Why have Short-Term Disablity?

Recently at my job, we had our annual visit by our insurance broker.  This meeting is where she explains to us our health insurance options as well as life insurance and disability insurance.   As I looked around the room at the blank stars, I thought of my next blog topic!

Do I need short-term disability insurance?

If your company offers this, you might be wondering if its something you need. If you sat through a benefits meeting you may even feel guilty if you don’t want to spend the money for this insurance. 

Luckily, the math on this is actually quite simple, and I am going to use my real numbers to explain it all, since they actually gave me the specific pay amounts. 

Short-term disability insurance means if you have a major illness or accident that is going to keep you out of work for an extended period of time.  They tell you benefits kick in “immediately,” or, as it’s worded on the paperwork I sign “after 0 days injury or 0 days sickness.”  However, that’s not entirely true, because you don’t really get a check that first week. (Hopefully you have vacation or sick days that will cover that time. If not, you will be 100% unpaid that week.)

Once it does kick in, for me in week 2, I get paid for 12 weeks.  I get $378 a week, or $1512 a month.  Because my premium would be coming out pre-tax, I will be taxed on that amount, so let’s say my income will be about $1100, for three months.

It might be tempting to say, then, as long as you have $3300 in your savings, you don’t need to spend the money for short-term insurance.

However, there are two questions you must answer.  First, can I live on $1100 a month?  Second, what if this extends into long-term disability?

For me, right now, if I stop putting money into my ROTH IRA, and suspend my gym membership, and figure less fuel expense since if I am on disability I probably won’t be going out too much, then yes, it’s no trouble to live off $1100.  Of course, there may be doctor visits and prescriptions and whatnot, so you really need a bubble there.

Second, what if this extends to long-term?  For me, that means the same amount per month.  And that’s where things get tricky.  The fact of the matter is, if you need long-term disability, there’s a good chance you will have added expenses.  Whether that means buying aids for daily life or getting help around the house or, again, medical bills and prescriptions, there will be expenses. Plus, over the long term there just ARE expenses. You’ll want a new CD or DVD, you will buy birthday presents, your car will need repairs, or your wardrobe will need updating.  So you can’t drain your savings in the first 3 months. 

Now, comparatively, what does it cost to HAVE short-term disability? 

$14.36 per month. 

This means, roughly, that I would need to pay in for nearly 9 years (105 months), to pay in as much as I would get out in ONE month, let alone three months.

So many people shrug and say they don’t need short-term disability, and I would love to believe that no one I know will ever need to use this type of insurance.  But at the end of the day, the numbers show clearly that short-term disability could be one of the smartest wastes  of money you can invest in.

Rewarding yourself

Recently, I was told that in order to get myself motivated to get back to the gym, I needed to set "goals with rewards." 

You hear that a lot, if you're trying to change yourself.  In debt?  You should find "free ways to reward yourself for not spending money, for making on time payments, for paying off accounts. . ."   Find "low cost activities to enjoy, remember, just because you're broke doesn't mean life should be punishment."

It's all well and good for someone who's just got a self-help book deal to tell me that every time I lose 5 lbs I should buy a new CD, a new outfit or go to a movie (have you BEEN to a movie in the theatre recently?!?!  OMG) but in the real world, we'd all be broke long before we were fit!  

As for "free" rewards.. . .well, a long walk is fine, but not really how I wanted to celebrate paying off my car loan!

Below are a list of free or low-cost rewards I have stolen from other people over the years or made up on my own.  They are also non-food rewards. . . .even though I really think an ice cream cone for every successful hour in the gym would be AWESOME!

• Compliment yourself. Write down what you would say to anyone else who accomplished what you did.
• Create an award certificate to post on your fridge or wall proclaiming your accomplishments.  Don't waste printer ink - use your crayons, markers and stickers!
• Take a day off from any goal activities.
• Put $1 in a jar every time you meet a goal. When it gets to $50, treat yourself.
• Create a Trophy Scrapbook, where you keep mementos from your accomplishments.
• Head to the library for free movies, CDs, or even, *gasp* a book. 
• Host a movie night using said library movies and friends.
• Create a spa at home...whether it's a steaming hot bubble bath or an uninterrupted self-pedicure.
• Exchange massages with a loved one. - If you're working on getting out of debt together, you should definitely get rewarded together!
• Sit outside at sunset. 
• Watch your favorite TV show. (It's OK to lock yourself in a room to make it uninterrupted)
• Read a funny book.
• Find some time to be by yourself.
• Fly a kite.
• Dig out a CD or cassette you haven't listened to in years and rediscover it.
• Call a friend and brag about your accomplishment and what your next goal will be.
• Take your child on a picnic, even if it's just in the backyard.  After all, they've probably made sacrifices to help you reach your goals!
• If you're teamed up with a partner, set up a competition and reward each other.... ie, first one to "snowball" $100 gets...one hour of babysitting, 1 week off dish-duty, control of the remote, etc

Poll: How often do you spend?

Earlier today I was reading a blog about a 10-day "no spending" challenge.   The post included helpful hints like stocking up on things before you start the challenge and having only enough gas in the car to get to work (so that you couldn't go to a store or restaurant).

The writer of the article was a self-proclaimed "overspender" so I can see how the challenge might help her budget overall.

Personally, since it tell you to stock up prior to beginning the challenge, I am not sure how much money you would save (especially if you stock up on perishable items).

Of course, I don't spend money on the average day...generally only on the weekends, when I fill up the car, hit the grocery store and run errands.  It wouldn't be all that much of a challenge for me to consciously spend money only 1 or 2 days a week.

But I am on the opposite end of the spectrum from the blogger who posted helpful tips like removing cash, cards and checks from your purse and "hiding" them for the 10 day challenge.

So this is an informal poll.   Please post (anonymous is fine), how many days you SPEND MONEY in an average week:

For the terms of this challenge, monthly bills like rent and utilities do not count.  Retail purchases using cash, check, credit and debit cards count - from filling up the car with fuel to hitting the vending machine or the corner coffee shop.

Also let me know if you consider yourself frugal, normal, or a spender.

Thanks!

Diet Busting and thoughts of Pickles

For the holiday weekend, I ate out twice, and had experiences at opposite ends of the "budget wise" spectrum.

First, two thumbs up goes to Red Mango for the self-serve, pay-by-the-ounce frozen deliciousness.   If you haven't been there and you have one nearby, check it out.  Not only is it healthy (they even post their calorie counts), but you give yourself as much as you want and pay only for the amount you'll eat. . . .as opposed to paying $7 for an ice cream you can only eat 1/3 of before it melts (which then cycles, because you eat more than you want and then have to pay for the gym membership and...well, that's a post for another day.)   So, I had 2 different flavors (dark chocolate and coconut) AND had a lot of strawberries on top, and walked out for under $2.  Not a bad treat.

Second, a big thumbs down to major chain burger restaurants.   I won't tell you which one I went to because they are all the same anyway, but I wanted a burger and a I wanted fries.  Just a bite of each would have been plenty.  I don't like a lot of stuff on my burger so I didn't want any of the value meals.  The kid's meal was $2.70 and would have been perfect, but I knew I would be paying for a toy & packaging...not to mention I didn't need the drink.    I was in the drive-thru and didn't have a lot of time to study everything up, but I saw they had a "double cheeseburger" on the "Value Menu" (so it was $1) and they also had fries on the $1 value menu.   OK.   I ordered "A small cheeseburger, just a single burger and a small fry."

In my mind, a SINGLE burger should have been less than a DOUBLE cheeseburger, and the fries should have been $1, so I was expecting everything to be under $2.  Sensible, right?

When the total was $2.91 I was a little confused, but since it was the correct items I didn't question her.  I reasoned "tax, the new food tax, drive-thru adders, etc...its been so long since I got a fast food burger, maybe the add-ons really did increase the bill that much.

When I looked at the receipt, I discovered that the single burger was $1.40. . .so I could have saved $0.40 by throwing away one patty.   The small fries were $1.25.  Apparently "value" is smaller than small.

Go figure.

Next time I am getting my toy and saving myself the stress!

Debt Free but not happy about it

Sometimes, I just get angry.

Angry over the spending of others.  Angry that I am not spending like they are.  Angry, perhaps, over the loss of my innocence.

I want to be able to go out to lunch and not think "Oh my goodness, this is SUCH a waste of money!"

I want to be able to buy a new top and not think about how "I don't really NEED this new top and perhaps this money should have simply gone into savings, because I might need this money five years from now when I need a new vehicle."

