Spending Money On Kids At Your Own Expense

Posted on May 19, 2009 by Jason (Frugal Dad) at 6:00 am

Susan writes in with the following question regarding kids and money:

We are a family of four on a single (decent) income and strive to be frugal and sensible. How much is OK to spend on the kids while we’re raising them, and when is it not OK to sacrifice financial security?

My oldest son has high-functioning autism. He is nearly five and will enter Kindergarten in the fall. He is brilliant (learned to read at two and can easily multiply in his head) but has poor social skills.The school district we live in has an OK reputation for special-needs kids and it’s overall a good school compared to others in the city. However he will likely have the usual struggles that autistic kids have in a mainstream school setting.

We have the option of enrolling him in a school for kids with HFA. The tuition is $7000/year or $777/month over the nine-month school year. This is ALL the extra money we have per month to put towards debt and savings. But the teachers are well-trained, the curriculum specialized, and the student-teacher ratio is 5:1. The kids all have soaring self-esteems which is rare for kids on the spectrum.

We also have a toddler who is home nearly full-time.

When do you go all out for your child, and when do you say no for the sake of financial security?

Thanks for your question, Susan. This question hit home for me for a couple reasons. In addition to having some experience coaching an autistic child in youth sports, my own son was run through the usual battery of testing and evaluations to determine if he has autism. While no definitive diagnosis was made, we did discover a number of related issues such as sensory processing disorder, and we learned a lot about conditions such as Asperger Syndrome and other autism spectrum disorders.

I tell you this up front because my personal experiences probably taint my otherwise financially objective response. I would do anything for my son, and while his condition is not overly disruptive to our daily lives, we have sacrificed a few activities and altered our routine to accommodate him. Fortunately, few of those alterations involve the kind of financial obligation you are faced with.

Many parents face similar dilemmas when living in a bad school zone, and the costs of private school are prohibitive. What makes your situation unique are the special needs your son’s educators must be able to address to help in both his social and educational development. From the sounds of it, you are not completely confident you can find that in your public school system.

Taking emotion out of the discussion (as if that is possible when talking about our kids), let’s look at the financial implications of sending your son to his special school. $777 a month is a significant obligation to take on. When you break it down further, that amount represents roughly $200 a week in reduced spending, increased earnings, or some combination of the two. While you could put your debt repayment and savings goals on hold, this would be detrimental to your overall financial plan, and could potentially place a financial burden on your kids as they get older and have to help you.

Instead, I would suggest you think of some creative ways to both come up with that extra $200 a week, and ways to cut your spending even further. Could you cancel the cable? Sell a second vehicle? Take a part time job in the evenings? Start a side hustle from home? Adjust your tax withholding to prevent a refund? It may take some drastic measures to drum up the extra money, but it sounds like you are willing to make the sacrifice.

I would also talk to the school about any scholarship opportunities, or employment opportunities for you that could reduce tuition (this might be particularly helpful when your youngest is in school full time). Perhaps you could do some administrative work for the school, or substitute teach after being certified, or your husband, or another family member, could do some technology work for them in exchange for tuition. Solicit help from relatives. Investigate options such as 529 savings accounts where grandparents, aunts and uncles can make contributions to your son’s educational expenses–and funds may be withdrawn tax free. I’m brainstorming here, and I realize some of these options may or may not apply.

The bottom line is to talk things over with your spouse and make sure you are in agreement with the decision. That is half the battle. Then focus on ways to make it happen, without doing irreperable harm to your own financial future.

Improve Budget System With Second Checking Account

Posted on May 18, 2009 by Jason (Frugal Dad) at 6:00 am

My wife and I have been struggling to adhere to our budget over the last few months. A number of personal crises have conspired to make sticking to each budget line item a tall order. I’ve been on the lookout for a less cumbersome budget process, while improving automation and reducing the opportunity to overrun our spending limits.

Fortunately, the June 2009 edition of Money magazine generated some ideas in the article, “Discover Your Budget Style,” written by Ismat Sarah Mangla. The article describes one method of budgeting that appeals to me. It is referred to as the “bucket budget.” The bucket budget is for those who prefer to track spending with less granularity. So rather than tracking every morning latte, the dry cleaning bill, the occasional meal out with friends, and baseball cap you bought for your son, you would simply track these categories as part of a larger “variable expenses” budget.

The Money article goes on to explain how to implement the bucket budget. I’ll consolidate their detailed steps into a few quick bullets below.

Two checking accounts and one savings account are required
Calculate saving contribution desired from each paycheck and have employer’s payroll office direct deposit that amount into an online savings account
The remaining amount of paycheck should be deposited in Checking Account #1 for payment of major, fixed expenses such as the mortgage payment, power bill, etc.
With what’s left in Checking Account #1, divide the amount by four and schedule equal, weekly deposits into Checking Account #2. This second checking account will be used to purchase all variable budget items, such as food, clothing, and entertainment expenses.

