In order to get customers into the stores on Black Friday, many retailers offer enormous sales on a handful of specific items. These items are often sold at a loss in order to simply get people into the store, because the logic goes that if a customer is in the store, they’re likely to buy other things. Plus, it provides some positive word-of-mouth promotion for that retailers, as people will talk about where they got enormous bargains on that day.

As a result, many retailers heavily advertise their “Black Friday” sales in the week or two leading up to that day. Websites proliferate online, tracking the bargains to be had.

And, through it all, the big goal is to whip consumers into a buying frenzy.

Such a frenzy is bad news. Getting caught up in participating in Black Friday just to get “deals” on stuff you don’t really want or need or items that may or may not be good gifts for others is a sure way to watch your money float away.

That’s not to say that Black Friday can’t be useful to someone with savvy – it certainly can. It just requires a bit of finesse and forethought.

Here’s exactly how I handle “Black Friday.”

I make a very careful list before looking at the fliers. In other words, I already have my Christmas list in hand. I know who I’m buying for, how much I’m spending on each person, and I also ahve a few ideas for each person to help me shop.

Beyond that, there’s often a specific item or two I’m looking for for myself. This year, for example, I’m looking for a replacement laptop. The ol’ frugal laptop has served me well for quite a while, but it’s suffering from a number of hardware issues. So, my eyes are open for a replacement, probably a middle-tier Windows 7 machine capable of photo editing and a bit of gaming.

Thus, before I even take a peek at a “Black Friday” flier or website, I know exactly what I’m going to be looking for.

Next, I use the internet to view lots of flyers at once and compare them. My preferred website for doing this is blackfriday.info, but there are lots of them that provide a similar service.

Why do I do this? First, browsing through lots of ads online – because they’re usually just lists of items – cuts down on the impulse buy possibilities. I’m not sucked in by intriguing pictures of items I’m not interested in buying.

Second, websites provide tons of sales lists to me at once. Instead of having to dig through lots of newspapers on Thanksgiving Day, I can just visit a website and get all of the details I want in one spot.

Once I’ve done that, I come up with a plan of attack. I’ll usually identify an item or two that’s got a strong price and matches something I’m looking to give out as a gift. On Black Friday, I’ll get up early and visit only those stores, and when I go, I’ll take a list for each store and get only those items. Everything else is just a leech on my wallet.

Finally, I’ll check online retailers a few times on Black Friday. Online retailers, particularly Amazon.com, offer all kinds of sales throughout the day on Black Friday (and sometimes even on Thanksgiving Day). I’ll check these a few times, looking for items that are actually on my list.

The big rule for all of this is simple: unplanned buys on Black Friday (or any day) are usually really bad ideas. Step back and think about what you’re buying and you’ll find value on Black Friday. Dive in head first waving your credit card like a mad man and you’ll come out of the day with a bunch of stuff you don’t need – including some fat bills.

Here’s an example, from “Monica,” relaying a bad experience with Apple’s customer service:

In December, my iPod started acting really weird. Since it was still under warranty, I called Apple and got the runaround. I had to call their customer service line three times and ended up yelling at a supervisor. Finally they gave me an address to send it to and it took them a month or two to send it back.

Here’s the thing, though. If a large company deals with a million customer service issues in a given year, some small percentage of them will turn out badly. Simple human miscommunication, an overly demanding customer, unreasonable expectations from both sides, a customer service rep on a bad day – all of these can turn a routine customer service situation into a nightmarish one.

As a result, any sufficiently large company will have bad customer service stories floating around out there. Many of them are likely true and, if you believe that to be the norm of a customer service department, you’d likely be scared to ever use that company.

But it’s not the norm – far from it, actually. To put it simply, I ignore most horror stories about customer service when evaluating a company.

So how can you know if a company has decent customer service or not? I usually look at three things.

First, I look for stories of exceptional service. A company that goes the extra mile to stand out from the crowd enough that people will publicly talk about their service usually has very strong customer service. For some reason, as I write this, Land’s End comes to mind.

Second, I look at customer service awards. Such awards are typically done as a result of examining typical user experiences with customer service, often through extensive surveying that averages out the rare awful experiences.

Finally, I look at the company’s policies. If I can’t quickly figure out how to return a product, how to handle obvious customer service issues, or how to contact the company and get a live person quickly to address my questions, that’s a bad sign. The easier a company makes it to interact with them, the better, and one can usually tell this with a short trip to a company’s web site.

To me, there is significant value in good customer service. I will pay more for a product backed up with a solid customer service reputation than one that’s backed up with a poor customer service reputation.

One final note – local always trumps international. In other words, I’m willing to spend 20% more to buy a homebrew computer from a local store than one from Dell, for example. Why? The local store has stellar service – I can just go drop off a piece of equipment there any time I want and they’ll repair it quite inexpensively. They also dispense advice and information whenever I need it. The same goes for many products that can benefit greatly from good customer service, like a game store that offers free game nights or bookstores that facilitate book clubs and the like.

When we, as a customer, immediately boil a transaction down to the minimal dollar, we usually lose in the long run. The company that shaves a few dollars off the price at the expense of good service will end up leaving you high and dry when the product fails.

I’m good at restraining my impulsive nature. I don’t simply go into stores and then emerge later with a hefty bag, a credit card bill, and a dazed look on my face. Still, in certain places, I am strongly tempted to spend. I look around and see tons of items that I’d like to have. Here are seven places that really fuel my spending desires.

Bookstores What can I say? I love to read – I read about ten books a month for my own enjoyment and probably five more for The Simple Dollar and other professional purposes. The smell and feel and sight of a new book is like manna to me. I usually resist most of my impulses by arguing to myself that I can get those books at the library or off of PaperBackSwap, but it’s definitely a struggle – one I don’t always win.

Williams-Sonoma As I get more and more adept in the kitchen, I’m slowly upgrading my kitchen equipment to superior versions of the cheap (and sometimes problematic) equipment I have on hand. Williams-Sonoma does an extremely good job of convincing me to accelerate this upgrade process, enticing me with better knives, a wide array of very nice pots and pans, and lots of other items.

Wineries If I stop at a winery and enjoy a tasting, I usually wind up buying at least a bottle. There’s something about the atmosphere of a winery that gets me into the right mindset, and adding onto that is the fact that I truly enjoy a glass of a distinctive wine, it’s unsurprising that I often leave wineries with a bottle or two in my bag.

Food co-ops Stores that put obvious care into their food selection often entice me to be much more willing to buy foods impulsively. At regular grocery stores, I usually avoid impulsive food purchases by knowing that the item is usually going to be full of ingredients I shouldn’t be eating or won’t taste all that good. At a food co-op, that’s often not the case at all – and thus I’ll find myself picking up items like feta made from sheep’s milk.

Gaming shops I love playing games against family and friends and gaming shops tend to bring out my strongest tendencies. I particularly like board games, and if I witness a game demonstration and the game seems fun at all, I’ll often be very tempted to talk myself into buying it.

Art supply stores My biggest weaknesses in art supply stores usually come down to notebooks/sketch books and writing implements. I can easily fill up notebooks with jotted notes, quotes, ideas, and other things, and the feel of a good pen in my hand is almost intoxicating and actually does a good job of fueling my writing tendencies.

The Apple Store I usually don’t buy anything at Apple Stores. Instead, they just do a great job of convincing me to save up and spend much more than I should to buy a MacBook Pro or a new desktop machine or an iPod Touch. Apple puts a lot of care into the little details of their devices and, after spending a lot of time using them, I’ve come to really miss them when I use other devices.

There, my confessions. Putting them all down on paper like that is fairly refreshing for me, as it helps me to realize that I use quite a few different techniques to minimize the temptation to spend in those places. I’ve mentioned some of these tactics before in various other articles, of course, but here are eight different tactics that I use to minimize the negative influence that these tempting places have on my wallet.

Avoid them entirely. The easiest way not to be tempted is to simply not visit these stores at all. This works to a certain extent. For years, I had a routine of going to a bookstore each Tuesday (to check out the new releases) and each Friday (to “celebrate” the end of a workweek). This routine usually meant that I would wind up buying a book or two at each visit, which could easily add up to $40 a week.

By simply breaking that routine, it was easy to see a tremendous amount of financial benefit – as much as $2,000 per year. While I still do visit bookstores on occasion, they’re no longer part of any sort of routine. This makes the individual visits much more enjoying, since they’re more infrequent and not based on any sort of schedule.

Take notes. If you visit a store, fall in love with lots of items, and are tempted to buy, stop. Pull out a notepad and write down all of the things that are tempting you. List the books, food ideas, clothing, games, or other items that are really intriguing you.

This serves two purposes. First, you can take the list home and do further research on the item(s) and some comparison shopping. Second, it allows you to utilize the “thirty day rule,” where you agree not to buy the item for thirty days and then re-evaluate at the end of the period whether or not you actually want the item.

Go with only cash. If you visit a place with such obvious temptations, leave your wallet behind. Just take in a small amount of cash, whatever you’re completely comfortable with spending there and won’t feel guilty about afterwards. So, if you’re going to a bookstore, take a $20 bill. This allows you to splurge a little, but prevents you from spending more than you should.

The real key here is to not bring in plastic, which effectively gives you access to far more money that you might otherwise have. Without strong willpower, credit cards can be a real danger, so it can be good to avoid them until you do have the personal fortitude to avoid over-the-top spending with them.

