Image: Melody Campbell

Frugal living involves a number of strategies to save on everyday and less frequent purchases.  Many of these strategies, such as using coupons, cash-back websites, mail-in rebates, and generic brands to save money, seem to only chip away at the surface of your overall bill amount.  Sometimes, I hear of people getting frustrated with putting so much working into saving a few dollars here and there.  Are these little savings even worth the effort?  To that question, my answer is a resounding YES!!!  Often, you do not realize just how much you are saving until you really sit down and crunch out the numbers.  Let’s look at an example.

Let’s imagine that through your coupon clipping, deal finding, and rebate mailing you are able to save $10 a week on everyday expenses.  This may not seem like very much to you, but look at what happens as time goes by.  Let’s say that the money you saved on your everyday expenses you put into a rewards checking account that makes 6% interest (that is what my rewards checking account currently makes).  After ten years of these savings, because of the power of compound interest, you will have saved up $7136.95 (if your bank compounds monthly).  At the end of twenty years, you will have saved up $20,121.28.  After thirty years, you will have saved up $43,746.63.  After forty years, you will have saved up $86,729.42.  Finally, after fifty years, you will have saved up $164,932.17.  All of this just because you were able to save $10 a week on your everyday expenses!

Now, 6% interest is a reasonable amount to expect if you invest your money or are lucky enough to have a rewards checking account that pays that much.  However, you can potentially make quite a bit more than that in interest if you invest in stocks (remember, there is always a risk involved with investing in stocks as well).  If you averaged an 8% annual return on your mutual fund, you would have $345,999.58 after fifty years, and if you averaged a 10% annual return on your mutual fund, you would have $756,979.63 after fifty years!

These savings are by no means insignificant!  These additional savings can make up a large chunk of your retirement savings or give you extra money to do things in life that you would not have been able to afford otherwise.  Moral of the story: don’t give up on the little things.  They really do add up.  Of course, you may be able to save money faster by doing bigger things like getting a higher-paying job or lowering the interest rate on your mortgage.  However, don’t ignore the little things for the big things.

Do you have any success stories from doing little things?  What little things have you done to save money?  We would love to hear from you!Similar Posts:

• Where to Put Your Emergency Fund
• What Comes First? A Step-By-Step Guide to Financial Independence. Step 5: Set Up College Funds
• Saving Just a Little Can Go a Long Way
• What Comes First? A Step-By-Step Guide to Financial Independence. Steps 3 & 4: Complete Your Emergency Fund & Set Up a Retirement Fund
• Are High-Yield Online Savings Accounts Dying Out?

In celebration of this happy time, I have decided to do a simple little giveaway.  This will be the first of several giveaways over the course of this summer.  The winner of this giveaway will receive the book The Skinny on Credit Cards by Jim Randel.

A while ago, I reviewed the book The Skinny on Credit Cards, by Jim Randel. For those of you who do not remember, The Skinny on Credit Cards is a fun, light read that provides a general education on the way that credit cards work. It follows the story of Beth and Billy, an American couple that have accumulated a large amount of credit card debt and are trying to learn how to solve this problem. They seek the advice of the book’s author, Jim Randel, who teaches them about how credit cards work. The book is written in Japanese manga style, which is somewhat similar to a comic book but uses stick figures instead of animations. It is a very funny, easy-to-read, and informative book. I especially recommend it for recent high school graduates and college students!

Check out the details of the giveaway below:

Who Can Enter? Giveaway is only available to United States citizens.

How to Enter. Leave a comment on this post telling me what your favorite personal finance/frugality book is. Make sure you include your email address.

Bonus Entries. Each of the following is worth a bonus entry. You must leave a separate comment on this post for each bonus entry. If you do not leave a comment, your entry will not be counted. Make sure you leave your email address.

1. Subscribe to my blog via RSS or email (you can subscribe at the top right of the page).
2. Blog about this giveaway.
3. Follow me (@collegemoneygal) and Tweet about this giveaway. Make sure to include @collegemoneygal in the tweet so I can see it (and still leave a comment here).
4. Digg, Stumble, Tip, etc. this giveaway and tell me where.
5. Add my blog to your blogroll.

When Does the Giveaway End? Entries will be accepted until 11:59 p.m. CDT on Friday, May 7th. The winner will be selected through Random.org and will be announced on Saturday, May 8th.

