I think it’s important to focus on simple, achievable goals.  As such, here are my top five financial priorities and principles -

Priorities -

• I will maintain adequate cash reserves, sufficient to replace my income for 12 months.
• I will remain debt free, paying upfront for all purchases.
• I will save for retirement, focusing on both pretax and after-tax accounts.
• I will teach my children sound financial principles, and help them pay for college.
• I will look for opportunities to bless others, both with my finances and my time.

Principles -

• I will live on a budget.
• I will respect every dollar that I make, and the work that went in to making it.
• I will look for opportunities to save more money.
• I will look for opportunities to earn more money.
• I will value people more than possessions.

As I work my way through each month, I keep each of these principles and priorities in mind.  I’m constantly asking myself -

Am I making decisions consistent with my priorities and principles?

It is easy to fell overwhelmed by the amount of information and financial noise.  For me, it’s imperative that I remain focused, keep things as simple as forward, and stick to my priorities and principles.

How about you?  Have you created or thought about a list of priorities or principles?  If so, leave a comment and share.

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Financial Priorities And Principles

I’ve been away from blogging for a few weeks, busy with work.  I want to thank those of you who reached out to say “hi” via Twitter or email.  You guys rock.  Things have settled down now and I should be back to my normal blogging routine.

A few weeks ago, MBH from Mighty Bargain Hunter reached out to me and asked me to check out a new site he’s been working on – Cash Commons.  I’ve spent some time on the site, and I’m really impressed.  As a member of the Cash Commons community, users can ask questions, answer questions, and vote for their favorite topics.  Over time, users will earn reputation points.  I encourage you to do as I did – Check out Cash Commons, register as a new user, and contribute to the community.

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Check Out Cash Commons

I am so excited.

I am going to take my oldest daughter to the bank and help her open her first savings account!

She’s ten now, having recently celebrated her birthday, and she has some birthday-checks to cash.  One of our local banks offers a no-fee, no-minimum balance required savings account for children under 16.  This type of account will be perfect for my daughter.

Over the past few years, my wife and I have worked hard to teach our kids about saving, spending, and giving.  Last year, we introduced them to the wildly-successful Kids’ Fun Fun.

I want to incorporate trips to the bank into our regular weekly routine.  I want my daughter to be comfortable with the entire process – filling out the deposit slip, endorsing the check, talking to the teller – so that she will never feel “overwhelmed” by the banking experience.

In a few years, when she’s ready for a checking account, she’ll have some grasp of how personal money management works.  Hopefully, by the time she’s ready for college, she’ll be prepared and be able to avoid many of the financial missteps that others often make.

What about you?  How old were you when you or your parents opened your first savings account?  Have you opened one for your son or daughter?  I would love to read your comments.

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Taking My Daughter To The Bank To Open Her First Savings Account

I once sent a credit card company $5 per day, every day, for a month.  Seriously.

The year was 2005 and I was in full on debt reduction mode.  Pumped up by the comments left by my readers – and ready to be debt free – I spent most of my waking-hours thinking about ways to reduce my debt.

Somehow, the thought struck me:  What if I manage to save $5 a day – say by skipping my morning trip to the convenience store or brown-bagging lunch – how quickly could I put that $5 to work?

I decided, just to see if it would work, to use online bill-pay to send a series of $5 payments to the credit card company.  I scheduled the payments, one right after the other, for each day of the month.  Every other day or so, I would check my credit card balance (online) and, sure enough, my balance was going down, $5 a day.

At the end of the month, I managed to reduce my credit card balance by an “extra” $150.  The silly little experiment worked!

Now, am I suggesting that anyone else do this?  Not really.  In fact, I’ve heard that some credit cards actually limit the number of payments that they’ll process during a billing period.  Nevertheless, I do think that my silly little experiment was valuable, in that it taught me the power of micro-payments.

I’ve mentioned micro-payments before – those small payments, sent throughout the month, which help to reduce the average daily balance in your account.  These payments are made after regular minimum payments and are in addition to the extra payment one might send while getting out of debt.

