Rethinking money (Re-post)

Originally posted February, 2009

As I have said before, so much of what I can now "teach" was learned the hard way. Here are some lessons learned...

What is my actual income?
Let's say you make $40,000 a year. If someone were to ask you your income, you would probably say $40,000. That's where some of us get into trouble. When we spend money, we are thinking $40,000. Wrong... your actual income is not your gross but your net income after taxes, Social Security, insurance, etc. is taken out.

Do the math, figure out what your net income is, and keep that amount in your mind when you are making your budget or spending money. You'll be surprised at how it changes your outlook.

How much does this cost me a year?
This is a question I ask Christopher once in awhile. Spending $1.00 a day on bottled water may not seem like a lot (unless you are over 50 and paying for water is still weird). However, multiply that by five to seven days times fifty-two weeks... are you sure you are that thirsty? It is far better to purchase water by the case and take it from home. Better yet is to make a one time purchase of a thermos or other container and fill it up with water from home.

I think that is why Starbucks is in trouble, people who used to purchase their coffee on the way to work each morning are no longer able to spend that kind of money on a daily basis.

I do the same math when thrift shopping. If an object is something I don't really need and I have to think about where to put it... I don't make the purchase no matter how cheap it is. I've started doing the math... $3.00 for a thrift store purchase multiplied by fifty-two weeks in a year? It's amazing how losing one-third of your income makes you rethink Goodwill and garage sales. :)

My Money or My Life
Remember the famous book where the authors have you "do the math", figuring out how many hours it will take you to pay for a purchase with your net income. It woke a lot of people up, not only to be more careful with purchases but to the fact they can live a much better lifestyle as a result of spending less.

Is the joy of driving a $50,000 car around town worth how much extra you have to work to pay for it as opposed to... say... paying $12,000 for a really good used car? Is eating out three or four times a week, going to the mall a few times a month, season tickets to the Bears games, etc. worth having the wife work outside the home if she would rather be home with the kids?

Well, as far as the Bears tickets go... don't ask my husband.

Can I Find a Cheaper Way to Get the Same Result?
This is where the rubber meets the road in decorating our homes, cooking meals, making celebrations for friends and family, etc. It is also where some of my blog friends (like Manuela) have genius ideas that I steal... I mean copy.

Here's an example, I was browsing the gift shop at the hospital yesterday (where we are trying to get help so Christopher can have his surgery) and saw the cutest "sign" which spelled out FAMILY. It was made of individual letters that were hinged together. It was also quite expensive. Next to it was a far cheaper metal sign that also spelled out FAMILY. Just as cute for far less money but still more than I can afford.

If I decide I really want something like this in my home, I'll make a trip to Michael's or Hobby Lobby for ideas. It will also go on my thrift store and garage sale radar. I have learned to ask myself this question many times over the years... what is it I like about an object, can I make the same thing at home, would something similar give me the same "feeling" or "look", etc.

I do this same thing when looking at a picture of a lovely home, an amazing garden, a beautifully set table, etc. What is it about this scene that causes me to love it and how can I recreate this at home without spending money (or at a small cost)?

It's the same with eating out... I LOVE to eat out. But do I need to eat an entire meal? Can I get the same experience by just going out for dessert and coffee? There are times when, of course, we need an entire meal but if it is experience we are after... coffee and pie may be all we need.

At the End of My Life, What Do I Want My Checkbook to Show?
I have friends whose house is... not beautiful. That's all I'll say. Even though they make very, very good money. Unlike me, having a warm and cozy and lovely dwelling place is not a priority.

However, their family has taken exotic and amazing vacations all over the world. I don't know of any other family (among my friends) that has had the travel experiences they have had. Except for their children's education, most of their "extra" income went to these vacations.

Their kids are now out of the home and they have wonderful memories. It's not the way I would have spent my money (I'm a terrible traveler, I get sick on cars and planes and trains and whatever else moves.) But it worked for them.

