After getting laid off from my previous job I initially thought I would remove the money from my 401k to cover any expenses that would come. But then I reminded myself that I'm not going to do this anymore unless it's an emergency.

Considering that the last few years of filling out tax returns has resulted in me paying out instead of getting a refund, I figured that would constitute an emergency and was prepared to get the money out of my 401k for that reason and that reason alone. However, a new day brings new situations.

Last week I was hired onto a job only because someone else declined the position, thus freeing up a space for me in the training class. Thank you anonymous person! Now I am able to keep the money for retirement and move it over to the new 401k at my current job.

But in the process of trying to figure out the steps in moving the money,  I had two choices given to me. 1) I move the money to the new 401k or 2) I move the money to an IRA. Not knowing which is better for my situation I did some research and came to a conclusion. (h/t to Gen X finance for help)

Flickr/CC - MJTR (´・ω・)
Non-Matched Money But More Variety - That was repeated over and over. IRA isn't matched money but it is a bigger variety of funds to choose from. However, if I move the money over to the new 401k, that isn't matched either, only the new money I put in is. And as for variety, giving me 29 varieties of ketchup isn't worth more to me than 6 as I know what I like and it's very simple. The same goes for fund variety, I look at the basics, fees, etc and go with what is available. The nice part of the new company 401k, they do have a better variety than the old company.

Lower Fees in an IRA - When I invest in my own 401k I look for the lowest fees as my top 3 things to do. In most all cases I don't have any trouble finding fees that are around .55% or lower. To me that savings of .55% (at most) with the little bit of money I have now doesn't seem impressive enough to me to deal with two retirement accounts. Plus there isn't a fee to rollover from one 401k to another.

This is the first time I have rolled over money from one account to another and that alone makes me happy. Before I have been too short-sighted to see beyond the immediate gratification that cash provides, but with experience comes some learning.

Since this post was short, I thought I would point you to a few articles I have saved.

** This is a pdf document that gives 10 steps to haggling. It is from a UK site, but isn't the idea of haggling universal anyway? My favorite one I need to remember is #2 It isn't about price: don’t look purely at the financial saving – instead think added value

** Did you watch that show on TLC called "Extreme Couponing" in between the shows about people eating laundry soap and hoarding? I'm glad I saw it after I read Denver Bargain's write-up on it, Extreme Couponing Meets Extreme Production in Reality TV, otherwise, I would have been talking to my tv set.

** If you are in need of a few new books to put on hold at the library, you will want to check out  38 personal finance bloggers favorite books that Planting Dollars gathered. It even has a little graph to boot. My response was the book, Living More with Less (not the cookbook) because it helps me appreciate the luxuries that I have and that there is so much more I can do without if I truly need or want to. We are a very blessed country and having a comparison to other countries certainly brings that out.

** One final link of self promotion - Sam McManis from The Sacramento Bee interviewed me about my thoughts on frugal and cheap. Spelled my name wrong, oh well, article is interesting about the new California Governor taking away state workers cell phones.

When I was growing up, my frugal-to-the-core mother was the master of “re-using.”  Now, first, I must say that I love my mother more than anyone on earth and my respect for her knows no bounds.  However, as a child, this whole concept of “Don’t throw that away!  You can RE-use it!” was first annoying and then just “not cool.”  Ironically, now a few years out of college and attempting to make ends meet, that concept has suddenly become “genius!”  If you’re in the mindset of save, save, save and you’ve got the whole recycled thing under your belt, fantastic!  But, I’d venture to say that even better than recycling sometimes, is simply re-using.  And, yes though it may have seemed annoying and uncool to my child-like/teen mind, this really isn’t nearly as terrifying as you may think.  It’s actually incredibly easy, and in some cases, fun!  So here goes, from my mom and from my own endeavors, is a Top 10 List of some easy things to re-use that you may have not considered before.

Flickr/CC - moonlightbulb

  • Teabags – one of my mom’s favorites.  She easily gets three cups from one tea bag.  Not going to drink that many cups in one day?  She puts hers in a glass dish and places in the fridge till the next time she wants a cup.

  • Tinfoil – another mom idea.  For used tinfoil that doesn’t come in contact with food, she simply refolds into a square when done and stores it until the next time she needs it.  She can make a roll of tinfoil last forever, people!

  • Coffee grounds – you can stop throwing them away!  And, no, I’m not going to tell you to make another pot of coffee, I’m too much of a caffeine addict for that.  However!  They do make an excellent addition to your compost bin for fertilizer.

  • Plastic bags – you can easily re-use all types of plastic bags: bread bags, sandwich bags, produce bags, etc.  If they’re clean, all the better, just fold up and store away, and if not, just wash in soapy water, rinse out and let dry.

  • Glass jars – these make great storage containers for leftovers!  If they’re airtight, you can even store dry goods like sugar, pasta, and flour in them.  I also use the “pretty” ones around the house for fun ways to hold pens and pencils and even toothbrushes!

  • Brown paper bags – hello wrapping paper!  Brown paper with a little red ribbon looks fantastically classy.

  • Egg cartons – ideal for starting seedlings if you’re a gardener.  Just cut off the lid, fill the cups with your favorite potting soil and go to it!  The best part?  Once your seedlings are ready, you can cut each cup out and plant the whole thing; the carton will disintegrate.

