Pets can be expensive, no question about it.  When budgeting for household expenses, it’s often necessary to include a fair amount allocated for pet needs.  While many people naturally accept and factor pets into the budget, some others resist and even resent the amount they can cost.

The annoyance at pet expenses makes you wonder why some of those people bought a pet in the first place, but hey, to each their own, right?  Well, a recent story I saw on vet costs reminded me of a discussuion I had with guy I worked with some years ago. He was irritated about how much money he had to spend on pets for his family. Yeah, I know…on the surface he sounds like a reach charmer of a guy:) I almost can’t believe I forgot about this, so I’ve got to share it here as the 29th edition of Squirreling Gone Wild.

Backstory

As a backdrop, the guy was a cost-conscious co-worker.  I was younger, so I didn’t quite get his hangups then, but I totally understand now how he’d be watching expenses as he had a family.  That part I get, and think was perfectly reasonable.

Anyway, at lunch one day – with a group of us – he was complaining about the costs of taking his dog to the vet, and how these bills really added up. He didn’t want the dog at all in the first place, since he felt that they’re expensive and he would have rather saved the money instead since he had a family to care for. Again, I totally get that. I know some hard-core dog lovers might not, but I do understand.

Now, I have never owned a dog. With allergies in the family, we didn’t buy a dog when I was growing up – and I haven’t purchased on since. So, I was just curious how expensive the dog really was for him. He continued on about vet costs, but also talked about how the dog added wear and tear to their home, consumed a lot of expensive dog food, and so on. Fair enough, I got the picture. Even though it was a small and older dog (don’t remember what breed), it was costly. He also made it sound like he was pretty much made to buy the pet by his wife. The words I still remember his saying were “That damn dog”.

Bottom line: he couldn’t stop thinking about how much money that dog was costing him.

The Scheme

He then proceeded to talk about how his kids wanted to buy a parakeet. As he mentioned that, I recall an eye roll. Obviously, he had enough of spending money on pets.

Then, he smirked as he told us what he would do if he was forced to buy this pet as well: buy an old bird.

His reasoning was that if he got an older parakeet, it would die sooner and he would have to spend less money on it over it’s lifetime. A baby parakeet would mean a longer life, more seed, upkeep, etc. I don’t know if he realized that parakeets aren’t exactly a big source of vet bills!

Anyway, we were all chuckling and shaking our heads, saying things to the effect of “Come on, man!”

Now, when I was a young child, we did have a couple of parakeets as pets at home, so I remembered how to tell an younger bird from an older one. The way I was told is to look at the forehead of the bird, and see if it has bars (lines). If it has bars, it’s a younger bird that’s just a few months old. If it has no bars, and has a solid color, it’s a more mature bird. Maybe not old, but at probably older than a 3 months old.

With that knowledge, I actually shared that information with him and the group. At first, I could tell his reaction was mild amusement as he looked at me: “This guy had a parakeet when he was a kid. Who knew?”

Then, I could see the lightbulb turn on. His eyes got bigger, and he pointed at me saying “That’s it!. If I have to get a bird, I’ll get one with no lines on it’s head, so at least there’s a chance that it’s old!” He laughed as he said it.

Get the picture? He was talking about buying the kids an old pet that would die soon so that he wouldn’t have to spend too much on it for too long.

To be fair, I have no idea if he actually bought an old bird or bought any bird at all. I never heard about the topic again, and never asked. Maybe it was all hot air.

But it was a crazy and shameful idea on how save money!

Note: I’m sure you realize this, but I don’t condone intentionally tricking family members or that guy’s plan. Just in case you’re new here:)

My Questions for You:

Have you ever let the cost of a pet deter you or influence your purchasing decision?

If you do have pets, how much do they cost you?

Lately, the price of gas has again become a topic of discussion here. It’s come up come up a few times in conversations, as people have expressed concern about how high gas prices might go in the near future. Nobody wants to have his or her bank account depleted even more by spending at the pump, and gas prices have historically been a hot button issue.

It’s hard to blame anyone for such thoughts, as prices have already gone up disproportionately over the years. In fact, I did some analysis on historical data which allows leads to the conclusion that gas prices really have increased more than the rate of inflation over the last 20 years.

Now, many of us have probably surmised as much in general, after noticing how high gas prices have gone lately and how they spiked a few years back. Personally, I have a memory of stopping at a gas station back in the early/mid-1990’s, and seeing gas for less than $1.00 per gallon. It had dipped a bit at that time, and it occurred to me that a road trip at that time wouldn’t be too expensive. Those were the days, weren’t they?

