Remodeling This Life

This is a guest post from Tales From The Road Less Traveled. She blogs about “Household finance for all family types”. Check her site out and if you like what you see, subscribe to her feed!

I may not be remodeling my life, but I am sure remodeling my husband! Four months ago, I started using The Grocery Game and religiously using coupons for all of our household cleaning and grocery shopping trips. My husband, Wes, started out as a skeptic. After all, coupons don’t really save that much and there was “no real way for us to cut our grocery costs any more than we already have.” Since my first few weeks of the game, Wes has been to the store with me a couple of times. The first time, he watched in awe as our total came down from $300 to $160, including beer and wine purchases that we had no coupons for.

Since then, he’s been going shopping with me just for the amusement factor and to see if I can keep up the savings over the long term. Now that he’s convinced, he tells his friends, my friends, and everyone who stops long enough to listen about his “wife who writes about personal finance and saves insane amounts of money by using coupons.”

Last night, Wes was replaced by alien coupon clippers. I sent him to the store for some wine, since we were having a dinner guest. When he came back, he was grinning from ear to ear and couldn’t wait to tell me the news. He picked up ice cream (impulse buy, but I’m totally not gonna argue over ice cream!) and two containers of topping… caramel and chocolate. Then, with a flourish that I’m sure he practiced on his way home, he informed me that he found a coupon for $1.50 off 2 ice cream toppings, and that with the coupon, buying two name brand toppings cost far less per ounce than buying one large jar of the store brand.

At this point, I didn’t know whether to laugh or applaud! My husband, the former spendthrift, not only used a coupon (that I didn’t give him), but he compared the unit price for the best deal too. I believe the world must surely be coming to an end. But, at least I have ice cream and caramel to celebrate.

This is a guest post from Miranda Marquit. She edits information on debt consolidation for DestroyDebt.com and writes about personal finances for Yielding Wealth.

One of the most valuable lessons children can learn is how to save money. This is a lesson that is not taught in schools, so it falls upon parents to make sure that their children learn about saving. I didn’t start teaching my son about money — really talking about it — until this past year, after he turned five. But I know some people who start talking about it when their kids are as young as three. It’s up to you when you start, but the earlier your kids start developing a habit of saving, the better. Here are some things that you can do to help your child learn about the importance of saving:

Give your child an allowance.

Choose an allowance that is appropriate for your child’s age, and give it regularly. I like to have a regular amount that I give my son that is not tied to chores (regular things he is expected to do — for free — as part of the family). But I also have more advanced and difficult tasks that he can do to earn a “bonus.” This allowance is the first experience many children have with managing their money. Start out by requiring that your children set aside at least 10% for savings.

Talk about the importance of saving.

When I spoke with my son about saving, I explained that some things cost too much money to pay for immediately. Sometimes we have to save up for what I want. Months earlier, we had allowed him to earn TV watching time, and labeled his movies with numbers that corresponded to length. When he earned enough “TV coupons” he could redeem them. I asked him if he remembered what he did when he wanted to watch the Incredibles. He thought about it, and told me that he looked at how many TV coupons he needed and then made a plan to set aside his coupons until he had enough to “buy” the TV time. I told him saving money was kind of like that. It’s setting aside money so that we have it when it is needed.

I also showed him, using actual money, how much he had left over after putting in the savings (and the donation for our church). “See?” I said. “Even after putting some aside, you have this many left.” He could see that the money set aside for savings was much less than what he got to keep to spend (or save up for a specific toy).

We also had a brief talk about interest, and how when you put money in the bank, the bank pays you to keep it there. He thought that was pretty cool.

Have a specific place to put the money.

We had a jar for my son’s savings. Putting the savings in a separate container encourages children to think about the separateness of their savings. When we opened a kids’ savings account at the local credit union, they gave him a cow bank (for his “moo”-la) for his savings. Now we make a big production of putting the money in this special place. When he has filled the cow bank, we take the money out, count it together and then go to the bank with his passbook. Having children involved at each step also develops in them an interest in engaging with their finances.

Create savings goals.

In addition to having a savings account, children should also see how savings goals can set for a variety of items. One way to do this is to talk about a specific toy that your child wants. Cut a picture out an put it on the wall so that he or she can be reminded that saving up is necessary. Make it clear that this type of saving up is different from the money that goes into the savings account. That money is for big things, later down the road, like college or living in a nice place “when I get old and want to relax all day.” Savings goals money is for smaller things that you want, but need to wait a little while for.

