The fifth episode focuses on talking to parents about money and their estate planning as they get older. Along the way, I mention my own challenges in figuring out how to handle this as my parents age. Total time: 16:25.

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Episode Notes
Here are some additional notes that go alongside the comments in the podcast. Approximate times for the corresponding links and notes are listed.

0:00 – The theme song is a snippet of a Camper van Beethoven concert on October 25, 1986, shared via their very open taping policy. Listen to the concert in its entirety.
0:22 – Some useful reading on this topic.
1:41 – The frugality lessons my parents taught me.
2:38 – Here are some of the ways they managed to juggle all of these things.
3:27 – The book It Pays to Talk by Carrie Schwab-Pomerantz and Charles Schwab was really helpful – here are my detailed notes on the book.
4:31 – Honesty is absolutely vital when talking about these issues.
6:02 – When I’m trying to calm myself down, I often sing to myself. I usually choose a very calm song – usually, it’s Crash by Dave Matthews Band.
8:58 – It might be worthwhile to get your parents a copy of Start Late Finish Rich by David Bach – here are my notes on the book.
11:30 – Estate planning 101
12:07 – A master information document is unbelievably useful in such situations.
15:22 – A semi-preview of next week’s podcast.

One thing I’d like to do in a future episode is have an audio reader’s mailbag. If you have a microphone on your computer and can record an MP3 of a simple, short question you might have on personal finance, careers, pop culture, or anything else you’d like me to answer, record it as an MP3 and send it to me. Keep the total recording under 15 seconds, please. Also, if you use Skype, feel free to ask your question that way – my username is trenttsd.

Comments and suggestions welcome.

About a week ago, I challenged my followers on Twitter to give me their best single piece of money advice in ten words or less.

I was flooded with responses.

After spending quite a bit of time sifting through them, here are the fifty best pieces of advice that came my way (out of well over a hundred – I actually used a spreadsheet to help me figure out the best ones to include). All of these are stellar money tips – and all of them come in with ten words or less. Enjoy.

writealvaro: Don’t invest in what you don’t understand.
mmmeg: I only need one word! ASK!
The_Weakonomist: index emergency fund to unemployment. 9% = 9 months.
MichaelBRubin: Spend more time, less money.
fiscalgeek: The secret to money management is learning to be content.
pearbudget: Know what really matters. Don’t spend money on other stuff.
creditgoddess: Don’t borrow more than you can repay.
dgstinner: A fool and his money are soon parted
jacobmlee: Be mindful of how you spend money.
JoeTaxpayerBlog: Don’t walk away from 401(k) match, regardless of debt situation.
EdenJaeger: Live below your means and save all you can.
tonyblacknyc: Better to sell a little early than a little late.
Kplavcan13: Pay yourself first, you can’t give yourself a bill.
dweliver: Be content with what’s yours and you’ll always have plenty.
centsiblelife: Spend less than you earn. Earn more.
MoneyEnergy: Don’t save at 2% when you’ve got debt at 10%.
thefinancialqb: If you try to get rich quickly, you will go broke fast.
ObliviousInvest: Diversify. Minimize costs. Stay the course.
Matt_SF: Borrowing money for a depreciating asset is a fool’s errand.
benburleson: If you can’t afford it, don’t buy it.
mapgirlsfc: Save regularly and spend less than you earn.
jj_observations: Learn to love left-overs!
tusharm: Don’t spend money that you don’t have.
danielckoontz: Never reach for yield.
randypeterman: “Where will you & your stuff be in 100 years?”
Cat8040: Don’t take on debt.
KasyAllen: Don’t be afraid to ask for the savings!
nhldigest: Best money advice “Don’t Spend More Than You Earn”.
Green_Panda: My advice: Change one money habit at a time.
MoneyEnergy: Don’t count all your chickens before they’ve hatched.
fcn: Save and invest for the long term.
MyLifeROI: If it depreciates, don’t pay interest on it!
jessw61: Save/invest as much as you can.
Lisa_S_47: working hard doesn’t mean you deserve anything you can’t afford.
mtswartz: I’ll do it in two: Spend Less!
GlennLucas: Prevent your government from bankrupting your nation.
myfindependence: Be thrifty but don’t forget to enjoy yourself
spendingsmart: You can’t outearn dumb spending.
randallkirsch: A penny saved is more than a penny earned.
Grumpicus: Use credit cards, NOT debit cards.
flexo: The only one who cares about your money is you.
ceetastic: Before purchasing, I ask myself, “Can you justify the expense?”
moneyhighway: Money comes and goes the memories stay
robertsm85: If you don’t have the money then don’t spend it.
roryboy: if you need to use plastic, you can’t afford it!
msimonkey: Keeping up with the Jones’s is plain stupid.
maverickstruth: Know what comes in, and what goes out.
crazy_eddy: Let your assets buy your toys.
sfordinarygirl: Buy generics/private label because it’s way cheaper
jasonbob7: One word: leftovers!

Now, how about you? What’s the best money advice you can give in ten words or less? Leave yours in the comments!

