I am so excited.

I am going to take my oldest daughter to the bank and help her open her first savings account!

She’s ten now, having recently celebrated her birthday, and she has some birthday-checks to cash.  One of our local banks offers a no-fee, no-minimum balance required savings account for children under 16.  This type of account will be perfect for my daughter.

Over the past few years, my wife and I have worked hard to teach our kids about saving, spending, and giving.  Last year, we introduced them to the wildly-successful Kids’ Fun Fun.

I want to incorporate trips to the bank into our regular weekly routine.  I want my daughter to be comfortable with the entire process – filling out the deposit slip, endorsing the check, talking to the teller – so that she will never feel “overwhelmed” by the banking experience.

In a few years, when she’s ready for a checking account, she’ll have some grasp of how personal money management works.  Hopefully, by the time she’s ready for college, she’ll be prepared and be able to avoid many of the financial missteps that others often make.

What about you?  How old were you when you or your parents opened your first savings account?  Have you opened one for your son or daughter?  I would love to read your comments.

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Taking My Daughter To The Bank To Open Her First Savings Account

I’ll admit it.  I actually enjoy shopping for groceries.  I usually shop on Tuesdays and I try to go to the store when there are fewer customers shopping.  Over the years, I’ve learned how to save money (and a little time) while shopping for groceries.  Here’s what works for me -

1.  Use a grocery store price book to track the prices of regularly purchased items.  (I’ve created a free printable version of the price book that I use.  Feel free to click the link and print out a copy for yourself.)

• The price book will help you figure out the rock-bottom prices from your favorite store or stores.
• The price book will help you know when to stock up – and when to buy just the minimum.

2.  Familiarize yourself with the layout and selection from your favorite store.

3.  Take advantage of a store’s price-match policy.

• This is especially important if you want to avoid driving all around town, just to save money on one or two items.  Take the weekly circular with you to your store of choice, find the sale items listed in the circular that you want to purchase, and then have your store price-match those items.
• If you are going to price-match more than one or two items, try to go to the store when there are fewer customers.  You’ll feel more comfortable asking for the price-match if there aren’t 10 people waiting in line behind you to check out.

4.  If an item that you want is on sale but out-of-stock, ask for a rain check.

5.  Use coupons, but only for items that you were already planning to buy.

• I usually get coupons from the Sunday paper.  I’ve also printed them from several online sites.  From time to time, our local store will send us coupons in the mail.

6.  Sample generic versions of various products.

• I have found that the quality of most generics is equal to the quality of most name brands.  Most reputable stores will give you a refund if you try their generic or store brand and you are not satisfied.

7.  Find out if stores in your area offer double (or even triple) coupons.

• My favorite local store will double coupons up to 50 cents.  So, if I have a coupon for 50 cents, they’ll take 1 dollar off of the purchase price.  I find that I can really save money when using doubled coupons and purchasing canned fruits and vegetables.

8.  Skip the grocery store and try the local farmer’s market or vegetable stand if you are looking for fresh produce.

• If you have the time, you can really save a ton of money by buying from local farmers or from local produce stands.

9.  Bring your calculator to the store – and use it!

• If you ignore all of the above, don’t ignore suggestion number 9.  I use the calculator on my cell phone.  You need to be able to figure our price per ounce or price per gallon or price per unit.  The little information stickers below most products are often wrong.  A quick calculation or two, and you’ll soon know whether to buy the 24 ounce or the 44 ounce ketchup.

10.  Pay attention to price – period.

• A lot of research goes into separating your money from you.  Ignore end caps.  Ignore where an item is on the shelf.  Ignore those bright yellow or orange “sale” signs.  Compare prices – per unit, per ounce, per pound, etc.

11.  Understand how “2 for the price of x” works at your store.

• In some cases, stores require that you actually buy 2 qualifying items in order to get the discounted price.  Other stores, while using the “2 for the price of x” signage, will actually sell you 1 item for half of x.  Know your stores’ policies.

12.  Shop with a list.

• Use your list in conjunction with your grocery price book.  List items in two columns. 1.) Items we have to have, right now.  2.) Items we need to stock up on, if they are on sale or have hit a rock-bottom price in our price book.

13.  Leave the kids at home (most of the time).

• It’s usually much easier to shop, compare prices, and get done quickly if you can leave the kids at home.  There are times, however, when it’s important to let the kids in on the process.  I’ve actually taken all three of my kids, by myself, to the grocery store, and while I’m not really able to fiddle with the price book or worry too much about using the calculator, I have managed to still save money and maintain my sanity.  The key is to stick to the list – and let the kids help whenever they can.

