Children never too young to learn value of frugality

Sometimes, living a frugal lifestyle means my husband and I go against the grain of modern society and its demands to have the shiniest, biggest and best of everything. We put value on making the most of our money and living within our means. We like simple pleasures that are richly rewarding but don’t break our budget. We live frugally, not as an end unto itself, but because our frugality allows us to have a life we desire. Frugality isn’t about deprivation (or about washing out plastic sandwich bags or reusing sheets of tinfoil). It’s about finding new, less expensive ways to get the things we need and afford more of the things we enjoy. It is a creative challenge.

We work hard to “walk the talk” of frugality with our children. We are teaching them to spend money wisely and carefully consider what they want. As our children learn thriftiness, they share the satisfaction and rewards of this kind of lifestyle. We have to consistently teach them how to live this way, so we’re dedicated to intentionally using our resources well.

For example, we have a 5-year-old daughter who desperately wants a scooter. I’ve seen them in retail stores for $30 to $50, but I’ve also seen them at rummage sales on occasion for half as much. We’ve told her that we will spend up to $20 on a scooter, so this means that she can contribute some of her own money, wait for a retail sale, or hold off buying a scooter until we stumble upon a secondhand one. Since we’ve set a budget, we don’t have to say “no” to the scooter when she asks. Instead, we can remind her to keep an eye out for what she wants at a price we can afford.

These types of conversations, when we discuss what we can and cannot afford, are common in our home. To us, it’s important to demonstrate to our children that we have a limited amount of money and that we need to make wise choices about how we spend it.

It’s also important to us that our children see how planning ahead can be a way to enjoy life and still keep a budget intact. Throughout the year, we pick up inexpensive gifts that we tuck away in our birthday box. Right now, we have cupcake kits, rolls of stickers, a floor puzzle, books, and sundry other items in our box. When one of our children receives an invitation to a birthday party, we can avoid an extra trip to the store and a last-minute scramble to buy a gift. We can choose a present from the box instead. And, by stocking up on gift wrap when it’s on sale, we also have paper and ribbons ready. Planning and buying ahead pays off for us with stress-free solutions when birthday parties roll around.

We’ve also discovered that planning fun activities close to home stretches our money and gives us many opportunities to spend family time together. In fact, we’ve found that the more often we’re away from home, the more we tend to spend. So we try to plan activities nearby that cost little or no money and that draw upon a child’s natural affinity for simple pleasures. We take picnics, blow bubbles, wade in the creek, go for walks, fly kites, and run through the sprinkler.

As they grow, we know our children’s likes and interests will change. We know they may want and need things more costly than a $20 scooter – but they don’t ever have to outgrow loving affordable, uncomplicated things.

Simple steps toward budgeting can empower you

When I was recently introduced to a friend’s husband, the first words out of his mouth were, “You’re that woman who writes about budgets all the time, right?”“I’ve never been good at that kind of stuff,” he volunteered. Then, as if I might ask him to get out his checkbook register for an impromptu budgeting session, he quickly left.I suppose it’s possible that I might have had spinach in my teeth, but I think talking about budgets made him uncomfortable. That brief exchange reflects two pervasive (and unfortunate) myths about budgeting: 1) Everyone just innately knows how to budget ; and 2) If you aren’t using a budget, you should feel guilty.Rest assured there is no such thing as a “budgeting gene” that skipped you. You don’t have to use complicated forms or be a math whiz to use a budget successfully. What’s more, the last thing a budget should do is create guilt. At its best, a budget is the single most powerful financial tool you have.If you’ve never used a budget, or you’ve given up on using a budget because it has never seemed to work for you, you may not know where to start. If the idea of throwing yourself wholeheartedly into the budgeting process seems overwhelming, you may want to try the baby-step approach.This type of budgeting lets you zero in on a single household expense. Start by reviewing your checkbook register, credit card receipts, or online accounts and calculate your total monthly spending in a specific area. When you’ve got the total amount in front you, you immediately become empowered to decide if you’re happy with your spending. If you aren’t, you can decide how much you want to cut back in that one area.But the purpose of budgeting isn’t simply to cut back. The real power is in reallocating your funds. A budget allows you to take money you’re saving in one area and spend it on things that can make your life better. You might take the extra money and build an emergency fund, pay off a debt, start a vacation fund, or put it towards another financial goal.Even if you already have a working budget, you can use this method to think critically about where your money is going. For example, my husband and I decided to look at what we spent on food last month. We spent $659 on groceries and a whopping (and shocking) $302.27 on eating out. These numbers were skewed because of some unusual family circumstances, so we took a three-month average, which put our total monthly food expenditure between $805.09 and $594.82 for groceries and $211.27 on eating out.Even though our monthly food costs fall within the average levels reported by the USDA (approximately $810 a month for a family of our size), my husband and I agreed we want to spend less on food so we can save for a woodstove. We estimate it will cost about $5,000 for the stove and installation. We’ve already saved roughly half of this, so we need to save an additional $2,500. If we spent half as much on eating out, we could save $105 a month, or $1,260 over the next 12 months.Additionally, if we adjust how we spend our food dollars at the grocery store (making our own baby food instead of buying jarred brands, cutting out prepackaged foods), we can cut our grocery bill by a $110 each month. Such carefully planned cutbacks could empower us to buy a woodstove in less than a year.

