Category Archives: saving money

Frugal School: Junior Year

[Frugal School is my fun way of maintaining a book list. It has 12 books total, meant to be read one book per month. You can check out the introductory post about Frugal School, and see the entire syllabus.]

Junior Year – Getting Frugal

Welcome back to Frugal School. Hope you enjoyed your summer break. Did you get a job for the summer, or take it easy? Unfortunately, there’s no time for you to spend a year studying abroad in Frugal School! These Junior Year books consist of an overwhelming number of tips and tricks that will help many people make frugal choices. Do not read these without a solid foundation from completing the previous years.

tightwad Tightwad Gazette by Amy Dacyczyn
This book is the bible of frugal tips. Atheists can think of it as the yellow pages of frugal tips. Amy, the author, started a newsletter (via postal mail) in the 1990’s, filled with frugal tips from her family and other readers. Her family cut costs down so drastically that her and her husband were able to quit their jobs and live off the income from the newsletter. Just a few years later, they reached Financial Independence, and no longer even needed the income from the newsletter.
live cheap 365 Ways To Live Cheap by Trent Hamm
Trent is the writer of the very popular blog The Simple Dollar. His book contains a tip a day for transforming your lifestyle over the span of a year. Not only are the tips unique and helpful, but the tip-a-day format makes them easier to digest and implement. I think the title sells the book short, and it should really be called “365 Ways To Live Well” since many of his money-saving tips also promote wellbeing and happiness.
urban homestead Urban Homestead by Kelly Coyne and Erik Knutzen
What would a degree in Urban Frugalism be without a book on living self-sufficiently in the city? This book gives step-by-step directions for many of the things you’ll be doing in your own Foundry in the Forest: gardening, keeping chickens, canning/preserving foods, and (my favorite) bicycling.

How to get creative when shopping for school supplies

Here’s what I’ve learned about buying school supplies without breaking the bank:

  1. Look around your house for supplies before going shopping. I found most of what was needed in the house. Look in the junk drawer, the desks, and anywhere else there might be school, art, or office stuff.
  2. For the things you can’t find around the house, wait until after school starts. School supplies go on sale then. If you feel bad not sending supplies with your child on the first day, send them with the stuff you’ve collected from around the house. If they have a pencil, paper, and some markers or crayons, they’ll be fine. Oh and don’t forget their lunch, it’s sitting on the counter!
  3. Go to the thrift store before the office supply or drug stores. Most of the stuff you need (folders, binders, rulers) can be found in the “home” or “office” departments of a thrift store.

Using the above tips, I was able to keep costs down to under $20 per child, and that included some optional items for the classroom (hand sanitizer, tissues, etc). The one thing that pulled up the average cost was that Isaac’s teacher required students to have a 1½” binder. The 1″ and 2″ binders were cheap and plentiful at Goodwill, but I had to buy a new 1½” binder at the drugstore for $6!

My apologies if this article arrives too late in the school year for the parents out there.

Hang Dry Your Laundry: Just Do It!

Speaking of laundry… Hang-drying your laundry is so easy, it’s something everyone should do! The sun is just sitting out there waiting for some laundry to dry for free. Even in Seattle, we keep the clothesline up year-round (though it doesn’t get much use from October – May).

We hung some rope from the house to a spare bamboo pole, and then back again, to provide two lengths of clothesline from which to hang clothes. And we added a drying rack for increased capacity. You can also see stuff hanging from chairs and even toys.

We’re blessed with a large deck that has Southern exposure, but there’s no reason you couldn’t do this inside, or on a small scale if you have a smaller yard.

There are plenty of other tips to increase the space on the clothesline: hang clothes from hangers or even an old umbrella frame.

And the proof is in the financial pudding. Dryers are one of the biggest energy consumers in the house. We just got our electricity bill for June/July (when we’ve been able to hang-dry almost exclusively). We used 387kWh per month.

According to the Government, “In 2010, the average annual electricity consumption for a U.S. residential utility customer was 11,496 kWh, an average of 958 kilowatthours (kWh) per month. Tennessee had the highest annual consumption at 16,716 kWh and Maine the lowest at 6,252 kWh.”