Not only did I learn the value of micro-payments, but I also learned that money management is about much more than just dollar signs, percentage points, and mathematical calculations.  Money management is about keeping your head in the game and staying focused on specific goals.  Each day, as I logged in to my checking account and scheduled another payment – that was one more day where I had successfully saved $5.  This $5 was above and beyond my regularly budgeted-for debt reduction payment.  This $5 required a change in my habits.

For thirty days, instead of focusing on the big-picture, I focused on the very, very small things.  If I wanted a soda, I had to remember the $5.  If I wanted a newspaper, I had to remember the $5.  If I wanted to rent a movie, I had to remember the $5.  This silly little experiment (which, in the end, wasn’t really all that sill), helped me learn the value of every dollar that comes in to my life.

If I had it to do all over again, here’s exactly what I would do – and it’s what I do when making micro-deposits to my savings account:

1.  I would set a goal of saving $5 each day.

2.  At the end of the week, I would send a micro-payment (or micro-deposit) of $35.

3.  A couple of days after sending the micro-payment, I would check my credit card balance, just for that emotional boost that comes with seeing my debt reduced.

The month after my silly little experiment, I went back to my standard practice of making my minimum payments to all accounts, making an extra payment to the first account on my debt snowball, and then I made four micro-payment throughout the month.

Micro-payments rock and they really kept me motivated. Have you used micro-payments?  If so, leave a comment and let us know about your experience!

One final note – All of these payments were initiated by me, using online bill-pay.  I never game the credit card company access to my checking account.  In other words, my bank was sending a payment to the credit card company.  The credit card company was not “pulling” money from my checking account.  And, obviously, this micro-payment thing probably won’t work if you are sending payments via paper check from your house.  The postage cost would be too high.

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How A Silly Little Experiment Helped Me Get Out Of Debt

My wife and I both have contributions to the retirement plans offered by our employers deducted from our paychecks.  In addition to those pre-tax retirement contributions, we also make monthly contributions to our Roth IRAs.

For me, the annual contribution limit to my Roth IRA is $5000.  (See IRS Publication 590 for complete information about contribution and income limits.)  My wife’s limit is the same.

The contribution time-table for both the Roth IRA and the Traditional IRA runs from January 1, 2009 until April 15, 2010.  That’s right.  We have until the tax-filing deadline of 2010 to make contributions to IRAs for 2009.

So, even if you haven’t made contributions for 2009, there’s still time.  We have six months to contribute as much as we can, up to our contribution limits.  Remember, once the deadline passes, we can’t go “back” and make contributions for the 2009 fiscal year. We’ll have to settle for making contributions for the 2010 fiscal year.

Between January 1 and April 15, there is an over-lap, and contributions can be made for both 2009 and 2010.  We indicate, using the memo line on our checks, the year for which we are making a contribution.

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Only Six Months Left To Make Year 2009 Contributions To Roth IRA Or Traditional IRA

Isn’t it amazing how our thoughts work?  I’m sitting here, typing this article, and it’s October 7, 2009.  There’s a part of my brain that is occupied with next word I’m going to type.  There’s another part that’s focusing on an appointment that I have tomorrow – and yet another part that’s thinking about next year’s summer vacation.  Even if I tried, it would be impossible to control just how far out into the future my thoughts are capable of exploring.  I can, in a split second, imagine tomorrow’s breakfast, or, just as easily, the birth of my first great-grandchild, decades from now.  My brain has absolutely no trouble imagining or picturing either event, with the exact same clarity.

However, even though I can see both events – the breakfast and the birth of the grand-child – the thoughts about the breakfast are much more linear in nature.  In other words, while I can picture both events in my mind, the paths to each event are imagined in very different ways.

For instance, I know that I will be at home tomorrow and that my breakfast choices will be limited to the foods that are already in my house.  I’m not really a big fan of cooking, so I’ll probably skip the eggs or the oatmeal.  I am, however, on a bit of a health kick this month, so I will not be having pop-tarts or doughnuts.  Let’s see.  That leaves a nice juicy apple and a handful of almonds.  Yes, that’s what I’ll have for breakfast tomorrow.

Did you see how that works?  Very quickly, I was able to narrow down my choices and make a decision about tomorrow’s breakfast.  For all intents and purposes, the decision about tomorrow’s breakfast has been made.  Freed from making that decision, my brain is now free to think about other things.

