Overcoming The Dreaded Car Payment

I remember in my early 20's, when I still lived at home rent free, I bought a shiny new red sports car right off the lot. I had an astronomical car payment that shackled my finances for years. In fact I never paid that thing off I just traded it in when I got married because my new giant husband couldn't fit in it.

All through our early married years we had car payment after car payment after car payment.....until finally we decided to just put all our energies into paying off what we already had and driving it until it died. No more replacements or newer models until we actually needed one.

We haven't had a car payment in 7 years. Both cars are paid for. I can't even tell you the freedom that brings to my budget and my stress level. Yes, both of our cars are from 1999 (a volvo and a suburban) but the fact that I'm saving around $600 a month in car payments makes them feel like that first shiny red sports car I used to drive.

But lately I've been aware that their days are numbered and I've been faced with the possibility of a car payment once again. The volvo will probably last me another 10 years if I keep up with maintenance and repairs. I love that car. But MAN, I don't want another budget busting payment when my suburban keels over. And at almost 13 years old, it's coming whether I like it or not. We don't have enough saved up to buy another reliable car with cash, so I came up with a plan. I decided I was going to be proactive and make a car payment to myself. As I drive the cars we now have into oblivion I'm going to start making a car payment to my savings account of about $200 to $300 a month. Hopefully before an urgent replacement is needed I'll have saved enough to pay cash for the next one.

Making a car payment to myself will require some self discipline but will also save me so much money in the long run. There are no interest fees to this car payment and much more of a grace period than if I were paying a bank. And OH! The satisfaction of paying cash for that next car and continuing with the tradition of being car-payment-free.

So if you are still saddled with a car payment I would encourage you to pay that puppy down. Even if all you can add is another $20 a month you'll be speeding up the process immensely. And I can't even tell you how much flexibility it will give you in your budget to be able to put that car payment towards something else....like a vacation.

Teaching Kids About Money

Many of us are cleaning up our financial messes from our first years as adults. From the time of my first job babysitting at 13 the only thing I knew about money was how to spend it. I had no interest and no concept of budgeting, wise investing, or how much debt could tie me down for years and years. So because of my own experiences I knew that it was important to teach my kids all about money and debt in a fun, practical way.

Over the years we've read books, tried curriculum, used the save/give/spend jars, had allowances and just about everything else you can think of. But the best tool we've come across by far is a board game that the whole family plays together called Cashflow for Kids. The kids get a true concept of payday, bill paying, investing, passive income, debt reduction, and real life... all in a fun game that everyone from the littlest to the adults have fun playing. We were playing it again last night and even our 7 year old was realizing how the chains of debt were keeping him from paying his bills and was coming up with out-of-the-box ways to try and get rid of it. I love that!

So if you worry about your kids financial future there's no time like the present to teach them a healthy concept of money. Combine family time and financial security together and take a look at this great tool for parents.

Will You Be My FRUGAL Valentine?

I bet if you asked most people, they’d tell you that Valentine’s Day isn’t really about the bling. The commercials will tell you it is, but really it’s more about appreciation. It’s about reminding the people in your life that they are important to you, that you’re glad they are there, that the history you share makes your life richer. In fact, I think bling is the easy way out. It takes much more effort and thought to remember all the reasons you like someone and to write it in a note than it does to buy something flashy off the pre-arranged holiday shelves at the local store. So guys, you’re off the hook. You can tuck your wallets back into your back pockets. This year try a gift from the heart. And if you still want to buy us something shiny too, well, we sure won’t turn it down.

• For a spouse: Try and remember the first days you met. What drew you to him or her? What was it that made you fall in love? Now write it down and dig up a few pictures from that era to look through with your partner. For your kids: Write down all the good qualities you see in them and how pleased you are with who they are becoming.

• No need for an expensive dinner out. Go out for a sweet dessert instead. It’s all of the ambiance at half the price and you can still dress up if you want to. No one needs to know that you didn’t just come from a fancy night out.

• Why get roses? How about something that lasts a little longer. If your sweetie has a favorite plant or flower, get one that they can actually put into the ground and can last awhile. Every time they see it they’ll think of you.

• Catch a free concert and hold hands all the way through. Check with local coffee shops or colleges to see if any live music is playing.

