Ugh.

Sorry for the blog silence, folks! I'm sick - for the second time in less than three months. Hmmm. Could it be that I'm working too hard? It's definitely a reasonable assumption, given the fact that I'm generally an incredibly healthy person, and I'm now working between 60 - 70 hours per week.

I'm teetering between working as much as possible for a short period of time (year to year and a half) to pay off a LOT of my debt, and taking it a little easier so I don't burn out (and ruin my health).

Like many people, I want the best of both worlds, of course!

I hope to be past the worst of this flu/cold/strep/whatever-it-is by the weekend! I hope you are enjoying your week!

5 frugal grocery shopping habits. . . .

People are often amazed (my own family included) that I can subsist on a grocery budget of $100 or less each month. While this seems rather anemic to some (my dad can't seem to stay under $600 - and it's just he and my mom), I do eat well and I can generally manage to avoid most pre-packaged foods (I'm thinking of frozen dinners, here).

Here are my five top tips for bringing a frugal mindset to the grocery store:

1. Make a list. Let me repeat that: MAKE A LIST! Doing this implies that you've put some thought into what you're going to eat for the week or the the month (see tip number two, below). It also reduces the odds that you will throw things in the grocery cart that you don't need, have no intention of using, or are simply spur-of-the moment whim items (see tip #3 for more on this);

2. Plan your menu, at least through the week. If you know that you're going to be home for dinner five nights out of seven, and that you want to bring your lunch to work every day of the week, spend some time cruising the recipe websites to find recipes that you know you'll use. Focus on those that can be made ahead, and avoid those that use expensive, hard-to-find items;

3. Don't go to the grocery store hungry (and for the ladies: try to avoid going when that ole PMS rears her insatiable head. In my world, shopping during this period - no pun intended - is a sure bet that I'll be coming home with chocolate covered cookies, buttery croissants, or red wine. Or all three);

4. Don't be afraid of store brands. If you don't at least TRY the can of store-brand diced tomatoes, you'll never learn whether it tastes sufficiently delicious to merit purchasing over the higher priced brand you usually buy. Some store brand items I avoid, while others work just fine for me;

5. Comparison shop. A couple of years ago, I took the time to note prices of items I often buy at several area stores. That way, I had a list of the store that frequently beat the others (for me, this is Winco) in terms of price. I NEVER shop at Safeway or Albertson's unless I'm desperate or have an outstanding coupon deal.

You may have your own methods for saving money at the grocery store; please feel free to share them with us in the comments!

Sigh.

I'm pretty sure I've mentioned my 15 (almost 16) year old 'beater' car, which I'm trying to keep running until I'm debt-free. Since I take public transportation, I put about 2,500 miles a year on it, if that. As far as maintenance, I get regular oil changes and that's about it.

For the last few months, I've noticed some 'sputtering' in the engine when I put my foot on the gas after changing gears. I knew I needed to get it into the shop, but I've been putting it off because I didn't want to spend the money. Well, now I have no choice!

While on my way to the grocery store yesterday it did its little number, but much, much worse than it ever has been. I was a few blocks from a dealership, and in my panic I drove in there and just left it in the service bay (but not before the salesmen tried to sell me a new car). I normally wouldn't go near a dealership for car service, because I just feel they charge more than the neighborhood mechanic (who really isn't in my neighborhood, but came well-recommended).

Anyway, I've just gotten the estimate, which will be about $500 for things that would have been fixed during the tuneups I never get (the last one was four years ago). And that's just to keep the car running! An additional $500 would fix the oil leak and a tear in the "CV joint" (whatever that is). Serious issues, but not in my budget, unfortunately.

I know I'll put this on my credit card (and immediately pay it off, of course), though I'm hemming and hawing about whether to take it out of my fairly healthy emergency fund (is it really an emergency if I could have prevented it by simply taking the car to MY mechanic weeks or months ago?) or whether to use the money from my extra jobs, thereby NOT sending that money to my debt.