Today, after seeing gas well over $3.00 per gallon here, I decided to check on how prices have changed over the last 20 years. I found a good source of data on gas prices at the Energy Information Administration site, which listed monthly gas data by grade, formulation, and geographic area. I focused on regular grade gas, and a national average.

What I found was the average price of regular grade gas has increased by almost 280% from February 1991 to February 2011:

February 11, 1991: $1.11 average price of regular grade gas

February 14, 2011: $3.10 average price of regular grade gas

Yes, we are spending almost $2.00 per gallon more today than we did 20 years ago!

When you compare that to the CPI (Consumer Price Index), it’s really apparent how gas prices have gone up. Along those lines, I did a similar analysis on monthly CPI, looking at data over the last 20 years.

The time period was one month different due to available data, but I found that CPI has increased 64% from January 1991 to January 2011:

February 1991: 134.6 CPI

January 2011: 220.2 CPI

When you compare the two metrics, it’s easy to see why it seems like gas has disproportionately increased in price – because it most definitely has!

20-year increase in gas price: 280%

20-year increase in CPI: 64%

Now, with any sets of data, there is variability. There have been even higher gas prices within this time frame, such as $4.00 per gallon back in June/July of 2008.  This was followed by a decline in prices down to $1.59 per gallon at the end of 2008.  That was a nice gift for the holiday season, but the rug was pulled out from under us as prices shot back up again, eventually to the levels they’re at today, over $3.00 per gallon.

Bottom line: gas prices have skyrocketed to the point where the resource is comparatively much more expensive today that it was several decades ago.

So, what to do about rising gas prices?

You could employ the following alternative modes of transportation:

1. Train
2. Bus
3. Bike
4. Walk

The train can work for me, though nothing else would.  If I tried to bike or walk to work, it would be the greatest physical accomplishment of my life. Then I’d probably collapse. Of course, the danger of doing so might catch up to me first.

If these alternatives work for you, great! If not, here are 10 tips on how to save money on gas:

1. Keep your car’s trunk empty.
2. Keep your tires inflated to the recommended levels
3. Use cruise control when driving on the highway
4. Avoid stop and go traffic
5. Consider using regular gas instead of higher grade product (make sure this is ok for your car)
6. Plan your trips ahead of time, so you make fewer stops and drive less
7. Carpool
8. Employ certain hypermiling techniques (as long as they are safe)
9. Special Tip: Buy gas early in the morning when the ground is cold; the gas is more dense at this time of day, so you get more for your money than later when warmth causes gasoline to expand
10. Super Special Tip: You’ll have to check out the extreme frugality displayed in Squirreling Gone Wild #1 to learn more

The following is a guest post from Tim Chen, founder and CEO of NerdWallet.com, a website that helps consumers to find rewards credit cards.  Tim also educates consumers about credit cards and debt management at the Forbes Moneybuilder Blog, the Huffington Post, and U.S.News. 

Everybody loves a bargain. But sometimes what seems like a bargain at first could end up costing you more in the end.  Companies know that nothing sells like a sale, and consumers are crazy for bargains, so they try to exploit your instincts and get you to buy things you don’t need.

So saving money can often cost you more. For example, buying that massive can of Beef-a-Roni that will expire long before you could ever eat it all, like Seinfeld’s Kramer and Newman, is saving gone awry. Another example would be upsizing that flat panel TV just to get a few more dollars of cash back credit card rewards. 

Along the same vein, there are also times when spending more can help you save. Here are some ideas for getting in touch in with your inner cheapskate, knowing when to be frugal, and when to pay up.

