Grocery Roundup

I'm looking forward to breakfast on Saturday morning. For me, most breakfasts are eaten alone, in the dark, something quickly poured into a bowl or spread on toast. On Saturday, however, I'm planning on making some bagel egg sandwiches with some hash browns and perhaps a nice bit of fruit on the side. Looking into my fridge and freezer, however, informs me that some shopping needs to be done first.

I was planning on writing up how I save money when I go grocery shopping, but I feel as though that topic has been done to death by many writers far more experienced than I. So here are some of their thoughts on how to save money at the grocery store.

Yahoo! Green suggests forcing yourself to shop on a two week schedule, to ensure that you use up all food without it going to waste before you but more to replace it:

"Raise your hand and repeat after me: "I solemnly swear to consume the remaining portions (if any) of meals I failed to previously consume within 24 hours of my failure to consume them."

Seems a little too regimented for me, but hey, if it works for you... I actually think that my mother did this while I was growing up.

Get Rich Slowly rounds up his favorite ways of saving up to $100/month at the grocery store:

"Buy your produce on sale. Purchase produce that is on sale that week. This is often based on what type of produce is in season. This will not only help your pocketbook, but it will also help you explore new foods and experiment in the kitchen."

My roommate Jeff did this the other day, buying himself some "apple pears", or "perapples" if you will. He did not like them.

Bargaineering has 5 easy ways to cut your grocery bill. The one that would be the favorite of my fiance is:

"2. Use less meat.By weight, meat of any kind is the most expensive part of your meal. You should try to use less of it."

I have to admit, because my fiance is a vegetarian, I've started to eat less meat. I've actually never felt better in my life, physically. I have more energy and I never feel bloated like I do when I eat a lot of meat or pizza. Try having one day meat free every week, it makes a huge difference in your diet - and your budget.

To add to the list, I'll suggest that you buy staples in bulk when they're on sale. Awhile back I found our favorite pasta sauce for $2/can, when it normally is $3.5-4/can. So I bought as many as I could carry home, and I haven't regretted it yet.

Back in May I was spending about $300-350/month on groceries. Now I'm down to a much more reasonable figure, about half of that, which is where I would love for it to stay.

How about you? How do you save money on groceries? Why not try just one of the many examples, and see if you can't help yourself save $100 this month.

Potential savings: $17+ per month. Total savings this month: $100

How to Start An Emergency Fund

Do you want to feel free financially? Do you want to reduce stress on your life, feel more comfortable at the end of the month, or even start to sleep better? All you have to do is start an emergency fund.

What is an Emergency Fund?

An Emergency Fund is a savings account set aside for emergencies. Quite simply, it is a set amount of money that you will not touch unless you absolutely need to. Emergency, in this case, does not mean a sale at Winners, or a new CD that you absolutely must have. It is something more significant, like unexpected car maintenance, sudden unemployment, emergency dental work, etc. An emergency fund is money that you would otherwise have to borrow to deal with the inevitable unexpected expenses of life.

Why Do I Need an Emergency Fund?

Life, as we all know, is full of unexpected surprises. I entered into my last year of college with an old(er) PC that had been sitting around all summer. After we got moved in, I set up my computer, plugged it in, and turned it on. It worked for about 6 minutes, and then "poof". Black screen, smell of burning, no more PC. Whether it was the power supply or the motherboard, I will never know, but I do know that I was suddenly facing 8 months of papers without the ability to type.

A few months later I was driving my then girlfriend now fiance to the Horseshoe Bay Ferry in my sister's little Toyota. The engine decided to leave all of its oil somewhere in between the terminal and exit 4 on the No. 1 Hwy, and suddenly car repairs were a necessity.

Emergency funds allow us to not only pay for those expenses when they do come up, they allow us to relax beforehand, knowing that when they come, we will be okay. After I returned from a vacation in Hawaii, I was facing the rather immediate prospect of unemployment with a very small amount of money in the bank account. An emergency fund would have significantly reduced my stress over the six or seven weeks I went without work.