  • Food containers – think butter dishes and cool whip containers.  Wash out and use for storage (no more buying plastic Tupperware).  My mom always used hers for dishes for feeding pets outside.

  • Glass soda bottles – okay, disclaimer: I’m not promoting drinking soda!  BUT, if you’ve got some around, these make really fun flower vases.  You can also fill them with scented bath oils and salts and decorate with just a simple bow.  Great gift idea!

  • Greeting cards – save your Christmas cards this year (or any fun cards for that matter!), cut out the picture, (fancy scissors will make this even more unique) and place on matching cardstock.  Stamp or print out your saying of choice inside.  Now that beats $3.25 for a generic card doesn’t it?

  • Have some fun, pick the ones that work best for you, and see just what you can re-use that you might not have considered before.  Do you have some ideas I’m missing?  Please share, I’d love to hear them!

    Author Tara Alley is a freelance writer from Montana who is very passionate about healthy cooking living a more eco-friendly lifestyle.  When not in the kitchen or working on her own writing, you can find her promoting green coffee for Coffee Home Direct.

    Being laid off has it's advantages like more time with family, crossing off items on the to do list, no longer putting off that exercising because you are too tired. But one definite disadvantage to being laid off is that depression lurks around the corner to sneak up on you if you are diligent to keep watch.

    I was doing really well keeping myself positive, working out and keeping myself busy with things to do, but my mind decided to dwell on the negative, nothing being accomplished part of it all. The first week of January, after the holidays had all wound down and I was done preparing, I got socked with some deep, don't-wanna-get-out-of-bed depression.

    The house was starting to look pretty bad and when it starts to effect other people around me, I knew I had to try to snap myself out of it.  I wasn't in the mood to tromp over to the gym to get my adrenal gland going. Instead I decided to clean the house.

    A recent study by Colorado University found: While controlling for age, race/ethnicity, and education level, Colorado adults who reported no leisure time physical activity were more than twice as likely to have been classified as having serious psychological distress compared to those who reported leisure time physical activity.
    How does this relate to frugal living? Simple. It's not uncommon to find yourself in a personal finance depression where you don't see that things are changing. Sometimes taking a clean sweep of your finances can get you through the valley and moving back up the hill again.
    Flickr/CC - Melissa Ann Barrett
    • Break It Up - When I started cleaning the house again, I broke it down into sections instead of taking it all in, that was too overwhelming. Financially when you look at the bigger picture it can be too much, break it down, look at what you are doing really well and take a moment to pat yourself on the back. Look at the areas that need improvements and take them on in small chunks.
    • Clean As You Go - Washing the dishes right away after dinner is better than letting them build up for a two hour deep clean later on. Apply that same idea, if you see you are making a mistake and spending money on frivolous items, take the temptation away, leave the cash or debit card at home. Keep the mistakes small and adjust as quick as you can.
    • Don't Procrastinate - It's easy to put off balancing the check book or updating the budget. But like putting off cleaning the bathroom, over time it will start to look very ugly. Try to remind yourself what the consequences will be if you delay the inevitable.
    • Keep Cleaning Supplies Handy - If you know where to find all solutions to your dirt and grime, it will make it easier to grab them and clean up. Likewise, keeping your budget, money and other resources in a central location will cut down on time and being easily distracted when you shouldn't be.
    • Grab Help - It's not hard to yell at other family members to help clean things up and make the cleaning go faster. The same goes with finance, grab help from the family and friends. Nothing is so sacred to not ask for help or resources when you feel yourself sinking.
    If you have tried all that, remember, it may not be all that bad and most people improve within a few weeks, with and without outside help. You don’t have to resign yourself to a messy house while you deal with depression — by getting your home and your financial house in order, you will also rid yourself of a source of stress.

    "My ribs hurt!" "I feel better sleeping on the couch or recliner." "I hate getting into that bed." "I never get a decent sleep, I think the bed needs to be replaced." These are all comments that have been mentioned in my home, more and more often, and I think it's almost time to get a new mattress.

    The foam mattress in question is going on it's 6th year and has acquired hills and valleys. A standard mattress should be good for up to 8 years and a premium mattress can be in good shape up to ten years or more. Just like finding a place to live is all about location, location, location. Finding a good mattress is all about comfort, comfort comfort.

    Flickr/CC - Krystn Palmer Photography
    Now that I have mentally agreed that the bed must be replaced, it is time to research mattresses to get the best quality for my money. There are so many choices; do you go air, foam or spring mattress? And if you do a foam mattress, how thick? How many coils per square foot? Or maybe I should only look at water beds?

    Surprising how such a perceived small investment can become confusing. But considering we spend at least 6 - 8 hours of our day in one and need it to make us feel better for the remaining 2/3 of the day, it is a decision we don't want to think cheaply about.

    Before I even start laying down on beds for 15 minutes at a time in my favorite sleeping position, I need to determine what mattress is best for my favorite sleeping position.
    According to ConsumerReports: "A study published in 2003 in the British medical journal Lancet suggested that people who suffer from lower back pain would benefit from a medium-firm mattress. That made sense to several experts we interviewed. If a mattress is too firm, it won't support the body evenly and may cause discomfort at the heaviest points (hips and shoulders). If it's too soft, a sleeper could sink into the surface and have a hard time moving, which could cause tingling, numbness, or aches."
    I sleep on my side and occasionally my stomach and back, so the cushioning of my side of the bed would vary and my partner sleeps in a fetal position or on her side (thanks to 7 back surgeries) and if the bed is too soft she really does have a hard time moving and aches in the morning.

