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. :)

Do You Have Drafty Doors?

We moved into this house two and a half years ago, almost three, actually. At some point a plastic thing was hanging off the door so I ripped it off. It was broken anyways and I figured I could just get some of that sticky foam weatherstripping that comes on a roll. But I put it off, of course. After three drafty winters (and three summers of probably paying to air condition the neighborhood) I got REAL TIRED of being cold ( and hot/broke).

I dug in earnest in the garage for those blasted rolls of weatherstripping and did my almighty best to stick as much of it as I could while still being able to close the door. Which was difficult. And, I could STILL feel drafts and see daylight!!!

I called my infinitely wise and experienced father, who lives in Wisconsin (on purpose, I can't figure that one out). I took photos and described to him what I saw. He said, "Honey, there's a groove in the frame of the door where the insulation is installed, and you can pull it out with a needlenose pliers, go to the Home Depot and get a replacement." I didn't believe him. "No Dad the whole door needs to be replaced!" But I went to the garage and got the pliers. I figured I couldn't make the door look any worse than it currently did (I admit I even used a roll of black Gorilla tape to cover the drafts that I couldn't get with the foam roll weatherstripping. It looked HIDEOUS).

I pulled and what do you know, just like he said, there was a replaceable plastic piece. Off to Home Depot I went. I happily paid ten bucks for two 100 inch pieces of the stuff (the back door is also very drafty). Went home, installed it and I am still on a high. I am downright giddy. I can't help but go open the door and run my fingers down the gloriously springy white vinyl-covered foam, knowing my source of near-constant irritation is GONE with the wind....(couldn't help myself).

Time Warner Internet Ridiculousness

I remember the good old days a few years ago, when our Time Warner Cable bill was about $45/month. It has slowly creeped up to where it is now $86/month!!! We have been loyal customers for, oh I don't know, ten years now, and I feel like we deserve better treatment.

My husband likes to watch TV shows online plus we use Netflix to watch movies from our phones and tablets. I personally watch 0-2 movies a month, so mostly, this is my husband's luxury.

I checked out basic service but they all seem to limit your data. We've never gone below 78 Gigs of data per month. I think for now my husband is not willing to downgrade service, so instead we researched what other companies were offering. We picked one of their offers and I called Time Warner. I told them that I was going to switch unless they could get me the introductory rate of the same service we currently get, which is $44.95/month (before taxes). She put me on hold for a while then said we could get the 200 mbps service for $57.99/month. I said, how much for just the same service we get now? Hold please. Ok ma'am we can give it to you for $23/month less than what you are paying now.

I was so excited that I said yes, when I SHOULD have said, no thanks, we want the intro rate, or we walk. Doh! I'll remember next time :)

Cell Phone Ridiculousness

I can't remember ever not spending a fortune on my cell phone. I got my first cell around 1998 and I can't remember a bill less than a hundred dollars. And we didn't even have mobile data! I didn't start texting till after 2007, when I had a fancy slide out keyboard. I still miss that thing, I hate the smart phone text keyboards. I got my first smartphone in 2012. Now that I have experienced the smart phone convenience, can I ever go back to not having it? I personally think so since I am rarely anywhere that doesn't have WiFi. And I can always get a dedicated GPS for my car should I need it, but I don't think so since I can just print maps from my home PC.

Right now I have a balance of about $366 on my phone. I pay Sprint $23/month towards my phone. At $23/month paying for my actual phone, it would take me 15.91 months to pay it off (lets round to 16).  I looked up how much I could sell it for, and it's less than what I owe (I could probably sell it for $150). So I need to try to convince my husband about selling it at a loss and then going to buy another phone (a cheaper one) on Republic Wireless, who offers phone plans from $5-40/month (with smart phones ranging from $99-399) in order to save money in the long run. Let's break it down.

I would get the $99 phone (one time fee) and the $10/month plan (unlimited text talk and data over wifi; no 3G). If I sold my current phone for $150 (losing $216), and spent $99 on a new phone on Republic wireless, if I only pay $10/month, it would only take a few months to come out ahead, and then I'd be saving money every month.

