Well with a day off I was anxious to get back to our discussion on the Tightwad Gazette. All of these ideas come from Amy Dacyczyn and any comments of my own are underlined.
Are you learning something new? Are you reading about something that you used to do and are ready to start again? I am really enjoying spending time each evening and re-reading this book and taking notes.
Enjoy today’s reading and as always, leave your comments and any other ideas to share with everyone. Many ideas I use today come from Amy’s books and from the comments left here on my blog.
We begin with page 77 today.
Pg. 77 – THE CHRISTMAS FULFILLMENT DRAMA
In this section Amy discusses the book “Transforming Your Relationship with Money and Achieving Financial Independence” by Joe Dominguez.
Joe has a theory that “when we spend money on the basics of survival such as food, shelter, warmth and clothing, then we receive maximum fulfillment for the dollars spent. To a slightly lesser degree we are fulfilled as we begin to spend on a few comforts and luxuries. Beyond this, however, the curve peaks and begins to drop so that we receive less fulfillment for the dollars spent.”
THE FULFILLMENT CURVE
Amy says that “it is not that spending money stops being fun altogether, but that the ratio of dollars spent to fulfillment received drops off. Ideally we should recognize where the peak is and consciously taper our spending beyond that point. If we do continue to spend we trade more hours of work to earn money to buy less and less fulfillment.”
As an example” the first $200 car as a teenager versus the $20,000 car bought 10 years later. The new car was nice, but not 200 times as nice.”
Okay, I did a lot of quoting the book on this one, because it was hard for me to put in my own words, but I think from the last example it is easier to understand. I could spend a lot of money on T-bone steaks and my family would have a nice meal and they would be full, but I could spend a lot less on ground chuck and make hamburgers and they would be full and it would still be a nice meal.
When Amy heard about the Fulfillment Curve she instantly thought of Christmas mornings (and birthdays) that she witnessed.
You know how it goes, the child opens a big gift such as a Sled and a Lego set. The child wants to play with the Legos, but the parents insist he opens the rest of the gifts. Then he opens another set of gifts and asks “where are the rest?” He opens another set of gifts and comments that he doesn’t like one of them. Then he opens the last set of gifts and he says they aren’t the ones that he really wanted. The mother then says that they can take some of them back. The child then complains “Is that all I got?”
The peak of the fulfillment curve is different for every family. I have a special memory of one Christmas when our oldest son was 4 years old. It is a tradition in our family that on Christmas morning you open your Christmas stocking first. Our son took his stocking and dumped the contents on the couch. He went through everything in the stocking, hot wheel cars, little Lego set, some candy and other little things. He then looked up at us and said “This has been the best Christmas ever!” I looked at my husband and looked at the gifts under the tree and said “quick hide the gifts and we’ll take them back.” No, we didn’t take back any gifts, but I was in awe that a 4 year old was happy with simple trinkets on Christmas. He had no idea that the stocking was just the beginning of opening gifts.
The peak varies from kid to kid. But there is one thing for sure, when you load your kids with a bunch of stuff, it isn’t appreciated or enjoyed as much.
PG. 78 – THE HOT COCOA COMPARISON
In this section Amy compares her Tightwad cocoa recipe all the way up to a name brand that comes in packets. Amy talks about when comparing the cost of food; she considers how much nutrition their money is buying. Her tightwad recipe gives 22 percent of the daily recommendation of calcium, while the store brand in a packet only gives 4%. Her recipe costs 7 cents per serving and the name brand in a packet costs 25 cents per serving.
Here is Amy’s Tightwad Cocoa Recipe
She mixes 1/3 cup of dry milk with 1 teaspoon of cocoa and 1 teaspoon sugar. Add 1 cup of hot water.
A reader sent in this recipe:
10 2/3 cups dry milk
6 oz. of nondairy coffee creamer
1 lb. of Nestle’s Quik
1/3 cup confectioner’s sugar
Mix together the ingredients. To prepare, mix ½ cup of the mix with1 cup of hot water. This recipe provides 15% of the daily recommendation of calcium and cost 12 cents per serving.
Pg. 80 - TIP ONE – CLEANING SOLUTION
Here is a recipe for a cleaning solution:
1/2 cup ammonia
1/3 cup vinegar
2 tablespoons baking soda
1 gallon water
Mix these together.
Pg. 81 - TIP TWO – RAZORS
Drying razors after you use them, extends the life of the blade.
Pg. 81 - TIP THREE – RAZORS – CONTINUED
After drying the razor, coat it with Vaseline or cold cream. This prevents the blade from rusting and lubricates the blade for the next shave.
PG. 81 – THE INVESTMENT PURCHASE AND THE DISPOSABLE PURCHASE
Amy and her husband started searching for a cannonball bed shortly after they were married. They found some in various prices and conditions. Finally they found one only a few miles from her in-law’s house. It cost $425 and when they paid to have a carpenter lengthen it and made some other adjustments, it cost them $700.
They also became conscious of their food bill about this time. While they were at the store they refused to pay 59 cents a can for tuna when it would go on sale for 49 cents probably the following week.
Were they crazy? The tuna fish was a disposable purchase and they could wait until it went on sale. Yes, they paid a lot more for the bed, but the bed was going to last them a lifetime. It was an investment and well worth the money. Although, they did spend a lot less on this bed than if it were brand new.
Disposable purchases are those things that we buy for short term use such as food, clothing and entertainment. Food is nutrition, and tuna can give the same nutritional value as other foods. Amy goes on to say that a good business suit is an investment while children’s clothing is considered disposable.
