Three months to go. . . .

My boss asked me for the specifics of myproposed drop to part time status next fall---in the form of an official letter that she could take to HR to get the ball rolling. Yikes! Putting it on paper really made it seem real, and it also made a tiny wave of anxiety zip through my body. Have a I saved enough? What if I lose my second job? Can I work upwards of 65 hours a week between the internship, the day job, and my night job, without going completely crazy???

A positive outcome of the experience is that I was able to nail down my start date at the internship, which should be September 1st. Since I'm a natural 'planner', this made me feel much more comfortable. On the flip side, this is about two weeks to a month earlier than I anticipated, meaning that I have less time to pad the savings account.

I'm doing very well so far with my goal of getting to $4,000 (I'm at about $2,700 right now), and if I'm very good over the next three months, I should reach my goal, or at least very close to it. I'm still amazed that I started saving in January and have made it halfway! Just think if I'd started saving money when I was in my twenties---or even my teens! I do regret the time (and money) wasted, but then again, I'm also grateful to have 'seen the light' even at this late(r) date.

I'm committed to paying attention to what I spend each month, and decreasing expenditures where I can. Here's a list of budget tips from a recent CBS article that helped motivate me to continue on my frugal path:

• Save on personal care products: the article discusses using smaller amounts of products like shampoo, conditioner, and toothpaste, which is a great idea. I would add that local drugstores and grocery stores OFTEN have great deals on these items. If you keep your eyes open for sales and use coupons or rebates, you can often get these items for free, as my recent post shows.
• Save money on clothing: CBS urges us to splurge on an accessory, rather than a higher-priced item of clothing. Slightly ridiculous is the suggestion that we purchase two necklaces this year and nothing else, for a $600 savings. That seems unnecessary when there are so many thrift stores around, just waiting for frugal shoppers to grab those deals. I know that a trip to a thrift store often scratches my itch to shop---even if I don't find anything I want to buy.
• Save money on entertainment: a reader commented recently about the $1 DVD's that are available at Redbox, which I think is a great deal! If you're willing to be patient, you can also rent DVD's at the local library, which is something I've been doing for a couple of months. I've been very happy with the selection and I love getting random emails from the library to let me know a DVD is available for pickup (they'll even mail them to me). The bonus (aside from the price)? I get to keep the movies for up to two weeks!
• Save money on exercise: I canceled my gym membership when I was in the midst of paying off my credit cards, and in November---when my balances finally fell to zero---I renewed it (I waited for a special deal when there were no initiation fees, of course). I've been going to the gym regularly for $29.99 a month, and I feel that this is a fair price to retain my sanity. Exercise truly keeps me balanced and healthy. I also bought a DVD that I use in the mornings when I don't have time for a gym visit, which I'll use for years. Aside from that, there's the great outdoors---parks, paths, sidewalks, outdoor tracks---that are free for the taking.
• Save money on your ride: One of the reasons I moved to Portland was to get out of my car and have access to more public transportation options. I LOVE riding the Max (and, to a lesser degree, the bus) each day to work. When gas prices went through the roof last summer, I was barely affected because I can---if I choose---walk three blocks to a bus stop where I can grab a ride downtown. Granted, it's a LONG commute compared to taking the highway or even surface streets to work. But I save on gas, I save on parking, and I save the additional miles on my already high-mileage car. Even if public transit isn't an option, consider carpooling! You'll save money AND the environment. . . .
• Childcare: somewhat sadly, this isn't a line item in my budget! However, if I had kids, I'm sure the outrageous costs of childcare would be a major drain on my finances. I have friends who make use of flexible grandparents and other relatives as well as friends to provide low-cost (or free) daycare. In my opinion, this is seriously an area where a little government investment would make sense. I think a lot of single (and coupled) parents will continue to live in poverty because coordinating and paying for childcare is simply overwhelming.

As long as I can keep these expenses low this summer (and next year), I should be fine. Although I'm feeling a little anxious, I've been crunching the numbers and I think I'll make it. In fact, in spite of the many hours I'll be working each week, I'm looking forward to this next challenge! I can do anything for nine months!

March expense to income chart. . . .

