Sunday, August 9, 2009

Frugal Flummox

Well, today was not exactly what I expected. I made an error that seriously interrupted my day and wasted a whole day's worth of income. Yet, there is a little bit of pride in myself and my ability to stand up for myself. Read on...

The error: I locked my keys in my car. Again.

Please understand, we only have one key to my car. And I was getting ready to go to work when I discovered it. Double-whammy. Sad thing is, I had been thinking just the other day that we should get some more keys made, just in case. Would have been more frugal to spend the extra few bucks to save the ordeal I just had. Where did I put that Murphy repellent...

So, I spend the next two hours calling my student to reschedule tutoring and calling around to locksmiths trying to find a deal. Finally find one, about $10 more than the cheapest guy, but seemed a lot less shady on the phone. Or not...

Mr. (lock)Smith finally finds the place, pulls up, and looks in my car window. "It will be $40 for the service and $80 for me to unlock it." (Did I forget to mention I've done this before? I know how easy it is to break into my car...).

I look at Mr. Smith, dumbfounded, and finally inform him that I don't have it, thank you, I'll call someone else. (I do have it, but there is no way on God's green earth I am paying him $120 to put a hanger in my window, thank you very much!)

Mr. Smith doesn't like that idea. He wants to know how much I expected. I told him the dispatcher said it would be about $40 for the service and $15 for the labor. (She told me $15+, but since I know there is pretty much no labor involved, I expect to only have to pay $15).

He calls, talks on the phone for a little bit, then calls me back and says he can do it for $80. I shrug and tell him I don't have it.

"How much do you have?" (I think this is the most unprofessional thing you can ask a customer!)


"Cash? OK, but I just won't give you a receipt."

What do I care if he gives me a receipt? It's not like I'm going to pay him before I get my keys out! He pulls out what amounts to a small blood pressure cuff and a thick coat hanger, jams the cuff in the door to separate the seal enough to put the coat hanger in, and uses the bent end to pull my manual lock. The whole thing takes about 90 seconds. I retrieve the cash and pay the man.

Outside, he has the receipt (I thought there would be no receipt?) with $40 for the service and $15 for the break in and asks me to sign it and gives me the carbon copy. I ask for a card, but he won't give me one. When I get inside, I discover that the carbon had been altered underneath so that the copy I have says that I spent $80. Quite suspicious, but I can't think of any reason why that could negatively impact me. After all, I paid in cash and since he left how would he prove I didn't pay him $80?

After a quick call to my dad for some semi-legal advice (can this false carbon copy bite me in the butt?), I have mixed emotions. On the one hand, $55 is a huge amount of money for us at the moment. On the other hand, I feel somewhat proud and confident in myself, having stood up for myself and "haggling" down the price. I tend to be a "just pay the man" kind of person. Who knows, maybe this is the beginning of a more assertive me.

Now, I'm off to get some keys made for my car...

How about you? Anyone try to royally rip you off lately? Did you succumb? Did you stand up for yourself? I want to hear about it!

Thursday, June 11, 2009

Living "a month ahead"

While most people are living "month-to-month," my husband (Lubby) and I live "a month ahead." Let me 'splain.

(Just thought an update would be appropriate in regards to the car: we just sent $1400 to the bank, so our liability is down to $1055. Hurrah!) That means that after everything we've taken out so far (most of our bills are at the beginning of the month), we are left with about $500 in the checking account and little expected for the rest of the month. So, why am I not panicked?

It has to do with our version of the "zero-based budget." At the beginning of the month (or the end of the previous month), I: take a look at our budget for the upcoming month, put the 'envelope money' (gifts, groceries, blow, and clothes) in its respective envelope, add whatever money Lubby's school will deduct to the budget requirement, then take everything else and put it to the car. This accomplishes three things:

1. It makes sure we are attacking our debt aggressively by putting every extra penny toward it.

2. It ensures that no matter what happens, we can pay our bills for this month.

3. It give my husband peace of mind.

So, let's take June as an example. We had $3000 in the bank. With budget and school, we needed $1700. Thus, we had $1300 extra to send to the car, plus the $100 that was part of the original budget, or $1400. We were left with $1600

-468 rent+water
-354 school
-150 groceries
-120 envelopes
508 remaining for the rest of the month

Let's say I bring in $300 this month and Lubby brings in $600. We will likely start July with about $1100, but since we were a month ahead, we still have time to catch our income up to our expenses. By the end of July we should be able to send another 'extra' payment to the car-- perhaps even pay it off.

I can understand why this system might not work for everyone:
-Having that money there could be a huge temptation since it feels like 'extra'
-It could be difficult to amass a whole month's living expenses ahead of time (although, if we can do it...)

However, I find our system to be infinitely better than living "month-to-month" and having to worry whether or not I will be able to pay the rent. As long as at least one income continues, I would say we have at least two months of being behind before we really run out of money and have to tap the emergency fund. Knowing I have food, and knowing well in advance if I really must only buy beans and rice next month, is what I call peace of mind.

Wednesday, June 3, 2009

Net Worth-- May 2008

Unfortunately, I will be unable to give a budget-breakdown for the last few months. Truth be told, I've/we've been somewhat rebellious with the uber-tight budget. The end of May found us at a restaurant nearly every day (sometimes twice a day). Thankfully, Lubby's steady part-time work and my three part-time jobs made for more wiggle room than I remember having ever in our married lives.

Follows is an update on where we stand as of the first of June:

Checking: $3,000
Savings: $1,005

Car: $2,435

Net Worth:


Would you look at that! A positive net worth! In only a few short months of focused dedication, we can not only afford to live, but pay down our debts and own more than we owe as well! Exciting! This net worth number is excluding student loans. Both my husband and I are blessed to have parents who shoulder that load for us. Should the time come when we take on that responsibility, I will add it to the "liabilities" list.

June is going to be a 'survival' month. We likely will not make as much money in June as our budget requires (about $1700 with Lubby's school). Fortunately, July looks like it will be much more lucrative-- we only need to make it until then. I shall explain how our budget allows for this 'short' month in an upcoming post. Until then~

For a look back, see February's update and January's initial post.

Tuesday, May 19, 2009

An unusual way to 'make' money...

Quick tip tonight: The government holds onto your stuff (or sells it and holds onto the cash) for you-- indefinitely. After all, if they kept it, it would be stealing.

You've probably seen the commercials/spam for services that locate untold millions of dollars that are "rightfully yours." Truth be told, there could be some money that is rightfully yours; and you don't have to pay someone to find it for you!

Simply visit, click on your state, and the link will take you to your state's treasurer's website where you can search for your treasures (and that of your family). Be sure to check each state in which you have lived.

Although not really a method for earning money, it is a fun way to spend a few minutes online and perhaps receive some money anyway. I think my husband's family might have something owed to them...

I look forward to hearing about your treasures.

Saturday, May 16, 2009

Hooray for Murphy-repellant

Murphy's Law: Anything that can go wrong, will.

A few weeks ago, the air conditioner in my car went out. It started making a noise that sounded like air escaping and then started blowing hot air. Not a good thing, especially when it's already consistently 80-90 degrees here.

When we bought the car, the air was blowing hot. I'm glad we checked, because it was October when we bought it. We had them check it out before we signed anything. It was a good thing, the salesman insisted, because instead of the 'just a recharge' fix he had previously insisted it was, it was a crack in the condenser, and that would have cost several hundred dollars to fix. But, since they caught it before we bought it, they fixed it for us-- no charge.

