This is the second of a three-part series, New Year’s Resolutions for 2009.

It might go down as the most unique New Year’s resolution I’ve come up with to date.  You are probably asking yourself why getting up at 4:30am is important enough to be declared an official “resolution.”  Well, for a number of reasons, I would like to start my day earlier because it has big payoffs in terms of productivity, fitness and personal well-being.  Allow me to explain myself.

Productivity

There isn’t anything magical about a 4:30am wake up time, but nearly every success story I’ve ever read cited someone who started their day at 4:30am.  Think about it; biographies on successful executives, politicians and other leaders often refer to how early they start the day. It is as if they are up getting things done long before the rest of us are chugging down coffee in an effort to wake up. As they say, if you want to be successful then you need to emulate the habits of other successful people.  Staying up late watching Seinfeld reruns and sleeping in doesn’t fit that pattern, so it is something I need to stop.

I tried this schedule off and on throughout 2008 with some success.  In fact, it was instrumental in me cranking out 400 articles for Frugal Dad in my first year.  Often times I was up before the rest of the house banging away on the keyboard (actually, I was lightly tapping a quiet keyboard because the wife doesn’t share my joy of early morning work!).

Fitness

For the first time in several years I am not listing a “fitness” resolution such as losing fifty pounds, working out three times a week, etc.  In my case, setting those kinds of goals just hasn’t worked.  Instead, my 4:30am wake up time should help me indirectly improve fitness in a number of ways.  First, by getting up earlier I will have time to sneak in a workout and stay caught up on my work here at Frugal Dad.  Once I get into a routine it will force me to fall asleep earlier, thereby cutting out opportunities to eat junk late in the evenings.

Personal Well-Being

I won’t get any additional sleep time by making this move, but I have found that I feel more rested when I sleep earlier in the evening, and get up earlier in the morning.  Ever noticed when you go to bed at 2:00am on Friday night and sleep until 9:00am you feel sluggish all day?  The same seven hours of sleep from 9:30pm to 4:30 leave me feeling much more rested.  I have more mental clarity, more physical energy, and I am generally in a better mood if I hit the ground running early.  The early morning hours are quiet, and I love being awake when the sun comes up.

Growing up my family tried to take an annual trip to the beach–even if for only a long weekend.  As I got older I enjoyed sneaking out before everyone was a awake and going down to the beach before sunrise.  There is a stillness about the early morning that seems to have a calming effect on me, and I’d like to experience more of those moments in the coming year.

This year I am declaring three New Year’s Resolutions in three categories:  finances, personal and blog-related.  These resolutions are really just big goals, but since the idea of declaring New Year’s resolutions this time of year is popular I’ll play along.

Our 2009 New Year’s resolution for finances is quite simple, but will take some effort to pull off.  We want to downsize our house.  Yes, in the age of bigger is better we want to reverse course.  Our current home is not overly extravagant, but it does require a little more of our paycheck than we would like to dedicate to living quarters.  While the small house movement (via Lazy Man and Money) does appeal to me, I don’t think I could convince the wife and kids to go to such extremes, so we’ll stick with a modest-sized home significantly cheaper than the one we are in now.

Benefits of Downsizing House

The first benefit is the most obvious–a lower monthly mortgage payment!  We have thought long and hard about staying put and continuing to pay for our current home versus making the move to downsize.  The number one motivation behind moving is to reduce our mortgage and free up that money for additional financial goals.  As it is, too much of our income goes towards making the mortgage payment, and not enough goes towards financing other dreams.  We aren’t quite “house poor,” but housing eats up too much of our budget.

A smaller home means lower utilities.  Our summers are brutally hot, and seem to last for five months out of the year (May-September).  Cooling a large home breaks our utilities budget every single month during the summer.  Our current house lacks a wood-burning fireplace, something we would like to utilize in the milder winters to heat the home without running a heat pump.

Moving to a small home will force us to simplify our lives.  This one seems a bit strange, but we would like to move into a smaller home and reduce a lot of the clutter we have now.  Of course, we could simply reduce the clutter in the home we are in now, but without space concerns there isn’t a strong motivation to do so.  I like the idea of giving away a large percentage of unused things, moving to a smaller home with a fresh start, and living a more modest, simple existence.

