So, I’m moving soon. And I’m moving into a neighborhood that has a significantly higher “lifestyle” than my current neighborhood. And gosh darn it if I haven’t read ever smart money book that explains how you spend like those around you! And gosh darn it, I’m gonna try to avoid it. My fiancee and I are quite frugal, and intend to stay that way.

So, here’s my strategy for preventing lifestyle inflation (ie, spending more as you have more money, live in a nicer part of town, etc)

1. Acknowledge The Pressure

I have no doubts that there will be external pressure, both seen and unseen to spend more. The good news is that I pretty much gave up caring what people thought of what I wear, or drive, years ago. I lived in an office on the floor for two months for goodness-sakes. But the pressure will be there. So, Step 1 is acknowledging that the pressure will be there. There is no use denying it.

2. Talk about Spending Changes

If you have a spouse, or significant other, talk about how you can prevent lifestyle inflation. I found just discussing the issue with my fiancee uncovered a number of good insights. Agree to not fall into the “keeping up with the Joneses” trap. Stuff doesn’t equal happiness. Never does. Never will.

3. Allow Yourself to Inflate A Little (if you’re debt free!)

Allowing yourself a little inflation isn’t necessarily evil. If you’re making more, and out of debt completely, then living it up a little bit is totally OK. Lifestyle inflation is a negative when you’re broke, or just buying for appearances, but spending more doesn’t always have to be a bad thing. It’s all about moderation, and circumstance.

4. Learn to Cook

One of the easiest ways to blow money with friends is to eat out all the time. Learning to cook, even if that means spending more on groceries, is a fantastic way to avoid lifestyle inflation. Instead of going out with friends, offer to cook them dinner! It will end up being cheaper for you, and you’ll probably have a chance at a deeper connection with a home-cooked meal anyway.

How do you prevent lifestyle inflation?

A few weeks ago I posted about my first experiences with the gleaning co-op that I have joined which resulted in many interesting questions. I thought I’d drop in and update you about how it’s going, how it’s affecting our “bottom line” and if it’s worth it.

First off: It’s a huge time commitment. I spend five to seven hours a week processing food. Picking it up in a nearby town, and then cleaning, composting, chopping, canning, freezing, etc.

Second: It’s totally unpredictable. Most weeks I pick up two banana-boxes of food. Last week I picked up six. (Roughly 250 lbs of food to deal with).

Third: It’s not flexible. If six boxes of food get picked up, six boxes of food must be dealt with. If it’s not done ASAP, fruit flies, mold and spoilage will ruin your next several days. You cannot ever be too busy to “deal” with whatever presents itself in the boxes. Even if it includes 35 lbs of cactus leaves, 150 bags of hamburger buns and two boxes of aged radishes.

That said, out of each pickup, we feed our family for a week and freeze extra. We also provide fruits, bread, vegetables and dairy products for as many as eight additional families.

My husband jokes about “food bank day at the Wards” but truly, it’s been benefiting many people.

Overall it’s reducing our monthly food budget by about $250 a month. It would be a greater reduction if I wasn’t doing the Atkins diet which is kind of expensive, so yes it’s worth it, especially when we add in the number of people we’ve been able to help with it. The other day I was able to make a fantastic eggplant Parmesan for six for a grand total of $0.33. (All I had to buy was the eggs—everything else came in the box).

Honestly, I’m enjoying the adventure and the opportunity to involve my oldest in this lesson in planning, thriftiness and resourcefulness and caring for those in need. She always looks forward to the boxes and wonders eagerly what treasures might be in there and she’s learned a great deal about the needs of others. We’ll be keeping this project up for a while I think.

Many have asked why this food is going to volunteers and not food banks. Generally, the non-perishables all go directly to food banks. Most food banks aren’t set up to process gleaned produce and breads and the ones that are, tend to have far more than they can handle. Most food banks prefer to buy fresher produce and dairy in bulk because the quantity and quality is reliable. We work with families in need from our own neighborhood and from our church to distribute as many items as we can on an individual basis. Otherwise, we’re just diverting items that would otherwise be sent to the landfill because the next inventory shipment has arrived or the item has a cosmetic flaw that results in it being unsalable.

If you’re interested in starting a co-op of your own, you can take a look at the by-laws and organization structure of the one that I’ve joined.

