Why I Bought A House I Couldn't Afford

I have a request. Please, will all of you that read this little blog do something for me? Will you all stop talking about this recession being caused by "people buying houses they couldn't afford"? Then, will you ask all of your friends to stop using that phrase and then ask them to ask their friends... and so on. I think everyone pretty much realizes by now that there are a lot of problems/reasons/causes for the current economic climate and they weren't all caused by people upgrading their homes. Remember the skyrocketing costs of food, particularly rice and corn? (Tortilla Wars, anyone, anyone?) Food costs are still continuing to rise and that isn't because of people buying homes. How about that huge 550 BILLION dollar bill our country's been paying? (Iraq war anyone? Remember that? Yeah, still going on - dollars still being spent.) Or how about the soaring cost of gas? ($4.00+ gallons of gas - last summer? Anyone? Anyone? ...Bueller?)

Can we all just agree that there are all sorts of things going on now or that happened in the last few years that have contributed to this crises? If we could do that, then vow to eliminate the whole "people buying houses they couldn't afford" phrase then maybe, just maybe it will go away and I won't have to grind my teeth and clench my fists every time I hear it to prevent screaming. Really, it isn't good on my teeth and I don't have the money just now for dental work.

Why do I hate this phrase so, so much?

Well, isn't it obvious? I am one of those people.

That's right, me. And I have to tell you, I am getting a bit tired of hearing how me, and all the other people out there who thought they were making very sound financial decisions for their families, have caused the downfall of American civilization. Even one of my closest friends said this to me the other day. In return, he was treated with a half hour tirade from me (complete with wild gestures and raised voices) which was probably better than the roundhouse to the jaw that I was contemplating.

First of all, let's take a look at that phrase "people buying houses they couldn't afford." Let me ask you something, who do you know who has bought a house they could afford? I personally don't know one person who has bought their home with cash. I know there are people who have owned homes without mortgages, but they are in the tiny minority. Most folks (even ones saying this phrase) have a home loan (or two.) And why do they have home loans?? Because they cannot afford to buy their homes outright. That's not all - I have a car loan too. Why? Because I didn't have $19,000 when I bought my car. Anyone who has ever gotten a car or a student loan, used a credit card, borrowed from a friend, or had a mortgage has bought something they couldn't afford. So frankly, the whole phrase is pretty moot. The author of Life As I Know it has a nice post about it called People in Glass Houses.

Now, let's look at what really happened, from someone who was there, from someone who has not only 1 home they can't afford - but has 2! Me. So, let's take a little trip down memory lane, shall we? Let's go back to 2004 and talk about what was really happening then and why so many people are losing their homes.

This American Life recently did a wonderful show on why the financial crises really happened. It had a lot to do with international finance and only a little to do with your neighbor buying a new house. I really recommend checking it out - they make sense of the whole mess in a way that no one else can. I'm not going to explain it, because they do a far better job of doing it than I ever could and you can download the transcript or listen to the audio show on your own, but for reasons they go through on the show, at that point in time there was a pretty big housing bubble going on and a lot of money changing hands. So what did that mean for the average consumer, aka "those people" we hear about? Well, I'll tell you...

The banking industry went about creating a whole lot of different loan types. Remember ARMS? Or the NINA (aka Liar's) Loan? Yep, I had them both!

Now, I hope that if you've been reading this blog for awhile you've gotten to know me a bit. I'm not a dumb person. I research, I pay attention, I make budgets, I plan. I also make mistakes... but buying my houses was not one of them. Here's what happened:

During this time my soon-to-be husband and I were living in a home he had recently purchased. He had bought it with an 80/20 loan. If you bought a house during this period, you know what this is. Instead of putting a down payment on the home, you got two loans. One is (usually) a traditional mortgage for 80% of the home value. The other loan is (usually) a home equity line of credit for the other 20%. In fact, you could sometimes get the home equity line of credit for a little more than the 20% and use this surplus to pay off or consolidate your credit card debt. Don't you roll your eyes at me blog reader! Though I wasn't blogging back then, I was reading plenty of articles written personal finance gurus and in 2004 there was a whole lot of advice out there about using home equity lines of credit to pay off credit cards. I didn't do this then, but there were a lot of people who did.

So anyway, he had bought his house that way. This house was broken into 3 rental units (one each floor) and we were living in the first floor apartment. Around about that time he and I started talking about having a little place away - each of us had always had dreams about owning a bit of waterfront property. It just so happened that before meeting him, I had been saving up for a house of my own. Now that we were living together in his house I could, instead of buying a house in town, buy a little place out in the country. So, we began the search and over the course of a summer we looked at all sorts of property. I ended up falling in love with and buying a little cabin in the woods for $72,000. (A mighty low price for waterfront property, I might add.) He and I weren't married yet, so I bought the house on my own. I had some money for a down payment, but by doing the 80/20 loan, I could save that ready cash and use it for some repairs the place would need. Everything went through like a dream. My 20% home equity was an interest only ARM at 4%.

Wait, was I an idiot? An interest only ARM?!? Heh. Just wait. It gets better...

So, we've been living together for awhile and soon realized that the whole apartment thing just wasn't working out. Looking back now (ah, gotta love hindsight) it was actually some mighty big signs of future relationship woes to come, but at the time it didn't feel that way, it felt like we were cranky because we didn't have enough space. My office was in a nook in the hallway, my closet was so deep I couldn't see the back of it, but so narrow the hangers brushed the sides. His closet was so small he had to crouch to get in it, and his dresser was shoved under the stairs. I had my stuff scattered between a storage unit and the cabin and I never felt like I was "home." There was no room for anything. There was, however, a whole lot of houses in our neighborhood for sale and a whole lot of talk about what a great bargain and good investment real estate (especially rental real estate) could be.

We made a list of the things that were important to us. We also figured out a budget and how much we could afford. It was mostly idle wishful thinking, that is until he found the "perfect" home. It was everything on the list, and considering it was a pretty fanciful list - that was a tall order to fill. For example, I ideally wanted to live in a particular area of town - he wanted a three stall garage. Most homes in this area don't have any garages let alone one with three stalls. My house? It has a three stall garage and is in the heart of that neighborhood. We had gone to a few open houses and looked at other homes in the area and this one was about $24,000 less than similar homes for sale. In fact, it was such a good deal that by the time we put an offer in, there were two other offers already in.

So, you know what happened, right? We got the house and once again we went for the good old 80/20. We figured it would be no problem - I have a good steady job, my soon-to-be husband and cosigner owned his own business, which had been successful for over 30 years. It turned out there was a hitch though - he had been married before and it turned out that after his divorce his ex had done some mighty shifty things on a loan that he was still on. That left him with less than perfect credit. My mortgage broker (same one who had helped out before) said there was a new loan out that I could qualify for - alone. It was a NINA loan. NINA is No Income, No Asset verification - it means that the bank didn't want to see things like tax records or pay stubs, they just wanted to know what I did for a living. Well, my credit is good and my job title is very impressive (for all that is worth) so, my husband and I couldn't get the loan together, but I could get it on my own. That's what we did. The house was funded on a NINA 80/Interest Only ARM 20 loan. That's right - all the big whammys in one big fat basket!

Now again, what was I thinking?

It wasn't that I didn't do my research. I asked about the rates. I was told that the 4% on the ARMs (Adjustable Rate Mortgage) would change. Historically they would go up by 1% to 1.5% a year. My mortgage broker even recommend that if I had extra money, these were the loans to pay down first. However, the rates were locked in for a year. I think one of them (if I remember right) was an ARM for the first 5 years and then had a lovely big fat balloon payment. However, I was assured, don't worry: "we can always refinance." Now that I had the loans, all I had to do was keep my credit score up and whenever I felt uncomfortable with the rates or if I saw them going up too fast, all I had to do was call and we could refinance them into more traditional fixed rated mortgages. Easy-peasy.

