Money Thoughts

As I mentioned in my last post, we've been a little, well, indulgent of ourselves lately.  Being hugely pregnant is inconvenient in a lot of small ways that add up financially.  It's easy to forget that my energetic "stay at home" schedule (ironically named) allows me to save us a lot of money.  It doesn't make up for my previous salary (not by a long shot) but it does let us to live reasonably on a single income.

For instance, I cook most nights (probably 5-6 nights a week) and DH cooks at least once a week.  My cooking is generally more made-from-scratch and vegetable-intense, requiring more prep time.  However, since I've been in my 3rd trimester, I'm usually too tired at 5:30 to be on my feet for another hour.  This has led to DH cooking after he comes home from work (usually 10+ hours) and quicker meals... i.e. more expensive.  While still couponing and meal planning, our grocery budget went up by ~20% last month and is on track to do that again this month.  We won't discuss the eating out budget!

I expect this to change in a few weeks, when I have a little more energy or can at least devote my energy to particular activities, rather than being struck by tiredness at random times.  In the mean time, I'm reading through a blog I found via a friend on Pinterest: 31 Days to a Better Grocery Budget.  It's always good to refresh my brain on finance topics, even when I've heard the majority of it before.  31 topics is a lot (and some I disagree with) but there are a few techniques I need to remember in the coming months.  I may post more specifics about this soon.

I've also been thinking about Christmas presents after reading this Yahoo Finance article today.  The first step for me is always determining how we can rearrange our money to pay for presents.  Only then do I pick who we're buying for (mostly immediate family these days) and what we can afford to do in December (lots of Christmas party invites every year, not to mention travel options).  I usually do our Christmas budget in September.  That may seem early (and sound boring) but it lets us anticipate expenses and use October & November to save for presents and travel, rather than trying to fit it all into December's budget.  I actually enjoy this task because it easily halves my stress level during the holidays when I know what we can and can't afford; plus, it's enjoyable to think about all the fun we'll have at Christmas time!  I think I'll be spending one day this week catching up.

In the past few weeks, lots of my friends have mentioned money being extra tight.  Are you doing anything extra these days to make ends meet?  Any financial wins lately?

Pre-Baby Thoughts

Being out of school and (temporarily) physically limited leaves me a lot of time to sit around and think during the day.  My brain is pretty good at quickly bouncing around on many ideas.  Lately, I've been thinking about a lot of family-centric topics: baby's impending arrival and the changes it will bring, finances, fitness, the holidays, food, housework, craft projects... the list goes on.  I started this blog to help me explore some of these wanderings in a more coherent way and so far, it's been very useful to me in that regard.  As a bonus, it's also garnered some great feedback from friends.  So here's some glimpses of my latest brain-musings... let me know what you think.

• How DH and I have changed over the years: We've been married for just over 5 years and together for 7.  5 years ago we were way over our heads in debt, with very different views of housework & daily living; neither one of us was good with credit cards and we definitely weren't ready for kids.  Today we've got a handle on our financial situation (which is steadily improving) with a more open communication about daily life and our expectations.  Along the way, we've found a lot of common ground and compromise (e.g. having friends over for dinner satisfies my introverted needs and his extraverted ones at the same time).  I don't know if we're truly ready for kids (is anyone?) but we're definitely ready to take on the challenge in a way we couldn't have 5 years ago.  I'm grateful that we've learned and grown together.
• Recommitting to our financial goals: We haven't strayed off our plan too far this year; we're even ahead a bit in some regards.  However, we've been very lax about a few areas and somewhat indulgent of convenience over savings as the pregnancy has progressed.  I'm hoping that post-pregnancy I'll have a little better self-control and that when we do our financial review in January, we'll find a few ways to speed up our debt repayment.  Baby will probably affect this in both directions: more motivation to do better but also less available cash.
• Our health: Maybe it's having a child that's pushing this issue but DH and I have talked a lot about improving our physical fitness recently.  Besides eating well, I can't do much in that department for a few more weeks, so I'm starting to mentally plan out my "return to fitness", beginning in November.  So far, it mostly includes daily weigh ins on the Wii Fit, more home cooking and less convenience foods, walks with the whole family (including the dogs), working up to working out on the Wii Fit at home, and trying to restart Zumba classes after the holidays.
• Housecleaning: Yup, nesting and OCD combine to create a mental image of a house that desperately needs some TLC.  We're steadily working on this.  Baby's room is 95% done (and 100% clean) and I cleaned the desk (i.e. major disaster area) last week.  DH even cleaned the whole kitchen, stove included, over the weekend... with no prompting from me (this may be the most amazing moment ever in our domicile-maintaining relationship).  There's still plenty to be done though, including the dreaded bathrooms.  What perk of working do I miss most?  Paying someone else to clean my house.

That's enough thinking for now, off to take care of dinner.  What's percolating through your brain lately?

August Readings & Thoughts

It has been awhile since I spammed my blog with interesting links.  While traveling last month, it was nice to be able to keep up on my reading through Google Reader, but I didn't have much to say about what I read.  Since I've been back home, it's been easier to focus and think.  Here's what I've been thinking about:

