Colleges Learn to be Frugal

The New York Times recently published an interesting article: For Colleges, Small Cuts Add up to Big Savings. In one college, students in dorms competed to save electricity -- getting 25% of the savings for a party -- and in another, the university hired students to do groundskeeping in return for minimum wage and a $1,000 scholarship. What is surprising is that colleges haven't done these kinds of things before (I know I would have mowed grass for a $1,000 scholarship!). Another aspect of this that the article did not discuss is the impact on the students; today's college students, or Millennials, are frequently displayed as feeling overly entitled and spoiled. What a wonderful chance to show students how to be frugal! If only the college could save money by providing financial education to its students.

College life may look different in the not-so-distant future: Students squinting out dirtier windows, faculty offices with full wastebaskets and no phones, sporting events in which opponents never meet, and paper course catalogs existing only as artifacts of the wasteful old days.

* * *
After years of boom times that led to competition among colleges to provide more luxurious dorm rooms and student centers, some perks of campus life have gone by the wayside. Dickinson, for example, is saving $150,000 by cutting back on free laundry service for students and an additional $75,000 by eliminating free ESPN and HBO in student rooms.

This is unbelievable -- almost a quarter of a million dollars every year for laundry services, ESPN and HBO? That is quite a cable bill. This may be one of those hardships that are really better for the students than the luxury accommodations. After all, in the real world, not only is there no free lunch -- there's no free laundry, either.

Ten things to save money on...or not!

Kiplinger has a great quiz on some common beliefs about money-saving items. I got an 80% -- how about you?

Where'd TInT Go?

My apologies to my readership that I suddenly stopped posting here, but what happened is that graduate school started up again and I am swamped with homework. I do plan to report on my spending for the summer (not good!) and I also need to vent about soccer uniforms, karate instructors and the cost of veterinary care. Regardless, I plan to be back, writing again about personal finance very soon, and I also plan to do a painful assessment of how badly we did over the summer.

How was your summer? Did you save or spend?

Principles, Ideals and Relationships: Why PF and Hollywood don't mix (to recap)

I love to read J.D.'s fantastic blog, Get Rich Slowly. Not only does he have fantastic, well-written articles that come so fast it's almost too much to keep up, but he has a great readership, and looking through comments often gives me a lot of inspiration for my own, much less read blog.

After responding to a comment on his blog, I came to mine to write about it and realized that, yet again, I've left my blog for too long. I also realized that my last post might be confusing; I argue that giving an expensive gift is better than giving an IRA. I just want to say that if, hypothetically, I was a person who had $7500 to give, I would want to give someone a gift they would want, not a gift to "teach them a lesson." Let me expand on that:

First off, I've spent far too much of my life with people who give me things to teach me a lesson, whether it is political (my in-laws gave me a subscription to the ultra-conservative World magazine for Christmas one year) or religious (I have many, many Bibles from my mother). I get the principle thing, but I'd really just like, oh, I don't know, a candle? Some flowers? Or even an IRA, because that's what I'm into, and I would really appreciate it. My point is: give the gift the other person would want.

Secondly, I wanted to emphasize that the ultra-rich world of Sex and the City is not the real world. Let's not take our personal finance ideas from Hollywood! This is a pretend world that doesn't exist for most people, and we should always keep that in mind. Hollywood is not our teacher, not for relationships (who really has sex with new strangers every week?), not for ideals (like letting the guy buy the apartment), and certainly not for finance (in make-believe, you can make as much or as little money as you choose). Even the writers of the show knew they were stretching.

Last, I think it is important to find balance in life. Sometimes gifts are required in order to keep your social capital, and that social capital can be more valuable than dollars.

I am constantly in the search for balance in life and in finances, and while I am still learning, here's one thing I know: Hollywood ain't got it. And now I've done enough posting about Hollywood (there's too much in this world about Hollywood as it is) so let's get on with some posts about real finances, because that's what Tired in Tucson is about!

Sex and The City -- Fun, or bad Finance?

I went to see the new movie Sex and the City a couple weeks ago. I thought it was lighthearted and fun, just like the HBO version. It also tied up more loose ends and had a pretty decent storyline. I came home missing the East Coast and great times with my female friends.

I didn't really think about the show in personal finance terms -- I mean, that episode, where she can't buy her apartment because she spent $40K in shoes? That one did it for me. Ten years ago when I lived in Japan, I saw a lot of articles about women there who would run up $40,000, $50,000 and even $70,000 in credit card debt to buy labels, and I knew that wasn't for me. One woman even used the oven in her kitchen to store extra handbags and coats. Watching the HBO series Sex and the City after I returned home was always somewhat shocking, but it was fascinating too; I remember well Carrie saying she would go without food in order to buy her copy of Vogue magazine. Let's just say I'm a lot more food driven than that.