• Is your life pretty stressful? Than set aside some time to relax.Chris and I are gluttons for old book stores.We both love to read and dig through the bargain books for hidden treasures.An afternoon in a quiet bookstore for us means hours of bliss, quiet and calm.We always walk out relaxed and with smiles on our faces.

• Offer a day off! Cash in on a personal day at your job and do something relaxing. Take over for a tired mom. Watch the kids, do all the cooking, catch up on the laundry and send your spouse out for a pedicure.

• Relive those private rituals. Remember those cute things early in your relationship that have become private memories? Remind each other of them. Recreate them. Reminisce.

The most memorable Valentine’s gift is one that takes a step out of the ordinary, that requires effort and remembrance, not necessarily a lot of cash. So this year try a little more heart and a little less flash and I believe your sweetheart will thank you for it.

Set Reasonable New Year's Goals

I have plenty of verbal gaffes that plague me at random moments. There was the time that I exclaimed with joy over a friends obvious pregnancy and I very quickly learned that she wasn’t pregnant at all. Or the time where I let my bawdy sense of humor (which I normally try to reserve for friends and family) out at my husbands office Christmas party. And even though those moments happened years ago, they can pop up at unexpected quiet times in my head bringing with it a cringe just as potent as when it first happened. And I’ve realized that I don’t like the feeling of living with regrets. Now is the time of year where it’s traditional to examine the last 12 months of our lives and implement some changes for the upcoming year. It’s a time where regrets can hit hard if we let them, unless we choose to look at them a different way; a way in which they spur us on to change in the next year.

Many people make New Year’s resolutions and most of us set the bar too high only to end up defeated. It’s the little changes that stick. Whether it’s finances, relationships, or our health we can all make lasting changes if we know how to make reasonable goals. Here are some things to get you thinking about how to make small changes in the New Year that you’ll be able to follow through on and have no regrets.

Finances

When you look at your spending habits over the last year did you save as much as you wanted? Did you increase your debt? Don’t regret your mistakes just make some small changes. Make a decision to cut up one of your credit cards and pay it off this year. How about building your savings up by purposing to set aside a percentage of each paycheck. Nothing’s too small. You could start with 2% of a $2500 per month income and have yourself a $900 nest egg by the end of the year to be used for a vacation, emergency fund or a debt free Christmas. Or you could try making a budget for 2011. Stretching yourself a bit is great. Expecting yourself to save 50% of your paycheck when it’s your first time trying to save is only going to make you frustrated and ensure that you are not going to reach your goal. So make sure you’re setting yourself up to win.

Relationships

When you look back over your year did you spend as much time with your kids as you wanted to? Did you let people know how much they meant to you? Was your marriage strained and in need of a little more TLC? We get so busy at our house with sports and school and work that it’s hard for us to eat a meal together. We’ve decided that we won’t let a day go by without sitting around the table for at least one meal as a family. Whether that means breakfast, lunch or dinner, we are going to make an effort to eat, talk and look each other in the eyes for at least that 15-30 minutes every day. Maybe you need to make sure that you have a regular date night with your spouse or have a family game night once a month. Or when you think nice things about someone, speak up. Give them a call or send an email to let them know rather than keeping it to yourself. Those are simple, doable things that you can accomplish this year.

Health

Diet and exercise are the biggies when it comes to New Year’s Resolutions. Ask any diet company or exercise teacher when their busiest time of the year is and they’ll probably tell you January. But the majority of us tend to set huge goals in this area and then fizzle out after a few weeks. Why not set some realistic goals? Decide to take a 30 minute walk three times a week. Make a point of drinking eight 8oz glasses of water everyday. Exchange your late night soda and chips snack with a piece of fruit and a glass of sparkling water. Any one of these changes will improve your health. It doesn’t have to be a drastic change to have a positive impact on your body.

Simple changes for the New Year can bring about a much more realistic outcome than grandiose schemes can. With a little bit of self examination and some realistic changes our lives can improve from year to year. So take a few moments to look back and see what you’d like to do different and then take small steps forward. Improvement is something you’ll never regret.

How To Immediately Save $50 A Month On Your Grocery Bill

*** This is a re-print from a post a while back.

Ok, I know that’s a rather lofty claim but your going to be amazed at this. Some of these you might already be doing but if you were to institute all of these ideas in one month you could easily save AT LEAST $50 bucks off your monthly grocery bill.