I want to stand in the snack aisle of the grocery store and think about what I WANT, and not about what is the best value, what I have a coupon for, or overall what a waste of money all the choices are.

I don't want to waste my time with cutting coupons, reading ads, getting discount emails or shopping around.

When I read an article like this one, about last season's Biggest Loser winner, who had lost his job and was in debt when he joined the show, I wonder how he feels when he's not being interviewed by Dave Ramsey.

Basically, this guy won $250,000, and because he had been a follower of Dave Ramsey was wise enough or prudent enough not to blow it all on frivolous items and then be left in more debt than ever when tax-time rolled around.

So he paid off some debt, eliminated a car payment, and starting meeting with CPA's and financial planners.

All very wise.  All very prudent.   Not at all fun.

He's 28 years old, and he's wondering how best to USE the money to cover his retirement, his children's educations, and all manner of sensible future plans.

Is he angry, ever?   Angry that the scare of job loss and debt robbed him of innocently blowing his 1/4 of one million dollars on.... ohh..... a boat?  Jewelry for his wife? Electronic toys?  A really awesome party?

Or is he just happy that he was prepared enough to keep a level head.

Personally, it makes me a bit depressed.  A reminder that even $250,000 wouldn't be enough to make me spend with abandon.   

May Check-In

It's hard to believe it, but it's 1/3 of the way through 2011 already.  How are your resolutions & goals coming along?

I am continuing to fully fund my ROTH IRA, so the progress on my future is coming along nicely.

I am continuing to put money away in my annual savings funds, though not as much as I would like.  I can tell you that Christmas will be slim in 2011, judging by where I am right now, although I am still putting some into the fund each month, as well as contributing to my future car fund and my current car repair fund.

I've been on a bit of a spending spree of late.  Not sure why that always happens in cycles, but I've learned in the past five years it certainly does.  We have some new furniture.  I have a new wardrobe.  I've had all sorts of one-on-one training at the gym.  It's cut back on how much goes into savings, but on the other hand, it's increased my comfort, it's increased my health and overall the purchases were all well worth it.

Summer is coming.  A time for vacations and traveling.  A time to watch the price of fuel and plane tickets sky rocket.

Perhaps a time for cookouts at home and lazy evenings watching the sunset.

But I'm rambling.

The point is, now is a time to assess and be honest with yourself.  Do you have the savings budgeted for your vacation?  For your summer wardrobe and activities?  For back-to-school purchasing?  Halloween? Thanksgiving? Christmas? New Years?  

The second half of the year is a downhill slide of spending that you have to be prepared for and budget for now.  

How much do you spend on cable?  Can you cut back for the summer and put that $30, $60 or $90 a month into the funds you've been neglecting for four months?

Now is the time of year to check on saving on auto insurance, to see you can scale back your cell phone plan, to remember to leave the lights off until it's actually dark out, to turn off your heat and avoid turning on your air conditioner.

I tell you this because I need the reminder.  For a month or two money has been flying out of my pockets, and it has me below the 1/3 mark of my annual goals.  But summer will come, and entertainment will be as inexpensive as reading a library book in the sunshine.  New clothes will last, new furniture will last, and the lessons that I learned at the gym will continue on long into the future.

Didn't My Cell Phone Used to have Games?

This weekend we went out to watch the UFC pay-per-view fights.  MMA is his sport of choice, so getting to watch the fights has become our regular date night.   

Unfortunately, the bar we normally watch at was not showing the fights this week, so we had to head to another bar.

This bar had EVERY television set to the fights.  No bar trivia games. No Nascar race on some of the televisions.  Nothing but men in tight shorts hitting each other everywhere I turned.

Needless to say, I quickly got bored.

Not to worry, though. In my purse I had my cell phone, the constant companion, filled with entertainment.

Which got me to thinking. . . .

When I bought my first cell phone, it came included with silly, low quality games.  Tetris or Crab Catch or a similarly mind-numbing game.  They drained the battery, but if you were stuck waiting in a parking lot waiting for someone it would entertain you for a while.

Over time, the games started getting better, more in depth, and actually draining the battery less.

Then came the day my phone came with three games, all in full color.  . . but I could only play them for a few minutes before I was required to buy them.  On that phone, I eventually did spend the $1 to buy a silly little game for that mindless entertainment I needed at times....like when I was sitting in a bar for four hours watching men beat each other senseless.

My current phone, though, didn't come with any games.  Where Tetris should be is a link to an Internet site with HUNDREDS of games. None of them are free.

This weekend I was bored enough I thought about spending another dollar on a game, just to have something on my phone.    That's when I learned. . . .

The games are now SUBSCRIPTIONS!  Pay-per-month!  Oh, and for many of them, expect to use airtime or data time when you want to play them!   I don't even HAVE a data plan because I just want my phone to make phone calls.   And, occasionally, provide free mindless entertainment.

Why is it that as technology gets more commonplace and easier to produce, it also is becoming more expensive?  Shouldn't phones still be able to offer crab catch or hangman included with the software?  Or, at the very least, if only fancy full color games can be marketed, why aren't there options you pay for once, and own? That don't require use of airtime when you're playing?  

I think I might dig out my held-hand electronic solitaire again.  Sure, the 3rd column burned out and you can't tell what the cards are anymore, but at least it won't rack up subscription fees!

Sad Day ~ Readjusting the Budget

When I printed off my budget for May, I officially had to adjust it.
I now allot myself $120 per month for fuel.   Considering my commute is less than 3 miles each way, that was sort of a depressing adjustment.
Let's hope that will be enough!

The Budget Wise Make Home Cooked Meals

We've all heard it.   Cooking at home leads to healthier food, reduced food budgets and happy, perfect families.   Not cooking at home is the downfall of modern society.

Right?

Before I tell you my story, let me tell you that I was raised with home-cooked meals.  I was raised sitting around a dinner table at 5 o'clock, on the dot, with no television or radio in the room and eating a meal my mother had prepared.  I was raised without Hamburger Helper, and I was raised in an environment where going out to eat was a treat, and definitely not the norm.

Let me also tell you that I ENJOY cooking.  I like to bake, I like to cook, I love to try new recipes and I am not "afraid" that what I make will come out poorly. 

Let me also say that I don't have kids, nor am I really "all that busy," come right down to it.  I work 40 hours, I hit the gym,  I don't volunteer overly much, don't have a second job, and my social life is a rare treat!


Now, all that being said, cooking at home is a pain in the butt!!   If you don't like to cook at home or tell me you don't have the time I will NOT lecture you on making the time or making it a priority or considering your budget, because chances are I fully agree with you!

Case in point, I purchased a very lovely pork loin not too long ago, which I was very much looking forward to having.  I had visions of pork and garlic mashed potatoes and zucchini and squashed sliced thin and grilled down to tastiness.  It would be better than anything I would get in a restaurant,  it would be much cheaper AND there would be plenty of leftovers.

On the day of the planned pork loin meal, I worked my normal 8 hours, and then hit the gym, arriving home about 6:30pm, famished.  I pulled out the defrosted pork loin, turned on the oven to preheat, and then looked up how long it would need to cook.

Forty to 50 minutes.

Excuse me?!?

So, I am not going to be eating until after 7:30pm, which means it will be nearly 8pm before we're done, then we have to clean up (have I mentioned we don't have a dishwasher so "cleaning up" is a family affair of washing and drying?), THEN I will have to prepare lunches for tomorrow, clean up AGAIN from that, go unpack my gym bag and repack it for tomorrow.  It will easily be 9pm then, so it will be another day where I don't have time to even turn on the computer, let alone blog, it will be a day where I have no time to get caught up on my book-club-book.  Heck, I won't even have time to just sit on the couch and relax!  The idea of working on a grocery list or starting laundry or doing any of the varied and random projects scattered around the house won't even occur to me.

On the other hand, if I had stopped at a restaurant on the way home from the gym and grabbed takeout, we would have been eating at 6:30pm, by 7 we would have been "cleaned up" and I would probably have the meals for the next day ready to go, too.  I'd energetically get the gym bag ready for the next day, possibly throw in a load of laundry, and have time to write a quick blog and check emails before moving on to camp on the couch, in front of the television, for an hour of relaxation.

Did I mention that I pass a minimum of 15 restaurants on my way from the gym to home? A distance of less than two miles, and that's only counting restaurants I have actually eaten at and would eat at again.  The alternative route is the same distance, but hits more like 20 restaurants.  I wouldn't have to go out of my way at all!