Nevertheless, I did think about the financial aspect of their lives. I have always thought about "how" it can be humanly possible for a newspaper columnist to make the kind of money Carrie needed to support her lifestyle (I saw a piece about the making of the series that said the writers put the $40,000 shoes episode in to show how an author could manage to buy that many shoes and still live). Of course, her apartment was rent-controlled, but I remember her maxing her credit cards on one show and thinking, gosh, what's the limit on those?

I think that Sex in the City is fun and interesting, in a voyeuristic, what-if-I-blew-money-on-fashion sort of way. As far as personal finances go, Carrie and her group aren't pillars of frugality -- nor does Hollywood paint a fair picture. Ever.

Nonetheless, some articles about finances have erupted from the pure materialism shown in the movie. The money and business section of US News had a very nice piece about making major financial decisions as a single woman -- Sex and the City meets Personal Finance, which I thought was timely, and a way to use the movie as a segue into more sophisticated information about finances. I wish I had thought more about my finances as a young, single woman (who doesn't?)

Then there are the negative reactions. That Rude Girl calls the movie a two-hour-long advertisement, but then goes on to admit she recognized every name brand there -- including the sheets! Wow. I am soooo not aware of labels, at least not to that degree. I had to look up what a Manolo Blahnik was after I first watched the series (I watched them on DVD, as I've never been one to pay for HBO).

BostonGal goes on to say that Sex and the City just isn't her kind of fairytale, and says a SEP IRA contribution would have been a better gift than the Louis Vuitton bag Carrie gave her assistant. I love BostonGals blog, and I read it nearly every day, but the more I thought about this comment, the more it fell into my "why young people ignore personal finance" bag. To give someone a gift like that is immensely practical, but for a woman in her twenties who loves fashion it would be like wrapping up a pair of practical wool socks as a gift -- nice, but not endearing. Nor would the gift of an IRA contribution teach the most essential skill -- contributing to the IRA oneself.

It's easy to look back and say, I shouldn't have done it this way. I spent $12,000 I didn't have in order to go abroad in college when I was 21 years old. Do I regret this? Yes, in a "I wish I didn't have to pay that money back" kind of way. But that trip sent ripples through my future that I simply can't regret -- it sent me to Japan, where I met my husband, changed my career path, and changed my life. You can't put a price on that.

In the quest for financial liberty, it's easy to lose balance. Sometimes a grand gesture is worth the money. Sometimes you have to take a vacation, or visit a sick friend or spend the money to attend a special occasion. Sometimes you really need to buy something you don't need, if you get my drift. That's all a part of being balanced. If we don't occasionally use our money for things that bring us pleasure, such as a gift or a thing of beauty, then why have it? It's easy to go too far to one side or the other; Scrooge was, after all, a bad guy for a good reason. I'm becoming more and more interested in the social and behavioral aspects of good money sense.

So much guilt, and love, and need is wrapped up in our money and what we do with it. A friend of mine whom I consider the paragon of austerity told me she owned a $750 Louis Vuitton bag that her British mother-in-law bought for her on Bond Street. Maybe this gesture was one of those grand gestures -- after all, my friend and her daughter nearly died working with refugees in dire conditions overseas -- and maybe it was her mother-in-law's way of saying, "I'm glad you're alive." Whatever the intent, my friend treasures her bag, and I don't think she wishes she'd gotten an IRA instead.

Who knows? Maybe in 20 years, she'll wish she had gotten that IRA after all. Having already escaped death once at age 30, however, I can understand my friend, and I can understand young women all over who focus on the now rather than the later. Life is short, and precious, and sometimes it seems best to enjoy the bag in hand.

"Yesterday is history. Tomorrow is a mystery. And today? Today is a gift. That's why we call it the present." ~Babatunde Olatunji

~And~

"Let the credit card companies market as they will, the only thing that's priceless is Now." ~Caleb Baylor Hive, 2005


Photos by Tolate2sk8 and Princess Poochie, respectively. Photos used with permission. For shoes, shoes, and more shoes, Princess Poochie's website can be found here.

Credit Card Companies -- They always, always win

We've been launched into summer (it's over 100 degrees in Tucson already) and our credit card debt is down to $6900. It is not the $5000 I had hoped for, but it is considerably less than the $24,000 I started at last summer. $17,100 less, to be exact.

