SmartyPig Race Out of Debt Contest

One of my favorite banks, SmartyPig, which still offers an above average 1.75% APY on savings, is rewarding one lucky customer with $4,951 to help pay off their debts (or take a vacation, shop for Christmas presents, etc.). That figure just happens to be the average amount owed by Americans on their credit cards. It’s an 8-year low, but there is some work left to do, and SmartyPig wants to help.

To enter the “Race Out of Debt” contest, open a SmartyPig account here, then follow the directions on SmartyPig’s blog post announcing the contest. Good luck!

The Frugal Roundup

The Lost Decade of Investing: Was All Really Lost? The big take-away for me – the market is broader than the S&P 500, and there were opportunities to make money over the last ten years. (@Generation X Finance)

100 Thing Challenge. Dave wrapped up his personal 100 Thing Challenge in November, but has shared a recent update on his continued mission to continue living with less than 100 things.  (@Guy Named Dave)

I Did It My Way: Long-Term Blogging Success Tips. When I first came on the scene three years ago with Frugal Dad, Amy was one of the first to virtually greet me. Her site remains one of my personal favorites. (@Mom Advice)

Ahh, the American Dream. A very simple, yet very powerful, post from Bernice. How many of these things can you relate to? (@Ramblings of a Woman)

FREE Christmas Planning eBook and Printables. With Christmas only 100 days away, and shopping/decorating season beginning well before that, this eBook and accompanying templates should come in handy! (@Organizing Your Way)

Best of the Rest

Support Our Sponsors

The Daily Middle. The Daily Middle is a group dedicated to helping those in the middle class cope with the coming financial crisis. And when they say “cope with,” they mean not just surviving the storm, but hopefully even prospering during it.

Monitor Bank Rates. MonitorBankRates.com offers a free rate search and compare service offering the latest best rates on products ranging from certificate of deposits, savings accounts, checking accounts, credit cards, mortgages and insurance.

J.G. Wentworth. Thousands of individuals contact J.G. Wentworth every month to inquire about selling some or all of their monthly payments for a lump sum. For some, selling their structured settlement payments (annuities, settlements, lottery winnings, etc.) is not the best option; for others it clearly is. J.G. Wentworth’s team of experienced representatives will work with clients to customize options tailored to each individual’s needs.

Do We Have a Right to Line Dry Our Clothes?

I don’t have many memories of my dad’s parents, because unfortunately they passed away when I was still young. However, one thing I distinctly remember was my grandmother hanging her laundry out to dry on her clothesline.

One day I asked my mom why we didn’t dry our clothes outside, too, and she said grumbled about the neighbors or the neighborhood or something. I didn’t really understand it all. I mean, who cares if you dry your clothes on a clothesline? Apparently, many people do.

Online by erix! on Flickr

Line Dryers vs HOAs

The latest issue of People magazine (September 13, 2010) has a small story featuring couples fighting for their right to line dry their clothes. The homeowners’ association in their area decided clotheslines were off-limits, forcing the couples to continue using their electric clothes dryer or indoor drying racks.

When one Oregon couple challenged the ruling by drying clothes outside despite the rules against it, they were hit with a $1,000 fine by their HOA.

This isn’t the first time I’ve heard of homeowners’ associations threatening legal action over clotheslines. Homeowners’ associations are notorious for setting some seemingly ridiculous rules for their members.

Naturally, HOA defenders will say a neighborhood needs rules to protect property values, etc. But I say we have enough rules – who wants yet another authority telling us what we can and can’t do within our own backyards?

How Much Does Line Drying Clothes Save?

It is difficult to estimate the energy efficiency of one particular drying method over the other because dryers are not rated similar to other appliances. Here’s the explanation from the Energy Star program website (EnergyStar.gov):

“ENERGY STAR does not label clothes dryers because there is little difference in energy use among models.”

However, the EnergyStar website does list a few tips for improved drying, should you decide to use an electric clothes dryer (or gas):

  • When shopping for a new clothes dryer, look for one with a moisture sensor that automatically shuts off the machine when your clothes are dry. Not only will this save energy, it will save the wear and tear on your clothes caused by over-drying.
  • Dry towels and heavier cottons in a separate load from lighter-weight clothes.
  • Clean the lint filter in the dryer after every load to improve air circulation.
  • Periodically inspect your dryer vent to ensure it is not blocked.

