Middle Path Finance

Food gardens that pay dividends

 Last August, I drew out a plan of what I wanted the gardens on our not-quite-half-acre lot, surrounding our 1957 ranch house, to be like. I live in the city, on a typical used-to-be-suburbs but now I'm in the city limits lot. I grew up in the country, in wide open spaces with plenty of sunny room for a garden. Not so here, but despite its limitations, I am determined to convert as much of our land to agriculture as possible.

I was discussing this last night with a friend who has never had a yard. He grew up in a condo, with no grass, and said he didn't understand why he felt compelled to grow things. He dreamed often of farming. It makes perfect sense to me. For thousands of years, people grew food. It's only the last two generations or so who have been so far removed from where dinner comes from. You can't breed such an important trait out of a species in only two generations.

So yes, our plan is ambitious. I dug about half of the new beds in September. With a shovel. Every night when hubby would come home, I would hand him the baby and head outside to dig beds. Our first two summers in this house we had only one row of tomatoes on the right side of the house, and a small bed that holds Peonies and sage that is hemmed in by a concrete sidewalk. Considering how many beds I have left to dig, I have made the executive decision to rent a sod cutter in April to clear the rest.

The real question now has become: How do I make the most of the garden? I can only make the beds so big, because I have to consider the neighbors. It has to be pretty and feed us. Our backyard is pure shade, thanks to two beautiful silver maple trees that keep spitting out saplings faster than I can dig them up and post them on freecycle. (Three silver maples have gone to new homes thanks to the local freecyclers.) The backyard garden is out, unless something unfortunate happens to my trees.

Now, with seed catalogs in hand, I must decide what to plant. Our system may help you make the most use out of your limited growing space as well.

My first stop is Bankrate.com. They have a handy article about home gardening and a list of what fruits and veggies cost the most at the grocery store.

This list is quite handy if your primary goal is to lower your grocery bill.Here are the spendy veggies and fruits.

• Mushrooms. • Blackberries.
• Collard greens. • Raspberries.
• Cherry tomatoes. • Cherries.
• Green peas. • Blueberries.
• Okra. • Apricots.
• Turnip greens. • Strawberries.
• Asparagus. • Pineapple.
• Mustard greens. • Grapes.
• Kale. • Plums.
• Cauliflower. • Avocados.

Of course, there is no sense growing foods your family doesn't love, no matter how much they cost in the store. But the list is a handy guideline. Several of the things we'd like to plant this year are on the list, which simply reinforces our decisions.

How do you grow a garden that will pay you dividends?

* Plant the foods that will save you the most money, or will provide you with a food that you like but normally don't purchase because it is too expensive. Growing foods that can be preserved for winter use, such as hot peppers, potatoes and tomatoes, can help you stretch your grocery budget well past the summer season. Plant foods that can be frozen or canned, and don't waste anything that your garden produces. By mid-September, it can be tempting to let those last green Roma tomatoes rot on the vine. That is not the way to make your garden pay off.

If you, like me, are just starting your food garden, remember that some foods take a long time to pay off. For instance, fruit. Raspberries and blackberries can be faithful fruits for small backyards, but generally take at least a year to bear fruit. If you plant a fruit tree, it can take three years or more for you to collect your first juicy dividend.

Asparagus is another patience-tester. Asparagus can take two to three years to produce a decent crop, but once established, that bed will produce for another 20 years. Strawberries take two years to produce a good crop.Fill in the wait by planting a variety of annuals that will provide a good harvest this summer, like peppers and tomatoes.

It is important to remember

* The garden is a work in progress. You probably won't be able to accomplish everything in the first year, nor will you necessarily be happy with the choices you make in the first year. Through the seasons, you will learn what grows best on different parts of your property. For instance, we grow tomatoes on the right side of the house. When we tried green peppers in that spot, they didn't do well. It's almost as if they got too much sun. When we moved them to the less sunny left side of the house, the peppers did very well. The beauty of the home garden is that every spring is a chance to start fresh.
* You must mix instant gratification with long-term production. Annuals can be great if you like replanting your entire garden every year (and paying for plants every year). Me? Not so much. So I am mixing annuals with perennials and longer-term plants like fruit trees, because in 5 years I hope to have a varied harvest, and a garden where something new ripens every couple of weeks.
* Don't spend a fortune on your garden if you plan to move, or if your main goal is to save money. Don't skimp on bargain seeds. Buy good ones, yes. But don't go crazy and spend $500 or more on tools and gizmos. That can get out of hand quickly, and eat up your profits.
* And when you are picking what to plant, don't discount something just because it's very cheap at the store. Cheaper foods like potatoes can be worth growing. Chances are anything you grow at home will taste a lot better and be more nutritious than what you can buy at a grocery store. And, you can choose to grow pesticide-free as well, an added health bonus.It all depends on why you want a garden and what you hope to accomplish.
* Be creative in your use of space. The aforementioned potatoes can be grown in a space saving trash can, if you don't have room for a long row of them.
* If you are going to do this well, you have to visit the National Center for Home Food Preservation web site. If you grow anything that you hope to eat after summer is over, it helps to know how best to preserve it. Freezing isn't always as simple as just tossing stuff in a Ziploc and putting it into the freezer.
* Make room for animals and insects in your habitat. It's always good to plant something for the honey bees, the butterflies, and other denizens of your habitat. The goal should be to tread lightly. You may also want to refrain from using pesticides. You might be surprised at how well your garden does without chemical assistance.

