February 23, 2014

Financial Myth: You Deserve It

The other day, a friend of mine was so excited. She was smiling from ear to ear and had announced that she just purchased a new car. I could see the new car outside. It was bright and shiny and of course, new. I overhead someone say, “Congratulations! You deserve it!”

Financial Myth: You Deserve It by TheThriftyMommy.com

You deserve it. We hear that so much today. You deserve a new car. You deserve to go on a big vacation. You work hard. You deserve some new living room furniture. You deserve to go out to eat. You deserve that candy bar.

Do you deserve it? Do you deserve to experience a great depreciation in your car as soon as you take it off the car lot? Do you deserve five to eight years of car payments? Do you deserve to be so wrapped up in debt that you can’t afford an emergency? Do you deserve the bondage of debt?

We are quick to rationalize our indulgences. Rationalizing bad behaviors leads to regret and sometimes worse behaviors.

Instead of telling ourselves that we deserve it, we should ask ourselves if we have earned it. 

It wasn’t long ago that I was driving a $1,000 mini van. I drove it for about a year. My husband piddled with it here and there to keep it working ok. The slider door didn’t work well, it was a little rusty, and it wasn’t very attractive. I saw people driving around with new vans and cars. It would have been nice to have a new mini van — one that had that new car smell, that didn’t have rust, didn’t make a squeaking noise, and one that the slider door worked properly.  Sometimes I would feel a little embarrassed about my van, but then I had to remind myself that I didn’t have a payment. It is really financially freeing not to have a car payment.  While driving our old mini van we were able to save up a little and now we have a $4,000 mini van. It’s not new and I’m ok with that. I don’t deserve a new mini van until I have earned the cash to pay for it. Honestly, if I had that kind of cash, I probably wouldn’t spend it on a car anyway.

I find peace in being content. There is not a constant drive to keep up with someone else. There is no guilt or regret from purchasing something I can’t afford.

Of course, I have made my own financial mistakes along the way. But they are mistakes — mistakes I have learned from. If you are currently living with financial mistakes, I hope that you will take baby steps to correcting those mistakes. Let’s change our entitlement attitude of “I deserve it” to one of “I have earned it”.

image credit: seanandlauren


Karen

August 14, 2013

Ways That We Save Money Each Year

Sometimes when I see the way the rest of the world lives I wonder how they afford it. Sometimes I wonder what they think of me. I don’t drive a nice car. I don’t have fancy clothes. I try not to think about it much. I’m not living my life for them anyway.  It is very apparent though that there are some things my family does to cut back on expenses.  Sometimes we do these things just because we can and because we like to save money.  Right now though, many of these are necessities to getting by every month.

Some things on this list may seem crazy to you.  That’s ok.  I was considering a few titles for this post.  One had the word “crazy” and another had the word “extreme”.  I don’t think these are extreme or crazy so those didn’t seem to fit in the title.  Perhaps these items will make you think and wonder if you could do one or two of these to help save your family some money.

ways our family saves money

We don’t make coffee runs. I enjoy my coffee just as much as anyone but I just can’t justify spending that kind of money on an indulgence.  Coffee can cost $2-5 per cup. I can make a lot of coffee at home for that price. I know of some folks whose coffee habit cost them over $100 per month. That’s a lot of money!  I don’t mind getting a coffee treat every now and again, but these treats might be once a month. They are certainly not a daily habit.

We don’t have a car payment. You may be wondering how in the world I can have three cars in my driveway and no car payment.  I have always been a frugal gal, but about 7 years ago my hubby and I took Financial Peace University classes at our church.  We sold our van.  Actually we paid the dealership $1,000 to take it back. Yes, that hurt.  Since then we have been buying used vehicles. It doesn’t matter if it’s a $700 car to get us by for a year until we can afford something better or a $3000 vehicle that we can drive for a while, we pay cash.  Some people say that they want a car that they don’t have to worry about or they say they can’t afford to make repairs.  If I’m not paying $350-500 per month in a payment, I can easily justify making some repairs from time to time.

We limit hair appointments.  When my hubby was in the Marines, he got plenty of experience cutting hair while on ship.  He cuts his hair and my son’s hair.  That alone saves us about $200 or more per year.  I also limit my hair appointments.  To be honest, I don’t go to the salon as much as I would like.  It makes me cringe to spend that much money on my hair.  I have longer hair so I can get by without making frequent visits to the salon.  If you have a regular appointment scheduled for every six weeks, maybe try to go seven or eight weeks and see how it goes.  You might be able to go another week or two which will save you money over time.

We don’t get manicures and pedicures.  While nails look attractive, I can’t really spare an extra $40 for my nails to look good.

We don’t smoke.  Smoking is an extremely expensive habit. Enough said.

