Thursday, January 9, 2020

11 Ideas for Financial Freedom and a Bonus!

It's math. And basic math isn't hard. You add and subtract and total.
If you are struggling financially or trying to be financially independent there are some things you can do today to help yourself move forward. Each day you do one thing and it adds up.

1. Mattresses. Someone called me yesterday asking about a mattress. Not everyone is going to buy a used mattress I get that and I don't want to either. However three of our four mattresses are hand me downs. Three of them came from family members guest rooms when they moved. They had barely been used. I put an egg crate topper or cool gel topper and they work great. If you are looking for a mattress and you are desperate first try a topper for under $100. If you must buy a mattress and you feel it's a need not a want then shop around. There is a great variance of prices and don't buy into the hype. There is a local place here that specializes in mattresses and furniture and you can buy a set for $200 (twin) and up. Be careful of those mattress stores that only sell mattresses, they will hard sell you. I've seen many people do this and only be disappointed.

2. Cut down on the coffee, soda, and eating out. I shouldn't have to say it but seriously ya'll WTH! If you are stopping at a gas station five days a week or going to the drive through and spending five dollars a day (and most  probably spend more and go seven days a week) you are spending $150 or more on crap that is not good for you. That is $1800 a year!  Go today and get a nice travel mug and fill it at home. I often use a glass jar (like a marinara jar, yes seriously).
It's not that you can never do these things but let them be a treat once or twice a month.

3. Shop your closet or house. I broke my favorite spoon rest and wanted another one. I looked at flea markets and then one day I was getting dressed and looked down on my dresser at the little dish I had. It was a spoon rest I had been using as a catch all! Viola. I didn't need it in there and had something else. It's perfect in my kitchen.
Yesterday I purchased a dress to go to party and will take it back. The cute flannel dress thing turns out to look like Ma Wilder going to a hoe down on me. I ended up in my winter uniform, a flannel top or sweater, leggings and boots. Turns out I would have been way over dressed at the party in the dress. Lesson learned again.

4. If you get a speeding ticket.  It happens to everyone but you don't always have to pay it. You could take a class in person or online for about $50 if it's your first one in a while and waive the fee and keep it off your record. When I was young and had no one to help me I asked for community service. I filed papers and served candy at community centers. We do what we have to.

5. Sell your stuff. It's easier than ever. I sold text books last week to a text book store, jewelry to a jeweler, returned some stuff in my house turns out I didn't need and ended up making $176 in a day. It's easier than ever. First think about what is in your town. The resale clothing store, the auction, jewelers, text book stores. Then there is Ebay, Craigslist, Amazon, Marketplace, and so many more. If you are broke and your house if full of stuff sell it now.

6. Shop second hand. If it depreciates you don't want to invest a lot of money in it unless it really brings value to your life. I do buy new occasionally but I often buy used cars, and other items. For years my clothes came from Goodwill or resale boutiques. I don't do this as much any more but I am not opposed to it and still shop resale a few times a year. For household items I always check Habitat and Goodwill to save tons.

7. Reduce your cost of housing. If you are really strapped consider a roommate or moving to a cheaper place. Take care of your home as it appreciates. Fix it and keep it in good repair. As you move forward in life consider investing in properties where you can have a renter such as an apartment building or duplex. Or in our case we have a vacation rental on our farm. We put our savings into building so it's positive cash flow.

8. Increase your income. This may not happen overnight but we can all do this. Ask for a raise, or find a way to move up in your current job to a higher paying position Find a part time job. A side hustle. Sell your stuff and other peoples stuff. Do you have a skill or talent? Use it. Maybe you have a skill and you decided to get out of that field. If it's high paying could you do it for a year or two to get ahead and then save to do your passion project. Many people can do what they have to do to become financially free then have more time for passion projects once they are more secure. Your dream job will still be there.

9. Auto Expenses Car Payments, Insurance, Gas and Fee's. This is one area where I see a lot of waste. Can you plan your routes to reduce wasteful driving. If you live far out can you plan your shopping or errands on the same day as you have to go out for other things. I do this. We live 25 miles from everything and I plan my shopping around when I have work or other appointments.
I am seeing many people pay about double what they should be for insurance. One drive a car that you can afford and check the cost of insurance with at least three companies. I am with Allstate and happy I have heard Gieco is also reasonable. Only insure what you need. Don't do full coverage on a beater car with no loan. Buy cars for cash, then save up for the next car. Avoid interest bearing car loans if you can. If you feel you have to get the best car for the least money and pay it off quick.

