31 Essential, Frugal and Wise Actions – 2

Part 2 of 6

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Here’s the second installment: Actions 7 – 11.

Make a list of all your newspaper and magazine subscriptions; cancel any that are not regularly read. Take action if you have a stack of periodicals piling up in a corner, untouched and unread. This ‘stack’ could represent hundreds of dollars wasting away every year. Chances are you only have time to read a handful of magazines each month. Frugal alternatives: (1) catch up on your reading for free at the local library (2) ‘share’ subscriptions or swap magazines with friends.

Review all recurring expenses (monthly and annual). Cancel any that are no longer important. These are expenditures that can add up but are easily overlooked as regular charges. They can include (but are not limited to):
- Gym, YMCA or health club memberships
- Pool or golf club memberships
- Any other association or club memberships where you rarely participate
- Credit alert or credit score services (of minimal value, provided you routinely review statements and your credit report)
- Credit or mortgage life insurance – incredibly expensive for what you get. Better to buy a term life policy.
- Subscriptions to video or music providers (Netflix, Sling, Pandora, Sirius, etc.)
- Annual credit card fees (unless the rewards exceed the annual fee)
- Monthly checking account fees – time to find a new bank or a credit union!

Contemplate whether it’s time to cut (or cut back) the cable. Here are several strategies for scaling back or eliminating the cost of cable:
- Cancel premium packages for channels rarely watched.
- Replace cable with a combination of over-the-air broadcasts and streaming services. Attention sports fans, click here for ways to get your sports fix – without the expenses of cable.
- Go old school: rent DVDs from RedBox or check out DVDs from the local library.
- Limit TV viewing – engage more in productive and healthy alternatives. Another advantage: you are less inclined to buy so much stuff when you are no longer being bombarded by commercials.

Investigate dropping the telephone land line – given the pervasiveness of cell phones, do you still need a land line? It depends…
- Pros: (1) dropping the land line could save several hundred dollars each year (2) lose the telephone ‘spam’: all those annoying telemarketing and robo calls. (3) simplify your life
- Cons: (1) there may not be much savings if your phone line is bundled with internet service (2) a land line typically has better sound quality; cell coverage is still spotty in many areas (3) emergency response for 911 calls is faster, since your address pops up in the 911 response center.

Review cell phone plans – cell phones, particularly those with data plans have become a big monthly expenditure. If you’ve had your plan a while, it’s time to shop around. Just be aware of any early termination fees. Take advantage of family plans where data and airtime can be pooled.

Cheers, Paul

Next time: Actions 12 – 16 Friday the 20th.

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31 Essential, Frugal and Wise Actions

January is the longest month of the year. Granted, six other months also have 31 days. But none last as long as January. To help pass the time, I present you with 31 Frugal and Wise action items. Make that long, slow slog through January (and February) profitable. Enhance your finances.

I’ll be breaking down the recommendations into six installments between now and the end of the month. (Unfortunately, 31 is a prime number and can’t be evenly divided.) Here are Actions 1 – 6:

Review Auto and Home Insurance Policies: Call your current insurer and ask about reducing premiums; get quotes from competitors. Some of you might have experienced what I have: premiums go up year after year but then you phone your insurer and somehow, they find a way to reduce your premiums. Definitely worth a 10-minute call. If your present insurer can’t do much for you, it’s time to shop around. Possible ways to save: (1) increase deductibles (2) cancel comprehensive and collision coverage on older cars (3) ask if you are you eligible for discounts because of your employer, alma mater, memberships or affiliations (4) get a discount purchasing home and auto policies together from the same insurer (5) ask about discounts for teen drivers with Driver’s Ed and good grades. But avoid skimping on liability coverage limits. Here are the J.D. Power rankings for auto insurance: and homeowners insurance:

Consider Umbrella Liability Insurance: As you faithfully practice Frugal and Wise ways, your savings and net worth are bound to increase. You should consider adding an umbrella liability policy to augment the liability coverage provided by your auto and home policies. Typically, an umbrella policy brings your total coverage up to one or two million dollars. Yet, the cost is reasonable, perhaps several hundred dollars to around $1000 per year. Just remember: a million bucks ain’t what it used to be…

Start Gathering Tax Records: For most folks, preparing a tax return is less painful than a root canal, but not by much. Be on the lookout for 1099 and W-2 forms arriving in the mail or made available online. Tally up last year’s charitable contributions and other deductions. If you are getting a refund, you’ll want to file as soon as possible. If you owe taxes, you don’t want surprises – better to know sooner than later and be prepared. Make an appointment now with your accountant or tax preparer. If a Do-It-Yourselfer, start your return online or with tax preparation software. Here are tax prep software reviews from two sources: http://www.pcmag.com/article2/0,2817,1904319,00.asp , http://www.thesimpledollar.com/best-tax-software/

Check Your Payroll Withholdings: If you anticipate getting a BIG tax refund this year, congratulations! You just gave Uncle Sam an interest-free loan for the year with your hard-earned money. I realize that many, if not most, taxpayers prefer large refunds. But as the Frugal and Wise, you should be taking a different tack: increase your take-home pay by reducing tax withholding. Then immediately save or invest the difference. Just don’t overdo it; withhold too little and you could end up paying a penalty. Come every April, you ideally should owe Uncle Sam a modest sum, say, a hundred dollars or so. Ask your payroll or HR department for a W-4 form to increase the number of exemptions you claim (the more exemptions, the less taxes are withheld from your paycheck.)

