Portion sizes have gotten so out of control that you often get enough for a small family when you order an individual entree. Sure, you can take leftovers home to eat the next day, but I’d rather not have to pay so much to get more food than I really want. In the past, I’ve said that I would gladly pay more than half price to get half as much food when I eat out.

That’s why I was so excited to hear about T.G.I. Friday’s Right Portion, Right Price menu. Restaurants have traditionally only offered smaller portions and prices at lunch time, if at all. The Friday’s program is all day, every day. I hope that other restaurants follow this innovative idea. I don’t eat out much, but when I do I would definitely consider going to T.G.I Fridays to get just the amount that I want at a more reasonable price.

The advertisement announcing this program isn’t available on YouTube at the moment.  I’ll add it to this post when and if it gets added there.

All too often we look at things from their monthly cost instead of the larger, more important picture, of total cost. There were times when these were the same thing. Stores once offered payment plans on purchases that effectively amounted to the 0% interest offers of today, without the associated catches. Offers to accept $5 a month until you had paid the full cost of some mail order item graced page after page of newspapers and catalogs in the early 1900s. Once interest, or the potential for retroactive interest (as is often the case in today’s 0% offers), comes into play, the difference between monthly payment and total cost can be quite large.

Continue >>

Being frugal should not be confused with being unable to spend. In fact the opposite is true. Carefully monitoring your spending, following a disciplined budget, and saving in as many ways as possible allows you to spend more in the areas that are important to you.

Since budgeting reduces unnecessary and wasteful spending it leaves more money available for discretionary purposes. Choosing the areas where you will spend that extra money is part of the fun of being frugal.

Looking at this topic another way, by being frugal most of the time, you create a situation where you can spend a little extra some of the time.

Continue >>

There are many reasons why my finances are in good shape. In coming up with a list of those reasons, I noticed that a few were key to my getting ahead. I call these my wealth accelerators because they have had a dramatic effect on my net worth. Without these I would still have a positive net worth, but it wouldn’t be anywhere near where it is. Your wealth accelerators may not be the same as mine, but I suspect that many of these are common to most people.

Continue >>

In part 1 of this post, I gave an overview to the envelope budgeting method. In this post, I present a few ways to implement the essence of that method, in a way more suited to the modern world.

The main problem with envelope budgeting in the modern world is that we have become a cashless society. Imagine trying to keep track of expenses, credit cards, online bill payments, and the many other ways we deal with money by using a cash based system.

Continue >>

The envelope budgeting method is a tried and true, if not somewhat outdated, way of tracking your finances. Before going into how to use this method in the modern world, I thought I’d present an overview.

In order to fully appreciate the method, let’s return to simpler times when cash was king. When you got your paycheck, you’d cash it and use that cash to pay for your expenses. Instead of just having one pile of cash and pulling from that pile to pay for all expenses, the envelope budgeting method was developed.

Continue >>

How many times have we heard budgeting advice simplified down to “cut coffee out of your daily routine”? Sure, it’s sound advice and I’ve probably even made that recommendation myself from time to time. It’s true that cutting back on small, repetitive items can have a large impact, but it’s often easier and more effective to focus budgeting efforts on larger items, what I call the heavy hitters. Reducing costs on more expensive items not only has a larger effect, there’s typically more margin available to be cut.

This philosophy is similar to one outlined by authors Marcus Buckingham and Curt Coffman in their book First, Break All the Rules. They stressed the value of managers spending as much time as possible with their top performers rather than wasting time on under performers. The same idea applies to your budget: Spend as much time and effort reducing your largest costs. You can cut back on coffee all you want, but doing so won’t have nearly the effect as reducing your largest costs (like housing, insurance, and food) by the same percentage.

Continue >>

In the strictest sense, negative cash flow can only be removed from your budget by increasing your income or reducing your expenses. Most commonly though, when a negative cash flow shows up in Quicken or Microsoft Money, it’s due to an error in one of your estimates. While overestimating your expenses is better then underestimating them, it can leave you with a projected negative cash flow even if your finances really would balance. Using the most accurate estimates possible and updating your budget as actual expenses become known is the best way to remedy this problem. Also look for obvious errors such as entering a budget item as a weekly expense rather than monthly or things of that nature. The downside of an apparent negative cash flow, if your budget actually should show a positive one is two-fold: First, you don’t have an accurate picture of your financial situation. Second, in order to balance your budget, you might cut back in some areas that you’d prefer not to. Making cuts that aren’t necessary, but only appear necessary because of an apparent negative cash flow, are the most painful.

Being frugal is a wonderful thing. It is at the foundation of a solid financial plan. Of course, there are other, more important things, than money in the world. It’s in this realm that I’ve found one of the few downsides of being frugal: spenders guilt.

I really do feel guilty spending money. I know that each dollar would be best saved or invested so that it might grow. That doesn’t mean that every dollar must be used as such. As with any endeavor that’s difficult, and living a frugal life is difficult, a small indulgence might make the end goal more achievable.

So be sure to allocate yourself some fun money that you can spend without feeling guilty. Doing so, as long as you keep it to a reasonably small amount, may give just the fix you need to keep living your frugal lifestyle.

A simple way to budget is to use the so called “60% Solution.” Try to keep all of your committed expenses at or below 60% of your income. Committed expenses include all of your bills, housing, taxes, insurance, food, clothing, charitable contributions, etc…everything that you have to pay for each month. Taxes will probably take the largest chunk of your allocation. Make sure you take the taxes taken out of your paycheck by your employer into account when calculating how you’re doing!

Split the remaining 40% of your income into four groups at 10% each for retirement, long term savings, short term savings, and fun money. If you can’t quite make 60%, take from fun money first, then short term, etc.

Continue >>