Tag Archives: Money

Coffers and Coffee

Once you start the journey to financial independence, you realize that every dollar counts. And that every dollar saved means you are one step closer to financial independence. It’s not even a one-to-one ratio (i.e., a dollar saved is a dollar earned). When you factor in compounded interest, every dollar saved is more than a dollar earned. At least… this is what responsible people would say. Me… I still like nice things. And if I didn’t have a latte every once in a while, I would have brittle bones since I don’t otherwise drink milk. But, before you criticize my latte habit, please know I consider lattes a luxury–not an everyday indulgence (though arguably it’s a slippery slope, going from “I deserve this latte” to “I deserve a week at a luxury spa” (though I really do!)) Without a little luxury every once in a while, waiting for financial independence becomes mundane and intolerable. You can’t just cut out everything you enjoy. Besides, I eat plenty of rice and beans to “make up” for it. However, the virtues of life’s little luxuries and how they fit into the goal of becoming finacially independant is not actually what this post is about. Not completely. This post is about using those little luxuries as motivating factors in how you decide if your efforts at some form of saving are “worth it.”

I am going to buy a latte every once in a while. Probably once a week. It’s just something that is going to happen. But it doesn’t mean I have to be mindless about it. For some time now, I have used lattes as my gauge for the value of savings I can seek. What I mean is that I tend to think of every dollar, or portion thereof, saved as worth saving because the value to me is tangible. A lot of people don’t bother, for example, questioning a grocery receipt for the $1.34 they were over charged on veggie burgers, or returning a screw from the hardware store that is worth fifteen cents. They think it’s not worth their time and energy. But I disagree. See, these things add up. I can put forth a small effort and, very quickly, get the equivalent of a latte–something that I consider a luxury, remember? This is not to say that every time I can eek out a savings of a two to three dollars I immediately go buy a latte. Rather, it means that at that moment when I’m about to walk out of a store and ask myself, “should I bother to go back inside and get the price difference,” the answer is always yes.

This moment when you question the value of your time happens far more often than in the grocery store. It occurs in late fees, service fees, price quotes, being unsatisfied with a product…etc. In my estimation, no fee is too small to not bother making a phone call to request a reversal. No overcharge is not worth your time to question. A discount is always worth seeking. Because, small amounts add up to big amounts.

Admittedly, it is hard to see the big picture. In fact, the big picture may not even help. For example, if all the small efforts you made made a difference of $86 for a year and you took this money and invested it at 5% interest with compound interest, in like 10 years, it’s still only worth about $140. You may just find that it is not really worth it to hang onto that $86 dollars for ten years. But if you think of the fact that this $86 dollars for which you spent some effort to search out savings or refunds gets you about 30 lattes… that become a tangible value that you see as worthwhile. At least I do.

What is your vice and how do you go out of your way to make it work in your savings goals? As always, your input is encouraged.

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Twelve Posts of Christmas Reinvented

The inspiration for these posts, quite obviously, is the traditional holiday song “Twelve days of Christmas”. It is a little tune that most readers are probably familiar with and that just may be getting stuck in your head right now. Sorry about that. The song is kind of annoying. But I guess it is interesting and mysterious enough to be a constant source of speculation around this time of year. Indeed, I am not original in repurposing this classic song.

For example, every year PNC posts the Christmas Index. This is an index using the items discussed in the song, adjusted for inflation. In other words, the Christmas Index comes out every year telling you how much you would have to spend today to get your true love each item on the “Twelve days of Christmas.” For a great read on the Christmas index, read this article. The index includes the birds and stuff as well as hiring the dancers and milking maids, etc. Not surprisingly, it is the cost of labor that makes the Twelve Days of Christmas so expensive for your true love.

Many out there have probably heard of the Christmas Index before, and it’s an interesting thing to run across every now and then. However, I recently discovered another take on the “Twelve Days of Christmas.” Author and researcher Olga Kazan has just come out with an article titled “Health Consequences of Actually Living the Twelve Days of Christmas.” This is a fascinating read that starts off with a scintillating history of the song and then launches into the effects of eating the Twelve Days of Christmas, which are surprisingly healthy if you remember to milk, dance, leap, pipe and drum as well.

This article also references another Twelve Days hanger-on… Heal Farm, out of England makes a stuffed bird (inside a stuffed bird inside another stuffed bird and so on…) using birds referenced in the song. Click on the link above to read more about the “12 Bird True Love Roast.” It’s a bit pricy, but it “[w]ill feed around 125 people, takes 10 hours to cook and yields around 4 litres of flavoursome stock.” Even at it’s steep cost, it is still cheaper than the Christmas price index. If you ever get one, please don’t forget to invite me!