 Right now, with Sprint, my phone is an add-on to the plan ($70 plus a $15 fee for each phone on the plan, mine and my husband's). Plus my iphone payments of $23/month. Remember from above, it would take me about 16 months to pay it off. So during that time in non-phone fees, I'll pay $15/month towards my service.  16 months of paying for only phone service (so not counting my $23 monthly payment for my current iphone) would cost $240. With the phone payment, I'll spend $606. But with Republic Wireless (counting the phone) over 16 months I'd pay only $259. That's a savings of $347.  Minus the iphone money difference loss by selling the phone at a loss (of $216), I'd still save $131 over the course of 16 months.

 Let's pretend the iphone's paid for. Phone service for a year for my phone only would cost 180/year. By switching to Republic, I'd pay only 120. Is paying $40 less per year for a phone worth it for me, considering I would lose my 3G data on the go? I'm not sure.

But, if I could get my husband to switch his phone at the end of his lease contract in a year and a half (he pays the per phone fee like I do, plus he pays $30/month to lease his phone, and the two kids' tablets are also $25/month combined, and don't forget the actual plan, in case you're wondering, which is 8 G of data for $70/month plus a $15 per phone fee), and just had the kids's tablets only work on WiFi, we could save a considerable amount of money, even if he went with the higher Republic plan with 3G (which is $25/month instead of $10). Yearly bill for two people would be only $420 (not counting actual phone cost, so add another $200-$400 depending on which phone he chooses...he probably wouldn't pick the $99 model) and we still would come out way on top.

I'll keep you updated as to whether/when any changes will be  made on this front! I have a husband's complexity to consider.

Update: 3/3/15 Things are way worse than I thought. After I found out that just dropping my service from our sprint bill would only save us at the most $38/month (after I finish paying $366 for my iphone and I'd have a useless phone I'd have to sell), I started to look into what would have to happen for us to drop Sprint entirely. I found out that my husband could get out of his lease but that he'd owe the balance of his iphone, which is $334. So that's $700 of a breakup fee which is pretty high. But wait, there's more. Sprint at one time offered us, out of the generosity of their black little hearts, a free tablet (samsung galaxy Tab 3.0) for each of our kids if we purchased the monthly service for a couple years (of 25/month for both tablets). Great, we said, Sign us UP! So the nice lady tells me we'd also have to finish paying (wait, I thought they were free?!) $343.71 for each tablet, bringing our Sprint Breakup Fees to a whopping $1,387.42. We'd still be able to keep and use the tablets on Wifi but that's a hefty price considering we could have gone and bought them ourselves for considerably less than what Sprint is charging us for them!! I MIGHT be able to earn back $400 by selling the iphones so even if we take that off the bottom, we still lose $987.42. How long would it take to earn that back by switching (we'd save $145/month by switching) to Republic Wireless? 6.81 months. Now, should we pull the plug or not?

Birthday on a Budget

It's easy to spend a lot of money on birthdays. You want your kid, and everybody else's, to have a good time. It's fun to get a party package at a bowling alley, Main Event, the skating rink or whatever. But those packages are also pretty spendy.

I got lucky and was able to steer my son into having a big slumber party at the house with all his friends.

We decorated with string lights (aka christmas lights) streamers and balloons, borrowed a movie projector (thanks Mom!), got some popcorn and glowsticks, ordered some pizza, and invited over about seven other kids (I'm a glutton for punishment LOL). It was a blast! Actually the fun is still occuring because this is the morning after and everybody's still here.

For my daughter's party last year (and I think the two previous years...she really likes to swim!) was at a local water park...sort of nicer than a regular pool, but not as spendy as an actual water park. Admission is about four dollars per kid, and we didn't feel guilty asking everyone to pay their own way. Four dollars is reasonable, and if we'd been rich enough to have a party at a place that requires ten or more dollars, we'd pay other people's ways! Anyhow, we brought cake, snacks and drinks to refresh guests and they all got to play with their friends. We like this arrangement and it keeps birthdays affordable and reasonable.

Shhh don't tell the kids, but I always put something in there that says gifts optional, because we don't feel like families should feel financially obligated to spend money on our kid if they can't afford it. Most people bring gifts or money anyways and we always appreciate their kind gestures. I've also put something in there a few times about please only bring a nice used gift in good condition or thrift store find. I would love to steer people in the direction away from conditioned consumerism and towards reusing and redistributing. Kids don't care if a toy is in packaging, they just are excited if it's new to them, interesting and fun.