Frugal Luxuries
Somewhat along those lines of thinking... one has to have a few luxuries here and there. The expense of those luxuries will be different based upon your income, if you are saving for a special purchase, etc... but even if you are on a limited income like us, you must have a luxury here and there are bitterness will be your companion.

An example... $4.00 a day for my morning cup of coffee is far more than I would pay (even if we were not on Disability). However, $4.00 for a Starbucks once a month is possible. A Pumpkin Spice Latte is an experience when it is slowly slipped, with eyes closed, breathing in the aroma. It is a cheap vacation. Spending $5.00 each day at Panera is far beyond my ability right now but investing $5.00 once or twice a month to "get away from it all" with a book, a notebook, and a pen is priceless.

I pay just a little more for my Seventh Generation dish soap (I can no longer afford Mrs. Meyers but I can still purchase Seventh Generation at Target!) and purchasing a very good quality liquid hand soap for my kitchen sink is a frugal luxury, since I spend so much time doing dishes and washing my hands while cooking.

The concept of frugal luxuries could (and has) filled an entire post before...

So, there you have it, lessons learned... many times the hard way. I hope they give you something to ponder today.

Note:  The term Frugal Luxuries is taken from the book by the same name by the brilliant and creative Tracey McBride.

Picture: Homemaking Magazine: allposters.com

Safe Harbour (Re-post)

Originally posted February, 2009

I woke up long before the alarm was to ring this morning. After realizing I wasn't going back to sleep, I took advantage of the early morning hours to start the coffee and turn on the TV for one of my favorite ways to relax. Two Christian networks play videos by worship.net* and CreationScapes.tv in the wee hours of the morning. (Note: These programs are no longer on the Christian networks at night... unfortunately.)

I sat in the Lazy Boy, sipped coffee, and found body... mind... and spirit relaxing in the hour before I had to wake Christopher up for his commute to his 8:00 class.

Watching the beautiful scenery and listening to praise music reminded me of other times I have found comfort in these videos and I thought about the concept of having a Safe Harbour to run to when going through the storms of life.
Just as storms come and go in nature, so we find ourselves in real life storms... some so mild we hardly notice the dark clouds... others leave us feeling as if we were in the midst of the whirlwind, hanging on for dear life. I've found the necessity of providing a Safe Harbour at times, those places I can go to find peace for my soul in the midst of hurricane force winds.

Of course, the storm continues to rage and the circumstances have yet to change. But a Safe Harbour provides peace in the midst of the storm... at times enough to help regain needed strength and encourage us with faith to continue.

What are some of my Safe Harbours... past and now?

• Reading the Psalms
• Talking to God in the morning
• Talking to God when I can't sleep
• Watching the antics of furry friends
• Getting lost in a book
• Baking in a warm and cozy kitchen
• Inspirational music
• Beautiful artwork
• Watching a re-run of an old TV show
• British flicks on DVD
• Gardens in Spring
• Forests in Autumn
• Sunrises and sunsets
• Hiking trails when Christopher was little
• Walking the shores of Lake Michigan
• Picnics at the park when both kids were home
• Breakfast at the Cracker Barrel
• Getting away alone for coffee
• Tea time at home
• Memories of fun family times

Well, I'm sure you "get the picture". While nothing can sooth my soul like getting into the Word... there are Safe Harbours where I run when the storms are raging.

Yours may be different than mine. While working with flour, sugar, and butter can help me temporarily forget my burdens... it can be a burden to another. My husband finds rest for his soul watching Chicago Sports... go figure.

When you are budgeting for tomorrow... make room for that which will be a place of Safe Harbour in the storm.


Photo of the Gulf Coast taken by my friend BB in Texas

The "How I beat inflation by stocking up" series... links to archives

We all have been experiencing sicker (Freudian spelling slip) shock on food prices, lately.  Last night, Christopher arrived home after watching a basketball game at a sports restaurant with friends.  He told me he thought the waiter had made a mistake when he got his bill but apparently it does now cost nearly $19.00 for two appetizers and one Cola!  His friend who was with him told him it is now over $11.00 to eat at one of the "food markets" on campus... that is for one meal.  Those are steep rises in previous costs.

