Managing Money

I've been slowly emerging from my funk this winter and one of the things that I now feel like I can cope with is our finances.--read more

Household energy consumption is a topic of increasing interest among homeowners. This is for two reasons: rising energy costs and global warming.--read more

Im sure some of you know about this already but just in case any dont and would be intrested, the last few months I have been subscribed to this group called freecycle.--read more

You've probably gotten lots of advice over the years on how to save money on clothing: Go to garage sales and thrift stores; buy at certain seasons; watch for sales. (Remember, we have a virtual garage sale here that people really need to use more. If you've got something to sell or swap, post it.)

But the easiest way to save money on clothing is to not buy any. And the easiest way to not buy any is to make do with what you have. Take care of it and stretch it out. Here are some ways to do so that you may not have considered.

1. Use a clothesline. Are you sick of me and clotheslines yet? I confess. Clotheslines make me irrationally happy, like sugar cubes--I love sugar cubes, I don't even have to use them, just having them in a sparkly heap in a bowl makes me happy, it's weird. There's something about clothes flapping on the line, too, that cheers me.

If I were rational, it'd be the knowledge that using a clothesline instead of a dryer saves wear and tear on our clothes. The lint in the dryer trap? That's bits of your clothing that have been worn off by the tumbling and the heat. Same with the pilling you see, especially on synthetic and synthetic blend clothing. And dryer heat ruins elastic, so you'll have to replace your underwear more often. I'm not kidding when I say that dryers slowly erode your clothes. Even if you live in an apartment or a place where clotheslines are illegal (speaking of irrational), there are ways to air-dry your clothes without one.

2. Refashion what you have. You don't have to be an expert seamstress, or any kind of seamstress. A few nips and tucks, some fabric paint, dye, iron-on appliques, embroidery--there are lots of ways to take what you have and change it round, including ways to make children's clothes out of adult clothes.

My absolute favorite, though, is...

3. Wear an apron around the house. Aprons are suddenly chic, and I blame Japanese craft books, myself. I've always worn an apron around the house--I can't even do the dishes without wearing one, it's a psych thing--and I'm thrilled that pretty ones are available and in style again. Especially because my old aprons are increasingly ratty and I want some new ones (ha! they're still cheaper than new clothes!). They really save your clothing. The ones I favor are full bib aprons, not half-aprons, but that's because I'm built like the Queen Mary. Full-prowed, don't you know. Stuff ends up mostly on my chest, but if stuff ends up mostly in your lap, half-aprons will do.

If you have daughters, get into the habit of pinafores. When Josie and Lou wear theirs around the house, they don't get half as nasty as they do without them. Well, their pinnies get nasty, but their clothes stay in pretty good shape and I'd rather wash the pinny.

I'm sorry to say I don't have a similar recommendation for boys. If you do, please share!

I talked last week about how John and I started our life together financially: To sum up, in a pickle! But we pulled out of it eventually, at least the parts we could control. If we hadn't been as prudent as we have been, we'd really be in a mess now, with all the unexpected employment and health issues we've had in the last five years.

We've managed it with budgeting. Not even strict budgeting--just having one, and keeping track of how much is going out (and where) and how much is coming in, has made a huge difference. It makes us stop and consider even smallish purchases.

It took us a while to get to where we were comfortable with the budgeting process. And we had to work through three common barriers to budgeting that many families face.

Barrier #1: "I Hate Budgets"
If you're going to do this, a positive attitude about budgeting is essential to your success. If you think of budgeting in negative terms (such as a financial diet, financial handcuffs, restrictive, penny-pinching, a sacrifice, etc.), you are doomed.

We were too, until we put in place a tactic I learned at a 12-step program. We don't call it a budget, we call it a spending plan. Well, we did until we got over that hump. We've been at it enough now that we call it a budget and don't think twice about it!

But it really helps to recast your budget in your mind not as what you can't buy, but as what you CAN buy, and what you WILL buy if you manage your money. A spending plan is a means to an end--a way to achieve your dreams and goals. Postponing the instant gratification of spending all the money you earn is worth the rewards you will earn in the end.

Barrier #2: "You Can't Make Me"
If you're doing this for anyone else, it won't work, either. Don't budget to get your partner off your back, for instance. Over time, external motivators will wear off. Following the terms of a debt repayment plan with a consumer credit counseling agency, complying with an agreement made in bankruptcy court--these are not bad motivations, but they are external pressures and will probably not be easy to maintain over time. The best motivations are internally generated. Do you honestly believe that budgeting can help you meet your goals? Do you even HAVE goals?

