Are you a pump watcher?

It's on the news, in the papers, and the topic of discussion around the water cooler at work. Are you watching the gas prices climb too? There is wild speculation on how high the prices will climb and how long they'll stay there. Some folks are flocking to GasBuddy to find out where the cheapest gas is in their area. Mapquest is even getting in on the action.

People where I work are talking about things they are having to cut corners on just to be able to make it back and forth to work. Does Dish Network cost less than Direct TV? How many of our cell phone services can we cut? Are we going to be able to go to Myrtle Beach this summer, like always?

I've been sending out referrals to the Grocery Game to everyone who mentions cutting costs. (If you head over there and decide to sign up, Momma would be very grateful if you'd use her email address for the referral: sunshinedavidson@gmail.com) I've also been shamelessly promoting the links to my favorite personal finance blogs and sharing tips from them whenever appropriate.

I know it seems a little odd, but I am doing my best not to pay attention to the gas prices at all. I have decided that it's just not worth the stress. I've been cutting our costs as I can, and have started my own Square Foot Gardens. I shop at Kroger every week, so I always have the $.10 off per gallon at their gas pumps.

Gas prices are going to go up, no matter how much I worry about it. I just remind myself that 25% of my 401k is invested in Natural Resources and try to hang on for the bumpy ride. What about you? Do you have tips for easing the pinch at the pump?

Snowflaking, sort of

I've probably said it too many times, but Wes and I aren't the most frugal of people. We are doing better, and every step in the right direction counts in the end. But we still have a long long way to go.

I've begun a little experiment. No matter what our other spending habits, whenever a bill or expenditure is less than planned, I snowflake the difference. If the gas bill is $140 and we budgeted $150, I'm sending that $10.00 snowflake, even if the electric bill was budgeted at $150 and really came in at $180.

So far, I don't notice a difference at all. We haven't come up short in other areas and this has been fairly painless. Since my experiment with tracking my expenses every single day failed miserably, I've decided that this approach may work better. We spend if it's there, but really tighten our belts when it isn't.

Anyone have advice on this? What other ways do you throw little bits at your debts without feeling the pain?

This week's Grocery Game, and some other stuff

Every day, the first thing I do when I log in is check out my favorite blogs (listed to the right). First up is Mommy Gets PAID. She lists freebies and surveys and other really cool deals every day. So, I always go get my free stuff first thing! Yesterday, she had a link to a coupon for a free Scotch Brite toilet cleaning starter kit. Normally, I wouldn't buy something like that, but my 10 year old cleans their bathroom and I thought it might be nice for her to have something easier to use.

This week's Grocery Game lists resulted in:
Publix:
Original Price - $34.34
Price Paid - $14.53
Savings - $19.81 or 58%

Kroger:
Original Price - $221.24
Price Paid - $108.96
Savings - $112.28 or 51%

Total spent on this week's groceries: $123.50
Snowflake for debt: $26.50

Received Register Coupons:
$1.00 on two Maple Grove Farms Sugar Free Syrup
$2.00 on any size Purina Fit&Trim Dog Food
$5.00 off (plus free shipping on orders over $39.00) for 1-800-PetMeds
*****Use Code:DOG46 - Expires 06/04/08

Financial Goal

Until now, I have had a very vague idea of what I want to accomplish. Getting out of debt is only a portion of the equation. It's going to take a long time, but how do I get there? Not only that, but once I get there.. and max out my retirement savings.. and get my emergency fund.. what then?

I have a financial goal. My goal is $100 per day in passive income (or at least non-traditional employment generated income), 5 days a week. I have a few ideas to try. I'll post about them as I go along. I'm not sure what the parameters are yet and I may modify this goal/plan a dozen or so times in the coming weeks, but this is my starting point.

It's not enough for me to stay at home, but then I'll never be able to do that. Wes and I are unable to be approved for private medical insurance. Since my job provides medical insurance, I can't lower my hours to part time or quit to work from home.