Go with the right kind of friend. Some friends encourage you to spend. They talk up the items they see, complement you on your choices and taste, and encourage you to splurge a little. Those kinds of friends will almost always cause you to have a bigger bill than you want.

I prefer shopping with either my wife or my closest friend, John. Neither one of them encourages me to spend more than I should. My wife usually makes no comment whatsoever if I choose to make a purchase. John usually just criticizes items in a humorous way, making them seem less appealing while also being entertaining. The end result? I buy less than I would if I were there with a heavy-spending friend.

Set an explicit budget. Each month, I allot myself a certain amount of money to spend on whatever I wish. Since I plan for it, I can spend that money without guilt, and this money is often spent at the places I described above.

Since I know what that limit is, I can spend up to that limit without any sort of guilt whatsoever. If I’m at Williams-Sonoma and see an item that costs two or three months’ worth of free money, I’m patient with it. I’ll wait two months without spending much “mad money,” then pick up that item without any guilt at all.

This is perhaps my most-used technique, and my wife uses it as well.

Use the ten second rule. Sometimes, on an impulsive whim, you’ll pick up an item and make the split-second decision to buy it. As you head to the cashier, stop for ten seconds and ask yourself if you really need this item after all, or if you couldn’t get a better deal on it elsewhere.

For me, this works quite well to at least slow impulse buys. I’ll usually put the item back and add it to my list (see the earlier tip). It doesn’t necessarily mean that I won’t end up with the item in the future, but it will be bought with a rational, not an impulsive, mind.

Never go without a purpose. And, no, social engagements aren’t a purpose.

Why are you shopping? If you’re doing it just to spend time with a friend – or even mostly to spend time with a friend – your wallet will thank you if you find something else to do. Why not go through the stuff you already have? Why not spend time in a public place that’s not designed to convince you to spend money?

If you actually do go shopping somewhere, particularly in places that you know tempt you to spend money, make sure you’re going with a specific purpose. There’s a book you want to pick up. There’s a French oven you want to look at. You have some technical questions about your MacBook. You get the idea.

Find a substitute. Remember above, when I mentioned that I’d buy three or four books a week at the bookstore? Sure, I did read most of these books, but very rarely more than once. So, why not use the library?

Most of the big temptations above have great substitutes for me. Instead of going to game stores (usually to talk and browse games), I visit a few community gaming websites to get most of the same effect. Instead of hitting food stores, I use farmers markets for the same effects. This helps me stay away from many of my worst temptations.

What places tempt you the most? And what techniques do you use to control your spending there?

As we shop, we make tons and tons of little decisions along the way. Those decisions, on their own, seem inconsequential.

Should we buy the bulk can of diced tomatoes or the smaller can?
These tortillas feel softer, but they’re way more expensive – is it worth it?
The free range whole chickens are on sale! Should we stock up?

A choice one way or another here might save us a dollar or cause us to spend a dollar more. In the eyes of many people, it’s an inconsequential decision – just make it and keep going. One dollar doesn’t make a huge difference, right?

The problem is that each little buying decision you make is deeply tied to other buying decisions, whether consciously or not.

How so, you might ask?

All of our buying decisions are based on a set of principles in our head, ones that are often so well-grounded that they don’t even pop up in conscious thought.

Here’s a thought experiment to help you see what I mean. Imagine a product you would never buy in a grocery store – pork rinds, maybe, or perhaps insanely potent hot sauce. Now, what about that product would cause you to not buy it? You’re likely to pop up an immediate simple answer – I don’t like the taste or it’s unhealthy – but on other purchases, you’re quite willing to overlook that principle for other reasons.

In truth, when we make a decision to buy in the grocery store, we’re trying to reduce a big set of principles and inputs down to one split-second decision. And often we feel we’re completely justified in that decision – and we move on with life.

It is very easy to tease apart each little buying decision, tell yourself that it doesn’t really matter that much and that it’s okay to splurge, and then essentially ignore your final tally when you get to the checkout because each decision was justified in your mind. Doing that, though, is a game that will, time and time again, put your wallet in the hurt locker.

So, what can you do to overcome this problem?

The easy methods are the shopping list and the meal plan. Making a shopping list in advance of your visit to the grocery store simply serves to reduce the number of decisions you have to make. This, of course, leads you to making fewer bad decisions.

But that’s just the start. Once you’re in the store with your shopping list in hand, commit to three more things.

First, simply do not put anything in your cart that’s not on your list. Your list, if it’s thought out at all, should have everything you need for your meals for the next week. If you see something you feel like you need or deserve, jot it on the back of the list for next time.

Second, mark any items that you’re not simply searching for the cheapest version of. On our list, I like to put a little X by any item that I don’t intend to just buy the cheapest version of. For example, with diced tomatoes, the various brands and cans are identical in terms of ingredients, so we usually just get the cheapest version. This, again, reduces the number of opportunities for poor impulse decisions in the store.

Third, if you have specific brands in mind (because of coupons or because of previous buying experiences), put those on your list, too, along with the size. For example, we usually have a big stack of coupons for V8 Fusion (100% juice, half fruit and half vegetable). So, instead of just writing “fruit juice x 3,” I’ll write “46 oz. V8 Fusion x 3″ on the list. In other words, if you make the list more specific, you further reduce the number of potential impulse decisions in the store.

Using all of these techniques, you’ll end up making just a handful of in-the-moment choices in the grocery store – and with fewer potential decisions, you have fewer chances to make poor ones. The end result? A cart full of items that you actually want and a much smaller grocery bill.

I like reading all of your suggestions about making a grocery list and searching for bargains. My technique is actually pretty simple. I trust Consumer Reports completely – they’ve never led me wrong. So each month when I get an issue, I write down their “best buys” in each product category. That’s what I buy – I just look for the best deal among these. I often use coupons for things on that list, too.

I actually really like this idea – it provides a wonderful balance of getting quality items for a good price. In fact, I decided to give it a try myself with a few product categories just to see the results with my own eyes, so I pulled out the May 2009 issue of Consumer Reports and went shopping with five product categories in mind.

Kids’ Breakfast Cereal
Consumer Reports identified four best buys for cereals for children, balancing health, tastiness, and price: Cheerios, Life, Kix, and Honey Nut Cheerios.

I pulled out the grocery flyers this past weekend and found a sale at Target on the General Mills cereals (Cheerios and Life). I then flipped through the coupons and quickly found a coupon for those cereals.

End result: the price for a “double box” of Cheerios or of Life, after the coupon, was cheaper than almost any other cereal in the aisle, with only some generics beating them. After doing an ingredient and Nutrition Facts comparison, Life was our product of choice. The kids utterly love it and it’s pretty good for them, too.

Glass Cleaners
Consumer Reports identified five best buys for window cleaners: Windex No Drip Foaming Action, Sprayway Ammonia Free, Windex Crystal Rain Ammonia Free, Glass Plus, and Streak Free with Ammonia (the Wal-Mart store brand).

The solution here is a simple one: shop at Wal-Mart and get the store brand at roughly a third of the price of the other brands.

Coffee
I’m far from an expert on this category (as I don’t make coffee at home – keeping it as an out-of-home treat keeps me from getting addicted to the morning joe), but Consumer Reports identified Eight O’Clock 100% Colombian, Caribou Coffee Colombia Timana, and Kickapoo Coffee Organic Colombia as the three best choices.

In the stores I visited, Eight O’Clock 100% Colombian was the cheapest of the three by far, usually costing less than $5 for a 12 ounce bag of whole bean coffee. Here’s the trick, though – there were many coffees that were less expensive.

Since I’m not familiar with this area, I asked my wife for some input and she said that unquestionably, the price premium of the Eight O’Clock coffee over Folgers is worth it. She claims the volume difference in the containers is deceiving, since it takes substantially more Folgers to make good coffee than whole bean Eight O’Clock. So, three votes for the Consumer Reports model.

Tub & Tile Cleaners
Consumer Reports says Comet Scratch Free Disinfectant with Bleach, Ajax with Bleach Scratch Free, Kaboom Shower Tub & Tile, and Green Works Natural Bathroom Cleaner are the best choices, with Green Works being not quite up to the standards of the other but the best of the “natural” cleaners.

Coupons for Comet are extremely easy to come by and they reduce the cost of Comet below the store generic brand for that item. It works well for cleaning our tubs.

Creamy Peanut Butter
This was the one area where there was some debate. Consumer Reports identifies Smucker’s Natural and Smucker’s Organic as the two best buys for peanut butter.

Smucker’s Natural is substantially cheaper than Smucker’s Organic, ringing in at $2.49 for a 12 ounce jar at my store of choice. However, there were several peanut butters available for substantially less on the shelves. Having tasted Smucker’s Natural, I can say that it is quite noticeably tastier (much stronger peanut flavor) than many of the lower-end brands, and the texture is better, too. An ingredient comparison shows that it’s healthier as well.

For me, Smucker’s Natural would be the purchase if I had a coupon for it. Otherwise, I’d put off buying the peanut butter.

My Conclusion
From my experience, Bob’s strategy simply works if you’re trying to get the maximum value for your dollar (and not just seek the bottom dollar). This strategy pairs up well with looking at coupons and flyers, reducing the price benefit that the store brand has over the “best buy.”

Will I switch to this strategy? Perhaps not completely, but I am starting a list of the Consumer Reports best buys. It works surprisingly well.