Yes, I knew what I was getting into was slightly dangerous, but I had been reassured by an expert that there simple options out and lots of plans I could fall back on. Was I irresponsible for believing my mortgage broker? Well let me ask you, the last time you had surgery, did you read the physicians manual first? When you went to your attorney, did you read all the law books and double check every one of his facts? At some time you have to take an expert that you have hired on faith. Let me say too that at this point I was not the only one with NINAs and ARMs. I was not the housing bubble. These loans were everywhere. It was common knowledge and commonly accepted and not one of the professionals I worked with, from the various loan originators to the realtors, raised an eyebrow. In fact, at this very moment I have a copy of "This Old House" magazine from 2004 sitting on my dining room table. I was looking for an article I had read on installing crown molding, and ran across an article on the different loan types. Included in it were ARMs and they dicussed the risks, but even there they made it sound slightly risky, but not insane - similar to the difference between investing in Goverment Bonds vs. a Mutal Fund. A traditional mortgage gave you a guaranteed rate, the ARM "adjusted" so you got a much better rate, but it wasn't guaranteed. Reading it today I have to chuckle - no one expected what would happen.

Plus, don't forget, I wasn't going into this blind - I had a budget. The husband would rent out the apartment we had been living in. The income from that plus the other two units in his house would pay for that house and contribute a bit more. That "bit more" would go to the house. Then we would also rent out the one bedroom apartment in the new house. That money would also go to the mortgage. What was remaining we split about 70/30. He paid 70 and I paid 30 - plus all the expenses for the cabin. (It worked out to about equal). We looked at all the payments and they were no problem. Even if they went up a couple of percentage points, we could still manage it with room to spare. Of course, if they went up too much, then we just refinance. What possibly could go wrong?

What went wrong was that interest rates started to skyrocket. It was no 1-2%! I was lucky, when my ARMs started climbing I managed to get in and get them refinanced... just months before the whole bubble burst and you couldn't get a loan to save your life.

There were other unforseeable problems as well - the company I worked for lost a major customer (to no fault of our own) which effectivively killed my monthly profit sharing checks from my job. That was about 20% of my income - cut. Heating costs went up, which killed the profit on the rental house. Plus there were months where we didn't have every unit rented. Following all that was my divorce, and we all know what happened there.

Here's the point... many of those "people buying homes they couldn't afford" weren't. They were making what they thought were smart choices. They looked at their budgets and could make the payments. Then interest rates started skyrocketing, home values started plunging, the old "just refinance" trick wouldn't work - the homes weren't worth the orginial buying price anymore, or even if they were, the banks stopped lending money! A family member loses a job, has high medical bills, goes through a divorce, has a paycut, or a thousand other unforseen things and suddenly you can't make the house payments anymore. I know people who have been out of work for months - they've gone through their emergency funds and are getting past unemployment. When one cog in the machine of your life gets stuck, it sometimes can take a long, long time to get that machine going again. When many cogs all across the country go belly up at once, you have a disaster.

I won't deny that there are people out there who made bad choices, but I will say that there are a lot of people who were doing what they thought was the right thing - before it all went wrong. I was almost one of them. Frankly, I still could be. That is why this blog is called "Fighting Foreclosure." There but for the grace of God go I. It was a "perfect storm" of events that swamped many folks, and continuing to blame them - or me - isn't going to get any of us to smooth sailing again.


Photo by: nz lawyer

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Good News in Bad Times

I've heard a number of people lately talking about how they have stopped listening to the news. I'm not quite at that point myself, but that is probably only because I am not home enough to watch the news and not in my car long enough to hear it. However, I know what they mean. So much of what we hear about the economy is so depressing. I read a statistic the other day that 1 out of 12 people in America are unemployed and it might get to 1 out of 8 before all is done. This is the kind of thing that can make anyone turn off the news!

However, if you are looking for something a little cheerier, I highly recommend this article from MoneyNing - How a Taoist Would Deal With the Recession. I have to say, it made me feel a lot better. I like the idea that this is all just a cycle and that just as things are down now, the wheel will turn again.

I was talking with a coworker yesterday who was saying something like "Next year, when the market turns around and we are wildly successful..." He really seemed to think that statistics were showing that by next year all our troubles will be gone, although like the old saying goes, 43.7% of his statistics are made up on the spot.

Whether he is right or wrong, I try not to think about it...

Personally, I don't think there is a lot of value in trying to predict what the economic picture is going to be. Oh, there are reasons to think about it - especially if you are investing in stocks or considering a big purchase - but in my own life I prefer to just knuckle down and do what is right for me. I try to work hard at my day job, keep my bills paid and my head above water. And as far as my job goes, it would be lovely to think the company I work for is going to be wildly successful in a year, but I am going to neither wait around for it or plan for it. Instead I'm going to keep celebrating the success we have now and pushing towards constantly making things better.

The same things goes with doom and gloom. I see problems - huge problems - in my industry. I'm not going to sit around and complain about them though. Like the Serenity Prayer, if there is something that can be done about them, I hope I have the strength to tackle them. If not, then just move on and go after what I can.

I guess I am just stuck here on the fence as a middle of the road optimist. I don't believe that people should sit around and wait to be rescued. That sounds easy to say, but I do believe that people can make their own luck. It is perfectly okay to complain about the economy and the state of affairs... but then get up and do something about your own situation. I also think that terrible things happen to good people (which is a whole other post) but blaming doesn't put bacon on the table. I feel like the only thing I can do is put my head down and concentrate on getting through the day, day by day. So, if I don't listen to the news or track what is happening on Wall Street, that is why.

What about you? How are you doing?


Photo by: SnoShuu

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Your Debt or Your Life... or Both

Kristy, the author of Master Your Card wrote a post last week that really struck me. It was called Does Debt Control Your Life? and as I was reading it, I thought, "Wow! That is exactly how I feel!" Well, Kristy must have thought the same thing because a little later she used me as an example!

Kristy's point is that even though paying off debts is incredibly important, it should not control your life to the point of making yourself miserable. I think about that a lot. In fact, it beautifully sums up what the heck I am doing.

There are several options I could have taken to fix my financial situation. I could have taken in roommates. I could have cut every single non-necessary thing out of my budget. (I have a $100 dining out budget. Cut that alone and I would only have to get $800 a month.) I could have tried to do some kind of short sale on the house and take the huge credit ding - or even worse, just let the house slide into foreclosure. I could have sold, done a short sale, or let slide into foreclosure my cabin instead. I haven't done any of these things, however. As it says up there at the top of the blog, this is "One woman's goal to avoid foreclosure by getting nine hundred dollars more a month - without ending up in jail, dying of starvation or going insane."

It's those last two words that are important...

If I had chosen any of the options above, they would have made me miserable and depressed. At the time I started all this, I had already been riding the emotional roller coaster of divorce, a mental break down was not out of the question. The part about "going insane" is not totally tongue in cheek. I realized (with the help of my therapist) that whatever option I took, however I chose to solve my financial problems, I had to do it in a way that made sense to me and preserved my sense of peace. This is obviously different for every person, some folks would have preferred getting a roommate or short selling a property in order to avoid scrambling each month as I do. Different strokes for different folks - the point is finding what works, without adding to the stress.

As I mentioned in the comments on Master Your Card, I see getting out of debt a little like going on a diet. If you starve yourself, you might lose weight, but several bad things will also happen: 1) you won't develop healthy habits, 2) you are likely to gain the weight right back and 3) you will be so miserable that you will be ready to binge at a moment's notice. If I were to let my financial problems completely control me the same thing would have happened. I wouldn't have learned all the things that I have over these past 9 months, and would have probably been likely to put on more debt. The thing is, you don't get into debt in a month. If all it took were cutting back to nothing for 4 weeks, well, that would be one thing, but for most people it takes years to get out of debt. In my case, even though my credit card will be paid off in just a few months, I won't be done with debt until the housing market turns around and I can sell the house. I am figuring on at least a few more years before that happens. That means a choice: years of going a little slower, but steady, or years of "starving" myself of the small extras in life, but having more money faster. In the former I have room in my budget for going out with friends and family, buying presents at Christmas, and getting to go see a play or going to the art museum upon occasion. I may have to cut back in other areas or work a little harder, but I am still living my life the way I want to live. Honestly, I can do this for the long haul - as long as I need to. On the other hand, if I were to take the other option and completely cut out all extras, I would be absolutely miserable. I wouldn't be able to do it long and I would be ready to blow any minute. Which is better? It seems obvious to me.

