Does It Really Pay to Be Frugal?

If you want to know, keep a running count of how much frugal habits are saving you.

For example:

• Bring your lunch from home instead of buying it.  If you save $5 per workday, that’s more than $1,200 per year. 
• Buy $30 worth of store brands per week instead of $50 of name brands. Save $20 per week, or $1,040 per year.
• Buy $200 of gently used clothing per year instead of $800 worth of new clothes, save $600 per year.
• Save $10 per week by using driving techniques to save gas, save $520 per year.
• Cut down on or eliminate “vices” and save $20 per week, or $1,040 per year.
• Cut credit card use and therefore monthly payments by $40 per month and save $480 a year.
• Work to cut electricity use by $30 per month and save $360 per year.

That’s actually not a lot to do, especially if you make these techniques habits, one by one. And the total for just these savings, per year, is a whopping $5,240.

That’s almost $450 less in expenses per month. Most of us can find a lot of thing to do with that much: pay off credit card bills, pay down our mortgage, create an emergency fund, save for college or a vacation.

So…start looking around. How can you save money, not by depriving yourself, but by doing simpe things that cut your costs?  It can be easier than you think….and a list of what you’re saving, week by week or month by month, can be a great motivator.  

My Recipe....for Saving

A spoonful of this, a handful of that...

One characteristic I've found essential to saving money is flexibility. If you're rigid about how things are done, you'll miss a lot of chances to cut your costs.

This evening, I did what I often do when it comes time to make dinner. Instead of starting with a recipe and gathering (or buying) the necessary ingredients, I looked into my fridge and my pantry to see what I had available. I live five miles from the nearest grocery store, so picking up "a few things" involves a ten-mile round trip and costs me $2 worth of gas and at least twenty minutes. I also hate to waste what I call "bits and pieces"....the last little chunk of this, the final piece of that, the spoonful or two of something that I didn't want to throw away.(I rarely eat more than I want of something just to "finish off" an ingredient.)

So....I started looking. I had a can of chili. One can of chili cost $1.60 and will basically feel one person if you have nothing else. Me, I like a more complete diet. So I kept looking.

A handful of rice left in the bag. One tortilla. About a fifth of a raw onion. Maybe a cup of frozen corn.

Are you seeing where this is going?

What else? About four inches of turkey sausage. A unopened can of black beans. A cup of shredded cheese.

Good enough. Plenty enough. I didn't have to go anywhere or buy anything and I could use up a lot of small amounts of food that might, if I let them spoil,end up in the garbage disposal.

So...grab.a casserole dish. Rice on the bottom, with a little water. A layer of corn next. Chop the leftover onion, the leftover sausage, layer those. A bit of the cheese. Drain and rinse the beans and add some of those. Cut the tortilla into thin  strips and layer that on. A little more cheese. A sprinkle of red pepper. (Don't overdo the red pepper.)  Three spoonfuls of chili on the top, the rest of the cheese atop that.

I baked it until it was bubbling, let it cool a few minutes and tried my impromptu Mexicali casserole. Delicious!

My point isn't to provide a recipe, it's to emphasize that flexibility can help you save. (For another example, see the 10 foot wraparound desk I build for less than $200.)  In this case, if I'd had two tortillas instead of one, I might have used some leftover chicken I had, the onions, the cheese, the final spoonful in the sour cream container and some bits of frozen bell peppers from my "bits and pieces" container in the freezer to make myself some fajitas. No chicken? Use an egg instead and have breakfast burritos....for dinner.

Get over the idea that you can only do things in a certain way. Flexibility, in so many ways, will help you cut waste, save time and save money.

Excuse me. I'm going to have a little more casserole. Then I'll put the rest in the freezer and day after tomorrow, have it for lunch.

Maybe You CAN Buy a New Car....Soon!

If you’ve been wishing you had enough down-payment cash to take advantage of the current dip in car prices, wait just a little longer. Your old fuel gulper may soon be your ticket to a great deal.

Congress has just passed a “cash for clunkers” bill that provides incentives for people to replace their gas guzzlers with higher mpg cars. Trade in a car getting 18 mpg or less and you can obtain a rebate voucher for $3500 that you can use to buy a car that gets at least 22 mpg. Find a car that gets at least 10mpg more than the one you have now and you can get a voucher for $4500.

Do you own a SUV, minivan or a pickup truck? Get a voucher for $3500 if you trade it in for something that gets at least 2 mpg more than what you’re driving now, or $4500 for one with a rating at least 5 mpg higher.

(There are a few more conditions involved. First, your gas guzzler must be over five years old, in working condition and registered for at least the past 120 days. So buying a wreck for a few bucks and having it towed to a car dealership ain't gonna work.)

Make a great deal on a new, high mpg car and that incentive could end up paying as much as one-third the cost. That could really shrink your monthly payments.

Now, if you want to pay a little more and effectively cut your gas costs in half, you might try one of these cars. Some of them boost ratings of 50 mpg or more.

Start by doing a little research now to determine what your needs are and what kind of car will meet them. But just make sure the President has signed this bill into law before you sign on the dotted line.

(Me? Though tempted, I’m not quite ready to trade in Quartermain. Yet.

Not...quite...yet.

