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!

Decorating For The Holidays On A Budget (Merrick)

I love decorating for Christmas, but every year I struggle with our small space, the additional cost on top of gifts, and good ideas that aren't tacky.

Despite my past failed attempts, I was determined to come up with something good. So this year I turned to my new best friend, the dollar store. The store closest to me is The Dollar Tree, and they have an excellent selection of Christmas items -- all for only one dollar! So after a little inspiration from blogs, I made my way to the store and picked up a few fun things. Let me show you what I ended up with:

[three ornament packs, two Dollar Tree vases, one vase I already owned, ribbon from Christmas last year, serving platter I already owned]


[half a pack of ornaments, vase I already owned, candle I already owned, ribbon from last year]




[2 Dollar Tree vases, 1/2 a pack of DT ornaments, 2 packs of DT candy canes, ribbon from last year]

[old picture frame, free printable art from a blog]


[vase I already owned, berry branches from my front yard spray painted white and sprinkled with glitter]


I'm really happy with how these decorations turned out. They're classy and pretty, and best of all I spent less than $10 on everything. It is possible to decorating for the holidays without blowing your budget!

How are you saving on your holiday decorations this year?

Dave Ramsey Books, CDs, DVDs and Software on Sale for $10

This is a yearly $10 special Dave Ramsey runs.  I purchased a whole bunch of these as gifts last year.

Thought some of you might be interested!

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 Tell a Teenager About Money? (Carole)

A few weeks ago, I was asked to speak about money to the teenaged girls in our church congregation.  Thanks to all of you and your many good comments on this blog since January, I felt like I knew what kind of information would be most interesting and helpful to these girls who are just on the cusp of adulthood.

Here's what we discussed:

1.  Getting a job and saving 50% of what you earn while in your teens.  I also shared with them examples of impressive teenagers I've known through the years and the amounts of money they've been able to save in their bank accounts by the time they graduated from high school.

2.  The cost of tuition at local and out-of-state colleges and universities.  We even took a look at the cost of elite schools like Harvard and Stanford, just so they would know.

3.  Typical salaries of standard jobs:  surgeon, fire fighter, grocery store clerk, pilot, flight attendant, lawyer, school teacher. . .  and what the monthly take-home pay (after federal taxes) would be for each of these jobs.  So. . .is a college education really worth the time and money invested for your particular profession?

4.  How much adult life costs:  housing, groceries, transportation, utilities and insurance.  True to one of my previous examples of teaching children about money, I brought in $3,000 (which is a typical take home salary if you make $50,000/year -- the average salary in Las Vegas) in cash -- in $10 bills.  Together we paid the bills of a typical family in southern Nevada.  Much to their surprise, we ran out of money, long before we ran out of bills.  This was very eye-opening to this lovely group of girls.

5.  How compound interest works.  We walked through how compound interest works in your favor if you're saving money or investing, but how it works against you if you're paying off a loan or a credit card bill.  We also discussed how the length of the loan (or investment) and the interest rate influence your payment (or return) and the total you will pay (or earn) over the lifetime of the loan (or investment).

It was a fun night, and I felt like the girls were right with me.  But I'd love to know what YOU would have said to them?  What do you wish someone had told you at their age?

Automate Your Savings (Carole)

You've probably heard the oft-repeated phrase, "Pay Yourself First."  These just might be the most important words in the English language when it comes to your financial health.  If it's all you can do to pay the mortgage, utilities, groceries, car payment and insurance and you are not putting money aside in some kind of savings vehicle on a very regular basis, then you will never get ahead financially.

The only way to long term financial stability is to put money away somewhere for the future.  You can call this savings account whatever you want:  Emergency Fund, Rainy Day Money, Retirement. . .  Guaranteed the day will come when you will be glad it's there waiting.

If a personal savings plan (in addition to a 401k or IRA) is not part of your current budget and seems absolutely impossible, take heart.  Everyone feels this way!  It almost doesn't matter how much money you earn, you can easily spend it all.  We've all learned that if you make more money, then your bills automatically go up by at least that same amount.  I think it's one of Murphy's Laws.

To stem this tide, you need to set your personal savings plan like any other BILL THAT MUST BE PAID.  Pay yourself -- every month, or every paycheck.  My husband often tells of our first experience with this.  We decided (after being married for many years) to have $100 electronically removed from our checking account every month and put into a money market account.  We both almost hyperventilated after setting it up!  Could we really afford this???  Would we have to transfer it right back within seconds of having it taken out?  Maybe you feel those same fears.