Fast forward to April. After a few weeks of light AC use, it starts making that ominous hissing sound and blowing hot. Since I have very little clue about anything under the hood, I couldn't remember what part it was that was broken before or what exactly was wrong with it. We took it in to an independent mechanic and got it diagnosed and repaired-- this time they replaced the whole condenser. Stupid, slimy used-car dealer not fixing it like they were supposed to... Oh, did I say that out loud?

Damage: $600

But you know what? That's OK! Because even though Murphy was in my back seat by right (I did finance the car, you know), we made it clear he was not welcome and kicked him to the curb.

How? Our mini-emergency fund. We followed Dave's advice (Dave Ramsey) and kept $1,000 in the bank "just in case." So, a problem that could have wreaked havoc on our finances was really simply a matter of getting it fixed, paying the guy, and taking it home.

Moral of the story: Get an emergency fund! Sock away every spare dollar you find until you have that little safety net safely in a high-yield savings account! That way, when life throws you lemons, you can say, "Hey, look! It's a lemon!" and get on with your life. Without the safety net, life throws you lemons, and all you can do is suck the juice out until your face is puckered grotesquely. So just do it. Start today. You'll be glad you did.

Friday, May 15, 2009

Brief update

Wow, it's been a while! I've missed March and April's budget/net worth updates, plenty of government financial insanity, Swine Flu panic, and plenty of other blog-worthy subject matter in the interim. But, rest assured, I have not been sitting around doing nothing. No! Here is what I/we have been doing these past two months.

I have been substitute teaching. A lot. I feel like I work, work, work.

I have been teaching voice lessons as well. This does not take up a whole awful lot of time, but it is nonetheless a weekly time commitment. More will be added this summer when some of my students from the school will be taking private voice lessons.

I traveled out of state to help my dad in a craft show that my mom was unable to go to. Not a lot of traffic but a very good time with my dad and a few bucks to show for it.

I started another part-time job. I teach at a well-known test-prep company. (I always knew those ridiculously high test scores would pay off). The pay is actually pretty good for a part-time job, plus I get paid for out-of-class time I spend preparing for each class. And by pretty good, I mean better than my mom's job that she's good at and has been at for several years. Too bad it's only about 15 hours a week.

Outside of work, we rescued a 1-1/2 week-old kitten, bottle fed her, weaned her, and are now litter-training her (she's now about 8 weeks old). We've made some inexpensive improvements to our apartment to make it more home-y. Currently, we spend a lot of time researching, choosing, and driving by homes for sale in our area that are in (what we believe to be) our price range.

I've fallen off the bandwagon a bit as far as couponing goes. I've been working so much and had been spending much more time looking for deals than I really should have that I put it on the back burner for now.

This post is not really very meaty, but I wanted to give everyone an update and mini-explanation as to why I've been so silent before abruptly jumping into more intense subject matter.

Posts may continue to be somewhat spotty for the next few weeks as the school year winds down, but once summer hits, look forward to more consistent work. I look forward to reconnecting with my readers.

Friday, April 17, 2009

Tax day has come and gone...

Tax day is gone, and many Americans (myself included) have again waited until the last possible moment to file their taxes.

Filing, while not overly difficult, was somewhat complicated for us this year. We had four W-2s and a Schedule C (for reporting business income/loss), student loan interest reports, plus 1098s for form 8863 (Lifetime Learning Credit) that we eventually found we couldn't even use because we didn't have a tax liability. There's a lot of math involved-- more than just copying numbers from your W-2. Yet, when all was said and done, we will be receiving $631 back from the federal government, plus some from state as well.

This was the first year my husband and I have filed jointly. Previously, school bills and my business had led me to believe that it would just be easier to keep it all separate. I discovered this year that that is not the case. In fact, we likely would not have been able to get as much of a refund if we had filed separately.

Speaking of the math involved, why do so many of us wait until the last minute? Really, most people have 1-2 W-2s and might as well take the standard deductions. Doing taxes that way is very, *very* simple, and with all of the tax software out, even more complicated returns are not much more than clicking a few buttons.

But, per usual, people have waited until the last possible moment. Again. Myself included. If it weren't for deadlines, some things would never get done.

Wednesday, March 25, 2009

It's about what you do with it

I have to admit, I'm a sucker for testimonials. I recently spent hours on Dave Ramsey's website reading the "I did it" section about how people got out of debt, how much, how much they made, and how long it took them to do it. When I come across a new blog, I often decide whether or not to subscribe to it based on the author's 'about me' section.

This is why I try to create a balance on this blog between 'objective opinion' (quite the oxymoron-- I mean opinions and explanations of issues outside myself) and personal issues. There are a lot of things on this blog (and more to come) that most people wouldn't share with their best friend, but I chose to share them because I want to help and inspire people to be more and do more with their finances and lives.

With that in mind, I want to offer a little bit of inspiration today by encouraging you to take a serious look at what you have and what you really do with it.

I have to smile, laugh, or shake my head (depending on my mood) when I hear people talk about what they've been able to accomplish with only $3,200/month take-home. Now, I understand that $40k is a decent middle-class income. Still, my husband and I count any month we bring home $1,600 as a good month. That's half of the above-mentioned figure!

Do not get me wrong; I am happy for anyone who is making progress to get out of debt and save for their future, et cetera. What I want to know is, "where is she spending all of that money so that she thinks she is barely able to live on double my income?"

Do you know where our money is spent? Of course you do: on bills, groceries, gas, and some debt. I've posted that information for all to see. Even with some of the glaringly obvious omissions from our budget (such as health and car insurance--we have them, just not in our current monthly budget), $1,600 would cover them all. Whatever we make above our minuscule budget is gravy we use to advance our financial goals.

What would you do if you had to live on $1,600 a month? What would get cut? Before you go crying that it is impossible to live on so little where you live, let me tell you that I live in a big city-- not NYC, but not Podunk, USA either.

What would I do with $3,200? I would pay off my car yesterday, have a close-to-funded Roth IRA for 2008, have two maxed-out Roths for 2009, dollar-cost-averaged, add $7-10k to our savings, and start saving for a nice, 7-day Caribbean cruise to be taken some time next winter (because, after that much saving and investing, we deserve to take a vacation!).

So ask yourself, what do you do with the money you have? Really, the above scenario sounds like the testimonial of a rich person, but it's actually the testimonial of a lower-middle-class person who tells her money where to go rather than wondering where it went.

Friday, March 20, 2009

Dave Ramsey wouldn't approve...

I do admit that I am a pretty big fan of Dave Ramsey. I like his no-nonsense, common sense approach to personal finance and his Biblical/charitable perspective is no turn-off either. Still, I did break a cardinal rule a few months ago-- I bought a car using credit instead of cash. Here is why I believe Dave to be wrong in this particular case.

Dave would say I should have sold my car, bought a clunker, and saved for a newer car and paid in cash.

Here's the scenario-- I already drove a clunker. It looked decent, but it had who knows how many miles on it (the odometer broke 5 years ago at 144k+), everything leaked, and was getting *horrid* gas mileage. Our gas budget at the time was $600/month. Yikes! I was in school at the time and worked very little (the program I was in specifically forbade working); Hubby worked two jobs and our out-go was still 100% of our income. We had zero room to 'save up' for anything, even though I budgeted the blood out of every penny we got. Ask anyone who knows me-- if there was room to be saving, I would have been saving.

