Frugal wardrobe. . .

As I continue to cast a critical eye over my belongings (how did I get so much STUFF?), I keep coming across these projects that are designed to remind us how little we actually need!

First, I read about the Six Items or Less project, in which participants pledge to choose SIX items of clothing (not including undergarments, outerwear and accessories, of course) from their closets and wear only those items for an entire month. The idea is to emphasize how much we already own versus how much we really need. I'm embarrassed to admit that there are clothes and shoes in each of my three bedroom closets, and I STILL feel as if I don't have anything to wear! I considered joining Six Items or Less, but I really don't feel that I could create a work-appropriate wardrobe out of six items.

Then I saw this: Project 333. In this project, you choose 33 items to be worn over a period of three months. This is more like it! I already use about 20% of what is in my closet, and a project like this could help me to cull the items that are simply taking up space. I did take some clothing to consignment shops in December (ack! It's time to find out if they sold anything!) so I'm making a dent, but I want to try to create a more minimalist wardrobe with quality items that I actually like and will wear.

I'm not sure when I would have the time to go through my closets and find 33 items; I'm thinking in the spring, because I am almost positive that I will try to work less than I am now, even if it slows down my debt repayment. I'll keep you posted!

A frugal solution. . . .

I hope you all enjoyed a wonderful holiday! I certainly did, although my frugal tendencies went right out the window when faced with fabulous food, lots of opportunities (and time) for socializing, and, alas, the dreaded spending.

As has been the case since I began my frugal journey several years ago, the Christmas season seems to trigger the 'shopping gene' and I end up not only spending more than I intended to on others, but also on myself! For some reason, the act of purchasing gifts for others seems to get the juices flowing and I end up buying things for myself as well. It's as if all of my self-control, which I wield so successfully during the rest of the year, simply flies out the window for a two-week period.

Although I did score a wonderful new jacket and a pair of boots (70% off!), the upshot is that I had to send my last paycheck not to my second mortgage-holder or to my student loan balance, but instead to my credit card! Aaaarrrrrrgggghhhh! It's frustrating, to say the least.

Although I am kicking myself (even while wearing my fabulous new duds) the silver lining is that I have come up with a plan to help myself avoid this next year. My solution is this: for the first time ever, I'm going to set up a savings account just for Christmas costs, to include travel (airfare to visit the family) and gifts. I had intended to nix my savings (except for the savings that goes towards paying my water and auto insurance costs, of course) so that I could concentrate on sending every extra penny to my debt. However, in the long run, I think sending $50 a month to the Christmas savings account will benefit me by helping me avoid the frenzy of spending that I experienced this year.

Downsizing. . . .

Since my goal is to sell my house in another year or two (depending on this fabulous housing market I find myself in), I'm starting to look around my home with a critical eye, especially at clothing and kitchen items that I've neither worn nor used in the past year. I definitely don't want to spend my last month in my house (assuming it sells) frantically getting rid of things I don't want to put in storage.

Wherever I end up, it's a good bet that my new residence will be smaller than the one I have now, and will not have a garage. Now, I'm no hoarder, but I do have boxes of things here and there that I never unpacked when I moved here over four years ago! To me, that means those mystery items are unneeded; if I've not found a use for them in the past four years, it's as it I didn't own them at all. With that in mind, why not start downsizing before I really have to?

So today, rather than cleaning my floors as I promised myself I would do, I started the task of dividing some of my unused clothing into groups of: 1. nice enough to go to a consignment store; 2. nice enough to go to the Goodwill; and 3. what is this thing even doing in my house? This last group is unfortunately destined for the trash, much as I dislike discarding anything (it's the environmentalist in me that hates to see one more consumer item sent to our already full landfill).

I'm hoping to make a wee bit of cash with the consignment goods, and take a small tax deduction with the Goodwill items. I'm sure that my 'take' will be less than the original costs of these items (I found a $70 pair of shoes I've worn maybe three times because they're too big, and a $90 pair of boots I've worn a comparable number of times because they're too tight), but it's something, right? Plus, I'm trying to figure out how I'm going to fit Christmas into my meagre budget, and every little bit will help!