But guess what?  The $100 came out the next month and we still paid all of our bills.  Whew.  And it happened again the next month and the next month.  It was magical.  And easy.  Unbelievably, we didn't really miss it.  Most budgets (even tight ones) have more wiggle room than you think.

After a few months, we sucked in our breath again and increased the amount to $200.  Same thing.  We didn't miss it.  But we did love watching that money market account grow bit by bit each month.  That gave us some serious endorphins to keep going.

After a year, we decided to really ramp things up and increased our auto-withdrawal amount to $1000!  Surely this would kill us.  But it didn't.  We survived and paid all our bills.

Start small.  But start.  I'm not saying you need to do the same amounts we did, but try something.  Call your bank or get online and set yourself up for an automatic withdrawal to some kind of safe savings vehicle (CD, money market, savings account. . .) and watch your stress level go down as your personal savings goes up.

This is what's called "Getting Ahead."

Eating On a Dollar A Day (Carole & Janssen)

I'm out in Boston with Janssen and her sweet new baby.  Plus her little family is days away from a move across the country.  We're a bit busy, to say the least!  So, rather than writing a post today, we're sharing a very interesting Time Magazine article, and the accompanying  blog, about 2 people who are feeding themselves on $1 per day.  Maybe a bit extreme, but it will get you thinking about your own food budget in a whole new way!

You'll quickly notice that they eat vegan.  

Time Magazine Article
http://www.dollaradaybook.com/blog 


Hope you're having a happy, happy day!!

Setting Financial Goals (Carole)

Anyone who knows anything about my husband knows that he is a goal setter.  I'm not sure how old he was when he set his first goal, but by the time I met him when he was 23, it was deeply entrenched in his soul.  In fact, when we were on our honeymoon back in the summer of 1983, he insisted that we take the time to write down our life goals.  These goals dealt with education, career, lifestyle, finances, travel, life experiences and habits to name a few.  We still have the original papers we wrote these down on in our Goals Binder that is kept at his desk at home.  We bring these sheets back out at least once a year and review how we're doing.  I'm frankly flabbergasted at how many of these goals we have achieved over the past 27 years!  We continue to set goals every year (both as a couple and individually), but we especially enjoy looking back at those original goals.  A few of them didn't turn out to be realistic or even relevant, but many of them were right on track.

You'll not be surprised that paying off our student loans in five years, paying off our house early and a set $ amount saved for our retirement years were a major portion of what we talked about that day.  In 1983, David was just about to begin his 2nd year of dental school and we were right in the middle of the whole student loan thing.  The idea of even buying a house was still years in the future and retirement seemed light years away.  But even so, we tried to make our best guess for
1.  How many years until we would be able to buy a house?
2.  What would a dental practice cost?
3.  How many years would it take to pay off our student loans?
4.  How much money will we need to retire in 2030?
This was an exciting discussion!  Our entire lives were ahead of us.

Now 27 years later (our anniversary is 2 weeks away) we've accomplished MANY of these goals -- and amazingly close to the dates we chose way back then.

I would highly recommend that you take time to think your life-time finances through, map out a plan and write it down.  I would encourage you mix in a hefty dose of Blue Sky with your Reality.  You really need both.  I think goals should move you forward at a speed (and maybe in a direction) that normal life would not.  If this were not true, why bother?   It's nice to be able to look back every year at a written goal sheet and be reminded of what you had hoped for when you were young and idealistic.  Maybe you'll discover you're ahead of the game in a few areas and possibly you'll be grateful for a nudge to get moving forward again.

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  

The Not So Big House (Carole)

I am a house-lover.  Just ask my girls how many model homes I dragged them to when they were growing up, or how many decorating books and magazines I've purchased over the years. I currently subscribe to several decorating/organizing type magazines and usually read them cover to cover every month.  I have several notebooks filled with idea clippings I've saved over the years, just in case I have a chance to start a new project in my own house.  It delights me to see how many blogs out there are devoted to making the most of one's house.  All these young women, just starting out in life, fixing up their homes and apartments and sharing their fun ideas and successes with the whole cyber universe.  I love to see the colors people use, the furniture arrangements people come up with, and some very clever renovations -- I love it all!  We do not have cable TV in our house, but if we did I'm sure I'd be glued to the home design and decorating shows all day long (hence, we do not have cable).


Out of all the thousands of articles and books I've read about homes over my 26 years of marriage, the one book that has had the most impact on my thoughts is The Not So Big House by Sarah Susanka.  It is one of my favorite reads about making a house a home.  I discovered it soon after it was published back in the late 1990's and have followed its concepts ever since.  I think its ideas fall right into line with a frugal lifestyle!

