The Penny Saving Mama

Gift Card Promo Time!!!!!

2013-04-30T12:44:00.002-07:00

May and June are my most favorite time of year as a couponer!!! Even if you are just a beginner, or don't really 'buy into' the whole couponing craze...this is simply the easiest way to save $10 off your grocery bill!!

For the weeks leading up to Mother's Day and Father's Day/Graduation most chain grocery stores (Safeway and Albertsons specifically) do a gift card promotion, where if you buy a specific amount of gift cards to certain stores, you will get a coupon for $10-20 off your next grocery bill!! Usually safeway offers $10 back when you purchase $50 in cards, and Albertsons has been known to do $20 back for a $100 purchase. It's the same 20% savings, so it just depends on which store has the card you want!!

Here is what I have done the past few years:

For Mother's Day, I will buy a few Old Navy/Gap gift cards and just save them for when I might see a great sale...this year, I need some comfy summer clothes for our trip to Disneyland, so I will use them now!!

For Father's Day, they usually do Lowe's/Home Depot so I either use the, to buy my hubby his Dad's Day gift (it was a $250 BBQ grill last year), or just save them for projects around the house!!

Basically, use the gift cards either now for things you need, or save them for later when you see something on sale, the store gift cards never expire...so you can even prepare for Christmas or birthdays!!

Both the 'Catalina' ($ off coupon) and the gift card spend like cash, so when you go to use them, you can use coupons to save even more...that's the best part!!!

CAUTION:

Make sure you buy within the dates of the promo, and only certain gift cards are included, so pay attention!

Although the gift card you bought never expires, the $10-20 off groceries usually does within a week or two, so be sure to use it!! Last year, the $10 off was good for ANY purchase, but this year it has to be used on a purchase of $25 or more (buy $25 of groceries and only pay $15).

Black Friday...

2012-11-21T22:36:00.001-08:00

I can now officially say, I hate Black Friday! I know that everyone complains that they start it earlier and earlier every year, and that its just too crazy to deal with, but my hatred for it is so much deeper. Beyond the fact that this day of excessive consumerism is just an excuse to spend way too much money on things people don't need and then just perpetuates this cycle of people missing the whole "point" of Christmas and just worrying about buying the best gift and trying so desperately to meet others' expectations. Black Friday is now costing people their families...

Several years ago, long before I so tragically lost my mother way too soon, I gathered up a group of my favorite girlfriends to spend the evening with me and my parents for my birthday. We all got dressed up and headed to The Melting Pot for a fancy meal, and it was a blast. I have always enjoyed spending time with my mom, and this night was no exception. Toward the end of the meal, one of my friends changed the subject from whatever we were talking about at the time to trying to decide where us girls were going to head next. I was a little annoyed, because my mother and step-father had just graciously treated us all to dinner, and I was really enjoying spending time with them and being silly. Several more times over the next several minutes, this friend kept bugging us to get going onto some other "fun" event that we should partake in. Finally, I guess she got fed up waiting, and she just stood up and said, "Let's go!" Even though it was MY birthday and I wanted to stay and hang out longer, I obliged and us young and hip gals went out on the town while my folks went home. That friendship didn't last long after that night, and looking back, I would give anything for 30 extra minutes laughing and chatting with my mom.

How does Black Friday compare to this night? Well, because now stores are staying open all day on Thanksgiving, or opening up at 9pm...or even earlier! IT IS THANKSGIVING PEOPLE! It is a day to spend time with the family that you never get to see but maybe twice a year. It is a day to be thankful for what you have. It is a day to focus on the important things in life, a day to remember your priorities. I don't want to leave my family early to go stand in the rain so that I can save a few bucks on some crappy toy. I don't want to sacrifice what little time I might have left with these people to go shop! I know that these stores aren't making me do anything, that these sales are going to happen whether I am there or not, but I just don't understand why our society thinks that this is an acceptable practice. If I do want to get one of these good deals, I have to sacrifice something much more valuable, something priceless, to obtain it. It is not worth it. I used to like Black Friday. I used to enjoy getting up early after my turkey coma, getting a Starbucks, and beginning the Christmas season with a bang, but I will no longer participate. These stores are acting a lot like my selfish and insensitive friend, they are asking me to give up a very sacred family holiday to go be reckless and irresponsible. I no longer wish to be friends with them.

If you are heading out for Black Friday---I mean Black Thursday---that is your choice. Just make sure you aren't giving up something much more valuable than what you are getting.

Creating a Christmas budget...that you can STICK to!

2012-11-09T10:31:00.002-08:00

Preventing myself from going overboard when buying things for other people is the hardest part of budgeting for me! I am constantly thinking of gifts I could get people (usually for no reason) because I guess that is how America is taught to show appreciation...buy something! I could go months without buying myself a new shirt or some perfume, but it is almost impossible for me to leave a store without me grabbing a cool knick-knack or some other random trinket to give to a loved one and say, "Here, I saw this and thought of you!" Christmas is absolutely the WORST time of year for this habit! Partly because I start shopping so early, always with good intentions of staying on budget, but by the time the 25th of December rolls around, all of those tiny little "treasures" I have found FAR exceed what I had committed to spending. A few years ago, after getting really on-track with Dave's cash system, I created a great way to not only stay on budget for Christmas, but to also stay very organized with my gift giving and purchases! Here are a few tricks I use to be successful:

1) Decide on a TOTAL Christmas budget: When you start gearing up for Christmas shopping (I usually start right after Halloween...) decide what your Christmas budget is going to be. Ideally, you should have been stowing money away for a while, or at least had a plan where this money was going to come from. Deciding on the budget should NOT be determined by how many people you have to buy for or by what you believe people expect from you, it should SOLELY be determined by how much you can afford! For us, this budget has been $1000 total. This includes traditional gifts, stocking stuffers, hostess gifts for parties, gag gifts, and neighbor/coworker gifts. Once you have decided on your total budget, go to the bank and pull it all out in cash. (Again, if you have been saving and planning ahead, this should be easy!)

2) Start an envelope system solely for Christmas shopping: Next, grab a whole bunch of blank envelopes and a pen. Put a name or category on each envelope and don't forget to label one, "Whoops!" For example, I will label an envelope with each person I will be buying for, ie parents, siblings, nieces and nephews, children, spouse...etc. Then, have envelopes for other smaller categories like neighbors/friends/coworkers. As for your "Whoops" envelope, that is a little extra for those people that you forgot!!

3) Divvy up the cash! After each person and category is determined, it is now time to divvy up the cash! Start deciding how much you will allot to each envelope and put that amount of money inside. Maybe $25 for your sister, $100 for your kid, $50 to buy for your neighbors and coworkers...and then whatever is left, stick it into your "Whoops" envelope!

4) Keep it organized: As the season progresses, you can write that person's wish list on the envelope, or print it out and stick it inside. Use each envelope to document what you bought the person so you don't panic when it is time to deliver them and forget what is wrapped in that box! You can also keep receipts inside each person's envelope for easy returns later on!! When each person's envelope is empty of cash, you are done shopping...no accidentally going over budget, and no worrying if you have shopped for everyone on your list!

5) Whoops! The "Whoops!" envelope is great for those people who show up at your house with a gift that you weren't expecting, or for that person who you totally forgot to buy for! I like to buy gift cards with my "Whoops" money and have them on hand to quickly stick in a card at the last moment, and voila, instant gift! PLUS, many restaurants give bonus cards or gifts for buying a certain amount of gift cards, so its an easy way to get a little kick back for your Christmas shopping :)

Other great tips for staying on budget:

Talk about your goals for saving money over the holidays with your family and friends. You would be surprised how many people are in your same boat. They might actually be relieved that you just want to do it "low key" this year. Last year I hosted all of my extended family at my home for Christmas, and I suggested that everyone donate to their favorite charity or do some random act of kindness (doesn't need to cost money) and just share with everyone instead of exchanging gifts. It was so meaningful and we had a lot of fun just being together!
Either avoid "Black Friday" or go with a VERY strict list! I have a love/hate relationship with this crazy holiday, but I know some people love it! Be sure to go into the store with an idea of what you want, and use your cash!! It can be a great way to stretch your gift buying dollars, but it is an equally great way of buying waaaaaaay too much stuff!
Trade services with friends, neighbors, coworkers, and local family members. Offer as your gift a night of babysitting so they can head out. Offer to fix that laptop they desperately need repaired! Give your co-worker a "free pass" from kitchen duty in the break room! This is a great way to save a little cash, but the value of the gift is priceless!
Make stuff! I know homemade gifts sometimes get a bad rap, but in certain situations, it might be really appreciated! I know one of my in-laws makes awesome blankets, bean bag chairs, and other kid items, so this year since I am buying my son a kitchen play set, I asked her to make him some of her sewn play food made out of felt. Saved her the money and hassle of getting her nephew a gift, and he will love it!!Or, if none of your family or friends appreciate that kind of stuff, make a whole bunch and sell it at one of the many Christmas Bazaars and use that money toward your budget!
Prioritize. This is the most important, and easiest change to make. Really sit down and think about why you enjoy the holiday season so much. For me it is spending quality time with my family, playing in the snow, Christmas music, and drinking hot cocoa and looking at all of the lights. Get rid of some of those super time-consuming or expensive traditions you have that stress you out more than you enjoy, and replace them with more rewarding and personal memory-making events. I'm absolutely positive that in the long run, you will remember those quiet nights at home watching movies with your kids in front of the fire way more than running around all stressed out!

Let me know if any of you have any great money saving traditions or tips!!

Rainy days...

2012-10-26T11:51:00.001-07:00

Here in Portland, there is a group of protesters rallying the city to turn on water and other utilities on a foreclosed home so that the squatter (the former owner) can stay there comfortably. This woman has already been evicted several times by the bank and the police, but she and all of her "posse" believe that it is her home and she deserves to stay there. She claims that she got into a "bad" loan and that the banks and the government should not have kicked her out just because she fell behind. I know that many of my liberal neighbors would feel pity on this woman for being kicked out of her home by the "big bad banks", but I have a different opinion.

Unfortunately most people in my generation grew up with the misguided belief that if something goes wrong in their life, it must be someone else's fault. It's hard to find someone these days that is able to take personal responsibility when they are facing a hard time, instead of finding an excuse that is out of their control. Of course there are things that do happen on life that are out of your control, but those things are great ways to learn something and change your behaviors. But if you aren't using enough common sense to make good decisions, and something bad happens, you can't blame anybody but yourself. This woman entered into a mortgage on her own, it may not have been a good rate or may have had a lot of costly stipulations, but she signed it and agreed to make the payments. She knew very well that if she fell behind, they would take her house. That is how a mortgage works. If the economy went south, and she lost her job, that is not the fault of the bank. Bad stuff happens. If she didn't have a savings plan or was able to find another job, the consequences have to fall on her. Nobody is promised a free ride in this world, when bad stuff happens, you take care of it yourself. Too many people live for the moment and never stop to think about what might happen on a "rainy day." It really is unfortunate that she did not have a "rainy day" plan, but the right thing for her to do is walk away and learn a valuable lesson for next time. Make sure you are entering into contracts you can keep, have a plan during the sunny days to save for the rainy days, and if things turn bad, handle them appropriately. I have gone through my fair share of rainy days, but I have always worked my butt off to get through them and learned valuable lessons for what I can do differently next time.

No matter what happens, there is ALWAYS something that can be either done to fix the situation, ways to prevent the situation, or at least a lesson to be learned from it. The government, big banks, corporate America, and CEOs are not responsible for you, they are there to run their businesses and they have worked VERY hard to be where they are. There are not any successful and wealthy people out there who got where they are because they sat on the curb and complained about life being unfair. They got there by working hard, facing a lot of obstacles, and taking responsibility for them and working even harder.

Instead of seeing more coverage of this woman and her plight to have someone else right her wrong, lets see more coverage of people who are struggling to get by but are keeping their head up and being responsible to the people who rely on them and keeping the promises they made. Lets also start thinking about some new lessons we can learn from this bad economy, and how people can change their habits so that a "rainy day" doesn't turn into a storm!