• Grocery Shopping: When I did my weekly grocery shopping last Thursday, a gallon of 2% milk had gone up to $3.13 from $2.86 just a week before.  That doesn't sound like much, but if 9.4% is indicative of rising grocery prices, no wonder my food budget has been creeping up a bit lately!  Get Rich Slowly (GRS) recently did an update to their ongoing "how much do you spend on food?" post.  It's garnered over 300 comments and reading through them is fascinating... everything from families of 8 living on $300/month to singles or couples spending $1500/month!  
• Comparative Statistics: Most of the comments on that article include info about urban/suburban/rural location and how picky people are about food choices.  This is a data goldmine that I really want to sink into.  For two suburban, non-organic eaters, we spend about $300/month on groceries and another $200/month on eating out; groceries includes entertaining an average of once a month.  Surprisingly, while our eating out amount varies, it never affects our grocery bill much.  As an added bonus, one of the comments introduced me to Bundle where you can compare how much you spend in certain categories relative to others in your age, family, income, and geographic groups.  Fascinating info!  This is one place where I don't mind being below average!
• Food & Science: Hmm, I'm starting to see a trend.  This article on biofortification of foods is why I love both the Freakonomics books and their blog.  This one is a guest post (which happens frequently) and, in addition to providing good data on a relevant social topic, gives a strong case for why waiting for the perfect solution is often a bad idea.  This is essentially why I'm an engineer and not a researcher; perfect theories blow up in the real world and you need to know how to adapt new knowledge to existing problems.  The article also brings up a favorite soapbox topic of mine: that engineered foods have, on the whole, been a Good Thing for the human race.
• Economic Circumstances: GRS had an entry last week about what part of your personal financial situation is your responsibility/fault and what is not.  This is a fascinating discussion and, interesting as the comments are, they don't begin to scratch the surface of how complex this topic truly is.  There's a lot of personal philosophy and experience revealed in how you feel about this subject.  We all know people who complain and yet do nothing to help themselves; equally, we know people who did "everything right" and still ended up broke (hopefully, we also know lots of people who did most things right and came out okay!).  Hindsight is 20/20 and articles like this remind me of two favorite quotes: "Chance favors a prepared mind" and "Statistics mean nothing to the individual".

That's enough thinking for me today... after all, I have homework to do.  ;-)

What's been on your mind lately?  How are issues like this affecting you?

Couples, Money, & Choices

Wow, it's been a busy few weeks!  One of the nice things about being currently childless is that summers actually slow down, rather than becoming schedule-crazy.  That means I've had a chance to catch up on some things lately, from laundry (there's my favorite capris!) to reading to finances.

Speaking of reading and finances, Get Rich Slowly had a cool article today about couples and managing money. One of the things I like about the site is the promotion of a "do what works for you" mentality.  The site author/owner (J. D.) and his wife (Kris) were recently interviewed for a short Redbook article about modern couples and finances.  Because of the number of questions he gets about their choices, J. D. put up the longer interview on his site.  It's an interesting look at one couple's system and a reminder that it's a good system if it achieves what you want it to.

The reason this caught my brain, however, is because my husband and I recently did something we swore we'd never do: bought a new vehicle.  Not just a new-to-us vehicle.  A new-to-the-whole-world vehicle.  A new-car-smell vehicle.  A vehicle with an odometer reading of less than my age (at least till I drove it home... I'm not that old!).  Scary!  But to me, it's a great example of meeting our needs with our resources in our way.

As I've mentioned before, we're expecting our first child this fall and we only have (had) one vehicle.  The one vehicle situation has been tricky but good, cutting our cost of living for well over a year.  But a new baby forces a lot of new questions, like: what if the baby spikes a fever and the car isn't at home?  Which, on the surface, is ludicrous; one of the reasons we decided to start a family here is the incredible friends we have, one of whom would surely either drive us to the hospital/clinic or would loan me their keys.  But you still worry.

Then we started asking more sane questions: what about our next move?  My husband is in the military and moving is inevitable, likely to happen in the next 18 months.  Our last move was done in one vehicle... packed to the brim with two dogs crammed into one seat for four days, because all the other seats had Stuff in them.  While my packing priorities will change this time (baby-stuff likely outweighing the Wii Fit), neither of us could picture a situation with less bulk to carry.  We still have two dogs, we will have an infant, and who knows how long we will be house-less.  So, we said, larger vehicle, an SUV.  But not till next spring, when we have to plan our move.

Right.  Then we started talking about summer plans, like the baby showers that our family is graciously throwing for us.  We save money by driving to see family (looked at airline tickets lately!?) in large part because we can take the dogs with us; plus it's built in us-time.  But baby showers, unsurprisingly, come with baby-stuff and it's the same stuff that we will eventually be moving with.  And my sister will be traveling with us for 1.5 trips this summer.  All of which adds up to needing the space now.

And so we researched.  And shopped.  And did a lot more research because we are nothing if not careful with large purchases.  We calculated what we could afford; we started a car fund where we've made a monthly car payment to prove we could do it; we looked at cost of ownership, not just sticker price.  And then we did some more shopping.  It turns out that through a combination of USAA's car buying program and a Memorial Day special, we could buy the basic Nissan Pathfinder we wanted for less than what we could afford.  In fact, for less than a two year old version cost, which is what we had been considering.

It was scary.  The whole time I was thinking "Are we really doing this?  We didn't come in today to buy and we especially didn't think we could buy new.  Are we jumping on something when we should wait?  I know we ran (and re-ran) the numbers, but can we really afford this?"  We asked the salesman to let us talk it over several times and (to his credit) he did it with no pressure to us.  We talked it over, re-ran the numbers quickly, and couldn't find a downside worse than not having intended to buy that day.

And you know what?  Besides one false-panic moment (3 in the morning is a bad time to be awake and trying to do math, especially while pregnant), I've been comfortable with it.  It's what we wanted, for less than we were willing to pay, for way less than the average sale price, and it has all the benefits of a new, warrantied vehicle. It would never have been possible for us to do this without prior planning, some serious advice-style help from family and friends, and a lot of communication between the two of us about what we wanted and could handle.  I'm thankful that my husband and I can have regular conversations like that without it becoming an argument.

Plus, since it's the color I wanted, what's to argue?  ;-)

Spelling and Financial Role Models

The next post I was planning was going to be an update on my quilt making and some pictures of the teddy bear fabric I found.  In the meantime, I was perusing Facebook and my Google Reader links and found a couple of interesting topics that I feel deserved some thought and conversation.