Now that I'm a few months into 2009, I wanted to share my progress in a graphic way (I do love the charts, folks!) As you can see, my expenses in March climbed significantly, mostly due to a birthday celebration to which I contributed quite a hefty sum (it was worth it, by the way---this is a good friend, whose birthday I missed last year due to work).

And, the chart itself:



One thing that jumps out at me right away is that although I spent more money in March than I intended, I spent LESS than I had in January, while my income was higher in March as well. So, although my perception had been one of failure to control my spending, the reality is that I did just fine.

Holy tax cut, Batman!

Well, the latest Stimulus Plan appears to be on its way to becoming reality, which means that most Americans will see some extra moolah in their paychecks come April or May. But how much? Technically, individuals will see up to $400 more over the course of the year, while couples will receive up to $800.

I've just discovered that one of my favorite online calculators, at Paycheck City, actually has a pre- and post- 2009 Stimulus Bill calculation. Using this, I was able to see that I'll receive $35 more in each paycheck (I'm paid monthly) after the tax cuts go into effect. This is about what I expected. In fact, before the November 2008 election, a page at Alchemy Today had a tax calculator, so we could see how much tax savings we'd have under an Obama presidency, versus a McCain presidency. Now, I have no idea whether this calculator is truly accurate (especially on the McCain side). However, the results show that I would receive approximately $468 under Obama.

Well, $468 over 12 months is $39! So it wasn't far off from the Paycheck City calculator (and I'm assuming that Paycheck City is using actual figures from the text of the Stimulus Bill. . . .)

Not bad. Now all I have to do is figure out how to ensure that I plug that money into savings before I ever see it, rather than frittering it away on useless items I don't need. . . .

Income to Expense chart

Over the past year, I've kept track of my income, my spending, and how much I'm sending to savings and to my 403(b) account. I'm not much of a numbers gal, so I love anything that indicates statistics in a graphic format.

In the beginning of my frugal journey in November of 2007, I was spending more than 100% of my income (using credit cards, of course!). Slowly, my spending began to inch downwards, while my income inched upwards. Although I missed a few months this past fall, it's been gratifying to see my progress graphically. I recreated the chart I use below, as well as giving you the exact information in a spreadsheet below that.

I particularly love watching the percentage of my income that is going toward spending (which started at 106%!). In the beginning, the red line (expenses) was higher than the blue line (income). As the red line (expenses) has decreased, the yellow and green lines (savings and investment) increase.



And, here are the exact numbers used in the chart above:

Note that May 2008 was pretty amazing on the income and savings fronts, because that's the month I received my tax refund. Hopefully this year will bring the same tax 'gift'! I'm starting a brand new '2009' chart, since this has been such a satisfying project for me. . . .

$1,000 lighter. . . . .

My credit card debt, that is! I sent off my electronic payment to American Express yesterday, and although it hasn't shown up on my online statement yet, once the payment is processed I'll owe a bit less than $550 to AMEX. It's a fabulous feeling!

I'm going to keep my emergency fund just where it is at $1,600, and try to send a bit more to AMEX this month from my regular pay (I just realized that in October, I'll receive three checks---rather than two---from my night job). That way, I'll still have a shot at killing my credit card debt by the beginning of November.

Another little bit of help I'll be receiving is the fact that I was offered a promotion and small raise (15%) from my night job! I just completed my first timesheet with the new pay, and although it's only a $2/hour raise, it really does add up!

I can finally imagine a time in the near future when I can breathe a little easier each month when the bills arrive---without my credit card debt, I can build up my emergency fund and then start working on that behemoth of debt: my student loans. I get tense just thinking about the $55,000 I owe to Uncle Sam, but I suppose if I can work at it little by little I'll eventually take care of it.

Continuing to watch my spending habits and learn more about frugal living strategies will help me keep my budget in line with my goal: to be debt free!

A frugal increase. . . . .

My union negotiated a small increase for us in July, and we are now seeing our retroactive pay (the raise was negotiated to start as of January 2008). I received my electronic paystub yesterday, and it appears that my January-August pay increase amounts to about $1,000, after taxes!! Although my monthly income will increase by less than $130, anything is better than nothing in this precarious economy.