So, what will I do with an additional $100 a day? Pay off the debts faster. Give extra money to Wes' daughters (one is in college and the other goes in the fall). Travel. Max out our personal retirement options. Save. Probably equal divisions in all of those categories. Maybe. I still have to map it on my spreadsheet.

HELOC Vs. Home Equity Loan

This is the 3rd post in my Articles by Request series. The first two posts were in response to the question "Can you explain how to save money while still raising a family and trying to keep up with what society seems to think a family needs to have?" and are titled Part 1 - The Joneses and Clothing and Part 2 - Living frugally, yet well.

The question was:
"Home Equity Loans. There's two types, the one that refinances your entire house with the loan amount included in it, and the one where you take out a loan but you only draw against it as you need it, and you only have to make payments against the balance you have out. Which is better if you're trying to remodel your home?"

This isn't the easiest article to write, as my main focus is on getting out of debt and not incurring more. First, I must beat down my urge to scream "NO! Don't Do It!!" Ok... that's done.

Second, let me say that I am not an expert on finance or lending. There is a good article about Home Equity Lines of Credit on the Federal Reserve website, that includes information about HELOCs and 2nd Mortgages.

There are no hard and fast rules regarding financing the remodel of your home. If you don't know how much it's going to cost or it is an ongoing project, a Home Equity Line Of Credit seems to make better sense to me. You only borrow what you need, as you need it, and you have a specified amount of time to take out the money. HELOCs also have very few fees, and some lenders have NO fees associated with the HELOC.

If you take out a 2nd mortgage or refinance your home and take out some or all of the equity to finance the remodel, several things are at play. One, you have to pay many thousands of dollars in additional fees and closing costs. When we refinanced our house last year to get out of our ARM, we found out that mortgage companies are allowed to charge up to 5% of the total borrowed in fees and they make the numbers work so that the fees DO add up to that 5%.

Two, you have to anticipate the unexpected and take out enough equity in your home to cover everything that COULD go wrong. If construction costs are higher, or the remodel needs extra work to be brought up to code, or there is more wrong than you anticipated, you have to take out a significant amount more than your original estimate just to make sure you have it covered. Refinancing your house or taking out a 2nd mortgage only to find out that you have to borrow more money later through another avenue is an expensive prospect.

Three, you take out more than you need and end up with more debt than was necessary to complete the project. This isn't the worst problem to have, except that when you borrow more than you need, it's easier to piddle away that cash on things rather than just going ahead and paying it back toward the principal of the mortgage.

For more professional information, the National Association of Home Builders has an article on financing your remodel. I also found some good information on Smart -- and Stupid -- ways to finance your remodel at MSN Money.

However you decide to finance your home's remodeling project, remember that what is right for you and your projects are not necessarily going to be right for everyone. Explore your own options.. and let me know what you find out!

Grocery Shopping - This Week's Results

I'm still in love with the Grocery Game. If you're interested in joining, leave me a comment here and I'll send you a referral. For every 3 referrals that sign up, I will get 12 free weeks. :) Every little bit helps!

And now, for the results:
Publix:
Actual Price - $73.07
Price Paid - $36.25
Saved - $36.82 or 50%

Kroger:
Actual Price - $159.16
Price Paid - $80.89
Saved - $78.27 or 49%

CVS:
Actual Price - $24.74
Price Paid - $9.75
Saved - $14.99 or 61%

Total Savings of $130.08 or 51%

Part 2 - Living frugally, yet well

This is the 2nd post in response to the question: “Can you explain how to save money while still raising a family and trying to keep up with what society seems to think a family needs to have?”

On Friday, I talked about Keeping up with the Joneses (AKA Society) and keeping Clothing purchases from breaking the bank.

To continue that theme, I want to talk a little bit about what Living Well is, to me. I suppose that "Living Well" is as subjective as you can get. It can vary drastically, even within households where everyone really has the same core values. I know that it varies for Wes and I frequently.

To me, Living Well means that I don't have to carry a lot of money stress around with me. It means that my children are happy, provided for, and healthy. It means that our basic necessities are met, with a little extra. Are we there yet? Mostly.