Let me add that while I am writing to you about the pork loin, since it is fresh on my mind from this week, it is actually not as bad as nights you attempt to cook something that requires action ~ stirring and adding ingredients.  Multiple pots and pans that will need washing.  Chopping and grating and measuring.  At least the pork loin I could pop in and walk away from.

Incidentally, my solution that night was to start the pork loin, then make Tuna Helper for that night.  I was done eating by the time the pork was done.  It set, was sliced, and wrapped for lunches.

So what's to be done?

You have to find balance, based on your lifestyle.  You have to have options that require different levels of preparation, and even options that different family members can create. 

If I can keep a frozen pizza on the freezer, then I can call him from the gym and ask him to pop it in the oven and he can prep a salad to go with it.  I can walk in the door to dinner on the table.

If we're open to having "breakfast for dinner" we can quickly fry up some eggs and meat, make some toast, and be eating within minutes.

I do buy the Hamburger/Tuna & Chicken Helpers and work them in to the busy nights or the lazy nights.
I do buy things to cook on the grill because it means I can do something else while he's in charge.

On the other hand, I do cook chicken breasts purchased on sale in 10 or 20 lb batches, and we do work together to chop it into "salad" size, back it in individual portions, and freeze it for use on salads, pizzas, in soups and pastas. 

I do cook large roasts on Sunday's and freeze individual portions for lunches or lazy quick dinners at a later date. 

I do microwave frozen vegetables and rely on instant mashed potatoes and frozen french fries for quick sides. 

Many of our meals are "made" by the frozen pre-made Texas Toast garlic bread, which I can throw on the grill, in the oven, or on the cook top to quickly add to just about any meal.

There are times I think about how simple and cheap the meal I am making would be if I just made it from scratch.  But when I start thinking "if I could just have a television/computer/chair in the kitchen, I realized the value in using the Philly Cooking Creme as a pasta sauce rather than making my own is well worth it!

Tax Day!

If you live in the United States and you haven't submitted your taxes yet, STOP READING and go get it done!

As most people who read this know, I am not a fan of tax returns.  It makes me feel like the government has been holding my money hostage all year.

Recently I read a blog post over on I Will Teach You To Be Rich (A blog which, frankly, I read just to find reasons to be annoyed, it seems), regarding tax refunds.   In that article he basically said that all of us who say getting a tax refund is bad are morons.

However, there are 3 problems with your advice:
1. Your advice is totally unrealistic as Americans spend whatever they have
2. Americans don’t understand withholding, despite your repeated exhortations to “change your withholding!” Perhaps you don’t realize that those words sound like COMPLETE GIBBERISH
3. Most people would rather get money back than pay it — numbers be damned

Needless to say, I think he's selling the average American short.  Sure, the mental aspect of money is true, and most of us WOULD rather get a big refund, rather than RISK owing money.  I get that. 

If that wasn't 100% true, then I would choose to pay NO federal tax via withholding and would pay in quarterly just enough to tide the government over, and then pay my balance every April.   I don't want to be writing checks to the government all the time, though, even if I WOULD get the most interest that way.  So I aim to break even.

However, the fact that we naturally want to avoid paying money doesn't mean that people "don't understand withholding."  I DO think it means people are afraid of not having the money set aside to cover the bill.

And I think that's changing in America, daily.

They say that today's graduating seniors will be the most frugal generation since the Great Depression.  We are introducing to the world a generation of people who know what it means to overspend, be in debt, have homes and cars repossessed, have no job and trouble making ends meet every day.  A generation that understands "emergency funds," and "planning to spend."

More importantly, that lesson is being hammered into people like myself.  I no longer have fear of "what if I owe on my taxes?"  I know that IF I owe on my taxes, I WILL have the money in savings because I PUT the money into savings.  Every month I pay myself.  Others who have gone through bankruptcy or who have crawled their way out of debt biting and scratching have no fear of OWING money.  The power to pay it is in their hands, after all.

By the same token, I think the belief that Americans will spend all their money is short-sighted and pessimistic.  Again, I believe that those of us who would rather spend $0.70 and pocket $0.30 are gaining a voice, forming a crowd, and will be rewriting the book on "normal" spending habits.

So with that change I predict a growing change in the coming years, with the average refund decreasing. 

The tax system as we know was established, after all, to "force" Americans to save.  It didn't really work, as not too long ago, savings in America were at an all time low.  For many, tax returns weren't treated like savings. They were being used to PAY CREDIT CARDS and LOANS and CONSUMER DEBT.   So.  The government holds your money, interest free, while you incur debt at...well, in my case, 30% interest.   Not really a great savings plan.

Those who don't have debt often do treat it like a windfall, and they run out and spend it (hello? You can now have your tax return put on a debit card?!?!   Some savings plan!!).   They make a major purchase.  Not necessarily getting a good deal because they haven't been shopping around or planning or waiting for the right moment.  They get a "surprise" check in the mail and they run out for a new television, a new mattress, a new car. You name it.  With the joy of a lottery winner.

Eventually, though, the wiser, frugal movement will spread.  And even the most carefree American will understand that, if you can tuck that money away, even at 1% interest, and HAVE it available for when the television goes on sale (perhaps on Black Friday, when tax returns are long since spent?), then it's a win-win.

Would I enjoy finding out that I miscalculated and the government owes me $2000?  Of course. 

Do I REALLY enjoy knowing that I have $2000 more in my savings TODAY then I did a year ago, and it's been earning interest all along? 

You betcha!

Always be Alert

Just a quick post tonight, because how could I not share when I get taken for a ride financially?  At least it was a mini ride.

So I went grocery shopping today, and, as I always do on Sundays, I headed straight for the bargain bin in the bakery section. . . this is a cart they hide behind the doughnuts with the marked down bakery items.

My score for the day was a package of 2 ciabatta rolls, marked down to 2/$1.   The package rang up as $0.50, which I wasn't sure was right, but I wasn't going to argue.

So, $0.25 per roll.  Not a bad deal.

Until I got home and noticed that the standard tag on the package was 6 rolls for $1.18.

So I actually paid MORE for buying about-to-be-thrown-away rolls.

Not really a shining moment in my grocery shopping, money-saving highlight reel.

I Got Out of Debt

As I drove home tonight, I was seeking inspiration for something to blog about today.   When I turned on the computer, I hit a few popular blogs to see if there was a topic I could put my own spin on.

I realized that some of the most popular bloggers out there are IN debt.  They are TRYING to get out of debt.  They are great at telling you how to scale down, how to save money, how to spend less, need less, get by with less.

I have to tell you, I can do that.  I know how to do that.  I DID that.  I can tell you 50 great ways to serve Ramen noodles and I can tell you all the things you don't need to buy.  I can share with you why vinegar and baking soda are the only cleaning supplies you need and how to mooch free vegetables from your friends with gardens.

I did all that, and I got out of debt.

I don't want to be that person anymore.

I read these articles about the "extreme couponers"  (I can't watch the show, since I don't have cable...perhaps I should hulu it?)  And I don't want that to be my life.   I LOVE saving money. I think it's worth it to take the time to look at the ads.  I think coupons are helpful in sticking to a budget, and I LOVE it when my grocery receipt tells me that I saved 50% of my bill.  But I don't want to spend my time searching for ads, I don't want to be forced to buy only what I have coupons for, and I don't want to travel to every store in the metro to get the best deal on every item.

Today for lunch I had a tuna fish sandwich.  I bought the tuna on sale, and had it on the uber-cheap bakery rolls that I bought on a Sunday from the bargain we-have-to-sell-these-today-or-throw-them-away bin.  And I topped that sandwich with thick slices of pickles.  The expensive, always refrigerated pickles.

I didn't follow the rules I learned digging out of extreme debt. I didn't run out for $10 lunch (probably a tuna sandwich someone else makes), either. 

So what I thought about today wasn't really a blog topic, it was a reminder of why I want to write a blog.  To share where I am now, to talk to others like me (who all seem to be a little bit envious or emulative of previous generations), who aren't in Extreme Debt.  People who don't need to know 75 uses for their pantyhose after they get a run.

This is the sustainable budget blog, I think.

And I like that.

Grandma's Diaries

When I went back home last autumn, I was honored when my grandmother gave me her mother's diaries.

My great-grandmother kept a meticulous diary, from 1926 well into the 1990's.   Needless to say, these are amazing.  Not just for me to be looking at a piece of my family history, but just in general.

She didn't keep a journal or a "blog," or a long rambling account on her feelings of anything.  Each day's entry is only a few lines. The weather, any visitors or travel, purchases, births, deaths & weddings.  In fact, the most sentimental entry I found was "Albert and I reminisced about the past this afternoon."   No more detail than that.

