Monday, January 31, 2011

Staying Accountable To My Budget

I recently created a detailed budget for myself. I have $100 to spend on miscellaneous items, and I've allotted myself a total budget for groceries and gas of $325 every month. The problem with budgeting isn't so much creating a budget - it's sticking to it.

At the end of every month I've been tallying that months spending. This month I spent $106.66 in the miscellaneous category. This included my antique store purchases, a Groupon certificate for half off at happy hour, lunch with the hubby's grandmother, the Living Social certificate which I applied to buying sprout seeds (can't wait to start this project - hopefully a money saver!) and a late fee and interest. No, I'm not perfect, and I'm super annoyed with myself for this one. I thought I had all of my ducks in order before leaving for the holidays, but I forgot to schedule the payment on one of my credit cards. Usually I can get the late fee reversed (while still eating the interest) but apparently I had done that last March, and USBank is only being lenient once a year.

I decided to include the late fee and interest in my miscellaneous category to really make it hurt. It's frustrating to know that the only reason I went over my miscellaneous budget this month is because of that stupid mistake. I assume that my miscellaneous spending is going to be somewhat flexible every month. By this I mean that sometimes I'll go over and sometimes I'll be under because I don't buy cat food or litter every month, or get my oil changed every month. But it's really easy to go a little over $100 a month, and a lot harder to stay under. I'm glad I almost made it, but I'm going to try really hard to be under in February because of the late payment mistake.

I came in just under budget on gas and groceries - $321.49. This is partly because I decided not to hold myself accountable for the $11.79 my husband charged to my card when I sent him out for eggs. He decided to also get 5 concentrated juices. I would never have bought these for him. Juice is expensive, and I try not to buy too many in a month, and typically keep them in the deep freeze in the garage so that my husband doesn't go through them so fast. This time he's already gone through all 5 cans of Welch's, and he just bought them on the 20th!

After reading that Kristen over at The Frugal Girl feeds her family of 6 on $100 a week (and she does it in part by avoiding expensive juice!) I'm feeling a little disappointed in myself for barely managing to feed the two of us on $285 a month (that's $325 minus the $40 I realistically feed the Prius every month). Truthfully I aim at $200 a month, added in $50 when I started making the hubby's lunches, and allot $75 for gas (which is more like what I fed the Lexus). I combine gas and groceries in my budget to give myself a little extra cushion on groceries, since I definitely don't spend $75 on gas anymore. So basically, I'm pathetic. I mean who am I fooling? Myself?

So I'm going to try to be more accountable for my grocery shopping expenses. I'm going to seriously aim at spending less than what I've currently alloted - a lofty goal, since last year I had a difficult time coming in at the already generous budget I've given myself. So I've decided to track even more data! (There's nothing I love more than a detailed Excel spreadsheet :) The last few times I've been to the grocery store, I've kept my receipts and started tracking exactly what I purchase. I've already recognized that I can probably stop paying $2.50 for two frozen pie crusts. It can't be that hard to make crust, right? And I'm pretty sure I can do it for less than $1.25 each. Hopefully I'll be able to plug more of these holes as I take a closer look at my grocery purchases!

Friday, January 28, 2011

Getting Paid To Take Surveys | Using Fusion Cash

Have you ever wondered how to take surveys for money? All around the internet I see ads about getting paid for taking surveys, but I never quite figured out how to do it. I even signed up for a couple of sites where I created a profile, and then waited to be e-mailed surveys that I matched up to. But then I never seemed to qualify!

Last year I stumbled across Fusion Cash. It makes the whole process a lot easier, and they even start you out with a $5 bonus.

Not only do they have tons of survey options available, but they also have other free ways to increase your earnings. Once you reach a minimum of $25 in your account, you can cash out and get the check in the mail, or deposited directly into your PayPal or bank account.

At first I was afraid it might be a scam, but I figured I'd give it a shot for a month and then if a check never arrived in the mail I'd chalk it up to a learning experience. The first and easiest thing I did was sign up for the daily e-mail. Every morning when I log into my AOL account, I have an e-mail waiting for me. I click on the link in the e-mail which takes me to the login page, and then I click on an ad. Instant 2 cents! It's not a ton, but it adds up. Every penny in the piggy bank counts!

I also take advantage of the 15 cent paid to click offer every day. I read through the entertainment news while I wait for the clock to count down, and then I click through some of the other pages. I can get the news, the weather, recipe ideas, even gas prices! And after I've clicked on 4 pages, I click on one of the sponsor ads, follow the rest of the instructions, and 15 cents is automatically credited to my account.

These two daily offers are now a part of my routine, and take mere minutes of my time. Every month, it's at least an extra $5 in my pocket.

When I first got started I took advantage of a lot of the daily offers. The Offer page at Fusion Cash is easy to sort through. If you click the Daily link, it will bring up the 4 daily survey options from MyThoughtCounts, SurveyHead, GiveUsYour2Cents, and SSI Daily. Every 24 hours you are eligible to complete EACH of these surveys again. I don't necessarily qualify for all four of them every day, but I do often enough that it is easy for me to reach at least $25 every month. 

On top of that, Fusion Cash has tons of other offers for things like downloading the Bing toolbar, trying out, or doing a free 30 day trial with Equifax ScoreWatch. Besides earning extra money, you can try out great tools for keeping your financial house in order!

Although some offers do require you to enter a credit card or purchase something, there are plenty of 100% free offers to take advantage of. I've never paid a dime on Fusion Cash, but I've still earned over $135 so far!

A picture of my check posted in the forums for an extra $1!

Once you get started with Fusion Cash, you can also earn extra money - like earning $3 for posting at least 30 times in the Forums every month, or $1 for posting a picture of your check once you cash out. All the bonus offers make it even easier to reach the $25 minimum.

