The piano she had in mind retails for about $10,000 and she had seen used, older models for as low as $6,000. She was hoping to find one at an even lower price of $5,000.

She had been spending 2-4 hours a week searching extensively from October to March and had found nothing. She was willing to travel within a 12 hours radius to pick up the piano if she found a good deal so she was even actively searching classified ads and on Craigslist in other major cities – but still no success.

Once she read my article, she had her husband set up an RSS search feed on CraigsList.com for the piano. Literally within 2 days she found an available piano about 12 hours away for the ridiculously low price of $2,500. It seemed to good to be true but they drove there anyway. It turned out to be a piano in excellent condition that had only been played once! They literally walked away with an $8,000 piano (that’s the going used price) for $3,500.

Shopping using RSS feeds really is a revelation. I’m surprised I haven’t seen the topic catching on more. I’m surprised by how much the general population doesn’t know about RSS feeds yet. Particularly when they can make such a huge difference in productivity. If you haven’t been introduced to RSS feeds yet, particularly for use in shopping online, check out the two posts below.

Shopping using RSS feeds
RSS shopping website guide

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Week 9 Buyer Beware

Dave Ramsey talks about how marketing affects behavior and subsequently debt levels. Some of the information about how companies use marketing to entice consumers is interesting but I somewhat question the usefulness on a practical level. Simply knowing the tactics companies are using doesn’t mean you’ll be immune to their effect.

Beware of marketing tactics

Here are some examples Dave uses:

• The number of daily marketing impressions the average person is exposed to has increased from 500 in 1971 to over 4,000 today. I believe it. In today’s multimedia culture, particularly with the internet, we are exposed almost constantly.
• More than half the GDP consists of consumption spending.
• Dave outlines the ways we’re sold to, including
1. Personal selling – Sales materials are increasingly customized and personal. By using database technologies, companies often have much information on potential buyers and are able to target individual needs.
2. Financing – Many businesses provide lines of credit or other forms of financing. In fact, some businesses make more money from financing than they do on actual consumer goods sales. I shouldn’t even need to mention that it’s a mistake to buy consumer goods with borrowed money.
3. Repetition – This one is self explanatory. This one is self explanatory.
4. Product positioning – Ever noticed the ice cold drinks displayed prominently in the store on a blistering hot day? Large companies are very savvy and do extensive research to determine the best way to position products in a store.

Again, I found this information useful but not incredibly useful or practical. There are many ways companies market that Dave left out. In fact, I currently run the marketing for a multi-million dollar internet company and am very familiar with many additional sophisticated marketing techniques. For example, a techniques called means-end laddering identifies the high-level personal benefits and values of consumers and emotionally ties the products features to them. Statistical clustering allows marketers to profile certain market segments in great detail and can effectively predict how certain segments will react to products. Conjoint analysis allows marketers to predict how much more a consumer will pay for a product given a tweak in the features of the product (e.g. gel vs. paste consistency in toothpaste).

Although marketers use these techniques, they are not necessarily bad. While they can be used for evil purposes, for the most part they can actually benefit the consumer. Using such tools, companies can create products that more fully meet consumer preferences. As a result, the consumer’s quality of living increases over time.

How to save on big purchases

On the more practical side, Dave gives a few very good tips for spending less, particularly on large purchases.

1. Wait over night before making a large purchase (being defined as $300 to $1,000 depending on how much money you make). Many of the large, multi-hundred dollar purchases people make are surprisingly impulse purchases. This happens particularly when people receive large lump sums of money such as a bonus. They go on a shopping spree and before they know it have spent the money on things they may not care that much about. The simple act of waiting overnight to make the purchase will deter most frivolous impulse purchases. Once the excitement of the moment has worn off, your brain actually thinks about it and realizes you’d rather spend the money elsewhere or even save it.
2. Understand the difference between needs and wants. You don’t need the wide screen 60″ LCD TV. You might really, really, really want it, but you don’t need it. Your needs are food, shelter, clothing, and transportation.
3. Never buy anything you don’t understand. If the sales person can’t explain it in terms you understand, don’t buy it. Buying things you don’t understand inevitably will cause you to buy something that doesn’t really fit your needs.
4. Consider the opportunity costs (what else could you do with the money). Opportunity cost is an economic term defined as the most valuable foregone alternative. Put in layman’s terms, what else could you do with your money? For example, if you spend $1,000 on the TV, what will you not be able to buy with that $1,000? Maybe there’s something else on your list of wants that you’d rather have even more. I frequently experience regret from buying several smaller items and realizing later that I could have saved that money to buy a bigger item that I want significantly more than the smaller ones.
5. Seek the counsel of your spouse. As painful as it may be, two minds are better, or at least more reasonable, than one. Unless you are spending personal money, you should consult your spouse on all major purchases anyway. A spouse can offer a different perspective and can often bring to your attention other uses for the funds or other alternatives that may meet your needs at a lower cost.