Still, the interest we're paying on that $6900 in credit card debt is $50 a month. That's $15 for a cash withdrawal (huh? I don't even remember a cash withdrawal, but it must have been an overdraft from months and months ago) and $35 for regular interest. That's $50 we could spend on two nice items of clothing a month...or a gym membership...or we could put it aside in an IRA and have an extra $600 a year towards retirement. Oh, how the credit cards siphon money from people! From ME.

Here's an interesting article about credit card rewards:

About 85 percent of U.S. households participate in at least one rewards program, according to a study released Monday by Consumer Reports.

And though rewards do spur consumers to spend more, the study found that confusing rules and restrictions make most reward cards more trouble than they're worth.

...

And while cash back, gas and grocery rewards credit cards can offer some relief for costly essential items, they often carry higher annual percentage rates than traditional credit cards, Consumer Reports said. Looking at some of the more generous credit card rewards programs, the study found that rates varied from 9.74% to as much as 19.99%.

We've gotten caught in the "points" game before, and have learned a hard lesson from it. I racked up nearly $7000 on my American Express card trying to get cash back; the cash back I got from last year (one single purchase was over $5500 -- I just read on my own blog that I used the card to get cash back from it) equaled $118.00. $118.00? Yes, that means I put over $10,000 on my card in order to get 1% cash back, paying who knows how much in interest (my monthly interest on credit card debt used to be almost $200). Credit card companies charge daily compounding interest, but that 1% cash back is a one-time annual bonus. It's like a $30 Christmas ham for the employee who makes $20,000 a year; it's a pat on the back, not real money or real help.

Here's a tip for beating the credit card companies -- don't use your card at all. Keep it for emergencies, and when you need to use it, pay it off immediately. They've always got an ace up their sleeve, and you just can't beat them at their own game.

The only way to truly get credit card rewards is by keeping your balance at zero.

How to keep saving money when life gets in the way

I've been reading some personal finance books lately (I'll review some of them here later on). There is no shortage of books on how to save, how to budget, invest, spend your money wisely, etc. What the books seem to lack, as a whole, is advice on difficult personal decisions.

This spring my marriage started to come apart. I was taken completely by surprise; my husband asked me for a divorce, and it was like a bolt out of the blue. I haven't written about it on this blog, because this blog isn't really to chronicle my personal troubles outside of financial decisions.

The problem is, divorce is a financial decision.

We talked, we went to counseling, but what really seemed to get my husband's attention was current divorce and personal property laws. I know my marriage isn't based on money, but the knowledge that we would have to sell our house in a down market, that up to 50% of his salary could go to child support, and that a divorce would bankrupt both of us was very sobering. I faced the fact that I would have to take a full-time job again and put my youngest child in daycare, and I started applying for jobs around the country.

More importantly, I made plans for my husband and I to separate. I would have left a few months ago, but I've been babysitting for a graduate student here and my leaving could have caused her to postpone graduating and getting her Ph.D. I couldn't let my emotional state cause her and her family financial hardship, so, I gritted my teeth and decided to stay until June.

Time eases all things. My husband and I have worked to solve some of our problems, and he no longer wants to get a divorce. Some things have remained, however, and one is my plan to leave in June. I no longer plan to leave for good, but I do plan to spend at least a month away. Part of that time I will stay with my parents, the other part with friends. It is an essential break that I think is necessary for me to continue my marriage. It is also a chance for me to network as I prepare to finish my master's degree next year.

All of this has been very hard to deal with, even as we have continued to pay off our debt.

I am incredibly proud of myself and my spouse, that we've stuck to our financial choices even as our personal lives have gotten more and more difficult. We had initially agreed to postpone travel for this year in order to save money, but which is better? Postpone travel and have an expensive divorce? Or pay the credit cards off a little more slowly while doing what is necessary to stay together?

Clearly, we've chosen the latter.

In addition to my travels north, my husband decided to ask his work to send him to Boston for a conference while we were gone. I know he is unhappy that I am leaving with the children for a month, so although I was initially irritated by his request to spend a week in Boston (after all, I'll be sleeping on the floor in my parents' house, not visiting fabulous historical spots in the beautiful Back Bay of Boston) I'm glad he's going.

This is at the crux of why it is so hard to eliminate debt and save money; life quite simply gets in the way.