One common question I’m asked a lot is how we actually balance our work lives and our family lives. Barb sums it up best:

How do you do it? You write tons and tons of stuff for The Simple Dollar, your wife works a full time job, you seem to have tons of time available for your kids, you read quite a bit, and you also seem to have a somewhat active social life. How do you do it? Do you not sleep?

There are a handful of tricks to making this all work. I’ll outline several, but I’ll start with the big one.

The line between work and family is pretty blurry at our house.
As I’ve mentioned before, I set aside a block of time each day to spend with the kids – and my wife does the same. This block usually goes from about 5:30 in the evening until 8:30 in the evening, with the last half-hour or so involving one of us putting the kids to bed while the other one does something else.

Outside of that, the lines between work and family are really blurry at our home. We’ll engage in family activities and in the middle, I’ll yank out my pocket notebook and jot down some notes. I’ll read books for review for The Simple Dollar in the late evenings when my wife is enjoying a piece of meaty fiction. My wife (who is a teacher) will grade papers on the way to an activity while I’m driving, or I’ll gather notes while she’s driving. Sometimes she even helps out with background tasks for The Simple Dollar, brainstorming ideas, correcting posts, and even helping with writing tasks here and there.

It’s not uncommon for us to spend a rainy Saturday afternoon watching a movie in the family room. The kids will choose a Pixar movie we’ve seen a dozen times and my wife and I will fire up our laptops, hers to record some grades and mine to answer some emails.

It doesn’t feel intrusive – at least not to me – because I enjoy the work so much. I love to write. I love to communicate with readers (in fact, I love it so much that I often get behind simply because I want to respond to as many emails as I can). It just feels – most of the time – like just another enjoyable thing to do in my life.

During the school year, the kids do go to daycare, a decision we put a lot of thought into before we chose it. The biggest reason, actually, was for the kids themselves – there are cognitive benefits and health benefits to such attendance. That doesn’t mean that we dump them at the door and run – I often spend days with them, taking them to the Science Center of Iowa or to the library or to the park – but I do try to maximize the time they’re at daycare, doing tasks that they can’t participate in (my work) or would greatly hinder.

The end result of all of this is that my children get my undivided attention vastly more than they did when I was working a full time job. When I had work intruding on my life then, I was either out of the house or mentally distracted when I should have been spending time with them. Now, when they need me and something work-related is on my mind, I have the freedom to slam the door on work whenever I choose. Plus, because I enjoy my work, I also have the freedom to pick it up whenever time allows without hating how it’s interfering with what I want to do – it is what I want to do.

We own one television – and it’s rarely on.
In the last month, the television’s primary use has been twofold. It’s kept us up to date with local storm coverage (since we’ve had some awful weather as of late) and it’s provided the source of our “family movie night,” where all four of us (once a week or so) watch a movie together. Other than that, I think it’s been on roughly two hours (to watch True Blood).

That’s it. The only television we own is down in the basement, and we simply don’t go down there that often. We’re too busy doing other things that we enjoy – activities that often involve active interaction with our children (like drawing pictures or building a giant model railroad).

We do lots of household chores together as a family.
We cook meals together. We clean together. We work on art projects together. We wrap presents together. We do dishes together.

Virtually any task that the children can possibly participate in is done in a social fashion. Everyone gets more out of it if we work together. Sure, there might be minor setbacks when the children get involved, but they offer a lot of help, too. Even our twenty one month old daughter can scrape plates and put them in the dishwasher (seriously) and our three year old loves stirring cookie batter.

The more things like this that we do together as a family, the tighter we bond and the more real world skills our kids have. Doing things this way turns household chores into opportunities for family bonding – and often gets things done just as fast, if not faster.

Many of our friends are also parents.
If you’re friends with parents that have children of a similar age, they’re much more understanding about things like taking kids to the bathroom or washing their hands. They’re also much more likely to be helpful when you need a hand, and you have a lot of experiences and advice worth sharing.

Here’s a perfect example. My wife had four bridesmaids at our wedding – two of them were her sisters and the other two were long-time friends. Today, one of those friends has a son that’s literally one day younger than our own, while the other has a daughter in between the ages of our kids and an infant son. The children have become part of the social bonds tying them all together.

Thus, our roles as parents and as social creatures overlap.

We choose enriching things for our relaxation time.
So when do we relax? Almost every evening, my wife and I spend some time unwinding. That time, though, is often spent reading or playing a game that requires some thinking. Last night, we both read for an hour and a half, side by side, before bed. The night before that, we played Dominion over a bottle of wine.

In short, we make an effort to keep our minds “on” as much as possible during the day.

Turning my mind “off” is done in a very focused way.
Obviously, though, being “on” all the time isn’t the best thing, so I have what I think of as an extremely focused “off” time each day. I meditate/pray for about twenty minutes – I clear my mind and do a few very basic relaxation techniques. Often, if I do this later in the day, I find myself hugely mentally refreshed for the evening instead of burnt out after a lot of work.

I used to try to do something like this during my commute, but it never really worked well, so eventually I settled on meditating/praying right when I got home. It’s a late afternoon tradition for me that I’ve used ever since – and it makes a huge difference in my energy and alertness in the evenings.

