The BudgeX Blog

I had to sum up a lot of courage to come to terms with writing this post, and I am still fighting an internal battle to accept it.  If you recall from a previous post of mine, cars are one of my top 3 most cherished material items, and you’ll soon understand why this is hard for me.

Have you ever wondered how much you should be spending on a car given your current income?  Spend too little on a car and you end up getting a piece of crap; spend too much and you won’t be able to afford anything else on your paycheck.  I have certainly seen some people buying cars that cost almost as much as they earn in gross income!

There has got to be an ideal car price-to-owner income ratio that can help you see if the purchase you’re about to make is a good idea.

What is this magic number?  Unfortunately, there is none.  Different people have different tastes and thresholds.  What I can provide you with is a range of what is reasonable.  This relatively old but very interesting website compares owner incomes to car prices, with car prices ranging from less than $10,000 to over $200,000.  Here are the highlights:

• Nobody on this list had a car that was worth more than their gross income.  The closest were owners of Ferrari 456 GTs, who has a car price-to-income ratio of 1.
• The most frugal people on the list had a ratio of 6.1 .  This means that their gross income is 6.1 times more than the car they drive.
• The average ratio of people on this list was approximately 2.5.

There have also been several opinions about deciding on a good ratio, but again, it is highly subjective.  So I’ll leave it to you to determine a good number for yourself, but I’d try to keep a ratio above 2.0 at the absolute lowest (i.e. if you make $50,000, the most expensive car you should buy would cost $25,000), and around 2.5 for a comfortable ratio.

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Whether we like it or not, we all need to make sacrifices in times of crises. However, we usually don’t think about the priorities of our material goods until these extreme situations hit us.

During the San Diego Fires of 2007, I remember waking up to a phone call at 6 in the morning from my parents.  They informed me that there were fires threatening our house, and they were required to evacuate.  I had 30 seconds to tell them everything I wanted them to save, and they had 30 minutes to take as much as possible from the house.

Fortunately, this story has a happy ending.  Though the fires came as close as 200 yards away, and our house was damaged by smoke and ash, it was thankfully spared from burning.

Similar to when flight attendants say, “in the unlikely event of an emergency evacuation, leave everything behind,” during that safety talk nobody listens to, almost every material good you own is replaceable.

Take some time to think about how many things around you are replaceable.  By doing so, you will hopefully get a better sense of your needs versus your wants.

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Those of you who know where the slogan in the title of this post comes from will better understand the message it attempts to convey.  Simply put, you don’t have to shop at designer stores and pay designer prices just to get designer outfits.  There are entire department stores dedicated to providing you with these exact same dresses and suits for lower prices, and I will introduce you to a few of them.

TJ Maxx, Marshalls, and Ross

These three department stores are just a few of the many stores out there whose primary goal is to provide high-quality clothing at discounted prices.  Most people, however, tend to shy away from these places because they fear that a discounted price means a damaged product.  This is not always the case.  There are several sources online that help better explain how these stores get their clothing, and the bottom line in each of them is that there is nothing to be afraid of when shopping at these places.  There is nothing wrong with shopping at discount department stores like TJ Maxx, Marshalls, and Ross.  They are cheaper simply because they buy the excess clothing from the higher-end clothing brand companies when they are overstocked, and can then offer those same garments to you at discounted prices.

Though I have hyped up these stores up quite a bit, they don’t come without their downsides.  Many times the reason why the clothing is so inexpensive is because it is being sold off-season.  For instance, it is likely that you may find yourself at TJ Maxx during the summer and see a row of winter jackets on sale.  Some might consider this a good thing, others a not-so-good aspect, but these discount department stores definitely deserve more than the reputation most people think them to possess.

Choosing which store to shop at is highly up to personal preference, so I would encourage you to visit each one at least once to check them out for yourself.  Happy deal-hunting!