Well that's my post on how to have a fun birthday with minimal costs. Please post your own ideas below, I'd love some fresh ideas!

Outsource it, or Do It Yourself?

When we moved into our house, my father-in-law (the homeowner) had just had the master bathroom re-tiled. Except the bathroom sink backsplash was never finished, as the contractor was a friend of a friend of a friend who lived in a nearby city (not near enough apparently) did not consider that small space worth the trip of returning. So I've looked at that ugly unfinished backsplash, and missing two false drawer fronts, for the last two and a half years. I've considered many times whether to tackle the job myself, but I lack tile-laying knowledge, and I couldn't figure out how to attach the drawer fronts without screwing it from the front.

At one point I was in Home Depot and saw these sheets of decorative vinyl and I picked one up for $20, thinking I could just cover up the ugly part of the backsplash. I admit, I half-assed it, because I wasn't prepared to remove the mirror, outlet etc. So I stared at ugliness for the next several months. I even called the tile people to see if they could match my tile and considered hiring a handyman to do the short job.

Finally, after becoming inspired by my new friend Mr. Money Mustache, I decided to tackle both jobs once and for all. It was easier than I thought on the backsplash. No mirror removal required. The drawer fronts were harder, but a youtube video gave me the basic principle I needed to get the job done. Here are the results! Now I just need to replace the mirror which the reflective backing is peeling off. But that'll come later, after I have my $1000 saved (and maybe longer, since my stare-at-ugliness muscles are well developed and I can instead focus on the pretty backsplash and drawer fronts. Well, that right one is crooked because my son was holding it for me and he let it sag, but that's quick fix I'll do when my husband can hold it on for me from the front).

Do you have something around the house you've been considering paying money for someone else to do? Can a library book or youtube or wikihow give you the knowledge and confidence you need to do it yourself and save money? Yes it can.

Hmmmmmm.

So I'm over at MMM soaking up the financial wisdom and I have (again) come across the blurb that if you don't have $1000 saved for emergencies, your hair is on fire and it is an emergency to be dealt with by locking yourself in your house to prevent money spendage (yes I invent my own words) on ANYTHING besides peanut butter (yes I also am the queen of run on sentences; you can handle it). Okay I'm exaggerating a little about the peanut butter (but not my much).

As much as my financial nincompoop alter ego doesn't like that, he's right. I think drastic measures need to be taken.

My best idea is that for every purchase I want to make (ie my financial nincompoop self would normally make), I need to add that to a piece of paper. When the total gets to $10, I need to transfer that 10 over to savings. Or pulse it out! That way, the money we've been wasting all along will end up in the savings account instead of in someone else's bank account. Or at the least, just leave it in the account. But.....

I don't know how 'on board' my husband is with this idea, so leaving it in the account could be risky. I've mentioned it to him in passing but he's quiet and stoic and he doesn't really share what his thoughts are about everything. Plus he's stubborn, and if I nag him about something, he's guaranteed to do the opposite. So I have to tread carefully.

Can I link to MMM's blog? I think I can! (I'm new to this stuff.) Read the above referenced post by MMM here:

Things We Do Already to Save Money (That You May Not Do Yet)

For the past several years, we've done the following which I feel saves money that maybe other people waste it on. Hey, if we can get along without it and not miss it, so can you!

Cleaning supplies. I just don't clean, so I never have to spend money on cleaning supplies! Ha, I'm just kiddin'. But I only buy window cleaner, Comet for bathroom counters/sinks/bathtubs, when they really need a good cleaning, and I'll admit it is NOT every week (I won't reveal myself further! LOL), Bon Ami (countertops), Dawn for dishes, Cascade for dishwasher. I've tried every ecologic and otherwise dishwashing soap and I can't live without my cascade. Everything else leaves film, no matter how little or much I used. Bleach, Ammonia for wiping grubby walls and cleaning grease, and vinegar and baking soda. I admit that I hate wiping toilets and I have in the past bought the clorox disinfecting wipes for that purpose. But I need to bite the bullet and use the nitrile latex gloves DH brings home from work with a bottle of bleach water, and quit whining how the bleach hurts my nose. I'll  have to mix it weaker.  I could probably also eliminate the Comet and Bon Ami. Maybe I'll try that once my current supplies run out, and just use the vinegar/baking soda and Ammonia. I should probably quit buying Windex, too, and just go with diluted vinegar. Look I just saved myself about twenty bucks right there, inspiring myself! Besides, I have to be accountable (and make my progress look as good as possible, too) so that will help.

