• Posts Tagged ‘choices’

    Save Money by Being Married/Antisocial

    by  • May 15, 2012 • Tagged: , , ,  • Comments

    Tastes Good Regardless of Location Consumed

    Tastes Good Regardless of Location Consumed

    My husband, Brad, is in the midst of his last school-related work before his summer (of more working) begins. He’ll be done on Friday, and the other day we had the following interaction:

    Abby: Hey, since you’ll be done on Friday, do you want to go out for drinks to celebrate?

    Brad: Maybe.

    Abby: What if we just go to [NAME OF NEIGHBORHOOD BAR] and get some dessert and a beer?

    Brad: I guess.

    Abby: . . . or do you just want to sit in the apartment and drink the beer we have in the fridge and eat a sleeve of Thin Mints?

    Brad: Yeah, that sounds perfect, actually.

    Sometimes, I read personal finance articles and the comments associated with them, and wonder how these people, most of whom are my age, spend so much money on going out. What are you doing? I think. Why can’t you just drink a beer at home? And then I realize – not everyone has the advantage of living with one of the few people they can stand for long periods of time. Don’t get me wrong – I like to dress up in something other than $6 men’s sweatpants from Target, and enjoy a nice gin cocktail with people to whom I am not married every once in awhile. But most of the time, my husband and I are each other’s company, and we like it that way. The added benefit, which we often don’t consider, is how much money it saves us. Consider some of our favorite activities:

    • Ordering takeout from the exceptionally delicious pasta place near our apartment and consuming it in our apartment.
    • Sitting with (nice – we do spend a little on our home-bound alcohol) beers in our apartment, while I watch something on Netflix and Brad half-watches, but mostly catches up on college sports blogs.
    • Ordering takeout from the great Taiwanese restaurant nearby and eating it in our apartment (sensing a trend?).

    Besides our penchant for carb-heavy takeout for which we don’t have to change out of sweatpants, we spend a lot of time hanging out with each other in the apartment (particularly in the colder months up here, which is almost all year long). And the natural consequence of this is that we don’t go out as much as we would if were single. We don’t feel compelled to head to a local bar that often, because the beer we would get there is the same beer we can consume in the comfort of our home, as is the company.

    As I said, this doesn’t mean I never get out. There are work happy hours, friends to meet with over a glass of wine, and potlucks that I attend. But after reading that some people my age go out on a near-daily basis, I can see how my generation can become mired in credit card debt after an accumulated however-many drinks consumed. It gets pricey, and we’re lucky to be cutting our expenses through our anti-social/homebody/married tendencies.

    How do you manage your social expenses?

    image: Jeramey Jannene

    The Cost of Higher Standards

    by  • March 19, 2012 • Tagged: , , , ,  • Comments

    Churros y Chocolate

    In my belly.

    Image: Oscar

    In college, I had the good fortune to spend a semester in London. Because I was on a boatload of financial aid, and determined not to run up any credit card debt, I spent my summer budgeting and saving and preparing to spend as little money as possible living and traveling abroad. Four months and many bean dinners and hostels later, I emerged slightly more cultured and no more in-debt than I had been before my travels.

    Back then, I was more than willing to do (and endure) whatever it took to see as much as I could on the money I had. Reviews for that Paris hostel say that it has bedbugs? Whatever, it’s cheap! Dublin hostel only has availability in a room of 20? Sure, I’ll be there with a friend, it’ll be fine. Yes, I’ll leave at 5 am to take the cheaper train to France, and sleep in the Dublin airport to cut down on one short night of hostel expenses. I was young, and excited, and happy to endure slight inconveniences for travel.

    Years later, I’ve noticed that my standards have changed. Thanks to some careful planning, and $800 in vouchers for sitting in an airport a few months ago (thanks, US Airways!), my husband and I will soon be off to Spain for a vacation. Where once I would be heading to hostel websites, I instead found myself looking up hotels and apartments with high ratings and nice amenities. I’m older, and I’m a little bit more spoiled, and I now value a certain degree of comfort and privacy over the frugality of the international hostel options. I do not want to be in a room with 20 strangers. I do not want to wake up any earlier than I have to. I want to take the train, and not the overcrowded bus, to the cities we’ll be visiting. I want to sit down at restaurants, and order what I like, and not skimp on ordering drinks to save a dollar.

