Category Archives: money management

Life without a credit card

In the distant past, I wrote a post about shopping online without a credit card. At the time, I recommended Vanilla Visa gift cards; these cards come in denominations of $25, $50, and $100, and can be purchased in many places, such as CVS Pharmacy.

I have come to decide that these cards are NOT the way to go. A big disadvantage of the Visa gift card variety is that they are only good for the face value, and cannot be reloaded. Add to that a steep initial purchase price, and the cost-effectiveness of using the card goes way down. The environmental impact of all those disposable plastic cards is also a concern.

Since then, I have been using– and highly recommend– the Wal-Mart Money Card. Say what you will about Wal-Mart (and I’ll probably agree with every criticism you might have), but the Money Card has changed my financial life.

The Wal-Mart Money Card has many advantages over the “single use” cards:

  • A debit card that can be used anywhere Visa is accepted
  • Card is printed with your name
  • Reloadable
  • Direct deposit for paychecks and income tax refunds
  • Convenient bill-payment service
  • Low fees

Using the Wal-Mart Money Card for direct deposit and bill-paying has made budgeting so much easier… and no more weekly trips to the bank to cash paychecks! Most important, I am only spending what I actually have– no credit card debt or hassles.

Do yourself a favor and check out the Wal-Mart Money Card. You may very well decide it is the right choice for you.

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Filed under budget, budgeting, cash basis, credit, credit cards, frugal, money, money management

Home Economics for the 21st Century

If my Google Reader inbox today is any indication, there seems to be a movement calling for schools to reinstate Home Economics classes.

This article appeared in the Journal of the American Medical Association:

Bring Back Home Economics Education (pdf file)

I absolutely agree that bringing back a revamped version of Home Ec is a great idea. Now, I suspect Home Ec went away as an understandable reaction to the gender role stereotypes of the 1950’s and ’60s.  There is often a fine line, however, between reaction and over-reaction. Reflexively swinging to the opposite extreme rarely solves a problem. If anything, it creates new problems.

Feminism, as I subscribe to it, is simply a state of independence– being able to take care of yourself, with or without a man. That may be oversimplifying (and probably to some, underestimating) the matter. Nevertheless, “taking care of yourself” without a doubt includes being able to feed and nourish yourself, as well as manage money responsibly. These were the two pillars of traditional home economics.

Even more than before, parents and caregivers today cannot be expected or relied on to teach children how to prepare healthy meals. Many parents never learned to cook and instead rely on restaurants, take-out food, frozen meals, and packaged food as basic fare. Many children seldom experience what a true home-cooked meal tastes like, much less see what goes into preparing it. (Alice H. Lichtenstein and David S. Ludwig)

Am I saying that feminism necessarily means malnourishing yourself and your children? Not at all.  But boasting the inability to cook as some sort of feminist merit badge strikes me as foolish, that’s all.  It is something women should think about, at the very least.

There may be other factors contributing to the widespread inability to cook healthy meals at home. In the absence of home cooking, for example, heavily processed convenience foods have stepped in to fill the void… and to fill stomachs. Far be it for me to suggest some nefarious food industry conspiracy behind this. I’ll just say that for consumerism to work as a way of life (as it has in America for some 60 years), it has been necessary to discourage responsible money management and to encourage poor eating choices.

Just think about the long-term benefits of teaching young people how to live healthy and sustainable lives:

An informed generation of children may also influence the eating habits of US families, just as tobacco education causes some students to discourage their parents from smoking. Ultimately, as this generation of school-aged children and adolescents reaches adulthood, they may serve as positive role models for their children and, through their longterm purchasing habits, ensure healthful food choices are readily available in homes, supermarkets, and restaurants
throughout the country. (Alice H. Lichtenstein and David S. Ludwig)

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If time is money, then I’m less frugal than I thought!

Looking at my schedule for the coming semester, I suddenly came to a harsh realization:

I’ll really need to manage my time very carefully if I’m going to make it to graduation!

Yes, I’ll be graduating in December with my Associate’s degree in Liberal Studies. After that, I’m transferring to the university for my Bachelor’s in Media Writing.

The next few months will be a crucial time for me… and time itself will be crucial!

