As featured in The Wall Street Journal, Money Magazine, and more!

June 2010

This is a guest article by Donna Freedman. Donna writes the Living With Less personal finance column for MSN Money, posts weekly at MSN Smart Spending and blogs at Surviving and Thriving.

Is your budget hurting? It could be overuse syndrome.

Ergonomically speaking, a body part that is forced to work at a greater level than it is prepared for will suffer strain and possibly serious damage over time.

Economically speaking, a budget that’s impacted too hard will suffer, too.

The obvious answers are to earn more or to spend less. A whole bunch of people would love to earn more. But during a recession, a whole bunch of people feel lucky to have jobs at all.

Which brings us to spending less, i.e., causing less strain on your paycheck. But suppose you’ve already cut the health club membership or the 600 cable channels. Or suppose you never had those frills to begin with and are wondering where to cut back.

Try some macro savings techniques. Specifically, look at the things you do every day to see if you’re overdoing them.

Here’s an easy example: driving at the speed limit or above it. If you slow down from 65 to 55 mph, your gas mileage improves by 15%, according to this article.

xeriscapeIt’s hard to estimate the cost of some habits. Water is a good example. Some people pay for city water (and, later, for the city sewer). Other consumers pay only for the electricity needed to pump it up from their own wells (plus, maybe, eventual pumping of their septic systems). Folks who live off the grid use people power to pump or haul. The first two groups can benefit from suggestions like xeriscaping the yard, installing faucet aerators and low-flow showerheads, and breaking habits like letting the water run while dishes are rinsed or teeth or brushed.

But we indulge in many other forms of waste that are much stealthier. I’m talking about habits so ingrained that we don’t realize how much they cost us – or why they might be unnecessary.

Pill popping

For example, do you take a pain reliever at the first twinge of a headache? Maybe you really need that ibuprofen. But maybe you just need a change of scenery, especially if you’re stuck in Cubicle Land with a bunch of other Whack-A-Moles. Some people take several smoke breaks a day or hang out by the water cooler; surely you can justify stepping outside for five minutes of fresh air, or at least to walk out of the room and move around for a few minutes. (Best-case scenario: You find a quiet spot to take a power nap.)

Headaches can sometimes be a sign of mild dehydration, so take a drink of water. Massage your neck or scalp. Brush your hair. Stretch. If you can find that quiet and private spot, do a couple of simple yoga poses.

Feel better? If not, then go ahead and take the ibuprofen.

Notice that I said “ibuprofen” rather than a brand name. The generic versions work just as well and are almost always cheaper, unless you have a coupon or rebate deal.

Keep it clean, on the cheap

Do you fill the laundry soap cap all the way? It’s probably overkill, unless your spouse is a farrier or a sewer worker. Clothes that aren’t heavily soiled can be washed with as little as one-fourth the recommended amount of detergent. Cut back slowly and see if you notice any difference. If not, then you’re spending 50% to 75% less each year on soap.

Some people make their own laundry detergent. You could do that, too, if you like that sort of thing. Maybe I’ll try it myself, once I go through the approximately two years’ worth of suds I’ve stashed cheaply thanks to coupons and rebates.

Speaking of laundry: Do you wash a bath towel after one use? Do you have to launder clothing every time you wear them or could you sometimes delay laundry day? I’m not talking about clothes you’ve worn while toting barges and lifting bales, but rather a shirt you wore for a few hours at church or a dress you wore to a job interview. Re-wearing means saving more laundry soap plus water, utilities, and wear and tear on your washing machine and your clothes.

Not on your dryer, though, since you mostly hang clothes to dry. You do, don’t you?

Cleanliness is next to thriftiness

Apparently you have to fill only one of the two detergent cups in your dishwasher. Personally, I use my dishwasher for storage; it’s full of canning jars and lids. Thus I can’t vouch for this tip -– but I see no reason to doubt it.

