Category Archives: Savings

Fun Free Podcast

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I’m not a big fan of talk radio (I find it too stressful). But I do like to listen on certian subjects, especially when the host is positive. I’ve found Dave Ramsey for free on iTunes and I’ve subscribed. It’s just one hour of his three-hour show, but it’s very educational and informative. My favorite part of the Dave Ramsey show is when people call up to scream “I’m Debt Free” when they pay off their debts (including their mortgage). It makes my day to hear people do their debt free scream. He also has some really funny expressions like “as long as you’re on this cabbbage truck, you might as well ride it” and “it’s time to paint or get off the ladder.”

Also, I’m subscribing to the Daily Audio Bible on iTunes, which is a “read the Bible in a year” kind of program. I’ve found them both great to listen to as I wash the dishes and do fold the wash in the evening.

This just in: Shocking frugality

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Wow. Here’s an article from my local news station about families getting really frugal and ::gasp:: doing their own house cleaning and lawn mowing.

Making the article even more comical, the subject is a stay-at-home mom who ditched her maid service, and stopped sending her husbands’ shirts to the cleaners. They now also do their own lawncare. The family has even started preparing their own meals. Seriously? What was she doing before? I’m a work at home mom (running a business and writing career from home) but I also do the housecleaning and cooking (with my husband’s help, of course). If I didn’t have the chores to do and my job I’m not sure what I’d do all day.

I don’t know about you, but my kids wouldn’t even want that much “quality time” with mom! Ha ha!

For those of us who are really trying to be frugal, this is a comical no-brainer.

On the subject of washing and saving money…

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Yesterday’s post was on the subject of saving money on laundry detergent. Today that got me thinking about an older, smarter choice we made on the subject of wash that has saved (and cost) our family a lot.

When we first bought our home five years ago, it had a five-year-old washer and dryer. Within a few months of moving in we discovered a wood rot problem that meant we had to replace an entire bathroom–right down to the studs in our 2nd floor condominium. It was heartbreaking, costly, and not covered by insurance.

Just a few months later, as we were leaving on vacation, the washing machine made a terrible noise. We called in a repairman and he gave us the news. “It’s dead.”

That is really the short story of what started our debt journey. An unexpected/unplanned bathroom repair after sinking EVERYTHING into the purchase of our home and an unexpected failure of a major appliance.

We had to replace the appliance. A busy family of three working all the time–and the nearest laundrymat is quite far. We bought a washer on a credit card, and delivery of the new one, and disposal of the old one.

One year later, as we sit down to dinner, black smoke rolled out of our laundryroom. Fire in the washer–of all places. The motor burned out.

We called a repairman who has a one-hour minimum charge of $150. Within minutes he’d told us that the machine had been damaged beyond repair.

My husband was especially resourcful in how he tackled this news.

“You’ve got to charge me for an hour right?” he asked the repairman.
“Yep.”

Rob made him a cup of coffee, pulled out the laptop at the kitchen table and had the repairman buy third washing machine. Without regards to price, but finding us something that we will never have to fix again.

This wonderful repairman navigated us to the best vendor, the best machine and told us what to look for if we didn’t choose that machine. We “comp shopped” around to other vendors, and he was right. (Who would know a washer better than he?).

We’ve now had the “new” machine two years and we love it. It runs smoothly, cleans well, and saves us a fortune on detergent and water because it’s a front-loader. Our energy bills are smaller too.

That’s not all–the repairman took a look at our dryer and told us what parts would wear out next and told us how much they would cost to fix. It turns out the main belt in the dryer was just about to go (hence the squeaking). The cost of another service call and the belt would have been the same as “adding on” a dryer to our planned order for the replacement washer.

Rob also got opinions on the dishwasher we knew was on borrowed time. We saved up another year and bought the recommended Bosch dishwasher and couldn’t be happier.

Three new appliances, and one consultation with a professional.

By the way–none of the three new appliances have ever required repairs. All came with excellent warantees, and all are kid-friendly.

Saving BIG MONEY!

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I do at least four loads of wash per week. This week laundry detergent was on the list and I was dreading buying it. I don’t budget separately for this but lump it in with our “food” budget in Mint since it comes from the grocery store.

