Click here to go directly to the latest episode - No Credit Needed Podcast Episode 10 of 2008

You didn’t know that I had a podcast?  Well, it’s been a few months - almost 5 - since I recorded a new episode.  But, today, while riding to town, I grabbed the mic and recorded an episode.  You can hear some traffic noises in the background, but, mostly, it’s just me rambling about life and finances.

By the way, you do NOT need an iPod (or even an mp3-player) to listen to the podcast.  A podcast is simply an online “radio” program, that you can “stream” from the site or download for later listening.  Just head over the the NCN Podcast page, and you’ll see a built in player.  Click play, and listen to my southern drawl.

Number 10 - Cook And Eat At Home

Like most families, we live our lives on-the-go.  With work, church, school, kids’ events, and family gatherings to attend and prepare for, life can get hectic.  But, even though we are very busy, we still take the time to prepare food at home.  Why?  It saves us money.

Let’s look at a typical trip to a “sit down” chain restaurant.  For a family of four, two adults and two kids, the average bill will be, what? $35 - $70?  Now, multiply that amount over 3 or 4 or even 6 times a week.  Pretty large number, right?

Now, imagine if both mom and dad eat out for lunch, each day.  What’s that?  $10 per person, per day, five days a week?  Mom and dad are spending $100 a week, just for lunch.  That’s $400 - $500 a month.

Instead of buying lunch, prepare a lunch at home.  Instead of going out to eat, start eating at home.  I can promise you that two things will happen -

1.  You’ll spend more time with your family, sitting around the supper table, actually talking.

2.  You’ll spend less - much less - on food.  Sure, your grocery bill might go up, just a bit - more on that later - but your eating out bill will shrink, dramatically.

If you don’t want to give up eating out entirely, make it a treat.  Instead of eating our 5 times a week, eat out once, maybe on mommy-daddy date night?  Or, take the kids for a special lunch after church.  When you do, splurge a little bit - if your wallet and waist line can handle it.  Remember, we want to sacrifice when appropriate, but we also want to enjoy our lives.

About those higher-than-usual grocery bills - I mentioned a resource a few days ago, my free printable grocery store price book - and I really think it will help reduce your grocery costs, if you’ll use it.  Print one out and give it a try.  See what you think.

By the way, my friend JD from over at Get Rich Slowly recently wrote a very interesting post about grocery shopping - and only doing so once a month!  This is an idea that I find very intriguing.  And, MBHunter has some excellent tips for brown-bagging it.

If you enjoy the site, and you want to keep up with the Top 10, please consider subscribing to No Credit Needed.  You can subscribe via RSS or via Daily Email.  You’ll always receive the very freshest content, delivered directly to your reader or inbox.  Rock on!

Free Online Debt Reduction Guide and Free Debt Reduction Ebook - This guide goes step-by-step through the debt reduction process.

Free Printable Grocery Store Price Book - This is one of the most popular downloads from my site.  This free spreadsheet helps you track grocery prices - which will help you save money on groceries.  And, saving money rocks!

Quick Summary of Current Debt Situation - This is page one of the “No Credit Needed Notebook”.  The Notebook is a work in progress, but this sheet is perfect for those who are getting started.  Use it as a spreadsheet or print it out and fill it out by hand.

Single Page List of Monthly Expenses - For those new to budgeting, this spreadsheet will help you figure out how much you are spending - and what needs to be cut!

Inventory of Financial Accounts - This is my way of consolidating all account information in one place.

Envelope System Video Tutorial - I created a video tutorial, explaining the popular cash management system.  This is one of the most popular posts on the site.

How To Withdraw Cash From Your Upromise Account - I didn’t create this resource, but I have taken advantage of it.  I love Upromise, but I don’t have a 529 plan.  So, once a year I request a check from Upromise.  (What’s Upromise?  It’s a free service that helps you save money for college.  Click the link above for more information.)

Calculating Average Daily Balance - And advanced debt reduction spreadsheet which calculates how much you owe - on a day-to-day basis.

My 3 Favorite Books About Debt Reduction - These are the books that inspired me to get out of debt - and they worked!

Financial Decision Making Flowchart - This is what a personal finance blogger does at 2 AM.