Laundry: We have hard water, no softener, and currently we use our clothes dryer, so we haven't missed not using the dryer sheets. Besides, the fragrances are made out of petrol and chemicals which have never been studied for safety (and they irritate my nose and lungs!) so we are happy without them. Besides, did I mention they cost money? I'm about to go get a clothes drying rack, though, and see if I can cut way down on the clothes dryer usage. I figure I'll do one load ever three days, dry it on the rack, toss it in the dryer for five minutes on unheated to get the crunchy out. DH hates crunchy underwear and jeans and I can't say I blame him. Another thing is I rarely sort by colors. If I have enough, I'll separate darks and lights. I put reds in with darks. Haven't had a problem yet, as long as the reds have been washed a few times already. I rarely use stain removers; only on my favorite items or if I'm sure the item will be ruined if I don't. Oxyclean is my favorite. You can just use hydrogen peroxide though, too. Hmmm I feel some savings coming up.

We do about four loads of laundry every two weeks, six, if you count the DH's uniforms. He's supposed to have work do them, but they always fail to return at least half his clothes and that just doesn't work for him. Our laundry prevention techniques are as follows. My kids are terrible about ripping everything out of their drawers in a hurricane, wearing something for four hours, and throwing it in the dirty hamper. Ah, who am I kidding? They throw it on the floor and then I hound them to put it away, and THEN they throw the (clean) clothes into the dirty hamper.
So, I assign them three outfits and pack the rest away till they're really needed. Remember they have school uniforms.

Not washing extra clothes is a big time, money and energy saver. I myself have thrown out all of the clothes I have been hanging onto for years and years (and years!) because it's a waste of space and I never use them. What is the point of having stuff hanging around if you never use it? Its tying up your psychological energy and keeping you from moving forward. Think about it. I have one row of clothes, about four feet long, which is probably three feet still too many. I wear it for a day and rehang it up for another wear, until I detect odor or see a spot, then it goes in the hamper. Lots of people probably do something similar.

I also do one load at a time and put it away right away. Trying unsuccessfully to tackle mountain of laundry, failing, leaving it on the couch/bed (or floor, and then REWASHING IT....you know who you are!!) is NOT doing yourself any favors here. So just do one load at a time as you are able and move on. If you must, teach your nine year old to use the washer and dryer (it really is simple enough! I taught mine), and put each in charge of their own laundry. I've threatened to do this if I keep catching them putting cleans in the dirty pile. I also only wash the clothes that END UP in the hamper, too. That helps keep me from having to clean their room to find the dirty clothes when it's laundry time (bet you didn't know you were signing up for awesome responsibility-inducing child-rearing techniques when you clicked, did you?)

We have our own chickens, use some eggs, sell the extras, which covers the cost of their feed. Free breakfast/lunch and sometimes dinner, saves about $25/month (if you're buying the humane, healthy eggs at the store for $5/doz like we were).

We collect rainwater to water the garden (I'm not a great gardener yet, but we are doing wicking beds and hydroponics this year to try to beat the Texas heat, so maybe I'll be able to add that to my money saving repertoire!), and we built our beds out of stuff we already had so that saved a little.

We LOVE freecycle, a yahoo group (there are subgroups for your city) where you can get anything for free (and get rid of anything you don't want). We've gotten two good dishwashers and a microwave, and untold amount of other awesome stuff without paying a dime. It's always been safe and I've never had any bad experiences in the nine years we've been doing it.

We bathe as needed instead of daily (yes we are clean people!) and we probably save on shampoo and bath soap as a result. We also use foaming hand soap dispensers, dilute the soap, and save money that way. Too much soap dries my hands out anyways. We also dilute the bath soap if it's too thick.

