Up until about seven years ago, we would eat out 2-3 times a week, on average. You would typically find our family dining out Friday, Saturday and Sunday. Occasionally we would venture out during the week as well. Not only did this have a negative impact on our health, but it had an equally adverse effect on our wallet.

We decided to limit our dining out to once a week. This was extremely difficult at first! We had to spend more time grocery shopping, for instance. Also, we had to cook dinner alot more often! But the rewards have made it worth all of our effort.

The first benefit was to stabilize our weight. In other words, we stopped gaining weight. I believe this has also contributed to our ability to loose weight. Many times when I would eat out, I found it easy to justify in my mind the ordering of entrees that were REALLY bad for me and that I would never cook at home. Menu temptation as I like to refer to it! I have found that it is much easier to control myself at home.

Secondly, and the reason you are probably still reading is the $25,480.00! This is real savings and here is how I got there. As usual, I am going to use very conservative numbers. Our savings are probably much greater.

I am using the following assumptions: Family of four (4), $35.00 per meal and reducing the number of restaurant visits by two (2) per week. So here we go!

The average dinner of $35.00 * 2 per week = $70.00 * 52 weeks in a year = $3640.00.

We have been saving $3640.00 * 7 years = $25,480.00

This just represents the raw savings number, I have not taken investing this savings into consideration, yet.

And now for the retirement run down! We will initially assume an 8% annual average return. This is a very conservative number which can easily be achieved by placing the money in a Total Stock Market Mutual Fund.

THE BIG PAYOFF

$70 per week * 52 weeks / 12 months = $303.33

Invest 303.33 every month for 30 years

At retirement you could have $310,770.00 after paying $74,235.00 in taxes!

If you put it into a traditional IRA you could have $385,005.00 at retirement!

Let’s Take It Up A Notch!

Lets get a little more aggressive and assume the historical 11% stock market return.

$70 per week * 52 weeks / 12 months = $303.33

Invest $303.33 every month for 30 years

At retirement you could have $461,978.00 after paying $133,038.00 in taxes!

If you put it into a traditional IRA you could have $595,016.00 at retirement!

All this from skipping two (2) restaurant meals a week! Small changes in our behavior can and will have a huge payoff. I try to always look at the big picture. I look past the $1.75 for a soda. I figure out that $1.75 * 4 *52 weeks * 10 years = $3640.00! Now there’s some motivation for behavior change!

In Conclusion

I hope this provides some food for thought and gets you motivated to make some life changes! If you have a similar story I would love to hear it!

On A Side Note

Edward Lorenz, father of the chaos theory, died this week. Lorenz was perhaps best known for the butterfly effect in which stated that a butterfly flapping it’s wings on one continent could create a tornado on another continent. Simply put, small variations in behavior can produce huge changes in the long term outcome. So why am I attempting to give you a science lesson, you may be asking yourself? Because, I think this theory holds true in many aspects of our lives. For instance, small behavior changes, such as asking for water in restaurants can equate to $93,474.64 in your retirement kitty. Not bad considering the average drink costs just $1.75! Or, as in my example above, a change in our family eating habits will add up to huge savings over the course of our lifetime. So, the next time you try and convince yourself that saving a little here and there won’t make any difference, think of the butterfly effect! Live long and prosper!

I wanted to take a few minutes and share my savings experiences today. I guess you could say this is an update to the post 5 Tips To Cut Your Grocery Bill Today!. I went shopping this afternoon, starting at Walgreens. I stopped by there to pick up some Alli. For those who don’t know, Alli is a weight lose product. I had three coupons totaling $25.00. So stop #1 netted a cool 42% savings! Not bad, right?

Now, on to the bigger and better savings extravaganza! I spent 45 minutes in Kroger and purchased 57 items totaling $145.28. Almost all items were on sale. Using a combination of electronic coupons, manufacturers coupons and store coupons, I saved $79.98. This brought my “out the door” cost to $65.30. That represents a 55% savings, not taking into account the sale prices.

I spent forty-five minutes reading the sale ads and clipping the coupons, 15 minutes driving, 15 minutes in Walgreens and 45 minutes in Kroger. Check the receipts! That’s two hours. I saved $104.98 OR $52.49 per hour for my time. Now you’re talking! Additionally, I used my Chase Mastercard, which gives me a cool 5% cash back at grocery AND drug stores.

One key ingredient that makes this all possible is my local paper. I signed up on a deal, imagine that. At the time the paper was running an unbelievable offer of $68.00 per year for the entire weekly paper, including Sunday! That rate will remain in effect as long as I auto renew my subscription every year. This is the source of many of my coupons and is essential to my savings plan. I highly recommend subscribing to your local newspaper.

As I have previously stated, I get and expect these kinds of savings everytime I go shopping. AND so should you! It will take some getting used to and it will take some of your precious time. But I feel the payoff is worth it! How about you? Share you savings experiences, we would love to hear it!