This “feature” crops up in many different products is called quantity surcharge, and it’s been prevalent in the supermarket and department store since the 1970s at least. Recently, while browsing through the Journal of Consumer Affairs (seriously – I live not too far from an academic library, and JoCA has lots of interesting material in it that serves as great food for thought), I came across an older article entitled Measurement of Incidents of Quantity Surcharge Among Selected Grocery Products. The article identified ten specific products where quantity surcharges often occur.

So, without further ado, here are ten products to study carefully before buying in bulk. I went to the store and tried to find them myself – my notes on what I found follow each item.

Tuna fish In the article’s survey, tuna suffered from quantity surcharge 84.4% of the time. In other words, the best deal on tuna is usually the small cans, not the bigger cans, as I noticed above.

Ketchup In the article’s survey, ketchup suffered from quantity surcharge 45.0% of the time. When looking for this, I observed it with Heinz ketchup. I also noticed that a ketchup multipack of smaller bottles was actually the best deal.

Canned beans In the article’s survey, canned beans suffered from quantity surcharge 40.7% of the time. When I looked for this one, I noticed it in virtually every type of Bush’s baked beans in my local store – most other brands had almost identical prices per unit in all sizes.

Salad & cooking oil In the article’s survey, oils suffered from quantity surcharge 36.5% of the time. This was perhaps the worst example I found. I found a store brand of olive oil in two different sizes, with the larger size costing almost 40% more per ounce than the smaller size. Even a cursory glance at the prices made it clear that the prices were out of whack.

Dishwashing detergent In the article’s survey, dishwashing detergent suffered from quantity surcharge 34.1% of the time. I found this in the store brand of dishwashing detergent – the name brands were cheaper to buy in bulk.

Laundry detergent In the article’s survey, laundry detergent suffered from quantity surcharge 33.3% of the time. Similarly, I found the store brands actually had a quantity surcharge, while the name brands did not.

American cheese In the article’s survey, American cheese suffered from quantity surcharge 31.6% of the time. Yet again, the store brand seemed to do this, while the name brand did not.

Canned vegetables In the article’s survey, canned vegetables suffered from quantity surcharge 13.0% of the time. I only found one incidence of this after examining quite a few canned vegetables, and that incidence was the result of a sale on the smaller cans.

Jams and jellies In the article’s survey, jams and jellies suffered from quantity surcharge 12.1% of the time. I couldn’t actually find different volumes of most jams and jellies.

Syrups In the article’s survey, syrups suffered from quantity surcharge 5.2% of the time. I didn’t actually find any when I looked around.

What lessons can we learn?

The best strategy is to always calculate the cost-per-unit yourself – or use stores that calculate it for you. Many stores give you the cost-per-unit right on the shelf. If your store does that, use the cost-per-unit as your metric for making a purchase. If your store does not, you can calculate it yourself very easily and quickly with a pocket calculator.

Sales and coupons easily make this confusing. Most of the time, sales alter the picture, but not always in the obvious way. I saw several incidences of the large and small versions both being on sale, where the regular prices had the smaller version being a better deal and the sale prices had the larger version being a better deal. This wasn’t clear, either, since the “sale” tags didn’t have the price per unit on it. Again, it pays to be able to calculate it yourself.

Store brands seem to do it more often than name brands. This might just be a quirk of my observations, but I consistently found quantity surcharges more often in store brands than in name brands.

Multi-packs were usually the best deal. Multi-packs of the smaller version of most items was the best deal overall – but it does require you to do things like buy three bottles of ketchup or dish soap at once.

Warehouse stores add to the confusion. I tried doing price comparisons between my local warehouse store (a Sam’s Club) and my preferred grocery store. I found that on almost every item I compared, the warehouse club was cheaper per unit than the same brand at the grocery store. However, the brands carried at each were often vastly different, so it’s hard to get a full picture.

In the end, though, the key is to just focus on the cost per unit. The larger item is usually the best deal, but as you’ve seen above, it’s not the best deal often enough that it’s well worth your time (and money) to pay attention when shopping.

Good luck!

In the end, a family friend gave me an old car of theirs as a sixteenth birthday gift. It wasn’t running, but it needed just a few hundred dollars’ worth of repairs to get it on the road again. I used the rest of the money for gas – and even though the car only ran for a few years after that, it served its purpose quite well.

When I purchased my next vehicle, a 1997 Ford F-150 pickup truck (purchased in 2003 – I spent several years without a vehicle, actually), my biggest concerns were low price and hauling capacity. Given my lifestyle at the time, I had constant need for the ability to haul all sorts of things, and I was mostly concerned about getting that hauling capacity at a low price.

What happened? Without a doubt, I was able to do plenty of hauling with that truck. However, the truck’s reliability has been highly suspect since day one, breaking down along the side of the road several times – and more than a few times, my kids were in the truck with me. A few of those times, the situation wasn’t good – tears and blankets were involved and bad dreams were the result.

Thus, the next time I was involved with a purchase, reliability became a major factor in the purchase, whereas before I wasn’t nearly as concerned about it. I was quite willing to pay more for that reliability because, for me, not stranding my kids along the side of the road is much more important than if it were just me.

Having young children naturally prejudices me towards buying cars with better reliability numbers and cars with lower mileage. I assign more value to those factors because of the current situation in my life. At other stations in my life, the values will be different. For example, if I have a small farm in ten years, the value of hauling capacity will go up substantially for me, while high-mileage reliability will be somewhat less important.

How about this example? A single person focused on their career is likely going to look for different factors in a washing machine than a person with a large family. A large family is going to be more concerned with large load capacity and reliability. A single person won’t need the large load capacity, but may seek quick washes and minimal water use.

It’s easy to run out the numbers on any major purchase and figure out what the best deal would be over the next ten years based solely on those factors. But those numbers rarely tell the whole story.

How much extra is a reliable car worth if you have a sick child at home?

How much extra is a smaller footprint on your washing machine worth if you have a tiny apartment?

How much reliability are you willing to give up to get a car for $1,000?

There is no exact answer to any of these questions because of the uncertainty in life and the varieties of personal experiences and situations.

There’s only one real solution when you’re making a major purchase. Figure out what factors really matter to you, do the research on those factors, and find the best deal with those factors in mind. It may be that your conclusion as to what constitutes the “best deal” differs greatly from someone else’s opinion – but that’s fine.

True frugality is not about finding the cheapest item – it’s about finding the best value for your situation. The trick is to figure out exactly what is valuable to you (and not necessarily to others) – and that’s not always easy. It’s a key part of really finding the best deal when you’re doing the research for a major purchase.

Let’s explore that idea a bit. Take a look at this picture:

This represents the reliability of a hypothetical low-end washing machine over time. It has an average lifespan of ten years – and most of those models fail at around the ten year mark.

But there are exceptions to that general trend, of course. Some of them fail quite quickly – and this, being a cheap machine, doesn’t have good warranty support. Others last for a long time, even up to twenty years or more.

When you buy a machine, it’s going to wind up at some point on this curve. Most likely, it’ll be one of the ones in that big hump in the middle, lasting ten years or so like the average machine. However, there’s a chance that it might junk out in three years, or it might last you for twenty years.

Now, what about a more reliable machine? If you chose to spend a bit more and buy a more reliable machine, you’d get a curve that looks more like this:

It comes with a good warranty, so there are no failures within the first five years. Overall, the average failure comes in at about the fourteen year mark – and some will last for twenty five years or more.

Obviously, when you look at Consumer Reports or other such research, this second washing machine would have a higher reliability grade than the first one. People (like me) are willing to pay a bit more to get a reliability curve that looks like this one than like the first one.

Let’s overlap them.

Notice the three colored spaces? They each tell a different story, and their relative sizes are really important.

The blue area shows how likely it is that the cheap machine will fail before the expensive machine does.

The pink area shows something very similar: how likely it is that the expensive machine will last longer than the cheap machine.

To put it simply, you can combine the blue and pink areas – combined, they show the likelihood that the more expensive and reliable machine will outlast the cheaper and less reliable machine. There’s about a 70% chance of that.

Of course, there’s that orange area. That represents the chance that the cheap machine will actually last longer than the expensive machine. In this example, there’s roughly a 30% chance of that happening.

So what’s the story here? Paying more for reliability means that the orange area is your worst case scenario; buying the cheap machine means that the orange area is your best case scenario.

Let’s put it in terms of comments about low-end washing machines. Yes, you’ll hear occasionally from an individual that bought a $200 machine in 1987 that’s still running today. That person lucked out – they bought a cheap machine, but it happened to wind up in that orange area.

However, most of the time, the machine will be a blue one. It will fail before a higher-reliability machine ever will.

Similarly, someone might complain about the “supposedly highly reliable” machine they bought in 2001 that’s already failed. Again, it’s an orange case. Most of the time, that machine will be a pink one.

Here’s the real truth: the exceptional cases mean very little. If you hear about one or two cases, pure chance might give you a few tales straight out of the orange area – exceptional cases, whether or not it’s a good exceptional case or a bad one.

What actually matters is a lot of cases combined together. When you get a lot of cases together, you can get a real picture of the reliability of the machine. The whole curve fills out, with the poor exceptional machines, the great exceptional machines, and the average machines.

Whenever you go to make a major purchase, you’re placing a bet on reliability. You don’t know exactly how it’s going to turn out. Good reliability data simply means that the machine is likely to be more reliable than a machine with poor reliability data.