Crossroads

2012-07-29T11:37:00.002-07:00

I have realized something about myself in the last couple of weeks...I am not very good at making decisions. I constantly worry about making the right choice, and I often feel that no matter how much thought and preparation go into making a decision, I still feel like I am rushing into things. My mind always plays out the worst possible scenario and that scares me into backing out and keeping the status quo. I have also realized that I really crave affirmation from everyone around me, and my ideal situation would be for someone else to make the hard choices for me. I mean, I know that asking people you trust about their opinions is a good thing, but I think I rely on other peoples' judgement too much. John and I have come to a crossroads in our life together, and a lot of big changes are in the works. I really need to find the strength within to go with these changes and trust that we are doing the right thing.

Maybe the biggest hurdle for me in accepting change, is that things are not going the way I had planned them out in my head. I never really had a whole life map for myself anyway, but I had envisioned finishing school (check), getting married (check), finding a teaching job (still waiting for that one), starting a family (check), and then I planned on taking a few years off to enjoy being a mom and then finishing my career out in a job that I loved and offered the optimal schedule for raising a family. Well, things are not quite working out that way. I have yet to find a job that will offer a steady stream of income, and while substitute teaching is a great part-time way to earn some extra money, it is incredibly unstable and it poses a real challenge in finding child care. Meanwhile, John and I are just treading water in our current situation just waiting for something to improve. On top of the fact that finding a job is difficult, I have a real fear of committing to something full-time because while I pride myself on working my way through college and having a great work-ethic, I have never actually had a full time, 5 day a week, 8-hour a day job. I'm worried that I will be overwhelmed by all of the new responsibility of having a full-time job, raising my son, maintaining a relationship with my husband and my family, as well as taking care of a home that already gets neglected most of the time. I doubt my abilities as a teacher as well. I have really great days and I get really pumped up and excited about it, but the long hours, the challenging students, and the many obstacles facing the profession really make me wonder if that is what I want to invest my life in. I have looked at other career paths as well, but the problem I face there is that I really have no other skills or experience outside of the teaching profession and my work in customer service. I'd really love to work in HR or college admissions, but they want experience and schooling in those fields. This is all just very depressing. I just wish I had the ability to see into the future and know what I was supposed to do at this crossroad. Do I wait out the teaching economy and devote my life to that, but in the meantime live in this agonizing limbo? Or do I turn elsewhere and get something full-time now, but put my dear boy in daycare and possibly overextend myself and get into a career that I am not as passionate about?

Buying our first home is also very stressful. I have seen and heard of way too many horror stories of people getting into homes that become a complete money pit and ruin marriages and financial dreams. My biggest fear is failing as a wife and a mom because the everyday stresses of life become too much. The biggest reason for divorce is money, so it seems like a deal with the devil to get into a financial obligation that I have doubts about. But then I step back and realize just how much John and I have done together so far, and we are leaps and bounds ahead of the average home buyer when it comes to our saving, our budgeting, and our expectations. We aren't looking at more than we can easily afford on one income, and we have proven over the past few years that we can commit to saving and living within our means. Even if something catastrophic came our way (which it has many times), I know we will get through it.

I think I just need to keep thinking rationally, praying, and talking it out and I will eventually be at peace with a plan of action. I just need to trust myself and make the best out of whatever we decide to do!

Moving Forward!

2012-06-25T17:14:00.001-07:00

Over the past 3 years, I have completely changed my views on the value of a dollar, managing my finances, setting goals, and living with content. My journey hasn't always been smooth, and I haven't always made the best choices, but I am leaps and bounds ahead of where I would have been if I had never heard of Dave Ramsey. I have done amazing things under extremely difficult circumstances, and I am so proud of how much I have accomplished when it would have been so easy to make excuses and feel bad for myself instead of sticking to my goals. Our first accomplishment was cutting our expenses way down and learning to live with less "stuff" and being happy with what we have. Our second accomplishment was paying off all of our consumer debt, and our third accomplisment was paying for a new (to us) car, a wedding, and a trip to Disneyland all with CASH! Now we are on to a new chapter in our lives and saving for our first home. On May 1st of this year (less than 2 months ago), I posted about starting a Purposeful Savings Account for the down payment on our new home. We started with $2,000 in that account and we began putting every extra penny we could find, my entire part-time paycheck, as well as the money we could get from selling some un-used things around the house into that account. Now, on June 25th, we are up to a whopping $7,000! I can't believe we were able to find $5,000 in less than 2 months! And anyone who says that this would be impossible under their circumstances, you have to remember we did this on one moderate full-time income and a small part-time income at the same time as paying on student loans. We are not wealthy by any means, we just REALLY, REALLY, REALLY want a house!! This just shows that if you put your mind to something, and you really reevaluate your priorities, you can make anything happen! This exersize also taught us that we have a lot more extra money after our monthly expenses than we thought, and that maybe home ownership (and all of the extra expenses that come with it) isn't going to be as difficult financially as we first thought it would be. I am so excited at the prospect of looking for homes in the next few months, and to see what we can accomplish before then!! This also motivates me to come up with additonal ways to bring in a bit of extra income on top of my part time job now...I've been racking my brain lately with being creative and putting my skills to work. Maybe a free-lance tutor? An editor-for-hire? Maybe babysitting occasionally? Or I could just be a big girl and get a real job :)

Happy Saving!

Sarah

Big changes ahead!

2012-05-29T16:57:00.001-07:00

Dave's motto for getting pumped up to get out of debt is, "Live like no one else, so that you can live like no one else!" At this point in my life, I was not expecting to downsize and minimize and live like a broke college student, but if I want to get ahead and have the things I want someday, I have to make the sacrifices now. John and I have decided that, although we are making progress toward our savings goal, it is not fast enough! We are going to minimize big time. Whatever that is not essential to our survival or our sanity has got to be cut back or eliminated. We can either live a mediocre life now, or live a great life later. I want a great life. These changes are not going to be easy...or fun...but they are necessary. I want Hudson to know that his parents busted their butts to provide for him, and that we were not afraid to make sacrifices to get ourselves into a better situation. The first time we went "Gazelle Intense" I was working full time and John was working two jobs. We don't have that luxury this time because we have Hudson, but we will have to be creative and figure out a way to do incredible things with less money coming in.

I would LOVE to have any suggestions that anyone has to live on less, earn more, and be happy while doing it!!

Sarah

7 ways to have a baby without going broke!

2012-05-24T22:23:00.004-07:00

As all of you know, I am obsessed with saving money and finding good deals, and being a new mom has posed some new problems for me: I am constantly navigating the world of baby toys, clothes, play dates, and the endless amount of "stuff" I need! I have found some great ways to raise a bay on a budget as well as made a few mistakes along the way and wasted some of my hard-earned dollars. Here are some tips on how to have a baby without going broke!!

Borrow, borrow, borrow!!! We were so lucky to have some friends and family loan us some essential baby gear such as a bassinet, a pack n' play, a swing, and a bathtub. Never in my entire life had I ever experienced so much generosity, and not until Hudson started nearing 1 year old did I realize why everyone was so eager to give me their stuff!! Not only does borrowing from others save you money, but it also eliminates the burden of having to store all of the "junk" for years and years until the next baby comes or sell it second hand for a fraction of what you paid for it! Take it from me, your baby will not get NEARLY as much use out of most of the toys and furniture and gear you are forking out top dollar for. Take people up on their generosity and borrow good baby gear, that is the number 1 way to save money! Make friends with someone who's baby is about 6-12 months ahead of yours and this stuff will just come pouring in :)

Find some mommy friends. I was able to join a "Mommy and Me" group at the hospital where I delivered for only $2.50 per visit. This was by far the best investment I have made as a mommy. I have made friends to socialize with (which is vital), we share stories and advice about issues that arise with ourselves and our babies, we share info on good products, baby sales, and places to go. All of us moms also started a Fabebook group to communicate and we are able to expand our friendship. The reason that this group has saved me money is that it is a super cheap place to go to get out of the house and be around friends and let Hudson socialize, as well as giving me a great opportunity to utilize the expertise of others before I buy things and borrow and try things out as well!

Ask advice and try-before-you-buy! Reading online reviews, asking friends who have children, and trying out products have become essential to me over the past year. I made the mistake of buying a lot of stuff before Hudson was born and when I saw popular baby gear at the store, only for Hudson to be totally not interested in it! And then there were other things that he played with at the homes of my friends that he totally loved! For example, for the first 4 or 5 months I bought pacifier after pacifier that he would actually keep in his mouth at night and in the car, but I could not find the right one!! Not until I took him to my sister-in-laws and a friends house, where he kept stealing the pacifiers out of his cousin and his friend's mouths, was I able to buy one he actually used! This goes for baby carriers (Baby Bjorn, Moby, Ergo...), toys, play equipment, food...anything! Ask someone to offer you a recommendation about what their baby likes, or even better, ask if yours can try it out (or borrow it) before you go out and spend the money to buy it!

Buy multi-purpose gear. I was so close to buying one of those super expensive baby food makers to make my own baby food, before I realized the food processor I already owned would work just fine (and he wasn't actually eating purees for that long anyhow). It's also super aggravating when you buy your baby a fancy toy and all they want to play with is your remote control, or your shoe, or your wooden mixing spoon! The cheapest and easiest thing you can do to entertain your baby is to just find random stuff around your house that they can play with, or if you have to buy something, try to find a product that can grow with your baby or be used for multiple purposes. Such as I was able to find an exersaucer (used of course) that Hudson could sit in at first, and then stand at when he got bigger. I also found a vibrating baby chair that worked great for newborn naps and stationary play and then was also a great pre-highchair feeding area for purees before he was able to sit up very well. Not only will this save you money on having to buy a lot of different items, it will also cut down on the clutter in your home!

Utilize your neighborhood. Most libraries have free story times as well as "cultural passes" that you can check-out for the day to attend local museums and activities around your area for free. Most indoor malls open their doors hours before the actual stores open, so this is a great place to go and just get some exercise and get out of the house for free (bring a friend from your mommy group for more fun!) Have a friend who lives in an apartment or condo? Set up a pool party and get some free swimming in! Hook up with someone with a membership to a local zoo or museum. I have a membership to my zoo with free babies under 2 as well as a free guest. I always post on my mommy group facebook page when I am going so another mom can come free as well! Local parks and schools are great places to picnic and stroll around, also many churches sometimes offer indoor play areas on certain days of the week that are either free or super cheap. Go on hikes, feed the ducks by the lake, visit a nature reserve, or just simply take a walk and get lost in your own town! And lastly, my mommy group and I always host monthly play dates hosted at someones house or a park where we bring snacks and toys and the babies play while we socialize!!

Don't over-buy before the baby comes! Diapers, clothes, bedding, towels, and all of those other "essentials" are always pushed on new moms to stock up on before the baby arrives!! But the reality is that your baby will grow out of them faster than you can use them, or they will simply not get used at all. My son was only in newborn diapers for his first 2 weeks, as well as newborn clothes. We wasted so much money stocking up on lots of those and he never even used them!! If you are having a baby shower, I can almost guarantee you will be well stocked on diapers and clothes to get your baby through the first 3 months at least. For sure go and buy those "have-to-have" adorable outfits that you just can't wait to dress your baby in, but you probably wont have to buy more than just a few items in each size for the first 6-9 months. Also, remember the season you are having the baby in. All of my NB-3 month fleece pajamas and socks went to waste because it was too hot to wear in the summer when he was born. When it comes to diapers, if you need to add to your supply after getting what your friends and family have donated, try to buy a few small packages from different brands. Each baby is shaped differently and will fit better in some diapers than others. I am a Pampers lover myself, but I know other moms swear by Huggies, and Costco and Target brand are amazing too! (this same advice also applies to wipes) As you start to get to know your little critter you will find that you (and the baby) prefer certain brands and styles of clothes and you will become a little more picky in your shopping and only buy things you KNOW your baby will wear and use.

Buy used, on sale, and out of season. Craigslist, second hand sales, clearance sections, and after-season sales have become my life saver!! Many great things can be bought used from friends, second-hand sales, or from garage sales or Craigslist. The only things that I would recommend buying new are the safety things like carseats, cribs, and bottles. Getting great clothes and toys and other seasonal items was so much cheaper when I was buying them for the future! Once you kind of get the hang of how your baby is fitting clothes you can buy them next year's winter coat this year after they go on clearance!! Borrowing that kind of stuff is always the best bet, but buying used or for dirt cheap is the next best idea!!