In the back of every diary, she tracked her spending and income.  Pages for each category, and meticulous records of everything she bought, for a YEAR, fitting onto six of seven pages.  Each child had a page, the car, the house, holidays.  Looking through it, it strengthened my thought that somewhere we all just got too much stuff, and our stuff needed stuff.  And then we needed stuff to store the stuff.  And then we needed new stuff because we forgot we had the old stuff stored away.   Phew!  As frugal as I tend to be, I certainly couldn't write down every item I bought on seven pages.  Even if I only wrote down how much I spent on a given day any time I spent money, I would still probably not fit it all.

But I digress.

Tucked in the bag with the diaries was a small stack of pay stubs from 1944.

My great grandmother, at that time, was bringing home about $20 a week.  I wish I could ask her how her pay was figured, since it is different every week.  Not sure if she was paid by performance/output, or if it was hourly.   At any rate, on her pay stubs, her withholdings are detailed.

I find this amazing, really.

On Aug 18, 1944, she was paid $27 for the previous week.
From that, $5.4 were taken out for federal taxes.

That's 20% to federal tax.
An additional $0.27 went to FOAB (Social Security, effectively).  Or, 1%.

There are fields for additional withholding for retirement plans & insurance, although she was not enrolled.
Her take home was $21.33 that week.

When she spent $15 to license her car, then, she was spending about 70% of one week's income.  By comparison, I would have to spend about $330.

They bought new dining room furniture that year, as well, for $25.  Over one week salary for her.  Not so different then what we might spend today.  About $500 for me.

And those $10 a month car payments are not so far off from the $300 per month payments I once made.

I hear people say that times were simpler, or things were less expensive then, or my personal favorite "people needed less" than.   
Perhaps they desired less stuff.  Or rather, had access to less stuff.  But the same percentage of money was going to the same places it is now.  Perhaps times aren't so different after all.

I don't know if there is a lesson in this, or if it's just interesting to look through.

I wonder where we would be if we all gave up computers and Ipod and "smart" phones and cable television and coffee-house coffee . If we all bought one new outfit a year.

Then again, I wonder what we would do all day.

Running Behind and Playing Catchup

Spring is here, the days are longer, and yet it feels like I have less time.  Not sure how all that works out, but there you go.

It's been a hectic few weeks.  We took a spur-of-the-moment vacation to Minnesota, where I spent money uninhibitedly.  Tax-free clothes shopping, new furniture from Ikea.  I've come home with a good chunk less in my savings account, but a new wardrobe, a new dining room table, and, of course, more relaxed after a few days away.

There's no particular reason that the blogs stopped for a while.  It's not a lack of things to talk about (if you know me you know I always have Something to talk about), although I have several posts I would like to write that aren't fully formed yet. I'm ruminating on them. .  and somehow one day turned into another and another.  

Hopefully this week with have me back on the wagon and posting away. :)

I've purchased a lot of "pickles" in the past few weeks.  Clothes, for one.  Books, for another.  Even my grocery bill was much higher than normal as I transitioned from "winter" foods in the pantry to "summer" foods.

Surprisingly, though, and perhaps for the first time in six or seven years, I don't feel guilty about my purchases.  I know I have the cash to pay for them (Ok, they went on the credit card, first, for the 2% cash back, and then I pay the credit card next week.).... but I have bought items, in cash, before and still felt guilty.

I can't say I needed them.  I don't really "need" any more books.  At 32 years old I still have clothing from high school, so you might argue I needed new clothes, but I certainly wouldn't be naked without the purchases.

I just feel like, I had a right to these purchases.  As simple as that. 

It hasn't been that simple in a long time. . . . it's a feeling I hope will continue.

(Not that I will be buying anything else in the near future!)

Mortgage Calculator

In case you were wondering, here's Bankrate's calculator to see what effect an extra $50/month, or putting your annual tax return to your house payment, has on your mortgage.

It's a Generational Thing

I read an article recently talking about how the current generation of college graduates will be the most frugal, basically since the Great Depression.   They will be a generation that will save more than they spend, that will drive used cars, and that will put off buying a house until they have a 20% or more down payment saved up.

This is because they are graduating college and entering a world where jobs are hard to find and harder to keep. A world where their parents are continuing to work because their retirement savings were reduced or swept away, and their family homes are worth less-than-planned, if they can even be sold.

However, I am not of that generation.  I am a 30-something.  He is a 40-something.  We own a home already, as do many of our friends.  Although my car is now 8 years old, I bought it new at a time when many of my friends were buying cars new.

Most importantly, we (my generation) are already deeply upside down in our homes.  We simply didn't own them long enough before the market crashed.  If we have a car payment, we're upside down on that, too.  We've gotten into debt (more than our parents did), and we're figuring out how to pay that off while still trying to have everything our parents had and more.

We're closer to retirement then those just getting out of college, and just keeping our fingers crossed and our prayers loud and clear that things will recover "in time" for us, and we're wondering how we will help our parents as they reach retirement age with drastically smaller incomes then they planned on.

As a follower of Dave Ramsey, there were a few things I had deeply ingrained in me during my broke years.  The baby steps, the baby steps were like the Yellow Brick Road. Simply follow them without question and you will reach the debt-free Emerald City:

1) Build a "Baby" Emergency Fund
2) Pay off consumer debt
3) Fully fund your Emergency Fund to 3-6 months
4) Invest 15% of household income into retirement (pre-tax & ROTH IRAs)
5) College Funding for Children
6) Pay off House
7) Build Wealth & Give


Then what happened?  Layoffs and downsizing ran rampant and even the debt experts said to stop paying more than minimums and IMMEDIATELY increase your emergency fund. Fund one or two YEARS of expenses, in fact, before you thought about socking money to a credit card payment.

The bottom fell out of the housing market and a mortgage became a bad debt, as well.  Looking at the market value of our home today, despite all the work we have done to improve it, it will be 2027 before we've paid off enough of our house to break even.

Sure, we would LIKE to think the market will come back, but we can't KNOW that.  So. 2027.  Sixteen years from today.  I won't be at retirement age yet, but he won't be so far off.  And that's not to make a profit in the selling and have that cash to roll into a smaller home.  It's just to break even.

It makes me wonder if it's time to rewrite the baby step order again.  Does the house need to get paid off right along with consumer debt?

If I was still doing my "debt snowball", and was only minimally funding retirement and savings, we could  double our mortgage payment, quite honestly.   If we did that, we would be "right-side up" on our home in two years, and have it paid in full in eight years.   (If you've ever DONE a debt snowball, you know that once you're snowballing, it keeps getting bigger....so that eight years is actually a worse-case scenario.)

For many of us, our home loans have taken on the weight of consumer debt.  Considering relocating?  Too bad, you can't sell your home.  Want to do a major remodel?  There's no home equity loans, because there's no equity.  Every month you make a mortgage payment and it's just a reminder that you bought too soon, paid too much, made a bad choice, or simply got screwed by the world at large.

Do you get out from under that, and then fully fund your retirement with an easy mind? Or do you trust the simple steps laid out by people a lot smarter than me?

Top Five Purchases for the Unbroke Kitchen

1. Invest in seasonings and spices. Pick up one or two whenever you have some extra grocery money until you have a variety. I know they look pricey, but they go a long way and they will keep you from getting bored. 

Can you fry an egg? Can you fry an egg and put pepper on it? Can you fry and egg and put thyme on it? Italian seasoning? Paprika? Mrs. Dash? Dry Ranch seasoning? (ohh, yea, its good). 

Same thing with homemade french fries and chicken and who knows what else? You can change the taste of foods with some good seasoning and you can make your food taste as good as any restaurant with a few spices.

2. Get yourself some Bisquick. Not to be a walking advertisement, but this stuff is handy. Biscuits. Pancakes. Pizza Dough. Baked chicken. Chicken Pot Pie. Banana Bread? 

Basically Bisquick is nothing more than flour, leavener (baking powder) and shortening already mixed together. So, on the one hand, yes, it’s pricier then those three things. On the other hand, it takes up less space, if you’re not a cook its less intimidating to mix water & Bisquick then it is to have to measure four or five ingredients, and, if you’re not using it that often you won’t be in danger of having something go bad. 

I, personally, don’t have flour, sugar or baking powder in my house.

3. Bread crumbs

Breaded chicken. Mix up a box of $0.33 macaroni and cheese, toss it in a casserole dish, sprinkle on some breadcrumbs and broil it for a few minutes and, boom, fancy baked Mac & cheese. Meatloaf, meatballs, meat patties. My mother has a no-fail recipe involving chopped mushrooms and breadcrumbs she calls stuffed mushrooms. 