Doing these things – blending work and parenting and play, meditating, socializing with other parents, and engaging in activities that are usually mentally enriching – has been invaluable for juggling all the roles we have without needing to shell out the cash to bring in extra help (like a housecleaner, for example).

The things that stick in your head after reading a book are often interesting. For example, just yesterday I posted a detailed review of Miserly Moms that outlined a ton of useful tips for cutting domestic spending.

Yet, the thing that stuck in my head for days after reading the book was an offhand comment she made about buying garbage bags. She pointed out that these were an item that one could easily switch to generic, since the low-cost garbage bags are a great way to save money.

My response to that? Not in my world, it isn’t.

We bought low-end garbage bags once. Of the first nine bags we used, two of them ripped and dumped their contents all over our kitchen floor on the way to the trash can. Each mess took at least ten minutes to clean up – one mess was almost entirely dry stuff, so it was fairly easy, but the other mess involved some sticky items, including a glass bottle that cracked and leaked some maple syrup on the floor.

The time lost cleaning up these messes almost immediately ate up the “value” we got in buying the low-end brand versus the price we would pay buying better bags in bulk.

Since then, we’ve stuck to the brand we trust – Glad Forceflex tall kitchen bags – which have won garbage bag comparisons in both Real Simple and Consumer Reports. We can get these bags in bulk for about eighteen cents a bag, compared to roughly fifteen cents a bag for generic. Given that we have, in three years, only had one breakage of our preferred kind of bag, we’ll stick to our preferred brand, thank you.

Whenever I make a comment along these lines, people almost always suggest not filling the bags as much. “If you only filled the generics 80% full, then you wouldn’t have the breakage!” Well, let’s look at that scenario. If I have five 13 gallon bags and I fill each of them 80% full, I’ve got 52 gallons of trash. On the other hand, if I have four 13 gallon bags and I fill each of them to the brim, I have the same amount of trash – 52 gallons.

So, I can either use five generic bags (which cost fifteen cents a pop), empty the trash 25% more often, put more plastic into the environment, and spend a total of 75 cents, or I can use four of our preferred bags (which cost eighteen cents a pop), put less plastic into the environment, and only spend 72 cents.

In the end, though, the take-home message has nothing to do with grocery bags. Instead, it has to do with finding your own maximum value. For us, the best value in garbage bags doesn’t come from buying the generic bags – in fact, with most of our household supplies, we’ve found that simply sticking with the Consumer Reports Best Buy provides us with an item that’s not much more expensive than the low end option (and sometimes cheaper if we can find a coupon) and doesn’t have usability problems like not getting the dishes in the dishwasher clean or dumping garbage all over our kitchen floor.

For us, a product that does its job well without such crises has a greater tangible value than one that tends to fail on occasion. We’re willing to pay a little more for easier use and fewer failures because of the time factor – cleaning garbage off the floor because we bought the cheap bags is time that we don’t get to spend with our kids.

Even better, when we start evaluating the situation as a whole, incorporating some of the costs incurred by poorly-working products (like the bad dishwashing detergent, which causes us to run another load of the same dishes, eating up water and another batch of detergent), we often find that the “cheap” item actually ends up being the expensive one.

Our perspective? Find the best price you can on quality items that actually do their job well. Over the long haul, the convenience of items that actually work all the time will add up to enough to make the difference between the prices, even if you don’t see that factor directly in play.

If you think I’m giving the generics a bad rap, let me make it clear: by all means, try the low-end items. Find out for yourself if they really add up to the total value that you want.

For us, it’s rarely worth it.

Each Monday, The Simple Dollar opens up the reader mailbags and answers ten to twenty simple questions offered up by the readers on personal finance topics and many other things. Got a question? Ask it in the comments. You might also enjoy the archive of earlier reader mailbags.

I’m 22 and I’ll be starting grad school in the fall. I have almost enough cash in the bank to pay tuition for my two year program (including the mandatory summer semesters), but I don’t have any additional cash for housing, food, textbooks, etc. I plan to work a lot of overtime this summer and save what I can from that, and then work as much as possible while I’m in school to help cover expenses. Because of my assets, I can’t currently get student loans, but I will probably become eligible later as my assets decrease, hence my question:

Should I contribute to my Roth IRA these coming two years, or should I keep my earnings as cash and put them toward expenses? If I contribute to the Roth, I’d become eligible for low interest student loans fairly soon. Would it be a better deal to have student debt and have the corresponding amount of money in a Roth with two more years of compound interest, or to graduate debt free?
- Ariel

There really is no “best” answer here, as both paths are good ones to financial security. It’s really a matter of personal preference.

The “no debt” person will clearly argue for avoiding the debt and getting out of college without anything on your plate. That affords you a lot of life and career freedoms that might not be in place otherwise.

The “save for retirement” person can argue quite well for putting money into the Roth IRA, because the younger you are when you invest, the more years you have for compounding to work in your favor.

What would I do? I’d probably sock money into the Roth and take on student loans. The student loans are usually low interest and that interest is tax-deductible, plus they have flexible repayment that stops if you’re jobless. Sure, you’ll have some debt after college, but you’ll also have a healthy start on retirement, which will be a big advantage down the road.