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Carolyn O’Neil (a registered dietitian) asked her readers the same question. It seems that no matter how we choose to eat, we always pay a price–either in money or in poor health.

The University of Pittsburgh Medical Center offers some suggestions for eating healthy without breaking the bank.

I’d love to hear if healthy eating has changed your spending, and your tips and tricks for eating healthy on a budget.

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How I got a $600 Zofran (ondansetron) prescription for $10

I mentioned earlier that my wife recently had surgery. During her recovery she was prescribed several medications which were hard on her stomach and caused severe nausea. In fact, she couldn’t even keep down the anti-nausea medication which eventually resulted in a trip to the emergency room a couple nights after the surgery.

They gave her a prescription for another anti-nausea medication called Zofran. This little pill works wonders and solved her nausea problems. The only problem came when we ran out of the Zofran the hospital gave us and we had to fill the prescription. To our dismay, we found out it was going to cost almost $600 for 30 pills. Actually it would have only cost about $250 because our insurance would only cover 13 pills. And that was for the generic version. I was absolutely blown away. Here we are absolutely reliant on Zofran to get through my wife’s recovery having just spent a significant amount on a surgery and subsequent emergency room visit. We got estimates from other main-stream pharmacies with similar results.

We actually learned later that Zofran is commonly used for chemotherapy patients and pregnant women to help with nausea. In fact I have two sisters-in-law that used it extensively during their pregnancies. And they paid through the nose as well.

Fortunately, we remembered that our surgeon had suggested a little old-school pharmacy by the hospital where they mix some drugs themselves. I’m not sure I’ll explain this correctly, but from what I understood they actually buy the raw drug (the generic name for Zofran is ondansetron) and make the pills themselves. This is different than buying the generic version because the generic version is purchased as a completed pill.

I figured I had nothing to lose so I ran over to their pharmacy and asked how much it would be. To my shock and pleasant surprise, they quoted me $10. I had to verify that it was correct and sure enough, it was a measly $10. I was blown away, and still am, that there could be such a price difference. I feel like I want to shout it from the rooftops to all chemotherapy patients, pregnant women, or otherwise nauseous people in the world. It felt like winning the lottery.

So my question to all GFD readers is, has anyone had a similar experience? Are there other expensive drugs that could be purchased inexpensively if mixed by the pharmacist? I plan on researching this further and will share the results.

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I loved the simplicity of the wearcacti site. It reminds me of Google’s bare-bones simple interface. You can buy 1, 3, or 5 ties at an increasing discount. The selection is small at this point but I talked with an owner and he indicated they will be expanding their selection soon. If you’re in need of a tie update, check it out.

On an even more random note, here are a few sites that explain how to tie a neck tie:
Plezer
Krawattenknoten
Paul Fredrick

Shopping online can increase your ability to save money on items from
TVs to toys, take
advantage of the opportunity to compare prices.

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Financial management principles are the same for millionaires and low-income-earners alike. Certainly the numbers your dealing with will change, but the basic principles and processes are still the same. In fact, by following sound financial management principles and optimizing your frame of mind, you can accelerate the process of building wealth and know how to keep it when you arrive. Here are 7 ideas that will help you think about and manage money like a millionaire, regardless of your income.

1. Be who you want to be. Earning more money amplifies who you are.

I’m going to borrow my first idea directly from my lunch partner who said “earning more money really just amplifies who you are.” While that might seem initially like a good thing, it really is a double-edged sword. For some, becoming a millionaire leads to a life of over-indulgence and decay. We catch glimpses of this in the popular media and entertainment world; drug addiction, abuse, and infidelity. Blemishes in your character will still be there if you become wealthy. Don’t fool yourself into thinking that having more money will solve your problems. It could make them worse.

On the other hand, if you have a mindset of serving and making a postitive contribution to your family and community now, you will be able to manifest those contributions with even greater power and effectiveness when you’re rich. By focusing on the positive contribution you want to make in your life, you will be prepared to expand and amplify your contribution as you earn more money.

2. Build your relationships. Earning more money amplifies your relationship dynamics.

Let me tell you a secret: earning more money does not solve your relationship problems. Even though my income has increased significantly over our 10 years of marriage, we still tend to argue about the exact same financial issues. If you have bad arguments over $100, just think of the how intense they will get arguing over $10,000 or $100,000. Working out your finances as a couple isn’t about the dollars, it’s about your values. By making all your spending and budgeting explicit, and by working as a team, you can address those values differences before they get out of control. As you become more wealthy, you’ll have a trusted, agreed-upon system in place to manage your increase.

