Dave Ramsey video about buying cars (Carole)

So, after a long winter's nap, here I am with a great video from Dave Ramsey on buying cars.  Hope you enjoy it and get a little bit of inspiration!

The Thirty Day Rule (Merrick)

I hate to admit it, but I have a pretty short attention span. And I have a tendency to get really really excited about things. These two traits combined means that when I get an idea in my head, I NEED to do it right then. I plan the whole thing out in my head and I spend all day thinking and dreaming about it. And if I act on these impulse ideas, which usually require spending money, I suddenly don't care about them anymore. The lust is gone, and suddenly I've spent money on something that I didn't need and now don't even want.

Thus I have instigated the thirty day rule in my life.

This is sort of a standard tip for saving money, but it really works. When I get the idea, I write it down (usually in my google docs so I can organize it and re-access it easily), and then I wait. Despite the temptation to act on it immediately and buy up the entire local home depot, I continue to wait.

And then a few weeks later I browse back through my Google Docs and am able to weed through the ideas. Miraculously, I don't care about 99% of them anymore. If I am still as excited about an idea as I was originally, I know that it's something that is worth my time and money. And if I'm not, it gets trashed.

This rule has saved me tons of money and time over the years because I'm not just spending and projecting willy nilly. I take time to think through the projects that I want to undertake and try to only do the necessary and important ones. Emphasis on try...

Controlling Your Hobbies (Carole)

A few years back, it was common to see bumper stickers that said , "The One Who Dies With the Most _______ Wins."  The blank was always filled-in with a hobby such things as fabric, boats, cars, power tools, dolls, Beanie Babies, yarn, baseball cards. . . you name it.  In the beginning I found this sentiment pretty amusing, as I had my own stash of hobby items in my spare room too, but the older I get the more I realize how much money can be mindlessly wasted on hobbies -- no matter how fun or even noble they may be.

For instance, when my children were very young, one of my dear friends casually mentioned that she liked to own every book she read.  I had never thought of this before, but suddenly decided this was a FANTASTIC idea, and latched right on to it.  Janssen and Merrick (and everyone who knows me at all) can attest that I have spent the past 20+ years  purchasing hundreds of book -- actually probably more that that.  In fact, very few things make me happier than spending time in a bookstore and walking out with a new book or two.  However, these books have come with a cost -- above and beyond the purchase price.  I have to shelve them, sort them, dust them, move them, alphabetize them, give them away, throw some away, and I've even forgotten about some and purchased duplicate copies by accident more than a few times. . . you name it, I've done it.  It's been a fun hobby (and I've LOVED reading all kinds of wonderful books), but maybe the original good idea just got away from me.  As you can imagine, this has also been a very expensive hobby for me -- truthfully I can hardly walk into Barnes and Noble without spending $40 (at least).

Amusingly enough, I recently spoke to this friend (who I had lost touch with for a few years) and found that she now has a Kindle and has given away nearly all her books.  She said that she'd be surprised if she owns more than 10 books right now!  Wow.  So who's winning?  We both still have hundreds of books, but she gets most of hers online for free (she reads a ton of classics) and never has to care for them in any way!  And she appears to be saving a lot more money on her reading than I am.

I'm sorry to say, I have this same trouble with fabric, yarn and magazines.  I obviously have some serious issues with this subject!

Maybe you too have a hobby that has gotten away from you.  Do you buy the latest gadget or newest thing, JUST BECAUSE?  Is it time to pull the plug?

Here are some ways to curb your reflex hobby spending:

1.  Avoid stores that sell what you crave
2.  Avoid people who encourage you to buy more of this item
3.  Organize what you have so you'll know what you truly need in this area of your life
4.  Take stock of your stash and decide to enjoy what you already have
5.  Ask for this type of item as gifts from others
6.  Walk away

Budgeting Software Giveaway (Carole)

With the holidays just around the corner, we thought it would be fun to have a week full of giveaways!

Today's giveaway is Dave Ramsey's Personal Finance Software, version 5.4.1  -- It appears to work exclusively on a PC, so if you win our random drawing and own a Mac, we'll choose something else for your prize.

On to the topic for the day. . .

Did you know that the average American family spends $935 on Christmas gifts each year?  Considering most families have no savings and live on the very edge of their monthly incomes, this amount typically gets charged to a credit card.  Of course, we frugal folks hate even the idea of putting nearly $1000 on a credit card at the end of each year.  What a terrible way to ring in the new year!


To help us all escape this terrible fate, please take a moment to share with everyone how you and yours keep to your budget through the highly commercialized holiday season.   Even though many of us are frugal, frugal, frugal, we are more than happy to learn a new trick or two.  In fact, it's the reason we love this blog!!

What Would You Do With a Windfall? (Carole)

Many years ago I had a good friend.  She and I lived in the same small town and had children who were just the same ages.  We became exercise partners and often spent entire days at each other's apartments while our children played.  After a year or so, we were both on the verge of buying our first homes.  I was aware that before she was married she had been involved in two accidents and had received two different insurance settlements adding up to a whopping $50,000!  In my mind, they had it made, since we were scrimping and saving to get our own down payment together.