If you think you can get rich for sitting at home taking surveys or participating in PTC offers, you're probably kidding yourself - at least I haven't figured it out yet. But I do earn extra pocket money from Fusion Cash that helps me stick to my financial goals, and it doesn't take up a lot of my time. Give Fusion Cash a shot - even if you only cash out once, you'll be at least $25 richer!

The link I've provided to Fusion Cash gives me credit for referring you to the site - another great way to earn bonus money through Fusion Cash! 

Wednesday, January 26, 2011

My Credit Cards - Rewards Are Rewarding!

I have a small handful of credit cards, and I'd like to talk about my personal experiences with them and which I like best.

The first card I ever had was the USBank College Visa which I applied for after reading an article about credit scores. My parents had never spoken to me about the importance of establishing credit, and it hadn't really occurred to me before then to open a card. A couple of years ago it converted to some sort of rewards card, but the cash back is less than 1%. I use this card about twice a year, just to keep it active. I also recently added my husband as a joint user (not an authorized user, they did a credit check) so that it would extend his credit history as well. We now each have 8 years of perfect credit history from this card, and a nice $17,000 credit limit grown slowly by about $1500 increase every 6 months.

In 2006, I realized I could be earning rewards for my credit card spending! My extended family all lives in South Africa, and we typically flew NWA/KLM airlines to get there, so I opened up a mileage rewards card for that airline with USBank. That has since converted over to the FlexPerks card. Before it converted I managed to get one first class trip to Vegas out of the card - not exactly overseas. Since it's converted, I can also get cash back for my points instead of travel. It equates to 1% cash back, and there are often opportunities for bonus points. You also get double points on cell phone and airline charges. Since the card converted in 2009 I have received $650 in cash back! That has been greatly assisted by bonus points. I have not spent that much money! But if we're ever going on vacation together, I'd be happy to book it and you can pay me back. Going in on a birthday present for someone? Sure, I'll buy, you can write me a check for your half :) I have a nice limit on that card of $16,500.

Worth noting: if you ever pay your USBank credit card a day late, you can call customer service and get the late charge reversed once a year. USBank's customer service is excellent, and I also really like their website. Since I have checking accounts with them, I can have my rewards deposited into my checking account instead of applied to the card. This comes with the additional benefit of a quick turnover - it takes just a few days for the credit to appear on my statement online.

When my husband and I first started dating and I had to start cooking real meals for dinner (I'd be perfectly fine with some steamed asparagus and brie on crackers after having a big lunch, personally) I started shopping at Costco a lot more often. As you're probably aware, Costco only takes American Express or debit cards. Not one to lose out on rewards, I applied for the American Express Blue Cash card. It rewards 5% cash back on gas, groceries, and drugstore purchases. Unfortunately, Costco is not included and is rewarded at the everything else rate of 1.25%. When I first got the card I think this was 1.5%. Again, unfortunately, these rates only apply after you spend $6500 per annum. Until you reach that mark, it's just 1% and .5% respectively. The year that I got married and put our honeymoon on this card, I knocked the $6500 out of the park quickly. After that it made sense to put any purchase I could make with American Express on this card. I've gotten cash rewards twice now: $232.17 and $226.97 applied to my balance. I really loved this card for awhile, but it no longer compares to my....

Fidelity 2% American Express! This is my favorite card. I've been coveting a 2% card for awhile now. You need really great credit to be approved for this card, from what I understand. I initially was after the Schwab 2% Visa, but waited too long and it no longer exists. Luckily, this card is still around. I opened a Roth IRA with Fidelity and I now make every purchase I can with this card. The 2% really adds up quickly, and overall works out better than the Blue Cash card because there is no limit you have to reach first. It is also gets the same rewards rate at Costco, which is a good chunk of my monthly bills. The rewards are redeemed in increments of $50 and deposited straight into my Roth IRA. So far I have redeemed $200. Again, this is thanks in part to booking the flights and hotels for a recent trip with my siblings who then reimbursed me for their parts.

In looking up the Fidelity 2% American Express online so that I could link to it, I just noticed that they also now have a Visa Rewards Card! While my 2% American Express is great, as you may know, American Express is not accepted everywhere. Sometimes I have no choice to put purchases on my FlexPerks Visa for just 1% rewards. It looks like this Fidelity Visa offers 1.5% on purchases up to $15,000 a year, and 2% after that! I'm going to do some more research, but I think I might have to apply for this.

I have a couple of other cards that I don't really use. One is an Alliant Credit Union Visa for $2500. I have accounts with them with great rates, and since they pull credit when opening a simple checking or savings account it made sense to accept a credit card offer at the same time. I've never charged anything to it though. I also have a Chase card with a $2500 limit that I opened with my sister in law back when it was Washington Mutual. This was mostly to do her a favor in meeting her goals, but I also used the balance transfer offer which I paid off over the next year. It gave me some breathing room on other bills, but for a 3% fee I'm not sure if it was worth it. I never had any problems with it, but don't have a whole lot of experience with it either.

During the credit repair process, when my husband's credit finally reached 650 we applied for a Bank of America credit card in his name. I had read a lot on MyFico about the 99/500 offer. Basically, we applied for a card we knew he'd be declined for, but were countered with an offer for a $500 secured card where you only had to actually put $99 down. The card was then supposed to convert to unsecured after 9 months of good payments. Unfortunately, the economy changed drastically during that time. He's had the card since December 2008, but it has never converted. It also comes with a $29 annual fee.

