A few weeks ago I was at the beginning of a 2 hour drive back from a friends lakehouse with my brother when, in the 105 degree Texas heat, the motor for the passenger window broke and the window would not roll up. I spent the rest of the drive progressing in emotional state from pissed off that my brother broke the car (which he wasn’t at fault) to being flat out grumpy because I was so hot, to laughing so hard I cried because of how ridiculous we felt.

Have you ever noticed that setbacks always seem to occur at the worst possible time, and more importantly that they always occur to you? Your computer crashes the night before a paper is due, you get sick before new health insurance kicks in, or you get in a wreck just after you drained your emergency fund to get your transmission fixed. It never fails, Murphy’s law (or what my family has come to know as “Luck of the Bowen”) always seems to show up at the most inopportune times making life much more hectic.

Now take a second and think about all the incidents like this you have had in your life; where it seemed like something that ordinarily would have just sucked, happened at the most awful time.

In looking back, was it really that bad? I would guess not. I know that when I think about the events in my life where everything seemed to go wrong, I realize that whether it was a true catastrophic event or something as silly as the car window not rolling up I am the person I am today because of how I got through them and what I learned from them.

Being a member of the Bowen clan, luck of the Bowen is always in effect and it always hits the pocketbook. As a result Mary and I have taken what we’ve learned from past experiences and started some “hedge” funds to hedge our bets against the expenses that always come out of nowhere.

We have our emergency fund for general emergencies, so far we have managed to save away 3 months expenses if both of us loose our jobs, and 6-8 months if one of us loses a job. We feel like we are in a good place with our emergency fund, and we continue to add to it every month, but we realized that there were other things for which we needed to be putting money away in preparation.

The car window breaking led to us starting a fund to replace the car. After all it is 11 years old with 150k+ miles on it. On top of that, my Labrador continually eating things she shouldn’t (Christmas Ornaments, Bottle of Tums, the Couch, a Chair…) and our Chihuahuas overly expensive teeth cleaning bills ($600) led us to hedging our bets for the dogs and creating a pets fund in which we put money every month for when one of the big pet expenses comes up. (Yes, pets can be VERY expensive, but in my opinion they are completely worth it).

We created these additional funds because we have learned from past experiences which forced us to use credit cards when we didn’t have the money available.

On top of all of these things we are currently evaluating life insurance policies outside of our work coverage, because life is just that unpredictable.

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After I hung up the phone I kept asking myself, “Am I truly happy?” and “What could I do to make myself happier?”

…and thus a personal journey of self discovery began.

I could bore you with an endless array of what I found about myself, or I could answer it for you in a simple sentence that might contradict the American dream: the opportunity cost of owning a house at 23 sucks.

No, we aren’t hurting financially like many Americans. We bought a house that we could afford, we got a low interest, fixed rate loan, and we put down a good sized down payment (10%). We have an almost fully funded emergency fund, we are both employed, and we live a frugal lifestyle. The issue comes when I look at the opportunity cost of home ownership, or what we could be doing if we didn’t own a house.

The thing about owning a house is that no matter how much financial knowledge you have you can never really account for the opportunity costs of this often emotional purchase that is deemed a “necessity.”

I think about how much money we spend each month on our mortgage, taxes, insurance, utilities, and HOA dues and I cringe when I think about what else we could be doing with half of that money if we had bought a less expensive house, or even if we were renting. One of us could work while the other focused on entrepreneurial ventures or attended grad school. We could work for a year, save up, then quit our jobs and travel the world for a year. Even if we waited another year we could have saved up enough money to put an even larger down payment on a house, thus lowering the future monthly burden.

I look at our house as the reason why we have to work. I feel like I work a job not because I want to (even though I do), but because I have to, and this feeling of burden makes work seem like a chore instead of a learning experience.

So I challenge you, as you are tempted by a free $8,000 first time home buyer credit, to truly think about how much money you want to spend on a house, and the opportunities that you will give up as a result.