Questions like this are what financial advisors feast on, because there’s reasonable logic no matter which way you choose. Thus, they can make a good case either way and will focus on whichever one will net them the most commissions.

We are dealing with a huge credit card debt that both me and my husband has piled. I have curbed my indiscriminate spending habits, have built some emergency fund. I also have a regular retirement savings and seperate savings for my kids education.
Unfortunately my husband is struglling with his debt and I am failing to help him with it. It is creating a lot of tension in our family.
As we are Indians I have a sizeable amount of gold jewellery that is lying unused in my locker. Should I sell off a part of it to help my husband and end the tension between us?
- Sudipta

Will selling the jewelry make you resent your husband?

For me, that’s the biggest factor in your story. If it will not, then by all means, find a reputable dealer and unload that gold – it’s an asset, after all, that is probably best used elsewhere right now.

However, if you’ll resent him for “making” you sell the jewelry, don’t do it. That’s the kind of sand in the oil that can destroy the engine of a good marriage over time.

Another key piece: you need to talk about this, just the two of you. Talk about all of the anger and hurt feelings and mistrust and angst about the debt. Get it all out there on the table.

As an older graduate student, I am finding that I am racking up quite a nice debt ($20-30K) in student loan money. I am working p/t while I am in school, so that I finish faster. What do you suggest I do with the debt once I start paying it? Should I try to pay it off in as little time as possible, or to hang onto it and pay it off over more years. I already have a good credit history. But, I have barely any retirement money saved, and will be 40 in a few years. I am wondering if money is better off split between the two, favoring the retirement fund. Thank you.
- Marie

There’s no reason to accelerate payment on student loan debt, particularly if it’s taking away from retirement savings. Student loan debt is usually low interest and has some of the most forgiving policies one can ask for – forbearance if you’re out of work, for example, and the interest is usually tax-deductible.

If you’re nearing 40 and have no retirement savings, I would “split,” as you word it, and start saving for retirement instead of making extra student debt payments. You’ll never again be this young – and that means you’ll never again have this good of an opportunity to maximize the compounding of your retirement savings.

How do you make a resignation letter look respectable, but not ramble? Where is the happy medium?
- Mol

Keep it simple – don’t ramble at all. Most of the reasons for your resignation will be revealed in conversation, not in the letter.

Simply state the date of your planned departure, offer your assistance during the transition, and make a short statement that you valued your time with the company – something like “Thank you for the support and the opportunities that you have provided to me over the last eight years. I have greatly enjoyed my tenure with the company.”

Don’t worry about any other details. If they need to be discussed, they will be discussed in other venues. There’s no need to actually include any of that in a resignation letter. Just keep it short, sweet, and respectful.

What are your feelings on a writer that plagarizes? For example, Chris Anderson apparently plagiarized from Wikipedia for his latest book.
- Elvis

First of all, I do understand how someone can plagiarize in the way described in the article linked above. As I’m writing my second book – a much more complex work than the first one – I find it littered with notes, clippings, and material of all sorts. It’s a lot of work to keep proper attribution straight – and then when you add in an editor who doesn’t understand fully what your notes are referencing, it’s easy for a piece or two to wind up without proper annotation – which seems to be what happened here.

I enjoy works that call upon lots of different sources to create a fresh new conclusion.

That being said, plagiarism is theft, period. If you take someone else’s work without any form of credit (unless they’ve allowed you to do this), you’re stealing from them, no different than if you walked into their garage and took their lawnmower. Material items and intellectual items are both the result of a serious time investment and stealing either one is wholly wrong and should be punished.

As for a writer, I tend heavily towards a “fool me once, shame on you – fool me twice, shame on me” approach. If a writer makes a mistake once and owns up to it, I let it slide, knowing as I do how things like this can happen inadvertently. However, I would then expect extra care from the writer to avoid similar mistakes in the future. If it happened again, though, I would no longer trust the writer, believing that the person has a serious problem.

How many monitors do you have for your main computer that you work on?
- Sandra

I currently have one – a 24″ Dell monitor that suits my current needs.

I am currently considering a second monitor, exactly the same size as the first, to sit over to the right. The big advantage of a second monitor is that it would allow me to see things at a glance that I currently have to either switch windows for or use a keyboard shortcut to see, breaking my train of thought. Having a second screen would allow me to glance quickly without such interruption.

At my previous employer, I had two screens on my desk, and such quick switching was both intuitive and useful for me.

You’ve talked many times about how you follow individual stocks for kicks. Why don’t you jump in and actually clean up on this rebounding market?
- Shane

I largely believe individual stocks are essentially investment gambling and I don’t have an interest in putting a large portion of our money at risk. If I just put a small portion at risk, it would be eaten up by brokerage fees.

So, for now, I sit on the sidelines. My intent, over the long haul, is to learn more by watching and studying, then eventually move to something like the “Black Swan” investment model. Basically, I’d have 80% or so of our money in something really safe, then I’d actively invest with the other 20%, attempting to hit investment home runs with it.

I’ve been doing well on my own lately. For example, in March and April, I was following Spartech closely and I couldn’t figure out for the life of me why it was staying so low. Since then, it’s doubled.

