Wednesday, October 31, 2007

Clearing out the Clutter

Clearing out the clutter from my cabinets and closets is therapeutic for me. It seems that debt and clutter are very similar in the way they clog up and stress out your life. You can't get to the back of the closet because too much junk is blocking your way. Debt is much the same for me. It's like an obstacle course that I have to push my way through and clean out before I get to the end. And I am not there yet.

Right now, I have about 15 things I need to sell, and much more I need to give or throw away. Even though I cleared out closets and cabinets when getting the house organized for a new baby six months ago, here I am again finding myself with a pile of junk that needs to be thrown away or sold.

The question that remains is... will the debt come back once we get rid of it like the clutter does?

If it does, I am going to have to learn to be more vigilant about clearing out the clutter. I want to form habits that never let debt (or clutter!) come back into my life once I am freed from it.

Monday, October 29, 2007

Using Bargaining to Save

After trying out the gym for seven days, and doing some research on other area gyms and exercise classes, I decided to join the gym I tried last week. Not only was the price comparable to other options, the gym offered lots of evening classes that I can join in for no extra charge, and I felt more safe in the parking lot of the trial gym versus the other area gyms, which was very important to my husband as well.

Although I chose the trial gym as my first choice, I wasn't happy with the cost, and after meeting with the sales rep for the gym, I had a feeling that the monthly fee might be negotiable. I had a brand new outlook after listening to old Dave last week, so I decided I didn't care if they thought I was poor. :)

I was told the rate was normally $49, but if I signed up before the end of the trial I could get it for $39 per month and $99 enrollment fee. I emailed the sales rep on Friday and I offered a much lower rate than he had previously told me. I said I could pay $30 per month, no enrollment fee. He countered with what turned out to be his best offer- $35 per month and the enrollment fee was mandatory for all members. I was happy with this, as it was what I was hoping for, but I countered again and said I would come in that day if he could get it down to $32. He wrote back that he couldn't go any lower and to get that rate he placed me as a corporate account. So I accepted the $35 per month, as I know I will get good use out of the membership.

The lesson I learned here was don't be afraid to bargain- for anything, even a service. If they say no, what have I lost? If they say they can't go lower, then I choose whether I want to buy it at the original price. But by simply asking for a lower rate, I saved $48.

Here is the definition of frugality from wikipedia:
Frugality (also known as thrift or thriftiness), often confused with cheapness or miserliness, is a traditional value, life style, or belief system, in which individuals practice both restraint in the acquiring of and resourceful use of economic goods and services in order to achieve lasting and more fulfilling goals. In a money-based economy, frugality emphasizes economical use of money in meeting long term personal, familial, and communal desires.

Being frugal with my husband's hard earned money is very important to me. Because the value of being in shape and losing weight is important to my long-term goal of being healthy and fit, my husband and I decided to allocate money to a gym membership. I researched my options, and by bargaining to obtain a lower price, I practiced frugality.

It's important to remember that you never know where you can save money! Give bargaining a try next time before you pay full price.

Friday, October 26, 2007

Great Thought on Personal Finance

I was listening to Dave Ramsey the other day and he read an email that said (a paraphrase here):

The poor get poorer by acting rich, and the rich get richer by acting poor.

That really struck me. The people I know that are extremely wealthy seem like some of the poorest people I know. They are serious penny-pinchers. An older man who owns half of the town I grew up in walks around in holey sweats and nasty tennis shoes. My husband's grandfather who is quite wealthy still uses a water-heater timer and helped build his own house instead of paying people to do it.

We got in debt by acting like we could afford the new car, the new house, the dog. We didn't think twice about debt because it was such a natural way of life, we thought. Who saves money to buy a car when you can make 60 easy payments?

I used to think acting poor meant you were actually poor, but as I get older I am not afraid of how "poor" I seem to other people. I am the one responsible for my bills each month, and their opinion of me is not going to fund my retirement account or send my kids to college.

