Dollar Tamer Helping you tame your money

Taco Bell has a free taco promotion good from 2PM to 6PM tommorow (Tuesday, October 27, 2008).  No purchase is necessary.

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Posted under Deals

Gasoline prices have declined from the $4 plus/gallon we had earlier in the summer.  How long will they stay down though?

Daryl Guppy, CEO of Guppytraders.com claims that oil might drop all the way to $48/barrel if it manages to break $58 in the near future.

Demand is certainly dropping due to the high prices we experienced over the summer.  According to an Associated Press article, Americans drove 5.6% less than a year ago, the biggest decline since statistics started being kept in 1942.

Demand is only half the picture, however.  Supply is the other half and OPEC is doing what they can to tighten supplies.  On Friday, in an attempt to slow declining oil prices, OPEC cut supplies by 1.5 million barrels per day.  These cuts usually take a few weeks to impact prices, not to mention that member countries of OPEC don’t always fully comply with the cuts.

According to the Wall Street Journal, J.P. Morgan forecasts that oil will balance around $79/barrel by the end of this year and $70/barrel into next year.  That should put gasoline somewhere around $2.25/gallon, but it seems at time there is no rhyme or reason to the prices.

As long as demand stays low, we shouldn’t see the huge spike in gasoline prices we suffered through this summer.  But if the economy starts to rebound and demand increases, we will see the prices rise once again.

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Posted under Spending

Preparation

Now that you’ve finished the first two steps (if you’re new to this series, please start at the beginning), recording your finances and budgeting, we are ready to start thinking of those oddball expenses that don’t happen every month.  Your normal budget is excellent at helping you control your money from month to month.  You have a decent idea how much your light bill will be, what you need to set aside for rent, and how much you want to spend on extras like dining out, but what about those irregular expenses?

Irregular expenses can be disastrous to anyone trying to tame their money.  I’m not talking unexpected expenses, that’s what an emergency fund is for (emergency funding will be part 4 of this series).  These are expenses that you can anticipate and know are coming down the road.

I have a garbage bill, but it is every 3 months.  Christmas comes every year, but I don’t want to have to set aside all the money I need for gifts from my December income.  How does a dollar tamer handle this?

Gathering Information

Just like in the previous step, we need information to proceed properly.  Gather up these irregular expenses and get the dates they are due and the amounts.  Some common expenses of this type might be insurance policies, garbage service, subscriptions (magazine, AAA, etc).

Preparing the Budget

Take each of your bills and divide the bill amount by the number of months between payments to determine how much you need to set aside each month for this bill.  For example, say you have a bill that is $60 every 3 months.  You will have the money ready to pay the bill when it comes due if you set aside $20 each month.

Do the same for things such as Christmas gifts or vacations.  Just estimate what you want to spend and how many months until that goal is due.  Divide the total you are budgeting by the number of months before you plan on spending the money and you have your monthly amount to set aside.

Do this for each expense, adding a line to your budget and inserting it into the budget.  Just like in the previous lesson, total and compare your budget when you are complete to make sure you have enough money to cover everything.  If you don’t, you’ll need to see what you can trim to make ends meet.

Goals

This same technique can be used for saving for larger goals.  Let’s say you want to buy a $5000 used car in 3 years.  Divide $5000 by 36 (the number of months in 3 years), and you will need to save about $139/month to meet that goal.

Compare this to buying the car on a 36-month loan.  If you save yourself, you spend $139/month.  If you put it in a nice interest rate account (such as a 2.75% interest ING account), you would have $5209.99 at the end of 3 years.  Getting a 7% auto loan (a pretty good rate) would cost you $154.39/month.  After 3 years you would have paid an extra $558.04 in interest.  In the end, taking a loan instead of saving would cost you $768.03 on a $5000 car!  You can see how a long-term budget plan can pay off!

Setting the Money Aside

Make sure you keep a running total of what you have set aside for later expenses.  You need to be aware that some of your account is already allocated if you keep the money in your main checking/savings account.  You don’t want to see $2000 in your account and think you have money to buy something only to remember later that you set that money aside for vacation.

What works best is if you can make a separate account to set the money aside (you can do this in an ING account).   Then you can have an account that you know exists for a specific purpose and how you are proceeding towards that goal.