I consider the purchase of a good quality mattress to be an investment. You don’t want to be trying to get to sleep on an uncomfortable mattress, so I knew it was worth shopping around for the best option. Also, recently, I have been doing a lot of painting. I waited for Sherwin Williams to have a paint sale and I bought their good quality paint for our home. This is especially true when using exterior paint. This is an investment to the upkeep of our home.
It is poor financial management to spend most of your money on disposable things. Amy stated that without resorting to deprivation, they try to spend a minimum on disposable purchases.
When they spend money on an investment purchase, such as a tractor they needed, they look for the best value and not the cheapest option. Of course, this is also when the Amy D. research comes into play.
Amy does say that this philosophy isn’t only for tangible items but you can consider higher education as an investment.
Pg. 84 – THE GIFT WHEEL
This one is a little hard to explain without showing the graphic so instead I will use the idea that we used for gift giving in our family. It operates on the same principle as Amy’s. Instead of using a spinning wheel to select the names, we used the following system.
For Christmas we would take a list of all of my husband’s family – you could do individual names or put all of the families into one group. Make a list of the names.
Buyer People to Buy For
Family A Family C
Family B Family D
Family C Family A
Family D Family B
We had 4 families to buy for on my husband’s side of the family. We would buy family gifts instead of individual gifts for each family member. Buyer (Family A would buy for Family C) one year. Then we would rotate the names down so that the following year Family A would buy for Family B. Any time it would show that one family was to buy for themselves, we would rotate the names down two families. In January we would announce who was buying for whom for Christmas so they had all year to look for a gift.
Instead of spinning a wheel, we just rotated the name down. It is the same philosophy.
Pg. 85 – SEEKING THE MINIMUM LEVEL
Amy opens this section by saying that we are all creatures of habit. Sometimes we do things the way our mothers or grandmothers did or because a teacher or expert taught us this way.
In forming new frugal habits you need to develop an awareness about all the small actions you do every day. Explore new ways and seek the minimum level.
When I read this section years ago, a light bulb went on. I could save a lot of money if I experimented by trying lesser amounts than recommended on laundry soap, dish soap, dish detergent and more. If I paid attention to see at what point I could get by using the minimal amount of a product and not seeing any difference in the end result, I could save a lot of money.
Sometimes it is something as simple as this that can make a big impact in your budget. Amy recommends experimenting with your laundry and use smaller than the recommended amounts on laundry detergent, fabric softener and bleach. The same is true of when you do a sink of dishes. Don’t squirt a big stream in the water, but put in a small amount and see if that will give you good results.
I went out and bought measuring cups and spoons from the dollar store. I use this to measure out products when I am seeking the minimum level.
The same is true of using household appliances. Do you need to use the heat setting on your dishwasher? After they wash, can you open the door and let them air dry and still get the same results? Also, do you just turn the dial on your dryer at the same point? Experiment with a lesser amount of time and see if that will get your clothes dry. My washing machine, as most, has different water levels. I am diligent about making sure I choose the appropriate water level when washing different sized loads.
I have been using my homemade liquid laundry soap for a long time. Over the past 3 months I have been able to get name brand laundry detergent such as Wisk and Era on sale at ridiculously low prices with a coupon. Instead of using all of the name brand detergent at once, I measure out ½ tablespoon of the name brand soap into a 1/3 measuring cup. Then I add the homemade laundry soap almost to the top. (My homemade laundry soap calls for using 1/3 cup per load.) I get the best of both worlds and I am able to stretch the name brand detergent a long way. My goal is that I will be able to stretch it for well over a year. I think I can make it last almost two years if I am diligent and I am definitely going to try.
Let’s talk about coffee. It is becoming expensive. My husband likes Folgers or Maxwell House coffee. I buy the strongest brew roast I can find when it is on sale. Then he uses a lesser amount of this strong brew to brew a cup the way he likes it. He gets more cups of coffee out of a canister of coffee this way than if he bought the medium roast. By adding fewer grounds of the strong brew he ends up with a medium brewed cup of coffee.
Do you need to take long showers or could you get the same satisfaction by taking a little shorter shower? What about filling the tub with a little bit less water until you get to the minimum amount that satisfies you?
Do you need to wear the full makeup regimend every day? On days that I know I will be at home, I just put on a tinted moisturizer on my face and a little mascara and a little blush. That is it. Also, I don’t wash my hair every day. I wash it every other day and on those in-between days it looks great. I love that this also saves me time.
Do you always buy name brand foods because your own experiment with store brands was unsatisfactory? Keep experimenting with lower cost brands that work for your needs.
Could you turn the thermostat down a little more in the winter and up a little bit more in the summer? Find your level of comfort and see where the minimum is.
Reduce the amount of money you spend on gift giving and see if you can get the same result with a smaller sum of money.
When you make up your budget, do you always spend the amount allowed in each category or do you try to spend under that amount on the flexible items?
“When you seek the minimum level you may be breaking old habits. As you do this, it may take a few months to adjust so that the change feels comfortable. And at that point try the experiment again.”
Again, this is my favorite section and I am constantly seeking the minimum level even in baking. I add a little bit less vanilla and I reduce the amount of sugar in some recipes. I use less hair product on my hair than is recommended and I get the same results. Every day I am seeking to use less and still get great results. This philosophy alone is a big part of how I live and how I save money. It is also part of my picking up the pennies philosophy in that all those pennies saved from seeking the minimum amount add up to dollars in no time.
Tomorrow we start our reading on page 88 through page 97. Tomorrow’s reading includes some Christmas projects along with interior decorating ideas and some other reader tips.
I hope that with each reading you will find one new idea that you can incorporate into your family life so that you can save some additional money in your budget. Remember, if this month someone calls you a tightwad or cheap or too frugal, be sure to tell them “Thank you.”