So we’re at about 1/3rd the national average. Granted, energy costs are lower for us in the summer, so let’s look at our family’s yearly average (the Seattle City Light bill gives you a nice graph of your yearly consumption), 811kWh per month. Lower than average, but we still have some ways to go before we can beat Maine! In February, our most electricity-consuming month, we use over 4x the amount of electricity we use over the summer!

Not only are you saving money, by hanging your clothes to dry you’re also helping save the earth. I love when those two things go together!

PS: Washington state enjoys the 2nd lowest energy costs in the nation (probably due to all our hydroelectric). But that doesn’t mean you can waste it!

A Supposedly-Frugal Thing I Actually Did Try Again

I previously tried a powdered laundry soap recipe, and concluded that it was too much effort and not worth the trouble for the minor cost-savings. As a footnote to that post, I mentioned a different, liquid recipe that looked promising.

When the homemade powder ran out, I decided to try that liquid recipe. Now that we’ve been using it at home for a few weeks, I’ve concluded that it’s great!

The recipe is from The Duggar Family, and is as follows:

  • 4 c water (heated in saucepan)
  • 1 bar of soap (I recommend Trader Joe’s oatmeal soap, it’s $1 and mostly free of weird ingredients)
  • 1 c washing soda*
  • ½ c Borax
  • 5 gallon bucket
  • Empty liquid detergent container (or any large-ish container with top)
  1. Grate bar of soap and add to saucepan with water. Stir continually over medium-low heat until soap dissolves.
  2. Fill 5 gallon bucket half full of hot tap water. Add melted soap, washing soda and Borax. Stir well until all powder is dissolved.
  3. Fill bucket to top with more hot water. Stir, cover and let sit overnight to thicken. (You’ll either need a very-long-handled ladle or a brave, clean arm)
  4. Next morning, stir well.  Fill a laundry soap dispenser half full with soap and then fill rest of way with water.

Shake before each use, as the mixture will gel. Use ¼ c per load in a front-load/HE washer or ½ c in a top-load/conventional washer.

Cost Savings:

The recipe yields 320 washes for top-load and 640 washes for front-load, so you might want to half (or even quarter) it as a trial run the first time. The ingredients cost about $6 total, so that’s less than $0.02 per load.

We used to use Trader Joe’s powder detergent which is $0.16 per load. We do about 200 loads of laundry a year and I estimate the recipe took about 30 minutes of my time, so I’m saving about $28 for a half-hour’s worth of work, or $56 an hour (more than I make at work). Plus, I know exactly what’s in the detergent and that all ingredients are safe, which is a plus.

In conclusion: totally worth it!

* To make washing soda out of baking soda, bake it for an hour at 400 degrees.

Update: This batch of laundry detergent lasted exactly one year for our family of 5.

FOMO and Facebook Stock

I couldn’t help but hear that tiny little violin playing while reading these first-world sob stories about people losing money by buying Facebook stock:

Some blame themselves for embracing the hype over a company whose underlying value likely didn’t merit the price at which it went public. But many accuse Facebook and its underwriting banks of setting the price too high and for trying to sell too many shares.

Others are pointing fingers at the Nasdaq stock market for botching buy and sell orders on opening day. Or they’re angry over brokers who pushed them to buy.

In fact, the article serves as a pretty good guide of now NOT to invest, and how to blame everyone but yourself for your own money mistakes. Let’s take a look:

  • Don’t invest in individual stocks, including Facebook (FB). It’s fun to play around with picking stocks, but it should be done with spending money (i.e. money you’d use for gambling at a casino), not investment money. Trying to beat the stock market is gambling. Instead, invest in low-cost index funds.
  • Don’t fall victim to emotions, especially FOMO (Fear Of Missing Out), when it comes to your money.
  • Don’t pay someone to manage your money, since their motivations aren’t aligned with yours. Unless you want to pay me to manage your money. I’d be glad to do that for you, skimming 1% off the top.