Drink Water With Meals – Most of us are drinking soda pop, milk, or juice with our meals but by switching to water (toss a slice of lemon in for some zing) you can not only improve the look of your skin, flush out toxins, and enhance weight loss, but if you normally consume 1 gallon of milk per week during mealtimes, at $3.50 a gallon, there’s $14 dollars off your budget right there!

Serve One Meatless Meal Per Week – Don’t let this intimidate you. It doesn’t have to be tofu, bean paste or some other strange vegetarian food. This could be a baked potato night with meatless toppings, a meatless chili with cornbread, homemade macaroni and cheese, or vegetable soup and rolls. If hamburger costs $2 a lb and a 4 pack of boneless-skinless chicken breasts is about $5 you could save between $8 and $20 a month by cutting out meat once a week!


Buy Generic – I know, I know, there are some brands that we are just not willing to budge on. But do you realize that most of those generic brands are made by the same company that is making your name brands? You’re paying for packaging and popularity in most cases and getting the same quality of product. Consider trying one or two generic brands this month instead of your name brands and see if you notice the change.

Make It Yourself – I can make a two dozen homemade donuts for close to 50 cents. I can make 4 gallons of liquid laundry soap (128 loads) for $1.42, and I can make homemade 409 for 35 cents. There’s not much out there that can’t be made yourself with a good google search and a willingness to try something new.

Reducing your family’s grocery budget can be done! We just have to think out of the box and be willing to experiment a little bit.

How To Bring In A Few Hundred Dollars A Year From Your Junk

I'm not a big clean freak. On any given occasion you'll find a light layer of dust on almost every surface of my house and maybe a hairball or two in the corners. BUT clutter is a big one for me so I'm constantly getting rid of excess stuff. If my house is tidy and in order, I can relax. But being the type of person who likes to squeeze every bit of value out of our food as well as our belongings, I usually find a way to get some cash for our no longer wanted items. So my clutter flow chart looks something like this....

• E-bay for small items
• Craigslist for large items
• Consignments stores for clothing
• and if all else fails....donate.

I probably make about $500 a year just listing our unwanted stuff on e-bay or craigslist. Things like unused homeschool books, out grown toys, kitchen wares, old pieces of furniture, replaced appliances and outdated electronics. Things that would have otherwise cluttered up my house.

It's true that one man's junk is another man's treasure.

So if you're interested in learning how to E-bay, I recommend THIS book to get you started. Just think what you could do with a tidy house a few hundred bucks in your back pocket.

Cash Versus Credit

We live on a tight budget. Duh...I KNOW. But I just felt like I needed to start with that little reminder. Because when my washing machine started to make the spinning noise but wasn't really moving....I jimmied it up to get it to spin and continued to wash my clothes. And when it decided to fill and fill and fill and just never stop, flooding my basement and my new master suite (that sounds fancy...but it's just a converted rec room) I cleaned up the mess and learned to stand over it and manually stop it every time so I could continue to wash our clothes.

These are just the things you do when money is tight and you still have dirty underwear to wash.

But when my husband decided to try and "fix" it and actually brought about it's final demise, I knew we needed to purchase a new one.

So I stalled for about a week and searched Craigslist for a used one. And then I took a trip to the laundromat. I used all eleven top-loading machines in the place, wasted four hours twiddling my thumbs, and spent $40. Then I went to Sears and picked out the best front loader set I could find on sale and went home to talk it over with Chris.

We thought our only option was credit. We knew better, but in desperation and our culturally trained mentality of "give it to me NOW", that's what we concluded. I wanted a front loader that would save us on electricity and water and wash twice as many clothes. But then, of course, I wanted my dryer to match. So we thought we'd charge it on a no-interest, no-payments for 12 months card. Sounds like a great deal, right?

But we both felt sick about it.

We spent a good 48 hours trying to justify it before actually committing.

"We can pay it off before the 12 months is up and have a washer RIGHT NOW!"

"Don't I deserve a nice one? I mean, geez, I do a ton of laundry."

"You know, our last Kenmore lasted 14 years. We need new so we don't have to repair an older one."

"It's 40 percent off, free delivery, and a PUD rebate but the sale ends in two days. We need to do it NOW!"

But in the back of my mind was this...

"Who knows what the future holds. What if something happens and we can't pay it off in 12 months?"

"I don't want the pressure of knowing I have a payment every month."