Now that I have said all of that, I'll tell you what I am going to plant on my modest lot, in the flower beds I have reclaimed from lawn.

Asparagus

* Mary Washington asparagus. An heirloom variety, to establish a bed.
* a hot pepper garden, so that we can dry them and use them to flavor our food all year long. We have chosen to grow Kung Pao hybrid, long red slim cayenne, false alarm hybrids and hot lemon heirloom peppers. We'll also plant one or two green pepper plants.
* five each of heritage everbearing red raspberries and royalty standard purple raspberries.
* red pontiac potatoes. We will be 'forcing' these in a trash can, like my grandpa used to do. By stressing the plant you can get great yields without wasting precious space.
* six Roma tomato and six cherry tomato plants. I don't know what variety, as we buy these from my former grade school every year during their plant sale fundraiser. They have always been good producers.
* the herb garden will consist of cilantro,pesto perpetuo basil,and Greek oregano.
* a patch of Ozark beauty everbearing strawberries.
* bloomsdale spinach and nantes carrots, for my raised bed and fall coldframe. I use these to extend the growing season. This will be my first year trying to extend the fall harvest into winter with the coldframe.
* green beans of a yet undetermined variety, at the request of hubby, who could live on these alone.
* the obligatory zucchini plant, also from the school fundraiser. I may get ambitious and plant two, even though I know I'll be up to my neck in zucchini. I have two new recipes for zucchini, and it always makes a great extender for sauces and such, so maybe I can keep up.Echinacea
* A butterfly garden, including five varieties of echinacea, two types of bee balm, and some butterfly weed. I will frame this flowerbed with butterfly-friendly annuals, and maybe with lingonberries, which are delicious on Swedish pancakes, unusual, and look like an ornamental plant.
* Luffa. Yes, the luffa sponge is a squash, not something that is plucked from the ocean. This will be a fun experiment. They grow as a vine, so with staking shouldn't take up too much space in the garden.
* English lavender, for its aromatherapy qualities.

It is overly ambitious, I know, and I haven't even included the two sweet dwarf cherry trees I'd like to plant. But through clever use of space, we hope to grow all of these things in abundance in our small garden, in plain view of the neighbors, without raising their ire. The seedlings for the rest have already sprouted in the sunny window in my kitchen.

No discussion of an economical garden would be complete without suggesting ways to save money in the garden.

* We use rain barrels to collect water for our plants. It saves money and the collected water is better for the plants because it doesn't contain the chemicals in treated water.
* We compost. You don't need an expensive set up, but you do need patience. It can take a year or two to turn waste into rich compost, but when it is ready, your garden will pay you back with lots of love, disease resistance, and delicious fruits.
* Save seeds, or at least let a few veggies and fruits fall into the dirt. This netted us some lovely volunteer cherry tomato plants that sprung up and gave us tomatoes just like the plants we bought every year.
* Skip the pesticides and fertilizer. We have never once used either in our garden. Instead, we try to take good care of our dirt via mulch and compost, and we don't get too upset if a slug eats a tomato or two. There is enough for everyone.
* Don't waste a single veggie or fruit. Last year, I had two marathon sessions turning Roma tomatoes and green peppers into pasta sauce. I froze about a dozen bags of it, which will feed my family all winter. You will have to have some marathons too, whether you are in the mood or not, to get the most pay off from your money-saving garden.

Links to No Spend Month bloggers

Here are the links to the bloggers featured in my recent Bankrate.com article, "Jump-start savings with a no-spend month."

Rachel and her family have a No Spend Month every July, spending just $250 that month on everything that isn't a regular monthly bill, including groceries. Read more about her experience at Small Notebook.

Shannon S. and her family went on a 6-week spending crash diet. Read more about her experience at Nourishing Days.

Joy P. Harkins had a No Spend Month last November.Read more about her experience at Just Plain Joy. 

And don't forget to read about my month of not spending, starting here.

I hope these stories inspire you.