This week, I saw a news program on TV about the large rise in grocery store sales as more people are cooking at home and I can tell you... it may be cheaper than eating out but those prices have all gone up, too.  I wrote a four-part series in 2009 about beating inflation through stocking up. In it, I shared how I keep food prices down as much as possible by stocking the pantry.  Here are those links...

How I stock up 1... here.
How I stock up 2... here.
How I stock up 3... here.
How I stock up 4... here.

It takes work and planning but if you look at how much you save as if you were earning that much per hour, you will be surprised!

The Hospitality Pantry (Re-post)

First posted January, 2007 

 

I've decided to once again put together a Hospitality Pantry. For years I had such a pantry but I got out of the habit when we were living in a town where we knew no one (and no one seemed to care about getting to know new people). I am putting together my grocery list for later this week so I am adding a few items just for last minute guests.

I think it was in a book by Emilie Barnes (one of her first) that I read about the concept of a Hospitality Pantry. Since then I've seen the idea in other books about hospitality. It differs from keeping items in our normal pantry. 

 

These items tend to be special and more perhaps on the gourmet side...not all but some of the items. It is set aside from our regular pantry so temptation does not overcome us.

For instance, something I always like to keep in a Hospitality Pantry are a couple boxes of Pepperidge Farm cookies. Because they can be pricey, even though I normally wait for a good sale, I will be less likely to open them up during a carb attack because they are more expensive. A box of Keebler Soft Chocolate Chip Cookies...watch out. Never get between a diabetic and a cookie during a severe carb attack (you should but if you value your life...).

 

These items are kept in their own area, not in with the regular pantry items to make certain they are there when needed. If I could make myself forget where they are and remember only when I need them...that would be a good thing, indeed.

In my regular pantry, I have a few boxes of mixes (brownie mix, cake mix, etc.) that I use from time to time. I prefer making things from scratch but there are days if I don't use a mix...it will not happen. In my Hospitality Pantry, I make an assumption there will be no time to bake something (added: I have collected some great recipes that start with mixes).

Normally I will raid the Hospitality Pantry when someone I'm not expecting stops by for a chat. However, it is just as good to have on hand for last minute tea parties with the children (or grandchildren), hubby has a bad day at work, the family has received news that is difficult to handle, and generally...when comfort is needed. Having these items on hand make it possible to put together a special "party" for one special person or our own dear family members.

My list may be different than yours. I don't drink beer at all and I drink wine only on special occasions so I normally wouldn't keep any on hand. I don't have young children over very much so one box of animal crackers would suffice. [On the other hand, since I don't keep them in my regular pantry (animal crackers...not children) it is important to have them in this area for those rare times I do have small children arrive.]

I have kept my Hospitality Pantry in various areas over the years. As with any pantry, you only have to make certain it is not in an area that gets too hot or damp, and the items are protected from harm (ants, mice, etc.). A good place is in the cabinet over a refrigerator...hard to get to but not impossible. When I had a larger house, mine was in a large Rubbermaid container on a shelf in our basement pantry area. Also, as with any pantry, it can be as "deep" as you like. Here is my basic list and the "deep" list...only given as an example to spark your own creativity.

Hospitality Pantry
Coffee 

The small packets sold at the grocery store and coffee shops are perfect for this. Be certain to have on hand at least one packet regular coffee, one decaf, and perhaps a flavored coffee. I keep these even though I normally have coffee on the shelf. Of course, you can store an unopened can of coffee or unopened bag of beans. If you only store one, make it decaf.

Tea
I always have teas on the shelf but I like to keep one or two boxes of Bigelow teas in this pantry. One box of a black tea like Earl Grey and one box of an herbal tea, especially one children can drink. Bigelow is best if you are putting back for storage because they are individually wrapped in foil and last for a very long time.  Otherwise, any favorite brand used regularly is fine.