Don't forget to pass your things along to other moms when you are done with them or wont need them for a while...spread the mommy karma!! Let me know if any of the other mommies out there have any other great ideas!!

Sarah

Baby steps toward the baby steps...

2012-05-22T17:24:00.001-07:00

So we have been on the cash budget again for about 3 months, and I am pretty disappointed in how I am doing this time though. I am speaking for myself in this post because John has been doing a lot better than me! The first time we lived on a cash budget for over a year and really stuck to it. I was super disciplined and only spent what I had allotted to each category and if something wasn't in our budget, we didn't buy it. This time through though, I have been cheating A LOT!! I think that maybe because I am not working as much, and instead spending more time trying to entertain myself and a toddler, I have been justifying going out to eat, shopping, and leisure activities more. We have been successful in cutting back in our spending however, and I am quite pleased with how much we have saved so far toward our down payment on a house...but I could do better.

In response to my failure, I have come clean with John about my "cheating" and asked him to better hold me accountable to staying on budget. He is such a great husband and often forgives me for my little spending indiscretions because he wants me to be happy, but I need him to be the bad guy every once in a while and make sure I am being held accountable for my spending! I also will be working even less this summer when school is out, so I need to make sure I am setting myself up with some good habits on how to exist as a full-time stay at home mom and not succumb to the temptations of going out and spending money to kill time!

June will be a new month with a fresh start, and I have a goal to stay committed to my budget and save every extra penny I can toward a house. I don't think I have ever wanted something so badly, and I just need to remember that every time I spend money on something I don't NEED, I am delaying that dream a little further. So goodbye Starbucks Chai Tea Lattes, and hello Crystal Light! Goodbye lunch dates, and hello picnics in the park! Goodbye Target shopping sprees for baby "stuff" and hello garage sales for things he really NEEDS!! I can do this!!

Wish me luck,

Sarah

Marriage and Money

2012-05-06T18:34:00.001-07:00

Just a warning: this is a very personal post, and I hope that you will read it with compassion and understanding instead of judgement...

When John and I met in 2007, I was finishing up my undergraduate degree and living with my sister and he was working the night shift at a local home improvement store and living with his parents. It was a pretty whirlwind romance and he moved in with my sister and I within a few months, and we had our own place a few months after that. John bought into my dreams of going to graduate school right away and was so supportive emotionally, physically, and financially while I saw that through. We began combining our money almost immediately after moving in, because it just made the most sense logistically. He was footing most of the bills while I focused on school, so there was really no use in keeping them separate. Soon after moving in, we were engaged and planning for our future together! Slowly over the next year, our financial histories started making themselves aware to each other and we really needed to sit down and lay everything out. I was so embarrassed and guilt-ridden for bringing so much student debt to the relationship, on top of the consumer debt that built up after years of living beyond my means. John came with less debt, but most of it was in a bad state of neglect and he also had some lingering financial obligations to an ex. I think we were both so ashamed of putting this burden on each other that it was really hard to just be honest and put it out there. I would be lying if I didn't say that I had some resentment toward him for not only having this old debt but also for not bringing it to my attention sooner. I'm sure he was feeling equally overwhelmed by what he was signing on to as well as the main breadwinner for such a large amount of loans to be repaid. There were many days where I wondered if we could ever succeed financially together and get ourselves to a place where we could start fresh. There was a little voice in the back of my head saying that money ruins marriages, and what a mistake it would be to start off in such a bad place. I was scared.

I had a decision to make. I either needed to slow down this relationship and make sure that both of us take care of our own personal finances before we get married, and allow ourselves to come to the table with clean hands and a fresh start, or I needed to decide that I was in it for the long haul and work it out together. I chose the latter. John and i came to a mutual agreement that whatever debt or financial obligations that we were bringing to the marriage was now OUR debt. We were going to start over fresh as a couple, making choices together and aiming toward the same goals, and whatever we brought from the past would be tackled as a team. John got a second job working nights, and I got a second job as well. We both worked our butts off and were able to make good on some of the more pressing obligations that he had bought with him, as well as knock out my consumer debt one at a time using Dave Ramsey's debt snowball program. We both were put at ease knowing that whatever mistakes we had made in the past were behind us, and we would be able to trust in each other to make good decisions in the future. We were also much happier knowing that we were attacking our problems as a team instead of holding each other's mistakes over the other one's head.

Once we made the commitment to attack our debts and get them out of the way of our relationship, it really didn't take that long for us to pay them off. I really believe that our marriage is so much stronger because we were able to go through this process together and really put our trust in one another. I have never regretted the decision to take on his debts as my own, and I know that he doesn't either. There is so much more love, understanding, and harmony now that we are on the same team, instead of the resentment, arguing, and judging that could have come from expecting the other one to clean up their own "mess".

Hope that this provides inspiration to let some grudges go and focus on what is important in your relationship. If things are hard right now, make the commitment to team up, and it will be a lot easier to conquer!

Sarah

Purposeful Saving!

2012-05-01T09:15:00.000-07:00

I have a hard time with immediate gratification. I have many long-term goals, varying from losing weight to saving for a home, but it is just so hard for me to put off the immediate gratification of a piece of cake or a night out with my husband now, for the pay-off of something big later! I look back on how much John and I accomplished a while back with our debt pay-off and our wedding and vacation on cash, but taking the next step of starting the major savings has been a little more slow going. We need to get our butt in gear! Maybe if I put my goals down on paper, I might be able to make them a little more tangible and easy to follow through on...

We are now starting month 2 of being back on our cash-only budget. Last month was relatively successful, but I did cheat a little on the groceries and stocking up for an upcoming party! I really need to hold myself accountable this month and stick to the budget I laid out ahead of time. I am hosting a couponing class for some friends this weekend, and I am actually looking forward to practicing what I preach again :)

John and I also set up a thermometer for our savings plan like we did for our debt repayment. What was so exciting about doing this was the fact that last time we were marking off what we were paying to other people, this time we get to mark off what we are paying to ourselves!! We will just have to make sure that whatever we put in savings stays there and doesn't come out!! We have a goal for $20,000 to put a decent down payment on a home with a sizable nest egg for home related emergencies or repairs. I think that it is totally do-able, and now that it is a visual goal, hopefully a lot easier to stick to and stay motivated!

John and I have also been sitting down to some inspiring and motivating "budget meetings" and just trying to get on the same page with our priorities; financial, emotional, and physical. He has been driving himself into the ground lately trying to keep up with a full-time job, school, being an amazing father and husband, and maintaining our rental property. He holds himself to such high standards, and it is hard for him to make sacrifices in something he takes pride in to better maintain his sanity. We had really big plans when we moved into this home a year ago to fix it up and make it a sanctuary, but I really don't think that it is possible anymore. We have spent so much time and money and energy and stress trying to make it look acceptable and it never seems to meet our expectations. It is such a great place to live, but if we keep being unrealistic, we are going to drive ourselves crazy! I have convinced John to only mow the lawn every other week and to give up some of the landscaping and repair projects he has planned. He needs to focus on de-stressing and working toward finishing his degree. There will be plenty of time in the future to make our own property outstanding, so we just need to maintain this place and stop trying to make it the nicest house on the block!! I could tell that when we made this agreement, that a ton of stress was taken off of his shoulders. I think it is important to re-evaluate ALL of your priorities every so often to make sure you are investing your time and energy into the right things!!

Wish us luck, and I would appreciate any other motivating strategies to stay on track and have fun at the same time!

Giving minimilism a try...

2012-04-25T15:58:00.000-07:00

I ran across a post on a minimalism blog the other day titled, "7 common problems solved by owning less." It struck such a nerve with me, that I ended up browsing their site for the rest of the evening. I couldn't help but relate with how freeing it must feel to get rid of so much unneeded stuff! Don't get me wrong, I had my doubts and reservations, but they were quickly thrown out once I read just how practical it could be! Read the blog below if you wish:

http://www.becomingminimalist.com/2012/04/16/7-common-problems-solved-by-owning-less/

1) First of all, the thought of getting rid of 80% of my wardrobe freaked me out at first, because I am so frugal that I hate to think that I would be getting rid of something that I may have to go repurchase someday, but once I really thought about it, it seemed like such a great idea! I hate the feeling every morning of being reminded of how much of my clothes still don't fit me almost a year after having my son, but in reality, they hardly even fit before. If I can slim down my closet to only the items that fit me fabulously, or will fit fabulously with minor to moderate work, I think I would be so much happier. And when, or if, I ever slim down enough to get some new threads, I can go buy a few key pieces that I can wear long term and look great!

2) I will be the first to admit that I am not the greatest housekeeper. I get so overwhelmed with all of the "stuff" that is needing to be washed, cleaned, dusted, swept, mopped, scrubbed...you get the picture. And this crap just keeps accumulating and causing me more stress! I look at some of my friends' houses and their stuff looks so nicely arranged and decorated, and I get frustrated with how much clutter I have lying around. One of my main problems is that I am way too emotionally invested in my things. I have a really hard time discarding items that were gifted to me or remind me of someone special. The passing of my mother has sent me over the edge and I have a hard time getting rid of anything now, in fear that I someday will miss that item and how much it meant to me. I have decided that my sanity is not worth salvaging these items and I really need to come up with a way that I can maintain my memories and still function in a clean home. I think I will devote a spot in my home to keep my most prized possessions from my mother and display them proudly. I think I will also keep a small box somewhere that I can keep some other more personal items that I can look through when I need to. Hopefully, that will be the first step to detaching myself emotionally from my things and focusing on more important ways to spend my day! Here are some great ways that I can honor my mom's memory while simplifying my stuff: http://www.becomingminimalist.com/2010/09/29/how-to-simplify-your-stuff-and-honor-your-memories/

3) I think when you see how little you actually NEED, your priorities shift to the most important things in life. I read a quote somewhere that said something to the tune of, "What's easier than wishing that you had things that you do not have, is to not want them in the first place." Maybe my need for stuff, and my dissatisfaction for not having them, would be lessened if I could learn to be happy with less. And the idea of not spending so much time, energy, and money on things I don't need will really motivate me to spend more time, energy, and money on the things that to matter. Here is another post from their blog that talks about easy ways to get started becoming a minimalist: http://www.becomingminimalist.com/2011/12/05/sample-living-with-less/

4) Trying to baby-proof for Hudson and thinking of the lessons I want him learning as he grows up has also made me want to really start trimming down on some of the stuff we have lying around. I don't want him having so many toys that he is overwhelmed and has a hard time occupying his mind without something stimulating to do it for him. I want him to be creative and rely on his own imagination to keep himself busy. I think it is natural for a new mom to want to buy all of the latest gadgets for their new little one, but I have quickly learned that not only is most of it pretty useless, but it is so quickly outgrown! I could have saved a lot of time and money by borrowing items or by just being creative and doing without, and he would have been just fine. Here are 7 ways to prepare for a new baby without shopping: http://www.becomingminimalist.com/2011/11/08/7-ways-to-prepare-for-a-new-baby-without-shopping/
I also want to limit the amount of cupboard locks I put on things and allow him some freedom to explore and discover the house. One item in particular has been on my mind lately, as I have been trying to find a new home for it since he now knows how to open the lower cupboard doors. It is a small hand-held mixer that I use occasionally to mix up scrambled eggs. It is actually quite a cool contraption, but since it has a sharp blade, I cannot leave it in his reach anymore. The more I thought about it though, the more I realized that I really don't need it. It is one of those "time saving" devices that is supposed to make my life easier, and while it does a fabulous job of beating my eggs, and is a bit faster than using the traditional fork. the time I spend afterward to take it all apart, wash it, dry it, and put it away, it really is not that time saving!!! Not to mention all of the stress of having to dig past it to get to something that is further back in the cupboard! I have decided that it will be something that will have to go!

