Sunday, January 18, 2009

Frugal returns

Brett Arends writes R.O.I. (Return on Investment) column for the Wall Street Journal Online. In one of his recent columns, he talks about small (non stock) investments that pack a big return.

Admittedly they're nothing new to those of us on the frugal path, but I'm going to highlight a few of them, and since I like to see if I can "do it for less," add a few comments:

Buy a bread maker. .... If it saves you just $4 a week on store-bought bread, that's $208 a year. A 280% return.

Doing it for less: It may be possible to get one at a thrift shop or a garage sale. Or perhaps you have a friend or relative who'd be happy to give you the one taking up space on their counters.

As for cost ... I've never paid $4 for a loaf of regular bread, and hope I never have to. (And at my house, we usually don't go through a loaf of bread per week.) When I do the math on bread making, I come up with about $1 per loaf for ingredients. That's what the cheapest loaf costs in supermarkets here. Do I get better quality bread for my $1. No doubt. So that alone is a good return to me.

Now, if you use the bread maker for other things, your return could skyrocket. If, for instance, you make pizza dough twice a month .. even if you spend $10 a month on ingredients, you could still save $20 or $30 a month over the cost of takeout.

Replace your premium cable package with a Netflix subscription and a $100 set-top box. You can download movies and TV programs as well getting DVDs through the mail. Cost: $100 for the cheapest set-top box, plus $17 a month for a three-movie subscription. If it replaces a $50-a-month cable package, that's a 98% return on investment

Doing it for less: The biggest return would come from ditching cable completely, watching TV shows online and using Redbox for your movie fix. There's enough free rental codes out there to keep your costs at a big, fat zero.

Admittedly, that's a problem if your shows aren't online. Or you have a sports fan in the house. I've never done Netflix, so I can't speak to their selection of TV shows. So the most practical solution might be to downsize the cable package (or try satellite) and go with Redbox.

Order a packet of seeds and plant them in a window box or garden. Growing your own herbs, spices, and even vegetables – depending on the amount of space you have – is a great investment. If you spent just $10 on seeds and saved a mere $50 in the year, that's a 400% ROI.

Doing it for less: Unless you're going to do tomato or other veggie seedlings, it's likely cheaper to pick up the seeds at a local store. Last season, WallyWorld had bean seeds for as little as 10 cents a package. Some of my gardening friends buy extra seeds to start plants the next spring.

Start making your own coffee to take to work ..... Cost: $20 for a Thermos, $10 for a filter and papers, and $60 a year for ground coffee. Then skip the $4 a day drive-thru. If that saves you $1,000 a year, the return is more than 1,000 %.

Doing it for less: If all you need is just one morning jolt, a good travel cup can be had for $5 or less. And of course, watch for coffee sales and coupons.

And while you're at it, bring along some tea bags, or a few cans of cola, or whatever else you like to drink during the day, along with your lunch and a few snacks. Stash them in your desk to avoid those wallet-bending runs to the vending machine.

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