But one day she mentioned that they were going to have to borrow most of their down payment from her parents.  She was unbelievably embarrassed to do so, because now her parents would know that she and her husband had blown the entire amount!   I don't know how they spent all that money.  I do recall they had a ski boat and an old truck to pull it with and their kids had a lot of cool toys, but beyond that I couldn't see where it had all gone.

I've often thought of my friend during these past 25 years.  What COULD they have done with that much money that would have been smart?  In reality, the possibilities were endless, but here are three super frugal choices.

1.  Bury it in their backyard or put it in a safety deposit box.  In 5 years they would still have had their $50,000.

2.  Put it in the bank.  In the mid 1980's an average money market account earned 7.71% (these were the high interest Jimmy Carter years -- great if you had money to invest, horrible if you needed to borrow it) and at the end of five years they would have had over $73,000.

3.  Buy a house.  In the 1980's, $50,000 would have been a hefty down payment on a starter home.

What would you do if you suddenly found yourself with a large amount of money right now?

Frugal Shopping (Merrick)

If you're anything like me, sale racks lure you in. I often find myself in Old Navy and being tempted to buy items only because they're $5.

Because I know myself and know that I will do this, and then end up with items that I don't love, I have come up with a few shopping guidelines. Now every time I take an item off the rack, I ask myself these three questions:

1. Do I love it?
2. Will I wear it?
3. Does it fit in with the style of my current wardrobe?

Now, I still occasionally buy things that I don't end up loving, but with these guidelines I buy more things that I really love and will wear. Being frugal is not just about buying a $5 skirt; being frugal is spending your money on something that you'll actually wear. Think about it as price per wearing. A five dollar skirt that you never wear will remain five dollars. The price per wearing for a twenty dollar skirt that you wear once a week will soon cost only a few cents.

So the next time a sale rack lures you in, think about these three questions and make sure you're spending your money on something that you actually want and really love. Your wallet and closet space will thank you.

Time Well Spent (Carole)

We've all heard the saying, "Time is Money."  When it comes to saving money, nothing could be more true.  This is just a short little post to remind you that -

the faster you're living your life, the more money you're probably spending

Because it takes some time to:
 *  Write up a budget
 *  Plan a menu
 *  Cook your own  meals
 *  Look for and use coupons
 *  Become familiar with the usual prices of things
*   Comparison shop
*   Do your homework on the best brands
*   Shop at more than one grocery store
*   Try a DIY project
*   Home repairs

Are you living your life too fast to be frugal??

It's difficult to remove yourself from the frenzied pace of modern life.  But try to slow it down, think things through, consider your options before you buy something, take a few deep breaths and spend your hard-earned money wisely.  Your savings can be enormous.


Photo courtesy of FreeFoto.com  

I Have Enough (Carole)

Is is possible to feel like you have ENOUGH??  One of David's cousins used to be the CFO for an uber-wealthy Saudi prince.  I believe he saw and heard things the rest of us mere-mortals can't even imagine.  A few years ago, we had dinner at this cousin's house and he mentioned that even on this mega level of income, people do not feel like they have enough.  The prince who has $50 billion is always on the look-out for things to buy that SHOW that he has $10 billion more than the prince who has "only" $40 billion.  What exactly would you buy that would clearly make that point??  I have no idea.

On the other extreme, I  know a gracious woman from Georgia who has chosen to be content.  She is in her early 70's and always looks very put-together.  I commented on one of her outfits one day while walking through an airport with her and she said that she had decided that even though she had always loved buying clothes, she had come to the realization that she had ENOUGH clothes.  She determined she was not going to buy any new clothes for the next few years. Instead, she was going to enjoy what she already owned and re-discover items she'd completely forgotten about.  Here she was a couple of years into this plan, and looking very, very lovely indeed. 

I've thought of my friend often over the past couple of years and wondered if I have areas of my life where I have ENOUGH.  Can I cross those kinds of purchases off my list for a few years??  Maybe forever?  What about you?  Do you finally have enough shoes, sweaters, blouses, scarves, earrings, skirts, jeans, dishes, cars, houses, boats, tools, TVs, CDs, purses, sunglasses, pillows, fabric, whatever??

Unnecessary Expenses: Part 1 (Merrick)

During a vacation to visit my parents a few weeks ago, my mom and I got talking about frugal living – this blog has taken over our brains and allowed us to think of nothing else! As we discussed this topic, she mentioned hearing on the news a story about a young woman who had recently been offered a job at Las Vegas’ new City Center, and how this job had been a godsend since “she just didn’t know where the money for next month’s cable bill was going to come from." *

Do we, as spoiled people of the twenty-first century, have this same mentality? Are we stressing and stretching our financial limits in order to have luxuries that we’ve been brainwashed to think are necessities?

I think we’re all guilty of this at one time or another, thinking that we just can't live with out [insert item here], even though we don't really need it or can’t afford it. This mentality results in credit card debt, living above our means, and having no savings or emergency funds.

Over the next few posts I’ll be talking about some of these unnecessary expenses, how you can overcome the “I need it now!” mentality, and how (in many cases), there are much cheaper options that are just as good.


*not an exact quotation

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.

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!