FrugalMomLA needs your assistance!

As I start to pack for my trip to Mexico, I wanted to quickly post a request for your assistance (don't worry, it's easy)!

FrugalMomLA is working on a project to explore the differences in grocery and gas prices across the U.S. (and Canada, if there are any blogging neighbors to the north reading this).

Basically, she is asking for the following information:

Blog name and/or url (if you don't have a blog, just leave this blank):
Location:
Gallon of milk:
Loaf of sandwich bread:
Pound of apples:
Gallon of gas:

The results should be on FrugalMomLA's website within a couple of weeks. You can send your responses (or any other comments) to my email address: finally_frugal@yahoo.com or just leave a comment here and I'll forward them on to her. . . .

Thanks for your help!

Mexico bound. . . .

I may not be able to post regularly for the next week or so, but don’t despair! I’ll be back!

I am off tomorrow morning for a week in a seaside village in Mexico! “WHAT?”, you say? “What right do you have going off to Mexico when you’ve got credit card debt to pay off? Who do you think you are, anyway”?

Well, here’s how I’m doing it---and I’m paying CASH!

1. My airline ticket was purchased by a family member, as a combined birthday/Christmas present.
2. We are renting a house in a small town, my portion of which will come to $500, or less than $75 per night.
3. Food: It’s Mexico. Can you say fish tacos and cheap beer?
4. Entertainment: beach (i.e. free)

And here’s how I came up with the cash for the house rental, food, and entertainment costs. About three years ago, I opened an ING Online savings account, and had $50 automatically transferred from my checking account each month. When I moved to Portland, I froze the automatic payments, until I was more familiar with my new salary and living costs. Then I promptly forgot about the account.

Last summer, I happened to be doing some personal finance reading, and suddenly remembered my ING account. Since I had completely forgotten my login ID and password, I contacted ING by phone and they were kind enough to restore my access to the site.

To my delight, I found that I had almost $800 amassed in the account! So that money, along with $300 from my hefty tax refund will completely fund my weeklong vacation in Mexico! I know, I know, Dave Ramsey would not approve, most likely. I'm okay with that. I'm taking a vacation that won't get me any closer to financial freedom, but since I'm committed to NOT using credit while I'm away, at least I won't be moving backward in my debt reduction journey.

Getting there. . . .

I've decided to start a monthly debt reduction chart, to help me stay on the path to paying off my credit cards (then it's on to the student loans and building up my emergency fund). I've had a bit of difficulty NOT spending my tax refund on frivolous items (such as clothing), but I did manage to put a chunk of money toward my credit card debt all the same.



I started February with $4,404.29 in credit debt. I plowed $1,079.63 into debt repayment (thanks, Uncle Sam, for my ginormous refund)! This leaves me with a total of $3,324.66 in remaining debt at the start of March. I'll update this chart again at the end of March to see how far I've gotten, so stay tuned!

I just saved $14.99 on my wireless plan. . . .!

My Verizon contract is (finally) up for renewal in May---a mere two months from now! I've been paying $34.99 for 300 Anytime minutes, of which I use on average 30 minutes a month (I'm not a huge cellphone talker, as you can see). I've been planning to downgrade to a Pay-As-You-Go plan (probably Virgin Mobile), which should save me $20 a month.

Just for fun, I called Verizon today to see if they have any lower-priced plans that will work better with my needs. Turns out, they have a 50 Anytime minute plan (not advertised on their website, of course) which will cost $20/month---a savings of $14.99 per month! And the beauty of it is, I don't have to sign on for another two year contract! I simply save money for the next two months, as I research phones and plans---or, I could choose to stay with Verizon if number portability isn't going to be an option with a new provider.

Now, WHY didn't I call and ask about this months (years!) ago???? Why did I wait? This is just a reminder to me that a contract is never written in stone, and especially when the contract is almost expired, it seems there is almost infinite flexibility!

Dumb stuff I haven't spent money on. . . .

In researching (ahem) interesting personal finance items to include in this blog (I can't spill my guts every day, you know) I came across a hilarious site called: SkyMall Madness. This website supposedly compiles the lamest, most useless items that can be found in the SkyMall magazine, that thing you read on the airplane when your i-pod battery is dead and the movie sucks. Now, I went to the SkyMall website and didn't find some of the items shown on SkyMall Madness, so I can't vouch for the accuracy of this site----sure is funny, though!

Here are some of my favorites:

The Giant Lighter: $29.99

Actual text purported to be from the SkyMall catalog: Imagine the looks on your friends' faces as you casually pull out your Giant Lighter to light their cigarette. I have one sitting on the coffee table and it never fails to illicit a response (note from Finally Frugal: I'm pretty sure SkyMag editors would have spelled the word 'elicit' correctly). People simply have to know where they can get one.

The Slumber Sleeve: $19.95

Actual text purported to be from the SkyMall catalog: The SlumberSleeve sleeve pillow is a first of its kind comfort device designed to prevent that numbness or achy feeling and enhance circulation. Since our sleeve pillow is worn over your arm, wrist, leg or ankle, it moves with you and you can change sleep positions naturally - and sleep like a kid again.