Cheap Charity: Plant a Row for the Hungry

The first warm winds of spring have finally arrived here in Ohio. It's a welcome reprieve from an unusually cold winter. For those of us with green tendencies, it also heralds a new season of outdoor work. Leaves need to be raked, soil needs to be tilled, and mulch needs to be spread. It will be at least another 6 weeks before the seedlings can safely be planted, officially kicking off our season of homegrown vegetables and fruits.But that doesn't mean our thoughts haven't turned to the fruits our gardens can bear. In these tough economic times, your garden could give back even more. If you, like me, are prone to growing edible goodies in your garden, an easy way to turn your efforts into a good deed for your community is to participate in Plant a Row for the Hungry. The program, a project of the Garden Writers Association, has resulted in at least 14 million pounds of homegrown produce being donated to food pantries nationwide. Food banks are in dire straits these days; just as donations have fallen, need has risen. Even in good times, many do not have the money to provide much fresh produce to the people they serve. Your local food bank would love to have some of your fresh veggies and fruits.

Participation is easy. Donate your extra garden-grown produce to your local food bank. If you'd like to multiply your return, ask your neighbors or your neighborhood assocation to participate as well.

Can the $100 house make sense?

The economic downturn has revived the myth of the $100 house. Investors poured millions of dollars into "investment" real estate sight unseen during the boom. Even though the bubble has popped, infomercials and sensationalistic ad campaigns are still touting real estate as an investment, this time using the lure of the $100 house. Or the $1000 house. Whatever the number, it's usually an obscenely low amount of money for a real estate purchase. We're supposed to believe that there are great deals out there, and if we are smart, we can profit when real estate prices recover.

But now that the landscape has changed, does the $100 house exist? And if it does, is it a good investment? The answer, surprisingly, might be yes.

I ran across this intriguing piece in the New York Times.

"Ah, the mythical $100 home. We hear about these low-priced “opportunities” in down-on-their-luck cities like Detroit, Baltimore and Cleveland, but we never meet anyone who has taken the plunge. Understandable really, for if they were actually worth anything then they would cost real money, right? Who would do such a preposterous thing?"

That is the million dollar question. Or rather, the $100 question. I don't believe in get rich quick schemes and I certainly don't believe the hype-mongers claiming we can all get rich off of foreclosures. But for the right person, with the right intentions, the current glut of under-priced, damaged homes in economically depressed cities is a once in a lifetime gift.

The article really made me think about who this sort of situation can really work for:

"A local couple, Mitch Cope and Gina Reichert, started the ball rolling. An artist and an architect, they recently became the proud owners of a one-bedroom house in East Detroit for just $1,900. Buying it wasn’t the craziest idea. The neighborhood is almost, sort of, half-decent. Yes, the occasional crack addict still commutes in from the suburbs but a large, stable Bangladeshi community has also been moving in.

So what did $1,900 buy? The run-down bungalow had already been stripped of its appliances and wiring by the city’s voracious scrappers. But for Mitch that only added to its appeal, because he now had the opportunity to renovate it with solar heating, solar electricity and low-cost, high-efficiency appliances."

After this couple moved in, they bought two adjoining lots and turned one into a garden. They bought a house down the street for $500 and sold it to an artist for a $50 profit. One by one, when the opportunity arose, the couple and others like them bought these cheap, damaged homes and have turned it into a real community.

When your intention is to stay, to build a community house by house and block by block, the cheap house is a gift and an opportunity that comes by once in a lifetime. To pass it up, if you have vision and purpose, would be utterly foolish.

Hey thrifty people, This recession is your fault

Everyone knows we're in a recession, and the economic landscape is pretty grim.

In 2008, Americans lost $7 trillion in stock market wealth. We lost another $1.2 trillion thanks to tanking home values. In 2008, 2.6 million Americans lost their jobs, and the Conference Board estimates another 2 million people will lose their jobs by mid-2009.

No wonder people are skipping the mall and saving their money. But the unseemly side effect of a deepening recession in an American economy so dependent on consumer spending is saver bashing. Yes, blaming all of the country's woes on people who don't spend money.

A curious slate of stories has emerged in the news in recent weeks, all bashing people for being frugal and actually using their money to invest, pay off debt, or god forbid, start a savings account.

Here is a round up of my favorite shame-on-you-for-being-thrifty articles that have appeared in recent weeks.

• One of my personal favorites is this one from CNN Money, where the expert says that yes, it's better for the country as a whole if people save more, just not right now and not everybody at once. The author even admits that the U.S. savings rate, although almost 3 percent higher than in recent years, is still paltry by international standards.

"It's not that the savings rate today is high by historic measures, or by comparisons to some other countries. But it has moved sharply higher in recent months -- at a time when what the economy needs most is for consumers to be spending more freely."

• Businessweek does a good job explaining why a savings rate increase is good, just not if people start saving all at once. Just let us remember that we are borrowing money, as a nation, from the countries that do have a higher savings rate. 

"However damaging its short-term impact, there are good reasons for wanting the saving rate to climb over the long term, most importantly the fact that more savings means a bigger pool of capital to finance companies' investment in improved productivity and innovation, says Nicholas S. Souleles, a finance professor at the Wharton School. Without a higher level of savings, innovation and increased productivity would stall, leading to wage stagnation and a lower standard of living in the future. Ideally, savings would build up gradually. The last thing you want to see in the middle of a serious recession is for savings to go up all at once, says Souleles."