Sometimes spouses need distance, and I know that right now I need my family and childhood friends to help me get through this. That doesn't mean I can't try to offset the costs of our travels; I hope to spend as little as possible and have some left over for the omnipresent credit cards when I return. I also hope that this time apart will continue to help my relationship with my husband because, after all, my marriage should last longer than my credit card debt.

Anyway, here's a few things we're doing to cut the costs of traveling:

• Shorter trips. I'm only planning my trip in 300-mile legs or less. This means I can drive more slowly, getting the best gas mileage possible.
• Camping, rather than staying in hotels. I'm camping in two national parks (possibly more) on the way up. I plan to buy the $80 annual National Park Pass; this gets me into the parks for free (usually $25 per park) and gives me a 50% discount on park campgrounds.
  
• Hostels to keep us showered. I initially planned camp all four days, but that is difficult to do in low desert and urban areas. In searching for campgrounds, I stumbled across Bootsnall.com which featured a couple of hostels in Salt Lake City, Utah. Once I'm sure of my dates, I can book a private room there for $47.00/night plus tax. That is a room with a private bath and it includes breakfast -- hard to beat! It also comes after two nights of camping, and I'm sure we'll be ready for a real bed and a hot shower by then.
• Freeze-dried food. I know this isn't the norm, but we had a failed 3-day backcountry hike a few years ago, and still have a ton of freeze-dried meals to show for it, along with a tiny camp stove and many cylinders of fuel. I plan to take this, along with a cooler of food, to help offset the cost of food on my slow trip north.
• Craigslist. My husband, rather than staying in a business hotel in Boston, has contacted a local resident who rents out a room in his house by the week; the total is less than half the cost of a hotel. We aren't sure whether this will actually work out, but we're keeping our fingers crossed. It means that he can use the rest of the money alotted to him by his work for some nice dinners and maybe a little sightseeing when he isn't working, without any out-of-pocket costs.

So, even by taking the extra days, I will still pay less than $80 for lodging each way -- about what I would pay for a single night in a hotel. I do have that initial outlay for the park pass, but I'm chalking that up to education expenses, as it will be a chance for my 6-year-old to explore geology, botany, and other educational opportunities available at national parks.

The picture I posted at the beginning of this article is one I took myself in 2004, when I took my son (then two years old) on a month-long trip to Canada. I'm sorry to say that we stayed in hotels every night, and ate primarily at restaurants, and I spent upwards of $5,000 for that trip. I have $1800 saved for my trip right now, and I think I can make it on less than $1000, but even if I don't, I certainly have learned a thing or two about cutting costs these past four years.

As my trip progresses, I'll post what works and what doesn't. Hopefully I'll get another great shot of the Grand Canyon at sunset again, for one-fifth the cost.

Bought a diamond between January 1, 1994 and March 31, 2006?

A class action lawsuit against DeBeers for inflating diamond prices is being settled, and today is the last day to file a claim. Anyone can file a claim, and documentation isn't needed unless your purchase was over $10,000. Here's an article about the lawsuit at Consumerist.com; you can also go directly to the class action website here.

I bought a diamond engagement ring in February 2006. We had bought gold wedding rings with engraving around the edge when we got married, but I later wished I had bought a more traditional ring, because I gained weight and it turned out the ring couldn't be resized. So, my husband bought me a beautiful diamond engagement ring for our 5th anniversary. Later, my 1-year-old daughter found the ring and toddled off with it -- I haven't seen it since -- for a loss of $800. We've searched the house repeatedly, and moving last summer it seemed sure to turn up, but it never did.

A few dollars in settlement isn't much of an exchange, but it's better than nothing...

A Belated April Net Worth

Our net worth is calculated, and we've done well, raising it by almost as much as a month's take-home salary, thanks to the tax rebate.

It's not quite fair to measure net worth in the middle of the month, since we've had 6 weeks to pay debt down rather than 4, but I still think we've done well. We saved our government rebate checks rather than using them to pay down credit card debt, a decision I still feel somewhat worried about, but I hope that the cushion can help us get through the summer and buy books for classes in the fall, as we usually don't budget enough for either.

I would have liked to use our checks (plus a little) to put $2000 extra on our cc debt, bringing it down to under $5000, but I'm planning to take a trip to see my parents this summer and I would have had to use our emergency fund in order to do that. Also, my husband's GI bill runs out in June, so we wanted a little extra cushion as we prepare to live with $750 less every month. I think we've done pretty well in trimming our expenses -- my sister is quite envious of our miniscule gas bill -- and I'm continuing to try to cut corners. It would be better for me to stay here the month of June, rather than visit my family, but it's important to my personal life right now that I take this time. It's also terribly hot and miserable here in June, and a good time to be somewhere cooler.