I’m about 3/4 the way through “Stop Acting Rich” by the same author of “The Millionaire Next Door“, Thomas Stanley.

The good news is that for the most part, my consumption and spending habits match exactly with the frugal millionaires (or Toyota Millionaires) that Stanley lusts over.

I don’t even drink Vodka, but if I did, I’m sure it would be the $10 bottle brand, not the $60 grey goose brand.

I drive a Toyota, which is good according to the book (well built, not flashy, good value). And I don’t lease. My car isn’t totally paid off yet, but I hope to have it paid off at the end of this month. Then I’ll go buy a new Mercedes….

Just kidding. My fiancee and I will probably keep my Scion Xb (a Toyota brand) for years to come. It’s a great little car.

Now, the one part of the book that worries me a little bit is that Stanley statistics show that the area you live in determines your spending habits. Not a shocker, but I think this will be a struggle for me when I move. We are planning to live in a nicer neighborhood in Portland, though will be renting. I don’t think our spending habits will change, but according the “Stop Acting Rich” they most certainly will.

I know for a fact our food budget is going to go down. It’s always been my Achilles heel. I’m just not much of a cook, and I’m willing to part with dollars to get food. I love food. So, our food budget has been way too high for a long time. Living together however, and without the stressful job my fiancee has now, I think we will cook a ton more. In fact, I know we will. As cliche as it is, she is looking forward to cooking more, and I’m looking forward to eating! (and doing the dishes of course!)

Why do so many people, especially my age group (young professionals), “Act Rich”.

Well, we think that to be “Rich” you have to drive a Mercedes, and buy a fancy condo. We don’t drive around town with our savings account balances as our hood ornaments, but maybe we should.

So, as I prepare to live in a nicer part of town after I’m married, both me and my wife will vow to not “act rich”. One, because we aren’t. And two, because being rich isn’t about status symbols. It’s about freedom, and the ability to sleep at night without worrying that the Repo man is taking away your leased Mercedes.

For 2010, I’m trying to be even more frugal. As I mentioned before, there’s just $7,000 left of debt to bust and I’m looking for a way to get there even sooner. Groceries consume about $500 in our budget each month for our family of four, so that’s certainly a candidate for “tweaking.” Sure, we could give up the few organics that we buy, or we could eliminate meat and eggs, but my low-carb diet would make that really hard. So I’ve decided to start gleaning.

What is Gleaning, exactly?

Perhaps you are wondering what gleaning is. Gleaning is a the process of salvaging food that stores can no longer sell, or crops that are left behind after a harvest. It’s such an old practice that it is even discussed in the Bible.

This week, I joined a co op gleaning group. It’s a non-profit and I pay an annual membership of $30 to support the groups’ activities. There are about 30 members and they take turns with their responsibilities. This way I’ll only be going to stores to pick up items two to three times per month, however, other members get the other days. This way, each store is gleaned each day and doesn’t have to hold spoiling merchandise. We’ll all be getting it fresh enough to freeze or preserve. Once a week, I’ll pick up my “share” of the gleans from a central location. All told,  it’s a time commitment, of 3-5 hours per week.

We’re encouraged to share our surplus with others in the community—I have several elderly fixed-income neighbors and will share with others in my church if there is anyone in need.

Where do you glean?

My group will glean a major warehouse store, a natural foods market, two supermarkets and two bakeries. Additionally, I’ve signed up for crop gleans and salmon gleans (when the Department of Fish and Wildlife has collected the roe that they need from salmon for hatcheries they need somewhere to send the dead fish and our gleaning group is a recipient).

Since I can, juice and freeze, the erratic nature of the gleans will work for me—if one day yields 7 lbs of aged grapes, I can figure out what to do with that pretty quickly. This summer I bulk-purchased tomatoes and peaches and canned those. Gleaned tomatoes may be too blemished to can, but could be turned in to spaghetti sauce and canned. While many would consider a crate of zuchinni a blight, I can think of what to do with it in no time. (One thing about gleaning is that you can’t pick-and-choose—you have to take the entire glean).

Tonight after my orientation, I followed my new friend to the house that hosted the day’s bread glean. She didn’t want all of her share of bread, so invited me to pick up whatever I’d like. It was a great surprise to come home with several loaves of artisan bread from a bakery and a big bag of bagels. (I’m so regretting my low-carb diet right now).