Given that a more reliable machine means less time investment (you don’t have to deal with time lost to a broken machine, nor do you have to deal with repairmen) and less money investment (the cost of repairs plus the cost of having to buy a replacement sooner than expected), paying extra for reliability is a bet I’m willing to take. I’m quite willing to pay a 50% premium to buy the machine with the pink curve than the one with the blue curve.

First, my biggest motivation when making a major purchase is the total cost of ownership. In other words, in my best estimation, how much money am I going to have to invest in this item over its lifetime, including the initial cost, regular maintenance costs, energy use, water use, and so on.

Here’s an example. I’m looking at two different washing machines. One uses 40 gallons of water per load and has an energy use of 550 watts, with a load time of thirty minutes. Another one uses 20 gallons of water per load and has an energy use of 320 watts, also with a load time of thirty minutes. I turn to Consumer Reports and it indicates that the first machine has average reliability and the second has excellent reliability. But the first washing machine costs $300 and the second one costs $600. Which one do I buy?

Well, what’s the total cost? Let’s say I do five loads of laundry a week and I want the best value over the next fifteen years. The first machine would use a total of 156,000 gallons of water – and with water costing $3 per thousand gallons, that’s a water cost of $468. The second machine would use a total of 78,000 gallons of water – and with that same $3 per thousand gallons, that’s a water cost of $234. On electricity, the first machine would use 1072.5 kilowatt hours of energy, and with electricity at roughly $0.11 per kilowatt hour, that’s a lifetime energy cost of $117.98. The second machine uses 624 kilowatt hours of energy, which would cost $68.64.

Adding these up, the first machine (the less reliable one) has a total cost of $885.98, while the second machine has a total cost of $902.64 – roughly the same. Given that the second machine is more reliable, the choice is easy – I’ll buy the $600 one and leave the $300 one at the store.

There’s another factor at work here, too, though. Once the purchase is made, the more expensive machine has a much lower cost per month of use.

Over a given month, the “cheap” machine would run 20 loads – a water cost of $2.60 and an energy cost of $0.66, totaling $3.26. The “expensive” machine, over those same twenty loads, would cost $1.30 in water and $0.38 in energy, totaling $1.68.

Every single month, without thinking, my bills go down $1.58 – and that fraction will go up as energy prices and water prices rise over time.

It’s a very simple example – and it seems like a small amount. It is a small amount. But it’s a reduction of $1.58 in spending every single month, like clockwork. I simply don’t have as much required spending.

Let’s extend that idea a bit. Let’s say I apply the same philosophy to all of the major appliances in my home. I spend a bit more to get the more efficient air conditioner, the more efficient furnace, the more efficient dishwasher, the more efficient clothes dryer, hot water heater, oven, refrigerator, deep freezer, car(s), lawn mowers, computers, microwaves, windows, doors, and so on. All of those purchases will each contribute a bit to lower my energy bills – and the cumulative effect is quite large.

To me, there’s extra value in that savings beyond mere dollars and cents. To put it simply, it’s very hard to tell what one’s future holds. You may succeed in your endeavors, of course, but our health is always a risk, as is our continued employment. Ensuring a lower monthly cost of living in the future is a bit of insurance against these things. It’s also a hedge against inflation, since over time, energy costs and water costs will rise.

Given these factors, if the total cost of ownership of two items is similar, I will almost always choose to purchase the item that is more expensive up front. It’s a great rule of thumb to apply in any purchase, given the uncertainty of the future.

The only problem is that chasing bargains like this takes time – time I don’t necessarily have. I used to have a routine of visiting a number of bargain sites, but after a while, I found more and more useful sites and it became harder and harder to keep up with all of them.

So I found a better solution (which I’ve hinted at in the past). Using a number of easy-to-use online tools, I built a single webpage that shows me the best deals from tons of different online sources all in one place, customized to show me just the deals I want. Better yet, I can access this page from any computer.

Sound good? Here’s how it’s done.

iGoogle: The Backbone
iGoogle is quite nifty. To put it simply, it lets you create a custom web page that is automatically updated with whatever you want to add to it – news, sports scores, weather, stock tickers, and so on. Here’s the URL:

http://www.google.com/ig

When you first visit the URL above (and sign in, if you have a Google account), you’ll get a small handful of default “gadgets.” Get rid of these so that you have some space to add more useful stuff. First, click on the down arrow on the left (seen below) and choose the option to “Edit this tab…”

Then, click on “Delete” for all of the gadgets and then click on the “Save” button in the upper right. You’ll go back to an empty iGoogle page, ready to be loaded up with some great gadgets for bargain hunting.

Adding New Gadgets
So, how do you actually add new things to this page? This is similarly easy. Just click on the “Add stuff” link over on the right hand side of the page…

… then click on the “Add feed or gadget” link on the right.

You’ll get a little popup box that asks you to paste in a feed URL. Once you do that, the contents of that URL will be added to the iGoogle homepage.

But what URLs can you add? There are lots of great URLs out there loaded with bargains. Let’s go through a few.

Bargain Websites
Below, I’ve listed ten different feed URLs that you can copy and paste directly into iGoogle, as described above. Just copy the URL below, paste it as described above, and it becomes an automatically updating part of your iGoogle homepage.

If you use a feed reader, you can subscribe to any of these (likely just by clicking through, depending on how your system is configured).

Amazon Gold Box
http://rssfeeds.s3.amazonaws.com/goldbox
This lists almost all of the daily deals available from Amazon.com.

CheapTweet
http://cheaptweet.com/all.rss
This lists deals posted on Twitter, filtered by the users of CheapTweet.com.

Coupons.com
http://www.coupons.com/rss.asp
This lists the latest coupons from Coupons.com, most of which are for discounts on household products.

Dealnews (Most Popular)
http://content.dealnews.com/dealnews/rss/popular.xml
This lists the most popular deals discovered by Dealnews.com.

Dealspl.us
http://feeds.feedburner.com/dealspl/all
This lists a huge number of deals on a wide variety of products, filtered by social bookmarking sites. This is definitely one worth filtering (see below) because a lot of stuff comes through.

FatWallet.com Hot Deals
http://feeds.feedburner.com/FatwalletHotDeals
This lists a wide variety of deals (mostly technology items).

Free Deal World
http://freedealworld.com/feed/
This lists a lot of good freebie offers.

Money Saving Mom
http://feeds.feedburner.com/moneysavingmom/mNWf
This is a well-written blog that features a lot of good coupons for household products.

SlickDeals.net
http://feeds.feedburner.com/SlickdealsnetFP
This includes a wide variety of deals from many sources, all filtered by the SlickDeals community. This is definitely one worth filtering (see below).

Woot.com
http://www.woot.com/Blog/Feed.ashx
This is a daily tech deal site that often has amazing bargains.

Bargain Twitterers
A few months ago, I mentioned that there are many useful people on Twitter worth following for the deals they post. If you’re not into Twitter and would rather “follow” these people in another way, you can keep track of the posted deals using this iGoogle technique. Here are the feed URLs for seven Twitterers I mentioned in the article.

DellOutlet
http://twitter.com/statuses/user_timeline/5688592.rss
Computer deals from Dell.

AmazonDeals
http://twitter.com/statuses/user_timeline/1922861.rss
Lots of “hidden” deals from Amazon.com.

AmazonMp3
http://twitter.com/statuses/user_timeline/14740219.rss
Excellent legal albums in mp3 format for $1.99-2.99.

Dealyzer
http://twitter.com/statuses/user_timeline/17331003.rss
A wide variety of deals of all types.

DealUniversity
http://twitter.com/statuses/user_timeline/17893953.rss
An excellent assortment of tech deals.

CheapTweet
http://twitter.com/statuses/user_timeline/17545909.rss
An aggregation of many of the best deals posted to Twitter.

BooksAMillion
http://twitter.com/statuses/user_timeline/17248079.rss
A great collection of deals on books.

Filter These URLs
You might find that all of these things are overkill – you can’t possibly keep track of hundreds of deals a day. If that’s the case, it’s quite easy to simply filter them, focusing in on the specific items you’re looking for.

FeedSifter.com lets you put in a RSS feed URL (like the ones above), then filter it for any list of terms you put in, then gives you an output feed that contains only the items that match the terms you listed. I actually described using FeedFilter once before, to similar ends.

Let’s see this in play. I like to use Amazon’s Gold Box (described above) for certain types of bargains: video games, cookbooks, and a few other odds and ends. I don’t have time for – and don’t really care that much – about the other deals that Gold Box might give me.

So, I’d fill out Feed Sifter like this:

A quick note: search terms fewer than three characters match everything, so use ones longer than that.

When you click on the “Filter my Feed” button, you’ll get an option to subscribe to that new feed. Click on that and you’ll find that the Amazon feed is now filtered for those search terms. Copy THIS URL and add it to iGoogle as described at the top of this post, and you’ll be able to see the latest deals, filtered to your specifications, whenever you want.

You can filter ANY of the above URLs in the same way using FeedFilter. Personally, I filter some feeds (SlickDeals) and don’t filter others (AmazonMp3).

How Do I Use It?
I have a nice big page built on this technique that I visit several times a day. Perhaps once a week, I’ll find something worth picking up – but when I do find something, I’m usually saving quite a bit on that item.

Give it a try! It takes a bit of time to get such a page set up, but once you’re set up and ready to go, it can be a big help when you’re looking for Christmas gifts or for specific bargains for yourself.

Yet, quite often, I find myself not always going for the rock-bottom price on specific items. I’ll pay a bit of a premium at a farmers’ market, for example. I’ll stop at the tiny market in my town for a few items quite regularly.