Much is being said lately about the state of the economy, the housing loan crisis, loss of manufacturing jobs, our soaring trade deficit and the recent Federal Reserve moves to further lower already low interest rates. It’s a dizzying array of bad news, enough to make your head spin.

You might be thinking “I don’t live in the US, why does it matter?” I’ve got news for you, it matters to everyone, no matter where you live. We are in a world economy, each country, effecting others. In this article, I’m going to give you 8 Ways To Recession Proof Your Finances. Eight common sense things you can start doing today, to help shield your family from the devastating effects of an economic slowdown. Now, as I have stated before, I’m not a financial expert or economist, I hold no finance degree. I’m just a guy that thinks, reads and evaluates what’s going on around me. So let’s get started, shall we.

1. Cut Spending

This is probably the number one most important thing you can do, starting today. I know that it’s counter intuitive. We live in a culture of spend, spend, spend! But, I’m telling you, if you try to out spend the Jones’, it’s a no win situation. When the chips are down, everyone screaming at you to spend will disappear. They won’t nor should they be there to help you. Many will say “It will hurt the economy if you stop spending”. Psssst!!! I’ve got a little secret to share with you. Yes you. Just you. If you stop spending and start saving some money, it won’t have a single noticeable effect on the economy. But it could be the difference between feast and famine for you you and your family. I don’t have enough readers to make even a small splash in the ocean that is the economy. Even if I had 50,000 readers and half of you followed my advice. No dice. Wouldn’t make a difference in the big scheme of things. Now, that being said, if all 230 million Americans stop spending watch out! And if you are one of the unfortunate ones with no savings, you’re on the modern day Titanic with no life raft.

So what can you do? Look for un-necessary spending and cut it. Buying a $2.00 coffee every morning. Make a pot at home. Do you really need 200 + cable channels. Are you eating all of your meals out? Do you go to the mall and drop a ton of money on a regular basis. Stop it! Small changes in your spending habits will add up over time. Live with in your means. Sooner or later you have to spend less than your income. I know, that stinks. But it is a heavy dose of reality that you need to hear.

2. Payoff Debt

If you carry any “bad” consumer debt, you need to pay it off as soon as possible. By bad, I mean anything other than a school loan or a first mortgage on your residence. Credit card debt is really bad debt. High interest rates, excessive fees and very low minimum payments spell disaster for most consumers. Case in point, if you have $1000.00 in credit card debt, at 18% interest and you make the minimum payment, it will take you 153 months (13 years) to pay it off. You will pay $1115.43 in interest, yes, that’s more in interest than you originally borrowed. In 13 years you will have paid $2115.43 total. And if you owe 5,10 or 15 thousand the numbers become unbelievable scary. See me after class for details. Another bad debt to have is an automobile loan. Autos, on average, loose 30% of their value the moment you take possession. Some people call their car an investment. What kind of investment looses 30% of its value on day number one and continues to loose value every day until you sell it? None that I can think of. Pay off your auto loan! Use the money you recoup from cutting your spending to pay off all of your bad consumer debt. There are many schools of thought on how to tackle paying off these debts. AND that is beyond the scope of this writing. Dave Ramsey, author of The Total Money Makeover, has a really great book on how to pay off your debts for good. I highly recommend it to anyone who wants to become debt free.

3. Put Off Unnecessary Expenditures

If you can postpone any major purchases such as a car, computer, television, refrigerator, washing machine or a stereo system, then by all means wait! If your reason for buying such items, is for the awe effect, keeping up with friends and family or to “reward” yourself, then you need to re-think the necessity of adding these items to your possessions. In my opinion, you ought to wait until the old one dies. If the economy continues to worsen you will be in a much better position if you don’t have loan payments on these type of items. And if you paid cash, good for you, and shame on you at the same time. You will now have that much less in savings.

4. Recession Proof Your Job

I have written on this topic in 5 Ways to Recession Proof your Job. But basically, shoring up your existing employment is key to recession proofing your finances. Some things such as lay-offs and down-sizing are completely out of your control. But following a few key steps that I have presented could increase your odds of making it through tough times.

5. Increase Savings

This is another very important piece of the Recession Proofing Your Finances puzzle. Assuming you have paid off all of your “bad” debt, the next logical step is to start saving. I plan on writing extensively on this topic, so here is the abbreviated addition. The first step is to save an emergency fund. This should equal 3-6 months of living expenses. This will enable you to make it through some lean times, a job loss or the inevitable economic slowdown. Next you should set some longer term savings goals and start saving for retirement. Like I said these topics will be covered in detail in later posts.