Let’s consider the birth of my great-grandchild.  Instead of the simple. linear approach that my brain took to figure out tomorrow’s breakfast, it’s now considering a nearly infinite number of scenarios that might lead to me actually holding a newborn great-grandchild at some point in the distant future.

My goal, honestly, is to free my brain up so that it can spend as much time as possible thinking about and planning for the future.  Before it can do that, however, I have to be sure that I’ve taken care certain short-term goals – like preparing breakfast – so that I can then begin to think about long-term dreams – like seeing that great-grandchild.

There are certain times when it is important to focus on short-term, linear goals. Extremely important.  I would never have gotten out of debt if I had spent my time reading books about investing or dreaming up scenarios for how to purchase a newer car.  My thoughts would have been all over the place.  I would never have settled on a specific plan.  I would still be exactly where I was five years ago.  Broke.

Compare that laser-like focus with where I am today.  Debt free with an established emergency fund, I am able to consider a whole world of opportunities.  The difference between where I am, mentally and emotionally, and where I was five years ago – it’s like night and day.

For a short period of time, I had to stop all of the mental-chatter and focus, focus, focus.  Taking the time to get out of debt was the smartest thing I have ever done for myself.  Taking the time to build an emergency fund was the second smartest thing.  I spent two years on those goals and now, I am in a very good position to think about – and dream about- the rest of my life.  Now, my thoughts are free to wander down a thousand different paths and my plans can be bigger than ever!

I would love to hear from you, my awesome readers.  Where are you right now?  Are you focused, like a laser, on the short-term?  Or, are you moving into a place where you are ready to think long-term?  Have you managed to do both?  Comments are more than welcome.

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Some Thoughts About Thinking

I’ll admit it.  I actually enjoy shopping for groceries.  I usually shop on Tuesdays and I try to go to the store when there are fewer customers shopping.  Over the years, I’ve learned how to save money (and a little time) while shopping for groceries.  Here’s what works for me -

1.  Use a grocery store price book to track the prices of regularly purchased items.  (I’ve created a free printable version of the price book that I use.  Feel free to click the link and print out a copy for yourself.)

• The price book will help you figure out the rock-bottom prices from your favorite store or stores.
• The price book will help you know when to stock up – and when to buy just the minimum.

2.  Familiarize yourself with the layout and selection from your favorite store.

3.  Take advantage of a store’s price-match policy.

• This is especially important if you want to avoid driving all around town, just to save money on one or two items.  Take the weekly circular with you to your store of choice, find the sale items listed in the circular that you want to purchase, and then have your store price-match those items.
• If you are going to price-match more than one or two items, try to go to the store when there are fewer customers.  You’ll feel more comfortable asking for the price-match if there aren’t 10 people waiting in line behind you to check out.

4.  If an item that you want is on sale but out-of-stock, ask for a rain check.

5.  Use coupons, but only for items that you were already planning to buy.

• I usually get coupons from the Sunday paper.  I’ve also printed them from several online sites.  From time to time, our local store will send us coupons in the mail.

6.  Sample generic versions of various products.

• I have found that the quality of most generics is equal to the quality of most name brands.  Most reputable stores will give you a refund if you try their generic or store brand and you are not satisfied.

7.  Find out if stores in your area offer double (or even triple) coupons.

• My favorite local store will double coupons up to 50 cents.  So, if I have a coupon for 50 cents, they’ll take 1 dollar off of the purchase price.  I find that I can really save money when using doubled coupons and purchasing canned fruits and vegetables.

8.  Skip the grocery store and try the local farmer’s market or vegetable stand if you are looking for fresh produce.

• If you have the time, you can really save a ton of money by buying from local farmers or from local produce stands.

9.  Bring your calculator to the store – and use it!

• If you ignore all of the above, don’t ignore suggestion number 9.  I use the calculator on my cell phone.  You need to be able to figure our price per ounce or price per gallon or price per unit.  The little information stickers below most products are often wrong.  A quick calculation or two, and you’ll soon know whether to buy the 24 ounce or the 44 ounce ketchup.

10.  Pay attention to price – period.

• A lot of research goes into separating your money from you.  Ignore end caps.  Ignore where an item is on the shelf.  Ignore those bright yellow or orange “sale” signs.  Compare prices – per unit, per ounce, per pound, etc.

