Base $250k
Housing Allowance (rent) $11.5k = $138k/year
Private school for Child
Maid
Home Equity Allowance (to buy a home)
Pension
Lifestyle Allowance
= $500-600k/year

Wow, that’s quite a haul.  Don’t get me wrong, part of it is definitely due to the fact that the guy is living in NYC.  It’s expensive to live there!  But it’s pretty generous to get a $140k/year to “rent” a home + maid + savings to eventually buy a home.

Obviously his salary and compensation is coming from the church tithes. Is this what the church tithes were meant to be used for?  It’s probably a very rich church so they can afford to pay the pastor well.  But should there be a limit on what a pastor makes?  Or is he like  CEO and should be compensated in the same fashion?

Should the collected tithe be used to run the church on a minimal budget and the rest be given out to do community works?  Or spread the ministry?  I discussed this with my roommate, the Sunday School Principal of his church, and he said that it sounded pretty outrageous.  We live in a HCOLA but his pastor makes substantially less.  The collected tithe in their church goes to people on missions and rebuilding communities in the middle east.  He also said it’s okay for people to come to church and give nothing.  There is no expectations.

I wonder if we weren’t required to tithe, what would the salaries be of the pastor’s?  Do you know what your pastor makes?

If it were $10k?  I think I still might spend 10% on fun stuff, but the $9k would likely go into a retirement savings account.  I’d probably consider myself very fortunate and happy.  It would make my life a little brighter but it certainly wouldn’t change my life.

If I were to come into $100k?  Well now we’re talking of a bit more of an impact on my life.  I don’t think I would necessarily spend $10k on fun.  Instead I would probably take that 10% and determine if my house needed any necessary repairs or if my car might need replacing in the next couple of years.  I would take that $10k and earmark it for either home repair or car replacement.  The other $90k?  I would invest it 90% stocks/10% bonds with the intention of using it for retirement.  This amount of money would definitely change my retirement planning and investment strategy.  I would know that I can be more aggressive investing for a chance at earlier retirement.

If I came into $1 million or more?  Well I’d probably do nothing for 6 months.  I would just park it into a few different saving accounts so it’s FDIC insured and start looking for professional help.  If it were $1 million I probably couldn’t quit my job and retire but if it were $10 million?  I probably could and consider starting my own business.  I would probably conservatively invest it 70% stocks and 30% bonds.  I might also consider paying off my mortgage and debts, again depending on the amount I inherited. I might also consider setting up college funds for my kids.

The main thing I wouldn’t do is immediately invest or spend the money. I would definitely take at least 3-6 months to think about my life and the money.

What would you do if you accidentally came into $1k, $10k, $100k, and $1 million?

So why isn’t it frugal?  Well we had to pay $50 to rent a rototiller and till our backyard.  Do you know how many vegetables we’ll need to grow and eat to make that back?  Not to mention buying a rake, soil, seeds/plants, and possibly putting in a sprinkler system?  Those are just the easily measurable costs.

What’s not measurable is the hours of backbreaking labor we’ve spent weeding the yard, composting, raking, gardening, etc.  Yes we’re not hourly workers so at least we’re not losing income.  But for a fraction of the cost we could just buy our herbs and veggies from the store, even the organic versions.

Yet it’s great exercise and we’re having fun.  I guess that’s the biggest reasons we’re doing it.  That and by putting in grass we’re able to enjoy the backyard finally.  Our dogs will have a little area to run around and play and we can sit outside finally and relax.  I guess I see it as paying for some cheap, healthy hobby.  I love the warmth of the sun.

Do you have a garden?  Is it really a frugal investment? Or is it just a fun hobby?

Amount in checking, write in all checks cleared, and then see balance.  This was to prevent me from spending money we didn’t have.  The realization that just because a check hasn’t cleared doesn’t mean it shouldn’t be accounted for.  And just because you have $x of dollars, doesn’t mean you should be preplanning to pay $x for mortgage, utilities, etc.

So what happened?

Well I got lazy.  Truth is that I write maybe one check a month.  I withdraw $80/month in cash near the first for our allowances of eating out lunch.  Everything else we charge.  So I have one credit card bill at the end of the month to pay in full.

I don’t have any auto-debits on my checking account, but I do have autopayment of our cell phone and cable bills to my credit card.  On the first of every month I pay all our bills.  I pay utilities, mortgage, HOA, property taxes, and all credit card bills.  Everything is early and we work mostly a month ahead.

But it’s a habit from being paid once a month.  It’s easier to just pay your bills and let the next month’s salary build up to pay next month’s bills.  Thus I don’t track any checks or payments after the 1st.  On the first, I know I have to pay $X and I should have enough in my checking.