Hopefully we'll save a little money to offset the cost, since (I'll be shameless, here) my parents and my friends will foot the cost of water and cooling (my husband usually just closes the house up and turns the a/c off when we're gone). I'm also planning to camp as we drive north, rather than stay in hotels. It's cheaper and more fun for the kids, but the biggest appeal is health related; my daughter is allergic to a lot of the cleaners/bleach used in hotels, and gets terrible rashes from staying in them. By camping we can use our own things, get nice and dirty, and she can be itch-free (I hope). I'm not sure what we'll do for showers, but 3 days without a shower, while gross, isn't the end of the world either. I'll take a camp stove and a cooler of food, so we can barbecue our way to Idaho. That should save money as well.

My hope is that my stash of money won't dwindle too badly, and I can use it to pay down credit cards when I return. I know I'm taking a risk here, but I also don't want to use the credit cards. It's purely psychological, but saving money and paying down debt is a behavioral change and I think I will be more disciplined if I cannot use the card.

This month I would have met and exceeded my networth goal of $50,000 for this year (and it's only May!) if I included the change in the worth of our house. According to Zillow, our house has gone up $10,000. But, since real estate is so rocky right now, I am keeping the worth of our house at the same for the rest of the year. The dips and hills are so unpredictable I don't want it to mar the actual progress we are making on realized debt and savings.

Scams, Shams and other Natural Enemies of Acquiring Wealth

I wrote this post as a comment on J.D.'s blog, Get Rich Slowly. He did a post on Multi-Level Marketing, and it really touched a nerve with me. After spending 45 minutes on my comment, I decided to make it into an actual post.

I started tracking personal finances last year, when I quit my job to be a stay-at-home mom. I had to do it; we just couldn’t make it otherwise. But, the other motivation was that I did not want to be like my parents. I am naturally cautious, so I haven't, up until now, gotten into the specifics of my family's financial follies. It still makes me nervous to talk about it, but I hope that it might warn others away.

My parents are really terrible with money, and they’ve always complained about being poor and in debt, but the truth is they have spent thousands of dollars in bad business ventures throughout my lifetime. They did Amway, Melaleuca (still do), some Rain Forest thing, and my mom sold MaryKay and Avon products. My mom started two real businesses that lasted only a day (a $10K loss each time) and has spent almost $20,000 on schooling to be:

A medical transcriptionist

A medical assistant

A phlebotomist

A realtor

Yet she doesn’t even have an associate’s degree — they were all certificate programs. And she barely made a profit as a realtor, because she is so shy, she can hardly talk to strangers at all!

The worst one she did was selling a fake “miracle” machine. You took a drop of blood, put it on a piece of paper, and FAXED it to them. Then they took crystals out, diagnosed you, and sent you the results. Of course, since the illnesses were fake, it was easy for the machine to “cure” them (most people were diagnosed with both cancer and AIDS/HIV). But they bilked people for $1800 a machine. A lot of these people were elderly and sick. And, though my mom made a lot of money in this venture (all under the table, I might add), she also lost a lot (she gave one woman alone $5000 for “off-shore stocks,” without getting even a receipt, let alone a stock certificate).

I was overseas for much of this one, but when I got home and realized what was happening, I called the cops on the company - the attorney general’s office was searching for their base of operations, and the local news had done an expose on the scheme. I told my parents I had notified the police (before they raided, I might add, but my mom still refused to accept it was illegal), and luckily my mom fell and twisted her ankle and couldn’t go to work the day the police came, or she might have done time. I have never seen my father more furious with me in my entire life, though, than when I told him I had called the cops on the operation. He just couldn’t see what was happening — to him, it was his “last chance” to get the easy life, never mind the morals. For myself, it was one of my lowest points; I was terribly disappointed in both my parents.

My parents are 58 and 62 now, and they’ve finally seen the light and are going to a real financial counselor. They are saving money, investing in index funds, and paying off debt. The sad thing is that, even though they’ve found what works, they have less than $10,000 saved for retirement, with my father only 7 years away from retiring.

Don't fall for the schemes. As J.D. writes in his post (it is the name of his blog, after all), it's better to Get Rich Slowly. And that, I'm sorry to say, is the truth of the matter.

The Politics of Reality: Driving 10 mph slower saves more than repealing the Federal gas tax

I always enjoy perception versus reality problems, although sometimes they make me sad, too (see this story about how "clean" biofuels are causing more environmental devastation than the Exxon spill). But, I also enjoy watching politicians squirm, and this great calculator from the NY Times shows how much you spend on gas per trip.