5) And finally, living with less ties in perfectly with the goals I have for getting out of debt and living a more peaceful life. I am drooling right now at how much fun it will be to have the garage sale of all garage sales this summer and make some cash to put toward our home! I am also getting excited about adjusting my priorities to try to live on even less than we already are. I think I will love the home I am in even more if there isn't so much stuff piled in it to wash and clean and maintain. It will be a good excuse to focus less on going crazy for holidays and parties, and focus more on the real reason that we are celebrating. I am excited to be able to SLEEP on black Friday instead of standing in the Oregon rain to buy a bunch of crap for people that they don't need. I am excited to be able to look in my closets and cupboards and be able to see what I need and what I already have! I am just so excited to see how these changes in my life can really make it more relaxing, rewarding, and stress-free. Are there any ideas that you all have for learning to live on less? I'd love to hear them!

Getting what I deserve...

2012-04-24T17:06:00.000-07:00

One of the hardest financial decisions to talk myself out of is when I convince myself that I "deserve" something. I deserve a lot of things...I work hard, I sacrifice a lot, and I am a good person. When I was putting myself through college I would often reward myself with material things after a particularly difficult term. A digital camera, a laptop, a night out with friends, and one time a vacation. I really felt like I "deserved" it after working so hard! Well, a lot of those little presents to myself really added up, and I guess I am now paying for that. Dave Ramsey makes a good point about dealing with this this dilemma: he wants to know if you really "deserve" to struggle with debt, stress about paying bills, and arguing with your spouse, or if you "deserve" to life free of financial burdens and live with peace. I have always loved this thought, but I still struggle with saying no to myself when I feel like I just NEED to pamper myself with something fancy to feel better after a rough day or week. It is so frustrating to me that my peers are able to take vacations, go out to dinner for special events, and buy new cars and furniture when they want. I work just as hard as they do, so why can't I have the same abilities to reward myself.

I had an epiphany the other day. I started thinking back to my baby shower a year ago, and although I loved all of the little washcloths and toys and outfits that I got, I really wished that a few of those people had gotten together to buy me something larger that I really needed like a crib, a stroller, or a play set. That made me start thinking about what I really wanted for my own life. I want a new pair of shoes, I want a new pair of Capri pants, I want a dishwasher, I want to take a vacation, and I want to throw my son a kick-butt first birthday party. But what I want more than any of those things is to buy a house. I really started putting these two ideas together and I started thinking that I can have all of these little things that I want, or I can focus on putting all of my focus on getting the one big thing. My husband and I decided that from now on, before we make ANY purchases, we will ask ourselves: "is this going to get us in a house faster, or slower?" If the answer is slower, than we really need to judge whether it is worth it.

I hope I can stick with this motivation. I am so determined to buy our own home and I hope that my friends and family will be good influences and help me reach my goal!!

Sarah

The TRUTH about student loans!

2012-04-18T11:54:00.000-07:00

"...student loans are a good debt...they are an investment in your future...just get through college, and the rest will work itself out..."

These were the only pieces of wisdom I heard about student loans while I was in college. I knew I was taking out loans, and that I would have to pay them back, but for some reason I wasn't worried about HOW I would pay them back! When you are taking them out a little at a time, it is hard to wrap your mind around what the total cost will be at graduation, and little did I know that I would be entering one of the toughest job economies in history! I was living on an altered version of reality that only an 18-year-old fresh out of high school could understand. I was living on the idea that I was only young once, and that I should enjoy the college years so that I could buckle down and get serious someday. I was living on assumptions. The assumption that I would exit college into an immediate job opportunity. The assumption that I would make more than enough to pay back my loans, buy a house, buy a car, and live the American dream. The assumption that several years into my career I would get married, have kids, and afford to stay home for a while until they were grown. The assumption that student loans were just a part of life, and that it was the only way someone like me could get through college without savings or help from my parents.

Here is the reality: After a Bachelors at a public university and a Masters from a private university, those tiny little loans every semester added up to over $60,000! Immediately after graduation, I met the man of my dreams and got married. 1 year later, we started our family. And after almost 3 years, I still have not been able to find a teaching job. When my loans came due, I was paying almost $1,000 a month. After consolidation (which took my repayments from 10 years to 25 years) I am now paying almost $400 a month. I will be 50 years old when my loans are finally paid off, and my education will have cost me about $150,000 with interest. That is to be a teacher who makes about $40,000/year starting out. Wow. I obviously didn't major in math because this is not adding up at all! I want to scream at all of those people who told me I was taking out a "good debt" and that I would just "figure it out" after graduation!! 7 years of having fun is now costing me 25 years of stress and financial burden!!

So what can a current/future college student do if they don't have the financial support of their parents?

First, my biggest mistake was not setting a budget for my college years. I worked as a waitress most of the time, so I had the luxury of living on daily tips and not needing to budget my expenses. I wish somebody would have sat me down before I left home and helped me set up a realistic living budget. I was making a pretty good income as a working college student, and I really could have put that to good use if i would have thought ahead!
Second, I would have surrounded myself with other college students who were also doing it on their own. It is hard to turn down all of the social invites and the youthful lifestyle when you are out on your own for the first time as an adult. I had so much fun going out to restaurants, movies, clubs, and parties. And when all of my other friends are buying new clothes and expensive meals, I felt like that was the "norm". I wish I would have traded in some of the dinners out with get-togethers at people's apartments, some of the movies out with popcorn and pajama movie nights at home, some of the clubs and parties with game nights and a bottle of wine at a friend's house. There are a bazillion ways to be young and youthful and fun without being out every night!
Finally, I wish someone reliable and trustworthy would have told me to grow up, be mature, and think about my future. In adolescence, it is normal to live in the moment and not think about the consequences, but there is no excuse for a college student trying to pretend to be an adult to be making such poor and thoughtless decisions. At 19, I realized that with my income as a waitress, I could afford to rent my very own apartment, pay bills on my own, buy new furniture, and live a pretty decent lifestyle. That was all good and true, but in the process of me living the above-average college lifestyle, I was taking out loans to finance my tuition, books, and living expenses. If I would have made some better choices, like living at home or with roommates, sharing bills, staying home more, not shopping so much, I could have been using my good income to finance my education, and not loans. I was kidding myself on how much I actually needed to borrow. But I didn't realize this until too late.

If I had the whole college experience to do over again, I would have definitely used my noggin more and made some sacrifices to pay for it myself. It wasn't as impossible as I thought. For instance, I could have saved at least $300-$400 a month by sharing an apartment with a roommate! $300-$400 a month over the course of 5 years (the last 2 were spent rooming with my sister and now husband) would have saved me $18,000-$24,000!! That would have cut my student loans by over a third! Just saving on room and board...factor in what I could have saved by going out less and shopping less, and I have no doubt in my mind I could have gone to school without any (or at least very few) loans. There is no way that those 7 years of fun was worth all of the stress, agony, and sacrifices I will have to make for the next 25 years!

Please pass this on to a current or future college student...and have them get started NOW!!!

UPDATE! Dave just premiered a gift sat for incoming college freshman with info about navigating the confusing world of college all on your own! I know several graduates who are getting this from me this year!! http://www.daveramsey.com/store/prodgsg.html?ectid=dd1204.3_1

Sarah

"Same as Cash" isn't the same as cash...

2012-04-14T10:12:00.000-07:00

I told you all in the beginning that I would blog about some of the mistakes and pitfalls that John and I have made along our journey to financial freedom, and I'd like to tell you about the giant one that is sitting right in front of me!

When John and I moved into our very first apartment together (and long before we discovered Dave Ramsey together) we decided to "reward" ourselves with a brand new Play Station 3 gaming system. John had been wanting one for so long, and who was I to tell him no? So we went down to the local Best Buy and picked one up. Cha-Ching! $300 put on my retail card, but it was 90 days "same-as-cash" so it wasn't really that bad, right? I had used the "same-as-cash" promo several times before and I ALWAYS paid it off before the deadline so I never paid interest. I felt pretty smart about outsmarting the system. Well, a few days later, after John had a chance to play some of his high-tech games on his new super crisp gaming system, he realized that our outdated 32" tube television was just not cutting it. The awesomeness of his new Play Station needed an equally awesome HD TV to play it on! So hi-ho hi-ho back to best buy we go! This time, they gave us 12 months free financing on a brand new 40" flat screen HD TV with all of the bells and whistles! I again was feeling pretty confident that we had just made a very smart move, using my impeccable credit to earn ourselves a year to pay it off with no interest!!!

Fast forward to almost a year later, and by the grace of God nothing catastrophic struck and we were able to make all of our payments on time and our amazing TV was almost paid off! Wouldn't you know it though, in an innocent trip to the electronics store, it happened. I saw the most amazing TV I had ever seen. The picture was so clear I felt like I could reach out and touch Johnny Depp. I HAD TO HAVE THIS TV! So back to best buy we go, and this time we decide to get the new TV and a matching theater system to go with it! We walk out with a $2200 theater set that was again financed at 0%, but this time for 18 months! Wow, they must really like me a lot to trust me with 18 months of financing. They even gave me a Best Buy Platinum Rewards card so I could shop even more and earn cash back! As we mailed in out $200-300 payments every month over the next few months, the awesomeness of the new TV wore off. The picture was still pretty cool, and all of our friends loved coming over to watch Blu-Ray movies on it and play games, but it hardly seemed worth over $200 a month for that luxury. But not until Dave addressed the true downfalls to 0% financing did I really realize that I had been duped.

First of all, most people do not pay of their item within the grace period. Luckily Murphy didn't strike while we were repaying on it, or else we might have fallen behind and not been able to pay it off. And interest does not start being charged once the grace period is over either. If you do not pay it off within the time period, they tack on the interest for the ENTIRE length of the loan! They just tack on whatever interest you would have paid since the beginning! Second, they are not as likely to negotiate on price if you are financing the item. You are often paying full price for something that could have been bought at a steep discount if you had brought cold hard cash to the table instead. For someone like me, that always needs to get a deal, I was surprised I fell for that. And third, I realized that if John and I had saved up $2200 in cash, and I walked into Best Buy with it in hand, I have no doubt in my mind that I would not have bought the TV. That last one was a real eye opener. Without barely a blink, I forked over more money than my car was worth (I paid $2000 for my car) and bought a freaking TV! But since it was on credit, and I thought I was getting such a great deal at 0%, I didn't hesitate. But once I thought about how much money that really was, and how much I could have done with that $2200 instead of buy a TV, I felt like a complete idiot! Not to mention that once we had paid it off, the thing was practically obsolete and worthless...

I was so unbelievably happy to cancel that credit card and let Best Buy know that they can keep their "Platinum Status". I was done letting them insult my intelligence and treat me like a fool! I can't help however, feeling sorry for all of those people who still think 0% financing is a good deal. If after this, you still feel that way, at least take some time to make sure that you can make the payments every month (it will be more than the minimum if you intend to pay it off before the deadline) without any chance of falling behind, and also be completely certain that if you had that entire amount in your had that you would still make that purchase for that price. I can almost guarantee you that you wouldn't!

I hope my huge mistake helped you not make the same one :)

Sarah

Debt snowballing!

2012-04-11T11:22:00.000-07:00

I have been so excited to write this post, that I waited until I had enough time in my busy schedule to actually sit down and do a good job! John and I had so much fun debt snowballing, that we almost want to rack up some more and do it again! (Just kidding) First of all, let me tell you a little bit about what a debt snowball is...

When you make a plan to attack your debts and monthly payments, you need to sit down and write out how much you owe on each account, and what the minimum payment is. Some financial advisers recommend attacking the debt with the highest interest first, and that does make some mathematical sense, but a more reasonable and much more successful plan is to attack the debt with the SMALLEST balance first! This new mentality is similar to setting a weight loss goal of cutting out dessert once a week versus planning to run a 5k right off the bat. Start with baby steps!

So when we laid out our debts (and we did not include my student loans in our snowball, just consumer debt) we had the following:

American Eagle retail card: $300/ $30 month
Friedlanders Jewelers: $800/ $170 month
First Financial CC: $1800/ $100 month
Best Buy retail card: $2200/ $200 month
B of A Consolidation: $10,000/ $250 month (YIKES!)