10. Food Bill. The best way to cut food expenses in my opinion and the easiest is to meal plan. Plan your dinners for the week and put in any eating out so you don't over buy. If you have a dinner date for Tuesday put that on the meal plan. Then plan two or three breakfast that you rotate and plan dinners for each night with a plan to eat the leftovers for lunch the next day. Plan some easy meals for the days you have a lot to do so you don't eat out, such as sandwiches or breakfast for dinner.  I have even started keeping a frozen healthy-ish pizza for times when I am to tired to cook.

11. Gift Buying and Helping Others. 
Set a budget. I included helping others because I have six kids and we help sometimes it gets to be a lot. I am setting a helping budget this year and keeping a log of it. I also took out money for Christmas in cash so I don't go over. I've set budgets before but get busy & I go over. When tired I forgot to keep up with cost. Cash is easier. On birthdays I set a budget and we do a meal and cake at home or go in as a group and everyone pays. If all my kids are going then I will have them meet at a lower cost restaurant for lunch which is cheaper. Recently for an event I took my mom and four kids out, a total of six people for lunch and it as only $80 plus tip.

Think about optimizing everything in your life. Always ask "Can I do this for less?".

The basic rules for financial freedom that everyone can follow.
1. Keep your housing cost low.
2. Keep your auto cost low.
3. Watch your food budget
4. Set limits on discretionary spending (give yourself an allowance for this, you'll spend it anyway).
5. Have an emergency fund. Get started so normal emergencies like a car repair doesn't spiral your finances out of control.
6. Avoid debt. Especially on things that depreciate.
7. Save as much as you can. As you make more get to a modest middle class life style and save the rest.
8. Don't wait to save for retirement. Always take the match! Save now and don't touch it. *Also avoid high cost brokers, use places like Vanguard and Schwab for your investments.
9. Make more, live on less, save. At the point where you have enough money to live off the interest or you have money coming in from other resources like royalties or rental properties you are financially free.


Monday, November 18, 2019

Holiday Expenses and Ideas for Saving

This time of year I get excited with the thought of having all of my kids together and visiting with family and friends. Most of the things I think about do not involve gifts however, I do really enjoy watching people open gifts. Not necessarily what I give them but just the opening and seeing the surprise. This time of year also gives me some amount of dread of expectations and doubt.
My dad and step mom have agreed to no gift giving between adults (not adult children, the grandchildren but between me and my husband and them). This makes it easy. My mom only has me and the grand kids and I've asked her this year to keep it to $30. She is on a fixed budget and it would only give me guilt if she spent a lot of money on me. Now I have a slew of friends, relatives and coworkers and I always have this feeling I am going to forget someone and hurt someone's feelings. I'm not a shopper but I like to give gifts. I am frugal but not cheap so I like to get gifts at a good price but the crowds and consumption wear me out. So this year I am posting this to share with loved ones about buying us gifts and about gift giving.
I am a bit of a minimalist and don't have a lot of decorations up. I don't put pictures on the walls because we have really expensive ship lap that you can't fill. Also I don't want to dust! I would prefer no one gave me decorations of any kind so I don't feel obligated to put them out. This also included decorations of the body because I have sensory issues with clothes and jewelry. It's such a nice gesture and so sweet and sometimes it works for me. I have a few pieces that friends have given me that I love but more often than not the weight of jewelry is to much for my sensory issues. Things that are stuffed or furry often aggravate my asthma so that is a challenge for me though I love a good teddy bear squeeze. I can't have the dust mites that occur over time so they end up in the cedar chest. Even writing this makes me feel guilty and somewhat ashamed because I would never want to hurt anyone's feelings. 
I also think of these things when buying others gifts and so here are some ideas I have for saving money and not putting pressure on anyone to display something I have given them. 