I’ll be taking six classes, working in the library part-time, caretaking at home, writing several blogs, working on other writing projects, reading close to four hundred different blogs, hopefully having something resembling a personal life…

After spending the past few days keeping track of how I actually spend my time…  I realized I waste a lot of time! Now, I’m all about living a life with broad margins (as Henry David Thoreau once wrote), but I’ve been seriously out of control! There’s really no excuse for playing twenty-seven consecutive games of Snood. That will not work when I’ve got six classes’ worth of papers and projects to do!

What I really need is to budget my time as frugally as I do my money!

Just as in learning to control your money-spending, it will take great self-discipline to rein in my rampant time-spending. I need to re-frame time as being just as valuable as money– Time is something that should be managed carefully to maximize its usefulness. Obviously, the analogy only goes so far– you can always make more money, but you’ve only got twenty-four hours in the day, and that’s it. Still, a subtle change in perception can make a huge difference.

Anyway, I’ve been working on an Excel spreadsheet, similar to my financial budget, to portion out my hours as if they were dollars. I’ll post a screenshot when it’s done.

I know I can stick to a money budget…. but can I stick to a time budget?

Stay tuned for updates….

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I demand my dollar-fifty-two!

Back-to-school shopping time for Christine!

This week, OfficeMax has their 15%-off-everything-you-can-stuff-in-a-paper-bag promotion going on.

It’s a standard sized brown paper grocery bag, and on my shopping safari yesterday I came nowhere near filling it. It can hold a deceivingly large volume of small pricey impulsive things, which is the nefarious plot that lies below the surface of the promotion.

In fact, I only bought about $10.15 worth of various things– a package of highlighters, some index cards, two three-ring binders (good price on the Avery “Durable” ones), a pencil pouch (so I can easily find my stuff, instead of digging around in my backpack for my eraser or pencil leads), and who knows what else. Restraint was used, anyway.

I pay for my loot, and check the receipt before I leave.

And do the math in my head, just to be sure.

There’s no sign of my 15% discount!

The whole ritual of putting-things-in-a-paper-bag-and-get-a-discount was the point of my visit!

Still overpriced, even at 15% off… but oh well.

I went back to the cashier and (sweetly as can be) pointed out the error.

She apologized and gave me my one dollar and fifty-two cents.

I felt a little silly, but I lived up to my end of the contract– I put things into a bag as they required!

Besides, that $1.52 could buy me several ounces of gasoline.

MORAL OF THE STORY:

Always, always, always check to make sure you get any discount you’ve been promised!

Think about the big picture: If 100 people per store, times 1000 stores in the country, don’t get their  $1.52 discount, that’s $152,000 that Office Max has stolen from the people of America.

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Budget vs. Lifestyle

Let’s talk a little about budgets and income.

Your budget (and you do have one, right?) consists of:

  • Income
  • Expenses
  • Savings

In a zero-based budget, no income goes unaccounted for.

[ Income – (Expenses + Savings) = 0 ]

Let’s say you’re cruising along with your nice zero-based budget, and suddenly your income goes up? Let’s say you get a raise or promotion at work, or maybe you take a part-time job to make a few extra bucks. Could this actually be a potential problem?

But that’s a good thing! Well, sure it is, and congratulations! For smart people, things won’t change too much. The extra money will mean extra savings, a bigger emergency fund, a thicker cushion against the slings and arrows of life.

For others, however, that extra cash will represent a potential lifestyle upgrade. It’ll go directly into the expenses (new car, nicer home, more stuff, etc) portion of the budget, and the savings will stagnate. The frugal instincts may weaken, and soon it will feel as if the raise never even happened.

We see this a lot with recent college graduates in their first real jobs. They’ve been living like poor students for the past four years, and become intoxicated by their first decent paychecks. And so they jump right into a spendy lifestyle they really have no business having…. at least not until the student loans are paid.

Now, what about the folks lurching through life without a budget or any sort of spending controls? That extra money will fix everything, right? Not necessarily. Habits don’t change that easily. If your spending is out of control at $20,000 a year, it will probably be that much more out of control at $30,000.

The smart person will maintain the budget, increase the savings, and keep moving along according to their goals… you do have specific goals, right?

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Is your sense of entitlement making you poor?

I remember my dad often saying of my sister, “She’s got a big a$$.”