And of course:

The Day of the Week Clock: $39.98

Actual text purported to be from the SkyMall catalog: Do you have little trouble keeping track of the hour and even the date, but the day of the week eludes you? The DayClock is uniquely designed to help you keep track of weekly events like your golf day, card night, movie night, and so much more. Not only a great conversation piece, it's a fun gift.

Ah, so many ways to waste my money!

How I squandered my financial fresh start. . . .

New here? First read The Early Years, and then The Middle Years. . . .

Once upon a time, almost two years ago, I was debt-free (except for my student loan). I sold my house in California (just a wee house, in a rural part of the state---so my ‘take’ was less than $50,000 after three years of ownership). With the proceeds, I paid off my car, my credit cards, and my home equity loan, leaving me with about $15,000.

I took a giant breath and moved to Portland, Oregon, to start a new life and a new job (at a lower salary---but hey, I was debt free, remember?). Somehow, I now find myself once again a slave to credit card debt, saddled with a mortgage that is probably too large for my salary, and with over $50,000 remaining on my student loan. How did this happen?

I was so unused to having money in a savings account---an actual cushion! It felt so great, I was loathe to spend any of the money on piddly, every day stuff. So I used my trusty credit card when I visited Target, Home Depot, and Bed, Bath & Beyond, knowing that I had the money to pay it off every month----which I didn’t. Pay it off, that is.

I then used much of my remaining ‘house money’ to purchase a house in Portland---now, granted, the home I live in is even smaller and cozier than my California house, and cost less than the sale price of my California home----but it cost over $60,000 more than my first house originally cost, and with me at a lower salary than I was then, the mortgage payments now seem almost overwhelming. And of course, you know what happens when you move into a new house or apartment, especially if you’re an ‘owner’! There are needs, after all! More trips to Target, Home Depot, and Bed, Bath & Beyond----adding to my creeping credit card debt.

Each month, as I continued to live as if I hadn’t just bought a more expensive house on a lower salary, I would take a little here and there out of my savings account, to cover dinner out with friends, or the electric bill that came due at the end of the month, or the auto insurance premium that I hadn’t thought about until the day it arrived in the mail. And so it went. Until my savings account was so meager I began getting nervous. Which was a good thing, because that anxiety caused me to re-evaluate how I was living, and most importantly, how I was spending.

I think the combination of ‘starting fresh’ two years ago, a new outlook on life---free of credit card and auto loan debt, after all---and actual money in my savings account served to create a false sense of financial security. I bit off more than I can chew---almost. I am, after all, ‘making it’, as they say. I am paying my mortgages and other bills each month on time, and I’m even finding ways to pay off my credit cards---for the last time.

I now realize that I squandered what could have been my ‘financial fresh start’. I can kick myself for letting this happen, or I can learn from it---I choose to learn.

Practicing frugality at the grocery store. . . .

A recent article about increasing grocery prices confirmed what I've already instinctually felt: grocery prices are going up, up, up. Granted, inflation is affecting just about everything, from gas prices to frozen corn. And it's been happening every year since, well, since economists kept track of that sort of thing. But it doesn't make it any easier for a newly-frugal gal to keep her grocery costs down.

A few months ago, I took the time to create a grocery 'price book' (data which was then entered into my trusty Excel spreadsheet). What I found has helped me save money on groceries with each trip, without using coupons. I discovered that the grocery store I usually shopped in didn't truly save me any money---in fact, I was spending MORE money on the food I generally purchased, by visiting this convenient store.

By taking the time to create a price book, I found that the much busier store across the street had prices on everything I needed at an average of 10% to 15% less than my 'usual' store! Granted, the cheaper store is packed from morning until night (gee, I wonder why?) and shopping there is more stressful and frustrating, given the crowds, but for a 10-15% savings, it's worth it!

FrugalMomLA is going to write a post in the next couple of weeks which compares grocery prices for staples (bread, apples, etc) from across the country (depending on how many responses she gets). Granted, it won't be a 'scientific' experiment, but it should be very interesting to see how much a loaf of bread costs in LA, compared to Portland. Check her blog in the next couple of weeks to see it for yourself!

In the meantime, I'm going to continue updating my price book, to make sure I'm buying my food at the best possible prices. . . .

Taming the beast. . . . .

Good news: both my state and my federal tax refunds have been deposited into my checking account!

Bad news: I've already spent almost $100 on totally unplanned, frivolous, non-necessities!

My original plan was to dump the majority (if not all) of my refunds onto my credit card debt, effectively wiping out two credit cards (at $190 and $794, respectively) and then dropping the rest onto my third (and last!) credit card. But there was something about seeing all that cash in my usually anemic checking account that made me go a little crazy!

Before I stopped, I had purchased a pair of shoes (on sale), a sweater (on sale) and a new spring top (also on sale). Do you like how I justified my purchases with the fact that they were on sale? I must have "saved" about $80 on my almost $100 worth of purchases! The guilt set in when I got home, and realized that by shopping for things I didn't need (but craved) I was sabotaging my own plans for financial independence. And that the pattern of letting money disappear from my life so quickly and for such trivial reasons is how I got so far into debt in the first place.