Isn't that What Credit Cards Are For?

No. Credit cards are necessary evils, but should never be relied upon. For one, anything you put onto your credit card can be charged interest. So if your emergency is costing you $200 and you can't pay it all back within the next 30 days, then you'll be paying $220 for your emergency instead of $200. Twenty bucks not so bad? What if the emergency is $2000, and you have to pay $2400 after interest charges? What if you can't pay it back at all?

In addition, credit card companies enjoy doing mean things to their customers. Like, cutting your credit limit - even below your balance, or canceling your card altogether while you're traveling. What a lot of people forget is that your credit limit is something that is arbitraily decided by your credit card company, and can be changed whenever and however they see fit. Your credit limit does not have a guarantee on it. The bottom line is that you cannot rely on credit to be there when you need it.

How Much Money Do I Need For An Emergency Fund?

If you read personal finance blogs, you'll read advice that ranges anywhere from $1000 to six or nine months worth of monthly expenses. Trent from The Simple Dollar wants an emergency fund that would cover 12 months of expenses. JD from Get Rich Slowly has an emergency fund of $5000, enough for three months of his mortgage payments, or two months of full expenses. The truth is that your emergency fund is a form of risk management, and its size is dependent on how much risk you are comfortable with. Apparently, for the majority of us, we are willing to take a huge amount of risk, because we don't have an emergency fund. I, for one, am not terribly comfortable with that risk, and am therefore starting to save an Emergency Fund bit by bit.

You are the only person that can decide how big your emergency fund can be. Many factors will contribute, including the stability of your income/employment, your monthly expenses, if you have any dependents relying on you, etc. The point of the emergency fund is to reduce your stresses, so save up enough so that you feel comfortable. The article that I first linked to by MSN Money recommends that you save up at least $500. The study referenced suggested that $500 in the bank will improve your life, both financially and mentally. I agree.

How to Start an Emergency Fund

If you've already opened a high interest online savings account, and if you have been following the advice to start saving some money, then you are already set up. All you have to do is create a sub account labeled "Emergency Fund" and start up an Automatic Savings Plan (ASP) to regularly deposit a small amount of money into the account. It doesn't need to be a lot, and it doesn't need to be a full $500 right away. I've been allocating $25 per paycheck to my Emergency Fund, which is currently around $200. It is money that I won't miss because it is gone before I even had the chance to count it, and it gives me an incredible sense of peace because I know that I have a few hundred dollars waiting for me, just in case.

So go ahead, set up your bank account to take a few bucks off each month. If you're worried about your finances, start small, with ten or fifteen dollars. I promise that you won't miss it.

Potential savings: $20+ per month. Total savings this month: $83

How to Reduce Fixed Expenses in Three Easy Steps

What is a good hourly wage to earn while you are not working? What's your time worth? Need to save some extra money quickly? Want something to put into your online savings account? Then perhaps you should invest a little time and a little effort over the next few days and you could earn yourself anywhere from $20 to $100/hour simply by saving money on your fixed expenses.

Expenses

When we talk about expenses, there are two basic categories. There are fixed expenses, and there are variable expenses. Fixed expenses are the bills that you pay on a monthly basis, bills like your cell phone, your TV, your internet, your electricity, your rent, etc. Variable expenses are expenses that change on a monthly basis due to different circumstances. That would be purchases like food, clothing, or entertainment. So when you are looking into saving money, you should consider cutting both variable and fixed expenses.

Personally, I like cutting fixed expenses, because it offers the highest reward for the least amount of time. You cut one monthly expense, and you can continue to reap the benefit every month thereafter.

How To Easily Reduce Fixed Expenses

There are two main ways to easily reduce fixed expenses. The first is to eliminate everything that you don't need. The question of what you need and don't need is a complicated one, and is something that you have to come to terms with yourself. The second method is relatively simple. You get in contact with the person that is providing you the service you require, and ask them to let you pay less.