Now the principle of the debt snowball says that you pay the minimums on all debts, and throw every extra penny (after building your emergency fund first) at the smallest debt. Then once that debt is paid off, you start attacking the next debt with its minimum payment, what you used to be paying toward the last one, and all extra money. You keep doing this until you are working on the last debt with what you used to be paying toward all of your debts! Doing it this way solves two main problems with trying to get out of debt: First, since you are attacking the smallest one first, you get almost immediate gratification. We were able to pay off the smallest retail card in our snowball that first month. So we got to pat ourselves on the back for getting out of under one of our cards immediately! Second, once you are getting rid of a payment every time you pay off another card, if anything catastrophic should happen, something that is too big for an emergency find to fix, you now have that much less financial liability to slow you down. You will understand this second benefit more as I explain the process.

Now, like I said, we were able to pay off the first of our credit cards that very first month! We scraped together $300 and just wiped it out. This now allows us to start attacking our next debt with even more strength! Friedlanders now gets their same $170 a month PLUS the $30 we used to pay toward American Eagle for a total of $200/month, PLUS any extra money we can scrape together. It is nice to be able to let go of the stresses of all of your bills and just focus on one at a time. We were still paying on all of them, but it was so freeing and peaceful knowing that they were all going to get paid off if we just stick to this plan.

I really strive on visuals when working toward goals, so I thought to set up our bill payments kind of like they do during fundraisers with those thermometer type posters. I laid out each bill with our total owed at the bottom and the goal of a $0 balance at the top, and colored in what the new balance was each month when I got the new statement. It looked something like this:

After I started doing this, a strange thing happened...I started LOOKING FORWARD to getting our monthly bills! Crazy, I know. The physical reward of getting to color in the arrows every month was enough motivation to keep at it and keep sacrificing and working hard. I really started seeing progress in getting out of debt, which seemed so hopeless just a few weeks before. If you use this idea though, you must only color in the arrows when you get your new bill with the new balance however. I made that a rule for two reasons: First, if you color it in when you make the payment, like when you pay $200 on a $1200 balance and coloring it down to $1000, it wont work out when you factor in interest. You will receive your next bill and it wont say $1000, it will be more like $1045 because of the interest. If you color it in when you get your new statement, then you will be coloring in the correct amount. Second, the physical reward of making a dent in your balance like that when the bills comes changes your mindset like it did for me, and making those payments seems like less of a bummer. I looked forward to getting the new bill so I could go color in the new balance...and the more I got to color the happier I got!

As the months went by, they started filling up and John and I got to see every day when we walked by them how much progress we were making. Once the second bill was paid, we took the $30 from the first one, the $170 from the second one, and we applied it toward the third one and were paying $300/month instead of $100. That made it go so much quicker as well! Then after that one was paid off, we took that $300/month and applied it to the next one and were paying $500/month instead of $200! Meanwhile, our last debt of $10,000 was barely making any progress only getting a mere $250/month, but I knew what was in store for that little brat. Once we had all of the others taken care of, we then applied that $500 toward the biggest one for a whopping $750/month! Plus we were still throwing any extra income or savings every month toward it as well, so it was more like $1000/month. Imagine how quickly that little sucker filled up!!! When we were all finished, our wall looked a little different :)

Man, was that a satisfying event when I got to fill in the last little bit on our final arrow. We had gone from over $15,000 in debt, down to $0 in a little over a year. That may not seem like a lot to some people, but to us, it was amazing. Mainly because I was not seeing an end in sight, and it was putting an emotional toll on the both of us and our marriage. Being financially free allowed us to then take a vacation to Disneyland (since we didn't get a honeymoon after our wedding) using CASH! And it also allowed me to finally feel financially secure enough to think about starting a family. Also during the snowball, we had that car crisis where we needed to come up with some cash fast, and since we were at the stage of working on the last debt, we were able to take a "break" from our snowball that month and only pay the minimum on that one card, and that freed up over $500 in our budget that month! (That is what I was talking about earlier, which is one of the advantages of getting them paid off one at a time)

We did eventually attack some of the smaller student loans as well using the same strategy, but then ended up consolidating the rest when I got pregnant. I figured lower payments now would allow me to stay at home more and we could work hard on them later when I started working full time again!

I hope this how-to post helps you to make a plan on getting out of debt and have fun while doing it! We worked really hard to get out of all that was crushing us, and even though we haven't always been perfect since, we are so much better off because of it!!

Until next time,
Sarah

Being content

2012-04-01T12:55:00.001-07:00

I found a quote online today (and I hate that I couldn't find it's original author) but it said, "Someone else is happy with less than you have." That made me think about some of those things that I curse at and wish were better or newer... I hate our old run-down house with its peeling paint, worn floors, drafty windows, and occasional 6-8 legged visitors; but it is a house with heat, clean running water, electricity, and its in a safe neighborhood. I hate that my compact car can't fit a jogging stroller, it is getting pretty complicated to get Hudson in and out of, the windows need tinting so the sun wont beat in Hudson's eyes, and I desperately want keyless entry so that I am not struggling to get a door unlocked while holding a baby, diaper bag, purse, and groceries in the rain! But it is a nice car, the newest car I have ever owned, and it runs great, looks nice, and is very safe. I hate that I have a lack of stylish and form flattering clothes, but they are in decent shape, they serve the purpose of keeping me warm and dry, I have a place to wash them and keep them nice, and they help me represent my fun and colorful personality.

These things that I have are much more than many people in this world could ever ask for. The more I think about it, the more I just want those bigger and better things to make myself feel better and impress other people. If everyone lived in a house like mine, drove a car like mine, and dressed like me, would I be happy with what I had? Of course I would! So why, just because other people have more than I do, is my stuff suddenly not good enough? It's the proverbial cookie theory: A little girl is happily eating away at her cookie, thinking she is the luckiest little girl ever to have such a delicious treat, until another little girl comes along with TWO cookies...and then she is suddenly unhappy. I need to remember that it doesn't matter what is out there that I don't have. I need to look around me and be happy with what I do have. I need to find excitement and contentment in things that I can control and obtain. I need to set goals for myself that are realistic, and reward myself by doing things that wont sabotage my efforts. I need to be a big girl and take responsibility for my own actions and not wish and hope that some magical event will take place that will solve all of my problems. Yes, I took out way too many student loans, and that sucks. I wish I hadn't done that, but there is nothing I can do about it now except to just accept that this is my reality and take care of it. I am very lucky in the fact that I can afford to pay on them every month. I just heard that 1 out of every 5 people with student debt is in default. I can't imagine what it must be like to not have the money to pay your bills. Sulking and complaining about having to pay them every month does not make them go away any faster. But at least I had the ability to go to college, right? I love my education and I am very proud of myself for being the first one in my family to earn a college degree, let alone two of them!

I also need to focus on all of the blessings in my life that cannot be bought with money, because the richest people in the world are the people who have the most things that money can't buy. Here are a few things that I am so grateful for:

1. My husband is the greatest husband, father, provider, and friend a girl could ever dream of. He cooks, cleans, takes pride in being a dad, works hard, makes me laugh, and treats me like a princess. I appreciate him more than I could ever express.

2. My son was born absolutely healthy in every way. He wakes up with a smile on his face every morning and amazes me with what he learns each day. He throws me curve balls every once in a while, but it shows me how much strength and patience I have.

3. I have the most amazing family. I can count on them for everything. Each one of them has stepped up to the plate for me and sacrificed numerous times to make sure that I am doing okay. It's unfortunate that sometimes it takes a tragedy to make you realize how lucky you are to be surrounded by the people around you, but I am glad that they were there.

4. I am grateful for my job flexibility right now while I try to figure out exactly what I want to do long-term. I chose a career that I love, that is rewarding, and that forces me to learn each day and become a better person. Although it is not financially beneficial at the moment, it provides enough for me to be able to stick with it and wait out the economic storm.

5. I am just grateful to be able to wake up every morning. I have said before in my other blog, that sometimes when things are not going their best, and I dread having to get up to another day of dealing with a difficult situation, I try to remember the alternative. Not getting up. There are very few things that can happen to a person that will not get better with time, And even though things may be hard right now, they will get better. Every time something difficult is thrown my way, something great and positive usually comes a bit later. These tough times also remind me that money and "stuff" are so freaking unimportant!

I want nice things, I want financial freedom, and I want prosperity. But at what cost? Am I willing to sacrifice my marriage? Nope. Time with my child? Nope. My emotional well-being and sanity? Nope! I am going to keep plugging away and giving it my all, but I am also going to enjoy each day for the blessings it brings me and just enjoy the ride. Being gazelle intense is great, but if you are running so fast that you miss all of the scenery along the way, it's not worth it :)

Till next time,
Sarah

Not always puppy dogs and rainbows...

2012-03-30T17:51:00.001-07:00

If I ever make working toward financial freedom look easy or sound magical, please let me know, because it isn't always puppy dogs and rainbows. I get really frustrated sometimes with living this way. Every time a friend boasts about buying their first home, getting a new car, going on a fancy vacation, or just living the life I envisioned for myself, I get pretty depressed. I try to remind myself that they may be living in a completely different financial situation than I am. Maybe they don't have the student debt, maybe they are bringing in two full-time incomes rather than one, maybe they are in debt up to their eyeballs and just hide it really well, or maybe they sell their organs on the black market...who knows. But I want it!!! I want it like a 3-year-old wants a Popsicle!! I can feel my inner little kid come out and I stomp my little feet and I scrunch up my little face, and I pout. Luckily, John and I rarely go through these moments at the same time so we have each other to bring the other one down off of the proverbial ledge.

Most of the time, the frustration and disappointment of living this way encourages me even more to try harder and push forward so we can move out of this stage in our lives, but sometimes I just want to take the easy way out and just do whatever I want. I wrestle with tough decisions like whether to stay home with my son and sacrifice financially, or to work and save up for our house. I struggle whether to ride out the economic downturn and hold out for my dream teaching position, or to put all of it aside and just take any job that will pay me. I wrestle with whether I should take $100 out of savings and go buy myself some clothes that actually fit me and look halfway decent, or keep living in my too big or too small pants and the unflattering shirts I already have from Old Navy. Every decision I make has its price and I worry that I am making the right ones. My optimistic side begs me to look around and take into consideration all of the positives in my life: my amazing husband, my healthy and happy baby boy, the nice warm home we live in, the food we are able to afford to eat, our supportive friends and family, our jobs, the list goes on and on. I do have a lot to be thankful for, but I still feel like we have been busting our butts for so long and I should be able to see some form of tangible pay-off by now!

I think that the reason I like Dave Ramsey's program so much is because he is just so straight forward and blunt. He is like the financial world's Dr. Phil. He just tells it like it is. And I can always imagine his voice in my head when I am about to make a stupid decision or make an impulsive purchase. I equate going through his program like visiting a meat packing plant. Once you see the carnage inside, you wont ever want to go back to that life. After learning all that he has taught, you would have to be pretty dumb to make the same mistakes again, but I have to admit, living above your means is a lot more fun and a lot less work. I guess the tangible pay-off is having the ability to turn down a sub job whenever I want, and to not have to worry about a bill not getting paid. Of course the downside is spending one more day in our rental with my too small compact car, but at least I have the choice.

Well, I have been having some really fabulous and inspiring days lately, and I guess today was just a valley between peaks. I have our monthly cash budget all set up for the month of April and I am looking forward to how much we will be able to save up!! Our goal is to have a $20,000 down payment saved up for a house by this time next year...wish us luck and for a smooth ride!

Sarah

Couponing and finding deals!!

2012-03-29T10:12:00.000-07:00

So here is my long anticipated couponing post!! If you are wanting to make a commitment to putting more money away and paying off debt, a great way to trim the budget without sacrificing much is to adopt a few money-saving strategies when shopping. The three main ways I trim my shopping budget is to use coupons, buy on sale, and buy used. I'll address my tips on couponing and buying on sale, as well as some of the misconceptions and a few warnings!

