Why You Should Switch to a Credit Union. Now.

This is how I feel about banks.
Image by David Castillo Dominici

I’m going to start with the bottom line.  We all make mistakes when tracking finances.  Yes, even you.  The thing is, when someone who has a healthy buffer in their checking account forgets to note last Tuesday’s mocha purchase, it’s not that big a deal.  You’ll catch it in a couple weeks when you get your statement, update your account, and life goes on.  Yay.

But when you are living paycheck to paycheck and your account flirts with zero on a weekly basis, these mistakes are devastating.  Let me paint you a picture of a typical payday for someone living this way:

Friday – Payday!  Money in the account!  Hurray!

• Check your budget and add up the bills you have to pay.  Not bad.  Looks like you’ll even have about a $20 buffer this week.  Sweet.
• Write the rent check.  Drop it off.
• Hit the grocery store.  Since you came in under budget, you decide to treat yourself to a fancy coffee.
• Transfer funds into savings.
• Pay the light bill.

Saturday –

• You’re at work.  You still have that buffer, and you’re exhausted, so you grab a coffee during the day.

Sunday –

• You grab a pack of gum.

Monday –

• You check your account.  Nothing has cleared from over the weekend.  Typical.

Tuesday –

• Still nothing.  Account hasn’t budged.  You snort in annoyance that the office still hasn’t deposited the rent check.  If you had waited until today to paid it, you would have gotten a notice on the door (and had to pay more fines, but they have no problem taking their own sweet time.)  Seems odd that the little payments from the weekend haven’t gone through, though.

Wednesday –

• You log in to check your account… and you’re $200 in the hole.  What the hell?

You go through your account to see what went wrong.  For starters, the damn sewer company that you have set up for automatic payment pushed through two days early.  But… wait a minute.  A closer look reveals that the payments you made went through in the following order:

• Rent
• Groceries
• Sewer bill
• Power bill
• Deposit to savings
• Coffee from Friday
• Coffee from Saturday
• Pack of gum from Sunday

And of course everything after the sewer bill got smacked with an overdraft fee of 30 bucks.  You check with the landlord.  Yup, they deposited the check on Tuesday.  But why did the coffee from Friday come through AFTER the rent check?  Looking again, you can’t help but notice that the transactions all went through in a clump… from largest amount to smallest.  If the stupid rent check had been the last to go through, everything else would have cleared just fine, and you would have only been nailed for $30 instead of $150.  Hmmmmm.

The worst part?  You’ll be starting the next payday cycle $200 short.  When you live paycheck to paycheck, that HURTS.  It means a bill isn’t going to get paid.  So you’ll have late fees.  If you have automatic withdrawal, the bouncing cycle is going to begin again. 

For the longest time, I swore that the banks were doing this on purpose.  I was assured over and over again that they were not.  Was I paranoid?

Nope.  Turns out I was absolutely right.  In fact, even though banks like Bank of America and Wells Fargo are being punished in class action lawsuits for the practice, they’re still doing it.  Just this past week, a friend was taken to the tune of about $1200 by her bank. 

Now let me tell you about our experience we had this week with BECU, a local credit union (that anyone can join, by the way).  A situation very similar to one described above occured.  When we realized it, we cringed and then watched the account miserably, waiting for the overdraft charges to come through.  When they hadn’t come through by Wednesday, I asked Gavin to call BECU to find out what they were going to be so we could account for them.  

Guess what?  There weren’t going to be any additional overdraft charges, except for the one charge on the sewer bill that went through early.  The rep explained that since the other, smaller debit transactions had been approved when there was money in the account, we were not charged overdraft fees on them. 

$25 vs. $100 in overdraft fees for this particular mistake.  Seems like a no-brainer to me.

Paying Bills Off Feels Gooooooood!

You might think I'm exaggerating... but I'm not.
Image by kongsky

In the past couple of weeks we’ve finally managed to say goodbye to a few bills that have been haunting us.  About a week ago I finally got caught up on payments to my son’s counselor.  I was sorely behind on those (to the tune of about $300), but we worked out a payment plan to get me caught up so he could continue seeing her uninterrupted.  I’m finally caught up now, so I only have to worry about the $10 copay when he goes to see her. 

The second big one was a medical bill that had gone to collections.  This collection agency is absolutely vicious.  A lot of financial advice online will tell you not to worry too much about collection agencies because the worst that they will do is call you and threaten you but won’t actually do anything.  Not true with these guys.  They don’t waste any time.  Two phone calls and you’re being served and they are getting ready to garnish you.  They are also difficult to negotiate and create a payment plan with.  “My way or the highway,” is their motto.  But this week we will finally be making our last payment to them, and we can cross off a $650 bill.

We also just paid off a $360 bill that we had been chipping away at.  This one was the result of a payday loan that we’ve been paying off for what seems like forever.  A word of advice?  NEVER.  NEVER EVER EVER get a payday loan.  NEVER.  They are practically impossible to pay and will only make the situation worse.  Here, have another NEVER for good measure.

It feels great to put these bills behind us.  It really feels like we’re making significant progress.  What are we tackling next?  A $700 bill that’s been bothering me and the power bill that’s been building up.  Unfortunately, when we fell behind on the power bill, they felt like the best way to solve the problem would be to charge us another deposit.  Which effectively doubled the power bill.  How helpful.  If we pay the power bill on time for the next several months, they’ll refund us the deposit, so I guess we better get cracking.  

“Why Save When You Have Debt?”

Because sometimes it comes to this.
Photo by Daniel St. Pierre

This question was posed to me in response to this post, in which we discussed our budget (I was also thrilled by the lively Facebook discussion that ensued).  I thought it was a fair question.  The logic behind it was, we are charged a much higher amount of interest on our debt than we could ever hope to earn on our savings.  This is true, and I’ve noticed that even experts can’t agree.  Some state that you should put every extra penny into paying down the debt and leave saving until the debt is gone.  Others argue that you should do both because you never know what life is going to throw your way.