1. Be frank with your significant other about what you want or get a partnered gift or a vacation or something. This is one area after the beginning of a relationship you should be able to talk about. My husband buys my face cream ($100) this one time a year and if I need perfume ($60) this is when I get it. 
2. Consumables: Make sure the recipient likes these things. My son often gets Starbucks cards and he literally never goes there. Things you can use up like coffee, tea, candles, food items, notebooks, journals, pens, pencils, scrubs or bath salts, fancy soaps, olive oil, chocolates, fun drinks, gums, makeup like mascaras or lip gloss, candies, hair products, nail products, and homemade food gifts. One year my mom made quiches for everyone and we delivered them. I loved it!  
3. Gift Certificates: Again make sure the recipient will utilize, Car Washes, Movies, Coffee Houses, Restaurants, Massages, Hot Springs (I live where this is a thing) and anything else you know your loved one or friend will enjoy. 
4. Useful items that you know someone will use. Comfy socks, hankies, items that people actually ask for. For instance my husband is a hunter so I know he will use up Hot Hands, warm socks, and anything camping or camouflage that he needs of course. 
5. Money. It's not personal but this year I am really considering it. One son will be traveling by air and the last thing I want to give him is stuff he can't get back on a plane. I'm planning on giving the kids a little money, one gift and their stockings full of consumables.
6. Experiences: Take a vacation, go to the movies, have a potluck, do an activity together. Maybe those who can pay chip in and pay and those who can't get it covered. I don't like to be out in the cold but going to look at Christmas lights while sipping something hot is always nice. Watching funny movies, having a potluck party and ugly Christmas Sweater party is fun. Assuming your celebrating Christmas.
7. Helping someone out that is less fortunate that you with a meal, warm socks, mittens, hats and things they need but can't afford. Do this as a group and it's always nice.
8. Ask if there is a book they want and buy that.

Lets talk about eating. Here are some ideas.
1. Pick a few things and make only those. Make a meal plan and stick to it. We always go over board so this year I am picking about 5 things for Christmas morning and that is what we are having.
2. Potluck. Those who can't cook bring drinks, ice, and rolls.
3. Split the responsibilities. My dad and step mom do Thanksgiving, I am in charge of Christmas Eve and we do Christmas breakfast.

What ideas do you have? Please share.

Happy Holidays!

Wednesday, November 13, 2019

Having to Cut Back do to Loss of Income

So out of the gate I want to say in a three month time my income has dropped by over 33%. Ouch. To give you a bigger picture I need to go back a few years. A year and a half ago, three years on my current job I ask for a raise and got one. We got busy, started new projects and I was making much more than I thought I would and it was good and it was hard. Hard because I had no time to keep up with anything else and my personal life and self care was suffering. We started to eat out more, I was buying more supplements to help with my auto immune issues, and buying prepackaged foods and driving a lot more.
Three years ago around 2016 I said "yes" to getting married and move from my house in town to a 40 acre ranch with my now husband. I also decided to close part of my business, a yoga school I had owned at the time for 8 years. That school was highly successful and was most of my income but it along with all I had to do for it was keeping me working 28 days a month. Now you may be thinking oh so you married a rich guy and he helps with your finances.  Nope. My now husband was broke when we met. With my help and business sense and his great skills and knowledge we built his small company which was simply "side work" into a successful business that makes more than our day jobs together now. However, I do not take any money from that business, we use all the profits to fund the ranch, retirement, and pay the house down. I pay half of all the house hold bills and food, etc... So a down turn is scary even though we are prepared.
When I decided to close the school I chose to save a years worth of income and pay off my only debt my car. So I decided to do that and I did. I retired in May of this year, with a years worth of income, no debt and a decision to take a leap.  With my savings and some help from the hubby we invested a large portion of that savings into cash flowing a cabin for vacation rental.

Now due to some issues that have more to do with holidays, insurance and some things I cannot speak about due to privacy working in the medical field,  we are in a brief slow down. We expect to pick back up after the holidays but for now my income has dropped to about 40% of what I was making when I had the school. So regardless of savings and lower debt I have to cut back on spending. I've always been frugal and so I'm not a huge spender but when money is flowing in I'm more likely to take that course, buy that book, pick up something for myself or the house or the kids. Here are some ideas  from my life that may be new to you and I sharing with you helps me process in my mind.