First, using coupons has become quite popular lately which is both good and bad for those trying to get into the "game" as I call it. The good news is that retailers are now more used to people using coupons, so it is less of a stigma and the sales people are usually a little more knowledgeable about their coupon policies than they used to be. Also, there are TONS of good couponing websites and resources that practically do all of the work for you! The bad news is that retailers are not savvy to our ways and are trimming back what they will allow and sometimes the coupon crazy people will clear the shelves of the really good deals and coupons before us average people get a chance. But even though it can be a little tricky sometimes and it does take a little more time to plan your shopping, it can pay off BIG TIME! Here are some strategies I use when couponing:

1) Shop for whats on sale. When you go to the grocery store with a particular need in mind or a recipe or menu already picked out, you will often end up paying full price. Instead of creating your shopping list based on your menu, create your menu based on your shopping list (or what is on sale). In the tips below you will find some great strategies for planning out your shopping trip before you go so that when you get to the store you will only be buying things that are on sale that day and save yourself a lot of money. That doesn't necessarily mean you can't buy ANYTHING that is full price or fresh, but if you are able to save on everything else, than you can splurge on the things that you like to buy that isn't super cheap :)

2) Use a couponing website. I use http://www.thekrazycouponlady.com/. This site is awesome because you can choose which store you shop at, and she will match up all of the sales happening that week with what coupons to bring. Many of the coupons are ones you can print right off of your computer, while others are ones that you have to have the newspaper for. These sites take all of the work out of couponing because they match up the deals for you!! For example, she might list that Crest toothpaste is on sale at Fred Meyer for $2.19 each, and that there is a $1 off coupon available in the newspaper which brings it down to $1.19. Simple as pie!!

3) Subscribe to the Sunday paper. You will need to subscribe to your weekend paper to get many of the coupons. Hardcore couponers usually subscribe to multiple copies so that they can get more coupons, but that depends on how far you want to take this. I promise that the savings you get every week will outweigh the cost of the subscription. Other ways you can get these coupons is to ask neighbors for the coupon inserts that they aren't using, joining a coupon-swapping site or group where people give or trade coupons they aren't using with others, browsing recycling areas where people might discard their newspapers, or even purchasing coupons from other people (I have never done the last two, but I have done the first two). The benefit of having more than one copy of specific coupons is that you can stock up on things if you find an awesome deal, or you can purchase enough of an item to qualify for even more savings (I'll talk about that later).

4) Combine sales, coupons, catalinas, and buying in bulk to increase savings. One of the common misconceptions about coupons is that you are only saving pennies at a time and that it is not worth it. First of all, that is not true, if you know how to COMBINE coupons (which is where the couponing websites come in handy) and you stock up at great prices, you can save a ton!! Let me give you an example: The other day at Safeway, I ran across a great deal on California Pizza Kitchen frozen pizzas. They normally sell for $3.99 each, but were on sale for $3.49. On the outside of the door, there were coupons (they are referred to as "peelies" for $1.00 off of one pizza. I grabbed 3 of the coupons. I bought 3 pizzas and used 3 coupons (where it says "limit one per item" that means you can only apply one coupon PER item, but if you buy 3 items, you can use 3 coupons!) Safeway was also running a promotion where if you spent $10 on frozen food, they would give you a coupon for $5 off your next frozen food purchase. Most of the promotions are BEFORE coupons, so if you but $10 worth of products, and then use coupons to bring the cost under $10, you will still get the coupon. So here I am with $12 worth of pizzas marked down to $10.50 on sale, and then $7.50 after the $1 off coupons. When I pay, they print me out the coupon for $5 off which now brings my 3 pizzas to $2.50. THEN, I get another coupon (they are called Catalinas) printed out from California Pizza Kitchen thanking me for my purchase for another $2 off my next purchase. Now I just got 3 frozen pizzas for $0.50. That's like 17 cents per pizza. I have done this kind of deal on cereal, cleaning supplies, soup, and pasta. You are also able to combine a MANUFACTURERS coupon with a STORE coupon. A great place to do this is at Target. Often Target will print their own coupons for items that the store pays for, versus sending the coupon to the manufacturer. For example, the other day I used a $2 off Pampers Target coupon AND a $2 off Pampers coupon! I saved $4 off of one pack of pampers by combining them!! If this sounds really complicated, remember, the couponing websites do all of these "match-ups" for you, and, I did this crazy pizza couponing without bringing any coupons with me! I used the sale and the coupons that were already at the store! When you combine these strategies, your coupons go a lot farther!

5) Stock Up! When you find an amazing deal on something you use a lot of, stock up! (This is where having multiple copies of coupons comes in handy) I know that we use a lot of chicken, cheese, tortillas, canned soup, and bottled water in our house, so when I find a great deal, I buy lots! The coupon and sale experts will say that retailers have a 3-month cycle, meaning that certain items usually go on sale roughly every three months, so if we are talking about foods with a decent shelf life or can be frozen, a 3-month supply would be a good goal to stock-up on, otherwise just buy as much as you will be able to use before it goes bad. I at one point had 11 boxes of cereal, 6 bottles of salad dressing, and 4 bottles of household cleaner that I was able to get for FREE using coupons! And when you are talking about dirt-cheap groceries and household supplies, feel free to let your inner philanthropist free and donate whatever you will not use to a local charity, church, or food bank. I enjoy doing that with some of the stuff I get for free but will not eat. When you are able to stock up on necessities when they are cheap, then you are less likely to have to buy them when they are full price!! Another thing to stock up on, is coupons! Often times I will see "peelies" or seasonal coupon booklets at my grocery store, and I will often grab a few. Many times manufacturers will put out coupons for an item (like canned tomatoes, soda, frozen pizzas) that are not necessarily on sale at that store or at that time, but may come in handy at a later date. For example, on my same great shopping day at Safeway I noticed that many of the 24-packs of Pepsi had peelies attached that were $2 off of 2 24-packs. That day, the 24 packs were $7.99 each, which even with the coupon was too high for what I like to pay. But I knew that occasionally on Fridays, Safeway will sell their 24 packs of Pepsi for $5, so with those coupons (that were good until July) I could snag them for $4 a piece!! My hubby loves his Diet Pepsi, and at $4 for a 24-pack, I'll stock up! I think I grabbed 8 or 10 of the coupons. Also, many of the manufacturer and store coupons can be used at other stores so just because you found a coupon at Safeway but that product is not on sale, doesn't mean you can't take that coupon to Albertsons and use it on sale there!

Some major misconceptions about couponing are that it takes too much time and effort, the savings are minimal, and that only processed and "bad for you" foods are on sale. Let me address these here. First of all, yes, it does take a little more time and effort to use coupons, I usually spend about 30 minutes on Sunday mornings looking through the coupons in the paper and cutting out the ones I may use. I also have a small coupon organizer I keep in my purse divided into categories that make sense to me. It takes me another few minutes to sort through the old ones to throw them out and categorize the new ones. When it comes to shopping day, I might spend another 30 minutes browsing the couponing website planning my trip that day to make sure I am taking advantage of the good sales that week. So on average, if I were to make a weekly shopping trip, it takes me a little over an hour to prepare. But I usually save a minimum of $30-$50 on each trip using these strategies, so that hour of time was definitely worth it!! Second, like I said previously, if you know how to use the coupons correctly, the savings add up a lot faster than just pennies at a time. And once you get used to buying things super cheap, you will realize just how far you can make that $1 you saved go. For example, I don't like to pay more than $1 each for boxes of pasta, and more preferably, 50 cents. So if a $1 that I save on something else in my budget can buy me 2 boxes of pasta, that can serve 8 people in my family, or 4 dinners!! It really adds up! And third, yes, often times the things that are on sale the most and can be bought for the cheapest are usually boxed, canned, or frozen. However, if you remember that saving on some of those essentials that you are able to can free up grocery money to spend on some of the fresh produce and higher end items that you prefer, than it is still worth it. Also, remember that many times you are able to get things for free that you can donate to food banks that could use those non-perishables, and lastly, the savings that I get on diapers, bath tissue, cleaning supplies, and make-up are incredible. If at the very least you are able to use these strategies and stock-up on household supplies while they are cheap or free, imagine what that could save you per year!!

A few warnings about couponing:

1) Don't buy things on sale or with a coupon unless you plan on using it or donating it. It is not saving you any money if it wasn't something that you NEEDED, or even worse, ended up throwing away.

2) Know what is too high, a good price, and a stock-up price. It took me a little bit to know when I was looking at a good price. I often use the unit price or price per ounce when shopping now. I remember seeing black beans at Safeway on sale for $1 a can on sale and thought I had found a good deal, then I realized that they went on sale for half that every once in a while, so now I have the rule that 0-50 cents is a stock up price, 50-79 cents is a good price, 80 cents-$1 is something I'll buy if I really need it, and anything over $1 and I am just not buying it!! Pick your top 5 items that you buy and do the research to figure out what is the best price for it and try to use discipline to only buy it for that great price!

3) Use coupons and catalinas before they expire!! I have made this mistake too many times :(

4) And of course, go to the grocery store with cash! This will keep you on budget and force you to only buy the best deals and make the best choices!! You will try a lot harder to stretch your grocery budget if that is all the cash you brought with you :)

Here is a print-out that I put together for a little "couponing class" I led: Couponing 101

Happy Couponing!
Sarah

Creating a budget on a variable income

2012-03-26T09:38:00.000-07:00

At the height of our crazy debt repayment and savings journey I had taken on four part-time jobs to bring in as much income as I could. I was substitute teaching in two different districts, waiting tables at a local restaurant and sometimes working the front desk, as well as working as a camp counselor type job for the parks and recreation district nearby. There were many challenges juggling so many different schedules and still finding time to relax and spend time with my husband. If you are in a similar situation where you are not only trying to balance work and life, but as well trying to figure out how to make a monthly budget when you have no idea how much money you will make in any given month, then this post is for you!

I created a system that not only helped me balance my work and free time, but also allowed for me to create a monthly budget that would work. Here are a few reasons why I NEEDED to do this!

1) As you have read before, I have a really hard time saying no to people. When you are substitute teaching in two districts, waiting tables and working the front desk at a restaurant with over 100 front of the house staff members, and working on-call as a youth supervisor, you literally have hundreds of people calling you on a regular basis offering to let you work. To someone who is working hard to get out of debt, this can seem like a Godsend, an unlimited ability to work and make money!! But on the flip side, there were times when I was working 7 days per week and running myself into the ground. When someone would call and offer me a job, I didn't want to turn it down because I could only imagine the money I was losing by saying no. Let alone, I felt bad for allowing myself to take a day off when my husband was gone at work.

2) I never knew how much money I was going to make and when I was going to get it. As a sub, I got paid once a month, from two districts, as a waitress I was paid every other week and daily in tips, and as the youth leader, I was also paid every other week. But each job also came with different rates of pay, and tips were always inconsistent. So how could I plan a budget with all of this uncertainty and instability?

3) As a server making daily tips, it gets really easy to just live day-by-day and not plan ahead to pay bills. Because if you get a bill in the mail, all you have to do is pick up a shift that night and you have it paid. It's hard to get out of that habit and to start looking ahead and creating a plan for your money.

So, these issues led me to creating a plan with my husband that took all of the stress off of me and led me to a little more freedom and the ability to make a stable contribution to our monthly budget and savings. John and I sat down, and after looking at our monthly expenses and our goals for debt repayment and savings, we came to the mutual agreement that I would bring in a bare minimum of $1,800 a month (after taxes). That wasn't a lot of money in comparison to what John was bringing in, but again, that was the absolute bare minimum to make our budget work. The next thing I did was to go through my pay stubs and figure out what I was bringing home after taxes per hour for each position I was working. I laid each position out in a spreadsheet with the hourly take home rate, and used the equation software to set it up so that when I entered the number of hours I worked, it would show how much I had brought in. I am not good with excel, but I figured it out after a lot of trial and error! Here is what it looked like:

Sarah's Income:
Sub Full Day-$140:
Sub Half Day-$70:
Server-$7:
Front Desk-$9:
Park & Rec-$11:

Tips-:

Total:

Then all I had to do was to plug in any hours I worked that day, or any tips I made, and it magically told me my running balance for the month and added it up at the bottom. Another thing I had to do to make this work was to get a small calendar and keep track of my paydays. If I knew that any hours I put in on March 26th wouldn't be paid until April 11th, I would put those hours on the April spreadsheet instead of March. ( I had a basic sheet that I just made a copy of for each month) So you need to keep track of when you will actually receive the money you are earning. If all of this computer stuff sounds way too complicated, then you for sure could do this on paper with a pencil and a calculator. Whichever way works best for you, as long as you keep up on it! What this spreadsheet did for me was for me to keep track of what I was bringing in for any given month, and allow me to evaluate each day whether I NEEDED to work that day, or whether I could afford to take the day off. For example, if I woke up one morning and just felt the need to stay in my pajamas and read a good book, and I was able to see in my spreadsheet that it was only the middle of the month, but I had already brought in $1,500, I would allow myself to take the day off. This made me feel less guilty for sitting at home...because in reality, John was able to take his weekends off every week and didn't feel guilty, so why was I feeling that way just because I had the opportunity to work, but didn't?