Shedding Light on the LightBulb Moment

Recently I had an article published on the website GetRichSlowly.org. This was an article similar to one published on my blog. Both were titled “Lightbulb Moment.” Not too surprisingly, GetRichSlowly.org had many, many more visitors and followers than LifeImproved.Org (for the moment) and many of those readers felt compelled to post comments. For the most part, people were kind, enthusiastic, and supportive. However, there were some comments that were irritated that I did not give more financial details, or that opined that since I admitted that we had healthy salaries that whatever accomplishments we shared were less than impressive. I get the sentiment. I mean, it’s a much more moving story when a single mother, working three jobs, making $30,000 a year claws her way out of crippling debt left by the death of her spouse. And her beloved poodle. Yeah. I, too, would be very moved by the story. We all love an underdog. Heck, we make movies and write stories about them all the time (See David and Goliath). And there is also something fascinating about peering into the minute details of someone’s life, especially if those details reveal something savory. The problem some people had with my article was that it was too… ordinary, I guess. But these people that wanted more juiciness missed the point of the article and the pulse of my message.

You see, when my husband and I first started our journey, we were nothing special. We were another couple, working on our careers, living in suburbia. We had purchased a house and new vehicles within the previous five years. These things we had “upgraded” as circumstances allowed, moving from our 1000 square foot town home to our 2000 square foot home and trading in our used, cheap cars that we had as graduate students to our new cars befitting our careers. We were moving on up, financing home improvement projects and furniture to fill our bigger home without giving it much thought. We weren’t out of the ordinary. In fact we were extremely normal. Every body was doing it. My generation and the generations around mine were expected to go out into the world and flex the power of our credit. We did not save up $15,000 to buy a decent car. We purchased a $35,000 car with no money down. And even when we could easily pay for a roomful of furniture by waiting and conscientiously saving for a couple of months, we were lured by 12 months free financing. As I have mentioned before, my husband and I always felt very responsible about our decisions because we never borrowed as much as we could have. We were somewhere between Ikea and Crate and Barrel and way south of the neighborhood of BMW and Mercedes. So it was kind of a shock to finally see with clarity that even though we didn’t borrow as much as we could have, that our were not very good financial decisions. By the time we went to see the financial planner in 2009, our debt to income ratio was almost 3 to 1–but our credit was outstanding!

I keep seeing this commercial for a certain large financial services company whose message is that seeing one of their bankers can make your life so much better. In the commercial, a couple is sitting in front of the banker and he asks them what they would like to do with some extra money. The husband immediately responds that he wants a motorcycle and the wife that she wants a remodel. This commercial is interesting for a couple of different reasons. First, the couple has no idea what they want, they just want to borrow more money to buy more stuff. And second, the commercial implies that the banker will help them each purchase both of the things that they desire, they just need to ask.

This brings me back to discuss the point of my article on GetRichSlowly.org. Taking on debt has become entirely too normal. And not just debt for the big, once-in-a-life-time things, like the house or your good family car. We finance dishwashers, and vacations and new cars before the other new car even has any equity. We worry more about our credit scores than we do about our ability to repay debt if anything changes in the precarious cash-flow game so many of us play. So that’s the heart of my story. It wasn’t an amazing feat that my husband and I paid off all of our debt. What was difficult was getting the point that we recognized that we were headed down the wrong road. We didn’t need to get to the point that we lost everything first and hit rock bottom in order swear off debt–though I agree that I probably could have written a tear-jerker of a story about it. I don’t need to see anyone else hit rock-bottom before starting to climb up, either. I will be impressed if you have a healthy relationship with debt and spend less than you earn. And I think that these kinds of stories need to be put out into the universe in order to encourage other people just like us to change their approach to debt so that they can really change the course of their lives.

Listen Up

You’ve heard of this thing called YouTube, right? You can watch videos on anything–from open heart surgery to making mittens for your chihuahua. Literally anything. Need to perform emergency surgery on your Gold fish? Yes. YouTube even has a video for that. Multiple videos, actually. Need to hang drywall? YouTube will make you think you’re a pro after a 2 minute tutorial. Luckily, there are videos on how to hire a real contractor for when you screw up the job.

