Category Archives: Money Management

Time to redeem MyPoints … what to do?

Never heard of MyPoints? Well, where have you been? It’s a free rewards program that requires very little work for a great payoff.

After signing up, you’ll receive about 3 or 4 emails every day. All you have to do to earn points is read through them quickly and click on the “Get Points” link to credit your account. Each email is worth 5 points.

You can also shop through their portal at a ton of online retailers to earn 1-4+ points for each dollar you spend. Just go to MyPoints, click on “Shop,” find your retailer, and click on their link through the site. Other retailers offer special points bonuses for taking advantage of offers, signing up for newsletters, or joining online communities.

Once you’ve acquired about 1500 points or so, you’ll be eligible to redeem them for $10 gift cards to a huge assortment of retailers, including Target, Starbucks, BP, Amazon.com, and more. Once you have 3500 points, you’ll be eligible for $25 gift cards. Finally, 7500 points will earn you $50. Some retailers offer $75-$100 gift cards for 12000+ points.

It’s part of a new trend that I absolutely love: marketers paying YOU for your time and attention. For our whole lives we’ve been inundated with advertising and marketing messages that don’t pay us a dime. It’s about time we get rewarded for listening to the messages they’re sending out.

You can visit the site yourself if you want more information about MyPoints. If you’re not already a member, drop me an email so I can send you a referral link! I’d love to pick up some points for telling you about the program.

I always click through my emails and check MyPoints before making online purchases to see if I can earn some points. I’ve been able to earn about 3500 points or $10 every three months or so for very little work. I’ve acquired almost 8000 points since my last points redemption in April. That’s enough for about $50 worth of gift cards.

With the holidays coming up, I know that the most responsible thing to do is use these points for a Target or Amazon gift card so I can cut down on my holiday spending and supplement my gift budget. We’ve also got a huge drive ahead of us back to Indiana, and a $50 gas card could help us out.

Last time, I used my points for a Starbucks card so I could treat myself to gourmet coffee without affecting my budget. Because this is “free money,” I’m so tempted to use it for something frivolous. It’s not like snowflakes because I can’t pay off debt with a gift card. However, I could potentially put $50 extra toward debt that would have been spent on holiday shopping or gas for our trip to Indiana for the holidays.

I’m torn. I know that every little bit counts, but I also like being able to treat myself without throwing off my budget. I don’t have enough will power to say that I never treat myself even when it is coming out of our budget. If I take opportunities like this to treat myself, then I’ll be less likely to use our regular income for frivolous things.

I look at $50 and it just seems so small when it’s used for holiday shopping or a tank of gas. But when it’s used for something fun, it seems like an huge amount of money. I’m not sure what to do.

My question for you: Do you use MyPoints to supplement your budget with necessary purchases like gas and gifts, or do you use it to treat yourself?

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Overcoming birthday & vacation spending mode

I apologize for my absence yesterday and most of this week. We’ve spent the week recovering from a wonderful but exhausting trip to Seattle, and yesterday we celebrated my 24th birthday with some sushi and gift card shopping.

Our trip has thrown off our budget considerably. It’s not because we overspent on the trip. Thanks to the generosity of my sister, who was a very gracious hostess, and my parents, we didn’t spend much at all. My sister and brother-in-law even treated us to a very fancy (and delicious) meal in the city for our birthdays.

As a thank you, we awoke early one morning and went to the grocery store to pick up ingredients for apple cinnamon pancakes and cooked breakfast for everyone Sunday morning. Other than that, we spent very little on the trip aside from a couple of quick airport meals.

This is good news, as we didn’t have much to spend from our vacation budget after buying plane tickets, boarding our dog, parking the car at the airport, and paying for gas to drive 2 hours each way to the airport. Our total vacation spending ended up being about $600 including all travel expenses. We’d been saving for it over the past few months, and factored a little cushion into this month’s budget, so the vacation itself didn’t throw us off too much.

However, we’ve been struggling all week to get out of vacation mode and get back on track. It seems that the casual vacation attitude seeps into our daily life every time we leave town. This happened after our honeymoon, too. Our spending inhibitions lower on vacation, and we come back home and can’t seem to get back on track.

We’ve had three meals out this week alone (including sushi for my birthday last night). We also spent my gift card on some new work clothes and Tony bought a new pair of shoes with some money he received for his birthday two weeks ago.

All of this is fine with me. I’m happy to use birthday money on practical things like clothes and shoes. Our food budget is probably shot due to several meals out in the airport and for my birthday, but I can live with that.