If any of these resources help you, and you use stumble upon, please consider stumbling this post - or the individual resource posts.  Thanks!

I live in a small town, and I really didn’t have time to hop in the car, drive 30 minutes to a jeweler, buy some cuff links, and then drive 30 minutes home.  Plus, I really didn’t feel like spending a lot of money on a pair of cuff links that I might wear twice a year.

So, I jumped in the car and went to a little, local, antiques store - and asked the cashier if she had any cuff links.  And, guess what?  She did.  I was able to buy, not 1, but 5 pairs of cuff links - for $3!

Lesson?  Think outside of the box.  I’m not an “antiques” kinda guy.  I’ve driven past that store, what, a thousand times?  But, Saturday, I took a shot and I found just what I needed.  Plus, the old cuff links cost a fraction of the price of new cuff links.

Oh, if you were wondering - Why did I buy 5 pairs if 1 pair would do?  Well, they were all in a plastic bag, and everything in the bag was on sale for one price.  So, I just paid $3 and brought all 5 pairs home.

(I realize that this post isn’t exactly filled with earth-shattering news or mind-blowing ideas.  I’ve been away for a week, and I missed you guys!  So, I thought I’d write and old school NCN post, just to touch base.  I hope you all are doing well.  Rock on!)

Before posting this article, I did a bit of searching.  It looks like there are a few sites that offer tools that help you calculate how much gasoline you will use on a trip.

Gas Addict - Uses a map-based tool.  It takes a minute or two to figure out, but it works pretty well.  You can enter multiple points along your trip.

Triple A - Has a very basic calculator.  There’s not much to it, to be honest.

MSNBC - This is very simple.  Just enter how far you are going, the cost of gas, and your gas mileage.

All of these calculators will get the job done, but I really like the one from Cost to Drive.  Check them out and let me know what you think.

I only have one savings account, but the money in that account is allocated to very specific goals, according to my various short-term and long-term plans.

Here’s the current breakdown -

Emergency Fund -

I have enough money in my savings account to cover 12 months worth of household expenses.  I do not plan to use this money except for a major life emergency - think job loss, sickness of a child, or other unexpected life-event.  This money just sits in the account, as a preventative against life’s curve balls.  It is our (my wife’s and my) security-blanket.

Annual Expenses -

Certain bills are due once a year.  There is no need to keep the money that is budgeted for these expenses in my checking account, not earning any interest.  Instead, I divide the annual expense by 12 and transfer that amount, each month, from my checking account to my savings account.  Then, when the annual bill is due, I transfer the entire amount due from my savings account to my checking account and I make payment.  It is vitally important, when you are making your monthly budget, to include any annual or non-monthly bills.

• Automobile Insurance Premium
• Automobile Taxes
• Renter’s Insurance Premium
• Club Fees

Short-Term Savings Goals - (less than three years)

Lets assume that in the next three years I want to purchase a new washing machine, a new dryer, and a new sofa.  I can -

A.  Save for one goal (purchase) at a time.  For instance, if I want a new washing machine, I can allocate all of my short-term savings to the purchase of a washing machine.  In my budget, I’ll create a line-item labeled washing machine.  Suppose I have a total of $300 for short-term savings and the washing machine costs $900.  For three straight months, I will transfer $300 from my checking account to my savings account.  At the end of three months, I’ll transfer the entire $900 from my savings to my checking, and I’ll buy the washing machine.  Then I will begin to save for the dryer.  Once I buy the dryer, I’ll save for the sofa.

B.  Save for multiple goals (purchases) at a time.  Let’s assume that the washing machine will cost $900, the dryer $900, and the sofa $900.  I will create three line-items, one labeled washing machine, one dryer, and one sofa.  I’ll then transfer $300 from my checking to my savings, but in my budget, $100 will be allocated to the washing machine, $100 to the dryer, and $100 to the sofa.  In nine months, I’ll have enough to buy all three items.

It really doesn’t matter which way I do it.  It all really depends on how many budget categories I want to keep up with and how detailed I want my plan to be.  Obviously, plan B can change to plan A at any time, and vice-versa.  If I’m following plan A, and I’ve saved up enough to buy the washing machine, I might change my mind, and wait another three months, so I can buy the washing machine and dryer as a pair.  Or, I might find a deal on the sofa, and buy it first.  The idea here isn’t to bog myself down in the minutiae of a thousand different budget categories.  The real goal is to think beyond today.  If I know that I’m going to need, at some point in the not-so-distant-future, a new washing machine, I need to start saving today.  If I don’t, I won’t be ready to pay cash when my old washing machine dies.