This book is all about LOVING your house.  But Ms. Susanka approaches this subject from a unique angle -- although there have been many copycats since her book came out.  She is an architect and discovered over the years as she worked with hundreds of clients, that people are most comfortable and content in cozy, small-ish spaces.  She tells of a large and grand home built by some friends of hers.  This mini-mansion was specifically planned with a super-duper LARGE living room and dining room to someday host their daughter's wedding reception.  However, when that festive event finally arrived a few years later, they found that all 100 of the guests gathered in the kitchen to visit and eat and left the grand, showy rooms nearly empty!  I bet you've attended a few parties just like this!  People like to be in rooms that contain your life and that have a warm, welcoming feel to them -- and this includes you functioning in your own home.

The title of this book might lead you to believe that it deals with reducing your carbon footprint (and there is a bit of that), but that's not her real message.  Her message is about making wise choices in your home that will greatly enhance the pleasure, comfort and convenience you find there.  This book (and her subsequent 8 books on related subjects) advocates keeping your square footage to a reasonable amount (4,000 square feet or less) and better using your financial resources  to create lovely areas that add character, personality and storage to your home.  She highly recommends adding architectural details (moulding, railings, stone. . .) to bring charm and real beauty to your rooms, rather than just wanting
big, big, big spaces that end up feeling cool and/or bland.  She recommends noticing the view from one room to the next (lining up doors properly -- if you were building a house, having complimentary color schemes, etc) that entices you to enter another warm and welcoming room and that brings a feeling of harmony throughout your home.

Her ideas are simple but thought-provoking and help you understand how to get the most pleasure for your housing dollar.  I hope you'll seek her books out at the local library and find your own inspiration on how to create the house of your dreams.

Your New Part-Time Job (Carole)

Are you getting bogged down with trying to save money on EVERYTHING??  Does it sometimes feel like a THANKLESS job?

If your answer was "yes" to either of those questions, here's an idea for you.  Try thinking of your frugal ways as a very small, part-time job.  Keep a tally sheet on the fridge, or in your smart phone of your savings.  I don't think it's worth your time to track every single penny you earn, but the general numbers of your penny pinching is nice to know.

There are a couple of methods for tracking your savings.

1.  You can go back into your own financial records a few months (or years) and see how much you USED to spend on certain items like food, eating out, gasoline, car payments, rent, and clothing.  List these numbers on your chart and see how far below them you are keeping your current spending during the month.

2.  Or you can look up on-line to see how much the average American family that is the same size as yours spends in these same categories (i.e.  average monthly food budget for a family of 4 in the the US is $600).  Track your spending compared to these averages and see how much you can save.

Any money you've saved is your "earnings" on this new part-time job you've started.   Being able to see total dollars saved in a month is a big boost to your confidence that you are making a difference for you family and your commitment to keep it up!

When you think of yourself saving a couple of hundred dollars (or more) on all your combined purchases in a month, suddenly taking the time to clip coupons or drive to Sam's Club or wash your own car begins to look like a good use of our time.  Most of the ways we save money don't really take that much time, but they do take some and that time is definitely worth the money!

Turns out Ben Franklin was right, "A penny saved is a penny earned."

I'd love to hear any numbers you'd like to share!  We're all in this together. . .

May I mention also, what TERRIFIC ideas our readers share in the comments!  If you don't read that part of the blog, you should!  We've got the smartest group of readers out there.  You inspire me every day!

Saving for Both Short and Long Term Goals (Carole)

Melanie, a faithful FWWL reader, asked about saving for both Long Term and Short Term goals at the same time.  Haven't we all been there?  If you sit down and think of all the things you really should/want to save money for, it will probably be a mighty long list.  Where do you start?   Most people don't have the personal discipline to prioritize their wants and needs, so they just buy everything on credit the moment they want it and soon find themselves in deep financial trouble.

There is a better way and it works every time.

First -- Write your list.  Take a couple of days or weeks to work on it, as it often takes some time for all your past ideas to come to the surface.  Take this time to decide what you REALLY want and need.

Second -- Divide your list into both Long Term and Short Term financial goals.
Long Term Goals might include:
Emergency fund (3 - 6 months of take-home pay saved in cash -- this money is used to cover unexpected car repairs, household repairs, major medical expenses, and possible unemployment),
A down payment on a house,
A new car paid for with cash.
Some of these long term goals aren't that exciting, but they will bring stability and safety to your future financial life.  Definitely worth the effort.