The question is, how do we get back on track now? As a former spending addict, it’s hard to shut off the valve once I’ve started overspending. Not to mention, I hate watching all that money come out of our bank account, even though it was put there specifically to use for birthday gifts.

Sigh.

What about you? Do you have trouble getting your spending back on track after a vacation?

Could frugality be bad for the economy?

While visiting my sister and her family in Seattle over the weekend, I saw an article in the paper that surprised me: Frugal consumers hurt economy, too. In summary, consumers have been spending less all year, but the past two weeks have seen a major drop-off in consumer spending. They’re expecting even less spending in the fourth quarter. Partly to blame, the article says, are fearful consumers. As they spend less, the economy slows even more, leading to a consumer-driven recession.

Is consumer fear and less spending driving this crisis? Maybe so. But I disagree with the reporter’s use of the word “frugal.” To me, frugality is a long term lifestyle, not a temporary reaction to a bad economy. Overall, I can’t see how frugality could be bad for the economy in the long run.

In my short experience with frugal living, I’ve become incredibly empowered when it comes to my financial future. With adequate savings and smart financial choices, I don’t have to let the crazy market dictate my spending. I can take a trip across the country in the middle of this financial chaos, because I know I’ve saved for it.

According to this article, increased spending is better for the economy. But isn’t overspending what got us into this mess? If reduced spending and a slowed economy are caused by fear, then couldn’t you make the argument that if all consumers made smart choices, saved adequately, and spent only what they could afford to spend, then market forces couldn’t lead to a consumer-driven recession? If nobody is financially insecure, then an erratic market wouldn’t have this effect on spending, would it?

I don’t claim to be an economist. I just can’t imagine that the solution to the country’s financial problems is increased spending at retail stores and restaurants. Yes, in the short run the decreased spending is slowing the economy, but in the long run, if we spent less and saved more, wouldn’t that make our economy stronger? It would certainly make us more financially secure.

I also realize that I’m talking about a perfect world here — one that doesn’t exist. The truth is that a lot of people live paycheck to paycheck, and when the market fluctuates like this, they realize that they don’t have enough to cover rising prices or carry them through in the event of a job loss. The consequence is a sudden decrease in spending that is felt throughout the economy.

In my opinion, the article got it wrong. It’s not the people who live frugally and save that hurt the economy. Frugal people are generally pretty secure in their finances, and in my experience their spending remains pretty consistent. They may not spend a lot, but they spend consistently. After all, consistent spending and budgeting are synonymous with frugal living.

It’s financial insecurity that leads to this type of wild fluctuation in the economy, and frugality generally doesn’t equal insecurity.

Am I completely off base here? What do you think?

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September Budget Round up

The good news is we were on budget in most of our spending categories in September. The bad news is we were $42 over in our miscellaneous “shopping” category. Part of the problem was five shirts I bought on clearance for $21 a couple weeks ago. I also forgot to budget for the $25 I spent on Tony’s birthday present. Oops.

We also went $30 over our food budget. As I look through our spending, I’m seeing red flags like Starbucks and ice cream shops. Looks like we stopped for a coffee, ice cream, or other snacks while running weekend errands several times throughout the month. Those little purchases added up to a $30 overage in our food budget. Good thing I’m getting my diet back on track now. It’ll be good for my waistline and my wallet!

Setbacks: Overspending in food and shopping. These are our two biggest discretionary spending categories, and also the ones we need to watch closest to avoid overspending. It also looks like this months’ budget included five trips to the grocery store instead of four. (The last shopping trip of the month in August and the last shopping trip in September were both included in September.) I’m not sure how to account for this in future budgets. What do you do when that happens?

Successes: We’ve been putting money aside for our dog’s yearly vet bills and flea and tick prevention medicines. Last week, Howie was due for his yearly physical, vaccinations, and city license. The $100 bill didn’t throw off our budget at all, because we had $75 saved and $50 budgeted toward pet expenses for the month. So we ended up being $14 under in pet spending instead of $60 over. Yay for planning ahead for necessary expenses!

This is also the second month that we immediately moved a little over 10% of our income into savings. I used to try to move what was left at the end of the month into savings. Bad idea. As you can imagine, there was usually not much left. I love getting it out of the way in the beginning of the month. It removes the temptation to spend what we should be saving.

Snowflakes: $50 refund from Costco membership (my employer pays provides membership as a perk, so I was able to cancel our current membership and get a refund). $60 printer cartridge refund from 123InkJets.

