Category Archives: Money

Financial literacy, your kids & a chance to win a Flip camera!

Sorry, entries for this contest are now closed. A winner has been chosen, and I will be announcing as soon as I’ve received the prize from T. Rowe Price and contacted the winner. Thanks for participating!

When I was a kid, my parents were a pretty open book. We talked about money just like we talked about everything else. My parents never kept us in the dark. We understood the financial choices they made, and they shared things with my sisters and me candidly.

Now that I have a baby of my own, I’ve already put thought into how I’d like to educate him about money. I think it’s important for parents to talk to their kids about money from an early age. The lessons should be age-appropriate, of course, but I think we’ll start Judah’s financial education pretty early.

We plan to ask Judah to put aside a portion of birthday and Christmas money given to him by grandparents into a savings account. He’ll be allowed to make choices about how he’d like to use the money, but we’ll talk with him about the value of saving money and spending it responsibly.

I’m not sure where I stand on the topic of giving an “allowance.” My sisters and I were given an allowance off and on throughout childhood, and it was usually tied to completing certain household chores. I think kids should learn that contributing to the household by doing chores is part of their responsibility as a member of our family — not an incentive for money. However, I think there’s value in teaching kids that work = money, and if they want to earn an income, they have to work for it.

Most importantly, Tony and I plan to be open with Judah and future children about our financial situation and choices. When they’re old enough to understand, I’d like to teach them about paying bills each month and show them how much things cost. I’d like to go over the family budget with them to show them where our money goes and discuss our emergency fund, savings, and other financial choices in depth.

I want to encourage our children to work part-time after school when they’re teenagers, and give them financial responsibilities of their own like car insurance, gas, and spending money. I was given financial responsibilities as soon as I was old enough to work, and I think it taught me a lot about money management and responsible spending habits.

As part of their financial literacy campaign, T. Rowe Price asked me to write a post about talking with kids about money. According to a recent survey conducted by T. Rowe Price, they discovered that parents found it more difficult to talk to their kids about money than talking to them about dating, drugs, smoking, or alcohol. That sort of blows my mind. I think money is a topic that you can begin discussing with children at a much younger age than I would bring up those other topics.

It doesn’t have to be complicated. It can be as simple as playing “store” or “restaurant” with a young child and teaching them to exchange play money for toys or play food. The lessons can grow with your child as you discuss more complicated financial issues like budgeting, saving, and investing.

To help parents start talking about money with their children, T. Rowe Price and Disney have teamed up to launch the Great Piggy Bank Adventure, an interactive website designed for children ages 8 to 14 to teach them about important financial concepts like saving, spending, inflation, and more complicated investing concepts. In addition to the website, T. Rowe Price is also the sponsor of the Great Piggy Bank Adventure experience at Epcot Center at Walt Disney World. There, children and their parents can learn more about financial planning in a hands-on, interactive environment.

I love the idea of the Great Piggy Bank Adventure, because I think it makes financial literacy fun for kids and parents. There’s no reason to feel overwhelmed about teaching your children about money. It can even be a game!

As part of their campaign, T. Rowe Price asked me to talk to you about how you talk to your kids about money. In exchange for your participation in the discussion, you’ll be entered to win a Great Piggy Bank Adventure Flip camera provided by T. Rowe Price. Here’s how to enter:

Write a comment answering one or more of the questions below. For each question you answer, write a separate comment. Each comment will be counted as a separate entry.

That’s it! It’s easy. The winner will be chosen randomly on Friday, August 12 at 9 p.m. EST, so you have until then to enter.

Here are the questions:

  • Is it easier for you to talk about drugs and alcohol than your family finances? If so why?
  • Why do you think it is easier for parents to talk about drugs and smoking than family finances with their kids?
  • Was the topic of money “taboo” in your family growing up?
  • What advice would you give to other parents talking to their kids about the family finances?

Good luck!

Disclosure: In exchange for writing this post, T. Rowe Price provided the Flip camera for this giveaway and also provided me with a gift card for my participation. T. Rowe Price is not involved in or responsible for the outcome of this giveaway.

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Are you managing your money, or is it managing you?

budgetingWhile visiting my best friend last weekend, we had an interesting discussion about budgeting. She and her husband are in the same place Tony and I were when we decided to start living frugally. They’re looking for ways to cut back after moving to a new city and taking a pay cut. Like a lot of 20-somethings, they have a lot of aspirations for their money, and they’re looking to make their dreams come true faster by saving more and spending less. They’re definitely on the right track.