He didn’t mean that she literally had a large rear end, because she most assuredly didn’t. No, this was his vulgar way of saying she saw herself as a princess. You see, a lowly chair wasn’t enough for her; only a throne would do. Her delicate, royal tushie needed plenty of room, plenty of luxury.

A lot of people have a similar sense of entitlement. But where does it come from?

Sure, a person brought up in a wealthy home may be accustomed to the finer things, and then go through life trying to continue that lifestyle. On the other hand, a person who grew up in a poorer home may make a subconscious decision to have all the nice things he or she was denied as a child.

While these two people’s motives come from completely different backgrounds, they’re really two sides of the same coin: both have a sense of entitlement, a sense that the world owes them something.

Now, I’m all for self-esteem. There’s not much real self-esteem these days, but a whole lot of false self-esteem. That’s another rant for another day. Entitlement, really, has nothing to do with genuine self-esteem.

I recently read an interesting op-ed piece called The Unfortunate Age of Entitlement in America. The author, Anthony B. Robinson, views the entitlement problem as both psychological and spiritual.

Entitlement is the handmaiden of the ego, the sign of a neglected, malnourished soul.

The dangers here are real, if not immediate. Let’s say a person decides she wants a 2008 Lexus. Why? I don’t know. Because she wants people to view her as sexy and stylish and successful… you know, better… or dare I say it, of a higher social class. She works so hard, and she’s been through so much, and everybody at work has a nicer car than she does, and… and… and… well, she deserves it, by golly!

Now let’s say her financial situation is better suited to a 1999 Toyota. There’s nothing wrong with an older Toyota, of course, as long as it gets her to and from where ever she needs to go. If it’s paid for, even better!

Whoops! Too late! She’s just signed away her life to finance that new Lexus. Now she’s saddled to that huge monthly payment, higher insurance premiums, and other assorted costs. Her sense of entitlement has just put her deeply into debt.

How much status do we place on things? I’ve been a vegetarian for ten years now, and I often come across people who can’t believe I would intentionally eat a meal of rice and beans. To them, prime rib or steak is the ultimate meal, and anything less is for peasants.

Adopting a frugal lifestyle can be an incredibly difficult thing for some people. To a person who feels entitled to having everything he wants, when he wants it, the thought of scaling back must be terrifying. The way our economy is going, though, it’s becoming more and more necessary… and not always voluntary.

Think about your own lifestyle. Are there things you absolutely wouldn’t cut back on or give up… not because you couldn’t live without them, but because you’d be too embarrassed for others to see you “coming down” or “lowering” yourself? Are there things you spend too much money on (gifts, meals, entertainment), because others expect it of you?

A lot to think about, I know.

RECOMMENDED READ:

The truly wealthy don’t always live the wild, gaudy lifestyles that we’ve been led to believe. Check out The Millionaire Next Door, by Thomas J. Stanley & William D. Danko.

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Rough times: just what we needed?

In one of my past careers years ago, I worked for a small company which also employed a delightful retired gentleman. He worked as a courier, making deliveries and pick-ups between our two stores and various local vendors and customers. In his working life, he had been a barber, and even well into his eighties his hands were rock-steady; out of love and friendship, he treated my bosses to free haircuts.

John had been around for most of the 20th century–  born during World War I, came of age during the Great Depression, and served in World War II. I always respected his wisdom, as crude as it might sometimes be.

Like many people who lived through the Great Depression, John had a very conservative attitude towards finances. He always deplored wastefulness, valued self-reliance, and saved every penny he could. John saw his beloved nation slipping out of control with greed and consumerism. He often told me that America badly needed a serious wake-up call:

“Sweetheart, what this country needs is another Great Depression. It’ll teach people how to live right.”

While I certainly hope things don’t ever get that bad again, I have to acknowledge the truth in his commentary. Many people do change their habits when times get tough. In the past few months, as our economy has gone into a recession, the lifestyle climate has definitely changed. Frugality, thrift, and self-sufficiency are definitely becoming hot topics these days.

I have to wonder, though: will a shift towards frugality last, or will it just be a temporary response to the economy? Will the scars need to cut as deeply into our consciousness as a full-blown Depression in order to create lasting change? Do we even want that?

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