I have added him to my USBank card and Blue Cash card, so the purpose of the BOA card (to establish credit) is no longer terribly relevant. If you're trying to reestablish your credit and don't have any other options, I would recommend this card. For our financial position now, though, I don't think paying the annual fee makes sense any more. It will still appear on his credit for 10 years after we close it, and it's not the oldest card appearing on his credit report. We've just paid the annual fee, so maybe we'll leave it alone for the next year, but I think we'll close the card before they charge us another $29.

Those are all my credit card experiences, and over $1300 in rewards in the past 2 years! If you can get them, I highly recommend the Fidelity Rewards cards. Between their American Express and Visa you should be set, and it's really fun playing with the calculator they have here in the upper right hand corner. If I spend $20,000 a year and invest the $400 in rewards at a rate of 7% until retirement in about 35 years, it becomes $57,788! Since I pay my entire statement balance and never owe interest, that truly is free money for me. Amazing!

Tuesday, January 25, 2011

Taking Lunch To Work

My husband used to eat out for lunch every day that he worked. I convinced him to aim for under $10 a day, and with a free sandwich every once in awhile courtesy of a Safeway Deli Card sometimes he'd even beat that goal! But just as easily he'd go over, so saying that he spent $50 a week on lunch is being rather generous. I finally cracked at the thought of this money flying out the window - at least $2600 a year! It's not the thing I want to do most in the world after working and then making dinner, but I started making his lunches every night.

I was worried that there might be complaints about variety, but it turns out my husband's real needs revolve around quality quantity, not keeping things interesting. He's a superintendent at a construction company, so filling him up is really the main goal. If he can have his favorite thing in the world - Timm's Jalapeno Chips - he's perfectly happy to have them every day.

Lunch consists of sandwich, 2 chocolate chip cookies and jalapeno chips. I buy a couple party size bag of chips each month (about $10) and pour them each night into a Gladware container to keep them from getting crushed. I also buy a couple tubs of Toll House Cookie Dough each month (about $12). Not only is this more delicious than out of a box and cheaper than at the bakery, but this way they aren't lying around for unchecked consumption. I learned the hard way that if I have a box of cookies lying around to last the month, they'll probably be gone in a week. I bake a week's worth of cookies at a time, and knowing I have just enough or I'll have to bake more keeps me away from them. My husband loves this sweet dark whole grain bread so I buy it even though it's a little pricey. I need about 2 and a half loaves a month (about $12). I buy a big tub of this pastrami at Costco because it too is delicious along with pre-sliced pepper jack cheese. The pastrami is a little pricey, although I think it sells in my store for about $12 - I need to double check - and the cheese is about $5. And then I supplement the pastrami with some salami (about $5) and other Safeway Deli lunch meat (about $10). Top that with a piece of lettuce or some sprouts and he's done.

That totals about $66 a month. I also buy 2 packs of dijon mustard at Costco and tubs of mayo at Safeway which I use in other cooking as well. These last a really long time, so the cost is pretty negligible. Nevertheless, I know I could probably do it even cheaper. I've looked into baking my own bread or making my own cookie dough. If anyone has a great sweet dark whole grain recipe, let me know! I should probably look more closely at the price of cheese that isn't sliced, but the convenience of the sliced cheese is part of what keeps me committed to making his lunches everyday. The easier it is on me, the more I know I will stick with it.

Due to a recent salmonella outbreak, I have looked into growing my own sprouts, an activity I loved doing with my mom as a kid, and I will post on my experience with that soon. I was also inspired by The Frugal Girl to tackle our breakfast expenses by making my own yogurt  and granola bars. I'll post about my experiences with that soon. But all in all, reducing the cost to $66 a week still saves us over $1800 a year! That's penny pinching at it's finest :)

Monday, January 24, 2011

Antique Shopping Thrifty Finds!

I posted a little while ago about going into a thrift store to check out clothing for pretty much the first time ever. This past weekend the hubby and I visited his grandmother and hit up some local antique shops in the morning. I had mentioned to him that I wanted to try making my own homemade yogurt and needed some mason jars to do it. He saw some adorable Balls jars with seals for $3 each. Probably more expensive than mason jars would be, but also so adorable! On top of that, his grandmother had 2 almost identical but larger jars that she gave me! So I came home with 4 jars ready for yogurt for $6. With the savings I'll have making my own yogurt instead of buying it, I'll pay off that $6 in no time.

Here they are after sterilizing them. Adorable? I think so!

As I was walking out with my jars I looked over and saw a cheese dome just like we'd had when I was growing up for only $4. At that price, I couldn't resist. Maybe thrift store shopping actually isn't going to save me money ;) 
Mmmm, cheesy goodness.

The jars are just perfect for making the yogurt. The big ones are quart sized and the small ones are pints. The cheese dome is something that I really didn't need. I've just been keeping my cheese in plastic bags in the deli drawer of my fridge, and it works just fine. The dome takes up quite a bit of room, while not really fitting all that much cheese since it's round and the cheese is usually...not round. But like I said, for $4 I couldn't resist. I might give it a good wash and put it on Craigslist next month. If I sell it for $10 I'm more than doubling my money. Has anyone else thrift store shopped and sold for a profit? Maybe this could be my new thing in the quest for pennies!

Thursday, January 20, 2011

Roth IRA

In high school I was lucky enough to have a brilliant physics teacher. I was especially lucky because he had actually retired the year before. He then took one look at his finances and returned to work part time. The first day of class he didn't say a word about physics. Instead he talked about Roth IRAs and told us all to start one as soon as possible and max it our contribution as often as possible. I have no idea why a man so brilliant at math, and certainly smart enough to realize in his golden years how beneficial a Roth IRA would have been, didn't think about his financial future earlier. My 16 year old sat there smug in the knowledge that I already had a Roth IRA, started by my father. When I took over my finances, the contributions stopped.