So, how did I tame the beast? This morning, I logged in to my checking account and started putting my money to work---on debt reduction. I paid off the two credit cards, and will put another $500 on my third card. If the money is literally gone from my account, then I won't be tempted to spend it on small, trivial things, as I have in the past.

My spending spree was a good reminder that my shopping beast is still alive and well, just waiting for an opportunity to rear its ugly head. It was also a good learning experience---in the past, I would have waited until the very last minute to pay the "boring" bills with my refund, by which time most of the money would be spent. This time, I learned to pay the bills early, to avoid the danger of spending my refund on things that won't contribute at all to my future financial security.

In student loan denial. . . . I mean deferral. . . .

Now that I can (kind of) see the light at the end of the tunnel as far as my credit card debt goes, I'm trying to force myself to get excited about paying off the $50,000+ in student loan debt I'm carrying. Granted, my loans are in deferral because I'm in school (again!) but some of the interest is accruing on the unsubsidized portions of the loans. Added to this is the fact that when I consolidated lo those many years ago, the interest rate was at 8.25%. Ouch.

So, today I've been cruising the personal finance blogosphere, looking for good articles that will get me ready to at least start paying the interest portion of my student loans (and get that tax deduction while I'm at it).

Here's a list of what I found:

• Student Loans: How to Pay Them Off and Build Wealth, by David John Marotta and Beth Anderson Nedelisky


• The Student Loan Tax Break and What Loan Brokers Won't Tell You, by Teri Newton


• A Rough Guide to Repaying Student Loans, by SJean at StackingPennies.

I'm sure there is more to be found, and I'm going to keep my eyes peeled during the upcoming months. Since my credit card debt won't be repaid in full until next fall, I've got some time to find my motivation for this seemingly overwhelming financial task. I would love to have the student loans go away all on their own (which they may do, but I can't count on that). Until or unless that happens, I need to start finding some inspiration to start the next phase of Mission: Debt Knockout.

Stock market pain. . . .

Awhile ago, I wrote about my 403b account, and my daily obsession with its value. Once the stock market started wobbling, I vowed to check it once a week---no more. Watching the value drop even as I continue to contribute 10% of my gross each month was simply too depressing.

I'm proud to say that I lasted longer than a week! It's actually been TWO weeks since I last checked my balance online, and as I suspected, the results were dismal. It's clear that in spite of my own contributions, the value has dropped precipitously, and probably won't be increasing any time soon.

So, should I stop my contributions? Put the money elsewhere? I think not. My opinion (possibly unfounded and based on instinct, granted) is to continue my contributions to take advantage of the lower stock costs now. Hopefully this will pay off later when (not IF) the market rebounds. This could take some time, of course. But then, I'm not going to be retiring for another twenty years anyway---and anything could happen during that time.

Retail therapy. . . .

Mark Morlock, my favorite columnist of all time, writes today about the American need to spend our way out of feelings of powerlessness, misery, and depression. His message is extremely political, as usual (one of the reasons I love him so very, very much), so if you're not overly liberal or if you're even slightly right of center, you might want to avoid clicking on his link---his writing WILL piss you off! Just a fair warning. . . .

Politics aside, his message is a good one for a newly frugal gal (a Fru-Gal?) like myself. Many an afternoon I've spent cruising the aisles at Macy's, Banana Republic, or The Gap, looking for that something special to make me feel. . . .well. . . special! Especially after a rough day at work in which my imperfections were magnified 1000x under the very nose of my boss, a new pair of shoes or a cute sweater could do wonders for the soul!

Morlock's column, of course, mentions the Bush presidency and our current economy of consumption as reason enough to begin to purge our collective STUFF (Mark doesn't suggest recycling or donation, though, which perturbs me---bad Mark, very bad!). Personally, regardless of politics, I'm trying to live less as a consumer (see my review of Not Buying It if you're interested) and take more time for the people in my life---the less stuff I buy, the less I'll have to (eventually) work, and the more time and energy I'll have for the people I love.

Amandajane over at Wisebread posted a 'zero waste' challenge last week, and although there were lots of comments about it, I think I'm the only one who tried it out (Sunday to Sunday---yesterday).

Here was Amandajane's original post at Wisebread:

I propose a challenge! How about we try for zero household waste for a week? The parameters would have to be decided upon but I thought I'd put it out there.

Since one of the ways I lowered my expenses in the past three months was to have my trash pickup just once a month instead of weekly, I've been keeping an eye on the trash bin anyway. This challenge intrigued me---I'm trying to decrease my trash creation anyway and this was a great incentive.

I have to say, being that I was sick almost all last week, I failed miserably at the 'zero waste' challenge. What with the hundreds of times I wiped my nose, the tissues added up fairly quickly. . . .Sorry, Amandajane!