For the record, my wife disagrees with me. Her rational (and mine at the time of purchase) was that we bought a house in which we could grow into and start a family, while this is true, I believe that the only thing that would make me a happier person right now would be owning a less expensive house that wouldn’t feel like a burden.

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Maintenance.  In a world where quality has declined, and new products are cheap, frugal people go out of their way to take care of every purchase as if it’s an investment.  And they know that spending money on maintenance is less expensive than spending money on repairs.

• They maintain their bodies.  Did you know that fit people get sick less than non-fit people?  Which means by taking care of your body you can save a great deal of money in doctors bills!  They also find frugal ways to work out: Run, Walk, Stadium Steps, the list goes on.
• They follow a maintenance schedule for their car and house.
• They check to see if something can be fixed before they buy new. You’ll be surprised to realize that more often than not things can be fixed.  The soles in my nice dress shoes were completely worn out, but I took them to a local cobbler, and for $15 they are as good as new!  

Make instead of buy.  Frugal people understand markup and know that they can easily make many things instead of buying them to save a great deal of money.

• Mary and I make most of our meals instead of eating out.  Just by taking our lunches to work we figure that we save at least $250/month.
• Instead of spending $80 on a particular medicine ball for our workouts, I made one using an old basketball, sand, and a tire patch, now I have the same thing for about $70 less.  It’s not as pretty, but it’s just as functional.
• Here’s a list of 100 Things You Can Make Yourself, some of them are very random, but it’s interesting to learn what you can make with household products.

Set a budget. Frugal people track their money and set priorities, because being Frugal isn’t about not spending money (that’s called being cheap), it’s about prioritizing where you spend it and where you save it to have balance between to two.  They think long term and know why they are prioritizing and saving.  They will occasionally splurge with their discretionary spending, but it’s something that they plan on doing.  They also tend to budget on meaningful things like a nice family vacation, instead of spending money on stuff.  By setting a budget frugal people are always aware of their financial standing.

• Check out 13 Tools for Building a Better Budget to get a good grasp for budgeting.
• Also, check out Mint.com, it’s an online budgeting tool aimed at Gen-Y that will send you text messages or e-mails when you go over budget on something, when your bills are due, or when you get charged a bank fee!  We’ve been using it for about a year, it’s a great tool.

Research. Frugal people know that they can’t avoid spending money, so when they do buy something, they research it first.  Frugal people spend money on quality that will last, they don’t go right for the cheapest thing.  So spend time researching, and looking for the best deal.  As a general rule of thumb my Finance Professor taught me, spend an hour of research for every thousand dollars that you spend.  I think this advice is pretty fitting, essentially, the more you spend, the more you should research (but remember to value your time!).  Here are some great research aids for you:

• Fatwallet, the forums on this site are a great resource for finding deals.  It may take you some time to learn the lingo (PM= Price Match, YMMV= Your Mileage May Very, B&M= Brick and Mortar store, FS= Free Shipping…), but you’ll be sure to find great deals in their Hot Deals section.  Also check out the Finance Section for great financial tips, and the Deal Discussion section for great tips on buying cars and houses.
• Edmunds is a key resource for all your car buying needs.
• Bankrate is a site dedicated to finding the best rates on Mortgages, Auto Loans, Home Equity Loans, Savings Accounts…

Coupons. Frugal people know that 35 cents here and 50 cents there really starts to add up.  They also know how to combine coupons with credit card rewards and/or haggling to save even more!

• Buy the Entertainment Book, spending about $30 on this book (if it’s available in your area) can save you hundreds throughout the year.  It has coupons for everything from groceries, to movie tickets, to dinner.  In fact, when we go out, we check to see if we have a coupon from the Entertainment Book first!
• Subscribe to the Sunday paper, it’s full of great coupons!  We pay $7.50 per month to get the Sunday paper, and easily save at least $5.00 per week in coupons!
• Learn how to combine coupons with rewards programs, like learning how to make CVS work for you!