Why are our past selves so stupid??

I recently rectified this situation. I was interested in applying for the Fidelity 2% Rewards Card. The rewards are deposited into a Fidelity account, something I didn't have. I knew we needed to start working on some Roth retirement savings, so my husband and I each opened a Roth IRA with Fidelity and I applied for the card and attached it to my Roth. I was pleased to see that Fidelity's trades are also $7.95 rather than the $8.95 I pay in my Schwab account. The Roth IRAs are fee free with a minimum opening deposit of $2500 OR minimum monthly contributions of $200. We set up monthly contributions of $500 each. The first contribution was set up for July, so we would each reach the $5000 maximum for 2010 by the required date of April 2011.

I thought the max contribution would go up to $6000 for 2011, so again we were set up perfectly to reach it by April 2012. Unfortunately, it remained at $5000 so we are actually set to reach the max by February 2012. Thanks in part to the rewards card, I'm hoping to speed that up a bit and make all of our 2011 contributions by December. By contributing as early as possible, we set ourselves up for the most compound interest possible, and this well help make up some ground lost by the max limit not going up.

I read an interesting article on Get Rich Slowly recently about building up an emergency fund even if you don't think you can afford it. I would add that you can also look at your Roth IRA as a part of your emergency fund since you can withdraw contributions penalty free - just not earnings. Although we certainly don't want to ever touch our retirement savings, in the case of an extreme financial emergency, we could withdraw from it. We don't have much additional cash in savings accounts - and I don't really want too much of our money sitting around earning a max of 1.3% - but by the end of 2011 we'll have $20,000 plus earnings sitting in our two Roth IRA accounts. That's enough money to make me feel fairly secure about being laid off, emergency medical bills, etc. and is also a great start to our retirement savings.

So here's to my old teacher. He was one of the very best I ever had. It may have taken me 10 years to really start listening, but I am now.

Wednesday, January 19, 2011

LivingSocial Deal - Free Amazon Money!

Every morning I have e-mails waiting in my inbox from Groupon and LivingSocial. I do my best to resist the daily temptation of fantastic offers on things I don't need. But today, LivingSocial is selling $20 gift cards to for $10! Sign me up for 10 of those! Or just know...since there's a limit of one per person.

Even if I didn't have something specific in mind, I know that at some point in the next year I'm going to need to purchase something from Amazon, and this Penny Pincher is never going to walk away from a free $10. But luckily I've been eying some sprout seeds at Amazon for about a week now. The recent Salmonella outbreak and scarcity of sprouts - a staple of my husband's sandwiches - had me remembering how my mom used to grow sprouts in a mason jar. Not only would that save me money, but now I've got some free money to get started! Win Win Wednesday :)

Tuesday, January 18, 2011

Shaving Down Your Monthly Bills

When I started planning out regular savings, I created a budget and took a hard look at it. A lot of things were fixed monthly expenses, and (as luck would have it) they all seemed to go up a few bucks more due to yearly increases right after I had written my budget down. It was disheartening! So I started taking a look to see if there was anything that could be done about them

The first bill I tackled was our cell phone plans. I had the (pretty good, actually) 450 minute Any Mobile, Anytime plan with Sprint for $69.99. I had already downgraded from my $99.99 Simply Everything plan and it had worked out great. We don't have a land line at home, and neither do most of my friends. Even when I'm calling my parents, it's typically easier to get hold of them if I call one of their cell phones. This plan had unlimited minutes when calling any cell phone, as well as an unlimited web and text package. It was perfect for me.

But I digress. It wasn't a family plan with my husband. Meanwhile, the hubby was paying $79.99 for a 1500 minute plan with T-Mobile, but really using a lot less than 1500 - especially when you took into account the number of minutes we were wasting on phone calls to each other when those minutes would be unlimited if we were on the same plan. My other big phone friend is my mother - also on T-Mobile, meaning I'd hardly use any minutes at all if we were all with the same network. I knew we were missing out on some savings, meager though they might be, by not combining.

When the iPhone 4 came out, my very generous co-worker gave me his old iPhone. I patiently awaited this knowing that it didn't make sense for me to switch phone carriers if I had to buy a brand new phone that I really didn't need (my beloved BlackBerry was working fine). My husband dutifully unlocked the iPhone for me, and I got set up with T-Mobile. Having carefully monitored our minute usage over a few months, I decided to stay with a 1500 minute plan even though we were sharing. We have unlimited text and data for $119.99 a month. Unfortunately, I see now that they've bumped that price point down to 200 MB of data - unlimited is $40 more! We're lucky we got in when we did. It's worked out to $30/month savings for us.

I also took a look at our Comcast Cable bill. I loathe this bill. (Isn't cable TV an unalienable right? No? Oh.) I guess the real reason that I loathe it is that they are constantly telling me - via friendly salesman knocks on the door while I'm in the middle of cooking dinner) that if I get cable, internet AND phone I could be saving money over my plan now. And it isn't true! Sure, the base rate is cheaper than the chunk of change automatically charged to my card every month, but that's because it includes tax! Marketing campaigns like this really get under my skin.

Unfortunately my husband has this really cool media computer that we have hooked up to a projection screen that was rendered useless after the switch to digital. We needed another box. I finally acquiesced. He had traded hard labor for both the computer and the projector and screen, and it seemed kind of cruel to deny him the necessary equipment to keep it running. Unfortunately, I was feeling kind of crabby about it and made him make the phone call to Comcast, who talked him into changing our plan over to the Better! More Channels! Phone! Inexplicably Cheaper! but not actually cheaper plan. When I got the first bill I immediately called and switched back.