Thus I stopped tracking my bills.  The only bill I pay by check are my doctor who doesn’t take credit cards.  I have a check cut from my account for my HOA, property taxes, and utilities saving me a stamp since the bank pays for those checks to be mailed.

So I have honestly stopped budgeting my checking account.  I do budget and track my expenses. I see if we’re on track for the month using an excel spreadsheet.  I preplan all known expenses a year out.  But I find it unnecessary to balance my checkbook anymore.

Do you?

We did a lot of spending this month however. We paid around $1500 for our cars 90k service and repairs. $500 for necessary dental work, I had a crown replaced. $100 tuning up my bike for riding. $200 on musical tickets, and $200 on our backyard. What a month. But I think that was our budgeted spending for the cars for the year, $200/month repairs and maybe one more oil change and possibly new tires later in the year.

I’ve found I budget approximately the right amount, but we always end up spending it in one go. So I have to “pay” myself back.

Trust me I’ve wondered about that as well.  And yep it’s envy talking.  Thinking about all the freebies people seem to get, the $500/month foodstamps, etc.  But here’s the lowdown truth.  Between my mom and my best friends mom who both helped people get welfare in different ways, it sucks to be on welfare.

One of the reasons is that it’s demeaning.  It’s also tiresome.  People make the assumption that it’s easy to live off government dole.  I don’t think it is. I think that it’s really not that nice a lifestyle.  I mean it’s nice because you don’t have to work.  But it’s not like you get the luxuries in life the rest of us really enjoy.  I doubt they go to the movies or have cable necessarily.  But I could be wrong.

I don’t want to have to be living on a shoestring personally.  Only being able to live in Section 8 housing areas.  Not being able to afford a car or choose my own food. I’ll have a budget determined by someone else.  There are lot of restrictions imposed.

Would you want to go to a laundromat?  Or ride a bus?  Or shop only for clothes at a thrift shop?  Also the doctors you can visit is limited because not all doctors take medicare.  So you’re stuck with doctors who accept medicare.  Nor can you afford better.

Is being on government dole really all it’s cracked up to be?

I say it depends.  Mostly it depends on where you are getting the 0% financing from.  I’ve read suggestions about asking for a cash discount.  That people are able to get 5-10% just by asking.  In my experience that hasn’t happened.

First off I asked my dentist for a discount if I paid cash for my share of my crown replacement.  His office manager said if I didn’t have insurance we could work out a deal. But since I had a pre-negotiated rate with my insurance it would not be ethical to get a discount after the insurance company paid 60% of the cost.  So I understood.  But I was offered 0% financing for 1 year.  I turned it down because it was $475 and not worth the effort.  But I believe that if I had needed to get a lot of work done, say $2k, the 0% financing might have been worth it.  And in this case there was no discount for paying in cash.

Second, I bought a washer/dryer set from Best Buy.  We knew we were moving 6 months beforehand, so I began watching the price of the set I wanted.  I kept a price book to track the cycle.  Eventually right before we moved in the lowest price hit and an offer of 2 years @ 0% interest financing.  We took the deal.  I did ask for a cash discount, and was told by the assistant manager, Best Buy does not negotiate as a national chain.  They might negotiate on a damaged appliance but there were none for me to buy.  So we went with the 0% financing for 2 years.

In both cases the 0% financing might have been worth it.  I’m still looking for a place that will give me a cash discount.  I always ask because we always have the cash.  But maybe because we live in a HCOLA they don’t do deals.  Maybe because we shop at mostly chain stores like Best Buy, Costco, IKEA, Macys.  We haven’t hit the mom and pops for items like a tv, sofa, etc.  I don’t know.

Have you ever done 0% financing?  If so from where?  And have you ever gotten a cash discount?  If so from where?  Have you ever gotten a cash discount specifically from a national chain store?  I’d really love to know.

Well in joint budgeting, I am going to explain how I do it.  We both spend money on a credit card.  I pay off the credit card in full every month.  We don’t overspend on any category because I track our spending.  Now how do we not overspend?

First off, we communicate our purchases.  That’s not to say we’re asking permission.  NO.  What we’re doing is informing the other person that we are going grocery shopping or we went grocery shopping and spent $35.  Now if it’s a big purchase we do discuss it, say over $100.  However, I think that discussing purchases over $100 is probably a reasonable rule of thumb for ALL couples whether they keep money separate or joint.  You are a couple after all, and even if the money is never combined doesn’t mean that it can be spent without consideration to future goals.

Second, I reconcile the spending when it happens.  This is necessary because even if I were single I’d have a budget for my credit card.  In able to not go over, I treat my credit card like a checking account.  It’s how I was taught by my mother.  Just because it was spent on the credit card doesn’t mean it’s not REAL.  No, it’s just like I cashed a check from my checking account.  I need to account for the money spent PERIOD.

