Tomorrow is Independence Day in the United States, a time for friends and family to gather and enjoy the early summer. I’m taking a l-o-n-g weekend, and won’t return until Monday. If I’m lucky, I’ll get a chance to play in the sprinkler.

In the meantime, I thought it would be fun to devote a thread to financial success stories. People send me e-mail all the time to say how they’ve taken control of their personal finances. I love to read these tales, and I know that other people do, too. (We even have a section of the forums devoted to them.)

For example, here’s what one long-time reader wrote a few weeks ago:

I paid off a credit card today!  At times its balance had been as high as $12K, but with the severance pay from my old job, signing bonus from new job, and various other resources, I paid it off completely today.  

The next step is to move the existing balance on my other credit card (about $8K) onto the now-zeroed card at a low balance transfer rate, and then pay down that last balance. It feels really good to have this thing off my back after so long.

Do you have a financial success story to share? Big or small, it doesn’t matter. Tell us about it! You have all weekend to do so. Have a safe and happy fourth, everybody…

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Related Articles at Get Rich Slowly:

• My Paycheck is Late Again
• Win a Free Consultation with a Financial Planner
• GRS Reader Success Stories
• Daily Roundup: Contest Edition
• When the Going Gets Tough, Get Back to the Basics

One of my favorite saving techniques is the use of targeted accounts. If I want to save for something big — like a Mini Cooper, for example — I’ll open a new savings account specifically for this purpose. I first learned about this method from Robert Pagliarini’s The Six-Day Financial Makeover:

Traditionally, most people invested for various vague goals and lumped all of their savings together in a single investment account. That?s pretty boring. It?s not very inspiring or effective. Purpose-Driven Investing satisfies our need for a purpose and our need for instant gratification by thinking of each of our goals as a separate ?basket?. Each of our baskets represents a single goal with a clear purpose that we can see and grow.

What does this mean in the real world? It means that we have a single investment account for every goal. For example, if one of your goals is to take the family on a European vacation, create a separate savings account called ?Family European Vacation Fund?. This account or basket contains all of your savings toward that one goal. Every penny in the account is for the European vacation — not for retirement, a new car, your emergency fund, your kids? college tuition, or any other goal.

I like this idea, and have been using it ever since I saved for my Nintendo Wii.

Until recently, I kept my targeted savings accounts at the local credit union where they earned me a paltry 0.35%. For the past few months, Get Rich Slowly readers have been urging me to move all of my savings to ING Direct, which is where I keep my emergency fund. “It’s easy,” my readers tell me. “You can open multiple accounts, give them any name you want, and track them all from the same screen. You can even open a checking account!”

Last month, I finally overcame inertia to try this myself. My readers were right: opening multiple accounts at ING Direct is easy. (It’s probably easy at HSBC Direct and many other online banks, as well.)

Step one: Choose an account
First, I logged into my ING Direct account summary page. From there, I clicked the big “Open an Account” button.

I was directed to a page listing a variety of available accounts, including business and retirement accounts. Because I wanted to open another savings account, that’s the option I selected.

On the next screen, I was asked to further refine the account type:

Step two: Fund the account
Next came the good part: I selected how much I wanted to put into the account and where those funds would come from. I was also able to give the new account a nickname. Since I was opening these extra accounts specifically for targeted saving, it makes sense to name each one based on my goal.

Finally, I had to agree to the terms and conditions of the account.

Step three: Wait
Then the waiting began. Because ING Direct had to “pull” the money from my credit union, it took several days for the cash to transfer to my accounts. At first they appeared empty:

After the money had transferred, it was easy for me to track all of my savings goals in one place.

Next on my list? Exploring ING Direct’s certificates of deposit and business accounts.

A useful tool
Thank you to all of the readers who suggested this. I don’t know why I took so long to try it. I’m sure this technique isn’t limited to ING Direct. I was doing something similar at my local credit union (though without the pretty interface, account nicknames, or high interest rates), so I suspect that other online banks offer similar functionality.

Not everyone needs multiple accounts to save for goals. My wife, for example, is perfectly content with a single gigantic savings account for everything. But for me, being able to separate funds like this is awesome. It keeps me motivated to save. And because it doesn’t cost me a penny, I’m happy to do it.

Note: This article was originally scheduled to appear on June 12th, but Trent at The Simple Dollar posted his handy (and similar) guide to budgeting with an online bank that day, so I delayed my story for a few weeks.

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Related Articles at Get Rich Slowly:

• Use a Freedom Account to Prepare for the Unexpected
• Which Online High-Yield Savings Account is Best?
• The Official GRS Referral Swapping Thread
• Optimize Your Bank Accounts with a Periodic Review
• What are Your Experiences with Internet Banking?