I go to train in stores Monday and Tuesday and should be able to post on gleaning progress before long.

Find a gleaning club

If you have volunteer time and a car (the bigger the better) and would like to join a gleaning club, they can be hard to find. Good places to start looking are local community message boards, food co-ops, churches, cooperative extensions through local universities (usually Agriculture universities) and food banks. Some food banks allow gleaners who volunteer on behalf of the food bank to share in the glean as well in exchange for their time.

This is a special post from debtkid reader Kimberly. Great tips for setting at wedding budget! Just in time for me as I got engaged at the end of last year!

Congratulations, you’re engaged! Now that you are now a “we,” personal finance should become part of the conversation. You could be thrown into this immediately with the thoughts of a wedding. As weddings can be overwhelming, expensive and all-encompassing, this series will discuss the way that personal finance and weddings can co-exist.

Dig a little into planning, and you begin to wonder – how much will this party cost? The largest party most people throw is a Halloween bash of a couple hundred dollars. Weddings can range from a $50 Justice of the Peace affair to hundreds of thousands. For those who enjoy thinking about personal finance, a wedding can present a whole host of challenges to a budget beyond adding up numbers – family expectations, relationships, and differing financial perspectives. Many will decry any restraint in the celebration of a marriage – and the kool-aid is easy to drink. If you’re determined not to be driven crazy, a budget is a must-have tool.

First, imagine the wedding of your dreams – a snazzy swing band, 1941 Packard LeBaron, bungee jumping, lobster, or a hot air balloon ride. Then imagine the smallest wedding you will enjoy, and plan for it. Write down every guest that you could ever hope to invite to (childhood friends, co-workers, long lost cousins) avoid continually revising the list upwards. Figure out a location amenable to both sets of families. Dream about location – a rural location is easier on the wedding budget, but more expensive for the traveler. Do some internet research to reveal the costs; typical high cost items include save the date cards, invitations, dress, tuxedo rental, celebrant, church rental, church musician, reception venue, food, open bar, photographer, florist, centerpieces, bridal party gifts, party favors, hotel, getaway car, rehearsal dinner, honeymoon.

Next, figure out who is paying – which inevitably means going back to step two and revising the budget! If a parent offers to pay, thank them…and remember that nothing in life is free! But regardless of who pays, no one should take on debt for a wedding – few things can shackle a young marriage quicker than money woes. Therefore, simple life hacks to reduce the budget are:

Tips To Reduce Your Wedding Budget

• skip the wedding planner
• ask guests for help in lieu of a gift – hosting (large house/yard; club membership for a reduced rental fee), talent (photographer, hair stylist), getaway car (a convertible will do), honeymoon (vacation house)
• hold the ceremony in a park – free, manicured, and less flowers needed!
• wear a used or non-standard wedding dress
• plan the day for the off-season (fall and winter)
• dance to a DJ instead of a band
• create a center piece with peacock/ostrich feathers and branches (no florist!)
• email the save-the-date instead of sending a paper version
• hold the ceremony and reception at the same venue
• serve hors d’oeuvres instead of a meal
• eliminate party favors
• hold the reception at an orchard or old barn (not inhabited by animals!)
• serve ethnic food – tends to be cheaper

Like anything, planning is the key. Create your vision together, and talk about creating a budget with your fiancé. This is harder than creating a monthly budget because you do not have a history of costs from which to estimate. One way to handle this is to treat it like a construction project and pad the budget by 10%. And as described in Debt Kid, ING offers subaccounts so that you can track your saving. Good luck, hang on, and enjoy being the ringmaster.

Perhaps the easiest step you can take in your journey to debt freedom is to cut your spending.

In our house, we’ve found ways to save on practically everything we buy. I’ll list a bunch of items here and ways to save 30% or more—and I invite you to post questions of items you’d like to save money on, and I’ll reply with my best cost-cutting idea and encourage others to do the same!