    My husband and I share similarly frugal ideals, although there are moments when we disagree on what is and is not worth it (I want to take a cab from the airport; he insists on public transportation). Luckily, we both agree on the unmitigated importance of stuffing our faces with as much jamon as we can find, and consuming all of the wine we come across. He’s had his fair share of frugal traveling, and we’re both at a place where we’re willing to spend a little more to get a little more. It’s a nice feeling, to know that my financial world won’t collapse if I’m not counting every penny that’s going towards sangria and churros.

    Have you noticed that your standards have changed as you get older? Or are there still areas where you’re willing to rough it?

    Beware of Scholarships

    by  • April 5, 2006 • Tagged: ,  • Comments

    Right now, thousands of families are finding college acceptance letters and financial assistance offers in their mailboxes. Seven years ago, I applied to several schools and was accepted at all of them. The full-price tuitions at those schools ranged from $4,000 per semester to over $17,000 per semester. However, all the schools offered various financial assistance packages that reduced the tuition rates by a little or a lot. At the time, I compared the bottom line (tuition minus assistance) to determine how much each school would cost me. But I made a big mistake in not comparing what kinds of assistance they were offering.

    The biggest mistake I made was in assuming that merit scholarships were guaranteed. One school offered me a $4,000 per year merit scholarship and I ended up accepting their offer. In high school I was a straight-A student with no academic worries. I did not anticipate the academic struggles I would face when I was competing with the country’s smartest students. Lots of students were their high school valedictorians (I wasn’t). In classes where my grade was determined by my rank in the class rather than the average of my scores, I was at the bottom of the heap. My GPA slipped so low I no longer qualified for the merit scholarship. In addition, the scholarship stipulated that you could not re-gain the scholarship if you later improved. My freshman year struggles cost me $16,000 over 4 years, even though I recovered and graduated with a good GPA.

    So, if you are comparing offers, beware of merit-based scholarship offers. Even the best students struggle with the transition to college. Be sure you understand the requirements for the scholarship and be aware of any risks involved so you can make a realistic comparison between financial packages.

    Veni’s Debt Diet

    by  • March 4, 2006 • Tagged: , , ,  • Comments

    Yesterday we got a desperate request within a comment on our blog. It was posted by a 46-year-old woman named Veni, who feels trapped by her spiraling cycle of increasing debt. She has watched Oprah’s Debt Diet on TV and wishes someone could help her get her finances under control. We were both struck by her plea…Well, Veni, this debt diet is for you!

    Step 1: Recognize that there is a problem.
    Veni’s has done some soul-searching and she admits that her problems include:
    -Trying to keep pace with friends who earn higher incomes.
    -Losing track of small expenses
    -Losing track of her checking account balances and incurring fees
    -Using credit cards for everyday expenses rather than as an emergency backup
    -Poor credit score

    Chin up, Veni! We were in your shoes just 18 months ago. We got educated, made a plan, stuck to the plan, and now we feel great! Remember, every day you stick to the plan you will improve your finances a little. So every day from now on will be the new best day of your financial life! And we think your whole life will start feeling better once you have your finances under control.

    Step 2: Stop hemorrhaging cash
    This step will cut your monthly expenses so you can free up some cash for debt repayment.

    First, cut your monthly fixed expenses. Call your service providers (cable, phone, internet, etc) and try to negotiate a better deal. Tell them if you’ve seen a cheaper deal with another company, they may match it. If your contract is up and they won’t budge, switch to a cheaper company or plan. Then call your credit card companies. Ask them to lower your interest rates and eliminate your annual fee.