Someone commented on her blog, "Shouldn't getting out of debt be your number on priority?' My answer is no. Your number one priority is YOU. Remember Maslow's Hierarchy? Your first priority is making sure you have the basics - food, water, shelter and sleep. Your second is your health - this includes financial and physical and mental well being in equal measure. If you are working three jobs that aren't bring you joy, but instead are burning you out, you might make a dent in debt, but you won't be able to keep up that pace very long. That's exactly why I have been very specific in the types of part time work that I do. It doesn't pay as much as other forms of employment, but I love doing it. That makes a huge difference to me. Getting out of debt or saving for the future is admirable and should be high on the list, but you have to live today as well as tomorrow.

If someone were to ask me how to get out of debt, here would be my advice:

1.) Cut out anything you don't need. Start with the easiest cuts first. Think outside the box - some might surprise you.

2.) Identify the things that would deeply effect you if you cut them out, but look at ways you can make those things more frugal. I contribute a bit to my "Christmas Fund" each week, but this year when I shopped, I tried to get the best deals and make those dollars stretch. Or look at my grocery bill - I pretty much only buy good, quality ingredients - yet I use them in such away that I can keep that budget pretty low.

3.) As you are saving, find ways to make more income. If possible find things that you would enjoy doing, that make your life better (decluttering through eBay perhaps) and/or further your other goals. (Picking up part time work in an industry you are thinking about a career change into, for example.)

4.) Do not neglect your loved ones. Now is when you need them more than ever. I have been moved to tears on more than one occasion by the wonderful amount of support and love I have gotten. Be honest in telling them where you are and don't be afraid to accept help, if you are comfortable with doing so.

5.) Do not neglect yourself. Depression, physical illness, unkempt appearance, anger - none of these things will help you with your goals. Shopping for good clothes at Goodwill is a great frugal tip, letting yourself go for the sake of putting a few more dollars away is not.

Everyone has different ways of making things work. What works for me won't work for others. Some people's situations are so desperate that shelter alone becomes a problem. I know this and know that sometimes you gotta do what you gotta do. Yet, I encourage anyone who is trying to pay off debt, build a budget, or save for retirement (or all three!) to remember the old story about the tortoise and the hare - slow and steady wins the race. It is possible to manage your money and still enjoy life - I promise.



Photo by: Jehsuk

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My Crazy Mad March

Things might be a little quiet around Fighting Foreclosure for the next couple of weeks, although I am going to try to keep posting frequently. Starting this week I am doing a whole bunch of volunteering. I'll be working for a nonprofit organization on a special project from now until the end of the month. The next two weeks especially are going to be hectic! I will be going straight from my job to the volunteer site and working an additional 4-6 hours each night plus more on the weekends. Why? Because I love it and this is a once in a lifetime opportunity! I don't volunteer nearly as often as I would like because my other responsibilities usually stand in the way, but this time they are doing a project I absolutely had to be a part of. I got a taste of it last night, and even though it will make for some long nights, I am looking forward to it in every way.

I thought that because of my volunteering I wouldn't be able to work at my part time jobs, however, I managed to squeeze out three shifts. This means that on top of working a 40 hour a week job and volunteering another 28-42 hours, I'll also pick up a few 4-5 hour shifts. Am I crazy? Probably.

However, in many ways this is the perfect time to be doing this...

The weather here is not so nice that I could be doing anything outside, but not so miserable that I have to worry too much about driving from one gig to another. The lack of extra income I can earn pushed me to try the No Spending Challenge, which has so far been a wonderful learning experience. On the other hand, I am so busy that I don't have time to shop or run errands, which fits in perfectly with my challenge.

In addition, should the money not come in as hoped this month, I know I have a large windfall in the works in terms of a tax refund. I am planning on putting 100% of that into my emergency fund, but should I need it... well, that is what an emergency fund is for. I would prefer not to have a shortfall, but I can cover it if I do.

I am noticing something else too - because of the Challenge, I have also sworn off pop. (I am not even ordering sodas in restaurants so as not to tempt myself.) In addition, I am also trying to stretch the food I have already in the house by cooking what I have. That way I can hold off grocery shopping as long as possible. Well, guess what? I have lost some weight! I don't know how much (I refuse to own a scale) but some of my clothing is fitting much better. Being a little healthier during times of stress is definitely a bonus! (Don't worry I am not starving myself - the house was well stocked with tasty food.)

March should be a very interesting month!


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Saving $900 a Month

There are two ways to have more money in your pocket -

1. Earn more
2. Spend Less

Since June when I began this blog and started my journey to get $900 a month, I've been working at both of these. To earn more I work several part time jobs, sell items on eBay, Amazon and Half, do surveys, mystery shop, and have done peer to peer lending through Prosper.

These have been very successful, but the savings I have managed to find in my budget are just as, if not more, important. Why more important? Because they happen each and every month - without additional work on my part. I thought I would take a look at my original budget, how it has changed, and how I have found some wonderful ways to keep money where it should be - with me!

Insurance - One of the first things I did was call my insurance agent. Through making some changes on my auto and life insurance contracts, I was able to save myself $31.44 a month. This may not seem like much, but it really adds up when you look at it over the course of the year. One decision I made was to always pay all my bills (including these) with the least number of payments. A number of my bills (including water and trash) will allow me to pay in monthly payments or pay annually or semi-annually. By paying up front, you can usually save yourself some service fees. I know that it is only a few dollars each month, maybe. However, there is another trick to this, and that is to pay yourself those monthly payments into an interest baring savings account. Then, when the bill comes not only do you have the money at hand but also you have been earning interest on it all year long!

Mortgage - This was just luck of the draw, frankly. My taxes on the cabin in the woods went down $80 last summer. It was a nice, unexpected bonus. Then my home insurance dropped $20 when I took my ex husband off the policy. He had had a special rider on the home insurance for his electronic and camera gear. No more gear in the house, no more money spent insuring it! Total savings equaled about $100. This is very likely to change this year. My assessed value on the cabin went down slightly, but the assessed value on the house jumped. The two will not cancel themselves out, so I may have a larger house payment coming up.

Bad Accounting - When I first made my budget I didn't realize that I had a bug in the system. It took me awhile to figure it out. It wasn't an actual technical glitch - it was just faulty thinking.

I have a Flexible Spending Account through my office. An FSA is an account for health insurance costs. Money comes out of your paycheck, pretax, and then goes into a reserve. Whenever you have a deductible or prescription cost, you submit it to the FSA and they reimburse you out of your account. Its brilliant and I love it! However, here's what I was doing - Each week I was putting $25 a week into a savings account for "emergency savings." Somehow though, every month I was always running low in my checking account. It seemed every time I turned around, I needed to dip into that "emergency" money. I couldn't figure out what was happening! Well, the problem was in how I was handling those FSA checks.

Say I had a medical bill for $100. I wouldn't budget for it because I knew my FSA would cover it. After I paid the bill, I'd submit my receipt and two or three days later I would get a $100 check in the mail. The problem was that I wasn't treating that check like the reimbursement it was - I was treating it like income. So, instead of just putting it back in my checking account I would go do something with it - sometimes really good things like putting it towards my credit card. That money though was not budgeted for my credit card, so I was constantly shooting myself in the foot. Why was I doing this?

Two reasons really, one was that the money from my FSA didn't feel like it was connected to the doctor bill, which might have been days before. The other reason is that back in the day when I was living well beneath my means, I could do that. I could treat FSA checks as income. I think I got in that habit and never thought twice about it... until my budget wouldn't balance.