4. Buy organic milk if you don’t drink a lot of milk. Yes, its more expensive up front, but check out the expiration date on that bad boy! No more throwing away 2/3s of the milk every time you buy some.

5. Eggs. Have you noticed that medium eggs are much less expensive then extra large? Did you know that an egg is actually “still good” for quite a while after the expiration date? A handy test is to put a whole raw egg (in its shell) into a glass of water. If it sinks it’s good. (If it floats it’s bad. If it hovers halfway up the glass it just depends how lucky you’re feeling.)    And my GOSH you can do so many things with eggs!   You can make them taste like ANYTHING!

Grocery Ads ~ Not for a Newbie!

I am a lucky woman this week.  He did the grocery shopping.

I should clarify, he is always willing to go to the grocery store with me, and even happy to go on his own, however, when I throw in the need to price match and provide coupons, he starts getting a bit faint at heart over the grocery shopping experience.

I admit there are weeks I think that the grocery shopping is becoming a frustrating, full-time job, and I wonder if it is all worth it.  After all, when I was IN debt, I didn't DO any of this ~ I just bought as little as possible as cheaply as possible.  Coupons and food ads were simply dangerous temptations.

I do it because of the weeks that I save 45 - 50% of what I spend.  That makes me feel like it's worth the time.  However, I am always trying to streamline the process (and set up weeks where he can do the grocery shopping without either of us feeling like more money was spent because there was no time-consuming price-matching).

Our food ads arrive every Wednesday.  That evening, I sit down with the ads, a pad of free post-it notes I got some years back and am always trying to use up (aka, scrap paper), and a pen.

Living in Omaha, which is a per capita champion for restaurants and grocery stores, my free ads cover 9 or 10 different grocery store chains each week.   I look through each one, even the ones I have never shopped at, and I write down on a scratch paper anything I MIGHT buy that is listed in the ad.  If nothing gets written down for an ad, I can toss it in the recycle bin right away, otherwise I save it for price-matching purposes.

Once I have all the lists written down, I compare them, and CROSS OUT the duplicates.    This is an important step, for me.  In fact, it's this step that inspired this blog post this week!

Spring is coming, barbecues are coming out of hibernation and KC Masterpiece BBQ sauce is on sale all over town.  I have a 50 cent coupon, as well.

The first ad I looked at advertised KC Masterpiece for $1.48 per bottle.  Not a bad deal, and significantly better than the next ad, which was offering it for $5 for 2 bottles.   However, it was the 8th ad I looked through that was selling the same size bottle for $0.99!   With my $0.50 coupon, that's only $0.49 a bottle!   I want to be sure to cross of those other prices so I don't accidentally end up buying 2 for $5!

Usually, the pile of ads and scraps of paper get set aside until Saturday or Sunday morning.  At that time, I dig them out, and use a new scrap of paper to write a list of meals I think I can make using the food I STILL HAVE.  On another paper, my grocery list ~ without looking at ads or coupons yet ~ this is just a list of things I need to buy for this week, in order to have four solid dinners, 20 servings of fresh fruit, 20 snacks for our work day, and a few lunches for the days we don't have left overs.  Sometimes it's even loose, like "Morning Snack something," that can be specified based on what's on sale.

Then comes the compiling.  What is on my grocery list gets compared to what was on the papers from each store (much easier then looking at the ads).  Things that are truly good deals on non-perishables get added to the list as well, though, due to the size of our pantry, these have to be REALLY good deals.

I aim to be able to hit only one store, but not all stores do price-matching, so it takes some balancing, and I often end up hitting two stores.  Luckily, the store closest to me does price matching, and offers Our Family brand store items, as do several of the other stores, so I can even price match store brands.

List completed,  then out come the coupons.  As I go through the pile pulling ones for items I will be buying, I also pull any that expire in the next week. If I don't want to buy the item, I toss the coupon.

At that point, I am almost complete.   The last stop is to the computer.  www.smartsource.com for any additional coupons on ITEMS I ALREADY PLAN TO BUY.  The website for the grocery store I plan to visit ~ Our Family brand offers coupons, usually on the items already on sale, and they also have Nash Brothers coupons, which is the organic store brand.  Bakers (a division of Kroger), not only offers store coupons, but lets you "load" them on to your customer card ~ so you don't need to print them out or remember to take them with you (and you can send your less Type-A-personality family members to the store).   If you haven't visited your store website yet, do it ASAP!

If I am lucky, after all that, I have a week like this one, where we could get by with shopping at one store, buying mainly items that were in the weekly ad, and using only one coupon.

(The 99 cent bbq sauce I will pick up, with coupon, later in the week when I am close to that store, anyway.)

I want. . . .

I want a gym in my basement.  Not a padded floor and a set of dumbbells.  I want an elliptical and a spin bike and bosu balls and stability balls and mirrors and weights, and a pool.  I want a big television and surround sound, so that I am always comfortable working out.

I want a dishwasher.  And a pantry big enough to stay organized when I "stock up a three month supply of non-perishables when they are on sale," just like all the frugal top 10 lists recommend.

I want Lasik surgery and not to have to wear glasses.

I want to Scuba dive the Great Barrier Reef and take a train across Australia and I want to see Europe and South America, and heck, in the summer I wouldn't even mind seeing Antarctica.

I want a garden, with many herbs and vegetables, and I want the green thumb to keep it all alive.

I want a week at Fitness Ridge so I can see what it's like to be a Biggest Loser.  I want a week at a spa so I can see what it's like to be primped and pampered.

I want a new wardrobe, and probably an appearance on What Not To Wear.

I want a pedicure.

I want books.  LOTS of books.  I want a room just for books.

I want a new car, a Nissan Leaf.  And a truck.  A really big truck.  A beater truck that can haul things and you would never notice a new scratch.   I want a garage big enough to house my Pontiac Aztek.   I want the cash to spoil my Aztek and have the seven-year-old hail damage fixed.

I want to eat out and not notice the prices. I want to eat out and have it be a meal that doesn't make me think "I could have made this at home for a fraction of the cost."  I want to know how restaurants justify charging $3 for a soda.

I don't want to spend my evenings clipping coupons, my Saturday mornings reviewing my weekly budget and spending, my Friday nights planning a grocery list that factors in sales, coupons and a menu plan.

I don't want to look at all the deals on new STUFF (cars, homes, electronics) and be so level-headed as to say "You don't need that.  If you really want it, you'll save up for it and that deal will probably STILL be there.  Or it will be a BETTER deal.  Or something new will be out you want MORE."  

I want to spend guilt-free, thought-free.

But I am happy I now have $5,000 in savings, for the first time in my life.

I am happy I am fully funding my retirement fund and may be able to see the world, guilt-free, someday, when I qualify for AARP discounts.

I want and I want and I want today, and it is hard at times to convince myself that the work of today and tomorrow and tomorrow's tomorrow will all pay off in the end.

Soreness

Since belonging to an overpriced gym wasn't expense enough, I now have a personal trainer.

This is a decision I went back and forth on for a while.  I go to the gym regularly, I get in decent workouts on my own, and I certainly haven't plateaued.  So perhaps the added expense of a personal trainer might not be necessary.

On the other hand, I often get to the gym, and wander a bit.  A few minutes on the treadmill, a walk around the track, five minutes on the elliptical, a walk past the bikes, a glance at the stair climbers, before heading back for a few more minutes on the treadmill, hopping off for a trip to the water fountain, annnnd, well, you get the idea.

With a personal trainer, all I have to do is show up.  No thinking, no planning, nothing to worry about.  Even during the workout, someone else is doing the counting, the timing, the watching of my form.  Someone else is selecting how much weight I should use and how many reps I should do.

Before I know it, an hour has passed, and my entire body is feeling a workout I barely noticed.  The next morning I wake up sore in a way I rarely do when I work out on my own.

This is also my main reasoning behind once again plugging financial planners.  If you don't have one, because you didn't believe me when I wrote about them before, it's time to consider one again.

Much like a personal trainer, they are specifically trained to get you in better shape financially.   Just like a trainer might help one person lose weight, another person bulk up, and a third person gain stamina; a financial planner can help you design a debt payoff-plan, grow wealth, or just plan for future expenses from college educations to vacations to retirement.

They will discuss your personal goals and make a plan for you using their expertise.  A good financial planner will find out what you want, and will set a plan that you might let you feel a little soreness at first (fully funding my ROTH IRA necessitated an adjustment to my regular old savings account contributions, believe me), but overall leaves you feeling better.