As for that $1,000, what do you think I'll be doing with it? Buying new clothes? Downpayment on a new car? A trip to California? Nope, nope and nope. I'm going to send all of it straight to my credit card debt, meaning that by the end of next week, my credit card balance will finally amount to less than $1,000---in fact, it will be just over $500!!! This means that by the end of November at the latest, I should finally have my credit card paid off.

Now, here's my dilemma: remember when my union was considering a strike, and I decided to send more money to my emergency fund, "just in case"? Well, I now have a bit over $1,600 in my EF. Dave Ramsey says I should have $1,000 stashed away for emergencies, until my debt is paid off. I'm considering using $300-$400 of the funds in my EF to pay my credit card debt down even further, which would allow me to be credit card debt-free by the end of October!

What do you think? Unless a huge emergency occurs in the next two or three months, I should be covered---I'll be able to start building my EF up even higher after the credit card is paid off, and have no credit debt would be phenomenal!

Benefits of a frugal salary. . . .

Or, more appropriately, the drawbacks of a large paycheck. On Wednesday, I wrote about the constant battle I wage within myself, trying to decide whether it would be better for me to seek a higher-paying job, or whether I should continue to pursue a frugal lifestyle that will eventually allow me to pay off my debt and live more simply (with the added benefit of having more flexibility and leisure time). It's a tough call, and one that I think many of us struggle with.

Often, when I write a blog post about some question I'm grappling with, I come across the perfect article within a few days, which helps me to see things in a different light. This is exactly what happened today!

While perusing the CNN website (reading about the awful plane crash in Spain), I came across a piece from CareerBuilder.com that discusses the drawbacks of having a larger-than-average salary! If I ever needed to know that making a lot of money isn't all butterflies and sunbeams, it's now. Here's what Rachel Zupek, the author of this particular article, thinks:

• Having a higher salary than your peers may make you target #1 when it comes to layoffs. I've never thought about this, but my relatively small salary makes me fairly 'cheap' when it comes to economizing and gaining value on the university's dollar. My higher paid colleagues do the same job, and I think a cynical manager might zero in on them first (unless the union has anything to say about it) rather than sending a pink slip in my direction.
• Higher salaries also make you an IRS target. It's possible (although not in my world) that a substantial raise might elevate you to the next tax level. Which means, of course, that the hefty raise you just received might be diminished by several hundred dollars a month anyway. I receive a refund every year---primarily because I pay so much in mortgage interest---but it feels good to know that I have a chunk of change coming back every spring, regardless of the penny-pinching and extreme budgeting I do throughout the rest of the year.
• A high salary may doom you to staying put. In other words, if you're at the top of your salary rate in your chosen field, you may not be able to find another job that pays as well, for the same work. If you love your job, that's just fine. But if not, you may have to make a tough financial decision in order to find a position that is more fulfilling. In my case, for the position I hold, I think my current salary is higher than I would find as an entry-level employee at another university in this area. I'll either need to change careers entirely, stay where I'm at, or deal with a lower salary if I moved into a similar position at another institution.
• Beware the glass ceiling. Again, this has never happened to me or to anyone I know, but it's possible that you could hit the top of your salary scale in your particular company---where there's no more room to move upward in terms of salary. So you either stay put, or move into another position at another company to try to get around the glass 'salary ceiling'. What do I think about this one? I should BE so lucky! With miniscule raises in the field of education, I'd have to be here for 30 years to hit the salary ceiling.
• A higher salary doesn't equal more happiness. This is what I've read over and over again. Once you hit a certain level where your basic needs (shelter, food, clothing, etc) are met and you feel comfortable, additional money adds zero benefit to your sense of well-being. Of course, extra money placed into the appropriate retirement fund would definitely benefit you in the future, but as far as present-moment happiness, there's not much difference between a $60,000 and a $100,000 salary (again, I should BE so lucky!)

So there you have it. More money might bring more trouble than it's worth. Has this article helped me solve my dilemma? No. But I definitely have some additional ideas about salaries, money, and career choices, which are now percolating through my head as I attempt to create my September frugal budget. . . .

Frugal ambition. . . .

So, I'm loving this article I just read at SFGate (the online version of the San Francisco Chronicle), about this man---Michael Skrzypek---who managed to work from 10 weeks to 5 months over the course of two years, and did, well, nothing for the rest of the year!