In the funny category, the sister of a former roommate of mine posted a link to this comic about 10 words you need to stop misspelling.  Misspelt homophones and possessives are a pet peeve of mine and I love the descriptions and examples on this comic!  I would also like to add are/our to their list, as I've seen that one a lot on Facebook lately (proof that people increasingly write/type like they speak).

Otherwise, one of the latest posts on Get Rich Slowly caught my brain today.  It's about frugal role models and surrounding yourself with similarly minded people (financially speaking).  Friends, family, famous millionaires/billionaires... the comments were nearly as interesting as the post.  Many people responded with not only role models but anti-role models, people they're trying to avoid becoming.  I'm intrigued by the idea of actively seeking out support by starting a savings club (sort of like a financial book club) but think it has a lot of potential to backfire.  You'd have to be very clear about rules and expectations from the beginning.  Ever tried it?  What do you think would make such a group work?

In any case, the GRS post makes a good point about having different role models for different areas of your finances, which is definitely true for us.  The post made me think a bit about who I associate with and who I look up to, as well as what I want our children to learn from us.  For instance, our parents are great about planning for retirement.  My friend Jen is an awesome coupon and bargain hunter.  She and my friends Leah, Amy, Kari, and Sarah are great about comparison shopping, making things at home, and spending where it counts (something I value highly as a financial attribute).  We have lots of friends at various stages of paying down debt.  It makes it easier to stay on track when you know other people are also working hard, even if their circumstances aren't exactly the same.

Do you have financial role models?  Are you like me, looking for more?

Internet Brain Food

If the internet has one overwhelmingly awesome feature, it's definitely the ability to bring me other people's thoughts and research with such ease.  I use Google Reader for this and it continually surprises me with what it reveals.

Take this for instance: a two-part post on Get Rich Slowly about how money does buy happiness.  It sums up a study that discovered that if money isn't buying you happiness, you're spending the wrong way.  Read the posts for tips on better ways to spend; my favorites are "buy experiences not stuff" and "delay consumption" and I was most surprised by "beware comparison shopping".  This falls very neatly in with my personal theory that money is a tool like any other.  The good or bad it does is related to how it's used, not any innate qualities.  (A favorite quote of mine: "Whoever said money can't buy happiness forgot about puppies!")

Does information like that change how you approach your finances?  Over the last year, DH and I have been trying to concentrate more on experiences than Stuff and it has definitely been good for us!  In digging through the last couple of weeks of posts at Get Rich Slowly, I also found a link to an interesting article that lists things we really could do without.  Some I agree strongly with (GPS, tanning beds) and others (microwaves, debit cards) I think provide a greater benefit than cost, especially in regards to time.

In addition to personal finance, I also get blogs and articles about a variety of science topics.  Yesterday, the Freakonomics blog posted about education versus expertise.  While I could use this to rail against the education system, instead it made me wonder about something psychological.  What the blog and the study it references seems to say (to me at least) is that people who spend time introverting a problem progress better than people who extravert it.  Now, there is definitely some personal bias coming through that interpretation, but the study supports the idea that mentally handling a problem (i.e. thinking about it) produces better comprehension than physically handling it (i.e. repeating a procedure over and over).  Coupled with Myers-Briggs typology (especially the I/E and N/S spectrums), there are all sorts of fun implications for that, but I think the salient point is that education should focus more on teaching people how to approach a problem, how to consider, rather than how to do.

What does the internet bring you?

Debt Free Month! Or not...

Note: This is the story of why April 2011 is no longer our debt payoff month.  It's a bit long, but I tried to make it flow for easy reading.  I hope you get something worthwhile out of it... please feel free to comment on your own experience!

About 3 years or so ago, we got serious about getting rid of our debt.  At that time, we had some substantial credit card debt (thanks to financial classes that were not a timely investment) and a lot of student loan debt (thanks to a private college that kept hiking rates).  We did have a financial game plan before we got married, something that I highly recommend for committed couples of all types, and we paid everything on time with extra when we could afford it.  But it becomes very easy to slip off the debt payoff wagon when things don't go quite like you expect.  For instance, it took a lot longer than we had planned for me to start my first career job.  We also discovered that there are some peripheral expenses to being a military officer (and really, just having a career... lunches out, anyone?) that we hadn't accounted for.

So, when I did get that job in April 2007, we recommitted to paying off our debt faster.  Much faster.  Because I have graduate loans, some of our debt had a 20 year payoff period.  Crazy!  I did not want to be one of those parents who writes the last check for their own student debt just to turn around the next month and start paying tuition for my own kids!  We crunched the numbers and decided that we could live off my husband's income for bills and groceries and in turn use ALL of my paycheck towards debt payoff.  As an engineer, I brought in just over half our take home pay, despite also taking a bigger tax hit.  By moving from a retail job at $10.75/hr to a career position, I had effectively doubled our total income.

This system was tough at times, but it had a huge effect.  Both of us kept lunches out to twice a month.  Dinners out were also twice a month and we tried to do one as a date night and one night out with friends.  We carefully budgeted for everything, especially household items and groceries.  It was hard sometimes, especially when friends bought new cars (mine was 15 years old) or went out to dinner constantly; but seeing those numbers go down was worth it!  At some point in our debt payoff scheme, I calculated how long it would be till we had canceled out all of our credit card and student loan debt.  The answer?  Fall of 2010!  Much better than December 2026!

Fast forward 18 months, to August 2009.  My husband got orders to PCS, which is military-speak for "relocate your life".  We only got about 8 weeks' notice, so we immediately changed our plan; no extra moving debt for us!  We kept paying debt minimums (of course), but everything else went into a savings account, just in case.  Moving is expensive, even when it's reimbursed, and it means finding a new job for me; there are no guarantees.

