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Jan 29, 2010

Mint.com - Part 2 (Janssen)

One of the things I like most about Mint.com is using it to set up a budget and then track how we're following it.

I showed you last time that the budget shows up on the front page.

If you go to the planning tab at the top, you can see it up close:


This is our budget, with all our major categories, and our estimated total per month for each ones. The colors are to show you how  you're doing - green means you've still got money left in the budget, yellow means you've hit the budget, and red means you've gone over.

On the left side, in that green box, it tells you how much of your budgeted money you have left, if any.

To set up your budget, you go the Planning tab, and click "Create a Budget:"


This screen will pop up:



If you choose a category from the drop down menu and you already have Mint hooked up to your accounts and it's pulled your recent transactions, it will make a guess at what your budget should be. For example, when I chose "Hair" as the category (it's actually a subcategory under "Personal Care"), it said we'd spent on average $10 a month on haircuts. You can choose to have it be a monthly, every few months, or one time budget, and then the amount you want the budget to be. Click Save and ta-da! Hair is now part of your budget.

You can keep on adding budgets for different categories until you have all your basic categories covered.

The "Make this Budget roll over" feature is one of my favorites.


In some cases, you don't want or need a budget to roll over - say Bart doesn't get a haircut one month because he's traveling and just doesn't get the chance. You don't need that money to roll over into the next month, because he won't get his hair cut TWICE the next month to make up for it.

Our allowances, however, we do have roll over each month. If we don't spend part or all of our personal allowances in a month, the extra money rolls into the next month, so that instead of having only $50, you might have $75. You'll notice that Bart practically never spends his allowance, so his continues to grow at an alarming pace. When he comes home with a ten thousand inch TV, I won't be able to say anything.



One other cool thing. On the home page, where the budget shows up when you log in, you'll notice a line through the middle of your budget chart. This shows you where you are in the month so you can see if you're on track with your spending. If you've spent 90% of your grocery budget and the month is only 1/3 over, well, that might be a problem.


Any questions about that? I'll try and answer them in the comments or in another post next week if there are a lot.

Jan 28, 2010

The Second of 3 Little Budget Secrets (Carole)

The Second Secret to making and keeping a realistic budget is getting each monthly bill to be the same dollar amount – every month.  

For instance, living in the desert southwest, our electric bill swings wildly from the winter months to the summer months.  In the winter (October until March) our bill is nice and low, typically well below $40 per month.  However, once we start hitting our hot months (April until late September) and the AC is running around the clock, it is easy for an average electric bill to be well over $500 per month.  Those are budget-buster months! 

I used to really revel in the winter savings, but I finally decided that the astronomical bills during the summer were just too stressful – yet another reason to dread the summer heat in southern Nevada!  So, we finally contacted the electric company and got ourselves on their Budget Plan.  They take your prior year’s bills and average them out.  So, now for the next 12 months, you pay only the average cost each month – closer to $250/month.  It may seem high, but at least you can plan for it.  And that makes all the difference!

You do not have to wait until the beginning of the calendar year to begin the Budget Plan.  As long as you’ve been a customer for at least 12 months, utility companies will allow you to join at any time.  And if you end up having paid a little over or a little under your actual consumption amount at the conclusion of the billing year, the utility company will either bill you the (usually small) difference or credit your account.  You might be surprised to find that your yearly consumption is extremely similar from year to year.

This plan works well with the electric, water and gas companies – any utility where your usage swing wildly as the seasons change.

Remember, the goal is to get your budget to be realistic and consistent.  And with this method, you’ll never again break into a cold sweat when the electric bill arrives in the mail – even when it’s 115 degrees outside. 

Jan 27, 2010

Spending Less at the Grocery Store (Merrick)

One of my goals this year is to spend less at the grocery store. I’m sure all of you want to spend less, whether you’re consciously thinking about it or not.

While there are many ways to spend less at the grocery store, here is one that I’m putting into practice this year and want to tell you about. This year I am only going to the grocery store once every two weeks.

Here is the way I do it: I plan out all of my meals. Every. Single. One. I am not the kind of wife who can spontaneously look in her pantry and fridge, see a few vegetables, meats, pastas, or whatever, and then whip up something fabulous before 6:30pm rolls around. Don’t ask me why, I just can’t do it. I’m always shocked when my mom emails me to say she tried a new recipe because she had all the ingredients just “laying around.” How is that possible? I must have the meal planned out beforehand and all the ingredients purchased.