We had about enough money in the bank to pay for exactly the same car I already had or to make a pretty darn good down payment while leaving a $1,000 emergency fund. We shopped around for a while, found this car and got a payment of $103/month. The car gets decent gas mileage (24ish) and we were able to drop our gas budget in *half.*

So, we added $100 to our monthly bills, but saved $300 per month in gas. This means we could make 3x payments and be out of debt very soon. Plus, the sale of my old car brought an injection of cash roughly equivalent to 1/5 of the original balance.

I am very debt-averse and I grew up in a family that does not believe in car payments. No one is foolish enough to buy something that loses half it's value as soon as the deed is done, or so I thought. However, with some research, I was able to find a vehicle old enough to be price-stable and new enough to last a good long time, priced where I could sell it in a year for about the price I paid if I wanted to. We specifically got something family-friendly so that I could drive it for ten years if I so choose.

We are dumping this debt as soon as possible. We don't even own a credit card (although if we had longer to pay on the car I would consider a 0% for that purpose only...). Although I agree with Dave 99.9% of the time, I really believe that we made the best decision for us at the time. I will drive this thing into the ground and never have a car payment again.

Thursday, March 19, 2009

Scooter economics

Ever since last summer, when gas prices were starting to get close to $4/gallon where we live, my husband and I have been thinking about purchasing a scooter. Since we seem to have a knack for living within a mile or two from at least one of our jobs, it seems like it could be a good investment that saves a lot of money in gas. Let's do some math, shall we?

Original investment: approx $1,200 (let's make it $1,500, to make it safe)
New licenses with motorcycle clearance: $70 (for two)
Insurance: I have absolutely no idea and I can't get a quote without giving every ounce of personal info I can-- we'll say $200/year, since that's about what I paid on my last car...
Registration: $100 (again, high-balling it)
Total: $2,070

So that's a hefty start-up cost. What will it save me?
My car gets about 24mpg and my husband's gets about 15mpg. We will say that the scooter gets 75mpg. It is a safe bet to assume that he will drive my car more if I have the scooter, but let's run the numbers both ways.

Our vehicle budget is $300/month. Assuming we each use equal parts for gasoline, that would put us each at $150.

My car gets24 mpg. 24mpg is approximately 1/3 of 75mpg, thus we can assume that I would save 2/3 of my part of our monthly gas allowance. 1/3 of $150 is $50, so I would save $100/month in gas by riding the scooter or $1,200/year.

Hubby's car gets 15mpg. 15mpg is 1/5 of 75mpg, thus saving 4/5 of his monthly allowance if he drove my car instead. 4/5 of $150 is $120/month saved by the scooter or $1,440/year.

Not bad, not bad at all. The scooter would pay for itself in about a year in this scenario. Especially if we deal-hunt and get a good scooter for under $1k, find good but inexpensive insurance, and we find that I've grossly overestimated other costs (which I usually do). Just dropping the initial cost of the scooter to $1k means the whole shebang is paid for the first year.

Not everything is oh-so cut and dry. I would drive one of our regular vehicles in the event of inclement weather or any time I have a lot of cargo to carry or need to use the interstate. (I am intentionally looking for something about 150cc so that it can go as fast as I need it to without going fast enough to really take it on the highway.) Not driving the scooter exclusively cuts into the actual amount of gasoline savings. Another year of skyrocketing gas prices could put saving over the top. There are plenty of what-ifs to think about.

I happen to have just about enough cash to pay for a nice, used scooter outright. Would you spring for it? On top of the economic benefits, it seems like a ton of fun! Soon my new-to-me car will be paid off (approximately 6 months into a 60 month loan... forgive the minor bragging...) and come fall if/when I'm working right down the road it could be a good thing. I hope to have some discussion on this one-- I really want your input.

Wednesday, March 18, 2009

Saving money by using less

I happened across a terrific blog post by Trent at TheSimpleDollar. It is called "The Happy Minimum" and can be found by clicking here. For some reason this post stirred up quite the negative response from some of his readers, but I believe there is a valuable lesson to be learned. Let me summarize:

The author uses a story about toilet-paper use to illustrate a point: we use a lot of consumable products in excess without even thinking. He spends the day paying attention to how much of things he really needs-- using only as much toothpaste as necessary, tasting food first instead of just pouring pepper on it, taking one piece of pizza at a time rather than loading his plate, etc. The whole point: he used less over the day and did not feel deprived in any way.

These things are pretty familiar to us, whether we see these things in ourselves or those around us. We all know that person who pours salt onto everything before tasting anything; that person who uses half the roll of TP every time; that person who stacks their buffet plate 10 inches high; the person who uses twelve sheets of paper towels to clean up a little spill. What if we limited our consumption to what we needed to feel satisfied rather than starting with too much?

Granted, the actual amount of money saved by one less shake of salt is negligible. However, being aware of our usage in the little things creates more awareness of the big things and the little things and the big things added together can mean big savings in the long-run. Also, it has the fringe-benefit of reducing our carbon footprint (which usually in turn further reduces our expenses!).

Some thoughts and ideas on how to reduce consumption without feeling deprived:
  • Pick one or two things to focus on using 'just enough'-- Chances are by focusing on those aspects, you will see it bleed over into other aspects of your life.
  • Make it fun-- Does your kid use enough toothpaste for everyone in the house? Get matching trial-sized tubes and have a 'contest' to see whose tube will last longer. Just be sure she's using enough to clean her teeth, and she'll be pasting like a frugal pro in no time. I'm seriously considering doing this with shampoo and body wash at our place.
  • Ration it-- If you are paper towel people (we use dish-cloths in our house), set an achievable but challenging limit for yourself. Only let yourself use one roll per month (or whatever is appropriate for you)-- if you run out before, you're out of luck until the 1st. This is also effective with treat-foods like soda, etc.

I would love to know your ideas and goals related to this. What areas are you simply using too much without thinking? I challenge you to spend the next 30 days figuring out how much is enough and then only using that much. Leave a comment for encouragement and accountability.

Monday, March 16, 2009

Long-Term Goals

There has been so much to post about that I have not yet posted about our personal long-term goals when it comes to life and money.

First, take note that my husband and I are 23 and 21, respectively, so we have quite a bit of life ahead of us. Also, with that much life ahead of us, our future is very fluid-- compounded by the facts that (1) he's still in school, (2) I still haven't had my first 'real' job, (3) he's a minister, which means we don't have a lot of say about where we'll end up or for how long even after he finishes school.

With all of this uncertainty, it is difficult to make plans and goals. However, there are certain things we each want out of life, so we make goals based on what we can do now to make sure those things happen.

One goal that we have is to be financially secure. This means many different things to many different people. What it means to us is that we have an emergency fund in place (3-8 mo.) and are free from debt as much as possible, including paying of our home (when we buy one) as soon as we can, so that our expenses are minimal compared to our income. That way, no matter what happens, we have a roof over our heads. This is currently a work-in-progress, as our income is just now starting to equal even our minimum expenses. Still, we expect the debt-free portion to be accomplished in the next few months. I see this goal as a goal everyone should have.

Another goal is to save up for a down-payment on a house. At least 20%. The specific amount we do not know, since house prices vary widely from state to state. We would like $20-40k. Our strategy for this is to rely on one source of income for our regular expenses and save the other income in its entirety.

I will be a stay at home mom. This is a very, very important issue for me. I do not want someone else to raise my kids. I do not mind doing home-based businesses, but I do not have plans to work full time after we start having kids. Financially this means that we need to be taking full advantage of the second income while we still have it (maybe two more years). Putting 100% of my income toward savings and retirement then becomes a two-fold benefit-- achieving the goal faster and keeping us used to relying on only one income for daily needs.