1. Free Education: I was literally registered for a course and it was sitting in my in box ready to pay the $295 fee when I found out that my income would drop even more yesterday. I decided to go online to my local library and find as much free info on the subject as possible instead.
2. Food: We did have a date night out last night and we chose to drink water, no appetizers or desserts. This is a nice restaurant but my husband got a small meal because we were going to a movie and he wanted popcorn. The bill was only $20. without appetizers and wine it cut our bill in half.  On groceries we had spent quite a bit over the past three weeks. I've been only picking up a small amount to fill in and avoiding a large grocery haul. This week I'll meal plan around the pantry to cut expenses even more. Keeping our food bill to $125 a week and toiletries or $500 a month or less.
3. Transportation: I will not have to drive to work but three days a week next month, saving 120 miles off each week. This will save me four gallons of gas each day for a total of about $80 a month. Also being at home I tend to stay at home and cook and clean and organize. It gives me time to optimize my life.
4. Gifts: It's the Holidays! - I told all my grown children I was giving them money and stockings this year. I usually have a $100 budget and go way over. So this year I'm giving them all $100 and I'm making them each a photo album of pictures from their childhood. I'll fill the stockings with little things they like and this should save me about $400. I've ask my parents and friends not to exchange gifts.
5. Decor: So normally this is not a concern, I can do without but we are in the midst of outfitting our first Air B and B so I had to decorate. I have been trying to think what I have that will work and not over buy. I've also been shopping for deals. I don't shop. I don't like to shop but I've been going to several stores and comparing prices before I make a decision. This has saved me a lot of money. I saved about $60 on a rug, another $40 on an electric fireplace, on the furniture I bartered a table for a couch and recliner. This probably saved me $500. I'm not looking for a table and chairs and then using what I have until the cabin turns a profit.
6. Clothing: I need some clothing. I will likely make do and make some outfits of what I have. I may order some more leggings and shop at resales shops. If I do this I will give myself a budget and I've been selling my clothes to buy new things. I got two sweaters the other day with my credit plus $6. I will likely not spend more than $50 on clothes the rest of this year until my income increases.
7. Housing: So we have a fixed mortgage but I pay extra on it. That will stop for now and we will pay the bill. When work picks up Jim will pay extra on it.
8. Discretionary Spending: With this most of the time I optimize. If we want a bottle of wine for the holiday it might be a cheaper bottle. Or we will do without. I will shop for small inexpensive options or go without. We will focus on needs versus wants and though I still like to be generous I will think before we buy. For instance we host a big breakfast for Christmas for about 20 people.  I'll offer maybe 5 items rather than 7. I'll simplify it so to speak and I really don't think anyone will even notice.
9. TIME: I will make a list of things that take time but not money. Organizing my house, cleaning things out and taking them to the auction for sale. Selling stuff I don't need. Cleaning out the storage building so we can let go of that bill of $120. I'll be able to save more because I will have time to sell things, to reduce bills, to optimize. I will make use of Holiday movies for free, time around the fireplace, long walks on warmer days and attending free events. I'll go to free yoga classes that I have bartered for that I often don't have time for. When you are dollar poor and time rich with a little savvy thinking you can have a richer life, it simply takes a change in perspective.

If these are helpful to you please share and share your ideas as well.

Monday, March 25, 2019

How to Cut Expenses and Still Have a Full Life.