Other beverages as desired: hot chocolate mix, lemonade mix for hot weather, etc. Remember, we are assuming "last minute" preparations.

Artificial sugar packets (I prefer Splenda) for those who cannot have regular sugar.

One or two cans of a good quality evaporated milk to use as cream for coffee. I like Milnot for this purpose. It tastes just as good as cream. This is where quality is important. I use store brands of evaporated milk for cooking but they don't make a good tasting "cream" for coffee.  Of course, if I have half-and-half or milk in the refrigerator, I will use it.

Good quality cookies like Pepperidge Farm and/or shortbread cookies. Animal crackers or vanilla wafers for small children.

To "deepen" your Hospitality Pantry...here are a few extra ideas:

A jar of Devonshire cream (expensive so I don't keep this on hand)
Very good quality jam
Scone mix (gourmet mixes are very easy and quick but can be rather expensive)
Fancy crackers
Can of good quality canned chicken, small jar of Mayo, small jar of relish
--instant chicken salad for the crackers

Pepperidge Farm cocktail breads (added note: I keep one pkg. of these in the deep freeze)

(Added) It can be fun to keep an eye out for items which can be placed in the Hospitality Pantry,  fancy paper napkins and plates, serving dishes, and obviously fun and tasty foods.  This is an area where we are limited only by creativity and budget... well, perhaps space.  :)

The beauty of forced frugality (Re-post)

Originally posted August, 2009

I doubt most of us would use the word beauty and forced frugality together... at least until the view you are achieving is from the rear view mirror. Years and years later one looks around at the skills developed and the life being lived, only to realize they would not have come about except for the day to day living when there is more creativity than money. :)

I thought about that this week as I was in the kitchen and working on small projects. Both the guys were away from home. I had plenty of time to think and ponder and work on decluttering projects (for there are always places in a small house which need to be decluttered). All those little items on my "to do" list are now "to done". It is amazing what two days alone (in the daytime) can do...

Yesterday afternoon I baked a loaf of honey wheat bread as promised for my husband, made the best salmon patties, set sliced cucumbers and onions in vinegar and sugar, and sliced some tomatoes... all coming together for a cheap but delicious dinner... leftover salmon patties carefully covered and set aside for a late dinner when the guys arrived home.

The bread recipe was learned long, long ago for the benefit of health and our pocketbook (kept taped inside my kitchen cabinet), the salmon recipe only recently discovered as a way to add salmon to our menu on the cheap (I used to hate salmon patties until I found this recipe, which is now on my recipe blog).

Sitting on my kitchen counter this week has been a small bowl of cider vinegar with a squirt of dishwashing liquid... battling gnats which somehow came in with veggies and reproduced. At one time I would have sprayed poison but I couldn't afford to buy any so I found a cheap solution, and it worked! So many of our "going green and good for the planet" solutions have come about by the need to be frugal.

There is a simplicity that comes when one must stay home for long stretches of time to save gas or the money isn't there to shop, go out to eat, sign the children up for various classes, or flitter from one friend to another (flitter?). Staying home is hard for some who have been used to leaving each day. It is only when one becomes good at staying home that it is possible to look at housekeeping other than maintenance... moving into the realm of creative homemaking... for such a lifestyle requires time.

I love going out to the garden to pick green beans for dinner or zucchini for a quick bread or cake (using the same batter in a 9 x 13 dish). As mentioned in another post... skills continuing to be learned as we're stretching money as a family over the years. New recipes are being researched as we use more beans, lentils, etc. in various recipes.

I was listening to a TV show recently where the author being interviewed had written about learning to live with less money. She thought some will come out of the present economic crisis with their life changed for the good, having gained many useful skills and learning how much joy can be found in a simpler and more frugal lifestyle... as she had after leaving a high paying corporate position.