To solve the problem I put $250 in my "super short term grab it from an ATM emergency fund," and then made a vow to leave it there unless it was actually an emergency. Then I vowed to put FSA checks straight into my checking account like the reimbursement they were. Finally I shifted $50 a month into my "slightly longer term interest earning emergency savings account."

Total savings for fixing some bad financial management mistakes - $50 a month.

Flexible Savings Account Changes - Speaking of my Flex Plan... last year I had pretty high medical needs. I was in therapy and with other regular run of the mill health concerns, I upped my FSA withdrawals by quite a bit. It was a smart thing to do. However, this year I don't need as much, so I scaled back considerably. Difference from last year's paychecks to the ones starting in January? $73.36 a month.

I'll be getting even more out of my paycheck since I have changed my tax withholding, but I'll leave that for another post. The point is that sometimes by making relatively small adjustments, you can get considerable savings. I know these aren't for everyone, and some, like having your taxes go down, are pure luck. (And luck I might not get next year.) Still, going through your budget and looking for every way to save, could put some coin in your pocket - money you have already earned.


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Paying Off My Debt!

I just went and took a peek at my car loan statement. It will be completely paid off May 26th. YES!!!!!!!

That is just 3, count them 1, 2, 3 payments. Ha! I feel almost giddy. However, I think one of the first things I am going to do is bring it in for a little mechanical love. I have been getting oil changes and all that, but I skipped my 30,000 mile check up. That's when they go through and look at your brakes and lines and all that. It was a bit steep for me at the time, but since I am now a tad over 40,000 miles, I need to get it done. I will probably use what would have been the June car payment to cover the cost. I plan on driving my car for a long, long time, so I do need to look after it.

While I was at it, I went and took a gander at my other debt, my credit card...

That is looking swell as well. By my calculations, I have 3.95 payments to go. (Three full and one slightly smaller one.) That means by June it will be done, done, done. I swear to you right now that I will never, ever have unmanageable credit card debt again.

So what will this mean? It puts a huge dent in the $900 goal, of course, and yet I still don't have all my goals met. For example, I need to get my big mammoth house painted. That's going to cost me somewhere in the neighborhood of $7,000 to $5,500. I would like to do that without accumulating too much debt if possible. For the first time, I think it might just be possible, but I don't know yet. I need to sit down soon and crunch some numbers. I also need to get a few quotes so I know exactly what I am dealing with.

I've been able to manage so far, if I could just go a little further, be willing to work at it a little bit longer, I think I could put myself in a much happier place. It would be completely worth it, and isn't financial happiness what we are all after?


Photo by: Unreliable Narrator

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My Own Power of Now

Here is something I've been thinking about -

How often I am motivated to buy something not because it makes the most financial sense, but because I suddenly decided I wanted it now. It is a strange phenomenon - I might have had a need for a long time, but then suddenly, for no rhyme or reason, I need to get it right now. For example, let's say I have a broken coffeemaker. It works, but not well. I've been dealing with this issue for a few months and it has been quietly percolating in the back of my brain that it is getting annoying, when suddenly I am walking down the aisle of Bed, Bath and Beyond and I spot new shiny coffeemakers. Without warning my brain goes from a brief, "Gee that is annoying" on the rare occasion that I make coffee to "I NEED a new coffeemaker - NOW!" Next thing I know I am not making a well researched, considered purchase - but a total impulse buy. Here's another example, and this is one from my real life - months and months ago (maybe even as far back as July) I decided I needed to repaint the bedroom. So, one day I am walking down the aisle at Lowes and there, on sale but not a particularly good deal, is a new set of curtain rods that would perfectly fit my idea for how I want my new bedroom to look. So I bought them... and they have been sitting in the corner of my bedroom quietly gathering dust ever since. I don't have the paint to do the room, but I have the curtain rods. Why? Why does something go from the back of the brain to "havetogetitnow"?

This isn't to say that I don't make well considered purchases, I do. Many times I take the time to do a little research on best product and best price before I buy. Yet, there is also a strong pull by the power of now. Several times during the first week alone of my No Spending Challenge I have thought of things I "needed" to buy. Usually I put myself off with the simple thought, "Can that wait until April?" So far, every single thing could.

So, why does this happen?

I think there are a couple of different reasons, (and I would love to hear your opinions on this.) As we all know, home improvement projects are my weakness. Sometimes I think the power of now slips in when I am starting to consider a project. I start buying things for the project, far, far before I actually need them. I usually don't see a problem with this because I know I will need it someday, but there is a problem. Now my money is tied up in an object. Here's one for you - late in December I noticed that my front windows needed new outdoor caulk, so I promptly went out and bought some, knowing full well that I wasn't going to be able to do a dang thing about it until Spring. Of course, when spring rolls around (and it is starting to, YAY!) I will be ready. Well, that is all fine and good except now I have thirty some odd dollars wrapped up in caulk and curtain rods that I am not using! Wouldn't I be better off having that money liquid in case I needed it, and earning interest until I was ready to spend it?

Maybe it is the call of the sale. I will see something I have been considering on sale or have a coupon for it and feel that I need to get it quick before the sale ends or the coupon expires. That is faulty thinking though, sales tend to come back around as do coupons. Do you know how many Bed, Bath and Beyond coupons I have stocked up? How many times have I quick bought something on sale, just to see it on sale for less the next month?

I think too, sometimes I just want to be out shopping. On a Saturday I may be making a list of all the things I have to do and I may realize I'm driving right by a store with something I've been coveting. Maybe I'll be driving by the health food store and suddenly realize that I am low on vitamins. I might be able to get a better deal somewhere else or find a coupon, but they are right there and so, I pull into the store.

Speaking of availability, I think that that old Power of Now also slips in when shopping. Let's face it, it can be fun to buy stuff. So when I am out and about, and already spending money, it is so much easier to keep right on buying. Great example - sometime back I was perusing my cookbooks and saw a recipe that called for (among other things, obviously) juniper berries. I thought to myself, "Gee, this sounds like an interesting recipe, but I don't have any juniper berries." Cut to several months later and I am out at a store where they sell herbs. I just came in for specific things, but what do I see? Juniper berries! So I bought them... and now not only can I not remember the recipe, I can't even remember the cookbook it was in! Would I have bought juniper berries that day had I not seen them? Of course not! In fact, I don't think I would have put them in my basket at all, if it had not been for the fact that I had already picked up the items I came in for and adding just one more seemed so easy. Sure, one could say that now when I find that recipe again (and I will, I go through my cookbooks pretty regularly) I will have the berries on hand, however, I am guessing I will still be missing one ingredient or another. As I recall it was for a pork roast; I don't happen to have a pork roast in the house. What I should have done was simply remembered where I saw them, then when time came to make the recipe, I could get them along with the other ingredients.

When I started thinking about the No Spending Challenge these were exactly the kinds of purchases I wanted to cut out of my spending. When I do buy something, I want it to be a considered purchase. I don't want to have my money tied up in things I am not using nor do I want to buy things without research. In order to do that, I need to remove mindless spending from my life and de-strengthen that terribly strong pull of now, and turn it into "later - you know, when I'm ready."



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Good Bye, My Beloved Coupons

Day Six of the No Spending Challenge and I am doing something I never thought I would do...

I am throwing away coupons.

If you knew me, you might realize how shocking this is. I LOVE coupons. I am not a manic Sunday Newspaper coupon clipper, but that is only because 98% of the the things in there aren't things I need and I don't want to pay the price of a newspaper for the other 2%. But back in my "just out of college days" when I was living in my first apartment and still doing laundry at mom's, I always got her to save the Sunday inserts for me. While my towels were spinning in the dryer, I'd be clipping away. How's that for frugal? I didn't even pay for the use of my own scissors. (Thanks mom!!) Of course, back then I ate a lot more prepackaged foods.

Now I usually tend to buy my food fairly natural. Spring through Fall I buy most of my fruits and veggies at the farmer's market and my meat from local butchers. When I do buy things at the grocery store, I usually try to scour the internet for coupons beforehand. I can almost always find them on cleaning products, aluminum foil, butter and so forth. However, it isn't grocery coupons that I am talking about here. No, it was something much more near and dear to my heart...

