Clark Howard recently polled his listeners on his website as to whether or not they would take a pay cut at their jobs in order to save the company from laying off employees (possibly even them)

During these economic times, it is a very real possibility as people that have not been laid off are having their wages frozen or having to take pay cuts as Donna Jean of The Weight of Money's husband experienced firsthand.  Feel free to comment and take the poll below!  

Most financial experts and bloggers will say that the road to financial freedom begins with one simple formula:  make more money than you spend. And the way to do that is by either making more money or cut expenses.

But it’s not always that simple. Often times, people let money fall out of our pockets and never bend over to pick it up. And when that happens, the money blows away in the wind never to return. What do I mean? Well, while those people might skip the trip to Starbucks and save $5, there is often money sitting in front of them that they fail to see even though it is right in front of them. And money that “falls” out of their pockets due to laziness or disorganization. I’m no different in that respect. Letting that store coupon expire even though I’ve shopped there store 20 times before the coupon expired. Failing to return that library book before it was due and having to pay a fine. Not mailing the check on time, only to get hit with a late fee. Been there, done that.

That being said, here are several things I have done recently to “pick the money off the floor”:

1. Cancelled my Blockbuster Online membership. Funny thing about this one. I originally got this membership to save money. I figured if I rented a movie a week, it would pay for itself, especially since I didn’t have to use gas to drive to my local Blockbuster 4 miles away from my house. Just mail the movies back, get a new one sent. Easy, right? Too easy. Because lazy me didn’t mail back my movies for 2 months. I could have owned both movies for the same price that it cost me for the membership ($17.99/month).

2. Mailed in a rebate form. After about a year of being out of contract and replacing my phone twice with used phones, I finally broke down and got a new cell phone. Quite frankly, I could do without a cell phone but my employer that reimburses me $50/month towards my cell phone sees it differently. I refused to spend money on a phone; I was determined to wait until the price dropped. So my wife and I got 2 nice new LG VX 8550 phones for FREE, after my “new every two” discount and the $50 mail-in rebate. Why do these rebates exist anyway? Can’t companies just give you the rebate on the front end? Of course they can. So, why don’t they? Well, it’s simple. Just like coupons, rebates offer a good value and incentive for a customer to purchase a company’s product.

Of course, the company hopes you never mail in that rebate or use that coupon because that money then stays in their pockets. Companies know people lose the rebate forms, throw out the box with the required UPC code or just don’t mail them in. I wasn’t going to be one of those people, so I mailed in my form and in 6-8 weeks, I’ll get my $50 check.

3. Cancelled service on my DirecTv converter box. Saved $4.99/month on this one. The wiring outside got chewed by a rodent and I have no TV in my family room. I could get a tech out to fix it, but at $75 minimum for a service call, I’ll pass. Besides, we don’t really spend much time in the family room anyway.

4. 15 minutes saved me $12/month on my phone bill. I have the unlimited local/long distance package with Verizon and was paying $44.99/month. This is down from the $49.99/month I was originally paying before I called regarding a commercial advertising the exact plan I had for $5 less than what I was paying. Unfortunately, most of my friends and family live about an hour away so everything is a toll call and the unlimited plan is a necessity. But I figured I could use my cell phone and Skype to make these calls and just keep the basic phone line so I can connect to TiVo. So I called Verizon to downgrade my service and they lowered my rate to $32.99/month for the same exact plan. I think I might have lost 3-way calling, but I never use it anyway, so no big loss. Just like the coupons and rebates I mentioned earlier, these companies hope you don’t take advantage of these deals. But they do have them in place as a way of keeping you as a customer. Eventually, I’ll probably cut the wires and ditch my house phone. But for right now, I’m too close to my minutes and the cell phone reception is spotty in my house sometimes (although much improved with my new cell phone).     