    Step 3: Find cash around the house.
    If you are subscribed to magazines you don’t read, call and cancel the subscription. They’ll usually issue you a check for a portion of your annual charge. If you have the receipts for recently purchased items, return them to the store. If you don’t have receipts, start saving them (every one) so you can audit your receipts and make returns later. If there are unused items around the house, sell them on eBay. Buy a newspaper, clip all the coupons, and sell the ones you don’t want on eBay.

    Step 4: Stop spending.
    From now on, before you purchase anything ask yourself these questions:
    1. Is it absolutely necessary for me to buy this?
    2. Can I rent it or borrow it instead?
    3. Is it on sale? Can I get it for less?
    5. Is this worth ruining my credit for?
    This means no new clothes, shoes, household items, you name it. Approved purchases include food, gas, utilities, and other minimum necessities only.

    Step 5: Increase your income.
    Consider working overtime (if your job allows it), asking for a raise, or getting a second job. If a formal job won’t fit in your schedule, see what you can do to earn money part-time. Can you baby-sit for neighbors, sell crafts on eBay, or do other small chores for cash? Also, check your mail for special offers that give you a cash bonus for opening checking or savings accounts. If you spare the cash for the deposit required, you can reap the bonus cash then close the account.

    Step 6: Get Organized.
    Create a spreadsheet or buy some budgeting software. Enter all your information then update it at least weekly. At a minimum, you need to know: The total amount of debt you owe, to whom, and at what interest rate; the total cost of your monthly fixed and variable expenses; your monthly income. Start saving every financial statement you receive. Buy a file cabinet and folders. Create a folder for each expense and sort your statements. A great book that explains very well how to do this is Smart Couples Finish Rich by David Bach. You also should know your credit score and understand why it is what it is. Get your free credit reports online, and pay the extra little amount to see your FICO score. There should be an explanation on here for why your credit score is low, such as “Too many late payments in past year.” Flip these around and they become suggestions for how to improve your credit.

    Step 7: Set Realistic Goals
    Some of Veni’s goals include having enough money to buy a car and a one bedroom condo within 2 years.
    First, determine if these are realistic goals. It seems like a long reach to stop getting into more debt, reverse your actions, and save up enough for a down payment within two years. We’ve been following our plan for 18 months and have paid off over $6,000 of debt and improved our credit scores significantly. Still, we haven’t even begun saving up for these kind of large purchases. Maybe you’ll need to give yourself a few extra years to reach your goals. These should be your long-term goals, but set some short-term goals too. Some good short-term goals could be: Cut spending by 50%, Pay off $3,000 of debt this year, or Improve your credit score by 10 points this year.

    Step 8: Get educated
    As soon as you have taken these emergency measures to immediately fix your finances, begin getting educated about personal finance. This doesn’t have to be boring or expensive. You could watch Suzi Orman’s television show about personal finance, read blogs like this one, or borrow some books from the library.

    Step 9: Stay Motivated
    Instead of surrounding yourself with the Jones’s (and their shiny new cars and houses), surround yourself with people who respect your financial goals and help you achieve them. The personal finance blog community is full of people like this. Your real-life friends will probably be supportive if you tell them what your goals are, too. You can also use Excel to create charts showing your progress in paying off your debts and saving for your goals. These charts can help keep you motivated as you see your progress increase over time.

    Well, Veni, there’s a fresh start for you! Congratulations on taking the first step and asking for help. We’re not financial experts, but these are the same steps we’ve been following for the last 18 months. We can assure you that taking these steps can only help you! We wish you well on your new financial journey. It won’t be easy or feel very good at first, but in the end you and your FICO score will be feeling HOT. We’d love for you to let us all know how things go for you, so be sure to stick around the blogging community!

