Buy Used

How long do things stay new? It depends on your definition of "new," but technically it is the moment right before you get your grubby little paws on it. So if that's all it takes to label something "used" instead of "new," people should consider buying discounted used products rather than their fully priced brethren. Sure, there is a whole litany of things that you don't want to buy used (underwear, mattresses, and bathing suits come to mind), but many of the larger ticket items people purchase can be obtained at a bargain price in the used market.

Back in the day, if you wanted a used TV you had to either comb through the newspaper to find the weekly garage sales or drive to the "affluently challenged" part of town to find a dilapidated old building with bars on the windows where a guy named Snake sat behind the counter with jailhouse tats on his arms, a cigarette in one hand, and a shotgun in the other making you an offer you can't refuse (literally!). Well thankfully, gone are the days. The internet has brought every corner of the globe closer together. Now it is easy to find almost any used item you could possibility want either locally on Craigslist or nationally on eBay.

If you don't mind not always having the “latest and greatest,” there is substantial money to be saved by being slightly behind the technology curve. As a rule of thumb, if I can find what I want new and on sale (a real sale, not the 10%-20% variety), then I typically don’t bother with used products. But some things are hard to find on sale, so the used market offers another avenue to get what you want for a fraction of the sticker price. Here is a list of a couple things ol’ Franco loves to buy used:

• Cars. This is bar none the biggest money saver when it comes to buying used instead of new. There is so much to cover here that we’ll hit it up in a future post.
• Golf clubs. Every three to four years I like to change out my clubs for newer used ones. If you have a half decent set of clubs already, you can sell your current set and buy a newer, used set for a couple extra hundred bucks instead of the grand plus you would have to drop on a brand new set. If you like to try things before you buy them, utilize the many demo days club manufactures will run at golf courses or driving ranges in your area.
• Baby Stuff. Let’s face it…babies grow up fast and it can be very expensive to keep them clothed and happy. Mrs. Franco and I just celebrated the birth of our first child in December and since then my house has turned into a veritable treasure chest of baby stuff. We received a lot of clothes from friends and family, and the rest we bought second hand (that’s a fancy way of saying “used”) from a local consignment store that was going out of business. As far as car seats, jumpers, cribs, changing tables, play pens, and high chairs go, we got them all used from people in our area off of craigslist.com. It may behoove you to check the recall list on any used products you are considering buying.
• Furniture. Lots of cool furniture can be obtained used for a fraction of its original cost. As long as it still looks good and serves its purpose, I say go for it. Furniture is heavy to ship, so stick with the local used markets rather than ebay (unless you do a localized search).
• Tools. Every man loves tools (even if we don’t “need” them) and tools can be expensive. I like to buy quality, name brand used tools instead of cheap, new knock-offs. It may just be personal preference, but it allows me to experience the quality of a good tool for the price of a knock-off.
• Wedding Dress. This one is obviously a “bonus pick” from Mrs. Franco, but she makes a good point – a weeding dress is something you will only wear once in your life, so it doesn’t make sense to spend thousands of dollars on a new one if you can find a used one you like. They key is to find one you really like…just don’t get caught up in the fact that it is “used” instead of “new”. After all, it’s new to you ;).

Things I don’t buy used:

• Computers. There are so many deals to be had in the new computer market and computers become obsolete so fast, that it doesn’t make sense to buy them used.
• DVDs. Just say no…rent don’t buy. Want to watch it more than once…rent it again! It just doesn’t make sense to buy DVDs with rentals being so cheap (Netflix, Redbox) and video on demand picking up steam.
• Books. Okay, I do buy used books (and sometimes new) but 9 times out of 10 I use the library. Your tax dollars are paying for those books, so you might as well use it.
• Clothes. This one actually can go either way. I typically buy new clothes off the sales rack or better yet the clearance rack, but if you like to treasure hunt, some pretty sweet vintage digs can be found at the Goodwill, Salvation Army, or local consignment store. Also, keep your closets clean by donating your used clothes to non-profit organizations and taking the tax deduction from Uncle Sam.

That’s all for tonight, but more to follow on buying used cars and budgeting as previously promised.

Ciao!
Franco

Eating Out

Look...everyone likes going out to eat, so here are a few tips that Frugal Franco likes to use to make the experience a little easier on the wallet.