This may sound ridiculous, and there are plenty of reasons why the company you are dealing with would never just give you back your money. However, about two weeks ago I called my TV and internet provider, and within 15 minutes I had reduced my bill by $40 a month for the next six months. That's a total savings of $240, for a few minutes of work. But wait! Before you call your provider, you are going to need to be prepared.

Step One: Determine Which Bill You Are Going to Reduce

There are plenty of possibilities here. Almost all of us have some sort of fixed expense that we could use reducing. We might be paying for a mortgage, for rent, for utilities, for phone service, for internet service, for television, for rentals or anything else. Now, narrow down your choices by prioritizing the bills by how much extra you think you are paying and by how easily they might be reduced (mortgage would need to be refinanced, so not so easy). Once you have an idea of which expense you are going to try to save money on, go ahead and get the last copy of your bill.

What I did was head on over to my cable provider's website (I get e-bills). I was actually able to look over the last year of my account with them. It listed all the different charges that I had through the company, as well as the different promotional discounts that I was also eligible for. I found out that I was paying $55/month for internet, and because of a promotion, $19/month for full cable television. The total was about $80/month after taxes.

Fig. 1 - Cable/TV bill post-negotiation

Step Two: Research Alternatives

After I saw how much I was paying for cable, I checked out all my options for internet and television. I looked at Telus's internet packages, and their television promotions. I also looked at Roger's website, but they don't offer what I'm looking for. Finally, I remembered to check out Shaw's bundle pricing, to see if they were offering anything to new subscribers that they weren't offering me. What I found out what that I was already paying a pretty low price, because of the TV promotion that I had signed up for back in the summer. If I kept the same features, I'd be paying at least $80 a month (same price I was already paying), and with Shaw, I would be paying $97 a month!

So am I resigned to continue paying my $80/month bill? No! There are yet other alternatives. Do I need the internet? Do I need television? I found out that I wasn't watching too much of the tele, so perhaps I could eliminate it altogether and save myself $20/month. Do I need the internet? Well, yes, but do I need to pay an extra $10/month for a slightly faster internet? No, I probably don't. So there's $30/month.

If you're looking to do the same, check all the competitors in your area. If you live in British Columbia, in Canada, then check out the following major providers. Be sure to check for local providers, as they tend to offer nice deals that only small providers can.

Internet:
Shaw Cable
Telus
Rogers
Bell

Television:
Shaw Cable
Telus
Bell
Star Choice

Cell Phone Service:
Rogers
Fido
Bell
Telus
Virgin Mobile
Koodo Mobile

There may be more options out there, but that list should get you started.

So you've determined which bill you are going to reduce, you've found your latest copy of your bill, you found out the best deal that you can get, and now you're ready to call your provider.

Step Three: The Phone Call

Before you pick up the phone and dial the number, take a deep breath and remind yourself of a few important principles. First, you are not entitled to a deal, you are asking for one. Act and speak humbly. Two, the person you are talking to is a human being, so treat them as one. They are just doing their job, and if they deny your request, feel free to be persistent, but do not be pushy or arrogant. You can always hang up and try again with another call center representative.

Now, call the number. Your first intention is to get in contact with someone who can get you a deal. Either use the phone tree to direct yourself to "downgrade service", "cancel service" or to a "retention" representative, or just mention that you'd like to eliminate or cancel your service to the first person you speak with. This is because the regular reps will not have the power to change your service, cancel it, or give you a discount. The employees working for retention can.

When you get the right person on the phone, state clearly what you're looking for. I said that I couldn't afford to keep the services that I had, so I was looking to eliminate the television service from my account. I also mentioned that I could get Telus internet for cheaper than Shaw. At this point, the rep got a little upset, and started explaining why Shaw was so much better than Telus. I just calmly explained that cheaper is cheaper, and that I needed to save some money. I also admitted that I did not want to switch services, as I had been with Shaw for awhile and did not want to go through the hassle of switching. So I asked if they could do anything for me to keep my business.