Every time something like this happens (which, let's be honest, isn't all that often - the car is pretty reliable usually) I start to fantasize about buying a used Toyota and just dealing with the $150 a month payments. Bad, bad, bad.

NOTE: just had a thought. My emergency fund earns 1.10% interest. My debt 'earns' between 8.25% and 8.9% interest, depending on which on we're talking about. Seems intelligent to pay off the debt and take the $500 out of savings, no?

And then there's this. . . .

For pete's sake, can we get some good news over here?????

Frugal housing. . . .

Last week, I was dithering about whether to pay down my second mortgage early, or start working on my student loan. I was questioning whether, with the sad state of the real estate market, throwing money at my second mortgage was really the intelligent thing to do, since I don't know whether I'll ever get that money back (I'm thinking not).

I got some really good (and thought provoking) comments on that blog post. One of my commenters mentioned that she thinks that the market in her area (another part of Oregon, I believe) has finally hit bottom. I'm hoping that's the case for Portland, though I'm still not convinced.

That comment made me think about all of the news articles written by supposed 'experts' who predicted that we had (or would) hit bottom in 2008, or 2009, or 2010, or even 2011! It seems that those of us in the trenches (like my commenter) may have more insight than the experts! Here's a sampling of the articles I've read over the years about this very subject (I'm a little obsessed with home values these days, as are many of us):

2008: The well-known Kiplinger's predicted that the housing market would bottom out in 2008, as did the equally well-regarded Bloomberg (though, in its defense, Bloomberg was really just parroting the predictions of a bunch of bankers).

2009: My very own Oregonian forecasted that in fact 2009 would be the magic number for a bottoming-out of Portland housing prices, while Moody's (via the Wall Street Journal) predicted that 'some' markets would bottom out in 2009.

2010: Reuters reported that 'Home Prices May Bottom Out in 2010' (I love how they start to qualify their predictions with the words 'may', 'could', 'some', 'possibly', etc, meaning that they don't want to commit to anything but they know we're going to read their article anyway because we're all desperate for good news. Way to protect your backside, economic experts!) Meanwhile, Standard & Poor's indicated that 2010 would be the year housing values stopped their downward slide, though they were nice enough to tell us that we might not see values at 2006 levels until 2020! Also, there is this rather interesting graphic that shows various predictions by the 'big players' in the world of real estate values (click on it for a larger version):


And now, we come to 2011: It's early yet, so there aren't many economists making predictions in writing, but I did find this one from Interest.com indicating that 'most' experts expect home prices to bottom out this year.

What does this all mean? Well, call me crazy but it seems as if all of those 'experts' have no freaking idea when the housing market will bottom out, and never did. They're guesstimating an end to the housing crisis based on, I'm sure, years of expensive education at Ivy League schools and various economic indicators. None of which has amounted to a hill of beans, apparently.

Meanwhile, I just tortured myself by checking zillow.com and learned that my home has dropped an additional $4,000 in value in the past few weeks.

Frugal decisions. . . .

One of the more interesting topics in the U.S. economic news is this tax cut that will (hopefully) leave an additional $50 to $85 dollars in our paychecks next year. This, apparently, is due to the fact that individuals won't be paying into Social Security in 2011 (which, honestly, seems rather inadvisable given the sorry state of our Social Security system, but I'm not making the decisions in D.C., folks!)

In any case, I came across an article with suggestions for how to use this windfall. This may be especially useful for those of us who - whether currently or in our spendthrift past - may be likely to fritter that money away as soon as it shows up in our paychecks.