Short Term Goals might include:
A new piece of furniture,
Re-carpeting a room,
A vacation.
Remember financial goals are about both wants AND needs.

Third -- Now comes the hard part.  Prioritize your Long Term Goals.  1, 2, 3. . .  Same with your Short Term Goals.

You will quickly see that you cannot possibly save toward all of these at the same time, unless you have a great deal of extra money sitting around.  My husband refers to this as trying to "ride your horse off in all directions at once."  (He's said this to me many times over the years).  If you try to spread your savings money too thinly, you will make very little progress on anything and will quickly get discouraged.

I suggest that you choose #1 from your Long Term list and #1 from your Short Term list and save for only those two.  Decide how much money each of these goals needs to bring them to fruition.  Then look to see how much money you can reasonably put toward each goal every month.  Make yourself a chart (I LOVE CHARTS!) with completion dates.  Tape the charts up somewhere you'll see them every day, so that you will keep these goals in the front of your mind.  Take it from someone who has saved for dozens and dozens of things over the years -- the first few months of saving pass very, very slowly.  But before you know it, it's been 6 months and your saved $ amounts begin to look pretty substantial.  Those big numbers are highly motivating to keep moving forward!  I've been saving up for a set of custom doors leading from my dining room to my kitchen for quite some time and just passed the $5,000 mark (these are expensive doors) and it feels GOOD.  I'm ordering them soon!

The Short Term Goal will probably max out within only a few months and you can go buy whatever fabulous thing it was you wanted to get -- with cash!  Celebrate not only by making your purchase, but also write across your chart in big red marker "SUCCESS!" and begin wallpapering your bathroom with these as you achieve each one OR fold up the chart and place it in your journal for future motivation.  Then move onto Short Term Goal #2.  You may find that some of your short term goals (possibly items #4 and below) begin to look a lot less interesting as time goes on.  You'll be glad you didn't impulsively buy these items on credit and now 18 months later you're still paying for things that aren't important to you anymore.  Delaying a purchase often causes your rational thinking to take control again or for you to  simply change your mind.  The VISA people hate that.

Your Long Term Goal may take you a few years to accomplish, but you'll get there too!  It may seem like a slow process at times, but there is absolutely no other way to achieve your long term financial goals.  This is where you see the value of keeping your monthly fixed expenses low.  The more expensive your daily life is, the harder it is to save for your future or any extra lovely things.

By following this technique you will join that rare breed of people who save money to protect their futures and pay cash when they buy something substantial!  Let me be the first to say it, "YOU are amazing!"

Monthly Expenses (Janssen)

One way we keep our overall spending down is by being very careful about adding monthly payments to our budget. In some categories, of course, you simply cannot avoid paying every single month (I think we’d mostly agree that running water isn’t really a bill we’re willing to forgo). But in general, I try to avoid committing to paying a bill every single month unless I really have to.

When you have a lot of bills you are required to pay every single month, the income you have at your disposal to pay down debts, build up savings, or fund vacations diminishes.

Worse, I’ve found that once you begin paying something every single month, you start to feel that it’s an absolute necessity, something you could never cut from your life. For me, at this point, it’s almost inconceivable to imagine not having high-speed internet at home or a cell phone.

A few years ago, Bart really wanted to get a smartphone. But not only was the cost for the phone more than I wanted to spend (I have always gone with the free phone because, really, I’m not doing anything more than making a few phone calls and sending some text messages), the cost of the plan would have increased our current cell phone bill three fold. This . . . did not really appeal to me. We finally agreed to stick with our cheap plans and free phones, and in the last two and a half years, I’ve been grateful every month for our relatively low bill.

Netflix is the same way for me – I just don’t want to be committed to paying every single month for it. I don’t want to own so many things that I need a storage unit (and its accompanying monthly fee) to hold it all.

By keeping monthly financial commitments to a minimum, we can better control our spending and increase our ability to save money and pay off our student loans at an accelerated rate. Because I don’t want to have a monthly bill for those loans either.

Simple Budgeting Plan (Carole)

I like to read books about money.  You too?  Right now I'm reading a brand new book called Your Money:  The Missing Manual by J. D. Roth.  I've just recently discovered Mr. Roth, but it turns out he is a long-time blogger at Get Rich Slowly.  Check it out.  You'll find he has tons of good ideas and stories.

However, back to the budgeting plan. . . in J.D. Roth's very readable book he tells of a very simple budgeting plan proposed in another book, All Your Worth by Elizabeth Warren and Amelia Tyagi (I haven't read All Your Worth yet -- but I plan to).  These two authors recommend dividing your take-home money into 3 simple categories.

