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Tightwad Tuesday

Investing – Time, Not Timing

September 10, 2009

With our current recession and the huge drop in the stock market, many people are focused on getting out of the market. But, did you know that the Dow had its best July in 20 years – it was up 8.6% for the month?

Many people try to time the market, and they’ll either pull their money out of the stock market during times of decline and put them in cash or bonds. However, did you know that just one day can make a huge difference?

If you look at the average annual total return of the S&P 500 between 1978 and 2007, those who bought and held their money in an index fund had an average annual return of 9.6%. Those who missed the 5 best days, had a return of only 8.52%. If they missed the 25 best days, the average annual return dropped to only 5.57%, almost half.

You never know when the market is going to bounce back. Historically, the worst market fluctuations and losses were followed by a period of market recovery. For example, I started my 401(k) in 2000. I started out buying stocks at the height of the dot com boom. However, they quickly turned to bust, and I “lost” a substantial amount of money. It did recover (plus profit) before the current downturn. You’ve only lost your money on paper until you sell, and I figure I have at least 30 years before I “have” to sell at retirement (and even then, you’re only required to pull minimum withdrawals once you hit 70 1/2).

Has the downturn affected the way you invest? Are you still saving and investing your money? Do you feel optimistic that things are going to change? For more frugal ideas, please visit Frugal Friday at Life as Mom.

Photo by OmirOnia

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Target’s New Price Matching Policy

July 21, 2009

in Tightwad Tuesday

Back in December, I wrote an article about knowing your store’s price policies in order to get the best deal. At the time, Target did not price match, but as of 7/12, they have a new Low Price Promise.

Target will match advertised prices from competitors on identical items in local markets. If you find a lower price on an identical single item (the same brand and model number) that is listed on a local competitor’s printed advertisement, during the effective date of the ad, Target will match that price. All price matches will be done at Guest Services, so you’ll pay the Target price and bring your receipt and the ad to Guest Services for the adjustment.

Also, if you find a lower price within seven days of purchase, you can bring the actual printed competitor ad and a Target receipt of purchase of the same item to Guest Service to receive a price adjustment. You must have the original advertisement and receipt for the price match.

Do you price match? Walmart already has this policy in place. Do you find it’s worth the effort? Plus, neither Target nor Walmart double coupons, so it may be better to go to the original store (like Meijer or Kroger) that do double coupons. What do you think?

For more frugal ideas, please visit Being Frugal.

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Save Money when Traveling by Car on Vacation

June 16, 2009

in Tightwad Tuesday, Vacation

A couple of weeks ago, my 2 boys and I took a roadtrip to visit my sister. It was about a 12.5 hour drive each way, so I broke it into a 2 day trip (there was no way a 5 and 3 year old were going to drive for that long in 1 day).

Last week, I wrote about how we decided to drive vs. fly or some other mode of transportation. Today, I’ll give you some tips on how we saved money on our road trip:

Plan Your Gas Fill-ups Before you Leave – you don’t need to know exactly which exit your going to get gas, but each state has different taxes on gas, so the prices can vary widely by state. For example, I knew that MI usually has higher gas prices than other states, so I made sure that I filled up in OH before I crossed the state border. You can use the site GasBuddy to get an idea of gas prices in each area before you leave.

Check your Tire Pressure/Air Filter – Make sure that your vehicle is well-tuned up to get the best gas mileage possible on your trip. Also, if you drive slower, you will improve your fuel mileage. You will use about 15% less fuel driving at 60 mph vs. 75 mph.

Get a AAA Card – We already have a AAA card, but we earned back some of the annual cost by booking the AAA rate at the hotels where we stayed. Plus, if anything had gone wrong with our vehicle, we would have the added security of knowing we had someone to help us.

Use a travel site to search for the best hotel prices – Although I ended up booking directly through the hotel site to get the AAA card rate, I searched using hotel search sites like Hotels.com, HotelsCombined.com or OneTravel.com to see the prices and reviews on all the hotels in the area. That way, I had an idea of the prices in the area.

Get cash-back on your hotel stay or Join a rewards club – If you do end up booking through a travel site, you can get 5% cash-back from Cashbaq for Hotels.com and 1% cash-back from Cashbaq or Ebates if you book through Expedia.com. Although it’s not much, every little bit counts. Or, if you book directly through the hotel site, see if there’s a rewards program where you can earn points towards free nights in the future.

Bring snacks/drinks/lunches with you in the car – In order to save money on food costs, bring snacks and food for at least lunch the first day. If you have room, bring a cooler for cold drinks for the road.

Choose a hotel with a free continental breakfast – Although we stayed in close to bottom-of-the-barrel hotels, each of the hotels offered a free breakfast. I wasn’t expecting much from them (based on the complaints in the reviews), but they were actually pretty good with cereal, bagels, donuts, juice, and milk. They filled us up, and helped us save money on breakfast food.

How do you save money when you go on a long trip in the car? Did I miss anything? For more frugal tips, please visit Being Frugal.

Photo by MarkMiller.