The path to really living well started with a budget. And then, some discipline. There are NO easy answers or quick fixes to getting your finances in order. But, there are definitely some quick wins. For me, the first quick win was understanding that "It's only $10" is a crappy response to buying something you don't need.

Use a free tracking service to load all of your bank accounts, credit cards, and/or gas cards. Mint is fabulous for this! Once you get all of your transactions loaded, review the categories. Make sure they're accurate, and take a good hard look at where you spend your money. Do you spend too much money on video games? Is dining out your weakness? Do you just HAVE to buy expensive crafting materials or the latest magazines to hit the news stands?

The first time I downloaded all of our bank account transactions into Microsoft Money, it was to prepare our taxes. When I categorized our expenditures for the previous year, I found out that we spent FOURTEEN THOUSAND dollars on eating out. That's more than our mortgage!

If you're married, go over the results with your spouse**. Discuss ways to compromise and make changes to your spending. Figure out how to work together to get your financial house in order. Unless everyone is on the same page, there will be sabotage. Sometimes, it'll even be you!
** This discussion should only happen when you're both prepared for it. Don't ambush your partner. No good can come from that.

Once you've determined your spending patterns, work on your budget. Get all of your fixed and mandatory expenses in there first. House payments, rent, and utilities should be at the top of the list. Next, your fluctuating expenses. While you're working out your budget, discuss where you can make cuts without having a negative impact on your household. This can be as simple as teaching the children to turn the lights off every single time they leave a room, to setting a timer for showers, or eating more vegetarian meals to cut meat costs.

Can't go without cable or high speed Internet? Bundle your telephone/cable/Internet packages for big savings on those utilities. Grocery shop with coupons, and use The Grocery Game (my favorite) or Coupon Mom, or another coupon and sales tracking program.

Can't go without eating out? Use the referral link from the Coupon Mom website to go to Restaurants.com. You can get a $25 gift certificate to your favorite restaurant for $10 through Restaurants.com .. and with the referral link from Coupon Mom, you get an extra 40% off. That's a $25 gift card for $6! You can buy more than one, if you choose. Watch out for the restrictions though.

Love books and magazines too much to give up? Go to your public library. They have most of the periodicals you could ever want. There is an endless supply of books. Have kids? GREAT! Go during story time and meet other parents and kids in your neighborhood.

While you're at it, start your own home play groups or a babysitting co-op, so nobody has to pay for sitters. If you aren't that ambitious, look for co-ops that are already in place. Time Banking is taking hold all over the country.

Don't dig the library for your reading fix? Try book swapping or Half.com. Two of the more popular book swap rings are Paperback Swap and Swaptree.

Do you need a shelf or table? What about canning jars? Do you have a bunch of baby clothes taking up space? Extra furniture stashed in the attic that will never see the light of day again? Use Freecycle! There is one in practically every neighborhood. You can find a home for just about everything you have no use for. If you're willing to put a little effort into it, you can also find just about anything you need there too. Can't find what you need on Freecycle? How about Craig's List?

These are just a few of the ways I've found to cut our costs in ways that don't hurt our lifestyle. They do require a little more effort than going out and plopping down your debit card or credit card, but they are worth it to my peace of mind. We're still Living Well. We're just doing it more consciously than we were before. The rewards are growing.

Results of Planning

The convention was AMAZING! Wes and I got to spend loads of time meeting new folks and reconnecting with old friends. There was so much to see and do, we didn't even get to 1/2 of it.

The planning ahead really paid off for us. We didn't spend any money on restaurant food or drinks of any sort. We did end up buying a few impulse things from the vendor room, but I budgeted money for that "on the sly" so that when Wes found something he just had to have, I was able to indulge him.

All in all, we spend $95 in the vendor area, $75 on food and drinks for 3 days (and had enough leftovers that I have not had to shop for breakfast or lunches at work for 3 more days), and $202.28 on the hotel room.

