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the crazy things we do to save

Most of our friends here know how careful my husband and I are with spending, most especially, spending too much. When you live in the US, spending can come, oh soo easily. But three years of living on a very (very) tight budget as graduate school international students allowed us to form this almost miser attitude.  Despite being blessed with a decent source of income now, we cannot help but stick to this framework that we have very well established in our family. It has its advantage of course; the savings and investments we have acquired for the past 2 years would have been unimaginable if we stayed back home and worked very hard for 5 years. The biggest disadvantage; rarely do we allow ourselves to enjoy this monetary blessing. What’s the point of “having” when you can’t do anything with it, right? It is only recently that we have allowed ourselves to buy without the complicated analysis we used to conduct prior to any purchase, which are most of the time, stuff for our daughter.

But as I’ve said, it has its advantages. And it is often the case that friends ask us how we do it. I’ve been meaning to write about it, to somehow make a list of the things we do to stick with our budget. Since I have 3 more days before the summer semester starts, I thought of finally doing it now.

Below is a list of a few of our spending and saving principles:

(1)    Everything that we plan to buy is subjected to our 3-way test:

  1. Do we really need it?
  2. Is there a cheaper alternative?
  3. Do we have to buy it now or can we buy on a later time?

(2)    The best things in life are FREE, or bought from a second-hand store.

We maximize the utilization of our local library. When we need something for our house, the Salvation Army is one of shopping stopovers. We buy books, dvd’s, and cd’s from our local second-hand shop (McKay) or through online stores (Amazon, AbeBooks). My toddler’s favorite shows are from PBS, and they’re the only ones I will let her watch. We prefer walking in the park rather than walking inside a mall.

(3)    Pay yourself.

The first thing we do with my husband’s salary is that we separate funds for our savings and investments. Whatever is left is budgeted for the monthly spending.

(4)    Whatever we save is placed on a black hole account.

A black hole is a region where nothing can escape. The only time we remove money from our black hole account is when it can earn more somewhere else. This black hole account/s is where  buffer funds are kept, which is basically the amount of money needed to live without any source of income for 6 (or more) months. Ideally, this account should follow a CD laddering to create maximum yields with zero risk. Only when you have this buffer account can you start investing your money to a more profitable (yet more risky) endeavors.

(5)    Create a realistic budget then stick with it – no excuses.

We review and adjust our budget every 6 months. It has to be a realistic because there’s no point of making one if you won’t be able to stick with it.

(6)    Monitor. Monitor. Monitor.

There’s no point of making a budget when you can’t monitor what you’ve spent, how much you’ve spent, how much you’ve invested, and where your investments are headed. Find a realistic way to monitor your finances. Open and update it as often as you check your email. We use mint.com. It’s free and very user-friendly, plus you can synch your bank accounts with it.

(7)    Support nonprofit versus corporate entities.

Sesame Street rather than Dora the Explorer. Farmer’s market rather than Whole Foods. PBS Kids rather than the Disney Channel or Nickelodeon. Credit unions rather than big banks.

(8)       Extensive research before buying anything.

And I mean, extensive. The amount of effort and time consumed in researching about a purchase should be directly proportional to its designated dollar value. 

(9)    Buy in bulk if you can, but stick with your budget.

 If you will be eating up your savings to be able to buy in bulk, then don’t. But also remember that annual savings is what matters.

(10) Look at every dollar in your bank account as an employee that you need to utilize to the best of its ability. A dollar now can be $100 in a month if you invested it properly. Remember this, especially when you are in the dollar store or in a yard sale.

11) Choose your bank wisely.

Choose a credit card that provides the best cash back policy. What’s the point of having pages of reward items to choose from if you don’t need them? Consider banking with a credit union. The fees are generally cheaper than the bigger banks, services are better, plus you get better loan terms.

(12) Learn to how cook well enough, that you and your family will adore and prefer to eat-in.