• There is also this lovely primer on Keynsian economic theory courtesy of the New York Times. At least this one is a bit tongue-in-cheek, but it does raise a good point:

"John Maynard Keynes, the great 20th-century economist, would have appreciated the apparent absurdity in these mixed messages. He coined a phrase, “the paradox of thrift,” to point out that what was rational for an individual during hard times — saving money — could be ruinous for an entire economy. Eventually, many of the savers may end up out of work because everyone else is saving, too."

• If you really want to throw on the guilt, read this Wall Street Journal story about how one family's spending cuts ripple through an entire town. This story, although the intentions were likely good,can't help but leave a "how could you?" taste in your mouth if you so much as dare to cut back on restaurant meals or haircuts. The story follows the layoff of Mr. Smith (his real name.)
  

"Now they realized those carefree spending habits were the first thing that had to go. Mr. Smith stopped perusing the list of new video releases and buying DVDs that would go unwatched for months. Mrs. Smith stopped shopping at Harold's, the upscale clothier that had been a favorite since her days at the University of Oklahoma.

Thousands of other shoppers were making similar decisions to cut back, and the drop in sales sent Harold's, already struggling to compete with larger rivals, underwater. The 60-year-old chain filed for bankruptcy in November, and this month closed all 43 of its stores in 19 states."

The brown bag challenge

Donna Freedman over at MSN Money has proposed a simple, easy money challenge: pack your lunch every day for a month. Then, pay yourself $5 every time you don't go out for coffee or lunch during the workweek. If you transfer that money into an online savings account, you'll have a decent chunk of change at the end of the month. You can use that money to pad your emergency fund or to pay down some debt.

I like this idea because it is a way to cut back without dooming yourself to years and years of no frills drudgery. Food your cook at home is usually healthier than restaurant fare as well.

This does not mean, however, that you are doomed to a month of peanut butter sandwiches. You just have to turn on your noodle and be creative.

Here are some lunch-packing ideas from the Internet:

• For those who love the simple sandwich: what to buy and how to pack it to avoid the mushies.
• RecipeCzar also has some ideas and recipes for exotic, interesting foods that hold up well in a lunchbox
• The Dallas Morning News has a feature, with recipes, to avoid lunchbox blues
• The Dollar Stretcher has some practical, thrifty tips for lunch packers

Here at MPF, we employ a two-pronged strategy to keeping the lunch budget in chec.. First, we stock hubby's desk with ingredients such as peanut butter, crackers, bread, tuna, rice cakes, and other miscellaneous food items every month. That way, if he is caught away from home and forgot his lunch, he still has something to eat.

Second, we try to make large pots of easily-reheated foods several times a week. Since it is winter, we make a lot of big pots of soup such as vegetarian chili, corn chowder, and lentil-mushroom-okra stew. Pot roast with potatoes and carrots, magically made in the crock pot, also do well as weekday lunches. Come summer, hot soup will be replaced with a lot of salad and fruit.

My mother-in-law, who can pinch a nickel until the buffalo poops, claims that packing lunch for her andd her hubby saved them at least $50,000 over the course of their working lives. You may not be able to save that much, but isn't it worth a little extra money in the bank to try it for a month?

Netflix vs the library: the fight for our entertainment dollars

I am convinced Hubby and I are one of three households in America who do not have cable. I bid adieu to that spendy luxury when I moved away to college at 18. After that, I couldn't even afford a TV until age 24 (and it was an in-kind exchange from a boyfriend who owed me money. Romantic), let alone a cable package.

Lately, with long days taking care of our 10-month-old, the daily hours of cleaning up after ourselves and said baby, long days trying to work, and plenty of working nights that begin the minute baby goes to sleep at 9:30 p.m., I've been seriously yearning for some mindless entertainment. Mostly, sitting in front of the TV vegging out for an hour or two.

We considered cable. Too spendy. Cheap runs thick in our blood. We don't have enough time to veg out to rationalize spending $60 or more on cable every month. That's when I started secretly lusting after Netflix. It started like a casual affair. I started walking by the site, throwing casual flirty glances at the monthly subscription prices. Then, it grew into a full-fledged affair, roping me in with its generous list of 1960s B movies and Bollywood classics. (Who would have guessed they had Corpse Grinders II??)

It almost turned adulterous when I filled out the membership information. Hovering over the send button, I just couldn't do it. For once, I was giving myself a bonafide Cheapache. Usually it's hubby who does that.

I was moping. Dreaming of DVDs dropping through the mailbox this week. We've had 12 inches of snow and for several days the city has been virtually shut down.We are under a level II snow emergency, which means everything is closed, and we can't drive anywhere. Miraculously, or sadly, Larry the mailman has faithfully delivered our junk mail flyers and tax forms every day this week, despite being knee deep in snow. Wistfully, I thought, he could be delivering our NetFlix videos, too. How awesome would it be to snuggle up with a movie now that we are trapped at home?