Resolve to NEVER Pay ATM Fees Again: Believe it or not, the average ATM fee is now $4.57 per transaction! This is SO unnecessary. You might as well be tearing up Five Dollar bills and scattering them in the gutter! Tips for locating surcharge-free ATMS: (1) Convenience stores – 7-11, Wawa and Sheetz among others (2) Drugstore chains: CVS, Walgreens, Rite Aid (3) Your bank or credit union’s website may have a directory of free ATMs. Note: some “free” ATMs might ask if you want your account balance. Just say No! Otherwise you could get dinged 50 cents or a dollar. If it’s your bank that’s charging the fee, it’s time to switch banks or, better yet, join a credit union.

Pull Your Credit Report: You are entitled to a free credit report every year from each of the 3 major credit agencies: (Equifax, Experian, TransUnion). It’s important to verify the accuracy of your credit record as well as to detect any signs of fraud or identity theft. Visit the online portal annualcreditreport.com – you can either access your credit reports online or download a form to mail a given agency. I suggest staggering the three agency reports so that you are reviewing your credit record every four months.

That’s all for now. As always, your input and suggestions are welcome. The next installment will include Actions 7 – 11. Cheers, Paul

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Shaping Up the FRUGAL Way

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It’s a New Year. Inevitably, millions of Americans will – once again – resolve to lose weight and get into shape. They are going to join a gym! Guess what? Eighty percent to those who sign up in January will be gone before the end of February! Here are some other interesting statics on gym membership: (source: creditdonkey.com)

The January surge – ‘resolution seekers’ will swell gym attendance this month by 30 – 50%
The second week in January is typically the busiest week of the year
Only 50% of gym members visit more than 100 times a year
Gym or YMCA individual membership runs $20 – $65 (or more) per month but there is generally a $100 ‘initiation fee’. Quit after a couple of months and you’ve paid dearly for your handful of visits!
Monthly membership fees are usually charged to your credit card or automatically deducted from your bank account; it’s easy to overlook them, meanwhile they add up month after month and year after year…

Don’t get me wrong. I am not discouraging anyone from joining a gym. Regular exercise leads to improved well-being, both physically and mentally. And the gym can provide an important social setting as well. But there may be lower-cost options that are right for you. Consider your choices carefully. You want to attain both physical and fiscal fitness:

Partner up – walk, run or bike with neighbors or friends. Make exercise a social event. Plus, a partner or group can provide the accountability you need to exercise regularly.
Shape up at home – get workout DVDs from the library or watch videos on YouTube. There might be a minimal expenditure for equipment (stretch bands, hand weights, etc.).
Check out local high school pools – does your school district open its pool to the public? This could be a very reasonable alternative to a gym or YMCA. Example: the Upper Darby, PA High School pool, charges $45 for annual membership plus $2 each visit.
Join the USMS (US Masters Swimming) – if you want to kick your swim workout up a few notches, join the USMS and be prepared for a vigorous workout. Annual membership is around $50. The USMS chapter near me holds practice at Villanova University most weekday mornings for $6 a session. Happiness is swimming a mile before 7AM!
Take advantage of community/public pools – the City of Philadelphia operates the 50 meter/Olympic-size Kelly Pool in a lovely section of Fairmont Park. Admission is free to all and there are 3 dedicated lap lanes. Unfortunately, the pool is only open approximately 10 weeks during the summer. In contrast, outdoor pools at the International Swim Center in Santa Clara, CA are open year-round (I’m very jealous!) Noontime swims for the public cost $5.
Investigate fitness classes offered by your community or school district – Jane and I are signed up for Pilates through our school district. It averages about $8 per 60 minute session. And guys, Pilates is not some namby-pamby chick thing; it’s tough stuff!
Does your employer provide a fitness center or subsidize membership? A gym located at your workplace can be very convenient and probably cheaper than other gym offerings (or maybe even free). Plus, there is a trend among employers to offer wellness incentives that decrease employee’s healthcare copay.
Ask your health insurance provider if they offer wellness incentives – example: Independence Blue Cross in the Philadelphia area will pay up to $150 per year towards gym membership.

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May 2017 be the year that your bod and your finances shape up! Cheers, Paul

Take These Five Actions Before Year-End

2017-calander — My 2017 Dollar Store Calendar ($1.06 with tax) It’s the Muscle Car theme.