The August 2008 issue of Consumer Reports — one of my favorite personal finance magazines — features two articles that may be of interest to readers of Get Rich Slowly. The first offers tips for cutting expenses. The second gives a brief overview of budgeting.

Cut your spending by $500 per month
The Consumer Reports Money Lab looked for easy ways for the average American to save money. They came up with six suggestions and estimated potential savings for the average consumer. Here are their suggestions (with links to relevant articles at GRS).

1. Find cheaper auto insurance. By shopping around, the average person can save $65 per month. Need help? Here are 10 expert tips for saving on car insurance.
2. Optimize your life insurance. Premiums have dropped in the past ten years, the article notes. It may be worth replacing an existing policy. Also, by adopting a healthier lifestyle, you can cut costs. Average savings? $110.
3. Shop smart for food. CR cites U.S. Department of Agriculture data indicating the average family of four can drop its grocery bill by nearly $200 per month though smarter shopping. We just discussed grocery shopping tips on Monday.
4. Stop paying bank fees. The average U.S. household pays more than $25 per month in bank fees. There’s no reason to do so. Learn how to avoid overdraft fees and get yourself a high-interest bank account.
5. Call up cell phone savings. According to the U.S. Bureau of Labor Statistics, the average family spends $90 on phone-related expenses. Consumer Reports suggests checking to be sure you’re not paying for too many minutes.
6. Pay off your credit card. If you can get out of debt, you’ll not only save on finance charges, but you’ll also free up the cash that was going to pay the principal. Estimated monthly savings: $65.

Consumer Reports also encourages readers to increase contributions to their 401(k) plans. This helps prepare for the future and reduces that tax bite today. You can read the entire article at the Consumer Reports web site.

Create a spending strategy
Last autumn, I shared my notion of a spending plan, which I called a “budget for non-budgeters”. Consumer Reports likes spending plans too:

That’s what a household budget really is — a plan to track your spending and keep it within boundaries. Done right, a budget lets you spend without guilt. Here we offer ways to make your budget — oops, spending plan — simple and painless.

Their advice will be familiar to long-time GRS readers:

• Set goals. I believe that the road to wealth is paved with goals. Consumer Reports believes that long-term goals help you achieve big things, while short-term goals keep you motivated.
• Track expenses. It doesn’t matter how you do it, but track your spending. You can use a notebook, computer software, or even online tools.
• Plan for surprises. If you haven’t already, start an emergency fund. Most experts advise saving three to six months of living expenses, but CR suggests a “personal escrow” approach instead.
• Set priorities. Know which bills get paid first. For most people, this means the big things like food and home. (If you pay yourself first, it may be your retirement.) Whatever’s left after your expenses is your discretionary money.

The full article includes tips on how to create a web-based spending plan. The rest of this month’s issue includes ratings of large kitchen appliances, tips on buying tickets to shows and ballgames, and a tests of two dozen running shoes. (They didn’t test the pair I bought last month, though.)

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Related Articles at Get Rich Slowly:

• The Consumer Reports Mother’s Day Gift Guide
• Credit Card Advice from Consumer Reports
• How to Drive a Great End-of-Summer New Car Deal
• 20 Free Ways to Save Energy
• Consumer Reports Auto Issue Round-Up: Top Picks for 2007

On Thursday I’ll be interviewing personal finance columnist Scott Burns. Burns may be best-known for his “Couch Potato” investment portfolio. He’s also the brains behind Asset Builder and the co-author of the new book Spend ‘Til the End, which explores the notion of “consumption smoothing”, or how to maintain a stable standard of living throughout your life. If you have you have personal finance questions you’d like for me to ask Burns, please let me know.

Meanwhile, here are a few recent personal finance articles from around the web.

First, Flexo at Consumerism Commentary believes that the idea of getting rich slowly may be a fallacy. Or does he? In “7 Ways to Lose Your Money”, he takes issue with a recent MSN article that promises seven ways to get rich a little more quickly. The problem? Flexo points out that these methods can also lead to financial ruin.

Meanwhile, Five Cent Nickel notes that cheap is not necessarily frugal. Quality may cost more initially, but in the long term, it usually pays for itself. (But don’t confuse quality with “name-brand” — they’re not necessarily the same.)

Jim at Blueprint for Financial Prosperity recently had his home’s roof replaced, and in the process learned some lessons about finding contractors. One of his tips? It’s not all about price. Kris and I have learned this lesson, too, over fifteen years of homeownership. For us, it’s more important to find quality workers than cheap workers. It’s a balance.

Finally, Love Food Hate Waste recently shared 5 sure-fire ways to save money on your food bill. The average household with children in the U.K. throws away £610 in food every year. This article offers tips for buying and storing food sensibly.

