Another Way to Save (Money AND Time!!!)

I have finally tried the Curbside Pickup option from Walmart and H.E.B. grocery stores. It is awesome!! You go online, add stuff to your cart, choose a pickup time, and then arrive at the store during your timeslot (usually a 30 minute or 1 hour window) at their designated location (usually the side or back of the store), and someone brings your cart of groceries to your car. You get to sit at your computer rather than wander around the store (I was having foot pain so this was a big draw for me), AND! Because you're not wandering the aisles, you're not tempted to add extra (insert dollar signs here) stuff to your cart. Genius!!!

Best (Financial) Book Ever (that I've read)!

Lately I've been spending my time doing a lot of reading. I've read 'You're Broke Because You Want To Be' by Larry Winget, which talks about all the stupid ways we keep ourselves out of money. This book talks less about the 'advanced' topics of investing but is good in its own right. His 'in your face' writing style calls you out on all your irresponsible character flaws and is either funny or disturbing, depending on how you look at it. I thought it was funny with a twinge of painful personal truth.

I've read Dave Ramsey's Total Money Makeover (with workbook), where there was more of the same (really good advice about wise vehicle buying philosophies), helping you see the benefit of doing things smarter so that you can pay down debt and use that newly freed up money to begin investing. Very motivating.

But better than both of them is a book called I Will Teach You To Be Rich by Ramit Sethi. This book picks up where Dave Ramsey's book leaves off. It's geared towards twenty and early thirty-somethings who want their cake and eat it too. You won't find a bunch of frugality-preaching here; he tells you to pick a few areas you can get some Big Wins in (think areas to revamp which will allow you to spend less/make more) freeing up money for investing over the long term. Not to mention Ramit has a funny, smart-alec writing style that keeps you engaged and laughing.

Personally, my investment history is abysmal. I've never really actively invested; I had a financial advisor, who helped me with my 401K which I rolled over into an IRA, and I had another investment account (some kind of IRA) that my stepfather had set up for me. I cashed them both in around the same time due to cash shortages for bill paying. Before that, I'd never even been able to contribute to the IRAs, or chosen to, my priorities being elsewhere. I've never bought stocks and never learned anything about it, only absorbing what others have said about investing (which is fraught with misinformation, lack of information and horror stories of loss stemming from poor investment decisions), which of course scared me away.

Ramit explains things in such a way that it is easy to understand. Even if you are a high school student, you can understand this. Combined with the successful actions of investors such as Warren Buffet, and David Swenson (who has milked a 16.5% return rate from the market and has doubled Yale University's money every 4.5 years since 1985), and recommended courses of actions by Ramit Himself, this book gives you NO EXCUSE for making your plan to save and invest your way to retirement.

He tells you:

Basic term definitions
Why you should NOT get a financial advisor
Why Index Funds are a much better choice than mutual funds
Why people who say investing is risky say this and why not to listen to them
How you can invest (safely for retirement) even if you are Lazy and are Not Interested in learning about investing
A pie chart used by Warren Buffet giving the types of investments and quantities of each, as a guide
on how to diversify (invest over several categories to spread out chances for gain and reducing chances for loss in any one area)
Step by step how to on choosing 401K investments
How to choose funds and actually buy them for your Roth IRA
Pitfalls (and successful actions) of considering your home/Real Estate an investment
How to (tools, equations etc) choose funds that have lower fees
How to choose (tools etc) funds for a diverse asset allocation (how to choose a nice balanced portfolio)
And did I mention the ONE type of FUND to buy (based on your current age) if all this makes your eyes glaze over and likely to continue not investing?! (spoiler alert: it's a Lifecycle Fund aka Target Date Fund)

Ramit has made me SO EXCITED* that I've opened an online high interest savings account** so that I can save up enough to get one of these funds. I checked out his book at the Round Rock Public Library but so far have taken about twenty pages of notes. I should just buy the book and highlight and mark it up, but I'm going to save my money instead! (it's only 7.88 on Amazon.com)

Please check it out here: Your future self put you on this webpage for a reason...it's because he/she wants you to take the steps now so he/she can be happy later.