Oh! I use Ecobutton for my computer. It plugs into your USB and you hit it when you walk away, putting your 'puter into sleep mode (easily awakened, has never malfunctioned), saving you a lot of money, and saving a lot of CO2 too. It tells you how much you've saved; let me go look: $633 over a few years. Not too shabby.

We don't water our lawn. That would be financially, humanitarian-wise and ecologically irresponsible. Just do a quick google search for how much drinking water people dump on their lawns, when there's a water shortage and distribution problem in the world. If you're going to spend money on water, please consider investing it in projects that bring it to people in the world who don't have any clean drinking water. Besides, the lawn gets brown sometimes but it ALWAYS comes back when it rains ;)

Food waste is taboo in my house. We eat alllll the leftovers, and feed the rest to the chickens if we must.

When I got my motorhome I was all excited about living it in one day, and began a de-cluttering spree, getting rid of and selling stuff that I wouldn't be able to, or want, to take with me (or store!) should we ever decide to live in it. I don't regret any of the purging. I feel simpler, freer, cleaner. I have a lot of stuff decorating the house that I can sell, too, when the time comes. So, sell stuff you aren't likely to use, and simplify your life, making money in the process. If it doesn't bring you utility and joy right now, purge it.


We have a great AquaSana water filter that saves me gas trips from having to go to the water store (and its cheaper) or buy bottled water.

This is getting long so I'll do another post if I come up with more. This is to document what we already do, and I know we will make more improvements as we go!

Food Wars: The Ultimate Battleground

It's my blog and I'll post my viewpoint if I want to! (Sing to the old sixties song about crying at her birthday.)

Food for me, is pretty much no fun. All the yummy stuff, I'm not (and you either, for mostly the same reasons) supposed to eat. No soy because of my thyroid condition (curses to my husband for calling out my remaining allowance for soy sauce: I buy no more! Waaaah!). No wheat because it contains phytate (so do beans and seeds and nuts and legumes, if not fermented/soaked/cooked properly. Google Weston Price phytate article) which causes your body to be unable to absorb minerals (kind of a big deal!). No sugar (we all know why...it makes you inflamed which leads to chronic diseases and causes early aging, brittle skin hair and nails).

No canned food because the BPA inhibits the pathway your body uses to process and use B vitamins/folate. I also have MTHFR gene disorder (which there are two variations, and 30-70% of the population has a copy of this defective gene and don't know it! Get blood tested!) which prevents the B vitamins from being absorbed properly, which can result in the body not working right, and predispose it to ALL SORTS of diseases, which we know have been trending upwards in recent history. Google MTHFR for more info. No dairy (ok I cheat here) because casein is not well digested and can cause chronic subclinical (undetected) inflammation which nevertheless is causing your allergy/asthma/auto-immune disorders etc. (Our family struggles with allergies and asthma constantly.) Per my bloodwork, my health, hormones, thyroid, etc has been so out of balance for so long, that I can't even detox the simplest of things. For all I know my kids have this disorder too; I plan to have them tested before they hit puberty, which is when problems start to arise. So I have to be careful what we put in our bodies.

There's probably a thousand reasons to not eat meat (and I've educated myself on all of them) but I have to draw the line somewhere. Healthwise, the human physiology has evolved on meat so as long as its as natural as possible and in moderation I'm ok with that for now. So I try to do a sort of Paleo based diet although its not strict. I also try to buy some of the products more likely to be doused with antibiotics, hormone,s and pesticides (read: meat and dairy and thin-skinned fruits and veggies), and I avoid GMO, because I have many hours during the day to educate  myself about the health-destroying properties of said products. I feel bad for those who do not have the time or inclination to also educate themselves, so consider this your affectionate 'kick in the pants' reminder to put it on your to-do list.

Anyways, I hate being hungry, and so do my kids, so I shop. My old M.O. was to wait for payday, kick up my heels with glee, and run to the grocery store, filling my cart with as much as it could hold with whatever looked good to me (within the parameters above) because surely that would last two weeks. On average, grocery trips like that (especially when other non-food items like Cascade and laundry soap needed to be replenished), the bill came to 325 per trip. that's 650/month.

