Saturday, September 8, 2007

Weekly Round Up

I'm glad to report that in my first week, I stuck to my goals.... mostly. My menu worked a treat and I will be repeating that experiment again next year. I ate out only once at lunchtime. I didn't have any days scheduled, but the office coordinated a welcome to the company lunch for a new employee. I did keep the cost to $7, which is well below the $12 meals I'm used to. Dinner was not so successful. I had dinner out twice this week and each meal averaged $15 with tip. That comes to 2 meals that I didn't schedule and $12 over budget. Its a vast improvement, but there is still room for improvement. Finally, I did not go to the little store on the corner for any munchies; no chips, no soda, no nothin'.

Here's to baby steps!

Thursday, September 6, 2007

Make Time to Manage Your Finances

How much time do you devote to taking care of your finances? No Credit Needed devotes 30 minutes every Monday night and discusses the need to have a regularly scheduled time for balancing your checkbook, paying bills, and organizing your papers in his 33 days and 33 ways to Save Money and Reduce Debts.

I have a history of burying my head in the sand when everything seems to be overwhelming. This is a trait that I am overcoming and admitting that it exists is the first step towards preventing future episodes. It is important to take care of yourself because so much of it is intertwined. If you let it all stack up it will become the albatross around your neck. Try sitting down 30 minutes to one hour each week. Balance your checkbook. Pay your bills. Evaluate your budget. Write a to do list. File your paperwork. Oh... yeah... and don't forget to reward yourself for a job well done!

Wednesday, September 5, 2007

Day 8 of the No Credit Needed 33 Days and 33 Ways to Save Money and Reduce Debt

Over on No Credit Needed's Blog, NCN challenges us to stop using credit cards as a way to Save Money and Reduce Debt. He mentions all of the wonderful results of not using credit cards like spending less than we make, not incurring more debt, and being able to make a dent in our debt load, but what about all of the other positives that no one thinks about?

For my response post today I plan to examine the benefits not everyone thinks of...
1. You can cut back on your chiropractic bills because you can carry a smaller and lighter purse/wallet.
2. With all of the extra space in your wallet, you can actually carry a current picture of your 18 year old child instead of the baby picture that you haven't been able to get out because it was permanently pressed into the plastic cover by all of the plastic wedged in behind it.
3. You will receive an honorary membership in The Audubon Society because you won't have to have a small forest chopped down to create the paper for your monthly bills.
4. You will have a smaller garbage bill for all of the space you will save from shredded statements.
5. You can speak to your spouse again rather than avoiding the subject of who spent what.
6. You won't have to pay for that extra P.O. Box for your monthly bills.
7. Paying monthly bills will cost you a few $.41 stamps rather than a few books of 20 stamps.
8. The postman will be highly regarded as the bearer of joyful tidings from friends and relatives rather than an evil spy from the cold war.

I Really Hate Buying Cars

My car was totaled two weeks ago while it was parked. I was asleep at the time and awoke to find her pushed partway out into the road. I’ve been looking at newer cars because she is 23 years old, but have been dragging my feet because I didn’t want to take on another debt. I really wanted to get my debt to income ratio down and have a budget that wasn’t quite so tight. Funny how some decisions are made for you.

Now I’m looking at cars and trying to decide whether I buy the car I really want or find a car that I can pay cash for. I read some time back an author (I really apologize for forgetting who it was) that recommended you buy a $500 car. When you have enough money, you trade that in with more cash for a better car. Like David Ramsey’s snowball method of debt repayment, this works the same way only backwards. Buying a $500 -$3000 car is a huge risk. While I’ve been driving an old car for a while, I know her history, I know her quirks and I know all of the work she has had done to her. I wouldn’t trust any other car her age or trade in value.

My other option is to take out a car loan and add to my debt. Luckily, I qualify for at least $10,000 so I should be able buy a decent used car. I’ve done a decent amount of research so I know I can get a good used Honda for that amount. Now I have the pleasure of calling and scheduling test-drives. Can you say torture?!?