We want to comfortably retire. I've touched on this in a previous post entitled "How to determine how much money you need to retire". To me this is also a part of being financially secure. I do not mind living on so much less than I may make so that we can reach our retirement goals sooner. The sooner we can live indefinitely on $0 income, the more comfortable I will be!

Even when life seems completely unpredictable, it is important to have long-term goals. Of course, we have short-term and mid-term goals as well.

What about you? Do you have your long-term goals in place, and are you actually working toward them rather than wishing for them? Is there a gaping hole in my list of goals?

Saturday, March 14, 2009

Walgreens windfall...

A Walgreens success!

5 free Coffee Mate creamers!

It took 3 Walgreens to find enough stock, but we made it. Following the advice and printable coupons from, I was able to print 6 $1.50/1 coupons for Coffee Mate. (FYI, the $1/1 coupon leads you back to the 1.50 coupon and lets you print that twice again).

These were (are for the next hour if you're near a 24hr store) BOGO at $2.49 at Walgreens. You can use 1 coupon for each item, even though one is free, so they ended up both being free with $0.51 overage. Limit two, but I fortunately happened to have two friends with me. So, we bought 6 creamers, I got two candy bars (thought they were $0.89, but were really $0.50), they got a candy bar and two packs of gum (with a BOGO coupon they had). All of these total probably cost $1.25.

I bought these for my parents, who go through about 3 creamers a week anyway. Liquid creamer is not really something you buy for the food pantry... I would not have gone to the trouble if I didn't really think it would be used.

I must confess I have been somewhat turned-off by Wags lately, as it seems so much work to try and find a store that is not sold out of the free stuff. But, now I know that if I go the extra distance to the rich side of town, they seem to have more on the shelves! Poor rich people, they're too good to use coupons...

Don't forget your Sunday papers tomorrow!

Friday, March 6, 2009

Difficult money decisions

There has been some talk about there being a job available next school year for me at the school I have been subbing for (school A). I don't know anything about the pay and this leads to a lot of what-ifs.

What if the school pays the bare minimum-- say $28k/year. That's not much, and it's really not competitive around here. My friend over in another district gets around $45k. Even some of the poorer districts pay $35k.

What should I do if that's the case?

School A has a lot of benefits:

  • I already have great relationships with administrators and other teachers
  • The school is a charter school with an emphasis in my area
  • I would have an opportunity to be involved in other disciplines outside my area of emphasis
  • I can see myself getting involved in growing the school and investing myself long-term
  • The school is less than 3 miles from my house, rather than a 30 minute commute

School B may or may not pay a lot better, but:

  • The $20/year difference itself is more than any annual income we've made in our married lives
  • Working at a well-established school means less work establishing routines and procedures, since the school is likely already running like a well-oiled machine

Those are the only pros I can think of for school B.

Our plan is for both of us to work, but for one income to be purely extra. We would love for that income to be whatever my full-time income is and live off my husband's part-time income. In a few years we want to take that savings to buy a house and start a family where I do not have to work.

What would you do? Speaking hypothetically that school A does pay $20k less than school B, would you take the higher pay versus a job you would love?

Thursday, March 5, 2009

Making Work Pay credit-- question from a reader

I recently received this question from a concerned reader:

"My employer will being withholding less income taxes beginning with my 3/16/09 paycheck because of the American Recovery and Reinvestment Act. A colleague is saying that although withholdings are changing, the tax tables are not and we will still have to pay at tax time. Is that true?"

I definitely understand the confusion. As if the tax code is not confusing enough as it is... Here is what my research uncovered:

  • The particular part of the ARRA that is affecting your paychecks is called the Making Work Pay credit. This credit gives each working individual (and even non-working individuals) a $400 reprieve ($800 married filing jointly) from federal taxes.
  • This went into effect 3/1/09, so look for it on your first pay check that includes days worked in March.
  • Employers have the ability to give this credit to you throughout the year by adjusting your withholdings. This has (can have) the effect of raising your paycheck amount.
  • You do not have to update your W-4 for this change to happen.
  • If you do not have an employer (work for yourself, etc), you can claim the credit on your tax return.
  • If your employer does adjust your withholdings, you must *still* report (not claim) the credit on your 2009 tax return.
  • The tax tables have been adjusted for this.

I like this credit-through-the-year plan versus an end-of-year credit. It means you get to keep and use your money now, rather than lending it interest-free to the government to be returned next April. Just be sure to use that extra little bit to generate interest-- either through paying off debt, savings, or investing-- otherwise it doesn't matter if you lend money to the gov. interest free!

You can find plenty of information by Googling "Making Work Pay credit." For more info on who is eligible, what this could mean to you, and the adjusted tax table, visit this IRS link.

I found to be pretty much useless on this topic, but it does have a lot of general information about the ARRA.

I am definitely not a tax expert. If you find errors in this summary, please post a comment and let me know! That being said, I hope this clears things up for some of you who are wondering what is going on.

Tuesday, March 3, 2009

How to prepare (financially) for a depression

Yes, yesterday was an ominous post. No one wants to think about-- let alone believe-- that a depression is upon us. I hope I'm wrong.

In case I'm not (and because it's a good plan anyway) I am going to detail some ways we can prepare for a potential depression. And no, I'm not going to tell you to learn how to cook a squirrel. That is a survival skill you can look up if it's necessary.

  1. Start an emergency fund. This should be 3-8 months of expenses depending on your job. If you work in a less-than-necessary field, be thinking 8 months. If you are a nurse, ER doctor, certain kinds of teachers, etc. and you don't know of any impending layoffs or downsizing, you can think 3-6 months. After you complete the rest of this list, build it up more. You will want cash on hand.
  2. Get out of debt. Get rid of your credit cards, car loans, car leases (please tell me you don't have a lease!), student loans... everything! You want what little money you have to be able to go where ever *you* want it to. You can do this with only a 'mini' emergency fund if your debt is small enough to be wiped out fairly quickly. Just don't forget to go back and finish it.
  3. Pay off your house. (a.k.a. get out of debt). I don't know why so many people do not consider their house payment to be debt. It is! The bank owns your house! I know there is a huge school of people out there who don't believe in paying off your mortgage early, but if you knew that no one in your family would have a job for the next 18 months, would you wish you had your house paid for? I thought so.
  4. Cut costs. Start couponing, reducing (or eliminating) cable, review your insurances to be sure you aren't paying too much, drive less to save on gas, don't eat out or eat out less. Take that money and insert it into paying off debt or saving in cash.
  5. Take care of what you have. This especially goes for your car and house. Do not skip the oil change or the leaky roof. If all you have is the shirt on your back, your car, and your house, aren't you glad the car runs and your house actually keeps you dry?
  6. Buy for the long haul. When shopping for clothes, don't buy something that is going out of style tomorrow-- or even next year. When buying appliances, skip the 'automatic pickle slicer attachment' or whatever other unnecessary doodad, but don't waste your money on something that will not last, either.
  7. "Stockpile." I do not mean go crazy and have toilet paper stacked to the ceiling in every room of the house. I mean give some thought to overstocking your pantry and toiletries. Pay attention to what is on sale and what you could pick up for free or next to free. Walgreens will pay me to buy toothpaste this week. Even though I am not out of toothpaste (actually just bought toothpaste), I will likely go pick some up. If you go out and spend $200 on toothbrushes and industrial-sized bags of rice you are missing the point.