In a twist of fate (Comcast Karma, perhaps?) the 3 month discount they gave us on our boxes with the new plan stuck around when I switched to our old plan. Then, after three months past the discounts came off and our yearly billing bump hit at the same time. I frowned at the bill angrily. I realized we were paying $7 a month to rent a modem. This wasn't exactly news, but it was the first time I considered how stupid this was. A quick search of the internetz lead me to a list of compatible modems, one of which I found on eBay for $30 with free shipping. The phone call to Comcast to set it up was one of the easiest dealings I've ever had with them. In another twist of fate, the cable box attached to the media computer inexplicably stopped working. I returned our old modem and the box and knocked $15 off my bill (and gained a hard cell at the Comcast return offices from a salesman who was concerned about me "downgrading" my services). Had I not been returning the modem, I probably would have put off returning the useless box for months, losing $8 every month. The hassle of one afternoon in line saved me $180 a year (minus the initial $30 investment).

What bills can you take a look at and tackle? Are you paying for more mobile time than you need, or a land line that you never use? Are you over-insured, or paying for a gym membership you don't use? We also cut down and then cut out our never used Netflix account, and I bumped up my health insurance deductible. It's amazing how those pennies really add up!

Thursday, January 13, 2011

Letting Go Of Living Above My Needs

For a lot of people the real F-word would be frugal. It doesn't necessarily conjure up the glamorous image many people want to portray. Although I've never gotten into any credit card debt, I did waste a ton of money in the past on things that I really didn't need but that looked pretty - my car being a prime example.

After the car my parents gave me finally died, I drove a used Audi and then a used BMW (seeing a wasteful theme already?) I didn't make smart purchases to begin with. I wasn't concerned about interest rates, or how much the car was, or even what it was worth! I knew I wanted it, and if I could afford the monthly payment being offered to me then why not, right? Of course when the next shiny thing rolled around a year later I traded in my car, rolled over the extra from my previous loan, and started making even more ridiculous payments.

After dealing with a number of issues, I decided I didn't want to deal with the hassles of any more used vehicles. I marched into Lexus, plunked a chunk of change down to get out of my BMW, and drove away in my brand new dream car with an $800 monthly payment.

Seriously, kill me now just thinking about it. What kind of moron am I?

I loved that car, and the one thing I have going for me is that I finally broke my new (used) car-a-year habit. But in 2010 I decided we needed to start socking away savings, and then I started looking for ways to save even more money. I examined our cell phone plans, our cable bill, our grocery spending, etc. and it suddenly sunk in you don't have to be spending this kind of money on a car!

I knew I wanted some kind of hybrid to save even more money on gas. I also knew that I didn't want to buy brand new. Although I loved having a brand new car covered by a warranty, I realized that there were plenty of used options being sold with warranties, and since a car depreciates the most during it's first year it makes a lot more sense to buy a newer used car than a brand new one. I finally decided on a 2007 Prius because it came with a lot of the things I was looking for - namely a backup camera. If you've ever had a car with a backup camera you know it's hard to pun intended.

I had a pretty good car buying experience. It helped that I didn't need to trade in my car and could take my time. My car was selling at dealers for about what I owed, so everyone wanted to give me a trade in value of less. I put my foot down, and would only do the deal if they covered all of what I owed. I also looked at a lot of cars, told my salesperson exactly what I wanted and at what price, and waited about a month until I got just that. And along with my stellar credit score I got a 3.9% rate.

I now pay about a third of what I did on my monthly payment, and fill up on gas about once a month for about $30 a tank - bonus savings since I'd previously been filling up twice a month for about $50. I love the way driving my Prius is like a video game where the highest MPG wins. My car is certainly not as flashy or luxurious as my last one, but it's nevertheless become the favorite of all my cars. I plan to drive it at least until it's completely paid off, and if I can hold out even longer, until the warranty expires in 2017 - thanks Toyota!

Initially I planned to make the same payment I had been and pay off my car really quickly, but because of the low rate I got on my car loan I decided to put the extra money towards my mortgage instead. It feels amazing watching that balance go down. I realize now that even if I was balancing my monthly debt and successfully making payments, I still couldn't afford that car. I'm lucky enough not to be in debt the way most people think of it - in terms of student loans and credit cards - but I do have a mortgage and I do still have a car payment, and until those go away there's no reason to live above my needs.

Wednesday, January 12, 2011

Avoiding Temptation | Stopping Catalog and Direct Mail Delivery

I came across a link to this awesome article in Sunset Magazine while reading The Non-Consumer Advocate. One of the things mentioned in the article that I thought I could immediately put to use were these two websites:


You can use DMA Choice to get yourself taken off direct mailing lists, and use Catalog Choice to get off specific catalog mailing lists. I routinely receive huge, beautiful catalogs from the likes of Nordstrom, Crate & Barrel, CB2, Macy's, and Victoria's Secret just to name a few. And to be perfectly honest, I love looking through these catalogs. But nothing derails a perfectly good budget like the glossy pages of a catalog and the tempting discounts or sales that often come with it.

If you've ever hoarded catalogs, folding down the corners of your favorite pages as you go through them, you probably know it's also pretty disturbing when you finally throw away a big stack. I cleaned off our coffee table just this weekend, and filled half the recycling bin! By avoiding temptation, I can also create a lot less waste.

And let's be honest, I already peruse the Crate & Barrel website plenty!

Tuesday, January 11, 2011

Paying Up Front & Avoiding Fees

One of the ways I save a little money is by paying up front for insurance bills, rather than paying an inflated amount each month. For instance, every 6 months I get a new bill from Progressive for our car insurance. I can either make a payment every month, or I can pay for the entire policy upfront meaning that I pay my insurance twice a year. While this is a big chunk to have to pay all at once, paying it all at once costs about $200-$300 cheaper than monthly payments. That's like saving an entire monthly payment for us - twice a year!