3. Spend money consciously, but on a macro level.

Even as a millionaire you should know where every dollar is spent, but you don’t necessarily need to know line-item detail. Rather, you need to know how much is spent within broad, macro-level categories. Millionaire’s still need to decide how many thousands of dollars they’re going to spend on the “blow” category every month in relation to other expenses. Their blow category may be able to fund a new truck while mine funds a new book, but the decision is the same.

I recently read an article at StevePavlina.com where he talked about his goal of becoming a millionaire. He mentioned that to get in the mindset of a millionaire he would carry hundreds of dollars in cash in his wallet and not fret over $100 purchases. At first glance, it seemed that he was spending his money irresponsibly. But the fact is you can spend some of your money frivolously and still have total control over your finances. The trick is to simply decide how much you’re willing to blow in relation to the rest of your finances.

If I were a millionaire I may very well give myself and my wife $1,000 in personal money every month. That leaves a lot of room for spending money any way I want, anytime I want. But looking at my finances as a whole, there will be some limit as to how much I’m really willing to spend this way.

4. Be generous regardless of your income.

If you want to become a millionaire, be generous now. Charitable giving seems to be a universal law that attracts abundance into your life. Scriptures have taught this principle for ages and even T.V. shows like My Name is Earl jokingly acknowledge the effect of good karma and the golden rule.

Many people deceive themselves thinking “once I have a lot of money, I will give generously to charities,” but don’t make even small charitable contributions today. If you have a hard time giving away $10 now, what makes you think you’ll be able to easily give away $10,000 when you’re wealthy?

Upon recieving some windfall money recently, my wife and I decided to allocate a few hundred dollars to “random charitable acts.” We already donate to our church regularly but felt that we’d like to be able to give to specific people as we felt inspired to do so. We hope this will put us in a mindset of giving. We can actively be aware of the needs around us and feel empowered to help others financially as needed.

How cool would it be to do this on a large scale? I’ve been inspired by Billion-dollar donations from Bill Gates and Warren Buffet to charitable causes and think it’s a great example of a person’s character amplified. I recently read about someone who just decided one day to go out in public and start handing out $20 bills to random people. It seems counter-intuitive, but the stronger you grasp money, the harder it is to attract it into your life. In contrast, the more generous you are, the more it will flow into your life.

5. Provide enourmous value at work (self-employed or not)

One characteristic most wealthy people I know have in common is that they are totally invested in their business. Whether they earned their wealth by starting their own business or by working for another business, they all are focused on adding enormous value.

Sometimes it’s easy to kick back and waste time when working for an employer. It’s easy to not feel personally invested. But by doing so you’re only hurting yourself. In every job there are possibilities to contribute above and beyond what’s expected. Those who do tend to expand their influence and are promoted faster. Treat your job like it’s your own business and you’ll find a level of enthusiasm you didn’t know existed. Looking at work through the lens of business ownership, you also may just find yourself aching to start your own business. Either way, you’ll be a happier person and will find that opportunities for advancement and wealth come to you more effortlessly.

6. Plan a “millionaire lifestyle” day.

Imagine what your day-to-day life would be like as a millionaire. Would you get up and go play tennis? Or would you sleep in as late as your want? How would you interact with family and friends? Would you still work but only on projects you love? Once you have a clear picture in mind, find a day you can take off work and do those activities. Of course, there may be restrictions on how much you can spend, but do as much as you can afford.

By actually doing what you think you’d do as a millionaire, you can take one small step towards turning your thoughts into reality. Some people may find that they don’t really enjoy the activities as much as they thought. If the reality doesn’t live up to your expectations, re-think things and try again. If you think you’d spend your time running a business, you could use your millionaire day as a way to take massive action towards starting that business. Don’t just do this once. Schedule a “millionaire lifestyle” day 2 or 3 times a year. Have fun and get a taste of the millionaire life.

7. Build a strong foundation and get ready for your finances to explode.

It’s easy for people to get overwhelmed by the enormity of the task of getting out of debt, paying off your house, and saving for retirement. But what most people don’t think about is that with a focused budget and a debt-reduction plan, there comes a point at which your debt and house are paid off and you’re already saving enough for a comfortable retirement. All of a sudden you’re in a position with no debt, no payments, and possibly thousands of dollars a month of disposable income. Overnight, your famine turns into a feast. That’s when life gets really fun.

While we’re still working on paying off our house, we have already started experiencing this shift. It used to be that we struggled to fund luxury categories like gifts and vacation. Bonuses and cash gifts were used to fund categories that we knew we wanted to budget for but didn’t have enough month-to-month income to fund. Over the past couple years, we’ve been able to fully fund these categories and windfall money now goes mostly straight to debt reduction. Soon our second mortgage will be paid off and we’ll be putting that several hundred dollars a month (our payment plus snowball) into our first mortgage. Once the first mortgage is paid off, we should have over $2,000 a month to play with. And that isn’t even taking into consideration any income increases I may have over time. $1,000 a month in personal money doesn’t sound all that far off after all. And I won’t even need to be a millionaire to get it.