During the conversation, we came to a conclusion that I think explains proper budgeting more simply than any way I’ve tried before: The problem is that many people choose the lifestyle they want, and they try to earn enough or stretch their money so they can live that lifestyle. Proper budgeting is the other way around. You need to look at how much money you have, and determine the lifestyle you can live with it.

This is the number one mistake I see new budgeters making. If you’re trying to make your income match the lifestyle you want, you’re setting yourself up for a life of debt, paycheck-to-paycheck living, and constantly feeling behind financially. Proper budgeting is about finding the best balance for spending the money you have.

Controlling my budget this way also makes it easier to increase savings. Extra money shows up as a surplus in our budget. I’m already used to getting by on less, so I’m more likely to throw extra money into savings. If I was constantly working on a deficit, that money would just be eaten up by daily spending.

I’m not against working harder to increase your income if you can do that. But don’t budget for that lifestyle until the money is in the bank.

Zero-based budgeting is the easiest way I’ve found to do this. If you’re setting up your first budget, don’t look at expenses first; look at income. Zero-based budgeting forces you to divvy up your income based on exactly what you earn. It allows for greater flexibility in your income. Some months you may earn more. Some months you have extra expenses. Creating a budget every month based on the money you have allows you to stay in control.

Remember, budgeting is about controlling your money. If you feel like you’re not in control of your money, it’s time to reevaluate your budget.

This article from my partners at Debt Advisory Centre * provides a little more budgeting advice.

Photo by think panama

*This post includes a link from one of my partners.

Homeowner blues (and green)

Last Sunday, Tony noticed a wet spot on the ceiling in the dining room. Oy.

It hadn’t been particularly rainy, but we’d had a little rain that morning, so we assumed it was a roof leak. Roof leaks aren’t covered in our homeowner’s warranty, but the roof passed inspection with no concerns, so we assumed it would be a small leak caused by the crazy storms this season and that would be relatively easy to patch.

Monday morning, I made free estimate appointments with 8 different roofers. I wanted to cover all my bases. During the inspection, we were informed that our garage door’s extension springs weren’t really safe on a door that size, and we had the whole thing converted to a safer torsion spring shortly after we moved in. Estimates ranged between $130 and $500 for the same job, so I learned my lesson about the importance of getting multiple estimates.

The first roofer who came out climbed onto the roof and said he couldn’t see any problems that would be causing a leak. Then he climbed into the attic to see where the water was coming from. I was impressed with his diligence, since we were in the middle of a heatwave, and the attic was probably 150 degrees.

He climbed back down and gave me the bad news. The water on the ceiling wasn’t caused by a roof leak. The water was coming from condensation on an air conditioning duct in the attic. We’d need to call an HVAC specialist. The roofer (who also owns properties and provides remodeling work) referred me to an HVAC specialist he trusts, and didn’t charge me a cent for his time. Thanks, mister!

I called the HVAC specialist, who gave me a few educated guesses over the phone about what could be causing the problem, but said he wouldn’t be able to work in the attic until the temperatures fell back down to normal. It was around 100 degrees here Monday, Tuesday, and Wednesday, so I don’t really blame him. We watched the wet spot on our ceiling get bigger and waited for the temperatures to fall a little.

When a new spot showed up on the ceiling Wednesday morning, I called and asked if there was anything we could do to at least slow the water down before it damaged the drywall or began to leak through. He said he’d come out first thing in the morning before it got too hot.

We discovered a couple things about our house that we didn’t know before. Part of the problem? Our air conditioning system was installed in an extremely unorthodox way. When the house was built in 1970, it probably didn’t have central air conditioning. When someone installed it later, instead of running the air conditioning through the furnace, they installed a separate air handler in the attic. A broken blower in that air handler was somehow causing air flow to run abnormally cold through the ducts, which was creating condensation.

The good news: He was able to stop the condensation and fix the problem for now with a $100 repair to the air handler. The bad news: It’s just a band-aid. The strange installation could eventually lead to a larger problem that can’t be fixed, and since it’s so old, he thinks the whole system will likely need to be replaced in the next 3-5 years. To the tune for $8,000. Gulp.

I asked why this wasn’t caught in the inspection. He said in decades of HVAC experience, he’s never seen anything like it, and it’s likely that the inspector just didn’t know to look for such a strange thing. He said it’s possible even the guy who remodeled the house didn’t realize the HVAC system was set up so strangely. As long as it was working, there was no reason to get up there and investigate inside the ducts.

