Monthly Archives: December 2009

What Have You Done Right Lately?

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This guest post is from Jackie, who writes at MoneyCrush about learning to love your financial life and reaching goals. Check out her site at www.moneycrush.com or subscribe in a reader.

We’ve all made financial mistakes, and chances are we’ll make more mistakes in the future.

Maybe we aren’t socking away enough money for retirement, or overdrew our account, or bought at the peak of the housing market and are underwater. When things like that happen, it’s common to take a step back to analyze our mistakes to see where we went wrong.

While reviewing and learning from past mistakes is good — that’s how we improve and prevent repeats of the mistakes — dwelling on them and beating ourselves up over them isn’t.

But when it comes to analyzing the past, there’s a step we often
overlook: Reviewing our past successes.

Take a moment to think about it. What have you done right lately?

See what you have done well in the past, and what you could repeat in the future. What caused you to make a decision that turned out well?
What traits did your successes take advantage of?

For example, maybe you’ve set up a bill paying system that where you pay your bills at the same time each month. Since then, bill-paying has been a breeze. That takes organization, so organization is probably one of your strengths. How else could you use organization to improve your financial life?

“Make a list of financial goals” is the first thing that pops into my mind when I ask myself that question. Once my list is made, I can set about organizing it further so that I can achieve the items on it.

Or maybe you’ve automated your bills so that they’re withdrawn from your checking account each month like clockwork. And since you’ve done that, you haven’t once overdrawn your account, which was a problem for you in the past. If automation is working for you, look for other areas that you could automate. (Such as retirement, investing, savings, etc.)

Play to your financial strengths and use them to your advantage.

Taking Financial Inventory for 2009

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The following post is from Neal of WealthPilgrim.com. After reading the article, be sure to sign up for free at Wealth Pilgrim to receive more from Neal.

Like you, I take stock of myself this time of the year.  I look back over the last 365 days and consider my accomplishments.  I also think about the challenges I still face. I think about what I could have done differently in 2009 and how to apply those lessons in the coming year and beyond.

This reflection is a really good thing – especially when it comes to finances.

But let’s face it.  For most of us, there is only so much you can to do.

Sure we can learn more about money.  We can earn more, spend less, get rid of more debt and invest better.  But I have to be honest with myself.  I’m going to be working on doing better in these areas for the rest of my life.  Probably, so will you.

So..yes…..taking this “financial inventory” is mission critical for me….but it’s also dangerous and I’ll tell you why.

I don’t know about you, but when I think about my finances, I think about improving things.  I focus on the outcome.  The results.  Control.

But in reality, most results are beyond my control.

Look….in 2008 my business and my income suffered a lot. When I did my financial inventory last year, it wasn’t fun.  Like you, I lost a lot.  Doing my “financial inventory” hurt.  I was in a lot of pain and fear.  Even though I wasn’t responsible for the global financial crisis – it felt like I was.

This year, things look better and I feel better.  Yes, we cut expenses…..but much of the improvement in our financial situation is a result of the economy improving and that’s beyond my control too.

I’m sick of tying my sense of well-being to things I have no control over. I am officially turning in my badge.  That’s it.  I quit.

I’m going to try my hardest to stop taking responsibility for things I have no control over – good or bad.

What I will do is take responsibility for suiting up and showing up – but that’s it.  My inventory is going to consist of a whole new list:

1.  Did I spend in a reasonable and adult manner?  Or did I act in fear and unreasonably?

2.   Did I invest in a similar way?

3.   Did I spend my time wisely?

4.   Did I have fun? What can I do to enjoy the process of earning a living, cutting my spending and investing?

5.   Am I trying to control the outcomes or am I willing to let my best be good enough – regardless of the outcome?

6.   Was I of service to other people?  Did I try to help?

This may seem really basic to you but it’s not for me.  I’m hard-wired to focus on the outcome .  That’s a good quality and it’s helped me a lot.  But that same character attribute is also a character defect when I take it too far and my natural tendency is to do so.

What about you?  What are you going to take inventory of this year? Do you think it’s OK to focus on results?

Reviewing Diet Plans For 2010

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During the last year I have put my own health on the back burner as I focused on the health of my mother, who passed away in September at 54 after a long recovery attempt from a stroke. One thing I have a learned from her illness, and death, is that I need to take better care of myself. So, like millions of others planning their diet of choice in 2010, I have started planning for a healthier me.