You don’t need to frost your entire toothbrush with toothpaste, despite what you see in the ads. (Think about it: Who designs the ads? The folks who sell toothpaste!) My sister the dental hygienist says this is true. In fact, she agrees with Amy Dacyczyn, who wrote a “Tightwad Gazette” article saying that you don’t really need toothpaste at all: Just plain water and dedicated brushing for at least three minutes will do the trick.

Myself, I like feeling all minty-fresh. But a little dab’ll do ya. Really. Try a spot of toothpaste the size of a pea. That’s up to a 75% annual savings.

How many times have you accidentally squeezed out too much shampoo but used it anyway? Next time the bottle is half-empty, fill it with water and shake well. Just a little squirt of the resulting liquid lathers quite nicely. When the bottle is empty, pour half of a new bottle into that one, fill both the rest of the way with water and shake, lather, save.

Also, consider washing your hair every other day (unless it’s particularly oily) and conditioning only a couple of times a week (unless your hair is particularly dry). Potential savings: 50% or more.

Or: Don’t use shampoo at all. This one’s a bit fringe-y for me but some folks swear by it. (Others swear at it.) Potential savings: 100%.

More ways to save

Do you automatically order soda or iced tea with meals out? At fast-food restaurants do you always upgrade to the cup that’s big enough to bathe in? In both cases you could save a couple of dollars a pop, as it were, by sticking with water or choosing the regular meal sizes, which are usually plenty big enough. Or try this: Order a kid’s meal and refill the cup as needed. It’s not only cheaper, you get a toy!

Of course, restaurant meals should be the exception, not the rule. Packing a lunch is a much thriftier way to go. Healthier, too, since you can control portion size, sodium intake, etc. When I interviewed people who’d started doing this, a common refrain was, “I just never added it up — I could kick myself now that I realize how much I’ve been spending all these years.”

dried beansCould you cut back on the meat used in a chili, stew or casserole? Or do you need to use meat at all? I’m a dedicated opportunivore — I’ll eat whatever’s around — but I can also go a week with few or no animal products. Maybe you can, too. Try a “meatless Monday,” a “vegan until 6” or some other way to go vegetarian once a week.

When making that chili or other dishes, do you need to use canned beans? Dry beans are much, much cheaper; for the price of one can (1 and 2/3 cups) of beans, you can buy almost two pounds of dry beans, which will yield six cups when cooked. They’re easy to prepare in a slow cooker or a pressure cooker.

Penny-ante or penny-wise?

Some people decry these nickel-and-dime tips as, well, too nickel-and-dime. They don’t think that packing a lunch or washing Ziploc bags could translate into real savings.

I don’t agree. If adjusting a few habits saved you 50% or more on everyday expenses, why wouldn’t you do it?

Let’s assume you spend $50 a year on that laundry soap. (I have no idea what it actually costs, thanks to those coupon/rebate deals.) Paying attention to how much you use could put up to $37.50 a year back into your budget. All it takes is a minor lifestyle change.

And that’s just one change. Add up all the examples cited above and it starts to sound like real money.

But don’t stop there: Come up with your own small changes. Start paying attention to the way you do things. Ask yourself why you do it that way. Brainstorm ways to do it differently. Keep track of the savings, which may motivate you to find more ways to save.

And by the way, washing Ziplocs is completely optional. So is washing your hair with baking soda.

Photo: dpatricklewis, Tamara Burross


“Hypermiling” is a word we use for doing everything you can to squeeze the best mileage possible from your car, including hardware modifications which may or may not void your warranty and certain driving techniques which may be both dangerous and illegal. You may have seen some of these tested on Mythbusters, such as driving ten feet behind an 18-wheeler.

It’s fun to read about, but I won’t be doing any of that, myself. However, somewhat buried in a story about “mileage maniacs” in Japan, I found the idea of using only your big toe on the accelerator. This doesn’t seem to add any danger, because I’m still breaking with my other foot which is normally shod. And except for days on which I wear boots, it’s easy enough to slip one shoe off after I get in the driver’s seat.