If my meals are planned, each item purchased has a purpose and then gets used. If I am just aimlessly buying food, hoping it will all come together to make meals for the next week, guaranteed half of my food will go bad and get thrown away. I have wasted so much money, especially on produce, by buying vegetables or fruit, but only needing half of it for my recipe. By planning out two weeks of meals, I find that I’m able to use the entire bunch of spinach by using it in three different dishes. If I only plan for it in one meal, the rest of the bunch sits unused in the fridge and goes rotten. Wasted money.

I keep this all organized with these two notepads:



On the “What To Eat” one, I write all my meals for two weeks (including lunches). On the “All Out Of” one, I check all the ingredients I need for these meals and then take this list with me to the grocery store. I bring a pen and mark off the items as I go to avoid forgetting anything and also to avoid buying items I don’t need. If you take your time in planning beforehand, you won’t get home and realize you forgot to buy five things you needed, meaning you’d have to go back to the store later in the week and spend MORE money.

Although it takes some planning on my part, I am never stuck with nothing to make for dinner, I never wander through the grocery store isles picking up random things, and I'm already finding that my grocery bill has significantly decreased.

Jan 26, 2010

Mint.com - Part 1 of Who Knows How Many? (Janssen)

When Merrick posted last week about how she budgets, several people mentioned that they used mint.com or had considered using it. My mom emailed both of us saying, "Should one of us give it a whirl so we can have an informed opinion?"

Happily, Bart and I have been using mint.com for over a year now, so I have many things to say about it (of course, if you read my personal blog, you probably know I would likely have many things to say about it even if I'd only used it one time ever).

Let me say this first - I do not like paper. I do not want to go through all my receipts, I do not want to print anything out, and I don't want to do a lot of work. Basically, I want to do Lazy Person Budgeting. Probably because I am, at heart, a lazy person.

So, for me, mint.com has been a terrific solution. It does a lot of the work for me, it's all online, available from every computer, and I don't have any paper to deal with.

Mint.com is a free online program (nothing to download) that you can use to manage all your bank accounts, loans, credit cards, and assets in one place.You can track your spending on a day to day basis and you can create and stick to your budget there. It also (and this is the biggest selling point for Bart) records every transaction you make, so you know when you pull out $20 from an ATM, or spend $4.27 at the grocery store on a Thursday afternoon or buy $1,000 worth of plane tickets. You can go through and look at every cent you've spent and categorize it.Basically, it's all in one. (And did I mention FREE?)

If you're familiar with Quicken (which my parents have used for years and years), you'll be happy to know that mint.com is their online version. I personally like mint.com far better than I ever liked Quicken. I think the interface is better, it's more user-friendly, and, well, it's just prettier.

Here's what my homepage looks like when I sign in (I've blanked out some things for privacy). 




You can add all the accounts you have to the left sidebar, including savings, credit cards, loans, mortgages, and checking accounts. It will automatically update those accounts every time you log in (one less thing for me to do), so you know instantly how much money you have available, how much you've spent on your credit card, and what your ratio of debt to cash is.

At the top there are alerts, things like "You have spent $520 on gas this month. Usually you spend $125," so you have something to tell you if you're way off your normal spending (this happened last month when we got new phones and so our cell phone bill was more than double the normal amount while we waited for our rebate checks).

Then you have the budget section in the center, which has all sorts of handy information available at a glance.

Later this week, I'll talk more about using it to budget (because I know you need some reason to look forward to Friday), and the specific ways that I use it. For now, I'll just reaffirm my love of mint.com and suggest you look into it.  Easy, fast, and free? What's not to like?

Jan 25, 2010

The First of 3 Little Budget Secrets (Carole)


I think setting up a family budget (and sticking to it, of course) has to be one of the hardest things a couple ever does.  However, the alternative is complete chaos and ulcers.  So, much better to take the time and set up a budget.  But there are some Little Budget Secrets that make this process so much easeir.  I’m going to share one of them with you today.

Every budget should obviously begin with the basic expenses you have every month

Budgeted item
Expected Amount
Actual Amount
Mortgage/rent


Nevada Power


Southwest Gas


Sprint


Gasoline











The budget killers though are those OCCASIONAL bills.  You know what I mean – car registration, property tax, insurance premiums, hair cut and color J, birthdays, Christmas.  The list can be pretty long.