I personally agree with the second camp.  What good is paying down the debt if every one of life’s little tailspins causes you to add onto it?  Take the car incident.  If we had had our emergency fund built up, we could have just run to the bank and solved the problem.  Instead we had to borrow money and just tacked on more debt.  That’s not helpful.  It’s completely a step in the wrong direction.  If every time something goes wrong I add on more debt, I’m just endlessly throwing my money into a bottomless pit.  The point of saving while I work on the debt is to keep a stash of cash handy for dealing with emergencies. 

While the logic behind not saving until the debt is paid off is sound, I believe that it doesn’t take the reality of day-to-day living into account.  Shit sometimes happens.  I want to be prepared when it does.

Back to the Budget

Not one of my favorite things to do...
Photo by Stuart Miles

Tonight we finally got our act together and worked out… not so much a budget, but a map of where our money should be going.  I figured out one of the reasons I utterly hate looking at our finances on paper:  It’s completely stupid.  There’s honestly no reason on earth why we should be struggling the way we do.  Even with my own meager earnings, we should be getting all this stuff paid with room to spare.  I just don’t understand why it never seems to work out that way…

Well, that’s not entirely true.  There’s crap like the car repairs.  Plus, we always seem to be starting from behind.  But at least we can play a little catch-up – we filed our taxes and should be getting a little refund by the end of the week.  Nothing amazing, but at least enough to keep swimming for a while longer.  I’m really looking forward to the flashcards project payout.  That’s going to give us some really good breathing room.

One of the other things we accomplished with this was that I was able to see how much I actually need to make per day to stay afloat.  Once again, what gives?  I can do this, easily.  I don’t know how it’s not happening, honestly.  But at least I can have that number in my head every day so when I sit down to work I know what my daily minimum is.  I’m not going to count the flashcards project toward that minimum.  That’s going to be gravy, as far as I’m concerned.

I’m not going to lay our entire budget out for inspection; we do need to keep some things private after all!  But I wanted to at least show you our categories.  We haven’t yet set up the categories for things beyond the basics.  Most of our expenses really are monthly.  I didn’t set up an entertainment category, although we do have a spending money category.  Once we have this running somewhat smoothly, we are going to look at options for one evening out a month and hopefully a regular date night.

The budget categories:

•  Rent
•  Groceries
•  Power
•  Gasoline
•  Water/Sewer
•  Internet
•  Emergency Savings Plan
•  Debt repayment
•  Cell phones
•  Bus fare
•  Taxes
•  Spending money
•  Netflix/Hulu

I should probably mention that I’m not counting things like insurance and such that come directly out of Gavin’s paycheck.  When we calculated our income, I only looked at the net that actually comes into the checking account.  The taxes category is for the taxes that I have to pay, since mine aren’t deducted automatically.

The next step in this process is going to be to track how much we are actually spending in each category to make sure the numbers are fairly accurate.  I think I overestimated in a few areas; groceries and gasoline come to mind.  I’d rather be over than under though.  

And now back to your regularly scheduled programming....

And it's not even a train.
Photo by Sura Nualpradid

I've been stuck in meltdown mode since the car problem occurred, and it's definitely time to yank myself out of my deep, blue funk. The last couple days I found myself stuffing my face and slacking on workouts, so it's time to put a halt to that.

Plus I finally got some great news!  Back in November or so, I applied for a position with a company that makes study guide materials for professional examinations.  It so happens that one of the tests they provide materials for is the pharmacy technician certification exam.  As someone who took that test and was a curve-setter for that session of testing (sorry guys!) and then proceeded to work in the field for the next 10 years, an evil little grin crossed my face.  I had to be a shoo-in for this.

I applied.  They responded quickly and sent me a sample to edit.  I dug in and realized that they had actually sent me a sample of a paramedic examination.  I went through and fixed all the grammatical errors, looked up as much information as I could to fact-check, then got my very own personal paramedic on the line (that would be my sister) to double check my medical info.  This trick has always worked well for me in the past.  I may not know all the answers, but I sure as heck know where to find them and who to ask.  If that makes me look brilliant, so be it!

I didn't hear back for ages, so I figured I must have botched something after all.  Oh well.  What can you do, right?  And then, a couple days ago, an email turned up -- "Sorry we didn't get back to you, we were doing a little restructuring, so on and so forth.... are you still interested?"  Hell, yeah, I'm still interested.  Sent back an email with that message (expressed a bit more professionally, of course).

Yesterday, I was officially offered the contract.  Attached were the details, a contract (nothing scary, just "don't steal our company secrets or set up a competing company while you are working for us" -- seems reasonable), and a W-9.  Signatures applied, forms sent.  According to the email, once that part is received on their end, I'll receive my full instructions and procedures and assignments.  I will be creating flash cards, and I get paid by the card.  From what they've described so far, I'm guessing I will be able to make about $30 an hour working on these.  Possibly more.

There's still some questions -- I don't know how long the contract or the project will last.  I think about all the possible information that could go on pharmacy tech flash cards and my head spins with dollar signs.  But in the short term, it will be a much needed influx of cash, a technical writing credit on my resume, and a chance to use a lot of info stored in my noggin that's currently going to waste (not counting phone calls from my mother-in-law).

It's nice to see some light at the end of the tunnel.

And… Cue the Meltdown

It was just a matter of time.
Image by digitalart

Sorry about my recent silence.  Beginning last weekend, things kind of went into free fall around here.  It started last Sunday, as I was on my way to the Y to get in a workout.  As I got off the freeway, I noticed white steam/smoke (I had no idea in that moment) pouring out from under the hood of my car.  I pulled over as quickly as I could. 

After getting the hood up, I discovered that my cooling system had completely blown its load all over the inside of the engine.  Unfortunately, I’m no car genius, so I had no idea what to do.  I posted an urgent message on Facebook for someone who knew anything about cars to contact me ASAP.  The phone started ringing almost immediately.  A huge thank you to Aaron, who was the first to get through, and the others whose calls I missed while I was on the phone with Aaron. 