14.  Don’t be penny-wise and pound-foolish.

• Let’s be real.  Time is money.  It doesn’t make sense, unless you simply have loads and loads of free time, to kill ourselves to save 3 bucks at the grocery store.  There is something to be said for convenience.  From time to time, pay the extra few pennies, get home a few minutes earlier, and enjoy the evening with your family.

15.  Learn to cook from scratch – or not.

• This one is last for a reason.  There are times – many times – when it makes a ton of sense (and cents) to cook from scratch.  There are other times when it just pays to buy pre-made or pre-mixed items.  You’ll have to decide for yourself, based on your cooking skills and eating habits, which will work for you.

This is a subject about which I’d love to hear from you.  How do you save money at the grocery store?  Leave a comment and let us know.  Rock on!

This week I will continue writing a series of Back to the Basics articles.  I encourage you to subscribe to No Credit Needed via RSS or Email.  Also, if you liked this article, please consider promoting it via the social network buttons below.  Comments are always appreciated – and don’t forget to follow me over at Twitter.com/NCN.

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How To Save Money On Groceries

If you are working to get out of debt, one of your goals will be to minimize the amount of interest that your creditors will charge you.  If you are working to save money, one of your goals will be to maximize the amount of interest that your savings will earn.  Here’s how to minimize the amount you will be charged and maximize the amount you will earn.

Minimize Interest Charged -

1.  Do not wait until the due date to make payments.

Most credit card companies use the average daily balance when calculating your interest charges.  What does this mean to you?  The sooner you make your payments, the lower your average daily balance will be.  The lower the average daily balance, the lower your interest charges will be.

2.  Carefully consider a balance transfer from a higher-rate card to a lower-rate card.

This one can be tricky.  Before you transfer debt from one card to another, be absolutely sure that you are committed to paying off the debt.  Our goal is to eliminate debt – not just move it around.  With all that being said, transferring debt from one card to another can make since, provided you understand the terms of the balance transfer, correctly calculate the cost of the transfer (transfer fee), and can pay off the transferred balance before the terms of the transfer expire.

3.  Get angry and attack your debts.

I can remember it like it was yesterday.  I was thirty years old, I had been working since I was fourteen, and I had almost nothing to show for it.  Sure, I had a house full of stuff, but I also had a mailbox full of credit card bills.  I can’t quantify the impact of attitude, but I can definitively state the following – Once I got sick and tired of being sick and tired, my financial life turned around.  If you really want to minimize interest, get angry, work hard, live on a budget, find another job, sell some junk, make lots of extra payments, and attack those debts!

Maximize Interest Earned

1.  Make deposits early and often.

Different banks use different methods for compounding interest.  Money saved with ING Direct (where we keep a portion of our savings) accrues interest daily and then that interest is compounded monthly.  Basically, whatever amount is in our account is multiplied, each day, by that day’s interest rate.  At the end of the month, all accrued interest is then added to our account balance.  Suffice to say, the higher the daily balance, the more interest that will accrue.

2.  Automate your savings.

Remember the old saying: out of sight, out of mind.  Build your automatic savings plan into your budget and you’ll ensure savings success.

3.  Consider a savings account which pays a higher rate of interest.

If you are comfortable with multiple accounts, consider opening a savings account that pays higher interest than your current account.  You might find a higher rate with a local bank, an online bank, or a credit union.  Be smart.  Do some research and understand all of the terms and conditions associated with any account you might open.  A good place to research rates is over at Bank Rates.  You might also consider certificates of deposit and money market accounts.

It’s extremely important, as we move from indebtedness towards prosperity, that we consistently look for opportunities to earn more (and pay less) interest.  I am not a financial professional (nor do I play one on the Internet), so I’m just like you guys.  I’m looking for ways to stay out of debt and improve my financial situation.

This post (and this week’s series of posts) is aimed at those who are just getting started and may have questions about how this personal finance stuff works.  My goal is to break-things-down and discuss the basics.  I am a big fan of keeping things simple, and I think you’ll see that reflected in this week’s posts.  Rock on!

This week I will be writing a series of Back to the Basics articles.  I encourage you to subscribe to No Credit Needed via RSS or Email.  Also, if you liked this article, please consider promoting it via the social network buttons below.  Comments are always appreciated – and don’t forget to follow me over at Twitter.com/NCN.

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How To Maximize Or Minimize Interest

My oldest daughter is going into the fourth grade and my son is starting kindergarten.  They need school supplies!  Thankfully, Georgia’s 2009 Sales Tax Holiday begins next week.  I should be able to save a little money, buying school supplies and some clothing, sales tax free.