• New Furniture
• New Appliances
• Newer Automobile
• Dream Vacation

Long-Term Savings - (three to seven years)

I am trying to save enough money to pay cash for a house.  This is a big goal, and I want to accomplish it in a relatively short amount of time.  If I were to focus my savings, exclusively, on this particular goal, I wouldn’t have enough money to cover some of my smaller, short-term goals.  So, I save for my long-term goal just like I did for my short-term goal, but with a twist.  Every extra dollar of income, above and beyond what it takes to meet my other savings goals, is allocated to long-term savings.  This includes income from my business, income from eBay sales, gifts from family members, etc.

In my budget, there is a line-item labeled new house, and a portion of my regular paycheck is transferred from my checking account to my savings account, each month, and is allocated for my future home purchase.  In addition to those regular transfers, any additional income that I might receive is immediately transferred into my savings account and is allocated for a future home purchase.

Various -

From time to time, I’ll also use my savings account to store Roth IRA or ESA contributions, before I transfer those contributions to my Roth, my wife’s Roth, or my kids’ ESAs.  I’ll probably stop doing this, once I move away from annual contributions and towards monthly contributions.

I’ve been very happy with ING Direct and their Orange Savings Account.  If you want, you can actually open sub-accounts, link them to your primary account, and keep your money separate that way.  I don’t do this, but I know many who do.

Keep in mind, many savings account limit the number of withdrawals you can make each month (or quarter).

Click one of the referrals below to open a new Electric Orange Checking Account With ING Direct.

Features of the account -

Electric Orange delivers the access and convenience of checking with the earning power of savings:

• Earn interest (1.75% APY on balances up to $50,000)
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• A MasterCard® Debit Card for purchases
• Free Bill Pay and automatic overdraft protection
• To receive your $25 bonus, your initial contribution must be at least $250.
• If you apply through one of the referral links below, I’ll receive $10.

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Click one of the referrals below to open a new ING Direct Orange Savings Account.

Features of the account -

The Orange Savings Account

• No minimum balance required. Everyone earns the same high yield.  (As of July 31, 2008, the yield is 3.00% APY)
• 24-hour access to your account - you’re always ready for opportunities.
• FDIC-insured - your money is safe and secure.
• To receive your $25 bonus, your initial contribution must be at least $250.
• If you apply through one of the referral links below, I’ll receive $10.

Orange Savings Account Referral

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Once these referrals have been used, I’ll post more.  If you click on a link and the referral does not work, then it has been used by someone else.  No problem.  Simply contact me and I’ll send you your very own referral link, straight to your email.

If you would like to open an account, but you don’t have $250 for the initial deposit, you can click here to open an Electric Orange Checking Accountor here to open an Orange Savings Account.  You will not receive a bonus, but you’ll still get the same great rates!

Over at No. Calories Needed I’m using a minimalist approach and simply tracking my calories.

Over at the NCN Network I went old school and posted 40 chart updates - all at once!

From The Money Blog Network -

All Financial Matters - The Genius Of Warren Buffet (And A Book Giveaway)

Consumerism Commentary - Considering Tax-Exempt Money Market Funds

Wise Bread - Make Your Own Deal Tracker

Get Rich Slowly - Drama In Real Life - Foreclosed

Mighty Bargain Hunter - Time To Get Back To The Basics

Free Money Finance - Do You Track Your Net Worth?

About the Midnight Meanderings -

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

This edition of the Midnight Meanderings will actually post at Midday.  Why?  Well, I put the wrong time-stamp on the post!

As a customer, the following quote from Yahoo Finance makes me feel a little better about the new deal -

While Wells Fargo has logged three straight quarters of profit declines, the bank has been weathering one of the nation’s worst credit crises much better than most of its competitors, in part because it had less exposure to the subprime mortgages whose failure undermined the financial sector. (This quote has been removed from the original Yahoo Finance article.  See note at the bottom of this post.)