New Year, new frugal strategies. . .

I mentioned in my Finally Frugal 2009 Goals post that this year I would be following The Compact, which is an agreement to buy used rather than new items, in an effort to reduce waste and increase savings. I'm having difficulty with my 'vice', which is new clothes and shoes, and in an effort to get a handle on this area, I'm willing to go to great lengths.

You can learn more about The Compact by clicking on the video below, or by reading this article in the San Francisco Chronicle.

Learning To Be an Un-Consumer
What following The Compact will require is an intimate knowledge of my local thrift stores. Luckily, I came across another great blog, called The Thrifty Chicks, which is basically a primer to thrift shopping. Lots of great tips abound on this website, which I hope to check often over the next year.

I should note that I'm embarking on somewhat of a 'modified' Compact. Here are my modifications:

• I am allowing myself six 'freebies' during the year. These will be purchases of new clothing or other items that I cannot find used. I hope not to use all of my 'freebies', but just the thought that I can buy something new makes this endeavor a bit less scary;
  
• I am allowing myself to purchase items such as underwear and other personal garments (like socks) new;
• If safety is an issue, I'm allowing myself to purchase new (such as the tire I thought I was going to have to buy recently);
• I'm allowing myself to purchase gifts for others that are new. I just don't have the time to create something myself or to spend hours at the thrift stores finding something appropriate.
  

Although I've not yet truly 'begun' (there's nothing I need desperately at the moment), I have noticed one positive side-effect of The Compact. I'm becoming more aware of my 'consumer' thoughts. That is, I've caught myself several times thinking: "maybe I'll go to the mall and see what's on sale". It's a comfortable thought, to be honest. After so many years of frittering my money away at the mall, it feels right. But then the next moment I remember: "oh yeah, I'm not buying new right now." And the thought passes.

Ultimately, I'm hoping that challenging myself with The Compact will help change those automatic thoughts that have led to so many unnecessary purchases (and the credit card bills that followed).

A frugal new year. . . . .

As I've struggled to keep a handle on my expenses while increasing the money sent to savings (and, hopefully at some point to student loan debt), I've felt the need for a new motivator. Some new goal or strategy to help me stay on track and learn new frugal skills.

I recently came across an article about a Colorado couple who, for the past year, have been living The Compact. This is an informal agreement that people make with one another to spend an entire year not buying anything new, except for food, personal grooming items, and perhaps some underwear (this particular couple also made an exception for items that they were simply unable to find in a thrift store, on Craigslist, or using Freecycle). The idea grew out of a anti-consumerism compact ten people in California's Bay Area made with each other in 1996. The idea grew wings, and there are currently over 10,000 members of the Yahoo Group associated with The Compact.

While something this radical will take some additional thought (and imagination), it's definitely an idea that appeals to me. What better way to 'force' myself to become more familiar with the thrift stores in the Portland area, while quelling my desire for new clothes and shoes (one of my vices)? Making frugal living a challenge may bring inspiration (and a fair amount of frustration, I'm guessing); more importantly, it will allow me to really 'feel' what it's like to live with what I have, rather than always striving for something new and better.

If I choose to take up The Compact for the 2009 year, I predict that I would not only find new motivation to reduce, reuse and recycle, but would also create a newfound appreciation for how good I really have it.

A Super Frugal couple. . . .

I blogged earlier this week about needing to decrease my grocery bill again; as I've fallen out of the habit of tracking every single penny, my expenses have slowly inched skyward. I hope to begin anew after the first of the year. In the meantime, I find myself buying fast food (well, Burgerville---which I argue isn't really all that bad because they use, for the most part, local suppliers) as well as 'convenience food', which is much more expensive than just buying the ingredients myself and cooking up, say, a lasagna.