Bathroom Scales

Since I’ve always been a big guy, I’m familiar with all sorts of diet plans, training regimens-even the gimmicks. When I was younger, spending lots of money on gym memberships, bikes, creatine and other supplements, and high-quality food was pretty easy. Now that I have a family, and other mouths to feed, spending a lot of money on those same things seems like an expensive hobby more than an effort to improve my health. But, it seems the years of eating cheap and working (and sleeping) through planned workouts is catching up with me.

The Costs of Commercial Diet Plans

Looking at the various available diet plans through a frugal filter leaves few options. Most plans require you buy the plan’s food, or pay for a subscription to a website, or pay for group meetings, or counselors, or all of the above. This can add up quickly. For instance, take a look at the program fees for three of the more popular diet plans(as listed in the January 2010 edition of Smart Money magazine):

NutriSystem ($349/month)

I tried NutriSystem for a couple months, but found it to be very expensive. Not only did I have to pay for the food, I also had to buy additional food to eat along with the NutriSystem meals (salads, vegetables, etc.). A few of the meals were pretty good, but I found all the canned, “red” sauce foods to taste like they had nail shavings in them (very metallic). I became convinced Dan Marino was full of crap.

Weight Watchers ($69/month)

If I had to pick a commercial diet plan it would probably be Weight Watchers. I’ve attended a few meetings out of curiosity, and found their points system to be more tolerable than counting carbs or calories. I also like that they have a “do-it-yourself” web-based plan for those like me who would rather not attend weekly weigh-ins.

Jenny Craig ($380-$770/month)

I don’t know much about Jenny Craig, but from what I’ve read it is one of the more costly diet plans around. The plan costs include enrollment fees, one-on-one counseling, and of course, Jenny Craig branded food and other supplies.

*Medifast is offering $50 off any purchase of $275 or more now thru 1-31-10. Use Coupon Code: Jan31C when ordering.

The Frugal Diet Plan

Instead of shelling out over $6,000 on a diet plan next year, I started thinking about putting together my own plan by taking  some of the better ideas I’ve come across in the last couple years of blogging. These ideas cost very little, and in some cases actually save money.

Eat less to be lighter. Here’s a novel idea: eat less food to lose weight. It’s a concept that is simple when said out loud, but very difficult when parked in front of a buffet. This concept focuses less on what you eat, and instead how much you eat. This will definitely be an important element of the frugal diet plan I develop in 2010.

Eliminate “liquid calories.” Americans consume more than 22 teaspoons of sugar a day, and soft drinks make up about 1/3 of that amount (Bottom Line Personal Magazine December, 2009). Considering one 12-oz can of Coca Cola has about 8 teaspoons of sugar, I could eliminate significant calories and carbs simply by avoiding soft drinks. And considering we pay $1.25-$1.50 for each 2-liter bottle (plus my daily, 3:00pm trip to the vending machine at work) we could save a good bit of money over the next year.

Grow more of our own food. Last year we skipped the square foot garden and I really missed it, not only for the fresh vegetables right out of our backyard, but gardening is also therapeutic for me. I enjoy getting out of the house for a few minutes of peace and quiet. And when I am not interested in peace and quiet, I love letting the kids help!

Eat like a kid. No, not ice cream and gummy worms for breakfast, but in kid-sized portions. Eat off smaller plates.  Use smaller cups for juices and other drinks. The other day my son and I were finishing some Christmas shopping and had to grab a bite to eat on the run. I ordered him a fast food kids meal with fruit instead of fries. Instead of ordering the usual super-sized gut burger I always get, I decided just to double the kids meal order. I had a grilled chicken sandwich, fruit cup and water, all for many less calories (and a couple dollars) than I would have spent on an adult-sized meal.

Think like a caveman. My wife accuses me of this already, so perhaps I’m on the right track! Actually, what I’m referring to is making food choices based on the types of foods our ancestors ate. When humans first began roaming the earth, Oreo cookies and Mountain Dew were not staples of their diet. They eat things that came from the earth, not hydrogenated oils and high fructose corn syrup. In the coming months, I plan to eat more vegetables, fruits and nuts, just like the hunter/gatherers of the past. With the major exception being I’ll hunt and gather inside Kroger rather than a frozen tundra.