Good luck!Similar Posts:

• My First Ever Giveaway–The Skinny on Credit Cards!
• Last Day to Enter “Ready for the Real World Giveaway”
• “The Skinny On Credit Cards” Giveaway Winner
• Winner of the Ready for the Real World Giveaway
• Book Review: The Skinny On Credit Cards by Jim Randel

Image: Lumaxart.com

Every Saturday, Independent Beginnings likes to highlight some of the best personal finance articles from around the web.  Each of these articles stood out to me either for being insightful, informative, entertaining, unique, or interesting in some other way.  Here are some of my favorites for this week:

Student Loans and Financial Aid: How to Save $23,000 @IWillTeachYoutobeRich.com–This is a very informative article that challenges the commonly-held view that first-choice schools are out of reach because of their price tags.  While I do not necessarily agree with all of the points in this article, I do think there are a lot of good things in here and that it forces everyone to re-evaluate his or her philosophy about college and debt.

10 Ways to Simplify Your Life (And Make and Save Money in the Process) @ChristianPF.com–This article offers some very useful suggestions for simplifying your financial life and saving/making some money in the process.  Definitely worth checking out!

Parents Should Teach Kids Finances, Not Just Schools @FrugalDad.com–This article provides a very well-reasoned argument for teaching your children about finances at home.  Additionally, it offers practical suggestions to help with teaching your children about money.

5 Dangerous Misconceptions People Have About Money @MyTwoDollars.com–This article discusses five commonly-held misconceptions that can end up hurting you financially.  Which ones apply to you?

Think You Pay Too Many Taxes?  Almost Half of US Households Pay No Federal Taxes @CashMoneyLife.com–This insightful article discusses why nearly half of U.S. household pay no federal taxes and some actually profit off of filing their taxes.  What is your opinion of the tax system?

Carnivals of the Week–This week, Independent Beginnings participated in the following carnivals:

Carnival of Personal Finance: Unanswered Questions Edition @MightyBargainHunter.com–My article Would You Risk Your Baby’s Life to Avoid Debt? was included in this carnival.

Congratulations to those who were included in this week’s spotlight.  Make sure to Tweet, Stumble, Digg, Tip, and otherwise share this spotlight so more people can see your article!

Similar Posts:

• Carnivals of the Week: 5/17-5/23
• Carnivals for the Week
• Last Week’s Carnival Roundup
• Independent Beginning’s Weekly Spotlight
• Funding Your Children’s College Education While Still Teaching Financial Responsibility

Image: lululemon athletica

One of the most important steps in reaching financial success is setting financial goals.  Goals help you to narrow your focus and actively work towards the things you wish to accomplish.  Without financial goals, it is easy to mismanage your savings.  For tips on setting effective goals, check out my article The SMART Method for Effective Goal Setting.

In an effort to better define my own financial goals, I have decided to share my husband and my goals for the near future.  This is not a comprehensive list, but it does include some of the goals that are most important to us in the short term.

1.  Save up enough money to pay for the baby. This is the #1 financial goal that we have right now.  Since we have budgeted our income for the next year and forecasted how much money we will have for every four-month period, we are confident that we will be able to meet this goal without changing any of our current habits.  We are fortunate in that we will not have many other large expenses to worry about this summer.

2.  Purchase a quarter of farm land. My husband farms for a living in a partnership with his dad and grandpa.  Although purchasing land at this point in our lives may be difficult at first, it has the potential to bring us large financial benefits later on in life.  The most important things we need to do to reach this financial goal are make sure we have enough money for a down payment and make sure we can handle the annual payments on the land.  We already have a good portion, if not all, of a down payment in our savings.  We do not feel bad spending this money as it will be used as an investment for our future.  We are currently working out the details of what the annual payments would be and how we would make those payments.  We also need to find out if we can get a loan from the bank.  We have been working hard to build credit since we have been married and we feel that we have a good chance of getting approved.  If everything works out well, we hope to purchase some land by the end of the year.

3.  Purchase a new-to-us vehicle. We currently have two sedans that are beginning to increase in mileage.  We are in the process of selling one of these sedans, a Ford Taurus.  Our current plan is to use our other sedan, a Lincoln LS, until it becomes a burden upon us.  Hopefully, it will last us at least another two years.  In the meantime, we hope to save up for a new-to-us vehicle.  We are looking at small SUVs since we live on a farm and they could handle the dirt roads better.  We would like to find a vehicle in good condition with no more than 80,000 miles on it.  Barring any unexpected expenses, we believe we will have the money to pay cash for a new-to-us vehicle in approximately two years, maybe sooner.  We are firm in our desire to avoid a monthly payment at all costs.  Of course, timing on this purchase will depend a large part upon the condition of our Lincoln.