6. Shop Smarter

Here is another topic I wrote about a while back in 5 Tips To Cut Your Grocery Bill Today! There are many things you can start doing today to get your grocery bill down. One good piece of advice that I didn’t specifically cover is the stock piling of staple items. An easy way to ease the pain of high inflation is to buy in on deals and stock up on items such as paper goods like toilet paper, paper towels and napkins. Canned goods that you use often would be another obvious choice. Laundry detergent and household cleaners are also good choice to stock up on when on sale. These items, will inevitably go up with rising prices.

7. Create a 2nd Stream of Income

Have a favorite hobby? Do you make crafts. Are you good at repairing things around the house. Do you have a topic which you know intimately and could blog about?

These ideas and more could net you a tidy little profit. Besides doing something you love, you could start making a second income to assist in your debt pay-off or savings goals. And if something ever happens to your main job, you will already have something to fall back on. Start working on your second income stream today!

8. Become a Do-It-Yourself-er

Have projects around the house that need to be done? Put on that tool belt and get-r-done. Have you hired a plumber or an appliance repair man lately. It will cost you a small fortune to have just about anything around the house fixed. From installing a new toilet to fixing a broken hot water heater, home repairs are easier than ever with all of the Do It Yourself books and giant Do It Yourself hardware stores. Give it a try and you could start saving yourself a bundle.

In Conclusion

As you can see, there are many steps that you can take to recession proof your finances and your family. I hope you found this information useful and will apply at least some of these steps in your personal finances. If you are already doing some of these things, tell us about it. Looking forward to hearing from you.

In this post, I will give you three real life examples of why you should bother to register for rebates. And, I will also share how our family combines multiple discounts to maximize the bang for our purchasing buck. Ready? Of course you are!

How many times have you been enticed into purchasing something because of a nice fat mail in rebate? After tearing open your new prized possession, the rebate quickly fades into oblivion. Sound familiar. You’re not alone. That’s why manufacturers do mail in rebates. They get the psychological benefit of a great sale, without having to pony up. It’s a Vegas-esque numbers game, with the “house” favored to win. They know that the majority of consumers will not follow through to get the rebate. Don’t be a statistic. Well if you want to be a statistic, don’t be part of that statistic. Capiche?

Painting Project

My first example is from August 2007. We decided to do some room painting and needed about 10 gallons of paint. We purchased 5 one gallon cans and one 5 gallon can. The total purchase price was $228.97. We got 1% cash back from our rewards credit card. That’s $2.29. We received $50.00 in mail in rebates. The rebates were mail in and took about 15 minutes to complete.

Purchase Price: $228.97
Less
Rewards Card: $2.29
Rebates: $50.00

Total Savings: $52.29
Total Purchase: $176.68 A 30% Savings

The rebates arrived in about 5 weeks and we promptly paid our credit card.

Back To School

Next up is from December 2006. My wife enrolled in on line courses to complete her Bachelors Degree. Ten more classes and she done, yeah! Anyway, she needed a laptop for school. So after doing my usual comparative shopping I settled on a brand, price and store. We ordered the computer online, shopped through Upromiseand paid with our Chase rewards card. The notebook was on sale for $789.00 ($140.00 off original retail) with free shipping. We got 3% cash back from Upromise. That’s $23.67. We got 1% cash back from our rewards credit card. That’s $7.89. And finally it had two rebates totalling $200.00. The rebates were online and took about 5 minutes to complete. So let’s add this up, shall we?

Sale price: $789.00
Less
Upromise: $23.67
Rewards Card: $7.89
Rebates: $200.00

Total Savings: $231.56
Total Purchase: $557.44 A 29% Savings (60% off original retail)

Oh and I almost forgot, we paid for the laptop with her school loan, so the interest is tax deductible. The rebates arrived in about 6 weeks, which we promptly paid to her school loan.

The Mac-Daddy

And my last example is from November 2007. Our refrigerator and dishwasher decided to collaborate together and start acting up at the same time. We purchased both in 1994 and decided to purchase new rather than gamble on future repairs. I visited several local stores, found the appliances with the features we wanted and of course, on sale. I then went home, ordered them on-line, through Upromise, using our store charge card. AND I had a special online voucher for 10% off. The total purchase price $2477.96. This included free delivery, free haul away of old appliances and a 5 year on-site maintenance contract on both the refrigerator and dishwasher. We got 4% cash back from Upromise. That’s $99.12. We saved 10% before taxes. That’s $235.40. The mail in rebates totaled $271.00. We put the purchase on the store card which had 0%, no payments for one year. Two weeks later, both items went on sale for Thanksgiving for $150.00 (both together) less than we paid. I called the store 800 number and they credited $150.00 right to the charge card. So let us look at this little gold mine of savings.

Sale Price: $2477.96
Less
Upromise: $99.12
10% Coupon: $235.40
Rebates: $271.00
Sale Match: $150.00

Total Savings: $755.52
Total Purchase: $1722.44 A 31% Savings (36% off original retail)

Once again, this rebate was completed on line, with minimal paperwork to mail in. We received the check in about 4 weeks, which we promptly applied to the credit card.