Did you also know that YouTube is a great resource for free Audiobooks? You need to explore this immediately. However, the one book that you need to listen to before you listen to anything else is The Millionare Next Door by Thomas J. Stanley and William D. Danko. Some of the analogies and references are a bit outdated–hey, the book was released in 1998, after all. But the basic message still rings loud and clear. You must listen. The book is eye-opening, even if you already know or think you know what this book is about. You’ll want to listen to it multiple times. And the beautiful thing is that you can. You won’t have to return it, you’re not on a time line to hear it, and you can hear it anywhere you can get YouTube, i.e. your smart phone, smart pad, computer, etc. Soon enough, you’ll be walking around telling people, “I only drink two types of beer, Free and Budweiser.” You’ll get that after you “read” the book.

So, click on this link to The Millionare Next Door Audiobook on YouTube and find the key to wealth…for free. If YouTube is not an option for you, don’t forget to check out your local library for the actual book or audiobook.

Taking Stock

Since reaching the milestone of being debt free last year, my husband and I have been in a state of limbo. Right before paying off the last of our debt, we were one synchronized team, attacking a mutual goal with an unrelenting fervor. After that final payment, sure, we felt good, but we were left asking ourselves, “now what?” And quite truthfully, we had different opinions about where to go from there.

For example, I really wanted to use a financial planner. One that I trusted, that wouldn’t try to sell me products just to make commissions, one that would help with the planning aspect of our journey and would help establish our investment and saving goals, educate us, and would guide us through tax issues. I had someone all lined up.  We even had her come to the house and answer our questions about her services.  While my husband was willing to listen and be polite, he went into the meeting with the preconceived notion that there was really no way that we would end the meeting with him wanting to hire the financial planner.  You see, he had done some reading. Particularly, Bogleheads Guide to InvestingHe also listened to a lot of Dave Ramsey.  A lot of Dave Ramsey.

These advisors pointed out that financial planners cost money. And they emphasized that the amount of money that you will spend on the financial planner, even if it is only a small amount, could ultimately cost you hundreds of thousands of dollars due to not being able to invest that money and letting compound interest do its work.  This is a hard point to argue against.

While going through this process, what I realized was that we kept confusing an investment plan with a financial plan. Our financial plan was already taking form.  We would no longer take on debt, we would live conservatively, we would continue to decreasing our monthly expenses and work on maximizing our savings.  We also had definite retirement goals (dreams, really).

So, as outlined above, my husband and I already agreed on the financial plan.  However, it was the investment plan that confused and frustrated us.  We had no idea what to do with the money we were saving.  In the end I agreed to allow my husband to act as our investment planner. Does he have a degree in business, accounting, economics, finance, or any other business or investment related sector? No.  It’s in English, actually.  But, he’s a smart man (except when it comes to finding something). And, well, I do have a degree in economics, so I figured we could figure this out together.  He was willing to do the research.  I was willing to trust him (and cross check his data).

I am going to admit, though, that one of the biggest reasons that I was willing to have us muddle through our own investment plan was that the plan was not going to be complex. Very basically, our plan is to focus on very low-cost indexed funds with moderate risk, such as one would find with Vanguard or Fidelity. In fact, we ended up buying a fund of funds.  While a traditional indexed fund is already diversified in stocks, a fund of funds is diversified in stocks and bonds.  So we don’t have to worry too much about whether to buy municipal bonds, high yield bonds, junk bonds, or U.S. bonds.  We are not looking for the next get-rich investment.  We are not looking to discover something new that we need to invest in now, before the opportunity passes.  We are just looking for a good, somewhat safe place to grow our money with low costs.

This does not mean that we do not have  a lot of questions and many moments of indecision.  We do.  Fortunately, in this day and age, the internet provides a lot of really good information, as long as we can sort through what is genuine advice and propaganda.  And we have discovered that we are much more intelligent about investing than every day before.  While new questions continue to pop up, we continue to learn the answers.  Obviously investing can get incredibly complex, and, honestly, our investment plan is slightly more complex than outlined above.  As we understand more, the types of investment practices we can conquer expands.

I am glad we took this route.  Had we gotten a financial planner, we would not have been forced to learn all that we have.  We would have relied on someone else to tell us what we should be doing and we would not have understood half of it. Now we are taking control of our own (future) financial independence.

The Urge to Purge–Shake your Money Tree

In my last article I discussed how enriching it is to get rid of your stuff. I meant that not only in a feel-good-about-yourself kind of way, but also in the literal sense. Now, can you retire by selling your stuff? Maybe only if you’ve been hoarding a lost Rembrandt or French antiques. So…it’s not likely. However, you can make some serious cash–enough to pay for a vacation, that pricey electronic you’ve been eyeing, or new carpet, for example. Or, maybe just provide an extra boost to help you tackle your debt. If you set a goal for yourself, you will get motivated to start getting rid of stuff to meet that goal.