*I am a tiny bit sad that I can't start actually acting on Ramit's extremely sexy investment advice right away; instead we are working simultaneously on our debt repayment (we don't have any really high interest debts) and an emergency fund of $1000, and after that we will keep socking money away. We recognize that our next savings goal should probably be to save three months' worth of living expenses which would amount to about $6,900. But it will be very hard not to raid that prematurely to open up a Lifecycle Fund.....we'll see what happens!!

**The reason I opened an online savings account is so that it won't be linked to my checking and me or my husband's present-day selves cannot easily transfer money OUT of it to cover shortages, thus saddening our future selves. It gives 1% APY/interest (better than a brick and mortar bank due to not having cost of maintaining buildings and more employees etc) and yet we would still be able to get access to our funds (keeping them liquid) within three days if a true emergency came up, unlike a CD/certificate of deposit.

Time For a New Job!

No, I didn't get fired, not exactly. I've worked for myself since 2006 watching kiddos as a Listed Family Home. I've ooched away from watching babies and toddlers full time and just doing after-school carpool and care for the last year though. The ten grand paycut has sort of sucked, though, and it's time to start getting serious about some more income. Because of the kids, its just not ideal to go work for someone else because the hours are wonky (really, charter school, do the kids HAVE to get out of school at 1 p.m. every Wednesday?!), not to mention having to call in to work every time they get sick. With no formal education, even working full time, afterschool care would severely cut into the profits, and having to purchase summer care for two kids would make me spend MORE than I'd make.

So, I needed another self-employment gig.

I seem to get wrangled into helping certain family members with cleaning, decluttering and organizing on a fairly regular basis, and it's something I take deep satisfaction in doing. I love to see a space uncluttered, functional, clean, beautiful. And I love it when I can be of help to people, so I decided to put an ad out offering my services as a personal organizing assistant.

Today I got a bite, and we have set up an appointment for this weekend. I very much look forward to helping this nice lady get settled into her apartment and make it seem more like home for her. I think I will also offer services to the elderly for grocery shopping, light cleaning, transportation and housework. Things are looking up!

Breaking The Cycle

...for the next generation. I was reading this in bed with my daughter next to me and she was reading it aloud as I read quietly. She was really getting into it! I had to get up to go do some stuff and she kept right on, all the way up to lights out. Maybe her financial life will be different than mine up to this point....

Tax Refund Time! Help Us Get the Most Bang for Our Bucks

Each year we get around $2,200 back around tax time. I would love to hear some comments on what you think the smartest way to use our tax refund.

So far, we need to pay about $1,100 back to our family for generously loaning us the money to purchase a used car in excellent condition except for the fact that it needed a new motor (they fronted the money for the motor too). So that leaves a balance of about $1,100.

Options:

Could pay off my iphone balance of $366 and bring my cell phone portion of the montly bill to around $15 instead of the current $38. This would bring the total bill down which would make me feel better. But not as good as if the husband would worm his way out of his current iphone 6 lease deal with Sprint and go with Republic Wireless, for a total savings of $145/month. But I digress.

We could pay for the year's car insurance, thus bringing down our monthly expenses by $136 each month.

We could pay for two months' worth of rent, freeing up that money to get ahead a month or two on other bills.

We could pay for one full months' expenses all at once, putting us using the current month's income for next month's bills, like the YNAB budgeting software wants to get us to, which would be very nice.

We could put it towards any one of these three debts:

Motorhome (we might not do this since it's an interest free loan anyways)
Student loan debt (of 5,000)
Home Depot (760 balance, with six months interest free)

What would YOU do? Please post in the comments, come on! Don't be shy!!

Helping Others Save Money

My favorite person (well one of them) always said, "Sweetie, I believe we are put on this Earth to help people."