So I decided to run a little experiment. This first screenshot shows what my normal morning commute looks like, mileage-wise. I take surface streets in the morning, because the traffic is negligible between 6:00 and 7:00 AM, and I don’t go more than 45 mph:

And here’s what it looked like the next day, when I removed my right shoe:

On both days I had the music on like normal, and neither day had more stoplights than the other, at least at first. The last five minutes on day two were kind of a traffic beating, but that’s bound to happen from time to time. What’s more important, I think, is that when I was shoeless, I got up over the 50 mpg hurdle much faster. Why is this happening?

I think that when you’re using just your toe, you’re putting less pressure on the pedal as a matter of course, and your body encourages your brain to think harder about how you should be accelerating. Also, and this may be psychosomatic, the engine noise seems more apparent to me, and I don’t want to hear any crunchy revving noises, so I back off more often.

I’ll keep running my experiments, and I hope you consider performing your own. This looks like a great way to save a few dollars a week without even trying.



July 1 and August 15 are the dates consumers need to worry about. New Fed rules for bank accounts go into effect on July 1 for anyone who opens a new bank account, while current account holders should know about changes to their accounts starting August 15.

On these dates, the Federal Reserve is limiting the ability for banks to collect fees from their customers through overdraft fees, a popular income source for banks and an unpopular nuisance for account holders. In the old system, the cost of offering free products was subsidized by the small percentage of customers paying overdraft fees.

Will I do believe it is good that overdraft fees, a penalty that targets whether by design or by practice the least wealthy customers, are placed behind an opt-in barrier, it leaves the banks with two strategies, both which will likely adversely effect customers who otherwise are good citizens and can skate by without paying fees.

First, the banks will enhance their marketing approach in order to convince customers that they want overdraft protection. For new account holders this is easy. A financial associate (salesperson) at a bank can ask the new account holder in person, selling the benefits of overdraft protection while downplaying the fee. For those who apply for an account online, the bank can bury the fee in an unrelated location on the website, separating the fee from the action in the applicant’s mind.

For current customers, banks can give their overdraft protection a fancy name like TD Debit Card Advance and send marketing materials through mail, email, phone, and text message, encouraging the account holders to allow the $35 fee.

Second, services for which we have grown used to accessing for free will no longer be so. I’ve managed to pay almost no banking fees for the last decade. Almost every fee I did pay in a savings or checking account was reversed. That has become more difficult in the past few years. Some of the accounts I prefer, particularly those with brick and mortar institutions like Wachovia, require minimum balances across all my accounts held there.

I expect that towards the end of the summer, banks will begin discontinuing many of their free products. Free checking will certainly be among the first of the most popular services to gradually disappear. The most popular programs across many banks, free checking for students and free checking for seniors, may be the last to go as we see free services for average, middle-class customers decrease.

Senator Chuck Schumer has already urged the Federal Reserve to ensure banks don’t penalize customers as they seek additional revenue when the cash cow of overdraft fees disappears. It’s unlikely the Fed will stop banks from adding new fees, some we may not have considered in the past. The banking industry will take a page from the airline industry’s handbook, in which every additional service has a cost to the consumer above and beyond the fare.

Like we are charged for meals on flights, banks may charge us for a monthly paper statement. Like we are charged for baggage, banks may charge us for viewing images of cleared checks. Like we are charged for changing our flight itinerary, banks may charge us for visiting a teller in person. Airlines charge us for cashing in our miles for “free” rewards, and banks may charge us for automatic bill payment services.

Perhaps banks are justified in charging account fees rather than offering free accounts. Shouldn’t a customer pay for his own service rather than expect another customer (such as one who pays overdraft fees) to subsidize the cost of operating that account?


PerkStreet Financial, a company that launched just over a year ago has decided to kick things up a notch by offering something new in addition to their online checking account.

Previously, PerkStreet enticed customers with a $50 cash bonus for signing up a new account, then 2% cash back on all non-PIN debit card purchases for 6 months and 1% on all purchases thereafter. Then they offered new PerkStreet customers up to 5% cash back using their debit card. This is a debit card offering better rewards than almost every credit card I know of, but now they’ve outdone themselves with a new structure to earn cash back.