I previously stated that you are surrounded by money. Granted, it is only a fraction of the money you originally spent on the stuff, but if you know where to sell it, you can maximize how much you can get back.

eBay:

Most people these days are familiar with eBay, though many have never sold anything on the site. It can be intimidating, especially with all these articles about ranking, sales techniques, and customer service. However, posting your stuff on eBay is quite simple. Even if you are just getting started, you can have success. After all, everyone at eBay starts at Zero. And with smart phones, selling on eBay is easier than ever.

You can successfully sell a huge range of stuff on eBay, from socks to cds to kitchen appliances. The thing to remember about eBay is that buyers pay for shipping, too. So if something is disproportionately heavy to its value, then you probably shouldn’t bother selling it. Also, if the object is so large or unwieldy as to make finding a box nearly impossible, you may want to reconsider selling it on eBay.

Listing on eBay is not free. However, they offer enough promotions that you can most always list for free. Wait for these promotions. Do not cut into your bottom line by paying to list. EBay also charges a percentage fee of the shipping you charged. So keep in mind that if you price your shipping exactly, you are actually paying something from your own pocket to ship. It is okay to charge for packing materials and handling fees.

When you set up an eBay account, you should connect it to a PayPal account. That makes transactions a lot easier and makes keeping track of your money a piece of cake.

In my opinion the hardest thing about eBay is finding boxes and shipping supplies. You can make this easier on yourself if you have a designated place where you keep supplies and if you find a good resource for free boxes and shipping supplies like bubble wrap and air packs (such as an office or store).

You can do pick-up only on eBay for items such as furniture and large appliances, but this tends to be a frustrating process because a lot of buyers don’t catch that they are purchasing something for pick-up. This happens because eBay buyers are not only nation-wide but world-wide. However, you may get more money for your items since a bidding war might start.

eBay requires relatively little upfront effort. You can start small, too, so it’s not overwhelming. But once you see the the stuff you considered junk start to sell you will get addicted. You will then start to sift through all you appliances and question whether you really need a magic bullet, a blender, and a plunge blender. (The answer is yes to the blender and plunge blender, but no to the magic bullet, so off it goes). Your stuff will sell. You may have to list it a couple of times and adjust some prices, but it will eventually sell.

This method is like having a slow, manageable garage sale all year long. So instead of hoarding a pile that never goes away (sometimes in your garage left over from last year because it never got further than that) you are working through your stuff all the time and making money. If it really doesn’t sell on eBay, then set it aside for your garage sale.

Craigslist:

I recommend using Craigslist when you have an item that is too big or difficult to ship. People shop Craigslist based on their location, so they are local to you. Craigslist is great for furniture, appliances–big and small–, exercise equipment, and home improvement supplies. Craigslist is FREE to list, so it is very low commitment up front. You will likely get contacted pretty quickly and often in the first day of listing because your listing will be one of the first that pops up. You can direct people to contact you by phone or email or both.

There are a few annoying things about Craigslist. First, you might have to re-post several days in a row so that people actually look at your stuff. Unfortunately, Craigslist has a policy against this. You are not supposed to re-list the same thing over and over. But if you are in an area where searching for “dining room table” yields hundreds of results per day, then few people will scroll back a couple of days ago when you listed your dining room table.

The second thing to be cautious of with Craigslist is that people will come to your house. If you are not prepared or preferential to this, then this is not for you. I have never had a problem with Craigslist, but I suppose there is a reason that it is warned about.

Also, you either have to be very clear about having people bring someone to carry heavy items or make sure someone from your end can help. If you are having them move it, they will walk through your house and carry heavy stuff without much care and caution.

To combat those annoying Craigslist issues, have the item brought down on your end before-hand to your garage so that people are not coming into your house. Ask for cash only, or set up payment with PayPal before hand so you know they are legit. And have someone at home with you so that when four large men come by to cart away your old bedroom set, it’s not too terrifying.

Craigslist also has a pretty good smart phone app. It makes listing a piece of cake.

Half-Price Books:

Half-Price Books (“HPB”) is a chain of second-hand stores located in Arizona, California, Illinois, Indiana, Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, Ohio, Oklahoma, Pennsylvania, Texas, Washington and Wisconsin. They will give you cash for books, cds, magazines, games, puzzles, some kid’s toys, records, comic books, and stationary (among other things). Cash. In. Your. Hand. Granted, unless you are taking loads of best sellers from the last two years, it won’t be a ton of money, but it beats sitting at a garage sale for three days selling this stuff for 25 cents a pop and still having a ton of it left over. Rather than wasting your time doing that, just take it all to HPB and call it a productive day, then enjoy the rest of your weekend. You don’t need an appointment to bring your stuff by, it usually doesn’t take too long for them to tally up your winnings and you get to walk away with CASH. And if you think it’s way too little, then lug it all back home and save it for the garage sale.