I found a recipe in Jim Bob and Michelle Duggar’s new book “The Duggars, 20 and Counting” about how they manage their very large family. The recipe will last my family two years, assuming 4 loads per week, and cost about $3.18 to make. I made it this morning and it took me about 20 minutes. Not too bad.

The book is great, with many cost-effective meal recipes and some great stories about living in a large family, being efficient and living without debt. They even built their 7,000 sq ft custom home cash. I’m impressed and inspired.

Here’s the laundry detergent recipe:

1 bar fels-namptha soap (grated) $2.12 at Winco
1 cup washing soda (not baking soda, which is different)$5.34 at Winco
1/2 cup borax $2.12 at Winco.

Mix the soap with about two cups of water in a saucepan and melt it completely (it will look like clarified butter and will make a sticky mess of your pan, so don’t use an hairloom pan. I’m going to pick one up at goodwill expressly for this purpose).

Pour the melted soap over the borax and washing soada in a five-gallon container (I got mine surplus via the Industrial Materials Exchange which is a service of King County here in Washington State, but maybe your county has something similar?)

Then mix the three ingredients completely and fill the container to the top with hot water and mix again. This will make a liquid concentrate which you have to cut in half one more time to use. Use a smaller container (I’m using a canning jar) and put one cup of concentrate to one cup of water and stir or shake.

For top-loading machines, use one cup. For front-loaders, use 1/3 cup.

I’ll make a note after we’ve done some loads of wash with this method. I’ll also give some to friends and get their opinions on the stuff and ask them to post back about it. Finally, if I like it in my washer, I’m going to try the concentrate in my dishwasher.

Image courtsey: en.red-dot.org

Saving a few bucks

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I called my auto insurance company yesterday (USAA) and updated my info. Both cars are paid off, which means we can remove our “gap insurance” (the insurance that covers the depreciaion on the cars in the event that one is totaled). Also, I upated my milage. Now that I’m working from home, my mileage is cut almost in half per yer. Total savings, $4.00 per month. Snowflake!

Just my $.02 for yesterday.

A Reader’s Cost-Savings Tip!

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I love it when people read my blog, and even more if it helps them in some way. Today I got a great tip from my friend Julie. Here’s how Julie’s family saved on their electric bill. What cost-savings tips have you implemented in your house?

I had read that for every degree you turn down your thermostat you save 3% off your total bill. We tried it this winter (last years Dec/Jan power bill was through the roof) Turned down our thermostat from 70 to 65 during the day and from 65 down to 60 @ night. We just got our power bill last this week and saved a total of 15% compared to our last year Dec/Jan bill.

Julie–what are you going to do with your savings? Way to go–helping your budget and the environment!

Our five FREE steps to financial Freedom

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I’ve been trying to make the best of the permanent layoff that came my way in early December. I started a business, I’m also writing and blogging. Without commute time I find myself with a lot of free time. I’m definitely enjoying the flexible lifestyle.

One of the things I’ve decided to tackle is households’ financial situation. This was especially critical now in the face of my less-than-reliable income and a new business startup. As an “under-30” family of four, we have some debt. A couple of college educations, a mortgage, two adoptions that zapped our finances but filled our hearts. We were not in financial peril, but we sure could have been uncomfortable if we had not been paying attention when the layoff hit.

The surprise in this project was how we were able to cut our household expenditures by one-third without really trying (or even noticing, for that matter).

Armed with this new information (and cash as a result!), we rushed forth and started getting out of debt. Using only free resources from the Web and strict budgeting, we’ve paid off two of three credit cards, one adoption loan and all of the college loan. Woot! Not bad for three months, huh?

Recognizing that not everyone was so lucky as I to be laid off, I thought I’d share some time-saving and free tips to financial freedom. No scams, no catches, no hidden spam-engine. And you don’t have to download my free e-book. I don’t even have one.

Have fun, save money, spend less, retire early, and get out of debt. It’s working for us. Unless you email me, you’ll never even hear from me again. (Unless we’re friends or family of course). For the sake of easy reading, I’m breaking this into several posts. Follow the hyperlinks for a free and easy journey to financial freedom.

But please do me one favor. If you like this list, please pass it on.