Several states offer Sales Tax Holidays, including the state where we live, Georgia.  (Click here to visit the Georgia Department of Revenue and read all about our 2009 Sales Tax Holiday.  If you live in another state, my man Jim over at Bargaineering has a comprehensive list of states that have sales tax holidays.)

According to the GADOR website -

Q. What merchandise qualifies for the exemption?

A. The sales tax exemption pertains to items in three categories:

Articles of Clothing. The exemption applies to articles of clothing and footwear with a sales price at time of purchase of $100 or less per item. There is no monetary limit on a purchase as long as the price of a single item does not exceed $100. Clothing accessories such as handbags, umbrellas, etc. are not exempt. See the lists of exempt and taxable items for more information.

Personal Computers. A single $1,500 or less purchase of a personal computer (PC) and/or related accessories is exempt. The exemption does not require the purchase of a “personal computer base unit” (tower, desktop, laptop) and is extended to peripheral devices such as modems, printers, speakers, non-recreational software, etc. If a single purchase exceeds the $1,500 maximum the entire purchase is taxable. A single purchase is considered the total of all sales made to a customer in one visit to a store. See the lists of exempt and taxable items for more information.

General School Supplies. The exemption applies to the purchase of general school supplies with a sales price at the time of purchase of $20 or less per item. There is no monetary limit on the purchase as long as the price of a single item does not exceed $20. See the lists of exempt and taxable items for more information.

Remember, while the holiday is designed to benefit families with school-age kids, anyone can buy the above mentioned items, and pay no sales tax.  Personally, I usually take advantage of the tax holiday and buy dress shirts.  I’ve noticed that one of our local department stores usually discounts there dress clothes during the holiday, and I like to stock up.  Last year, I purchased several really nice dress shirts for less than $7 per shirt.

If you own your own home business, a sales tax holiday might be a great time to buy a new computer, or to stock up on paper, staples, scissors, pencils, and other office supplies.  Just stay below the above mentioned price limits, and you could save a substantial amount of money.

That’s how I’m saving money this week – I’m taking advantage our a sales tax holiday. I will not have to pay state or local sales tax.  Sweet!

One note – If you go into debt, simply to take advantage of a sales tax holiday, you might be making a big mistake.  Remember, if you have to pay interest, you’ll be throwing away any advantage you might have derived from the holiday.  Personally, if I have to make the choice between using credit (and paying no tax) or waiting to pay cash (and pay some tax), I’m going to wait.  Never let a temporary sale or discount prevent you from making a well-thought-out-purchase!

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How I Plan To Save Money Next Week – State Sales Tax Holiday

Let’s face it, we live busy lives.  I’m pretty sure that most companies are aware of this.  I’m also pretty sure that that’s why many companies entice customers with trial periods.  Think about it.  How many times have you signed up for a service because it was free for 3 months, with the real intention of canceling said service at the end of the trial period, only to forget to call and actually cancel the service? Having figured out that many customers will forget to call and cancel, companies can afford these trial periods, banking on the busyness of the average consumer.

Personally, I’m very busy.  So, when I’m offered a trial period, especially one that requires a phone call in order to cancel a service, I’m vary wary.  In most cases, I simply decline the service.  This is by far the easiest way to deal with most of these types of offers.

Once in a while, however, I’ll actually get an offer to try a service that I’m actually wanting to check out.  For instance, I recently switched satellite television providers, and enjoyed three months of free premium movie channels.  Just last night, I called my provider, just as the free trial period ran out, and canceled the channels.  It was fun to have the channels, but I really do not need them.

If, like me, you struggle to stay organized, but you still want to take advantage of these trial periods, consider setting up a reminder system.  Personally, I use the iCal program on my computer, and make a simple note, reminding myself of when to call and cancel a particular service.  I also know folks who use websites like FutureMe, a website that will allow you to schedule a reminder email, and send it to yourself at a specific time in the future.  Pretty rad.

Remember, before signing up for any free trial period, be sure that you know exactly how to cancel the service.  This is especially true for services offered by credit card companies and credit reporting services.  Taking the time once a month to take care of these pesky little phone calls can, in the long-term, save you a lot of money.

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Dealing With Trial Periods

From a recent email -

I love your site!  (Thank you…)  I’ve been working on a basic plan for managing my finances.  Could you write a post about your current plan?  Or maybe a post about some of the things you’ve done to get where you are?  Thanks!

I love it when I get questions like these.  It makes me happy to see that folks are taking control of their own finances.  Bravo!  So, here are the basic steps I’ve taken (and plan to take), with links for further reading.