Why would I regularly abandon the lowest possible price? For me, there are a number of factors at work.

Is the location convenient? For the most part, this is the “time” factor. I’m willing to pay a small premium for an item if it’s convenient for me to buy it. If I need a loaf of bread or a dozen eggs in a pinch, I’m often willing to pay the premium prices at the local market just a couple blocks from my home, especially when the next closest market is ten miles away. If I need a book for research purposes, I’ll often get it from PaperBackSwap or from Amazon, simply because of the convenience of clicking a few times to get the item in the mail.

Is there a distinguishable quality difference between the items? I’ll often pay more for a produce item that’s exceptionally fresh versus one that’s been sitting on the grocer’s shelf for a number of days. They’re the same item, more or less, but one will taste better and have more nutritional value than the other, and that’s worth a premium to me.

Am I buying from a local business or local producer? Buying local means that the money stays in the local economy. Some portion of that money winds up in the local tax system, improving schools and other services that I use every day, and other portions of that money wind up getting spent again within the local system. Some fraction might be donated to local charities, and some amount may go towards providing jobs in the community. To me, this is worth a small premium on the price, particularly since the items are often freshly-made, which means there’s a quality difference at work here, too.

Is the business ethical? Does the business treat its employees well? Does the business treat the environment well? Does the business interact well with the community? Some businesses make a great effort to be ethical members of the local community – other businesses could care less and view the environment and their employees as cogs in the machine. To me, it’s worth it to spend a little more at businesses that are stewards of the environment and of their employees.

Does the business have good customer service? A great example of this (from my personal experience) is Apple and Dell. Some businesses go the extra mile to provide good customer service for their customers (Apple), while others make it very difficult to get appropriate help (Dell). To me, that makes me more likely to pay a premium for an Apple product when a comparable one is available from Dell. I apply a similar philosophy to almost any business where service is a useful component, like grocery stores, for example.

Does the business provide a good shopping experience? I like to call this the Aldi factor. If I feel uncomfortable going to a particular store, I won’t go there, even if there are great bargains to be had. On the other hand, if one store is much cleaner than another store, I’ll go to the cleaner store even if the prices are slightly higher. Are the salespeople pushy? That pushes me away. Can I find a salesperson if I need one, though? That’ll bring me in. Is there plenty of room, or are we pushed in there like rats in a maze?

In the race to always get the lowest price, many of the above factors are tossed out the window. The lowest prices often come from companies that don’t have the strongest ethical standards and don’t pay their employees well and don’t participate in the community.

In other words, there’s often an extra hidden cost in always seeking the lowest price. Is that an extra cost you’re happy paying?

I can’t give you an answer to that question, because this is one of those points where personal values and personal finance intersect. The things that you find to be “right” in your life are likely different than mine.

However, I can say that in my own life, I place a significant extra value on buying local produce and dairy products versus buying items that are shipped in. I place a slight premium on the ethics of the business, but I often find that companies with questionable practices often have many competitors and it’s trivial to simply use more ethical businesses. I have something of a minimal standard for customer service and shopping experience – if a company doesn’t meet that standard, I just don’t give them my business, regardless of price, but above that level, I view all competitors roughly equally.

Where do you stand? What additional factors are important to you when making a purchase?

Is it worth it for you? I can’t answer that question – it’s clearly worth it for us, as we save literally hundreds a year shopping at Sam’s Club versus shopping at other grocery stores and department chains.

However, I can suggest a pretty easy way for you to figure out for yourself if you would save money at a warehouse store.

Make a “Bulk Buying” List
Your first step is to make a big list of all of the things you might be willing to buy in bulk for your home. The items to really focus on are nonperishable items that you use consistently and perishables that you use only on a very consistent basis. Some of these might include dishwashing detergent, laundry detergent, laundry softener, garbage bags, flour, rice, bread, milk, eggs, fruit juice, cleaning supplies, water filters, breakfast cereal, oatmeal, and so on.

One great way to do this is to save grocery and department store receipts for a few weeks (or a few months) and use those as a starting point. Go through those receipts, pick out the items that are regularly repeated (or are nonperishable and you have room to store), and make a new list of just those items.

On that same list, write down the prices and the units. So, for example, if you buy a bundle of 36 rolls of toilet paper, write down the number of rolls and the price of the package. Number of rolls, number of bags, number of packets, number of servings, and so on are all key numbers to write down here.

After that, you’ll want to calculate the price per unit of each of these items. It’s easy – just divide the price of the package by the number of units. If you bought a 36 pack of toilet paper for $7.99, you’d just divide $7.99 by 36 to get $0.22 per roll. This is an important number to have when you’re evaluating bulk prices.

Get a Day Pass
Once you have your list of things you’d regularly buy in bulk, get a day pass to your local warehouse store. Call the local branches and ask whether or not you can get a day pass at the front desk. Most such stores will offer one once – often, any purchases you make with that pass would cost you 10% extra (but don’t worry about that).

Go to the store, pick up your pass, and go around the store with your list and your calculator. Ideally, you’ll want to find as many of the items as you can – and you’ll put only the ones that are actually a bargain into your cart.

Know How to Calculate Per-Unit Prices
Figuring out which ones are a bargain is pretty easy. Just find the item you’re looking for, find the price and the number of items in the package, then use your calculator to divide the price by the number of items to get the price per item. If it’s better than the one on your list, add the item to your cart and jot down the better price per item on your list, along with the number of units. Don’t worry about the 10% difference on your one day pass at all yet.

Easy enough – most of you probably yawned your way through that tip. But here’s the kicker. At the end of the trip, you’re going to need to decide if the full membership is worth your money. Here’s how you do that.

Figure Up Your Total Deal
Go through your list and figure out the difference between the two prices per unit. For example, if you’ve got $0.16 per roll toilet paper in your cart and your previous best deal was $0.22, the difference is $0.06. Multiply that difference by the size of the package in the cart. So, if you’ve got a 36-pack of toilet paper rolls, multiply the $0.06 savings by 36 rolls, giving you $2.16.

Do this for every item in your cart, then add up the results. This total should be significant enough that it’s very clear you’ll save money over the course of a year. You might find that the stuff in your cart pays for the membership right now, or that it’s close. If that’s the case, go straight to the customer service desk, sign up for an annual membership, and check out. If that’s not the case, pull out any items that are cheaper at your other shopping locations and check out whatever is left in your cart (since, even with the 10% charge, they should be cheaper than you’d pay elsewhere).

On our staples – dishwashing detergent, water filters, bread, wine (Sam’s actually has a very good wine selection), olive oil, and so on – we regularly save enough to pay for the annual membership in a single trip.

The Real Trick
The real trick with warehouse clubs is to know how to focus on the stuff you’ll actually use in good time and avoid the stuff you don’t actually use in large quantity. When we shop there, we basically only buy things we know we will consume in their entirety in the near future (i.e., a bottle of wine) or we use so consistently that we’ll get through it pretty quickly (i.e., dishwashing detergent).

If you don’t stick to a similar policy, you’ll end up with a cupboard full of unusable stuff – and that’s a huge waste of money. Focus on the staples, though, and warehouse clubs can likely save you quite a few dollars.

Good luck!

People often ask me what kinds of items I buy there and I respond with the usual things: toilet paper, trash bags, bulk foods, and so on. These are the things that people always think of when they think of warehouse stores – the stuff you buy on a normal grocery store run, but in bulk.

However, I’ve come to find that many of the best deals at warehouse stores aren’t simple replacements for grocery shopping. Here are ten things I’ve come to purchase regularly from my local Sam’s Club instead of through other options.

Paper and office supplies Printer paper? Check. Blank prints so I can print off photos for wall decorations and sending to family? Check. Printer cartridges? Check. Bulk Christmas cards? Check. Folders and paper clips? Check.

Toothbrushes I’m pretty fanatic about replacing my toothbrush regularly. I usually replace them after two months, even though you’re supposedly able to keep them for three months – I just feel like the brushes are in poor shape and aren’t cleaning my teeth nearly as well around the two month mark. That means I need two replacement brushes between each dentist visit (where they give me a free brush). That’s four brushes a year just for me – and two for my wife – and we like to keep some extras on hand for guests. The solution? A big jumbo pack of twelve brushes or so, which saves us a lot and lasts about two years.

DVD-Rs and CD-Rs I like to burn CDs full of pictures for family members – and I also sometimes assemble DVDs of family movies to share. This means I regularly need a big cylinder of blank CDs and/or DVDs – and the warehouse store is the cheap place to get them.

Gift cards My local Sam’s Club sells a ton of gift cards for various restaurants, cell phone plans, online games and music stores, and so on. All of them are below face value, and many are significantly below face value. These are not only useful for gifting, but they can occasionally be useful for one’s personal use – if I’m planning on using the iTunes Music Store, for example, it’s worth picking up a gift card so I can get $25 worth of credit for less than $25.

Adult beverages Our local Sam’s Club has an enormous selection of sub-$10 wines, many of which are quite tasty. You can also find the ingredients for pretty much any mixed drink you might want to make there, with prices substantially lower than the local liquor shop.

Light bulbs Our home has roughly fifty light bulb sockets, which means we’re regularly replacing bulbs. The vast majority of the bulbs are 75 watt bulbs, so we simply buy the 75 watt bulbs in bulk and keep them in the cupboard. It feels rather silly to have twenty bulbs in the closet, but when you eventually use all of them and you calculate the per-bulb savings, it’s well worth it!