I remember when we had been married only a few years and Janssen was a baby.  I was suddenly home full-time with her and put in charge of the family finances.  I must admit I didn’t know hardly anything about money and was basically learning on the job.  I would sit down twice a month while she napped and pay the bills.  I had a nice sheet that listed all our usual bills, and also had some empty lines down at the bottom for anything “unexpected.”  I came to hate those empty lines – because they were always filled in!  Every dang month!  Couldn’t we have just ONE month without some unexpected bill or two that used up all our extra money??

I mentioned this to David finally and he recommended I read a series of slim books he had about family finances.  I had never had the slightest interest in these books before, but suddenly I was motivated!

I found the secret -- these bills were not UNEXPECTED at all.  They were just OCCASIONAL.  So, I needed to plan for them.

We set up a special savings account attached to our checking account.  We looked over our past year of bills to see what “unexpected” bills kept showing up.  We listed them all out and divided each bill by 12.  I then began putting 1/12 of that bill’s total in the savings account each month.  I made up a little chart where I could keep a cumulative total of what money I had saved aside for each bill as the months progressed.   All the bank saw in that savings account was one lump of money – but to me it had a dozen little categories filling up with ulcer-free money. 

Occasional Bills
January
Febuary
March
April
Car Insurance
105
210
315
420
Car Registration
40
80
120
160
Christmas
70
140
210
280
Property Tax
125
250
375
400

What a relief the next time the car insurance was due to have the entire amount already waiting to pay the bill.  I simply transferred the money into our checking account and wrote out a check.  No "unexpected" budget busters ever again!



From then on our budget became realistic and predictable.  This is the goal!  Take a look at your own yearly bills and see what you can do give your finances some consistency.  Then throw out the Tums.

Jan 22, 2010

Eating Out For Less (Merrick)

OK – now that we’ve talked about saving money by eating in, let’s talk about a few ways to eat out, but still save money.

I’m all about eating out; I think it’s a great way to get out of the house, have a nice date night with your spouse, or just avoid doing the dishes for one night. But it’s all about moderation and knowing how to find great deals.

One great website for restaurant deals is Restaurant.com. Have you heard of it? It’s a website that has gift certificates for thousands of restaurants, but all at a discounted price. For example, you can purchase a $25 restaurant gift certificate for $10, with the only catch being that you have to order at least two entrees, or a minimum purchase of $35 (this will vary by restaurant).

But wait, it gets even better. I have personally never purchased a $25 gift certificate for $10 because I simply added myself to their email list and I’m constantly getting emails about their 80% off specials. Yes, you read that right. 80% off. That means at $25 gift certificate for….(wait for it)….$2!!

I was a little dubious about it until I finally caved in and tried it for the first time for a vacation a few years ago (we don’t use this site very often for date nights since Provo has a total of two participating restaurants…). Vacations already cost so much between plane flights, hotel rooms, daily activities, and eating out every day, so we’re always trying to save wherever we can. I knew roughly where we would be each night of the vacation, so I searched the available restaurants in those areas with Philip and we found one that sounded great. Using my 80% off discount code, I purchased the $25 gift certificate. This particular restaurant required a minimum purchase of $35, but 18% gratuity was included prior to the discount. Being the miserly people we are, we figured out exactly how much food we had to get so that the 18% gratuity would bump us up to $35. We walked out that night after a large appetizer, drinks, and two large entrees, with a total bill of $35.20, meaning we only spent $12.20 for all that food! We now use this site every time we go on a vacation and have probably saved hundreds of dollars as a result.

This is only one of so many ways to save on eating out, and if you take a little time to research what restaurants participate in your area, think of all the money you could save on those weekly date nights.

Jan 21, 2010

Keeping Your Money Temptations at Bay (Janssen)

I read a few months ago (online somewhere that I can't even remember, so, you know, this is very official and absolutely true) that people who think they have a lot of self-control around food tend to actually eat more junk food/desserts because they buy it and keep it around their house, assuming they can just "say no" with that iron will. Whereas the people who who say, "I can't even have a cookie in the house or I'll scarf it down before it's cooled," eat less because it's just not there. Let us not discuss which category I fall into. There is a reason I buy nothing except canned tomatoes and cheerios, if that gives you a hint.

The same thing is true, of course, for money.

We all like to think we're good at money, using our coupon here, or sending in a rebate form there, but then finding ourselves with the cupboard full of cookies that we are deeply tempted to inhale. I can say no to a lot of things, but show me a pair of shoes or clothing item on clearance (here come my True Confessions too. . .), and I am hard pressed to say no. Because, I can justify it all afternoon long, since it was 75% off, or because it was already on sale AND I had a coupon.