I’m not making this up folks. It’s not rocket science. Anyone can do this. With just a little planning and time on your part, you can achieve HUGE savings. In my appliance example, I have about 7 hours invested in that entire transaction. That includes my comparison shopping, online ordering, waiting on a Saturday for delivery, filing out the rebate information and calling to get my sale price match (this took 15 minutes). I had a total savings of $755.52. So, you could look at it like a was paid $107.93 per hour for my time spent. Not bad!

I want you to take note of a few things. One, I usually try to buy on sale. Two, I try to combine some other offer, a coupon, rebate, etc. Third, I always take the savings and pay back my payment vehicle. (credit card, school loan) And fourth, but a very important part of my savings strategy, I ALWAYS, try to shop through Upromise website. To date, our savings since January 2003 is $1442.99. That’s not small potatoes!

AND, most important of ALL, is take the time to fill out the rebates or you will certainly pay much more than you had convinced yourself your purchase would cost.

Disclosure: I have been a member of Upromise since January 2003. I became an affiliate in February 2008. If you decide to sign up with my link, I will be paid a small pittance. This would be much appreciated as I have a self hosted Wordpress site and do have EXPENSES associated with the running this blog.

Whomever says there’s no inflation, hasn’t bought milk lately. OR bread, or meat, or eggs, or gasoline. You get the picture. What’s going on here? Why do these government bureaucrats insist that inflation is under control.

For one, the governments formula to figure inflation doesn’t include food or gas prices! Presto! Low inflation. Just like that. Hey, Uncle S, when I’m calculating my taxes this year…can I exclude the income from….my job? Of course not! So why do we exclude food and energy from the Consumer Price Index (CPI)? I suppose it’s so the general public won’t panic. Like we haven’t noticed that gas has almost tripled from just 5 years ago.

Note: There is a poll embedded within this post, please visit the site to participate in this post’s poll.

With prices continuing to rise and with no end in sight, it’s time to fight back! Implement the following 5 tips and start saving on your food bill today.

Shop Smarter

1. Join a frequent shopper program

Many supermarkets today offer a frequent shopper or a rewards program. This will entitle you to special pricing, coupons and mailings not offered to non “card holders”. The savings can be significant! On a recent visit to the store, I purchased $115.93 worth of groceries. All items I bought were on sale, including milk. I had coupons for about half of the items. All coupons .50 and under were doubled. I had a “Save $7.00 on $70.00″ frequent shopper coupon. My final bill was $49.68. I saved $66.25 (57%) in one trip! And I do this week in and week out. My savings are not always this drastic, however I enjoy significant savings every week. I plan on detailing how I do this in future posts. Some stores offering Card Programs: Albertsons, Food Lion, Kroger, A&P, Giant Eagle, Harris Teeter & Safeway

Become a bargain Hunter

2. Shop sale ads

Become familiar with the regular and “good” sale prices of items you use often. Actively look for bargains, blow outs and discontinues. Stock up when your price is right!

3. Use coupons

Collect and clip those coupons. Get the coupons from your friend who foolishly tosses them out. Sign up at CoolSavings.com for special offers. Visit manufacturers websites and sign up for special offers and coupons. And then just remember to take them to the store with you!

Get paid to shop

4. Sign up for Upromise

I love Upromise. I have been a member since January 2003. As of today, we have saved…are you ready…$1437.51…One Thousand-Four Hundred-Thirty-Seven Dollars and Fifty-One cents. Just simply buying and shopping for what we normally use. That’s about $287 per year! Why that’s a car payment! A weekend getaway! Two weeks worth of groceries! Or whatever. Now, this is our total savings, not just from groceries. But the grocery savings have really added up. You can save anywhere from 1 -5% on eligible items PLUS if you use your CITI Upromise Card you will save an additional 10% per participating item. That’s some serious savings! After accumulating some dough, you can just take the money and run. OR you can open and fund a 529 college savings plan. Next, you can link it to your Upromise account and the accumulated funds can be automatically swept to the 529 account.
S W E E T ! Start saving for junior today!

5. Get a rewards credit card

Here is another cool one. Sign up for a rewards credit card like the Chase Freedom MasterCard and save 3% on groceries. Use it at non-Upromise stores! With this card, you get 3% for purchases in your 3 categories where you spend the most. All other purchases net you a cool 1%. It adds up fast.

A word of caution

You should only use credit cards to shop if you can afford to pay off the balance in full every month. If you are already carrying consumer debt, this option is probably not for you. Because, as common sense should dictate, it makes no sense to collect 3% cash back, if you are paying 13.9%++++ for that privilege. The funny thing about common sense, is that it isn’t so common.

Have a suggestion for saving on groceries, we wold love to hear it!