Cell Phone Bill - Take Two

Last month, I wrote about an adventure with our cell phone plans and my attempt at cutting some of our costs by lower the plans. After carefully combing through this month's bill, I am pleased to announce that not only is our bill correct, but it's less than I budgeted! So, that's another $3.97 snowflake toward back taxes.

Snow Flakes to date: $18.33

The Grocery Game - Unexpected Benefits

I posted last week about The Grocery Game. Since then, I've come to believe it's the smartest move ever!

The Investment
Cash
Each week, I spend $2.35 on a double edition of the Sunday Atlanta Journal Constitution. This gives me two sets of the week's coupons. The cost of the website is $20 every 8 weeks ($10 for the first store and $5 for each additional). So, for the service, I spend $2.50 or $.83 per store per week.
Total expense per week: $4.85

Time
I spend 30 minutes reviewing the list for each store on the Grocery Game website and checking the boxes of the items I'll be purchasing. I choose the option of hiding all of the items I'm not choosing, as well as all supplemental notes on the page, and print the pages.
Then, I get out the coupons and spend an hour organizing them. This includes:
-Labeling the current week's packet of coupons with the date they came out
-Clipping the coupons* for each grocery list I printed
-Putting the coupons and the list in the envelope**
Total Planning time: 1.5 hours

*I only clip the coupon when I need it. It's incredibly simple to keep up with and makes life easier, as all of the coupons on the Grocery Game are listed with the date and circular that the coupons came from. Instead, I write the date of the circular on the front and then use a large rubberband from the newspaper to hold the stack of circulars, then file them in date order when I'm finished clipping.
** I use one envelope for each store so I don't have to dig through the coupons as I shop. I know exactly what I have with me and exactly what I'm buying, so I only have to take the coupons out at the checkout line.

Shopping
The Publix and Kroger are across the street from one another. The CVS is on my way ho me. So, I stop at Publix first, drive across the street to Kroger, then hit CVS on the way home. I make one small circle and there is no running all over town.
Total Shopping Time: 1.5 hours, including driving.

Special note on the shopping time: I now shop with lists, so I don’t forget anything. I no longer have to stop at the store during the week, which saves me about an hour or so every week. This evens out the planning/clipping time completely.

The Benefits
Cash
Between the sales, the coupons, gas, and not stopping the store during the week to pick up random things and adding impulse buys, I save about $100 - $150 a week.

UPROMISE
SO many of the name brand items that I have coupons for are also UPromise items. These are things I would never buy the name brands of before it was exceptionally more affordable. (Rice A Roni for $.12 a box this week.) Not only do I get the food at insanely low prices, but I get a percentage of the original price applied to the children’s UPromise accounts.

School Donation
Another benefit of being able to buy name brand items at incredibly low prices are the Boxtops For Education labels. A good percentage of items I have coupons for have these labels. Our PTA program receives $.10 for every Boxtop redeemed. This is not a direct benefit to me, but it definitely helps out our children.

Other Donations
There are, often times, coupons and sale prices that combine to make the price of the items FREE. Except that, some of these free items, no matter how great, are not a good fit for our family. Diapers, Formula, and Cat Food are not items we will ever need. Wes is allergic to cats, and our baby days are far long gone. Rather than let these deals go to waste, I go ahead and get the free items and donate them to animal and people shelters. If one wanted to work the system, these donations are tax deductible at market value. I haven’t done this, but if it turns out that I make enough of these donations, I may just go for it.

I'm sure I'll post about this again, as I get ramped up. But, let me just say that my freezer and pantry are filling up. There is less money going out the door for food. My children are loving the variety of new things I'm stocking, and I'm saving enough money that I don't have to scrimp when it comes to rising food prices on fruit, milk, eggs, and meat.

First Paycheck

Yesterday, we got the FIRST check made out to Wes' new company. WHEW... I have to be honest, I was a bit panicked. The payment was 30 days overdue. Our savings account was officially down to one mortgage payment and 1/2 month worth of child support. To say that Momma was a little stressed might be the understatement of the year.