"How can I really enjoy it, knowing that we don't really own it."

So finally, we reminded ourselves that debt is presuming on an uncertain future. There's no guarantee that we'll have the money to make the payment later. And with that, we chose cash-only or to do without.

We decided to take a deeper look at our finances. We pulled a little bit of money from here, and little bit from there, sold some stuff we didn't need, decided to put off some things that could wait till later and lo and behold....we had managed to come up with enough to buy the matching set for cash.

The money was there the whole time, we just had to use a bit of creativity and patience.

Living on a cash-only system can be inconvenient, I admit. But I can't tell you how good it feels to know that there are no strings attached. And when my beautiful new babies are delivered on Monday they'll be mine.....all mine.

Yes, We Can Survive Without All The Modern Conveniences

Periodically we take the time to re-evaluate our monthly expenses.

Do we really need internet access? Oh yeah.

Do we have to get haircuts every 6 weeks? Nah, we can stretch it to 10.

Do we really need our cell phones? ummm....

Honestly, I thought that was a need. I mean, how could I live without my cell phone? But the more we thought about it and remembered the days before we had cell phones, we realized that they weren't really a need after all. So we called and cancelled and immediately knocked $100 of our monthly budget.

Oh the withdrawals.

I had to actually plan better. When I left a kid home to babysit the others I had to make sure and leave the phone number of where I was at if they needed me. How archaic. When I wondered what time my husband was going to be home for dinner, I had to actually just wait to find out. And when I needed to find someones house, I had to actually make sure I had a google map before I left the house instead of just relying on the ability to give them a call if I got lost.

Oh the horror.

But guess what? It's been several months now and I've managed to survive. Modern technology isn't near as much of a need as I once thought it was.

Now, I'm not saying all this to convince you to get rid of your cell phones. But what I am hoping you'll see is this....

Sometimes our needs are really just wants.

If you're serious about cutting costs and living on less, then be willing to experiment and see what you truly need. I'm willing to bet that we all have some things in our budgets that would only take a minor adjustment to do without but a major savings of our resources.

FAQ's - Calculating As You Shop

A question from a reader...

I know you try and stay below $60 a week. PLUS I believe you only bring cash right? So how do you calculate your groceries while going through the store to ensure you are only spending so much? Do you have a calculator with you? If you do, what happens if you hit the wrong button and zero everything out or something? I've always wondered how people keep track while in the grocery store. Thanks so much for sharing your groceries and stuff! I LOVE your blog!

You're right. I do only bring cash, no debit or credit cards. It helps me to stay accountable to the fact that I truly have to stay on budget. I usually shop with a clipboard with my shopping list attached. The clipboard is so I have a sturdy surface to cross out what I've already bought and to make notes or calculate as I go.

My shopping list (and maybe I'll make a PDF that you can download and use if anybody is interested) is in several rows and columns. It's all organized under headings like Produce, Canned Goods, Baking Supplies, Meat...etc. so I don't have to backtrack all over the store for missed items. I like to get in and get out.

In the margins I keep a running total of everything that goes into my cart. Number one, so I can control how much I'm spending and how much I have left to spend. Number two, is so I know if the checker is charging me correctly. I can't tell you how many times I've arrived home to find out that I've been overcharged for something.

Also, I don't use a calculator for the very reason that I've slipped up too many times to count and accidentally erased my running total. The woman standing in the aisle with the horrified look on her face would be ME after slipping and hitting the clear button on my calculator. Ugh.

To make it easy I always round up the price of the item as I'm adding them up. If I bought something for $.98 I would round it to the nearest dime which would be $1 so that it's easy to add and I have a built in cushion for any addition errors I might have made or to allow for tax.

So that's how I do it. Again, I want to say that mine is NOT the only way to do this. It works for me but I know there are tons of great ideas and resources out there. I'm smart enough to know that I don't know it all. So if it works for you too, great.

Yes, You Can Have It All

Ok, I admit, I love a good French pedicure. In fact it is a close second to chocolate for me. And chocolate is as important as breathing.

But when our finances became tight, salon pedicures were the first thing to go. So I had to either figure out how to do it myself or go without.

So into my grocery budget (which covers food, household items, toiletries, cleaning supplies, and cosmetics) I began to make room for drugstore french manicure kits.