The goal, then, is to empty your money cupboards of cookies and chips and other things you can't resist, and just make it easy on yourself to not spend. Make it so you don't have to decide EVERY SINGLE TIME you open that cupboard to say, "No. No cookies." 

My mom mentioned yesterday that she doesn't keep her debit card in her wallet. She doesn't have to decide every single time if she's going to spend or not. That's keeping the cookies and chips out of your cupboard.

I do not go to the grocery store more than once per week. Otherwise, every single trip will cost me an additional $10-15 and kill my budget. I just don't even go through those doors. I can live without any one item for a week. I can go two days without eggs. If I'm out of cereal, I can have oatmeal or toast or a muffin or a smoothie.

Some people use only cash because you can't actually spend cash you don't have, much like you cannot eat cookies that are sitting on the grocery store shelf, miles from your kitchen. 

A friend of mine had his credit card numbers saved in Amazon and iTunes so that he could make purchases at either site without having to dig out his wallet. Very convenient. Actually, a little too convenient, he discovered, when he signed up for mint.com and it showed him the previous year's expenditures at each of those vendors. Hundreds and hundreds of dollars at each location. Especially on a site like iTunes, where each song or movie is 99 cents or maybe $3, that means he had clicked the purchase button, literally, hundreds of times. It's just too easy. The same day he saw those numbers on mint.com, he disconnected his credit card from both sites so that he would have to consciously choose to make purchases. (Oh and, yes, I asked permission to share this story - if you share a story about your money habits, I will not link to you and tell in great detail about your horror stories).

It can be hard to identify your own spending temptations. Like my clearance shopping, it's easy to justify; like my friend's iTunes spending, it's such little amounts that you don't have any idea until you see a yearly chart that it's costing you hundreds of dollars. This might be a chance for you to ask your spouse, "what do you see as a money spending trap for me?" (maybe ease the pain of that conversation by offering your own helpful advice to them about what their spending pitfalls are) or to plug your bank accounts in to mint.com and see if there are categories that shock you. And then decide what you can do to get rid of the temptation.

Disconnect the credit card; stay out of the store; take your debit card out of your wallet; call and cancel the catalogs that come to your house. None of those things are worse than the stress of feeling like your finances are out of control. None of those things is harder than retiring with less money than you need to live comfortably. It's worth asking yourself an uncomfortable question now and then doing something about it.

Make it easy on yourself to do what you know you should be doing.

Jan 20, 2010

Are You a "Natural Spender" -- like ME? (Carole)

Many experts say that nearly every married couple has one Natural Spender and one Natural Saver.  In our house, I am the Spender.  (I don’t think I realized that writing a blog would turn into True Confessions. . .)

Now, let me qualify this.   I am not an out of control, crazy spender-of-every-cent-that-walks-through-the-door wife. Nor am I a wife who has a large credit card balance with every major store in town.  Those women probably need some therapy.  But I do enjoy spending $20 or $50 or even $100 on a pretty regular basis – just for fun.  Personally, I see myself as generous, as much of what I buy is for one of my children.  Somehow that makes spending seem almost noble.  However, being noble or generous or whatever, has busted my carefully crafted budget more times than I can count.  How many times have I had to ask my husband to add more money to my account so I can survive until the next pay day?  Ugh.  (Of course, he’s the Natural Saver who can keep the same $10 bill in his wallet for a decade.)   

But our family has BIG financial goals!  You probably do too.  Our family has millions of dollars yet to accumulate before retirement.  If I spend it all -- $20 or $100 at a time (remember, I'm the Natural Spender) -- then we will never get where we want to go.  So, I have to STOP myself before I spend AGAIN!!

So, after 25 years and test-driving many other methods, I have finally discovered the Wonder Plan (at least for me).  I’ll share it with you – because just maybe it will be the right thing for you too.

First, I have my own checking account.  Every Monday morning I move my weekly, budgeted money from the family account into my personal checking account.  I have found that our budget is safest if I do not have easy access to all the family money sitting in our joint bank account. This one strategy has saved me from spending hundreds (or possibly thousands) of dollars over the past few years.