After seven months of unemployment, I finally found a job and I start next week. I’ve completely used up my emergency fund and had to live on my credit card for a while. Should I use my first check to start paying down the credit card or start rebuilding my emergency fund?
- Andy

Rebuild the emergency fund, at least to $1,000 or so, before you focus on knocking down those debts. Just because things are going well at the moment doesn’t mean your car won’t break down next week.

You’re obviously living pretty lean now. Don’t undo that because you have a job – keep sticking with the things that are working for you in your leaner life. Many people have a tendency to let their lives expand to meet their paychecks. If you can avoid that, you’ll be in good shape.

Did you take your kids to see Up? What did you think of it?
- Yan

We had planned a family excursion to see Up the day after Father’s Day and my son was really looking forward to it. Unfortunately, on the day we were planning to see it, my daughter got really ill. After some discussion, my wife and I made the decision that one of us would take our son to see the movie and the other would stay home.

So, my son and I went to see Up last Monday and we both loved it, for drastically different reasons. My son kept talking about the dogs, particularly Dug, and the balloons. I was far more captivated by the relationship between Carl and his wife as well as between Carl and Russell.

It was really a movie that both a three year old and an adult could get something really enjoyable out of – and that’s a pretty high compliment. It’s something that Pixar simply does well.

Why aren’t you on LinkedIn?
- Jeff

Why don’t you comment on FriendFeed?
- Louise

Why are you ignoring my invitation to Facebook?
- Andy

To put it simply, I don’t have time to participate heavily on all of these services. Instead, I tried them all and followed the conversation – and it led me to Twitter. I think Twitter’s the best “social media” service for actually carrying on conversations with like-minded people – and finding new ones. Facebook and LinkedIn (beyond the basic signing-up and getting your info out there) are good for keeping up with people you know – but that doesn’t get me heavily involved over the long term.

FriendFeed basically combines all of these together, so I signed up there as well and created a single feed for my site, Twitter, and anything I put on Facebook. If you want to follow me there, feel free, and I occasionally jump into discussions there.

However, Twitter is where I spend most of my time. I post links, chat with people, and share interesting stuff on there all the time. It just fits me better.

Got any questions? Ask them in the comments and I’ll use them in future mailbags.

Every other Sunday, The Simple Dollar reviews a personal finance book.

Miserly Moms by Jonni McCoy wears its target audience right on its cover – stay-at-home moms (or at least moms who devote a significant amount of time to domestic management) that are trying to maximize every penny. It’s a good read with lots of specific, applicable tips for domestic spending, particularly in terms of food and household supplies. The book hones in on these issues like a laser beam – though the cover of the book clearly aims for the stay-at-home mom, the contents of the book really apply to anyone – we all shop for groceries and we all need to eat, after all.

In other words, if you’re looking to maximize every penny on household expenses – particularly if you have a large household – this book is packed with advice. If you want stock investing material… you might want to go somewhere else.

Since the book is actually divided into thirty two short chapters, I’ve just pulled out ten of the points and principles that I thought were really thought-provoking.

Don’t Confuse Frugality With Depriving Yourself
Many people hear frugality and they have visions of eating a steady diet of ramen noodles and wearing fifteen year old clothes and never leaving the house while living in a hovel and driving a rusted-out 1978 AMC Gremlin. The truth is that frugality merely means being mindful of finding the best value in your own life and not just settling for the easy, thoughtless solution. As Jonni says on page 33:

If any money-saving activity makes you feel cheap or tight, you will eventually abandon your efforts. This is not the price we need to pay to reach our goals. I don’t need to feel tight and cheap in order to stay home with my kids. There are ways to save money and keep my dignity.

Well said, indeed. If you’re unhappy with a spending cut in your life, then don’t make it. The big trick with frugality is that many people never even think about it. They never ask themselves if they really are getting value out of that expense, or if a less-expensive option will do for them. Quite often, you can make a more frugal choice and never notice the difference (except for the gradually heavier wallet – don’t go frugal if you don’t want extra cash in your pocket).

Don’t Buy Everything at the Same Store
Jonni advocates finding the stores that have the cheapest prices on the various items that you buy, and I fully agree with that strategy. However, I think it’s possible to take that advice too far. I essentially use two stores for almost all of my grocery and household supply shopping – Fareway and Sam’s Club – with occasional stops at Walgreen’s if there are a number of exceptional bargains there.

The trick is simply being objective and finding the store or two that really does have the lowest prices on the items you buy regularly. Don’t obsess over grocery store flyers from every different store, because you eventually reach a point of real diminishing returns, where you dig through flyers for an hour to save $3.

Instead, just stick to the basics. Find a grocery store with low prices. Plan your meals carefully (and use the flyer as a tool). Make a grocery list from that meal plan. Then, go shopping and stick to that list. If you’re not doing these things already, switch to them and your food bill will drop dramatically – I wouldn’t be surprised to see a 50% drop.

Buy in Bulk Whenever Reasonable
Sure, buying whichever version of the item has the lowest cost-per-ounce is usually the best deal. But not always.

For one, if you don’t have adequate storage space, such excess items can easily get in the way. For another, if you’re not going to use the entire amount before it expires, then you’re wasting money buying the bulk version.