October Goals: Remember to account for everything in the budget, especially purchases outside our regular monthly expenses, like Tony’s birthday gift. Avoid letting little purchases add up to a big overage in the budget. Check up on spending in food and “shopping” every week to make sure we’re on track.

Bottom line: +$14 (from pet spending category) – $72 (overage in shopping and food) = -$58 for the month of September. Not counting snowflakes and the money we put into savings, we spent $58 more than our income this month. Not good. I’m reminding myself that this is new, and it’s going to take us some time to get used to sticking to the budget. Next month is an opportunity to do better and learn from this month’s mistakes.

Hope you were more successful that we were in your budgeting for September!

The hidden danger of budgeting?

Photo by jonnystiles

When we created our first budget, I felt instantly liberated. I knew our absolute spending limits. As long as we didn’t go over those amounts, I knew we’d have enough to pay for everything. I no longer had to wonder, “Can we afford this?” I knew exactly what we could afford. I also knew exactly how much we could afford to put toward savings and debt.

I view our budget as a challenge. “How low can we go?” That’s my mantra when it comes to discretionary spending for groceries, entertainment, and other shopping. Every penny we go under budget automatically goes toward savings or debt, and watching those balances go up or down is my favorite part of budgeting. It’s what makes me feel so free. I’m constantly trying to lower our budget for discretionary spending so I can increase our savings and debt repayment.

Over the weekend, I had an interesting conversation with my husband about the different ways that we view budgeting. It made me realize that everyone doesn’t view budgets the same way I do. For some people, budgeting can actually work against them.

After creating our menu plan and grocery list, we realized we’d be on the low side of our grocery spending limit. I was happy, as my goal every week is to lower our spending so we can be under budget.

My husband’s first reaction, though, was to start adding things to the grocery list … things that we don’t need. “We can afford it this week,” he said. “We’re under budget.”

Wha …? I had never thought about it, but it made perfect sense once he put it that way.

I see the budget as an absolute limit. Ideally, we’ll spend less than that, but we absolutely can’t spend more. My husband, however, viewed the budget as the number we’re trying to reach. If we go under, it’s a license to spend more. We can afford it, after all. It’s in the budget.

I have to admit, the conversation somewhat blew my mind. We’ve been married since May, but this is only our second month of strict budgeting. I had no idea he viewed it this way.

The conversation illuminated a hidden danger in budgeting. By setting hard figures, are we in danger of reaching them? Can a budget actually lead to overspending? When people like my husband manage budgets, do they overspend without knowing it? Maybe they could spend less, but they’ll never know because they’re constantly reaching to meet their budget goals.

It’s a scary thought. Luckily, my husband and I are working together to amend both of our bad habits when it comes to money. He shares my views on savings and debt repayment. He also feels liberated as our savings account grows and our debt diminishes, and he agrees that the best way to make them grow and diminish faster is to spend even less than we’ve budgeted to spend.

His view on the budget was just if we’re meeting our goals, why change them? The budget is an outline of how much we can afford to spend, so why not spend it? He didn’t see the harm in spending all of our budget as long as we’re meeting our goals for savings and debt.

Though we set our budget together each month and discuss how to manage our money, I handle the day-to-day finances. So his views on budgeting haven’t caused problems in the past two months. But it could have eventually if we never discussed it and explained our differing points of view.

I guess the moral here is something about the importance of communicating about money. Mostly, I just thought it was a fascinating perspective on budgeting, and something I never even considered. I always thought that people got into financial trouble by not budgeting, and never once considered the idea that for some people, the budget can be part of the problem. Huh.

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TGIF Link Round Up: Surviving the economic crisis edition

With everything that’s happened in the economy in the past two weeks, there’s been a lot of buzz in the personal finance blogosphere and the news on the topic. Though the topic of tonight’s presidential debate is officially on foreign policy, the candidates have agreed to spend some time on the economy as well.

In times like these, the question on the minds of most everyday Americans is, “What can I do to protect my own finances?” In my opinion, the best thing you can do for yourself is spend less and start saving more. Today I’m sharing some tips from other personal finance bloggers on simple ways to minimize living expenses and cut back spending.