Insurance: Is a low rate always the best value?

When I opened our new escrow statement this week, I immediately looked at the total payment amount. I breathed a small sigh of relief when I saw that it was roughly the same as it had been before. Still, a closer look revealed that our hazard insurance premium was increasing. I whipped out my calculator and found that the increase amounted to an extra 15 percent.

I know it’s wise to get a new rate quote from competing insurance companies every year, but our insurance has become an expense we don’t tend to think about. We budget for it and record the automatic withdrawal in our checkbook register every month. Nevertheless, seeing an unexpected increase was enough to jolt me out of my complacency and remind me that we can’t assume we’re getting the best rate possible.

I dug out our policy statement and called our insurance agent the next day. He explained that the increase was caused by what he called “projections of future losses.” In other words, our home insurance premium was increasing so that our company could pay us (and other policy holders) in the event of widespread losses. He admitted we might be able to find a less expensive premium elsewhere, but he said we should consider the overall health of the company before we decided to make a switch.

After talking to my agent, I knew I needed to see how our rate compared to those of other companies. I called several insurance companies. Even though I was dreading the work of making phone calls and giving my personal and policy information over the phone, I found friendly, knowledgeable agents who were willing to help me. By the end of the day, I had several new quotes to consider.

All the quotes I received were lower than the hazard insurance premium we’re paying with our current company. Sometimes, the difference was negligible, but a couple of quotes came in significantly lower than ours. One company can beat our current rate by a whopping 30 percent. If we chose to switch companies, we would save close to $400 a year.

I can think of a lot of ways I’d like to spend $400, but my home insurance premiums aren’t on that list. Still, there’s more to consider than the rate alone. Part of the value of using our current company is that we’ve created a relationship with our agent. When I called him, he immediately knew who I was, and he took the time to explain the rate increase in terms I could understand. The insurance company we use is financially healthy and growing. That’s worth something to me.

Now I have to decide how much it’s worth. I plan to go back to my agent to see if he can give us a better deal on our hazard insurance. If he can’t, then we need to decide if we’ll knowingly pay more for our insurance or if we’ll do the legwork to change companies.

Either way, I’m glad I took the time to compare hazard insurance rates. (Now it’s on to automobile rates, too.) My husband and I are more informed consumers, and we can use this information to make smarter choices about how we spend our money.

Are you confident that you’re getting the best value with your insurance? If not, take time to get quotes from several companies. The work you invest could result in renewed faith in your insurance company, or perhaps, a switch to get better premiums so you can stretch your money farther.

Your eating habits may be keeping you from reaching your goals

Last week, faced with a slightly unappealing piece of homemade lasagna I had packed for lunch, I accepted an invitation to go to lunch with two of my co-workers. We settled on fast food, where I ordered a chicken sandwich, a side salad, and hot fudge sundae, spending $3.21. I silently congratulated myself on my frugality. Of course, given that I had lunch in the refrigerator at the office, I wasn’t being frugal at all.