Consignment

I have successfully sold clothes on eBay, though I have only found it to be successful with new or like new name-brand ladies’ clothing or accessories. In fact, if you have Guess Jeans that you finally acknowledge are too tight after your second uncomfortable wear, list them on eBay. They will sell for a surprising amount of money.

Unfortunately, in order to maximize your earnings on eBay, you list one item at a time, and it gets really tedious to list and re-list all that stuff. The point is to get rid of your clothes, not store it for another year until it finally sells on eBay. Plus, the great normal majority of us don’t go through our closets one name-brand item at a time. Rather, you probably have that one day when you are finally fed up with the mess, or that or that one day you feel ambitious enough to re-organize your closet. Either way, what you end up with is a huge mound of clothing. In the olden days, I would put these in a bag or bin and wait for THE Garage sale. But now, I do things differently because I am tired of selling the nice things I buy for 50 cents a piece.

So I finally decide on another route and searched for a consignment shop near my house. I took my pile of clean, mostly name-brand clothes and lugged a large box over to the store. I then found out that they are only taking summer clothes. Okay, that was a bit of an inconvenience but apparently they start taking fall clothing in July so it’s not too much of a delay. Basically, once I figure out this process a bit more, I will be better organized. Granted, I have to see if any of the stuff sells, but if it does, I will get a healthy percentage of their sale price and all I had to do was let someone else do the work. The consignment store I went to also handled home furnishings, home decor, and children’s clothes. So next i go in, i may take some more junk with me. Unfortunately they do not handle men’s clothes.

Garage Sale:

All this Garage Sale bashing aside, they do have their place. After all, you can’t sell random juice glasses and cheap candle holders and free t-shirts on eBay. ( If you can get it at the dollar store, it’s just not worth trying to list on-line.) However, it is worth putting it on all on a table and seeing if anyone else wants it. It is surprising how fast 50 Cent transactions add up to some real spending money. Yes, you’ll need some big ticket items to make the Garage sale really worth your time, but it is a perfect opportunity to get rid of your odds and ends.

What I have found myself doing recently is trying all of the above methods first and then leaving it for a Garage Sale when it doesn’t sell. My Garage sale pile is smaller and what is left is stuff I know I can’t get a good price for in other places.

Donations:

Why not just donate? Well..it’s tricky to figure out how much monetary value you are going to get. It may very well be Zero. So if you are donating to get the tax refund, you better make sure that you are actually going to get a tax refund. In order to make the donation affect your taxes, you must itemize your deductions rather than taking the standard deduction. If you take a standard deduction, all that nice stuff that you are giving to the Salvation Army is simply a donation and not a tax deduction. Even if you are itemizing, your tax benefit is worth only the rate of your tax bracket. So, if you are donating a book and you say its value is $1 and you are in the 15% tax bracket, then the tax savings/benefit is only 15 cents.

So let’s say that you are going to make $500 at a garage sale over a three day weekend. In order for a donation to be more valuable than that to you, you would need to value your items at the following amounts depending on your tax bracket:

Tax Bracket / Estimated Value of Donated Items

10% / $5000

15% / $3333

25% / $2000

28% / $1785

33% / $1515

35% / $1428

Sometimes a donation can put you into a lower tax bracket by reducing your taxable income, and that is something to consider. If you are considering donations, you should keep receipts in case of an audit, especially if the total annual donation amount is more than $500. Donations above $500 need to be reported on form 8283 and need to include information on the organization, as well as the date and articles donated. The tax professionals hat helped me sound like less of a moron in this paragraph also recommended that you seek the advice of a tax professional if you have any questions and that you should not take this article as a replacement for tax advice.

These are some of my methods, though I am sure there are plenty others out there. I have heard that Facebook is a good forum, but I have not explored it. Some people also have success with flea markets or those antique malls (which really aren’t just for antiques), especially with large quantities of one thing like books or tea cups. If you have a good source, let’s hear about it.

The Grocery Game

When my husband suggested we review the budget on groceries, I immediately took offense. I mean, I was the one that always did the grocery shopping. I thought I was shopping conscientiously. Plus, it was my husband who ate so much and who needed diversity. I could live on eggs, rice and beans for the whole month. When he pointed out to me that we were spending around $700-$800 dollars a month, I didn’t believe him. I kept saying that the month he was looking at was an anomaly. I told him to just look at the month before. Yet, it never really went down, and sometimes was a lot more.