On top of that, there is a $5 fee for putting the monthly payment on a credit card. I like to put everything onto my rewards credit card, and even when there are fees involved I have a hard time breaking this habit. But when you pay the bill upfront, not only are you only making one payment, but they waive the $5 charge.

It can be hard to have a big chunk of change like that lying around. Recently another bill that can be paid upfront or in 3 yearly payments came in the mail. They also have a $5 charge if you choose to break it into 3 payments, but because there's no additional savings and my husband doesn't budget quite intensely as I do, I usually don't have him pay it all up front. However, this time I just happened to have a 0% convenience check offer through my FlexPerks rewards card that gave 3500 bonus points for any check over $1000. I cash out my points as soon as they accumulate, so 3500 points represents $35 of my next $50 cash out. Although USBank has increased their balance transfer/convenience check fees to 4% from 3%, along with the $15 in payment savings, I was able to write a check for $1000 and actually save $10. If the savings are big enough, a convenience check offer like this one could help you get started.

In my case this helped give us a boost, but the only way to be able to pay bills like this is to budget savings for them ahead of time. It's not so easy to pay a $1000 bill at the drop of a hat, but could you put aside $200 in savings over the next 5 months? In my husband's case, at 0% interest, he can pay me back over the next few months. The bill won't be due again until next January, so he can then continue to set aside a little extra every month and be ready for next year.

I think another great thing to incorporate in this advanced planning is online savings accounts. You can easily open accounts with ING Savings or SmartyPig and earn interest along the way. ING is currently at 1.1% and SmartPig is at 1.35%. Open multiple accounts and give them names like "Car Insurance" or "Vacation Fund". Make a plan for when you'll need them and how much you'll need, and start stashing away a little each month. This can also be a good safety net along the lines of an emergency fund. If you're laid off, or injured and not working, you might have some extra discretionary money in the Vacation Fund that you can now use to pay your bills. Or if you need some extra padding before you get back on your feet, you can use the Car Insurance money for necessities and pay it monthly when it becomes due. These shouldn't be your emergency fund, but I think they can be a great supplement.

On the other hand, when my health insurance recently changed and the savings I'd been getting from paying a year in advance was wiped out, I chose to start paying monthly. I didn't see any reason to hand over a couple thousand dollars when I could put that money to work for me compounding interest and just pay $150 bill each month. Figure out which bills you could be saving on. A $5 fee doesn't sound like much, but it can certainly add up. The question is, will it be adding up for you, or adding up for the companies you're paying?

Monday, January 10, 2011

Banking Incentives | Getting Free Money From A Bank

I love banking incentives, and take advantage of them whenever I can. Right before Washington Mutual collapsed I took advantage of the best offer I've seen. I opened a checking account with $100 and received another $100 for my trouble. Money doubled, just like that. When Chase took over I was sent another offer from them. If I paid 3 utility bills within a certain period of time they would deposit $30 into my account. Typically I pay every bill I can with my rewards credit card, but I certainly wouldn't be making $30 of rewards off of 3 utility bills. So I paid the cable bill, cell phone bill, and water bill and got another $30.

I've since taken advantage of offers to open savings accounts, pay more utility bills, and use Bill Pay within my checking account rather than paying my bills through the vendor websites. I'm currently waiting on $20 to be deposited into my Chase account by February 15th, and another $15 to be deposited into my USBank account by February 28th. I also just signed up for an ING Direct Orange Savings Account that rewarded me with $25 to do so. I probably wouldn't have opened this account if it wasn't for the incentive, but now that I have I love how easy the site is, and the 1.1% rate isn't bad for a savings account either. They're also offering a $50 bonus for opening a checking account. I'll probably go for it!

I haven't taken advantage of incentives to open credit cards because I really don't like taking the credit hit for an inquiry and a new account just for a small reward. But if I was in the market for a new card I would definitely check out who was giving away rewards. Sites like The Piggy Banker and Money Stasher make it easy to find great bank deals. 

My husband likes to make fun of my plethora of accounts and the few bucks here and there that I've made from them. But the fact is that I've earned about $300 over the past couple of years for doing nothing but giving a bank a few minutes of my time. While taking advantage of deals I've also learned about great rates and accounts that really suit my needs. I'd encourage you to take advantage of offers that comes your way!

Saturday, January 8, 2011

Prius MPG | Keeping Track Of My Mileage

Ever since I purchased my Prius last year, I have dutifully written down my mileage (miles driven since last gassing up) and the number of gallons I put in the car. Unfortunately, I was recording this in the notes section of my iPhone, and a recent update debacle erased everything. Oh well! I still want to keep track of how far I get and how much I put in my car so I can compare that to what the dash computer tells me, and this seems like the perfect place to do it - and not lose it!

Miles Driven: 318
Gallons Filled: 10.18

Due to extenuating (and uninteresting) circumstances, I don't completely trust that I only drove 318 miles between fills this time. It doesn't jive with my usual performance. But, I've decided to include it for posterity. We'll see how it goes!

Friday, January 7, 2011

Ebates Referral Bonus!

I have an extreme love affair with Ebates. I was already in love with the convenience of online shopping, so when Ebates came along offering cash back on shopping at some of my favorite stores I was hooked and have been using it for 2 years now.

I've told a lot of my friends about it, but only a couple of people have signed up. I'm not sure why that is. Maybe people think that all money back offers are scams of some sort. It is a little bit different to earn money back on a purchase and not get it until later, but it's not that different from a 10% off sale - you just have to wait a little while before you get that discount. I guess it's more like a mail in rebate.