On the Ball. Frugal people are on the ball by being organized and informed.  They don’t just use the paper for coupons, they actually read it too!  How does staying informed help you be frugal?  It makes you aware of where rates are at so that you might be able to get a higher return on your money, or a lower rate on a loan.  It allows you to follow legislation that might have a direct effect on you. Staying organized is also a key aspect, if you aren’t organized, you aren’t ready to act to make sure you lock in that low rate on your mortgage refininance, or you can’t find the coupon you need to make use of the CVS cash back. Only informed people can make informed decisions, and only organized people can act quickly enough to make the move.

Understand Needs vs. Wants. Frugal people understand what is a need and what is a want, and they ask themselves if something is a need or a want before making a purchase.  Do you want something really badly?  Prioritize and save for it, you might be surprised to see that the desire to purchase will pass.

• I am writing this from a 6.5 year old Powerbook.  Do I want a new mac?  Absolutely, but I maintain my computer and it still functions perfectly for what I need it for.
• I drive a 10 year old Acura with 150,000 miles, and yes, I want a new car, but I absolutely cannot rationalize it.  It’s paid for, it runs great, I can work on it myself (unlike many new cars with which the manufacturers have made it nearly impossible to work on yourself).
• I want to finish outfitting our garage as a gym, no we don’t need it, but Mary and I see an ROI in our health (body maintenance) so we are slowly gathering things from Craigslist, and finding good deals at specialty shops. We understand that this is a want, but it is a priority for us, so we are pursuing it.

I hope that you will be able to form some of these habits and become more successfully frugal!

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Bernard Madoff is a name that you should know (unless you live in a bubble).  A simple Google news search reveals that in the last month over 33,000 news articles have been published about him, all relating to his $50 billion dollar Ponzi Scheme, the largest in History… or so they say.

As you all know by now a Ponzi Scheme is a “fraudulent investment operation that pays returns to investors out of the money paid by subsequent investors, rather than from profit” (Wikipedia).  On the surface it seems like a decent concept, until you think about how it only works as long as there are new investors to pay off the old ones; then when new investors dry up, the whole thing crashes to the ground and the newest investors are the ones who end up with nothing.

People are baffled at the concept.  We comment on how immoral and unethical it is.  We ask how did no one realize what was happening?  How were major red flags not looked into?  Wasn’t Sarbanes-Oxley supposed to make sure this stuff didn’t happen?  How did $50 billion just disappear?

$50 billion dollars is no small sum, but in reality it’s pennies compared to the Ponzi Schemes that Gen-Y is the “new investor” in.  That’s right my friends, whether you like it or not, if you work in America, you are paying into the largest ponzi scheme in the worlds history, probably never to be overtaken.  They are known as Government Entitlement Programs, but you know them as Medicare, Medicaid, and Social Security.

These entitlement programs are underfunded to the tune almost $100 Trillion dollars.  (assuming the programs go on…) This works out well for the boomers who will most likely be the last generation to actually receive payouts from these programs, but Gen-Y is the one left holding the bag.  As a side  note, I do find it ironic that boomers complain that we are the “entitled generation,” but they are the one’s eating up all of these programs.  

In 2004 Medicare began paying out more in benefits than it receives in taxes, and Medicaid and Social Security are soon to follow.

Where is the outrage over this?  Gen-Y, where do we stand on this?  Are we just apathetic because we think there isn’t anything we can do about it?  Gen-Y is widely regarded as the reason Obama is in the White House, so where is our force regarding this issue?

Here is my proposal.  We bite the bullet, we take one for the team, and we jump on the grenade.  It sucks, but any way you put it, we are left holding the bag in this ponzi scheme.  The boomers are soon becoming unproductive members of society, and will be receiving what they are “entitled to” whether we like it or not, so let them have it and end the programs.  There is no reason why we need to leave our children and grandchildren holding the bags, and there is no reason that we should further bankrupt the country for them.