After lots of moving fun (read: annoyances), I wound up unpacking the house about three months later (the military is also fond of sending people to training, heedless of timing).  We planned for me to be out of work for about 9 months.  At the time, most people in my industry who were looking found new jobs in about 6 months, but they could go anywhere.  I recalculated that debt payoff date using our new lower cost of living (city to small town move): if I had a comparable job/income by July of 2010, we would be debt free by April 2011.  Still awesome!

You probably know, or can guess, most of the rest of the story.  The economy is still down; the local economy is non-existent for highly-skilled/educated jobs.  Our experience living on one income has been a lifesaver; my husband has been promoted and gotten the commensurate raises since then, meaning that his income now roughly equals our starting income from four years ago: his career plus my retail job.  We can and do live on one income comfortably, but April 2011 is no longer our debt payoff month and it's hard to say what it is now.

Some good things we did:

• Savings build up.  We rarely touched this, but it has given us tremendous peace of mind and stopped us from running up credit card bills (if we're not willing to sacrifice savings for something, why would we pay interest for it?).  We recently reduced the disproportionate amount we had to pay off a couple of low balance, high payment loans, which has been great for our cash flow while still leaving us plenty for emergencies.
• Early debt payoff.  The credit cards and loans that were paid off before we moved (plus the two paid off since then) meant that our minimum payments were much lower.  Our original minimum payments would leave no wiggle room on a single income, so this has made a huge difference.  We are also continuing extra debt payments, albeit at a slower pace.
• Rented out our property.  It doesn't cover the mortgage, but the extra money that this brings in is being split between debt payoff and a baby fund that will likely purchase our next (family-sized) vehicle.  This income is only guaranteed for the length of the lease, however, so we don't count on it past a certain point.
• Living on one income.  This move would have been an insane adjustment with no prior experience; instead, it was just a question of juggling some numbers.  I cannot overemphasize how little stress this has caused us and how horrible it could have been.

Now you know the story of my not-quite-debt-payoff month.  What about you... have you set financial goals that you've needed to re-evaluate?  What steps have you taken that turned out to be great in the long run?

Random Findings

My post about our former debt free month is coming soon, but I ran across a few unrelated links today that I want to share before I forget:

• First, the most important one: Preeclampsia Fundraiser.  My sister works for the Preeclampsia Foundation in Florida and every year they host a promise walk, just like those cancer walks we've all been on.  Pre-eclampsia is basically a condition during pregnancy where a woman's blood pressure rises to levels dangerous for both her and the fetus.  Although there are some known risk factors, it can develop with absolutely no warning.  Even with modern medicine pre-eclampsia is dangerous (sometimes fatal) to both parties and generally leads to early labor induction (with all of early induction's risks) when it is caught.  Besides labor induction, there is currently no treatment or prophylactic available.  The participants try to raise some donations themselves, so if you could help out with even $15, you would be doing a great thing!  
• Second, a fun link: Suvudu's Final Cage Match of 2011.  Alright, so this is for sci-fi and fantasy geeks like me, but here's the scoop anyway: Suvudu runs a cage match of dozens of sf/f characters from different series each spring.  Each match also features a write-up of how the judges think it will go, but the winner is determined by an online voting poll.  The tournament is single elimination and eventually results in a final showdown: this year, Quick Ben from Steven Erikson's Malazan series is pitted up against a favorite character of mine: Vin from Brandon Sanderson's awesome Mistborn series.  You (yes, you!) can go vote for who you think would win in a fight between them; no registration is needed and you can only vote once, so no annoying reminders from me either.  And if you like me at all, you'll vote for Vin!  ;-)
• Lastly, an everyday life link: Thoughts on Tipping.  I think that pretty much sums up what I think on the subject (especially about auto-gratuities).  I will add two thoughts: one, a party of 6 is not a "group", even though I've observed more restaurants lowering this number.  It would be more effective to have a policy of "8 adults" or "more than two checks".  Two, when out with a large party, we let a waiter or manager know (before ordering) that tips will be higher if they are not automatically included; otherwise, they will get the 18% only or (if the tab includes the "suggested" tip and we can adjust down), 18% will be the maximum they get for great service.  This has worked the majority of the time, both to get rid of the "auto-tip" and getting us wonderful service.

Alright, off to do some quick homework and my beginning of the month financial update.  Then tutoring, class, a volleyball game, and hopefully back here to write that debt payoff month post.

Trade-Offs

Today, our big screen TV arrived.  It's our first one ever... up till now, we've had my husband's old 27" CRT television in our living room.  Yes, we only have one TV and yes, we like it that way.  As a matter of fact, we're probably moving the old TV into our guest bedroom after today.  But as I sit here staring at this very expensive box in my living room (DH isn't home from work yet to set it up and connect it to every other device in the house... not that I couldn't, but it makes him happy), I can't help but realize that it represents a lot of our financial values.

Specifically:

• Pay using money you have today, not money you hope that you will have tomorrow
• We used the first of our new rental income after it was deposited.
• Get something extra for your purchase
• We paid using a rewards card (which we paid off immediately!) to get a gift certificate.
• Pay the least possible
• We watched the price fluctuate for a year and bought at the second lowest price we've seen.
• Prioritize spending
• We put off buying until our other priorities were met.
• Buy exactly what you want
• We did research and bought what we wanted.  No buyers' remorse for inferior quality!

You see, my husband has wanted this TV for three years.  That's a long time to put off a purchase that we've actually been able to afford for most of that time. But we decided that it was more important to use our "extra" money to pay down debt.  So why now?  One, we finally rented our house out and we agreed that 3 months' rent could purchase a TV and the rest of the contract went to debt payoff.  Since the rent money is income we didn't have before, we were both comfortable with this arrangement.  Two, the price has dropped considerably in the last three months (it's last year's model).  And three, it felt like the right time.  That sounds a little wishy-washy, but finances are a head game as much as they are logic.