We haul off our own trash.  When we lived in the city, it was nice to roll our trash out to the curb every week and not worry with it.  Of course, we paid for trash removal in our city taxes.  Now that we have moved to another part of the state, they do things differently around here.  In some areas you pay per bag.  We just decided to make trips to the landfill.  Every two or three weeks my hubby and son haul off all of the trash and recycling.  I’m guessing that this saves us about $50 per month.

We do our own yard work.  Well, actually, my hubby does the yard work.  🙂  He mows the grass, uses the weed eater, puts out grass feed, and whatever else needs to be done.

We drink water. When we go out to eat we always order water. The exception is if the kids’ meals come with a drink.  Think about it — If your family of four goes out to eat and orders four drinks, that will cost you around $8. There’s quite a bit of savings for choosing water.  Even at home we drink water. Sodas and sugary drinks aren’t good for us anyway.  We have a water system in our house and another filter on our refrigerator so we just drink it from the tap.

We pack our lunch. When I was in college and worked at a restaurant, I would see people that came in to eat lunch every day.  Every day!  Eating out every day is so expensive. I’m not saying I don’t like to eat out. Trust me, we like to eat out.  When we do, it is using coupons, sharing meals, or as a treat. It is not an every day thing. I have also seen people eat in the school cafeteria every day.   Those $3, $5 or more each day add up quickly.  I try to pack leftovers, a sandwich, and I try to keep things like peanut butter and hummus at school for those days when I’m extra hungry or I don’t have time to prepare something.  You know what?  I’ve heard Dave Ramsey say he also packs his lunch.  He can afford to go out to eat and chooses not to because it’s not a frugal option.

We limit costly entertainment options.  I can’t even tell you the last time I went to the movies.  It’s not that I don’t enjoy going to the movies. I just can’t see paying such high prices just to watch a movie.  We have learned to look for free and cheap events in our area.  Whether it be a trip to the beach, a museum, state park, parade, or a festival, we find things to do.  I look online for happenings in our area.  There are also free pamphlets and papers listing events. Do a google search and see what you can find.  These kinds of events are more memorable for our children and are certainly better for our budget.

We don’t have a dog. I know that dogs are like a part of the family and if I had a dog, I certainly wouldn’t get rid of it just to save money. But I don’t have a dog and right now another animal is not on my list of priorities.  Dogs are expensive — the shots, deworming, medicines, vet bills . . . whew I am seeing visions of dollar signs.  I love animals and I have two cats. This is just one of the things my husband and I have agreed not to spend money on right now.

We constantly look for good deals.  My husband and I tend to be conservative on our purchases. Rather than going out and spending $200 on a camera we see in store, we’ll spend two or three hours at home reading about the camera and looking for reviews. Instead of buying our clothes full price we shop the clearance racks or look for great sales.  I just shopped a back to school sale on a tax free weekend and used a $10 coupon and bought myself some shirts for work.  I try to know the cycles for when items are at their lowest prices. For example, I know that Target has deeply discounted toys twice each year.  I know that November and December are the months when cream of mushroom and cream of chicken soups will be the cheapest.  We try to be good stewards of our money and make it go the farthest that we can.

We don’t have the latest in technology.  In fact, I don’t even have a smart phone. I just can’t see spending $30 or more each month. This equals almost $400 per year!  We don’t have iPads or iPhones. My son just recently got a used DS. haha. Contrary to what many people think, technology is not a necessity.  It’s not air and water.  If your job requires you to have a smart phone, then so be it. Checking facebook, twitter, and email on the go is not essential.

When possible, we buy used.  This can include toys, furniture, bicycles, etc. (The exception is used mattresses.)  Some of my favorite pieces in my home are used.  I like the thrill of finding a unique item.  I am also teaching my children the value of buying used.  A few years ago my daughter wanted some Polly Pocket toys.  She went to Target with her birthday money and came home with one small toy for $14.  She was sad at how little she got for the money.  I told her I would look online to see what I could find.  We ended up finding a big box of Polly Pocket stuff – mall, pool, clothes, dolls, etc for $40.  The cost of these things would have been over $200 new.  My children have learned that they get more for their money this way.

We pay cash. This is probably the biggest way that we save money.  We just moved into our new home seven months ago. I would love to have new blinds and curtains throughout my home. New wall hangings, shower curtains, rugs, I could go on. If I just swipe that credit card I can have it all now.  The problem with that is, there comes a day to pay our debts and with interest.  I choose not to be in bondage of debt.  Sure, I would really like to have those things but for now, I am trying to be thankful for all of the other wonderful things I have and know that in time I will furnish my home.