My primary question was can the car be driven home, or would I be calling AAA for a tow.  (Get AAA.  Seriously.)  Verdict?  That car wasn’t going anywhere.  Great.  Another call out soon had my friends Kelli and Kris en route to help me get the kids home.  They showed at the same time as AAA, and we all got home safe.

To help distract me, Kelli and Kris helped me clean the place (bless their souls).  I was trying very hard not to think about the money situation.  I was hoping it was something small and maybe I could get away with a $200 repair bill.  At least the house wasn’t chaotic.

The next day, we started making phone calls.  We arranged to have the car towed down to the Firestone.  Bam.  $75.  We waited and waited, and finally they called back with the estimate.  The initial estimate was over $1000.  Gavin and I immediately began stressing out.  We were already late paying rent.  We had money in the account, but that was because we were holding it until Gavin’s next paycheck.  The apartment complex doesn’t let us make partial payments, which often presents a problem. 

At any rate, we had to have the car.  While the car was in the shop, we had a situation in which I had to go pick Elias up from school.  My friend Danielle came to give me a ride, but it really highlighted the fact that we needed the car fixed ASAP.  We were able to negotiate a bit and got the bill down to about $900, but this was still an ugly situation.

A temporary fix is in place to stop the bleeding.  I’m not happy about it, although I’m grateful for the help.  But it really emphasized the problem that we always seem to find ourselves in every time we try to save money and get things in order. 

Namely, SHIT GOES WRONG.  Call it whatever you want – emergency fund, freedom account, whatever.  I often feel like there’s this assumption that shit will stop going wrong while you try to build up the plan.  I can’t put the world on hold for the year it’s going to take me to build up this account.  We’ve saved about $100 toward the emergency fund and immediately get slapped with a $900 bill.  How is this going to be possible?  Now I need to pay back a ton of money, while still attempting to save for the future?  Do you see the problem here? 

And everything starts falling to pieces.  I ask Gavin about the transfer for this week.  It didn’t happen because we were trying to figure out the rent/car situation.  THIS IS WHAT ALWAYS HAPPENS.  It feels like there’s a hand on my head, pushing me back down, telling me to stop trying.  Why bother?  Things will always be shitty.  Shit will always happen.  I don’t know how to make it stop. 

So I’ve been in money meltdown this week.  Who the hell am I to try to help anyone else?  I can’t even help myself.  The more I try, the worse it seems to get.  We can’t continue this way, but no other alternative seems to present itself.  I can’t go to work full time because of the situation with Elias (which got considerably worse this week and, once again, emphasized that point).  I can’t change Gavin or make him do things he clearly doesn’t want to do.  I can only change my part of the equation.  I’m trying.  But I’m tired of failing every time I try.  

Why Should Only Rich People Be Healthy?

I am loving this book.

How many times have you avoided doing something good for yourself and cited a lack of money as a reason?  I know I’ve used the argument plenty of times.  “I can’t lose weight – Weight Watchers and gym memberships cost a fortune.”  “Who can afford to eat healthy?  Have you seen the prices on produce lately?”  “I can’t make time to work out.  I have to work full time and take care of the kids.”  Feel free to add your own.

As you know, I’ve taken the weight issue in hand and decided to make this thing work.  No, I can’t afford one-on-one sessions with a health guru, and yes, Weight Watchers is definitely out of my budget.  The heck with it. 

As of today, I’m down 7.5 pounds since Christmas.  Not too shabby, right?  What am I using?  A book I purchased for 12.99 and a free website.  I have a free membership to the Y courtesy of the CCORS program, but even if I didn’t, the apartment complex has a gym, I have a car to drive to Seward Park, a number of DVDs and a whole library of workouts of Netflix. 

Has food been more expensive?  Nope, I’m spending less on groceries now than before.  Funny how a bag of oranges costs the same as my favorite brand of potato chips.  I can buy the chips without even thinking about it, but I complain about the cost of the oranges.  When I’m not making all the impulsive junk food purchases, the bill goes down.  Strange, how that works!

Okay, so how about this book?  Why did I spend anything at all when so much information is out there for free?  The book is Full-Filled by Renee Stephens.  I found Ms. Stephens through her podcasts (free, by the way).  She has over 200 podcasts available for free on her website.  They are also available through iTunes.  What makes this book so special?  There’s not a word in it about how to count calories or how many times you should exercise in a week and for how long.  So many of us who struggle with our weight struggle with a lot of inner baggage as well, and that’s what the book addresses.  Her words are powerful.  She has taken the essence of the podcasts and condensed it into a workbook.  I can’t believe how much I’ve already gotten out of it.  If you can’t get the book right now, see if it’s available at the library (request it if it isn’t) or start listening to the podcasts.  Good stuff.

The website I’m using is LoseIt.com.  There’s plenty of other excellent free websites out there… SparkPeople and MyFitnessPal come to mind.  SparkPeople has many of the same tools as Weight Watchers Online (except that it’s free).  I found it too cluttered.  It demanded too much of my time and the emails were tiresome.  I haven’t tried MyFitnessPal, but I’ve heard really good things about it from people who have.  I like LoseIt because it’s simple, without too many frills.  It helps me track calories in and calories out, tells me how many calories to shoot for each day, gives me reports and breakdowns if I want them (without shoving them in my face) and has a great network of supportive people.

Speaking of support, I’ve been getting the most support from my friends and family through Facebook and emails, and those are completely free. 

What’s your best cheap/free way to stay healthy?

Time to Deal with the Budget

Coming into the part I've been dreading...
Photo by Stuart Miles

Now that the emergency fund plan is set up and running, I’m finally able to move forward in the Planner.  Rather than reading it straight through and trying to create some sort of hybrid plan (my usual way of dealing with things, because I always somehow think I know so much more than the experts), I’m treating it like a workbook.  I’m doing the assignments as they come up, and I’m following the directions. 