I think we should set a series of cutoff dates, that leaves Gen-Y, and possibly some young Gen-Xers holding the bag for our parents and grandparents.  We will pay into the programs until they aren’t needed anymore… and we will receive nothing in return.  We will be responsible for our own health care and funds when we retire.  Once we know there are enough people paying for the boomers entitlements (and not getting anything in return) we stop the next generation from paying in.

On top of this, we ask the boomers who don’t need the money to not take it, and in return they get massive tax breaks to compensate once they reach 65.

It sucks, but it’s what is needed, and most of us realize that we won’t be getting anything out of it anyway, so we are planning accordingly.  And if you haven’t planned?  Then you still have time.

Please share your solution and maybe we can solve this once and for all.

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Now that we have moved into our house, I’ve found myself at a loss of ideas and motivation to post.  As I’ve been trying to analyze why I feel this way, I’ve come to the conclusion that it’s because I’m beginning to feel like a hypocrite.  We live in a very nice new house, that we have worked very hard for, however we have had a great deal of help getting here.

First, we got a huge leg up from my wife’s brother and his wife.  They currently own two houses in the Dallas area and offered to let us live in one of them, rent free, as long as we maintained it and paid the utilities.  So far we have not been able to thank them enough for the head start they gave us on saving for a house.  We lived there for about a year, and by living frugally we were able to live on my wife’s salary while saving all of mine.  This enabled us to have a good sized down payment on our house and to fully fund an emergency fund.

Next, my in-laws gave my wife her mom’s old car for her graduation.  Which is a very generous gift by any standards, but when her mom’s old car was a mint condition Lexus SC 430 with low miles, it’s above and beyond.  We were able to sell the car for a large sum, which enabled us to put a very large down payment on our Volvo, and put the rest into the down payment on our house.

Finally, something that I have written about previously, but a check that my grandmother gave me when I was young.  I was able to invest and exponentially grow it.  This money paid for Mary’s engagement ring and our wedding rings.  It also paid off all of our debt after college, and for some of our furniture.

Living in our nice new house I have to say it is hard to feel like we are living frugally, in the truest since of the word we definitely are not.  We have a new 2500 sqft house (for 2 people), and we drive a new car that we make payments on (when we could have paid cash), but what I have really come to realize in the last few months writing this is that being frugal isn’t about being stingy, cheap, or not wanting to spend money.  What being frugal is really about is choices.

Mary and I choose to live in a nice new house, we choose to drive a nice new car, and we choose to make sacrifices to afford both of them.  We take our lunch to work.  We don’t eat out much.  We carpool.  We don’t have cable.  We use coupons. We don’t belong to a gym, instead we workout on our own…which will hopefully be a future post.  Mary made the drapes in our bedroom from nice fabric she found deeply discounted.

As you can see, although we may not be the true poster couple for being “young and frugal,” we like to think that we are wise with our money, and we are able to enjoy the choices that we make, while still saving for retirement.

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I write (what is for the most part) a personal finance blog, so you’d think that I would track every penney, but I don’t.  We budget to pay ourselves first (savings/retirement), pay all of our bills, and then everything else is give and take.  One month we might go over on eating out, but we won’t touch our clothing budget, so we call it even; but over the last month as we have moved I have learned a very valuable lesson.

Once you start spending, it’s hard to stop.  It’s like the floodgates of your bank account open, and the next thing you know, you’re asking how your credit card bill got that high!?

We realized this week that we have run our credit card bills up much more than we realized.  It’s not like we have purchased large items, it’s a great number of little things that we did not appropriately budget for.  For instance, the last two weekends we have been out of town, and we did not adequately budget for food for either weekend.  Plus being gone on the weekend messed up our schedule, so we didn’t go to the grocery store to stock up for the week as we usually do, so we ended up eating out.  Then we moved, there was no point in us buying tons of food when we would have to move it, so we ate out more.  