Things NOT to do:

  1. Cash out all of your retirement. Unless that is all of the money you have in the world and absolutely cannot find a job, leave that where it is for now.
  2. Buy so much beans that you have a rat infestation. If stockpiling is 'your thing' and you really want to go for it, do. But if you are going to invest that much time and effort, do your research. Be sure you would want to do that even if you did not think the economy was bad. Also be sure you know how to properly store things and how long the shelf-life is. It would be awful to avoid starving only to poison your whole family with tainted peaches.
  3. Panic. This list is to help you avoid panicking. Use your head, be smart, prepare as best you can. We're all in this together, so don't get some idea that you're going to starve alone in your living room floor. People will find a way-- it's just that the people who prepare earlier will have a much easier time of it.

Really, preparing is pretty simple. If we all prepare now, maybe it won't be so bad.

Feel free to add to this list by posting a comment.

Monday, March 2, 2009

The rumblings of a depression

The state of my own personal recession has distracted me from the original intent of this blog-- which was more of a macro take on personal wealth-building with micro examples from my life. Yet another example of how easily the urgent can take the place of the important. It is time to return to the important.

A depression is coming.

Yes, I said it. Some will now forever label me as a kook. I don't know if it will be soon, but I have a strong impression it will be in my lifetime. While many of you are bemoaning the mess your kids and grandkids will never be able to sustain, I despondently acknowledge that I am a part of that group. Being 21 right now is no fun.

Why am I so confident that a depression is coming? Because Americans no longer have any common sense.

Imagine a 64-year-old cashing out his retirement in small bills, taking it (in a large bag) to the top of the tallest building in his city, and dumping it all out. What charity! All that money going to help those who really need it! There are homeless people down there! There are people down there who will pick it up and spend it! Hurrah!

This seems to be the government's idea of stimulating the economy; and we trample each other on the streets trying to catch a couple of $1 bills and believe that this is the answer to our prayers and we could never survive without it. Meanwhile, our hero on the roof now has no job, no money, and 25 dependent grandkids to feed.

Our American hero of a grandfather is now at the mercy of anyone willing to give him money and at risk for having to feed his family dog food just to keep them alive. I'll leave how this could apply on a national level to your imagination.

The fault in this situation lies everywhere. We can trace it all the way back to eliminating the gold standard and establishing a fiat economic system. Our economy by definition is every bit as much of a 'bubble' as the 'dot com bubble' or the 'housing bubble.' We can blame it on our own exorbitant consumer debt, the Clinton administration's forcing financial institutions to give loans to people who couldn't afford it, the Bush administration's Iraq war. The fact is that there is plenty of fault to go around.

The reality is that contributing factors are now being added exponentially so that they are getting bigger and coming faster. It's like an avalanche; or a rapidly growing snowball of impending economic doom. "10 trillion dollars in debt? Let's add another trillion or two! That will fix it" ...And the snowball approaches faster and faster. It has already eaten some outlying villages in the form of massive layoffs and unemployment.

I do not claim to be a prophet or a macro-economic expert. I also do not want to get eaten by a giant snowball of doom. But my hope is waning. Our new President and Congress do not seem to have the sense we all need them to have. God bless them, I don't have a personal problem with the President or anyone else, but I can feel my confidence in their ability to bring us out of this mess slipping away.

Perhaps the President will bring us out, cut the deficit, bring us back into a surplus, then actually use the surplus to get us out of this hole. Adding a trillion dollars to the red column within the first 30 days of office is not the strategy I would use, but hey. As for me, I'm working on getting my own house in order.

Saturday, February 28, 2009

Net Worth-- February 2008

It's that time again. Time to take a look out our bank account and find out what we've done this month. Things have likely gone down a bit considering the job situation, but we're no worse for wear. With both of us working this next month, I anticipate a good beating to our liability (the car).

Checking: 1800
Savings: 2000


Car: 4500

Budget Results:

Income This Month:

Substitute teaching: 216
Plasma donation: 100
Return of deposit from other apartment: 175
Random check from prev. employer: 13
MySurvey check: 60
Gifts: 200

Difference-- checking: 200

Net worth: -700

Yikes! However, never fear! We made it through the month with less trauma than originally thought, and work income for March has already exceeded that of February. (I only counted income actually received in February, not work that has been done but will pay in March).

I'm pleased to see our gas expenditures have been reasonable. That is even with a way-overpriced oil change and a trip out of state. We're still new to the area, so I want to track this for a few months, but I hope that perhaps we can adjust this budget down a little bit. Although, in a few months gas may be over $3/gallon again. If it is, I'm buying a scooter.

We went overboard on eating out this month-- nearly $100 worth of fast food. I worry about this next month because we will have more freedom with more cash. Lubby and I will have a talk to determine our goals for this month and see if we can come up with a game plan for curbing spending in that area and attacking our car payment again. Everything else has been terrific.

Looks like next month we will get free Internet as well (they screwed up our order so they overcharged us last month). One less thing to pay for.

All-in-all, I am pleased with this month's report even though we're in the red. We've done well with what little we've had and stand a more-than-promising chance of making twice what we made this past month. I expect a huge chunk out of the 'liability' column next month and a positive net worth.

For January's states, click here.

Tuesday, February 24, 2009

How to save on your energy bill

Got a couple of bills today, electric among them. It was actually very exciting!

Budget for energy for February: $150
Spent in February: $90 (aprox)

That's a difference of about $60! Here's what we did that seems to have contributed:

  • Turn off the heater. It's been pretty warm-- even close to eighty some days. However, our apartment stays cold, so it has been a sacrifice. No heat and a high of 39 is cold, but blankets, some fire wood, and more blankets keep the chill at bay. We do use it if it is going to be cold for a good while, like when we had an ice storm a few weeks ago.
  • Limit lightbulb use. We try not to use the lights during daylight hours.
  • Unplug stuff. We're actually not very good at this, but we try to turn off our surge protectors and unplug many of our appliances/computers/etc. when they are not in use. "Ghosting" electricity can really drain your wallet... apparently... (Note: Do not unplug your refrigerator! I do not want to be responsible for that!)

I know it's not a list of 35 things-- that may be coming at a later date. The point is that you don't have to do a million drastic things to see a difference in your bill. Our first bill was about $70, and it was only for about 10 days! From people I've talked to around here, average monthly bills are about $150.

I hope we can keep this up through the summer months as well. Of course, you'll know when we know.

Monday, February 23, 2009

Rebate Fun!-- good for newbies

We're up visiting my family for the weekend, and yesterday my mom and I just happened to have to go by Walgreens to pick up a prescription...

Mom has been following my couponing adventures through my blog and phone calls, and she was really excited to get all of her free stuff! We are both get in, get out, no extras kind of people, so there wasn't any danger of us picking up extra stuff just because it was nearby on the shelf. Following is a play-by-play, so if you're new to rebates this should be helpful.

As we came in the store, I picked up my papers, the circular, and the rebate book. Flipped through the circular; there were no fantastic deals that lined up with the rebates this week. (I knew this because I already knew what the rebates were. If you are a newbie you will likely want to go home and check it out, or resign yourself to only getting things for free and not getting two or making money this month).

Opened the rebate book to the center yellow pages and pointed out the first few that had the giant, red FREE next to them. We then went on a scavenger hunt for the items listed, making sure the size and price matched up. (Note: Found out from a cashier that at this particular Walgreens they had their rebate items in shelf-displays. I did not see where it said 'free after rebate' or anything, but knowing they were on displays makes them easier to find. Also, if you check out a display, it may behoove you to check the rebate book to see if it's on special.)