Now, my family’s first five free steps to financial freedom.
1. Expense tracking
2. Budgeting/Cost cutting
3. Saving
4. Alternative Investements
5. Paying down debt (fast!)

Step 1 of 5: Expense Tracking

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Ok, I know, nobody likes to do it, and you really can’t do anything about your expenses until you know what they are. How did I finally conquer this dragon? I signed up for Mint.com. It’s a free, online banking aggregator (i.e. dashboard) for your money. It downloaded 90 days worth of transactions on all of my bank accounts and put them in one place. Egads! $115.85 spent in 90 days on my cat? Are you kidding me? You can see my earlier post about Mint here and how it works, but I’m telling you, this may have saved this family’s bacon! While we consider ourselves to be fairly frugal people, what we learned is that we simply aren’t extravagant… but we’re definitely aren’t frugal. At least we weren’t. Mint doesn’t keep your personal info, it is just shown to you through their site, so don’t fret, they won’t Twitter your Visa balance.

Bottom line: The thing I love about Mint.com is that I didn’t have to track my expenses for a month and loose four weeks of time. It took a retrospective look at what we’ve spent in the past few months and categorized it, saving time and allowing me to start slashing our expenses while I had the gumption. Result? A viable household budget on our new income in hours, not weeks.

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Part 3 of 5: Savings

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Just do it! The only savings I’ve ever really been successful at was my 401K. With a layoff nothing was being automatically withdrawn from my paycheck every week, i.e. nothing getting saved. Why save when you have credit cards to pay? Well, if you get laid off (like me) what will you pay those credit cards with? Your savings! You definitely don’t need the tax or future implications of cashing out your 401K in your 20s!
That said, I knew that to survive future hardship and meet future goals without debt, we needed to save. I learned about SmartyPig. SmartyPig is an online “transaction engine” that allows you to set your goals, and have your funds automatically withdrawn into a savings account. They also offer an excellent interest rate and the FDIC backing of a real-live bank. (And not one of those shrouded in scandal, either).

The bottom line: We’ve set up “SmartyPig” accounts online for two major upcoming expenses. Once my income becomes more regular, we’ll re-start our emergency savings there as well. Dollar for dollar, our savings rate is now higher than ever, despite the reduction in household income.

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Part 4 of 5: Alternative Income Strategies

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Try it Now! Join Lending Club.
This part of my strategy is mildly controversial and not yet totally proven, but it’s working for me and it’s a whole lot of fun. I’m going to encourage you to risk only what you can afford and give it a try. Our 401K, 403Bs and IRAs are tanking. We’ve literally lost 50% of our retirement/savings this past year. Seriously not fun because we have been very diligent during our working careers to save responsibly. I’m too afraid to try the stock market just yet, so when a friend suggested I investigate microloans, I decided to give it a try. First I put $25 on Kiva.org in a five-month loan. No problem, in five months, I get my money back and in the meantime, a nice lady in Central America is starting her clothing shop. No harm, no foul, and my interest-free investment is more secure than under my mattress or in my 401K. Thank you Kiva. But then I wondered if it was possible to make interest on these investments. Turns out, there is. I joined Lending Club and invested $100 into four loans, to prime borrowers only. There’s a risk of default here, but I invested only in prime borrowers, and only $25 in each, so there’s a pretty good chance I’ll get paid back at least most of what I leant. Also, Lending Club has a reputation for really chasing down those who owe money. Most forms of microlending have very low default rates though and as I’ve learned more about these while blogging at Prosper Lending I’ve decided to go ahead and keep investing. So far, I’m making money every day on my “microinvestment” of $100. This month, I’ve made $.60, and I have monthly payments of $3.33 owed to me tomorrow. Not bad for doing nothing. It’s like being a landlord with less commitment and no midnight maintenance calls. If you’ve got a little cash you’d like to invest (or if you need to consolidate a higher interest loan into something lower-interest) you might want to give peer-to-peer lending a try as either a borrower or investor. I love how interactive it is—I got to choose who I was investing in. Other options include Microplace (international investing) and PertuityDirect (a mutual-fund version of peer-to-peer lending).

The bottom line: diversity in your investments is good right? I’m helping someone and earning 10.89% interest right now. Not too shabby.

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