$10 off $25 at Lowe's

This is a great coupon, as Lowe's doesn't often give them out. Just fill out the registration form to receive the $10 off $25 coupon by email.

Wednesday, October 24, 2007

Gym Membership- Worth the Cost?

Since I had my youngest eight weeks ago, I am really wanting to jump start my exercise and weight loss. I have been running for about 4 weeks getting ready to run in a 5k, but it doesn't really make me feel stronger. I know with my first child, I got in shape and lost weight in a church aerobics class that cost $5 per month. It was a steal, and they provided childcare during the class!

We've moved since then, and the gym closest to us costs $39 per month plus a $99 enrollment fee. I have begun a 7 day trial of the gym, and I like it so far. Both the Turbokick class and the Pilates class were extremely challenging and would get me in shape fast. I have to let the gym know I want a membership before next Monday or it will cost $49 per month.

Both prices seem extremely high to me. This is the nicest gym in town, and I haven't checked any other gym prices. I know there is a Jazzercise class at a nearby church, but it's farther away too. I am willing to spend money to get back into shape, but how much is too much? We can "afford" the extra money, it would just take away from our debt reduction.

I know I need to go somewhere to exercise, and on a schedule. I need people to know I am supposed to be there, because it helps me to be more accountable. I have tried all kinds of home exercise options, but with three needy little ones and housework to do all around me, I just can't be home and exercise. So an outside place just works for me, and I am willing to pay for it.

Now I just need to call other gyms and see what they have to offer as far as classes and prices. I also need to check with that church for their prices as well. I want to get in shape as frugally as I can!

Tuesday, October 23, 2007

Birthdays on the Cheap

Since we are trying to get out of debt, we planned on spending a much smaller amount on gifts and parties during our family birthday season. We stopped doing big birthday parties this year, because it was a ton of stress to get it all together and then the cost of the actual party was far more than we wanted to spend three times a year. We decided to do only immediate family birthday parties after the first birthday, with just cake and ice cream.
This year, instead of buying a cake at the store, we made a birthday cake at home for our four year old. He loves Veggie Tales, so we made a Larry and Bob cake. It certainly wasn't a beautiful cake, but it only cost us about $4 instead of $12-15 like we would normally spend for much less cake. It did take a lot more effort than just buying one at the store, but the money saved and the specialness of the Larry cake made just for my little one made it worth the time spent. He loved it even more because it resembled (I use that word loosely!) Larry the Cucumber.

Monday, October 22, 2007

$20 off $50 at Office Max

Here is link to the coupon for $20 off $50.

Saving Money Dining Out During Birthday Week

Whew- what a busy couple of weeks we have had. We celebrated two birthdays and have one more to come this week. We usually dine out to celebrate, but we have been trying to be more cautious with our spending. My dad and mom took us out three times, but no one will be coming tomorrow. Which means we have planned to spend about $35 to dine out at our favorite restaurant.
One way we save money on dining out is to sign up for restaurant clubs. I have received so many coupons for free food at places like Fazoli's, TGI Friday's, Johnny Carino's, Quizno's, etc. Many have birthday clubs where you get a free meal or appetizer on your birthday- I just got a $5 gift certificate to McAlister's and a free appetizer at Johnny Carino's for my birthday (That saves at $12-$13 right there). I will probably use the appetizer as my meal to save even more money. It's so much more enjoyable to eat great food when it's free!

Tuesday, October 16, 2007

Frugal Thinking is Becoming Part of Me!

Last week I went shopping to find a nice outfit for my birthday. I went to my favorite store on Wednesday and found a pair of pants that I absolutely loved. This pair of great pants was not on sale this week, and since I am on a budget, I just couldn't bring myself to automatically pay full price for any clothing I buy. I hated to leave them behind, but I knew I hadn't done any pre-shopping online to see if the price was competitive.