Using the calculator, you can see how much you'd save by having your tires properly inflated, by driving 10 mph slower, or by having the Federal Gas Tax repealed. If you click on "Drives 65 mph instead of 55 mph" and "Repeal Federal Gas Tax," you can see that driving just 10 mph faster negates any savings you might get from repealing the tax. Very revealing, I think.

I highly recommend the article it came from, too; I know that we've been spending our weekends biking the kids around town, rather than driving up to the mountains like we used to, in order to cut our costs.

Of course, our commuting now is with the 167cc scooter, and I can't tell you how smug my husband is everytime he has to fill up. "I haven't filled up for two weeks," he said last weekend, "And filling up today cost me $5.67." We took a gamble by selling the station wagon and buying the scooter (the scooter cost twice as much), but we're saving over $65-120 a month just in gas, and about $600 a year in maintenance and $500 in insurance. It looks like that scooter will pay for itself in another year or so, and I have to say -- thinking about that makes me slightly less tired than usual.

My Newest Venture: Index Funds

I'm hoping to start putting a small amount of money -- say, $15-20 a paycheck -- toward a Roth IRA and invest it in an index fund. My current investments have really taught me the art of tolerance; the markets went up and my stock funds went from $1000 to $1400 in just a few months. Then the market went down, and my stocks -- mostly in solar and renewable energies -- also plunged, finally stopping at $605. I was feeling a bit panicky, and wishing I hadn't followed the advice of financial magazines (and really, I shouldn't have -- I was picking my stocks on P/E ratios, but there were a couple "big performers" that the magazines were touting, so I bought them -- and lost big.)

However, when I looked over my purchases, I decided that only one stock was an "unknown." It was stock I had bought for sentimental reasons without really scrutinizing the business practices of the company (it was near my hometown). So, I cut it loose. It was a good thing, because the stock has continued to drop, and I lost relatively little.

My stocks just surged back up to $825, and from this I've learned: thou shalt not check the stocks every day. I trust the companies I've invested in and so long as they don't go under, I know the stocks will eventually perform.

Now I am beginning to research the much-touted index funds. I've discovered the Vanguard 500, and today I saw this article on a new Vanguard Index fund that follows mid- and large-cap companies in the FTSE All-World Index. I'm also trying to follow and understand securities. At some point, I'd like to take a class; I never learned anything about finance either in high school, college, or now, having gone through most of a master's degree. It's kind of an adventure, really, except that I feel pretty stupid a lot. So I'll be posting more about Index Funds as time goes on, as well as continuing to discuss debt paydowns.

Congrats to Budgeting Babe

Congrats to Budgeting Babe, who aired in this piece on CBS:

Net Worth for March

As predicted, we have a positive move on our net worth for this month, going from $39,686 to 44,050, which is an increase of $4,364 for this month. This is almost entirely due to the paydown of our credit cards; we are down to a single card now.

This month we should have a positive increase also, as we continue to save and pay down our cards, but this summer we'll have to really tighten our belts.

Fantastic Post about Living with Children

If you read this blog much, you may notice that I tend to rant about the perception of single people and DINKS (double-income-no-kids) couples about the reality, financial or otherwise, of living with children. It is rare that I find a post I think is really great; there was a fairly decent guest post on Get Rich Slowly called How To Prepare For A Baby Without Going Broke. There were some simple things to do, like buying used baby clothes and furniture, and borrowing from friends. It also advised breastfeeding (I breastfed both my kids and it is considerably cheaper, even with the purchase of a $250 breast pump). It recommends cloth diapering, although most cost calculators find that people tend to break even once washing (hot water is a must for a load of diapers) and the cost of the cloth diapers and diaper covers is included. We ran those calculations ourselves, and finally switched to disposables after a few months of torture, because water is at such a premium in the southwest.

What tends to bother me is the "pollyanna" attitude so many people take; the reality is that even a used crib (I was recently shopping for one for a refugee family here in Tucson) runs $75-$100. That doesn't include a mattress ($50 and up) or blankets and sheets. So even someone who buys used can expect to spend $175-$200 for a crib, and parents must be careful not to get an older crib because they can be dangerous, even fatal, for infants (their little bodies slip through the slats, which are made too big, their heads get caught and they can hang themselves). So yes, buying used can save you money, so long as you are very careful, and watch the recalls and safety issues related to used goods.