That's where John and I started. We wrote down what we really wanted out of life, even the "impossible" bits. Chances are they'll remain impossible, but we have goals now that we didn't have before, and they help us as we plot out how to spend our money. It's also helped our marriage. We know more now about what's important to each of us than we did before we had goals.

Speaking of impossible bits...

Barrier # 3: "Pinch! Spend! Pinch! Spend!"
When we first started working on our spending plan, we went through a period of "financial anorexia." We were afraid to spend anything. And then, just as with an eating disorder, we would "binge." (I must confess here that this was mostly my problem, though John has had his moments.)

What do you expect to gain from instituting and following a spending plan? Do you think that you can magically transform your spending habits after a month or two of tracking expenses?

The reality is that budgeting is an endurance event--those who stick with it, through thick and thin, will come out ahead financially. Do not expect miracles. What you WILL see if you stick with it is steady, measurable progress towards the goals that really matter to you.

This is the barrier that takes faith. For us, getting through this stage took time, and a steady belief that sticking with our spending plan would see us through. We knew where we were going; all we had to do was look at the spread sheet and there was the path, all spread out for us.

Why your family needs a spending plan
We got serious about working with our money flow when Josie was born and my work hours were curtailed. We kept at it after we came into some very good fortune, and when that fortune left us. Budgeting is not just for poor folks; it's for everyone. The worst mistake you can make is to wait until you think you need a budget. You need one now.

Hey kids! It's another MotherTalk blog tour!*

When John and I first met, neither of us were terrific with money. A previous relationship left him unable to have a checking account--she bounced a bunch of checks on their joint account and left him with the clean-up. And I had recently come to grips with a spending problem that sent me to a 12-step program. It was an interesting seven years waiting for his checking privileges to return. We paid cash and money order for everything. His troubles kept us from using checks and mine kept us from using credit!

Cut to the present. While we're not rich, we're in much, much better shape than we were 15 years ago. For instance, we have a checking account. Just this evening, in fact, as we contemplated our current money troubles--unemployment--we were both satisfied that despite all the setbacks we've experienced in our time together, we've gotten stronger financially. We don't have much, but what little we have we've managed well.

In a way we were lucky. When we met we had both just faced financial troubles and so had our "money cards" on the table. We learned to talk about money right from the start.

Most couples don't. And that's who "The Big Payoff" is for.

The most important chapter in the book is the the very first one, dealing with budgets. (I was taught in that 12-step program to think of a budget as a spending plan instead; if you have a negative connotation for the word "budget," try substituting that phrase for "budget.") If you can't start working within a budget, and if you can't bring yourself to talk about money, the rest of the book won't help you and in fact your marriage is very probably headed for trouble.

"A budget helps facilitate communication," says author Sharon Epperson, and John and I agree. Our first steps towards making a budget were actually rather silly. We'd sit on the front steps drinking coffee and talk about what we'd do if we won the lottery. Since we never bought tickets, it was moot! But it did teach us what we each thought was important, and what our dreams were.

Epperson's approach is more common-sense. She suggests talking about money before arguments break out about who's spending frivolously, perhaps in a monthly meeting. (At our house, we have "spread sheet time" about every two weeks, when we sit down and figure out what's coming in, what's going out, what's left over and what to do with it.) Learning the difference between your needs versus your wants, she says, is critical. This is where money leaks away from people, and that certainly was our experience.

Once you get past the budget, Epperson goes through retirement savings, college savings, real estate, health and disability insurance, life insurance and estate planning. Her advice on college savings is particularly good, broken down by income level with strategies for maximizing the amount of money you can put aside for higher ed.

There is nothing here, though, that will lead to either instant riches or instant happiness. It takes thought, planning and discipline to work through your finances, and it takes trust and openness in your marriage. Epperson doesn't offer an easy way out, but she does offer a thorough and entertaining guide through the forest.

For John and me, right now, there isn't much we could take away from it, though. We, like so many other families, are just barely scraping by, and it's not because we're drinking $10 in lattes a day or putting Disney World vacations on the Visa. We've worked hard to clear our debt and stay debt-free (one of Epperson's commandments--stay out of debt), and that's about as far as we've gotten. The in-depth advice, while not aimed at the rich, is for families with more income than we have.

If you and your spouse have a hard time talking about money, or if you've just never really thought about it that much, this is the book for you. If you are easily bored when the subject of finance arises, or if your partner is, this is the book for you. And if you've got a wedding present to buy for a young couple, you could do much worse by them than this book.

*What that means is, I got a free copy of the book and a $20 Amazon gift certificate for reviewing it, in full disclosure.

TNH's edition of "The American Frugal Housewife" from 1832 is now available in wire-bound paperback. It's $9.95 from CafePress. The ebook is available here at TNH for $1.95, 10% discount for members, 75% discount for subscribers. (Discounts don't apply to paperback editions.)