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Related Articles at Get Rich Slowly:

• Daily Links: PearBudget Edition
• Daily Links: E-Book Edition
• Money Hacks Now at Get Rich Slowly
• links for 2006-09-12
• Daily Roundup: Bringing Home the Bacon Edition

This is a guest post from Amanda, a Colorado tech writer and an activist for children with congenital heart disease. This article is about Amanda’s personal experience with insurance. It’s not a prescription for other people, but insights into the value of insurance in her own life. It’s her hope that it will get you thinking.

There was a time in my life when the thought of insurance made my eyes glaze over. I’ve never been one to want to read details in insurance contracts, license agreements, etc. I also don’t always enjoy thinking through potential unpleasant situations. So, when it comes to buying and using insurance, I’ve learned some lessons the hard way.

I’ve made some mistakes with my car insurance, for instance. When I bought a second car to drive to grad school several years ago, I thought, “No, I don’t want to pay $3 extra a month for rental car coverage because we have two cars.” A few months later, I rear-ended a woman on the highway going 45mph. It took a while to get my car back, and my insurance went up a lot. But it also made it difficult for my husband Jim to get back and forth to work while I used the other car for work and school.

I had thought I didn’t need rental car coverage, because I figured, “Oh, I won’t be the one to cause an accident.” Ha! There is a reason it’s called an “accident.” So, lesson learned — I needed rental car coverage. I learned was to understand what I was buying.

Insurance details can be a pain:

• How high of a deductible can I actually afford?
• What kind of impact will that have on my emergency savings if I have to pay it?
• How much will I save by trimming features?

Recently I got a notice that wet- and dry-rot are no longer covered in my homeowners policy — do they know something I don’t? I’m still trying to figure out what this means to me, but I did notice that the price didn’t go down. Also, it took me five months to update the beneficiary information with the insurance company; I finally got it done right before Christmas. So, I’m not an insurance expert by any means, but I am a consumer and I have to make choices.

You’ve got my back — right?
In the early 1980s, my dad had his left foot crushed in a construction accident, and he nearly had it amputated. He couldn’t work for two years, during which our family of six lived on workers’ compensation wages of less than $1000/month. My sister was still a toddler and my dad couldn’t walk, much less care for her or pick us up from school, so my mom couldn’t get a job that paid enough to cover daycare.

When I was 19, working at McDonald’s I spent two months on workers’ comp after a pot of McHot McCoffee broke open and burned the skin right off my left foot. I was paid 75% of my wages, but did not have to pay taxes. Still, it was really hard to live on what amounted to less than minimum wage that summer.

When I was 21, my dad was diagnosed with esophageal cancer. For nine months, he lived off of his paid disability insurance through work. For his last nine months, he lived off of Social Security. There was a substantial difference in coverage. I have never been confused by an AFLAC commercial — I know exactly what that duck is quacking about. I don’t buy their product, but I appreciate what they’re selling.

When they offer disability insurance at work, I buy the maximum allowed. It’s a few bucks out of my pay check, but I ate enough government cheese in my childhood to know the value of this coverage.

At least I’ve still got my health
I could write a book on health insurance. (Maybe someday I will.) When my dad fought cancer in the mid-nineties, he had over one million dollars in medical bills. At the time, all but $4,500 were covered by his insurance. From 2003-2007, my own nuclear family paid out about $58,000 for insurance deductibles, copays and prescriptions; yet our insurance company has come closer to $3 million dollars (before their contractual discounts with hospitals and doctors). There are a lot of open-heart surgeries and a couple of c-sections, and an ambulance ride and a lap-coli in that tally, but as much as I might complain about my part:

• It’s not $3 million, and
• At least much of it was tax-deductible.

Once when I was sitting in the waiting room with my son at the cardiologist, a woman asked the receptionist how much an echocardiogram costs. The receptionist didn’t know; the nurses didn’t know; the doctor certainly didn’t know. It was early in my cardiology adventures, but now I could tell her it’s roughly $900-$1200, with another $200 for the cardiologist visit and $300 facility fee; so at least $1500 to tell her where her son’s murmur was on the spectrum of “let’s watch this” to “he needs a transplant or he’ll die.”

This woman, who ran a small business with her husband, had no insurance on her eight-year-old son. She had to talk to the finance department before she could decide whether she could afford to have this ultrasound to learn the secrets in her son’s heart. I don’t know what happened to her after that, but from what I know about congenital heart disease, she could easily be owing the hospital and doctors over a million dollars today. If their business was remotely successful they would not have qualified for Medicaid until a year after they went completely bankrupt. Today’s bankruptcy laws make it even harder for families to recover from these setbacks.