I threw out home improvement coupons. I love home improvement coupons.

So, why am I throwing them out? Because they expire in March. I'm determined not to shop in March, and I have to be honest, home improvement stores are my downfall. They suck me in for impulse buys worse than shoes or makeup ever could. One of my local hardware stores emailed me a notice that they were having a special next weekend - and with a deep sigh, I clicked and into my email trash folder it went. (Yes, it hurt a little.)

Then last night I opened my mailbox to find a sales mailer for a local fabric store. On the back is a really good coupon. And here's the thing, I have a dining room chair that needs a little repair work. It is nothing major, but I could certainly pick up what I needed at this store. Unfortunately the coupon expired before the end of the month so in the recycling bin it went.

Just now I got yet another coupon for $5 of a $25 purchase at my local pharmacy. That's 20% off - not bad if I needed something. But I don't. Once again I clicked the magic "delete" button and away it went.

What is interesting to me about this whole challenge is the the little things I am learning about myself. Like how good it feels to stick to my principles and how my shopping habits influence my impulse purchasing. Now I see another trend - coupons, while wonderful, also have their dark, slimy underbelly. How often have I gone shopping just because I had a great coupon? How often have I bought more than I needed just to get those extra few dollar off? Or to make it worse - how often have I had one of those $5 off a $25 purchase coupons and went home with $40 worth of merchandise - or more?

I will always love my coupons. After this challenge, I plan on using them again - I just need to be wary though that they aren't the ones using me!


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My 2008 Tax Returns

I told you I would update you on update you on the status of my taxes, so here we go:

I am getting a $3,578 refund for my Federal taxes. I am getting $156 refund from state taxes, and I owe $364 for my city taxes. I also owe $285 to the accountant for filing them for me. So, when all is said and done, the amount coming to me will be $3,085. Whew!

Honestly, that is way too much. I am one of those people who doesn't believe in giving the government a free loan. Heck, my checking account pays 5%! I certainly can't say that about Uncle Sam. My accountant told me how to change my withholdings so that won't happen again next year. One thing I need to keep in mind is that next year I will be paying far more home interest. This year my ex had the house for 6 months and I had the house for 6. Next year it will be all mine. So, I increased my deductions at my office payroll so that approximately $3,200 less in taxes will be taken out. That will ultimately effect my paycheck and also my $900 a month goal. My ultimate goal would be to have the government pay me a little, somewhere around $300 - $500, while the rest goes into my pocket!

Like Goldilocks and the Three Bears, my state refund was 'just right.' Not too much or too little, I am pleased with the way that one turned out. I like to get a little back so that I have a cushion and don't have to pay, and that money can go towards paying the accountant.

However, I wasn't as excited about the city taxes, but I have a plan for that too...

As I mentioned in another post, the reason I owe city tax is because my office was not doing the proper tax withholding. I talked to one of my coworkers and he ran into the same thing last year. Basically, our office accountant didn't have me as a resident in the city of which I live. My guess is that it was that way last year too, since my coworker had problems with it then. My ex handled the taxes last year and because he was threatening to move out of the house before my apartment lease was up (leaving me with either two payments I couldn't make or forcing me to forfeit my security deposit) I offered him the tax return money as a temporary bribe to keep him in place. (Yes, that was the same time I got a lawyer.) Anyway, for obvious reasons he didn't mention the issue to me. Ah well, it is all water under the bridge. I talked to our office accountant already and he has fixed the problem, so it shouldn't be so much of an issue next year. I might be two months low, but that should be okay. I certainly don't need another $300+ bill next year!

So, now I know $3,085 is coming to me, the question is, what am I going to do with it? While it is tempting to go do something fun, I am actually going to take the whole thing and dump it into my emergency fund. If I do that, plus what is in there now, I will have have my 2009 goal of having one month of income successfully completed! Note that my "one month of income" includes not only my regular 40 hour a job pay for a month but also the $900 I need every month. By putting my tax return dollars away, I will not only hit that goal, but exceed it.

YAY!!


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Discussing the Rising Prices of Groceries

Writing about getting groceries this morning reminded me of something else I wanted to write about. Last month I was out grocery shopping and ran into a couple of good deals on meat. I am not normally someone who believes in stocking up, but once and awhile I will be drawn into a good deal. In this case it was a number of wonderful cuts of meat that had some outstanding sale prices. (This is one of the benefits of the current economic crises, you can get some mighty fine deals right now if you look.) Anyway, sometime after I bought my precious cargo of meat home and stored it away safely in the freezer, I was chatting on the phone with my mother on the best way to cook a roast. Somehow the conversation proceeded from there to recent grocery store finds.

Mom was telling me about things she stocks up on, canned goods in particular. I don't like many canned foods (with the exception of black eyed peas and garbanzo beans) but she had hit a good sale recently. Then we both lamented about things that have gone up recently like toilet paper and laundry soap (neither of which I have to buy for a long, long time) and commiserated on the high cost of quality aluminum foil - something neither of us buys without a coupon.

It was after we got off the phone that I was suddenly reminded of a memory from childhood...

It was Thanksgiving. I must have been in junior high or so and I, along with the rest of my mother's side of the family, were celebrating the holiday at my Aunt Carol's. It was after dinner and the menfolk, my uncles, were all gathered in one room watching the football game. All the cousins were hanging out downstairs, and my mother and her many sisters were lingering over coffee near the kitchen. I snuck upstairs for some reason, probably to see if there were still any olives in the relish tray, and I happened to hear my aunts talking. They were discussing the price of soap. Palmolive, actually. One aunt (I don't even remember which) was talking about finding at one place for one price and then finding it for a dime cheaper somewhere else.

As I left the room I distinctly remember thinking to myself, "I am never going to be that lame. I am never going to sit around talking about the price of groceries and how to save a dime." I then promptly went downstairs to find my cousin Denise to talk about something far more interesting - like the cute boy at school.

When I think about that now I just crack up! I have over 20 posts alone that are tagged with "groceries" and I don't know how many posts about how saving small amounts of money really adds up! My, was I cocky in those days!!

As I think about it, I wonder, is it just a sign of the times? There was a rough patch in the early 80s, and that would have been at just about the right time for this memory. Do conversations on how to save on groceries come up whenever times are hard? Or is it a sign of maturity? I don't have a weird Science teacher or a cute boy in English class to talk about anymore. As we grow older do the things we have in common become more, well, commonplace? Or is it in my heritage? Whether you are Scottish, Dutch, from the east side of town, the next state over, or whatever the definition may be, i>n almost every culture, in almost every part of the world, there is always one group that is considered "cheap" by the other. My people are quite proud of their cultural past of being tight with a dollar. Tell me, was I born to talk about groceries?

Whatever the case, I'm not ashamed of it anymore. In fact, I am rather proud of this little blog and all it has helped me accomplish. What about you? Is there anything you find yourself doing now that you would have laughed at a few years ago?

(Speaking of which, I just read Cut Your Food Bills in Half on Mother Earth News. There's some good information in there! A lot of it I knew, but there's some great ideas in it for us frugal folks.)


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A Question on the No Spending Challenge

Yesterday was my first actual "No Spend Day" of the No Spending Challenge. Sunday I bought my ticket to a movie, Monday I bought gas, and Tuesday I bought shampoo and conditioner. All of these are allowable purchases. The movie was social spending, which I am not limiting beyond my normal budget, the gas was needed to get myself home, and I was completely out of shampoo (I had turned the bottle over and used what little I could rinse out of the bottle) and conditioner was getting very close to the same point. I will say I managed to buy it as frugally as I could - it was on sale, I had a coupon and I had a gift card. It worked out nicely.