• Sweat the small stuff. Many people spend hours researching the best price for big-ticket items such as televisions and home appliances but are clueless about how much everyday items cost. While you might save $100 on that laptop, you could save much more by paying attention to the small purchases too. Saving $.50 on cans of soup or $1 on boxes of cereal seems like small change until you consider how many items you bring home from a typical grocery shopping trip.
• Fight the urge for a good deal. Buy only things you will use, no matter how much they are discounted. Think about it – how many items of clothing have you bought over the years because they were on sale or you found them at an outlet? And how many of those now sit in your closet, never worn, maybe even with the tags still on? If you’re not going to wear the stuff, it doesn’t matter how low the price is, it’s all wasted money.  And as a general rule, Costco is a great option for non-perishables, but think before you buy that jumbo pack of pork chops.  
• Don’t be afraid to splurge when it makes sense. Clothing serves as a great example here as well. While it’s tempting to buy things that are deeply discounted, these items often tend to need replacing after only a couple of seasons. You may well be better off buying a more expensive and well-made coat or pair of shoes that will last you for years. It’ll require a great upfront investment, but could cost significantly less down the road. 
• Take care of your health. Doctor’s appointments aren’t cheap, even if you have great insurance. But paying the cost for that yearly physical could spare you many more appointments in the future. You may also be tempted to put off seeing a physician until you’re absolutely certain you have a problem, which could be a costly mistake.  Preventative health care can uncover potentially expensive ongoing conditions such as diabetes, saving money on medical bills in the long run. 
• Time is money too. Money is only part of the equation. What is your time worth? It may make more sense to hire out tasks such as changing the oil in the car or cleaning your house when you compare how much time it takes you versus how much it costs you. The best way to save money is to find a way to make more, so consider how much more time you could spend working toward that goal if you weren’t bogged down with menial tasks. 
• Don’t jump at 0% offers just to earn interest. Plenty of people try to game the system by borrowing money on 0% introductory APR credit cards and reinvesting the money into things like CDs. This may sound like free money, but with interest rates so low right now, it’s probably not worth the headache. If you run up an unnecessary $5,000 balance just to earn 2% on the money, you’re talking about $100 per year in interest, if you can manage not to screw up by making a late payment. At the same time you are raising your credit utilization rate and having your credit report pulled on a regular basis, both of which can lower your credit score.

Love it or hate it, Costco has become a phenomenon in many ways. A big warehouse filled with produce, dry goods, and frozen food. And that’s just the beginning. You can get books, clothes, computers…and even glasses when you visit these stores.

I just yesterday visited a local Costco on it’s very first day in business, basically it’s grand opening to the public. Now, it wasn’t my first trip to a Costco; I had visited several other stores multiple times. In fact, I was once a member. This time, I visited the new store with my father.

This particular experience was especially interesting, due to the opening of a new Costco location. The place was absolutely packed. There were shopping cart traffic jams everywhere, as people tried to make their way through the store. Picking up bits of conversation along the way, it was clear that there were some first-time Costco shoppers there.

Along the way, I had two major observations:

1) Many people go absolutely hog wild over the samples.

While of course most people were civil and normal, there were some people who were swarming over the sample tables like hungry wild animals going after raw meat. I don’t know if these people were new to Costco, or were there partially (primarily?) for the samples, but they went nuts. I saw a few adults walking briskly, almost at a jog, to get to the next booth of goodies.

There were tables with chips and salsa, cookies, bread and olive oil, pizza, meatballs, chicken, Korean beef and rice, prosciutto, coffee, cranberry juice….you get the idea. Lots of stuff.

One woman and her daughter rushed over to a booth where they were handing out shrimp, only to be told that they were out. The mother’s reaction was: “You’re OUT! Awwww….!” It reminded me of seeing a little kid get disappointed that she couldn’t find a toy at a store.

I was at another station where they were cooking chicken, in preparation for putting sample pieces in these little paper cups with a plastic spoon. I stopped there too, and paused to look at the others waiting. There were probably 8 to 10 people there, all staring at the lady prepping the food. Their eyes seemed glazed over as they just waited for the food to be ready. They looked like zombies. I quickly realized that I was one of them if I stuck around, so I grabbed my cart and moved elsewhere.

Getting free stuff really brings out interesting behavior in people. Those of you who are regular readers probably know that I get a kick out of such observations, as seen in the Squirreling Gone Wild series.

2) Impulse purchase opportunities abound

There are so many things that one sees at Costco that you just won’t expect. Whether it’s “specialty” products (such as seasoned quinoa/rice packs), or regular products (such as tortilla chips) at low prices, it’s easy to get carried away when you go to the warehouse.

I once couple carrying 5 or 6 giant bags of the aforementioned tortilla chips. It made me wonder: just how many chips are they going to eat? Maybe it was for family that would be visiting over the holidays. Who knows?

Anyway, I think shoppers at Costco need to be careful with such purchases. It’s easy to get carried away and buy more than you really need, just because the per-unit cost is low. This can actually be costly, if perishable food is purchased. For example, I saw an absolutely enormous tub of yogurt for sale. Unless one has a large family, or eats mind-boggling amounts of yogurt, some of that is at risk for spoiling.

So, how did we do at Costco?

Well, the good news is that we walked out of there with just a few purchases. Bought a big tray blackberries, a 12-pack of single-serve Greek-style yogurt, and a small toy for my daughter. And that’s it. Impulse purchases were successfully controlled, except for that toy for her. Really, I just wanted to check out the new store, and I came out of there unscathed.