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Freebies for a Good Report Card

June 2, 2009

in Freebies, School, Tightwad Tuesday

As the school years winds to a close, several stores offer freebies for students with good report cards.

- Streets of New York – bring in a report card with straight A’s and receive a free 10 inch pizza as well as a free soda.

- Chuck E. Cheese – bring in a report card and get free tokens for grades – up to 15 free tokens per child. You will need to make a food purchase for this offer.

- Pizza Hut – If your child has at least 3 A’s on his/her report card, receive one Personal Pan Pizza and a small soft drink or carton of milk by presenting his or her report card to the manager. See the site for details.

- Sbarro’s Pizza – June 23 is PizzAchievers Day. On that day, stop at Sbarros with your report card and say, “A’s and B’s… Pizza Please!!”. Sbarro will then provide every PizzAchiever and an accompanying adult with a free slice of cheese or peperoni pizza and a small soda.

- Topps – Every time you bring in a report card to this store, the manager will award you with a gift.

There are several other offers that could possibly be regional/dependant on franchise, so you will want to call the store to make sure they participate before you bring your report card.

- Chick-fil-a – bring in your report card with all A’s and B’s and receive 8 free nuggets

- Krispy Kreme – get a free donut for each A, up to 6

- McDonalds – if you child has straight A’s, get a free Happy Meal

- Blockbuster – get 1 free “Kids/Families” movie rental for “A’s” on your report card

- Family Video – free rental during the summer for A’s on a report card.

- Baskin Robbins – get a free scoop of ice cream for good grades on your report card

Thanks to Debadoo at SlickDeals for parts of this list.

Are there are stores that I missed where you can get freebies for good grades? Fore more frugal ideas, please visit Being Frugal.

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The Cost of Being Brand Loyal

May 12, 2009

in Beginners, Tightwad Tuesday

After I graduated from college, I started having to make toiletry and cleaning product purchases for myself. I usually made my purchase decision based on either which item had the lowest price, or I was brand loyal.

If I didn’t really care about the product, I would purchase the lowest priced item, which was usually the private (or store) brand item, or I would pick a product I liked and always purchase that brand every time I made a purchase. To my credit, I did usually keep an eye out for sales and try to stock up then.

That strategy worked for me, because I would save a little money, and it would diminish the amount of time that I had to spend thinking about every item I was going to purchase. Who wants to spend 10 minutes deciding what to buy for every item they place in their cart?

However, once I started playing the CVS game, I discovered that the best way to save the most money was to drop most brand loyalties. Once I decided to go after the best deals regardless of the brand, I was able to get many items for free or almost free. Many times, when manufacturers introduce new products (or product improvements), they’ll often have great promotions and coupons that allow consumers to try to product for “free”. The goal is to get the consumer “hooked” on the product, so they’ll pay full price in the future.

For example, I have always used Tide detergent, since that’s what my mom used when I was growing up. I loved the smell of it. But, would other detergents clean my clothes just as well and still smell good? I have recently purchased Arm & Hammer detergent as well as All, and they have both worked out well for me. Plus, I was able to get a much better deal than trying to get Tide on sale with my usual $0.25 coupon.

By relaxing your brand loyalties and shopping the drugstores at “rock-bottom” prices, you are also able to try out many different brands that you might not have experienced. If you hate it, you just don’t purchase it again (I know not to buy any more Soy Joy bars for my husband!), but I have discovered some great shampoos and deodorants that I might not have normally tried.

Even if you (or your family members) have some items that you are very brand loyal, by saving money on the other items that you don’t care so much about, you free up money to make your brand-loyal purchases. And, you can still pair sales and coupons on those items and stock up.

But, most importantly, I have been able to decrease my family’s toiletry and household goods budget dramatically. By shopping at the drugstores and having very little out-of-pocket expenses, I probably spend about $20 per month on these expenses vs. a much higher amount previously.

Have you decreased your brand loyalties to save expenses? If not, what’s holding you back? For more frugal ideas, please visit Being Frugal.

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Should We Spend to Help the Economy?

May 5, 2009

in Recession, Tightwad Tuesday

Michigan has the highest unemployment rate in the country at 12.6%, and its economy is looking pretty bleak at the moment due to the plight of the auto industry.

I was listening to my usual radio station today, and I heard one of the public service announcements that they’ve been letting various companies use. This one happened to be for a car dealership. The gist of the announcement was asking people to purchase a new car to get our MI economy moving again. It would provide jobs to the dealership employees as well as the employees that manufactured the car.

I had to stop and think when I heard this commercial. Of course I know many people whose jobs are affected by the slump in the auto industry, and I feel really bad for them. But, should people really go out and make an unplanned automobile purchase just to help the economy? I would argue, “No”. Isn’t spending beyond our means one of the reasons we’re in this economic mess?

So, I started thinking about whether we should spend just for the sake of helping out the economy in general. We haven’t really changed our spending habits much due to the economy, since we’ve always tried to spend within our means and save for an item before we purchase it. In fact, years ago, a friend of mine thought it was weird that we were saving for a new roof for our house before we had it done rather than just taking out a loan.