1. Baby diapers (disposables) or overnight trainers: Costco is pretty good, Toys R Us is also good. At any costs, don’t buy these at the grocery store. The very best place however, is a liquidator’s shop. They’ll sell bags that were damaged in shipping, have misprinted labels or are odd lots. A pack of pull-ups for our tot are usually $16. I spend no more than $9. Bonus if the pack is damaged and you can negotiate a price because it’s missing one diaper or one is torn/cut. Never buy baby products like this though if the pack has been damaged in shipping with water or other contaminates. I try to make sure that the damage appears to have come from opening the box. Switching to cloth diapers for some families (especially families with multiple little ones). Independent liquidators will often negotiate!

2. Office Supplies: Find a thrift store that carries them. I found one that is run through a church and is often donated things like paper, pens, post-it flags and more. I go through a lot of legal size paper that usually costs $70 to $80 a case if I use a coupon. The thrift store sells me the cases of paper (usually with one broken strap or missing the box lid) for $10.

3. Auto Service: Ok, this one isn’t a guaranteed 30% savings, but that’s usually my goal. First, shop around the price on the service you need. (Don’t forget to check auto shop’s ratings!) Also, ask about discounts that may apply to you. USAA member, Military member, Senior, AAA member? This will usually get you 10-15% off. Combine that with a local coupon (check the service provider’s Web site) and finally, ask if they’d give you a discount for allowing them to schedule the work at their slow time? The week of tax day auto shops are dead. Same for the week of Christmas. I just got a large auto service done over New Year’s weekend and saved a bunch of cash. Also, ask if they can extend the discount to services needed but not yet scheduled. I need a serpentine belt and a transmission flush that I didn’t have done on New Year’s. Would they give me the same batch of discounts if I bring in my car again at the end of the month? Sure, why not. Just tell them it’s “Eric’s deal” they told me, and signed the quote on my receipt. Cool beans. Never be afraid to ask. Especially when they know you have plenty of time to shop around.

4. Groceries: First, make a price book, and step outside of your grocery routine. Try ethnic markets and bulk food stores. Next, check co-ops. Finally, especially for large families, consider joining a gleaning club. I’ve just joined one in my area, and in exchange for one run twice a month to a store to pick up produce or breads that are expiring soon, I get a weekly allotment of the whole clubs’ gleans (some glean dairy, some glean breads, others other foods, supplies). If you can or freeze or have a spare freezer, this is a great way to fill your pantry. Liquidators are also good for canned foods, coffees, etc. Learn food safety (i.e. never open a can that bulges) and buy non-perishables that are dented or discontinued. You can check the shelf-life of food at www.stilltasty.com if you want to know if the food is still good.

5. Detergents/Soaps/Cosmetics: I use bulk liquidators/chains for these things. Big Lots is my favorite. I can always find my favorite dishwasher detergent for 50% of what I usually buy. Also, for laundry detergent, I make my own. It costs me about $3 to make one year’s worth. I used to spend $17 a month on laundry detergent. Cosmetics like shampoo, makeup, lotions are very, very easy to find at BigLots and usually very affordable.

6. Eating out: STOP! Do not pass go! Do not collect $200. You don’t need to eat out—you’re getting out of debt. See item 4 and go pick up a can of tuna and a can of SPAM at a liquidator’s. Surf and turf baby!

In sum, on anything you need to buy, try the following: Craigslist free or Freecycle.org (today I got a garbage can lid–mine blew away, and I gave away a fitted crib sheet), pawn shops, thrift stores, consignment shops, liquidators, bulk stores, barter/trade and negotiate. Sometimes you can even combine the above techniques.

So what do you need to save money on? Let’s brainstorm some solutions!

Mint: There’s many other great systems, but I simply want something that will scream at me (or text me) if I’m over budget and a dashboard or “mission control” for all my accounts in one place. Networth on demand, every day. I love Mint. If you haven’t tried it—you should! If you use a smaller bank—you may need to use Green Sherpa (they’ll add banks for you, but there is a small monthly subscription fee). Green Sherpa is also much better for the data-nerds who want to download, and “play” with all their data every month.

SmartyPig: Who doesn’t love a 2% return on a small-balance savings account? Just try to beat that with your local bank for a minimum deposit under $100. This is like savings account and gift registry, with all the convenience of an automated 401K contribution. Set it and forget it—literally, and there’s no charge to use it. These handy free savings accounts are set to automatically transfer from your primary account at any bank over to your SmartyPig account until you’ve reached a savings goal. You can even use a widget to show your savings goals on your Web site or Facebook. Kids’ college fund, honeymoon cruise, or just your annual Christmas shopping savings account, this is free, convenient and cute. Check it out! (Also, they offer great customer support via phone or Twitter!)