As far as the samples go….well, let’s just say that I walked in a little bit hungry, and I walked out with no hunger at all:) Yes, I had good intentions of not having any food there, but gave in to a cup of salted, mixed nuts. Then some pasta (good, though I have seen a better spaghetti sauce recipe). Then a sample of pizza.  Then….well, you get the idea. There was a little bit of ”Squirreling” going on. I almost became one of those people - but hey, I was civil and polite about it.

In other words, I wasn’t like the ravenous wild animals I described earlier. Maybe you could say I was like a hungry, domesticated pet instead:)

So, do you ever shop at Costco? How do you approach your shopping experience there, or at other warehouse stores for that matter? Please feel free to share stories and even advice.

They’re out there. Lurking in our midst. Frugal, seemingly modest-living people, that are quietly hiding their secret.

What’s that secret? They’re millionaires.

I came across this story from The Seattle Times that was yet another example of a stealthy millionaire. This particular example was of a lady who recently passed at the age of 98.

We often hear about people who made their millions in seemingly typical ways: business, fame, inheritance, etc. But we also hear stories about everyday people that become millionaires through frugal living. Some of these can be quite boring, yet inspiring. Work at a job, do a 401k rollover when moving to each new job, and let the money accumulate and compound. Yet other stories, inevitably, are inspiring and compelling.

This one I find to be of the latter variety. This lady did not just live within her means, it would appear, but would go well out of her way to pinch pennies:

• She bought a coat for $2, then used the zipper to lace her shoes (why pay for shoe laces?)
• She never went to a salon; rather, she cut her own hair or used a wig
• She would heat her home with wood she hauled in with a wheelbarrow, even into her 90′s; she didn’t want to pay to heat her home

What she also did, besides living within her own means, was become knowledgeable about investments. She apparently studied finance on her own, and became self-taught in the subject, though she held such hard jobs as picking cranberries, shucking oysters and filleting fish. Is a million dollars not enough? Maybe to her that’s the case!

So, this is a lady who:

1. Lived within her means
2. Worked to grow her income through investments

The result was a $4.5 million nest egg, of which she left $1.o million for the local school district and $3.5 million for her town to build an indoor swimming pool. Very interesting choice, with the pool, but I give her credit – she did it her way. Kudos to her.

I’m a proponent of trying to live with an income minus expense gap that facilitates saving, having a sound stock investment strategy, and also trying to grow the top line through career management. While there wasn’t career management involved here, she followed the general framework of saving and investing.

A compelling story, odd yet inspirational in its own way. An ordinary person who successfully saved money, and left for causes dear to her. As long as someone doesn’t hide their wealth to mislead or take advantage of others, why not be private if you choose?

What do you think? Is this inspiring to you, or just plain quirky?

In the 5th installment of Squirreling Gone Wild, I’ll go back to a story about my old college buddy. While the last SGW post went away from the college buddy and covered an airport carry-on loophole, I’m thinking its time to revisit another extreme penny pinching tale from the past.

Much like some  previous examples – gas station penny trick, picking up change from under the drive through, etc – the following example is one that I personally don’t advocate for mature adults Rather, its an interesting example of how people will go to great lengths – often crossing lines of self-respect – to pinch pennies.

In this case, lets go back 20 years, to undergraduate days. By the way, as a side note -  just typing 20 years makes me realize how time flies, and things move fast. Anyway, back to the story. At the school at which I did my undergraduate work, sometimes people would grab lunch at the main library cafeteria. Depending what your class schedule was, or if you needed to be studying at the library, this might be your only choice to grab a meal or snack if you weren’t carrying your own. Needless to say, as college students, most people weren’t carrying their own food!

This cafeteria offered standard fare: sandwiches, pizza, snacks, drinks. I would occasionally go there and would often run into the same friend who invariably would have popcorn and a soda as a snack. No big deal, but what was interesting  was how he purchased them. A box of popcorn cost $0.50, and a drink cost $0.75.

He would first get a tray, the standard cafeteria-style offering. Then, he would go the popcorn bin, grab a popcorn box (much like at a theatre), and fill up the bag with popcorn. But he didn’t just fill up the bag with pocporn – he showered the bag with popcorn, as if it were a popcorn hurricane. The aftermath was a cafeteria tray that had a mound of popcorn, with a popcorn-filled box buried within the larger mound.

Next, he would get a 32 oz fountain drink (or about 946ml for our Canadian friends). He would fill up the cup with diet coke, would take a straw, but would not put a lid on the drink. Rather, he would go to the cashier line – usually 3 or 4 customers ahead of him, and look for the “stamp of the day”. So, what was this mysterious stamp? Well, it was a stamp that the cashier would apply to a 32 oz drink lid, so that the customer could get a $0.25 refill that day if he or she wanted. The stamp was only valid that day.