Eating-in is actually more expensive in some cases. Why labor in the kitchen, preparing dinner from scratch when a big box of pizza that would be good for 2-3 dinners is only $7/box? Burger meals can be as low as $3/person, there are even $1 big burritos at 7-11 or at the Dollar Stores. But if you would want a healthy, decent, and scrumptious meal that only a sit down restaurant can provide, then eating-in becomes the cheaper alternative. Doing things from scratch – from cookies, cakes, breads, to buffalo wings, and ice cream cakes is cheaper and healthier than the stuff you buy pre-made in stores. Attending cooking classes or buying good cookbooks are worth every penny if you are committed to learn how to cook well.

Here are a few of the crazy things we do to ensure that we would be able to stick with our strict budget:

(1)    We don’t buy the latest technology. When we need to buy any electronic equipment, we buy models that have released its second generation, or we wait at least a year before we buy them. By then they would be way cheaper , with lesser or known bugs, yet we get to enjoy almost the same features that a newly developed technology could offer.

(2)    I buy whole chicken, then I cut them up to small serving sizes that I need. Whole chicken is around $0.70-0.75/ pound, sometimes even cheaper plus you get a range of chicken parts. The cheapest cut-up chicken available in the supermarket is at $0.90/pound. Of course you need to know how to cut chicken properly if you plan to do this too, just search for instructions in youtube.com on how to do it.

(3)    I rarely buy meats that are not on sale. And when I find a really good deal, I stock-up and buy as much as my freezer could hold.

(4)    I cook batches of food in the weekends, because electricity rate is cheaper during the weekends than in the weekdays.

(5)    I create a 2-week menu list and I shop with a list based on this menu. This helps me utilize all the items that I buy efficiently allowing less spoilage, and I get to stick with my food budget.

(6)    We bring packed-food when we leave the house. This is a necessity because of my daughter’s allergies. But eventually it has become a health concern too. We do eat out, but when we do, we reserve it for special dining experiences and not just to remedy our hunger whenever we go out.

(7)    We have a 2-gallon water jug in our car. This prevents us from buying from vending machines. We used to buy those big cartons of water bottles, but we remembered that those bottles are bad for the environment, so we now have big water jugs.

(8)    I use coupons, but only for items that I planned to buy. What’s the point of saving through coupons when it forces you to buy something you didn’t need in the first place?

(9)    I am a BIG fan of store brands. The only time a name brand can beat the price of store brands is when you have a coupon for it. Yes there are corporate brands that I stick with, but only after proving that it was way better than the store brand.

(10) Always think twice. Over thinking can be a problem yes, but most of the time it helps.

Categories: others Tags: , ,
  1. May 13, 2010 at 11:43 am

    Hey, you have a great blog here! I’m definitely going to bookmark you! Thank you for your info.

  2. valuetrade
    May 16, 2010 at 8:31 pm

    I’m saving this post because it’s very useful. But, this helps, too: Matthew 6:31-33

  3. May 16, 2010 at 10:55 pm

    Thanks VaueTrade! 🙂 Though I think Matthew 6:31-33 discusses worrying about the future. The essense of saving and being frugal is not just about preparing for the future, but more of a frame of mind – or a lifestyle- where one doesn’t waste the blessings bestowed upon us. When one sees it this way, it becomes easier (and maybe the right thing) to do.

  4. May 16, 2010 at 10:58 pm

    Thanks deksamrong – do i know you? 🙂

  5. valuetrade
    May 17, 2010 at 2:31 am

    I agree. Good stewardship is the way to go. Though I think the verses also mean ‘let everything be second place.’ I thought of commenting because I think it’s a great prescription to the “biggest disadvantage problem” and the “overthinking problem” that you mentioned above. Peace!

  6. May 17, 2010 at 6:55 am

    hahaha you’re right, thanks! do i know you? 🙂

    • valuetrade
      May 20, 2010 at 11:22 pm

      no. i don’t think so. you’ve got a great blog here and i can relate to most of your posts 🙂

      • May 21, 2010 at 9:38 am

        thanks for visiting the site, i’m glad you enjoyed it. if you have a blog too, feel free to post the link 🙂

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