In fact, we still have about $1300 of our $1800 2008 stimulus rebate left in our money market account. The only reason we spent the $500 was we had a car repair that we used it for. We do plan on using it someday for a Disney vacation, but we want to wait until our boys are old enough to remember it rather than just to stimulate the economy.

What do you think? How do you feel about spending to stimulate the economy? Have your spending habits changed since the downturn? For more frugal ideas, please visit Being Frugal.

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Save Money on Prescriptions

April 28, 2009

in Healthcare, Tightwad Tuesday

Do you or someone in your family take prescription medicine on a regular basis? Even if you do not, you can still save on prescription costs.

I am currently using a prescription skin cream that is VERY expensive. Thankfully, my insurance copay is only $25. Although my copay is a very small percentage of the actual cost of the drug, it can still add up over time. But, how can I reduce my out of pocket cost?

Prescription Coupons - almost every week, there’s a new coupon for a new or transferred prescription. Usually, the coupons for a new prescription offer a $10 gift card and the transferred prescriptions offer a $25 gift card.

I cut out every coupon and save them for when I need to have a prescription filled. Every week, I update which coupons have been released in that week’s paper. Even if I don’t have a prescription to fill, I’ll still cut them out, because you never know. My 2 year old got pink eye last week, so I was able to use a $10 new prescription coupon for his eye drops.

Many pharmacies will also accept competitor coupons. CVS and Meijer both do, so even though CVS rarely offers their own prescription coupons, I can still fill a prescription there and get CVS gift cards. Plus, you get $1 ECB for every prescription you fill at CVS.

Check for Discount Cards or Rebates – my doctor was kind enough to give me a discount card for one of my prescriptions, which reduced my copay to zero (plus I still used a gift card coupon). The prescription I’m on also offers a $25 rebate that I can send away for twice a year (which I found on the internet), so that reduces my copay to zero too.

If you don’t have prescription insurance, you can get a free drug discount card to help you save on the cost of your medicines or do a search on Swagbucks for a prescription assistance program that some of the pharmaceutical companies offer to people with limited incomes and no insurance. Here’s an example of a program offered by Pfizer.

How do you save money on medicine? Do you know of any additional pharmacies that accept competitor’s coupons? For more frugal ideas, please visit Being Frugal.

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Five Additional Stimulus Plan Tax Credits

April 21, 2009

in Taxes, Tightwad Tuesday

Do you know all the key tax credits and deductions from the latest stimulus plan? If you don’t, you are in danger of doing what one of my tax clients did last year – he purchased all new windows for his home, thinking that he would be able to get a credit for them. However, he would have been able to get a credit in 2007 and a credit in 2009 (as long as he followed certain guidelines), but Congress did not allow the credit in 2008. So, he spent $8,000 in a year that it had no taxable benefit to him.

Previously, I discussed the Making Work Pay Credit and some of the benefits for the unemployed, and today I’ll talk about the rest of the main provisions in the bill.

First-time Homebuyer Credit – Most people know about this credit, but it can get confusing because there was a credit available on your 2008 taxes for $7,500 where the buyer has to pay the credit back over 15 years ($500 a year). However, in the latest stimulus plan, it has been changed to an $8,000 refundable tax credit (10% of the purchase price, up to $8,000) for first-time homebuyers who purchase a home between 1/1/09 and 12/1/09. The $8,000 does not have to be paid back. A first-time home buyer is someone who has not owned a principal residence during the three-year period prior to the purchase, and the credit starts phasing out at $75,000 ($150,000 for a joint return).

Nonbusiness Energy Property Credit – You can get a credit of 30% of the cost, up to $1500 for certain energy efficient improvements that you make to your house in 2009 or 2010. Not all improvements qualify; it usually only includes products at the highest efficiency levels. See this article for more information.

American Opportunity Tax Credit -This credit is similar to the Hope Credit, except that it can taken during any of the 4 years of study (instead of just the first two). During 2009 and 2010, the Hope Credit has been expanded to up to $2500, and 40% of it is refundable (meaning available for lower-income taxpayers who may not have qualified in the past). The credit phases out at $80,000 ($160,000 for joint filers).

Section 529 plan distributions – Congress has expanded the definition of qualified higher education expenses to include computer and related equipment to be used for college. In 2009 and 2010, you will be able to use your 529 plan to purchase computers (and you won’t pay tax on your withdrawal).

Vehicle Purchase – If you purchase a new vehicle after 2/16/09 and before 2010, you will be eligible for a tax deduction for any state and local sales tax that you paid on the new vehicle costing up to $49,500. Fortunately, you can claim it even if you don’t itemize on your 2009 return. The deduction begins phasing out at $125,000 ($250,000 for joint filers).

Do you plan on taking advantage of any of these new tax credit this year? Do you think these will make doing your taxes next year more complicated? For more frugal ideas, please visit Lynnae @ Being Frugal.

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