To review the highlights of my frugal diet plan, in 2010 I will eat less food, cut out soft drinks, and grow my own fruits and vegetables while eating like a kid and thinking like a caveman. Simple enough.

Photo by PicsmaKer

Last Minute Gifts For The Frugals On Your List

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Over the years I’ve tried to compile a few last minute gift ideas. Oddly enough, I nearly waited until the very last minute to run this post, as we find ourselves on the final shopping weekend before Christmas. However, it’s not too late to add some frugal gifts to finalize your Christmas shopping this weekend.

Black & Decker Energy Saver Series Power Monitor. Here is one we don’t have, but it is on our Christmas list this year.  I’ve become a bit obsessive about ways to cut our utility bills (yes, I admit it, I have a problem!).  It hurts opening those huge energy bills in the extreme summer and winter.  This gadget allows you to see the effect of each electrical appliance as they cycle on and off, and using info from your electric bill, you can estimate how much those appliances are costing you to operate.

Amazon Gift Card.  Amazon.com used to be the one-stop shop for buying books online. In fact, it still is.  But Amazon now offers so much more!  I have bought everything from packs of diapers to household appliances from Amazon, and I’m sure an Amazon gift certificate would go a long way towards pleasing someone on your list.  They offer several options for procrastinators like print from home or email delivery, so no waiting on a gift card via snail mail–perfect for last minute gifts.

Netflix Membership.  Plans start at $4.99 a month, and are a wonderful last-minute gift idea for the movie buff in your life.  Simply select the plan, length of time you would like to gift and you’re all set.

Programmable Thermostat.  Our utilities were out of control before switching to a programmable thermostat.  We managed to shave nearly 20% off our utility expenses by allowing the night temperature to float up in the summer, and drop lower in the winter.  Just before the alarm clocks go off each morning, the thermostat returns the inside temperature to a comfortable for the morning routine.  A 5-1-1 or 5-2 model even allows you to set a different schedule for sleeping in a bit on the weekend (unless you have small kids).  With utility costs continuing to rise, it won’t take long for this one to pay for itself.

The Total Money Makeover. This one remains in my top two favorite personal finance books.  Oddly enough, I heard the audio book first while commuting after accepting a new job in a new town.  I was hooked, or “gazelle intense,” as author Dave Ramsey likes to say!  I credit Dave, and this book, with helping turn around our financial lives.

The book is not overly complicated, is inspirational, and is written in a tone you’d expect from Dave Ramsey. It would make a great gift, and I recommend a copy for yourself if you have never read it.

Your Money or Your Life. I already mentioned The Total Money Makeover, but this book is my other favorite money book. It is the book that got me interested in the idea of personal finance to begin with, and it introduced the concept of financial independence.  Written in the 1990s, the information is timeless and thought-provoking.  When I read this book I finally made the connection between work, earnings, and life energy.  I realized that trading my precious life energy to pay for additional stuff was simply not worth it–that I could enjoy a more simple way of like and work less for it.

TiVo Series2 80-Hour Dual Tuner DVR. We’ve had our TiVo for a couple years now, and I have to tell you it is one of the best purchases we have ever made (this was a present to ourselves).  For a while we were renting a DVR from our cable company, and the digital service that went along with it. Then, I discovered TiVo.

I like the TiVo interface much more than the one that came with the cable box, and I like the fact that I own the machine outright. If I move, I can take it with me. If I want another one for the living room, I can buy one. No extra rental fees from the cable provider.

We have really cut back on television viewing, but enjoy the efficiency of watching a program on TiVo.  Fast forwarding through commercials cuts way down on television viewing time.  I also like the ability to log into my TiVo box from work, or on the road, and select a program to record via a web interface.

Programmable 5.5 qt. Crock Pot.  We stay pretty busy around the frugal household these days.  A couple times a week we have after school activities and sports practices on the same night!  Not much time for meal preparation on those days.  And that is where our crock pot comes in handy.

Our favorite meal is a large pork roast rubbed with garlic salt and cooked slow all day in a crock pot and about a 1/2 cup – 1 cup of water.  We have enough meat to slice for homemade barbecue sandwiches for days–delicious!