Thus, all expenses are reconciled as spent.  I keep an excel spreadsheet to track each category, but the money is already spent before it even posts to the credit card statement.  My DH was the same way prior to meeting me.  This is necessary for anyone who uses a credit card and doesn’t want to pay interest.

But let’s say I used a debit card, I’d still reconcile all money debited as spent even if didn’t show up on the account.  But how to reconcile?  This is where communication comes into play.

My DH tells me I have these receiepts or I bought $x online.  If he weren’t married he’d be reconciling it himself, I just happen to do it for him.  So we’re constantly on top of our spending.  Is it necessary?  Yes if you want to stick to a budget.

Unless you are 100% cash, and even then you may have to write checks for utilities and mortgage payments, it’s pretty hard to not reconcile a checkbook or credit card as a single person.  You have to track your spending to see if you are on track to spend $200/month on groceries.  Or $200/month on eating out, you get the idea.

To us, it doesn’t matter who spends the money.  The money is spent.  We’re not here to nitpick over the details.  We have a joint budget of X, Y, and Z.  We stick to it jointly.  We also don’t just go out and spend $100 on something because we have our own account and we can.  Our efforts are joint and mutual.

My question to separate financers, how can you be sure that you are saving equivalent amounts?  What happens if one person gets into a car accident and can’t afford to replace their car?  Won’t the other partner pony up the money?  Or is there a bit of resentment for not saving more?  Do you split vacations? What happens if one person can afford a more expensive vacation than the other?

I understand the type of couples who have all money joint and two small separate accounts for fun money.  NOT a large portion of the budget.  But I wonder about couples who have a small joint account or take turns paying for this bill versus that bill.  When you lose an income how can it be fair?

I guess with a joint account, it’s all ours.  It’s all either for the greater good or not.

But the reality is with gas prices creeping up, is it worth it to drive for a vacation or fly?  My DH and I struggle with this all the time.  Since we’re always a couple traveling we have to determine how much it would cost us to drive.  Sometimes you do the more expensive option for the experience.  What do I mean?  My roommate is an amateur pilot.  He loves getting hours flying and splitting the cost with people.

One particular trip takes 3 hours to drive, but costs around $500 to fly for the whole trip.  Even with gas at $4/gallon it would cost my DH and I $250 to fly versus $80 to drive.  No brainer right?  But surprisingly my roommate has actually found a ton of people willing to shell out substantial more for the experience of flying.

But how to determine whether to fly or drive?  Like the article my DH and I pretty much drive if it’s within an 8 – 10 hour drive.  Why?  The flexibility.  We can leave when we want and stop when we choose.  Typically 8 hours drive is a 2 hour flight, with getting to the airport, waiting around, getting luggage, etc, a 2 hour flight easily turns into 4 hours.  One big incentive with for us, is if we drive we can also take our dogs.  Flying with pets is expensive and hard on the pet.  We may end up boarding the pet, but we have the option of boarding them nearby to where we are staying or going camping.

Also it depends on the type of trip we’re taking. If we are going somewhere that we need to rent a car, then driving often wins even if it takes a bit longer and might cost more.  But honestly I sort of like roadtripping.  I enjoy the journey of chilling with my DH in the car, listening to music, and talking.

What’s your cutoff?

Personally I haven’t made any large purchases in 2+ years.  We bought our washer/dryer and TV in 2005 and couch in 2006.  Both times I asked for cash discount or any discount.   I got free delivery and no sales tax.  Nothing spectacular.  For the couch I had a $100 off coupon to boot and got 0% financing on both deals for 12-24 months.  I don’t normally haggle, I just ask for the best price and deal.

What I’ve noticed is that at Best Buy they will throw in stuff like free 3 year warranty, free delivery, or no sales tax.  They don’t like to lower the price unless it’s an open box item or return or damage.  But those items of course can be hard to find.

But these two articles imply that haggling is back.  That it’s worth asking for discounts even if you pay with a credit card.  I’ve heard from people that car dealers are nearly giving away new cars.  People have mentioned on money message boards that new cars are going for $500 or $1k more than a used 2 year old car!  Dealers have so much inventory and incentives this year.

I can’t help but think it’s the economy.  I know I’m not alone in thinking, there’s no way I will be buying a big ticket item unless mine breaks.  I would like a new car but it’s not a great idea with the tenuous job situation.  I don’t know many people who are buying new cars, tvs, or taking lavish vacations. Actually that’s another place deals can be had.  Vacations.

So is it time to start haggling?  Have you bought anything and haggled the price down this year?  Did you try it before with success?  Or is this a new trend?