Checked out. She got $10 lip gloss, $10 foundation, $2 contact solution, $4 hair-spray-type-stuff, and 4 papers ($6). One $1 coupon (provided by the cashier who clips her coupons and brings them to work-- Thanks!) made the total after tax $32.98.

With the rebates, she'll get the full purchase price with a 10% bonus for getting it on a Wags GC. The rebate will come out to 28.56. I gave her $3 for my two papers. So, her total was/will be $1.43-- She didn't even have to pay for one of her papers if you look at it that way.

We came home and I had her log on to, find the EasySaver Rebate section (which took some finding, but we got it), create an account (it's free), and enter her rebates.

She's very excited and looking forward to adding coupons to the mix as well. She keeps saying, "I'll never have to pay for milk again!" I like that.

Friday, February 20, 2009

Revised budget for February and March

Things change. We didn't get jobs as fast as we could have hoped in this economy. So, our budget for the next few months is going to take a hit. Here's what February looked/looks like:

425 Rent (had 1/2 off, but finished out our pet deposit)
150 Electric
200 Groceries
300 Gas (cars)
20 Water
35 Internet
1130 Total

March looks like this:

430 Rent (we got $20 off for participating in a community event)
150 Electric
150 Groceries
300 Gas
20 Water
35 Internet
1085 Total

Thankfully we've been able to stop paying our car until we get our feet under us. We had been paying about double to quadruple the payment, so we don't technically have to make another payment until April. Now, if we don't make another payment until April I will be very sad. We've lost a lot of ground already in intrest.

All the reading about frugal living and couponing has me inspired to cut my grocery bill in half. Since we were able to comfortably get what we need this month for about $200-- including a lot of convenience foods like frozen waffles, granola bars, etc.-- I am confident that with coupons and watching for deals I should be able to take us down even one more notch.

Thursday, February 19, 2009

Unemployed no more!

My husband just walked in. The first thing he said to me was "I have a job."

There are no sweeter words to a wife's ears.

CrackerBarrel... Yum. Neither of us have ever worked in food services before, so it will be a new experience. There's a temptation to feel dejected because, after all, he has a college degree! However, we're just happy to have a promise of a source of income. He was really mostly looking for something part-time, and they can likely give him close to 40 hours. He also might be leading music very part time at a church for a pretty decent amount of money. I'm very optimistic about having a full-time teaching position of $40,000+ by the fall, so by then his income will be gravy.

I have it worked out so that if I continue to do the things I've been doing (subbing, plasma, voice lessons), I should make enough money to pay for March's bills by the time they arrive. I've also applied to work at Kaplan as a teacher (I had insanely good test scores in my day). Plus, I really need to get going on my jewelry business that I've been letting slide for the past two months.

Now that Lubby (my nickname for my husband-- Lover+Hubby) will be working, we can get back to living more of our normal life without dipping into our cash reserves and start paying on our car again.

Oh, and by the way, I gave the plasma thing another shot. Everything worked out this time and I made $40. I plan to go tomorrow and make another $60. (They're running a special; next week and the weeks after it will be $20 and $40).

Coming later, either tonight or tomorrow, is a revised, bare-bones budget for February and March. We have a lot to cut out, and a lot of catching up to do if we want the car paid off by June or July.

Couponing lesson learned

I guess you could chalk this up to a rookie mistake...

There are not coupons in every Sunday paper. I am fairly certain I knew that, but I got carried away in the couponing-mania of it all. So, on Sunday we bought two papers and, after extracting the Walgreens and CVS ads from one of them, threw them away. Disappointing? Yes. Lesson learned? Yes.

Next week I am confident there will be coupons again. I will, however, check my sources (currently to be sure there are new coupons available BEFORE I spend 3 dollars.

Sunday, February 15, 2009

Taking Care of Business

Wow! This week has been exhausting! My personal goal of posting once a day has (obviously) taken a back burner the past five days. Made a little money and focused on the more important things in life.

Wednesday-Friday I substituted again for a friend in my discipline. It was a blast in a lot of ways-- much easier than just walking into a classroom without really knowing what's being covered-- but it was also totally exhausting. I pretty much came home, collapsed into a puddle, and went to bed early. Made about $240 gross and will get paid in late march.

Wednesday and Thursday we went to donate plasma. Didn't get to either day. Long story. Unfortunately my husband will never get to donate. I probably could if I'm not dead next time I go (long story-- I'm fairly sure the blood pressure machine was broken), and if I can swallow my indignation and frustration well enough to sit through that again.

Friday evening through this afternoon my husband and I attended a marriage conference. We enjoyed it very much and loved getting to spend the time focusing on each other and our relationship. I know I would have gotten more out of it if I had a little bit more sleep the past few days, but it was important to have that time anyway.

Things can get ugly out there, ladies and gentlemen. There were over 400 people there who attended for free because they gave it to anyone who had lost their job in the last 6 months. Money is the number one cause of fights in marriage-- I'm sure you've all heard that statistic. If you can't support and cling to your mate in these times, the prognosis isn't good, folks. Take care of your relationship with each other before anything else right now.

If you've lost one or both jobs, a lay-off is looming, or if you're just worried about what could happen, talk about it. Hug, cry together, reassure each other that you still love each other and you're in it for the long haul. Then make a plan. Cut everything that's not vital to existence. Go donate plasma together. Make sure your man knows that you are proud of him for delivering pizzas so that you can have a roof over your head. A man who will swallow his pride to provide for his family is a hero, not a failure. If you are that man, I am proud of you. There isn't a better gift you could give to your wife than to provide for her.

Where we live it's pretty warm, so we haven't had the heat on for weeks. My fingers are pretty cold right now, but it's not miserable with a blanket and a warm laptop in my lap. My first student for my private lessons comes tomorrow. I can donate plasma and take sub jobs (as much as I'd like to avoid that some days). My husband is going to do his best to have a job by the end of the week, even if it's delivering pizzas for Domino's. We bought a couple of papers again tonight so that I can continue clipping coupons for next month's groceries. We're taking care of business so that we don't have to live in fear, shame or guilt. We're in this together-- for better or worse, richer or poorer.

Coming up-- our budget may be changing. A revised plan until we get our feet under us. Hopefully we'll get to eat more than peanut butter and ramen noodles, but we'll see what we can do.

Tuesday, February 10, 2009

More thoughts on the trillion-dollar package

Came across this video on the Dual Income No Kids blog ( The video gives details about just what 'one trillion' is. Interesting points such as 1 trillion one dollar bills stacked would reach 1/3 of the way to the moon, and if you started spending 1 million dollars a day from the day Jesus was born to today, you *still* would not have spent one trillion dollars.

And, as an update to the previous post, I said that the national debt was over 1 trillion dollars. That's true. It's over 10 trillion dollars. Which, I guess, would reach the moon three times and more.

Economic stimulus or just spending money?

I just read breaking news from the AP about an economic stimulus package passage. Here's a link.

click to read

Some thoughts on the article...

I am pretty good at reading political-ese. I spent a huge majority of my time in high school reading senate bills, contacting senators, helping campaigns, talking to law makers at the state capital building, etc. (Oh, the things you can do when you're home schooled and don't have to waste 8 hours a day sitting through classes you could pass without taking...) However, I guess being so out of the loop during college has cost me, because the article doesn't make much sense to me.