Second, I work only in cash.  As soon as my weekly money is transferred into my account, I run to my bank's ATM and take out all the cash I will need (according to my budget) for groceries and household expenses and personal extras.  I keep these three piles of money separate in my wallet.   This is all the money I have to spend for the week.  When the money is gone, I have to quit spending.   Now I watch those $20s like a hawk!

Third, I keep my debit card hidden in my car.  No, I am not hiding it from myself.  I am hiding it from any would-be thieves – I do live in Las Vegas, you know.  After taking out my grocery and extra money, I leave enough money in my checking account to fill up my car with gasoline at least once during the week.  I personally refuse to use cash to buy gas.  When my children were little, I didn’t want to leave them alone in the car while I went inside to pay and now I just don’t want to be bothered with walking through all the slot machines and cigarette smoke.  So, the debit card hidden in the car keeps it handy for the gasoline pump, but also keeps it safely out of my wallet when I’m in a store loaded with temptations. 

These three little strategies are the Wonder Plan that keeps my Natural Spender tendencies in check.  It’s now become an exciting game to see how many $20s I can still have when Monday rolls around again.  I gleefully sneak those un-spent bills into a big envelope that I keep hidden at the house (do you see a disturbing pattern here??) and am saving up for a Bernina Serger.   I’ll post a lovely photo when I buy it with cash in a few months!  

Jan 19, 2010

Budgeting - What's Your System? (Merrick)

One of my biggest challenges since getting married has been keeping a consistent budget. Although neither Philip nor I are big spenders, I still have felt the need over the last few years to record our spending and document our progress.

I have tried many different systems, and this year I’ve finally come up with one that works for us. I understand that everyone’s needs are different when it comes to budgets, but let me just share mine with you on the off chance that it might work for you too.

Here were my three guidelines in coming up with a new budgeting system: First, I needed something easy. Second, I needed an accessible system. And third, I needed something that covered ALL my expenses in one spreadsheet.

From there, this is what I came up with:

1. I keep ALL receipts. (Philip and I only use a credit card, but we use it like a debit card or cash, paying it off in full EVERY month, and NEVER spending more than we have).
2. I write down every purchase in a weekly spreadsheet that has all the basic categories (groceries, gas, eating out, fun money, etc), and also lists our weekly budget for each of these categories.
3. At the end of every day, week, and month, I do a quick evaluation to see where we’re at – How much did we save this month? Did I go over my budget in any category? Where do I need to be more careful next week/month?

Now let me tell you a little more about my spreadsheets, since they are the basis of my entire budgeting system.

I have a monthly budget sheet, and a weekly budget sheet. That’s it – keeping it simple. My monthly spreadsheet is this one, which has been condensed and personalized so it only includes expenses that apply to us. The weekly spreadsheet is just a much smaller version of this that I mentioned in #2 up there. I printed out fifty two copies of the weekly budget sheet, put them in a binder, and put it in my kitchen drawer where it is now very accessible.


Here is how I keep myself accountable:

At the end of every single day, I pull out the binder and any receipts from that day, write them in the spreadsheet under the correct category, and then place the receipts in the envelope. After a ten second glance, I know what I’ve spent so far this week, and how much I have left in my budget for each category. Seriously, this takes less than two minutes every day. So easy.

At the end of each week I pull out the binder and spend five minutes entering all the handwritten expenses into an identical spreadsheet that is saved on my computer. Automatically the monthly spreadsheet pulls from the weekly spreadsheet and inputs each expense into the correct categories over there.

And lastly, at the end of each month, I pull up the monthly spreadsheet and enter in our income, the exact amount of our electric bill, gas bill, and a few other non-standard numbers, and viola! The spreadsheet formulates all the numbers and spits out how much we earned, how much we budgeted to spend, how much we actually spent, and our bottom line savings for that month. This takes no more than fifteen minutes.

Now remember, this is the Frugal WIFE blog – I do this all on my own, only asking Philip for his receipts and occasionally reminding him what our budget is for this or that. But it’s mostly the wives that are evaluating the finances, keeping track of expenses, and spending most of the money. So make a system that works for YOU. That YOU will follow. And that will hold YOU accountable. Once you find that system, whether it’s based off of mine, or is something completely different, you’ll be surprised how much easier it is to follow your own budgeting rules and spend way less than you earn.

Jan 18, 2010

Do You NEED Netflix? (Janssen)

Several years ago, when Bart and I both had fairly good salaries, we had no student loans, and we lived in Texas, where the cost of living is practically zero, we had a Netflix subscription. Eventually we gave it up, for reasons I can't quite remember.