What I like about this is that, although he seemed to have the talent, personality and intelligence to succeed, he clearly wasn't interested in the 'rat race' mentality, which is especially evident in SF these days, in my opinion. He didn't need to make $175,000 a year so he could rent a loft in the Marina district and drive a new Audi. Instead, his salary of $38,000 (10 weeks) and $78,000 (five months) meant that he had complete freedom to NOT WORK during the other 42 weeks and 7 months, respectively.

What doesn't appeal to me is the whole doing nothing thing. If I had that kind of time, I wouldn't spend three hours walking the dog, I would drive to the coast and walk along the beach, go camping, hang out in coffee shops, volunteer, read, do some more volunteering, and, well, make really good use of my time without the stressing about how little of it I actually had (like I do now). Of course, I'd try to live my life frugally, to get the most out of my salary (note: $78,000 would do nicely---I can't imagine NOT being able to live like a rockstar on that kind of money).

One of the reasons I've gone back to school (yet again!) is so that I can eventually find a fulfilling job that doesn't require me to be on the clock from 8 - 5, Monday through Friday, 50 weeks a year. Michael Skrzypek proves that it can be done, although he may have gone to an extreme I'll never even attempt to replicate. I think the key here is to realize that in order to have that kind of freedom, frugal living wouldn't be just a hobby, but a requirement.

June Zero-Based Budget. . . .

Well, this is a little late (that seems to be a theme for me this month), but here it is. I had difficulty getting myself to even start this budget, because as I mentioned earlier this week, I anticipated that this month would be a tough one financially. Actually, looking at the numbers, it appears that as long as I can keep my airline ticket to California under $200 (one of my goals this month), I should be fine.

As you can see, I'm splitting my 'extra' money between my emergency fund and my credit card payment. I've so enjoyed watching my credit card balance shrink that even though I really need to beef up my EF (due to the possibility of an impending strike), I decided to continue paying more than the minimum on my American Express.

Now if I can just find an air ticket to California that won't break the bank!

Preparing for a strike. . . .

As I mentioned in yesterday's post, my labor union may very well call for a strike in the next 60 days. I do have $1,000 in my emergency fund, so I'm feeling somewhat comfortable with the idea of not earning any money for a few days (as long as it's no longer than a few days!)

However, thinking about the possible financial ramifications of striking has led me to consider whether I should deposit my 'debt repayment' money into my emergency fund for the next two months, just to beef it up a little more. I lowered contributions into my 403b last month, so that I would have $550 free to use toward credit card debt, beginning in the month of May.

Should I put off the oh-so-sweet (so sweet I can almost taste it, folks) notion of being consumer debt-free by August? It's possible that the extra money won't be needed at all, and after the threat of strike has passed (hopefully with an adequate salary increase, to boot) I can take it out of my EF and send it merrily along to American Express.

Just for kicks, I updated my debt spreadsheet, which is shown below. As you can see, I've paid off $1530.84 in the past two months (primarily using my tax refunds, but also increasing the amounts I'm sending from my salary). Two of my cards are completely GONE! Only one more remains. . . . !

Frugal strike. . . .

It's entirely possible that within the next two months, my labor union will choose to go on strike. We don't know when, and we don't know for how long; all we know is that contract negotiations between the university and the faculty union have been cool at best and downright nasty at worst.

Six months ago, our upper management received salary increases in the 10-25% range. We are being offered 7% over two years, and that isn't even retroactive to last summer, when our contract expired. 7% would probably about cover the anticipated increase in cost of living over the next two years---there are no additional funds for merit increases or any other recognition of outstanding work.

A year ago, this news would have struck fear into my heart---I was living paycheck to paycheck, covering the gap between my expenses and my income with credit cards.

Today, I have a small emergency fund ($1,000), enough to cover a short period if I were to go on strike. I'm feeling somewhat uncertain about the future, but I'm confident that I can survive this. My emergency fund and my new frugal lifestyle has given me the freedom to support my union and my colleagues, if it should come to that.

What new behaviors can I thank for this newfound confidence?