I think the other problem is that a lot of people don't buy into the PigPennies philosophy. They don't think that a few pennies here and a few dollars there really add up. The smallest amount I've ever gotten back for an Ebates purchase was 24 cents. I purchased thank you cards after my wedding from Office Depot for $11.99. They were adorable; I purchased them online and picked them up in store a few hours later to avoid shipping costs, and Office Depot gave me 2% of my purchase back. This may sound like nothing, but combined with another 6 purchases that quarter I received a check for $20.67. It really does all add up.

Right now Ebates is offering a generous referral bonus. If you refer 3 people between January 1st and February 28th they'll double your referral bonus so you get $30! If you're already using Ebates, now is a great time to let your friends in on your secret! If you're not using Ebates, consider signing up using my referral link. There's even still enough time for you to sign up and share the Ebates awesomeness with your friends! Not to mention that as a new member you'll receive a $5 sign up bonus. Remember, every penny counts!

Feel free to share your favorite stores on Ebates, or your tips for getting referrals in the comments. Happy shopping and happy savings!

Thursday, January 6, 2011

My Clothing Budget

Yesterday I wrote about my budget. Today I'll tell you a little bit about my clothing budget. When I sat down and created a serious budget I did so based on a combination of how much I wanted to save each month and how much I realistically would spend having examined my spending habits over the past year. I settled on an annual clothing budget of $900. I don’t know if this is good or bad. For a girl with a Nordstrom habit, it’s probably fairly conservative. For a girl with a Nieman Marcus habit it would probably be impossible. On the other hand, if you’re shopping at Good Will you probably think I’m ridiculous and are wondering how the hell I can claim to be a penny pincher.

I read a local blog pretty regularly in which the author has discussed her clothes spending habits many times. They kind of blow my mind. She basically aims to spend $10 or less on every item, although there are some things she'll spend (slightly) more for and others she wouldn't dream of spending as much as $10 on. Since we live in the same area I can't exactly claim that the high cost of living is the reason I spend so much more than her on clothing.

I also recently discovered a Portland based blog that I love, and after jumping around the site for hours I discovered this post about thrift store shopping. Mostly the idea of thrift store shopping has made me queasy in the past. But I'm a new person, a penny pinching person, a frugality-equals-sustainability minded person. So could I do it?

He mentions that he's lucky enough to live near a high end thrift store. At first that derailed me. I thought maybe when I visit Portland I'd give thrifting a try. Then I realized that there have got to be high end thrift stores. The one that popped into my head immediately was Plato's Closet which specifically buys and sells brand name clothing. I'm not actually in the market for new clothes, so I decided to gather up some old things that I've been meaning to get rid of for awhile and head down to check it out.

I have a few dresses and tops that I purchased from Bebe a few years ago hoping to wear them on vacation. I spent about $500 because I was buying online and figured I'd be returning things I didn't like or that didn't fit. Unfortunately, my online order arrived after I'd left for vacation despite paying for rushed shipping. By the time I got around to returning everything the 2 week limit had expired - I had never purchased from Bebe online before and had no idea they had such stringent rules. The penny-pinching-me now would have kicked up a fuss about the shipping coming in late and the fact that I'd been out of town for the majority of those 2 weeks. The could-care-less-about-money person I was then shrugged her shoulders and took a $500 hit. All of those clothes have been hanging in my closet ever since with the tags still on them.

I took them into Plato's Closet and wandered around the store while they looked at my items. They told me they pay out 1/3 of what they expect to sell the item for, and when I realized that virtually everything in there seemed to be $12 I was cringing at the possibility of getting $4 for an item that still had a $150 price tag on it. Turns out I wasn't even going to get that. They told me they weren't interested in anything I had because it was outdated. Pride deflated. It wasn't until I got home that I realized they hadn't given me back a cheap t-shirt I'd also taken in. The shirt was too worthless for me to waste the gas on a drive back for it.

So, if anyone is keeping track, so far it's PigPenny - 0, Thrift Stores - 1.

I’m hoping this will turn out to be a blessing in disguise. I have the clothes ready to be photographed and put on Ebay, and I'm thinking I might get more money for them there anyway. I've also determined that Plato's closet would be an okay bet for me if I'm shopping for weekend clothes or summer things, but is probably aimed at a demographic too young for me to do the majority of my shopping there. Despite getting (accidentally) robbed, the place wasn't so bad. I'm definitely going to look further into what other thrift store options I have in the Seattle area and give them a chance.

Listing my old clothes on Ebay is a work in progress. I'm going to start out listing some of my cheaper things at the under $0.99 price that doesn't carry listing fees. I'm also going to try out some of the nicer items on Craigslist before I pay to list them on Ebay and risk not even getting bidders. I'll post again once I see the results of this experiment. I'm also going to work on chipping away at that $900 clothing budget. I'm thinking my days of purchasing $200 jeans should be a thing of the past.

Wednesday, January 5, 2011

401K Match Slashed In Half

I did some analysis of my husband's 401K performance a couple of days ago, and made some estimates about where it will be a few years from now and by retirement. I played around with changing his contribution level, and even took a look at what we could expect if we maxed out the contribution limit. No idea where that money would come from, but hey, wouldn't it be nice? I had no sooner finished reading this article about retirement plans getting changed up on you (and not in a good way) when I returned home to find a letter from my husband's company saying as nonchalantly as possible that his 401K match of 4% was being dropped to 2%.


I suppose my fantasies of him getting another raise at his annual review this month are a touch optimistic, too. Come to think of it, annual reviews haven't even been scheduled yet. Perhaps management is avoiding some awkward conversations.