I am going to have to admit that I didn’t have any idea of what we were spending. But the next thought was, “well…what should we be spending?” The answer to this questions varied and vague. According to an online article by NBC the USDA estimates that for a family of four “spending ranges from a “thrifty” $524 per month to a “liberal” $1,014.

We are a household of two adults…and two cats. We only entertained about once every other month, and I’m talking dinner with another couple, nothing lavish. Plus, we did not spend a lot on liquor.

I was stubborn and insistent that we weren’t overspending, not based on our salaries and lifestyle. Plus, did I mention how much my husband eats? No, he’s not fat. But he does exercise and weight train and he needs to consume a lot of food to keep his weight up around 180. He is also a bit fanatical about healthy eating. And as we were trying to eat healthier my costs kept increasing. I was now buying ground turkey instead if ground beef, wheat pasta, a lot more fruits and vegetables, Greek yogurt, and gallons if milk, for example these things were all more expensive than their less healthy counterparts.

I then got to the point where I was looking at the amount of protein rather than price and I was also looking for a lot of convenience items that would be easy for my husband to grab if he were looking for lunch or a snack, like protein bars and sandwich fixings, since he always looked into our full fridge and said there was nothing to eat since we had ingredients versus meals. We also had started making runs to places like Trader Joe’s and Whole Foods. In my mind, I blamed my husband. Though have you ever tried to walk out of Trader Joe’s or whole foods without stocking up on wine or cheese? Maybe it was partially my fault.

My arguments weren’t swaying my husband. He acknowledged we ate well, he thanked me for the efforts I made to keep him fed, and asked, can we cut this in half? I began to see that he had a point, and begrudgingly answered that we could, of course. He challenged me to bring the spending down to $100 a week. I said fine, but he had to come with me.

Now, this is not a story about advocating extreme couponing. That stuff takes too much time and space. You don’t end up buying what you need, and it’s usually processed and not good for you.

However one of the time-tested techniques which we did abide by was checking out the circulars before we went shopping. Around our house we have the choice of over a dozen chain and independent stores. I would normally go to Jewel, which I always valued for what it was: a big grocery chain that would have a lot of loss leaders, hence great sales. And I could shop there consistently because I wasn’t married to a set list of items.

However, around the time that we decided to meet the challenge, Dominick’s came out with this amazing app (also the same company as Safeway). I had never really shopped at Dominick’s, but this app really appealed to me. It was the kind of app I wish Jewel had come out with. With this Dominick’s app, we could load coupons right onto the card from the smart phone. We could check out what was on sale and plan what we would buy for that week. The app didn’t just have the circulars, it also had items that were deal matches from other stores, specials just for me, coupons, and sometimes free items.

Prior to this app, I would do what most people probably do…cut out coupons and then forget about them. With this app, I didn’t have to clip coupons. Now, the savings were right there. The only thing they could do to improve this app is allow me to scan my coupons from other sources right onto my cars…but hopefully that is around the corner.

Nonetheless, that one step of looking over everything on sale that week, was a big psychological prep. With my husband in tow we set aside a specific time to go to the store.

I quickly realized that this was also one of the problems. Previously, I would go to the store a couple of times a week, either on my lunch break or after work. My shopping trips were unscripted and too numerous. While I didn’t spend a ton each time, it added up quickly. This was part of the reason I didn’t feel I was overspending…because I never was on individual trips. Plus, my husband would also sometimes make a run if he was out of razors, deodorant, or hair stuff.

I was leery of having my husband along. He has the attention span of a five year old and easily gets bored. Luckily, he now saw these trips as a challenge. He kept engaged and interested by running the calculator. This also helped keep to the budget.

On very rare occasions do we go over $100 a week. We stay on budget by buying ingredients rather than processed or boxed foods and by being flexible with the grocery list. Brands do not matter. We just want the best deal. And we are willing to put things back if we go over $100.

We always check our receipt before we leave and have lost our embarrassment about going to customer service and asking for rain checks or refunds of a couple of dollars. One of the things we have learned is to not be afraid to ask. A few weeks back at Dominick’s, we realized that we had lost a $10 coupon we had earned the week before. We looked for it, blamed each other and then basically figured we were SOL. We decided to go to customer service anyway just to see if there was something that could be done. There were a couple more hoops we jumped through, but in the end, they were willing to give us a $10 gift certificate. Incredible.