After going to the cafeteria long enough, this guy noticed that there were 4 possible stamps, and that the cashiers used one specific stamp per day. The stamps seemed to rotate somewhat randomly by day, but you never knew for sure what stamp would be. So, what he did was he saved the stamped lids from prior cafeteria visits, and then kept them in his backpack. As he got closer to the cashier, he peered over the customers ahead of him to see which stamp the cashier was using that day. Then, he reached into his backpack, and pulled out an old lid from a prior visit, which happened to have today’s stamp. Then, he put the lid on the drink, and ultimately paid $0.25 for the drink as if it were simply a refill, instead of $0.75.

Devious? Yeah, I think so. I couldn’t do it. But it was funny to see someone else do it, and do it over and over. Even funnier was his delight at gaming the system.

So, basically, instead of paying $1.25 for a drink and box of popcorn, he paid $0.75 for a drink and the equivalent of two boxes of popcorn. He would eat what was in the box (you know, the one buried in the popcorn avalanche), and then refill the box with the rest of the popcorn covering the tray and take it to go. He looked at this as paying $0.75 for a $1.75 value.

Extreme penny pinching that went too far, but could be excused as youthful immaturity. What I find interesting are more “grown up versions of extreme penny pinching. Do you have any examples from either yourself or someone you know, in terms of adopting offbeat yet above-board ways to save a few dollars or cents?

My initial “Squirreling Gone Wild” post was regarding my college buddy from way back when, who would routinely fill up his gas tank at one penny over a whole dollar amount, and then take a penny from the jar at the counter. As I mentioned – can’t recommend that to adults, but I got a kick out of it Additionally, while a bit nuts (pun intended), its an example of extreme squirreling.

After going through that story, another example came to mind, so I thought I would add a second “Squirreling Gone Wild” post. 

This second example involves the same college friend. This guy, after college (early 90′s), would try to save money in most situations, though not all. For example,  he bought an expensive car right out of school, with a sticker price equal to 60% of his starting salary.  He later learned his lesson, and within a few years had made it a practice to buy only used cars for which he paid cash and got great deals.

Anyway, back to this second example of extreme squirreling. During this post-college stage, one of the areas where he did try to pinch pennies was with food. Now, he might go out with a group once in a while and have no problem spending on a fun evening out. All was normal there. That said, on other days, he would try to eat at home (smart) and get deals outside where possible (clever, though not always wise).

His eating at home deals took the form of coupons on top of sales at the supermarket. As a post-college student, he would save good coupons and wait for deals on frozen entrees. For example, there might be a deal for a Lean Cuisine-type of entree at 2 for $3. He would bring in a coupon for say, $0.75 off an entree. Then, the supermarket would double those coupons. He would net out at ZERO spent on  a meal. He relished those “arbitrage opportunities”, as he called them.

For eating out, he would go to a happy hour and eat the “complimentary” buffet. He scoured the area to find two that offered food with the purchase of at least one drink. This was usually one day of the week, in the early evening for 2 or 3 hours. He would skip lunch on that day or maybe just eat an apple or something small (not smart, but he did it), and then just load up at the buffet. He would buy the compulsory drink for $1, and then fill up with mini burgers, pasta, nachos, etc.

His other favorite was going to a bagel place to get a bagel and cream cheese for lunch. Again, not the most nutritious lunch, but he used buy one get one free coupons, and had the other one at dinner or lunch the next day. Bagels that are a day old are not too great in my opinion, and he would complain that they were chewy. But as frugal as he was, the thrill of saving would apparently override that issue:) To make the deal better, he would use their loyalty punchcard of buying 6 and getting the 7th free. They punched the card even for the second ones of the buy-one-get-one, so he could go there 3 times and get 7 bagels w/cream cheese. At about $1 per bagel, he would get 7 meals for $3.

To recap, he could work it out to look like this in the perfect week:

2 frozen entrees ($0)

2 happy hour buffets ($2)

7 bagels w/cream cheese ($3)

All told, that’s 11 lunches/dinners for him through the week, and remember that he would skip lunches on the happy hour days and essentially eat a piece of fruit or another small snack. 6.5 days of lunches/dinners for the price of a little more than $5.

He was over the top. Otherwise cool guy, but I (and others) thought he was a complete nerd when it came to saving money, and hazed him for it. But as I mentioned before, as this guy has matured, he has done quite well in his life overall – doing very well financially, in absolutely great shape, and has a nice family. He has obviously learned to channel his energies appropriately. But I know the real story of what he was once like