Recently, I learned to my horror that my favorite 'bad' treat, frosted circus animal cookies by Mother's Cookies, have gone the way of the dodo bird. Yes. Extinct! I was devastated by this, until I learned, through a blog called The Naked Loon, that there are a couple of alternatives. So, I've been happily purchasing $3 bags of Franz frosted circus animals---not great for my budget or my waistline!

As I contemplate getting back to a more healthy, raw (and hopefully cheaper) diet, heavy on the fruits, vegetables and grains, I've learned of a couple who had as their goal to live---EAT---for just $1 a day! The two high school teachers decided to voluntarily challenge themselves---as many in the world are forced to do---to survive on less than most of us pay for a cup of coffee each day. While the experiment was 'non-political', it does force one to think of the way we live in the United States, our perceived "needs" versus "wants", and how most of the rest of the world lives.

The results were interesting; the couple blogged about losing weight (and energy), describing their daily meals, and the story was picked up by news outlets across the country. There are links to articles in the New York Times as well as links to Fox News snippets about the challenge. I've not had time to go through each article or video, the but stories and the blog are interesting, especially if you have any interest in consumerism, waste, living closer to the earth, or other issues that affect us on a local and global level.

I will certainly consider the challenge as I'm trying to get below $100 for my food budget again, beginning on January 1. Even a low $100 food budget is three times more than this couple---and many all over the world---have to spend on food.

The origin of shopping. . . .

When I made the decision to move from California to Portland two years ago, one of the first things my mom said was: "Who will I go shopping with"? When a good friend comes to visit, shopping is the main focus of our 'recreational' activities. When bored or depressed, I used to use 'retail therapy' to fill my time and ease my worries. I almost never shopped for necessities; nearly always, I went out in search of something to buy, without a list, and without a clear need to be filled.

Why is this? Well, a new book called 'Consumed', by Benjamin Barber may help explain this.

"The exact point at which a life of frugality – led by most people until the 1950s – developed into one of comfort, before slipping into absurd excess, is impossible to determine, admits Benjamin Barber

Since basic human needs – food, shelter, clothing – have long since been met for most people in the developed world, marketing professionals now bang their heads together to reinvent and recreate goods in order to sell more stuff.

Hyper-consumerism is a major contributor to environmental problems, yet so-called green marketers are as guilty as your average marketing man. "Don't fool yourself," warns Barber. "Green consumerism is still consuming. The simplest way to go green is not to consume, or to consume less, but these people want you to consume their way, because if you stop consuming they don't make any money."

While I haven't yet read this book (it's available at the library though, so I'll be picking it up soon!), it might be helpful to understand the marketing mechanisms that drive our consumer spending society. And understanding the tactics that are used to make us want a new cell phone every nine months or new boots with a 1.5 inch heel instead of the perfectly good one in the closet (with the 2 inch heel) may just help us to fight back, regain our frugality, and return to the values our parents and grandparents held in the 50's and before.

I sincerely want to avoid the shopping-as-recreation habits I held up until very recently. I want to concentrate on my immediate needs: food, shelter, and yes, relationships with family and friends. I'm hoping to replace my retail therapy with more laughter and real-life experiences.

Why are we still using credit cards?

According to a recent Associated Press article, Americans decreased their credit card borrowing in April. Granted, it was still an increase (meaning, an increase in the billions of dollars owed to credit card companies). However, April saw a 4.2% increase in borrowing versus 6.4% for the month of March.

Unfortunately, some Americans seem to have simply transferred their borrowing habits to other areas, like auto loans, which rose to an annual rate of 6.5%, up from 5.5% in March. Dare I hope that these auto loans represent people who are turning in their gas-guzzling SUV's, opting instead for environmentally and wallet-friendly smaller cars and hybrids?

Banks are predicting an even greater slowdown in the U.S. economy, leading to recession (if we're not already there, that is). Bloomberg published this graphic indicating that while consumers are using credit cards more often to purchase necessary items like gas and food (as opposed to vacations and clothing), due to the housing crisis Bank of America shares will decrease in value by 24%.