However, I DID have some success:

1. I reached for paper towels more than once, and then stopped and grabbed a washable kitchen towel instead
2. I made sure that my medicines came in as little packaging as possible, and that all of it was eventually recyclable
3. I made my own bread from scratch last week, rather than buying packaged---primarily because I didn't want to leave the house, but in any case, I ended up with less waste.
4. I was very aware of everything that I used---I asked myself if I could compost or recycle it later, and if the answer was no, then I tried to find an alternative.

There are things that occurred to me during the challenge:

1. I need to buy more kitchen towels, and maybe just stop buying paper towels altogether. I reach for them way too often when a washable towel or sponge would do just as well.
2. I need to purchase some 'hankies' to use rather than using a tissue when my nose is running. . . .
3. I'd like to buy some more cloth napkins, as well. I have a small collection, but not enough, especially if I were to have more than six guests over. . . .

A great challenge, and one that I think many others could benefit from. One caveat: I'm not sure zero waste would work in a family with many members, or multiple kids---but I'll bet larger families could learn to decrease their waste substantially, just by being conscious of what they use on a daily basis. . . .

'Preacher' Dave on dumping debt. . . . .

Since I've been sick for, oh, going on a week now, I've had a chance to catch up on some reading and CD's that have been languishing by the side of my bed.

Yesterday, I listened to Dave Ramsey's 'Dumping Debt plus Cash Flow Planning' CD. The first two CD's (in the three CD program) dealt with getting out of debt, and the last CD discussed budgeting.

After having read The Total Money Makeover and Financial Peace (both reviewed by Trent at The Simple Dollar), I was curious to hear what Dave sounded like 'in person'. Well, he sounds like a preacher, complete with the pregnant pauses, the dramatic enunciation, and southern accent!

The preacher aspect bugged me for a total of about 15 seconds, and then I started becoming inspired (all over again) to beat my debt, increase my savings, pay off my mortgage, and finally find financial peace! I could listen to these CD's over and over again, if only to remind me that IT (meaning financial independence) CAN be done.

The drawback of these CD's is that you really need to have read at least the Total Money Makeover before listening----Dave refers to his 'baby steps' and to other principles that are laid out beautifully in the Total Money Makeover, but he doesn't expand on them in the CD's. I almost felt like the CD's were created as a sort of advertisement, to entice listeners to sign up for the several hundred dollar Financial Peace University, which bothered me a bit. However, if you've gone to the local library and checked out his books, then I don't think there's a need to spend hard earned money hearing the same principles at your local church.

If you have a choice, read the Total Money Makeover, and then listen to this 3-CD lecture (probably both are available at the local library---although I had a good month's wait for the CD's). I would skip the book entitled Financial Peace, since it's just what Trent at The Simple Dollar calls a 'first draft' of Total Money Makeover.

And the best news? I'm starting to feel better!

"Meat"loaf update. . . .

In attempting to reduce my food and grocery costs (I've only spent about $35 this MONTH on groceries so far---see my zero based budget for updates) I decided to try TVP, or textured vegetable protein, in place of expensive (and environmentally unfriendly) meat.

Last night I made my first 'meat' loaf from TVP, and it wasn't bad! It wasn't as tasty and juicy as the meatloaf my dad makes (and the real meat meatloaves I've made in the past), but it was definitely edible, and I'll make this recipe again, with some tweaking. For example, I added some onion soup mix to this recipe and it just made the entire loaf a little too salty for my taste, so next time I may leave that out. Also, I used an entire can of tomato sauce instead of catsup, and the mealoaf is RED. Really, really, RED. Kind of strange looking---so maybe a half a can will do, in the future.

Here's the recipe I used, from: Veggiedaze

"MEAT" LOAF

1 cup oatmeal (coarse grind is best)
1 cup TVP 1/2 cup whole wheat flour (used seasoned bread crumbs instead)
1/2 cup minced celery (didn't have this, so left it out)
1/3 cup minced onion
1/4 cup minced parsley or 2 generouse tablespoons dried parsley flakes
1 clove minced garlic
1 cup grated mozarella cheese (didn't have this: used cheddar instead)
2 beaten eggs
salt and pepper to taste
1/2 c. catsup (used an entire can of tomato sauce instead)
enough water to make a slightly softer than meatloaf mixture (didn't do this at all)

Mix everything together in a bowl and let stand for 1/2 hour. Turn mixture into a greased loaf pan and top with more ketchup. Bake for 1 hour at 350 degrees F. Let stand 5 minutes then slice. Is really good cold on sandwiches.

Environmentally frugal. . . . .

I work full time during the day, and then to earn extra money, I work at night from home, doing web research concerning environmental health issues. Because of this, I end up reading a lot of articles about climate change, pollution, toxins in our food and consumers goods, and all sorts of other uplifting topics!

Lately, I've been considering my food choices, and how those choices relate to the environment. For example, I don't eat much meat or poultry (they're expensive!), but due to the knowledge I've gained through my night job, I definitely think about it every time I pick up a package of ground beef. Raising cattle for food contributes greatly to greenhouse gas emissions, and is generally not so great for our environment (see this New York Times article for more)---not to mention my budget!