Parenting, really, is an issue of preparation; if you know what's coming, you can be ready. The most important thing to do is to be stable financially before you even get pregnant. Someone who has at least a year at the same job, very little debt and is done with school is in the best state, financially, to handle pregnancy and children without incurring bankruptcy or undue stress. That doesn't make parenting perfect -- it just makes it easier.

However, when I read this post called 25 Ways to Simplify Your Life with Kids, for the first time in a long time I felt someone "got" what it meant to parent.

Anyone who has kids knows that any life with kids is going to be complicated, at least to some degree. From extra laundry to bathing and cooking and shopping and driving and school and chores and crises and sports and dance and toys and tantrums, there is no shortage of complications.

You won’t get to ultra-simple if your life includes children … but you can find ways to simplify, no matter how many kids you have.

Take my life, for example: I have a house full of kids, and yet I’ve found ways to streamline my life, to find peace and happiness among the chaos. How is this magic trick accomplished? Nothing magical, actually, but just little things that have simplified my life over the years.

The main magic trick, however: making my family my top priority, and choosing only a small number of priorities in my life. If you have too many things you want to do, or need to do, your life will become complicated. But if you choose just a few things that are important to you, you can eliminate the rest, and simplify your life greatly.

The author goes on to list some really wonderful ways to enjoy your life as a parent, and these things also reduce costs over time. For example, cooking and cleaning with your kids reduces your tendency to eat out (or hire a housekeeper) and also provides learning time for the kids. Not over-scheduling also means not spending extra money on "activities" that may or may not be useful (a friend confessed that she spent $250 for a 6-week kinder-music course -- ouch!). My favorite tip, though, is the last one -- "Focus on Doing, not Spending." Not only do you save money this way, it also communicates something to your kids -- that love isn't about dollars.

And that, to me, just makes sense. Thanks to Zen Habits for the best post about families I've seen in a long time.

$4000 more on our credit cards

We got our tax refund back, and that combined with a little extra went towards paying off another credit card. We have a little more money coming and should be able to put another $2K on the credit cards next month, so I am very happy with our debt reduction. Since we are working against a deadline in May -- we'll lose $750/month in income then -- I'm hoping to have our credit card debt down to "manageable" if not "gone." We will just have one card with a balance after this week. I will adjust the bars to the left so everyone can see our progress.

We went ahead and spent $250 of our refund on a new iTouch for my husband; he's been collecting gift cards since last fall, and had over a third saved that way. Since he's been diligently saving in a savings account, and because we've been paying things off steadily, we agreed to make this purchase. He's a tech-head and has used his iPod of 3 years ago nearly every day and it's getting pretty old and delicate (when I set it down, it turns itself on, etc.). Plus, it means a lot to him. It's important to me to pay off the debt, but it's also important to let him have some cool stuff every now and then. I can hardly get him out of holey t-shirts and khaki shorts from the used clothing store, so it isn't as if he is a spendthrift in other ways.

I'm bringing in $400/month now babysitting and this month we'll pull in around $250 for the guesthouse, so that income is relatively steady. I'd like the guesthouse to be rented out more, but I'm giving it some time. I may start looking for more advertising venues; so far I've limited myself to "free," but I may be able to find some really low-cost things to do as well. I'm considering buying a domain and building a website for it also -- maybe a good project for summer, which is off-season here.

It's amazing how much cutting our monthly expenses -- $40 here, $60 there -- really helps. I don't feel nearly as stretched financially as I was just last fall, and we had more money coming in every month then.

We sold the car! $1500 more towards paying off our credit card

We finally sold the Volvo wagon yesterday, after a harrowing two days of last-minute fixes. I cracked the valve cover trying to change the valve cover gasket (gasket = .01 pounds of rubber and cardboard, valve cover = 2 lbs of metal). Luckily I found a used one, flirted with the guy at the counter and he gave me the cover for $10 instead of the $45 quoted price. Sometimes it pays to be a female who fixes cars... (not usually, though, just for the record).

So, we got $2100 for the car, and I used most of the money to pay off bills, although we've earmarked $150 for a good tune-up on our remaining car, and we are putting $1500 on credit cards.

Debt snowball, here we come!