I despise budgets.  It doesn’t matter what you call them:  budget, spending plan, cash management system… I know perfectly well what they are.  They stress me out.  Quite frankly, they scare me.  I keep finding myself going back to the weight loss analogy.  Who wants to go on a diet or make a budget?  I want to do whatever I want and nobody else can tell me what to do.

I guess we can all see where that particular attitude got me. 

I need to approach this part of the book the same way I am approaching the weight issue.  Namely, I’m tired of living this way.  Following this plan will help and I am dedicated to seeing it through to the end.  I’ve done a great job these last two weeks on the weight-management plan.  I’ve worked out every day, I’ve tracked my calories, I know exactly what’s coming in and what’s going out.  Hmmmmmm…. Kind of sounds like a budget, doesn’t it?? 

Answering the questions in the planner:

Which of these describes how I view a budget?

“I’m afraid of what I’ll find.”

Denial is my problem here, all the way.  I know our income is low and our bills are out of control.  We need to get Comcast and PSE paid this week.  That stresses me out.  I was hoping to toss a little cash that way, but then I remembered that my gas tank is on empty and I promised to make a payment to Elias’s therapist. Since we had to deal with a car issue, that pretty much cleans out the extra from our incredible grocery trip.  Looks like we’ll be calling them this week to ask them to hang tight ‘til Friday.  I hate doing that and I want that to stop. 

Describe the way your parents managed their finances. Did they have a budget?  Who created it?  How did they talk with you about finances?

Would it surprise you that the answer is “I have no idea”?  I had no concept of money or budgets. I had a vague awareness that we weren’t rich, but that wasn’t until I was about 12 and we moved to an old house out on the Peninsula.  I think our suburban two-story new home in University Place might have been foreclosed on, but I have no idea.  My parents divorced when I was 14.  Today, my mother appears to mostly have her finances in order – she is the one who loaned me the Planner, though, so she must have had concerns at some point.  My dad’s finances are, frankly, a disaster.  I suspect he’s actually quite a bit worse off than we are.  That’s a little frightening, since he’s in his 60s now.

What has kept you from sticking to a budget?

We’ve gone through periods where we’ve done pretty well, but I think complacency and denial are always what do us in. We go through a rough patch and don’t want to face the reality anymore, start borrowing from Peter to pay Paul, and pretty soon we are in a major downward spiral.

When was the last time you reconciled your bank statement?

In all fairness, I no longer have a checking account.  I have my Paypal account and with the debit card attached to it, that works fine for me.  Better than fine actually, since I can’t overdraw the damn thing.  My old checking account drove me nuts.  No matter how often I requested that they remove the “courtesy overdraft protection,” it never budged, mistakes happened, and I’d suddenly be drowning in overdraft fees.  Gavin watches his account online, but because he’s not good about keeping track of debit card use and check transactions, we get hit with “surprises.”  That has to stop.

Looks like our next step is to create an equity sheet.  Not sure if I have enough red marker for that.

The $1000 Emergency Fund Plan... As Promised!

Okay, that might be a slight exaggeration... not much, though.
Photo by Bill Longshaw

It’s a miracle!  We have our plan in place!

Gavin and I sat down and worked out our plan.  Just like everything else I tend to dread (I’m looking at YOU housecleaning), it didn’t take nearly as long as I thought it would.  It wasn’t too difficult to work out a solid plan.

My friend Erin was kind enough to forward me an interesting blog post this morning that took a slightly different spin on Mr. Ramsey’s plan.  This plan had a different approach to savings, namely just start saving and then figure out how you’re going to continue.  Without intending it, we had actually done just that. 

I had $50 hanging out in my savings account.  I left it there when I cashed a check.  We also have quite a bit of assorted change in the family jar currently, but I’m not going to sit down and count it all out.  It probably has about $5 or $6 in there.  We’ll work that out later.

Here’s the plan we decided on.  

In order to do this, we will have to go a ways out.  Our goal is to have $1000 in our savings account by the end of the year.  Counting the $50 we currently have, we will need to withhold approximately $40 per Gavin’s paycheck.  It would be $20 per paycheck, but my Paypal doesn’t want to link with the savings account, so we are just going to do it this way.  I know to a lot of folks, that doesn’t sound like much, but that figure makes me a little shaky.  We are going to need to trim a few more expenses to come up with that amount.   We’ll discuss that in an upcoming post. 

We are also going to be contributing any amount of change we can gather into the family money jar.  We’ve had that jar for a while.  We usually let it accumulate for a bit and then use it on a grocery run.  From now on, it’s going to be deposited monthly into the savings account.  We debated whether to use that extra bit to lower our biweekly contributions or to reach the goal faster.  We decided to try to reach the goal faster, but like any other plan, we may eventually decide to tweak that.  We’ll see how it goes.

So there it is:  our plan to save $1000 by the end of 2012.  It feels good to have it in place.  

Will Somebody Please Invent a Perfectionism Cure?

Image by Grant Cochrane

I’m doing it again. 

We are supposed to be figuring out how to come up with that $1000 emergency fund.  It’s been our assignment for nearly a month now and we haven’t gotten anywhere with it. 

Excuse #1:  It’s the holidays.  Who wants to deal with it right now?

Excuse #2:  Rent’s due.  I don’t want to deal with it right now.

Excuse #3:  Gavin’s at work.  I want to sit down and have a real conversation about this, not over Google Messenger.

Excuse #4:  Gavin’s off.  I have other things I want to do. 

Excuse #5:  (I don’t know what this excuse is, but give me another day and I’ll use it.)

I want to come up with the perfect plan, the one that will solve all our problems.  I think I need to accept that that’s probably not going to happen.  I’m determined that the plan will be created tonight and will be posted here tomorrow.  It might not be ideal, but it will be good enough and it will be a starting point, which is all we really need right now.  We can tweak it as we go.  