Only last night, when the snow stopped and the city started to dig out did I start to feel mildly better. I pulled on my boots. I needed to trudge to the public library to pick up Judith Levine's "Not Buying It." I have a story due next week on super frugality, and I am interviewing her on Monday. It's always better to read the book before you interview the author. Don't want to sound silly, after all. 

The basement of my local libary is wall to wall videos. I used it a lot when I was too pregnant to do much but get off the couch, but hadn't given it much thought since then. With more snow in the forecast, I thought it would be wise to peruse the selection and grab a handful of videos to get us through another potentially snowbound weekend.

Standing there, in the As, I made a pact. I would not pay for or sign up for a Netflix membership until I had watched all of the videos in this library. No, any video just because it's there, but all the movies I want to see, missed at the theater, were vaguely interesting, or would inform me of some piece of cinematic history or the cultural dialogue. I would make all of this more palatable by organizing library movie nights around themes, to make it more fun for me and the hubby I was going to drag reluctantly into this orgy of popcorn, quantity alone time, and free DVDs.

Tonight is French & Saunders night. A little BBC comedy from the creators of Absolutely Fabulous will set a nice tone, and give us a good cheering up. Saturday night is 1970s camp: Cannonball Run and Every Which Way But Loose. Hubby watched zero television growing up, and missed out on these <ahem> classic films. Now he'll have something to talk about with our friend Brian the movie buff, who is also the author of "Wild Beyond Belief: Interviews with Exploitation Filmmakers from the 1960s and 1970s."

He needs to have something to talk about with my friends, right?

Luckily, it looks as though we will have fuel for many theme nights to come. Next week? Diane Lane. Yes, the library even has a copy of "Streets of Fire."  

I'm sure Alfred Hitchcock night and Charlton Heston night will be part of our not too distant future. It looks like the library has trumped Netflix. At least for now.

The subtle beauty of the cheap Valentine's Day date

I really look forward to Valentine's Day. Yet, I would be horrified if hubby marked the day with roses or diamonds. This year, he knows he'll be in trouble if the day ends with any kind of chocolate other than that in the mushy pudding cake at the Ponderosa Steakhouse buffet.

By now, you must think I am crazy, and I am when it comes to this holiday. Seven years ago, on our first Valentine's Day, we decided we would always mark the occasion at a cheap restaurant. Something not dressy, not fancy, and where the average entree (nee, buffet) cost no more than $10.

So far, we've eaten at Shoney's (twice), Golden Corral,the Chinese buffet, the sushi buffet, and White Castle.

This year, we are going to Ponderosa. And not just any Ponderosa. THE Ponderosa, where I had my first job as a food bar attendant and waitress at age 16. This job was a doozie.

You haven't lived until you've watched hungry churchgoers during Sunday rush fight over the last chicken drummy. You really haven't.

At this point you are probably scratching your head and wondering why we insist on cheap Valentine's dates.

Simple. There is real joy in cheaping out on Valentine's Day. Real joy in spending $20 for dinner for two, sans flowers, on a made-up greeting card holiday that has so much pull that millions of teenagers, wives, and girlfriends are devastated if they don't get at least a dozen roses.

I say yes, mark the day. But like Christmas, remember the true meaning of Valentine's Day: To spend time with the one you love.

My theory is that all those people who yearn for flowers, for fancy dinners and diamonds aren't really after those things at all. All anyone really wants is to know the person they spend every day with, good times and bad, through honeymoons and arguments about dirty dishes and dirty diapers, still cares about them, still wants to spend time with them, and still notices them. If you choose to celebrate, it's a good excuse to spend one whole day recommitting to your honey. It's important for you to know and for your significant other to know that you would choose them all over again, if you had the chance. (If you wouldn't that might be a wake up call..)

You can have all of that at a cheap restaurant. It doesn't have to be at a cheap restaurant, of course, but that's the way we like to do it.

"It's always laid back and funny. There's never risk of unfulfilled expectations because you always know what you are going to get," hubby said of our yearly cheap date.

True. Because we laid the groundwork early in our relationship, we have never had one disappointing Valentine's Day. Okay, except one, and that was the first time we tried to go to the Ponderosa to celebrate. They were closed due to a water main break. That was the year we ate at White Castle, and we weren't the only ones on dates there either.

Instead of secret hopes being dashed, or a day of spendy trinkets, Valentine's has turned into a game for us.

We choose the location of our cheap date months in advance. Sometimes a year in advance, and since it's someplace we never go, there is anticipation and excitement surrounding it. It's a new experience for us, even if it's cheap.We talk about our date for months, giggling excitedly and anticipating what it will be like.

And when the day arrives, we are never disappointed. Maybe it's time you, too, made the cheap Valentine's Date a family tradition.

Max it out: Get more for the money you already have.

 I seriously doubt anyone is going to get a pay raise this year, me included. We all know the economic news is bleak, lay offs, banks not giving loans, taxpayer bailouts, budget deficits, and of course the plummeting value of retirement accounts. It's enough to make your head spin.