Going through tough economic times can be very difficult. I have been there when a decision was made to put the house up for sale before we lost it. I have been to the grocery store when a decision was made to purchase either milk or bread (which is why knowing how to make bread became a priority... we don't own a cow). :)

Living on less can make convenience hard to come by but it also forces us (as in forced frugality) to gain knowledge and experience which come only by doing things for ourselves... and that can be a heritage passed to the next generation just as important as what is found in a bank account.

Personally, I believe such lessons learned are worth all the gold in California as one decides to depend less on what money can buy... manage expectations... develop skills for living... and stop complaining about circumstances but becoming less consumers and more producers... even it is just a tomato plant on the deck and bread in the oven.

As the Word says... do not despise small beginnings... and don't stomp your foot and complain that you are being forced to learn to live on less. In the long run, you will be thankful... someday even if it is not now. :)

Picture: Grandma's Garden, Robert Duncan; allposters.com

Rethinking frugal myths (Repost)

Originally posted May, 2009

This is the first of the favorite Recession and Pantry posts from the past.  I believe it had the greatest response of any such post so it is well worth repeating.

I was brought up in a culture where if one practiced frugality they were thought odd or miserly. Especially if they had a good income. There were a few exceptions as we know from books like The Millionaire Next Door (where some people became wealthy due to frugal living instead of spending everything they made)...frugal without becoming miserly.

Last week I used a Panera gift card to pay part of the cost of a coffee and bagel (one of those days I was waiting for my son). I gave the manager at the cash register my gift card to use first and then paid the balance... knowing there was just under $1.00 left on the card.

It sparked a conversation about the use of gift cards. She said stores love to sell them because many people don't see them as real money and often lose them or forget about them. Most people don't use all the credit available (which is why my use of the last dollar was unusual).

I remembered at Christmas time, reading that gift cards were not welcome by many teenagers (those we know enjoy them, though). I love, love, love gift cards so it was hard to understand why someone wouldn't.

After reading a little more, I realized many of these young people had never "wanted" for anything in their life. They could not comprehend what a gift card meant to one who had little to spend on luxuries (or stocking up). It would be no different than handing the teenager $10.00 when they already had $500 in their billfold.

It has me thinking... perhaps a recession isn't a bad thing for all of us (as one who has been living in a Recession for a long time now). It helps us rethink the making, spending, and saving of money. So, being a pondering type of person... I thought of a few statements about frugal living which I've been told and found to be myths.

Some of them are...

Small expenditures don't count... On the contrary, I think most people tend to be careful about big purchases (cars, furniture, etc.) and get in trouble with the small purchases adding up. I've been (trying) to teach this to Christopher, telling him to think about how much he is spending on each small item multiplied by say... 52 weeks. Once I started doing that, I realized being frugal meant being honest with myself about the dollars spent "here and there".

Money can't buy happiness... Well, that is quite true. What money can buy is convenience. The myth is that... doing that which is convenient and easy automatically brings more happiness than that which was brought about by hard work. A simple and frugal lifestyle is not always easy or convenient, it is full of hard work... but it can bring about happiness from a job well done... not to mention peace of mind when we don't have to finance a convenient lifestyle.

Frugal people don't shop... I've found that not to be true at all. Just the opposite, frugal people are good shoppers. They find enjoyment in searching out the best places to shop at the right times, knowing where to get the best deals, when to shop (for instance, the end of season sales), etc. They are masters at living "off the financial grid".

Frugal people never spend money... No, frugal people know how and when to spend money. Misers don't spend money at all if they can help it. Not spending money can get you into as much trouble as spending too much (more about that in tomorrow's ponderings).

Frugal people are hoarders... There is a huge difference between hoarding and stocking up. Frugal people save money by stocking up when items are at their cheapest prices, especially items they know they will be using like food and household goods for the pantry, craft items, clothing they will need, household and automobile maintenance products, school supplies, etc. Misers hoard, frugal people let their money work for them in a timely fashion.