1.  50% of your money for needs:  housing, food, transportation, insurance, basic wardrobe. . . (this is where some hacking and slashing may be needed -- a very worthy endeavor)

2.  30% of your money for wants:  eating out, extra clothes, books, cable TV, hobbies, travel. . .

3.  20% of your money for savings (this should be used for paying off debt if that is where you are on your financial journey)

(For those of us who pay a tithe to our church, I would suggest dividing your money into these 3 percentage categories AFTER you've paid tithing -- otherwise you'll get all goofed up.)

This balanced plan (as they describe it) lets you have fun (30% of your take-home pay is A LOT of fun!) while living within your means AND paying off debt or saving for your future.  If you've struggled to live on a budget, give this really good method a try.  Let me know if it helps!

Naming Your Accounts (Janssen)

Dave Ramsey likes to say, when talking about budgeting, "Tell your money where to go." We try to make this happen in our family budget, but sometimes it's difficult when money is being saved up for various future expenditures (say, a twice-yearly bill or a vacation or a large purchase) instead of being spent by the end of the month.

To combat this slushfund approach, where your money being saved for various expenses is all mixing together, untitled, in your checking account, Bart and I have a whole host of savings accounts. We use ING Direct and it's incredibly easy (and free) to open as many savings accounts as you'd like. You can name them whatever you choose and there is no fee to transfer money between various accounts.

For instance, we currently have an account called "Student Loans." When we get extra money or deposit a check, we put that money directly into the Student Loan fund, where it sits for a week or two until our next paycheck and then we pay the total amount toward our student loans. There's no temptation to accidentally spend the $85 check we'd said was for the student loans, because it's not in our checking account.

Likewise, our fifth anniversary is coming up this summer, and we wanted to do something great. About a year ago, we opened an account called "5th Anniversary" and started putting money towards it. All our graduation gift money went into that account and when plane tickets went on sale earlier this year, the money was right there ready to be spend (and to help us determine how much we could afford). The money hadn't been washed away in electric bills or fast food or an impulse pair of shoes.

Putting a name on our money, having it in a dedicated, specific location, makes budgeting and saving considerably easier for us.

Any one else use multiple accounts this way?

Teaching Your Children About Money #1 (Carole)

When I was in college, I took an education class from a professor who always had a hands-on method of getting his point across.  One of the many great lessons he shared with us was a powerful way to help your children understand the value of money and how it works within your own family.

He suggested that one month, instead of depositing your paycheck in your account, you cash the whole thing into $20 bills.  (You may need to hire yourself some security for the evening. . .)  Bring all that cash home and stack it on the living room floor.  Sit your kids down on the carpet (enjoy watching their eyes bug out) and explain that this is ALL the money your family has to buy things with during the coming month.  They will be very impressed with your piles of cash at this point!

Then bring out a poster with the monthly family expenses listed in a large font.  Have them count out the bills to "pay" the bills  -- mortgage, grocery bill, electricity, water, sewer, insurance, gasoline, car insurance, piano lessons, etc.  They will watch those stacks of green backs disappear just like you do every month.  When you've paid all the bills, let them count up how much money is left.  This just might be the most sobering moment of their young lives, and will help them understand why the $80 tennis shoes or $150 jeans they want might not be in the best interest of the entire family.

If you are uncomfortable using real money, try using Monopoly money or cutting up green paper and writing $20 on each one.  But, as you can imagine, it would be much more effective using the real thing.

I

A Peek at the Promised Land (Carole)

A few weeks ago, Tara commented that she didn't see the point in being frugal, frugal, frugal just so she could be a millionaire when she and her husband are 80!  What is the fun in that??  Maybe some of you have had the same thoughts as you've thought about coupon-ing, garage sale-ing, eating at home. . .   Hopefully, I can give you a glimpse at where this whole Frugal Life thing is really headed.

If you have credit card debt, car loans and/or student loans, most people (when you finally get very serious about it) can pay all of it off within 3 years.  We have never carried credit card debt, but we've had a few car loans and we had over $60,000 in student loans back in the 1980's -- so about $130,000 in today's money.   We paid minimum payments for a number of years, and then we got religion.  We paid off our car in about 8 months and our student loans in about 2 years.  So we paid off all our consumer debt in right around that 3 year mark.  We weren't making tons of money and we had 3 children.  We were extremely average.  You could probably pay things off faster than we did.