Another thing you can do is cut the picture into pieces, and write an amount on the back of each. If the item costs $15, cut the picture into 5 pieces with $3 on the back. Every time your child reaches another $3 set aside, put a piece of the picture up. When the picture is complete, take the money and go buy the item. I like to let my son pay for things he buys with his own money. (We do count up the coins and have them exchanged for bills first. But this is part of the fun.)

Set an example.

This is very important. Show your children that you save up, too. When we visit my husband’s family in New York, we put out a family “fun things to do in New York” jar. We show our son that everyone puts money in — even mom and dad save up. This also instills in him a sense of ownership of our vacation as well, and lets him see how we can all work together. We also tell him when we are putting money into savings, and I take him with me to the bank regularly so that he can that I am putting money in there. This is much easier for a five-year-old than trying to explain how direct deposit works.

If you start at an early age to help you child learn about saving, and the importance of saving up for things rather than just buying them, it will help him or her develop a habit that can be used throughout life.

This guest post was written by Peter of Bible Money Matters. Please feel free to visit his site and subscribe to his feed

My wife and I were recently talking about how we need to get a new TV in our bedroom. With the digital switchover happening next February, we have two options to consider. First, we could buy a digital to analog converter box for about $10 after using our $40 government coupon. Second, we could buy a new digital TV for $4-500. After considering it we both decided we wanted that new TV, after all, we’ve earned it right?

We considered the expense over the next few weeks. We asked ourselves, “Do we really NEED to buy a new TV for our bedroom? Or do we just want to buy it out of a sense of entitlement?”.

We ended up not buying the new TV, and instead bought the $10 converter box. The TV works like new, and we saved ourselves a ton of money.

Entitlement blurs the line between wants and needs

The whole experience got me thinking about the sense of entitlement people have in this country today. They want to be able to have everything their parents had, but at a younger age. They want the house, but without saving for a big down payment. They want the fancy car, and they sign up for a 5 year loan at 9% interest. They want the new TV, so they put it on the credit card.

In an article on bankrate.com psychotherapist, Olivia Mellan talks about how people confuse needs with wants:

A lot of us in wealthy, overspending America are either born or raised with a tremendous sense of entitlement. We say to ourselves,”I work hard or, I work at a job I hate — at least I should be able to have a Starbucks coffee every day or eat out for lunch.” But of course, those are not needs, they’re wants. They’re pleasures. 

Wants and pleasures turn into needs because we feel like we deserve it - even if sometimes we don’t deserve it or can’t afford it.

Having a standard of living beyond our income is almost expected these days. Spending has gone beyond the actual needs of food, water, shelter and clothing, and have expanded to include things like a cell phone, cable tv, bottled water, eating out every day and new furniture. The things people enjoy having become needs in their mind, and without them they don’t feel like they’re living to the fullest.

The better off we become financially, the more we realize that true happiness can never come from the things we own. Instead they come from faith, family, friends and through helping others. All other sources of happiness are fleeting at best, and corrupting at worst.

Are you aware of your wants and needs - and how the line has become blurred in your own life? My challenge to you is to keep close track of what you’re spending this month, and see just how much of your spending is on things you want, but don’t NEED.

Avoiding impulse spending on things we want

So how do you avoid impulse spending when you’re trying to save or pay down debt? Here are some ideas that I came up with, along with a few from MSN Smart Spending:

• Implement a “touching and talking rule”: Either touch the item 3
  times, or talk about it 3 times with a spouse or loved one before actually purchasing it. If you still can justify the expense after that, consider purchasing it if it will fit in your budget.
• Wait it out: Wait a while before making a big purchase. Give yourself some time to mull over the decision before dishing out the big bucks. At our house we try to wait at least a month before buying something, and if we still consider it a good purchase, we’ll go
  ahead with it.
• Don’t Buy it, Try it: Try borrowing the same or a similar item from a friend. Try it out and see if it is all you thought it would be. Chances are you may realize that you don’t need that Ipod as much as you thought you did.
• Save up and pay cash: Save for the item you want and pay cash for it. By the time you have enough money you may realize you don’t want it anymore.
• Ask yourself if you really need it: Ask yourself, “Do I really need this? If I get it, will my life be significantly improved? If I don’t get it, will my life be substantially diminished?”

When you think consciously about your purchasing decisions, and actually ask yourself if you NEED the things you buy, you’ll be well on your way towards living a less cluttered and more fulfilling life. You might even be able to save some money in the process.