So, the check has been deposited. "Payroll" has been processed. The new Business ING Direct account has been established. This morning, I feel like we're getting a little more control going in our situation.

I was able to send in the debt payments that I usually send on the 15th of the month:
$450 for Federal Tax Debt
$300 for State Tax Debt
AND! I sent in my $14.36 Snowflake (Thanks PaidTwice!!!)

I'm now off to the thrift store to find costuming goodness for an upcoming costume party. This should be fun.

The Grocery Game

Well, I've been reading about the Grocery Game for quite some time now. I'm happy to report that I decided to give it a try. I signed up for the 4 week trial for $1. Last night, I did the grocery shopping, using the Grocery Game's "game rules". Here are this week's results:

Store --- Full Price --- Savings --- Total Paid --- % Savings
Publix ---$71.00 ---- $43.93 ----- $27.07 ------ 62%
Kroger --$161.63 ---- $71.41 ----- $90.22 ------ 45%
CVS -----$42.09 ----- $23.74 ---- $18.35 ------- 56%

Total Spent: $135.64
Total Bdgt Wk: $150.00
Total to "Snowflake": $14.36

YAY for my first official Snowflake.

Reimbursable Expenses

I've had this entry on the back burner for the last several days. For some reason, the words are not finding their way onto the page. I know what I want to say, but... hmm.. there's a block. So this will just be a ramble, I think.

Wes and I will, at times, spend money that isn't budgeted for things that are to be reimbursed. I recently purchased sodas, film, and craft items for the PTA Sweetheart Ball. I need to submit the receipts for these purchases so that I can be reimbursed. Yet, I've been so lax about this that I have not only forgotten to fill out the check request form and turn in the receipts, but I've misplaced the receipts. It's not as though I don't care about the $250 that I spent on these items. I'm just lazier than I should be when it comes to pulling the money back into the account.

Wes has always had this barrier when it comes to reimbursable work expenses too. When he traveled for work, he used to put off the expense reports for months, then scramble to gather the $10,000 or so in expense receipts, send in all the reports, and get a huge check. Now, this isn't so bad until you realize that when he lost receipts, he couldn't submit them for reimbursement. Often times, he lost income for several weeks worth completely because they were outside the 90 day requirement.

We've purchased major appliances and equipment with significant rebates that we've never mailed in. Even though I've filled them in and had them ready to go.

I have a lot of reflection to do about this. Why do I so carefully guard the money that we have by budgeting and planning, but not work aggressively to put the money back in that should be coming?

Food for thought this morning.

Hiccups and Money Stress

This weekend was a difficult one for me. I'm still trying to wrap my mind around the emotional relationship I have with money. I am relieved to have enough money saved that I can replace the tires on my car without worry. If the electric bill is more than expected, there is no financial crisis for us. If we forget to lay out something for dinner and we just decide to jump in the car and go to a restaurant, there is no big dilemma.

However, there really is. Or, there will be. Maybe.

Starting our own business was a great idea! We had enough money in the bank to cover 3 full months worth of expenses while Wes concentrated on contracting work, as well as looking for a "regular job" so that he kept all of his options open. Wes has already completed one contract and we've invoiced for (OMG) $10,000. He started another contract today, for a considerably larger amount. Why am I worried? Am I completely crazy?

Once again... Maybe.

The invoices have been sent out for the completed contract, but nothing has been paid. In 3 days, we will be at the "Net 30 Days" for the 1st invoice and I am nervous that it won't be paid on time, or at all if the company decides to be difficult. Ok, so even if that invoice doesn't get paid... Wes is still working on the 2nd contract! No problem! Except... that contract is "Net 45 Days" ... so, no paid invoice for 2 months. Ut oh... now we may have a problem. No money from our consulting company for 2 more months is a definite possibility.

Jumping in the car for that "no problems" dinner is suddenly seeming like the beginning of a possible problem. Wes doesn't seem worried. I have complete faith in him to provide for our family. I also have a job, but it barely covers the house payment and half of the utilities. So, if nothing else, I know we won't be homeless or starve. I am just SO emotionally attached to that number in the ING account. It causes me great amounts of distress to see that number going down.