8. Recognize your wealth now to attract more into your life.

If you’re reading this blog, chances are you’re more wealthy than the vast majority of the world. Sometimes it’s easy to forget that simple fact. You are wealthy. I recently listened to an audio program by Dr. Wayne Dyer where he mentioned that if you were to compare the population of the earth to a village of 100 people and apply the same statistics you would see that 6 of the people (all from the United States) have 59% of all the wealth of the world and that only 1 person would own a computer. If you have food in the refrigerator, clothes on your back, a roof over your head, and a place to sleep, you are better off than 75% of the world’s population.

By focusing on the wealth you already have in your life, you will attract more of it. If you only think about scarcity and what you don’t have, that’s exactly what you’ll attract. To create wealth, you have to think creatively.

Be a millionaire is a frame of mind. If you’re only after money, you’ll always want more and will never have enough. If you’re after happiness, you can find it at any moment by changing your focus. By following these guidelines you’ll be able to experience just as much joy and satisfaction as any millionaire. “Money can’t buy me love” nor can it buy happiness.

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Unfortunately you can’t subscribe to specific search terms. But there is a main RSS feed and you can search on the site for specific items. Check it out!

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Greg over at StackBacks.com has a unique and GTD friendly way of managing cash involving envelopes, index cards, and paper clips. His method is a great way of divvying out your cash so you don’t spend it all at the beginning of the month, leaving you living like a pauper at the end of the month. It’s essentially a sort of cash tickler file (look under “Tools and techniques”).

Please let us know how you manage your cash!

Cash Allowance File

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Last week I mentioned in passing a great site called ShopLocal.com that allows you to see Sunday shopping circulars online. It’s almost a tradition for me to browse the shopping circulars every Sunday looking for deeply discounted items and rebate deals that allow you to save a lot of money. With a little patience, you can usually find the specific types of items your looking for. That is, as long as it’s not Black Friday.

ShopLocal.com makes it even easier to find deals in the Sunday circulars. It catalogs every item in every circular and makes them searchable online. When I’m look for a specific item, it’s much easier to just perform a search rather than sifting through the other 99% of the items that aren’t relevant.

When you perform a search be sure to notice there are two areas you can search: online and local. When you perform your initial search, you’ll see the online items. To see the local items, you need to click on “switch to local offers” in purple on the right side of the screen. Once you switch to view local offers, all subsequent searches will also be for local deals.

Power Browse the Circulars

Sometimes I’m not wanting maximum efficiency, but rather want to browse the circulars to find unexpected deals. With ShopLocal you can do that too! In fact, you can power browse. To view the actual circulars, click on “See all Circulars” in the left navigation. Once you select a circular there are two different ways to look at them. By default you will see a small picture of the circular with the individual items for sale listed on the right.

You can also view a larger version of the circular by clicking “Enlarge this page” (under the circular). When you roll your mouse over an item, a box shows with the description and pricing. To get more information you just click on the box and wallah! You can also save items to a list which is useful when I find several deals on the same item and want to compare later.

The site has several other features such as browsing by category or store. Give it a try next time your looking for a specific item or if you want to have an enhanced circular experience.

Feel free to share more of your favorite shopping sites. Also check out my list of online shopping websites that use RSS feeds.

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Lynn has posted a great response to my “10 ways to save money this Christmas” post. She advocates taking it easy for the holidays and negotiating a “cease fire” with friends and family by opting out of gift exchanges. Instead, use the holidays as a time to slow down and reflect on your life and goals. In particular, I liked her analogy of hibernating bears:

Most living species in this ecosystem respond to the absence of light and the plummeting temperatures by drawing inward for a long period of quiet regeneration. Except humans, who plan parties, decorate their homes, and flock like manic lemmings to shopping malls.

The very best way to save money on your Christmas shopping is to simply stop participating in the compulsory insanity. Instead, take naps, build fires, read books, watch movies, play games, listen to music, snuggle, talk and sip cocoa.

I am now free to hibernate a bit in this coldest, darkest month. I have noticed that lights and decorations seem prettier and the connections I do make with family are far more enjoyable now that I am more in sync with my inner hibernating bear.

How awesome is that? I love the idea of getting in sync with my “inner hibernating bear.” Her point is well taken. Society really speeds things up during the holidays. It would be more healthy, and less expensive, if we were to slow down and take time to enjoy the season and reflect on our lives. By doing so we would all feel less of a need to compensate for our anxiety and overwhelm by overspending. If only I had given time for such reflection before my Black Friday craziness!

Check out Lynn’s post and her website:

That perfect gift – part 1

Take Back Your Brain!

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