I've written here before about how inspirational I have found the Dervaes family of Pasadena, CA, which homesteads on a large city lot. Well, meet a new inspiration, No Impact Man, who is trying to live in extreme simplicity in New York City:

My wife Michelle and I decided, before jumping in at the deep end of this year-long project, to try no impact living as an experiment for a week. No garbage. No greenhouse gasses. No toxins. No water pollution. No air pollution. No electricity. No produce shipped from distant lands. No impact. Or so we naively hoped. ...

The fact is that if city dwellers can’t learn to live without reducing their ecological footprint then we’re in deep trouble because most of the world’s population now lives in cities. Saving the world can’t be left to the country bumpkins. It’s an urban problem. ...

In specific terms, the challenge is to take a year to develop and live a no impact lifestyle. Our approach will be to research our ecological options and run down our damage in one area at a time—solid waste, transportation, energy, for example. Our aim, over the course of the year, is to do no net harm to the environment. We’ll wind down in stages.

A brave experiment and engagingly written. I'll be watching them to see how they do.

Living simply and affordably is a goal of mine. So when I saw some links to frugal sites here, I went with great interest and found some good information and good writing, which was nice.

One of the things I've been thinking about it the relationship between frugality and parenting style. A lot of things that I do with the girls I don't necessarily do because it is cheaper (although that is often true) but for other reasons.--read more

I haven't done one of these in a while, so here is some linkiness for a Saturday:

Conservation begins at home. Of the top five industrialized CO2-emitting nations, citizens of the US can do the most on their own to reduce global warming. Translation: What you do DOES matter, whether it's turning your thermostat down or replacing all your light bulbs for compact fluorescents. Plus also? Massive money savings. It's more than a personal virtue, folks.

Which brings me to the latest TNH poll: How important is energy conservation to your family?

New diagnostic technique may improve breast cancer detection: "In a small study of 80 women, the technique — called 'elastography' — distinguished harmless lumps from malignant ones with nearly 100 percent accuracy." Best of all, it's a non-invasive technique--no painful biopsies with long waiting periods for results. The researchers need to look at a larger study group than 80, but here's crossing our fingers; this could save a lot of women a lot of pain, and lead to instant diagnoses of malignancies. Every day saved is life saved when it comes to cancer.

I've got a temp job, contigent on passing background checks, at a call center for a catalog company.

I'll be spending an insane amount of time on the light rail train to and from work, but the plus side on that is that I'll undoubtedly get all my holiday knitting done that way.--read more

Waaaaahoooo! OK, so I am in a good mood today. See, I've been searching for a new, well-made bag to tote all my junk (read: baby stuff and mommy stuff and involved citizen stuff). So, as I was shopping, I found this awesome leather bag with a 10 year warranty, sounded good.--read more

OK, I have a question to pose, and I hope that someone on here has had experience with what I'm asking. Our community has been thinking of starting a community currency (for more info, click http://www.michianacurrency.org) and I'm wondering if any of you have had experience using a community currency. If you have any successes, failings, etc that you'd be willing to share with me, so I can bring them to the attention of the committee that is working on it. It seems to me that if we go into this with ours eyes open, knowing what may go wrong, we'd be better prepared to deal with it.--read more

Hi!
I've been having a sort of clash with my webhost (cost, bad service, etc). I've been shopping for a new one, and I realized (for some reason, just barely-duh) that this site has to have a host, and others of you who have your own sites must be hosted somewhere!! So, I'm asking if there are any that you'd recommend, or places I could look to find a good one.--read more

--A reader at Get Rich Slowly asks JD, Why Bother with Personal Finance? After all, some of the stories he tells of people trying to be responsible don't end all that well...

--Oh, to be a poor little rich girl: Parents harass a hapless high school coach. Why? Because their little darlings are sitting on the bench. It's like the old saying goes--these people were born on third base and think they hit a triple.

--Firefox 2.0 is here! joyous squeal!

Two via Lifehacker:

--Rebates are scams. And you know it's true.

--Free iTunes Downloads: This blog exists only to track all of iTunes' free stuff. I subscribe to it in RSS so as not to miss goodies. Sorry, overseas/Canadian folks, it's just us Amurricans.

Today's good stuff:

--Fellow Portland blogger Get Rich Slowly summarizes an Ask Metafilter post on when it pays to make stuff from scratch. (I think they miss the point about knitting socks from scratch; it's not just the superior materials and fit, it's an enjoyable hobby that results in something useful.)

--Eliminating Lead Poisoning over at Treehugger talks about the new point of care testing device that turns testing for lead poisoning into a simple finger stick with results in three minutes. This could revolutionize public health.