As a tax payer, it’s great to see that this deal will go through without government funding or FDIC funding.  Again, from Yahoo Finance -

The Citigroup deal would have been done with the help of the Federal Deposit Insurance Corp., but the Wells Fargo deal for Wachovia will be done without it. (This quote has been removed from the original Yahoo Finance article.  See note at the bottom of this post.)

This might not be the end of the Wachovia saga, but I feel much better than I did a few days ago.

Edit - Not one minute after I wrote this post, the information from Yahoo Finance changed.  It looks like Citigroup is upset about this deal and is claiming that it has an exclusive agreement with Wachovia.  Stay tuned.

Budget -

I live on a budget.  My wife and I receive monthly paychecks and I receive irregular income from various sources.  I use the You Need A Budget software to create my budget and track my spending.  As I create my monthly budget, I’m able to think about the coming month’s expenses, and plan accordingly.

Many people, when dealing with personal finances, feel anxious and frustrated.  Budgeting can help with these feelings, because a realistic budget helps to remove some of the what ifs and replaces them with actual realities.  When you create your budget, you may not like the numbers that you see, but, at the very least, you’ll know exactly with what you are dealing.

Learning to live on a budget can take time.  Be patient.  It took me almost six months to get things right.  Eventually, creating a budget will become second nature and you’ll actually look forward to sitting down with your bills and hammering out your monthly plan.  Seriously.  Trust me!

Plan -

Sure, my budget helps me get through the month, but also create short-term and long-term plans.  Remember, you’re learning to pay CASH for every thing.  That new washing machine?  You are going to pay cash.  That newer automobile?  You are going to pay cash.  College for the kids?  Yep, you are going to pay cash.  So, you need to plan, plan, plan.  (Note, when I use the term cash, I mean that you are going to pay for these things, up front, instead of borrowing money and paying for them later.  The actual method of payment might be cash, debit card, online bill pay, or check.)

I have several short-term plans (and goals).  Currently, we are saving to buy new furniture, a newer automobile, and new appliances.  But, I also have long-term plans (and goals), including buying a house for cash and paying for our three kids to go to college.  So, even though we are debt free, and could spend our money foolishly, our plans keep us honest and frugal.  In fact, we have less spending money, now, than we did when we were in debt, because so much of our savings are allocated to future purchases.  (Of course, the cool thing is, even though this money is allocated, on paper, for specific future purchases, we could, in the event of a real emergency or opportunity, use this money for anything we wanted.  That’s what’s great about having money in savings.  It’s ours, and we can use it as we wish.)

Sacrifice -

There are no shortcuts.  If you want to have enough money in the future, you have to sacrifice today.  If I bought every gizmo and gadget that I wanted (and could, at this point, afford), I would never achieve my long term goals.  Right now, we live in a house that is provided as part of my compensation.  We really want to buy our own home.  But, our real goal is to pay cash.  So, we make a house payment, to ourselves, each month.  Even though I could buy name brands, I still buy generic, because getting out of debt was just the first step of a very, very long journey.

Focus -

It’s never easy to go against the grain.  When everyone else is buying new cars and upgrading to the latest and greatest, it takes a certain inner strength to be content with what you already have.  As recent events have shown, however, most Americans (and most politicians) would do well to learn a little fiscal restraint.  So, the next time everyone in the office goes out for lunch, proudly produce your brown bag.  When the newest cell phone hits the market, be content with the one in your purse that still works just fine.  If you can’t afford your lifestyle, make the changes necessary to bring your expenses into line with your income.

Side Note:  I’ve been living without borrowing money for four years.  I’ve also avoided using credit cards.  If you choose to use credit cards, and many do, just remember to pay them off at the end of the month, so as to avoid those pesky interest payments.  As credit card companies look for more ways to make money, in tight times, I’m sure that they’ll get more and more aggressive with their fees and charges.  If you must use them, be careful!

I’ve written about this subject before, and you might be interested in some of those articles.

Click to read -

How I Live Without Credit Cards

Life Without Credit Cards And The No Credit Needed Experiment

Edit:  I just reread this post, and I think I want to write a little more about combining the budget with short and long-term plans.  I’ll write about that in my next post.  If you haven’t done so, consider subscribing to No Credit Needed and you’ll receive all updates and new posts.