Our move was a beast by itself.  Thank goodness I have friends and family who were willing to come help when I offered free beer (which no one ended up drinking!).  I rented the largest Budget truck available, for 24 hours, found a coupon code online to nock off 10%, and then surprised myself when I was able to negotiate another 15% off at the truck rental place.

Somehow a great number of little things added up.  The only major things I can remember buying are drapes and blinds for the house (which we came in way under our budget for!…to bad we went over everything else!)

This will serve to be a very interesting month.  We will soon make our first mortgage payment (yikes!), and we’ll get to see how close we were in our estimates for our new utility bills!  Plus, we’ll map out a plan to pay off our credit card bills.  Which right now I’m thinking will involve pulling some funds out of savings and tightening the budget to replace the money over the next few months (and hoping for a decent raise soon!)

Also, allow me to apologize for this seeming rant.  As you know it’s been over two weeks since I’ve really posted anything of substance, so A. I’m a little rusty, and B. it helps to just start writing to get the wheels moving sometimes!

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Everywhere I look small “upgrades” are popping up that I know I can find cheaper elsewhere, or that I can do myself without having to pay the builders up charge for, and it pains me every time I give the go ahead for them to do something else when I know I’m being ripped off.  I can’t haggle with them, I’m not in a position to.  I already signed the contract to build the house and put down earnest money, so I’m at my builders mercy.

Why would I voluntarily get ripped off you might ask?  Because as I plan ahead for all of our upcoming expenses like drapes, blinds, rugs, random furniture (although we have most), deposits on utilities, moving costs… It’s easier to lump it all in and finance it so that I’m not out anymore cash after I seemingly drain my accounts at closing, because I will not allow us to dip into our emergency fund for these items.  Really the only thing we aren’t having them do that they can is hang our drapes and install our doggy door ($350 for something I can do myself in a hour is too much for me to bare).

At the end of the day, and especially as our country is testing the waters of economic uncertainty, emergency funds are too important to tap into for non emergencies.  And I’m proud to say that even though we may be paying an up charge on these items, our emergency fund will remain in tact and actually grow a bit due to the rolling in of some of our closing costs, so in the case of an actual financial emergency we will have money to keep us afloat.

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For the first time in my adult life I experienced positive peer pressure, and it made me glad to have the friends I have.  The other night I called one of my former roommates, who is a very good friend of mine and I caught him in the middle of a beer pong game with a fraternity brother of ours.  We all graduated at the same time, all with double degrees, all with finance as one of them.  We spoke about how things are going in life and our conversation came around to finances. 

My former roommate told me that he decided to splurge his tax refund on a new set of golf clubs to celebrate his year in the workforce and a recent promotion.  The conversation went something like this, I will use R for the roomate and G for my other friend (They have me I’m on speakerphone… mid beer pong game):

Me – Nice!  Congratulations…that’s a pretty big purchase!

R – I know, but I’ve already funded my 401(k) and started funding a Roth IRA for the year and I wanted to splurge on something nice as a reward.  Are you and Mary funding your 401(k)’s?

Me- Unfortunately we don’t get 401(k)’s until we have been at the company for a year because of high turnover in our industry.

R & G- THAT SUCKS!

Me- I know, BUT we have both fully funded our Roth IRA’s for 2007.

G- Very good.  So you’ve each got your 4 grand sacked away… that’s impressive.

Me- Thanks.  Have you been funding yours?

G- Absolutely, and I’m saving all the rest of my money for an engagement Ring…

Towards the end of our conversation we all agreed to peer pressure another friend into making sure he is saving and on a good track.

Maybe it’s just my circle of friends, but I’m starting to think that we might be getting it!  We have seen family members want to retire but not be able to, we have seen friends and family get in way over their heads in debt, and we don’t want it to happen to us!  The credit crunch/recession/whatever you want to call it may end up being a good thing for our generation because we are seeing first hand what can happen when your priorities are not in line, and we are learning from it!  We are learning from other people’s mistakes and enriching our own lives because of it. 