I went home to do some research. I found the pants were out of stock online and that any available internet deals would be negated by the shipping costs. Add that in with the fact that the pants would probably not arrive within the week, and I decided I would probably have to purchase the pants in store.

Before I would buy them, I made myself go to other stores with coupons in hand to see if I could find a better deal on similar pants. After hitting all my favorite stores, I finally made it around to the store to try on the pants once more. When I arrived, they had started a weekend sale on all pants- $10 off. I tried my favorite pair on and still loved them, so I bought them at a newly discounted price.

This experience really had an impact on me- I realized that without a conscious effort, I didn't make an impulse buy like I would have in my less frugal days. I waited and shopped around online and in other stores to make sure I had the best deal, and it didn't bother me at all. I took a few days to really think about the purchase before I made it and my patience paid off in the form of $10.81.

Monday, October 15, 2007

Saturday, October 13, 2007

Getting Started on the Envelope System

After I read the Total Money Makeover by Dave Ramsey in May, we really started getting serious about being on a budget. We had previously heard of the envelope system (a system where you use only cash, and each budget category has an envelope with a budgeted amount of cash in it), but at that point in our lives we were quite skeptical about using only cash. We didn't really believe that using envelopes would be any different than using our debit card- we wanted to change our finances, but thought using cash required too much weekly effort.

In July of this year, we decided to give the envelope system a fair chance. We made out our budget for the month based on what we spent out of our checking account the month before. I decided in the budget how much I was going to need for each category of cash spending: gas, groceries, and miscellaneous (which included clothing and gifts). For the monthly bills, we write checks and use online bill pay as much as possible.

The consumer in me wanted to purchase a tool to get started on (read: reward myself for using) the envelope system. Dave Ramsey's website has a beautiful *deluxe* envelope system that holds everything. But before purchasing it, I decided I was on a new path- a frugal one, where it was ridiculous to spend $20 on envelopes! Instead of spending money on it, I decided to ask for extra money holders they give you at the bank.

So off to the bank I went. I added up the total of spending categories for the two week period and wrote a check to cash. I asked the teller to break it up into the amounts I noted on the check. I ended up with three separate envelopes with different amounts of cash in each.

Taking care of the logistics of the envelope system turned out to be the easy part. The next two weeks of existing without using a debit card was a challenge to the lifestyle I had lived since I opened my first account at 16.

Instead of an easy swipe to spend money, I was seeing it leave my envelope. I felt like a middle schooler finally spending their hard-earned allowance. I had forgotten what spending money was really like. It was so much harder to give up $20 in cash for gas than it had been on a debit card.

Using the envelope system for those first two weeks really changed my perspective about spending. Since we had already planned our budget for the month, I knew that the money in that envelope was just enough to cover two weeks worth of expenses. Not spending money became a huge priority, because I didn't want to run out.

Now that we have been using the envelope system for a few months, I wouldn't go back to using my debit card. There are occasions when we have to use it because we haven't been to the bank after payday, and I hate it because I feel like I don't know how much is there to spend, and then I have to figure out how much less cash I should get in each envelope. Cash has gone from being inconvenient for us to being the most convenient option for us.

We have made some mistakes along the way- like not budgeting enough money for the month- but using cash has certainly reaped great rewards in our finances. We spend much less money than before and I am much more careful to find the best deal so I don't waste our limited weekly cash supply.

If you haven't used an envelope system before, I would definitely recommend trying it for at least one pay period. Once you start using cash envelope system along with a budget to control your spending, you will really start to see positive results.

If you are just starting out using an envelope system, here's how to get started based on what we learned:
1. Make a realistic budget based on the previous month's or pay period's expenses.
2. Categorize your cash expenses (for us it was gas, groceries, and miscellaneous- other categories might be entertainment, clothing, dining out, gifts, etc.).
3. Go to a bank or ATM and get cash. Place it in envelopes according to category.
4. Spend money only out of the envelopes. When it's gone there's no more to replace it (this is the hardest part!). Any money left over each week could stay in the envelope or go to savings, another category, or debt reduction.
5. Repeat 1-4 every pay period- as soon as possible after each paycheck so you aren't tempted to spend with your debit or credit card.