Tires Recently, I was able to replace a pair of tires on my truck. The total bill for replacing both tires was actually cheaper than the total cost of replacing one tire at a comparable auto shop in town – for the same kind of tire. That’s a significant and surprising savings.

Gas The local Sam’s Club has the cheapest gas prices in town, usually (not always, but usually) beating all competitors by a nickel a gallon or so. Every time I fill up my truck there, I save about a dollar – and over the course of a year, that alone can pay for a large portion of the club membership.

Underwear and socks Not long ago, I finally replaced most of my socks – my wife’s constant complaints about holes in my socks convinced me to replace them. This meant I needed to buy a lot of socks – multiple packs at once. I purchased a huge bulk pack of socks at Sam’s after comparing prices and saved roughly twenty cents a pair. I get similar savings when I buy underwear there as well.

Video games Sam’s Club has a poor video game selection, but when they do have a game, you can’t beat the prices. I always check Sam’s first before making a video game purchase – and on a recent purchase, I saved more than $10 over the cheapest price I could find online on a particular game.

It’s not just the expected stuff that makes warehouse shopping a value for me – it’s the unexpected things that really have made our membership worthwhile.

My first shopping trip was entirely by myself. I went with a shopping list in hand, which I almost always do, and I stuck pretty strictly to it. My only splurging, if there was any, was on specific items – I bought free-range eggs and organic milk, like I usually do. I only made one real impulsive buy, which was buying some organic steel-cut oatmeal.

My second trip was with just my wife and I, when we decided to go shopping before picking up the kids one afternoon. We shopped with a list again, but with just the two of us, we wound up with several unintended items in the cart at the checkout: salad dressing, a loaf of Italian bread from the bakery, a smoothie, and a pint of ice cream were among the items (and I believe there were one or two more).

My third trip was with just myself and my two kids. This time, I stuck 100% to the list. The only diversion that occurred at all on this trip was that I had an item on the list that said “snack” and I let our son pick a type of cracker to get – we wound up getting Triscuits, which he loves.

What did I learn from these three trips? My two children are my best shopping chaperones. When they’re along and I’m under their watchful eyes (and they are watchful – they pay careful attention to what I do), I tend to be very careful to follow the list. When I’m by myself, on the other hand, I just focus on the list and don’t have time for distracting conversation or anything like that. With my wife, however, we often get engrossed in conversation during the trip and decide together on impulsive items.

What’s the point of this observation? Shopping habits are often influenced by the people you shop with. This just happens to be a great example of this effect, but it’s something I often noticed during my life. If I shop with certain people, I tend to spend more than if I shop with other people.

If you want to cut your shopping expenses, having a list is one useful step, but having a strong chaperone that controls your frivolous tendencies can also be useful. Here are some useful tactics that fall in line with this strategy.

Master shopping alone with a list. Give it a sincere shot. Every time you go into a store for the next month, have a list with you and only buy things on that list. If it’s not on your list, don’t buy it, period. Mastering this skill makes it much, much easier to get in and out of a store without succumbing to the desire to buy impulsively.

Identify those friends that encourage you to spend more – and those that encourage you to spend less. For example, I have one friend who almost always subtly convinces me to spend money on electronics and video games. For some reason, we often tend to wind up in electronics stores, and it’s with him that I’ve purchased several items that I simply don’t need.

On the other hand, another of my closest friends basically doesn’t spend anything at all. Whenever I happen to be in a shopping situation with him, he gives almost a negative vibe towards spending – and that’s a good thing. It discourages my tendencies to spend.

Avoid situations where you’re in tempting places with friends that encourage your spending tendencies. To put it simply, I should make a special effort to avoid electronics stores when with my gadget-loving friend. If I sense that I’m about to be in such a situation with him, I should have my guard up very high – or I should try to divert us into a different activity.

Similarly, window-shop with a “chaperone” that encourages your frugal side. On the other hand, when I’m doing comparison shopping, my frugal friend is a good one to have along. He subtly discourages bad buying tendencies and helps me keep my focus on the things I actually need instead of frivolous and short-lived material desires.

The word “chaperone” is a loaded one. It might make you think of a high school dance or of treating yourself like a child. I think of it more in the sense of curbing your poor tendencies. A shopping chaperone can really help you save money. Give it a try.

Still, I couldn’t help but notice when several readers emailed me to point out ING Direct’s new “We, the Savers” ad campaign. Instead of directly promoting ING, it takes a different tactic, offering up a ten-point “Declaration of Financial Independence.” You can read the full thing here, but here’s a taste:

1. We will spend less than we earn. Saving a little out of every dollar we bring home is the foundation of independence. Without it, we can’t build equity in our home, we can’t invest for the future, and we can’t be ready for challenging times. We promise to pay ourselves first, always.
2. We will use our home as a savings account. Besides shelter and comfort for our family, the role of a house in our financial life is to build equity. We will have a healthy down payment when we buy. We’ll choose the mortgage that lets us pay down the principal fastest. And then we’ll leave that equity safe where it is instead of spending it on things that don’t last.

In short, their ad campaign basically states many of the basic principles I talk about every day. I agree with virtually everything they state on that page, from spending less than you earn to getting involved in politics. I firmly believe that if you took the advice of those ten points, you would be in substantially better financial shape than most people.

It doesn’t change my overall opinion that advertisements are junk, though. As a general rule, the more exposure you have to advertisements, the more likely you are to spend your money in less-than-optimal ways.

But, of course, companies dump billions of dollars each year into advertising. Why? Because it works. Ads influence people all the time, from what kind of hot dog to purchase to which presidential candidate to vote for.

And this one’s no different. The underlying point (although it’s done fairly indirectly) of the ad is to convince you to open up an ING Direct account. Their approach takes advantage of a general move towards frugality going on in America right now.

So why bother to point out this ad at all? There’s really two reasons.

First, if advertising dollars are going to be spent and ads are going to be placed anyway, they might as well come with constructive information instead of destructive information. A commercial break that contains an ad that trumpets “spend less than you earn” as a catchphrase at least has some degree of positive effect in convincing people to make positive financial choices.

Second, highlighting and encouraging companies to present ads that encourage personally responsible behavior can only encourage similar ads. If an ad is going to convince you to buy a product (and they all do), at least that ad can be balanced with some sort of positive additional message.

Take, for example, this rather silly Anheuser-Busch ad:

It goes for the cheap gag and still pushes for Anheuser-Busch products, but the biggest takeaway is to have a designated driver. If that ad lodges into someone’s mind and “sells the product” later, it might convince them to find a buddy to drive them home when they need it, keeping a drunk driver off the road.

Alternately, look at this Dove ad:

It does a great job of demonstrating step-by-step an example of how our idea of physical beauty is distorted. Sure, the point of the ad in the end is to sell Dove products, but if it is capable of convincing a teenage girl to look at a model on a billboard and realize that comparing her own body to that image is a false comparison – and she’s thus able to walk away without a reduced body image – then that Dove ad is substantially more worthwhile than a typical beauty ad which implies you have to use the product to obtain some unattainable level of beauty. I’d far rather that my teenage niece see that Dove commercial than a typical Revlon or Clairol ad with an airbrushed ethereal woman.

From my perspective, this ING Direct campaign falls right into this group – and I hope they run with it.

People take many, many social and moral cues from the media that they consume and they absorb the ideas in surprising ways. While minimal exposure to advertising is always the best route for anyone to take, we all are exposed to some degree of advertising (and some of us are exposed far more than others). If more of those ads chose to include authentically valuable information and messages along with the product, then more people would subtly be exposed to such worthwhile information. And that can only be a net positive from where we are now.

We live in a world filled with advertising. Advertising is obviously there to convince us to buy stuff, but we have the power to choose what we buy. With my dollar, I’d rather support a company or organization with some degree of social responsibility in their work, if for no other reason than it encourages other companies to do the same.

Or, better yet, seek out companies that produce quality products regardless of advertising, and let them know that it was not the ads that sold you on the product, but the impartial reviews you found.

At the same time, I’d rather avoid companies that promote stereotypes, false images, and false information in their ads.

Just remember: the next time you see an ad that tries to play on your fears or on your self-esteem, don’t give that company your dollar. Instead, seek companies that try to inform or do other positive things along with their advertising. Better yet, support companies that don’t spend much money on advertising at all and instead produce high quality, low cost products.

In the end, the dollar you spend at the supermarket, the drug store, or the car dealership doesn’t just buy a product, but it’s also a vote for the kind of advertising you see. Fall prey to an ad that promotes nothing but image and you’re telling them you want to see more fluff. Alternately, you can support products that promote informative ads that at least have some degree of redeeming value – or buy generics and support no advertising at all.

It’s your dollar. It’s your call.

I don’t shop at Aldi because I’m personally uncomfortable with the chain as a result of a bad experience when I was young.

When I was a young child, my family used to shop at Aldi somewhat regularly, usually just to buy certain items that complemented our purchases elsewhere. I remember going there and not minding the trip at all – in fact, I would usually help my parents by going around the store and picking out specific items that they wanted. “Trent, I need two loaves of white bread,” for example.

One day, something horrible happened. My mother was looking at a stack of floor mats. I was standing right next to her minding my own business when suddenly she shouted and backed up rapidly, bumping me to the side. When I looked over at the mats, there was a horde of cockroaches coming out of the pile of floor mats. Hundreds of them.