Well, crap.

I was relieved that he was able to come up with a solution for now that didn’t require us to shell out that kind of cash. Now we have some time to plan and prepare for an $8,000 investment in our heating and cooling system. We’ll also get a second and even third opinion before we do anything to see if an entire system update is really necessary.

After the repair he made yesterday, it seems to be running more efficiently now. With temperatures so hot, the house just wasn’t staying as cool as we wanted, and the air conditioner really seemed to be struggling. After he fixed the problem, it’s much more comfortable in the house.

It’s not a complete shock. We knew the air conditioning unit was pretty old before we closed on the house, and we knew we’d probably have to replace it at some point. An new AC unit is a few thousand dollars, though — an entire system update is going to be close to three times that. Harrumph.

I’m thankful that something minor went wrong first, so at least now we’ll be prepared. If the entire system had died on us suddenly, we would have been shocked at the price tag to fix it. That broken blower saved us from the shock, because now we know what’s going on with it, and we can prepare to make the necessary changes in a few years.

The moral of the story? Owning a home really is so much more expensive that just your mortgage payment. Thankfully, we have some time to prepare for this investment, but it could have just as easily stopped working overnight and required an $8,000 investment immediately.

If you’re considering buying a house, do not wipe out your savings accounts to do it. An inspection won’t catch every potential problem, and new problems can spring up overnight. As a homeowner, you need a healthy savings account more than ever.

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Why the Internet makes frugality easier than ever

The Tightwad Gazette (affiliate link) by Amy Dacyczyn is my favorite frugal book. It’s full of simple ideas for how to cut costs without affecting your quality of life, and Dacyczyn’s values and priorities are very similar to mine, so I find it motivating and inspiring.

The first time I read the book, the ideas were brand new to me. It was a few months before I started this blog, and it was the beginning of my frugal journey. It was eye-opening to realize how simple it could be to cut expenses even more, even when you think you’ve cut them as much as humanly possible.

I just read it for the second time, and it wasn’t so revolutionary this time — for obvious reasons. I’ve been living (somewhat) frugally for three years now. I’ve been through these ideas over and over, and they’re no longer new.

Because I wasn’t so focused on the ideas this time, I noticed how dated some of the advice is. Most of it is pretty timeless, and it is absolutely still useful. However, you can’t deny the fact that the Internet has changed pretty much everything about how we live our lives, and because the newsletters and books were written before the Internet age, it serves as a reminder to me of how much harder it was to live frugally before the Internet.

Here are a few of the things that struck me:


Throughout the book, the cost of stamps and postage is a frequent concern. While this may be bad news for the U.S. Postal Service, I use maybe three or four stamps a year. It’s just not a major expense in my daily life. I keep in touch with old friends and family through social networks, email, and cell phones. I pay bills online.

I do remember the days when it was expensive to call someone who lived even a few cities away. Long distance calling fees were a huge part of the monthly phone bill. Most cell phone plans don’t differentiate between local and long distance calls, which has eliminated this expense for me. Since the majority of my closest friends and family are on the same carrier and I make most of my calls in the evening and on weekends, our phone calls don’t even affect my monthly minutes.

Price comparison

Before the Internet, there was a lot more leg work involved in hunting for the best prices. You’d have to physically drive to the store or call. For insurance rates, there were no easy price comparing engines — you’d have to call each company to obtain a quote. I have no idea how people price compared items like plane tickets or hotels. Now you can hunt down prices from the comfort of your home.

Warranties & Parts

One of the ideas in the book is to call the manufacturer of a broken item to obtain cheap or free replacement parts to fix the item rather than buying a new one. Several pages are devoted to phone numbers you can call or addresses you can write to if you want to get in touch with manufacturers. I can’t imagine a world where finding out how to contact a company is any more difficult than looking up their website and clicking on the “Contact Us” link.

Yard sales

Many sections of the book discuss how to shop and sell at yard sales. Internet sites like ebay and Craigslist have become virtual yard sales where it’s possible to sell things to people living across the country, which vastly improves the likelihood of buying or selling things for a good price. I don’t think the Internet has completely replaced the usefulness of local yard sales, but it’s also made finding and advertising them much easier.


Online games, social networks, and streaming sites have made it easier than ever to find cheap entertainment.