This past year and a half has been interesting to say the least. I've been interested in finance and how the mind works around it for many years. In my youth I would worry about what growing up would look like and how you pay bills (like the actual where does it come from and how do you have electricity worries), which is probably not normal for an eleven year old. I'm quite sure my upbringing by Depression era grandparents had a lot to do with it.
I've been debt free three times in my adult life, once without a mortgage and twice with a mortgage. Now we are debt free with a mortgage that we are trying to pay off and I intend to not ever have consumer debt again. We follow the Dave Ramsey baby steps but not to the letter and that is okay.
Last year I did a no buy on clothes, books, and accessories like shoes and jewelry (even those $10 earrings at Target). It was amazing and hard. I learned so much about myself and my buying habits. Though never a spend thrift I enjoy having a new outfit to wear, a new pair or sunglasses or a new fresh book to open and dive into an alternate reality for a time.
This year we had some goals that have been put on hold. We paid over $35,000 on our mortgage last year, which was about 1/3 of our income, we took a big trip to Yellow Stone, and we paid off our tractor and our car. We had a good year and have not always made as much. As a matter a fact seven years ago when I met my husband together we were both making about $35,000 a year combined.
This year started off with some challenges and it has caused us to have to put a hold on all extra spending. We both had unexpected health challenges at the same time, big bills, two surgeries, test, thousand and thousands of dollars of medical bills in two months time. The weather has not been conducive to keeping a roofing company busy but I know that will change. And since we got married it put us in a higher tax bracket and low and behold Uncle Sam asked for a huge chunk of our income, twice what we thought we would have to pay.

So what do you do when you have to cut back? How do you do it? I'm here to tell you the sweet spot is in the flexible spending and simply your perspective.  Here are my top ideas for cutting back and actually enjoying your life more. Some will be familiar but others may not.

How to Cut Expenses and Still Have a Full Life. 

  1. Write down everything you pay for. EVERYTHING. Subscriptions, mortgage, rent, food, gas, insurance, clothes, gym membership, cable and wifi..and anything else. This tells you where you are on the map of life with spending. 
  2. Think logically. What is really a need. We often put our emotions into this. Think if you were helping another person who was identify needs and wants. What would you say? Often people make a want a need by emotional justification. If you spent time on your own self care then would all of these things you think you need really just be a want. You can cut your flexible spending here greatly. Eating pancakes at home rather than going out for breakfast is about $2 a person versus $15 a person when you add tax and tip. That can add up to a savings of about $175 a month if you go out to eat breakfast three days a week. 
  3. Identify your income. If your income is spotty or irregular add up the last three months and divide by three to get an average income.  
  4. Cut the cable. Get Net Flix, Watch You Tube, Go to the Library. You don't need cable. We paid $200 recently to get rid of cable. Yes that expense caused me resentment to the cable company for their terrible service but it saved me $1000 dollars over the course of the year. 
  5. Get rid of subscriptions. Check your statements to find any that you may have. Go to the free versions of everything. 
  6. Don't Shop. You won't be tempted if you aren't shopping. 
  7. Avoid advertising. Read books over magazines. Stay off social media more. Don't watch normal t.v. Don't make shopping a sport. 
  8. Find alternate things to do. Go for a walk, hike, visit a park, organize your house, clean your house and car, organize your closet. These things will make you feel better about your life and situation. Getting exercise, going outside, having a clean home and car feels good and makes you feel more in control of your life. 
  9. Watch something on You Tube everyday or read a blog about living a full life, financial freedom, health. something positive that contributes to your life without making you feel worse. 
  10. Start to think of purchases in terms of how much you have to work to pay for something. If you want to go on vacation but need to cut back and a one week vacation to the beach would cost $2000 and you make $36000 a year you will have to work about a month to pay for it after paying taxes. If your boss would pay you in a vacation instead of money, but you had to work one full month, 40 hours a week for 4 weeks would you take the money or the vacation? That begins to change your idea of what a vacation can look like. Maybe a stay-cation this year. Maybe you simply need some time off. 
  11. Have a mind of abundance. Instead of bemoaning having to cut back. Give thanks to the God of your understanding, the universe, whatever or whomever you give thanks to and say "Thank you for the roof over my head, thank you for my job, thank you for my family, my feet that carry me through life, my health.". Giving thanks will change your mindset. 
These are principals I use when I cut back and in my daily life. Our grandson ask this weekend how we had all that we have (three paid for cars, a boat, a tractor, a forty acre farm with a cabin, barn and animals) and the truth is we pick and choose what we value. We live on less than we make. We pay cash, we save, we work hard, we enjoy our life but we value pancakes at home and walks in nature and books over shopping or fancy vacations every year. Truthfully the big things like buying new cars can take a toll on your finances but it really is the little things day to day that we take for granted that really add up. I recently cut our food bill by $400 by doing a little research on it and redoing our food budget. You can do this too and feel even happier than before. 