We immediately abandoned our cart and ran straight for the exit, then out to the car. I had squashed two of them under my shoe and I felt very uncomfortable all day. For the next several nights, I had nightmares about the incident.

As a result of that experience, every time I see an Aldi logo, I feel nervous. I basically refuse to go in the door because when I do, I feel really, really uncomfortable.

One strong negative experience has shaded my feelings towards Aldi for life.

I have visited the local Aldi and found it relatively clean, but during the entire visit, I had a strong desire to just leave the store. I constantly have a sense that if I touch anything in the store, bugs will start crawling out from underneath them.

This personal sentiment prevents me from truly giving Aldi a fair shake.

I know quite well that Aldi has the lowest prices of any grocery chain around (for the most part). Many of the items they sell simply can’t be found at cheaper prices – the only way you can compete is by playing a very careful game with the grocery store flyers and knowing the best deals at warehouse clubs.

I also know rationally that such an experience could happen (theoretically) at any grocery store chain. Hypothetically, I could pick up an item in another grocery store and find a bug infestation. Also, the incident occurred almost twenty years ago at a different Aldi than the current one I use.

That doesn’t change the fact that one horrendously bad experience has spoiled the soup for me. Is that rational or fair? Maybe not – I’m judging an entire chain/brand based on one specific bad experience. But that bad experience personally makes me question the safety and sanitary nature of the food I would buy there, and I feel uncomfortable feeding it to my family.

I’m quite sure that Aldi fans will show up in droves in the comments, stating how they never had a bad experience at Aldi, and I don’t doubt that at all.

But that bad experience – and the personal questions it raises for me – is enough for me to feel much more comfortable using Fareway as my “economy” grocery store. I’m quite happy to pay a few cents’ more for my staple foods at Fareway when I feel comfortable in the store and confident about the quality of my food purchases.

Have you had any nightmarish experiences with specific brands that have (fairly or unfairly) tarnished your view of that brand? Do you think it’s rational or fair to feel that way? Share your thoughts in the comments.

On an individual basis, the messages are innocuous. For example, one recent email was for Heroes: Season 1 on DVD for $29.95, a pretty strong price. Given the people on the list, of which a large number are lifelong comic book fans, this seems like a worthwhile thing to mention since many of them are either fans of Heroes or are potential fans of the show. If you make a splurge purchase like this once a month, it’s not that big of a deal, and it’s something that many people on that list might enjoy.

The problem comes in when you read ten or more of these messages a day. The Watchmen for $8.99! Guitar Hero: Aerosmith for $19.99! A 50″ LED TV for $799! People were even linking to cheap eBay auctions.

It culminated (for me) with a recent email to the list (emphasis added):

Thanks for the emails guys! I saved so much money this week!

I realized, right then, that this had turned into a “deals” list, so I unsubscribed.

What’s Wrong With Finding Bargains?
A lot of people might read through those prices and think, “Wow! Nice deals!” For the most part, they are solid discounts on what you’d normally pay, and if you were already thinking of buying one of those items, it’s probably not a bad time to go ahead and pull the trigger.

The key part, though, is “if you were already thinking of buying one of those items.” When you go “bargain hunting,” you’re not seeking out a particular item that you need. You’re simply seeking out low prices and accumulating stuff for the sake of accumulating stuff. And, even though an individual item might be a bargain, buying a bunch of items is a sure way to empty out your pocketbook and make it difficult to make ends meet.

Doing that leaves you with a house full of stuff you didn’t really want and a nice big fat credit card bill.

Sensible Bargain Hunting
That’s not to say there isn’t a role for bargain hunting – there is. But when people snap to attention and pull out the wallet when they hear the word “sale” or see a big discount, they’re going at it completely in reverse.

The sensible way to bargain-hunt is to know exactly what you want before you even start looking. If you’ve decided, on your own, that you do in fact want Heroes: Season 1 for your own entertainment, great.

Now’s the time to bargain hunt, with the item you already have in mind. Utilize tools for finding it, like this clever trick for automatically bargain-hunting Amazon for specific items. Use price comparison tools to find the item at a steep discount. Set up saved searches on eBay and check them regularly. Check out retailers and see what their offerings are like.

The important part is to put on your blinders and ignore other items. A big sale on an item you don’t really want is still a waste of money.

Purposeful Bargain Hunting for Profit
One of my online acquaintances – a person I’ve mentioned a few times recently – makes his living selling trading cards online. He actually does very well at this. But he also bargain hunts quite often without any specific item in mind.

See, he happens to be a walking encyclopedia of trading card prices, and he’ll often go to different places simply canvassing for bargains. He has nothing in particular that he wants to buy, but there’s a chance he’ll stumble upon something that is genuinely mispriced. If he finds it, he’ll actually clean the store out of the item. He’s put more than $2,000 worth of trading cards on his credit card in one swoop when he didn’t intend to buy a single thing.

The difference here is that he’s not buying “stuff” to accumulate for personal use. He’s bargain hunting without anything specific in mind, sure, but when he’s buying the trading cards, he’s not actually buying trading cards. He’s buying goods to profit from – and he will profit from them.

In other words, using “well, I’ll make a profit” as a bargain hunting excuse only really means anything if you’re actually doing it. If you see an item you don’t need and didn’t really want, but you buy it because you think it’s actually worth more than the price, you’re still wasting money. The only way it’s actually worth more than the price is if you can actually sell it at a higher price.

Most Bargains Aren’t Bargains
The simple truth is this: if you’re buying something you don’t really need and didn’t really want before you saw it, you’re wasting your money (unless, as I mentioned, you’re going to directly profit from it). It doesn’t matter how good the “deal” is – if it’s something you weren’t planning to buy anyway, you’re just throwing away your money for stuff, and that’s a sure way to put yourself in a worse financial position.

By all means, buy some fun stuff for yourself. Just spend some time thinking about what you actually want – and then hunt for bargains on that item.

The solution, often suggested in personal finance books, is to start a bulk-buying co-operative with family and friends. If you go in four ways on a jumbo package of toilet paper, for example, splitting the cost four ways as well as splitting the rolls four ways, you can all save significant money on the purchase. Do this often enough with most of your staples and you’ll save significant money and get higher quality items.

The only problem with that is such books never tell you how to get one started. For me at least, the idea of starting a bulk buying co-operative seemed a lot like herding cats – a lot of work without a whole lot of reward.

The truth is that it’s not actually that hard at all. You just need to do some up-front planning yourself to make it work.

This seems like a lot of work just to save a little money… It’s not really much additional effort at all once you’ve got the prices down, and the savings really add up. Here’s a brief example to show what I mean.

At Sam’s Club, I can get a 36 pack of Quilted Northern toilet paper for $16.88, and I can also get a 55 count variety pack of instant oatmeal for $10.28. Alternately, our local grocery store sells a 4 pack of Quilted Northern for $3.29 and a 10 count oatmeal variety pack for $3.99.

So, let’s break down the Sam’s Club price into packages equivalent to the store. The cost per 4-pack of toilet paper at Sam’s Club is $1.88, versus $3.29 at the local grocery store. The cost per 10-pack of oatmeal is $1.87 versus $3.99 at the grocery store.

So, I just adjust the prices up a bit to still keep them way lower than the grocery store, but help cover my costs and effort. I write down $2.25 for the toilet paper on my price list, and $2.50 for the oatmeal variety pack. I pocket $0.37 each time someone wants me to grab toilet paper for them, and pocket $0.63 each time someone asks me to get a variety pack of oatmeal for them. Each time. And that’s just two items.

Let’s say two different people want two boxes each of the oatmeal variety packs, and four people each want two packages of toilet paper. You buy one big box of oatmeal variety packs at $10.28, divide that into four boxes of 10 packs each, and there’s 15 left over. You charge them each $2.50 for those oatmeal pack boxes, leaving you with 15 packs that cost you a total of $0.28. You divvy up the toilet paper, getting rid of eight four-packs packs at $2.25 a pop, leaving you with four rolls for free and pocket $1.12. Overall, you have almost a dollar in your pocket you didn’t have before, plus fifteen packets of oatmeal for breakfast and four rolls of toilet paper. All for the effort of ringing a few friends before you go.

Given that you can do lots of these on just a single warehouse trip, it’s easy to see how it can drastically reduce your personal household shopping bill and help your friends out, too, by getting them cheaper stuff.

Here’s the game plan for making a bulk-buying co-operative work with your family and friends.

Get a membership for yourself. If you’re the one with the initiative to make a bulk-buying cooperative work, you’ll have to step up to the plate and get that membership for yourself. Go visit your local warehouse store and put up the money for the membership. Don’t worry – if you follow the rest of these steps, you’ll recoup that cost and much more over the course of a year.

Create a detailed pricebook of everything you’d buy there. This will be your biggest time investment. Go through the store and make a big list of all of the items you might buy – or items you know that someone else would buy. Write down the quantity and price of the items in a notebook. If someone asks you what you’re doing, just flat-out tell them you’re making a price book to help you with your shopping later on.

This doesn’t take as long as you might think, and isn’t as boring, either. When I attempted to make a pricebook in a warehouse store a while back, it took me about two hours and pointed out several big, useful bargains to me along the way. I also got a nice, healthy load of shopping out of the way, too.

Break that pricebook down into cost per unit. Once you get the pricebook home, break down the pricebook entries into reasonable units. For example, if you can buy a three-pack of Aquafresh, divide that cost by three to get the actual cost per tube. If you’ve spotted a 36-roll jumbo pack of toilet paper, divide that by nine to get the cost per four-pack. Make sure you include sales tax in the adjustments, of course – non-food items need to have the sales tax cost added on.