Working a second job in the evenings. Last May, I was lucky enough to be offered an online job that I could do from home. I only make $13 dollars an hour, but it's about 25% more than the other moonlighting jobs I considered last year, and the extra earnings are allowing me to pay my credit card off twice as fast.

Canceling cable. I work two jobs, and I go to school part time. Who has time for anything other than local TV?

Downgrading my cellphone plan. I am NOT a 'phone talker'. I don't spend hours on the telephone---I prefer speaking to people face to face, or via email. My cellphone is primarily used to make plans with people (i.e. "when/where are we meeting"?) when I'm away from the house. I switched to an unadvertised 'low minute' rate, and saved $10 a month. Soon, I'll do away with Verizon altogether, and transfer to a pay-as-you-go plan.

Using tuition benefits to go back to school. My first master's degree cost over $30,000. This one will leave me in debt to the tune of $0. That's an amazing thing.

Saving money on utilities. I kept my thermostat at 58 degrees this winter. I was diligent about turning off lights and unplugging appliances when not in use. I'm saving about 30% on each of my gas and electric bills, when compared to last year.

Paying myself first. This really works! The first thing I do when I get my paycheck is transfer funds to each of my savings accounts. Not having the money in my checking account means that I truly don't spend it.

Zero-based budgets. Dave Ramsey's book, Total Money Makeover, was an eye-opener. I recommend it to anyone struggling with debt and under-earning. I created my first zero-based budget in February, and although I'm continually tweaking throughout the month, this type of budget has changed my life. I'm now planning ahead for things (like my quarterly water bill) that used to send me into a tizzy each month, wondering where the money was going to come from.

Note: here are links to my February, March, and April zero-based budget posts.

These are some of the most important factors in my continuing education toward a frugal lifestyle. There are more, and I'm sure I'll be learning some new tricks over the next year. I hope I don't have to go on strike; but my finances are secure enough that I think I can do it if I need to.

The Middle Class Millionaire. . . .

I’ve been reading many of the posts at the Early Retirement forum, which led me to do a little reading about people who appear to be on a path to millionaire status through their own hard work, commitment to saving, and smart investment strategies.

In The Middle-Class Millionaire, Russ Alan Prince and Lewis Schiff take a page from The Millionaire Next Door, and suggest that ‘middle-class millionaires’ are different enough from all of us regular Joes (or Marys) that they can be studied as a unique group. And, of course, the reason we’d want to study them at all is so that we can emulate them and become millionaires ourselves.

The authors define ‘middle-class millionaires’ as having a net worth that falls between $1 million and $10 million---including the equity held in their homes. Importantly, Prince and Schiff point out that their millionaires became wealthy not through inheritance but through hard work. In other words, these millionaires are self made. These millionaires were then compared to a sample of middle-class families with incomes between $50,000 to $80,000 and with net worth of less than $1 million (whom I'll call the 'non-millionaires').

What they found was interesting. For example:

• Middle-class millionaires are always ‘on’. While both millionaires and non-millionaires alike believe the statement “Anyone can become a millionaire if he or she works hard enough”, millionaires work, on average, 70 hours per week, as compared to 41 hours per week for non-millionaires.
• Millionaires are five times more likely to say that they are always available for business by email or phone (76% versus 16%)
• They are three times more likely to say that they regularly work weekends (67% versus 21%)
• They take fewer vacations than non-millionaires (12 days versus 19.5 days)
• Middle-class millionaires believe in networking. They believe that knowing many, many people is crucial to success.
• Millionaires are three times more likely to say they belong to a formal or informal networking group (43% versus 16%)
• They value networking as a way to connect with people you can turn to for information (83% versus 29%)
• Middle-class millionaires never give up. Nine out of ten respondents in both the millionaire and the non-millionaire groups reported having had a serious setback with a very bad outcome. However, millionaires had 3.1 such incidents, while the non-millionaires had 1.6.
• Millionaires were twice as likely to credit learning from these bad experiences as being very important to their eventual financial success (73% versus 36%)
• Millionaires were five times more likely than those in the middle-class non-millionaire sample to try again in the same field, after a setback (77% versus 14%)
• Only 2% of millionaires reported that their most common course of action was to give up and focus on other projects In the middle-class non-millionaire sample, 51.5% reported giving up.
• Millionaires go where the money is. Middle-class millionaires can more often be found in ownership of a business, or in businesses with incentivized or pay-for-performance compensation.
• Millionaires are three times more likely to say that choosing a career on the basis of its prospective financial rewards is important to financial success (73% versus 28%).
• Non-millionaires were more likely to believe in the idea of “do what you love and the money will follow” (54% versus 2%)

In all, there do appear to be some important differences between the middle-class millionaire and the non-millionaire. If you want to be a millionaire, as many in the Early Retirement forums do (and, truth be told, as I do), you may want to check this one out at the library.