Thursday, October 11, 2007

Tylenol $5.00 Off Coupons

Tylenol is offering $5 off their products (any Tylenol, Motrin, PediaCare, Benadryl, Sudafed, St. Joseph, or Imodium products) due to the recent recall of children's medicines. You can print 2 coupons, or call the number listed and get them sent to you in the mail. $5 off makes many of their products totally free!

Toys 'R Us Freebie Coupon

Toys 'r Us freebie link over here.

Second Emergency Fund Brings Security

Philip over at Wisebread wrote about having a second emergency fund you never spend. A kooky idea, he says, but it really resonates with me. Since we got on a budget and saved for an emergency fund, it has changed the way we look at money. Having money saved in a separate account makes a huge difference in the way I feel about our financial security.

I no longer feel that we desperately need money- on paycheck day I don't worry if the money got into the bank before the cut-off time. Debt creates an anxious feeling in the pit of your stomach, and it's gone now that we have an emergency fund.

Having an emergency fund for us is a psychological safety net. It makes you feel like you are in control of your money, instead of your money controlling you. If you had a second emergency fund, like the article suggests, I imagine your security level would be even higher. As soon as we get our debts paid off, maybe we will find another place to stash some cash and forget about it.

Wednesday, October 10, 2007

Free Dr. Pepper at Chick-fil-a

Chick-fil-a is offering this contest and a free Dr. Pepper to the first 300,000 who sign up.

From their website:

LET THE GAMES BEGIN.

Chick-fil-A® and Dr Pepper® are teaming together for 40 days. Each day until November 17 someone will win.


You could win:
  • A trip to the ACC, SEC or Big 12 Football Championship where each trip winner will have a chance to compete to win up to $1 million
  • Free Chick-fil-A food for a year

And there is more good news. If you don't win a trip or free Chick-fil-A food for a year today, you can come back once each day until the promotion ends to try again.

And by the way, the first 300,000 people who register will receive a coupon good for a free large Dr Pepper.


Check out more frugal finds and tips at Crystal's blog.

Tuesday, October 9, 2007

Carnival of Personal Finance #121

I participated in this very fun carnival over at Ask Mr. Credit Card. My post Learning to be Gazelle Intense Without Going Crazy was featured in the lively presidential candidate discussion. Mr. Credit Card did a great job organizing all the posts!

One of my favorite articles featured was Never Have a Car Payment by Chris Kakaras. I love to see how much money you actually save by not having a car payment. We are trying to get out of ours now and we can't wait to free up that extra money in our monthly budget.

Great Post on Fair Debt Collection Practices

FiveCentNickel has a great post on the Fair Debt Collection Practices Act. He has been called by a collection agency, and most likely they have the wrong person. He outlined the basic tenets of the FDCA. My favorite is that they are not allowed to "Annoy or harass you with repeated calls."

When I was in college, I had debt collectors repeatedly calling and harassing me because there was a girl with the same name who had apparently run up a ton of debt on store credit cards. These people called me almost everyday, insisting I owed this money. I told them over and over it wasn't me (they never believed me), and after a couple of weeks, they finally stopped calling. To this day I will not shop at Bealls because of their harassment. I only wish I had known about the Fair Debt Collection Practices Act then.

Friday, October 5, 2007

Walk Before You Buy

Last Sunday afternoon we went to my spouse's favorite store- Lowe's. I generally dread going to any home improvement store, but if I had to choose one to go to I would pick Lowe's because it has more organization tools. I love baskets and containers of any kind- they can be used in so many ways around the house! So when I saw two laundry baskets on a great clearance, I picked up a couple. At less than $2, I thought these sturdy baskets were a great find.