Your money or your life
Growing up, my father always emphasized the value of insurance. I knew our family’s insurance agent personally — he came to our house twice a year. When my dad was ten, his own father dropped dead of a heart-attack. My grandma lost the house, and they were forced to stay with relatives until she remarried. Like his father before him, my dad died young. He was only 48 when his battle with cancer ended — clearly cancer won.

My parents never had a lot of money, but my dad always made room in the budget for life insurance. My mother, who had been a stay-at-home mom since she was 17, had no work experience or job skills, but when my dad died, she was able to pay off their modest home and create retirement accounts for herself. Eventually, she used the care-giving skills she acquired as a parent, and taking care of my dying father, to start a career caring for the elderly. If my dad hadn’t obtained solid life insurance, my mother would have struggled to keep her house, and wouldn’t have had the luxury to try out a few different jobs before she found the right fit for her.

Those were my early life- and disability-insurance lessons. So, when we were 21 and 22, Jim and I bought our first life insurance policies. It’s no coincidence that my dad was going through chemo at the time. We started with $100,000 each. For a 21-year-old non-smoking woman, that was pretty cheap! Now I have a little over $1,000,000 and Jim has about half that (work doesn’t offer as much for the spouse as the employee). We pay about $80 a month for all of that life insurance.

I’ve worked it out, and with my son’s heart condition and the cost of our mortgage, we may be slightly over-insured for me, but not for Jim.  If he died and I took a leave of absence (or worse if I were in an accident with him and incapacitated) that money could handle our mortgage until I was able to get back to work and childcare after it, but that’s all. Also, if we both died, a trust would be created for our kids that would not be eaten up by our son’s medical expenses, so at least our kids could still go to college and have essentials during the rest of their childhoods.

I think I’ll always carry enough life insurance to pay for my funeral and settle immediate, because insurance usually pays out faster than investment funds. I learned this when both of my grandparents died last year. The insurance check came six weeks before the investment money. They had actually pre-paid for their funerals, but they were both in their late-70s and did that as a favor to their grandchildren (my dad was their only child) so we wouldn’t have to deal with those details or expenses. This I wouldn’t do at age 33, but I’d start thinking about it when I get north of 70.

We finally had our wills done last year, and it feels good to take care of that too. It cost $500, but that buys a lot of peace-of-mind knowing my kids will never end up in foster care while a court takes several months in probate to settle our estate.

Pick your poison
Everyone has unique insurance needs. These are my own family’s experiences. If I had two cars again, I’d buy a used one and carry liability based on it. If I were a single woman with no kids, I would probably rent or own a small condo, and have only enough life insurance to pay for my funeral and settle my estate so my mom wouldn’t have to do it for me. If we didn’t have dependent children, I wouldn’t have as much life or health insurance coverage as I do. When we’re older and have more money in retirement, we’ll carry less insurance.

None of this stuff is fun to think about. But it’s a simple and unavoidable fact that we all die.

You may die from a car accident, a work accident, cancer, heart attack, infectious disease, or just old age. Most of the time, you don’t get to chose when or how you check out. You also don’t get to choose whether or not you or your children will get seriously ill. I’ve known lots of healthy people who’ve lived well and still gotten cancer, and I know great parents whose children have died from brain tumors, leukemia, and heart disease. You can control what you eat and whether you exercise, and that will mitigate your risk, but it doesn’t eliminate it.

I think the trick is to choose all of your insurance coverage options carefully based on where you are in life today, and who would be impacted if you were hurt, fell ill, or died. But do not forget to update your coverage based on your own needs and circumstances as you move forward and experience changes. Sometimes you will need more; sometimes you will need less.

I didn’t share all this to scare people into wasting money on insurance, but to encourage them to think seriously and realistically about what would happen if the roof caved in, the car got wrecked, a foot got lost, you find a lump somewhere it should not be, or you just never make it home one night. The most expensive mistake we can make is believing it won’t ever happen to us or someone we love.

Amanda’s previous articles at Get Rich Slowly include:

Look for more from her in the future.

Auto accident image by Incase Designs.

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Related Articles at Get Rich Slowly:

• Drama in Real Life: Cancer Scare
• Steve Pavlina: The Power of Now
• A Brief Introduction to Insurance
• Ten Ways to Drive Down Your Car Insurance
• Daily Links: Out Too Late Edition

My sister-in-law has cancer.

Last week, a biopsy revealed that Stephanie has a cancerous lump on her thyroid. She’ll likely have her thyroid removed, meaning she’ll need to take medication for the rest of her life. (She’s 37 years old.) She’ll also probably need a handful of radioactive iodine chemotherapy treatments.