11.  Understand how “2 for the price of x” works at your store.

• In some cases, stores require that you actually buy 2 qualifying items in order to get the discounted price.  Other stores, while using the “2 for the price of x” signage, will actually sell you 1 item for half of x.  Know your stores’ policies.

12.  Shop with a list.

• Use your list in conjunction with your grocery price book.  List items in two columns. 1.) Items we have to have, right now.  2.) Items we need to stock up on, if they are on sale or have hit a rock-bottom price in our price book.

13.  Leave the kids at home (most of the time).

• It’s usually much easier to shop, compare prices, and get done quickly if you can leave the kids at home.  There are times, however, when it’s important to let the kids in on the process.  I’ve actually taken all three of my kids, by myself, to the grocery store, and while I’m not really able to fiddle with the price book or worry too much about using the calculator, I have managed to still save money and maintain my sanity.  The key is to stick to the list – and let the kids help whenever they can.

14.  Don’t be penny-wise and pound-foolish.

• Let’s be real.  Time is money.  It doesn’t make sense, unless you simply have loads and loads of free time, to kill ourselves to save 3 bucks at the grocery store.  There is something to be said for convenience.  From time to time, pay the extra few pennies, get home a few minutes earlier, and enjoy the evening with your family.

15.  Learn to cook from scratch – or not.

• This one is last for a reason.  There are times – many times – when it makes a ton of sense (and cents) to cook from scratch.  There are other times when it just pays to buy pre-made or pre-mixed items.  You’ll have to decide for yourself, based on your cooking skills and eating habits, which will work for you.

This is a subject about which I’d love to hear from you.  How do you save money at the grocery store?  Leave a comment and let us know.  Rock on!

This week I will continue writing a series of Back to the Basics articles.  I encourage you to subscribe to No Credit Needed via RSS or Email.  Also, if you liked this article, please consider promoting it via the social network buttons below.  Comments are always appreciated – and don’t forget to follow me over at Twitter.com/NCN.

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How To Save Money On Groceries

A little back-story for those new to No Credit Needed -

Back in April of 2005, my wife and I decided to get serious and do something about our debt reduction.  As part of our plan, I created this website to track our progess.  After ten months of planning, working hard, sacrificing, dealing with setbacks, and learning from our mistakes, we were able to celebrate – we were debt free!  Less than a year later, we managed to fully-fund our emergency fund and for the past two years, we have managed to fund our retirement accounts and education savings accounts for our three kids.  Presently, we continue to fund our retirement accounts while saving for a future home purchase and building cash reserves.

I share the above so that you’ll understand where I am coming from when I make the statement – The more things change, the more they change.  I know, I know.  The actual quote is – The more things change, the more they stay the same.  The truth is, I just don’t believe that.  Nope.  I believe, like I said before – The more things change, the more they change.

Frustrated with being broke, even though I had a good job and a decent salary, I decided to make some changes.  Those changes, once they had born their fruit, led to other changes.  Subsequently, those changes, after bearing their fruit, led to even more changes.  And, so on.

My point?  We must not relegate ourselves to unmitigated stasis.  Instead, we must force ourselves to change – to break free from the foolish habits of the past and replace them with positive routines in the future. As our circumstances evolve, our attitudes evolve, our emotions evolve and our responses evolve.  This evolution – amazingly – begins to push itself forward.  The process, almost literally, takes on a life of its own.

Here’s an example.  After getting out of debt and building our emergency fund – our entire outlook on life was altered.  We were no longer bound by the day-to-day drudgery of paycheck-to-paycheck living.  Free, even a little-bit free, we began to think long-term.  Think about that.  I had worked for almost fifteen years, and I had never really considered that I might, someday, be a guy who “had money”.  I honestly thought that worrying about debt and feeling nervous about the future were simply parts of life.

Imagine how liberated we were when we realized – Hey, we’re actually saving money, living below our means, and planning for a pretty awesome future.  Things had changed!  And, they continue to change.  Each step in the process leads to another step, and then another, and then another.  With each step, we have more opportunities, more freedoms, and more choices.