Added to the environmental issues is the fact that I can't stand to see anything or anyone suffer, including animals. This is a video I recently saw that depicted the horrific way sick cattle are treated in an attempt to get them to walk into the slaughterhouse (the only way the cattle owner will get paid for his product). Not only is the treatment bordering on torture and definitely inhumane, but think of the fact that SICK cows are being added to our food supply!

So given the environmental and philosophical problems related to eating animal products, in my quest to decrease my spending, pay down debt, and increase savings and financial security, I decided to attempt to eat less meat and poultry. Granted, I don't think I'll ever be able to give up cheese----that's just unthinkable to me right now. Baby steps! Tomorrow I'll write about what I had for dinner tonight: a "meat" loaf made out of something called 'TVP', or textured vegetable protein, which is a very inexpensive meat substitute. Stay tuned!

Credit card payoff. . . getting closer!

While sick at home yesterday, I took the opportunity to complete my tax returns, and realized that I would be receiving a slightly higher refund that I anticipated! Once the visions of new wedge sandals stopped floating above my head, I started getting excited about putting a larger chunk of this cash (my own money, after all!) toward my debt repayment.

This inspired me to list my remaining credit card debt, which can (hopefully) be seen in the spreadsheet below. . . .



I hope to have all credit debt paid off by October of this year, after which I'll start padding my emergency fund (currently at $1,000) and then work on my student loans ($50,000---ouch!) and my mortgages. By the way, at this time two years ago, I had NO credit card debt----I promise to write soon about how I squandered my financial fresh start!

I'm excited to rework this spreadsheet soon, to show the large refund amounts I'll be throwing at my debt, hopefully within the next two weeks!

Book Review: Not Buying It, by Judith Levine

In my quest to inspire myself to decrease the money I spend on non-essential items, I’ve been reading a book called Not Buying It. Since I’ve been home sick for the past two days, I finally finished it, and thought I’d introduce it here, for others who may be interested.

Judith Levine and her partner, Paul, spend an entire year doing exactly as the title describes: not buying anything other than essentials (food, mortgage, utilities, gas for the car, etc). Of course, Paul and Judith have differing ideas of what constitutes a necessity. Paul is Italian---therefore, he is loathe to give up his wine. Judith has a love of Smartwool socks (I admit, they’re great!) but spends the year without replacing hers. The book describes their journey, from January to December, the difficulties, the disagreements, and the epiphanies related to being citizens, rather than consumers.

I found myself questioning my own ability to pass a shoe store without feeling a deep need to enter it and try on a pair of sandals, some ballet-inspired flats, or tall leather boots. Could I spend a year without purchasing anything frivolous? I’m not so sure! Not Buying It reminded me in many ways of ‘The Compact’, that group of people who pledge at the beginning of the year to do just as Paul and Judith did---to avoid becoming another cog in the wheel of American (or maybe I should say 'Western'?) consumerism. Instead, followers of The Compact use creativity and imagination to obtain the ‘things’ that most people pick up on the shelves of WalMart without a second thought.

Not Buying It is not a ‘how to’, explaining the ins and outs of getting by without spending money on new shoes, knic-knacs, and collectibles. Instead, it’s more of a philosophical discussion about how the need for stuff permeates every minute of every day, and how Judith and Paul reacted to that (ultimately their relationship strengthened, primarily because they spent more ‘quality’ time together). My favorite quote from the book is:

“As I ramble through the aisles, a young salesman asks if I need help. He seems genuinely concerned, as if offering spiritual counsel or a hot meal. But I don’t need help. In fact, I am feeling almost lightheaded with the absence of need or desire”.

This absence of need or desire sounds like nirvana to me!

Sick as a dog. . . .

I have that flu/cold that's been going around! I've already called in sick to both of my jobs, and am considering whether to go to class tonight (it's a 45-minute commute each way---on the light rail).

I really want to just crawl back into bed in a Nyquil-induced fog. Unfortunately, I'm all out of cold remedies. Can I hack it without the expensive cold medicine? And where, in my tiny little budget, would the money for medicine come from? It would have to be from my 'fun' money, and knocking myself out with cough syrup is NOT my idea of fun!

For now, I'm going to keep drinking lemon tea with honey, and if I really need some knockout pills/syrup, I'll get the generic brand to keep costs low. Following my zero-based budget without any flexibility isn't worth it to be miserable!

Hopefully back with the living tomorrow!

Socially frugal. . . .

My budget is pretty tight at the moment (see my post about my zero-based budget to see just how much I'm squeezing out of my salary). I think I have about $75 budgeted for 'fun' this month, which has to include all purchases and social costs that are not absolutely necessary (like the $39 boots I talked myself out of last week).

Today, I went to a baby shower, in honor of one of my coworkers. Thankfully, the parents requested no gifts, since they already have one child and don't need anything more. As an inexpensive 'gift', however, I created a sign-up sheet for friends and coworkers to bring a simple meal to their home once a week after the baby is about a month old. My pregnant coworker also indicated that having someone come over and hold the baby for an hour or two to allow for naps and showers would be great. Perfect free gift, and my colleagues were happy to sign up.