A year or so later, when we were in the throes of school, Bart suggested we resubscribe. I balked. We discussed it at length, and I finally convinced him we didn't need it.

Here's why I think you might not need Netflix as much as you think you do:

1) Redbox. There are so many Redbox codes online (I like this site), you probably never need to pay to rent a new release movie again. Blockbuster Express is also a good option with free codes. You get the movie the day you want to watch it, watch it, and return it. Done. Free (as long as you return it the next day). 

2) The library (I'm a librarian. You must have known this was coming). Your tax dollars are already funding the library, so you might as well take advantage of it. Many libraries have tons of TV series, classic movies, new releases, and PBS/BBC documentaries and dramas. We have watched six seasons of 24, House M.D., a lot of Alias, and Gilmore Girls (maybe the whole series twice) (Bart would want me to note that I am the one who has watched this, not him), not to mention dozens and dozens of other films.

3) The problem with Netflix is that it just keeps coming. If the movie sits around for a week or two until you have a moment to watch it, you've paid a high premium for that specific movie. Sometimes there are weeks where you have lots of time; other weeks, you might not have any time at all for movies for long stretches. Netflix doesn't know, and frankly, they don't care, because your credit card just keeps getting billed, whether you watch the movie or not.

If you feel Netflix is an absolute necessity in your life, it's a great thing to request as a gift from your in-laws, an aunt or uncle, or some one else who wants an easy gift idea. My parents receive it each year from my dad's staff. They know he'll love it, it's easy, and everyone wins.

Jan 15, 2010

What Does a Monthly Car Payment Really Cost You? (Carole)

Most people in America can’t even imagine life without a car payment.  Many of us even begin our car payment lives while still in high school!  It’s just such a part of our lives.  But what does that monthly car payment really COST you?

I’m going to let one of my favorite financial gurus answer this question.  Here is what Dave Ramsey has to say in his book “The Total Money Make-over” on page 32.

“Taking on a car payment is one of the dumbest things people do to destroy their chances of building wealth.  The car payment is most folks’ largest payment except for their home mortgage, so it steals more money from the income than virtually anything else.  USA Today notes that the average car payment is $464 over sixty-four months.  Most people get a car payment and keep it throughout their lives.  As soon as a car is paid off, they get another payment because they “need” a new car.  If you keep a $464 car payment throughout your life, which is “normal,” you miss the opportunity to save that money.  If you invested $464 per month from age 25 to 65, a normal working lifetime, in the average mutual fund averaging 12 percent (the seventy-year stock market average), you would have $5,458,854.45 at age sixty-five.  Hope you like the car!”

$5.5 million dollars!  That is what your car payment could cost you.  So what is the alternative?  Pay cash. 

How is that even possible?

Buy whatever level of car you can actually afford for cash right now, then save aside a typical monthly car payment for the next 12 months.  You will now have nearly $6,000 to add to the money you will earn from selling your current paid-for car to buy a nicer car for CASH.  Do this step again for another 12 months and you’ll have enough to buy an even nicer used car for cash.  Imagine buying a $15,000 car for cash!  You can keep doing this until you get a car you’re satisfied with.  But pretty soon, you’ll want to start investing that money instead of just saving for the next car.  Investing that money is the goal, remember?  You’ll never get rich just buying cars.

According to the experts, a 3 or 4-year-old car purchased from an individual (especially if he or she is a motivated seller), will get you the most car for your money.  You’ll also have incredible purchasing leverage when you show up in their driveway with cold hard cash in your hand. 

Plan on keeping this car for around five years.  Keep yourself out of other consumer debt and you’ll find that when it’s time to buy your next car, you’ll already have the money saved (probably in a mutual fund someplace, because you're smart like that!) to buy a great car for cash the first time.  Your money accumulates like magic when it isn’t being mailed to the Ford Motor Company or VISA every month.

Ask yourself, is missing out on several million dollars in retirement really worth that new car smell??

Jan 14, 2010

Why Go Out When You Can Stay In? (Merrick)

How often do you eat out?

After a little online research, I discovered that Americans eat out on average four times a week! Although some of these meals may be lunch (slightly cheaper), it’s still a huge number when we think about how much money is being drained out of our wallets simply by eating out.

My husband and I rarely eat out for lunch, but for the last few years we’ve had regular date nights once a week. Regardless of where we go, we spend anywhere from $20-30 (plus tip!) for just the two of us.