Prognosis positive
Jeff and Stephanie have both settled down a bit after the initial scare. They’ve heard from many sources, including Steph’s grandmother, that this form (and location) of cancer is easy to eliminate, and has a low chance of spreading or recurring. Steph’s grandmother had her thyroid removed years ago (due to a growth on it), and she is now 77 years old.

Still, this is cancer, which no member of my family takes lightly. My father died from cancer ten days before his fiftieth birthday. Last summer, cancer killed a cousin at age 47. Other family members have died from the disease as well.

A lucky mistake
A situation like this has enormous personal finance implications. Steph’s case is especially interesting because it demonstrates that sometimes the “right choice” isn’t.

Before the birth of their daughter in February 2006, Stephanie obtained a supplemental hospital/short-term disability insurance policy because she knew she would need a C-section. After Emily was born, Steph tried to cancel the policy, but the agent talked her into switching to a cheaper cancer/accident policy instead.

Inspired in part by Get Rich Slowly, Jeff and Steph have been taking control of their personal finances. This past May, when it came time for her office to renew policies, Stephanie asked to have her cancer/accident policy canceled because she wanted to save the $70 recurring monthly expense.

After the cancer diagnosis came through, Jeff and Stephanie were kicking themselves for having canceled the policy — it would have offset some of their upcoming costs. Then Steph remembered that both of her June paycheck stubs still had the deductions listed. She called her agent to see if her policies were still in force. Sure enough, the official cancel date was July 1st, so the agent was able to revoke the cancelation.

“I don’t know if it will pay out enough to compensate for all the premiums we’ve paid in the last two years,” Jeff writes, “but at this point I don’t care. If it helps with the medical bills that are bound to accrue, that’s all that matters.”

A calculated risk
Stephanie’s situation highlights just how difficult it can be to know how much (and what kind of) insurance to carry. It seemed unlikely that she’d need the cancer policy, so she canceled it. From a Big Picture perspective, this was probably the right decision. But in her individual circumstance, it turned out to be the wrong move.

Last fall, in his brief introduction to insurance, Aaron Pinkston wrote that “insurance is the cheapest and most immediate way for a person to displace risks that are too great to assume individually”. That is, insurance allows groups to pool their money to offset unexpected large individual costs.

But how can you decide how much insurance you need? And what types? Later today, I’ll share a guest post about making informed insurance choices.

Meanwhile, friends and family are ready to help Jeff and Stephanie through this crisis. And although they have bigger things to worry about, it gives them a degree of comfort to know they have a little insurance to help with the financial challenges that loom ahead.

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Related Articles at Get Rich Slowly:

• Ask the Readers: Personal Finance During a Health Crisis?
• Daily Roundup: Bringing Home the Bacon Edition
• Daily Links: My Favorite Stories from the Past Two Years
• Drama in Real Life: “You’re Fired!”
• Get Rich Slowly’s Greatest Hits (2007 Edition)

June was a difficult month for me. I was busy in Real Life, distracted by home remodeling and by physical fitness. Things are settling, which will allow me to spend more time on the site. On top of that, I now have actual help around here!

• My wife, Kris, is processing the backlog of e-mail.
• My friend, Winston, who is one of the inspirations behind GRS, is doing research and handling publicity.
• Another friend, Lisa, will help copy-edit guest posts. (You may remember Lisa from “Saving with Albert” and other guest posts.)
• Meanwhile, JerichoHill continues to keep an eye on the discussion forums.

Thanks to everyone who is lending a hand. I appreciate it. And thank you for your comments, links, and tips. The readers are the heart of Get Rich Slowly. You keep the site a vibrant place for exchanging money-saving (and money-making) ideas.

Here’s a brief overview of some of June’s top stories on the blog:

• June 3rd: How to take a mini-retirement: Tips and tricks from Timothy Ferriss
• June 9th: Guarding against the invasion of Stuff
• June 11th: The new reader’s guide to Get Rich Slowly
• June 15th: Financial advice from my father (when I was nineteen)
• June 16th: Personal finance made easy: Pay yourself first
• June 20th: Cheap vacation: Be a tourist in your own hometown
• June 23rd: Subscribe to Craigslist search results to grab great deals
• June 26th: The non-conformists’ guide to personal finance (a guest post from Chris Guillebeau)

Best of the Forums
The Get Rich Slowly discussion forums were active again this month, spawning several interesting conversations:

• Living debt free…is it really possible? this is a great thread
• Going (mostly) car-less
• Unusual ways to save money
• Debt snowball vs. emergency fund
• How do you work your clothing budget?

The forums are a great place to chat with your fellow readers. Have questions about emergency funds? Ask! Want to chat about cheap vacations? This is the place to do it. (Since opening a year ago, the forums have 1800 registered users and over 21,500 posts.)