Unfortunately, I also agreed to bring a fruit salad to the brunch/baby shower. For some reason I thought this would be very inexpensive. It's just fruit, right? Well, it's fruit, in FEBRUARY! I spent close to $15 dollars on one salad! Everyone loved it, and there were no leftovers, but I spent 20% of my month's 'fun' money on one salad.

Sigh. I'm still getting used to this new frugal lifestyle, while attempting to retain some semblance of a social life. It's not easy! Next time maybe I'll just bring a carton of juice. . . . . that can't cost more than $3 or $4 dollars, right?

How big is too big?

I ride the local MAX (our light rail system) back and forth to work, and I am so entertained by some of the conversations I overhear from time to time. Some of them make me laugh, and others make me think.

For example, this evening as I was on my ride home, I overheard a man talking about his "giant" house. Apparently, he and his wife own a 4500 square foot house----for the two of them. They only use 50% of the rooms, and the master bedroom takes up the entire second floor of the house. They have a three-car garage, and the man stated that he didn't really like the town they lived in; it was too "country".

There were so many questions I wanted to ask (but couldn't, as that would have tagged me as an eavesdropper): Why did they buy such a big house? Were they going to have children, and thought they would potentially use all of that space? Were they going to be caring for aging parents soon? Why did you invest in such a large home, in a town you didn't like? How do they justify the money spent on electricity, maintenance, insurance, and other costs of heating/cooling/protecting the house?

I'm trying not to be judgmental of this man and his wife. Maybe they had really good reasons for buying the McMansion. Maybe they bought, and realized it was way too much house for them. Maybe they can afford it, and don't mind heating and cooling a 4500 square foot house when they only use 2250 square feet of space (by the way, a 2250 square foot house is still over twice as big as my own little abode).

I'm so grateful for my cozy little house----it's expensive relative to my income, and I may have to sell it and downsize sooner or later, but for now it's the perfect nest!

How I’ve reduced my bills over the past three months. . . . .

At the end of October, 2007, I decided to make a commitment to lowering my monthly bills---primarily because I finally admitted to myself that I was spending more than I was bringing in. I was slowly inching my way back into substantial debt, after having squandered something of a financial fresh start (I’ll write about this in a later post) before moving to Oregon in 2006.

Cable: first I lowered my premium HD service to basic service, then when I could, I completely cancelled my cable. SAVINGS: $59.99 per month.

Auto insurance: I researched different auto insurance companies, and finally switched from my previous company to GEICO. SAVINGS: $250 a year.

Storage: I drove back to California and emptied out a storage facility I had been using. SAVINGS: $40 a month.

Trash: I decreased my trash pickup to once a month---and I rarely even fill the trash can once a month, because I recycle and compost. SAVINGS: $12 a month.

Electricity: I started paying attention to my electricity usage, switched to CFL bulbs for most lamps, and unplugged appliances and the TV/DVD when not in use. I have consistently received either comparable or lower electric bills over the past three months. SAVINGS this month compared to February 2007 bill: $8.91.

Gas: I have kept my thermostat at about 58-60 degrees when I’m at home (sometimes lower) and I turn it off completely at night and when at work. Although this has necessitated wearing MANY layers (my wool socks are my best friends), it’s been worth it. SAVINGS this month compared to February 2007 bill: $63.87!!

There is more I can do: I can climb under my house and make sure my furnace has a clean filter (I’m pretty sure it doesn’t), and I can check the thermostat on the water heater. I want to call my phone company and see about ordering the very basic phone plan---I’ve already cancelled long distance and use an LD card, but my local plan might need some tweaking. Finally, in May I’m going to cancel my Verizon cell contract (yay!) and go with a pay-as-you-go plan, which should save me at least $20 a month.

I’m excited about all of these savings, and now it’s become something of a challenge to see how much I can shave off my monthly bills each month. Stay tuned!

Frugal advertising. . . .

I've noticed that the words 'recession', 'economy', and 'savings' are popping up a lot in the media; however, it also looks like advertisers are actually using these same words to their benefit, to make us feel more comfortable spending at current (or higher) levels during a time when Americans should really be socking away their extra cash in an emergency fund.

The New York Times has a great article that discusses this very issue. Wal-Mart (a place I try to avoid at all costs. . . .) is creating advertising that urges consumers to: “Save money. Live better.” Meanwhile, other businesses, large and small, are using the current economy (which is shaky at best) to tweak our attitudes about spending money. We can "save" money by eating a "Sammie" at Quiznos rather than visiting Subway, we can buy a brand new Nissan that will, again, "save" us money at the pump.

The elephant in the room is the fact that by bringing our own sandwich from home and continuing to drive the five year old (or, in my case 11-year old) car that gets average gas mileage (or, God forbid, using public transportation) we can REALLY save. I suppose it's not surprising to me that advertisers and marketing experts have their own bottom line in mind, rather than advertising true frugality that will help more Americans get ahead financially. It's a short term approach---after all, who will buy all of these products when we're all foreclosed-upon, bankrupt, or have exceeded our credit limits. . .