I am very proud of my friends for having their priorities in line by not getting caught up with excess, splurging when everthing else is taken care of, and still making time for fun by enjoying a good game of beer pong on a weeknight.  Way to go guys!

On second thought I may have gotten ahead of myself, I need to call them back and make sure they have emergency funds as well… I will update.

Update:  I checked back with R.  And I am pleased to say that he has quite a few separate funds set up.  He says that he has an Oh Shit fund (read: emergency fund), 401(k), Roth IRA, and a mid-life crisis fund (which apparently could double as a house down payment fund as well).  Wow…good job R!

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By no means do I consider myself to be smart, but the fact that I am a clean cut, in shape, nerdy looking guy, who can carry a conversation on just about any topic, has really helped me out in life. My image allows other people to come up with their own realities of who I am, and I have found that for the most part, people consider me to be a mature young guy with a good head on his shoulders, though if you read young and frugal you already knew that (I kid). And for the most part I work at my image because I want people to walk away feeling that way about me.

Whether we like it or not, image is important in our society, and our society sees the things we appear to possess as extensions of who we are. Our friend who drives the BMW must be rich, and the guy down the street who drives a ’95 Civic with 225k miles on it must be poor (eww!).

Notice how I used the phrase “appear to possess,” I say this because if I’m leasing or I have financed a 3 series is it really mine? If it’s paid off like the ’95 Civic then of course it is, otherwise…? I don’t know, can you claim half a BMW?

All of this perception is human nature. As kids, we know that rich people drive nice cars, live in nice houses, and watch huge HDTV’s. As we grow up, and learn about money and responsibility we learn that just because we appear to possess these items doesn’t mean we are rich.

Mary and I listened to NPR on the way home from work today and we heard an interview with Moby. Moby grew up very poor, and he and his mother were on welfare and food stamps until he was 18. He knows and understands the merits of frugality, and that perception isn’t everything. He said on the radio today that earning a great deal of money hasn’t changed him and that he still shops at the same grocery store and does his laundry at the same laundromat. He says he still even has a little 13 inch TV.

When talking about his spending habits and his TV, Moby said “will watching Family Guy on a 42 or 50 inch TV make it funnier?” This practically stopped me dead in my tracks. For months I’ve been salivating over flat panel TV’s that I can’t really rationalize purchasing, but I always end up salivating and coming back around to wanting one. Mary and I even went shopping with her mother for one yesterday. I have had my dream home theater in my head for months (with a mac mini at the helm), and this one prompt by Moby made me question my motivations. Yes, Family Guy is hilarious, but A TV won’t make it funnier because it’s bigger, nor would Davidson have beaten Kansas had I watched in HD.

Why do I feel compelled to make such a big purchase? I could definitely put $1500 to better use somewhere else like an IRA/401(k) or paying down our car loan even faster.

I really can’t come up with a good reason as to why I want a new TV. We have two 20″ TV’s and they both work perfectly. Plus, I don’t really watch TV anymore! Yet, for some reason I want one that is newer/better.

Maybe I feel that our new and incredibly nice house is an extension of us and the TV is an an extension of the house that makes it that much nicer. Maybe I want people to perceive that we have made it, when we drive in our nice and practical new car to our nice new house and watch Nightly Business Report our big new LCD. But at the end of the day image is only as deep as the debt you (can) get yourself into.

Here is the anomaly on all of this, I don’t want my friends looking at our house and our car and being jealous. Sure it makes everyone feel good when other people are jealous of them, but Mary and I are in a unique situation where we are starting out in our lives and careers together. We are a dual income family with no kids (ok we practically treat our dogs like kids…but I digress). It is easier for us to afford this lifestyle. I don’t want any of my friends jumping into our lifestyle too quickly and getting in over their heads, I want them to understand that yes, we have nice things, nicer than we deserve, but we also have car payments, mortgage payments, insurance payments, property tax payments, Homeowners Association Dues, and various other things factored in.

Hey, at least we have no credit card debt! 