From the Money article:

The system creates “artificial scarcity,” forcing you to live on less and within hard boundaries.

I like the idea of creating this “artificial scarcity.” If you are like me, I tend to let cash burn a hole in my pocket, so if I withdrawal all of my spending money at the beginning of the month, or the beginning of the pay period, it tends to run out well before my next paycheck. In the past, when this happened I turned to credit cards to float expenditures to my next paycheck, or I dipped into savings. Using the bucket budget system, we would never be more than a week from refreshing of our supply of cash.

One word of caution: to avoid costly overdraft fees it is probably a good idea to save up a little cushion for both checking accounts, since the timing of automatic deductions, subscription payments and your weekly allotments could draw down your balance at the worst possible time. To keep things comfortable, I’ll try to keep $500 in each account and treat that number as the floor amount, rather than $0.

To further enhance this system we plan to incorporate our envelope budget system. When the weekly transfers are made to Checking Account #2, we will withdraw a portion of the money in cash and use it to fill our envelopes. This allows for some specific budget category tracking for things like food and entertainment, and keeps us from overspending in those particular categories. For remaining categories like gas purchases or subscriptions (Netflix, the gym, etc.) we’ll stick to a debit card for convenience.

I recognize this budget system won’t work for everyone. After all, some people enjoy tracking spending across dozens of categories. I used to. However, I found myself spending too much time in front of an Excel worksheet, and too much time beating myself up for overrunning the “Magazine” category because I renewed my Money subscription last month. Just imagine–if I had continued to be that strict on my budget categories I would have missed out on reading about this very idea.

Lawn Care Tips

Posted on May 16, 2009 by Jason (Frugal Dad) at 6:00 am

It looks like winter temperatures have finally left most of the U.S, and that means it’s time to give way to spring. It also means it’s time to brush up on our frugal lawn care tips. From checking lawn sprinkler systems and sprinkler heads, to putting down some post-emergent weed killer, the spring lawn care work you put in will pay huge dividends later in the summer by producing a beautiful, healthy lawn.

lawn care tips
Photo courtesy of Mish Bradley

How Often Should I Water My Lawn?

Some of this depends on how well-established your lawn is, and the kind of conditions you live in. For new lawns, it is recommended that they get daily watering (or at a minimum, every other day) until the lawn has established a strong root system. Older, more established lawns, should only be watered two or three times a week to encourage roots to dig deeper for water sources, which leads to a healthier root system.

What’s the Best Time Of Day to Water My Lawn?

The best time of day to water your lawn is early morning, just before sunrise. The temperatures are relatively cool, so no worries about evaporation. Watering in the heat of the day can be counterproductive because much of the water will evaporate when it hits the surface of a hot lawn. Watering in the evening can lead to fungus and grass disease because the lawn blades do not have adequate time to dry before nighttime.

How Short Should I Cut My Grass?

Mowing height depends on a variety of factors, such as the type of grass, your climate, etc. Generally speaking, grass should be cut relatively short early in the year to discourage weed growth. As the spring wears on, and the temperatures begin to rise, it is recommended to raise your mower blade slightly as well. A taller lawn will withstand periods of extreme heat and be more drought-tolerant than a lawn with shorter grass.

When Is The Best Time To Put Down Weed Killer and Fertilizer Products?

The best time to put down weedkiller is before weeds appear. In early spring, before the weather begins to warm, putting down a pre-emergent weed killer can significantly reduce the number of weeds in your lawn. Once weeds appear, treat them with a “weed and feed” product that acts as both a fertilizer and weed killer, or spot treat with a liquid weed killer. Take care in selecting the type of weed killer to use to be sure it is safe for your type of lawn. If you are unsure, ask a local nursery, landscaping company, or agricultural extension. Click here for all natural pesticides from Gardens Alive!

Inspect Lawn Sprinkler Systems and Sprinkler Heads

If you have an in-ground sprinkler system, spring is a good time to run it through all the various zones to make sure sprinkler heads are properly adjusted. If you discover a broken sprinkler head, pick up a replacement at a home improvement store. Though most sprinkler heads are simply threaded onto the PVC pipe running below, take care removing them or you could pull a pipe joint loose somewhere downstream and have a bigger mess to clean up.

Putting these spring lawn care tips into practice will help you establish a beautiful, green lawn for many seasons to come, improving your curb appeal and the value of your real estate property.

Work Out Effective and Smart Couponing Strategy

Posted on May 15, 2009 by Jason (Frugal Dad) at 6:00 am

A coupon code can generally only save you a bit of money – but this can accumulate into great savings if you have a smart couponing strategy. Let me share mine with you:

Pick up just a few reputable coupon code directories and monitor them effectively.

qponcutie There are plenty of coupon code sites and blogs and keeping track of all of them would be too time consuming (and time is money too!), so pick just a few ones. How to choose? Here are my tips:

It should be easy to navigate and user-friendly;
It should provide some handy tracking options (for example, newsletter or RSS);
It should be updated daily.
It should focus on your needs (in other words, pick the one that mostly lists products you buy often).