  • Our Fourpence Worth shares an exhaustive list of 101 ways to save money in everyday life. It’s amazing how “tiny leaks” can add up to a bucket throughout the month. (Check out the fun design on the post, too!)
  • Not Made of Money shares a great method of organizing your pantry stockpile. Stockpiling is a great way to take advantage of store sales a minimize grocery costs, but organization is key to making the most of this system. A cluttered, disorganized pantry can lead to wasted food and overspending.
  • Lynnae at Being Frugal challenges herself to plan meals based on her leftover pantry stockpile once a month to clear things out. This is a great method for taking stock of your pantry and ensuring you’re not letting things go to waste. It can also be a good way to cut spending if you’re having a particularly tight budget week.
  • Paid Twice discusses what to do if your current grocery budget (or other budget) isn’t cutting it, but you don’t have the extra money to increase it. It’s important to make sure your budget is constantly updated to reflect your current needs, but it’s also important to ensure you’re not increasing your budget due to unnecessary overspending.

I’m off to see what the candidates say about the economy. Happy Friday!

Budget weddings: It’s ok to spend a little more on what’s important to you

Every couple has a different set of priorities. Some couples choose to spend next to nothing on the wedding so they can take the trip of a lifetime for their honeymoon. For some brides, a designer dress is the budget buster.

For us, it was photography. When we first started planning, we weren’t going to hire a photographer at all. My mom has a professional-grade camera that she uses to take photos for fun. We were going to put her in charge of photographing the day.

Then I started talking to my married friends. Their advice? “If you’re going to spend money on something, it should be the pictures.” Why? Because the day flies by so quickly, you probably won’t remember any of it without the photos to remind you.

When I really thought about it, I realized they were right. I wanted a permanent keepsake that would last long after the food was gone and the flowers had wilted. Tony and I will never be that dressed up again. We wanted professional photos to remember it forever.

We started looking for a photographer who could take professional photos at amateur rates. After interviewing several people and looking at their work, we just weren’t impressed. Their portfolios matched their amateur rates.

In the end, we decided to hire a professional photographer who was highly recommended by a friend. We spent less in other areas so we could devote almost half our budget to photography. It was worth every penny.

Because we were married in our college town, the pictures serve as a reminder not only of the wedding, but of the place we met and fell in love. The picture above is us in front of our favorite college bar. Ha!

We were married on campus, and our reception was held in a restaurant downtown. We walked from the chapel to the reception, and the photographer followed and took some great pictures of us in the heart of Bloomington.

It’s only been four months since the wedding, and I already feel wistful when I look at the framed wedding photos on our bookshelf. I know I’ll cherish these photos even more when we’re old and gray.

If you’re getting married in the Indianapolis area, I hope you’ll consider Zach Dobson Photography for your photography. All of the beautiful wedding photos in this series were taken by Zach Dobson. We were thrilled with his work.

Maybe your top priority is the honeymoon. Maybe it’s an open bar or a professional DJ. If it matters to you, then it belongs in your budget. The important thing is that you’re not going overboard on everything.

Figure out what your priorities are, and adjust your budget accordingly. If there’s something really important to you, it’s ok to work it into your budget even if it’s expensive. Just remember, you’ll have to cut corners in other areas to make room for it.

What about you? What was your wedding budget buster?

Exchanging gifts with joint finances

My husband’s birthday is this Saturday, and I’ve been struggling to come up with a special gift for him that won’t blow our budget. Exchanging gifts with joint finances is tricky.

Our birthdays are 2 weeks apart, and we’re taking a trip to Seattle the week in between, so we both agreed to a very small gift budget. We considered skipping gifts for each other all together, but that just didn’t feel right. We enjoy choosing gifts for one another and exchanging. Our solution is to limit our gifts to something small and thoughtful.

When we first opened our joint account, we decided to keep separate personal accounts with a bit of money in them specifically for this purpose. The idea was that the personal accounts would be used for discretionary personal spending and gifts for each other. We didn’t plan on the personal accounts getting lumped in with our regular money. That’s kind of what happened, though.

Now I’m faced with two dilemmas: he’s requested ideas for what I’d like for my birthday, but I’ve kind of shut off my “want” mode for the past year. It’s easier to live frugally if I’m not constantly wanting things. You would think I’d have a ton of ideas built up over time, but I don’t. Everything I think come up with just seems so frivolous. Is it completely terrible that receiving gifts used to be a lot more fun when they were coming out of someone else’s budget?

I also have to figure out what to get for him. The problem is, when it comes to gift giving, I still struggle with the urge to go overboard. All of the ideas I’ve come up with are out of our price range. In short, I don’t want him to spend anything on my gift, but if I had it my way I’d way overspend on him. Funny how that works, huh?