Later in the week, I’ll present some of the differences that made me a bit squeamish about the middle-class millionaire route to financial success. . . .

If you liked this review, share it! Click on the link below to email it to a friend, and help me increase my readership!

Life or Debt. . . .

This weekend, I picked up a book by Stacy Johnson (of TV’s Money Talks fame. . .), called Life or Debt. Although the book was published in 2002, it somehow seems dated (perhaps because Stacy mentions VCR’s and Walkmans). Despite the impression that the book was written in the early 90’s, Johnson does outline a fairly common-sense plan to get out of debt. In fact, there were a few times when I wondered if he had taken some of his idea straight out of my all time favorite, Your Money or Your Life.

Here are the steps to debt freedom, according to Stacy Johnson:

Step One: Compute your average hour after-tax, after-work-related-expenses wage. Just as YMOYL suggests, we need to find out how much we really make on an hourly basis, after taking commuting costs, food expenses, and clothing costs into account. Johnson includes his own instructions for doing this:
· Write down your annual salary
· Multiply this number by .7 (to account for taxes)
· Add up all the expenses (gas, food, clothing) associated with your job every year; subtract this total from the number in line two.
· Divide this new number by 2,000, the average number of hours a person gets paid to work every year. This is your true hourly wage.

Step Two: Inventory your possessions---everything, from the contents of the garage, to the attic, to the pots and pans in the kitchen. Write it all down.

Step Three: Go through the inventory, and make a mark by those things you purchased but didn’t really need or didn’t use. Do you really need two cars, three cell phones, two lawnmowers? Tally the total cost of the things you bought but didn’t really need. Multiply this number by 6.7, which will tell you the opportunity cost of these items. The opportunity cost represents the amount that you would have gained had you invested that money for 20 years at 10%. So, a $250 lawnmower you rarely used because you borrow your neighbor’s riding mower instead would have been worth after 20 years.

Step Four: Find items on your inventory list that truly meant something to you. Johnson’s example is an old backpack that took him through many countries. This exercise is meant to help you refocus on what is really important in your life.

Note: steps one, two, three and four are almost identical to information presented in YMOYL.

Step Five: Determine your 'Debt Destroyer'. Multiply your annual income by .10, then divide by 12. This is the amount that you will use each month to pay down your debt (in addition to your minimum payments).

Step Six: Finding that 10%. To figure out how you’re going to find that 10% for debt repayment, Johnson suggests writing down every penny that leaves your hands. Once you know how you’re spending your money, you’ll have an easier time finding ways to save (this is the ‘Latte Factor’ in action).

Step Seven: Begin eliminating debt, by:
· Not creating any more debt
· Ranking debts in order of fastest possible payoff (divide total amount owed by minimum payment; the lowest number is the first debt to repay)
· Build a ‘Debt Destroyer’---this is your extra 10% payment from step five.
· Pay off your debts, using the Debt Destroyer.
· When all debts are paid off, invest the Debt Destroyer plus the total of all of your old monthly payments.

I would characterize Life or Debt as a combination of ideas from Your Money or Your Life and Dave Ramsey’s Total Money Makeover, without the radicalism or the religious undertones. It’s a good book for someone who hasn’t read much else about debt reduction, and who is highly motivated. Personally, YMOYL and TMM both inspired and motivated me more than this book did, and I would recommend those over Life or Debt.

Do you know someone who might benefit from this post? Email it to them, by clicking on the link below.

Frugal economy. . . . .

CNN has an ongoing series that profiles American families and how they're reacting to our slowing economy (i.e., the recession). It's called 'America's Money: In their own words' Today's profile caught my eye, because it's written by a man who is working a second job, to "pay the bills", just as I am.