We are also willing to go to more than one grocery store if we can find a great deal on meat or produce, though we try to avoid that to prevent the temptation to over shop. But to be fair to places like whole foods, there is no better or cheaper place to buy bulk, diverse whole grains, beans and rice. And can you beat three buck chuck from Trader Joe’s for consistent cheap wine?

There were lifestyle changes that we made that helped us save. There were little things like my husband converting to a vintage double edged safety razor and getting rid of the Tassimo. I also don’t buy juice anymore. We just drink water, tea and coffee (we have milk, but we don’t drink it straight). I’ve started to make my own all-purpose cleaner and I have stopped using plastic wrap. We are not willing to give up meat, though we tend not to eat much red meat. I’ve also explored making things like hummus and breakfast bars, which were things that we previously bought thinking that they weren’t expensive. However, when you realize that a bag of dry garbanzo beans costs around a dollar and yields about four cans of beans at around a dollar a piece, or about six tubs of hummus at around three dollars a piece, it’s a huge savings.

At this point we have successfully cut our grocery bill almost in half. But I know there is more we can do. Many people may be reading this thinking that $100 a week is high (though keep in mind that this budget includes toiletries, cat food and litter, household needs like TP, garbage bags, etc). What is important is to take an accounting of what you spend, then take steps to reduce it. Set a goal. It’s easier to make changes gradually as you realize the benefits of making those lifestyle changes. You can’t make comparisons to other families, because everyone is different. But, more than likely you are buying a lot of crap you don’t need, that is not particularly good for you.

According to my own smug advice, now that we know we can shop, with all of our personal, household and feline needs met, at $100, the next step is to reduce it. There is room for improvement, and it may not all be in food consumption. For example, if we can really reduce our waste, we’ll need garbage bags less often. Or, if I can make a pleasant, effective laundry soap, I wont have to buy detergent every other month.

As far as food goes, I am looking forward to summer when we can grow and pick our own produce. I need to learn how to can or freeze foods so I can use what I grow and pick throughout the year. Right now, I buy some frozen fruits and vegetables to supplement our needs because I really haven’t thought through the freezing of fresh items. But if I just freeze the stuff I grow, or at least when it’s in season, then that would be a nice chunk of monthly savings.

We are also committed to increasing our intake of produce and need to decreasing the amount of meat we consume.

Do I miss really good cheese? YES. Do I wish I could always have a bag of brown rice in the freezer without having to cook and divide it? Sure I do. But we are talking real numbers here, not just a couple of lattes, which is my usual measurement for whether saving is worth it. We are saving thousands of dollars a year! And I know we can do better.

The lightbulb moment: negative net worth

About four years ago, my husband and I went to see a financial planner. It seems we had finally been making enough money to cover all our debt and start accumulating savings. We had a nice little nest egg of about $20,000 and thought that we needed to go speak with someone about how invest this money. And I have to tell you, we felt that we had real wealth and that this wealth would only grow.

A funny thing happened though when we met with the financial planner. He pointed out all of our debt. Now, he didn’t necessarily have an issue with debt, but he highlighted a loan we had taken out for my husband’s big boy toy that was higher than the others at around 8%. If I recall, his advice was to try to refinance or roll this into a home equity loan to get a lower rate. On top of this debt both my husband and I had car loans, student loans and together we had a mortgage.

Going into this meeting we thought we were being conservative because we were living below our means and didn’t carry over credit card debt. I just took for granted that my twenties and thirties were about acquiring “stuff” and that naturally meant taking on debt. It’s what everyone else did, and we thought that because we didn’t buy the biggest house or the fanciest cars that we were being fiscally responsible.

My husband’s light bulb moment at that meeting was the realization that he not only had no wealth, he had substantial negative net worth. My lightbulb was that there was really no point in saving this money when we had debt we were paying interest on.

While we both arrived there a little differently, the conclusion was the same: we needed to get rid of our debt before we could even start thinking about saving for our future. We joked that we had more actual wealth the day we graduated from high school with a minimum wage job but debt free.

At the time of this meeting with the financial planner, about mid 2009, we owed over $100,000 in student loans between the two of us and had a mortgage of around $190,000. My car had a five year loan that was a half year from getting paid and my husband’s car was leased. We had also that unfortunate loan for my husband’s little hobby for about $50,000.

It was daunting. While we both made really good salaries, we had never considered paying much beyond the monthly amounts. We never thought we could do what we did, especially not as fast as we did it.

We went with the good ol’ snowball method: tackling your smallest debt first and then progressively attacking each subsequently sized debt. However, first, my husband sold his toy. We then took our savings and paid off my car early. This all happened fairly quickly and immediately freed up several hundred dollars a month.