Here are my personal picks:

FreeShipping.org (for its clear interface and quality selection of coupons);
QponCutie (for its RSS subscription and female-oriented coupons – just what I like).

Don’t trust the seller’s word, check what other buyers say!

Buxr I love it when the site not only list deals and coupon codes, but also allows their members share their experience on each one.

This way you save your money by choosing only trusted deals and retailers. My favorite site for that is Buxr.com. Let me tell you why:

Each deal has ratings, votes and reviews.
The site is attentively moderated, so totally spam-free (each deal should be approved before it goes live).
It offers quite a few Web 2.0 goodies (like wish list and deal alert);
Best deals are daily rewarded with cash, so members do their best to deliver most useful codes and deals.

Make sure you know how to track

My coupons Email box is by far not your only way to get updated on new deals. Use your couponing toolbox wisely:

Try various RSS readers to choose the one you like best (my personal favorite is Wizz RSS FireFox plugin because it doesn’t take much space and is well-organized);
Use Twitter! Many sites now offer Twitter as an alternative way to subscribe to their updates. The best thing about this tool is that Twitter delivers updates right to your mobile phone (if you are in the United States), so you can get new deals even when you are offline (again, don’t go too much into it, pick only one to follow closely).
Use services that allow alternative subscription methods (for example, FreeShipping.org mentioned above allows to subscribe only to those sellers you plan to buy from via their “Favorite Coupons” option).

Use your calculator!

Right, your own common sense is your best weapon! It is a commonly-used trick to offer “fake” coupon: first increase the price and then offer a discount – so that the end price just ends up to be even higher just in the nearby store that offers no discount at all. So take your time, compare prices and make the right choice!

Good luck!

The guest post was provided by Ann Smarty, an SEO Consultant. I hope you will find it useful!

Weekly Roundup: Car Payment Almost Gone Edition

Posted on May 14, 2009 by Jason (Frugal Dad) at 6:00 am

My wife and I are closing in on a status we have never achieved during our married life together – without car payment. Just a couple months after we married I leased an SUV. The lease represented one of the dumbest finance moves I’ve ever made, and has haunted us, financially, for a decade.

When the lease was up I refinanced the balance into a traditional loan, and before that loan was up I traded in the SUV and financed our current vehicle. We are now within one month of saying goodbye to car payments – forever. We plan to continue to pay our car payment to ourselves by depositing the same $310.00 we’ve been paying for our curerent vehicle into an online savings account. In a few years we’ll use what’s in savings to buy a new (used) family car and I’ll drive the old one back and forth to work. We will continue this pattern for the rest of our driving lifetimes.

The Fab Five

Early Retirement or Meaningful Work? Thought-provoking post which asks, would you rather “retire” early or continue meaningful work? To me, the question is asking, would you rather hang up your current job to spend your remaining time in an endeavor that is meaningful to you. Which begs the follow up question, why aren’t we already doing meaningful work? Like I said, very thought-provoking. (@ Brip Blap)

Your Real Wage. Do you know your real wage? No, not your hourly wage…your real wage? I’m referring to the amount you are paid after taxes, commuting costs, employment costs, child care, etc. Read on to figure out your real wage. (@ Hundred Goals)

Five Ways to Make Laundry Day Easier. My wife recently had to tend to an ill family member, leaving me alone for a couple days with the kids. I typically help with laundry duties, but rarely do I take the lead. I was reminded why I dislike it so much over those couple days. The tips in this article remove much of the stress (and expense) from laundry days. (@ On Simplicity)

Recoup Your Lost Savings. The last time I looked at my retirement account statements I was closing in on being down 40% from the highs of last summer. Thanks to a slight rebound, I’m hoping the most recent quarterly statements will look a little better. Kiplinger has put together a helpful calculator to figure out how long it will take to get back to those high balances again. I’m still depressed. (@ Kiplinger.com)

How to Live Well on Less in Retirement. This post goes along with the theme of my favorite personal finance book, Your Money or Your Life, which emphasizes the point that you don’t need to be a multi-millionaire to enjoy a comfortable retirement. By making sacrifices early on, and living frugally both before and during “retirement,” you can live on less than you might think. (@ Get Rich Slowly)

The Best of the Rest

Site of the Week

Early Extreme Retirement. I was planning to include this site in the roundup itself, but I found so many interesting posts I decided to just link to the entire blog here. Any time I feel like I am sacrificing too much I go read a post at Jacob’s blog about how he became financially independent and I quit feeling sorry for myself. This guy has made some incredible sacrifices, and I like that his ideas are outside of the normal personal finance advice box.

Frugal Dad

Money Saving Insights: Coupons, Smart Spending and Promotional Codes

Monthly Archives: May 2009