I do have a bit of a dilemma though. As I have mentioned, I am on the board of a nonprofit group. We are having a small gathering on Saturday. It is estimated that there will be about 30 people there. One of the other board members sent us an email and asked if we each wouldn't mind bringing a container of soda or a package of cookies as a treat for all the folks that attend. So, here is my question to you -

How does this fit in the No Spending Challenge?

On one hand, it is unnecessary spending. Even though I am attending the event, there is no rule that I have to bring something. No one will look down at me if I don't. On the other hand, this is not exactly the kind of impulse purchase I was trying to prevent. I was thinking more of things like adding items to my own grocery cart. I wouldn't buy a 2 liter of soda for myself, but, if it is going to a good cause, isn't that different? I don't know - what do you think?

There is one compromise that I could do...

I probably have enough empty cans that I could return to the store to pay for a 2 liter. Here in Michigan we have a $.10 deposit return on bottle and can returns, so it wouldn't take much. I could take the cans I have in the garage back to the store and use the funds to buy pop - that would satisfy both my non-spending rule and allow me to feel like I am a contributing member of my board.

I would bake cookies... but I don't have anything in the house for ingredients. Not unless I can find a recipe for pork chop cookies! What can I say? I don't do a lot of baking, but I do have some lovely pork shops in the freezer. I'm betting we'll get a lot of vegetarians there though, so that might not be the right thing to bring.

So, what do you all think? Does this fall under the "social spending" category or even the "charitable giving" category, both of which are okay under my No Spending Challenge, or does buying food I don't need constitute a breach of my plan? Ideas anyone?

It is funny, I didn't think I would have a lot of conundrums like this when I thought out the challenge. I wonder what else will come my way?


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Survival Guilt in the Financial Crisies*

Recently my friend Tracey bought a herself a new (to her) used car. It was a very smart decision. Her old car wasn't dead or anything, but it it had slipped over the tall peak of "running great" and was starting to edge down that slippery slope of "little things starting to go wrong" that we all know can nickle and dime us to death. Tracey did everything right - she knew exactly what kind of car she wanted, knew she could afford it, did research for over a year before buying, and then took advantage of the financial crises to get herself a great deal.

Buying your first car all on your own, without assistance from a parent or a spouse, is a big deal - it is huge! I really think it is one of those life milestones. So it was natural that she wanted to share the good news with her best gal friends, but when she went to do it, she hesitated. Why? Because she knew that some of us aren't doing well financially and didn't want to brag. Now if this had been the only instance of what my other friend Catie calls "Survivor Guilt" I probably wouldn't be writing about it but Catie admitted she was feeling the same thing. She's getting new windows in her house (and is another one who will do research and make good decisions - undoubtedly taking advantage of some recession bargains) but feels bad talking about it when there are a lot of people out there that can't afford their homes. Nor is this feeling limited to my neck of the woods, M is for Money had a post the exact same day about how she was uncomfortable admitting that she just got a raise.

It's funny, in some ways this reminds me of how uncomfortable I felt when I first started talking to my friends about my financial status. It took me awhile before I was able to confess that I was flat broke. Interestingly, the more I talked about needing to budget, saving money and looking for extra work, the more my friends and family admitted they were doing the exact same thing. Then at some point things changed. The recession really kicked in and now it is somehow hip to be broke. You can't walk by a magazine rack without seeing frugal tips, DIY websites are getting tons of traffic and every news show has information about people dealing with their tightening budget.

In some ways, I appreciate this. I think if people are budgeting and saving money and working on their finances, that is all to the better. However, this flip side of making people feel uncomfortable about their own good fortune really bothers me...

Maybe I am seeing this a little differently because I don't really feel like my problems came from the recession (mine came from my divorce), but if there were any way I could be taking advantage of this temporary drop in prices, you bet your shiny boots that I would be! Now is the perfect time to be picking up fantastic bargains on areas hit by the crises - cars, construction, stocks!

When I hear about the success of others I don't feel bad at all, in fact, I am really happy for them. Tracey has been increasing her income regularly, Catie's been saving for those dang windows forever, and M is for Money has written before how hard she works at her job. Even if a coworker just won the lotto (I had one tell me he was playing last night) I wouldn't begrudge them their millions. I don't believe that there is a finite amount of good fortune in the world. Because Bona Fortuna smiles on some, that doesn't mean she frowns on others. People who are doing well aren't in any way taking away from those of us who aren't.

I think it is a bit sad that society is putting this pressure on people. I don't want anyone to feel like they can't celebrate their good luck. Instead, I want to raise a glass with them! (Though I might let them buy! heh.) When I think about this in my own life, I can see a point in the not too distant future when I will have the $900 I need each month. I want to be able to share that.

I don't think you have to be broke to be financially savvy. Sure, being frugal is great for helping to get through hard times, but the whole point of it is so that you can have plenty of money for the things you really want. To anyone out there who is considering large purchases or making extra money - I applaud you! Besides, we need you guys... someone has to help jump start this economy!



* Tracey and Catie - you KNEW I was going to write about this, right?

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The Pleasures of Mystery Shopping

I did a mystery shop the other night. It has been awhile since I have done one of these, and I have to say - I love mystery shopping.

Okay, the money isn't great. In fact, as far as I can tell, it is downright lousy. I don't think I have ever been paid more than $5 - $12 for a shop - and that shop may take an hour or more to complete. Let's face it, $5 an hour is not what I would call stellar - and some shops I have even done for free!

Why? Because mystery shopping really isn't about the money...

It's about the reimbursement.

While I have done a few retail shops, most of the jobs I have done have been at restaurants. For those I always take a friend along. The beauty of mystery shopping is that generally my friend and I get our meals and drinks reimbursed - and on shops where they want to make sure their servers are carding - it may be an alcoholic beverage or two. Once and awhile the cost of the meal runs slightly over the reimbursement amount (they always tell me what it is beforehand) but that tends to be because I am a pretty good tipper. So basically, for the price of tipping I get to enjoy a night out with a friend. How great is that?

Now I could see that for some, having a friend along could be distracting, but for me it works out great. Whoever comes with me always knows the scoop beforehand. Friends have been great at helping me track the time between ordering and when the food is served, doing restroom checks, and getting server's, manager's and host's names. They sometimes spot things I don't or confirm an issue I caught. I've been known to call them up after a shop to verify information and help me remember everything for my report, (you aren't allowed to take notes.) I also think two friends dining alone is much better cover for a mystery shopper than one person alone. I know that in my days of dining alone I frequently got amazing service from chain restaurants because the servers thought I might be shopping them!

I think more companies should do mystery shopping. Okay, the fact that I love doing this kind of work does make me slightly biased, but think about it - having a mystery shopper find out that your staff isn't carding is a lot less expensive than having the police find out about it! Plus, I have to say that almost all of the places that I go have pretty good service - some have what I would go so far as to say is exceptional service. According to the orders I get, the manager's bonuses for these restaurants are effected by the mystery shopping reports. That tends to get results!

For me as a side income stream, it brings in maybe a few dollars, but as a way to pay for time with friends, it is fabulous.


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The Shoeshine

I am a person who appreciates great, well made shoes. For many years I bought the cheapest shoes I possibly could and then just threw them out when I wore holes through the toes, the soles started flapping, or they just started looking plain embarrassing. Then I discovered the difference in owning great shoes. Back in my 'ready cash available' days, I invested in a number of pairs of high end shoes and boots. The difference between them and my old cheapies is incredible. My higher end shoes fit better, are more comfortable, wear better, breathe better and frankly, look better than my old shoes ever dreamed of being. I haven't bought much in the way of shoes in a long time, obviously, but fortunately, all the ones I bought in better times are still going strong.

This last weekend when I was away, I brought my favorite pair of black boots with me. These are my "old stand-bys." I probably wear them more than any other boot in my closet. They are tall black leather dress boots, laced up the front with a fairly impressive heel and a good set of tread on the sole. I shopped for them forever! It is ridiculous how hard it can be to find an attractive women's boot that actually has tread! In Michigan winters with all the snow and ice we get, having tread is fairly important, to say the least. Anyway, after getting home Monday I noticed a couple of scuffs on the toes of the boots, so I decided last night to polish them.