Podcasts: My personal favorite is The Dave Ramsey Show—especially the “Debt Free Friday” shows. I plug this one-hour daily podcast in and hit the treadmill. So far I haven’t lost any weight but I’ve lost a lot of debt!

NetQuote: If you love shopping for insurance… you’ll be disappointed. But if you’re like me, and would rather hang out with your dentist—a wealth of free quotes is pretty spiffy and saves time and money.

SmartHippo Nope, the name doesn’t tell you anything, but SmartHippo.com can tell you if you can get a better deal on a mortgage. It’s smart and social search engine is an awesome tool for getting the best deal out there—it helped me get a screamin’ deal on a refinance earlier this year.

Credit Score: You don’t get your full credit report, but you can monitor your credit score for free at CreditKarma.com. Handy for a multitude of reasons, and allows you to watch for long-term trends in your credit history.

Blogs: The blog world is vast. Most bloggers aren’t experts in their area. I’m no personal finance expert—but I’m an expert on my situation—and you may find some things are similar to your situation. Perhaps we can all learn something from one another. Not only is the blogsphere a great resource for creativity and ideas, but also for community. We get to know our readers and our readers get to know us. It helps keep us on track and accountable.

So—speaking of staying on track and accountable—what have I missed? What are your favorite free financial tools online?

Next month is open enrollment for our family. I dread this season. My husband works for the state government, which gives us a broad range of choices—six this year.

This is the first time we’ve had to consider the whole family on one plan—and to shop around for the best deal—the last time we’d added our newest daughter and I on the plan as secondary insurance—just in case of layoffs at my company. It turned out to be a good move, as it became our primary insurance within a month.

So, how do you compare plans?

Our options range from $373 a month to $71 a month for our family of four—but how does one choose the best plan for their family? How do you compare tiered versus flat-fee prescription coverage? What about formulary/non-formulary medications? How do you compare deductibles, annual maximums and other items?

These questions and growing dissatisfaction with our current company’s bizarre fee structure has had me probing this problem for answers—and the best deal.

Here’s what I’ve discovered:

1. You must consider your needs. While my family is in generally good health, both of our daughters have chronic manageable health conditions that require extremely expensive medications. For us, a $2,000 annual maximum is no problem—provided we know we’re not going to be spending $10,000 on medications in a year. That is to say, we’re all in good health when we’re on our medications. If we expected an inpatient hospital stay or a kidney transplant to be part of the process, we may choose a different plan.

2. You must consider your providers. Who do you want to be seeing? I called our doctor’s office to see which plans are accepted. I also called the social work department at our local Children’s Hospital to see what they recommend in terms of coverage based on our kids’ conditions. The hospital informed me that because we make less than $106,000 annually—they won’t bill us for anything beyond our insurance company’s share of the bill. We just have to provide quarterly income verification. I wish I knew this about $2,000 ago.

3. Consider your health, both physical and financial. Can your savings account take the hit of you in the hospital for a week? Can you cover 25% of an inpatient stay, or should you look at a plan with a co-pay of $200 for an inpatient stay? Take annual maximums and deductibles into account. On our plan, an annual deductible of $4,000 per family is really not that bad, considering we only pay $123 a month.

4. Consider your prescription uses. I called our pharmacist and asked for more info about our co-pays. One of my daughter’s medications ranges from $5 a dose to $5.80 a dose. Our current insurance just has us pay 30%, not a fixed amount—so our co-pay varies with the cost of the drug. She suggested I ask the prescription plan about specifics on the medication. Our youngest will require extraordinarily expensive medications soon, so I called the prescription plan to inquire. They provided me with an online calculator that shows the current price (just like a commodity) of each drug so I could calculate my price. (Usually about $44 a month). They then said that if our doctor would fill three months at a time, we could get 3 months for a total of $50. (A savings of $328 a year!). I could calculate the medications that our littlest daughter will be on later and see that, as feared, they’ll be expensive.