Discipline

Don’t forget why you are doing this.  It is easy to want to splurge on something and justify it by saying “oh, that isn’t coming for a few months.”  Don’t do it!  Stick to every part of your budget and you’ll keep your money working for you!

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Posted under Budgeting, Series

There are so many different ways to save money.  I was just thinking about some of them and wanted to share them with the readers.

• I’ve started washing and reusing the quart and gallon sized Ziploc bags.  I usually have just a few pots or dishes that I handwash each day and if I have a bag, I just wash that as well, turning it inside out to dry.
• Almost everything I buy at the grocery store is on sale and usually I’ve got a coupon to go with the sale for a great deal.What we eat in our house revolves around the sales cycles. I utilize supercook.com to get ideas for what to fix with things that I’ve bought.
• Lights – we try to get our kids to turn off the lights whenever they leave a room.  Along with that, we very rarely turn on our porch light in the evening unless we’re expecting company.
• Drink water, especially at restaurants. If we’re out to eat and decide the budget allows us to get pop for an extra few dollars, it feels like a big splurge. We’ve encouraged our kids to drink water too and they like it. Kids Meals often include a drink, so then they luck out.  Not only free, water is very healthy!
• Eating out can be a really big chunk of your budget.We always have a coupon when we go out, usually for a free meal. I have found restaurant coupons to be abundant. They come in local magazines/fliers in the mail, you can sign up for many e-clubs that will e-mail you coupons, often local organizations sell coupon books for a very reasonable price for fundraisers, and the Entertainment book is full of all kinds of coupons.
• Don’t buy clothes for your kids that they won’t wear.  My 6 year old daughter is extremely picky already so I won’t buy her anything unless she is with me and she gives it her seal of approval. Thankfully, she doesn’t yet care too much about the labels or if it has already been worn. We will visit thrift shops, the occasional yard sale, or some churches or other groups have huge sales that we love to check out.
• I work a part time job at the YMCA, watching babies and little kids a few hours a week.  It earns a paycheck plus we get a regularly $69/month family membership to the Y for just $24. Those that have small children can take them with to work!
• Keeping a budget for family spending is important.  Since we’ve written a budget for each month, it has really helped us to reach our goals!
• Tell the kids (and yourself) ‘no’.  It can be so tempting to buy things we don’t need when we see the ads that try to convince us we have to have the latest and greatest.  As I pumped gas today, I saw the signs placed on the pump for the ice cream inside the gas station.  They were giving away the second scoop for free, but I had to tell myself No.
• We wear our clothes and shoes often until they really, truly need to be replaced.  Our son is so super good at this one.  He absolutely hates to go shopping for clothes or shoes.  His toes will have created holes out the front of his shoes and grown another 1/2 inch before I notice and he still doesn’t want new shoes.
• Buy used or scratch ‘n’ dent.  We’ve gotten used bikes, toys, books, and framed artwork among other things that work just as well as anything new.  I see some used furniture and cars in our future too.
• Freecycle.com is a really interesting online group that exists to keep unwanted items out of the landfills.  People want to be rid of their magazines, clothing, mirrors, furniture, toys, appliances, etc. and there are others happy to go pick it up and give these things new life.
• I cut my kids’ and husband’s hair.  It is really very simple to do, using the clippers.  Contrary to what my husband says, I do not need a degree to do it!
• We trade babysitting with our neighbor who has kids similar to our kids’ ages.  The kids love to play with each other and it really cuts down on the cost of date night!
• Sunlight!  Our kitchen has a lot of south facing windows which let in the sun and provide a lot of warmth during these cooler months as long as I have the blinds up.
• Don’t read the catalogs that come in your mailbox!  That just makes you want to buy things that you probably don’t need!  Just pitch it as soon as you see it!
• Don’t buy anything unless you have the cash to pay for it.  That is crucial in reaching your goals!

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Posted under Spending

Came across another 60% deal at Restaurant.com.  That means you can get their $25 Gift Certificates for $4 (normally $10).  This offer is good until October 26.  Just enter SAVOR at checkout.

There’s a ton of good local and chain restaurants available on the site.  Just enter your zip code and you’ll see what is available.  They do tend to have more options at the start of the month, but there are more offers late in the month.

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Posted under Deals