A lower mortgage puts us closer to financial independence.  In my favorite personal finance book Your Money or Your Life, the authors suggest minimizing your monthly expenses so that you can afford to do something you really love without worrying about the salary.  So many of us have become slaves to stuff, particularly our homes, that we continue to drag ourselves to an unfulfilling job simply to make a mortgage payment.  I don’t want to be that guy in another ten or fifteen years.

We plan to payoff our mortgage in about ten years and enjoy living completely debt free from that point forward.  Think about it; with no house payment or other debts, and practicing frugal living, it wouldn’ t take much income to meet our basic needs.  Free from the burden of earning a high salary to pay for stuff we would be able to turn our attention to causes that matter more than pushing paper.

In the coming weeks I’ll be sharing more about our journey to downsize homes.  First, we need to do a couple small things around our current home to improve its selling condition, and I’ll need to contact our real estate agent for some advice on pulling off a sell/buy in this market.  I wonder what her reaction will be when I tell her we want to move back into a “starter home?”  A few years ago this probably seemed strange, but I bet we aren’t the only ones considering such a move in these times.

Hard to believe I have been writing here at Frugal Dad for an entire year! In some ways it is hard to remember a time when I wasn’t writing, but in other ways I can easily remember being a fan of so many other blogs, but hesitating to start one myself.

I have been a great starter all my life.  But I haven’t been a great finisher.  This is the first idea I have started and stuck with for longer than a few months.  It is also the first quasi-business idea I have had any success with.  In the past my wife and I have started a number of at-home businesses including things like custom children’s books, Avon and web design.  All fell flat after a few months of draining our wallets because they lacked a key ingredient:  passion.

I am passionate about what I write about here at Frugal Dad, and I hope that comes through in the writing.  I try my best to lead a frugal lifestyle, and to adhere to the money principles I discuss here daily.  But, I am human. I make plenty of mistakes, and don’t mind sharing them along the way in the hopes that someone else will learn from them (and avoid them).

Never in my wildest imagination did I expect to attract nearly 5,000 subscribers in one year.  Thanks to all of you who have stuck with me during what at times has been a rough 2008 for me personally. I found the personal finance blogging community to be one of the more supportive groups around, and that includes both readers and fellow bloggers.

The fact that I have been able to monetize the site a bit has helped our finances by reducing debts faster than my single income could have alone, and we have beefed up our emergency fund.  Writing has become my side hustle, and one I thoroughly enjoy!

To celebrate my one-year blogging anniversary, I thought it might be fun to look back at a few of the more popular articles over the last twelve months.