The other thing that using this spreadsheet did for me, was it finally made me accountable for my tips!!! I had to make the mental shift that my tips were now part of my FAMILY income, and that each penny needed to be accounted for. In the past, whenever I took a break at work, or maybe aftrer my shift was over, I would order some food off the menu at half price (what a deal, right?) and eat! It usually cost about $5, but when I made $100 that night, it was no big deal. But when you add that up, that is $5 a day, 5 days per week...that's $100 a month!! That is a whole day's work!! I justified it to myself because it was only a few dollars, but if John were to spend $5 a day on lunch everyday we would probably nip that in the bud. So it wasn't okay for me to do either. After doing this I started taking advantage of the free soup and bread my restaurant offered the employees, and I would often bring a sandwich and some fruit and other snacks with me to make my own lunch. I needed to make sure that any tips I made that day were going toward our household budget, and if I decided to treat myself on my break or after my shift, that it was deducted from my "blow" money or somewhere else in our budget.

This type of system and mentality can work for any person working a job that has a variable income or works for comission. Just find the bare bones minimum amount of money you need to make that month and aim toward that number. Anything extra (and I always made more than $1,800 a month) would be put toward savings!! I loved those shifts where I was able to tell myself while I was serving some horribly obnoxious guest that I was doing it for ME and not to pay someone else!!! I would chuckle to myslef and say, "you are giving me money for just brining you food, what an idiot!" LOL. It was a whole new mentality when I had clear goals and I was no longer a slave to my lender.

Here is one last tidbit to encourage you to change your ways, especially if you hate your job, like I did: Imagine that you go and buy yourself a brand new TV (because you work hard and deserve it) and you take them up on the offer of 0% financing for 90 days. Even if you pay it off within the 90 days, you are still forking over several hundred dollars a month to pay off that TV. You are going to work, and busting your butt, to pay some cheeseball in a suit at Best Buy headquarters...no fun! Whereas, you instead decide to save up for a TV, and instead of going to work everyday to pay back some cheeseball, you now bring home that several hundred dollars a month and watch it collect on your dresser in cash until you can walk into that same store and pay for it in cash!! In the second scenario, you are working for YOU, not for someone else...its a liberating feeling!!!

Till next time,
Sarah

Setting up a household budget

2012-03-25T11:17:00.000-07:00

Once the crazy whirlwind of the emergency fund month is over, and you and your spouse are starting to get excited about the reality of becoming debt free and financially secure, the next step to take is setting up a household budget. This step was extremely difficult for me to get started on for so many reasons. First, I really did not want to face how much my daily and monthly expenses were costing me because it was only going to make me feel depressed about how much debt I was really in, and guilty about how much money I blow without realizing it. Second, I am horrible at saying no to people, especially myself. I was looking at the budget as a kind of diet that I would never stick to. I really did not want to give up the things I enjoyed doing, and I was afraid once I got real with myself, I would have to make some hard choices. And third, it just seemed really complicated and a lot of work. But honestly, once John and I got started, it turned out to be a lot of fun and very surprising about how much money we were actually saving!! By the end of the first month on our budget, John and I both looked at each other stunned as if a magician had placed money in our bank account...we had no idea how we were able to come up with that much surplus cash with very little extra effort. Keep reading if you want to know how we did it!

First of all, the way we did our budget is an interpretation of what Dave teaches, so it might work for you, or you might want to set it up more like how he explains it. Here is a link to his budgeting advice: http://www.daveramsey.com/articles/article/articleId/the-truth-about-budgeting/category/lifeandmoney_investing/

The basic principles of budgeting that Dave teaches are to:

1) Make a plan on paper for every dollar before you get it. That way you are in control of your money and none of those handsome dollar bills are running away before you have a chance to tell them what to do!

2) Budget your daily, weekly, monthly, and even inconsistent expenses every month. That means, not only should your rent/mortgage, electricity, and debt payments be budgeted, but birthday gifts, groceries, school supplies, even Christmas!! Yes, budget for Christmas every month! That way, when your car needs its oil changed in any given month, you have been putting aside $10 every month so that after three months, you have your $30 to go get it done...no need to stress about having that expense pop up!

3) Adjust your budget as needed and have regular meetings with your spouse about how it is working and what needs to be changed. In some households where one spouse may be in charge of allocating the funds, and the other spouse is in charge of spending them, it may not always match up. I know that if John only budgeted $10 a month for diapers, there would be a problem!! But having the month planned out ahead of time is great because there are no arguments later when one spouse goes and spends money on something that was not agreed upon.

4) This one is my favorite...budget for "blow" money. Give each member in the household a fixed amount every month that they are not accountable for, just to spend on whatever they want. I know that when John and I were doing this, he spent his blow money on a video game subscription and Rockstar energy drinks, and I preferred to spend mine on lunches with friends and pedicures. I loved having this money because I no longer had to feel guilty for or justify my indulgent spending!

5) Use cash. The only thing that should be coming out of your bank account electronically is direct payments to your utilities and bills. Make as many of your daily and monthly expenses in cash, so that your account is easier to monitor, you are less likely to spend as much, and you are better able to stay on budget. I know that I am much less likely to go over my grocery budget if I take $50 in cash rather than just shop and use my debit card.

Now here is where Dave and I differ:

Because I had a variable income (working FOUR part-time jobs) it was practically impossible for us to plan out our month before we knew our income, so we did our budget a little backward. At the beginning of the month I would go to the bank and pull out enough cash to satisfy our months worth of groceries, fuel, blow money, entertainment money, and we had an "other" category for such incidentals that changed every month. Then I would look at our payment schedule, and anything that was going to be due before the next payday, I would leave that amount in the account, as well as a $200 buffer. We always had a minimum of $200 in our account so that we would never overdraw. If you need to use your emergency fund to get this process started, it would be worth it. I always liked working a month ahead because then we never had any surprises! So here is what our budget looked like:

Bank balance: $2,400
-$250 cash for groceries
-$250 cash for fuel
-$100 cash for blow money
-$50 cash for entertainment
-$100 cash for other expenses

So after withdrawing all of my cash monthly expenses, I still have $1650 left in my account. Now I have to look ahead to what is coming due before the next payday. John got paid every Friday, so I only had to account for the next week's worth of electronic payments.

Bank balance $1,650
-$850 rent
-$125 car insurance
-$35 pet insurance
-$16 for newspaper subscription

Later in the month (after John gets his next paycheck) there will be more bills due, but his deposit will more than cover them. I only do this process at the beginning of every month because I take whatever is leftover and deposit it into SAVINGS!!!

Bank balance of $624
-$200 buffer

I deposit $424 into our savings account!! Now each paycheck this month will pay that week's bills and then have some leftover, and at the beginning of the next month, I do this all over again. I said at the beginning that John and I were shocked by how much was leftover that first month!!

You could do this same process if you got paid once a month or bi-weekly. The key is to NOT use your debit card so that you never have to wonder how much you have in your account. You planned at the beginning of the month what your electronic payments were going to be, and everything else was pulled out in cash!

Here is another area that I branched out on my own and did not Follow Dave's plan to the letter. Instead of keeping my whole monthly budget in cash with me, I used a jar system in some super secret location. I would put all of the month's cash budget in here at the beginning of the month and pull out what I needed when I needed it. Since I didn't carry it with me, I had an "oops" jar too, just in case I needed to stop for something on my way home and didn't have the cash on me. I normally didn't let that happen, but sometimes I would put something on my debit card and then pull it out of the corresponding jar at home and put it in the "oops" jar to be put back in the next month.

Our growing savings account ended up just being the catch-all for any expense that popped up. Getting tires replaced, taking Chewy to the vet, getting some new glasses, whatever. As I said, Dave advises that you plan for these things and make a separate collection, but I knew that wouldn't work for us, and I felt that we had enough self discipline to only use it for necessities. I DID however make separate collections for our trip to Disneyland that fall though! We paid cash for our plane ticket, hotel, Disneyland passes, and spending money. That was the first time in my whole life that I saved up for a vacation!!

I loved this new cash budget!! It kept me on track because I had a visual to see just how much I was spending, and I had a lot of fun seeing how far I could make our money go! It also gave me the opportunity to start using the idea of "opportunity cost" that my lovely high school economics teacher taught me. Since John and I only allotted ourselves $50 every month for entertainment, if we wanted to go out to a movie or bowling or drinks with friends, we either had to use that money or our blow money, or once we even took from our grocery budget!! It made us start really evaluating just how much sacrifice we were making to go out. If we blew our whole budget in one night, then we wouldn't be able to go out again until next month. I honestly never felt like I was depriving myself using this system, I just remember asking myself, is going bowling tonight with these friends worth blowing my whole entertainment budget, or would I rather wait and do something else later on? I would have never asked myself that question before making a budget. And I never had to say no because I was "broke". I loved having that freedom!! I just said, "nah, I don't think I want to do that." I loved not being broke all the time!!!

There is a lot more to this whole budgeting thing, and honestly, Dave Ramsey makes it sound a lot more fun than I do. I would highly advise that if you need more guidance in this area, to really commit to following his program and seeing how much it can change your life. If you have any specific questions on what we did, let me know and I would LOVE to share!! My next blog will be specifically setting up a budget with a variable income, because that posed quite the challenge for me, but I came up with a great idea that made it work!!

Sarah

Setting up the emergency fund...

2012-03-24T12:09:00.000-07:00

When you are making a plan to start getting out of debt and making better choices with your money, it is hard to know where to start. I remember when John and I were at our lowest point we were taking back bottles and cans, selling used books, putting things on Craigslist, and taking whatever odd jobs we could get to make ends meet. Luckily, we weren't using much credit during our relationship, but the overwhelming burden of our past debt, my student loan payments, and just day-to-day expenses was just too much to handle. I didn't want to keep living like we were, but I didn't see any way to get ahead. If we were barely able to make our minimum payments and survive, how would we ever get out of debt, let alone move ahead and buy a home and be financially secure?!?

Dave Ramsey calls each step in his plan, "Baby Steps", and his first baby step is to establish a $1000 emergency fund. Immediately. Like within a month. While that may seem overwhelming to some people (i9t was for me!) it is totally doable. Let me start by explaining why this first step is crucial to beginning the process...

1) By establishing an emergency fund that is substantial enough to cover most emergencies, you are eliminating your need to use your credit cards to bail you out. Most people have at least one credit card for an "emergency" like car repairs, medical expenses, dealing with an unforeseen event, or whatever "Murphy" throws at you. Dave has a simple solution to that: prepare for something to happen!! Have the money in a savings account just waiting for that emergency! I explained in a previous post that John and i were able to use our emergency fund to take care of replacing my car when it died, and what would have been a HUGE financial crisis for us turned into an inconvenience when we had to drain our account that we worked so hard to build. But the important thing is that the money was there.

2) By building the emergency fund quickly, you are forced to work overtime (literally and figuratively) to get the money together. You will figure out where you can scrape together a few dollars here, where you can save a few dollars there, and how you can earn some extra money at work or by getting a part-time job. At the end of the month, you will stand back and look at all that you accomplished financially and say, "hey, that wasn't so hard after all!" It's forcing you to dive headfirst into the financial peace journey. This new mentality and focus will help you get started on the second baby step...your debt snowball!