Our next step was paying off our house.  We knew a couple of families our own age (early 30's) who had paid off their houses.  We were AMAZED.  Could we do that too??  How long would something like that take?  We owed about $160,000 on our house at the time.  As a little family we confronted this monumental financial goal with everything we had.  We printed out an amortization schedule (numerous pages of small type -- very scary), and taped it ALL to the back of the door where the bills were paid in our house.  Every month when we paid our regular house payment, we also added as much extra $$ as we could scrape out of our home budget and sent that along to the mortgage company too -- that extra money goes straight to the principle.   We often gathered our 3 girls into the room while we marked off  the payment amount with a highlighter pen and circled all the skipped interest payments that NEVER HAS TO BE PAID-- EVER!!  Did we starve through this time?  Live on nothing?  Never leave the house?  No, we actually took a few pretty decent vacations along the way and fed and clothed everyone.  Probably saw a few movies too.  But we stuck to our house payback schedule.  We threw everything we could at this debt and in 3+ years we received our title, free and clear, in the mail.  That is a moment never to be forgotten.

We paid that house off in 1996.  In 2003 I wanted a bigger house (we had more children, the older ones were larger, and we wanted to live in a better school district).  We found the house we wanted and went back into a $100,000 mortgage (we were able to pay for MOST of the house with cold, hard cash from the sale of our first house -- that felt very, very nice).  We paid off this new mortgage in about 2 years.  I thought I would mention here that both times we got down to the last $30,000 on our mortgage, extra money just started appearing.  I can't even explain it.  It's like the Lord knows you are serious about taking care of your family and your finances, so He blesses you beyond anything you've ever seen.  The last $30,000 was paid off about 5 months earlier than scheduled -- both times.  When you get to that point, let me know if this happens to you too!

So, when you've paid off all of your debt -- in under 5 years probably -- how does life look?  It is an amazing place to be.  Think of the amount of money you bring home every month in your paycheck.  Now think of how much it would cost you to live with no major bills.  No credit card payments, no car loans, no student loans, no house payment.  Can you even wrap your mind around that?

You still have to buy food, electricity, gasoline, car insurance, clothes, property taxes.  That's about it.  Hmm.  How much would that add up to in a month?  Not very much.  All the rest of your take home pay is YOURS.  Wow.

What will you do with it?

Saving is a big thing.  Putting as much money as you can into tax-free or tax-deferred programs is very smart.

Beyond that, you can spend it on anything you want.  You could buy a new car with cash  -- every few months!  You could buy a brand new boat in cash, also in just a few months.  You could redecorate your entire house.  Put in a backyard pool.  You can be generous beyond anything you can imagine.  Travel to Europe, Asia, Africa -- every few months.  All for cash.

You will finally be free.  All the hard work you (or your spouse) puts in to bring home money, will finally benefit YOU.  All in about 5 years.

Enjoy.

One Reason I Budget (Janssen)

I know I'm a huge money nerd, but even I don't particularly enjoy budgeting. But I do love it that budgeting OFTEN saves me money that I would have spent completely by accident.

In November, we got new phones, sent in our rebates and ended up getting them for free. All was well. Until in February, when Bart opened up Mint.com to go over our monthly expenses and saw that our phone bill was $20.00 over the budgeted amount. What in the world?

We pulled up the bill and saw that for some reason our phones were connecting to the internet and we were getting charged for it. Since we weren't USING the internet, we weren't very interested in paying for it and we particulalry didn't like the idea that our phones were automatically connecting any time they got jostled or dropped (which, in my current pregnant condition, is an embarassing amount).

I pulled up the last three months of the phone bill and realized we'd been charged a few dollars in the months before for the same thing. I tallied it up to come up with an exact number ($31.28) and called Sprint.

I was on the phone about seven minutes, in which time I got through to an actual person, explained my problem, she credited my account $32 (yes! I MADE money), and switched off the phones' ability to connect to the internet so we wouldn't have the same problem again.

I know $32 is not huge money. But we could go out to dinner instead. We could pay for a big portion of the week's groceries. I could buy two pairs of shoes. It took Bart about 30 seconds to spot the problem and about ten minutes total for me to get the money back. I figure that meant I was making around $190 an hour - let me tell you, my time is certainly not too valuable for that kind of money!

I can't tell you how many errors I've caught because of careful records and good budgeting (most notably the time the bank sent us payment coupons for an $8,500 student loan we didn't actually take out, but that required more than ten minutes and thirty seconds to resolve). It's money we would have paid completely by mistake or by accident if we hadn't been paying attention.