    One idea I am looking into is a sleep number bed to adjust it as needed. The downside is that you can't flip the bed around to make it last longer and you start with a higher price mark right away. I just have to remember that a $3000 bed over the course of 8 years is a dollar a night and even less if I bought a foam or inner spring mattress in the $1000 range.
    According to consumer reports: "Seventy-eight percent of those who spent more than $4,000 said they were highly satisfied with their purchase. But 66 percent of those who spent less than $1,000 were also highly satisfied."
     Some rules to go by when shopping for a bed are based on experience and the consumer "bible", Consumer Reports.

    1. Try it out in the store: Before I bought my current bed, I slept on it in the store for about 10 minutes. As weird as it felt sleeping in front of people, it is very well worth the time.
    "Seventy-two percent of those who invested at least 10 minutes (for instance, lying down on each side, back, and stomach) were highly satisfied with their mattress purchase compared with 62 percent who didn't."
    2. Guarantees, Trials and Fees: Find out what the return policy is, can you return the mattress after a 28 day trial or is it only a 10 day try out? What is the restocking fee or pickup fee if you do return it? One suggestion if you do send it back is to take a picture of it when they pick it up, that way you have proof it is in good condition as they are carting it out if the company gives you flack.

    3. Keep up on Sales and Haggle: There are always sales on mattresses and besides comparing prices between stores, also compare prices to their own online site. Sometimes you can use the online price to barter with if it is lower than the store price.
    Again consumer reports states: "The suggested retail price of a mattress is pure fiction. Discounts of 50 percent or more are common. In our survey, only 36 percent of respondents tried haggling. Among those who tried, 72 percent got a lower price."
    4. Rip the Tag, Rip the Warranty: If you have trial period on a bed and you don't like it after 26 nights, but you have ripped off the tag, the bed is yours to keep. One way to get around the warranty issue below is to use a bed cover for the trial period to keep stains away from the mattress if you should need to return it.
    "Some warranties don't cover full replacement value; instead an annual usage charge is deducted from the current retail price.
    When you make a claim, the store or manufacturer sends an inspector to your house. You'll need to show a receipt. If you say the mattress has sagged, the inspector checks whether the dip is below the allowable limit, 1 1/2 inches. A company will void a warranty if you remove the "do not remove" tag, if the mattress is soiled, or if it has uneven support from a box spring or frame--a common reason for sagging, says Stan Steinreich, a Simmons spokesman."
    5. Read Reviews: Once I have things narrowed down to one or two types of beds I like to read the reviews of them. People are always more willing to give up information on how bad things are, so I try to take in the complaints in the light that some things may be more personalized. But an overall continuous complain on structure would draw me in.

    Overall, I think I have what I need and it is just a matter of going out in person to test them out. I'll put on some comfy clothes and slip-on shoes to make it a nice experience as I figure out what is comfortable.

    h/t to the consumer "bible" on mattresses (some paid areas)

    Anytime frugality is brought up in a conversation, eventually the talk turns to those who are extreme in their frugality. I know that there are some things that I do that are too extreme for my co-workers and some things they do that are beyond the pale for me.

    But frugality isn't about shocking your friends and family. Frugality isn't an extreme sport where there are winners and losers. It is a way to get from point A to point B, financially and as long as you are not hurting yourself or others in being frugal, have fun!

    I thought I would list a few things I have learned from living frugally over the years:

    1. Quality matters as much or more than price in most situations
    2. Patience does pay off, and it can only be self-taught
    3. Friends and family matter more than where you gather or what you eat
    4. It truly is the giver and not the gift that makes the longer lasting impression
    5. Cutting down on eating meat stretches my dollar very quickly
    6. Water is the greatest benefit to body and wallet
    7. When you start small, DIY projects aren't so scary
    8. Laughing, exercise and talking are doubly beneficial; both free and healthy
    9. Time is equal to or greater than money in most situations
    10. Having another support you on your frugal journey is like being wrapped in a warm blanket
    11. The library is the greatest resource, next to paved roads and emergency responders, for which I am happy to pay taxes for
    12. Going for a drive to nowhere with a friend to talk and daydream is priceless
    13. Warehouse clubs are both a godsend and an evil temptation
    14. Nothing beats a beautiful day walking your dog barefoot in the grass (as you watch where you step)
    15. Handing coupons over to a friend who appreciates them makes me feel good
    16. Actions do speak louder than words, eventually people will pick up what you are talking about
    17. Haggling isn't so bad once you get started
    18. Vinegar and baking soda are invaluable products
    19. Staycations can be quite fun for all involved
    20. A hobby doesn't have to be expensive
    21. Sometimes all you need for a bad day is a smile from a baby to forget
    22. It is a great feeling to have more control over finances when you know what is coming in and going out
    23. Picking through trash to find a gem is a great high
    24. And decluttering could become just as addictive
    25. Being proud of my frugality and speaking out about it has taught me that others can learn from me and I from them
    26. You get along better with your partner when your debt isn't piled up and stressing you both out
    27. There are more free activities in my city than I have time to do and that is very cool
    28. Life is less stressful when you aren't worried about what others think because you have a goal and a plan
    29. With a little time to be creative I can find ways around buying new
    30. New doesn't always mean better. Old, antique, worn and used are good words as well
    31. Being frugal can seem scary, but with little steps it is amazing what you can achieve
    32. I really don’t need half the stuff that I think I want
    33. Sitting out in the warm sun is the best vacation, whether the fish are biting or not
    34. It's amazing what "sleeping on it" can do for a buying decision
    35. Food portion control can save money and health
    36. Eating healthy doesn't have to be expensive
    37. Homemade cafe mocha beats out all fancy coffees anyday
    38. If you have the space, a stocked freezer or pantry is a thrilling sight to see
    39. The value of asking myself "Do I need this?" is priceless for saving money
    40. Being frugal has allowed me to help others more through financial means