The feeling was immediately empowering. We tackled my student loan, then dealt with my husband’s car, then his student loan. I have to admit it was frustrating at times to throw big chunks from bonuses and such at these loans. There were still things I wanted. Nice things. Expensive things. And throwing it at the loans didn’t actually result in any tangible returns.

As we were nearing having only the mortgage remaining we made a strategic move to change our loan from a 30 year fixed to a 15 year fixed. With interest rates so low, the new payments were roughly the same as before, but soooo much more money was applied to principal every month. Unfortunately with the real estate market being what it was in 2010, our house didn’t appraise high enough to get rid of PMI. Nonetheless, while we were paying about $115 before on PMI, the amount on the 15 year loan was only about $40 a month. And even though it was only $40, we made ourselves familiar with the rules regarding getting rid of PMI as soon as we could.

This strategy often meant living paycheck to paycheck because any money left over at the end of the month was thrown at the mortgage. It was a delicate balancing act to calculate how much we needed to have in checking to pay any bills before the next paycheck. Sometimes we would have only $1000 to our name.

When we had paid down about $80,000 after refinancing, we changed our strategy a bit. We decided to keep paying our normal monthly payments but to keep the money we would use to pay off the house set aside in a separate account. This would accomplish a couple of different objectives: We would have a savings account in case of emergencies and we would have a stash of cash in case we wanted to move, which was always on the back of our minds.

So this account grew and grew. When we got close, we threw everything we had into it. And requested our payoff amount. When I went into the bank to send the wire transfer, I wanted to tell everyone that we were paying off our house.

It took a little while longer than I thought it would at the bank, but all in all, around half an hour to send off the money. Just over $100,000. That hurt a little bit. Spending that money. All at once.

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Those were the texts we sent to each other that day and the next. It started to feel good. Knowing that next month we would not have to pay the house bill! It was like getting a $1500 raise a month !

So that was the first part of our story. I truly believe that any one can do it. I will admit that my husband and I, as attorneys, made really nice salaries. Really nice. But along with that, came the student loans, debt that a lot of people do not carry to the extent we did. Or, you may not own a home and have less to pay off. Everyone’s story and situation is different. But the first thing you have to do is stop. Just STOP. Figure out everything you own and owe. Make sacrifices and start tackling those loans. One at a time. As you pay one off, you will have more to throw at the next one. You may get there faster or slower than we did, but you’ll get there. Start now.

First… admit you have a problem.

My dear, beautiful sister was always so proud of herself for getting such fabulous deals on after-holiday items, decorations and wrappings.  Perhaps the best example was Christmas.  Every year, she would buy her wrapping papers, tissues, foils, boxes, bags, decorations on super sale after the season and put them away for the next year.  She got such fabulous savings!

When she moved from Illinois to Arizona three years ago she brought out from under the house FIVE bins of Christmas stuff, much of it never opened. Together, with hands held, and tears in our eyes, we acknowledged she had a sickness.  If you buy things and never use them, it’s no deal at all, no matter how cheap it was.

Now, I will admit, I took a lot of it…she couldn’t take it with her and we weren’t going to throw it away…it was all free for me.  But, I have to be honest,  it will be years before I actually go through it all.  Especially since I have made a vow to never buy wrapping paper and gift bags again.  Once you make a conscientious effort to save tissue, gift bags, cellophane, bows, ribbon, fillers, foils, and boxes, it adds up very fast.  People may look at you strangely at a baby shower when you are folding all the tissue into manageable folds, but you’ll be glad you did. (Baby showers are gold mines for tissue paper, by the way).  There are so many uses for tissue paper.  You can shred it and use it for easter baskets, shipping delicate products, and gift baskets. You can even wrap presents with it. You can use if for decor on gifts of plain bags, such as making tissue flowers, bows, or taking some watered down glue and decoupage-ing.

At Christmas time, I collect the ribbon and tissue and bags that people otherwise throw away. And they throw so much away! Everyone so far has rolled their eyes at the idea of shredding and composting the wrapping paper, but I hope to put that into effect soon.  I also collect small boxes and ribbons like the ones that come with all those yummy office gifts. Even if it’s too small to actually use to wrap, ribbons are great for crafting.

Occasionally my husband also has a good idea. Sometime ago he collected a handful of flight maps that the local flight school was getting rid of.  They have now become his signature wrapping and everyone remarks on how clever it is.  Repurposing things like maps, comics, your kid’s coloring book pages, instructions, newspaper, magazine pages, and tissue as wrapping paper is a great and FREE idea. Don’t forget to shred and compost after wards (I know…I haven’t gotten around to that yet, but I WILL.)