Ok, it's not really my sort of thing, being a guy, but starting tomorrow many department stores will be giving away free cosmetics to settle a $175 million class-action lawsuit.  The lawsuit alleged that department stores and cosmetics companies conspired to sell products at the manufacturers' suggested price only - never at a discount. It also alleged that special promotions were coordinated in a way that ensured there would be no competition among stores.   Some of the retailers include Bloomingdale's, Saks Fifth Avenue, Macy's and Nordstrom.  Anyone who purchased specific brands of makeup, moisturizers, and fragrance products at these stores between May 29, 1994 and July 16, 2003 is eligible to receive one of a list of products, up to $25.  For a complete list of stores and products, click here.  You do not need proof of purchase to get your freebie, but you will need to sign a sheet saying you received your free product.   

Yesterday came the announcement that surprised few:  after being unable to find a buyer, Circuit City asked a bankruptcy judge to allow them to close their remaining 567 stores.  They had already closed 155 stores in the past 2 months while attempting to find a buyer.  Below is a partial list of stores that are closing or in the process of closing (thanks to Terri Potratz of Now Public for the list):

• Ann Taylor (117)
• Movie Gallery (378)
• Sprint/Nextel (125)
• Ethan Allen (12)
• Dell (140)
• Friedmans (120)
• Pier 1 (25)
• Sigrid Olsen (54)
• Talbots Kids/Mens (78)
• Home Depot (15)
• Eddie Bauer (29) 
• GAP (85) 
• Footlocker (140)
• Bombay (all 384 stores) 
• Disney (98)
• Macy's (11)
• Sharper Image (184)
  
• Wilson Leather (160)
• Pep Boys (31)
• Pacific Sunwear / PacSun (154 Demo stores)
• Zales (105)
• Cache (20) 
• Lane Bryant (40) 
• KB Toys (356) 
• Dillards (26) 
• Fashion Bug (100)
• CompUSA (all stores)
• Linens 'N Things (all 371 stores)
• Mervyn's (all 149 stores)
• Club Libby Lu (Saks owned) (all 78 stores)
• Steve & Barry's (all 173 stores)
• Sergio Rossi (all standalone US stores)
• Office Depot (126 stores)
• Rite Aid (181 stores)
  

Many other companies like Lowe's, JC Penney and WalMart had already announced plans to scale back plans for expansion.  There are some pros and cons to these closings:

Pros: 

• Great bargains to be had for consumers as retailers are trying to liquidate and others are trying to compete.
• A "thinning of the herd" so to speak, as the strongest retailers survive and the weakest go under.  It could be argued that there are too many retailers out there now.  Find a corner where there isn't a Starbucks, strip mall or a big box store.  
• A return to superior customer service as the retailers that remain realize that they must woo their customers in order to keep them (ok, maybe this is wishful thinking...)
  

Cons:

• Many retail employees are being laid-off, which not only gives them less money to spend, it shrinks the number of available jobs.
• Once the retailers close, there will be less competition, which could lead to higher prices.
• Because of all the bargains to be had, customers will be less likely to pay full price, instead opting to wait for extreme deals, further squeezing retailers' profits and increasing the likelihood that some retailers could go under.   This was evidenced during the last Christmas season, where many waited until bargains were at absolute rock-bottom prices before splurging.
  

For me, personally, I only buy when I need stuff anyway, so there is little effect on me.  I am curious though, what effect these closings will have on other buyers.  

As people are spending less and less during this "recession", competition amongst QSR's (quick service restaurants) and convenience stores is just beginning to heat up.  Many of the chains have resorted to giving away free food and drink to customers in order to keep them coming in.  At Philadelphia-area convenience store chain Wawa, they are giving away a free coffee (any size) with a breakfast sandwich purchase.  McDonald's, taking direct aim at c-stores like Wawa and 7-Eleven, is offering Free Coffee Mondays in select markets.  Although not free, 7-Eleven has countered with a promotion featuring 2 Supreme Omelet Taquitos and a Coffee for $1.99.  The taquitos are regularly priced at $1.39 each, so this is a pretty good deal as well.  In other areas, already-struggling Starbucks is their target, as they are giving away lattes as part of their "Free Latte Fridays" promotion.   