Recently I started getting scolded for spending this much at the store, 'especially when there was still no food left to eat' afterwards. That comment comes from my husband who, God love him, contradicts himself regularly regarding the food situation. I think he is as conflicted about food as me and the rest of the country. He will eat fast food and corner store snacks (read: junk food and drink), then later he will poke his belly and say he wants to start eating healthier, less processed food etc.

But since he has not been living at his mom's house or single for the last 15 years, he has forgotten how to cook for himself and is loathe to even slice up a canteloupe, so to him, (remember this is my genuine heartfelt observation and perception, and I LOVE my husband, so anyone who knows us and happens to be reading this, please be merciful in your interpretations!!) when he sees a pantry with no Hamburger Helper or Lipton Cheesy Cheddar  (I don't know if that's what they're really called but we used to buy them all the time), that requires prep/cooking and thus equals 'nothing to eat.' In his defense, he calls me from work and says, "What's for lunch" Which I hear as an affectionate "get in there, kitchen wench, and make me some grub!" which I am all too happy to do.

Anyways, back to getting scolded. I get scolded if I don't buy the food and there's 'nothing to eat.' I get scolded if I buy the food and I spend too much (or the food requires prep). What does this tell me? That it's time to get the management involved! This means documenting everything, making a meal plan sheet that everyone can agree on for each week, and keeping the DH informed. I also decided to split the two week allowance into two parts and do one week's shopping at a time so its easier to not overbuy on quantity and extras we don't need.

Also, I want to CUT the grocery budget from 650 to 400-500. This means $100-125/week on food items. Personal care and household goes in its own budget category. (That will be another post!)

So how did I do today at the grocery store? I combined DS's birthday accessories (cake mixes, balloons, glow sticks, popcorn) and household items (TP, Cascade, glass pyrex food storage containers) with the food bill and spent $141. So items which are budgeted elsewhere don't count towards my $125. Let's look at the receipt and see if I went over: Nope!! I spent $98.34 on FOOD ITEMS which are all ON MY MEALS LIST! Yay! If I keep that average up, I'll only spend $400/month on food, and considering what I've been researching, that's pretty decent, for Real Food, not pansy sugar-and-processed-flour food.

Ahhhhh....sweet success. I'm so happy improvements are being made.

The Next Logical Step (You Need A Budget!)

Now that we have the analysis out of the way, I thought the next logical step would be some sort of way to budget.

Our 'old' M.O. was on payday, see what bills were due up, pay those, and if there was money left for gas and groceries, get those too. If we were behind, we'd skip a bill to be paid later out of the next incoming check, and get gas and groceries with that money. If we paid the bills, and had enough for two weeks of gas and groceries, AND there was money left over....well, you know what happens then! It got spent!! Oh, the opulence of unfettered corner store trips (DH) and Goodwill runs (my occasional guilty pleasure).

All too often though it seems like we were behind and trying to make the gas in the car last long enough to get to the next paycheck. Boy am I hoping those days are over!

MMM shone the light (although he is so far ahead that he doesn't budget or use budgeting software) on a program called YNAB (you need a budget!). We are financially illiterate and backwards enough that we need to budget, though, so after lurking on their website for a few days reading testimonials and watching intro videos, we signed up for the free 34 day trial. I have to say, so far I like it! It doesn't just track what you've done in the past, but it helps you assign each dollar a job, so that there is no 'extra money' floating around, just itching to be wasted. You can assign it to yearly expenses so you don't have the imperception that it's freed up.  And you can apply the appropriate amount of 'should I' or 'do I really need to' thought-prefacing before you grab the debit card.

You can enter all your spending categories (current and also the ones you want to have in the future, like 'Vacation fund' and 'Christmas'), assign a certain dollar amount to each (what it's likely to be and/or what you want it to be), you can enter your income as it comes in, and then as you make transactions during the month (the automatic car insurance comes out, then you enter that, or you make a grocery run, then you enter that) and it subtracts the transaction amount from the total budgeted amount, so you can see if you have any left (or if you went over). The YNAB software tells you not to feel guilty if you go over-budget in a category. But if you do, you have to take it away from another category. It's a constant adjustment, and you get a good picture of your spending habits, and hopefully use this info, as well as meetings with your spouse, to tweak it and hopefully keep you close to being on the right track.