Facing Two New Year’s Challenges Head On

What does weight loss have to do with money management?
Photo by vorakorn kanopipat

Last night a lot of people made a lot of resolutions to change themselves in the coming year.  Many of those resolutions have likely been broken already.  In years past, I’ve made resolution after resolution, and it’s always the same ones over and over.  I seem to be stuck in a cycle.

This year, they aren’t resolutions.  For one thing, I didn’t make them last night, and I didn’t start them today.  They’ve been ongoing projects, with clear lines and clear plans of attack.  Two of them are, of course, the perennial favorites:  get my money situation in order and get rid of all this extra weight.  I know – fix finances and lose the weight.  Practically a new year cliché, isn’t it?

Well, maybe so, and with good reason.   For me, these two are intricately tied to each other.  I strongly suspect that by fixing one, I will fix the other.  There’s something in my head that just doesn’t quite work right when it comes to these two subjects.  Both appear to come from a fear of denying myself anything.

Why is this?  What is it that I’m trying to make up for?  Granted, I was never taught the best habits.  I find that I am jealous of those for whom these two things come so easily.  I envy those people who claim to love vegetables and exercise.  I’m flabbergasted by those for whom money management is practically second nature.  I feel angry that I’m not one of them, that I have to struggle.  I’m angry that I never learned these skills from my parents (sorry Mom and Dad, I know you read here and I’m not trying to throw you under the bus, but you have to agree that these skills weren’t exactly well-modeled).  I’m angry at myself that for some reason I continue to struggle. 

I’m not a stupid person.  I know perfectly well that eat less + exercise more = lose weight, and spend less + save more = good money management.  But putting those things in practice… it’s a constant struggle.  I can complain until I’m blue in the face about how hard it is to buy healthy food on a budget, and it’s true that it’s a challenge, but I also must make the choice to take that challenge on.  I’m educated, I have no excuse.  I know how to fix healthy meals – I just prefer the taste of salt and fat.

I can complain about how I can’t afford Weight Watchers or a personal trainer – but I do have access to many free programs that can help me and provide practically the same tools.  I can complain about not making enough money, or I can learn to properly manage what I already have.  And when I choose to waste money on meals out or junk food, that is a choice that impacts both areas and affects my progress on both fronts.

So.  I have a plan. I’m dealing with both.  I’m aware of the problem and I’m actively working on a solution.  My mantra for 2012?  No excuses.  No bitching about the problem unless I can find a solution for it.  There’s plenty of things in life that are completely out of my control.  Those things are the ones I should be complaining about. These are the things I can fix.  

Being on a Tight Budget vs. Being a Tightwad

If you can afford to eat out, you can afford to tip.
Photo by worradmu

Remember this post?  It sparked several discussions, and I enjoyed following them.  One of the questions raised was:  “If you can afford special services, shouldn’t you be tipping those people?”

Of course you should.  My post was primarily aimed at people who can’t afford special services and who worry about trying to find extra money in the budget to tip people who are normally a part of life, like teachers and mail carriers and trash collectors.  If you’ve got enough extra money to consider hiring a house cleaner, you should think of the tip as part of the wages you can expect to pay, and budget for it accordingly.

I can’t afford a house cleaner.  I can, occasionally, afford to eat dinner out, on special occasions.  Actually, it’s probably arguable if I can afford to eat dinner out, but sometimes we do, so let’s not quibble about it, okay?  On those rare occasions when I eat out at a place where I am expected to tip, I do so, and I consider it part of the bill.  I would never not tip with the intention of saving money.  That is where you cross the line into tightwad. 

I’m on the mailing list of several “get your money under control” type people.  One of those people is Mary Hunt.  I don’t know if you are familiar with her or not.  She has a pretty decent method for getting out of debt and usually gives fairly good advice about handling your finances.  However, earlier this year, she posted a piece about tipping in restaurants.  I can’t link to it, because you have to pay a fee to get access to her blog (paying a fee to read a blog about saving money?  Sheesh) and I refuse to pay money, when so much advice is available for free.  She posts the blogs on Facebook, and they are accessible for about a week for free. 

Anyway… in this post, she was griping because the restaurant where she liked to eat lunch had raised its prices.  She wasn’t griping about the price increase, though; she was griping because she didn’t like that, based on the 15 – 20 percent tipping rule, the servers “got a raise” because of the price increase. She didn’t think that was fair.  She decided that she was going to tip based on the previous prices.

You should have seen the feedback she got on that one.  If people had had access, she probably would have been run out of town on a rail.  Talk about a tightwad.  I was one of the ones who gave her a good reaming.  Here were my primary arguments:

1. Prices are going up everywhere.  Those servers probably have to pay more for their own groceries, health care, rent, gasoline, etc. etc.  Prices increase at restaurants because the business has to pay more for the ingredients.  They can’t afford to eat the difference.  You can bet the extra isn’t going into your server’s pockets. 
2. In many parts of the country, servers quite literally live off their tips.  They are exempted from minimum wage laws because it’s expected that they will make up the difference in tips.  Trust me when I say that no server is getting rich because tipping 15 percent requires you to leave an extra quarter. 
3. If you can’t afford to tip the proper amount, you can’t afford to eat out.  Period.  

Her attitude throughout this post was appalling.  She sounded so smug and seemed quite convinced that she was above these lowly servers.  I was glad so many people called her out.  

At one point in her life, she was like us.  Struggling and trying to get by.  Through her book sales, speaking engagements and website subscriptions, she’s become quite a wealthy woman.  I think she’s forgotten how it is to depend on others’ generosity. No matter how much or how little money you have, don’t be like that.  Tight budget is okay.  Tightwad is not.

Expenses Expand to Fill the Income Allotted

Her relatives are cheetahs.  Never forget that.

While feeding Minerva (our cat) the other day, I had one of those brain-lapse moments and opened the freezer instead of the cupboard.  As luck would have it, Elias noticed and started laughing at me.  Then he started asking why anyone would keep cat food in the freezer.  I recalled seeing a type of specialty raw cat food that you do, in fact, keep in the freezer.  I told this to Elias, mostly to demonstrate that looking in the freezer for cat food really isn’t as nuts as it might have looked initially. 