Near me, there are two Chick-Fil-A locations that offer free breakfast on Tuesdays during January (Edited to add: This promotion is now extended through February 24th and is taking place in ALL participating Chick-Fil-A locations in Pennsylvania, New Jersey and Delaware).  They generally offer these deals different times/days throughout the year.  The one Chick-Fil-A also has had a promotion all during football season that if you come in wearing a football jersey on Saturdays, you get a free entree.  In addition, Chick-Fil-A is always giving out coupons for free food (some require an additional purchase, some do not).   Although they give out some free stuff, the two Chick-Fil-A locations near me are constantly packed and have more than their share of paying customers.  

  

Finally, I was able to take a shower this morning as my water is now fixed. The problem: a broken well water pump. The house is 15 years old and it hasn't been replaced, so we were due. It was nice not having to pay a water bill for the last 8 years, but I made up for it in one shot: $2482 total to replace the pump! Couple this with my $161 speeding ticket, this pretty much wiped out my savings account.

On the positive side, I had the cash to foot the bill and did not have to worry about putting it on a credit card. This is where having an emergency fund comes very much in handy. Now it's back to the drawing board as far as savings goes. Fortunately, my quarterly bonus should come in about 2 weeks followed by (hopefully) my annual bonus. Last year, there was no annual bonus, so we'll see. In addition, I should have a pretty good refund as we still have a tax credit from adopting my son from Guatemala 2 years ago. All in all, it sucks, but I feel optimistic for the future!

My blog is still growing, but if you want to get a little extra exposure for your blog, drop me a line as I am looking to add some guest bloggers to the site. My plan is to have one guest blogger per week, probably on a weekend day. It can be content you have posted previously on your blog or new content. All that I ask is that the article is personal finance related and that you post about the guest post on your blog. If you have interest, please email me at thefixx27 (at) gmail (dot) com.

(Note from Dave:  I have had no water at my house for the past 2 days (the well pump went, so the blog has been on the back burner temporarily.  Below is a post that I did for Tiffanie at We Like Money last week.  This is especially timely given my current circumstances.  I'll be blogging about what happened with the water in the next day or so.  In the meantime, enjoy the post!)

One of the reasons personal finance blogs are so popular is that they are a great source for frugality tips. For most people, even though they implement these tips, they are still broke at the end of the month? This is because the money saved often gets absorbed in other spending. Think about your last trip to the grocery store. Let’s say you saved $10 on your trip by using coupons or buying store brands. You know for a fact that you saved that money. But when you go in your wallet, the money isn’t there. Maybe it was lunch at McDonald’s, coffee at 7-Eleven or that pay-per-view movie you rented last week, but the money you saved is gone.

Why did this happen? Unless you use credit cards, you can’t spend more than you have but human nature is that people spend everything they have. I think about when I was a kid going into the neighborhood store with a dollar and buying a candy bar or a pack of baseball cards. I gave the clerk a dollar and they would give me change back. The first thought in my mind was, “Wow, I still have money?” And then I would turn around and grab as much penny candy that I could get with the change I had.

So what’s the solution? Seizing your savings!

Think about your 401k plan (if you have one), chances are you have adjusted your spending so that you don’t miss the money that is going into it. However, if that money wasn’t automatically taken out of your paycheck, what are the likelihood you would save the same amount of money?

The only way to seize your savings is to get it out of your wallet, out of sight and out of mind. Just like when you put money into a 401k, you will adjust your spending accordingly. Think of this plan as your personal 401k, except that it is liquid and you can access the money in an emergency. How do you do that exactly? Here are the steps to seizing your savings that I teach in local financial management seminars in my area:

· Do a “reverse” budget. Unlike a regular budget that tracks your spending, the reverse budget only calculates what you plan to save. Examine every area of your spending and see where you can save money. Get creative, but keep it fun. Frugality is one thing, deprivation is another. Some examples include: Cutting back on eating out from 4x weekly to 2x = $100/month savings. Optimizing cell phone and home phone plans = $25/month savings. Getting rid of HBO (I only got it for “The Sopranos” anyway)= $15/month savings.