Note to self: don't check mutual fund balances daily.

In the past two months, I've checked my 403b account balance (through TIAA-CREF)dozens and dozens of times. I watched the balance inch painfully upward, only to plummet the next day when the latest oil prices or inflation indexes were announced.

Each time I logged into my account, I warned myself: "It doesn't matter; you won't be retiring anytime during the next 20 years, so whether it's up or down just doesn't matter". That, unfortunately, doesn't make it any less painful to watch my contributions (and the interest earned over the past 8 years or so) diminish before my very eyes.

The Money Blue Book has a great post about this issue, reminding us that if we're really in it for the long term (I am! I am!) then don't worry about stock prices on a daily (or, in my case, minute-by-minute) basis. Sure, follow the general business news, but don't bother with stock tickers at the bottom of your computer screen or television (unless, of course, you're into individual stock purchases and are looking for good deals---I'm a mutual fund gal myself).

I'm going to try to keep my habit of checking online investment balances at once a week from now on, if that. Maybe even once a month if I can possibly stand it, just to save my sanity. FYI: Millionaire Mommy Next Door has a great post about how she handles the recent market rollercoaster. . . . .

Is it a Need or a Want?

One of my more difficult issues in living more frugally is deciding between a ‘need’ and a ‘want’. I can rationalize any purchase by telling myself that I NEED it (whether “it” is a new pair of boots, a new coat, a new dining room table, or any other item). This is what I’ve done for the past twenty years or so, which explains the steady increase in credit card debt over the years.

Most recently, I stopped in at Radio Shack to look into a new cell phone, one that will work with Virgin Mobile, the service I intend to use after my Verizon contract is finished in May. Once I switch to the Virgin Mobile plan, my monthly bill should be less than $10 a month, compared to over $40 a month for a phone I used rarely, if at all.

Why did I go to Radio Shack NOW, to look at phones, rather than waiting until I actually need the phone (three months from today)? Well, they have this cool white phone that was a holiday special. They had two (TWO!) left in the store, priced at $49. Radio Shack was not expecting any more shipments of the white phone. I immediately starting considering how I would scrape up $49 right NOW so I could buy the cooler white phone before they ran out! My heart started beating faster, and I felt that credit-card itch in my fingers----if I just put it on credit now, then I’ll pay it off next month, and. . . . . you see where this is going, I’m sure.

Did I buy it? NO! I actually talked myself out of it, one of the first times I’ve been successful at this! I asked myself specifically: is this a need, or a want? Do I NEED the white phone, and do I NEED it now? The answer was no, on both counts! I saved myself $49 dollars---maybe in May, when I really do need a new phone, I’ll buy the one for $14.99 and forget all about the ‘coolness’ factor.

What are you going to do with your rebate check?

Although I know, as a good American, I'm supposed to go out and spend my rebate check on shoes and other nonessential items, I also know that my rebate check is going directly into my debt repayment.

I found this great little calculator on fivecentnickel's website, which supposedly will tell you how much you can expect to receive when the rebate gets into your hot little hands. . . .

How to survive a recession: I was going to do those things anyway. . . .

I spend a great deal of time studying at the public library. Since I’m keeping my thermostat at 58 degrees this winter to reduce my exorbitant heating costs, I find the tables at the library to be a much warmer substitute for my living room couch, where I would be buried under three layers of blankets and two cats, wearing wool gloves and a hat. It’s kind of difficult to really learn and internalize the difference between test reliability and validity when one’s teeth are chattering.

Another benefit of the public library is that I have access to all sorts of magazines and newspapers that I’m too frugal to actually subscribe to. Today, I took a look at Newsweek, the front cover of which shows a lonely highway stretching into the distance, along with the title: ‘The Road to Recession”.

One of the shorter articles describes how consumers can ‘survive’ a recession (assuming we are truly heading for one; there seems to be a fair amount of disagreement among the ‘experts’ on this question).

• Protect your job: in other words, this is not the time to tell your boss just how lame, ignorant, or ineffective he or she is. Instead, it’s time to act really busy---or, if you can stand it, actually get busy and do some work! The article suggests getting to work early and leaving late, possibly skipping lunch, to prove to the boss that you are indispensable. In my case, my boss rolls in around 9:30, so getting to work early would be a waste of my time. . . .
• Protect your portfolio: if you own any stocks, hold onto them (there are, of course, always exceptions to this advice), because at this point you will probably be selling low and later buying high, which is pretty much exactly the opposite of what successful investors do. My stock portfolio is tiny (the remnants of an investing group I joined many years ago) and I wouldn’t know how to sell even if I wanted to.
• Protect your pocketbook: ahhhh, this is the one I can relate to! Pay off debt (I’m trying, I’m trying!) and think about refinancing the house if you can get a better rate to reduce your monthly payments. This latter suggestion is something I’m toying with. My monthly mortgage payments make up between 50-60% of my net income (when my second job is included). That’s way too high. I either need to sell the house, or decrease the payments in some way.
• Protect your psyche: realize that recessions come, and recessions go. They are a normal part of the economic cycle, apparently. By paying down debt, considering ways to increase your income, and increasing savings, you can increase your emotional or psychological sense of security.