“How come we don’t buy Minerva that kind of food?”  Elias asked. 

“Because it’s really expensive and it’s not exactly within our budget,” I answered. 

“If we had a lot of money, we could buy Minerva that kind of food,”  Elias said.

Well, yes, I suppose we could.  At that point the little wheels in my head started turning.  What other little “improvements” would we make if we could improve them?  Although our income was essentially double at this time last year, we really weren’t any better off then.  With the cut in income, we cut down and cut back on every little item that wasn’t essential.  When we had more money coming in, we simply frittered away the extras on those things that were “upgrades” from the bare minimum. 

I think these sort of little expenses are part of the reason that so many people feel like they are constantly broke and can’t figure out why.  People don’t think about these kinds of expenditures.  After all, when we purchase the “upgrade,” it’s usually only a little bit more expensive.   We deserve these little luxuries, we tell ourselves.  Even when it’s just the more expensive cat food. 

I’m not saying deprive yourself of every little luxury in your life.  But the next time you start thinking of making an upgrade to something, ask yourself if a) you can really afford it, and b) you really need it.  After all, if your cat is like mine and spends most of her time laying around purring, I don’t think she really needs an evolutionary raw-food based diet.  She’s doing just great on the Whiskas.  

The Breakdown

It adds up faster than you think.
Photo by Michelle Meiklejohn

Following the directions in the Planner, we’ve been tracking our spending since last Friday.  Here’s our report, warts and all. Take advantage -- be a little voyeuristic!  There’s some ugly stuff on here, so no judgments please.  We are aware of the problem, and that’s the point of this project.  Change isn’t overnight.

Friday:

• Gas   25.15
• Groceries (including Christmas/Birthday gifts)  167.30

Saturday

• Coffee with Dad  6.00
• Red Robin (Mom’s birthday lunch)  32.74
• Lunch at work (Gavin)  8.00

Sunday

• Gift for my brother   20.97
• Breakfast at work (Gavin)  4.93

Monday

• Hulu    8.75
• Gift for Gavin    13.93
• KFC   18.92
• McDonalds   10.05
• Breakfast at work (Gavin)  6.47

Tuesday

• Gas   21.00

Wednesday 

• Parking (for Elias’s appt.)  5.00
• NSF fee through bank   25.00
• Payment on Merrick account (credit card)  23.30

Thursday

• NSF bank fee 25.00
• Breakfast at work (Gavin)  2.10
• Sodas  5.25

Okay.  I can see some serious problems and money drains.  They’re pretty ugly in fact.  But that’s not what we are looking at today.  Our assignment was to evaluate how our spending reflects our priorities.

I can see my family priority reflected in my spending on gifts and the treats on Saturday.  I spent money I really couldn’t afford because I wanted to participate in my mom’s birthday.  Responsibility and health kind of flew out the window when I was feeling lazy on Monday and opted to get dinner at KFC.  Convenience really took over at that point.

Gavin’s priorities weren’t very well reflected in his spending this week either.  Taking care of the family with groceries and Christmas gifts was there, but he also spent a lot of money trying to streamline his mornings.  He will probably say that he is eating out in the morning to keep from waking Maddie up, and that’s his way of helping the family, but it’s clear that we are going to have to find a better solution.

And what about those bank fees?  Neither of us has a goal of keeping BECU in business, so we definitely need to get that under control.  

The next step is to figure out how we're going to save that $1000 emergency fund.  It looks pretty challenging at this point, but we're going to sit down tonight and hammer out a plan.  I plan to post the plan, along with constant updates on how we are growing that $1000.  I think it will be fun to see how it grows!

The Problem of Tipping at Christmas

Are you really obligated to gift everyone who has provided
you with a service this year?
image by digitalart

There’s a certain expectation around Christmas-time that pretty much every single person you had contact with throughout the year needs some sort of tip or acknowledgement.  As lovely as that sounds, for those of us who can barely afford to get gifts for our own families, it can put us in a real bind.

Blog posts and tipping guides abound this time of year, with advice on how to tip everyone from teachers to the person who delivers your mail (who I don’t think I’ve ever met, by the way).  One site that claims to be about frugal living offered tipping advice for nannies, personal trainers and house cleaners.  Clearly their idea of “frugality” is a tad bit different than mine. 

So what am I supposed to do?  When the latest tipping advice suggests $15 to $20 gift cards for teachers, child care workers, and so many others, where does that leave me?  My son is in middle school – he has six teachers every day, and that doesn’t even include the therapists and other professionals who I think deserve tips more than the teachers.  At 20 bucks a pop, that’s $120 right there, over half of this year’s Christmas budget.  I can’t afford to get gifts for my friends this year – it seems unfair to be obligated to gift these other people.

What are the consequences if I don’t tip?  Is each teacher keeping a list and checking it twice, marking off the kids who brought in a gift card and pledging as a New Year’s Resolution to be much kinder to those kids for the second half of the school year?  Will my mail carrier start spitting on my mail if I don’t leave a Starbucks gift card for him in my mailbox next week? 

If you have the means to tip and you really feel like saying “Thank you” to someone who has done an exceptional service for you this year, by all means, knock yourself out.  But if your budget is already strained to the limit and you are only tipping because of a feeling of societal pressure, maybe you should rethink the reasons behind your tipping. 

There’s plenty of ways  to say thank you and acknowledge gratitude without buying gift cards or giving cash.  A nice homemade treat, especially one that your child helped make, is a great way to say thank you.  Better yet – call up the person on the phone and say the words “thank you.”  I bet they’ll actually appreciate that even more than the gift card.  

Our Priorities

Spending money should reflect our priorities.  But first we need to know what those are.
Image by Naypong

So, moving along in the Planner.