Tuesday, September 4, 2007

Day 7 of the No Credit Needed 33 Days and 33 Ways to Save Money and Reduce Debt

The verdict is out on which way is better to paying off credit card debt. There are those who believe that we should start with the highest interest rate and pay that off first. Others believe that we should start with the smallest amount. Finally, David Bach, the Automatic Millionaire suggests a hybrid solution in a recent posting on Yahoo! Finance. His method gives points based on interest rate and size of debt to figure which credit card will get the most attention. Like weight loss, I believe that the answer lies within. Which one works for you? The idea is to pay the minimum on each debt except for the focus debt. After that one is paid off, transfer the amount paid for that debt to the next lucky winner and so on. It is better known as a "snowball effect".

I personally like to mix it up. I will start with the smallest amount owed with the largest interest rate. That way I get the psychological rewards along with the financial benefit of paying off a high interest rate. I just recently paid off a store credit card which had a 21% interest rate. I then switched my attention to a Line of Credit attached to my checking account. These are both small amounts, but they deplete resources for taking care of my two focal debts; a couple of Visa cards. Its sad to say, but I'm looking forward to working on that one. I think that the small triumphs help build the momentum so I don't loose enthusiasm for that challenge.

Is it Frugality or am I a Cheapskate?

Long before being eco-friendly was cool, my family has worked at being green. I am always looking for ways to reuse things that would otherwise be thrown away. The following are a few ideas of ways to reuse…

~ We get a lot of gift baskets at work during the holiday season. While everyone else is eyeing the basket, I get dibs on the seltzer. This is extremely useful when putting together my own gifts, it saves a lot of money, and it does not have the same stigma as re-gifting.

~ One serving yogurt containers are extremely wasteful. There is a tremendous amount of petroleum used in their production and they are almost as prolific as plastic water bottles. My solution is to use them for packing my lunch. Each container is the perfect serving size for salads, fruit, and tuna salad. Nobody tries to steal them out of the employee refrigerator either.

~ I reuse those cute little boutique bags with corded handles for my lunch. It is a much more stylish way to pack my lunch than buying brown paper bags. ~ Old t-shirts and linens always find new life as cleaning rags. It eliminates the need to buy paper towels. Kitchen towels also double as napkins quite nicely.

~ I always ask for a doggie bag when ever I go out for a meal so I can have two meals for the price of one or I split an appetizer with a friend and have a side salad. Who can eat everything a restaurant serves as a meal anyway?

Monday, September 3, 2007

The story begins...

No Credit Needed is challenging us to share our story as Day 6 of 33 days and 33 ways to save money and reduce debt. If this doesn't go against every grain of what I've been brought up to do I don't know what does. Money is as much of a taboo as politics and religion otherwise people wouldn't have the convenient curtain to hide their debt behind. I am selectively talkative. My family and friends know that I am concerned about my debt. The usual response from family is guilt for getting into debt. The next question is why am I not out of debt since I've been in this situation for what seems an eternity.

The trick with conquering debt like all other challenges is to build a support system; a group of people you can rely on to divert your attention, remind you why you are making the sacrifices, cheer you on when you accomplish a goal. It may be one or two close friends or it may be a blog community. To all of those support groups... Thank You!

Breakfasts, Lunches, and Menus Oh My!

Well, I did it. I went to the grocery store with my list in hand and purchased items for breakfasts, lunches and some dinners for the upcoming week. I got nervous when I came home because it didn't really feel like I had enough groceries to make it through the week. My budget was only $35. I came in at $32 but this also included 4 12-packs of Coca-Cola (my one remaining vice and they were a steal). After being inspired by I've Paid For This Twice Already, I sat down and wrote out a menu for the week. Yes, I realize this should have been done before I went the the grocery store, but I've never done this before and I'm learning. I am glad to report that all meals are accounted for.

Labor Day weekend is a fantastic time to stock up on items that can be used for lunches. I picked up English muffins which will work with peanut butter for breakfast and for pizza bread for lunch; a rotisserie chicken for dinner, sandwiches and quesadillas; and crackers since I have a habit of making lunch out of tuna, cheese, and crackers.