Meanwhile, experts urge consumers to trim their consumer debt during a recession, rather than increasing borrowing. Here's the rub, though: the Federal Reserve lowers interest rates during economic downturns, making borrowing more attractive. Lower interest rates mean that borrowing is less expensive. The detail that truly frustrates me is that the government does this on purpose, to entice consumers to borrow more!

Here's a quote from Consumer Reports, which has a very helpful list of ways to survive a recession.

"In recessionary periods, the silver lining for consumers is that interest rates often decline, making borrowing less expensive. That is entirely by design, says Sweet, an economist at Moody's.

During the 1990-91 recession, for example, the Federal Reserve gradually reduced the federal funds rate from 8 percent to 6 percent in an effort to ramp up the economy. "The reduction in short-term interest rates reduces the real cost of borrowing," notes Sweet. "This is important for stimulating economic growth, as lower interest rates entice consumers to take on additional debt to finance their consumption."

And the Fed has been on a rate-cutting spree lately. In late March, after six rate reductions since September, the federal funds rate was just 2.25 percent, down from 4.75 percent seven months earlier."

Now, I know that we live in a society in which consumption drives the economy, whether I like it or not. I choose not to contribute to over-consumption and have lowered my expenses considerably as a result. It simply frustrates me that the government continues to rely so heavily on (and even encourage) consumers fiscal irresponsibility!

Frugal side effects. . . . .

Pictured to the left is my accumulation of trash for the month of May. This bag represents the items that couldn't be composted or recycled, and as you can see, the bag is quite small---about the size of a full-grown cat---and it isn't even full yet! I estimate that I will get away with this one bag of trash, plus one from the bathroom, for the entire month!

About three months ago, I switched from weekly trash pickup to monthly service, saving myself about $12 a month--this made me nervous at first (I imagined smelly garbage overflowing from the trash can, raccoons and feral cats setting up shop outside my house, and neighbors picketing in my driveway in opposition), but soon I realized that I could probably get away with even less frequent trash pickup (unfortunately, there aren't any plans for service every two months. . . .)

Now, granted, I live alone, and when friends and family come to visit, they generally don't bring their garbage with them, but one of the reasons my trash accumulation has decreased so substantially is due to a frugal lifestyle.

I'm paying greater attention to the items I purchase: I buy in bulk, and often bring my own bags or re-use packaging (like Quaker oats tubs); I shun pre-packaged food or items that are individually wrapped (these are usually more expensive anyway); I compost tons of vegetable scraps and shredded paper; I fill my recycling tub religiously (this is still picked up weekly).

When I started thinking about simple living, frugality, and downsizing my expenditures last year, I never considered the fact that I would also be minimizing my footprint on the earth. I was so focused on my debt, my income, my expenses (and the widening gap between those last two), that I didn't pause to consider the positive side effects of living a more frugal life. Now I can see that I'm not only bringing more 'green' to my bank account, I'm greening the environment too!

Finally Frugal's Weekly Roundup. . . .

This is a bit late, but I thought I would share the best of the best posts in the blogosphere from last week.

J.D. at GetRichSlowly wrote a short post about the Secrets of the Extremely Thrifty. I hope to be one of these people someday!

Meanwhile, Flexo at Consumerism Commentary wrote a piece that confirms something I've learned just in the last six months: namely, that the wealthy earn their money, rather than inherit it. Good news for all of us hard workers!

Plonkee, at plonkee money, discusses Supercharging the Debt Snowball, using a method called the "credit card shuffle". This works best if you're just starting your debt reduction battle, but could be helpful for those of us who are beginning to see the finish line too. . . .

FrugalDad posted a great article about ING Direct accounts (I highly recommend this bank), including information about how to create and name sub-accounts. Email me if you'd like a referral to ING. . .

Money Cash Life had a guest blogger, Sher's Corner, who talked about ways she has successfully gone on a 'Shopping Diet'.