Once a week, spending roughly $25, adds up to $100 a month, and $1200 a year! Now what if we were eating out four times a week? That’s almost $5000 a year – just on eating out! And that doesn’t include all the money you’re spending at the grocery store.

So why do we eat out so often? In a 2006 study conducted by the U.S. Department of Agriculture, it was found that American’s eat out for three primary reasons: variety, convenience, and entertainment.

I’m here today to tell you that if you want variety, convenience and entertainment, you don’t necessarily have to go out (although we will talk about ways to eat out cheaply another day). About a year ago, I instigated “Friday Homemade Pizza Night.” It started out a little slow, but now it has become tradition and is a fun date night together. We stay in, we rent a movie from the Redbox (with a free rental code, of course), I make homemade pizza, and it fulfils all three of those reasons American’s eat out.

1. Variety: Yes, I understand that pizza once a week does not seem like variety, but after catching on to the tradition I’ve picked up a few pizza cookbooks and since then we’ve tried many different kinds of pizza. We have our favorites that we always go back to, but it’s fun to try new things, especially if it’s cheap.
2. Convenience: From the time I start making the pizza dough to the time it comes out of the oven is about 45 minutes. If you go to a restaurant, especially on a Friday night, you’ll be waiting for longer than that. Yes, you might not have to do any cooking or cleaning up, but a 10-15 minute prep time (and 30 mins in the oven) is really pretty hard to beat. (If we really want to talk about convenience, I’ll show you the fastest way to make homemade pizza – 5 minutes! – in another post…but I don’t do that every week).
3. Entertainment: Philip and I often make the pizza together, putting the toppings on as part of our date night. Then once the pizza is cooked, we cuddle up on the couch to enjoy a free movie ($1 at the most!) and dinner simultaneously.

And here’s the best part. I’ve broken down our cost for dinner, dessert and a movie so you can see our savings:

DINNER:
Homemade Crust (4 ingredients: flour, water, yeast, salt): $1.00 estimated – possibly cheaper
Sauce (Kroger Brand from Smiths, $1.79/jar, I use about 1/3 of the jar): $0.54
Cheese (I only buy it when the big bricks are on sale, 2/$6, and use about 1/3): $1.50
Meat (pepperoni, Canadian bacon, salami, etc. I use about ½ a pack at $3): $1.50
Veggies (peppers, mushrooms, etc): $2.00 estimated

DESSERT:
Vanilla Ice Cream (Kroger brand from Smiths, $2/qt, we use about 1/3): $0.60
Crushed Candy Bar (2/$1.00, we only use one): $0.50

MOVIE:
Redbox (usually can find free rental code): $0.00

TOTAL for dinner, dessert, and a movie: $7.64 (and no tip!) for two people!!

Now I’m not saying that you shouldn’t ever eat out, but look at the difference. Think about that next time you don’t feel like cooking…

Jan 13, 2010

Don't Let a Dollar Slip By (Janssen)

Last summer, my husband finished his masters in accounting. It was only a one year program, and we were Texas residents, so the cost was not insanely high, but we did have to take out some student loans for it.

This year, we decided, was the year we'd try and pay the remaining loans off, if it at all possible (and I think it is).

Over Christmas vacation, my mom told me the story about a woman who called in to Dave Ramsey's radio show to celebrate being debt free. When he questioned how they'd done it, she reported that they'd taken every spare penny they could find or that came their way and thrown it at the debt. She said when they started calculating up how much they'd received in "extra" money in a year, the total was something enormous, well over ten thousand dollars.

Bart and I agreed we'd do the same thing - if we were serious about paying off this debt (and we are), we needed to make it the top priority.

It is now less than two weeks into the year, and I have been astounded at the amount of money that has come our way. Money that, a month ago, we would have considered "free money" and squandered away on clothing, dinner out, and extra things we didn't need.

We received a few checks for Christmas from generous grandparents. Did we really need to spend that on a pair of jeans? A year ago, I would have said yes. This year, I said "Student loans."

Last week, I won a $200 Visa gift card on a blog giveaway. Last month, I would have said, "Yippee! A new pair of shoes! And some shirts. Maybe a dress. Bart, let's go to dinner and then a movie!" This year, I said "Groceries" and deposited $200 from the checking account into our student loan fund.

The rebate checks from our free cell phones finally got processed and are, allegedly, making their way to us as we speak. That money, instead of being divided among us and spent on whatever caught our fancy (and then, of course, later we'd be hard pressed to even remember where that $100 had vanished to), is going straight into the fund.