I know that these tips may not work for everyone but they help my family out tremendously.  I’m estimating that these things alone keep my family from spending over $10,000 each year!  In what ways does your family save money?

image source: kwod from sxc.hu


Karen

July 20, 2012

10 Ways to Save Money on Your Car Insurance

Just recently, I received a bill to renew my car insurance. I glanced at the bill and was getting ready to make a payment when I noticed something — this time there was a pay in full discount amount.  I began to look over my bill more closely.  Normally I pay a $3 monthly installment fee so that I can make payments for my auto insurance.  Considering I don’t have to plunk out $450-600 at a time, I didn’t think the $3 per month was too bad.  But when I factored in the pay in full discount, it makes a big difference.

 

By paying the full amount up front, I was able to get a discount of $39.90.  Also, by making the full payment I avoided paying an extra $18 in monthly installment fees. This made my savings a whopping $57.90.  Quite a bit a difference, don’t you think?

Here’s a few ways to save on your car insurance:

1.  Ask for a pay in full discount such as the discount I received. If you can’t afford to pay the full six months, perhaps you could afford to make two payments – half up front and half later. It doesn’t hurt to ask.

2.  Ask for other discounts.  Some insurance companies offer discounts for military or students with good grades.  Periodically we call our insurance company and ask for discounts.  We have been with them for about nine years. When I call them I ask for a good driver discount. We’ve had no tickets or wrecks so we are considered safe drivers.  Or you could ask them for a loyalty discount.  There are all sorts of discounts available. You just need to ask.

3. Compare prices.  It pays to shop around and compare prices of different companies.  Be sure you’re comparing similar coverage though. It wouldn’t be a good deal to save $25 and not receive the coverage you need.

4.  Ask about a higher deductible.  Some financial advisers will tell you to always get a higher deductible.  I would have to disagree with that one.  Compare, compare, compare.  We have a zero deductible and there wasn’t much difference in price.  Don’t assume that it will be way cheaper to get a higher deductible, but then again, it could be.  I would recommend making a list of companies you want to call and writing notes on prices for different types of coverage and deductibles and then comparing rates.  An hour of your time could save you hundreds of dollars.

5.  Check into a company’s reputation.  With all of the online rants and reviews, it is fairly easy to research a company.  Also, ask around to your friends and locals.  Find out who they use and if they are pleased.  It’s not a good deal if you are with a company that won’t answer your calls or help you when you need it.

6.  Carry multiple policies with the same insurance company.  Many companies offer a discount if you hold more than one policy with them.  You could have your homeowners, renters, or life insurance policy with that company. Ask if they have a multiple policy discount.

7.  Drive a low profile car. Some cars have a reputation for speeding tickets and trouble and therefore the premium for them is higher. Annual reports are available that  list the most stolen cars in the country.

8.  Keep your credit in good standing. Until recently, I didn’t realize that insurance companies check your credit regularly. A few months ago we received a letter from our insurance company stating that our rate would be higher because of an issue on our credit report. We did some investigating and found an incorrect claim that we had to dispute and get corrected. Without the insurance credit check, we wouldn’t have known about the error or that insurance companies check on people.

9.  Maintain a safe driving record. This one seems like common sense, but a ticket or accident could really raise your insurance rates.  Pay attention to speed limits and school zones.  If you do get a ticket, see if you could take a safe driver course to reduce the points and insurance premium.

10.  Drive less.  Some insurance companies offer low mileage discounts for those that carpool or drive a low amount of miles each year. I once received the discount because I worked less than five miles from my house.

Making calls, comparing rates, and asking for discounts can save you hundreds each year.  Make sure you have enough coverage and be safe.

What other tips do you have to add?

image (c) Karen Weideman


Karen

March 5, 2011

Professional Tax Help May Be Needed

Each year I procrastinate getting my taxes done.  All of the itemizations and deductions are confusing and many times overwhelming.  Thankfully, I have an established relationship with an accountant in our area.  She is so nice and doesn’t mind me emailing her with questions.  All of this craziness is making a flat tax sound all the more appealing.  Why do we all have to go through this each year?  But that’s another rant for another day. Back to this whole tax mess . . .

The adoption tax credit has changed, there are rules about purchasing a new home, selling a home, and what if you receive a monthly housing allowance? 

If you’re the common man (like me), this sounds like a foreign language to you.  Don’t give up just yet.  You want your taxes done correctly and you want to receive your money without delay.  Forms that are filed incorrectly can delay refunds.

All of these new  laws and extended tax credits make it really hard for a person to file their own taxes.  I am known for being a thrifty tightwad money saving cheapskate, but here’s one time I cringe and shell out the money to a professional.   

Of course, there are some ways to save money on your tax preparation expenses.  Have your papers organized and deductions itemized by category.  Don’t make the tax preparer search through your papers.  Since they usually charge by the hour, this will only cost them time which costs you money.

Remember that the IRS has set up a handy YouTube channel to help answer some of your questions.

Will you hire a professional this year?

image sxc by YM


Karen