That's it for now, folks. I'll be posting a bit late on Monday so check back in the afternoon!

Frugal consumerism. . . .

We're constantly bombarded with advertising and enticements to purchase consumers goods. On my commute to work, I must pass at least fifteen billboards hawking everything from new cars to furniture to garden ornaments. I get off the lightrail in the middle of downtown, and walk past Borders Books, Saks Fifth Avenue, and J.Jill before I ever get to the bus stop that will take me to campus.

I'm getting better at controlling my urge to shop---when I do shop these days, I'm paying cash, rather than using my trusty credit card. I'm also learning to be a more discerning shopper, considering not just whether those new boots will look good with my new jeans, but also whether the item will truly add value to my life.

I recently found a website called The New American Dream, which forwards the idea of conscious living and responsible purchasing. The site has a nifty little wallet-card that can help consumers snap out of a consumption-driven frenzy, by asking themselves the following questions:

• Is this something I need?
• Do I already own something that could serve the same purpose?
• Can I borrow one, find one used, or make one instead of buying new?
• Was it made locally?
• Was it made with environmentally preferable materials?
• Was it made with fair labor practices?
• Will it serve more than one purpose?
• Is it made well enough to last a useful ength of time?
• Will it be easy and cost-effective to maintain?
• Will using it require excessive energy?
• Does it come in excessive packaging?
• Can I recycle or compost it when I’m done with it?
• If I’m still not sure, can I wait a month before deciding to buy it?

I'm starting to ask myself these questions at the grocery store (is that packaging recyclable? Is there an option in the bulk section? Are those coffee beans organic, fair trade?), at Target (do I really need another white t-shirt? Aren't my 'old' towels working just fine?), and at the many othe stores I either visit or pass in the course of a day. Asking myself questions such as these on a daily basis creates a new consumer habit for myself, and ultimately results in fewer purchases that I'll regret later.

Credit card debt: the perfect storm. . . .

While it appears that consumers added less consumer credit debt than analysts predicted in February (a measly $5.1 billion as compared to the estimated $10.3 billion), experts believe that the slowing economy and rising prices are leading more Americans to use their credit cards.
According to this CNN article, total revolving credit debt rose 2.4% to an astounding $2.54 trillion dollars in February! Meanwhile, non-revolving debt (such as auto loans) rose by 0.4% to $1.588 trillion. It's hard to believe that Americans are still out there financing cars at all!

The article points out that the total consumer debt discussed doesn't even account for mortgage and home equity loan debt! Considering many people appear to have been financing their lifestyles using home equity credit, the fact that these loans are getting more and more difficult to come by means that more Americans are turning to their credit cards to bridge the gap.

One analyst calls this the 'perfect storm' as credit card companies are now raising interest rates, especially for people who are close to their credit limits, submit late payments or no payment at all! These are the same people who may be struggling to pay their mortgages, cover the grocery bill, or keep the utilities on.

If you're on the fence about whether or not to use your credit cards, take a moment to watch Maxed Out, a documentary about the credit card industry. It may open your eyes to some of the more devious practices credit card issuers use to get your business and to keep you in the earn and spend cycle.

Maxed Out: Part 1
Maxed Out: Part 2
Maxed Out: Part 3
Maxed Out: Part 4
Maxed Out: Part 5
Maxed Out: Part 6
Maxed Out: Part 7
Maxed Out: Part 8
Maxed Out: Part 9

If you don't want to watch this on your computer, consider checking it out at your public library. It's definitely worth an hour of your time.

The tax rebate dilemma . . . .

According to an article at MSNBC, Americans may not be spending the upcoming tax rebate in the way politicians and economists would like us to. The idea behind the rebates is to strengthen our weakened economy by bringing more money to the market; Americans are expected to spend their 'windfall' on items such as TV's, clothing, vacation travel, and other goods.