The more things change, the more they change.  Instead of worrying about this month’s credit card payment, I’m thinking about investment opportunities.  Instead of fretting because I don’t own the latest and greatest, I’m satisfied with my current automobiles and saving up to pay cash for their replacements.  Instead of facing a future clouded with doubt and worry, I’m making plans and preparing for my life thirty years from now.

Before you finish this post, please keep the following in mind.  I am, quite literally, just a normal dude.  I like football, french fries, and hanging out with my friends.  I don’t have an advanced degree in finance and I haven’t figured out some way to line my pockets with gold.  Frankly, I’m just a a guy who got fed up with being broke and decided to do something about it.  When is the best time to start planning for your future and embracing some change?  How about today?

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The More Things Change, The More They Change

Site Redesign -

I’ve tweaked the look of No Credit Needed.  I hope you like the larger text and less-cluttered layout.

From No Credit Needed – The first four articles in the Back to the Basics series -

How To Eliminate Credit Card Debt

How To Maximize Or Minimize Interest

How To Stay On Track

How To Stay Out Of Debt

From No. Calories Needed – The latest articles from my weight loss blog -

Not Feeling Hungry

Throwing Away The Scale

From the NCN Network - Check the site for updated charts -

Time4planB

DebtFree4ever

ChrystaGoingBroke

AllPennies

From around the web -

My Life Roi presents Budgeting Tips – Back To The Basics

Cash Money Life presents How To Open A Roth IRA

Budgets Are Sexy presents My Four Favorite Pieces Of Financial Advice Ever

Four Pillars presents 10 Tips – Saving Advice For College Students

Man Vs Debt presents Negotiation Tips For Beginners

Mighty Bargain Hunter presents Stockpiling Food Helps Everyone

Get Rich Slowly presents Peace Of Mind For Ten Bucks A Month – Renters’ Insurance

Wise Bread presents How To Save Green When You Buy Green

Money Tips Network - Real life money management tips – for the people, by the people.

Final Notes -

If you are new to No Credit Needed, welcome!  I hope you will take just a second to subscribe via RSS or Email and then click here and follow me via Twitter.  I tweet several times a day, and when you follow me, be sure to say ‘Hi!’

About the Midnight Meanderings -

The Midnight Meanderings are published two or three times a month and highlight articles I like from across the web as well as the most recent articles from my sites.

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Midnight Meanderings – Back To The Basics

We have this green chair that sits in our sun-room.  It’s a very comfortable chair and I like to sit in it when I’m studying my Bible or reading a book to the kids.  The fabric is in great shape – but two of the little legs on the bottom of the chair have become unstable.  The holes where the legs attach have become “wallered out” and the legs will no longer hold firmly to the bottom of the couch.  On top of that, one of the little legs is broken and I have no idea where I might be able to purchase another one.

As a side note – I’m pretty sure the legs broke when my kids decided to play “can’t touch the lava” and used the chair (and the couch in the same room) as trampolines / safety zones.  If you are unfamiliar with “can’t touch the lava” – it’s a game kids play where they try to go around an entire room without touching the floor.  It also goes by “snakes on the ground” or “stay out of the water”.  Being a kid rocks!

I’m not much of a carpenter (although I did manage to build a playhouse for the kids), but I do know how to use a skill saw and a hammer.  So, I took all of the legs off of the chair.  I then took a 2 X 4 that I had out back, cut it into 4 pieces, and nailed those to the bottom of the chair.

Take a look -

Yes, that is a pretty rad Thomas the Tank Engine setup that you can see in the pic.  I nailed the first board along the left-hand side of the chair.  I then nailed the second board on top of the first, creating a very solid “leg” that runs the entire side of the chair.  You can’t see it in the picture (because the battery of my ancient digital camera died) but I did the same thing on the right-hand side.

Here’s how the chair looks with the new “legs” -

Notice the power cord trailing out the door?  It’s running to the skill saw.  You can’t see the “legs” – and the chair sits perfectly.  I think I might have another 2 X 4 out in the shed.  If I do, I might add another set of “legs” to the front an back, for even more stability.

There you have it – my free, frugal, simple, easy-as-pie fix for the broken chair.  Sure, if anyone looks under the bottom of the chair they’ll probably burst out laughing, but I can deal.  Rock on.

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My Frugal Fix For The Broken Chair