We are now in the last few days of 2016. Here are five Frugal and Wise actions you should take before the year’s end:

Stock up on holiday merchandise for next year. Take advantage of the post-Christmas deep discounts on holiday decorations, lighting, greeting cards and wrapping paper. Do not pay full price for the same items next November or December. (But please exercise some restraint in your post-holiday purchases.)

Pick up your 2017 calendars at the dollar store. OK, the dollar store calendars are not as nice as the on ones sold at book stores or Staples for upwards of $8.00. But are the calendars from Staples 8 – 15 times better???

Make last minute charitable donations – if you itemize deductions on your federal tax return, additional donations can reduce your 2016 tax bill (or increase your refund). Typically, those with middle class incomes are in a 25% tax bracket. That means that every $100 donated to charity could reduce your federal income taxes by $25. To qualify as a deduction for 2016, mailed donations must be postmarked no later than December 31^st. Donation by credit card or electronic fund transfer must be initiated by the 31^st.

Gather up unwanted clothing and household items to donate. This week could be a great opportunity to reduce household clutter and get a tax break to boot! All that stuff no longer being used can be carted off to the Salvation Army, Goodwill, Purple Heart or similar organizations. Be sure to get a receipt for your donation. As a rule, your donation is valued by what it would cost to purchase similar items in a thrift store (Thrift Store Value). Donating $100 worth of clothing and household goods (not all that difficult to come up with) could reduce your tax bill by, say, $25.

Bump up your retirement plan contribution by a percent or two – at a minimum, you should be contributing enough to your 401k or 403b to get the full match from your employer; failure to do so means losing out on a huge sum of money over a lifetime. Every year, try to ratchet up your contribution just a bit more: 1 or 2 percent each year? Such a small reduction in take-home pay likely will not be missed* but could significantly accelerate your retirement savings. See my posting You can’t spend what you ain’t got: Why You Need to Automate Your Savings.

*Example: If your annual salary is $60,000, one percent is $600 or only $50 per month. If your contribution is pretax and you are in a 25% tax bracket, your take-home pay is only reduced by $37.50 per month. Over a 30 year period, assuming a 7% annual return, these extra 1% contributions would accumulate about $56,000 in additional savings!

Wishing you a Happy and Prosperous New Year! Cheers, Paul

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A Class on Personal Finance

FYI for readers in the Philadelphia area: I will be teaching a class on stewardship and personal finance at Tenth Presbyterian Church starting Sunday, December 18, 9:00 – 10:15 AM, in Fellowship Hall east. There will be 9 sessions running through February 26, 2017 (no class on Christmas or New Year’s Day).

The class will be interactive and tailored to the financial questions, needs challenges and goals of the individuals attending. Bring questions!

Here are some of the proposed topics:

A Biblical perspective on money, wealth, stewardship and contentment
Practical suggestions on becoming savvy consumers, cutting costs, stretching dollars and living below your means.
Getting out of debt, staying out if debt. Good debt vs. bad debt
Saving and investing: the power of compounding, the importance of an emergency fund, long term investment for college and retirement. Saving for a house.
Legal essentials, particularly for families with young children.

Please join us if you can. Information on parking can be found on Tenth’s website. Regards, Paul

My Favorite Things Part III

The Next Installment of My Favorite Things ….

Melitta European Roast Coffee – ditch that ruinous daily latte habit; brew yourself an awesome pot of coffee at home for a fraction of the cost! A 12 ounce can of Melitta goes for $5-6 at regular price but can be had on sale at Shop Rite for as little as $3. Even at $6 a can, that’s only 25 cents per 8-ounce cup. Take that, you Four Dollar Latte!!! melitta

Our friend, fellow blogger, coffee aficionado and roaster Bryan Stoudt once complimented us on the coffee we served. That’s a resounding endorsement from someone who knows good coffee when he sips it!

GasBuddy– gas prices in given area might vary by as much as 15 cents per gallon, or even more. The GasBuddy mobile app or website helps you find the least expensive gas station near you, whether in your neighborhood or on a road trip across the country. And it’s free (though they do derive revenue comes from ads).

CONS: It may not save you that much money. If you drive 12,000 miles a year, get 20 miles to gallon and GasBuddy saves you 5 cents per gallon every time you fill up (optimistic, IMO), that’s only $30 per year. Also, there is a lot of frustration with the recent update to their mobile app.

ALDI Supermarkets

If you are fortunate to have an ALDI nearby, you cannot beat their prices. ALDI sometimes gets put down as the ‘ghetto’ grocery store. But guess what? ALDI is owned by the same German consortium that runs the hip Trader Joe’s chain. And ALDI is to be greatly commended for bringing inexpensive, fresh food options to America’s inner cities.

CONS: Typically, smaller stores with a somewhat limited selection. Mostly store brands with few name brands. Remember to bring your own bags.

That’s all for now. Look for more My Favorite Things postings to come. And please send me a list of Your Favorite Things.

Meanwhile, click this YouTube link to hear Mary Martin singing My Favorite Things from the original Broadway musical. Sound of Music opened on Broadway this month, 57 years ago (16 November, 1959)

Cheers, Paul

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