    Can you help me with the 41th one?
    What are some things you have learned living frugally?

    I've written multiple times about my own bankruptcy and having to deal with the aftermath of a ruined credit score. I have also had to learn ways to bring my credit score back up to a good level.

    The classic way and most common suggestion is to make sure that you make all your payments on time and keep your debt ratio around 30-50% (or less) of the credit that is available to you. These two ideas will never fail in helping you achieve and keep a good credit score, but there are a few other ways as well.

    This should be done regularly whether your score is good or bad, as mistakes do happen. Over the years I have combed through my reports a couple of times to make sure they are as up to date as possible and inaccuracies are removed that can hurt my credit score.
    flickr/cc - coxy

    Since all of my old credit was included in the bankruptcy I had to start over with some new credit. After cleaning up my report I wanted to establish good credit, prove to those who check my scores that I'm not damaged goods and that I've turned over a new leaf. But I had to take it slow, if I had to many inquiries on my report, it looked bad. If I had too many newly opened accounts, that also looked bad for my future.

    A secured loan is one uses your existing money as collateral and the credit union then reports to the credit bureaus. A credit union I was already with was the best place to get this, but you don't have to be an existing member with many credit unions any longer. This type of loan was an installment loan that I paid back monthly, but in my case I set the money aside and used the loan to pay itself back.

    You need a variety of types of loans/credit on your account, and again, since credit unions are very forgiving in regards to bad credit, I went with them on this as well. With this type of card, your past credit is less important as you will be opening a savings account to secure the credit line on the card. By putting money into a savings account, you will be allowed to charge up to amount in your savings, on the card.

    The first unsecured credit card I got was from a store, I can't remember which one but I do remember being approved and then just putting the card in ice so I don't use it but once a couple of months. Since stores have such a high APR already they seem to approve people pretty easily, especially if the store has pretty high mark ups on products, like furniture, jewelry and tires.

    After my bankruptcy, I was trigger shy and wanted to cut up the cards after they came in the mail. But in order to jump my score up higher, I had to use them. 20 dollars a month was an easy amount to pay off on time and keep the credit companies happy that I was an active user and responsible with the credit approved to me. If I had kept the balances at zero for long periods of time I wasn't showing that I was credit worthy, I was showing them that I couldn't handle all the credit I was given and shouldn't have been given that much. Between a rock and a hard place.

    This final option is one I purposely placed last as I don't think it is a great idea, but is an option if trust is very strong

    You could become an authorized user on a person's account with whom you have no trust issues. This option still allows you to build up your credit but the credit agencies don't put as much priority on this type of credit building as they used to.

    When you become an authorized user on someone else's credit card, the credit/debt ratio is reported on your credit report as well as the master account holder. As long as they keep the account active and in good standing it will look good for you as well. The best way to be an authorized user is to have them call the company and add you, then when you get the card, give it back to the master card holder as you don't have to use it to reap the benefits.

    You will need to display at least one year of positive credit habits to be taken seriously when you pick up a car payment and especially for a mortgage.

    In a 13 page, study, researched by Xinying Cai, Soyoun Kim and Daeyeol Lee, they have come to the conclusion (at least in monkeys) that immediate gratification may be one firing neuron away and can determine if we are genetically spenders or savers.

    "Two monkeys (H and J) were trained to perform an intertemporal choice task, in which they chose between two different amounts of juice that is either available immediately or delayed. Both animals chose the small reward more often as the delay for the small and large reward decreased and increased, respectively, indicating that they integrated both reward magnitude and delay to determine their choice."
    Essentially, they gave the monkeys different amounts of juice depending on how long they waited. The longer they waited, the more juice they got. Both H and J chose the small amount of juice more often as the delay time for the larger amount of juice took longer and longer (as one would assume for monkeys)
    flickr/cc - Salim Virji
    What they found through the research was that when the monkeys chose the immediate gratification a certain part of their brain fired and when they waited patiently for the larger amount of juice, a different part of their brain fired. But these two areas are connected by one specific neuron and the researchers were able to "listen to" that neuron to determine which direction it would fire.
    "In the present study, the signals related to the temporally discounted value of reward developed in both divisions of the striatum before the animal’s choice was revealed, even though the outcome of the animal’s choice was already known. This suggests that striatal signals related to the value of chosen action might be an integral part of the action selection process rather than only contributing to the computation of reward prediction errors."
    Basically they may not have the exact location in the brain for where we get our gambling problems, shopaholics or impulsive behaviour, but they are slowly mapping out the brain and starting to pinpoint which neurons seem to control what areas.