Regardless of the general state of the economy, these are all ideas that I’m either implementing already, or am considering as I try to change my habits and improve my chances of attaining financial independence.

By the way, Newsweek didn't see fit to include this article in its online version (although I did link to the article about our being 'on the road' to a recession). However, UK's The Guardian does have a similar article.

Grocery "deals". . . .

I'm trying to be better about checking the weekly supermarket ads for good deals (those things coupon experts are always calling "loss leaders"), before shopping.

Yesterday I saw a deal at a local store (QFC, I believe) for 10 cans of Nalley chili (which I love, especially with cheddar cheese) for $10! "What a great deal", I thought to myself, "but do I really need ten cans of chili"? There were several other advertisements at the same store of the 'buy ten, pay $10' variety, so I'm sure I could have mixed and matched.

I always start my grocery shopping at the least expensive stores, and work my way up to average or high priced stores, in the hope that most of my groceries will already have been purchased at a lower cost store by the time I get to, say, Safeway.

Today, at the second store I visited (which does NO advertising), my eye was caught by a giant display of stacked cans of Nalley chili-----at .73 per can. Luckily, I hadn't made it to store number three for the "great deal" at $1 a can! I took home five cans, for $3.65, or $1.35 less than I would have paid at QFC!

Note to self: those "great deals" may not be as great if I take the time to do a little research and keep my eyeballs peeled for even BETTER deals. . . . .

Are you keeping up with inflation?

I’ve been reading the newspapers voraciously during my commute to work, and have been stunned by the inflation numbers I’m seeing. When food and energy costs included, consumers saw a whopping increase of 4.1% in 2007, compared to a 2.5% increase in 2006. No wonder I’ve been eating beans and rice so regularly and keeping the thermostat at a chilly 58 degrees!

Since I’ve not had a raise in a year and a half (and to be honest, took a hefty pay cut when I moved to Oregon from California in 2006 anyway), I started wondering whether my income has kept up with inflation at all since I finished my master’s degree in 1998.

I recently found an inflation calculator on the Bureau of Labor Statistics website, which tells me that from the time I took my first post-graduate school job until now, I’m making about $500 more than I was ten years ago, when inflation is taken into account! Of course, this doesn’t include the money I bring in from my second job, which will increase my gross income by about $6,000 this year. I left that out because I don’t think citizens should have to take a second job make up for the effects of inflation.

By the way, The Baglady has a great post about the CPI (Consumer Price Index) and how it does (or doesn't) relate to our everyday costs.

However, you feel about the CPI, try out the calculator here; you may be pleasantly surprised! Or, like me, you may end up questioning the employment choices you’ve made over the years. . . . . .

The Middle Years. . . .

Click here for my post on the Early Years. . . .

I returned to sunny California from graduate school on the East Coast in 1998, still blissfully ignorant about the true state of my finances. I decided to try my hand at a marketing position at one of the new internet start-ups that dotted the Bay Area. Living with family in Marin County (that was nice!) while attempting to find a ‘room’ (aka closet) to rent in San Francisco on my $25,000 a year salary (not so nice!), I could have used this rent-free period of about three months to save some money. Did I do this? Of course not! I bought a car! Isn’t that what every new graduate with $50,000 in debt does?

In my defense, it was not a new car, by any means, and it wasn’t sexy or fast (it was a tiny Honda Civic, over five years old at the time). As humble as it was, I still had to finance it and make a monthly payment. In addition to my credit card payments, and the soon-to-be $600 a month student loan payments. Did I mention I consolidated my student loans at the low, low rate of 8.25%?

As it became clear that I wasn’t going to find a room to rent in San Francisco without some major cash in hand, an office at the university I attended for my undergraduate degree called---they had a job opening, and it was actually related to my graduate degree!

In desperation I returned to my hometown, and took the university job. Slightly better pay and excellent benefits (including an actual pension) made me feel like my ship had come in. Why, with all the extra money I’d be making, I felt comfortable enough to sign a lease on an expensive apartment, and bought some new furniture and clothing. Somehow forgetting about the car payment, the credit card payments, and the looming student loan payments. . . .

I’m amazed when I read blogs by people in their 20’s, who actually GET the fact that saving is a good thing. That contributing to a 401K (in my case, a 403b) is a GREAT thing. That paying off credit card debt is a guaranteed investment. None of these concepts even entered my mind.

I kick myself for not starting earlier, for not being ‘smarter’. Then I remember that at least I get it NOW. Yes, it’s 20 years later than I would have preferred (I’m 38 now). Yes, I could probably retire in a few years had I started saving when I was 18. But I didn’t. I’m grateful that the stars finally aligned at the right time in exactly the right configuration for the light bulb to go on over my head.

Tomorrow, I’ll write about where I am now, financially, and more importantly, where I’m headed!