Not having an Emergency Fund IS an Emergency

This is my first guest post, from lucky writer Allen Long. Alan enjoys writing about economic news, finance, and employment verification, and long walks on the beach. Take it away Allen…

Financial emergencies are not only common, they’re inevitable. Whether you lose your job, acquire sudden medical expenses, your car breaks down, or a water pipe explodes, making your home inhabitable, unforeseen circumstances can easily make having an emergency fund necessary. Not having the funds to handle a situation like this can cause you to lose your home, lose your job, or ruin your credit rating. Being prepared is part of being financially responsible. The following guidelines will help you begin an emergency fund to ensure your future financial stability should you face an emergency situation.

How Much Do I Save?
The general rule of thumb has always been to save at least 3 months’ worth of living expenses. With the current state of the economy however, it could be beneficial to aim for 6 or even 9 months instead. If you should lose your job, it could take some time to find something else. Unless you want to have to settle for something you really don’t want to do, saving enough money for a sufficient job search is the only way to fully protect yourself.

Don’t Mix
It’s important to know the difference between an emergency and other forms of savings. You don’t want to mix your emergency funds with your vacation funds, for example. If you’re saving for a wedding, keep the emergency money separate. The best way to do this is to have separate accounts for the two. Keep your emergency funds somewhat liquid without making them too easy to access. Don’t get a debit card for the account. This way, it is there when you need it, but not easy to grab when you don’t.

How to Start
You don’t want to start off by dumping half your paycheck in the account. This might trigger a financial emergency earlier than it has to be. Start out small. If you generally have trouble saving, try putting 5 percent of your pay into the account. Chances are you won’t notice this amount, and you can always bump it up later on. Don’t get discouraged; it will take a while to accumulate 3 or 6 months’ worth of expenses. The important part is to start saving as soon as possible and save something every single paycheck. If you are particularly short on cash one week, throw $10 in the account. Everything adds up, and once you convince yourself you can skip one week, you’ll quit putting money in altogether. Stay consistent.

Don’t Spend It
What’s the point in having it if you can’t spend it? I know the temptation is tough when you’ve got that money sitting there and you want to take a much needed vacation. However, you must resist. Dipping into your emergency fund for non-emergencies is the fastest way to spend the money before an emergency happens. This fund needs to be limited to real emergencies, such as the loss of a job or another financial disaster. Be tough on yourself.

Having an emergency fund will give you peace of mind and lessen your stress should an emergency arise. Don’t take it for granted. If you do lose your job, it’s not going to benefit you to wait the 6 months before looking for another job. Use your funds sparingly, even during an emergency. Just remember how long it took you to save up that amount, and remember you will have to replenish it once you get back to work.

Thank you, Alan! Great article. The only thing I would add is that if you’re in debt, limit your emergency fund to $1000-$2000 and then work like mad to get out of debt before adding more to the emergency fund.

Foundry Mailbag: Dealing With Medical Expenses

Here’s the first edition of a regular column I’d like to do, called Foundry Mailbag, where I write about topics or answer questions that people have sent in. Today’s Foundry Mail comes from Cathleen, who writes:

I love your blog and would love to see a post about dealing with medical expenses. Personally that is my biggest challenge, trying to work expenses in if you have a chronic condition can be difficult to budget. (I’m not even going to go into what it’s like if you have an employer like mine that is too small to offer health insurance) I figure with all the hubbub about the recent Supreme Court ruling, it’s on many other peoples minds as well.

Keep up the good work!

First off, thank you for the kind words.

Medical expenses are like a horrible lottery that everyone has to play. Not only do you get sick or injured, but you sometimes have to pay huge amounts of money in doctor bills. Here are a few tips for dealing with them:

  1. Set up an emergency fund – This is the single biggest piece of advice I can give to anyone who’s getting their financial life in order. The size of the fund is up to you, but as a rule of thumb it should be a minimum of $1000, if you’re in debt or have other emergency spending needs. A healthy-sized emergency fund for someone with no debt is 3 – 6 months of living expenses. Store the fund in cash. Even though you’ll be getting a crummy return on investment, this is not money you want tied up in illiquid or volatile investments
  2. Expect the unexpected – I have a savings account named Doctor Bills into which I stash some money each month. When medical expenses do arise, I can tap into that account before draining my emergency fund. Think of this as being your own health insurance company. You’re paying yourself a monthly premium, and when something goes wrong, you get your bills covered by your own capitol. But unlike a real insurance company, you’re in control of the size of the premium, when you pay out, etc.
  3. Stay healthy – They say prevention is the best medicine, and I couldn’t agree more. Money spent on eating well, and time spent exercising and getting enough sleep will pay huge dividends down the line in the form of a healthy body, which means fewer doctor visits and reduced medical expenses. This also includes keeping a healthy attitude and eliminating stress from your life. A bike ride is my favorite way to stay healthy and de-stress.
  4. Negotiate your bills – None of the above tips will help Cathleen, or anyone else already saddled with large medical bills. But this tip might. Bills can be negotiated on two fronts: the medical provider and your health insurance company. I admit I’ve never done this myself, but I know it’s possible. Ramit from I Will Teach You To Be Rich is an amazing negotiator, and while he doesn’t discuss medical bills specifically, his general negotiation tips have saved me some money.
  5. Optimize for insurance – Now that the Supreme Court upheld Obamacare, people with pre-existing conditions can’t be denied insurance. That means you can shop around for a new job and make your decision of where to work based on the insurance plans that various would-be employers offer. Easier said than done, but it’s one extra tool in the financial tool box.

Hope I was able to help Cathleen, and maybe some other readers as well. Feel free to contact me if you have any questions.

Fill In The Blanks

Welcome MMM readers! This is a blog about urban frugalism and my family’s Mustachian journey, here in Seattle, USA. Take a look around, I think fellow Mustachians will find a lot to love.

One of my favorite Personal Finance bloggers, Mr. Money Mustache, is gone for the summer and taking a break from blogging. As some sort of taunt or joke, he left a list of all the blog posts he’s been meaning to write but hasn’t got around to it. I thought it would be fun to steal, I mean write a few of them for him, in a slapdash manner…

An Amazing New Prescription Medication
It’s called “exercise,” and you can self-prescribe based on the dosage you need. Taken daily, it boosts your immune system, and increases your longevity. Side-effects include happiness, weight-loss, and socializing with others. Best of all, it’s practically free.

Fancy New Appliances, for Less than Zero Dollars?
If your old appliances are wasting gas or electricity, and you find almost-new ones on craigslist for a deep discount, the amount you’ll save in energy costs over the lifespan of the new appliance will outweigh the initial cost. Therefore, you’ll be making money by buying new appliances. Do the math.

Are You Using Work as an Excuse to Accomplish Nothing?
When you work a 9-5 for someone else it’s easy to occupy yourself with non-productive busywork that pleases your manager but doesn’t really accomplish anything great. Furthermore, the busywork helps mask the fact that you’re not happy with your job. They seem to go together.

Quality over Quantity
In almost every situation, quality wins out. I’d rather have a small steak from the grass-fed beef we bought directly from a local farmer, than any number of fast-food hamburgers. Same goes for most other purchases, and also intangibles such as spending time with friends and family. Quantity is what marketers want you to buy so it’s what’s shoved down your throat on a daily basis. You have to step back and consciously choose quality, but you’ll be glad you did.

Mr. Money Mustache vs. Peak Oil
Folks like MMM who bike everywhere don’t care about peak oil or the price of gas. In fact, we’d love to see the price of gas go to $10+ per gallon. Then more people would ride bikes and the roads would be safer for all of us. Plus there’d be less pollution, more healthy people putting less of a strain on our healthcare system, etc. I could go on for hours on this one but you get the point.

Recovering from the Pack Rat Years
I feel like I’m living through this one now, with the July Challenge of giving away 100 things. Ask me again in a few weeks.

My 401k is Too Small to Retire, Waah, Waah!
You have a few choices: 1. invent a time machine and go back to when you were 21 to punch yourself in the face. 2. cut living expenses to the point where you can live off your current 401k balance. 3. do #2 but also work your ass off for a few more years to drastically increase the balance.

Fasting: a Fast Way to Greater Badassity
I fast once a year at the Jewish holiday of Yom Kippur. It also includes no water. I consider that pretty badass. It feels amazing and when you break the fast, no matter what you’re eating it tastes like the best food ever. I recommend trying it once in a while. Fasting also makes you very thankful for what you have.