Subscribe!
You may subscribe to Get Rich Slowly via any of the following methods:

This weblog is a success because of you and your support. As always, I welcome reader contributions, either as ideas for stories, or as guest entries. If you have any comments or requests to improve this site, please feel free to pass them on.

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Related Articles at Get Rich Slowly:

• The Best of GRS: June 2007 Edition
• The GRS Garden Project: June Update
• Daily Links: 100 Pushups Edition
• Press
• Daily Links: Technical Difficulties Edition

Kris and I went grocery shopping this weekend. We stopped at Bob’s Red Mill — a local health-food store — to use some “buy one, get one free” coupons. “You can get anything you want,” Kris told me, “except hot cereal.”

“Why can’t I get hot cereal?” I asked. “I love hot cereal.”

“I know,” Kris said. “But you buy it all the time. You buy it faster than you eat it. Just last week, you bought another box of that blueberry oatmeal from Trader Joe’s. You never remember what we have at home. You need to shop with a list.”

She has a point.

A shopping list is a useful way to remind yourself what you do and do not need to purchase. But most frugality experts emphasize shopping with a list because it prevents impulse purchases. Impulse purchases wreck grocery budgets. In Why We Buy: The Science of Shopping, Paco Underhill writes:

Supermarkets are places of high impulse buying for both sexes — fully 60 to 70 percent of purchases there were unplanned, grocery industry studies have shown us.

More than half of all grocery purchases are unplanned! No wonder creating and sticking to a list can bring down grocery costs.

But that’s not the only way to save money at the supermarket. Over the past two years, I’ve published a lot of tips for saving money on your grocery bill. Some of these have been obvious — others less so. All of them can help you save at the supermarket. Here are some of the best:

Make a list — and stick to it.

This is the cardinal rule of shopping. The list represents your grocery needs: the staples you?re out of, and the food you need for upcoming meals. When you stray from the list, you?re buying on impulse, and that?s how shopping trips get out of control. Sure, a magazine only costs $5, but if you spend an extra $5 every time you make a trip to the supermarket, you waste a lot of money.

Compare unit pricing.

The biggest package isn?t always the most cost-effective. Stores know that consumers want to buy in bulk, and so they mix it up: sometimes the bulk item is cheaper, sometimes it?s more expensive. The only way you can be sure is to take a calculator. Our grocery store posts unit pricing for most items, which makes comparisons easy.

Ditch the basket or cart.

If you’re dashing into the supermarket to pick up milk and bread, don’t use a basket. Baskets induce people to buy more. If you’re limited to what you can carry, you’re more likely to avoid impulse purchases. Only use a basket (or shopping cart) if it’s absolutely necessary.

Don’t examine things you don’t need.

The more you interact with something, the more likely you are to buy it, says Paco Underhill in Why We Buy: “Virtually all unplanned purchases…come as a result of the shopper seeing, touching, smelling, or tasting something that promises pleasure, if not total fulfillment.” Do you know why grocery stores place those displays in the aisles? To intentionally block traffic. They want to force you to stop, if only for a moment. It only takes a few seconds of idly staring at the Chips Ahoy! to convince you to buy them. Stay focused.

Live on the edge.

Health-conscious shoppers know that the perimeter of the store is where the good stuff is. The baked goods, dairy products, fresh meats, and fruits and vegetables are generally placed along the outside edge of the supermarket, while the processed stuff can be found up and down the aisles. But shopping the edges isn’t just healthier — it’s cheaper too. Stock up on the fresh food first, then venture to the middle of the store.

Discard brand loyalties.

Be willing to experiment. You may have a favorite brand of diced tomatoes, for example, but does it really matter? Go with what’s on sale for the lowest unit price. You may find you like the less expensive product just as well. If you try a cheaper brand and are disappointed, it’s okay to return to your regular brand.

Choose generic.

Better yet, try the store brand. Generic and store brand products are cheaper than their name-brand equivalents and are usually of similar quality. But do you know why you’re reluctant to try generics? The power of marketing. Most generics have unappealing packaging. If they cost less and taste the same, who cares?

Use coupons wisely.

Coupons really can save you money. But you have to know how to use them. Clip coupons only the things you need — staple foods and ingredients — not for processed junk food. Learn to use special coupons. Once each month, one local store sends us a “$10 off a $50 purchase coupon”. We know it’s coming, so we plan our trips around it.

Make one large trip instead of several small ones.

Each time you enter the grocery store is another chance to spend. By reducing the frequency of your trips, you’re not only avoiding temptation, but you’re also saving money on overhead (time and fuel).

Buy from the bulk bins.

Some stores offer bulk bins filled with baking ingredients, cereal, and spices. When you buy in bulk, you get just the amount you need, and you pay less. Much less. (One GRS reader recently shared how he saved over $150 by buying spices in bulk.)