1.  I stopped using credit cards.

Before I could fill in the hole, I had to stop digging it deeper.  Putting my credit card in my wallet, and just leaving it there, taught me to live on the money that I actually make.  I do not like credit cards, and I am of the firm belief that most people would be better off without them.

2.  I started living on a budget.

This sounds very basic, I know, but living on a budget really works.  As a testimony, a brief examination of my own life.  I worked for 16 years, and had over $11,000 in debt and $500 in the bank.  10 months after giving up my credit cards and living on a budget, I was debt free.  Less than a year later, I had $20,000 in the bank.  Living on a budget works.

3.  I created a mini-emergency fund.

During my debt reduction period, I always maintained a cash reserve between $500 and $2000.  This cash reserve came in handy, and I was able to use it for “emergencies”, that in the past, would have required the use of a credit card.

4.  I systematically paid off my debts.

I used a plan like the one outlined in my free Debt Reduction E-Book.  The plan is simple.  It’s easy to follow.  It really does work.

5.  I fully-funded my emergency fund.

As soon as I paid off my last debt, I started to build an emergency fund equal to six months of my wages.

6.  I began to focus on retirement.

I use several accounts to save for retirement.  Here’s the breakdown.

Pre-Tax Accounts -

My 403(b) – 15% of our gross household income is contributed to my 403(b) account.

My wife’s pension – 5% of my wife’s salary is contributed to my wife’s pension.

After-Tax Accounts -

My Roth IRA – I make maximum contributions to my Roth IRA.

My wife’s Roth IRA – My wife makes maximum contributions to her Roth IRA.

Side Note – asset allocation (what I invest in) – I buy index-based mutual funds and ETFs.  I am not a professional investor or adviser, and my investment choices are pretty boring.  If you ever take a peek at the Vanguard VTI ETF, you’ll have a pretty good idea about how the majority of my investments are doing.  I do, however, have a small portion of my portfolio invested in very aggressive small-cap and international funds, and I own one individual stock, CLX.  Why?  I like being clean, and I like Clorox.

7.  I began to focus on saving for my kids’ college expenses.

I have opened and continue to fund 3 Education Savings Accounts (ESAs), one for each of our children.  The maximum annual contribution to each account is $2,000.

8.  I save for future major purchases.

After funding retirement and education accounts, I then focus on saving for future major purchases.  Currently, I am saving for the purchase of a newer automobile, and the possible purchase of a new home.  The new car purchase should occur in the next five years, while the new home purchase should occur within the next decade.  (I hope to pay cash for the new home.  It’s a major goal, but one I’m hoping to achieve!)  You can read more hear, about how a few years ago, I paid cash for a new-to-me automobile.

9.  I try to maintain proper amounts of insurance.

I have health insurance, life insurance, renter’s insurance, long-term disability insurance, dental insurance, and automobile insurance.  Insurance coverage can be expensive, but it’s an important part of a well-rounded financial plan.  (We waited until we were out of debt, and then we purchased additional life and disability insurance, but we had a minimal amount of both, even while in debt.)  We also have wills and other end-of-life documents.

10.  I am always looking for ways to save more and spend less.

This step makes all of the other steps possible.  In fact, it could have been number 1.  I’m constantly evaluating my spending habits, and always looking for ways to save money.  At the same time, I’m also looking for ways to increase my income and maximize my earning potential.  By the way, here are some of the best tips for saving money, submitted by my favorite people, you, my awesome readers!

I like to keep things simple – very, very simple.  The outline above is easy-to-follow.  I tend to ignore most of the noise surrounding financial planning, and focus on the things I understand.  I’ll leave the high-risk maneuvers to those who can tolerate violent swings in the economy.  For me, I want to maintain an emergency fund, methodically fund my retirement accounts, plan for major future expenses, and spend the rest of my life… living my life!

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A 10 Step Outline Of Our Financial Plan

If you are enrolled in Kroger’s Baby Club rewards programs, be sure to check your mail.  I just received a letter from them, notifying me that they have decided to end their current Baby Club program, effective yesterday.  Inside the letter was a coupon, equal to the value of my current points balance – in my case $10.  I am a little disappointed with the fact that the program has been discontinued, but thankful for the $10 coupon.

As I have mentioned before, I actually enjoy shopping for groceries.   I use my grocery store price book to track the prices at Kroger, and I have noticed a definite uptick in prices over the last year, especially for their store-branded items.  The Baby Club was a nice way to save a few bucks, and now that it has been discontinued, I may decide to look for a new grocery store of choice.