1. Drink water (the free kind). This is the number one thing I would recommend for people when they eat out. When you order a drink at a restaurant, you end up paying at least 4 times as much as it would cost you to make the drink at home. Whether you are talking about soda, juice, ice tea, or "adult beverages," drinks at a restaurant have the highest mark up of any product on the menu. That is why all good waiters/waitresses will ask you "anything to drink?". Discipline the pallet to enjoy that tasty beverage after the meal in the comfort of your own home for a fraction of the cost. My rule of thumb is that I don't order products at a restaurant that I can replicate at home by purchasing them from the grocery store (a coke is a coke, but a pizza is different everywhere you go).
2. Take advantage of the lunch special. Lunch specials are great because you typically get the same great food for a much more reasonable price than dinner. There is a restaurant close to where I work that is very nice (white table cloths, coat check, multiple wait staff per table) that serves an excellent Angus beef burger with gorgonzola cheese for $10 at lunch, whereas it would be almost impossible to get out the restaurant at dinner for less than $25 a person.
3. Split a meal. Portions seem to be getting bigger and bigger while everyone is trying to keep their waste lines from following suit. Splitting a meal with someone is an easy way to keep the wallet and the waist line happy. If your not worried about the waste line, split a meal and a dessert or appetizer if the price is right ;).
4. Use the Entertainment book. The Entertainment book is packed full of BOGO ("buy one get one" for those that are new to the game) coupons from a variety of local restaurants. I especially like using the Entertainment book to try new restaurants in my area that I wouldn't typically frequent. Some of my favorite restaurants today were found through the Entertainment book. Depending on where you live, there may be a good number or a small spattering of restaurants close by. Entertainment books are usually grouped by large population areas, so you may not want to pick one up if there are only one or two restaurants within an hour's drive of your house.
5. Budget how much you want to spend on eating out per month and stick to it. Budgeting will most likely be my next topic as it is the essence of frugalness. Keeping a lid on discretionary spending (like eating out) can really help the old bank account and put you on the Frugal Franco track -- save, invest, & give back.

One last thing about eating out before I sign off…don't try to save money on the bill by stiffing the wait staff. I'm not an over generous tipper by any stretch of the imagination, but a fair tip (15%-20%) is expected for fair service. Personally, i prefer the European model where the wait staff is paid a decent wage, the price of the food (including taxes) and service is included in the menu price, and a gratuity is something that is left for exceptional service. But until the "Colonies" decide to adopt this model, patrons will continue to be REQUIRED to pay the salaries of the wait staff. Tipping here in the US really isn't optional, so don't ruin some guy/gal's day by short changing them on a bill.

Ciao!
Franco

Grocery Shopping

There is so much to say about this topic that I don't know where to begin. I'll start with a time sensitive deal that everyone should take advantage of if possible. Many grocery stores in my area (and I believe around the country) are offering a 10% bonus when you put your stimulus package (wait...this is spose to be a kid friendly blog) rebate check toward an in store gift card. You don't have to cash the physical check at the store. Instead you can put it on your shiny new cash reward credit card (that you had overnight delievered to you after reading yesterday's post...very un-frugal of you) and save up to an additional 5% (depending on the reward structure). The Mrs. and I went hog wild with this one since grocery shopping is something we have to do every week. I wouldn't recommend buying more credit that you can easily pay off when the credit card statement comes in the mail (or email) at the end of the month. Remember, if you're going to use a credit card, make sure you pay it off IN FULL every month. Getting a couple percentage points back on all your purchases is great and all, but it's never worth the double digit interest charges the credit card companies charge you if you carry a balance.

Alright, let's move on to how to grocery shop. Remember how I originally told you how much I love a good deal...well this holds true at the grocery store too. Some people might be thinking, "great, Franco is going to tell me how I need to read through the paper every day and clip coupons." Let me tell you that nothing could be further from the truth. Time is a valuable resource. Some people's time like my dentist are appartenly more valuable than others (your's truely) as he consistently likes to make me wait in his waiting room (well that's what it's for), do 10 minutes of actual work on my mouth, and then slap me with a several hundered dollar bill...but i digress. I couldn't think of many things I'd rather NOT do than pour through the paper clipping coupons to save an extra 50 cents on my next puchase of Spinach Souffle. If clipping coupons is your thing, than more power to you, but if not, let me tell you another effective way to save.

All grocery stores run weekly specials. Some of the specials (usually on the front or back pages of the ciruclar) are much juicer than the "sucker's special" when they drop the price of shaving cream from $4 a can to $3.90. When you go to the grocery store, try to make a list of staples that you absolutely need (e.g. milk, eggs, bread, etc...) and then leave plenty of room for creative "extras." The non-staple purchases should center around your favorite products that are on sale that week. If you have extra storeage at home, stock up on your favorite items when they go on sale. I'm a bit embarassed to admit it, but I tend to stock up on the breakfast Lean Pockets whenever they get marked down to 4 for $6.00 and after watching this hilarious bit, who can blaim me ;). If you want to take it to the next level, many stores will match their competitors ads, so instead of criss crossing the city to hit up all the deals, just go to your favorite store and see if they will match all the prices. This type of grocery shopping gets adicting as Mrs. Franco and I reguarily compare receipts to see who's percentage savings are the highest (I smoke her almost every time ;) ).

Lastly, let me leave you with this parting thought. If you are willing to put in the time to cook your own food at home, you can eat really nice meals for about the same price that you would pay for a standard lunch and a drink at any sit-down (where did that saying come from and how does one find a "stand-up" one?) restaurant. As a quick example, you can buy an entire beef tenderloin from Costco for about $8-$9/lb. Let's assume you want to eat a standard 8 ounce (half pound) steak with a side of asparagus and a potato. The asparagus and potato will probably only run you another $2-$3, so your grand total is somewhere in the ballpark of $6-$7. Put that with a bottle of "good enough" wine in the $8-$12 range and your are talking about a great meal for right around $10 (unless you are bit of a lush and drink the whole bottle of wine). It's hard to get out of any restaurant...even Denny's...for under $10 per person. The cost of eating out (which I LOVE to do!) is a whole nother post. The key is to plan your portions and use all your ingredients before they go bad. All the money you saved on groceries can quickly get flushed away when food is not consumed and has to be thrown out.