I'm somewhat surprised by the Republicans' nay-saying, for the most part. It seems to me that a large number of politicians sway in the wind. Perhaps the complete and total failure of the first two bail-outs has sobered up some of the former conservatives. Or, perhaps they are simply paying attention to what's in the bill.

Which brings me to another thought-- this looks suspiciously like a spending bill rather than a stimulus package (although the difference is quite debatable at this point). Reading to the bottom of the article, I find that:

"The Senate proposed $450 million for NASA for exploration, for example, $50 million less than the House. It also eliminated the House's call for money to combat a potential flu pandemic."

DO WHAT??? What the crap does NASA have to do with it??? Pardon my French, but half a billion dollars on space exploration is not the same as public works projects!!! What flu pandemic? What if there isn't a flu pandemic? Can't we spend money on that when it happens, not before???

I'm very passionate about this, people! The government owns huge parts of our major banks, for crying out loud! We have well over a trillion dollars in national debt, yet we want to throw money at imaginary disease outbreaks and space exploration??? What if our national creditors do what some of the banks did to citizens and call our loans early? Think of post WWI Germany (this is not Nazi Germany, although it may have led to it)... Look it up, if you have to. Find a very general description

I think I'm going to actually read these bills. I haven't because some of these things are multiple hundreds of pages long with a lot of politicalese. I urge you to try to read these, too. I have a feeling you will say to yourself, "I don't know a lot about this stuff, but what does NASA have to do with helping laid-off Starbucks workers?" You can find the most current version of the bill by visiting the office of the clerk of the House of Representatives. Read it from the bottom up and you can see everything that happened in the House that day. Thomas is another great resource for looking up legislation, but you have to be careful to figure out which one is the most recently amended.

After that, Republican and Democrat alike, call your representatives and ask them to demand that the extra junk be eliminated and if it's not to vote 'no.' I know Democrats probably feel like they really need to support the president and that if we don't pass this thing by Friday a million babies are going to starve to death by Tuesday morning, or some similar tragedy. That is simply not true.

The more likely scenario is that we will pass bail-out after stimulus package after bail-out after spending plan, the value of our money will (eventually) plummet and we will be standing in line for bread because even those who have jobs can't feed their families. How much did the first stimulus help? Answer: none. The Obama administration's own projections say that the recession will continue for another five years or so and only be slightly prolonged if no action is taken. If that's the case, ask yourself why it's so urgent that we give NASA $500 million dollars before Friday, or else.

Perhaps a public-works deal could be beneficial. I know that my friends and family just hit their jaws on their desks. I'm generally pretty conservative (read: very conservative), but I'm open to suggestions. This could get ugly, and I'm willing to read any legislation that has a precise plan with obvious economic benefits, a strategy for turning over the project to the private sector with a timeline, and a decent sunset. (A sunset is when the bill is set to expire unless law-makers renew the bill). If I can feel fairly confident the government won't be involved forever, I would consider supporting it.

I will not support legislation that involves throwing money at special interest groups-- I don't care which ones-- or the government buying huge assets (or any assets, really) in privately owned companies. Companies fail-- that's what capitalism is. You screw up your business plan and mismanage your money, you go out of business. If those banks had failed completely, people would lose money in the stock market and some people would lose their jobs. Another bank would have bought them (which, ironically, is what actually happened before we started giving them money). Even if not, people still have up to $100,000 each in FDIC insured money (which is now $250k).

After all that, please don't panic, people. Don't let yourself get bullied into making a poor decision because of some artificial deadline. Don't clamor for the passage of the PATRIOT act then get outraged because people get jailed without charges or bail. Call your representatives and insist that they take more time. Cut all but the essentials and bring it back to us after you have a plan, transparency, oversight, and only essentials. Not before.

And the results are...

I have the most wonderful husband in the world. Who else would take me to Walgreens at 9:30 at night because I had finally gotten my coupons and list together and didn't want to go alone?!

That said, I went to Walgreens last night to try out my couponing strategy. I chose Walgreens over CVS this time because some of the deals were slightly better (although they were pretty close to having the same ones...) and because the register rewards (RRs) at Walgreens do not expire whereas CVS ExtraCare Bucks (ECBs) must be used within 30 days. My list was composed of deals I found at and various blogs that list coupon deals.

I didn't come out with as much free stuff as I originally thought. This is in large part due to the fact that I left my list in the car! Here's what I did get, though.

Garnier Fructis mousse. Brought the wrong coupon, or I would have made a dollar off the deal.
free after rebate.

Revlon Creme Gloss. Had a $2 coupon from Sunday's paper, and the product is free after rebate.
$2 profit after rebate.

Glade Sense & Spray (two total). 8.99 each. A printable BOGO free coupon plus a $4 coupon from Sunday's paper, $3 rebate for each one.
free after rebate (or $.01 profit?).

Progresso Soup. 4/$5 in-ad coupon, plus two bricks printable coupons for $1.10 (you can print each coupon up to twice. If we had another computer that could print, I would have printed a coupon for each can).
$.70 each after coupons. Originally $3.19 each.

I will probably go back in a few days to pick up the other things that were on my list that I didn't get. They include free-after-rebate contact lens solution, F-A-R Themacare trial-size heat wraps, and a razor that has a $2 profit after RRs and coupon (the store didn't have any).

It looks like I pretty much broke even on my purchases last night. I entered my rebates online after I got home, so they are saved and even if I forget to submit them at the end of the month, Walgreens will do it for me. Very good for a procrastinator like me. They will send me a Walgreens gift card and the gift-card option has a 10% bonus.

So, even though we spent about $20 out-of-pocket (which I don't like), we will be getting about the same back, and gift-cards don't expire. Next month I'll be able to do it all again without any out-of-pocket expense.

Sunday, February 8, 2009

A couponing test

So, I've finally bitten the bullet. After years of subscribing to various 'coupon-maximizing' sites, I went to the store today and bought two Sunday papers. I've devised a plan to visit the local drug stores and buy a few things I need for next to nothing and a few things I don't (but will eventually use) because they will actually *make* me money in store credits. I don't want to give too many details yet, but rest assured that I will keep you posted on my deals and steals!

In other news, my husband and I are contemplating donating plasma for a little extra cash this month. I don't know how I feel about it-- selling your blood for profit seems almost demeaning. However, I am a firm believer in doing what you have to to provide for your family (provided it's legal and on the moral up-and-up, of course). If we both do it twice a week, we can make enough to pay March's rent. That's nothing to sneeze at, especially since the work I do next week as a sub won't pay until March 23rd.

Any thoughts on the above? What do you do in a financial crunch?

Saturday, February 7, 2009

How to determine how much money you need to retire

Although I've already laid out a huge picture of our money situation and short-term goals, I have yet to get to the 'millionaire' part of the story. So, I thought I'd lay out for our readers how to determine how much money *you* need to retire, then plug in some real numbers for *my* situation.

This is a little math-heavy, but I'll break it down for all our sakes.
  1. Determine how much money you think you need (annually) in order to retire in today's terms.
  2. Calculate what that amounts to in future dollars. (Here's how I do this: find a good savings/investment calculator online, enter the aforementioned dollar amount in the initial investment field, make sure future deposits equal $0, enter an estimated inflation rate in the APY/interest rate section ((I use 3-4%)), make sure the compounding rate is annual, enter the number of years until you want to retire, and hit submit.)
  3. Whew! Now that that's done, you know what your annual income needs to be to keep your standard of living in x number of years. Now take that number and divide it by the percentage of interest on your nest egg you want to live on. This instruction will be more clear in the example, so keep reading.
  4. Arrive at the amount you need to have invested by the time you retire.