4.  Start a Roth IRA. When it comes to retirement savings, starting young is critical.  In our effort to get started saving for retirement, we would like to set up a Vanguard target-date Roth IRA.  We would have started one already, except a $3000 minimum deposit is required to open one.  Our current plan for this goal is to wait until we purchase land and then use any of the money we do not use as a down payment as an opening deposit.  Hopefully, this alone will be enough to open the account.

Again, these goals are by no means comprehensive.  We have many smaller goals in mind and we have a few longer-term goals in mind as well.  If you have any suggestions that we did not think of for meeting these goals, feel free to let me know.

What are your financial goals?  How do you plan on meeting those goals?  I would love to hear from you!Similar Posts:

• The SMART Method for Effective Goal Setting
• Using Positive Reinforcement to Change Bad Financial Habits
• Funding Your Children’s College Education While Still Teaching Financial Responsibility
• 10 Things to Do Upon Graduation
• What Comes First? A Step-By-Step Guide to Financial Independence. Step 5: Set Up College Funds

The new version is similar to the original version in many ways.  It still has a section for income, a section for expenses, and a calendar section.  The calendar section still has a cell for every day of the month where you put in how much money you made/spent in that category for that day.  The new features do not change the basic concept of the spreadsheet, but they do add more functionality to it.  First of all, the colors have been updated to make the distinction between income and expenses more clear.  Second of all, the categories have been updated to include the most common budget categories.  This means less revising for you!  Thirdly, there is now a separate sheet for each month of the year and the calendar for each month includes the correct number of days for that month.  Finally, there is a new “Current Standing” section where you can keep track your total amount of liquid assets each month.

I firmly believe that this revision is full of improvements for you.  Make sure you check it out and let me know what you think!  Are there any other revisions you would like to see made?  You can download the spreadsheet by clicking on the link below.  There is also a download link on the “Budgeting” page of this blog.  Enjoy!

Download the New Monthly Budget Template

Excel Monthly Budget Spreadsheet by Olivia is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.Similar Posts:

• A Free, Easy, and Useful Excel Monthly Budget Spreadsheet for You!
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Image: Waldo Jaquith

Imagine that you are up to bat in the last inning of the last game of the World Series. You step up to the plate, lift up your bat, and look up at the pitcher with a “give me your best shot” glare. You are not scared. The entire series so far, the pitcher has been sending fastballs right down the middle of the plate. You have been knocking them out of the park! This time, you have the chance for a grand slam and you are sure you are going to get it. The pitcher winds up and sends the ball speeding towards you. You swing with all the force in your body and the ball connects with. . . air. What!?!?!? You cannot believe it. After all the fast balls you had been getting, the pitcher had thrown a curve ball. The game has just changed. What are you going to do now?

Sometimes life is like a baseball game. For a while, life may send you good things, or fast balls. You get used to these good things and start planning for the future assuming these good things will keep coming. Just when you least expect it, however, life may throw you a curve ball. An unforeseen situation, often a negative one, happens and changes the “game”. At that point, you must decide upon a new game plan or you just might lose the game.

I recently had a couple of “curve balls” thrown my way. Last month, I had a miscarriage. My husband and I had been so excited for the new addition we were going to have to our family. We told everyone we knew and started planning for our future baby. When we least expected it, however, our dreams were torn away from us and we had to adapt to our new circumstances. A few weeks later, we discovered that we needed quite a bit of dental work done and we had no dental insurance. Before we knew it, we were scrambling for a way to pay for the dental work as well as all of our normal bills. By the end of the month, we were wondering if life would ever start throwing us fast balls again.

Luckily for us, we were at least somewhat prepared for these curve balls. We had an emergency fund that we were able to use to cover the unforeseen medical and dental expenses. We also had health insurance. Without these preparations, we would never have been able to pay for these bills. Although these situations were still extremely difficult for us, I truly feel that the emotional recovery has even been somewhat better because we were prepared financially and did not have to deal with additional stress due to finances.