The rep went on hold for a minute, and came back with an offer to keep my TV bill $30 lower than it ought to be for six more months, and to give me an upgrade to a higher speed internet (which I was paying $10/month for) for free. So $40/month savings, total. I gladly accepted, thanked the rep, and called it a day.

15 minutes research, 15 minute phone call, $40/month for 6 months = $240.
"hourly rate" = $480/hour

Think you can do better? Sound off.

More Information

How to Reduce Your Credit Card Interest Rates
How One Guy Reduced His Television Bill By 15%
Television Alternatives
How to Optimize Your Cellphone Bill

Potential savings: $20+ per month. Total savings this month: $63

How To Track Your Spending With a Spending Record

How intimate are you with your spending? One of the first things that I did when I started getting interested in my personal finances was to develop a spending record. It took on a number of variations at first, starting as a few scribbled notes on a piece of paper, or a list in a text document. Eventually, it turned into a multi-paged spreadsheet, and someday I am sure it will evolve yet again. All of the different versions boiled down to the same basic principle - where was I spending my money?

I think a lot of us think we know where our money goes. We might not write it down or record it, but we don't need to. We know approximately how much money is in the bank, and we know about how much we've bought. If we think hard, we might even be able to label prices with purchases. For example, a Subway sandwich costs three and a half dollars, and when we went to see the movie last week we spent $20. However, I think the reality of our spending is completely different from what we think it is.

For example, when I started recording where I was spending my money, I was shocked to see how much money I was spending at the grocery store. I knew I was eating a lot of food, and that I especially enjoyed ice cream and snacks, but I had no idea I was spending $300-350 a month on groceries. I thought I was spending $150, maybe $200, but certainly not twice that. It is downright shocking to add up how much money I was spending on certain categories. Not all the surprises were bad. I thought I was buying a lot of beer, but it averaged to about $20 a month, not including if I purchased something while I was out for dinner.

Tracking my money was the first step towards financial responsibility. Before I was keeping track of my spending I thought I was being responsible, because I wasn't spending more money than I made, at least most of the time. Financial ignorance, however, is often irresponsible, and there are no excuses for it.

Now, keeping track of spending doesn't have to be a difficult thing. You might think that you'll have to start getting receipts for everything, or writing down all your purchases as you make them throughout the month. While this does work, and is highly recommended for some people, I think that we are of a generation that will not put up with that hassle. Instead, I use the benefit of technology to assist me. I make almost all of my purchases using a debit or a credit card. I very, very rarely pay cash. This allows me to go back over my bank and credit card statements, and everything that I've purchased is listed for me. I just copy the numbers down onto my spread sheet and into the appropriate category. The spreadsheet even does all the adding for me, so that the totals are easily viewable. This works for me because I very rarely use cash. If you do use a lot of cash, it is not traceable after the fact, so you might have to start collecting those receipts. This whole process only takes me about 20 minutes every month. Sometimes I'll wait a couple of months and then go back over them all at once.


For me, I managed to bring down my average grocery bill to $190/month over the last three months. That's a savings of about $110/month. I think that just the recognition of the overall monthly cost of silly snacks or food that went bad made me a little more hesitant in Safeway and at Costco. It's a quick and easy way to save money, and at the same time, you're informing yourself of your spending habits so you can plan for them in the future.

What about you? Where are you spending more money than you thought you were? Where are you spending less? Any place you think you can reduce costs without much effort? Put that savings into your high interest online savings account!

Potential savings: $30+ per month. Total savings this month: $43

Want a copy of that spreadsheet for your own, personal use? Comment below, or on the wall of The Great Blog Off and ask for one.

How to Set Up an Online Savings Account

By the end of this post you'll have the chance to earn yourself $13. If you read my last personal finance post, I promised you that you could save $100 by the end of the month. All you have to do is read my blog and follow some simple and easy ways to save money. The first step in the process is to create a place to save the money. This is where an online savings account comes in.