I really wish these profiles were a little longer and more in-depth, because I'd love to know several things about this person: for example, just how much (or little) does a Vice President make? Is he truly living a "lower middle class" existence? Does the wife work? Do they have overwhelming student loans or other debt? A giant house? Is he driving a gas guzzler, since his gas bill is $170 a week (mine is $30 a month)?

I'm trying hard not to automatically judge this person and make assumptions about how his family is living. I look at my own situation (also working two jobs) and realize that everything is relative, after all. I have access to great public transportation (hence the lower gas bill) and make use of it. I have a wonderful public library where I can stock up on books, read magazines, and study in a warm and inviting atmosphere. I live in a tiny house, although with an admittedly too-large mortgage compared to my income. My car is old, but efficient and reliable. I have access to great health benefits, retirement plans, and tuition remission through my employment. Yes, I'm working two jobs, but I feel like I'm squarely middle-class.

It's interesting to read about how others are handling their own financial struggles, if only to help me realize that I'm not doing all that badly. . .

Vice president of information technology, 32, Denver, Colo.

We purchased a home last year and I'm proud to see my children live in a decent neighborhood close to a good public school and have a backyard to play in.

However, since moving, unexpected expenses and rising costs have created a situation of struggle. I do have a fixed-rate mortgage, but everything else is getting so expensive. Last week I spent $170 on gas alone. I've taken on a second job, and I know as long as our economy hangs in there and doesn't collapse, we'll be okay.

My biggest frustration is I work very hard to maintain a lower middle-class income and lifestyle. We don't go on vacations, or rent movies. We just hang out and do free or cheap stuff. But I still work a second job and I miss out on school events and struggle to feel okay explaining this to my son.

April zero-based budget. . . . .

I've found that a zero-based budget is working fairly well for me, although it does require some tweaking throughout the month as unexpected expenses arise. I also need to think about my 'fun money' allocation, as it seems that I use this money for items that I wouldn't normally consider fun (like the notebooks I'm going to buy today for my classes). As usual, I'll be updating this throughout the month.



Here are the links to my February and March zero based budgets, for comparison.

Rich by 30. . . . .

Last week, while perusing Wise Bread, I came across a review for a book entitled: Rich by 30. I left a comment thanking the poster, Lynn Truong, for her review. Amazingly, Ms. Truong emailed me and offered to send me her copy of the book, with the caveat that I donate the book to my local library when I was finished. I happily accepted, and the book arrived on Saturday!

Although I had a friend visiting this weekend and was therefore busy, I was able to go through the book at lightning speed. It's truly basic, and much of the information presented will be familiar for anyone with an interest in personal finance. I commented to my friend that it would be an amazing gift for a teenager just starting his or her first job. How I wish I had had the wisdom to start saving (even just a little bit!) at the age of 16, when I got my first job!

Thanks, Lynn, for the book! I enjoyed reading it, and will pass it along to the Multnomah County Library system this week, so that others in my area can benefit from it as well.

Frugal calculators. . .

I'm horrible at math, but I love running numbers using online (and my home-grown Excel) calculators.

The SmartMoney website has a couple of calculators, which I'm using to 'test' my own Excel worksheets, which are helping me figure out when I'll be free of my credit card debt. My Excel calculator tells me that if I pay $550 a month (plus $1,000 in May, after I've received my 'rebate') I'll be consumer-debt free by mid-September of this year! In that time, I'll pay $32.22 in interest (at a 4.99% rate), according to the Excel worksheet.

Meanwhile, the SmartMoney calculator, included in an article regarding Digging Out of Debt, indicates that my credit card will be paid off in five months (by August), and that I'll pay $37 in interest during that time.

So, there is a slight difference between my own worksheet and the fancy one on the SmartMoney website, but they're close enough that I know I can trust my home-grown version. That won't stop me from playing around with the numbers online at other sites I might find, though!

What's going on in the blogosphere. . . .?

It's pretty quiet in my personal finance world, so I thought I'd create a compilation of recent posts from other personal finance and/or frugality blogs:

Lynnae at BeingFrugal posted a great article with suggestions for frugal spring break activities. For those with kids, there are some helpful tips on how not to blow the budget while entertaining the children.