So I’m asking you: Do you exchange gifts with your partner? If so, what kind of budget rules do you set? And how do handle the joint finances issue?

As a newlywed, I’d love to know how all of you handle all of this stuff.

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5 ways that budget management and weight control are alike

I’m pretty proud of our financial success in the past few months. My husband and I have improved our financial health immensely since our wedding. Unfortunately, the same isn’t true for my physical health.

I’ve been avoiding the scale for the past month. I didn’t want to confirm what I already knew. Last night, I finally decided to face the inevitable. I’ve gained 8 pounds in the four months since my wedding. Yikes. I was 3 pounds below my regular weight on my wedding day, but I’m officially 5 pounds above my “happy weight” – the heaviest I’ve been in two years.

One of my first posts was about how I lost weight using basic budgeting skills. Now that the honeymoon’s over, and it’s time to get real and lose these pounds I’ve put on since the wedding, I wanted to revisit the topic. Only this time I’m talking about why constant monitoring and reassessment are crucial to staying physically and financially fit.

Here are some tips I’ve found helpful when managing my weight and my budget:

1. Be realistic.

Sometimes it’s necessary to go on a strict budget to pay down massive debt. You may have to cut all discretionary spending for a little while to overcome a major financial hurdle. However, if you try to maintain that level of restriction for too long, it’s harder to stay on track and meet your own high expectations.

Your best bet is to find a comfortable balance between necessary bills, discretionary spending, and saving. Maintaining a reasonable budget requires constant monitoring, but it shouldn’t be incredibly difficult or make you feel deprived.

The same is true for weight management. Find a comfortable weight within your healthy range that you’re able to maintain without going to extreme diet measures. Once you get there, maintaining that weight requires constant monitoring, but it shouldn’t be a terrible struggle as long as you’re eating well and exercising.

I’m able to stay at my healthy weight pretty easily just by avoiding overeating and staying active. When I try to venture below that weight, like I did for my wedding, every pound is an incredible struggle. My body just doesn’t want to be that thin. So I’m happy to compromise. I may not be thin enough to feel comfortable in a bikini, but at least I know I’m in a healthy weight range.

2. Frequently monitor your progress to catch yourself before you veer too far off track.

Once you find a comfortable budget, it’s crucial that you measure your progress regularly. Without careful planning and monitoring, you could easily throw your entire monthly budget off track with one weekend of bad decisions. Imagine how bad it could get if you just stopped monitoring your spending for months at a time.

Just as you check your budget frequently to make sure you’re not overspending, you must weigh yourself regularly. A slight increase in weight could alert you to a problem in your diet and activity before you veer off track to an unmanageable degree.

3. The longer you avoid the problem, the harder it is to resolve.

It’s much easier to pay off your credit card balance every month than it is to pay down several thousand dollars of debt that’s accrued over months or years. It’s also a lot harder to lose weight when the pounds have packed on over time. Overcoming a 1-pound weight gain usually just involves watching what you eat closely for a few days. I’ll have to work a lot harder to lose these 5 pounds. It would be even harder if I waited until I was 40 pounds overweight again to get back on track.

4. Constantly adjust according to your changing needs.

When it comes to budgeting, everybody knows that you can’t continue spending the same after a major pay cut. When your income decreases, your spending must decrease, too. Likewise, when you welcome a new baby, your discretionary spending is probably going to take a hit to accommodate for diapers and formula.

You must find the same balance between activity and calorie intake for weight management. I think part of the reason I’m struggling more to maintain my weight is because I changed my job. In retail, I was on my feet 8 hours a day running around the store, moving heavy objects, and constantly moving. I didn’t watch my diet as closely as I should have, but the constant activity made it easy to keep extra weight off. Now that I’m sitting at a desk all day instead of moving, I need to seek out more activity outside of my job and become mindful of what I eat to avoid weight gain.

5. Sticking to it and making the right choices are the hardest parts.

Everyone knows that the easiest way to stay ahead of the game financially is to spend less than you make. We also know that the best way to maintain a healthy weight is to burn more calories than you consume. It all sounds so easy when you break it down into those simple equations, doesn’t it? The truth it, it’s not that easy.

The part that’s left out of that equation is the constant struggle every day to make the right choices and stick to your commitment. After all, if it was as easy as it sounds, nobody would struggle with their weight or their finances.

The best thing that weight control and budget management have in common? They’re both totally worth the struggle.

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