Even if Energy Star won’t rate how much energy my dryer is using, I know from experience that not running my dryer as often reduces my electric bill.

Alternatives to a Clothesline

Before considering a retractable clothes line, my wife and I used an indoor clothes drying rack similar to this one. It was a little smaller than the one shown, but still large enough to hold a load of towels or jeans (the two items that seemed to hold the most moisture after the final spin around the washer).

The downside to indoor clothes drying racks is that the evaporating moisture often increases the humidity in the room you are drying clothes, which makes air conditioning work a little harder in the summer months. For this reason, we often set up the drying rack in our master bathroom, because that’s a room that is expected to be a more humid than others.

Drying racks, and even outside clothes lines, are also thought to change the shape of clothes (as in clothes often get stretched out a bit rather than returning to their normal size). One remedy for this, and perhaps a good compromise for those still unsure about line drying, is to partially dry clothes outside and then toss them in a clothes dryer on a light, cooler setting with a dryer sheet for a few minutes.

Using this method, the  dryer does not have to produce much heat, and therefore drains less energy, while fluffing clothes, removing static and giving them the scent you are used to (although for me, nothing beats the scent of clothes dried outside).

Any readers personally use a clothes line to dry laundry? Anyone prohibited from using them, but would like to?

Relocating To Save Money On Housing

One of the benefits of having readers spread across the country, even the world, is that often we are introduced to a different perspective on a particular topic. And often that leads to even more thoughtful discussion. That was the case recently when I wrote about my thoughts on the television show My First Place on HGTV: How to Spend Your Next Thirty Years House Poor.

While many agreed the premise of the show seems to steer first-time home buyers towards more expensive housing, few of us could agree on whether or not the featured couples could afford such housing. Part of the problem is key elements of an affordability equation are often missing – such as income, other debts, etc.

An even larger discussion developed regarding the regional variance in housing prices. I must say, even I was surprised by some of the comments (and there were a bunch of them – 91 at last count!).

In response to my suggestion the couple should look for a house in the $200,000 range (half their intended budget), reader “Cat” commented:

I completely agree with your post, however, in the city I live in a you cannot get a house for $200,000 even in the worst part of town right by the railroad tracks. You’d be hard pressed even to find a crappy condo for that low of a price here.

As a guy who grew up in a $27,000 (at the time it was purchased) house built in the 1960′s, and purchased a decade later, that was hard to believe, but no doubt true considering the grossly inflated real estate markets around the country. Of course, everything is relative. Areas with high real estate values also usually offer higher salaries, making these more expensive homes affordable to potential home-buyers.

Still, I was struck by the number of people who indicated they could not find a decent home for less than $450,000. My gut reaction – why not move? But it’s not that easy.

People tend to settle close to family, where they graduated school, or near job opportunities in their particular field. Others may enjoy a particular climate or part of the country. It’s not easy to just pack up your stuff, leave behind family, and move clear across the country.

I’m fortunate in that I live in a relatively small town in a very reasonable real estate market. Home values here are among some of the most affordable in the country. It was a consideration we made when accepting a new job ad relocating here some six years ago now. It just so happened to be the same city my mom lived in, and before she passed away (a year ago today, in fact), we enjoyed being closer to family.

Comparing Apples to Apples: Housing as a Percentage of Income

We spend about 15% of our after-tax income on housing. I’m comfortable with that figure, even though when we were shopping for a home those involved in real estate tried to convince us we could easily afford to mortgage 25%-30% of our take home pay on monthly payments. No thanks.

The reason we avoided taking on a larger mortgage is risk. Risk of job loss, illness, income reduction, etc. should weigh heavily on you when deciding how much house to buy. Instead, risk is often an after thought. Oh, that won’t happen to us. We have plenty of savings. I can always find another job. Trust me; it will, you don’t, and you might not.

It’s worth pointing out that if I moved to another part of the country, and made significantly more money than I do now, then 15% of my income would buy a more expensive house (not necessarily more house, just a more expensive one).

Unless the couple in that show were bringing home $20,000 a month, a $3,000 a month mortgage was probably considerably more than 15% of their income. It may have been more in line with 30% of their take home pay, and if that works for them, they can probably pull it off, assuming nothing goes wrong over the next 30 years.