Best of all, for me, a financial planner handles the details.  You show up, discuss the plan, and then put it into their hands.  (OK, you should at least pay attention to the statements and tell them if it's too much or too little...money, risk, etc).

At the end of my six weeks with a personal trainer I know I will see results I would not get on my own, even though she didn't make me do anything I didn't already know HOW to do.

At the end of the year, or 6 years, I know I will see results from my financial planner I would not have gotten on my own, even though I am completely capable of putting that same amount of money aside each month.

Stupidest Purchase of the Year

No offense to the makers of the product, but my stupidest purchase of 2010 is Quicken.

Not that it's not a perfectly nice program.

But I don't pay any bills using it.  I haven't updated my accounts with it in at least 3 months, and I have never used it to balance my checkbook.  I didn't itemize my taxes this year, let alone use Quicken to identify my tax-refundable purchases.

Beyond the first week, when I imported historical bank account info and used it to analyze my spending habits (which, admittedly, was faster then manually plugging it into a spreadsheet), I have not used it for "budgeting" purposes.

I continue to use the spreadsheet I designed when I had no other choice because I couldn't afford computer programs.

I LIKE the spreadsheet I designed.  It provides the information I want, but not so much information as to give me overload.

When I was so broke I couldn't afford ANYTHING, I found a way to track every penny (granted, I spent as few as possible.).  I didn't but anything for that task, though. I used half-filled notepads and packages of Post-It notes I'd collected over the previous 10 years.  The back of the page-a-day calendar pages became worksheets for how much I could send to my credit card that week or month.   I used pens I'd collected for free at who-knows-how-many events over the years.
Spending nothing, I paid off old purchases, I paid cash for current purchases, I put money away for future purchases.

It's so much easier for me now ~ I no longer have to worry about old purchases at all.

And I am not out of free pens and pads of paper yet, either.

I thought I was making a wise choice when I purchased Quicken along with my new computer, but I was forgetting a cardinal rule ~ Keep It Simple.

According to e-mails from the manufacturer, by the way, this program I bought mere months ago is already outdated and I am falling behind every week I delay purchasing the 2011 upgrade.

Succeeding in an At-Home, Direct Sales Business

When I went broke, one of the (many) factors may have been my direct sales business, which I ran poorly, rarely charged customers the correct amount, and kept way too much inventory.

(Yes, Mom, you were right)


Being honest, though, that was due in large part to a series of my own (bad) decisions, and perhaps as well to the as-yet-undiscovered low calcium, that muted my otherwise micro-managing type personality.

Eventually with that business, I became more of a home office assistant to more successful businesswomen, so I can tell you without hesitation that people do succeed in the business.  They do make extra income, to be able to become stay-at-home moms or pay off debt or build mansions.  They do "win" cars and vacations and other prizes.

More recently, I decided to give the at-home business thing a try again.  Ironically, again to pay off medical bills, and, ironically, again while suffering from undiagnosed low calcium.    This time, though, I had a few things working in my favor.  My eyes were wide open to the dangers of spending money on a business, and my life was significantly more manageable thanks to him being home to keep the dishes clean and food in the fridge.

That second business netted me over $300 a month right from my first month in business.  Eventually I did end that business, as well (a regret that I regularly think of correcting, now that the calcium thing is FINALLY worked out and my energy levels are back above those of the average 110 year old.)

Having been at both ends of the spectrum, I have a few words of advice.  If you are considering starting a direct sales (ie, Mary Kay, Avon, Tupperware, Pampered Chef, Lia Sophia), business, here's some points to consider:

1. Research research research
1. You have no idea what is out there in terms of established direct sales businesses.  There are 203 members of the Direct Selling Association, and that's just one membership organization.  Start there, write down some companies or products you would be interested in.
2. Understand the payment plan options out there!  The first business I had, I bought product, at a discount, and then sold it for what I wanted, basically.  It allowed me to forget tax or shipping, to my detriment.  The 2nd business I had, 100% of party sales went to the company, and then I was paid my commission bi-monthly.  For me that worked.  For people wanting "immediate" income opportunity the first option might be better.  Understand the options.
3. Find out who's in your area.   The second business I started had only one other person serving my entire state when I started.  Think about it, if you want to sell candles, because your best friend makes a lot of money selling candles to you and all your friends...who are YOU going to sell candles to?   Many direct sell companies have a company wide website that lets you search for consultants by zip code.  Make sure your area isn't inundated already.
4. Form a realistic idea of inventory levels.  The second item I sold didn't want me to have ANY inventory that I sold AT a party ~ it was a food item and they wanted to ship direct to customers to ensure freshness.  Other companies would like you to keep popular items on hand, or even all the items.  Look at catalogs and think about the variety of product.  Think about, if you were the client, would it be something you would want to pick up right away, or would you be okay waiting.  With make-up and candles, you might lose sales to the drugstore when customers think "I really like this shade, but I can just stop at the store on the way home."
5. Gain an idea of product roll-over.  This is tied to inventory levels.  In my first business, there were seasonal items that only appeared in one catalog, and then sat on my shelf indefinitely, eventually given away as a door prize.  How often does the parent company put out catalogs and how much of that catalog are specials?  Think about how you would sell that and inventory it.  Regular "new" products helps keep customer's coming back, but regularly "discontinued" products may be hard to sell.
2. Pick something you LIKE!  
1. You want to be thinking about this product in your free time.  You want to be trying out new items and having opinions on them.   You want to enthusiastically call customers and say "Oh my we just got the cutest new lunch bags and you HAVE to see them." and mean it.  Ideally, you want people asking you about the product and chatting you up on the street about it.  So, please.  Pick something you like.  Not to give away the ending, but my first business was make-up.  My second business was chocolate.
2. You want to know about the product.  What other companies are out there, what are their pros and cons.  If you can't eat chocolate, you can't compare your product to something your customers already know.  You can't think on your feet when a customer says "I love Peppermint Patties" and you say "You MUST try our mint-filled baking bits!"  If a customer loves a certain type of jewelry or shops at a certain store, you want to know about that if you're selling jewelry. 
3. PLAN!
1. Don't start a business without already opening a business account.  Really.  No kidding.  OPEN A BUSINESS CHECKING ACCOUNT.   Give yourself a loan.  At least triple whatever the company says is your "start up" costs, because you're going to need things that aren't in your kit, not just product from the company, but pens.  Cotton balls.  Serving ware.  A bag to lug everything to your party.  Labels. Purchase business items from your business account.  Period.    (And don't pay that loan back until you have double that amount in the account, by the way.)
2. Know where you're going to keep your product, both inventory and party supplies.  Know where you're going to keep your paperwork.  If you want to always have inventory on hand, you might need several shelves & a large portion of your basement.  Especially if you're selling baskets or something bulky!
3. Know when you're going to work.  Its a job, even if it's your business.  Look at your calendar, think about your life.  If you're like me and you really enjoy Biggest Loser, then say "I can work Mondays and Wednesdays but I prefer not to work Tuesdays" or "Tuesdays are my paperwork day."  I can not stress this enough because I did learn it the hard way.  HIghlight "party" days on your calendar and work within them.
4. If you have a family, make sure they know, in detail.  "This room is now my office, and will have product in it for my business."  "I will be using the computer for an hour, three nights a week for my business." 

There's more to success, perhaps, but all I can say, in my most been-there-done-that voice, is if you can follow the above, you'll be leaps and bounds ahead of many others signing up for a business on a whim.

One more thing about travel

Who says I can't be European?

Yes, I DID check trains, too.

$752 total travel, for both of us. We'd be 2 hours from our actual destination.  Oh, and travel time would be 40 hours, EACH WAY.   AND, as if that wasn't discouraging enough, travel would include 3 hours on a bus each way, so no checked bags are allowed.   Trains simply don't run north-south in mid-America.  The tracks were laid to run East-West.

Bus travel comes in slightly better.  $86 per person each way, or $344 total, and 36 hours travel time each way.  We would start in Omaha and arrive at our desired destination.  Unfortunately, we would not be traveling in the preferred routes with the "upgraded" buses, so there would be no wi-fi or outlets, which might make bus travel more tempting.  

Travel Planning

Right now, we're tossing around the idea of getting to visit some of his family, in southern Texas.

We're in Omaha, and the closest airport to our destination is McAllen.

Simple enough, then, to log on to any old travel site and pop in those airports.  Tonight I am using travelocity and saying that my travel dates are flexible, so it will show me the best rate available any time between now and June.

$636, round trip, per person.  

