Occasional indulgences will keep your finances on track.
Scared that your money won't keep pace with rising food and energy costs? You may be tempted to cut to the barest of bones, buying nothing nonessential and pinching every penny twice before putting it under your mattress.
I have a better idea. Spend a little money. And spend it on something that isn't strictly necessary.
Seriously. I believe that allowing for the occasional indulgence, whether it's a new book or a meal out or a carousel ride, will keep you on budget in the long run.
I'm not telling you to trash your spending plan. I'm just suggesting that you say "yes" to a little splurge here and there. Having something that you want every so often makes it easier not to have it the rest of the time.
Just ask personal-finance blogger "Story Girl." She bought herself a chocolate croissant when she should have been saving for retirement.
Benefits of eating home-cooked meals together are numerous.
Americans not only need to be reminded to eat with their families, they have to be told how to do it. At least that’s the impression I got from radio spots touting "Family Dinner Night" as a way to, among other things, keep our kids off drugs.
Then there's the print ad for a brand of frozen entrees: mom, dad and two kids enjoying lasagna from what looks like a glass dish, not a microwave tub. "Real dinner and great conversation any night of the week," the ad copy exults.
It goes on to say, "Get your family talking!" -- and provides a Web site to help the conversation along.
Let's see: We don't seem to know that families are supposed to eat together. Once at the table, we need cue cards to help us talk. Oh, and a frozen dinner is helpful, too.
Skip the dealership and find a technician you can trust.
Recently I used a coupon to get a $17.95 oil change and tire rotation at a local auto-repair chain. Along with the bill came -- surprise! -- a warning that more work was needed. They suggested a tune-up plus a flush of both the coolant and brake fluids because the former was "dirty" and the latter was "dark and dirty." Horrors.
This may have sounded like a scam -- come in for cheap work, pay for additional work -- but I believed them. It's been a long time since those chores were done. I'm not sure how long. According to an MSN Money article, I should have been keeping a service log instead of (usually) tossing receipts into a folder. Oops.
Clearly it was time for some Chevy coddling, especially since my brakes had begun to squeal. Immediately I thought "$500." That's the number that pops into my head whenever a mechanic pops the hood.
People are less likely to blow a rebate.
If President Bush wants us to spend that tax rebate, he needs to call it a tax "bonus." Or so wrote behavioral scientist Nicholas Epley in a New York Times guest column.
"A rebate, psychologically speaking, is the return of a loss of one's own money ... so it is unlikely to be seen as extra spending money," wrote Epley, a professor at the University of Chicago Graduate School of Business.
In one experiment at Harvard, he and some colleagues gave out $50 checks. Half the study participants were told it was a "rebate," while the other half got a "bonus." A week later, the bonus recipients had outspent the rebate crowd by more than 50 percent.
Can simple word choices really make that much difference? Sure they can. The word "budget" makes some people's jaws clench. Somehow the phrase "spending plan" sounds a lot better.
Freebies abound if you have time and know where to look.
Something for nothing? Sign me up!
Sign up a whole bunch of us, apparently. Readers of the Smart Spending message board recently revealed the best ways to troll the Internet for freebies. Seems their mailboxes spill like busted piñatas with toys, gift cards, sample toiletries, OTC meds, T-shirts, magazines – and even cold, hard cash.
- Bing: Find free stuff
And then there are those freebie endorphins.
"I just like the idea of getting stuff for free," said Karen, a Pacific Northwest reader, who got "a nice Adidas tote bag" from My Coke Rewards.
Some of these frugal tactics are just plain gross.
Re-used any dental floss lately?
All together now: Eeeewwww!
Yet a reader of the Smart Spending message board knows a guy who did this. "There’s nothing grosser than dental floss hanging over the towel rack," said the reader, who posts as "Willowtears."
Sure there is. How about the folks who flush their toilet only once a day? Or the guy who would re-use wash water "until it was black"? Or the woman whose mom strained and re-used cooking oil regardless of pedigree: "Doughnut-flavored taquitos, yum."
- Bing: How to conserve water
All this came from the "Most Extreme Savings Tactics" thread on the message board. I’m pretty extreme myself, but I flush my toilet each and every time, thanks.
Nation's addiction to credit is unsettling to say the least.
Just before Christmas, the Associated Press reported that Americans are losing the battle with credit-card debt. We're falling behind on payments, and defaults and delinquencies are increasing rapidly.
The subprime mortgage mess is partly to blame, economists say. But they also cite "America's long-standing attitude that debt -- even high-interest credit card debt -- is not a big deal."
Howard Dvorkin, the founder of a Florida credit counseling service, put it this way: "The desire of consumers to want, want, want, spend, spend, spend -- it's the fabric of our nation."
Dvorkin's words irritated the heck out of me. Unfortunately, they happen to be true.
Making every penny count is actually kind of fun.
When I wrote "Surviving and thriving on $12,000 a year," some people thought it was a scam. They wrote notes to the editor along the lines of, "Come on, nobody could really live on that." The fact is, plenty of people in this country live on less.
These days, some readers ask whether this part-time writing job changed things. As I noted in the follow-up to the original article, my life changed but my lifestyle didn't. The additional income has let me visit family, invest in decent shoes, and buy the occasional rotisserie chicken.
I still hate to pay retail, though.
Yesterday's errands are a good example. I'm listing a typical day of frugal hacks to show that yes, I do still live this way and that no, it's not onerous. Actually, it's kind of fun.
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