However, it appears that at least some of us may be planning to use the money to pay down debt or increase savings. With the shaky state of the economy, families are wondering if it might be better to have that $1200 or $600 in the bank rather than frittering it away on a new, fancy BBQ or car stereo. In fact, much of the money might already be earmared for increased fuel costs, which according to the MSNBC article, won't do much to help the economy since most of that money goes to our overseas oil suppliers.

Despite the hints that the rebate money might not enter the economy for quite some time, some economists are counting on Americans' inability to live frugally. For example, David Wyss, a chief economist at Standard and Poor's, says this: "Americans have an amazing ability for self-deception, and I have full confidence that they’re going to end up spending the money regardless of what they say they’re going to do with it.”

I feel a bit insulted by this comment! Mr. Wyss is saying that no matter how smart we think we are, our instinctual drive to consume will trump our intelligence. For my part, the rebate check will be going directly to debt payment. This will (if all goes to plan) more than double my monthly payment to the credit card company, and will result in my credit card debt disappearing a full month sooner than expected! Now THAT is smart, and no amount of advertising or consumption lust will convince me to spend that money on items I don't need, which were probably produced overseas, anyway.

If you haven't decided how to spend that rebate check, here are some ideas to consider:

How about buying yourself some freedom? Freedom from debt, that is. Do you carry a credit card balance? Have you been ignoring it, paying the minimums month after month? Why not pay it down (or off)? Consider the satisfaction you'll feel as you watch your balance shrink, along with your minimum monthly payment.

Split the rebate. Are you a family of four? Are you receiving $1200? How about dividing that by the number of family members and allocating the money this way: $300 to debt repayment; $300 to retirement savings or emergency fund; $300 to the upcoming camping trip; and $300 toward that new TV or other purchase.

If you purchase, buy American! If you decide the use the rebate check to buy something fun (or necessary), make sure you're purchasing something that was made in America! I know, I know, this is almost impossible these days, especially in the case of electronics or appliances. However, the only way the rebate will serve its true purpose (to improve the American economy) is to buy items made by Americans. An alternative to buying a thing would be to travel domestically---this also benefits Americans.

So, I'd like to know: what are YOU going to do with your rebate check?

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.

Winning the war on debt. . . .

I am now less than $3,000 away from paying off my credit cards (again!) and becoming consumer-debt free. There have only been a couple of times in the last twenty years when I’ve been anywhere close, and I can almost taste the freedom. Then it’s on to the student loans and mortgages, but that’s another post for another day. . . .

After years of pulling out the credit cards to pay for clothing, gas, entertainment, car repairs, and travel, I’ve lived primarily on cash for the past five months. Although I’ve been ‘here’ before---meaning, I’ve vowed previously to deal with my debt---this time feels different. I truly believe that this time I’ll be successful. Why is that?

There are several factors, which, when combined, are helping me to finally face and conquer my debt ---and this time I know I will come out on top. Here’s why:

Discovering the blogosphere: debt has always been my ‘dirty little secret’, something to be hidden and tended to anxiously, while pretending to the world that my income was greater than my outgo. Last year, I discovered blogs---and learned that there are hundreds, probably thousands of people just like me, all of them struggling to banish debt from their lives. In writing my own blog, I feel like I have joined a community that supports and understands me and my ‘secret’. Not only have I been offered heartfelt encouragement from complete strangers, I have learned a great deal about the nitty gritty of saving money, increasing income, and getting out of debt.

Hiding my credit card: Of the many blogs that I peruse, and the many books that I’ve read on the subject of personal finance, debt reduction, and frugal living, one idea appears in about half of them. That is the notion that credit cards---in the hands of people like me---are a dangerous tool, which should be ripped from the wallet and destroyed. Having nursed my credit like a babe at the bottle, I could never wrap my brain around this. I decided on a half-measure: I would remove my credit card from my wallet and leave it at home, far from my reaching fingers. Well, I must be getting old, because I literally can’t remember where I put it! This has kept me from making quite a few purchases which---at that moment in time---I thought I HAD to have, whether it was a new pair of boots, a raincoat (of which I have plenty), an expensive haircut, or any number of unnecessary items. Perhaps I’ll never find my credit card; now that I have an (albeit tiny) emergency fund, I’m not as worried as I would have been five months ago.