--8 Ways to Save for a Quick Emergency Fund. Pretty self-explanatory. via.

Just dumpin' links here you'll enjoy.

--The Gentle (and Possibly Profitable) Art of Complaining: Don't trash broken stuff; send it back. Read this article now. You may end up saving a ton of money.

--Treehugger TV: Urban Homestead. Video of the wonderful people behind the Path to Freedom project.

--Paging Ray Bradbury: A house that optimizes itself. I kept thinking of that house in a Bradbury story that ends up defending itself from the parents that want to unplug it...even though this house looks completely benign..no holograms, anyways...

--Grocery Warning: The Seven Most Dangerous Ingredients in Conventional Foods. Sodium nitrate is the one I have to watch out for the most; it affects my medication. The rhyme the butcher who parts out our yearly pig taught me is "nitrites are right, nitrates we hate." Ignore the book pitch.

--Wee Wonderfuls: Make-a-Long Story. Read a story and make the dolls that act it out. Just go look, she explains it better.

The 39th Festival of Frugality is up! Well worth reading.

Since we're on the subject, take the Local Food Challenge:

From September 12th through September 18th, check to see where the foods you eat are grown. Measure the amount of each food. Measuring by weight is best, but if you do not have scales, please feel free to measure in cups or by metric volume. As long as you stick with one measurement method for everything, you will be able to evaluate your information. ...

1. How much of your food is grown within walking distance (3 miles or less)?

2. Are there any food groups central to your diet that come from far away?

3. If you altered your shopping to get as much local as possible, how did this affect what you ate or the cost? Did you like the taste of any of the items more or less than usual?

4. What items from more than 3 miles away could be grown within the 3 miles? 50 miles?

5. Did you discover any local fresh or prepared foods or markets that you hadn't tried before?

6. How much of your food did you eat fresh/raw (without cooking)? (Note: For the sake of your intestines, don't try to change a mostly-cooked diet to an all-raw diet at one time.)

7. If you have a nutrition program, did the local foods meet your overall nutritional needs?

Personal finance is non-political:

Even if you’re bothered by the blatantly liberal perspective of The Two-Income Trap, you can glean some useful information. You may think religion is a curse, but if you suffer from back-breaking debt, there’s no better starting point than Dave Ramsey’s The Total Money Makeover, Bible verses and all! Ignore the liberal rants. Ignore the Bible verses. Focus on the financial advice.

Amen.

Get Rich Slowly shares Some Thoughts on Discouraging Materialism in Children, a goal I wholeheartedly support. (Note that I am not the "Lynn" referenced in the post.) We try like hell around here to make our kids skeptical of marketing and advertising in all its insidious forms, and we try like hell to model behavior that doesn't make shopping a "hobby." How can shopping be a hobby? I never understood that one...

Financially we're at a crisis and I must return to the workforce. We absolutely have to have another income right now so I'm doing job searches and school searches at the same time.

I'm sick to my stomach and my heart is aching that I have to relinquish my job as homemaker/at-home mother and give up the plans to homeschool DD. But for DD I think this may actually be better for her. She's desperately lonely as a homeschooler. And I do mean desperate. My miscarriages are even more painful to deal with when DD goes on and on about how much she wants a brother and sister, about how her friends have a brother or a sister to play with, on and on.--read more

This isn't hard for me since I rarely buy clothes anyway so here goes:

I, Lynn,

Pledge that I shall abstain from the purchase of "new" manufactured items of clothing, for the period of 4 months.

I Pledge that I shall refashion, renovate, recycle pre-loved items for myself for the term of my contract.

I Pledge that I shall create and craft items of clothing for myself with my own hands in fabric, yarn or other medium for the term of my contract.

I Pledge that I will share the love and post a photo of my refashioned, renovoated, recycled, crafted or created item of clothing on the Wardrobe Refashion blog, so that others may share the joy that my thriftyness brings!

---

That's the Pledge itself; I'm adding:

I further Pledge to abstain from purchases of new-to-me fabric and yarn.

THAT's going to be the hard one.

Getting rich is easy, but like most easy things, it's not that simple for most folks--except it is:

Budgets can be intimidating, especially to somebody just beginning to gain control of her personal finances. So many things to track, so many concepts to learn. And it’s all so tedious. In The Only Investment Guide You’ll Ever Need, Andrew Tobias offers the following simple yet effective budget:

1. Destroy all your credit cards.
2. Invest 20% of all that you earn. And never touch it.
3. Live on the remaining 80%, no matter what.

Though Tobias is being glib, this is actually an excellent system. If you can develop the discipline to follow just these three steps, you can become rich.

See? Simple. Really.

The thing you have to get your