    Let's consider a future where they have found that single neuron that fires much too often in one area of the brain and brings about the cause of their excessive spending or excessive saving.

    Would we want a drug that helps loosen up the cheapskates to spend more or that tightens the purse-strings of those who can't stop buying electronic gadgets or shoes?

    Could you imagine taking a yellow pill when you go shopping so you don't spend money and are able to keep your money in your pocket and just enjoy the window shopping? Or how about popping a green pill so that you lower your impulse behavior enough so that you don't feel like a wet blanket to others? Would companies pump out  brain altering chemicals in stores to get consumers to spend more?
    Flickr/cc - Salim Virji
    Obviously this sounds like a mad future world of science run amok and humans chemically induced. But in a way, that future is now. 

    Companies spend oodles of money to determine what you will buy and why. They pay you and me to test out products and give reasons why we will or won't buy an item, including how that makes us feel. They spend money to get their food on the shelf at eye level because they know that a percentage of shoppers don't want to move their head up or down a half an inch looking for the less expensive products.

    Who knows how this will play out and if there will ever be a way to map the brain in such a specific way. For now we can't blame a specific neuron and will have to continue to fight with ourselves and each other over clutching the money too tight or spending too much.

    The longer you stay in the grocery store the better chance you have of increasing your receipt total with impulse purchases.

    My partner is amazed when I run to the store to pick up the groceries, how quickly I come back after leaving. For her it is an easy 60-90 minute shopping trip. I thought I would pass along a few ways I get in and out so quickly for those who are wanting to cutting down on their trip.

    Plan Ahead. When you have your list of items to buy and you have any coupons ready to use then you don't have to worry about missing any items or having to make another trip. I also eat something before going if I'm already a bit hungry, so I'm not tempted by chips and soda pop.

    Map It Out. I usually shop at the same 2-3 stores and I have a pretty good idea where 90% of the items are. With that in my mind I am ready to plan my route without doing any backtracking through the crush of people or going down aisles that I know are not on my list.

    flickr/cc - qmnonic
    Use the Proper Size Grocery Container. If I have a large list, then I grab a cart, if the items to pick up are less than 5, I use no cart or carrying container. The less room I have, the less likely I am to want to carry it around or want to go back for a bigger grocery container.

    Outside to Inside. I prefer to get my produce first and then work my way around the outside "ring" of the store, then going into the middle area. If I have quite a few heavy items to pick up I leave room in the cart so I don't crush the produce.

    Price and Size. I'm not brand loyal on most food items, that allows my eyes to taken in the price and the size to determine the best value for what I need on the list. If I have a coupon I take that into consideration at this point and if generic is cheaper, I will leave the coupon behind on the shelf for someone else.

    Constantly Moving. I don't stop to enjoy a pretty holiday display or look over the flowers wishing I had a bouquet. Unless I'm stopping to decide on an item from my list, I keep walking toward the nearest item on my list. Milk to Eggs to frozen foods and on.

    Asking for Help. If I can't find what I need from the aisle chart, I wait until I've come across an employee and then ask them to point the way. It does seem to save time if I'm still shopping and not finished when I ask.

    Record Keeping. If you are like me and you have a monthly food budget, this is where you will see me adding up (rounding up) the cost of items to stay within budget. IF, and only if I have enough money left over, then I will get the junk food at the bottom of the list.

    Recheck Your List and Cart. While I'm standing in line I go over my list to make sure I haven't forgotten anything and I go over my cart to make sure the items I have are ones I definitely need and not impulse items. This is also a good way to keep my eyes off the checkout candy so I don't add to my cart.

    Rain-checks. If an item I wanted that was a good deal and they were out, it is as I walk towards the door that I will stop at the customer service desk to get my rain-check. Doing it right when I find it is sold out just adds time to my shopping trip - I just star the item on the list so I remember.

    For more help with your shopping, please read through The Psychology Behind Store Layouts that I wrote up a couple of years ago.

    Holiday season 2010 was the best year for retailers in the last 4 years even though December was a poor sales record on it's own. (via) Why? Because people started their holiday buying early! Not that I like to see the Christmas season creep in on Halloween, but it's nice to hear that sales are helping people spread out the buying so that people like me can use a budget to buy gifts instead of plopping it all on credit cards and suffering depression in January when the bill comes in.

    After reading this I wondered if other people did the budget thing or even set aside money throughout the year so that they could pay for all the holiday gifts with cash. I know I'm glad I did since I was involuntarily downsized in 2010. It is amazing how $25 a paycheck can add up when it's time to buy gifts (or make them). With 26 paychecks in a year thats around 500.00 when black Friday rolls up on you for 2011.

    flickr/cc - gsz
    Besides just setting aside money from each paycheck there are other ways find the money to put aside. First, start by setting up a separate savings account that is for your gift giving only and then remember to put the money into the account when you have reduced your budget.

    * Cutting Down on Eating Out - lunches out with coworkers can be dropped for one day of the week, those lunches can run 5-6 dollars a day and in a month that's 20-24 dollars that can be instead put into a jar.