How to accumulate that amount of money is for a future post. For now it's just good to know what we're aiming for.

Our future nest egg-- a real life example

Of course, this number is very much subject to change, but here goes. First, you need to know that as part of our future financial plan we will have already paid off our house by the time we retire and plan to have no consumer debts whatsoever.

  1. We've set a tentative goal for our income at $40k/year. Without a house payment, car payment, or anything else, this should give us plenty of fun money and give-away money to use as we wish. Whatever vacations we want, etc.
  2. I've plugged this number into a 'savings calculator' and come up with these figures: if we were to retire in 30 years (that will put us at 50-ish), today's $40k will be worth $100-130k. So, really, our income goal is actually 100-130k if we want the standard of living 40k will get us now.
  3. Now the fun begins. If we want this money to last until we die, even if we're 300 years old when we do, we need to live on the interest. Plus, we want this money to keep growing so that we stay ahead of inflation. If we invest in growth-stock mutual funds averaging 12% and inflation is calculated at 4%, we need to live off of the interest minus inflation (12-4), or 8% of our total nest egg. 100k is a nice, round number, so taking 100,000/.08=1.25million. This approach will have the added benefit of leaving a nice big inheritance to our children or beneficiaries in addition to our house, etc.
  4. We need to accumulate $1,250,000 over the next 30 years to acheive our retirement goal.

So there you have it. Yes, I know that this formula is highly simplified, but for those of you who don't know where to start it should at least give you a point of reference. I'm interested in knowing what kind of numbers you have come up with. Comment and let me know!

Friday, February 6, 2009

A pleasant surprise!

Honestly, I never had any intentions of promoting services through this blog. However, the service I have gotten today has really knocked my socks off. When you take this kind of care for your members, you deserve to be promoted!

Today I got a very pleasant suprise!

I have an account with My Survey. I take surveys periodically, and each survey is worth a certain number of points. When you stockpile enough points, you can redeem them for cash, prizes, or donate to charities. So, here's the story...

Last Novemeber (or some time around there) I cashed in my points for $60. I had gotten a check from them before, so I already know it was legit. I waited, and after I had waited more than the 6-8 weeks delivery time, I checked to see what was up. Everything said it was mailed, so I chalked it up 'just another one of those survey things' and resigned myself to never getting the check. Or, at least waiting a good 90 days and calling to see if the check had cleared and possibly getting a re-issue.

Today, I received an email from My Survey letting me know that the check was returned undeliverable and I should update my info and try again. WOW! They could have just kept the money, but instead they credited my account without me even asking and let me know about the problem!

My Survey has been a pretty good service for me.
  • It is NOT a get-rich site.
  • It is NOT a part-time income. I've been stockpiling these points for quite a while. Most surveys are 10-20 points and 1000 points equals $10, if you're redeeming for cash (which is what I do, since the prizes are cheaper if you cash out and buy it at WalMart...) it comes out to about a dime per survey.
  • It is NOT a service that will spam you with unending emails. They email me when I have a survey available (maybe once every week or 2, sometimes more often).
  • It is NOT a site that sends you to surveys where you first have to purchase a product or sign up for a 'free' trial (I cannot stand these. I recently joined a survey site like this. I don't care if they'll pay me $10, I don't want to pay $3.88 to do it! I now delete their emails without reading them.)
So, if you are interested in taking surveys in your sparest of spare times and mostly for the fun of it, with nominal monetary reward, I must recommend And, if you want to say a little 'thank you' to me for telling you about it, comment and I'll send you a referral email.

Anyone else know about good survey sites that don't spam and have a good pay-out system?

Thursday, February 5, 2009

Substituting-- All in a day's work

To date I have performed two substituting jobs: one in high school speech and one in first grade. I must say, substitutes do not get paid enough. More have been available, I just haven't taken them.

To those of you who may think otherwise-- substituting is *hard* work! In my opinion, it is easier to be the regular teacher than a sub. This is not what I originally thought. I thought subbing would be great:
  • no grading
  • no planning
  • no pressure to produce

However, I have found that sometimes the lesson plans are difficult to understand (or even read!), or the students are openly defiant and disrespectful. I had one tell me to my face that he was going to "tell them it was the crazy sub. You'd be suprised how often that works." Geez!

But, as many people start to feel the crunch of 'recession' and are looking for work, I can tell you from experience and from all of the teachers around me who keep telling me, they are always looking for substitutes. If you have a degree, you'll get paid better, but even without you could be paid about $60/day. That's the going rate around here, anyway. Degreed/certified teachers are paid up to $80/day (that's the highest I've found) and up to $110/day if you're in a long-term position. Hourly it doesn't break down to much, but it's better than nothing!

I don't want to give up on substituting, since I think spending time in a classroom regularly will keep me sharp and give me an edge on the job search. Plus, hopefully the more I do it the better I will be.

So, for all of you job searchers and stay-at-home-moms (SAHMs) out there, you might give substituting a try. Just don't take my jobs, please! :)

Thursday, January 29, 2009

Net Worth-- Day 1

In order to truly prove that you can live on next to nothing and still come out ahead, I'm going to post our square-one stats.

First off, my husband and I are both, for all intents and purposes, unemployed. I have a business that has the potential for substantial earnings, but we've recently moved to a new city and I have not restarted that venture yet. I am a certified teacher, so substitute teaching is a definite possibility in the interim. My husband is looking for part time work while he pursues his master's degrees (yes, he's working on two).

4.5k-- car loan

2k-- checking
2k-- savings
4k-- total

Monthly expenses:
Rent $450
Utilities $150
Gas (car) $300
Car pymt $103
Internet $ 30
Groceries $300
Total $1,333

As you can see, our current net worth is in the negative to the tune of about $500. However, our monthly expenses are negligable. We watch movies, out-of-the-air TV, and play video games for entertainment.

Goals for 2009(ish):
  • Pay off the car
  • Compile an emergency fund of 3-6 mo. expenses (about 8k)
  • Fully fund Roth IRAs for the two of us
  • Should either of us obtain full-time employment w/ retirement, contribute up to the full employer match

Our plan:
Our financial plan is to divert any income in excess of our expenses toward paying off our car liability. This, of course, is after tithing 10% of our gross income. The goal is to have the car paid off by June, thus freeing up money to set up an emergency fund of 3-6 mo. of expenses. By the end of the year we should have completed both of these goals with some (or maybe a lot) of wiggle room for retirement and possibly saving for the downpayment on a house.

Why I'm telling you this:
Never despise meager beginnings. I'm posting all of this so that I'm accountable and so that the readers can see what progress can be made on a very limited income. If you are searching for hope for your finances, if you don't believe it can be done, or if you want to see what we do to pull this off... subscribe. I'll keep you posted on what jobs we do, how much we're making, where that money goes, and all else related to our progess toward a $1,000,000 net worth.

On that note, tomorrow I'll do my first subbing job and make about $80 gross. That will be our total income for the month of January. It has been a month of many unknowns, changes, and challenges. Stay tuned: our future is bright!


Welcome to the millionaire teacher blog. Here I will be posting my progress on on earning, saving, investing, and other personal finance considerations. It is my mission to show that anyone can spend less than they make, save money for retirement and a rainy day, and still have a decent standard of living-- even on the modest salary of a teacher! Check often, as I will be posting many thoughts, strategies, and updates as the days go on!