Ciao,
Franco

Credit Cards

Wouldn’t you love to get paid for doing all your everyday tasks? Take a shower in the morning…$3, brush your teeth…$2, take the garbage to the curb…$4. Alright, so my analogies aren’t the best (fair warning -- I love analogies), but hopefully you get the picture. But this type of opportunity is available to almost everyone through the use of no annual fee, cash back reward credit cards.

I use credit cards for two reasons 1) they are super convenient & 2) I get paid to do so. Credit cards can be dangerous if used improperly, so if you don’t trust yourself to pay of your balance IN FULL every month, than read no further. For those that can handle the responsibility, I highly recommend doing the following:

1) Figure out how much of your spending can be charged on a credit card every month
2) If possible, categorize your spending into broad buckets (e.g. gas, groceries, utilities)
3) Visit one of the many credit card comparison sites on the web to find a list of the best cash back cards.

So how do I know which card is the best? The answer depends on how much you spend. The only way to know for sure is to “do the math” by figuring out how much you spend per category (since some credit cards pay higher bonuses for certain things like gas and groceries) and then multiply your spending by the reward structure.

If you are a big spender, look for a card that does not cap the rewards paid per year. These cards typically have a tiered reward structure so it may take a couple months worth of spending to break into the juicy top tier rewards. Personally, I like Blue Cash from American Express because they offer 5% cash back on all supermarket, gas station, and drug store purchases along with 1.5% back on all other purchases once you break into the top tier (spending over $6,500 on the card annually). With rising gas and food costs, this these types of rewards are money (literally)! I always carry a backup card (usually a Visa or MasterCard) as American Express isn’t “everywhere you want to be.” This is a bit of a hassle, but worth it for the extra dough in my opinion.

If your not a big spender (less than $1,000 per month), it may take you too long to work up to the top tier, so a simple non-tiered reward structure would be better. One of my favorite (and my backup card) is the Chase Freedom card. It offers 3% back on your top 3 everyday spending categories and 1% back on all your other purchases. Your top 3 categories may not be gas, groceries, and drugstores, so you get the added flexibility of juicier rewards on whatever you spend the most.

Always remember to read the fine print as important information like reward caps, tiers, and exclusions are hidden there. For example, the maximum bonus reward on the Chase Card is $12 per month. So if you go hog wild and spend $2000 on a vacation one month, you won’t get the full 3% back on the entire purchase. If you don’t like reading the fine print or get confused, just call up the credit card company and the nice representative will be sure to read you a canned response of their computer screen ;).

Finally, one last point before we shut her down for the day, cash is king. There is still a contingent of folks who willingly (I know…it’s hard to imagine) sign up for mileage plus cards and PAY the credit card company for the privileged to do so. I’m not sure how many of you have actually tried to book an airline ticket using miles, but gone are the days of the 25,000 mile ticket. Okay, sure, if you want to fly at 6 am from Dallas to Chicago on a Wednesday, that route might be available (but I’m not promising anything). If you want to fly to non-hub cities or during regular waking hours, be prepared to fork over 50,000 miles for your troubles. Assuming the average ticket cost $500 (high in my estimate, but work with me here), you miles are worth exactly 1 cent per mile. That doesn’t even factor in the annual fee on the credit card or any booking fees or taxes the airline might try to nickel and dime you for. So the in the end, you are paying a credit card company to give you (in essence) 1 cent for every dollar you spend when you could be getting this or better for FREE with the cash rewards card. So my advice is that you fire the mileage plus card, start collecting cash, and use Kayak and the money you’ve earned to book your next flight.

Frugal Regards,
Franco

So why the blog?

I'm not really sure if I'm ready to answer my own question, but i've heard all about this "blog thing" and I thought I'd try it out. I plan on using this little corner of cyberspace to share my thoughts on saving money, putting that saved money to work, and ultimately using your money to help others in need.

As the name suggests, I'm frugal. I've always know the value of a dollar and would definitely put myself in the "saver" camp rather than the "spender" group. Don't get me wrong...spending money is great fun, but I've never been one to spend my hard earned cash on frivolous pleasures. You have to work pretty hard to get me to open up my wallet and the best way to do that is to throw me a deal.

I have quite a nose for the old bargain and nothing gets me more excited than a good deal (kind of sad really). Sometimes I get more excited about the deal than the actual product (just ask Mrs. Frugal Franco). I often am asked by friends and family to "help them find a deal on _____" which is one of the reasons i've started this blog.

On top of my latest steals and deal, i hope to sprinkle in some opinions on financial planning, investing, and even philanthropy. We'll see how it all goes and I'd love to hear feedback from anyone who stumbles across this blog.

Ciao!
Franco