Three years ago, it felt irresponsible to spend this much on one item.  This month, we knew we could afford it, it was what we wanted, it was down in price, and it was no longer an impulse buy.  That lets us enjoy it without dreading the credit card bill (and I must re-emphasize, already paid) or feeling guilty.  Personal finance is about what works for you.

Have you ever made a purchase that seemed externally out of line with your priorities?  How did you make your decision to buy?  Did you regret it or enjoy it?

Financial Summary

I was attempting to write out a multi-post series on the story of our financial journey, but I ran into a problem: it's a very long tale.  It's really only about 6 years of story, but there have been a lot of ups and downs that I think are relevant to where we are now and how we approach all things personal finance.  So instead of putting up the multi-part post right away, I'm going to summarize a bit and end with a question.

Here is where we started just after we were married:

• ~$125,000 in student loans
• ~$35,000 in credit card debt
• A home mortgage in Las Vegas (go ahead, laugh...)
• A 3 month emergency fund
• 2 cars with no car payments
• 2 incomes (with health insurance; one "real" job and I worked retail for another year)

Here are some bad things we've done:

• Slipped up with the budget.  (Repeatedly.)
• Waited months to hire a property management company for our house.
• Paid for very expensive financial classes that were informative, but not immediately useful
• Waited months to adjust our spending after we moved

Here are some good things we've done:

• Adopted 2 dogs and are proactive about their health care
• Paid ahead on our mortgages
• Paid 50% of our student loans in 4 years (20% of the time allotted)
• Paid off some student loans, rather than extra payments to all of them
• Paid off all our credit cards but one (currently our pay-off focus)
• Started retirement accounts
• Increased our emergency fund
• Controlled our expenses
• Increased our income
• Used our spare income to pay off debt
• Negotiated with our credit card and mortgage companies (successfully!)
• Planned ahead for our military move (on 8 weeks notice!  But this alone has paid huge dividends)

Here is where we are today:

• ~$70,000 in student debt (we added ~$9k for me to go back to school)
• ~$8,500 in credit card debt (the plan is for this to be gone by the end of the year)
• A rented out house in Vegas
• A 5 month emergency fund (which could stretch a lot further)
• 1 car with no car payments (and half the insurance payment!)
• 1 income (which roughly equals our 1 income + retail job income from 4 years ago)

So here's my question: what would you like to know more about?  How we cut expenses?  What order we paid off debt?  Where we are now?

Or, since I love swapping advice stories, what have you done in your situation?

Gift Lists

After my last post, a friend asked an interesting question:

As far as gifting goes, I'm curious what your thoughts are on that. I've been having the worst time building christmas lists these past few years. Maybe next year, when we're not a DINK household (dual income, no kids), I'll have more wants. Right now, and with our current financial choices, it's difficult to generate a christmas list of reasonably priced items that we haven't already bought for ourselves.

We were a DINK household, too, and it does make a difference.  When I write my Christmas list, it's for me, not for my family, as my husband is quite capable of writing his own list.  Two solid incomes meant we could buy anything we needed while still meeting our financial goals.  Right now, even though I'm doing online tutoring, I still consider us a single income household (my income is wiggle room in the budget).  That does make a huge difference in what we can afford, but as you probably know, we are very careful with our money and are sure to use it where we need it.  Being budget conscious, we also strive to put reasonably priced items on our lists, although we generally include one or two "big" items as well.  I'm not sure how well this thought process will work for everyone, but here's what I did this year.

I mentally and physically break my list into categories.  Yes, I organize my lists.  You're shocked, right?  First, I include the basics: clothes, anything I need, and stores I shop at for gift cards.  Most people that I know hate giving gift cards, but I love receiving them.  It's a great feeling when I do want to go shopping (rare, but it does happen!) and I can do it for free!

The next thing to go on the list is what I think the household/family could use. For instance, this year I have a large "kitchen goods" section.  None of the things on that list are really necessary (hence why I haven't bought them for myself), but they would make my kitchen easier or more fun to use.  The current list includes things like tea spoons, a milk frother, and a recipe box.

After that, it's all individual taste.  I used to ask for tons of stuff but only use a small portion, leading to tremendous clutter.  Now, I try to pay attention to what I actually use in my house and how that could be improved.  For instance, this year I spent a lot of time cooking & baking, exercising, sewing & cross-stitching, drinking tea, and reading.  Hence, there are kitchen & tea accessories, exercise equipment, sewing paraphernalia, and crafting supplies on my list.  For the first time since I was very young, the list only included one video game and three DVDs.  I just don't spend much time playing video games or watching movies any more.

And then of course, there are the books.  *evil grin*  Okay, I actually wasn't that bad.  The list was mostly books in series I've already started or new titles by authors I love.

I'm also trying something new.  Get Rich Slowly had a great post last year about a study showing that good experiences lead to happiness more consistently than good Stuff does.  Based on my experience, especially in the last year, that felt very true to me.  So this year, I also included some "experience" requests, like tickets to the local symphony orchestra.

If that sounds like a lot, remember that this list goes to six different households, all of whom buy gifts separately, and all of whom like to have options, making me sympathize with the need to be creative when writing!

Does your family influence how you write your gift list?  Did you give that up when you got married or reached a certain age?  Do you request them from others or use a different method to choose gifts?  How do you handle gift giving during the holidays?

Holiday Resources

With December starting tomorrow (eep!) and Christmas just around the corner, it's time that I came through on my promise of a bargain shopping post.  George and I love shopping for Christmas gifts.  He likes to buy something just right (i.e. expensive) and I like to buy for everyone... you can see how this would quickly become a problem.  One of the hardest parts of our financial journey has been to convince ourselves that good gifts should be thoughtful, not perfect.

The last two years we have successfully given ourselves a per-person spending limit.  We decide together who we're buying for (8 people this year, excluding ourselves), what our total budget is, and divide, leaving a little margin for error.  Since we're a military family, the rest of our families live hundreds of miles away, so that limit includes everything: the item, taxes, & shipping.  You don't pay taxes and shipping with Monopoly money!