While we sat in our corner booth, both my co-workers mentioned that they wanted to eat out less. One commented about the power of the up-sell; he’d planned to buy a snack and spend less than $3. Instead, he bought a meal and an iced coffee and spent nearly twice as much as he had intended. The other ordered a $5 salad.

This lunch scenario reflects how complicated our decisions about food can be. According to Cornell University professor Dr. Brian Wansink, we make approximately 220 decisions about food every day. That’s a lot of decisions, most of which probably seem small, but together, they can have a significant financial impact. Sure, my lunch only cost about $3, but it was money I hadn’t planned on spending. I also threw away the lasagna and accidently left the chocolate bar I had packed melting in my car, which just upped the ante on my supposed $3 lunch.

Nationally, American households spent an average of $7,514 on food last year--$2,736 of this amount went to eating out. Do you know how much you spent last year on food? If not, you should, particularly when you consider that your eating habits could be keeping you from building an emergency fund, saving for a down payment on a house, taking a vacation, funding your retirement, or reaching your other personal financial goals.

This doesn’t mean you need to stock up on 10-cents-a-package instant soup or stop eating out, but you might consider ways to become more intentional with your food budget. What could you do with the money you’d save by eating out half as much? How much money would you save if you prepared and froze meals ahead of time instead of hitting the grocery store several times a week? What if you bought an inexpensive French press and brewed your own coffee at home or the office? Small changes can add up to a significant amount of savings.

Consider a homemade breakfast burrito. At first, a $2 burrito at a fast food restaurant seems inexpensive. However, I made my own sausage and egg burritos at home for 98 cents each, including tax. Without the sausage, the cost drops to 68 cents—plus, I have more control over what I’m putting into my food. I used all-natural sausage and farm fresh eggs I purchased from my niece. Even when I paid a premium for these ingredients ($3.69 and $2 respectively), the total cost of each burrito was half what it would have cost at a restaurant.

When I add a glass of not-from-concentrate orange juice (42 cents per serving), my total at-home cost increases to $1.40. By comparison, a small orange juice costs $1.59 at a fast food restaurant, bringing the total amount spent for a burrito and drink to $3.59, plus tax. If I ate a homemade breakfast burrito three days a week, instead of eating out, I’d save about $30 a month, or $360 a year.

What could you or I do with $360 a year besides order fast food? That question surely will inspire me to think more carefully about how I spend my food budget.

Create a wholesome breakfast that’s easy on your wallet

Breakfast is serious business around our house—so much so that our 4-year-old son has been known to wake before sunrise if he knows we have powdered-sugar donuts in the kitchen. Even on mornings without donuts, one of our children inevitably wanders into our bedroom and wakes me with, “I’m hungry. Can I have breakfast?”

It’s probably no surprise, then, that children who wake with yawning hunger can eat a lot. (Our donut lover can easily eat five pancakes at one sitting.) With big appetites and busy mornings, the challenge is to have breakfast fare that is quick, easy, and inexpensive and that isn’t overly processed or sugary.

I’m continually looking for ways to create wholesome breakfast options that we can have on hand and grab on the go. That way, on those mornings when we get a late start and the dog bolts out the door and the baby is crying and we have to search for a missing shoe or backpack, we won’t starve or be tempted to hit the drive-thru.

You no doubt have your own morning scenario, and yours probably involves being short on time, too. With a little planning and kitchen savvy, you can prepare breakfast foods that will fuel you for the day ahead without breaking your budget.

One of the most practical, easy things I make at our house is breakfast burritos. My mantra is that anything wrapped in a tortilla is good. I usually end up using eggs, beans, and cheese in our burritos, but if I have leftover meat or vegetables, I toss those in, too. I line up the tortillas assembly-line style, spoon about ½ cup of filling into the middle, fold the burritos and wrap them in aluminum foil. I put the burritos in the freezer, but they never last long.

Whole-wheat banana chocolate chip pancakes are another favorite for freezing. They are easy to make, warm beautifully in the toaster, and are good eaten out of hand—no syrup necessary. Breakfast cookies are in the same category. The idea of eating cookies for breakfast is enough to make everyone love them, no matter what I put in them. One recipe calls for whole-wheat flour, mashed bananas, canned pumpkin, and grated apples. I’ve added mini chocolate chips, flax seed, raisins and cinnamon at various times, too.