After we dreamt about having a million dollars, our next job was to think about our top five priorities.  Gavin, Elias and I all worked on this, with fairly different results. 

I think Elias was probably the most honest in his priorities.  I know what my priorities should be, but sometimes I forget, especially when something tantalizing is in sight.  Gavin didn’t even list “fun” as one of his priorities, but I know that isn’t true.  I also noticed that each of us interpreted the question slightly differently.

Without further ado, here are our lists:

Amee

1. Family
2. Friends
3. Having Fun
4. Responsibility
5. Health

Gavin

1. Being a good husband/father
2. Being a good friend
3. My job
4. Money
5. Myself

Elias

1. Having fun
2. Reading
3. Learning science
4. Colors (his fish)
5. Maddie

I should probably be worried that he considers Colors to be higher priority than his sister, but he is, after all, only 11.  I also don’t think it’s necessarily true.  This morning, he made breakfast for Maddie, but I had to remind him to feed the fish.

So, on to the next question.  How did spending our million reflect our priorities?  Elias’s spending decisions clearly reflect his desire to have fun above everything else.  Because he has Asperger’s, he is also limited in his ability to look past himself and his own desires. 

Gavin felt that using the million to take care of the bills and other responsibilities freed him from stress, which would in turn allow him to be a better father.

I felt like my desire to have a house represents my need to put my family first. 

Our assignment for the next week is to track our money that we spend.  This is where things always tend to fall apart, but we’ve done alright for the first couple of days.  I don’t think it will be a fair representation of our spending habits, though, since Gavin is in between paychecks and we’re trying to cope with Christmas being right around the corner.  We’ll report the results when they are in, though.  The goal is to see if our spending habits reflect our priorities. 

What are your top priorities?  Do your spending habits reflect them?

My Favorite Charities

No matter where we stand, we should continue to help others.
Image by David Castillo Dominici

I’ve read my share of “manage your money” books.  And one of the major tenants of any program involves giving to those in need.  I believe in this completely.  Even when I am not in a position to donate money, I still make the effort to donate time. 

For example, I am currently donating my time and editing talent to DailySource.org.  This nonprofit provides an unbiased collection of news from different sources, providing a brief summary and a link to the source.  The site strives to stay free of left/right politics, and I respect that.  Additionally, it has been a fantastic place to hone my skills, and I have learned a lot about website editing and AP style. 

With the holiday season here, many people are in a very giving mood.  Before spending money on more stuff that you don’t need, consider making a donation to a charity that is actively working to make lives better.

Gavin and I support several charities.  Some of our favorites include:

• American Cancer Society – Not just about finding a cure, ACS works to help patients affected by cancer and their families.
•  Autism Speaks – I have participated in the walking event, raising money for this organization.  Autism has deeply touched our family, and this charity is working to find solutions.
• Boy Scouts of America – Elias is a Scout and it has done wonders for him. 
• Child’s Play – This charity was founded by gamers.  The goal is to make gaming systems available to kids I hospitals so they have something fun to do to take their minds off treatment.
• Humane Society – We got our Minerva from the Humane Society.  Before buying a pet from a pet store, check here to see if you can give one of these wonderful animals a home.
• Make-A-Wish – I think everyone knows this charity and its goal.  Make-A-Wish does phenomenal work.
• Northwest Harvest – A local charity that helps put food on the tables of people who need some extra help.  We have been fortunate enough to not have to use this service ourselves, so we will continue to donate food to this program.
• Northwest Hope and Healing – I did a 5K for this charity.  They work to provide help to women undergoing treatment for breast cancer, from providing financial support during the times they can’t work and even helping with child care during chemotherapy.
• World Vision – I am hoping to participate in child sponsorship one day, although I have supported this program financially.  I know people who have sponsored through this charity and they were very happy with it. I think this would be good for teaching Elias more about the world, as well.

If I Had a Million Dollars....

BNL back in the day....

This was a fun assignment in the Planner.   Each person in the family has an opportunity to create a list of what they would do if they had a million dollars.  There’s obviously more to this assignment, but we’ll take it one piece at a time.  I created my list, and I asked Gavin and Elias to create lists as well.  Maddie is exempt…

My list:

• Buy us a new home, nothing too fancy.
• Buy a newer car.
• Pay off all of our debt.
• Help out family members and friends who need it.
• Donate to charities.
• Set up an investment plan, including 401k.
• Finish school and go for my Bachelors, and maybe a Masters.
• Take a nice long vacation, maybe do some travelling.

Gavin’s list:

• Pay off medical bills and all other debt we owe.
• Get Elias into the school that specializes in working with autistic children.  (This is a really good one and I wish I’d thought of it).
• Buy a home (about 300K).
• Place enough money in the bank for the kid’s college (about 60K).
• Send Amee back to school so she can get the degree she wants.
• Buy new vehicles outright.
• Place a good amount of money (about 300K) in the bank for our retirement.
• Donate to a charity like Child’s Play (or another children’s charity).
• Host a thank you party for family and friends to thank them for all the past help.
• Buy new PCs for the home.
• Invest the rest into accounts to protect it, while still having dividends to use as we may need them.

Something interesting I observed about both of our lists:  Neither of us said that we would stop working.  We would use the money as a buffer, but we still plan to earn our keep. 

Elias’s list:

• Buy a house that I don’t have to keep paying bills on.
• Buy myself some new clothes.
• Buy a car like the one we have now.
• Buy an indoor movie theater.
• Buy my own Xbox 360 with Halo and Fable.
• Buy a desktop PC.
• Buy a widescreen TV.
• Donate to the army.
• Donate to some hospitals.

Spoken like a true 11-year-old boy, I guess.  Looks like we’ll need to keep working on that whole “materialism” thing with him.  The last two came only after I prompted  him with “Is there anything else you would do with it that doesn’t involve buying things?”  I’m not entirely sure what he means by “donate to the army,” but I didn’t press for details. 

Coming up next – a discussion about values.

What would you do with a million dollars?