I realize that I need to pick up some freezer container so I can save portions of casseroles and other dinners for future lunches. I also have some dead bananas in the freezer waiting to be made into Banana Nut Bread for future breakfasts.

Sunday, September 2, 2007

Reducing debt by eating out less.

Over on the NCN, Day 5 of 33 days and 33 ways to save money and reduce debt examines eating out less. Wow, if this isn't near and dear to my heart with a huge need for examination I don't know what is.

I would bet that 75% of my debt stems from charging meals and nights out with friends. I'm not a big purchaser. I've been driving the same car for the last 7 years and it was paid off when I got it. Bessy is an 84 Oldsmobile Cutlass Supreme. She was my grandfathers and I learned how to drive on her. I've only purchased a used t.v. and that was from a friend who loves electronics and was looking to buy a new one. My "stereo system" is a boom box from 1994. I live with antiques and second hand furniture. My friends often complain that I don't spend enough on myself and I suppose they are right, but since I don't have anyone to share expenses with, I've had to make choices. Please don't get me wrong, I have a very comfortable and inviting apartment and I try to keep clutter to a minimum. I take very good care of the things I own so I don't need to replace them and feel little need to have the latest toy or gadget.

As you may have read in my first blog, one of my goals is to cut back on eating out. If I look at my budget from last year, I know I didn't budget the amount of money I spent eating out. In fact, I'm not sure I even budgeted for a quarter of the money I spent on eating out. It was about $12 per day 5 days a week for lunch which translates into $3,120. It doesn't include dinners, but it also doesn't take into account having some business meals paid for. Now there is a chunk of change.

This weekend a friend and I are going to Costco. The plan is to purchase items and share them because neither one of us has the extra space. I am open to any suggestions on meals that will make lunch time more interesting.

Blogging for Cents?

In my quest to become financially stable and free of debt, I have considered a number of different options for increasing my income. After all, that’s the next big step on the road to freedom. I’ve put together a pretty comprehensive budget, but I admit that it’s so tight I often have a problem living with it. But that’s another posting. I have house/pet sat for people since I was in college, which brings in a bit of extra money. I cut back on the number of people I work for because it became too tiring living at everyone’s house but my own and working a full time job. I had the energy when I was younger, but I find that I get cranky if I do it for too long without a break. I have cleaned houses, done yard work, painted, made things, participated in focus groups and research projects, ebay, and whatever else seemed like a good idea at the time. Recently I’ve been exploring the wonderful blog world to get new ideas and I must admit that a number of the postings that I’ve read make me nervous. The idea of providing personal information over the Internet seems risky. How do you protect your identity and participate in things like secret shopping? How do you post ads on your site that you may not believe in? Most importantly, how do you provide information albeit my opinion that does not steer someone else into problems?

Boggled by Budgets - How do you fit a square peg into a round hole?

Nothing stresses a person out like trying to put together a budget. A friend of mine has her heart set on a cute little condo. I helped her to put together some preliminary numbers in a budget which came up to a shortfall. It is always interesting to go through each category and decide what is important and where there is space for adjustments. My challenge personally has always been in trying to work it too tightly. I feel like if I just give up a bit more, I can pay that debt off quicker. The problem is I don’t give myself that buffer and it ends up creating more problems. In looking over her numbers I could see that she was lacking in an emergency fund as well. One of my goals is to establish $1000 for an emergency fund. (Anyone who is a fan of Dave Ramsey will recognize that as an important first step.) Key Bank has been running a special that if you do two electronic deposits of at least $100 each they will give you a free ipod nano. My problem up to now with using my savings account is that it is linked with my checking account, which makes it too easy to dip into.

While running her numbers, I kept working on fitting the Expenses into the Income. There is a significant difference if she purchases this condo. I think she does have the ability to do it, but she will have to make some lifestyle changes. She is already restricting her meals out and she had decided to give up her Dish and high speed internet access. My question is when do we get to the place where we have to stop trimming. I mean, lets be realistic. You can’t budget out food or shelter, but just how low can you go. This is where the frugal game gets played.