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We all want to save money on food.  The most obvious solution to this problem is to not eat out all the time, but the thought of making our own food and staying home isn’t always the most appealing option.  So how, then, can we get the best of both worlds?  How can we save money by eating in while still making the experience more attractive?  One simple way is to make cooking at home more entertaining.  By doing this, you and the people you live with will feel more inclined to make a meal in your own kitchen rather than go out for dinner and spend more money.

Add a Little Spice to Your Meals (pun intended)

There are several different ways to make cooking more fun; I’ll go through two of my favorites.

• The Iron Chef Strategy

If you have ever seen an episode of Iron Chef on television, you know how entertaining and energetic the kitchen can get when it comes time to cook.  Bringing this mindset to your personal home’s “Kitchen Stadium” is a fun and exciting way to increase participation and innovation during dinnertime.  Having “Iron Chef Cookoff” days where different people rotate playing the role of chef provides for an atmosphere and experience that you won’t be able to get if you eat out.

• The Ratatouille Strategy

The idea behind this strategy, adopted from the movie Ratatouille, is a more traditional approach to cooking.  Rather than having two chefs compete against each other a la Iron Chef, the Ratatouille strategy assigns roles to each member in the kitchen, and makes them responsible for one part of the meal.  This concept is not entirely revolutionary, and has been around long before Ratatouille even premiered.  However, branding it with a highly popular movie that many people (and kids) enjoy will boost your participation rate.

The benefits to these two ideas are clear and simple: they help save you money and make cooking more enjoyable for everyone.  So the next time you are debating about whether to drive to Chilis for dinner or stay at home, give one of these a try.

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The age-old battle between the computer software giant Microsoft and the reborn innovator Apple has been bubbling for years now, and in the past few years it has spread to more than just personal computers.  Each side has their arguments about what makes them better than the other, and chances are that this war will not be decided anytime soon.

That being said, Microsoft recently launched a new ad campaign that hits one of the most crucial differences between the two competitors.  Instead of aesthetics, customer support, or computing power, Microsoft is targeting an aspect that we can all relate to: price.  The ad campaign, titled “Laptop Hunters,” follows students who are on a tight budget and need a computer that fits their specific needs.  So far there are two Laptop Hunter commercials that have aired.

Though this new ad campaign is not likely to change a whole lot in the back-and-forth battle, in my opinion, Microsoft has finally hit the right chord with their commercial assault on Apple.  What do you think?

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As a child, were you the one who used to keep an empty water cooler jug in your room and fill it with spare change all the time?  What about the kid who always searched underneath the couch seats for Dad’s lost coins?  If you came across a coin on the sidewalk, would you stop to pick it up?

We’ve all had our share of joy when we find money in strange places.  So tell me: where is the strangest place  you have ever found money before? Leave your comment below for everyone to enjoy.  I’ll start: my college roommate and I once found two $100 bills stapled together in a grocery store parking lot.  We don’t know why they were stapled, who they belonged to, but it we definitely had an interesting time trying to figure out what to do with it.

Your turn!

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Did you ever notice that when times are tough, people tend to come together and enjoy the little things in life? Things like books, friendly company, and one of my favorites: pranks.

The good thing about jokes and pranks is that they cost little to nothing in order to prepare. The outcome is usually fun for everyone except for the one getting pranked, but I’ll take those odds :).

Pranks Never Die

Here are a few easy-to-do April Fools Day pranks that you can try on your friends and family today:

• Take a rubber band and slip it over the lever on the spray handle of a sink, so that when someone turns the sink on, it will spray him or her in the face. This is an easy way to pull a great prank!
• Stick a post-it note under your friend’s mouse so that the paper leaf covers the mouse ball or laser.  Align it so that the sticky part of the note doesn’t touch the ball. Costs next to nothing to do, and doesn’t cause any damage.
• Put some water in a cereal bowl, and place it in the freezer so that the water freezes. Offer to make your friend cereal in the morning. Make sure you use that same bowl. Put their favorite cereal over the top of the ice, and serve.
• Send a fake love note to a co-worker from another co-worker
• Put a For Sale ad for an item belonging to a co-worker and post it around the office
• Change the language setting on a friend’s phone to a foreign language

Of course, there are plenty more.  Here are some good resources:

• Office Pranks
• Home Pranks

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If you have a backyard where you live, it’s never too late to start producing your own fresh produce there.  Even the Presidential family has started creating their own “Kitchen Garden”.  By growing your own fruits, vegetables, and herbs, not only are you decreasing your dependency on grocery produce, but you are also ensuring that you always get the freshest ingredients for your meals.