What is an Online Savings Account?

Unlike what a lot of us are familiar with, an Online Savings Account is a bank without a local branch that you are able to walk into. It is also not the online version of your local bank, like your credit union's website. Instead, it is a bank that you do business with entirely by mail, phone, or preferably, the internet.

Why an Online Savings Account?

There are three major reasons why you should set up an online savings account.

1. Higher interest rates. Growing up, my credit union's savings account was banking me a whopping 0.1%. That means that every year, they gave me one tenth of a percentage of my money back. At that rate, I was losing money to inflation. However, my online saving's account is giving me 2.3% 2% (curse the economy), which is a fair bit less than the 3.5% that I originally had when I signed up, but apparently there's a recession going on. So put your money somewhere that it is going to work for you, not against you.

2. Separation of church and state (or at least savings and spending). Online banking's greatest weakness is also it's greatest strength. The online account will not give you a debit card, you cannot write cheques for the account, and you can't pay your credit card bill with it. In addition, transferring money to or from the account will take a business day or two. That's a good thing. The point of a savings account is money that you won't spend immediately. Forcing yourself to think over a purchase for 48 hours will ensure that if you are withdrawing the money from the account, it's for a good reason.

3. Automatic transfers. You can set up your online account to withdraw money from your normal bank account on a regular basis. Automating savings is the most important step you can take towards saving money. I guarantee that if you don't have money in your bank account, you will be far less likely to spend it. Keep reading and I'll show you how to set it up.

How to Open an Online Savings Account

While Americans have a few more options, the best bet for Canadians (as far as I am aware) is to head on over to ING Direct. I have an account with them, and I've been very happy with it. Just click on the "sign me up" tab and choose to open an "investment savings account". Fill out the information and you're practically done. The most difficult part of this process is linking the online account to a real bank account. This is how you'll be doing most of your banking online, by transferring money from your regular main account to and from your online savings account. A few minutes of work now will be worth it later though, I promise.

You'll have to get a cheque from your local bank account, make it out to yourself, and mail it to ING Direct. Once they receive it, and the cheque is processed, then your account is open, verified, and ready to go. Want to earn that extra $13? Make the cheque at least $100, include the Orange Key "17504111S1" and when your cheque clears you and I will both get an extra $13 deposited into our online savings accounts. Opening an online account won't take you more than an hour and you'll get $13 for moving $100 from your regular account to your new one. Free money. Please note that this is not the $100 I said you could save. This is, however, the first $13.

How to Set Up an Online Savings Account

Once your account is opened you have the option of setting up an automatic savings plan. This is where your online account will automatically pull a set amount of money from your main chequing account on a regular basis. For example, if you're saving for a new computer, or a car, you could have your savings account pull $100 at the end of every month into your savings account. After a few months you'll have enough to transfer the money back to your chequing account for your new purchase.

What I've done is set up my account so that every other friday, on payday, I have my employer directly deposit my paycheck into my bank account. On that same day, ING Direct pulls a set amount of money right back out of that account for my wedding savings. It's as if I never even had the money. That is the brilliance of the automation. I cannot spend money that I never had. Trying to hold onto a couple hundred or thousand dollars in my chequing account is too tempting for me, there's too much to spend it on. By automating my finances, I've removed temptation from savings. It's not whether or not I want to save money this paycheck, it's already saved.

So if you want to save $100 by the end of this month, set up an online savings account today. It'll take about an hour and you'll earn an (almost) instant $13. Start small by setting up your automatic savings plan to withdraw $10 twice a month from your account, and by the end of the month you'll have $33 waiting for you. It isn't much, but we all have to start somewhere. I started with $15 a month while I was a student, and by the time I realized it I had a couple hundred dollars in there.

*Disclaimer. I am not endorsed or paid in any way by ING Direct, I've just used their service, have appreciated it, and wanted to share it with my readers. Yes, I will get $13 if you use my orange key, but so will you.