One thing they recommend is to have a meeting each time money comes in. Then, consult each other for any purchase over $10. Heck, I think its best to be accountable for each and every transaction. They say to budget in some fun money for each person, and I think that's important, although it should be kept to a reasonable minimum, for people like us who have no savings and next to no investing (if we ever want to retire)! Accountability and transparency, I say! It keeps you honest.

Actually YNAB is where I heard the idea that you should be using this months paycheck for next months bills. That was mind-blowing, I tell you. Which is probably SAD. But I digress. The software calls this Emergency Fund, I think, and you eventually want to get to where that has at least one month's expenses saved in it, and then (when you're REALLY rich!!) three months, etc. etc.

The GOOD news (always a silver lining somewhere!) is that we always get a tax refund back, usually around 2,000. We plan to pay back the in-laws with half of that, and with the other half, pay some bills in advance so we can get closer to being ahead one month instead of behind or current. I'll update you on the happy day that we get that accomplished!

Into the Nitty Gritty

OK! It's time to reveal our financial situation here, so you can see what we are dealing with. I came from a family that always has lived paycheck to paycheck, increasing its expenses as the money came in. My parents could not pass on skills that they did not have. I learned to balance a checkbook in Home Ec. but that's pretty much it.

My husband's "Money M.O." (that's modus operandi) appears to be much like mine, if you make it, you should spend it...there's always stuff that comes up either that you need or that you've been wanting for a long time, right?

So our current situation. Income:

DH grosses about 57K a year.  401K 3%, matched, HSA account, plus other taxes and deductions (federal, medicare, vision and medical insurance...more than $400/month).
What actually got deposited into our joint checking account last year from his job: $37,539.
I bring in about $450/month ($5,400/yr).

Our monthly expenses:

rent  $450/mo. We get a really sweet deal on renting DH's dad's house. We've never bought a home.

electric $150/mo. (we have it averaged. before we did this, summers are around $300, winters $100

water $60

gas  $70

car ins $136

timewarner internet only $63/mo. it was an abysmal $86 but I called and got it reduced by $23/mo.

Sprint cell $200/mo. We're paying for two iphones: mine's got a balance of $333 left and his is actually a 2 year lease plan because he always gets the new phone when it comes out. We have 8 gigs shared data and unlimited talk and text. We typically use around 4 gigs. Keep in mind this in an area I'm thinking hard about and just waiting for the right situation to make changes. More on that later!

student loan $100

gasoline $275

food/grocery $450/mo.(was 650 but I was able to bring it down)

motorhome $100/mo.

home depot $130/mo. to pay back $780 balance in six months for interest free. Our oven went kaput.

2003 Toyota Sequoia $290/mo....we just paid that off last month! Sweet deal for us! We had to have a Toyota because my husband's a certified Toyota mechanic (free labor!) and it had to seat a buncha kids because that's what I do...I carpool and pickup kids from school. We used to also 'need' it to haul my horse and trailer around. Sadly but in a way gladly, I was able to let the horse and trailer go to new homes and use the money to pay down previous debts.

HSA $300/mo. which covers things like medicines, dr. visit copays, supplements . I think this amount is taken 'off' before you consider his final deposited amount per paycheck so not sure if you can consider this a true monthly expense off the bottom line.

tools: $100/month Hubby uses to replace worn or broken tools, drills, lights, etc.

Netflix: free (we use the in-laws account so we don't actually pay for this. Thanks mom!) 0/month.

Hulu $7/month

Redbox $15-20/month (because for my movie-fiend husband, no amount of free or $7/month streaming movies is enough) 

Pets $40/month. (six chickens and two rabbits) Chickens provide free eggs (we eat what we don't sell which pays for their feed)

Liabilities: 

$1,160 loan from parents for 2005 Toyota Camry LE  (update: paid that off).