As a final note, the last line in the letter from Kroger did mention that they will be sure to send special offers to my family.  My hope is, and only time will tell, that the coupons they send will compensate for the loss of the rewards program.  We shall see.

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Kroger Ending Baby Club Rewards Program

Fifteen days ago, I started working on my modified CD ladder.  As part of my plan, I’m trying to earn $100 a month, each month, from eBay sales.  As of today, I’ve made $76.45 (after fees).  With 16 days to go, it looks like I’ll make my $100 goal for the month of December.

Last year, I wrote an article about how to sell baby clothes on eBay, and I use many of the same tips and techniques when selling other items.

So far, I’ve sold several books, a broken portable DVD player (for parts), and a pair of shoes.  It usually takes five to ten minutes to list an item, and it feels good to make a little extra cash and rid my house of unnecessary clutter.  By the way, when selling books, it’s usually a good idea to ship them using USPS Media Mail.  It’s cheaper than Priority or Parcel Post.

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eBay Total Halfway Through December

Number 5 – Follow Through

Okay.  You’ve finally decided to get your financial house in order.  You’ve worked through the numbers and sorted out your bills.  You’ve filled out your budget – (My favorite? You Need A Budget) – and you and your spouse on the same page.  There’s just one more thing you need to do — Follow Through.

How many times have you said that you were going to focus on debt reduction, only to put it off for “one more month”?

How many times have you “thought” about creating a will or buying more life insurance?

How many times have you “really meant to” fund a Roth IRA?

How many times have you talked about saving for kids’ college, or a newer car, or new appliances?

Don’t just think about making a change – Make a change!

It doesn’t matter how many times you rework your spreadsheets or retool your debt reduction plan.  If you don’t implement your plan, the plan becomes useless.  So, turn of the TV, grab that stack of bills, get started – and keep going!

You rock!

This post was written twenty minutes after Interval Training Thursday – if it reads a little coach-like, that’s why! 

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Top 10 Ways To Save Money – Number 5 – Follow Through

Number 6 – Work Together

A good friend of mine owns a two-person pedal boat.  The last time I got in the boat, my nine year daughter and two of her friends hopped in the boat with me.  As you can imagine, I did most of the pedaling.  By the time we circled my friend’s pond and arrived back at the dock, I was exhausted.

It can be tough trying to go it alone, feeling like you are the only one working to get out of debt and save money.  If you want to succeed, you have to develop a plan which allows you and your family members to work together.

Talk With Your Spouse

Let’s face it.  If you are reading this blog post, then you are, more than likely, the person in the household who handles most of the financial paperwork – paying bills, filing taxes, balancing checkbooks.  As such, you probably feel overwhelmed, from time to time, with all of the responsibility you have.  If so, take a few minutes, maybe over a quiet dinner, to talk with your spouse.  Don’t argue, don’t condemn, don’t blame, just talk.

I’ve actually written a couple of posts about this subject -

How I Avoid Arguing With My Spouse About Money and

Is It Really Possible To Talk To Yur Spouse About Finances Without Getting Into An Argument

Talk With Your Kids

I have three kids, ages 9, 4, and 6 months.  Obviously, I have a different conversation with the 9 year old than I do with the 4 year old, but they both know that we “honor every dollar” that comes into our house.  If you are heavily in debt, and worried, some of that worry is bound to rub off on your kids.  Be reasonable.  Don’t put more on you child than he or she can bare.  At the same time, be as honest as you can and let them know that you – and the whole family – are working hard to save money.  As kids get older, let them in on, little by little, to the realities of family finances.

Here’s a post I wrote a few months ago -

5 Ways To Teach Young Children About Money

Become A Team

As corny as it sounds, when my two older kids get in an argument, I take both of them by the hand, and walk them to a quite place in the house.  Kneeling down, to their eye level, I remind them that we are a team, and that we have to work together.  The same holds true when it comes to managing family finances.  The entire family has to be moving, together, in the same direction, like minded and determined.  As an adult, you can cultivate a good attitude if you celebrate victories, those big and small.  If your daughter receives a twenty dollar bill at Christmas, teach her how to save a portion, give a portion, and spend a portion.  Let her have some freedom, but also teach her some responsibility.

Find Your Role

Do what you do best and let your spouse do what he / she does best.  Support one another.  I like graphs, charts, spread sheets, and calculations.  So, in our family, I do most of the paperwork.  My wife, she’s more of a people person, so she handles a lot of the human interactions – calling doctors, insurance companies, etc.  This works for us.

Here’s a more in depth look at the subject of family roles

How Free Spirits And Money Nerds Can Help Each Other Out

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Top 10 Ways To Save Money – Number 6 – Work Together