It's definitely not all bad. I know a lot of companies lowered matches a long time ago, or have even cancelled them altogether. His company has been very generous, and they continue to offer a very good benefits package. On the other hand, he hasn't gotten more than 10 hours in since the holidays so things can't be looking that good. He works as a superintendent in the construction industry, so slow winters are pretty par for the course. I'm withholding my panic about unemployment and job searching for now. At the moment I just want to get through the slow period and decide if we should bump his contribution up 2% to cover the difference between this year and last year.

I had already been thinking about upping his contribution last year. Ultimately I didn't pull the trigger because we took a somewhat ridiculously expensive vacation to spend the holidays with my extended family overseas and I realized the "extra" money I think he could stand to save each month had pretty much been eaten up by that last year. I think we will use this change at the company to motivate us to increase the contribution this year, even if it's just by 2%. The great thing about the pretax status of 401K contributions is that we'll barely feel a 2% increase. And if the economy turns around and his company brings back their 4% match, we'll be sitting at a 10% total without his paycheck changing at all. Maybe one day we'll even be able to get close to that max!

Here's to a better 2011!

Tuesday, January 4, 2011

How I Manage My Budget

I started tracking every penny I spent in April 2009. I didn't use any fancy software to do this. I just created an Excel database and have a tab for my checking account and each of my credit cards. I keep track of my balance and estimate purchases or charges for the year so that I can track whether my income will cover my future bills.

When I started saving and contributing to my Roth IRA in earnest, I added these future contributions to my estimates to make sure I knew how much I'd really be able to save. When I did this I started to wonder why I hadn't been saving before. If my income and expenses left room to contribute to savings, why didn't I already have a lump of money sitting there at my disposal? The obvious answer is I'd spent it.

I decided another column needed to be added to my spreadsheet - a spending category column. I created a bunch of category names. The Comcast and T-Mobile bill were easy - I named them Cable and Phone. The amount I spent on these each month was fixed, so I already knew my extra money wasn't going down the tube there. It was the categories like Gas, Groceries, Coffee and Travel that I had lumped together in my spreadsheet as an estimated miscellaneous charge every month, but that I was obviously overspending on. When I added all of these charges up for the past year I was shocked by how much more than my estimate I was really spending.

My first problem is that I over estimated how much my miscellaneous spending could really cover. I didn't worry about how much I spent when meeting a friend for happy hour or coffee because it wasn't something I did often. Or a new pair of Paige Jeans? No biggie, I hadn't bought clothes in awhile. I assumed that some months I was going to go over my miscellaneous budget, and other months I'd be under and that it would all even out in the end. I didn't track any of this spending, and I didn't set limits on any of it.

I decided that I needed to take a serious look at my miscellaneous spending, figure out a realistic number for all the miscellaneous things I needed throughout the year, and then start tracking those purchases monthly so that I'd know how much I could continue to spend. My miscellaneous budget broke down like this:

  • Gas
  • Groceries
  • Coffee
  • Drugstore
  • Clothing
  • Travel
  • Presents (birthdays, Christmas, Mother's & Father's Day for my family)
  • Miscellaneous 
The Miscellaneous Category was to include things like dinners out, pet store purchases (because the cat's got to eat too!) and trips to Ben Franklin. It's a little broad, but on everything else I could estimate a pretty accurate figure. On the things that I couldn't I lumped them all into Miscellaneous, took a look at my savings goals, and allotted an amount I am allowed to spend on miscellaneous items each month that allowed me to meet those savings goals. Everything in Miscellaneous (other than feeding the cat) is non-essential. If I can't keep my purchases within my alloted limit, then I can't buy it.

At least that's the theory :) I started tracking each of these categories every month to make sure that I met my goals. On most of them I did. On a few I saved a few dollars, and on some I overspent. It made me take a closer look at my grocery shopping habits, which were pretty easy to get under control. As you might have guessed, the miscellaneous category has been the hardest to keep under budget. But I think the longer that I track it the more I'll get it into my head that I can't just spend money on anything I want. If I do that, it really won't all balance out. And if I overspend one month, then the next month I'll have to do without.

Monday, January 3, 2011

About PigPennies

My husband would call me a penny pincher. His idea of saving for the future is putting away a big chunk of money when it becomes available - like say a bonus. Personally, I don't think any money really gets saved that way. It's easy to spend money when you have an unexpected windfall, or when you suddenly have more than you did. It's not so easy to worry about it and sock it away. I like to save regularly, whether it be putting a little bit away each month or every paycheck in a Roth IRA or 401K, or saving .25 cents at the grocery store on one brand over another. Every penny counts!

I haven't always been a penny pincher. When we first met, my husband was shocked by the amount I dropped on a pair of sunglasses without even thinking about it. When you're young and making money at your first real job it's easy to not think about your spending habits and live paycheck to paycheck. But I've gradually grown more responsible, and I'd like to think of myself as fairly frugal now...and still working on it.

I like to earn every penny I can, even outside of my regular paycheck. I've been using Ebates on any and every purchase I can for a couple of years now. It helps ease the pain of my Nordstrom habit (like I said, I'm working on it!) I also started using FusionCash and InBoxDollars to make a little extra money. And because a penny saved is a penny earned, I work hard at keeping our bills down, which means analyzing our usage, looking for better deals, and keeping a careful eye on our credit to make sure we pay the lowest rates possible on our loans. It also means my husband had to give up eating out every day and start taking my (delicious) sandwiches to work instead.

I've learned a lot and gotten great advise from a number of the blogs I read. I hope to share some of that knowledge here on PigPennies, and to keep learning every day. It feels great taking control of your financial future - way better than the way a pair of $300 sunglasses makes you feel :)
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