Kiplinger’s Personal Finance Magazine Subscription. For one dollar a month (assuming a $12 annual subscription) you can get some of the best reporting on investments, taxes, insurance, paying for college, planning for retirement, home ownership, major purchases such as cars and computers and other personal finance topics. Over the years I have also subscribed to Money, Smart Money, and a host of other finance magazines, but Kiplinger’s remains my favorite.

529 College Savings Plan Contribution. You could just skip presents altogether and make a contribution to a child’s 529 college savings account. It could be for a niece or nephew, a younger sibling, or maybe even an unrelated child whose family could use a little boost. This is truly the gift that will continue to give for years to come.

Presto 22-inch Jumbo Electric Griddle.  I mentioned that we stay busy and have little time cooking most weeknights. To further complicate matters, we are experiencing more cold, rainy weather than we are used to.  This makes grilling outdoors tough. Our solution? An indoor griddle.

The griddle was given with the idea we could use it to make pancakes and breakfast foods, but we found it to be excellent for cooking slices of chicken, pork, and thin steaks indoors. As fattier meats cook the grease runs down into a drip container making meats a little healthier.  Cleanup is a snap thanks to a non-stick surface.

Money Mammals. We were lucky enough to receive a copy of Money Mammals from the creator, and my kids really enjoyed it.  In my review I posted here at Frugal Dad, I called Money Mammals the Little Einsteins for personal finance education for children.  It remains a unique product, and would make a great gift for little ones on your Christmas list.

Cash. If all else fails, give cash.  Cash is the universal gift. It can be spent anywhere that accepts money!  No worries over expiration dates, stores going bust and gift cards becoming invalid.  And one of the best things about cash is the recipient doesn’t have to spend it at all.  Maybe they can use it to add to their debt snowball, or get a jump start on an emergency fund.

Dealing With Financial Setbacks

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This post was written by Chris. He is a twenty-something battling his way out of more than $150,000 in debt. You can read more about him at Money Relationship.

When my wife and I decided to get out of debt, we went at it full force. We felt like nothing was going to stop us. However, almost immediately, financial troubles began to pop up. They weren’t necessarily large, but they were putting a damper on our extreme dedication to get things rolling. For example, my car needed new brakes, rotors and registration ($1000). My wife needed a small amount of surgery ($300), etc., etc. It just kept adding up and it felt like we were getting nowhere. After dealing with those setbacks, I’ve thought about some things that we did wrong (and right) in dealing with them. I’ve broken them down into some tips for dealing with financial setbacks.

Don’t Make Excuses

Over the past few months, I’ve realized that I made a lot of excuses for not paying down as much debt as possible. For example, every time we ran out of cash in our grocery envelope, I thought it was OK to just take it from somewhere else (the debt envelope for example). I figured, eh, what’s one month, we will get it rolling next month. That excuse seemed to pop up almost every month. Maybe one month we needed the extra cash for car expenses and the next we needed it for something else. All I can say is, stop making excuses and start getting angry at your debt.

Have a Small Emergency Fund

Everyone knows the importance of emergency funds. They’re there in case you have a financial setback or lose your job. Having a small emergency fund while in debt insures that if you do have a small financial emergency, you won’t have to accumulate more debt to handle it. Our emergency fund is set at $1,000. It’s a simple, round number that we feel comfortable using. You can make yours whatever you feel comfortable using. I think Frugal Dad actually used a $3,000 emergency fund while he was getting out of debt. Before you start paying off your debt, get an emergency fund set up. It will save you a lot of pain in the long run and it will prevent you from adding on to your debt.

Save Elsewhere

Something that we continued to do even when we had financial setbacks was spend elsewhere. I mean, we had $50 in our clothing budget, so we spent it on clothes. Looking back, we should have rolled that $50 into our debt snowball and postponed the enjoyment of clothes shopping for a month. Would we have gone crazy if we didn’t spend that for one month? No way. When you have financial setbacks, find other ways to save money. Maybe you shop at the discount grocery store that month or brown bag it the whole week. Why not pick up some overtime at work or a side job? These small things can make financial setbacks easier to handle.

Refocus and Get Moving Again

Once the setback is in your rear view mirror, it’s time to refocus and get back into gear. After our setbacks, we really started to attack our debt. We managed to pay off our $1,500 Best Buy credit card in 2 months. It just angered us so much knowing that we could have had it already paid off and we would be almost done with another debt. But, things happen and you just deal with them.