My New Year’s resolution was to take at least one photo every day. The truth is, my “one photo a day” is usually 20 or 30 shots of the same thing. Most of them are bad photos that I delete without saving. I can’t even imagine how expensive amateur photography was back in the days of film cameras and developing costs. I only keep a fraction of the photos I shoot, and I keep most of them digitally. I print a tiny fraction of those photos for display in frames. The Internet and digital cameras have made amateur photography incredibly cheap, and I can keep daily memories of our life without paying for expensive film and development costs, or figuring out what to do with hundreds of “bad” photos that aren’t worth keeping.

Do-it-yourself maintenance

When something goes wrong in my home or with my car, I can easily do some research to try to determine the problem and whether it’s something I’m able to fix myself. Before the Internet, this type of research was much harder and more time consuming. I suppose you could check out home and car repair books from the library or call a knowledgeable friend, but the amount of information you could garner was limited. It was much easier to just call in an expert. We’re often able to solve minor problems ourselves with the help of Google and social networking sites, so we can avoid a huge mechanic, plumber, or other expert’s bill.

Menu planning

The Internet has made millions of recipes available at our fingertips, and we can hunt through millions of food and recipe sites to get ideas for cooking at home inexpensively. Before the Internet, you were limited by your own culinary knowledge, cookbook collection, and recommendations from friends. Now it’s much easier to cook delicious meals at home without eating the same things every week.

Exchange of information & ideas

The biggest thing that struck me is that The Tightwad Gazette newsletters were basically the very first frugal blog. Dacyczyn shared her ideas with readers, and readers shared their ideas with each other by writing letters that she published. It’s the same concept as a blog, only it’s much much harder and more complicated. The Internet has made it possible for frugal people to build an entire community around the exchange of ideas and information. We can support each other and learn from each other from opposite sides of the world without paying postage or waiting days between replies.

I pay $40 a month for my Internet connection. I think it’s worth much much more than that. I’m thankful to live during the Internet age.

How does the Internet save you money?

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Breaking a lease — how I avoided a $1500 termination fee

This post is based only on my personal experience. I am not a legal expert, and nothing written here should be considered legal advice. If you have a legal issue, always seek the advice of a legal professional licensed in your state.

One of the only cons about buying our house when we did is that we were locked into a lease until next January. We had the option to terminate, but I decided we’d only do that if we found a really special house for a great price, because breaking our lease was expensive. According to our lease, we had to pay a termination fee equal to two months rent.

Of course, we did find a special house for a great price, and interest rates were extremely low, so we decided it was worth the extra cost to buy this house and terminate our lease. I never regretted our decision, because I love our house, and I know it wouldn’t have been on the market by January.

A friend from high school who is a lawyer saw me talking about the apartment lease termination fee in a Facebook post, and she contacted me to offer her advice. “Those termination fees aren’t legal,” she told me.

Here’s what she said: when a contract is broken in my state (Indiana), the other party cannot hold you responsible for any more money than they actually lost as a result of the broken contract. If I break the lease, and someone moves in immediately, they can’t charge me two months rent, because they didn’t lose the equivalent of two months rent due to the broken lease.

Theoretically, I could have been responsible for rent payments for the remainder of our broken lease, but ONLY if the apartment complex made their best efforts to fill the vacant unit and it remained vacant. I knew that wouldn’t be the case, because my landlord made a big deal about the fact that ours was the only available 2-bedroom unit, and she thought it would rent quickly. Landlords are also not allowed to collect rent from two tenants simultaneously.

I was nervous and skeptical about it. It’s not that I didn’t trust that my friend was right. I just assumed that it would take a long legal battle (read: lawyer and court fees) to get out of the fee. I wasn’t interested in going to court. In the end, I was concerned that I’d spend more time and money fighting it than I would if I just paid it. So I sent the check.

My friend suggested that if I didn’t want to deal with a legal battle, I should just give them a little resistance and see how they reacted. Oftentimes, landlords know these fees aren’t legal, so if you give them even just a little push back, they’ll let it go.

“Landlords do this sort of thing all the time. They know it’s void, but they don’t expect anyone to question it, so they’re usually able to collect the fee without problems.”

That made me angry. I hate to think that landlords are collecting all this money from people simply because most of us don’t know our rights.

Two weeks later, I went to the move-out inspection. Things had calmed down a lot, and I regretted that I hadn’t fought the fee. It was a lot of money. After the inspection, I brought it up.

“I’m confused about the termination fee,” I said. “The way I understand it, it’s illegal to collect double rent. How is the termination fee not double rent if you have another renter living in the apartment?”