Frugal people are stingy... Once again, misers are those who hold everything tight to their person. The people I've known who are the greatest givers are those who have known what it is like to be in need. Frugality gives those with little the option to be able to give and those with "more than enough" the freedom to share.

Frugal people never have any fun... On the contrary, some of the most creative and fun filled people I've met are also frugal with their expenditures. Some are forced to be creative by lack of money and end up growing in their creativity (and fun). Others have money because they are very careful with their spending and they know when to spend for pleasure (without putting their family into debt).

Children of frugal people have often learned from one or both parents how to have fun with little or no money to spend. They are often quite creative and resourceful. Children of misers grow up needy and often with hostility toward the miser.

You can't be frugal and have beautiful things... Well, anyone who has read this blog and those by many of my blog friends know that is not true. Quite the contrary, frugality in general (and forced frugality by circumstances in particular) causes one to think through their purchases in such a way that their homes tend to have more beauty and less things... more simplicity and less clutter.

Recession Ponderings #1 reposted - Learn from my mistakes

(First posted March, 2008)

As I have said before, I look back on some of the decisions we made before entering "times of long term unemployment" and I wonder what in the world we were thinking! Then I realize I have to give the younger Brenda a break.

When one is living life a day at a time, it is far easier to make unwise decisions than when one is on the other side of a financial trial... when one can turn around and see the entire picture... and put each decision in perspective.

I wasn't surprised when I read my free Gary North financial e-mail letter a couple days ago (I figure if I can't afford the letter one must pay for, I don't need it!). He stated the mistake most people make about their finances in times like this is... denial! Absolutely! I've been around that mountain so many times, I meet myself coming back.

Here are the big mistakes we made a few times (not all at once). Making better decisions would not have prevented the financial setbacks but they would have made them a lot less painful.

1. We thought my husband's job was too secure for him to be laid off (wrong a few times).

2. We did not believe he would be out of work very long.

3. There was certainly no way he would be out of work for more than a year (uh, huh...twice).

4. When he did lose a job, it would be replaced with another engineering position (NO... in one instance he had to work as a janitor at a church for months, before getting a temp job at a factory for a year or two).

5. When the main breadwinner has a Master's degree, the family has a lot of savings, and $50,000 equity in a house, one will never be on the verge of being homeless (wrong).

6. Mom can always take a job to help the family budget (not always...).

So... why are these wrong beliefs dangerous? Because they affect our every financial decisions. Like... um...

Do not purchase a car when the economy looks like it is going into even the slightest recession. Even if economists make you think you can turn the economy around alone just by spending money.

Spending money for car repairs with a good mechanic to keep your car(s) going until the economy is much better is a wise decision. You may even come to realize purchasing very good used cars most of the time will be good for your long term financial future. That new car aroma is often gone before you make the first payment.

There are exceptions but most of the time, a good used car is a far superior choice. Exceptions: when a car is used to commute great distances sometimes it is better to purchase a new car with a warranty... sometimes... and only in a secure economy!

Do not keep up your past standard of living by using your savings. This is probably the most common mistake people make (and we did). It's that denial thing again... certainly there will be a regular income coming quickly. Instead, set your priorities for spending and cut out all extras. (I'll talk about that in the next post.)

Do not keep up your past standard of living by using credit cards! This is far worse than even going through your savings. This extends your financial trial! For once the recession is over and there is a regular income... you will be paying... and paying... and paying... and paying (get the idea) for the past.

Some economists, the Secretary of the Treasury, the President, my uncle Homer, and all others who should be in the know say a recession isn't on the way so I choose to listen to them and go on living my life as I have in the past. Uh uh... see if any of them give you grocery money or pay your mortgage.

ADDED NOTE:  Of course, now we know we did go into a major recession and the worst since the Great Depression.  Some who are in the know believe it will get worse before it will get better.  I don't have an Uncle Homer.