Saturday, December 29, 2018

Setting Goals to a Simpler Less Stressful Life. Reflections After a No Buy Year and Going Forward.

Do you set goals every New Years only to find by March you don't even remember what they were or are you struggling with guilt over not reaching your goals?
I set goals as well  but find I am often working on them decades later. And I am okay with that. At thirty I said to myself I would "practice being a better listener" at forty eight I am still practicing. Some goals are ongoing. We may decide to "get healthier" but that is something we want to maintain. There is no reach and stop.

This year after a "No Buy" year I have really been focused on how much simpler my life became with restrictions, self imposed as they were. The end results are "I want even less, far less". It was that good and yes it was hard. See in a "No Buy" year you set the rules and perimeters for yourself. You should make them so that you can and will follow them, and take hurdles as a chance to learn about yourself and explore your feelings, this is where the life changing moments happen.
On my "No Buy" year I vowed to not buy new clothes, shoes, jewelry (not even those $5 earrings at Old Navy), purses or books (that last one...H A R D). This is how I discovered HOOPLA a free book app like Audible and Kindle. So how did it go?You can watch my video to see more.

As a result of my "No Buy" Year this is what my goals are this year and below that I'll give you some suggestions for setting your own goals. My goals might seem large but many of these are in motion and I've got the ball rolling so it is a continuation of goals I've already been working on, at least many of them are.

My Goals for this year: 2019

1. Self Care and Health: 
Meal Plan weekly, cook more, walk a minimum of 3 x a week for 20 minutes (1 mile) and take one yoga class and one at home yoga session. (I generally do more but on crazy weeks less, so it needs to be doable or so easy I feel like I am a total loser if I don't:)) .  Let my hair go more natural (low lights and go back towards my natural color (I think it is dirty blond) and reduce coloring and haircuts by also letting my bangs grow out. Reduce trips to get my nails done by doing them myself except for special occasions (I know this is a no brainier for some but I am horrible at nail care and I live a very public life so if I have to speak in front of 400 people I'm having a nice manicure for $20).

2. Business:
 Make sure to fully collect all tuition and close out the school in May successfully and have happy graduates at the end. Teach one more class per week at work for the public. Finish at least one ebook this year (I have one about ready to go). Possibly get started on two more, but my publish goals for those are two years. Speak at two conferences where I am compensated for my time (Until now in the conference arena, not workshops but the big deal ones, I've volunteered).  Grow our roofing business to a minimum of 100 roofs, we are at about 90 this year. Be smarter with keeping the roofing books and avoiding costly mistakes, this means me keeping books and letting my husband bid the jobs and organize our crews.

3. Personal Finance: 
Save enough money to replace my car. Pay 1/2 the mortgage off by 12/19. Cash flow from our day jobs our home bills and food. Cash flow vacations and hobbies, gifts, personal money etc..Set up sinking funds for large expenses and save more in our emergency fund (we have 1 years living expenses now, I'd like two to four years). * This is a continuation. As our incomes grew from about $40,000 a year to quite a bit more we never increased the cost of our living. We cash flow, paid off debt and lived mostly the same, this has helped us pay over $40,000 on our mortgage this year and pay cash for 1/3 of the cost of our home when we built it. Follow and subscribe to my You Tube channel for tips on this. 

4. Environment (Home, Farm, Cars): 
Clean out the storage building. Get every room and closet cleaned out and minimized. Same goes for storage building on the farm and barn. Keep cars maintained and cleaned. Keep farm property cleaned and maintained (we are rebuilding a barn, outdoor storage, garage for equipment, and run in shelters for the pasture animals which we will cash flow).

Setting up Goals for Yourself:

My goals are fairly large and you will see categories, also many of my goals are continuations. I have a notebook, a planner, and sticky notes stuck to the closet wall to keep me on track so I don't forget. I highly recommend this! I have a black belt in this and have been doing it since I was eight (I know I am crazy, lol). Do what you can and don't get overwhelmed. Start small.