Add a small amount to each unit to cover your own risk. Once you’ve divided things up, add a bit to each smaller item to cover your own risk, time, and effort. Add a nickel to each item, perhaps, or just a penny or two to the cheaper items. This basically helps pay for your time, your membership, and your risk (in the event that someone doesn’t pay for the items). The extra pennies and nickels will first pay for your membership, then later help you get your own items for much cheaper.

Then, create a flyer listing the prices per unit of each of the items. Once you’ve figured out that final per-unit cost for each item, make a flyer for the items and give a copy to your family and friends, just so they can use it on their own. They can take the flyer to the grocery store with them, see that the warehouse prices are cheaper, and will then be willing to give you the money to pick up the items.

Keep the number reasonably low – 5 to 10 “partners”. Don’t invite so many people that you’re burning tons of time managing the co-operative – keep the number low. Focus on people you actually trust and who are interested in saving money. If you get much beyond ten members, you’ll end up wasting a lot of time.

Whenever you’re planning a trip, give some of them a ring. I usually go to Sam’s Club once every two weeks or so. When I’m getting ready to go, I’ll give some of my friends a ring and ask if they need me to pick anything up for them, since I’m already going. Invite those friends to go along, too, until you find someone who will go along as a “shopping buddy.” Jot down the items they want on your list and then pick them up – let them know that you may buy them two or three units of the item, depending on how many people want it. Then, when you get home, just divide the stuff up into sacks for each person, total up what they owe you, and let it sit until the next time you see them. Easy as pie.

Good luck setting up a bulk-buying co-op. It can not only save you money, but can actually put some pennies in your pocket and help your friends with surprisingly little effort.

Until recently, I’ve been doing the drudgework of visiting Amazon on a daily basis to check for some of these items. But, after doing a bit of careful thinking and some clever hacking, I’ve found an easy way to get Amazon to automatically report those deals to me. Here’s the trick in its step-by-step glory.

Step 1: Get the Feed!
Amazon has a feature called Gold Box, where they collect a bunch of hugely discounted items from across their site each day. The deals are a mixed bag of stuff – one might be a software sale, another might be a watch, another one might be glass tumblers, and so on.

The point of the page is to attract people who are “bargain” hunters – the people who will buy anything provided it has a pretty good discount. It also entices people who are actual bargain hunters in the hopes that once they have an item or two in their cart, they’ll add a few more items. Plus, there’s the “temptation” folks – the people who randomly find the page and buy something they really don’t need. Add it all together and you get a lot of additional sales (and happy customers) for Amazon.

The only problem is that if you’re living cheap, this is just a giant temptation to spend money you shouldn’t. If only there were a way to filter all these deals just for the relevant ones…

There is.

Amazon makes the vast majority of these deals available via their Gold Box RSS feed. It’s basically a single page view of most of the available Gold Box deals, all on one page:

http://rssfeeds.s3.amazonaws.com/goldbox

This makes it convenient to stop at one page for a giant list. Or if you have a feed reader, you can subscribe to that feed to get the deals. But that’s just the start of it.

Step 2: Filter the Feed!
Now, head over to FeedSifter.com, a brilliant little tool if I’ve ever seen one. It lets you put in a RSS feed URL (like the one above), then filter it for any list of terms you put in, then gives you an output feed that contains only the items that match the terms you listed.

Let’s see this in play. Let’s say I’m trying to find a couple of older games for my Wii on a huge discount, plus I’m looking for a cheap Nintendo DS or Playstation Portable for Christmas gifts for my nieces and nephews. While I’m at it, I’m also interested in any bargain cookbooks they might put up, plus any grocery deals or deals related to my Mac computer.

I’d fill out Feed Sifter like this:

A quick note: search terms fewer than three characters match everything, so use ones longer than that.

The actual list I’m using is much longer than this one – I’d share it with you, but I’m worried I’d reveal a good chunk of the Christmas gifts I’m looking for.

Anyway, when you click on the “Filter my Feed” button, you’ll get an option to subscribe to that new feed. Click on that and you’ll find that the Amazon feed is now filtered for those search terms. For my list, I found that it had only left one item – and I actually went ahead and purchased that single item, as a Christmas gift! Hooray – one down, a big bundle to go!

Step 3: Remember the Filtered Feed!
Obviously, with most of these sales having an extremely limited time frame, you’ll need to check it regularly. Since many people have Google as their home page, it’s very easy to integrate this filtered Amazon sales search right into the home page on their browser.

Just pop over to http://www.google.com/ig and click on the “Add stuff” link over on the right hand side of the page…

… then click on the “Add feed or gadget” link on the right.

Then, paste in the URL of the feed you created in step two.

Wham! Your filtered feed is now on your Google homepage. Whenever you fire up your browser and visit Google, you’ll see a list of the sales over at Amazon that match the terms you put in. Click on the link to an interesting one, and you’ll go right over to Amazon.

Whenever you want to create a new search, just follow all these steps again – easy as pie.

Bonus tip: If you’ve found your item and are ready to check out, but have found yourself a few dollars short of getting free Super Saver Shipping (Wait! Add $4.32 to your order to qualify for FREE Super Saver Shipping), use FillerItem.com to find a cheap item to just barely push you over the top. I used to regularly get a pack of AA batteries here, but since moving to rechargeables, I often usually get a “stocking stuffer” type item and hold onto it for later.

This technique has saved me quite a bit of money on gifts I intended to purchase anyway with almost no effort after the initial setup. Give it a try today.

Here’s the real scoop: every item listed above cost us less than a dime. In each case, we saw a tremendous buying opportunity matching coupons to a sale and we simply stocked up big time on those items, leaving us with a large closet stuffed full with unusual items. I like to call it anticipation buying.

Anticipation buying revolves around four distinct principles.

First, there are some items that we will continually use over time. Soap, shampoo, oatmeal, Yogurt Burst Cheerios (without them, our son would riot), flour, sugar, some fruit juices, milk, coffee, razor blades, toilet paper – these are items that we use over and over again and continually need to stock up on. Because we’re aware of this, we can use a specific plan of attack for these items to get low prices on them.

Second, there are irregular opportunities to find such items on sale. These items pop up on sale on a completely irregular basis. Brand A shampoo might be on sale one week, then two weeks later Brand B will be on sale. Not only might national brands be running a promotion where items are on sale in stores, but individual stores might select different loss leaders to get people in the door.

In order to keep up on these individual sales, we just follow the grocery flyers in our Sunday paper (and in other flyers we get in the mail throughout the week). I usually have flyers for all of the local grocery stores and I keep an eye out for their big sales by reading their flyers each Sunday over breakfast.

Third, there are irregular opportunities to find strong coupons on such items. I clip every coupon for items in the above categories that are of acceptable brands from the Sunday paper, and if I see a very good coupon, I’ll stop at the local convenience store early on Monday morning and ask for the inserts out of the old Sunday papers (the cashier always says “Sure” and I start scavenging for coupon inserts). Sometimes, I can get as many as fifteen of the good coupons – if they’re for $1.50 off an item I know we’ll use frequently, it’s like cash in the pocket.

So, we patiently clip all coupons for these items and save them until there’s a sale, then stock up. I have the coupons. I have the flyers. I then just wait for them to sync up. Usually, it happens about a month or so after I clip the coupons (yep, the one month coupon strategy at work).

Another tactic to note: quite often, individual store flyers will have coupons that match the manufacturer’s coupons you have. Often, you can use these coupons simultaneously. So, let’s say my local Fareway ad has a coupon letting me get Herbal Essences shampoo or conditioner for $1.99 a bottle (limit 6) and I have three “save $3 on 2 bottles” coupon from the manufacturer. I just take all of them there and walk out with good shampoo and conditioner for $0.49 a bottle.

Here’s a real-world example. Recently, I had several copies of a coupon that permitted me to save $3 on any two bottles of Old Spice body wash. I waited until I noticed a sale – and not long ago, there was one at a local Walgreen’s. The individual bottles were $1.79 on sale there. I took in my wad of coupons and picked up ten bottles, paying $0.29 a bottle. I walked out of the store with ten bottles of soap, having spent less than $4 total – and it was just a five minute stop on my normal shopping trip. That’s how you save money.

What’s the long-term effect? The result from doing this regularly is quite interesting. Our regular shopping lists almost never have these “anticipation” items on it. Instead, they almost always just list the food items we need for the week, which means that at the grocery store, we rarely even visit big sections of the store. We mostly visit the produce aisle, the meat counter, the dairy area (for milk, etc.), and a few other specific places (pasta, canned items, bread when I’ve not made any), and that’s about it. Our grocery bills are cheaper and our shopping trips are actually quite a bit shorter because we’re not going over to the far side of the store to pick up shampoo or toilet paper – the time invested in executing this strategy is partially redeemed on ordinary shopping trips.

When I first started The Simple Dollar, I had a very simple coupon strategy that didn’t save me a whole lot of money. It’s been fun to watch the strategy evolve over the years – first syncing it with a grocery list and evolving that strategy a bit, then discovering the figuring out how sales and coupons synchronized and now evolving that strategy a bit. I used to believe that perhaps coupons weren’t worth the time invested, but I’ve found more and more that if you do it intelligently, there are some serious savings to be had – and it doesn’t take as much time as you might think.