I'm still choosing gifts for everyone this year, but while I'm doing that, I'm using some basic techniques and tricks to stretch our budget as far as possible.  Here's what I've come up:

• Shop Online - In my world, online beats in line any day.  Internet sites can be a great way to compare prices, look at reviews, and avoid buying related to social pressure ("I came in so I should buy something to make the trip worth it...").  I recently posted about how I saved 66% on some books that I ordered; 2/3 of that discount came just from shopping online instead of in stores.  Some people enjoy the "thrill" of shopping in a store, but I always feel stressed when I shop.  Thus, the lack of instant gratification is great for me (i.e. I can't buy to make myself feel better because I don't feel bad in the first place).  I can sit back, make a calm decision, and either buy (cheaply!) or walk away with no problem.  *See my note at the bottom for info about paying online.
• Comparison Shop - This is the #1 rule of bargain hunting (#2 is probably Never Pay Sticker Price).  Search for the lowest price, keeping in mind extraneous costs like shipping.  This is about an information imbalance: if only the seller knows the cost, you lose.  If you comparison shop, you are correcting that imbalance in your favor.
• Coupons - Coupons aren't just for grocery shopping!  They can save you hundreds when used properly.  Sign up for your favorite stores' emails (see the email section below) and you'll get coupon codes for online shopping as well as in-store discounts.  There are a number of sites that collect coupon codes (my favorite is RetailMeNot and there are others), but you can just Google "(store name) coupon" to find them, as well.  There are also online sites that have deep discounts advertised for local activities or one day deals: Groupon is the most famous, but again, sites like this are growing in number.
• Cash Back Programs - This is as close to free money as you're going to get.  There are two ways to get cash back on purchases and yes, they can be used together!  The first method is the "old fashioned" way - that is, rewards cards, which can be used in stores or online.  Every credit or debit card we have is linked to some type of rewards program.  (As a personal note, I think if your bank or card company doesn't offer a rewards program for free, it's time to swap banks... yours isn't working enough for you!)  Some of these give you a percentage back, either on your statement or in the form of a check, and some earn you points towards gift cards.  The second method takes advantage of the advertising arrangements between online retailers.  It involves signing up on a website (generally with just an email address and name) and then using that website to link to wherever you're shopping online.  My preferred site is Ebates but there are several other reputable sites out there (and again, it pays to compare!).  This article from Living with Less has a great overview of available sites and how to use them.
• Discounted Gift Cards - Still going to the store to buy gift cards?  Think again.  Sites like Plastic Jungle buy gift cards that people don't want at a discount from the face value (another money source if you have these laying around) and then sells them to people for a slightly lower discount. There are many sites like that, so I use Gift Card Granny to find them.  This can be a great way to save big right up front.  Standard discounts generally run from 5-15%, but I have seen much bigger numbers.  You can use this two ways: to get gift cards as gifts for others at a discount or for yourself to use to purchase gifts.  Combined with a coupon, this can add up to a very big discount.

I would be remiss if, along with those methods listed above, I didn't mention a couple of things that I do to make my very busy life a little less stressful.

• Email Address for Advertisements & Orders - I have a separate email address for all websites.  Every coupon site, every store, every newsletter goes to that address.  It's easy to get a free email address these days; I recommend gmail because of their phenomenal spam detection and organizational tools.  I opened that address thinking that stores were selling my email address and I didn't want to wade through spam or advertisements not targeted at me.  In fact, it has been a great organizational tool because all of my coupons and ads go to that account and all of my online order info is there as well.  And I have to say, having had the address for the better part of a year, not a single spam item has been found... not by the spam filter and not by me in the inbox.  Which should tell you something about those forwards your friends and family send you...
• Security when Buying Online - Shopping online is easier and more secure than ever.  Most companies have shipping date guarantees and tracking numbers; the information that you enter is fairly standardized (name, address, card #, etc.) so you can detect anomalies easily; you can use a payment service (like Paypal, although there are others) instead of your credit card if you prefer; and your Visa or MC is protected from fraud liability as long as you report it.  Major credit card companies also offer an option to use a "dummy number" that they generate for your online purchases, which you can get through their websites when you log in to your account, as an extra layer of security.  While you should be careful when shopping online, using a major credit card, looking for the https:// instead of http://, and being heads up about what information a company actually needs are good ways to ensure your information is being properly used.

I should quickly point out that I recommend doing all of this in addition to having a solid financial plan.  If you can't afford it in the first place, no discount is going to make your situation better.

It's been a long post, but I know most of my friends are as bargain minded as I am, so I hope you found it interesting.  There are lots of opportunities to spend less.  Is there anything you do that gets you more for your money?  Tips or techniques to use in combination with these?

Savings Article

When I first started this blog, I was also discovering other web features.  The one I've used most so far is Google Reader.  This is a cool (and free!) organizational tool that lets me collect, via RSS feeds, all the blogs and websites I read into one location.  I just sign into my Google account and voila, interesting updates tailored to me (and by me).  It's also the source of most of the articles that I feature here.

I read several interesting articles today, learning that I don't know squat about tea (yet!) and that Patrick Rothfuss' annual Worldbuilders fundraiser has restarted (great cause + cool swag = awesomeness).  My blog following is a little eclectic, but centered on a lot of the themes I use here: books, authors, tea, history, economics, and personal finance.

So it should come as no surprise that it was this Freakonomics article that captured my attention this morning.  It discusses an interesting idea about using incentives to encourage savings.  Using some quick Google research, the current savings rate in the US is anywhere from a negative number to about 4%, depending on what you count as "savings".  It always surprises me how little financial preparation many people have; the article's note about half of Americans not being able to access $2,000 in 30 days is pretty jarring.  Speaking from experience, our financial planning and savings have been fundamental to our success in the last year, in which I have been unable to find a job commensurate with my skills and education.  I can't imagine going through these months with no savings account, knowing that any unexpected financial burden would drive us further in debt.