• The first suggestion is a great one (because I've already put it into practice with my first January paycheck!) Basically, the idea is to avoid a post-Christmas financial hangover by putting those extra dollars away in a special holiday savings account, thereby gaining a nice cushion when the gift buying season raises its expensive head once again;
• Second, how about starting a fund just for the car maintenance costs? I have actually mentioned wanting to do this, since I drive an old car and am constantly anxious about spending money on new brakes, new tires, tune-ups, etc. Unfortunately for me, I'm not sure I have room in the budget, but it's a great idea all the same;
• How about some extra education (such as a certificate or associates degree) that will put you in the running for a new, more meaningful (or better compensated) job? I'm currently working four jobs and two of them came as a result of the degree I recently completed;
  
• Medical costs can add up over the year, so this extra cash could be used to create a medical fund to pay for prescriptions and copays. Although the article doesn't mention it, I think this extra money could enhance your health by paying for a gym membership - as long as you actually use it;
• Finally, how about having some well-earned fun? During the Great Recession, many of us have felt overworked and underfunded and as a result we've replaced vacations with 'staycations'. If you feel the need to add some (inexpensive) fun to your life once again, an extra $50 to $80 a month might be just the ticket!

I'm not sure when this new moolah will show up in my check(s), and to be honest I'm not exactly wondering what to do with it - mine will probably go towards more debt repayment, since that seems like the focus of my life at the moment. I do know it might take a couple of months for human resources departments to get all the details down so we may not see it until February or March. You can bet I'll be keeping an eye on my bank account to ensure that the funds are given the appropriate home (i.e. debt!) before my spendthrift side can get its grubby paws on it. . .

Frugal doubt. . . .

I sort of knew this was coming. Inevitably at some point after I've made a decision I start to question myself. In this case, I'm questioning whether I should pay off my second mortgage first, or wait on that and pay towards my student loan instead.

I keep thinking that I may be throwing good money after bad by paying down my second mortgage. After all, if (and this is a big IF) the housing market ever recovers (or just stops resulting in decreasing value) then I may be able to sell my house without creating equity by paying off my second mortgage debt. Right? Here's what I read in a recent US News article about who will continue to struggle in 2011:

Homeowners. Americans have lost about $9 trillion worth of household wealth since 2007, largely because of falling home values. The rout isn't over, unfortunately. Most forecasters think home values will decline another 5 to 10 percent in 2011, as high unemployment causes more foreclosures and a glut of homes pushes prices down. The good news, if there is any, is that the housing market may finally hit bottom in 2011, with home values stabilizing after five years of declines. That doesn't mean home prices will shoot up any time soon. But once buyers believe that prices have stopped falling, they'll be more inclined to buy, the first step back toward a healthy housing market. Stabilizing home values will also help owners do better financial planning, since they'll have a firm idea what their home is worth.

Sigh.

Meanwhile, I could be working on that student loan, almost half of which may be paid off by the generous gift of a family member. Meaning that I could, potentially, have my student loan paid off by mid-2012. At which time I may be able to sell my house and just break even. Right?

Or is this just a case of 'six of one, half-dozen of the other'?

Happy New Year!

Welcome to 2011! Little did I know when I started this blog in January of 2008 that I would learn so much and come so far in my struggle to overcome my debt and control my spending. Over the past three years I've heard from so many of you who are in the same situation, either just beginning your journey or close to the end. It helps so much to know that I'm not alone in this battle!

I've also heard from many of you who "walk the talk" so to speak; people who have always, it seems, lived frugally. Those who are living within (or beneath) their means, who espouse the ideals of simple living without feeling as if they're missing out on anything. I am hoping to join the ranks of this latter group within the next two years. Until then, I'm continuing to ramp up my extra income while attempting to control the negative financial effects of my 'shopping gene' (I think I'm generally pretty successful at this, although this past Christmas I fell off the proverbial wagon).

With that said, here are my goals for 2011:

• Attempt to double my income (from roughly $40,000 from the day job to $80,000 including all of my part time and full time income. With all four of my current jobs, I'll only make around $65,000 in 2011 so I need to add about $15,000 in additional income to get there);
• Related to the bullet item above, continue to develop my online teaching portfolio in order to bring in extra funds;
• Pay down my second mortgage to such a degree that I can sell my home in the spring of 2012;
• Continue paying at least the interest on my student loans.

So there you have it! We'll see how things go; I'm definitely committed to following through with my goals, although they seem rather daunting at this stage. I hope you'll continue to join me in this journey!