It's results like that that make vacation planning difficult!  There's no need to panic, though, or to assume we can't take a vacation.  This post will be a bit about the process I take as I decide how much I think this trip should cost us.

OK, the ideal travel plan, flying from the airport that is 3 miles from my house to the closest airport will run us $1272, assuming we only take carry on bags or use an airlines with free baggage.

Travelocity recommends I fly from Sioux City, Iowa to Brownsville, Texas, instead.  Plane tickets for that trip will run me only $238 per person.   However, Sioux City is 90 miles away, which means I will need to plan my travel TIME carefully.  I'll also need to park at the airport......  a quick Google search, and I know two things.  1) Parking will run me $7 per day.  Depending on our trip, this will be $21 to $49 cost. 2) the code for this airport is SUX.  Which has no effect on anything, but makes me laugh.   Since Brownsville is also an hour away from the end destination, we would also want to rent a car.  Another quick search, this time on Priceline, tells me car rental rates in Brownsville are roughly $22 per day.  (Although mid-size cars are oddly the same price as compacts...)  There's $30-$50 of taxes and fees to consider, as well.  Not to mention gas to consider ~ 300 miles, round trip, between the two airports.   As of this moment, (according to Mapquest), gas prices here are $3.50, and at my destination they are $3.40.  So, 300 miles at $3.45/gal, and I am looking at roughly $41 in fuel costs.     Overall, then, the least expensive airline ticket will cost us $700.

That still seems like a lot, considering we're not even looking at food, lodging or entertainment!  Plus, there's a lot of inconvenience factors to consider.  He doesn't love traveling, so 2 hours in a car, followed by 2 hours sitting at an airport, the flight itself, THEN picking up a rental car AND another hour in the car before we get to our destination better save us significant amount!

The next option one would always have to consider is driving.  In regards to convenience, see above.  Although I wouldn't mind a 20hour drive each way, I am not sure we want to spend 40 hours in a car together and call it a vacation.  But for the right price. . . .   Currently, using that $3.45 average price, and his car (a Nissan Cube, which gets 30mpg), we would be looking at $140 each way for gas.  We would also be looking at doubling his annual mileage!  An oil change before he leaves and one when he gets back would be another $50.   There are also tolls in Kansas, Oklahoma and Texas to consider.  With two drivers, we can certainly drive 20 hours without getting a hotel room, but we would need to take at least one extra day off work to recover from the trip, and I would also be sure I had budgeted at least $100 to cover a roadside motel if needed. I would also have to figure foods and snacks for two or even three days of travel . . slightly more even than the above option.  Overall, my notes put the driving expense at $500. . .with a close eye on gas prices.  In terms of personal preference, I would put this option at slightly better then the driving & flying & driving.  Your own car, for me, is always a bonus, especially when it comes to packing.  You also have more freedom, when driving.  Less waiting around and NOT moving.  But driving is more tiring than sleeping on an airplane.

** Note:  If we used MY car, instead of his, the estimated gas cost would be $100 more than it is with his on this trip. For me the hurt of putting miles ON his car is out weighed by the benefit of his improved mileage.

The cost of a rental in Omaha would run me $80-$100 after fees (depending on how long we were gone & what size car we got).  If we got an Aveo, which is posted at 34 mpg, we could reduce our overall fuel costs to $250.  I wouldn't need to pay for the pre- and post-trip maintenance, so my costs would be less then $350.  Add the same meals and possible hotel room costs, and I would put the rental at the same $500, roughly, as driving his car.  No wear and tear on our car, though, I am not sure I want to roadtrip in a compact car.

After looking at all this, my next step would be to work on WHEN I want to travel, and getting $500-$800 set aside for our trip.  When I got to within 6 weeks of the trip, I would want to KNOW I would have the money (ie, have 80% of it already saved), then I would start my hard core bargain hunting.

First, I would recheck airfares.  Assuming they are unchanged, I would then priceline a flight, maybe for $200 each, round trip, Omaha to McAllen (That is the $600 flight normally.)  Afterall, if we CAN fly, we SHOULD.  

When that didn't work out, we would have to weigh time off from work, and look a bit closer at the Sioux City to Brownsville trip, and times.  Convenience is IMPORTANT on your vacations!   At the same time, I would be seeking car rental deals and sending off for MyPoints gas cards.   I would be aiming for a mid-size car for $50/week. . . if we decided we were definitely driving I would priceline something along those lines, because you just never know.

** Another note.  He just asked me, as I was sharing the results of tonight's initial research, about renting a car, turning it in when we got to Texas, and then picking up another car to drive back in.  This isn't always available, and is often MUCH more expensive.  However, every so often it is a good deal, so be sure to check.   For example, in the summers it seems a lot of people rent cars in Boston and drive to the coast of Maine. . . and stay there all summer.  So, renting a car IN Maine and returning it to Boston is doing the car rental company a bit of a favor. . .and is LESS expensive then simply renting from Boston.

Now. . . to convince him that saving over $700 is worth 2 days in a car. . .

Get Me Outta Here!

If you know me, you probably know that I have become a relative expert on traveling without breaking the bank.

Every so often, I hear someone tell me they've never used Priceline.com, for example, and I am shocked.

A friend recently asked me how I decide when to fly and when to drive. How I reached the decision to put thousands of miles on my own car as compared to renting a car.

So I want to tell you about some of the options I considered before I took my last road trip.  In my next post I will talk about the next trip we are planning, and use some actual numbers.

My last trip, which I have mentioned on here a time or two, was a nearly two week long solo road trip from Omaha east, with the farthest destination being Portland, Maine, but with various stops along the way.

The factors I had to consider on that trip were mainly that in one trip I wanted to attend a wedding in Massachusetts and visit friends in that area, as well as visiting friends in Maine and family in New York.  I wanted to do all that while spending the least amount of money, and the least amount of time off work (while still getting adequate time with every person I wanted to see, from friend's new babies to family I had not seen in years.)

The first thing I started doing was shopping airfare.  Priceline, Travelocity, Expedia, Hotwire, not to mention all the individual airlines.  I jotted down a list of "preferred" airports, closest to each of the people I wanted to visit, and I checked airfares from Omaha to each of them, jotting down prices.  Then I started checking car rental rates at each of the airports and jotting that down, as well.  The car rental rates were staggering.

I started checking car rental rates at other airports around the region, since if I had to fly and drive, it really didn't matter where I flew in to.  To save on air fare I started shopping other airports close to home, instead of Omaha.

To shorten the length of the trip, and thus the car expense, I looked into flying into "one end" and flying out at the "other end"  (ie, flying into Portland, Maine and out of Rochester, NY.)  Probably not surprising, this pushed the expenses even higher.

I looked in to renting a car in Omaha and driving for my vacation, then leaving it at the airport and flying home, and into flying into, well, anywhere in the Northeast and renting a car for return to Omaha.

Because of the unique aspects of this trip, it came down to that I HAD to drive it, in order to visit everyone I wanted to visit.   Also, throw into consideration that I rather enjoy long road trips and was pleased with the idea of a bit of time to myself.

Rent a car or drive my own?   Ahhh, a good question.
My own car, a 2003 Pontiaz Aztek with over 100,000 miles on it, is no spring chicken.  Last year I sunk quite a bit of money in to the ol' Aztek, in new tires and in intake gasket repairs, fluid flushes and replacing a leaky fuel pump.  It's fuel mileage is decent, though, well over 20mpg, and the vehicle is reliable.  Also, I am comfortable driving my car, even on long distances.

So, the decision came down to, renting a car or driving my own.

It is easy to quantify costs of renting a car: Easy to quote online, plus shave a bit more off with priceline (I always Priceline my rental cars).

The price of gas can be estimated, both for my car and a theoretical rental car (with better gas mileage), at Mapquest. It's a bit harder to find in the new format, but if you scroll down to the bottom of the screen there's a few buttons, one of which is "Mapquest" and if you select that, you'll find "gas prices" and once you get to that screen there will be an option for "gas calculator."  (Until Mapquest again hides this REALLY WONDERFUL TOOL!)

For my own car, I needed to include the cost of two oil changes.  

Given the age and mileage of my car, and how much I love to drive it (versus a strange rental car that might not have my six-way power seat), I negated the "wear and tear" factory against the "convenience" factor.

If I wasn't a little person who has a hard time driving many cars, I would have probably weighed in favor of getting to "try" a newer car, with newer features (which is the best part of a rental car.)

I also knew I would be doing some shopping while I was traveling and the increased storage capacity of my car also worked in its favor.

So for that trip, driving my own car became the best thing.  