Another key point: storage containers. If you’re not reusing the containers you use to store items, you’re likely throwing money away. In other words, you’re better off over the long run putting sandwiches in small reusable containers than in Ziploc bags – even buying them in bulk doesn’t add up. This is a principle I remember my parents using when I was a kid – my father’s lunch was always packed with resealable small containers instead of with baggies.

Cut Back on Prepackaged “Convenience” Foods
The argument in favor of convenience foods is pretty clear – you’re paying a little extra to save time. However, that “little extra” is substantially more than you think at first glance.

Why? It’s a health thing. Prepackaged convenience foods are often loaded with preservatives and unhealthy ingredients like corn syrup and artificial sweeteners. Over the long haul, these things add up to additional weight, a lower quality of living, and additional health care costs. Instead of subscribing to a pattern of unhealthy convenience foods that cost more and contribute to poor health just to shave a few minutes, learn how to prepare your own healthy simple foods instead. For example, I can make an egg-white omelet sandwich with whole wheat toast in about four minutes for less than $1 (and put all dishes straight in the dishwasher) or I can buy an unhealthy breakfast to go for about the same time cost, a lot less health, and likely a higher cost, too.

Why do this? Cut back on the prepackaged foods!

Don’t Assume Something Saves Money
Jonni tells an interesting anecdote about her freezer on page 241:

The first thing I did to conserve energy in my kitchen was to get rid of the extra freezer I had. It wasn’t actually in my kitchen (it was in the garage), but I considered it an extension of my kitchen, as it held all my extra food. When the energy audit revealed that it was responsible for 15 to 20 percent of my utility bill, I questioned its cost effectiveness. I figured it was costing twenty dollars a month to run. At that time, that was 20 percent of our utility bill. I was buying in bulk and storing food in there, but the savings on bulk foods was being spent on the appliance to store them in.

It’s worth noting that many modern freezers are more energy efficient than this. We actually ran similar calculations on our own freezer and found that it was cost-effective for us, but it was closer than we expected. We also found that we were better off filling it to the brim, so we started filling up the extra space with ice – empty gallon milk jugs, rinsed and filled with water, then frozen.

Cut Back on Meats
I’ll admit it – I am currently thisclose to switching to being an ovo-lacto vegetarian. For example, today so far I’ve had a bean and salsa omelet for breakfast and a bowl of leftover vegetable soup for lunch, and I anticipate a vegetarian dinner.

Why am I doing this? As I try cooking with these restrictions, I’m finding more and more recipes that are quite tasty – and I’m finding more and more that meat is the most expensive part of the diet.

Take beans, for example. They’re very healthy, they provide lots of protein, and they’re incredibly cheap. You can take a lot of meat recipes – especially those with ground beef – and just substitute beans, and the resulting recipe is quite tasty.

I never would have believed that I would find myself cutting back on meat so much, but there are lots of great, tasty, filling recipes out there that don’t use meat – and they’re almost always much cheaper than similar dishes that contain meat.

Have a Regular Soup-and-Bread Night
Pencil in one dinner a week for just soup and bread, nothing else. A big bowl of vegetable soup is incredibly easy to make (just boil up whatever leftover vegetables you have with a bunch of spices) and a bit of bread to soak up some of the juices and make the meal more filling is a great side.

Not only that, you pretty much can’t get a cheaper meal. Just take the vegetables you cook during the week and save the leftovers in a closed container in the freezer. If you’re like us, a nearly free and quite healthy meal once a week – especially one that can really be jazzed up with spices and peppers – is a spectacular deal.

Cook Several Meals at Once
A while back, I wrote an article providing an example of preparing several meals at once. The central principle is absolutely true – preparing several meals at once and freezing the extras saves both money and time. The money savings comes in because you can buy ingredients in bulk – the time savings comes in because you have to do very little prep work for each meal once the extras are frozen, since you just pull them out and cook them.

Jonni offers a ton of examples on how to do this. My favorite is one that we’ve started using – just cook tons of chicken breasts at once. We cook several pounds of chicken breasts in the crock pot at one time. Then, we put two chicken breasts into a freezable container, pop several such containers in the freezer, then just pull them out when we need cooked chicken as an ingredient – salads, soups, and the like. Easy as pie.

Warehouse Club Wariness
This is one area of the book where my perspective differs from Jonni’s a bit. With regards to warehouse clubs (Costco, Sam’s Club, and the like), Jonni is extremely wary, arguing that on many items, the prices aren’t better than what you can find in other stores. I agree with her in this regard – as with any store, you have to have a good grasp on what you’re buying. In my own experience, however, I’ve found that many items are substantially cheaper there.

From there, though, Jonni makes several claims about warehouse clubs that oppose my own experience. She argues that they sell only store brand items and usually only sell one type of many items (dishwashing detergent, etc.). In my experience, there are usually several brands available for these types of items. Similarly, her shopping list of items that are good deals at warehouse clubs are a little confusing as well, since I’ve found that different warehouse chains tend to have different items with exceptionally low prices.