PerkStreet Checking AccountAll PerkStreet debit cardholders are entitled to 1% unlimited cash back for all non-PIN debit card purchases*, and 2% cash back on online purchases at:®, iTunes®,,, and* The online purchase bonus perks are limited to $2,500 in spend every calendar year. Customers can earn 2% cash back in-store, with a current account balance of $5,000 or more at: Walmart, Target®, Best Buy® & Apple® stores.* The offline purchase bonus perks are limited to $2,500 in spend every calendar year. Earn 2% unlimited cash back when you and a friend use your cards together at the same restaurant, bar or coffee shop, however, these transactions must occur within 60 minutes of each other.* You may be familiar with cash back credit cards that offer 5% cash back on rotating categories like the Chase Freedom℠ Visa and Discover® More® Card but PerkStreet offers 5% cash back on special categories and merchants that they announce every month via Twitter (@perkstreet), their Facebook page or other company communications.* And PowerPerks bonus perks are limited to $5,000 in spend every calendar year.

New customers will earn the new cash back program stating March 5, 2012 while current PerkStreet account holders will be upgraded to this new cash back offer on April 4, 2012 and while most cash back offers are promotional, this offer has no expiration date. The profitability of PerkStreet rests in their ability to save millions of dollars by focusing specifically online, rather than at brick and mortar institutions. The money you keep in your Perkstreet checking account is loaned out by The Bancorp Bank and the interest earned is shared with PerkStreet. So the more money you deposit, the more money they can loan out and the more money they make.

In addition to a world class cash back debit card offer, PerkStreet also provides the following for all checking account holders:

  • Free checks
  • No minimum balance required
  • No account maintenance fees when you use your account
  • The nation’s largest surcharge-free ATM network
  • Free online banking and bill-pay

If you haven’t heard of PerkStreet before this offer, you’re not alone. PerkStreet is an up-and-coming consumer banking company, along with the likes of SmartyPig that you’ll see and hear a lot more of as time progresses. For now, PerkStreet has solidified themselves as the top option for opening an online checking account. With their current cash back offer, PerkStreet will continue to attract a lot of new attention.

To open up a PerkStreet checking account and take advantage of this amazing cash back offer, visit or sign up here.

PerkStreet Checking Account


Podcast 62: Families and Money Survey, Bank Overdraft Fees

by Luke Landes

Today’s episode of the Consumerism Commentary Podcast features two guests. In the first segment, Tom Dziubek talks with Carrie Schwab-Pomerantz, president of Charles Schwab Foundation. Carrie discusses the findings of their 2010 Families & Money Survey and also talks about the financial tools available at Schwab MoneyWise. In the second segment, Tom speaks with Jim […]

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Live Sports: One More Reason to Get Rid of Cable

by Smithee

Among the more popular reasons for not ditching cable is the desire to watch live sports. ESPN is coming to the rescue of many future cable-less households by introducing live, streaming sports in HD through the Xbox. In order to benefit, you’ll need to be an Xbox Live Gold member, which is about $50 a […]

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Good and Bad Uses of Leverage

by Luke Landes

Earlier this year, I suggested starting the decade off right by paying off debt. In general, debt is something that should be eliminated. Credit card debt is expensive and often unnecessary, personal loans generally carry a cost to personal relationships as well as interest, and mortgages hang around forever and make you a renter who […]

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How to Invest $300,000 — Or Any Amount

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Last week I wrote about lump sum investing vs. dollar-cost averaging, voicing the opinion that in most cases, if a lump sum is available, it’s a better choice in the long run. But how do you invest that lump sum? It’s great that the financial media has been encouraging young people to start thinking about […]

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Discover® More Card $50 Cashback Bonus

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The offer you are interested in has expired. Read our review of the Discover® More Card.

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Fed Issues New Rules for Credit Card Fees

by Smithee

The Credit CARD Act of 2009, which we’ve been covering in detail throughout its long snake through Congress, is finally nearing the end of its beginning. Ever since the fall of 2008, lawmakers have been trying to end abusive credit card practices. It started with a set of proposals from the Federal Reserve, but that […]

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