Rethinking my attitude about ‘stuff’: I have been blessed to find a second job at which I can work from home, a couple of hours each evening. I do computer research in the field of environmental health---I read all sorts of articles about pollution, global warming, and toxins in our food and consumer goods. Depressing? Yes. However, learning about the role humans have played and continue to play in the degradation of the earth has made me much more aware of everything that I bring into my life. I pay attention to the packaging of my food and other items; I shun the offer of the ubiquitous plastic bag at the checkout counter, to walk my tiny purchase 100 yards to my car; I consider each purchase not only in terms of whether I want it, but whether I need it, and more importantly, what will happen to it when I’m finished with it? Will it go to a landfill? Is it biodegradable? Will it end up swirling in the Texas-sized vortex of plastic in the North Pacific Ocean? This has helped me to whittle down my purchases substantially, and conversely increased the amount of money I have available to make increased debt payments and increase savings.

In spite of my debt and the long hours at work and school, I feel incredibly lucky to have finally realized that I can get off the ‘earn and spend’ rollercoaster. That I have the power to change the way I live my life and how I spend my money. In September I’ll have paid off my credit card completely----after that I’ll begin the next phase of my journey toward debt freedom---and I’m looking forward to the challenge!

Danger's gone. . . .

My friend left this afternoon, and as expected, the shopping and spending (hers, mostly) was a sight to see. Her current 'obsession' (other than bags, shoes, and makeup) is costly fabric, with which she's making these amazing little boxes. She buys cardboard boxes at a craft store, then covers them with velvet and silk fabric, embellishing with fancy ribbon. The piece de resistance is a flower made of ribbon, that she affixes to the top of the box. The boxes, while beautiful, are created with high-end materials, and are none-too-cheap to make. Not exactly a frugal past-time. I have to say, I did accompany her to a few fabric and notions shops in the area, and am guilty of spending some of my own hard-earned cash on pretty velvet---most of which I'll probably never use. Here's an accounting of the money I spent while my houseguest was in town (three days):

Dinner: $62.75
Velvet fabric: $16.50
Other craft supplies: $4.48
Pedicure: $26.00
Breakfast: $17.40
Movie: $5.50

Since I rarely carry cash, I used my debit card to take care of our dinner the first night, and also paid for fabric, for which my friend was going to reimburse me. Instead, she covered my drinks/appetizer/dinner and lunch the next day. At which time I felt that I then owed her money, and bought her breakfast. Now, I have no idea whether I spent more or she did---we didn't keep a close accounting of this. Next time I have a visitor, I'll do several things differently:

1. Save for the visit: I spent roughly $130 over three days---money that I could have had in savings, since I've known since December that this particular friend planned to visit. Had I saved $50 a month up until now, I would have had this money set aside, rather than taking it out of my checking account.

2. Carry cash: this will help me to pay for my share, rather than coming up with elaborate schemes in which I pay for dinner, the friend pays for lunch, and no one knows how much either owes.

3. Keep a close accounting of who paid for what: when spending time with a heavy shopper/spender, be sure that close attention is paid to what you owe---it may seem nit-picky at the time, but it can save money in the long run.

4. Don't get carried away by someone else's obsession: it was fun to shop for and buy fabric---I like being crafty. However, I have neither the money nor the time to be searching out high-end fabric and then sitting around and making pretty boxes. There are only so many people in my life who would enjoy a useless item (beautiful or not) like that.

There is some good news: I still can't find my credit card. Therefore, everything I spent came out of my checking account. This forced me to think about my purchases---I have a feeling that if I had been carrying a credit card, my purchases would have been even greater than they were.

