround myself with them, I find tons of great and memorable experiences without spending much at all.

In the end, then, the real key is to find the elements of your life that make you happiest and make those elements the center of your experiences. The best part is that it doesn’t have to cost much at all and it will put you on the path to leading a memorable life.

This has been a guest post from Trent Hamm who writes about personal finance at The Simple Dollar. Please visit his blog for even more articles like this one.