My first trip I tried the stickers that you tape on your nails so you can paint nice straight white lines.

Ha, what a joke. If I can’t keep the taped off stripes on my painted walls from bleeding through, I’m sure not going to do a good job on my teeny, tiny, very far away, must-be-a contortionist-to-reach-them toenails.

My next trip I got a small bristled paint brush and thought I could just soak it in polish remover and straighten out my lines that way.

I realized I must have early onset Parkinson’s because my hands would not hold still.

But finally I came to this little gem.

Sally Hansens has this amazing product that comes with three items; a base coat, a fancy little white pen, and the creamy translucent top coat.

And, By George, I think I got it.

It’s that little white pen that is the mini-miracle. It’s kind of like those paint pens that you have to shake and then push the tip down to load it. And it paints a nice little straight line, right across my piggies.

I went from a $40 salon visit every few weeks, to a $10 Sally Hansen 5 Minute French Manicure Kit that has lasted for 5 home pedicures and is still going strong.

And I’m really hoping the pedicure fairies at Sally Hansen notice this endorsement and send me a years supply.

Home Hair Cuts, Yep, That's What I Said

I know that this tip doesn’t necessarily cut back on your grocery budget but it’s definitely a money saver.

I have never been to cosmetology school, I don’t have a friend who has taught me all her tricks, and I certainly don’t have a hidden talent. What I do have is a houseful of people that need regular haircuts that can break the bank.

Even if I go to the local chain “hair salon” it costs at least $10 per head to have my kids’ hair cut. That’s $40 a visit…almost my whole weekly grocery budget.

Over the years I’ve invested in a set of electric clippers, some combs and some sharp scissors, and I’ve watched a lot of hairdressers and took note at how they angled their cuts.

I read a few books, the directions in my clippers and then just cut loose one day. It started with my husbands’ hair and when he walked away with no bald patches or Mohawks, I started in on the kids. There have been times where the cuts haven’t turned out exactly the way I wanted but there have been no hair-tragedies in my 12 years of haircutting.

When I did a google search so that you guys would have some resources I came up with hundreds of great sites that either show you or tell you how to do a simple cut.

Here is a great link to get you started. It gives some great tips on how to cut a simple straight one length girls cut as well as bangs, men’s hair and little kids.

Here’s a video for a man’s cut. It has some great tips! You’ll watch this and think, “Yeah, I can do this!”

Some ideas for the cuts when your kids are really young…I let them suck a lollypop while I was cutting, (Ehh, what’s a little hair?) or my husband would stand in front of them and entertain while I snipped away.

We also use a towel wrapped around their shoulders and clipped at the neck with a clothes pin to keep hair from getting all over their neck and clothes. We’ve tried garbage bags too.

And as you can see from the picture we don’t have any Alfalfa do’s or nerd haircuts.

***I have to admit that lately my hubby's been getting his done at the salon because as he gets older and his forehead gets, um, larger he needs a little more creativity than I've got to give.

My Secret To Spending Less

Do you ever notice how banks are really trying to push those handy little visa debit cards? And I’m constantly getting mail for the latest low-interest rate offer for ANOTHER credit card. Do you know why they do that? I’ll tell you why.

If it’s easy to spend money, well, then spend it we will!

They know this and have used their knowledge for evil…not good. They WANT it to be easy for you to spend your money. They also want it to be easy for you to spend THEIR money so they can make an even bigger profit off the interest. So my theory is this...

Credit/Debit Cards Baaaad!

Cash Gooooood!


Now visa and credit cards aren’t all bad. But very few of us use them to our benefit. They are great to have as ATM cards to get cash out of the machine. They are also great if you order things off the internet or have an emergency where you can’t get to your bank.

But we’ve found that for us, if it’s a little more difficult to get to our money, we have a bit more time to decide if it’s really something we want to make the effort to buy.

For example, we recently decided not to carry our cards with us. They stay at home in a safe place and aren’t conveniently in our wallets or our purses. When I make a purchase I have to calculate how much I’m going to spend before I leave the house. I make a plan and I’m forced to stick to it. Then I take the card out of its box, head to the cash machine and ONLY take out what I’ve decided to spend.

This eliminates impulse buys and makes me really consider what I’m buying as I shop. I don’t have the convenience of adding more to my grocery cart than I intended. I have to keep a running total as I shop and make sure that it fits in my budget.