Growing Your own Food Saves More than Just Money

In addition to providing you with a sustainable supply of sustenance, according to this Irish Times article, growing your own food also has these added benefits:

• Cuts down on food miles driven
• Shrinks your carbon footprint
• Cuts down your food bills
• Provides you with regular exercise in fresh air

It’s no wonder that during tough economic times, people are turning back to their yard for nourishment

Resources

Here are a couple good websites that will help you get started on planting your own personal garden:

• WikiHow: How to Grow Your Own Garden
• (Video Tutorials) MonkeySee: How to Grow a Vegetable Garden
• How to Grow an Herb Garden

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You’re not alone if you’ve been laid off recently.  At the time of this writing, the national unemployment rate is 8.1% according to the US Bureau of Labor Statistics.  It’s nothing to be ashamed about, just be sure that you spend your newly-acquired time wisely.  Here are a few tips on how to not only get back on your feet, but hit the ground running.

Cash in on your Unemployment Insurance

This should be the first thing you do.  In fact, do it now!  Visit your state’s website to apply online.  Here is California’s Unemployment Website, but since it varies by state, you’re going to have to search for it if you don’t live in California.

Optimize your Job Search Efforts

There are many ways to optimize your search efforts, and the Internet will be your best friend during this mission.  Here are a few options for you to help maximize your job hunt outreach.  Depending on how technically savvy you are in this area, one option might be easier than another:

• Create a bookmark folder that contains saved job searched from your favorite job sites
• Create a Job Agent on your favorite job sites and have it email you frequently with updates
• Subscribe to an RSS feed on your favorite job search sites

Here are a few of my favorite places to look for jobs:

• If applicable: Your school’s recruiting network
• Indeed.com: A very comprehensive job search site that aggregates jobs from several popular search engines
• Dice.com: A good source to find technology-related jobs
  
• Ventureloop.com
• Startuply.com: An excellent website that contains jobs for startup companies around your area

Once you have this structure in place, searching for new jobs will be quick and easy.  Every day when you wake up, dedicate at least 30 minutes to going through your optimized process on your favorite networks.

Capitalize on your Free Time

Sure you will finally have the time to do the things you wish you could have done while you had a job, but seriously, you’ll have a lot of free time.  Additionally, if you’re getting unemployment insurance, the value of your time won’t be worth $0 like it usually is.  The reality is that you will have free time, so make the most of it.  Use it to pursue a hobby, practice finding deals, or follow another passion that you have; just don’t let it go to waste.

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Here’s another simple practice to getting closer to achieving complete financial discipline: eat out as little as possible.  The first sentence of this article on how to save money eating out explains this strategy pretty clearly, stating, “First the obvious, don’t do it.”  You may be tempted to go and get a $5 footlong from Subway for lunch (such a catchy tune), but instead make a sandwich at home and pocket the extra cash.

A Penny Saved is a Penny Earned

The guy on the $100 bill said that, so he knows what he’s talking about.  Saving a few dollars per day by adhering to this method can really add up when you look at your annual budget.  This is not rocket science, nor is it a revolutionary piece of advice.  But it does work.  Many people have experimented and documented their expenses while eating out versus staying at home and cooking their own meals.  In fact, this article on eating out vs. staying in even ventures so far as to say that in addition to money,  cooking your own food saves time as well.

I’m sure you’ve heard it before, but have you ever taken the challenge of not eating out?  If you are willing, you can try it for yourself: make your own food for two weeks and document your time and expenses during that time.  The folowing two weeks, eat out every day, again documenting everything.  See what you come up with.  Which method was cheaper?  Which method was more convenient?  Hopefully it’s not something you have to see to believe.

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