One of the most effective ways to feel worth as a human being is when I've helped someone. I asked the other day on Freecycle what everybody else paid for their internet. One user commented that she'd like to know my results, as she is also on a low budget and trying to help put on her her kids through college. I gladly shared my results with her, shared my philosophy* and also linked to my blog.  Her response was one of excitement and gratitude. You're welcome, and Thanks to you too 'lala!'

A friend of mine who is a single mom with three kids struggles to get by. If she could only have enough extra to invest in herself, she could take this class and earn more. I told her that if she could get 50 people to pitch in $30, she would be there! So she created a fundraiser. This is just one example (sharing a viewpoint or an idea) of how to help others. **

Each one of us has a skill set or knowledge base that if put into the right hands/audience, can really help others out (one of mine is horse training and behavior modification, and also decluttering/simplifying/organizing households. If you're in my area (Austin, TX), drop me a line!!). Also, a person, regardless of their age/circumstance, might not know MORE than someone else, but might have different knowledge that can help others. So always be open to learning from whomever it may be.

So put yourself out there and help others, and also be ready to be helped. If people just know about what you need, they do care and want to help!

*part of my response to her: "You are welcome! Remember, a company has to earn your business, and if they are not catering to their customer, it is up to the customer to fire them for bad behavior. Otherwise we are going to end up, as a country, as people who are dependent/beholden to the companies that provide services to us. We have to be willing to fire them and do without in order to make them see that they can't push us around. Good luck!!"

**If you'd like to contribute to her fund, please go here!!
http://www.gofundme.com/kfytrg

Brighten Your Life and Lighten Your Spending

Yesterday I was at Home Depot getting Weatherstripping (see yesterday's post), and I had been thinking about replacing a few light bulbs. I am not crazy about CFLs because of their mercury content and we have some dimmable fixtures in our house, so I hadn't really moved away from incandescents.

My money guru Mr. Money Mustache got me thinking about how much money I'm frittering away, so back to my Home Depot trip. I passed by a display with LED bulbs, a two pack for $14. I got two packs, took them home and began contemplating which fixtures are used the most per day. You know how bathrooms have those strip fixtures with four bulbs each? We already only used half the bulbs, but I unscrewed all but one incandscent in the master bath, and in addition I put an LED bulb (of the same wattage: 60 watts). When my husband got home, he said, "It looks brighter in here." Test passed! I put the other three in commonly used locations, also unscrewing extra incandescent bulbs. So we have the same amount of useable light and will pay six times less on lighting costs, according to this article. And, per this article, one LED bulb lasts 11 years, which is a whopping 50 times longer than an incandescent!*

I called my sister to share this exciting news (well she called me but that's neither here nor there), and she said, "Yeah, my husband's been saying we need to go energy efficient too, but he can't get over the up front costs of a more expensive bulb." She said she'd have to drop $49 (at least) to do the lights in her house, and he'd definitely notice that.

So I said, "Here's what you do. Instead of going to Wal-Mart and buying pants (off the cuff example), get a two pack of LEDs instead. Replace them slowly over a few paychecks and he'll never feel it, and he'll be saving SIX TIMES what he's currently paying on lighting costs."  (So even if a kid breaks on once in a while because she has young kids and open fixtures, they'd still come out ahead.) She liked that idea. I think he will too, once he notices the decrease in his electricity bill.

*See that on the lower left of the pic? That says 'estimated energy cost $1.20 per year'!! For my kwh rate it would be $1.35. The same use of an incandescent 60 watt bulb (using my area's price per kwh) is $8.08! My brother in law will want me to figure in the actual purchase price of the bulb, so I spent the last agonizing thirty minutes trying to figure that one out. The LED bulb costs the same amount for one year as running the incandescent if you figure in the purchase price of the bulb, THEN you save $6.73 per bulb per year for the life of the bulb, which is 11 or more years. :)