Check your receipt.

Make sure your prices are scanned correctly. Make sure your coupons are scanned correctly. Sale items, especially, have a tendency to be in the computer wrong, and yet few people ever challenge the price at the register. You don?t need to hold up the line: simply watch the price of each item as it?s scanned. If you suspect an error, step to the side and check the receipt as the clerk begins the next order. If there?s a problem, politely point it out. It?s your money. Ask for it.

Shop alone.

In Why We Buy, the author notes that people tend to buy more when shopping in groups than when shopping alone. “But men are especially suggestible to the entreaties of children as well as eye-catching displays.” Kris complains that we always spend more on food when we shop together. She’s right. If possible, shop alone.

Use a grocery price book.

A grocery price book is an ongoing list of the items you most commonly purchase and how much you paid for them. This list allows you to detect price cycles, spot bargains, and plan your shopping trips for maximum savings. A price book allows you to practice strike-point shopping.

Shop on a full stomach.

Studies show that folks who shop when they?re hungry buy more. This is certainly true for me: If I go to the store for milk on a Sunday morning without eating breakfast, I?m likely to come home with donuts and orange juice and Lucky Charms, too.

Walk or bike.

In our recent discussion about how to pay yourself first, Ross Williams suggested another way to reduce impulse purchases. By walking or biking to the store, you can automatically limit your spending. “It’s amazing how focused you can be when you are limited to one shopping bag full of groceries,” he writes. “Once you are very conscious of each purchase, it seems to carry over even to the small items where space isn’t really an issue.”

Any of these tips can help a savvy shopper save money at the supermarket. But when combined to create a cohesive shopping philosophy, they have the power to slash your grocery budget significantly. I’m not promising that you’ll be able to feed yourself for $15 a week, but you might be able to save enough money pay down your debt or to jump-start your savings!

Here are some related articles:

• How to save hundreds by playing the drugstore game
• The lazy man’s guide to groceries on a budget
• Grocery store vs. farmers market: Which has the cheapest produce?

Kris requested I offer some final pointers for the gentlemen. “Check with your wife before you go shopping,” she says. “Check with your wife before you put anything into the cart. And remember: Just because you like a food doesn’t mean you need to buy it every time you go shopping.”

Bulk food photo by mattieb.

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Related Articles at Get Rich Slowly:

• Use a Grocery Price Book to Slash Your Food Spending
• The Grocery Game
• How to Spend Less - Lessons From ‘Why We Buy’
• Daily Links: Money Saving Tips Edition
• Price vs. Ethics: Is the Best Price the Best Choice?

This is a guest post from my wife, and features a story I’ve come to look forward to updating every summer: the tale of two entrepreneurial girls.

Last weekend I explored Portland’s beautiful Eastmoreland neighborhood during its annual 140-family garage sale. In the past, I’ve come away with major bargains, but this year I had to be content with enjoying the first day of summer with a couple of friends. We admired the homes, gardens, and assorted cast-offs of the well-to-do.

Many of the adult garage-salers were raising funds for charities. Sidewalks and curbs were also strewn with young entrepreneurs selling their wares: homemade cookies (still warm from the oven), beaded jewelry, rice-krispie treats, iced bottled water, and grilled hotdogs.

Over the past two years, J.D. and I have had fun meeting one pair of entrepreneurial sisters who rise above the run-of-the-mill baked goods and soda. I was pleased to see them once again. In 2006 they were selling jokes:

Last year they were selling stock tips:

My friends and I each bought a cup of lemonade, which we downed while questioning these young businesswomen about this year's products. The elder girl was selling bottle-cap magnets — each individually created and carefully crafted — at two price points. She told to us some of her inspirations, and compared the relative strengths of the magnets. (The one dollar bottle caps had stronger magnets than the seventy-five cent magnets.) She was proud of her creations, but, like any good salesperson, she didn’t oversell. I selected one with a cancelled 26-pence Queen Elizabeth stamp and moved on to see what her younger sister was selling.

The younger girl had created two issues of a neighborhood newspaper: The Lofty Times. Typed on an actual typewriter (without correction tape!), the publications bear phonetic misspellings and creative punctuation, but are brimming with enthusiasm and real journalistic gusto. We purchased a copy of each issue, did some negotiating to arrange limited re-print rights for Get Rich Slowly, and exchanged email addresses. Here’s a sample story from The Lofty Times, reprinted by permission of 8-year-old author Grace:

the Eastmorland goroge sail

Thouthins of peaple look forwerd to this moment in Eastmorland it is the garage sale! A man named Jared Seger is selling different parts of a house, such as windows, doors, and other things.