Catching up on the Financial Peace Planner: Stuffitis

The problem with wanting the best
Image by Danilo Rizzuti

Have I been procrastinating on keeping up with the Planner program?  You bet I have.  One of the goals of this blog is to make myself accountable and practice building good habits.  But it’s so darn easy to fall back into the old habits.  Procrastinating, pretending my bills don’t exist, putting off the hard work.  It’s a lot easier to write fun blog posts about chicken recipes and try out new and cheaper ways of doing things than it is to face up to the major problems. 

Major Problem Number One:  According to the Planner, I have “stuffitis.”  I try not to.  But I do.  Apparently if you check more than one statement in the little quiz, you have it.  I checked two, so it’s only a slight case and, most likely, curable.  Gavin has this condition far worse than I do.  That’s not me placing blame; he’s totally upfront about it. 

Here’s the statements I checked:

1.  “It’s not unusual for me to say ‘It’s only a few dollars extra’ when I’m shopping for something I want.”
2.  “So I spent $100 on a pair of running shoes.  The top of the line lasts longer.”

I can sit here and try to justify those responses (and believe me, I can justify damn near anything), but I’m not going to.  I’m going to accept that this is a problem.  It does no good to catch a great deal on chicken if I go out and blow $40 on a dinner out because I didn’t feel like cooking.  I have several bills piled up on my desk that I could be putting that $40 towards, and there’s really no excuse. 

I do like to have nice things.  When I can get nice things at a lower price, it can sometimes be seen as a justification to purchase something I don’t really need.  This time of year is especially difficult.  I don’t just like to have nice things, I like to give nice things.  It’s fun to have someone unwrap something you got them and see a big smile on their face because it’s just what they wanted. 

If you look around our place, you might say “How can these people be in financial trouble?”  We have two desktop PCs, our son has a laptop, we have a flat-screen TV, an Xbox, a Wii… and that’s just the living room.  Well, the PCs have been mostly cobbled together (it’s nice to have a hubby who knows his way around a computer), the laptop was purchased several years ago and is no longer of much use other than as a word processor, the Wii was purchased as a family Christmas gift quite some time ago, and the Xbox and the flat-screen were both donations from people who had more than one. 

So why don’t we just sell these items and pay off the darn bills?  Well, I work online, and Gavin sometimes has to communicate online with his job, and we both really like our games.  So, come to think of it, I actually meet one more of the criteria for “stuffitis”:  “I can’t get rid of my boat/truck/Andy Warhol print.  That would leave a huge hole in my life.”  Just substitute TV/computer/Xbox for the other items.

I’ll keep working through Chapter 2.  This is usually the point where most debt plans make you actually pull out all your bills and figure out your debt.  I have to confess:  I’m pretty scared of that part.

Cheap and Easy Meals with Chicken

Stir-fry is a great way to use chicken breasts.
Photo by Sura Nualpradid

Today we scored a really good deal on chicken breasts.  We got a 10-pound bag of frozen chicken breasts for $1.66 per pound.  That’s a lot of chicken at a really good price.  So, what are our plans for all that chicken?

Chicken Tacos

• 1 lb. chicken breasts (frozen is okay)
• 1 cup chicken broth
• 1 packet taco seasoning
• Soft or hard taco shells
• Favorite taco toppings

Place the chicken breasts in the crockpot.  Mix the taco seasoning and chicken broth together.  Pour over the chicken.  Set to low and cook for 6 to 8 hours. 

When chicken is ready, shred with forks.  You can add in another pound of chicken breasts to have leftover meat for nachos or enchiladas.

Poor Man’s Cordon Bleu

• 1 lb chicken breasts
• Laughing Cow cheese wedges, or cream cheese
• Ham lunch meat
• Shake ‘n’ Bake or bread crumbs

Flatten the chicken breasts using a meat mallet.  Spread each breast with a cheese wedge, or about 2 tbsp. of cream cheese.  Place a slice or two of the lunch meat over the cheese.  Roll each chicken breast and secure with a toothpick.  Cover outside of the chicken in Shake ‘n’ Bake mix or bread crumbs.  Place in a baking dish that has been sprayed with cooking spray.  Bake at 375 F for 45 minutes or until done.

Mexican Chicken Soup with White Beans

• 1 lb. chicken breasts
• Onion
• Minced garlic
• 1 tsp. dried oregano
• 1 tsp. dried cumin
• 2 15-oz. cans white kidney beans
• 3 cups chicken broth
• Cheddar cheese

Cook chicken breasts in a nonstick skillet with about 2 tbsp. of olive oil until they are no longer pink on the outside.  Place in a slow cooker.  Add a little more olive oil to the pan and cook onion (however much you like, I use about ¼ of a sweet onion), a clove or two of minced garlic, oregano and cumin, just until the onion is soft.  Add this mixture to the slow cooker. 

Drain and rinse the kidney beans, then add to the slow cooker, along with the broth.  Stir well. 

Cook on low for about 8 hours.  When cooking time is complete, use forks to shred the chicken.  Mash beans against the side of the crockpot with a large spoon to thicken the soup.  Garnish with shredded cheese.

Chicken Stir-Fry

• 1 lb. chicken breasts, cut into bite-size pieces
• Assorted fresh vegetables, we like carrots, snow peas, celery, mushrooms, sliced
• Canned, sliced water chestnuts

Sauce ingredients:

• ¼ cup soy sauce
• 1 tbsp. minced garlic
• 1 tbsp. rice vinegar
• 1 tbsp. ketchup
• 2 tsp. minced ginger
• 1 tsp. sesame oil

In a large skillet or wok, cook chicken in 1 tbsp. vegetable oil or wok oil over medium-high heat until cooked through.  Add vegetables and cook until desired texture is reached.  Add water chestnuts.  Mix sauce ingredients together and add to pan.  Cook a minute or two until sauce thickens slightly.  Serve over hot rice.

What are your favorite ways to use chicken breasts?