Right before Christmas, hubby was moping around the house. He's not prone to the holiday blues, and finally admitted it was because he felt completely powerless over our plummeting retirement accounts and stock portfolio, and his doubt about his ability to keep a steady paycheck and health insurance coming to our household.

I told him that we can't control all of that. We can only control what we do. That's true for everyone. We can't control the stock market, but we can control how we react to the swings. We can't guarantee we'll have a job, but we can prepare for not having one.

This conversation led to a household reprioritizing. Things are uncertain, all we can do is prepare.

Since Christmas, we have made a significant effort to max out every dollar. Usually max out is a phrase associated with debt. I think it's time we revisit the concept of maxing out your money, and turn it into a tool for getting more out of what you already have.

We are still refining this technique, and I'm sure we will have many more tools in the arsenal come next year. In the meantime, I consider our efforts a beginning, a "Step 1" of the MPF way to max out your money. Here are the systems we have put into place so far.

We are chasing yields.

Last year my bank had the nerve to offer a measly .05 percent interest on their savings accounts. And we wonder why Americans don't save money. Insulted, I opened an Emigrant Direct online savings account and an ING Direct savings account. Both have been easy to use and have paid me an average of about 3 percent on my money in the past year.Unfortunately, thanks to the Fed and their rate cutting bonanza, that is down from 5 percent two years ago, and is dropping slowly.Today, Emigrant  and ING are both paying 2.4 percent APY.

Better than .05 percent, but I decided to see if I could get a better deal somewhere else. The first stop for any yield chaser should be Bankrate.com's list of the 100 highest-yielding savings accounts, which gives you a handy rating system for gauging a bank's stability. You can also search the highest yields by state.

FNBO Direct of Omaha, NE is offering 2.8 percent APY and recently was named Kiplinger's Best Online Savings Account in 2008. Everbank of Florida is offering 3.76, but it drops to 2.9 after 3 months.

So far, none of these yields are high enough to make the hassle worth switching, at least for me.

We are chasing rewards.

We have used an Amazon Chase Visa for several years. In that time, we have used the $25 gift certificates we occasionally receive to buy CDs, DVDs, software and computer games. It has been a great card for us, because we would rarely buy these sorts of treats for ourselves. This was our first rewards card, and since we were in the habit of charging almost everything just because it was easier than carrying cash, we figured we may as well get something for what we were already spending. The Amazon card has saved us some money. We upgraded the operating system on my computer for only $16, the rest was covered by rewards. We also bought a mattress for our baby's crib for only $7, with rewards covering the rest. We have used certificates to buy Christmas and birthday gifts, which has saved us some money. This has been great while it lasted, but the time has come to review our strategy.

Do we really need more CDs and DVDs? Or is there a rewards card out there that will give us something we need more?

In our search for a more profitable rewards card, I ran across two new rewards credit cards that could reap dividends, literally, if used wisely.

One is the Charles Schwab card, which actually deposits, in cash, an amount equivalent to 2 percent of your monthly spending into a Schwab One brokerage account. Of all of the cards we looked at, this may make the most sense for us. The market is down, and we would like to buy more stocks in the hopes that we can profit from a future upswing. We already have a Schwab brokerage account and have been struggling to find the extra cash to make deposits. The rewards are a larger percentage than what we are currently receiving, and you don't have to spend a certain amount before the rewards arrive. They are automatically deposited every month.If invested, these rewards could increase in value, due to dividends and stock appreciation. You don't get that with a DVD.

Our second choice was the CitiBank Thank You Rewards card, only because you can redeem points for a student loan payment of up to $100.

Our criteria for selecting a new rewards card is that the reward must help us meet one of our other financial or personal goals. We considered a travel-related rewards card because we hope to actually leave the U.S. on vacation soon, but were put off by the dubious value of airline miles and the restrictions placed on hotel bookings.

Maybe it's time you looked in your wallet and did a little credit card renovating. Clean house, look for better rates and better deals. The Schwab card may not be for you, but chances are if you haven't shopped around in a while there is something better out there, something that will reward you with something valuable, like cash back or money in your kid's 529 account. Visit Cardratings.com to look for and compare cards. 

The obvious caveat is that chasing rewards on a credit card makes zero sense if you carry a balance.

We are "stacking" rewards.

I firmly believe that "stacking" rewards is one of the most effective ways to stretch your budget. Stacking is using as many discounts, coupons and rewards offers as you can on a single purchase.

As an example, I recently bought some Gerber organic baby food. I had several 75 cent coupons. I went to Kroger because they double coupons, so my coupons are now worth $1.50 each. Kroger also happened to be having a special where for each $10 worth of Gerber baby food you buy, you get a certificate worth $2 off your next shopping trip. When I checked out, I scanned my Kroger card, which earned me 10 cents off each gallon of gas I pump there. Then, I paid with my Amazon card, earning me points toward the DVDs on my wish list. I earned a $4 off coupon, and I used two 75 cent off coupons that were actually worth $3. The next day, I rounded up more baby food coupons and went back. I used the $4 off coupon, plus several more of the $1.50 doubled coupons, used my store card for gas discounts and paid with my rewards Visa. It saved me quite a bit on something that I need to buy anyway.