1. Make goals in different categories or simply choose one.
2. Follow the SMART method.
S.M.A.R.T., it needs to conform to the following criteria: Specific, Measurable, Attainable, Relevant and Timely.
S: Such as I want to lose 10lbs 
M: I want to lose 10lbs in approx 10 weeks at 1lb per week
A: I will follow a low carb diet, a 12 hour window of eating and an exercise plan of 2 days of yoga and 3 days of cardio.
R: I want to feel better in my clothes and improve my health
T: by 3/1/2019
3. Have an accountability buddy if you need one. I have a friend that we compare health and well being notes.
4. Review your goals weekly or monthly and see what you can do better next week or month.
5. Make it so easy you can do it! Don't plan to go to the gym everyday if you have never gone. Be realistic.
6. Work your schedule around your commitment rather than trying to fit in your goal to your schedule. For instance put your exercise on your calendar and let nothing get in your way. If someone calls then say "I'm sorry I have an appointment can we do this another time". You don't have to explain.
7. Know your why (That is the relevant part of SMART). If you don't have a reasonable why you will return to square one after the goal is reached.
8. Have a plan to maintain your goal or get back on track. Avoid the all or nothing trap. I recently lost 15lbs by following a low carb diet and doing moderate exercise. Over the Holidays I gained 4lbs back. I am back on track now and following the plan. I didn't just give up because I had several cheat days, I just accepted that this would probably happen and I would correct for it.

Happy New Year to You!


Tuesday, December 11, 2018

Frugal VS Cheap.

Frugality for me is a way to achieve a life that is richer in experiences and is in line with my values. I pursue and promote Financial Freedom because I myself have been on the other side a few times and know what it is like to be a slave to a lender. You can read back on my stories but until a few years ago my husband nor I made more than $40,000 a year. As a matter of fact until my forties I never made over $25,000 a year.

Because I had learned black belt frugality from my Depression Era grandparents I was able to survive when hard times hit, the collapse of the housing market, a financially devastating divorce and raising four teens by myself. These skills have increased the quality of my life not decreased it. I have everything I need and want and do not feel the pressure or stress of being deep in consumer debt.

Cheap versus frugal. What's the difference? For instance lets say your faucet breaks and instead of fixing your faucet you simply use a wrench to open and close it for years so you can save money, even though the fix would be less than $50 and you have it in your emergency fund. To me this is cheap (this is a true story about someone I used to know). Frugal is you go to the store and buy a quality faucet that will last because you have money saved to pay for it. If there are twenty five available to choose from so  you research to find the most reliable. You may pick one you like that matches your decor but it won't be the most expensive and fancy one that you have to put on a credit card because you have planned for this kind of thing. This is frugal. You will have more quality items but not items that you cannot afford to pay cash for.

Another example is that you have a 3 pairs of quality fitting blue jeans that you purchased at a resale shop for $35 each. These jeans may have cost $100 or more brand new. You get them cheaper at resale but you could have purchased a pair of new lesser quality jeans at a big box store for $30 that wouldn't last as long or be as comfortable.

This is how I live my life. I have less but better quality. In my living room I have three high quality leather pieces. A $3500 Henredon sofa that I paid $300 for on Craigslist, a high quality leather recliner that a friend no longer needed (free), and a hand me down leather chair and ottoman from my family. New all of this would have cost me nearly $6000. I paid $300. I was patient and lived with only a couch for a while.

Some qualities of frugal people.

1. They put values first then live their life in accordance with their values. The live frugal to support their values. If health is a value they may forgo some expensive trips to afford high quality food and pay for a good treadmill. Forgoing extraneous expenses in other areas.
2. They have patience and wait for a good deal.
3. They do not use credit, they save for emergencies.
4. They save for big expenses like vacations and cars.
5. They avoid marketing (advertising) as much as possible. This may mean not watching cable t.v., staying off social media and not shopping for fun.
6. They save in areas that aren't as important to them so they can spend in areas that support their values. For me I save on the daily expenses like eating out, clothing and excessive living like a bigger fancier home and car so I can travel and spend more time with loved ones.
7. They find free and inexpensive ways to entertain themselves. Such as working out at home, reading from the library, having date nights in.
8. They budget their money. They know what comes in every month and they know what their expenses are. In the early days I had to budget every dollar. Now that we have no debt and a higher income I don't have to do this but I have some strict habits I've developed that allow me to  have a high savings rate.
9. The live on less and save more. My husband of one year, who I have been with for seven, and I have not increased our standard of living as our incomes have grown. We now make two to three times what we made when we met but we still live on $45,000 a year. We save the rest and pay cash for expenses like cars and repairs. We also are paying our mortgage off quickly.
10. They have an emergency fund. Start with $500 then build up to two years in the bank by the time you retire or before (this does not include your retirement savings).
11. They keep a reserve in their checking and business accounts.
12. They are always learning and staying up to date on information that supports them in their journey.
13. They keep their mortgage or rent payments at less than 1/4 of their income. For couples it would be suggested that one income could support you in the event that one person lost their job or had to be off for an illness or special circumstance.
14. They are able to cut back on work if they choose to, in order to enjoy more of their values like exercise, travel, health etc.
15. They are planners. They think about what they want their life to look like and live day to day with accordance with that plan.