    * Reduce Your TV Service - Instead of going cold turkey, drop down your tv subscription to basic service for a few months or the summer and sack away the savings. This is also handy if you are coming to the end of a promo and can't get another one, drop down in service for a few month and then pick up the new promos going on later. You could save 50-100 dollars a month right there.

    * Limit the Coffee/Donut/Soda Pop Budget - I am really amazed at the queues for Starbucks and other coffee shops in the morning, especially the drive thru part. This wouldn't be a lot of money set aside but if you buy a 4-5 dollar drink and reduce it by one cup a week, you have another 16-20 dollars to put into savings for gifts.

    By making some simple changes to your budget NOW, you can plan to have a terrific Christmas. There are plenty of other ways to save money. Just look at what you are currently spending on any one item and try to reduce it by a few dollars each week. Those dollars add up quickly.

    Now if you aren't wanting to cut back at all, there are a couple of ways to bring in extra money and set that aside for gifts as well.

    * Save Change - I'm a fan of rounding up in my checkbook and by the end of the month I'm a good 15-20 dollars higher in the bank than my checkbook. That extra money goes to savings without a thought. And add into that any change I get throughout the year, I've got around 200-300 dollars that didn't even have to cut back for.

    * Going, Going, Gone - Selling off items around the house or found on the curb for trash pickup is certainly a way to make a few extra bucks. Keep the fees to a minimum and try selling the items off through Craigslist first. The idea is to collect it all in a closet and then have yourself a grand yard sale over a warm weekend.

    * Tax Refund - Why not set aside 25% of your tax refund for holiday gifts. If you are anywhere near the average tax refund amount of $2900 (via 2008), then that is 725 dollars for gifts without even having to think about money for the holidays the rest of the year!

    There you have it, a few ideas to spur you on for a better gift giving in 2011.

    Coupon Sherpa recently post the top 10 coupon stories of 2010 and I have a few things to say about this last year as well. The good, the bad and the ugly part of coupons.

    1. Groupon goes viral -
    I am one of those people who signed up and has bought a few things through them. I bought a good deal for a subscription to the newspaper (for the Sunday coupons) and I have been milking that subscription for as long as possible - when there are no coupons in the Sunday paper, I put a hold on the paper to push the subscription out another week or two.  I also bought a teeth cleaning and checkup at a dentist across town and was happy to find out that I am taking good care of my teeth while I'm underemployed without dental insurance. And then finally I bought a holiday lights trip to a local museum but didn't end up going - I chalked it up to donating the $8 to the museum.

    The Groupon deals are out there, it just takes a few weeks or months to find one that fits your lifestyle. I can understand how Groupon has gone viral, it is a good idea. And in comparison to other group coupon sites, they would be worth my time checking out.

    flickr/cc - sdc2027

    2. Newspaper coupons are dying
    Though I see the newspaper subscriptions dropping and the girth of the paper slimming down, I have never thought about the Sunday coupons dying out. But thinking about it, I would have to agree that out of 10 coupons I use, only 2-3 are going to ones from the newspaper and the rest will come from printing them off from coupon sites.

    I have also noticed that the Sunday coupons appear to be more and more high end cleaning, beauty products or B1G1 free items, though even the buy one get one coupons are diminishing or going to B2G1 coupons.

    Unfortunately, this does appear to be bad news for some of us, though not the end of the world. We have always wanted to influence companies and this is one way we are, by printing our coupons online and making the newspaper one less important.

    3. Online coupons are taking off
    Coupon Sherpa said that, "In 2009, close to 397 billion printable coupons were distributed online, a figure that grew by nearly 25 percent in the first half of 2010." That is an impressive amount and I'm sure that many people, like myself print out 2 or more coupons for more savings and stocking up. But with online coupons have come the ugliness of coupon fraud and even I have been embarrassed by this.

    Because of the coupon fraud stores may be taking some more conservative approaches to online coupons. In 2009 1% of 3.3 billion coupons were fraudulent, which isn't a lot, but if you consider that it is a 14% increase over 2008 and who knows where we stand for 2010.

    The Coupon Information Corp. updates daily, fraudulent coupons that come out. It's quite amazing the business that is out there for these and unfortunately stores and manufacturers don't have a way to "void out" the bar codes on these fraud coupons. Until then, please be aware that you may be stopped from using them.

    Those are my good, bad and ugly from 2010 - read the remaining 7 over at

    13 years ago I claimed bankruptcy and the process was easier than my imagination made it out to be. In my imagination I saw myself and my lawyer on one side of the huge courtroom and the mean, impatient credit card lawyers queuing up to give the judge a reason why I should not be allowed bankruptcy. It didn't go like that at all, but the process of chapter 7 was a learning experience.

    With the laws that took effect in 2005, they do make it slightly harder and more paperwork is done to essentially find out if you are worthy of the big dinging a bankruptcy would do to your life and finances. What used to be an easy way to file chapter 7 bankruptcy, now is much harder for those who have debts of $50,000 or even $100,000.

    In 2005 changes were made to the bankruptcy law and now certain things have to be met, such as a Means Test. The test is supposed to stop those who have too much money for filing for a  chapter 7.
    You have to answer "NO" to the following questions
    1. Is the family earning above the average income for their state? Look up your state
    2. If you answer yes to the above, but you can answer "NO" to having excess monthly income of more than $166.66/month to pay $10,000 of debt over 5 years and you do not have excess income of greater than $100/month to pay over the next 60 months at least 25% of your unsecured debt - Then you can file chapter 7 bankruptcy.