Budgeting helps you catch mistakes or problems that are costing you money you could spend elsewhere, on something you'll enjoy far more than you'll even enjoy accidentally paying for internet access you didn't know you were using. And that's more than enough to motivate me.

Save Money By Cooking like the Kennedys! (Carole)

Years ago I read, that Rose Kennedy (mother of JFK, RFK and recently deceased Teddy) served the same seven meals every week.   Since the Kennedy clan has been in the multi-multi-millionaire category since the 1930’s, I’m confident that Rose was not actually in the kitchen with an apron on, whipping up these nightly meals.  But, however these meals were prepared, the message is that she had a limited list of dinner main dishes that kept life simple.

Like your family, mine would probably revolt if I only served 7 meals – over and over and over again.  So I’ve increased mine to 37.  There’s nothing magical about that number, it’s just what I came up with about 10 years ago.  I sat down one day and listed all the decently easy-to-make main dishes my family liked.   I can hardly express how much this little list has helped me over the years.

I am not an amazing cook, nor do I love to cook.  However, since it is so much cheaper and healthier to eat at home than it is to eat out, I have cooked most of the meals in our house for the past 26+ years.  And I have found it is much easier to deal with dinner time if I am extremely familiar with the main dish recipe I’m cooking -- I've also found that my family eats more of the meal if I serve a dish they recognize. 

My list of 37 main dishes are all family favorites.  About once a year I update it – whacking out anything  I’m tired of making (or have ceased to be favorites) and adding in the occasional new recipe that I’ve tried and everyone found tasty.  So, it is a list that continues to evolve.

I keep this list as a Word document on my computer (for easy updating) and print it out.  I then tape the list to the inside of one of my kitchen cupboards for easy reference.  It is titled “Main Dishes that David Likes.”   Since he and I have very different palates, I also use this list as a reminder of what he will enjoy eating (mild and creamy) – versus what I might enjoy (hot and spicy).  I’ve highlighted the REALLY EASY meals on the list, so that in a time or ingredient pinch, I can remember what makes a good meal without taking either too much time or having to run to the grocery store for a special ingredient.  I also have all the crock pot recipes grouped together.  

Having a list like this saves me a huge amount of time and effort when planning my weekly menu – no more digging through piles of cookbooks, recipe cards or websites for ideas of what to serve.   Some of these 37 recipes don’t get made more than a couple of times a year (Manicotti).  While other recipes are made every couple of weeks (Quiche).  It just depends on what sounds good to me at the time. 

This simple list also helps me when I’m at the grocery store or looking through the store’s weekly sale flier.  Because my menu is pretty standard month to month, I know what ingredients I traditionally need, so when I see them on sale I can stock up (saving lots of money).   It also keeps me from having to buy some odd ingredient and then having it sit in the back of the fridge until I throw it away (wasting lots of money). 

I’ll share my list with you and maybe it will get you thinking of your own family favorites.  Feel like sharing your favorite go-to meal ideas??  We'd love to hear them!!

1. Chicken Bacon Wrap - crock pot
2. Pot Roast - crock pot
3. Beef Stroganoff - crock pot
4. Chicken a la King - crock pot
5. Stew - crock pot
6. Beef Dip Sandwiches - crock pot
7. BBQ Spareribs - crock pot
8. Taco soup - crock pot 
9. Quiche
10. Pork Loin Roast 
11. Pepperoni Alfredo
12. Salmon
13. Tuna over Rice
14. Mini Pizza
15. Ham and Baked Corn
16. Breakfast for dinner (waffles, pancakes, eggs and toast)
17. Tacos
18. Hamburgers
19. Baked Chicken
20. Fried Chicken
21. Baked Pork Chops
22. Chicken Packets
23. Potato Soup
24. Tuna and Pasta casserole
25. Italian Pastry Bake
26. Shepard’s Pie
27. Manicotti
28. Chili and Corn Bread
29. Enchiladas
30. Chicken Pot Pie
31. Crepes and Fruit Smoothies
32. Stuffed Baked Potatoes
33. Grandma Henrie’s Meatballs over rice
34. Peanut Butter Chicken Soup 
35. Chicken Salad
36. Ranch Chicken
37. Chicken Divan 

Save Big Money When Buying a House - Part 2 (Carole)

Once you have your personal mortgage payment (24% or your monthly take-home pay) number in hand, it is time to go looking for a house.  Here are a few ways to buy a house for less:

1. Buy a foreclosure.  In today’s sad housing market there are some amazing deals to be made on beautiful homes that are being foreclosed on.  Foreclosures happen every day in every state.  However, right now, there are thousands (if not millions) of homes in foreclosure (take a peek at HUD homes too -- they are merely foreclosed homes that had an FHA loan).  The previous owner could no longer afford the monthly payment and the bank has had to take ownership of the house back.  In a foreclosure you buy the house from the bank.  The bank does not want to own the house and they are often willing to sell it at a substantial discount in order to  get it back into a mortgage where they can make money off the interest again.