Along the same lines, FrugalMomLA has posted some links to websites for the pre-Kindergarten to grade 2 kiddos.

J.D. over at Get Rich Slowly asks the question, "how to live simply, without looking cheap"? Something I've struggled with as I attempt to have a social life while living frugally.

Meanwhile, Moolonomy explains why a penny saved is actually better than a penny earned.

The Simple Dollar (which I haven't visited for quite some time) reviews a book called The Little Book that Builds Wealth. This is book five of a series of investment books by Wiley Publishing. Today, maybe I'll do a search of the site for a review of the first in the series, so as not to miss anything.

As for me, I'm all set to go out and help and friend celebrate her birthday tonight, and am planning to eat before I go----and I'll be driving, so that means my alcohol consumption will be limited. I'm hoping to keep the entire evening under $10, including the drink I plan to buy for the birthday girl.

March zero-based budget. . .

I hemmed and hawed for two weeks about whether to create a zero-based budget for March, primarily because I wasn't sure whether to include the money I spent in Mexico. Finally, I decided since the money I spent for my vacation didn't come out of my salary, I would go ahead and create it----plus, February's budget went very, very well----I followed this budget as closely as I could, and it truly did help me to reign in my spending last month.

So, here it is!



I have one more check coming from my night job, which will be tiny because I spent a week in Mexico NOT working, so I'll update this when I know how much that check is (Note: this has been updated, and as promised, is 'tiny'). The 'overage' at the bottom of the spreadsheet will probably be used to entertain my friend when she visits next weekend, so probably will be added to the 'fun money' section. . .

All gain, no pain. . . .

I spent all day Saturday at the library, writing a paper and studying for a final exam (I'm on the quarter system, so our winter term finals are this week). As per usual, I spent a fair amount of time catching up on my magazine reading.

Money Magazine had a fairly good article concerning tips for increasing your savings rate. Now, generally, most 'savings' tips regurgitate the same old ideas over and over again. This article actually had some tips I hadn't seen before.

Put it on Autopilot: Of course, there was the tried and true suggestion that we should set up an automatic savings plan, whether that means sending part of our salary to a 401K, a Roth IRA, or to a savings or money market account. The idea being, of course, if you never 'had' the money in the first place, you'll be less likely to miss it when it's gone. We've all seen this before, many, many, times. Probably because it's such a great idea, I suppose. I myself do this, and plan to increase my auto savings rate when and if I ever get a raise (my faculty union is currently in negotiations with the university----almost a year after our contract ended).

Reward Yourself: Ooooooh, I like this one!!!! I'm all about the rewards. The idea behind this is to set a specific savings goal. For example, one of my New Year's Resolutions was to increase my emergency fund by $1,000, to $2,000. I know, I know, it's not much---but I'm still in debt repayment mode. Anyway, using this strategy, I would get to 'give' myself a reward when I've met my goal----maybe a new pair of shoes, or $100 to spend on whatever I want?

Wield a Stick: Money Magazine cited a website, Stickk.com on which you can enter your goals (whether it's saving money, losing weight, or exercising more). Then you can appoint 'referees' to help keep you honest by monitoring your check-ins. You can even 'put a contract on yourself', by wagering money against your goal: for example, if your goal is to save $100 a month for the next six months, you can create a contract in which you'll have to 'pay' money (say, another $100) if you don't meet your goal. You can choose to send your money to an individual, to a charity you like, or even a charity you don't like, if that acts as a great incentive.

Invest in a Roth: Okay, this is one I've heard before too, but since this is one of my goals after I've paid off my credit debt (later this year), I was glad to see it on the list. I just decreased my 403b contributions to 1% of my salary from 10%, so I can use the extra money to pay down my debt further and faster. Since I have a pension (of sorts) through the university where I work, I'd like to keep my 403b at 5% and then do 10% to a Roth when my finances allow for it.

All in all, this article was a mix of 'vintage' (but good) ideas as well as some newer, perhaps more controversial suggestions. In the end, I benefit from hearing the same savings tips over and over again anyway----the more times I read or hear it, the better chance I will follow the authors' advice and put some of these ideas to good use in my own life.