Your best bet? Figure out what’s really worthwhile at your local warehouse store. If it’s worthwhile for you, join up – it probably will be. Remember, the key is to get the items you want at the best possible value for you – and you may find that a warehouse club does that very, very well.

Make Your Own Gift Baskets
When it comes to gift-giving occasions, many people sweat it out and end up spending way too much on gifts. Jonni offers a different avenue: a themed gift basket pointed at an interest or life event of the recipient. This requires some planning, but since the basket is made up of little items (many of which are consumable)

This is a great encouragement to make batches of homemade items for weekend projects. We make homemade beer, homemade soap, homemade pasta, and homemade wine. Later this summer, we intend to make a few giant batches of salsa. All of these items will be used in part to make gift baskets – we’ll just package these items nicely, collect them together, and given them as gifts to family and friends, with different assortments depending on the person.

Is Miserly Moms Worth Reading?
If you feel a need to cut domestic spending in your life, Miserly Moms is undoubtedly a worthwhile read. Aside from The Tightwad Gazette, this is probably the best collection of tips I’ve ever read on trimming domestic spending – and it’s certainly quite concise and focused.

If most of the advice above seemed very old hat to you, though, you may not get too much out of the book. Having said that, though, for most people, the advice above is not old hat.

For me, I pulled out a few useful tips, but this book was not a world-changer for me. However, I can certainly see it being very valuable for some people I know, and I’ve already passed along my copy to a friend that’s also a stay-at-home mom. For her, Miserly Moms could very well be an invaluable read.

Samantha writes in:

I don’t understand why I need credit at all. Credit just gets you into debt and you wind up paying interest to other companies. What’s the point of throwing my money away like that?

Samantha asks a really good question here – and in some respects, she’s spot on. Poor use of credit is a big net loss for people. Because of the interest payments, you lose far more than you gain.

However, there are a lot of upsides to healthy use of credit.

First, a good credit rating helps your insurance rates. Insurance companies use your credit rating as a factor in determining what sort of rate to offer you on homeowners insurance, auto insurance, and life insurance. The higher your credit rating – meaning the more reliable you are at obtaining credit, then paying the bills faithfully – the better you seem as a risk, because people with high credit are statistically more likely to be safe drivers, safe homeowners, and likely to live longer.

Second, a good credit rating helps you with employment options. Similarly, many employers run credit checks on potential employees and, again, are much more likely to hire people with strong credit because it’s a clear indication that they’re reliable.

Third, credit often offers great buyer protection. If you use credit to make a purchase – particularly credit cards – the cards offer a lot of protection against fraud, identity theft, and other serious problems. If you pay cash, you miss out on those protections.

Fourth, a good credit rating helps you with renting. Even if you’ve made the decision to entirely avoid credit and rent until you can write a check for a home, your credit still affects your housing because many landlords – particularly those in charge of higher-end housing – will check the credit ratings of potential renters and will reject (or charge a much higher deposit) people who have no credit or poor credit.

In the end, it pays to have a strong positive credit rating. This does not imply, however, that it’s good to be in debt. You can have a great credit rating without digging yourself into debt. Here’s how.

First, get a credit card. If you have no credit history, you can usually get one with a low credit limit pretty easily. Look for one that has some sort of bonus connected to a retailer you use. If you shop at Target, get the Target Visa. If you shop at Amazon, get the Amazon Visa. If you get all your gas at BP, get the BP card.

Second, use the credit card for routine purchases. If you stop for gas, use your card and pay at the pump. If you’re at the store buying some items you need and would buy normally, use your card for that routine purchase. Other than these events, forget about the card entirely.

Then pay off your bill in full each month. If you stick to just using the card for routine purchases, you should have no problem whatsoever paying off your entire bill each month. Thus, you never incur debt that generates interest.

Instead, you get all the benefits of a positive credit rating – lower interest rates, better job application success, buyer protection on some purchases, and better housing opportunities – plus the benefits of the rewards of a good credit card – discounts at the retailers you already use. Together, these add up to a net positive, and if you’re disciplined enough to keep yourself from using the credit card for purchases you would not make without it, it’s nothing but a positive.

Here’s another way to think about it. Your credit rating is simply the method many businesses use to figure out if you’re reliable or trustworthy. If you are, they see you as having more value – you’re likely to be a better employee, you’re less likely to have insurance claims, and you’re more likely to pay your rent. By avoiding credit, you’re sending no signal at all to them – and thus they’re unable to decide if you’re reliable or not and thus won’t offer you the best rates.

Positive credit helps you in many ways and saves you money consistently. Don’t avoid all credit because of a fear of debt – responsible people can enjoy all the benefits of good credit without the drawbacks of bad debt.

Good luck.

Millie writes in, describing her interesting system of making herself save:

I have my paycheck direct deposited into ING Direct. It comes in like clockwork on the first and third Friday of each month. Then, on the 10th and the 24th of each month, ING automatically transfers about 60% of that paycheck amount directly into my main checking account. I then proceed to live on what’s in my checking account.

Once every few months, I’ll go to ING Direct and do various things with the money. I usually transfer most of it into an investment account – the rest goes to replenish my emergency fund or help with some other short term savings goal.

This really works for me. I hope you share it with your readers.