• February 1, 2008 - Planning a Frugal Family Fun Night.  One month into blogging I shared a little post about how my family often spends our Friday nights.  Nothing elaborate, in fact I think it was popular because of its simplicity.  At the time this was the first article to get double digit comments from my new readers.
• February 4, 2008 - Goodbye Expanded Cable TV: What Will I Miss Most.  A sad day in the Frugal household.  Here I shared a few things I miss without cable television. I’m proud to say a year later we don’t miss any of the things I mentioned here as we have plenty of frugal alternatives.  The one-year-without-cable experiment will continue in 2009.
• March 3, 2008 - Square Foot Gardening, a How To.  I’d be willing to bet this is how many of you long-time subscribers found me.  I wrote up an article about a weekend project with the kids that was featured on Life Hacker, and then made the front page of the popular bookmarking site de.licio.us.  I had to immediately research what the word “viral” meant.  The article remains one of my top landing pages from search engines.  Fun stuff!
• March 27, 2008 - There Are No Financial Cinderellas.  I’m often told by visitors and new subscribers that this is my most inspiring post.  I still get fired up when I watch that commercial linked in the bottom of the article!
• April 11, 2008 - How to Teach Compounding Interest to Kids.  This remains my most popular “kids and money” article.  It was my attempt at taking a tough money concept and explaining it in terms my kids could understand.
• April 14, 2008 - Language of the Perpetual Poor.  I took a lot of heat for this one.  Many people thought it was an attack on poor people.  Quite the contrary.  It was an attempt to show how the language we use, and the actions we take on a daily basis, ultimately lead to a financial success or failure.  Commenters were right about one thing–I have never been poor.  But I sure have been broke!
• May 21, 2008 - How to Get Out of Credit Card Debt, and Stay Out.  My most popular “how to get out of debt” article, and the subject of an upcoming side project here at Frugal Dad (stay tuned!).
• June 16, 2008 - 75 Money Saving Tips to Survive a Down Economy.  I worked on this post for days, adding a tip here and there as I had time.  I wanted it to be the “mother of money-saving articles.”  The work paid off.  The article was mentioned on Smart Spending, a blog on MSN Money, and ultimately made the front page of MSN.  The traffic surge knocked out my site, but lead to a big boost in new subscribers.
• July 28, 2008 - In Memory of Randy Pausch:  Inspirational Videos to Watch When You Are In a Rut.  Probably sounds a little vain to admit that I bookmark some of my own posts, but this is one of a couple posts that I refer back to frequently.  I was deeply saddened by the death of Pausch, and still turn to his inspiring videos and others when I get down.
• August 6, 2008 - Note to Readers:  Family Emergency.  Little did I know at the time that this family medical emergency would play out for the next four months.  On August 4th, my mom was diagnosed with a giant cerebral aneurysm at 53 years young, and underwent a number of surgeries to treat the aneurysm.  The final procedure was on September 12th, and in the recovery process she suffered a stroke.  She remained hospitalized for 102 days, much of that time in neuro-ICU, returning home just two days before Christmas.  She is currently wheelchair-bound, but has regained the ability to talk, eat, and has movement on her left side.  Her fight has been both an inspiration and a sobering reminder of the importance (and in some ways, the insignificance) of the things I write about here every day.  The lesson learned for our family is to have a solid emergency fund, strong disability coverage and to become debt free as quickly as possible.  You never know what emergencies are lurking around the corner.
• October 28, 2008 - The Most Important Election In Our History, Not Really.  I think I speak for most people when I say that I’m glad to have the election news behind us for a couple years.  I’d like to think that a week after the election many people agreed with what I wrote in this article.  Life went on.  Since election night we have learned that Obama may not be as radical as some feared, and that McCain was more gracious than many gave him credit.  Sarah Palin wasn’t the demon the media made her out to be, and Joe Biden is still Joe Biden.  I hope at some point both parties will again find fiscal conservatism, but as the recent bailouts have proven, it is safe to say we are entering an era of unprecedented government spending.  That terrifies me much more than any one man (or woman) in the oval office!
• December 3, 2008 - Introducing the One Dollar Give Project.  It is a shame that I waited nearly a full year to join forces with other bloggers for a great cause.  Some of reason for delay was that I figured I had little to offer, in terms of financial support or blogging clout, and a lot of it had to do with what was happening at home as we “circled the wagons” to support my mom.  As things smoothed out, and continue to smooth out in 2009, I plan to make this a higher priority throughout the year because I think blogging provides a great platform for spreading news of the great work by others.

Over the next few days I plan to share more of my goals for 2009 (blogging, financial, and personal). I encourage you to join me this week by taking some time to think about your goals for the coming year, and get them down on paper (or in my case, online).  Thanks again to all of my readers, advertisers, and fellow bloggers who have helped Frugal Dad become the success it is today.  Without you, I would have thrown in the towel long ago.

A good number of people expected a second stimulus check by Christmas, and many others held out hope for another stimulus check by the end of the year.  Well, with the year winding down it looks like the chances of getting another stimulus check are zilch.  And the stimulus package pitched by the incoming Obama administration looks less like a tax stimulus package and more like increased federal spending on infrastructure projects–great for our interstate system, but not so great for those looking forward to an economic stimulus check.

We The People, Without A Bailout

Since it appears we can give up on the idea the government will bail us out, even though they have bailed out numerous industries, I say it is time to bail ourselves out.  Yes, it is possible even in rough times. I frequently get asked how it is possible to save money when you are not even earning enough to cover expenses.  Well, that’s a good question.  And with rising prices and falling wages, it only gets tougher.