She seemed caught off guard by my question. I honestly don’t think very many people had ever questioned it. It’s in the lease, so they think it’s set in stone. Like me, they don’t know their rights.

“We don’t charge double rent,” she said. “If someone moves into the apartment right away, we don’t charge a termination fee.”

Huh. That’s funny. Because she was the one who told me there was no way out of the fee, and in the same breath, she told me our apartment was the only 2-bedroom available and it wouldn’t take long to rent it.

“If you find a new tenant sooner than two months, I should get a refund for the remainder of the two months I paid for my termination fee then, correct?”

“Yes, but I doubt we’ll have a new tenant that soon,” she told me.

Do you know for sure that you haven’t found a new tenant yet? I asked. “I don’t know. I’d have to check,” she said.

She didn’t seem to be in a big hurry to check. I followed her back to the office, and before I left, I asked her to check. Sure enough, a new tenant was scheduled to move in two weeks after we moved out.

“Great! How much money will I get, and when will I receive it?” I said.

She acted really funny about the situation. She went into the other leasing manager’s office, and closed the door. I waited. Ten minutes later, she came back out with a number written on a Post-it note. It was the amount of my expected refund — 80 percent of the total termination fee I paid. I would only be responsible for paying the equivalent of two weeks rent since that’s how long the apartment would be vacant.

They both acted like no one had ever questioned this termination fee, but once I brought it up, they had to refund me.

They couldn’t confirm that I’d actually receive it until the new tenant signed the lease and actually moved in. They told me to call in two weeks.

They gave me the run-around a little. I had to make several follow-up calls. But this week, I received confirmation that I would receive 80 percent of the fee that we paid back.

Like I said, I am by no means a legal expert, and my friend is licensed to practice in just one state (not even my state), so this is not true in all cases or all states. As I mentioned, if there are a lot of empty units in your apartment complex, it’s probably worth it to pay a termination fee, because otherwise you could be responsible for rent payments for the remainder of your lease term if the unit remains empty. But if you break a lease, be adamant about checking to see if the landlord has found a new tenant, because it likely means you are owed a refund for any fee you paid.

The lesson here is just that it’s absolutely worth learning your rights and being persistent about exercising them. Even if you’re like me and you’re wary of a long legal battle, it can’t hurt to question a policy if you think something is fishy. It can save you a ton of money.

The surprising electricity drain that’s costing Americans billions per year

What’s the biggest electricity drain in the United States? Refrigerators that run non-stop? HD televisions? Nope. According to a story in the New York Times on Sunday, it’s your cable box.

These set-top boxes are energy hogs mostly because their drives, tuners and other components are generally running full tilt, or nearly so, 24 hours a day, even when not in active use. The recent study, by the Natural Resources Defense Council, concluded that the boxes consumed $3 billion in electricity per year in the United States — and that 66 percent of that power is wasted when no one is watching and shows are not being recorded. That is more power than the state of Maryland uses over 12 months.

Because they’re constantly connected to the network and receiving updates, set-top cable boxes continue to suck energy even when they’re turned “off.” The only way to stop the drain is to unplug the box entirely.

Unplugging the box may create a slight lag when you’re ready to watch television again, but it could save you as much as $10 a month. At the very least, it’s essential that you unplug the box if you’re leaving for vacation. There’s no sense spending money and wasting energy on something you’re not even using.

How much money do I “earn” by living frugally?

Since I’m a stay-at-home mom, I don’t add any steady monetary income to our household (aside from occasional freelance work and sporadic income from this here blog). However, my decision to stay home has afforded me more time for household chores than I would have if I worked. To offset our lower income, I try to devote my extra time to tasks that reduce our expenses, and I consider the money we save as my financial contribution to our household.

I thought it might help motivate me to figure some rough estimates of what I’m “earning.” Hopefully you’ll find it helpful, too.

Cloth diapers

I initially invested about $300 in our cloth diaper stash, which will fit Judah until he’s potty-trained. The time I devote to cloth diapers is an extra 3 loads of laundry per week. I line dry them to fight stains, bacteria, and reduce electricity costs. I probably only spend about an hour washing cloth diapers every week. That four hours of work saves us about $30-$50 per month.


I realize that for working moms who need to pump, breastfeeding can be a considerable time investment. Since I’m with Judah 24/7, breastfeeding doesn’t take anymore time than formula feeding (in fact, it probably takes less time since I don’t have any bottles to wash). It saves us $75-$100 per month. Easy money!