So, how can you prepare for and deal with life’s curve balls? Here are a few suggestions:

1. Always, always, always have an emergency fund. An emergency fund is vital in preparing for life’s curve balls. Whether you lose your job, need medical work, or total your car, an emergency fund can cover these unforeseen expenses. It is reassuring to know that you will survive if the unexpected happens. For more information about emergency funds, check out my article about setting up an emergency fund.
2. Make sure you are insured. Although insurance premiums may seem high, they are nowhere near as high as the expenses you will face in the case of a serious emergency. Because of this, it is extremely important that you are always insured. Some of the most important kinds of insurance to have include medical insurance, life insurance, home owner’s insurance, and car insurance. Some other kinds of insurance that may also be beneficial include dental insurance, vision insurance, renter’s insurance, disability insurance, etc. Decide which kinds of insurance will be important for your family. You will be glad you have them when you need them.
3. Remember that YOU are in control of your actions. When curve balls are thrown your way, it is easy to feel that you are not in control of your life. When I had my miscarriage, for example, I felt completely helpless and like I had no control over anything. While there are, indeed, many things in life that cannot be controlled, remember that you are ALWAYS in control of your actions. You can CHOOSE had to respond to any situation. You can change your game plan when curve balls come your way and face them in the future with confidence. You can choose to make the most of any situation.

So, next time life throws you a curve ball, don’t let it defeat you! You are strong and you can be prepared for such a situation. You can change your game plan and on that next pitch you can smack that curve ball out of the park! You really can achieve that grand slam.

How have you dealt with life’s curve balls? How have you prepared for them and grown from them? We would love to hear from you!Similar Posts:

• What Comes First? A Step By Step Guide to Financial Independence. Step 1: Set Up an Emergency Fund
• Would You Risk Your Baby’s Life to Avoid Debt?
• The Purpose of Debt
• Where to Put Your Emergency Fund
• What Comes First? A Step-By-Step Guide to Financial Independence. Steps 3 & 4: Complete Your Emergency Fund & Set Up a Retirement Fund

Image: Lumaxart.com

Welcome to Independent Beginning’s first ever Weekly Spotlight! From now on, ever Saturday I will be spotlighting what I feel are the best personal finance articles I have read during the week. There are a couple of reasons I have decided to do this. First of all, while I do my best to provide you with the best possible articles I can write, the fact of the matter is that I can only write a limited number of articles per week. Doing this will give you, as readers, access to a wider variety of personal finance articles without forcing you to sift through hundreds of articles to find the best ones. The second reason I am doing this is to thank those other bloggers that I learn from every day. Not only do they keep me informed about the latest financial news, but they also teach me how to be a better blogger. I could never have started this blog without their help, even if they did not know it! I hope you will enjoy this new feature of Independent Beginnings! Anyway, let’s take a look at this week’s picks!

Baker at ManVsDebt presents Tyler Durden’s Guide to Personal Finance. Did you know the movie Fight Club could teach you a lot of personal finance lessons? This article is very in-depth, well-written, and interesting!

Cap at StopBuyingCrap challenges wonders if you can Live on Half Your Income. This article not only discusses why you should live on half your income but also how you can live on half your income. Very useful!

Ray guest-posted on Frugal Dad about How to Destroy Your Investment Portfolio. It’s amazing how learning what not to do can teach you so much about what to do. This article gives you some key things to remember about your investment portfolio.

Sarah at WiseBread teaches us how to Eat Healthy This Winter Without Spending a Fortune. This article is loaded with ideas on how to prepare to eat healthy this winter. Don’t miss out on this one!

Hank guest-posted on Budgets are Sexy about How to Pay Rent Volunteering for Science Experiments. This article made me laugh as I thought about all of the fliers calling for volunteers posted around my school. While I don’t agree with every suggestion listed, I think this article lists some great ways to make some extra money!

Congratulations to those of you who were chosen for this week’s spotlight! I am always on the lookout for new articles, so if you have an article you would like to have included next week, make sure to shoot me an email!Similar Posts:

• Independent Beginnings’ Weekly Spotlight 4-10-2010
• Guest Post Guidelines
• Carnivals for the Week
• Last Week’s Carnival Roundup
• Carnivals of the Week: 5/17-5/23

Image: lalunablanca

Similar Posts:

• Why a Target Retirement Fund May Be Right For You
• What Come’s First? A Step-By-Step Guide to Financial Independence: Step 6–Pay Off Your Low-Interest Debt
• What Comes First? A Step-By-Step Guide to Financial Independence. Steps 3 & 4: Complete Your Emergency Fund & Set Up a Retirement Fund
• What Comes First? A Step-By-Step Guide to Financial Independence. Step 2: Pay Off Your High Interest Debts
• What Comes First? A Step By Step Guide to Financial Independence. Step 1: Set Up an Emergency Fund