However, at some point we all need to give our financial picture an honest assessment.  Have we really cut out every single thing possible?  Are we really maximizing every single earning opportunity available? Chances are we are not, because to cut deeper or earn more requires making some extremely tough sacrifices.

No one likes the idea of living without cable television or cell phones, or working a 40-hour a week job and then picking up night and weekend work.  But the hard truth is that is often exactly what it is required to claw your way through a financial turnaround.  I know because we have had to do those same things.

I won’t lie to you; it was hard work and it hurt to be away from my kids while I was working two jobs and going to school at night. But we scraped and we sacrificed for a short time to get things under control so that we can enjoy the rest of our lives without financial worry.  We’re not quite there, but we are on the right path.

How To Create Your Own Stimulus Check

So rather than sitting around complaining about the government not bailing us out, or giving us yet another stimulus check, we have decided to create our own.  The last stimulus check was for $600 per individual.  That’s $50 per month, or roughly $25 per paycheck, or $12.50 per week.  Most people can easily spend $12.50 eating junk food in a week, or buying cups of coffee in the mornings on the way to work, or playing the lottery.  By simply eliminating those activities you can come up with $600 per year to add to your savings account.

The current federal minimum wage is $6.55 per hour.  To generate $50 per month one would only need to work about 10 hours (allowing for taxes). That’s 2.5 hours per week. Could you work an extra couple hours a week at your current job?  If not, could you pick up a part time job a couple nights a week, or work one full Saturday a month selling newspapers?  Sure you could, if you really wanted to.  I know people who have worked much harder, and overcome much more difficult circumstances to become successful. So instead of blaming the government for not cutting another check, or bailing you out, I encourage you to join me in a plan to rescue my own household finances.

When I was a kid I remember being so depressed the day after Christmas, knowing Santa would not make a return trip for some 364 days. As a grown up, I developed new reasons to become depressed after Christmas: bills!

Fortunately, in the last couple years we have managed to get a handle on our Christmas spending.  But it hasn’t always been that way.  Early in our marriage we bought presents for everyone under the sun (and to make matters worse, I married into a large, extended family).  I guess I was suffering from “new son-in-law” syndrome. The symptoms include overspending around the holidays in an effort to impress your new half of the family.

The years of overspending at Christmas were not a total loss, as we did learn some debt reduction tactics out of the exercise, and it did manage to cure our mega-consumer habits. So if you find yourself preparing to dig out from holiday bills, I offer the following tips I’ve collected along the way.

Take an inventory of the damage.  This first step is by far the most painful. To devise a game plan for digging out of holiday debt you must first figure out how deep you are buried. I suggest firing up a spreadsheet on the computer, or even dragging out a legal pad and pen, and listing each of your credit cards.  Update each card’s balance with current information from their website or voice response unit (you can wait on statements to roll in, but if you are already anxious I recommend getting a jump start).

Use extra savings to pay down debt.  If you went a few hundred dollars over budget, and have that money in savings, I recommend transferring some money around to pay off the debt. Only take this route if your savings balance is high enough to pay off the debt and leave some for emergencies.  The last thing you want to do is clear out all of your savings, because as soon as you make the payment you will encounter an emergency–guaranteed.

Rework your debt snowball plan.  If you have racked up more debt than you can pay off in one swoop then you will have to come up with a debt snowball plan. Line the balances up smallest to largest and pay minimums on all but the smallest.  Throw every single bit of “found” money in your budget at the smallest debt until it is gone.  Yes, that includes the money your great-aunt slipped into your Christmas card.

If you racked up quite a bit of high-interest debt, such as credit card or store card debt, consider a low-interest consolidation loan to pay off the high-interest debt and then snowball the loan.  If you go this route, be sure to close out the store card accounts and cut up the credit cards or you risk going right back into debt.

Do not allow history to repeat itself.  When your debt snowball has completely melted turn your attention to saving some Christmas cash to spend next year. Set up a dedicated savings account and funnel a little money there each paycheck throughout the year. By November you will have a few hundred dollars to spend on Christmas, saving you from post-holiday debt blues.