I think this is a brilliant method for making automatic savings work. It strongly enforces the idea of “paying yourself first” – meaning that personal savings is the highest priority with your money. It forces you to learn how to budget with what you have – if you naturally live paycheck to paycheck, this really enforces some discipline on your financial life. You can throttle it back and forth however you wish – the less you automatically transfer from the savings, the more you will be able to save up for emergencies, debt repayment, and other savings goals.

If a person sticks with this plan over the long haul – no cheating and no dips into the emergency fund for non-emergencies – they can get ahead financially. The smaller the percentage of their paycheck that they transfer, the better off they’ll be.

An Example
Let’s say John brings home about $400 a week. He realizes that with some discipline, he can live just fine on about $300 a week – so he decides to try it out. He signs up for an online savings account, has his paycheck automatically deposited into that account, then sets up a weekly automatic transfer that triggers a few days later to transfer $300 into his main checking account.

John scrimps a little bit – taking on a few cash odd jobs, living lean – but he makes living on that $300 a week work. Halfway through the year, he gets a raise at work – now his paycheck is $425 a week, but he doesn’t change a thing about his savings plan.

At the end of the year, John has about $5,900 in savings. That’s enough to write a check for a fairly reliable car. That’s enough – with another two or three years of this – to have the down payment on a decent home. That’s enough to pay for some night classes or, in a few years, pay for a couple years of schooling leading to a bachelor’s degree.

For a person bringing home $400 a week, $5,900 can be “change your life” money. And all it takes is a year.

Switching to This System
This system isn’t too hard to set up, either. In fact, I use my own (overly complicated) version of this system to manage my own money.

First, start living leaner right now. You’re going to need to build up at least a little bit of buffer in your checking account, because there will be a period where you almost “skip” a paycheck. You’re not really skipping a paycheck, but this system means you’ll start receiving your paychecks about a week or so later than you used to. Thus, you will need some extra cash. Plus, you’ll need to live a bit leaner in order to survive on the smaller “paycheck” that you’ll get.

I usually recommend that people start by trimming some of the obvious fat, particularly through one-time actions. Look through all of your bills and see if there’s anything you can cut – premium cable, excessive cell phone plans, and so on. Work on improving the energy efficiency of your home.

Once that’s done, look at your regular expenditures. What things are you constantly spending money on? Breaking an expensive habit can be invaluable, as can moving away from eating out and preparing food at home instead.

Most people can trim a surprising amount of fat just by doing those two things. The problem is that many people then replace that trimmed fat with other unnecessary spending – but you’re not going to fall into that trap.

Once you’ve built up a little bit of a buffer, it’s time to set up your plan.

Sign up for an online savings account. I use ING Direct and I’m very happy with them, but there are a lot of options out there. An online savings account has the advantage that you can easily manage it at your own computer and also that it earns a solid interest rate.

The real advantage, though, is that it creates a wall between your savings and your spending. With an account at a bank completely separate from your primary bank, you can’t just stroll in and make a big withdrawal on a whim. Instead, you have to log onto your account, execute a transfer, then wait a few days for that transfer to clear both banks. That waiting period gives you time to really think through your decision and it will often convince people that they shouldn’t go through with an unnecessary expenditure.

Once you’ve done that, change your direct deposit at your employer to your new bank. It’s during this period that you’ll have to live lean and pay careful attention to the process, because the direct deposit may not necessarily arrive at your new bank at the exact same schedule as your old bank. Watch your new account carefully to see when the deposit comes in.

Once your first paycheck is in the new account, set up your automatic transfer from the new account to your old checking account. You have a lot of options as to how to set this up.

For one, you can match your current payment schedule – only a few days later – and simply transfer a bit less than you bring in. So, if you have a paycheck that comes in every week for $400 on Fridays, you can have a transfer the following Tuesday or Wednesday for $350 to your checking account. This will leave behind $50 each week in your account, which will really build up.

For another, you can slowly spread out your paychecks. For example, if you’re paid every two weeks (26 times a year), you can have the transfer happen on the 1st and 15th of each month for the amount of your paycheck – $400 – which would be 24 times a year. This would leave behind the two “extra” checks you get each year – a total of $800.

Or you can do both. If you have a weekly paycheck that’s $400 (52 checks a year), set up four transfers a month at $350 (48 transfers a year). This leaves behind $50 each time you make a transfer – a total of $2,400 over a year – plus the extra four checks – $1,600 a year – for a total savings of $4,000 over the year.

The key is to make sure that you’re transferring less than you bring in. How exactly you do that is up to you, but the purpose of this is to make sure you’re leaving behind some savings in the account. If $10 comes in, less than $10 should be going out.

Once the first transfer comes through from your new account to your old account, you’re good to go. The system is in place – you can largely forget about it. I recommend not changing anything if you get a raise – let that raise go entirely into savings. Instead, only make a change if you’re sure it needs to happen in your life. If you find yourself actually spending substantially less than you’re getting into your checking, lower that transfer a bit. If you’re struggling to make ends meet and you’re not wasting money, don’t be afraid to bump it up a little.

Good luck! This is a great plan that can really help kick your savings into gear.