Lessons I've Learned from Being Broke

This article in Kiplinger made me start to reflect on my own life and the times when I was happiest. Ironically, the times when I had the least amount of "things" in my life were some of my happiest times. One of the things I can't explain to my husband is that right now, even though we don't have a lot of extra money, I feel rich. I own a home. I have two kids that I adore. We can afford to have birthday parties, go out for dinner and buy clothes that fit. For someone who grew up without being able to afford to either attend or have a birthday party (my mom wouldn't let me go because we couldn't afford a gift), throwing my son a party at the Children's Museum in Tucson made me very happy. We might have a crumby car, and my husband might have to save up for his iTouch, and maybe I make things from scratch during the week so we can have that Sunday morning breakfast at our favorite breakfast place, but the more I downsize and get rid of "stuff," the happier I feel.

Very un-American, isn't it? At least, what with all the newspapers and t.v. media encouraging us to spend our way out of a recession.

Here are the highlights from this article, which I found very interesting.

1. Know your priorities.
2. Debt is a vampire.
3. Have a cushion to fall back on.
4. Set goals and tune out peer pressure.
5. Small sacrifices add up to big rewards.
6. The size of my bank account doesn't matter.

My favorite quote from the article: "I remember my dad telling me that the only things worth going into debt for were those that appreciated in value: a home and an education. Anything else will suck you dry. Lesson learned."

Quote of the Week

This is from a comment on Get Rich Slowly by Catherine on downsizing your life:

"I don’t want to be rich, I want to be free. And freedom is worth more than stuff."

Credit card debt down another $1000

With the extra money coming in this month, we were able to put another $1000 on our credit card debt. We also put extra toward my student loans and toward the mortgage. We are slowly paying things down, and I'm looking forward to adding up net worth for February!

Here's a few things we did this month to further reduce our cost of living:

*I pulled out our old bread machine and started making my own bread. At 86 cents a loaf, I can make whole wheat, all-organic bread for 1/5 of the cost of buying it at the store.

*I started making things in bulk. I made homemade macaroni and cheese, which seemed more expensive at the time (about $8 in ingredients), but one recipe made a giant pan and it lasted for several meals. I also made pinto beans from dry beans -- 3 lbs of dry beans = $2.00. My kids absolutely love refried beans, beans and eggs, beans and quesadillas...you get the point. Since I make the beans myself, I get to control what goes in them. I put 2 strips of bacon in the entire pot, and the bacon flavor...mmmmm. And instead of one person eating 2 strips of bacon for breakfast, we ate the "taste" of the bacon in the beans for over a week. This saved money AND was better for us. (tip: I froze pints of beans, which were enough for about 2 meals. This kept them fresh, and the freezing actually makes the beans better for refrying.)

*I started making my son's lunches for school. This week I made him a lunch 3 days out of 4, and not only was he thrilled, he got fresh bread, fresh fruit and a healthy snack of root vegetable chips instead of his usual lunch at school -- pizza, pre-made bean burritos or a hotdog. I also put a note in his lunch, which made him really happy.

*I tried to get by on as little as possible. When I went to the grocery store, I stuck to fresh foods and bulk items. I found that, when I avoided the doomsday aisles of chips, crackers and juices, I could get everything I needed for under $50 a trip, or for around $100/week. This worked even at Trader Joe's.

*I bought in bulk from Amazon.com. This helped alleviate the costs of dry goods items like diapers and paper towels, and it allowed me to buy unbleached, recycled products like 7th generation. I didn't know at first if it would really reduce our total costs, but it truly has.

*I cancelled our YMCA membership. This was hard to do, but I have to go at least 10 times in a month to justify the $60 monthly cost, and it wasn't happening. I did use it last fall, when I went to Pilates 3x a week (and I loved the class!), but the nursery uses bleach and it made my daughter break out a lot afterwards, so I finally stopped going. I can still use the Y for $6-8/day, depending on which one I go to, but it was hard to give up the membership. However, $60/month was a pretty big expense -- $720/year. It is more than the insurance on our Volvo, and we're selling the car so we won't have to pay that expense, so I decided it had to be.

Those are some of the things I've done the last 6 weeks to try to save money, and it really has worked. It is surprising how the small things make a difference, and even more surprising how your attitude changes. I "treated" myself to a lunch at Barnes & Noble, and I was terribly disappointed in my $6 half-sandwich that was overcooked and drowning in cheap Italian dressing. The kids got a cookie, and for $1.95 I expected a good cookie, but it was stale and tasteless, and I thought, how their quality has gone down! But then I realized that the cafe has not changed -- I've changed. Making my food from scratch, and realizing the actual cost of a thing has changed how I look at things.

We are waiting on a possible buyer for the Volvo, so that, combined with (hopefully!) a tax return could pay off a pretty big chunk of debt. I'm feeling good about our 'debt snowball' at this point; next stop, reducing our energy bills.