    But if you answered "YES" to either of these, above the state average income, excess of 166.66 over 5 years, excess 100.00 to pay over 60 months at least 25% of unsecured debt - then you have to file a chapter 13 and set up payment arrangements.

    One of the tests that is used to determine how much excess monthly income you have is the following formula:

    Income - Living Expenses = Money to be Applied Towards Debts

    And that is the exact same formula you can determine if you can pay down your own debt without having to pay a lawyer to find out for you. But how a lawyer determines what is income and what is living expenses is the complicated part. As of this law, the IRS determines that based on your previous tax return and they decide what is reasonable.

    Ok, so you are still going through with the bankruptcy. According to the 2005 law, every person has to go through credit counseling within 6 months before filing bankruptcy and you have to pick from one of the approved counselors for your state. And you have to have your certification before the bankruptcy can be discharged.

    Vehicles - The old law said that you only had to pay the value of the car in a certain time to keep the car. The new law says that you have to pay the entire loan off to keep the car. The timetable on payoff is usually 3 years. So if you bought a $4,000 car from a car dealer when you had poor credit and the life of the loan is $15,000, then that is how much you have to pay out with this new law.

    Homes - If the property was acquired in the last 1215 days (3.3 years) then their is an equity exemption of up to $125,000. Unless you live in Kansas, Texas, Florida, Iowa, and South Dakota, then you have unlimited exemptions and can keep your 2 million dollar home with $1 million dollars of equity built up in it.

    Charity- Up to 15% of your income can be used toward charity and is considered a loophole for some to move from a chapter 13 to a chapter 7 bankruptcy.

    Let's say you don't qualify for bankruptcy at all...
    1. Use equity in your home to pay debts
    2. Use cash savings
    3. Use Retirement or 401k

    If you can't use any of the above means to pay off your debts when you don't qualify for bankruptcy then your next step would be
    Stop paying your credit cards and create your own "bankruptcy". If you do this on your own and don't pay your cards, you are doing so without the hassle of the court system, but also without the protection of the court system.

    The Pros and Cons of the two bankruptcies:
    With a Bankruptcy Chapter 7:
    * You don't have to make payments on your credit cards.
    * All of your debts are wiped out, your creditors will not be contacting you.
    * Your credit is really ruined for 10 years. You will have a tough time getting an unsecured credit card. It's tough to get a bankruptcy off your credit report.

    Not Paying Your Credit Cards
    * You don't have to make payments on your credit cards.
    * All of your debts are not wiped out, your creditors will hounding you.
    * Your credit is ruined for 7 years. Late payments and any corresponding collections only stay on for 7 years from the date of first delinquency. You will have a tough time getting any credit for a while.
    * It's possible to fix your credit before the 7 year reporting time is up.

    While I don't advocate not paying bills, in rare situations I could see that being justified. But I wouldn't ever consider it worth the phone calls at all hours or the possibility of lawsuits. And if you decide to stop paying your bills:
    1. Make sure you set aside the money in a bank account that you would normally pay on bills to cover settlements with collections agencies.
    2. Also keep all written correspondence with credit card companies and collection agencies. 3. If you get any mail from a collection agency, make sure you write a debt validation letter.
    4. When you do settle a debt, try to settle for 10-25 cents on the dollar - get it all in writing!

    There you have it, bankruptcy laid out a bit more clearer if you are thinking of starting over, though you may want to take steps to just avoid bankruptcy all together if you can turn back now.

    I apologize for the trouble with approving comments, will have them posted once figured out.

    Have you noticed that people who are successful at living frugally- living on less than they make and saving and investing - are always asked how they did it and seem to expect a 3 point solution that will be as easy as waking up and putting on underwear in the morning.

    There is a trap to thinking that there is a magic key that will unlock success and it can be replicated the exact same way by each and every person. Unfortunately, this is not the truth of the matter.

    Before I go further, I want to make it clear that we can all learn lessons from people who have achieved a successful frugal life. Sometimes their correct decisions and roads taken in life can work in similar way for you. And like birds who find nourishment in the crumbs we drop, we also can find useful ideas from the lives of those who have succeeded before us.

    As we journey toward a frugal life, there are a few things to consider so that you don't get tripped up along the way. Just as I want to be successful, I want you too as well.

    flickr/cc - bestbib&tucker

    1.No Magic Key
    Action is the foundational key to all success.
    Pablo Picasso

    A successful frugal life has no key to open up steps that, if done in the right order, will take you right to a life of financial freedom. I wish that were true, but in my 37 years on this earth I have found that nothing is that simple except a recipe. If you look at those who have frugal living down, you will notice that nothing has come easy to them. They make mistakes and learn from them and they know that the goal for a frugal life is one of patience, hard work, doing things they may not want to, and all to get an end result that they are happy about. It doesn't fall into their lap; instead they put one foot in front of the other and move towards the goal they have in mind.

    2.No Conclusion to Life

    Despair is the conclusion of fools
    Benjamin Disraeli

    Life never comes to a conclusion as long as you still take in it's richness and expel your own thoughts and ideas. Through the process of my under-employed days, I have learned that frugal living is tossing me a new set of challenges that I thought I would be prepared for. I am very aware that I need to keep in the forefront of my mind all that I have accomplished and all that I have learned and use those to my best abilities, but also take those ideas and grow them beyond my initial understanding while using my creativity.