· Open a separate checking account. This is the key.  Once you have calculated how much you are going to save, open up a separate checking account at a DIFFERENT bank than where you currently bank. Why at a different bank? The goal is to keep this money separate from your spendable income and if your money is at the same bank, it is merely a transfer away. Also, make sure the account you open is a totally free checking account, with no fees and no minimum balance requirements. Turn down the checkbook and the debit card, but ensure that you have access to online banking so you have access to your account.

· Seize your savings by having the money direct deposited into that account.Many employers not only offer direct deposit but offer “split” direct deposits, where you can deposit a fixed amount or percentage into a second account. Don’t have direct deposit? If you have online banking, you can set up your separate bank account as a payee and have that money withdrawn from your primary bank account after your paycheck is deposited into the bank.

Here is a table to help you calculate the amount you need to have deposited from each paycheck:

If you are paid…	You need to “seize”
Every week	23% of monthly savings
Every 2 weeks	46% of monthly savings
Twice a month	50% of monthly savings
Monthly	100% of monthly savings

By seizing your savings and automating the process, your chances for success are greatly increased. Once you seize your savings, it’s up to you what to do with it. Build up your emergency fund, pay off debt or use it for that special vacation you’ve been longing to take, it’s up to you. Best of luck!

One of my best friends pays a couple hundred bucks to H&R Block every year for a simple return she could do herself but I can't seem to talk her into it as she believes the "professionals" can get her more money back.  I have even offered to do her taxes for her, to no avail.

Turbo Tax is now offering free Federal tax preparation and filing online at their website for simple returns.   If you have no itemized deductions such as a renter or someone still living at home, this is a great way to save on tax preparation fees.  Even with more complicated returns, you can still prepare your return online to see where you stand and pay when you file.  Free e-file is included on all tax preparation packages.   They even give you audit support for free.  Once you are done your federal return, the info can be transferred to your state return and filed as well (for an additional fee).  

Now if I could only get my friend to be a little more computer literate, she might go for it...

I recently bought my son his first Piggy Bank, well, it's actually "Gobble, The Money Monster" (see photo).  When you put money into it (there is a coin slot and a bill slot), the monster blurts out several sayings such as:

"Feed me I'm starving!"
"Don't empty my belly!"
"Oooh paper money makes gobble very happy!"
"I'm still hungry"
"Money monster is your friend!"
"Money, money, money in my tummy"
"Burp!

I'm not sure how much money it will help him save, especially as he has already figured out how to open the back of it to take the money out.  It's only a matter of time before my son will soon learn how to spend this money and I want to  try to head him off at the pass.  Any tips on getting children how to save?

Check out my guest post today at We Like Money titled Seizing Your Savings.  Thanks to Tiffanie for giving me the chance to write on her blog while she is on vacation.  Hope you like it!

If you like the blog and live in the Philadelphia area, I will be teaching "Achieving True Financial Freedom: Invest in Your Debt" at several local venues, listed below:

Date(s)	Event	Town	Time
January 26th and February 9th	Downingtown Area Recreation Consortium	Downingtown, PA	7 PM
March 3rd and March 10th	Haverford Adult School	Havertown, PA	6:30 PM
March 12th	Hamilton Middle School	Trenton, NJ	6 PM
March 19th and March 26th	Haddonfield Adult School	Haddonfield, NJ	6:30 PM
April 2nd	West Windsor Community Center	Princeton Junction, NJ	6:30 PM
May (date TBD)	Temple University (Center City)	Philadelphia, PA	6:30 PM

Here is a description of what will be taught:

In this 2 night class, you will learn how to get a 37.13% guaranteed, risk free, tax free return on your money by eliminating your debt! Pay off all your debts - credit cards, student loans, personal loans, auto loans, and even your home mortgage - in an average of 7 - 8 years, and save over $100,000 in interest. LEARN POWERFUL AND PROVEN STRATEGIES THAT WORK …EVERY TIME. Operate 100% on cash, even when emergencies strike, and never need credit again. It’s not too good to be true, and you can do this with your current income! In addition, you will learn to capture more of your dollars worth using reverse budgeting to plan your savings rather than tracking your spending. By attending this workshop, you will develop your own personalized plan to save 10-40% based on your spending personality. Bring a list of your debts with balances and monthly payments along with a calculator and during class develop your own financial freedom plan that can be immediately implemented into your lifestyle. This is strictly an educational workshop; no insurance or investments will be offered or sold. 