401k loan balance: $1,474

(to pay off his huge tool cart work required him to have, and then the company got sold to someone else, and they rebuilt the shop, providing tool boxes, so now he has a huge one at home, in case he ever leaves this company and needs it for another job)
student loan balance: about $5,000 at 4% interest
motorhome loan (interest free) $9,800

Assets:
Toyota Sequoia valued at $8,000 ish
2005 Toyota Camry LE valued at $4,300 ish
401K: contributed in 2014 was $2,303. That doesn't sound that great. Total in the acct. is $21,000. That's a pretty abysmal retirement savings for our current ages, and we know it.
tool cart current resale value: $5,000
motorhome 1994 Winnebago Elante valued at about $18K

There is a weird discrepancy regarding income. If you take the amount actually deposited into our bank account from my husband's job, our total income should be a combined average of $3,578/month. But in reality, most of the time we are dealing with an actual take home amount of $2,240-2440/month. Somewhere, something is off (probably my understanding of how his paycheck is distributed between all the categories dipping into it before it is deposited) and I'd love to figure out what I'm missing here. Please comment if you have insight as to what I'm forgetting to consider.

Income adds up to a potential $3,578/month

Expenses add up to $2447

Difference equals to $1131 (totally MISSING money per month. see above.)

Are there any mystery expenses? Sure. Corner store trips would be one...if I had to guess, my DH spends about $15-25/week on beverages and snacks (read: junk food). I don't want to pick on him too much, besides, this is NOT about picking on people!! This is about being honest with ourselves and each other and finding ways to cut waste and optimize saving, right?! Right!

We used to eat out more but this happens way less because of my income reduction from what it was before (I quit watching babies full time and now only do the afterschoolers...for my health and sanity!) We eat out at fast food as a family maybe 2-4 times a month usually when we're on the run on the weekends working at the in-laws, or I'm too sick to cook dinner (which has happened all too frequently these last couple months), and my husband eats lunches out some days. I'll have to ask him how many days this happens and then convince him to cut it out (hopefully). I don't have my hair or nails done, I cut the kids' hair, and the kids have school uniforms which thankfully, there is a uniform swap each year so we just round out whatever we can't get from that, usually that bill comes to around $100/year.

And up till last month, another 290 went to the Sequoia, and we're done with that, so going forward it should be possible to do better.

There's always birthdays and christmas that comes up (we rarely spend more than $200 on Christmas).

Goals: To be one month ahead (using Feb's income to pay March's bills all at once at the first of the month)

To have a Rainy Day fund for unforeseeable expenses

To have money budgeted for each expense that we know will happen over the year (birthdays, Christmas etc.)

To be able to retire, ever.

This post is getting a little long, and I think I've given you what you need to know about what we spend and what we make to get your juices flowing. Leave your unbridled (but couth) suggestions in the comments, and we'll see if you throw anything at me that I haven't already been considering. I do have some changes in the works and I'll be sharing those soon, so stay tuned!

A Journey from Living Paycheck-to-Paycheck to Affluence

Who We Are

Hi there. We are a middle-class family of four. There's me (the wife), my husband, our son (10) and our daughter (7). My husband is an automotive diagnostic and repair technician (aka specialist grease monkey at a dealership), and I am a stay-at-home mom who carpools and does after-school care for a couple of friends' kids. My hubby and I are around 38 years old. I have no certified higher education, and he of course has trade school education. 

I have found that many of the people I talk to have the same problem as we do, which is that we live paycheck to paycheck, usually paying the current month's bills with the current month's paychecks, which invariably leads to us being either barely current, or even sometimes slightly behind. Maybe I'm hanging around with the wrong people...nah. But I do need to start associating with some other people too, ones who actually know what they are doing and are not in the same boat as us, ones whom we can learn from. 

I forgot how, but I stumbled upon a blog called Mr Money Mustache and he has opened my eyes to the fact that what I'm doing really isn't working and if I ever want to get my husband off the treadmill/rat race of working for others for way too many hours a week, we both need a "punch-in-the-face" reality check (MMM's signature phrase, LOL!). So this is our journey. One of a standard American family with two kids, barely making it on one income, and our plans and actions to dig out of this hole, by saving, shoring up our earnings, and investing for retirement. Maybe even early retirement, like MMM did! His core audience tends to be those who make 75K or more a year and who waste a lot of money on lattes and SUV's, but we make way less. I thought it would be interesting to document our path. I don't want this intro to be too long so I'll get into specifics on what we make and what we spend in another post. And what our current plan is to take the first step on the first rung of the ladder up.

Anyhow, glad to meet you, and Welcome!! Please post your own intro in the comments!