2. Buy a Short Sale.   A short sale is similar to a foreclosure, except that the owner still technically owns the house but is behind on their payments and will soon go into foreclosure unless they sell it.  The delinquent owner is trying to convince the bank to let them sell the house to a new owner for less than they paid for it and have the bank eat the difference between  the old loan and the new loan – rather than the owner still owing that money to the bank (BEWARE: the seller will be taxed on the "forgiven" part of their home loan -- that can be extremely expensive.  Doing a short sale also goes on your credit report).  It is a horrible thing to be a seller in this category, but the new owner gets a great deal – sometimes saving 50% on the house. 

3. Buy a modest home in a great neighborhood.  Remember the old real estate saying:  Location, Location, Location.  This is ALWAYS TRUE.  The value of your house is always going to be tied very tightly to where your house sits.  If you have a modest home, but it sits in a beautifully cared for, desirable neighborhood, it will be worth more than if you have a gorgeous home in a declining neighborhood or next to a gas station or freeway.  Be very aware of what surrounds the house you buy.   Good neighborhoods tend to see their home values increase over time and your demure home will climb right along with it – at a much faster and higher rate then a great home in a medium or declining neighborhood.

4. Buy a fixer-upper.  If you buy that modest home in a good neighborhood AND it needs some work – you are getting a home run.  (As long as the work to be done is not too extensive.)  I’ve known many, many people who have moved into a house that had a nice location, but it needed some new paint colors, some lawn care and maybe a few new roof tiles.  The price for a house with these kinds of problems goes WAY down – often tens of thousands of dollars.  Old kitchens and bathrooms especially drive a house price down like nothing else -- remember this tip when you're selling yours.  If you’re willing to put in a bit of elbow grease, you can really get a  nice home at a cheap price and turn it into your dream house.

5. Stay put:  Another way to save big money on a house is to stay put.  Buy a house that meets your needs and live in it for 50 years.  The house will appreciate around you.  Even in a less than desirable neighborhood.  Buy something modest and make it work.  Those children who need so much space when they’re teens, move out sooner than you’d guess.  Before you know it you’ve got an empty nest.  Might as well let them share bedrooms and bathrooms for a few years (it builds character!) and not end up with the mega-house to heat and clean after they’ve all move out. Inflation will work in your favor as long as you are not constantly restarting your 15 or 30 year mortgage by moving.  One of our older relatives bought a home back in the 1930’s for about $12,000.  His daughters sold it when he passed away in the 1990’s for over $400,000.  Real estate – over enough time – does go up.

6. Have a long-term plan:  I have a good friend who has owned 4 homes in the nearly 20  years I’ve known her.  They have lived the last 8 years in a FABULOUS home in one of the very exclusive guard-gated neighborhoods in our area.  From what I hear, their house is paid for.  But they had a plan – all those years ago on how to get there.  House One: When their oldest child was very small, they purchased a HUD home.  Take a look at the last link for the rules on buying a HUD home.  It was a small home in a medium-level neighborhood.  But they paid pennies on the dollar of what it was worth.  They redid some tile, painted it inside and out and fixed up the yard and sold it 3 years later for tens of thousands of dollars more than they bought it for.  House Two:  They found a builders close-out house in a brand new neighborhood that was being sold $25,000 below the cost of other similar homes, because  it was the last one of its kind and the builder just needed to sell it.  They put in a nice yard, and kept it in good shape and 3 years later they sold it for tens of thousands of dollars more than they paid for it. Are you seeing a pattern??  House Three:  They built house #3 and the husband acted as general contractor (saving tens of thousands of dollars).  He used every connection he had among builders, carpet sellers and such to keep his cost very low.  This house was in a guard-gated community near the airport.  So, even though it was in an upscale neighborhood, the noisy location kept the lot prices low.  This was a beautiful home with many designer amenities, but all installed following a strict budget.  They lived in this house for about 5 years – and you guessed it, made a killing when they sold it.  House Four (current home):  Again they built this home and acted as their own contractors.  This house is massive and spectacular.  And paid for.  All because they had a plan and were willing to put in some work to get there.