It seems to me that polishing shoes has gone the way of canning vegetables and changing your own oil. So many shoes are made of 100% Man Made materials now that when they get beat up we try coloring them in with a Sharpie for awhile then just throw them out. It just so happens though, that I happen to have my father's old shoe shine kit.

My mother kept it after my father died, probably because she is a practical kind of lady and knew it might come in handy. However, at the garage sale I had with my friends last summer, my mother brought it to me to sell, probably because that practical lady realized that she never used the dang thing! I knew as soon as I saw it I couldn't sell it. Isn't funny how things from our childhood hit us like that? So many things we can just let go and then along comes something that brings back a ton of memories. This wooden box always resided in the hall linen closet. Mom used to pay us kids a little cash to do extra tasks around the house and me, I always liked cleaning out the linen closet - pulling out, sorting and restoring all the towels, sheets, board games, and of course, dad's shoeshine box. It's been sitting in my own linen closet ever since, down on the bottom shelf well below all the towels and sheets. So, last night I pulled it out...

I don't think I have opened it since my mother gave it to me. I wasn't even completely sure there would be any usable black shoe polish in there, but there was - a ancient Kiwi can with just enough in it for a few pairs of shoes. It is funny to see all the things in this box. There is a plastic bag full of packages of white shoelaces. One of them has big blue cartoon whales on them. Who could those have possibly been for? A very young me? In the box were old shammy cloths, old polishing rags, Dad's bristle brushes. I saw a container of white boot polish. From the age of the container, I would say it was probably from back when my dad was wearing red flare legged pants and his ankle high white kidskin boots. Yes, this polish is close to 40 years old - no wonder it looked cracked and dried! At the bottom of the box was an old cologne bottle for High Karate, dried remnants of it still coloring the sides. He paid a $1.75 for it at a store I've never heard of. I couldn't help wondering why it was in here. Did he sprinkle a few drops in his shoes? Or was this just his place for all his "young man" things, shoe polish and cologne, to be used on a date or before church? There is no one to ask. My mother won't know and my grandparents are long gone. I'd love to dig into the box further, but every time I lifted something out tiny flakes of dried shoe polish drifted gently down to my carpeting. It will have to be a task for another day over newspaper.

Fortunately Dad did teach me to polish shoes. I can't say that when I was done I could see my face in them, but I'm not sure I would have wanted too! I loved the way they cleaned up though - the scuffs just disappeared and the black leather gleamed. It felt good to get that done, and I think he would have been proud.

Let me tell you something right now, no matter how frugal I might get, shoe shopping is not ever going to be taken completely off the list. I may not be able to splurge right now, but my time will come!

EDIT: If anyone would like to learn how to polish their own shoes, there is a nice clear article "How to Shine Shoes" on eHow.


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A Look at My 2009 Goals So Far

Last month was an excellent month for me. I got a small windfall in the form of a year end bonus, which technically should have been paid out in January, but actually showed up on the February paycheck. One upon a time my company gave out quite considerable bonuses, but this year it was quite a bit smaller. Still, you didn't hear one person complain since none of expected anything at all! I received a tiny bit in interest from my banking - its a real shame, even though I am stocking more money away, as interest rates are dropping, I've been getting smaller and smaller returns. Ah well! I also sold a few things on eBay, Half and Amazon (though not as much as I'd like.) And finally, I worked two different part time jobs, which frankly was the bulk of the $900 and got $3.00 for completing a Pinecone survey. Whew!

In addition to my $900 a month goal, I also have set some goals for 2009. I try to update here in my blog each month how I am doing on these so I can keep me on target. So, how did I do?

Financial

One month of emergency savings - I still currently have about a third of this goal completed. Each month I add $50 to it, but that won't be enough to get me to the goal by the end of the year - I need a windfall so this where my tax refund is headed.

Credit card paid off - My credit card is now under $450.00! I am paying over $100 each month so I will have this paid off in just a few months. Seriously I cannot wait!

Three eBay items per week - Oh my goodness, I was terrible at this! Just awful this month. However, I did manage to list quite a few things on Amazon and Half - one of which sold in a few hours!! Still, I have got to get back in the eBay habit. Last month I was incredibly busy with the two part time jobs (in addition to my 40 hour a week day job) but in March I won't have much extra paying work. I am going to have to rely on some heavy duty selling.

Get an additional $900 per month - Last month I said February was going to be my month and I was right! I hit my goal and beyond. Yay!! The downside is that I had a few extra bills during the month, so my surplus won't stretch as far as I'd like. That is why I am excited about my No Spending Challenge for this month. I need to save me some pennies!

Home Improvement

Paint my house - Can't give this one a color yet because there wasn't anything I could do about last month. Hopefully this month or next I can start getting quotes from house painters. I also need to find a handyman to rebuild one of my wooden porch railings. That has to get fixed before I can paint.

Create a compost pile - While there isn't a whole lot I can do in these cold winter months, I did contact a friend of mine about getting some extra wood pallets. I recently read about a compost pile design using old pallets for fencing and it looked cool. My pal mentioned that she could score me some from her work, so I am definitely moving ahead with this.

Winterize my home in preparation for next year - I got this started, but have a long, long way to go. I found a bad leak on my back door and purchased some weatherstripping to try and fix it... but haven't installed it yet. Again, the busyness of last month was intense. However, I plan to get this done this month.

Paint my bedroom - Once again I am giving the celery colored header of "well, I tried." I continue to hunt for scones on eBay. Didn't really find any winners and can't buy them this month anyway due to my Challenge, so while I did what I could last month, I am going to have to come up with a different way to push this forward in March.

Fix up my attic - Much like last month, I didn't touch this product. I did actually make it up into the attic this time. I walked up there, looked around, and left. This is still on my list though. There is a lot I can do to this room to make it better, even without spending money.

Personal

Self Schooling - I did a bunch of research on books I can read about my field. Since I can't get back into school at the moment, reading on my own time has a lot of appeal. The downside of this was that I found that there weren't a lot of everyday reading books in my field. Most of them were pretty stuffy looking tomes better suited for being in a library. The bright side of that is that I am pretty sure they can be found at the library. now I just need to dust off my old library card.

Gratitude Journal - I've been continuing to write in my Gratitude Journal regularly. It continues to be a great tool for helping me realize how much I have.

How are you doing on your New Years Resolutions or Goals for the year?

Photo by: *Nomi* & Malcolm

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Kicking the Pop Can Habit

The dreaded 3:00 pop.

My office has had free pop for years. I've been here 10 years in May and the tradition is from well before then. At the end of last year, that changed. We went through a series of layoffs and along with it, my boss decided to raise the cost of soda to $.25 and coffee to $.10. The point was not to have employees pay for their own pop, (although it would have seemed strange to still have free pop when friends and coworkers were just laid off) but the point was to constantly remind us that we are in tough times and need to be frugal. It was a way to encourage us to conserve and save money.

I've never been a huge soda drinker, but somewhere along the line I developed a 3:00 pop habit. Come 3:00 each day, I'd find myself heading on over towards the break room for my fix. The increase in price and my fixed budget slowed me down, fortunately, and it became more of something I had when I was having a rough day. I'd throw some quarters in my desk drawer and see how long they would last. Some weeks I didn't have any, other days I ended up having 2. Almost always when I did indulge it was at 3:00.

I'd say that is when my blood sugar drops and when I start craving something sweet, except that I always drank Diet Caffeine Free Coke. It has nothing in it, and yet, I was addicted. What was I drawn to? I have no idea. The odd thing is that I rarely drink soda at home - occasionally some ginger ale or sparkling water, but that's about it. Occasionally I will have pop out at a restaurant, but I am just as likely, if not more likely, to have water or ice tea. If I am on vacation or away from the office, I don't have this craving at all. It is only here where I work that I feel that dreaded puuuulllllllll....

Of course, that has all got to stop.