If you are interested in attending and would like more info, please feel free to contact me at thefixx27 (at) gmail (dot) com.  

If you've never heard of Freecycle, you need to check it out!  I have been a member for about 6 months now and it has done wonders in cutting my household budget.   Freecycle is a international network of "gifting groups" (administered through Yahoo groups) whose mission is to divert useable items from landfills by having members give them away to other members.  According to Freecycle, there are over 5 million members worldwide.  Here's how my local group describes what Freecycle is: 

Freecycle is...
- About keeping things out of the landfill.
- About sharing an item that retains usefulness.
- About clearing out our unused clutter.
- About COMMUNITY.

Freecycle is not...
- A lending closet.
- A free-for-all.
- A means to get as much free stuff as you can.
- A way to get more stuff to sell, EBAY, or auction.
- A way to keep from taking your broken items to the dump if that's where they really belong.

Since joining Freecycle, my wife and I have received clothing not only for ourselves, but our son as well.  We have also received toys for him, a TV set and other items.  We have also given away the clothes he has outgrown and cleared most of the stuff from our attic that we no longer use, which is much less aggravation (and much quicker) than trying to sell them on ebay or doing a yard sale.  There is often computers (albeit older ones), furniture, various household items posted in our local group, which is over 2000 members county-wide, many of which are close to us as there is a county sub-group in a nearby city that also has a lot of members.  

Basically how it works is that members post an offer to the Yahoo group for an item and then receive responses from interested takers.  It's up to the giver who they give the item to.  The parties then make arrangements for pickup. Once an item is taken, the member posts it as taken in the group message board.

Members may also post items that they are looking for (up to 5 per month) in our local group.  Members that only post wanteds and never post offers are generally not well received.  We rarely post wanteds but we recently got Dora The Explorer videos on a wanted post.  

It is recommended that you set your email settings to "individual emails" under the edit membership settings in your Freecycle group.  The only downside to this is that you get A LOT of emails.   It is not uncommon to get upwards of 100 emails a day from the Freecycle group.  However, by switching to "daily digest", it is unlikely that you will get items.

Overall, Freecycle has been a good experience for me as it has allowed me to allocate money elsewhere that would have been spent on things that I received from Freecycle.  I can't even recall the last time I have spent money at the mall (not that I spent a lot to begin with).  In addition, getting emails from grateful people receiving items makes me feel good as well.  I'd love to hear from fellow Freecyclers out there! 

One of my goals this year (I'm not going to use that "resolution" word), is that I will be posting a lot more to the blog and hope to attract more readers. To start the year off right, I will be giving away a copy of Invest In Your Debt by Bill Keenan and Dave Ireland. This book is a great read that has lots of great tips that will help you:

• Eliminate Credit Card Debt, Car Loans, Home Equity Loans and Even Student Loans - in Just 1-3 Years!


• Then Pay Off Your 30-year mortgage in another 4-5 Years!!


• Live 100% on a Cash Basis, even when financial surprises occur, and Never Need credit again.


• Cut Your Effective Interest Rates In Half.


• Reduce Your Financial Stress


• Lay the Foundation for Your Strong Retirement Plan

All you have to do to enter the contest is comment on any post during the month of January and you will be entered automatically. The only restrictions are that spam posts will be deleted and comments must be relevant to the topic you are commenting on. Contest ends January 31st and the book will be mailed out in early February. Best of luck!

Don't want to wait? Buy the book by clicking on the photo at the top of the posting. And if you do, you will get FREE Debt E-racer Software with your purchase!