Wealth is something that is created, not just divided
Making and saving money isn’t a zero-sum game, so no need to get competitive about it. You can make a bunch of money and the next guy/gal can too. In fact, it’s best for all of us if we work together and share tips. That’s one reason I started this blog.

Life Cycle Funds: Become a Dynamic Fancypants Investor with No Effort
I just happened to write about Vanguard’s LifeStrategy funds in a previous post, so go check it out. Vanguard also has a set of “Target Retirement” funds, which grow more conservative as they approach the target date. For instance, if you plan to retire in 2040, the fund for that year is mostly stocks with just a few bonds right now, but over the next couple decades, it will slowly sell stocks and buy bonds so you’ll have a low-risk/low-volatility fund by the time you retire. All without the need to rebalance or figure out your optimal blend of investments for your age.


Hope you enjoyed reading these as much as I enjoyed writing them. Next post will be on a topic of my own choosing, or maybe yours…? Let me know if there’s something you’d like me to write about!

update: I sent this post to MMM and he tweeted about it, calling the post “not bad”. I’ll take that as a compliment 🙂

Just-Cash June: Final Thoughts

June is over and I’ve removed the tape from inside my wallet. My credit and debit cards are free! Let’s take a look at how my household spending changed this month compared to an average taken over the past year:

Total spending down 22%. We invested the difference towards retirement. If we’re able to permanently keep up this savings level, I could retire 7 years sooner! Think about that for a minute…

Spending in “Auto” and “Entertainment” were cut in half. When’s the last time you paid for gas with cash? It’s a pain in the ass! And I remember turning down those extra drinks at the bar, since I never had an open tab. Amazingly, I got everywhere I needed to go this month, and felt as entertained as always.

Spending in “Personal Care” and “Shopping” categories down 75%. I guess the added hassle of paying with cash and tracking my purchases was enough to get me to stop buying shampoo and other non-essentials.

[A few notes on the results: I deferred a couple expenses that couldn’t be made with cash (e.g. new tabs for the scooter), so my spending for the month should be a tiny bit higher. Also, I paid no yearly bills this month (e.g. auto insurance), which makes this a relatively inexpensive month.]

I must admit I cheated a couple more times towards the end of the month: once to pitch in towards a class gift for my son’s teacher (money was being collected online), and once to have some books shipped to the boys at summer camp.

This exercise was eye-opening for me as it reaffirmed my belief that money is actually intangible and the paper or plastic we throw around are just abstractions of the concept of “money.”

The paper abstraction (dollar bills) are simply wired into our brains at a lower level than credit or debit cards, so it’s easer to remember what you’re trading away when you spend paper money. This concept is why casinos use chips for gambling. Chips are even more abstract than bills or cards, which makes people more likely to spend a lot of money at the casino. Imagine if you had to gamble with cash at the roulette wheel? That’s pretty much what I did all last month.

From now on, the trick will be keeping this mindset of being at one with my money, but adding the various convenient payment forms back into the mix. Let’s see how it goes!

A final thought: By not using credit cards, I kept about $60 in the local economy that otherwise would have gone to credit card companies in the form of transaction fees. Money-savvy people often like to boast about how they’re not helping the big banks get rich, but if you’re using a credit card, you’re syphoning profits off the stores you patronize, and moving that money to the banks’ bottom line.

July Challenge: Give away 100 things

I had so much fun with Just Cash June, I’m going to do another monthly challenge next month: get rid of 100 things in the house by the end of July. Venessa is doing it too, so as a house we’ll be rid of 200 things total.

Cleaning house reduces clutter, and may allow you to move into smaller living quarters or take on a housemate, which will save big bucks. And giving things to charity is a tax deduction, so either way you’re helping yourself and the community.

I cheated and started early, by clearing out some books and other assorted things from my bookshelf:

  • 20 books
  • Exercise band
  • Map of Yellowstone

I have a few other things on the chopping block that I need to find. The basement is a mess, which means there’s a lot of things down there that will go. I’ll make updates throughout the month of July to track my progress.