I am AMAZED how much money passes our way that, if we weren't paying attention, would slip right back out of our lives. I'm glad to be grabbing it and holding it tight. Even if we have to eat at home every night for the rest of the year.

Jan 11, 2010

How Much Money Will You Earn in a Lifetime? (Carole)

Have you ever stopped to add up how MUCH money you will earn in your lifetime?  If you haven’t, let’s do it together – right now!

If you earn $30,000 per year for 40 years (ages 25 – 65) that adds up to $1,200,000.

Well. 

If you earn $50,000 per year for those same 40 years that adds up to $2,000,000.

What if you (or your spouse) have gone out there and earned a professional degree and earn a whopping $100,000 per year.  That adds up to $4,000,000!!! 

I think you’re catching on.  Take a moment to take your current income and figure out how many more working years you probably have until retirement and determine what your total earnings will be by the time you retire at age 65 or 70 or 55 or whatever.  You can also rejoice in the fact that most people’s income increases over time.  So, what you earn today may look pretty small 10+ years from now.  How lovely!

Of course, some of your income never ever enters your checking account because the federal and state governments take their share before you ever see your check stub, but (so far) the majority of your earnings do come to you.  That is still a lot of money over your lifetime. Feel free to use your net income to do these calculations.  You’ll still be amazed. 

So, where will these millions of dollars have gone by the time you retire?  Will you have spent half of it on pizza?  Or car payments?  Or your cable bill?  How much of this fortune will you spend on things you won’t be able to remember, or how much of it will you invest during your lifetime to make yourself wealthy (at least $1,000,000 in investments) in retirement? 

It isn’t hard.  You can retire a millionaire – on any income.  As long as you don’t spend all your money! 

This is the goal of this new blog:  how to live so that you retire wealthy – no matter what you earn.  If you can learn to not SPEND IT ALL, and SAVE WHAT YOU DON’T SPEND, you can retire as a millionaire. 

Stay tuned with us as we lay out the strategies that normal, wealthy people follow to live on less than they earn so that they can accumulate substantial wealth.  Since women tend to spend more money in a household (groceries, bills, clothing, children’s expenses) we chose our title.  A wife, who understands how to keep the household expenses within reason can move a family toward wealth like no one else. 

We are a mother and 2 married daughter team --  normal as can be – who are learning to be frugal in new ways to increase the net worth of our individuals families.  We read a lot and have our radars out for key strategies.  We’re here to inspire you to move your family toward financial prosperity. 

Here we go!

Jan 10, 2010

About Us

Carole, who lives in southern Nevada, is the matriarch of this trio. She and her husband of 26+ years have bought, managed and sold two small businesses while raising a family of 5 children.  Amazingly they were also able to pay off two separate homes, $60,000 in student loans and over a million dollars in business debt.  Living in a frugal way has always been part of the family equation, but so has been taking advantage of the good things of life!  Over the years they have travelled a great deal and saved up for anything they really wanted.  Carole and her husband have successfully launched three daughters into independent adulthood and have a teenage son still living at home, who is well on his way to a bright future.  No debts and money in the bank -- or the stock market -- brings a peace that comes in no other way.

Janssen and her husband Bart live in Austin, TX. She has a bachelor's degree in history from BYU and a masters in information studies from UT Austin. She worked as an elementary school librarian in Boston before the birth of her daughter. She lives frugally in order to feel secure and for the rush of "beating the system." If money were no object, she'd travel the world, buy clothing that wasn't on clearance, and have a kitchen stocked with every item Williams-Sonoma sells. She likes to read, cook, and garden (in an apartment, that means three little window pots). She also earns a little extra income working for her dad's dental office in Las Vegas. She blogs about books and the minutia of her life at Everyday Reading.

Merrick and her husband, Philip, live in Provo, UT. After recently being laid off from her job, she has fully embraced life at home as a full-time painter and crafting entrepreneur. She received her bachelor's degree from BYU in visual arts, and now attends evening classes at the Bridge Academy for post-grad fine arts studies. She lives frugally in order to keep the savings account high on a now-one-income family, to feel secure about adding baby expenses to our budget in April, and to never get over the proud feeling of buying a $5 pair of shoes. She likes to paint, listen to books on CD, and cook. She also blogs about her art (and other random stuff) at Merrick's Art.