Soda at work is definitely an unnecessary expenditure. So, as part of my No Spending Challenge, I am going to break this habit. Honestly, I think soda is pretty evil. We are talking about a whole lot of chemicals and no nutritional value - so why am I putting it my body? I love tea and usually keep a few different kinds on hand at my desk so, if I need a beverage I am going to have a cup of Earl Gray or Peppermint tea and skip the soda.

This is another one of those little things - $.25 or $.50 a week really isn't all that much when you compare it to $900 a month. Even if I have 3 cans a week, it is still under well $40 a year. However, being frugal isn't just about saving money - it is about making wise choices. Is drinking these chemicals really a good choice - even if it does cost me change? Can those quarters be put to a better use? I'm going to use this Challenge to motivate me to drop kick my work pop habit. My consumption outside of work is so small that I don't see it as a problem at this point, but the work sodas gotta go!!


Photo by: Dom Garcia

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Brown Bagging it on the No Spending Challenge

So we all know that one of the ways to save money is to pack a lunch for work, right? I used to think this was one of those completely obvious tips until I noticed how many of my coworkers eat out almost every day. Considering that our bonuses and raises have been slashed, I'm not sure how they are still affording it!

Way back in the days of big bonuses and extra cash, I did go out to eat on a fairly regular basis myself (though even then it wasn't every day.) I enjoyed getting out of my office for a bit. I don't eat fast food, so those lunches weren't exactly cheap, but that was okay at the time. Since I began my $900 a month journey, I have been rarely eating out alone. I still do lunch with friends occasionally, but that is down to a few times a month. Fortunately, I enjoy my own cooking! Usually I'll make dinner for 4 (which is how most recipes are designed) and have one dinner that night and 3 portions to have as dinner or lunches. It works out pretty well.

However, yesterday morning as I came back into town from staying at a friend's I realized I had no lunch. The town where I was staying was a little over 2 hours away and since I work at 10:00 a.m., it made sense for me to leave there Monday morning, rather than Sunday night. (That way I can be on the road around 7:00 a.m. and drive during daylight.) As I got closer to the office, I started thinking about the lunch dilemma. I had just started my No Spending Challenge and one of things I definitely wasn't going to do during the challenge was eat out alone. So, what were my options?

1. I could eat out and just chalk it up to a "beginning of challenge" slip.
2. I could cheat and quick call a friend.
3. I could swing by my house and pick up something to eat.

The problem with #1 and #2 was that both of those solutions felt like they were against the principles of the No Spending Challenge. The problem with #3 was that in order to go to my house before work, I would have to drive past where I work and drive 12 extra miles to get something. I had the time, but did that really make sense?

In a word - yes.

At the time I just decided to do it because it felt like the "right choice" to make. It wasn't until later that it occurred to me to do the math. According to FuelClinic.com, my car gets between 26 mpg (city) and 29 mpg (highway). I was on the highway, but would have to do city driving to get home, so let's just call it 26 mpg. I had just bought gas that very morning for $1.89 a gallon. That means that each mile costs me roughly $0.07. Now, I would have to drive home and back to work which was about 12 miles round trip (6 miles each way.) So, my drive home cost me about $.84. It also cost me time - but since while I was home I checked the mail, watered the plants and put some of my travel items away and still made it to work on time, I say that time was well spent. The meal that I grabbed - chili - was leftovers from a big pot of chili a friend had made me. I ate a fair amount of it and froze the rest in lunch containers. So it was free. Total cost = $.84.

Had I gone out for lunch, the cheapest place I regularly eat is a lovely little Chinese place that has great lunches for $5.00. But with tip and beverage, I don't usually get out of there for under $7.00.

In the past I would have never considered driving right past my office and going home to pick up lunch rather than going out. Will $6.16 make or break my goal for this month? Probably not, although, each month that I work on getting $900, it usually earned by small amounts like this - in dollar amounts under $10 that add up, rather than big $100 lump sums. Plus, the homemade chili was far healthier than the restaurant Chinese food so I not only saved on my pocketbook, but also my waistline. And as it turned out, I ended up having to use my lunch hour for an emergency errand, something that would have been tough to do if I also had to get food at that time.

The most important thing though, is that by going home I stuck to my rules, which I think is really important when you are trying something new like this whether it be a diet, a budget, an exercise routine or whatever. Once you set rules you have to stick with them, especially at first when you are trying to form habits.

And hey, the chili was delicious.

Photo by: keuynish

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Not Spending Money in Big Box Stores

So, the weekend went really well as the start of my No Spending Challenge! Over the course of my out of town weekend I spent less than $25. That $25 was my half of meals and my ticket to see the movie "Milk." (We went to the early Sunday matinee for only $5 a ticket.) As I have stated, my No Spending Challenge does not include what I would call "social spending." I am not out to alienate myself from my friends for a month or make them feel like they have to pay for me or what-have-you. My main goal in this challenge is to curb myself of my own unhealthy impulse purchases and to curb my unnecessary spending.

On Saturday my friend and I went to Bed, Bath and Beyond with the specific purpose of picking up a new pillow. I shop quite a bit differently than my friend and it was interesting to see the differences. When I go to a box store like Bed, Bath and Beyond I typically walk in with something in mind. In our instance, we were shopping for pillows, so, I would have gone straight to the pillow section. After I found the perfect pillow, I would have gone back to towards the cashiers, and that is where my impulse cravings might have kicked in. That's the time I would remember that I needed a new cheese knife... or maybe I should see if there were any candles on clearance... that sort of thing.

My friend shopped in a completely different way, and it was rather eye opening...

As soon as we walked in, a handy step stool was spotted - and almost purchased. Then it was to the first section on our right, where next thing I knew, we were looking for omelet pans. Then it was to the section across the aisle where we were looking at gadgets... a vegetable peeler... a lemon juicer... adorable measuring cups. I will give my friend credit, several times they stopped just before putting something in the cart and said "No, I do not need this." However, some things did end up accumulating in the cart.

As we wandered from section to section I saw a lot of very cool things, (including a knife rack I fell in love with), but I am very happy to say that I fell victim to none of them! It really hit me though, how dangerous for the checkbook aimless wandering is. Had it not been for my No Spending Challenge, I would have fallen prey to at least one, if not more, impulse buys. Finally at one point I actually said, "Okay, you know what? I think we need to get out of here." Since I tend to do my aimless wandering at the end after the shopping bug is already engaged, I don't think it ever hit me before how easily stores like that suck you in.

Here's another thing, the wandering induced unneeded buying. Yes, some of the purchases my friend made were handy, but we only had brought one coupon for the needed pillow. Therefor, every other item was full priced. On top of that, when we got home, we discovered my friend already had bought a vegetable peeler awhile ago and had forgotten about it. I have been in that very same situation many times! How easy it is when we are shopping to keep buying. It is like a glass of wine - once you start it is very easy to keep drinking; the first item in the cart enables more items.

The lessons I got from this trip were ones I knew, but with this challenge in mind, they really were hammered home:

1. Wandering is dangerous. Know what you are going for before you go in. Go to it, get it, get out. The likelihood is that if you don't already know you need something - you probably don't.

2. Stores want you to buy stuff, that's their job. So, they put the practical things you want behind lots of brightly colored interesting stuff you don't.

3. If you find yourself picking up things you don't need, it is time to get out the store.

4. Never pay full price if you can help it. If you really need it, come back another time with a coupon or when something is on sale. (It was killing me that I had a drawer full of 20% off coupons for Bed, Bath & Beyond at home!)

5. Shopping with a cart is frequently a bad idea. Had we not used a cart, we might have only been able to comfortably carry half (or less) of the items purchased, but carrying one pillow would have been easy.

6. Although some of what we bought were impulse purchases, my friend had the money set aside for spending, and paid cash. If you are going to do this kind of shopping that is the best way to go: have cash ready, be able to afford it, and know that you are splurging. I have absolutely no problems with splurging now and again under these conditions.

So what about you? What are your tricks for avoiding impulse buys in bug stores?


Photo by: dotpolka

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