I will mention, though, that one item I underestimated in my plans was the cost of tolls between here and there.  They weren't enough to have made flying the better option, but they did put me closer to maxing out the credit card I was using for trip expenses! (Don't worry, I paid it in full the day of my return!)

My Potential Budget-Busters

WARNING:  If you are currently broke, in debt, or over-spending, please skip to the next post.  If you're a Dave Ramsey follower, you should be at least at Baby Step 3 before reading this post.

This is just a short list of the sites I check regularly and potentially spend unbudgeted money on.  It's a bit dangerous putting them out there - you have to have some control.  I have to have some control when I look at them.  

I have to do a quick search most days and check, "Is this really a good price for this item?"

I have to read reviews for the item from other sites and decide if it's really a good deal, or an attempt to unload merchandise that isn't moving.

Recently one of these sites offered heart rate monitors from a manufacturer I had never heard of.  A quick search showed me that the deals were pretty good.  The full description on the manufacturer's website described exactly what I had been looking for.  However, I could find no reviews on the brand online, at any site.   I regretted not making the purchase, but convinced myself it was not the day to buy.    About a week later, I was at Dick's Sporting Goods and checked out the heart rate monitors. I found that all the ones by the unknown manufacturer were on clearance. What's more, standing there in the store I was unable to successfully get a reading on any of them.  Suddenly I felt a bit better about skipping over the online deal.

OK, the sites:

www.woot.com:  One Deal, One Day.  Mainly electronics, (often refurbished), but I have seen everything from mattresses to compost pails.  And the best part?  Always $5 shipping, which on large items like mattresses or over-sized televisions is a significant consideration.   Items can sell out, though, so I always check on it in the morning.

www.thefoundary.com:  Generally high-end items, from home-goods to children's accessories (toys, diaper bags, furniture) to personal care items.  There's always something interesting on here, and the deals stay up for a few days (unless they sell out), so you have time to consider the purchase (which, since we're often looking at items like a rug, couch or other significant purchase, is nice)

www.groupon.com:  This one is pretty well known. I would mention that you should remember to look at other cities in your area, as well.  And, since these are local deals and pretty much always a good deal, don't rush to purchase every one that you think "Oh, I would use that."  For example, I always check restaurant.com before I Groupon a restaurant gift certificate.

www.restaurant.com:  A double deal here.  Restaurants have to choose to sign up for it, and then it is discounted gift certificates to the restaurant (i.e. $10 for a $25 gift certificate).

• Never pay the $10 though - You can get a $10 certificate for $3 if you have a MyPoints account (free), a Borders Rewards card (free), or a multitude of other memberships (or even as a benefit through some employers). 
• The downside is that you really have to read the fine print.  You can't use a gift certificate with a $25 face value and only purchase $25 worth of food.  It is generally $50 total bill required.  It may or may not include beverages.  Sometimes, this is still a great deal.  However, there is a restaurant we love (11Worth) which is very budget friendly - We generally eat there for $10 - $15 total.  For $3 we can get a $25 gift certificate, but we would need to spend $50 in one visit.  You need at least 6 really hungry people to make that a worthwhile deal.  But if you have 6 or 8 people to feed, then it's a great deal.  Just read the fine print.

Free Money Meltdown

Please tell me I am not the only one.

I participate in MyPoints and I currently have enough points for a $50 gift certificate to...pretty much anywhere.

For several days in a row I have opened up MyPoints and looked at the list of reward sites, frozen in indecision.

Do I want something fully practical, like $50 toward gas?  Something sort of practical like a clothing store, or one with many possibilities like Wal-Mart, Target, or even a Visa Cash Card?  Perhaps I should get a Home Depot card that I can give him as a gift for his birthday.  Should I pamper myself and get a card to a spa or treat us to a nice meal out?  It's free money, so maybe I should be completely impractical and get us a free night at an over-priced hotel.

When something comes up to buy, that I need to buy, I say "I have the money for this in my budget, I don't want to "waste" my free money on something I can just pay for, because then I will never treat myself.

When I think of a treat I would like, I talk myself out of it because it's silly and "I wouldn't even think of getting that if I didn't have this free money, so I shouldn't get that.  I should save it for something I really want."

A gas card will be gone in one tank of gas, but an iTunes card would last for ages.   As I keep working out, new clothes would be handy.  He has to deal with the MyPoints Search bar on the computer, so something we could share, like a meal out (oh, but WHERE?) seems fair.  But it's MY points.

Eventually I close my browser and put the decision off for another day.

Your Grandparent's Budget

When I was traveling this fall, I spent some time with my brother, and we spent some time going through boxes of old books he has inherited from various family members.

I came across an amazing little...book cover.

The book title is "Budget Envelopes" and although it is not dated, it was mixed with other frugal-friendly books, like how to use the "cheap" cuts of meat to give your family protien even during the Depression, and other books dated from the 1930's to the 1950's.  So let's just say it reflects the budget of my great grandparents, when they were my age.

Aside from my utter amazement that my great grandmother was using the envelope system for budgeting long before the days of Dave Ramsey, Suze Orman, David Bach or the myriad of others (hmm, I wonder who the budget-guru of 1930 was?) was my interest in what envelopes were being used.

Luckily for me, although the envelopes have long been removed, the inside front cover has a complete list of "Suggested Budget Classifications"

I have heard and read people who talk about (whine? Make excuses?) that budgeting is harder now because we "need" so much more.  There were no cell phones, gaming systems, Ipods, personal computers, DVD players, cable television, GPS or all the music, movies and games we need to use those items.  Malls and restuarants were not as temptingly prevalent and the world was just a "different" place where you didn't "need" as much money.

I would challenge those people to identify one item they spend money on, that does not fit into the following categories, as listed on the book cover I found in my brother's garage:

1. FOOD:  Including beverages, lunch money, restaurants, etc.
2. CLOTHING:  Husband, Wife, Children
3. SHELTER: 
1. Rent, Mortgage Payments, Etc
2. Real Estate Taxes, Repairs & Improvements
3. Fuel:  Coal, Oil, Gas, Wood
4. Utilities: Telephone, Electricity, Water, Gas
5. Payments: Furniture, Appliances, Etc
4. AUTOMOBILE: Payments, Operation, Registration, Insurance, Taxes
5. MEDICAL: Doctor, Dentist, Hospital, Etc
6. INSURANCE: Life, Health, Accident, Fire, Insurance for Furniture & Home
7. EDUCATION: School Expense, Books, Magazines, Newspapers, Etc
8. DONATIONS: Church, Charitable, Personal Gifts for Birthdays, Christmas, Etc
9. ENTERTAINMENT & VACATION
10. SAVINGS:  Banks, Government Bonds, Stocks, Etc

We all need to find a system that works for us, and the envelope system may not be it.  I don't like using envelopes because I don't like using cash, but I take the idea and put it into my spreadsheets.  Others simply allow themselves a certain amount of money and know that one month that money might go mainly toward the doctor, or to car repairs, and another month might take the family to Disney.  The idea of envelopes makes those people feel too structured and limited.

But I think this small brush with the past is a pretty good reminder that the key is not to try to reinvent the wheel.  Not to try to come up with new and different categories or to stress yourself trying to peg every item you buy into it's own category.    The categories have been around longer than you or I and they will be the same when your grandchildren are struggling with their own household budgets.  (Afterall, if you think fuel is expensive NOW, imagine how much it will be to fuel those rockets they will all be driving in the future.)

Follow up to the Prescription Hunt for Discounts

Last week, I wrote that I was looking into savings options for my prescription.   Blogging is great, because then I have to be accountable and actually follow-through!  I must admit I have never thought about where I get my prescriptions filled, until this week.

The short version is that I will be keeping my prescription where it is.

I did learn that there is a $24 swing between the most expensive place to get my prescription and the least expensive place, which really surprised me.  There is no generic form of the medication I take, so I would have thought that the cost would be steady no matter where you purchase it.

Also surprising was that drugstore.com was the most expensive place I found, even if I bought three months at a time.  I actually started this hunt after reading a magazine article touting the great deals available at the online pharmacy.

Most importantly, I learned that my insurance has an online tool that allows me to plug in any drug and see what all the pharmacies in my area would charge me, what the insurance-sponsored mail-order drug plan would charge me, and what alternatives (different doses or generic versions) are available.   Hopefully I don't add any new prescriptions to my life, but it sure is good to know that online tool is available.

In the end, it turns out that the pharmacy I am using (Walgreens) is about $4 higher than the least expensive option, but it's significantly more convenient in terms of location and hours, so I won't be changing. . . but I am very glad I took the time to do the research!