    Good Choices

    by  • February 11, 2006 • Tagged:   • Comments

    As a comparison to my parents Bad Choices, I’ve decided to list some of the Good Choices we’ve made as a couple:

    -Chose to complete our education before getting engaged
    -Chose to save up and pay cash for the engagement ring, even though it meant waiting longer than we wanted to
    -Chose to work as a team on our finances, spending time together each week to review our accounts, pay bills, and plan for the future
    -Chose to forgive each other’s previous financially bad choices, such as missed payments and unnecessary purchases
    -Chose to support each other in making good financial choices, such as discouraging splurge purchases and encouraging saving
    -Chose to combine our finances to double our leveraging power
    -Chose to pay off the highest-rate credit cards first, no matter which of us owned the card
    -Chose housing that is slightly under our budget to allow for extra savings
    -Choose to menu plan together each weekend so we don’t have to waste money on dining out during the week

    I’m really proud of the choices we’ve made.

    Bad Choices

    by  • February 11, 2006 • Tagged: ,  • Comments

    Since we recently got engaged, I’ve been spending a lot of time on the phone with my mom, discussing wedding plans. This conversation has opened the door for my mom to share her memories of being young and married. My parents married at 18, and my mom gave birth to her first child at 19, then another at 21. I was an unexpected baby when my mom was 41, so I don’t know much about her life as a young wife and mother. Today she opened up and talked about her life choices and I was surprised to learn just how many bad choices she made. It seems as though every chance she had to make a decision that would impact her lifelong finances, she chose the obviously bad option.

    First, she chose not to go to college, despite her good grades and her wealthy parent’s offer to pay for school. She says she lacked confidence and never really considered it as an option. Instead, she married a man with an 8th grade education. This combination of choices pretty much set the stage for the rest of their financial achievements. Immediately after getting married, she chose to have children. I asked her if their poverty played a factor in her decision, and she said no. I asked why not and she replied, “Because things have a way of working out in the end.”

    Boy did they. A few friends had given my parents some used furniture to start their new home (an unheated studio). My sister was born and had a digestive problem that required a special goat’s milk diet. My father was earning less than $70 per week, my mom wasn’t working at all, and the special milk was expensive. One week they had no money at all, so they chose to sell all their furniture for $4 to a pawn shop. Things went on like this for a few months, and then my mom chose to get pregnant again.

    My dad finally got a good blue-collar job and my parents purchased their first home. Within a year, my mom suspected my father of having an affair with a neighbor and chose to put their house on the market and take the first offer, which was 1/3 of what they had paid for the home.

    Finally mom chose to start working. But there were few options available to an uneducated mother, so she chose to start a home day care. She chose to spend all the revenue from the day care on toys, furnishings and supplies for the day care, claiming that this was a good tax write-off and a “good” financial choice.

    Over the years she has made similar “tax advantage” choices, such as buying a new expensive vehicle instead of driving the old car.

    She has also made some pretty heinous choices on my behalf that will have long-term effects on our finances. For example, I chose to attend an out-of-state college, which required me to pay additional tuition. If my parents had agreed to allow me to become a legal independent, I could have paid the in-state rate and qualified for grants and scholarships based on my income alone. This cost me an additional $36,000 in student loan debt. She didn’t want me to become an independent because she wanted to be able to claim me as a dependent on her tax return, saving her maybe $750 on her taxes each year. She convinced me I needed her permission to become an independent, and she threatened that if I were audited and the IRS saw that my parents were claiming me as a dependent when I was an independent, then I would be in big trouble. Looking back on it now, that’s ludicrous! The mistake would have been theirs, not mine. I’ve tried discussing it with my mom over the years, but she dismisses me completely, saying that she was following her tax advisor’s instructions.

    Since our conversation this morning, I have a new understanding of how my mom deals with finances…or more correctly, doesn’t. I’m focusing this rant on her because she has been the single point of control over the finances in my parent’s entire marriage. I suppose my dad is equally to blame. If you have contributed nothing, I guess you’ve contributed to failure as a couple.

    This whole thing has made me more aware of how well we’re doing financially. Even if our bank accounts look shaky, at least we’re making good choices together. I’ve always been afraid of ending up as financially wrecked as my parents, but this gives me confidence that we’re on a completely different path.