There are as many ways to stack rewards and coupons as there are people. Here are some that I find particularly interesting:

• LizaJane over at SavingAdvice.com recently bought a laser printer from Staples. That's not that interesting, but how she used her money certainly was:

  "I signed onto Staples via Ebates, which had a 2% cash back reward instead of the usual 1%. My printer was $199, plus I bought a cord for $25 and an extra black toner cartridge for $57 (and then got $30 off because I combined it with the printer purchase), so the grand total with tax was $263. My 2% back will be $5.26. Ebates also has a $10 bonus, which this should qualify for. So, I should get $15.26 total back there.
  
  The $100 Staples Easy Rebate will come in the form of a Visa gift card. Then, because I have a Staples rewards card, there should be some rewards money due to me at the end of the quarter. And, on top of all that, I used a credit card that pays me cash back. It's a small percent, but the small bits and pieces add up!"

• DisneySteve, another SavingAdvice.com blogger is also using perks wisely:

  "We went out to lunch today at a local restaurant that we like. They were having a special deal on gift cards: buy $100 worth and get $20 free. So we did just that. Not only that, but I charged them to my Discover card which has a 5% cashback bonus at restaurants through December, so I'll get $5 back on the purchase. That means I actually spent $95 and got $120 worth of gift cards. Coincidentally, our meal today came to exactly $25.00 which means the meal was basically free. We spent $95 (after the Discover cashback), got lunch for the 3 of us and walked out with $95 remaining on the gift cards."

Retailers have so far been reluctant to cut back on coupons and loyalty card programs because they know that a lot of people won't shop there if there is no special deal attached. Credit card companies are the most likely to trim rewards because the programs are expensive and retailers are threatening litigation over the merchant exchange fees they are charged every time someone pays with a credit card. In the meantime, get the best deal you can.

We finally came up with a smart monthly spending plan

I hate budgets. Hate. hate. Hate. But at some point, you just have to have one if you are going to really get ahead. We had to do something drastic to get our monthly spending in line and rethink our priorities, so we had a No Spend Month. You may not have to do something that extreme to get things under control. But for us, the result of No Spend Month was money in the bank and a renewed sense of discipline and purpose, two things that are very valuable in uncertain financial times. As a result of No Spend Month:

• We have an allowance. Hubby and I each get a $40 weekly allowance that we are allowed to spend on whatever we please. It is important to have fun money, even when you are on a tight budget, because it keeps you from feeling completely deprived and one day making a huge financial misstep because of that. The allowance has been fun. We use it to take each other on dates, which means more because we are using our "own" money. We also use it for things like cosmetics and video games, little indulgences that make us feel good but don't cost a lot. This way, we do not have to feel guilty.
• We have tamed the grocery budget. It's ghastly to admit this, but at one point we were spending $950 a month on groceries and eating out. For two adults and a baby. Ghastly. Our monthly budget is now $125 a week, for groceries, eating out AND gasoline for our two cars. We have cut our food budget in half, and added fuel to that category. Our grocery savings weren't magic. The biggest difference was that we started shopping for pantry-stockers at Aldi. We love it. We can buy a cartload of food and it never costs more than $40. We now clip coupons, but only for items where we insist on using a brand name. We look at the sale fliers for all of our local grocery chains and plan our weekly meals and match sales without coupons. Also, we cook more vegetarian meals. It hasn't been a sacrifice for us. Now that our budget is under control, we are making subtle changes. For instance, we have decided to eat less meat, but to pay more for the meat we do eat. i.e. grass-fed, hormone free meat from Whole Foods instead of CAFE meat from the store.We are also incorporating more organic foods into our diet, all without busting the budget. We never thought this would be possible.We also save fuel by running all errands on one trip and using our most fuel-efficient car for all trips longer than 5 miles.
• We save first, then live on what's left. This is a very very important. If you want to save but only save what is left over at the end of the month, you aren't going to get very far. Save first. We have set a high target: 25 percent of our take home pay every month goes directly to savings. We have the money wired out of the checking account and into one of our high-yielding savings accounts every two weeks. It's gone before we even wake up on payday. We have to live on the rest. No cheating. It's helping us significantly boost our cash cushion, which is our No.1 priority in this troubled economy.
• We're doing the cheap fix-its around the house. During No Spend Month I realized I had the materials for half a dozen home projects that need to be done, so I didn't need to spend any money to knock some things off of the to-do list. The rule now is that we won't buy supplies for a house project (barring a phenomenal sale) until we have finished the projects we already have supplies for. This may not seem like a big budget item, but every little bit helps.