Monday, November 19, 2018

Going Against the Current with Money.

Yesterday I found myself once again frustrated with a money conversation. My beliefs are very different against main stream money thinking. I began this journey back...well truthfully it's been my life growing up in my family. My grandparents were this way (frugal and debt averse) and though they passed on with about $250,000 in assets not millions, my other frugal grandma was a millionaire  unbeknownst to us. So you know they are rock stars with money in my book.

So recently we found ourselves debt free except the house and wanted to know if I should pay off the house or invest the difference after paying my IRA. Well of course a financial planner with a firm is going to tell you to invest, which they did. There was a lot of talk about making more money than I was paying in interest on the house and tax deductions but I'm not sure those financial planners are as wealthy as my grandparents were. So I  thought about  my grandparents. They lived frugal, had all they needed and both left a legacy that helped their children. So instead of looking to what main stream society tells me I decided to look to my grandparents.

Our decision:
We are paying the house off and investing the max into IRA's for now. All excess goes to the house. I'll continue to max out the IRA's after the house is paid off and either invest in real estate, index funds, or keep money in the bank in high yield checking or savings, probably some of both. I also keep us fully insured with life, home, auto and good health insurance.

Here is what my grandparents did. One passed on a millionaire the other had a paid for house, money in the bank and over $154,000 in stocks, no debt and they had over a quarter of a million in assets.
They had all they needed, wanted and for the most part were normal people who didn't have to worry about money.

Lessons from my Depression Era Grandparents

1. Eat at home
2. Grow your own food when you can or catch it (we ate a lot of fish). I am not a gardener but my husband is. I can cook anything though.
3. Wear it out. If it ain't broke don't replace it.
4. Do without. You don't need half of what you want.
5. Needs first then wants within reason.
6. Keep a tidy house and car it leads to a tidy mind.
7. Don't buy into trends. You don't have to remodel. You can have a nice clean house with furniture that is older. I buy antiques and furniture that is timeless, much like timeless clothing. I have a coat from the 40's that is a simple cashmere mid calf and it has never been out of style. I have Persian rugs that never go out of style. My bedroom furniture is from the 40's and it is still super cool.
8. Buy quality. Research before you buy.
9. Don't do debt. Pay it off. Then don't get back in.
10. It's more about what you don't do than what you do sometimes. Not doing things that cost a lot of money actually saves you tons over buying stuff you don't need on sale.
11. Keep a simple wardrobe or basics and a few fun pieces. Buy when you need something but not simply for an activity.
12. Have simple hobbies like reading, walking, cooking, gardening. Hobbies that help you learn, keep you fit, and actually save money.
13. Send in the rebate, use the coupon if you actually buy that which you have the coupon for. Don't buy crap you don't need because it's on sale or you have a coupon.
14. Say "NO" to enabling others. If they can do it for themselves don't do it for them unless you truly want to gift them from your heart. If you feel resentment then you are enabling.

My grandmother was a millionaire when she passed, She lived in a modest home, drove an older Toyota Highlander, cut her own grass until she was 84, cleaned her own home, cooked her own food. She had a nice home but it wasn't over the top and it was paid for. She truly was the millionaire next door. She didn't have to worry about her food or if she could pay her bills. That is true financial freedom. I'm not saying we should never have fun or spend on life's pleasures but we should consider first that our future is secure so we are not a burden on others.