Relocating for More Affordable Housing

So the big question is this: Would you consider moving to a new city if housing prices were cheaper, and you could buy more house for a lower percentage of your monthly income? After all, these days more people are considering relocating to end unemployment; why not relocate to spend less on housing, often a family’s largest budget category.

Obviously, one would have to consider a variety of other economic factors such as general cost of living, average salaries and job opportunities, quality of education, crime rate, climate, and very personal matters such as proximity to friends and family.

It is certainly not an easy decision, but one I would strongly consider obligating myself to such an expensive housing payment. By the way, I found this Best Places to Live in America post which lists average home price. You can see from the list there is a considerable range, even among the top places to live.

Weekly Roundup: Household Ledger Update

July and August are in the books, quite literally since we began tracking every household expenditure in our paper and pen ledger. It was a great exercise in identifying leaks in our budget – and we had quite a few.

We discovered we are spending more than we thought on things like food and entertainment. Those trips to the drive-thru on the way home from soccer practice, and the occasional magazine or book purchase add up, but are often lost in the shuffle of cash, credit/debit card receipts, etc. over the course of a month. Forcing ourselves to account for and record every single transaction was eye-opening.

Next week I plan to put together a longer post about tweaks we’ve made to our budget, and other areas, as a result of the household ledger exercise.

The Frugal Roundup

Mired in Media. Isn’t it interesting that the more “plugged in” we become the more “checked out” we become? When I find myself growing more distracted I simply unplug from everything for a day or two until life slows down a bit. (@Mark’s Daily Apple)

Ignore Your Personal Finance Guru. There are a couple so-called “gurus” that I ignore as well. From the ones I do enjoy listening to I take the good from each and develop my own beliefs. (@Lazy Man and Money)

How to Make Homemade Baby Food. You know I never scrutinized the contents of store-bought baby food as closely as I probably should have. But I’m confident homemade is better for baby. (@Cash Money Life)

5 Frugal Chicken Dishes You Can Make Out of One Chicken. Is there anything better than a chicken pot pie made from leftover chicken? Here’s four other ways to make use of a leftover chicken. (@The Digerati Life)

Frugal Living Guide: How to Find Quality Furniture Cheap. We’re still enjoying the yard sale sofa we scored last year. Soon, I may be hunting a new-to-us recliner as well. (@Frugal Confessions)

17 Semi-Secret NFL Football Stadium Deals. Just in time for the new season, some deals on everything from hot cocoa to tickets. (@Coupon Sherpa)

Best of the Rest

Support Our Sponsors

The Daily Middle. The Daily Middle is a group dedicated to helping those in the middle class cope with the coming financial crisis. And when they say “cope with,” they mean not just surviving the storm, but hopefully even prospering during it.

Monitor Bank Rates. MonitorBankRates.com offers a free rate search and compare service offering the latest best rates on products ranging from certificate of deposits, savings accounts, checking accounts, credit cards, mortgages and insurance.

J.G. Wentworth. Thousands of individuals contact J.G. Wentworth every month to inquire about selling some or all of their monthly payments for a lump sum. For some, selling their structured settlement payments (annuities, settlements, lottery winnings, etc.) is not the best option; for others it clearly is. J.G. Wentworth’s team of experienced representatives will work with clients to customize options tailored to each individual’s needs.

What To Do When Gifts Cause a Rift In Your Family

The following guest post is from Tracy O’Connor. Tracy writes for Money Ning, a personal finance blog . Visit to find all the latest information about online savings accounts.

A recent post on Frugal Dad, Do Your Kids Have Too Many Toys? reminded me of a frequent topic on the parenting forums I used to administrate: how to deal with your extended family and the gifts (or lack of) that they showered on your kids.

Many of us who limit the amount of toys our children own aren’t solely motivated by the desire to save money. Toys are expensive but the real goal is to raise children who aren’t focused on material things, who take care and pride in what they do have and who value quality over quantity. It can be frustrating when well meaning relatives ignore our desires  and give our children mountains of flashy toys that don’t fit into the lessons we are trying to teach.