The best aspect of articles like that one?  It reminds me that even when money is tight that we took the right steps.  It's good to keep it all in perspective.  What finance statistics and factoids surprise you?

In Which I Gloat About Cheap Books

I'm slowly learning that everything can be had for a bargain.  Paying sticker price is rarely either a good idea or your only option.  There are some days that this goes better than others.  For instance, I shoot for an average 10% coupon rate at the grocery store, but that means that I range anywhere from about 4% to my all time high of 17%.

Today, though, I'm pretty sure I got one of my best deals ever on books.  I purchased three books (not all for me) which were list prices of $29.99, $15.00, and $15.00, or $59.99 total.  At least, that's what they would have been in the bookstore...

I do a lot of my shopping online; it makes it easier to compare prices, make calmer decisions, and to walk away from an item I'm not 100% sold on.  Knowing that I wanted to purchase these books, I turned to online retailers to see what kind of a deal I could get.  I settled on Barnes & Noble because I had a gift card and because I almost always have a coupon.  Amazon rarely sends out coupons and Barnes & Noble has been on a successful push to narrow the online price gap (the difference in totals came out to a few cents and I don't remember in whose favor).

Just for shopping online, the prices of the books are $16.43, $8.72, and $10.59, or $35.74 total.  That's already a 40% discount, just for clicking the mouse instead of wasting gas money!  The other great thing about internet shopping is how savvy people have thought of so many smart ways to use the web.  So even though the most recent email coupon I had from Barnes & Noble was expired, I just Googled "Barnes & Noble coupon", and voila, coupon codes!  In this case from Retail Me Not, which had a 25% off one item code.  After putting that in, my final total was $31.63, a  47% discount.  Could it get better?  Oh yeah.

The piece de resistance is that I had a $11.14 gift card from returning a book I purchased a few months ago and decided I would never get around to reading in my recent book elimination efforts (new post on that coming soon!).  Because I made a smart choice in trading in a book I wouldn't read, I paid $11.14 less than the discounted price for books I will read.  It hardly seems worth mentioning that the credit card I used to finish the transaction gives me 5% back on book purchases (I will, of course, pay off the balance just as soon as the transaction clears and my books arrive).

Even after factoring in taxes, and we all know lower sales price means less sales tax, I paid $21.56 for what should have been a $64.19 purchase.  I saved myself 66% off the sticker price.  Not too shabby, if I do say so myself!

Could I have done better?  Believe it or not, yes!  If I had a Barnes & Noble Membership I could have saved another 10% off the discounted price (saving about another $3, or 5% overall).  I could also have purchased a discounted gift card to use on the purchase.  I could have gotten my purchase price below $15 if I had really wanted to, and honestly, I'm kicking myself a little bit that I didn't.  But not too hard.  Because you have to admit, 66% off is a pretty awesome discount.

Today's Finds

While I'm waiting for my class' website to load, I'm happy to announce that I finished my final paper for my second class!  Yay!  I'd like to thank all the History and English teachers I ever had for giving me so much work that I learned to write a 4,000 word paper, complete with research and editing, in 10 hours.  And also for their unending patience with my stubborn reticence to improve my writing, despite their excellent teaching efforts.

Whew!  Now that that's done, let's move on to something more interesting.  Or rather, several somethings:

First up, yet another cool article from Get Rich Slowly.  This one is about how to make car dealerships fight over your business.  Or, at least, how to stop getting ripped off so horribly.  What I got out of this, besides how to make my introverted-self very happy if we ever buy a car from a dealership, was the writer's solution to a gender issue, namely that car salesmen offer better deals to men.  Because after all, a girl's gotta do what a girl's gotta do.

Secondly, a short article about natural versus human-made systems.  This one's particularly concerned with genetically modified food.  My favorite quote:

The fact that cross-species gene transfer happens without human intervention in nature, however rare, provides further justification for viewing transgenic technology not as a Frankensteinian intervention into the natural world, but as yet another method of trait selection, something we’ve been doing with heroic results since the dawn of agriculture.

Believe me, statistically speaking, you wouldn't be here without that intervention.  For info, look up the history of fertilized soil some time.  I'm reposting this article because the underlying lesson is a favorite philosophy of mine: That every choice, even making no choice through non-action, has consequences.  The point is not to avoid them, because you can't, but rather to engineer them to be positive consequences, something that human beings are uniquely suited to do.  In short, don't hate humanity!

Lastly, a few weeks ago I posted my review of Steven Johnson's new book, Where Good Ideas Come From.  As my review implied, I'm completely enamored by this book and have referenced it countless times since I read it just a few months ago.  This article from the UK's Guardian says everything I felt about this book, but in a more journalistic, readable way.  If I'd said it, it would have rambled.

And while I've been typing, my paper is officially submitted!  All done with my second class.  My third class, Project Planning Execution and Closure, starts Sunday.  Too bad I'll be at the Celtic Festival!

In for a Penny

This is the smartest article I've seen in awhile:

One Dunkin’ Donuts store is taking a stand against the penny.  A sign at the store reads “We will be rounding your change to the closest nickel. For example, if your change is $2.03, we will give you $2.05. If your change is $2.22, you will receive $2.20.  For any customer who still would like their pennies, please just ask the cashier and we would be happy to accommodate you.” The change is designed to speed up service. Here’s hoping the initiative goes viral. 

 In case you weren't aware, it costs more than $0.01 to make a penny (and more than $0.05 to make a nickel).  So basically, every time a penny or nickel is made, we lose money.  Lots of people have advocated for the U.S. to stop producing new pennies and nickels and Congress will review a bill to change the metal composition of coins to reduce production costs next year.  It may not sound like much, but think about the billions of pennies and nickels out there... yeah, it adds up (more info here).