    3. Enjoy the Journey
    The road of life twists and turns and no two directions are ever the same. Yet our lessons come from the journey, not the destination.
    Don Williams, Jr.

    It bears repeating again, we need to remember that if it weren't for the journey, we would have no lessons learned and wouldn't be stronger in character for it further down the road. Make sure you look back on something you have achieved and realize what a large hurdle that was at the time. Now look at the hurdles you have today, would you be able to handle these back before you got over those other hurdles, earlier in your life? However difficult things are in life, we become stronger people because of them. Consider how our generation looks upon those who went through the 1930's and 1940's. We too can be great people because of our bumps in the road.

    4. Don't Run, Walk
    The best thing about the future is that it comes one day at a time.
    Abraham Lincoln

    How many times have we been told that at the swimming pool as kids. Don't run, Walk! We all get a chance in the pool. It certainly would be more exciting to win the pot of gold at the end of the megamillions jackpot. But such a small percentage of people actually keep that money and then they also have to deal with the new found friends and family sticking out their hands.

    Instead, taking our passion to live frugally, and we have the time to learn the best way to make and use that money that comes to us. We are already in a rush to learn the new technology that come out every year and are used to cheap  gadgets that can be replaced faster that fixing them. Building anything worthwhile takes time, whether that is the home you live in or garden you grow.

    5. Passion Flickers
    Those who danced were thought to be quite insane by those who could not hear the music.
    Angela Monet

    Your passion, your desire, your drive to find that financial freedom, to living frugally isn't something that can be taught at a seminar or learned through a Youtube video. You bring that one small flickering flame to the game and you stoke the flame with knowledge, inspiration from others, hard work and patience. Taking action as you learn will cause the flame to spread throughout your life. For each of us the frugal life is a unique flame that only our life experiences, inner voice and  personal skills  can determine how far we go.

    6. Trust That You Can
    Follow your heart, but be quiet for a while first. Ask questions, then feel the answer. Learn to trust your heart.

    By all means call upon the help of mentors and friends who have walked the road before you. But, Remember that we each have a unique path to go and it is our hard work that brings the goals we have set for ourselves to come to fruition. Sometimes we look to other because we don't trust ourselves to do our own thing and trust our decisions. We need to learn that starting today, we need to listen to what our heart, our intuition, our gut is saying and start acting on what feels right. The only person who can regret a life is the one living it.

    The first sheen of snow and ice sometimes makes us realize how much we aren't prepared for winter travel and if we aren't careful, that car may not last through the season. We all want cars that don't give us headaches and last year after year.

    1. Type of oil - switch to thinner oil as thicker oil not allow your engine to get the proper lubrication (consult your manual}

    2.  Antifreeze - check your antifreeze to make sure it is filled up and antifreeze is a mix of 50/50 with water. This will help against overheating and engine corrosion or your radiator freezing and cracking. You can check the mixture with an antifreeze tester (cost: $10-15)

    3.  Frozen doors and locks - Sometimes you can heat up your car key to thaw out the frozen lock mechanism, but if your car key has a transponder in it that is the worse thing to do. Instead, have some Lock De-icer (cost: $2-3) but for a homemade version, try rubbing alcohol in a spray bottle. There are a few alternatives to handling the icy windows as well.

    flickr/cc -joiseyshowaa
    4.  Rust and corrosion - fight back the damage that slush and road salt have on your car by washing your car frequently in the winter time. Doors (both inside the door well and along the edges) are the first to show signs of rust. Make sure when you clean your cars interior you also vacuum and wipe down the door well.

    5.  Belts and Hoses - check wear on hoses by giving a good squeeze and check for damage, cracks or holes on the outside as those will need to be replaced. Look at your serpentine belt for cracks, frays and chunks missing or if the belt makes noise while the engine is running. Most belts have a life of 30-60,000 miles or 4 years

    6.  Battery - check battery for cracks and breaks or have a tech check it out to make sure you have enough life to get through the cold winter months.

    7.  Seeing the road - visually check your lights and replace any that are burnt out. Also replace any windshield wipers that cause streaking as well as filling up your washer fluid tank with proper winter related fluid.

    8.  Roadside kit - already we are seeing situations of people getting stranded in cars. Having a roadside kit isn’t a bad idea, something that includes a blanket, flashlight with new batteries, some meal replacement bars, jumper cables, flares or a help sign, a can of fix-a-flat and a first aid kit.

    9.  Tire tread - check your tires tread to reduce your spin out on slush and hills. Tire tread is considered legally worn out in most states when they are at 2/32” remaining. That would be putting a penny in the tread, with the head down. But it is best to replace them when they reach 4/32”- which is a quarter in the tread with the head facing down (like so)

    Most preventive maintenance can be checked out at home and information on how to fix is found online or through your car’s manual. If you have an older, rear wheel drive, like myself, fill up the gas tank and add weight to the trunk to reduce slipping. And remember that if you do slide and spin on the road, you want to turn your wheels in the direction you are flying - it may seem counter intuitive, but it will allow you better control. And finally, go slow and keep some distance between you and the car ahead of you, an accident will make you even later to work or getting home.