Image: lalunablanca

Similar Posts:

• What Comes First? A Step-By-Step Guide to Financial Independence. Steps 3 & 4: Complete Your Emergency Fund & Set Up a Retirement Fund
• What Comes First? A Step-By-Step Guide to Financial Independence. Step 2: Pay Off Your High Interest Debts
• What Comes First? A Step-By-Step Guide to Financial Independence: Step 7–Build Wealth Through Wise Investments
• What Comes First? A Step-By-Step Guide to Financial Independence. Step 5: Set Up College Funds
• What Comes First? A Step By Step Guide to Financial Independence. Step 1: Set Up an Emergency Fund

Image: lalunablanca

Welcome to the fourth installment of Independent Beginning’s Step-By-Step Guide to Financial Independence inspired by Dave Ramsey’s “Baby Steps”. Yesterday, you learned about Steps 3 & 4: Complete Your Emergency Fund & Set Up a Retirement Account. Today, you will learn about Step 5: Set Up College Funds.

Step 5: Set Up College Funds

By step 5, you will have completely set up your emergency fund, paid off all your high-interest debt, and started a retirement fund to which you are regularly contributing. At this point, it is time to set up college funds for your children. If you have children now or plan on having children someday, this is an important step to take.

Why should you save for your children’s college expenses? Although some people are fundamentally against saving for their children’s college expenses, I personally believe it to be an important part of my financial future. There are several reasons why I want to help with my future kids’ future college expenses. The first reason is that I think it will help to show my kids the value I place upon education and the expectation I have for them to go to college. Knowing that I have saved up a sum of money exclusively for their college expenses will help them to realize that I am serious when I tell them that I would like for them to pursue higher education. The second reason that I want to help out my kids with college expenses is because I do not want them to have to go into large amounts of debt to pay for college. I was fortunate enough to receive a lot of help with my own college expenses and I know that I have it a lot easier now because of it. The final reason why I want to help my kids out with their college expenses is because I do not want them to be forced to work their freshman year. I think a year without work is a nice way to help kids transition into college life and focus on their studies. I do not think that having a job freshman year is wrong, but I do think that it is nice to give kids the option not to work for that first year.

How much should you save for your children’s college expenses? The answer to this question will be different for each family. How much aide do you want to give to your kids? Do you want to pay for their first year of college? Do you want to pay for just tuition for all four years? Do you want to pay for their entire college careers? Look at the cost of colleges in your state. Then, adjust for inflation. College expenses actually rise higher than inflation. They rise about 7-8% per year. Determine how much those colleges would cost when your children enter them. Then, decide how much of that cost you want to cover. With that goal in mind, you can then determine how much you need to save per year to reach your goal.

Where should you invest your college fund? As I mentioned previously, college expenses rise about 7-8% per year. Because of this, you need to place your college fund somewhere that will equal or beat those returns. Probably the most highly recommended location for your college fund is a state 529 plan. 529 plans are tax advantaged and can be transferred to different beneficiaries if the original one does not need the money. You can choose any state’s plan. For help choosing a plan, see my article “How to Choose a 529 Plan for College Savings“. Another highly recommended location is an Education Savings Account. These accounts have more restrictions and only allow you to invest a certain amount per year. However, they are good options for college savings.

With your college funds in place, you are now ready to move on to Step 6! Tune in on Monday to see what it is!

Articles so far in the series:

1. Step 1: Set Up an Emergency Fund
2. Step 2: Pay Off Your High Interest Debts
3. Steps 3 & 4: Complete Your Emergency Fund & Set Up a Retirement Fund
4. Step 5: Set Up College Funds

Similar Posts:

• Funding Your Children’s College Education While Still Teaching Financial Responsibility
• What Come’s First? A Step-By-Step Guide to Financial Independence: Step 6–Pay Off Your Low-Interest Debt
• What Comes First? A Step By Step Guide to Financial Independence. Step 1: Set Up an Emergency Fund
• What Comes First? A Step-By-Step Guide to Financial Independence. Steps 3 & 4: Complete Your Emergency Fund & Set Up a Retirement Fund
• What Comes First? A Step-By-Step Guide to Financial Independence: Step 7–Build Wealth Through Wise Investments