It's the end of the month and you get your credit card bill, eyes pop out of your head and you think, WHERE IS ALL MY MONEY GOING? You've stopped eating out, you only buy cheap coffees, and your clothing and travel budget is nonexistent. You think you have no more room to cut costs. I am here to tell you that you do! There is hope at the end of the "very broke" tunnel. I know this because despite all of my penny saving tricks, I needed to find a way to save another $100 or more a month and I found it. It's your recipes man! Yep that's right. You think you are being thrifty by cooking home-cooked meals but let me tell you where all the extra money goes…it's those darn recipes!
Recipes are a total money sucker. That's where your "stay in and cook" plan starts to get expensive. Let's play this out. You make the frugal decision to stay home and cook. What's the first thing you do? Google a recipe that has you flying to the store to pick up all the missing ingredients you need for this home cooked delight. Before you know it, you have a jar of masala seasoning (of which you only need a teaspoon), a bunch of leeks (of which you only need one), and a jar of sun-dried tomatoes (of which you only need a quarter of). You use your new ingredients one time, and are on to the next recipe, likely throwing out, or never using the other leftover un-versatile ingredients. Stop this, stop buying ingredients you only use once a year, stop googling recipes that require additional trips to the store, stop wasting money…and no, I am not saying stop eating. Well I am, I am saying stop eating food that requires you to waste money and start REVERSE MEAL PREPPING.
What the heck is reverse meal prepping (RMP)? It's cooking backwards! No, I don't mean put your back to the stove while you try to simmer your veggies. I mean make a weekly grocery list, stick to it, buy your staples, some proteins, some veggies, some fiber, complex carbs etc… When it's time to cook, type in three main ingredients you have in your house like chicken breast/broccoli/rice or salmon/pasta/green bean or potato/egg/cheese...you get the idea. NOW google. Recipe's will pop up with those ingredients. If any recipes pop up with additional ingredients you don't have you can either leave them out, or google a substitution for that ingredient.
Sounds obvious right? I have so many people ask me "what gave you the idea to make that!?" and I simply say, I just googled a couple ingredients I had on hand. I care about being healthy, but I am a very flexible cook. If a recipe calls for onions and all I have are scallions, it's fine. If a recipe calls for sweet potatoes and all I have are regular potatoes…yep you guessed it, it's fine. This way at the end of the week, or year, you wont throw out hundreds of dollars of food, and you won't head to the store to purchase hundreds of dollars of additional ingredients.
A few tips to make your Reverse Meal Prepping successful:
- Have a well stocked spice cabinet
- Have a variety of condiments that have a long shelf life
- Only buy one meal's worth of meat/veggie protein at a time (unless you are prepping lunches and stuff).
- Buy veggies that you know you love (not the I "should eat this" kind)
- Minimize the purchase of foods that expire within 7 days, more trips to the store is better than throwing out food
- Don't be afraid to get crazy in the kitchen and mix ingredients you never thought would go together! Breakfast Pizza and Hotdog omelets can totally be a thing!
- Focus on healthy ingredients, not magazine worthy presentation
Let the RMP Begin!
When you take out a loan for a car, charge something to your credit card, or get a personal line of credit, there is going to be an interest rate that applies to your loan.
A lot of different factors go into what you will be charged, including your own personal credit score. But even those with flawless credit still see a minimum charge that they can't get around. That all goes back to the Federal Funds Rate.
One thing consumers rarely realize is that all of our banks are lending money to each other every night. Banks are legally required to maintain a certain percentage of their deposits in non-interest-bearing accounts at the Federal Reserve to ensure they have enough money to cover any withdrawals that may unexpectedly come up. However, deposits can fluctuate and it's very common for some banks to exceed the requirement on certain days while some fall short. In cases like this, banks actually lend each other money to ensure they meet the minimum balance. It's a bit hard to imagine these multibillion-dollar financial institutions needing to borrow money to tide them over for a bit, but it happens every single night at the Federal Reserve. It's also a nice deal for those with balances above the reserve balance requirement to earn a bit of money with cash that would normally just be sitting there.
The Federal Reserve
The exact interest rate the banks will charge each other is a matter of negotiation between them, but the Federal Open Market Committee (FOMC) (the arm of the Federal Reserve that sets monetary policy) meets eight times a year to set a target rate. They evaluate a multitude of economic indicators including unemployment, inflation, and consumer confidence to decide the best rate to keep the country in business. The weighted average of all interest rates across these interbank loans is the effective federal funds rate.
This rate has a huge impact on the economy overall as well as your personal finances. The federal funds rate is essentially the cheapest money available to a bank and that feeds into all of the other loans they make. Banks will add a slight upcharge to the rate set by the Fed to determine what is the lowest interest that they will announce for their most creditworthy customers, also known as the prime rate. If you have a variable interest rate loan (very common with credit cards and some student loans), it's likely that the interest rate you pay is a set percentage on top of that prime rate that your lender is paying. That's why in times of low interest rates (it was set at 0% during the Great Recession), a lot of borrowers should go for fixed interest rate loans that won't increase. However, if the federal funds rate was relatively high (it went up to 20% in the early 1980's), a variable interest rate loan may be a better decision as you would be charged less interest should the rate drop without the need to refinance.
The federal funds rate also has a major impact on your investment portfolio. The stock market reacts very strongly to any changes in interest rates from the Federal Reserve, as a lower rate makes it cheaper for companies to borrow and reinvest while a higher rate may restrict capital and slow short-term growth. If you have a significant portion of your investments in equities, a small change in the federal funds rate can have a large impact on your net worth.
Whether you're leaving a job involuntarily, departing for something new, or just want to prepare for the unknown, it is smart to understand all your options regarding your 401k.
Frugal gifting often gets a bad reputation. However, this shopping method does not make you cheap — it makes you practical. Frugal gifts often avoid waste and overspending and can be just as meaningful (if not more so) as any other present.
With the National Retail Federation predicting each consumer this holiday season to spend upwards of $1,000 on holiday gifts amidst an economic recession —this year might be the perfect time to reconsider your spending budget. We've formulated the ultimate list of frugal gift-giving ideas to get you started.