About Those E-Readers

I want an e-reader.  Desperately.  Enough to make what is, for me, a large financial commitment for a relatively new device and to continue that commitment with future purchasing.  This is a device I would use constantly, researching, reading for school, and feeding my insatiable sci-fi/fantasy habit.  So why don't I own one yet?

Over the years, with an increasing understanding of finances, I have come to be frugally minded.  I track where every dollar of our money goes.  Later this morning, I'll be doing the weekly accounting as well as setting up the few bills for November that are not on auto-payment.  But this emphasis on the value of money leads me to an interesting mindset: I believe very strongly in buying the things you want.  No, really!

The worst purchases I have ever made are, without a doubt, the ones where I compromised quality for cost.  Not because they were a bad decision or didn't meet the criteria I had set out, but rather because I hated them.  Hated that they represented my inability to obtain what I wanted.  Every time I look at a purchase like that, I think about the compromise I made and what I gave up, rather than the value that I added or how much I like the product.  As my favorite personal finance blog says, money is mental and emotional as much as it is rational.

Hence, my husband and I have a strategy for managing the emotional side of money: buy what you want.  I'm not saying go impulse spend or go into debt, but save the money for the product you want, not the one that's 50% of the cost for 75% of the features (technically a better value but not satisfying!).  This is the same reason that we own and use our 27" CRT television rather than buying a big screen TV.  We want one of the best on the market and we'll wait until we've saved the cash for it, rather than wasting money on an inferior product.

So back to those e-readers.  I was excited about Barnes & Noble's announcement of the NOOKcolor this week.  It seemed to be the e-reader I was waiting for.  After looking through the specs, however, it's not even close.  Here are my criteria in a rough order of precedence:

1. E-ink screen, not LCD.  I want to read in bright sunlight on car trips.
2. Multiple file support, including .pdf, .doc, .docx, and .epub.  Others are a plus, but those 4 are required for my continual use.
3. Color.  If I'm reading a .pdf for school, I need to see the definition on graphs.  Yes, there is a company out there that has developed a color e-ink screen; they're "in talks" with manufacturers.
4. Note taking.  I'm creating an electronic commonplace book for myself and I need to be able to move quotes from books or articles to OneNote.
5. Expandable storage.  I'm a book acquisition nut and one day I'm going to blow through the device's limit, especially with all the public domain books that are available for free.
6. Easy to use.  This includes understandable menus and fast refresh rates for quick page changes.
7. 3G.  Wi-fi is great, but if you want me to impulse buy books on a road trip, 3G is a must.
8. Web-surfing.  I don't need to do extensive web searches, but access to an online dictionary, Facebook, Wikipedia, my blog, my email, and blogs I follow are a must.
9. Other pluses: .mp3 player, long battery life, nifty accessories, ability to lend e-books.

It's really not much to ask, considering that all of these features are available on some e-reader device.  The problem?  They aren't available on the same device.  The Kindle misses #2, 3, 5, & some of 9.  The Nook misses #3, 6, & 8.  NOOKcolor misses #1, some of 9, & possibly 6.

I hope that some manufacturer wises up soon and realizes what could be done with an all-inclusive e-reader.  In any case, I'll be reserving my cash until MY e-reader appears.

Links and My Already Long Week

Too agitated yesterday to post, even though I had a lot to say!  First, a couple of links to brighten your day:

How Social Networks Predict Epidemics (~18 min. video)

The Child-Driven Education (~17 min. video)

Although they're worth watching, you can absorb most of the content through listening, so it's perfect for entertainment while you're chopping veggies for dinner.  :-)

I discovered TED Talks (the source of the links) about a week ago in my recent quest to update my understanding of the internet.  There is a lot going on in networking and education that is web-centric and that's a large part of what motivated me to start blogging.

So what's happening with me lately?  Still spending my time between classes relaxing, after a fashion.  I have a hard time being idle for long periods (notice my entire family laughing in the background and clarifying that "long periods" means an hour).  So in the last week or so, I have:

• Repaired two shirt hems
• Progressed on two more sewing projects (bench cushions and replacing the zipper on a shirt)
• Finalized a cross-stitch design and started work on it (for a friend's wedding gift and I think I may have waited too long to finish in time...)
• Made steady progress on The Way of Kings.  I'm on page 462 of 1007 and I hope to finish it by Saturday, before my next class starts.

The highlight of my week so far was the grocery run I made yesterday, wherein I got out of the store with a week's worth of groceries for $41.  That's right, terribly mundane, but what can I say?  The goal was $275 for groceries this month; we average about $305/month.  We've spent $241 at the commissary and subtracting $24 for dog food and treats leaves me at $227 for September. Barring any major milk crises this week, I think we're going to make it!  I recommend CouponMom for those of you who don't have a good source for printable coupons.

One last note: the older I get, the more I realize what a useful tool social etiquette can be when properly applied.  Beyond saying please and thank you, the phrase "I'm sorry but I have prior plans" is helping my psyche feel a lot better today.  ;-)

Some Perspective

I spent part of the evening catching up on my favorite finance blog, Get Rich Slowly.  I hadn't read it in awhile because I've recently been simmering over my own financial state (more on this to come, probably next week).  That's a big mistake, of course; one of the criteria by which I choose my financial guides is how inspiring they are, to help keep me motivated on my own path.

In any case, reading through the backlog got me to this little gem: Banker to the Poor.  It's a bit long, but well written and definitely worth the few minutes it takes to read.  Personal finance is a topic of interest to me anyway, but micro-finance is increasingly grabbing my attention.  I feel like it's a cause I could give to, helping people help themselves (I'll discuss my issues with charities some other day).  Based on the review, this title is definitely going on my to-read shelf on Goodreads.