I was happy to see my friend---we had a good visit. But it also reminded me of why I'm living a more frugal life. I don't need as much stuff as I used to think I did. Those pretty boxes are great! But they'll sit in my house and gather dust for about a year or two until I can find a way to get rid of them. Better not to have them in the first place!

Finally Frugal reminder. . . .

A close friend is in town visiting this weekend, so I'll be posting next on Sunday evening or Monday afternoon, with an update of how I managed to control my spending in spite of the influence of a "shopper".

The new epidemic: Affluenza. . . .

I've been waiting for literally three months for a PBS documentary called Affluenza to become available at my local library. I think when I placed my hold on it, there were 46 people ahead of me! Needless to say, I had totally forgotten about it when I read a post on WiseBread with a link to the documentary on YouTube!

The piece is about 10 years old, which isn't really a problem because the comments about American consumerism still hold true today. Note that in one of the segments, gas is shown at $1.28 a gallon!!! Wow. The most disturbing part, I think, is a segment in which a Disney marketing guru talks about 'owning' and 'branding' children----so they'll buy Disney products rather than some other company's plastic, throwaway toy. Basically, this documentary is a commentary on the U.S. 'earn and spend' mentality, how we got here, and what the consequences will be for our economy and our environment. I also own the book, which I promise to review at some point in the near-ish future.

The documentary has been divided into six parts on the YouTube site, probably because the entire video would have been too long to post. I've created links to each of the six parts:

Affluenza: Part 1 of 6
Affluenza: Part 2 of 6
Affluenza: Part 3 of 6
Affluenza: Part 4 of 6
Affluenza: Part 5 of 6
Affluenza: Part 6 of 6

Snarky note: Ted Haggard, of the New Life Church in Colorado is also briefly featured, talking about how to have a successful marriage/family life: he's the big-time pastor who was accused of homosexual relations with a gay man.

This is what I'm up against. . . . .

This Saks Fifth Avenue window, seen above, is right across from the light rail stop I often use. Luckily, I'm smart enough (and poor enough) that I've never stepped foot in the store. The salespeople would take one look at my Old Navy/Banana Republic wardrobe and my old Timbuk2 bag and immediately divine the knowledge that I can't afford a $200 dress (on sale!) Even during my days of wanton credit-card use, I went for quantity over quality (not that a $100 Juicy Couture t-shirt is made in a "better" Thai sweatshop than a $40 Gap blouse. . . .)

With this kind of advertising, though, is it any wonder Americans are over-extended and under-satisfied? You might 'want' that yummy orange handbag the mannequin is holding, but how long will that (probably $500) purchase satisfy you? How long until you're on the search for the next 'must have' bag, or belt, or pair of shoes? I have a friend who is constantly on the search for the bag/shoes/thing she has to have; once she knows her target, she spends hours online searching it out, weeks tracking it down, until finally she pounces----and these things are never cheap.

She's visiting me for the weekend, so I'm curious to see what her latest 'need' is. As for myself, I'm going to try to view the inevitable shopping excursions from the perspective of an anthropologist or sociologist, rather than getting swept up in my own need for more stuff.

Tomorrow, I'll post about Affluenza, a PBS documentary about the reasons behind and the consequences of Americans' need for STUFF. Soon, I'll also write a brief review of the book, which is one of the few I actually purchased last year.

Needs versus wants. . .

Just found this great cartoon on the GetRichSlowly site, and thought I'd share it. If you click on the link above or below, you can see a full size version of this cartoon, which was created by Dorothy Gambrell, of Cat and Girl.



















I think one of the reasons I find this so funny is that I actually DID ask for socks for Christmas this year. I wanted yummy, warm, wool (not the scratchy kind) socks, because I'm keeping my thermostat at 58 degrees to save on energy costs. Throughout the months of December and January, I was bundled up like an eskimo when I was at home. For Christmas, I received one pair of socks. The year I truly want and yes, need socks and I get one measly pair. However, I've worn them so much both feet have giant holes in the toe. Time to get the needle and thread out.