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The book is filled with very good information on everything from budgeting, to living on your own and debt management, but I’d like to focus in on the section titled: Being a Smart Shopper.  (Keep in mind that as I go through and quote this that it was written in 1996 for teenage boys, but the lessons transcend age and date.)

 Suppose you have your eye on a really special skateboard.  How much does it cost? (Don’t forget to include the cost of protective gear if you don’t already own such items.)  You count your money and discover that you don’t have enough.  What do you do?  You Might:  

• Shop around.  Maybe another store or a catalog has the identical skateboard at a cheaper price.  A telephone can make comparison shopping easy.  Call at least three stores.
• Earn or save more money until you have enough to buy the skateboard.
• Wait for a sale.  A store clerk might tell you if the skateboard will go on sale soon.
• Look for discount coupons.  These can be found in newspapers, coupon books, or the mail.

What if you still don’t have enough money to buy the skateboard, or you decide you don’t want to spend that much money, even if it is on sale?  You have other choices.  Shoppers can’t always buy exactly what they want.  Sometimes they must compromise.  Thats part of being a good money manager – knowing when to say no to yourself. 

 Wow.  I’d say those last few sentences are something everyone needs to remember!  Mary and I are in this situation with our house right now.  We really want hardwood floors in our living room, but we know that we just don’t have the money for it.  We are forcing ourselves to say no, and it’s hard because we need want them.  It is very hard to say no to yourself, and it takes a great deal of self control, especially when (once you get older) it’s so easy to put a purchase on the credit card.  Luckily for Mary and I, we are able to hold each other accountable and it really helps.  

The Scouts are essentially saying, if you can’t afford something you have a few options: shop around, save more, wait for a sale, and look for coupons.  Very smart advice for anyone.  It also reminds us all to consider all of the costs we will encounter for this item, like having extra money for protective gear for the skateboard.

The passage goes on to recommend that you buy a less expensive skateboard with a different paint job, buy a used skateboard, check classified ads, and it even brings up building your own skateboard (which sounds fun and easy to me!)

The book then offers a checklist for smart shopping some of which are (my commentary in parentheses):

• Be wary of advertising…(Always!)
• Before buying a product, talk to…others who may already use [it]…  (Also seek reviews from consumer reports or on the internet)
• Try before you buy/demo
• Consider quality.  Price isn’t everything… Why buy something, even at a low price, if it falls apart quickly or doesn’t work properly.  (I am obsessed with quality products, if there is a difference in quality and price, I will buy the one that has better quality)
• Consider Service. (I’m usually willing to pay more for something if I know that the service behind it will be worth it.  For instance, I’ll pay a bit more for something at Costco in order to get their service and extended warranty)
• Don’t Impulse buy.
• If there’s a problem, take a product back right away (be sure to keep your receipt).  Don’t toss the item aside and feel sorry for yourself….Most stores…[will]…probably fix the item or give you a new one.  (I am terrible at actually returning items to stores.  It always seems like too much of a hassle.  But I’m going to make a point to return a broken glass bowl we got as a wedding present (in June) this week.  We have the receipt.  I hope they take it back!)

It’s not always easy to be a smart shopper.  Most people, myself included, aren’t good at the waiting part.  We impulse buy, it’s what advertisers and marketers try to train us to do, but we need to always remember to stop and ask ourselves if we need the item, or if we just want it.  We also need to ask more important questions… Can I afford this?  How long with this take me to pay off?  How long will it take me to save for this?  Those are the types of questions that should be going through everyone’s head when they see something they want to impulse buy.

Writing this has been very beneficial for me today, because Mary and I did our Tax return yesterday and when I saw the amount we will be getting back I got very excited.  I even caught myself drooling over Mac mini’s online today.  But I slowly moved my mouse up to the corner of the screen and closed the window, because even though a Mac mini is on my list of things I want and need (yes I do need a new computer), I want to achieve other Goals first.  Most of our Tax return will hopefully be going directly into savings to help us achieve higher goals.

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