Granted, we planned for this. It's been budgeted. We've looked at everything from every possible angle. We've discussed it. We both agreed to this course of action. So, why can't I get my head wrapped around the depletion of our savings to bring our dreams to fruition? Whew... I hope I work through it soon.

Surprise! Financial Windfalls

Today seems to be the day to discuss Financial Windfalls on the PF blogs. Over at We're In Debt, the King of Debt posted an interesting question about what you would do with a windfall of $500,000. And over at Get Rich Slowly, JD answers a question from a reader who wants to make sure he doesn't squander a windfall of $125,000.

I posted a response to the King of Debt's post, and as I thought about how I'd handle a $500,000 windfall, I was actually surprised by my decisions. I realize that my priorities are not really in line with conventional money wisdom. I don't necessarily want my money to work for me later. I want it to give me freedom NOW. I don't care to retire later. I want to travel while I'm young enough to enjoy it and even share those experiences with my children.

With that said, here is the way the breakdown worked out for me:
45% ($225,000) to pay off all back debt and the mortgage
24% ($120,000) directly into 529 accounts for college for the children at $20,000 per child.
23.2% ($116,000) to a high yield savings account for payment of child support for the next 8 years.
6.8% (34,000) to invest in a moderately aggressive portfolio
1% (5,000) Vacation



*Experiment #1 - Yesterday's spending
$91.55 for school lunches for the kids.

Budget Meetings

I tried to have a budget meeting with Wes last night. This did not end well.

Thus begins my campaign to learn to effectively communicate with Wes about the budget. In his eyes, we're doing all we can with the planning and cutting expenses. He says he agrees with my perspective, thus there is nothing to discuss. "No more lunches out, done. What's to talk about?"

He does not like to deal with bills or finances in general. Before we combined households, his process for bill paying was very simple... he paid the bills when the shut off notices arrived (or the utility in question was actually shut off). Enter the bounced check fees, late fees, and reconnect fees. So , now I maintain the budget. I handle the bill paying and the finances. He is confident that I will handle things in a manner that is best for our family and in line with both our beliefs.

I fear that this means I am going to be the bad guy. We reduced spending because I said we needed to in order to live within the budget. We are paying off back debts because I have been proactive in arranging these payments. I pay the bills and help keep us on the financial track. He doesn't disagree with me, so he doesn't feel like we have anything to discuss but I feel like I'm imposing limits on the family's spending that will haunt me later when he resents them.

My plan is to begin setting aside time to review spending reports and ask him how he thinks we're doing, where we can improve our spending, and/or where we need to allow for more. I need to work on ways to engage him in the conversation without making him feel as though it's going to be a "finance lesson" or an opportunity for me to gripe about money.

.... Maybe a Martini will make it an easier meeting.

Acquiring Things

I'll be the first to admit that I'm very obsessive about spreadsheets. I love them. If I could tweak and adjust and toy with everything in my life and get it "just right" the way i can with the formulas in my spreadsheet, I'd never be stressed. Oh look... that thought train just went right off the rails.... onward...

I tweaked our budget yesterday to find out just how low our spending can realistically go. Let me just say WOW. We can almost live on half of what our income was, if we just try. So why haven't we done that? Well, because it means sacrifice and planning.

Not only sacrifice and planning, but WORK. It means remembering to thaw the roast the night before, every time it's on the menu. It means keeping accurate stock of what you have in the kitchen... or the bathroom... or knowing just how long that pair of socks can really last before replacing them.

I'm very guilty of acquiring things. Not because we're wealthy or because we need them... but because I was poor for my entire life and many times left behind everything I owned at the whims of a gypsy mother. Now that we're fairly stable, the habit of buying things for my family just because I can is very ingrained. My first personal goal is going to be to combat that habit. I'm dragging it out in the open and staring it in the face. That is going to make living more sensibly much easier.

I think......