We DIY as much as possible
The Wall Street Journal ran an article recently about the resurgence of DIY. Apparently I am not the only family that is now "insourcing" household tasks. OK, I admit we have never been the high-powered couple with the nanny and the housekeeper. I think it's a luxury to have a babysitter 4 hours a week.

But, we are expanding our arsenal of DIY projects. For instance, we have planned an ambitious veggie garden this year. To save money, I am starting most of the plants from seeds this year.

Also, a leaky toilet ruined the floor in our half bathroom. I had the original installer give me a quote to fix it. It came back at $500, about $300 more than I wanted to spend. Mind you this is a tiny bathroom. I will be attempting to do the work myself. If I get hung up and have to call the installer, I will at least have saved money by removing the toilet, sink and old tile myself.

Coupons Coupons Coupons.

I never was much of a coupon clipper until recently. I thought of coupons only as something at the grocery store. That was my mistake. Coupon deals have gotten much more generous in the last few months, as everyone from retailers to restaurants scramble to keep cash-strapped consumers coming back for more. Most of the coupons I use these days are for restaurants. Some of our locally-owned favorites have coupons in the Val-Pak and DollarStretcher packs that arrive at my door every week or so. And, since we now have a food budget, we generally only eat at restaurants that have coupons or a good special deal. 

Some of my friends have asked me what the point of all of this is. It's simple. I'd rather spend less on the things that aren't super-important to me so that I have the money to do the things that are super-important. Why spend 25 extra cents on each can of black beans when I could use that money to help pay for a backpack trip through Mexico? It's an extreme example, but drives to the heart of it. Little savings here and there add up to more money to do interesting, exciting things with our lives. And, to help us weather uncertain economic times.

The value of frivolous financial decisions

Let's be honest. No one can be thrifty and frugal all the time. Maybe it is possible, but a life without a few frivolous financial moves may just not be much of a life at all.

I made a frivolous move today. I spent $1,300 on plane tickets to New Orleans. I will be there for only 24 hours and am coming back home. Not the most judicious use of the travel budget, I know. But it's a decision that makes perfect sense for us and has made the hubby and I very happy. We are going to celebrate one of our best friends' 40th birthday, and all of our other friends will all be there. 

It wasn't easy to press the "Book Travel Now" button.

You see, we suffer from hyper-responsible syndrome. We are textbook cheapskates. We do everything "right". We put money in the 529 plan (which we opened before baby was even born). We save a good chunk of our income. We have no credit card debt, no car loans. We have an emergency fund, health insurance. We each get a small weekly adult allowance, spend no more than $500 a month on groceries, gas, and eating out. We save up and pay cash for home repairs and improvements, and take on extra work whenever we can to increase our income.We get movies and books for free from the library.

And do you know what? As our finances have become more secure, our life has become more boring. And, if we aren't careful, our super responsible frugal ways have the potential to turn us into boring people. A lot of frugals stay home because it's cheaper, and we started to walk that fine line. We forget that we once had a lot less than we do now, but still managed to travel overseas and live a full social life without going bankrupt. It's just easier, once you are in your 30s, have a baby and a steady job, to get complacent, to do what's easiest instead of swimming against the stream to have an adventure. Slowly, we have become lulled by the gentle rock of our daily routine.

How many people do you know who are so obsessed with saving a dime that they can never rationalize making their dreams come true? They never take that dream vacation, never open that business, never [insert dream] because it requires money that can be "put to better use" somewhere else.

Everyone's money can always be put to better use, at least when it comes to discretionary income. You could forgo the $4 latte and tack that extra money onto your student loan payment. You could skip the $3 DVD rental and put $3 in savings instead. Sure, we could all do that. But what life does that leave you with?

There is a time and a place for super thrift, but at some point you have to ask "What am I saving my money for?"

Retirement, yes. A noble goal you should save for. But does that mean you can't take a vacation during your working life, in order to save as much as possible?

I know a couple that did that, and then both of them got cancer at age 55. They could have worked all of those years, scrimped and saved, denied themselves all kinds of fun, and then died before they reached their goal. Fortunately, their story had a happy ending. That was 10 years ago, and they managed to retire and start to spend their money.

Some people would use a story like this as a reason not to save for a rainy day. That is the wrong lesson. Save for tomorrow,yes, but don't forget to live your life now. Everything in moderation, including moderation.

This brings me full circle to today, when I clicked "book travel now" on two obscenely-priced plane tickets.

I spent the bulk of my adult life in New Orleans and only moved because I was forced to by a natural disaster. I haven't been back in two years, due to work, pregnancy and the rigors of raising a new baby. We had originally planned to spend a week in New Orleans this month, but the babysitters fell through. I was dejected and sad, but then had an epiphany last night. Go anyway, even if it's just for a day, and no matter how much it costs. So we did it. The little man will stay with grandma this weekend, and the trip will be so fast that no one will have to miss a day of work, not even the hardest-working grandma in town.

Sometimes, being frivolous pays bigger dividends than a bigger savings account.