This post was originally written as a guest post for Mrs. Micah. It seems fitting to post now, as I am on vacation, living it up and enjoying my summer with family. I think one of the most important reminders I can give myself and my family is that although we are debt-free, but we have our own financial limitations, we can still try to focus our goals on making sure that we are able to live life to the fullest. I hope you enjoy the post while picturing me swimming with my kiddos and soaking up the summer sun And don’t forget to go visit Mrs. Micah when you are done reading here!

I know a lot of people talk about the day when they are debt free and financially secure that they can finally fulfill their real dreams and follow their true passions in life. I agree with this, to an extent.

I wholeheartedly believe that one of the most sound financial decisions a person can make is to become debt free and then put as much money toward saving for the future and security as they can.

But I also believe that we are only young once, we only get one life, and we can’t let our entire life be consumed by finances. I believe every person, no matter what their financial status, needs to make room in their budget today for following what they are passionate about.

You may say you can’t afford to. I say you can’t afford not to. Not only does it make it harder to keep at the goal of debt reduction and ultimately elimination of the goal of enough money in the bank to retire at 50 to a tropical island. What if that day doesn’t come?

Life is still happening. You are still a person with a passions and dreams that need to be attended to. Whether it is setting aside a small amount each week in the budget so you can scrapbook or spending one month of overpayments to your debt to fly to Boston to run the marathon, it’s okay to let yourself do something that means a lot to you.

As much as we don’t like to admit it, we just don’t know what tomorrow brings. You can still plan and have outlined how you’d like things to go for your financial future but the reality is none of us know what tomorrow holds.

You have to also live for today. If you dream of something that really gets you excited, you love having it part of your life, just do it. You don’t have to be frivilous and I’m not suggesting your bills go unpaid to live a life of grandeur because that is your passion. I am talking about loving yourself enough to do what means a lot to you.

I’m saying that today you deserve to fulfill your dream and do something that makes you happy. You really do.

This is a guest post from Ashley at Wide Open Wallet, where she blogs about personal finance. Her site is a very real, down to earth glance at her family’s financial journey. Please pay her site a visit and consider subscribing to her RSS feed.

In case you haven’t heard, as of June 15th, American Airlines is charging a fee for checking bags. And not a small fee either. They will be charging $15 for the first bag, $25 for the second, $100 for the third, fourth, and fifth, and $200 for the sixth bag. Dang. This irritates me quite a bit.

I understand that times are very tough right now. I don’t fault them for raising prices, and I don’t fault them for cutting services, but I think this is a terrible move. It bothers me because it doesn’t affect all passengers equally. It affects families more than anyone else. As a single adult it’s pretty easy to pack what you need for a weekend get away in a carry on bag. But families have to take tons of stuff. And it’s already so expensive to travel as a family. I don’t think it’s fair to have a fee that affects one group of people so much, and another group of people so little. I would much rather just see the cost of the ticket increase by $15 or $20 and have it spread across the board.

The last time we flew as a family was in October of 2006. We bought three tickets for about $200 each, my son was only 10 months old so he didn’t need a ticket. Our luggage consisted of three suitcases, two car seats, a stroller, a pack and play, a huge diaper bag, and two backpacks. We carried on the diaper bag and backpacks. They don’t charge the fee for strollers or car seats (how nice of them) so that means we would have had to pay for the three suitcases and a pack and play. It would have cost us three $15 fees and one $25 fee, a grand total of $70. Each way. So even after we paid $600 for plane tickets we would have been charged another $140. I think that’s unfair. If we had been three adults flying we could have packed what we needed in our carry-ons. Or if that wasn’t enough space then we could have shared a fourth suitcase and just paid one $15 fee. We wouldn’t have needed to bring a week’s worth of baby food, formula, diapers, coloring books, teddy bears, bottles, blankets, etc… We had thought about mailing some of our stuff a week in advance just for ease, these fees may have made that more cost effective.

And besides the fact that I think it’s unfair to families it irritates me because I don’t see what difference it makes to the airline if I carry the bag on or check it. It’s still weight in the plane. I understand when I’m charged a fee for something that costs money. Like getting charged $2 for a paper statement when they have an online version available. It costs money to print and mail a paper statement, I can see why they charge fee. But this… this makes no sense. No extra cost is involved in me checking a bag vs carrying it on.

So I don’t know about you but this fee just rubs me the wrong way. I think it’s a very poor way to go about raising revenues.