5. Don’t forget to consider all of your options together. Remember the little daughter with the crazy-expensive meds to come? She doesn’t need them yet, but she will, and a 30% co-pay could be devastating, but remember option 2? Our little one’s medications are covered through the hospital’s pharmacy (our regular pharmacy won’t even carry the meds)—and any part not covered by insurance is covered by the hospital.

In the end, it turned out that the insurance company we have is actually the best deal for our family. Ultimately, I’m disappointed (and embarrassed) that I didn’t learn to navigate this plan a little better when we first signed up last year—it would have saved us almost $5,000. If you don’t understand your health insurance, trust me—it’s worth the time to sit down and figure it out. It took me about a half day and a half-dozen phone calls, but was well worth the effort.

Back in December when I was laid off from my regular 9-5 job and decided to pursue self employment in lieu of reliable income, I did some pretty serious bill slashing.

I called every service provider to our household and demanded a better deal. In all but one instance, I got a better deal. Now for ten months, I’ve been resting on my laurels.

We’ve been in our Financial Peace University (FPU) class for three weeks now so we’re in to budgeting and cash flow, and had to create a zero-based budget. More on this later, but ultimately, it makes me really uncomfortable, so I wanted to whack down our fixed expenses even further.

This week I took a look at all of our expenses from largest (house) to smallest (my gas money—at about $35 a month) and made some likely targets for a better deal. Here are my results.

Newspaper

My husband likes to read the NYT on the ferry to work though, but he doesn’t touch it on weekends. Total cost: $65.00/mo It really was always our intentions to read the weekend papers… but, well, you know where good intentions get you. This week I phoned the circulation desk and asked for a deal. Could I drop the weekend papers? They seldom do this for residential addresses, but they agreed. New cost: $30 a month!

Mobile Phone

I have a contract with my provider. Two lines, two phones with data plans. I use my phone for my business, but rely very little on actual minutes—more on the ability to send/receive data on the road. I checked out the competition with www.billshrink.com and saw that my $260/mo bill wasn’t exactly competitive. Mind you, I’m under contract, so I don’t have a lot of leverage here, but I tried anyhow. I called and asked for a plan “that fit the family better.” And they were happy to oblige—reviewing our past use history, and reducing our bill to $120/mo with no change in service. Just fewer “anytime minutes” (though we’ll still have more than we’ve ever used in a month). Total savings: $140/mo!

Food

We’re a family of four, and food is a major expense. I’ve been tackling this with a series of $1/serving dinner recipes, but have also found that meal planning saves a fortune on food. We’ve literally knocked our weekly grocery bill from $150/week a year ago to $90 a week now (and that’s adding one person and disposable diapers to the expenses!) We don’t waste food due to spoilage. We also batch cook a few “convenience” meals for those days when nobody wants to cook. Total monthly savings $120

It’s amazing the difference that such a few little changes could make! The total monthly savings of these easy changes is actually $295!

The scissors had to come out.

When the time came for me to create a budget and cut out all the extras, I really struggled. I had grown so accustomed to being pampered! I would get manicures and pedicures at least once a month. My hair would always get colored every 8-10 weeks and I would get a monthly massage.

Changes were made.

As it stands right now I have not had a manicure or pedicure since my birthday in 2008 and it was my gift from my boyfriend. I did get my hair colored and cut recently but the coloring was free. I always try to look for when salons are offering classes to their staff and you can usually get a cut or color for free. For a while I was no longer getting massages either.

A chance meeting.

As chance would have it I ended up becoming friends with a massage therapist that owns a spa. I learned that in this type of service industry people will trade each other for services. I never thought that I had any skills to offer someone to trade but I guess I do. The spa owner and nine other people participate in a 24 hour running relay in the mountains. She is the team’s contact/organizer. Last year she was over whelmed and asked if I could help her out with getting everything ready and everyone signed up. She offered to trade me for four hour long massages. These are valued at $60 each.

The POWER of the trade.

Because of the power of the trade I now go in every two weeks to vacuum, dust and any other light cleaning they need. I am normally there for less than an hour and I end up getting one massage for every time I clean the spa.

Be careful!

You can post ads on free sites such as craigslist or call a place you are interested in trading services with and see if anyone is willing to accept your deal. Unless this is someone that you are already acquainted with please use extreme caution when meeting strangers. Also be cautious about what personal information you give out as well.

Best regards,

Maeghen