But the longer I carried around those baskets, the more I thought about purchasing them.

I first thought about how much I really needed those baskets. I could definitely use them, but did I really need them? I have four baskets already. Granted one was broken but it still functions well. I began to think I really didn't need them after all.

Then I thought about the cost- at less than $5 total, they could be bought with our budgeted miscellaneous money. But the question that bothered me was how much time and effort I go to save $5 normally- how much I normally valued $5, but if I thought I was getting a deal $5 wasn't much at all. If I was overcharged $5, that would be a ton of money but I didn't think twice about spending it on something I didn't need. I realized money I saved was more valuable to me than money I spent.

As I walked around thinking these thoughts and carrying around those baskets, I slowly talked myself out of the purchase. I didn't need the baskets, and simply thinking about the purchase for a while before walking to the register kept me from buying something I didn't need. I walked out of the door basketless but with a light heart because I had just avoided more unnecessary "stuff" and saved my spouse's hard earned money.

More frugal living tips can be found over at Crystal's blog.

Thursday, October 4, 2007

My Very First Carnivals!

I participated in my very first round of carnivals this week. So exciting!

First there was the 107th Carnival of Debt Reduction which was so graciously hosted by Moolanomy. I contributed my post Debt=Stress. My favorite article featured there was Gazelle Intense Not for Me, Thanks by Gather Little By Little. I am on that path now but trying to become more gazelle intense without going crazy.


I also participated in the 120th Carnival of Personal Finance hosted over at My Retirement Blog. I submitted my post The Day I Realized Almost Everyone was in Debt. The article Extreme Saving: Hide your Money from Yourself by ProBargainHunter was quite entertaining- I can relate! We have a savings account online that we rarely even think of- it helps that it is a three day transfer because it's not worth the trouble to get the money out of it. Slowly but surely it is growing. I may need to get a few more savings accounts like the article suggests! :)

Tuesday, October 2, 2007

Learning How to be Gazelle Intense Without Going Crazy

From Lindsey at Finding Contentment in the Suburbs:

I have an idea that many of you newer "frugalites" or "frugal zealots" out there have a romantic love affair with being debt-free. After all, for most of us, it is the supreme zenith of the quest before us---to be completely, utterly, totally debt-free (including the mortgage!). Just hearing the phrase "debt-free" makes us shudder with excitement. It's almost a rush. Almost.

Okay, I have to admit it- I am a new "frugalite." I am in love with the idea of being completely debt free. No car payment, no house payment- I dream of the day! I love to stare at the numbers in my little spreadsheet and imagine what it would feel like not to have those payments.

It's been about 3 months since I started listening to Dave Ramsey, and I am not even close to as "gazelle intense" as Lindsey. If we were, we would rent, sell our car now, and we wouldn't go out to eat EVER. That seems like almost too much to handle at once, but it would be so great for paying off our debt. We are working on finding a balance between being gazelle intense and still staying sane. We aren't quite there yet though!

Since we started trying to be debt-free and on a strict budget, I have noticed that we have cycles of super-frugality at our house. We don't really go anywhere or spend any money for about 2-3 weeks, then we will have a weekend where we go and do and spend $100 on shopping and eating out. Then there's much guilt (only on my part, my spouse doesn't do the guilt thing) and we go ultra frugal. And the cycle repeats. It's bad. I feel the "need" after a couple of weeks for a new shirt or a nice date. It's like the binging of personal finance.

I still haven't figured out quite how to manage this cycle, but it seems to help when I make sure to include a small portion of our budget for blow money. And I consistently listen to good ol' Dave to keep my motivation and focus on not spending. It also seems that reading other blogs like I've Paid for this Twice Already and The Simple Dollar encourages me to save instead of spend.

Lindsey was right- I am seeing that becoming debt free is definitely intense and very hard work. I just hope I can become as intense as she has been so I can go on and enjoy life without payments.