Don't tell Quartermain I'm even thinking about it, or he'll wait until I'm on the most remote country road possible, in the middle of the night, when it's raining and I don't have my cell phone...and then he'll die on me. Just to teach me a lesson. Very touchy creatures, old cars.)

How Much Can You Save? Gas Costs

It's not always obvious how much you can save on a weekly, monthly or yearly basis by just changing certain of your buying habits. MoneyToSpare.net is all about making choices. What you spend your money on is entirely up to you....but you might want to think about what you could buy or how much debt you could pay off with savings like these .


Drive 10 miles less per day in a car that gets 14 mpg and you'll save 5 gallons per week, a savings of $11.25 at $2.25 per gallon. That's an average of $48.37 per month, and $580.50 per year. In three years, you'll have a 15% down payment for a low mileage, late-model used car. (Like the 2007 Hyundai Accent GLS 4D Sedan, 26K, $11,599, that I found on CarMax this evening.)

Fuel: Price Plummet Due to 6% Drop In Demand? Don't Count On It!

A few months ago, the price of gas at my local Wal-Mart was nudging the $4 mark.

Today, it's $1.89.
Almost every day, I have breakfast at Duke's Chevron on Jacksboro Highway. Sausage biscuit, cold tea that I bring from home (see my post about my too-expensive diet cola habit) and a newspaper, specifically, the Fort Worth Star-Telegram. Today there was an article in the Star-Telegram explaining this spectacular drop, complete with a quote from the president of the National Petrochemical and Refiners Association. "It's supply and demand....this summer there was a monumental shift [downward] in driving habits."

The gentleman has an interesting definition of "monumental." According to the rest of the article, we've cut our gas use by a less-than-staggering average of 3.3% during the last ten months, including a 5.6% drop in August.

Does something strike you as odd in this equation? A less than 6% drop in gas use in the last few months results in a nearly 50% drop in gas prices?

Excuse me if I'm a bit skeptical, especially when the main source quoted is, essentially, a Washington lobbyist working for the oil and gas industries.

Could there possibly be another factor at work here?

In less than six months, the price per barrel has dropped from a high of $140 to less than $60, so low that OPEC has already cut production once and is thinking of cutting it again. So... did that tiny drop in demand (sorry, but I am not...repeat, not... going to call a decrease of less than 6% "monumental") take us from oil being as scarce as roses in the desert to a situation where we're now swimming in in the stuff?

I don't think so. Despite the cries of "Drill, baby, drill!" we haven’t recently added a few dozen new offshore oil rigs. (These take seven to ten years to start producing.) No one has reported the discovery of massive new oil fields. Peace has not suddenly broken out among the oil-rich countries of the Middle East, nor has there been any scientific breakthroughs that will let us turn water into gas.

So why this huge drop?

Can you say “oil futures?”

The Star-Telegram also runs the work of an award-winning journalist called Ed Wallace. Wallace reports on the auto industry, but he talks about a lot more than the newest models and who’s making a profit this week. Read Wallace and you’ll often get a very interesting take on the whole U.S. economy.
Which I got back on May 19th, when I read a Wallace piece called “ICE, ICE, Baby.” In this article, Wallace reports that the zooming gas prices in the first part of this year were not the result of short supply, but were caused by the gutting of regulations designed to control not only speculation in the oil market, but also speculation in natural gas futures. Speculators were allowed to buy oil futures, often millions of barrels worth, then hold them while prices rose, thereby creating an artificial scarcity.

This, according to Wallace, is why prices increased, and it became evident in a Senate investigation as far back as 2006...but no one did anything about it.

How did it pass under the radar that both the Senate and the House studied the issue of price manipulation in our energy markets and both concluded that it was unregulated, massive trading in one futures market that was really driving up the price of oil and natural gas?

I suggest you read both this article and Wallace's follow-up, which we now know asked questions that should have been asked by a lot more than one reporter:

We started as a society that worships hard labor and the basic business ethic of building value into the goods you create. How’d we get from there to worshiping Wall Street’s billion-dollar boys — who create nothing, build nothing, own nothing and deliver no goods, and yet can throw so much money into products made by others that they determine what we consumers will pay for those goods?

When you read those articles, I think a lot of things involved with our current economic meltdown will begin to make sense…especially when you read Wallace’s comments about ICE, the Intercontinental Exchange. Basically, Wallace makes a pretty good case that prices throughout the energy market climbed because deregulation allowed speculators to go crazy buying and holding energy futures...and these speculators then fed misleading stories about "scarcity" to media outlets that accepted them with few questions asked.

Now all of Wall Street, including those who bought up huge blocks of oil futures, are scrambling for cash. Is it too much of a stretch to wonder if they are dumping those futures at fire-sale prices, and this, rather than a small drop in demand, is the reason for the astonishing plunge in gas prices?

If so, let’s hope that our incoming Congress and new president will re-impose sensible regulation. But even if this happens, it’ll take time, so don’t go back to your old wasteful driving habits. Fire sales are temporary...but greed is always with us

Enjoy $2 a gallon gas now….but don’t expect it to last. Let's hope that--with a little luck and a different attitude in Washington--while the cost of gas may soon begin to inch up as true supply-and-demand comes into play, we won't see anything near $4 for a long, long time.


Update: My thanks to the folks of the Money Hacks Carnival for including this post in their latest edition.