Even trickier is when one child or children in the family are favored above the rest and you are left trying to deal with questions about why Suzy got more or why Timmy gets less.  What’s more, whatever the issue is surrounding gifts in your family, chances are good that it’s complicated by feelings from the past and current power struggles.

If you’re experiencing conflict over extended families and gifts, here are a few points to keep in mind to help resolve the problems in the best possible way for all involved.

Sometimes it’s best to just let it go

If the problem is just that your family members are giving your child too many gifts or aren’t buying the kinds of gifts you prefer (for example loud, plastic toys over simple, wooden ones) it might just be better to let the matter drop and choose to feel grateful that your child has so many  people that love them. This is not to say that it’s not annoying that your wishes are being annoyed, just that it’s not worth the time to feel angry over something that is not that big of a deal in the long run.

You can always put away some or most of the toys and bring them out for rainy days so that they are not cluttering your house. Don’t worry about your child become spoiled because they get too many birthday or Christmas presents, as long as you are giving them a good example every day of a frugal, sustainable lifestyle they’ll get the message.

Be Proactive in Offering Gift Suggestions

Nobody wants to been seen as greedy or a gift-grubber, but sometimes it’s best to be direct about asking for what you want on behalf of your kids. You can’t control what other people do, but if you give helpful suggestions with solid reasons why you think it’s a good idea, there is a chance that they might do what you want.

Don’t be offended if they balk at the idea or insist their idea is better. After all, you think your ideas are better, too! Sometimes people need to feel like their point of view has been acknowledged and respected before they concede so don’t turn it into a power struggle. Instead respond with grace and tact and you might find that they change their mind and do as you suggest after all.

Try Not to Focus on the Past

Often dealing with these kinds of gifting issues can be surprisingly painful. Seeing your own child showered with gifts by grandparents that never visit can remind you of how you wished your own parents would spend more time with you. Or, if you were the odd child out, seeing your sibling’s children get more gifts and attention than your own can bring up feelings of rage and resentment that you thought had been buried years ago.

Your feelings are valid, but it’s important to remember that you are an adult now and your children don’t deserve to be saddled with your baggage. Do go to your spouse and friends for a supportive ear but be careful of what you say in your children’s earshot. Keep all discussions focused on the here and now rather than using it as an opportunity to bring up hurts from the past.

When to Speak Up

While sometimes it’s better to just say nothing and chalk things up to family weirdness, sometimes speaking up is necessary.

  • When relatives are constantly giving your child things that are not age appropriate or go completely opposite your values or give items that present serious safety issues. Scale your response to the seriousness of the offense – giving an infant preschool toys might only require a gentle reminder to check the ages on the package while constantly giving your children who are being raised Jewish Christian themed items is a good call for a firm discussion on boundaries.
  • If the discrepancy between gifts that the grandchildren receive is large and noticeable to all concerned, it’s important to take action so that relationships between family members are not permanently damaged. It might become necessary to avoid family gatherings to protect your children’s feelings. Ideally, these discussions should take place between the blood relations to avoid adding tension to relationships between in-laws.
  • If family members are involved in the everyday care of your child and you feel that bad habits are being established. There is a large difference between getting spoiled rotten a few weekends out of the year and every day over-indulgence. Remember to show your appreciation for all the love your family member has for your children and be ready with suggestions of things that they can do to bond with your children that won’t cause issues with materialism or entitlement down the line.

Other Suggestions:

  • Ask family members to buy things that provide value all year long, such as a zoo or museum membership rather than buying more toys. Point out all of the educational and social opportunities that this will give your child to make it extra attractive and promise lots of pictures.
  • Suggest that family members draw names or buy family gifts for major holidays rather than buying for each person.  Family members might see this as a welcome relief from the stress and expense of buying for so many people.
  • Let grandparents and Aunts and Uncles know that your child would treasure some one on one time with them more than a gift on their birthday. A lunch date and the movies would be a treat for both.
  • It’s fine to ask for a gift receipt if your child is truly not able to use the toy because it’s age inappropriate or unsafe.
  • Make sure that you give your child great lessons about money, consumer culture and the value of spending time together as a family on a daily basis. No matter what, you are your child’s best and most influential teacher.

Your turn

Have gifts to children caused any conflict in your family? How have you dealt with it? Did it work as planned?

This article was included in the Carnival of Money Stories