In th past years my family has allways gone big on the garagesale. one year DAD beleave it or not bot a hool stack of inapropryite gossap maggaseens, it was hollywood gossap and lemenaid, every year it was a tradishon to have lemenaid.

Other years were forchentelling, jocks, stack priceed, and so many more things that even if I tried, I probly could not name them all! this year is going in a todaly different path. AT ages of 8 and 10, my sister and I have lerned so many things, I, as you can see am making my newspaper. Madeline is making bottlecap prodex.

I have many, many good thouts about the garagesale, I hope you do to.

The girls and their mother gave us a crash course in their annual entrepreneurial endeavors. Their parents loan them seed money for the projects, which the girls must pay back from their profits. Any profit is theirs to spend. With parental support and guidance, these sisters are well on their way to understanding the value of money and the joy of making and selling their own goods — as well as knowing how to stand out in a crowd!

I’m sure that it would be easier for these parents to just give their daughters spending money, but they know that the lessons learned here are priceless and the extra efforts worthwhile.

My friend Rhonda and I later discussed the merits of each girl’s choice:

• The magnets clearly had higher start-up costs, but broader customer appeal.
• Yet the newspapers were well-worth the cover price for entertainment value.
• Both projects showcase the imagination of the creators.

I wish I could eavesdrop on these girls as they consider, reject, and perfect ideas for each year’s merchandise. And I hope that by the end of the weekend, Grace and Madeline were both sold-out! May they return next year with their contagious entrepreneurial spirit, and Bravo, parents!

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Related Articles at Get Rich Slowly:

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The Motley Fool is a web site devoted to helping average people make better investment and financial decisions. Recently, GRS forum administrator (and resident economist) Jericho Hill got a chance to visit The Motley Fool headquarters. This is part two of a report on his experience. (Here’s part one.)

When I was in high school, I participated in my state?s stock market game. It was designed to introduce our economics class to the world of investing. That?s where I first heard of The Motley Fool, an upstart website for financial investors that went against the grain of having advisors manage your money. Their newsletter analyzed the advantages of managing your investments yourself, and advocated indexed mutual funds over managed funds.

So, when I received an invitation recently to visit the Fool Headquarters in Alexandria, VA for a focus group, I jumped at the chance. The purpose of the focus group was two-fold.

• One part of the meeting focused on The Motley Fool?s free CAPS service, a community stock-picking tool. I discussed this experience last week.
• The second part of the focus group dealt with how the participants used financial information, where they got it from, and what our views on investing were.

It was the second part of the meeting that I felt was the most valuable. Along with various Motley Fool staffers, the group members spoke about their personal investing habits, beliefs, thoughts, and attitudes. We heard from people ranging from first-time investors saving for retirement, to a professional financial planner, to well, myself. The breadth and depth of perspective was illuminating.

Prior to the focus group, I had walked around the office floor and noticed quite a few quotes on the walls. One by Peter Lynch read ?Never invest in any idea you can?t illustrate with a crayon.? Another said ?Though it?s easy to forget sometimes, a share is not a lottery ticket, its part ownership in a business.?

Later, during the group discussion, another quote came up by Warren Buffett: ?If you have one or two great ideas a year, you?re doing great.? The two new investors in the room stated that they felt pressure to succeed and succeed often as they started to invest for retirement. Knowing there were resources that played on the psychology of investing rather than mathematics of investing was important to those attendees. They also didn?t know where the best sources of information were, or who to follow.

Many of those in the room felt that it was not prudent to follow one particular author or person. Rather, it was the subject matter that as important, and as Burton Malkiel said ?Investors should act like intelligence agencies, gathering information no matter how seemingly insignificant.?

Somewhere during the conversation, I brought up the problem of risk. Individuals have different risk profiles, just as some people can ride very scary roller coasters while I?m stuck on the Dahlonega Mine Train ride at Six Flags. Further, not only do we handle risk differently, but another attendee pointed out that we even define risk differently. Our group took five minutes to write individual definitions of risk. They were all different when we reconvened.

We had a long discussion about risk, and about how our differing views on risk can make conversations on financial topics difficult. Different risk tolerances create difficulties in determining just what one?s best financial plan is. How does one define risk? More importantly, how do you define risk? All agreed that becoming more comfortable with one element of risk (volatility) was exceptionally important to being a successful long-term investor.

When the focus group ended, there was no general consensus on what information we should consume, to whom we should listen, where we should invest, or even how we should invest. That seems like a profound thought to me: that your best personal finance advisor is yourself, regardless of whether you?re just starting out or finishing up.

Jericho Hill also recently had a chance to speak with David Gardner, one of the founders of The Motley Fool. Look for excerpts from that interview at Get Rich Slowly in the future.

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• links for 2007-05-16
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