3) The process of building this safety net, and the peace it brings you and your spouse, pays off exponentially in your marriage. All of the sudden you are both focused on the same clear goal, and you begin to talk openly about what may have been a touchy subject to discuss. No longer are you arguing (or not talking about) which bill to pay first, what to spend the bonus on, when to save and when to splurge; finally you are both on the same page and aiming toward something positive that is proven to work! Let Dave be the mediator :) Once John and I started this baby step, our great relationship got even greater, and the stress that we were both feeling about our finances started to slip away. This is when we knew that we were on the right path, and things were looking up...we could do this!

So there are three very important reasons why this is the right first step in the journey. So how did John and I do it on a very limited income?

1) Well, the first step was to look in our cupboards and realize that we had enough food in there to eat on for quite some time. We are total foodies so we were really kidding ourselves by how much we were spending on groceries! (I will have a great post about how to save on groceries in the future, I promise!) We got creative and were able to make do on what we had, which was a lot of pasta, chicken, and sandwiches! Remember, it's only a month!

2) Second, we only paid the minimum on our debts that month, because the priority this month is to build that emergency fund.

3) Gulp, we also toned down some of our spending. The cable TV? Gotta go...Entertainment subscriptions...also gotta go. Turn off or cancel whatever you can to eliminate or reduce your monthly payments. Again, remember its only for a month. These things can be revisited after the month is over during the budgeting step!

4) Figure out a way to make some extra cash...that might mean getting a part-time job, having a garage sale, selling a few things on Craigslist, or just doing some odd jobs for a neighbor or working overtime at work. Anything to bring in a few extra dollars. Dave says, "Sell so much that the kids think they are next!!" You would be surprised about how much money is lying around in unused stuff that could be sold or how much your time is worth making money from a hobby or with some extra hours at work.

5) I'm not sure if Dave addressed this, but I liked having all of that money I was saving that first month in cash on my dresser! It was a visual of how much we were saving and how hard we were working. It motivated me to go to work a little early and stay a little late. I was suddenly seeing every piece of furniture and every article of clothing with a dollar sign on it!! I wanted to sell everything because it was so freeing emotionally and so rewarding to see the cold hard cash piling up.

So if the first step has been holding you back, I dare you to try this. Even if this is the only step you take toward financial freedom. But I can give you my guarantee, that after this month, after you will have seen just how disciplined you can be, you will be motivated to take the next step. So join me in my next post about setting up a household budget!!

Sarah

How I got to know Dave...

2012-03-22T16:57:00.000-07:00

Since Robbie at FPU decided to share my link (how cool!!) I decided I better give a little background into my story and how I was led to Dave...

My name is Sarah and I live in Oregon with my husband of 2 years, John and our 9-month-old son Hudson. I am a part-time substitute teacher and full-time mom! I am an eternal optimist and I enjoy looking at the bright side of things and trying to remain positive through all of the trials God has put me through in my life. I enjoy learning new things and constantly challenging myself too. I was raised in an amazingly loving middle-class family with two working parents out on some acreage in the country. I was never given formal financial training or guidance, and I was a first generation college graduate. That is where my journey to Dave begins.

Going off to college at the ripe old age of 18 and 1 month, I thought I was pretty savvy and had it ALLLLLL figured out! I had maintained some form of employment all through my tens and had a checking account and a savings account already set up and knew how to use them properly. My first year in school I was living in the dorms, on the college meal plan, and had grants and loans set up to help pay for school. The next year, I had a roommate in our own apartment, was eating out and meeting new friends, and had a few less grants and a few more loans. The next year I was living in my OWN apartment (how cool was I??) paying my own bills, and had even fewer grants and more loans...this goes on for a total of 7 years. During these 7 years I also found out that my school would even let me borrow more money than I needed for tuition to pay for such incidentals as a new couch, some fancy new make-up from the department store, or even a trip to Chicago!! These were all necessities of course, and I would obviously pay them back when I got my grown-up job after graduation!! In my defense, I was working a good amount all through college as well, but that never stopped me from taking out the maximum amount of loans offered to me and making sure I enjoyed my youth to the fullest! Fast forward to my graduation from graduate school in 2009 with a fancy teaching degree into the worst economy my generation has ever seen. Not only are there no jobs, the are even less teaching jobs. Once my deferments and forbearance ended, i was paying almost $1000 a month with no salary. Luckily for me, by this time I had met and married my amazingly supportive husband, and we were making do with his income. And on October 29, 2009 which was 19 days after we got married, we attended an event that changed our lives!!

I had seen Dave live once before when I was in school, but with me barely scraping by and not having the opportunity to change my habits much, a lot of what he said went right over my head...but I was still hooked. I convinced my new husband that he should come with me for the next one, and after all of the dirty looks and sighs I endured for dragging him to a 6-hour financial presentation, he actually enjoyed himself! As a matter of fact, during the intermission, we dug into my purse and grabbed out half of the $200 I had saved up for a new iPhone to go purchase the FPU membership. For the next few months until we officially got registered for his course, John and I took bottles and cans in for redemption, I sold almost my entire library to a used book store, and we lived on macaroni and cheese while I tried to build up my network of teachers to substitute for. We then signed up for his course at a local church starting in January of 2010. We began the program with an embarrassingly high amount of student loans (this is the only amount I'm not wiling to share...yet...but its over $50k) and a little under $16 in consumer debt. The only thing we had done right up to this point was to save up and paid for our entire wedding with cash, so we had no debt from that! We really needed help at this point because John had been off work for an injury for almost a year and was collecting temporary disability on top of me trying to find work. Yet we managed to pay off every single penny of that consumer debt that year being gazelle intense and working our butts off! At one point I was holding down four--yes FOUR--jobs and we were experiencing so much happiness in our marriage, the communication was better on all fronts , not just our finances, and we were having fun!!!

I will explain more about our journey step-by-step throughout this blog, and even note some of the stumbles we have had along the way. We are still working on the journey and I hope I can inspire myself to keep going too!!

Living like no one else!!!

2012-03-22T11:33:00.004-07:00

Dave Ramsey (okay, I refer to him a lot!!) has a motto to, "live like no one else, so that you can live like no one else!" Basically he is saying to buck the norm financially NOW (which is to spend and buy all of the fancy things) so that LATER you can live the life you always want instead of facing the reality of losing your home and living on social security like so many are doing now. I can tell you, that this is the hardest to follow of all his teachings! It is a daily struggle to wake up in my rental home, hand wash my dishes because I have no dishwasher, sit on my old tattered couches, wear clothes that aren't in style anymore or were bought on major clearance, and sit at home when my friends are out on vacations and other social events. So much of our self-worth is tied in with how we present ourselves to others, and many of us succumb to the pressures of trying to impress people and putting ourselves in financial ruin to do that.

Luckily, for us, my daily experiences, while very difficult to endure sometimes, are by CHOICE and not by necessity. We have been approved for a home loan, we could go buy a dishwasher today, we could pay for a new set of couches with cash, and I could go on a shopping spree or plan a vacation anytime I want. I just choose not to. John and I have talked about our priorities in life, and living paycheck to paycheck or paying credit card or loan payments are not priorities right now. We are choosing to pay off student loans, save up for a sizable down payment on a house, and live on one income so I can spend these irreplaceable first years with our son. Dave says that our values are expressed by where our money goes; clothes, cars, houses, vacations, and fancy luxuries like that are not where we want to put our values right now. We are determined to start our marriage and our family based on the values of independence, patience, community, and God. We have made many sacrifices to live that lifestyle, and while it is not always easy, I am already seeing it pay off. Let me tell you a few instances where our choice to save and maintain our priorities has saved our marriage and our family...

First example was when we first began Dave Ramsey's program, he said to always prepare for "Murphy" as in, don't let life sneak up on you, and plan ahead for emergencies. So when we received a sizable tax return that year, we put it away in savings for when my old jalopy of a car decided to kick the bucket. Sure enough, a few months later, my 1994 Ford Probe died on the Markham Bridge during rush hour and was a total loss. On top of that, John's SUV needed repairs that very same day after it began malfunctioning while he was driving around looking for a new car for me! Luckily, with the savings we had, and the money we got from scrapping the Probe, we were able to purchase a new(er) car and fix John's car with cash! Was it an inconvenience, sure was!! Did it devastate us financially to fork over $4,000 in cash that day? NOPE! What could have been a major strain on our new marriage turned into an opportunity to high-five each other and remind ourselves that we are doing the right thing.

Second example was the year John was out of work on an injury. While we were both working, we were able to make our payments on all of our bills with no sweat! Many people rely on their incomes to stay the same in order to pay their rent/mortgage, car payments, insurance, cable, phone, credit cards, and daily necessities. Some people, who are half-way thinking ahead, might even have a back-up for if an income is lost (most people don't though). But what happens when one spouse is in a graduate program full-time and can't work, and the other hurts themselves and is collecting disability for almost an entire year?!? Well, that could be disastrous!! John and i definitely struggled that year. We were still trying to pay off some old debts, on top of paying for our upcoming wedding. But luckily, we had paid off the major consumer debt by then, and were able to cut back in other areas to make do. It is a lot easier to cut back to necessities (lose the cable, eat out less, stay home more, maybe sell some stuff) when you don't have creditors looming over your back! Think about all of those pesky credit card and retail store and car loans you have...they are very hard to cut back, especially if you are upside down on that car! But it was nice for us, because we didn't have the consumer debt to drain us, and we just budgeted our way out of the problem!

The third example is where I feel like God really intervened. John was offered a position at his work with a sizable pay increase and room for advancement, which was a huge goal for him. The downside? It involved us moving almost all the way across the country and putting in more hours per week. At first it seemed like a no brainer...more money!?! Yes please!!! But the more we talked about it and consulted with the people that we loved and trusted, the more we realized that it wasn't the right timing. We had a newborn who was the first grandchild in my family and I really wanted to stay close and raise him with their support. I felt bad because I knew that I was holding John back from his dream, but I remember saying, "What if something happened to one of our parents while we were gone, Hudson would never know them." How prophetic that statement was. About a month or two later, when we would have been all moved and settled had we gone, my healthy, vibrant, and amazingly wonderful mother passed away totally unexpectedly. This rocked my world, and I couldn't help but imagine the resentment I would have felt toward my husband had he asked me to move away and miss those last few weeks with her, and the loneliness I would have felt having to head back "home" after her service to the void of family and friends. I really think God helped us decide to stay, and that our last memory of my mother, which was picking out pumpkins at Hudson's first visit to the pumpkin patch, was a product of his intervention. And God provided for John as well, he found out afterward that his company would pay for him to return to school and finish his business degree so that he would be able to move up in the company more locally. Our choice to put family ahead of money and "stuff" in this scenario literally saved our marriage and quite possibly my sanity!

This will be my longest and most preach-y post, I promise...In the future I hope to write about more tips and tricks I have learned, and possibly confess some stupid mistakes I have made along the way too...thanks for joining me in my journey!!

Sarah

I'm definately missing a few digits...

2012-03-22T10:53:00.000-07:00

Dave Ramsey (my financial savior and possibly the smartest man in the world) says to his listeners that, "taking financial advice from a broke person is like taking shop class from a teacher with missing fingers." It's so true that we often listen to people around us (our friends, parents, co-workers, salespeople) who love to give advice about what we should be doing with our money, but often those are the people who are riddled with debt, no savings, no retirement, or living way above their means. And those people in our lives who really do exhibit great money managing skills, we are often embarrassed to admit that we might need a little guidance. I was turned onto listening to Dave and really paying attention to my money by my step-father in about 2005. At that time, I was a full-time college student and part-time waitress barely making ends meet putting myself through school. A lot of his teachings went way over my head and I had a hard time being able to apply anything because I was so focused on survival! Once I graduated, started working more regularly, and got married, I revisited his teachings with my husband in the fall of 2009 and we began our Financial Peace journey...

I titled this blog "I'm definitely missing a few digits" because I feel like I am in no way in the financial position to be giving anyone else advice, as I am the proverbial shop teacher with missing fingers, but what I would like to do is to share what I have learned along the way and open myself up to some of the stumbles we have had and the hard lessons I have learned. In this economy, a lot of people who once may have been doing just fine, are looking for new ways to save money, spend less, and create more financial freedom by cutting the puppet strings that creditors have on us. I hope this blog will help me stay on track, and inspire others to make small but very meaningful changes in their lives.