Look for ways to streamline your breakfast routine with homemade, make-ahead versions of fast foods. If you find yourself grabbing instant oatmeal packets, for example, why not make your own? You can make a large batch of ready-to-eat oatmeal by mixing oatmeal, a little sugar and dried fruit in a sealable bowl. When you need a quick breakfast, scoop out a ½ cup of mix and add boiling water, or try packing individual servings to keep with you at school or work. You can experiment with other flavors and concoct your own custom oatmeal mixes.

If you’re like me and you love breakfast sandwiches, you can make your own. I fry eggs and sausage patties and put them on English muffins with some cheese. I wrap them individually and store them in the freezer. When I know I’ll have an extra busy morning, I put one in the refrigerator to thaw overnight, then pop it into the microwave when I’m ready to eat it. Frozen fruit cups, baked oatmeal, homemade granola, and miniature muffins have also been part of my breakfast repertoire.

A good breakfast is a satisfying way to start the day, especially when you’re eating something quick and nutritious that’s easy on your wallet, too.

Kitchen Sink Breakfast Cookies

Ingredients:

½ cup canned pumpkin
½ cup applesauce, unsweetened
½ cup grated apple
1 cup banana, mashed
½ cup brown sugar
½ cup sugar
2 large eggs
1 tsp. pure vanilla extract
½ cup whole-wheat flour
1 cup all-purpose flour
½ tsp. baking soda
1 tsp. cinnamon
½ tsp. pumpkin pie spice
1 tsp. salt
3 cups old-fashioned oats
1 cup raisins (or mini chocolate chips)

Directions:

1. Heat oven to 350 degrees. In a large bowl, beat pumpkin, applesauce, grated apple, banana and sugars. Add eggs and vanilla; beat well. Add flours, baking soda, cinnamon, pie spice and salt; mix well. Add oats and raisins (or chocolate chips); mix well.

2. Drop dough by rounded tablespoonfuls onto greased cookie sheets.

3. Bake 10 to 12 minutes or until light golden brown. Cool 1 minute on cookie sheets; remove to wire rack to cool completely.

Whole-Wheat Banana Chocolate-Chip Pancakes

Ingredients:

1½ cups whole-wheat flour
1 tbsp. brown sugar
½ tsp. baking soda
1 tsp. baking powder
½ tsp. salt
1 cup milk with 1 tbsp. lemon juice or cider vinegar mixed in
1 egg
1 tsp. pure vanilla extract
1 tbsp. canola oil
1 mashed banana
½ cup mini chocolate chips

Directions:

1. Mix flour, brown sugar, baking soda, baking powder, and salt in a medium mixing bowl; set aside.
2. In another mixing bowl, mix the milk, egg, vanilla, and oil; add the mashed banana and mix well.
3. Add the wet mixture to the flour mixture and stir until blended. Stir in chocolate chips.
4. Cook on a greased griddle over medium to high heat.

Granola

Ingredients:

4 cups old-fashioned oats
1 cup slivered almonds
1 cup sunflower seeds
1 cup chopped pecans
1/3 cup canola oil
½ cup honey

Directions:

1. Mix ingredients in bowl.
2. Spread on cookie sheets lined with parchment paper.
3. Bake for 14 minutes at 300 degrees.
4. Add dried, chopped fruit of your choice.

Bran Muffins

Ingredients:

1 cup wheat bran
1 ½ cups whole-wheat flour
1 tsp. baking soda
1 tsp. baking powder
½ cup raisins
¾ cup applesauce
1 cup milk
½ cup molasses or honey
2 tbsp. oil
2 eggs, beaten

Directions:

1. Preheat oven to 400 degrees.
2. Combine wheat bran, whole-wheat flour, baking soda, and baking powder.
3. Stir in raisins.
4. In a separate bowl, blend applesauce, milk, molasses, oil, and eggs.
5. Add wet ingredients to dry ingredients and stir until moistened.
6. Spoon into greased muffin tin (or paper muffin cups) and bake for 15-20 minutes.