Line drying clothes

I line dry about two loads of laundry per week, in addition to diapers. It takes maybe 30 minutes to hang and take down each load of laundry, so I spend about four hours a month line drying laundry. It’s difficult to estimate how much money we’re saving at this point. My dryer isn’t very efficient, so I often had to run loads through two or three dry cycles to get them totally dry. Estimates for dryer costs vary depending on your dryer, how many loads you dry, and how efficient it is. I estimate that we save about $10 per month by line drying. You could argue that $2.50 per hour isn’t worth the time it takes to line dry, but I find hanging our laundry relaxing, I like the way it smells when it line dries, and I like that we’re reducing our carbon footprint, so I’m sticking with it.

Eating at home

This is where I admit that even though I’m a stay-at-home mom, my husband is the cook in our house. Thankfully, since he’s a college professor, a lot of his work load involves grading papers and preparing lesson plans at home, so he’s home a lot more than the average full-time worker. So he cooks dinner for us every night when he gets home. I spend about 30 minutes a week menu planning, and we spend another hour and a half shopping together. Most meals take 30 minutes to an hour to prepare. All together, that adds up to 5 to 9 hours a week. There are too many factors at play to know exactly how much we’re saving, but we can easily spend the equivalent of our entire week’s grocery budget on two restaurant meals, so it adds up.


I’ve really cut back on my couponing lately, because we’ve built such a huge stockpile at the drugstores. When I was clipping coupons every week, I spent probably an hour clipping coupons and planning shopping trips, and another 20 or 30 minutes in the drugstores. It’s tough to quantify how much I actually earned, but I could buy enough toiletries to last months in a single shopping trip for pennies per item.


We cut our $50-per-month cable bill, and replaced it with Hulu, Netflix, and the library. Our memberships to Hulu and Netflix cost a total of $20 per month. Watching less TV costs us nothing, and forces us to get out and do other things. Win-win!

I eventually hope to add gardening to this list to cut our food expenses. Next year!

How does frugality enhance your income?

Photo credit: me!

Why I politely declined the invitation to your candle/purse/kitchen/jewelry party

Everyone likes to be invited to a party. I love parties! I don’t even mind if the hostess asks me to bring a dish. If I’m being welcomed to her home to enjoy the festivities, it’s the least I can do. And if it’s a shower, I love to bring baby or bridal gifts for people I love.

Unfortunately, the invitations I usually receive aren’t for parties. They’re for sales ambushes from trusted friends. “Come to my candle party!” is really code for, “Come to my house, eat some appetizers, and buy some overpriced crap out of my catalog so I can get free stuff or money.”

Maybe I’m being a curmudgeon here. It certainly wouldn’t be the first time. The thing is, I don’t want to feel pressured to buy stuff I don’t need, especially when it’s typically so overpriced. Not to mention, it sort of makes me feel bad to know that I’m not being invited to a party simply because the hostess enjoys the pleasure of my company, but because I’m another person who may buy stuff from her.

When I choose to buy something, it’s because I need and/or want it, and I can afford it. I don’t want to feel guilted into buying things because my friend has provided appetizers or drinks, or because I feel responsible for supplementing her income. That’s not how business works. Good business is based on the exchange of money for worthwhile goods or services — not guilt because your friend is trying to start her “home business” if only her 20 closest friends would spend $200 each on the junk she’s selling.

I don’t like when sales people ambush me. I don’t like when they call me, I don’t like when they approach me in the mall, and I don’t like when they knock on my door. The last thing I want is to be solicited by a friend at a party.

If you want to build a business selling products, I don’t begrudge you that. By all means, let your friends know that you have those products available, and the ones who are interested in buying can come to you. But please don’t solicit sales from me under the guise of a get together. I’m too cheap to buy any of your overpriced stuff anyway.

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Are you “financially fragile”? How to fix it.

According to a new study, nearly half of all Americans definitely or probably couldn’t come up with $2,000 in 30 days if they faced a financial emergency. Financial experts recommend keeping an emergency fund with enough cash to cover at least three to six months of expenses. Based on this research, it seems almost half of Americans would struggle to cover even one month in the event of a job loss or other emergency.

Considering the state of the economy over the past several years, this doesn’t surprise me. I have lived paycheck to paycheck in the past, and I know what it’s like when the money seems to leave your savings account more quickly than you can save it.

I truly believe that with some advance planning, though, most of these families wouldn’t be nearly as financially fragile. We were earning less than half of our current income when we finally began saving money. We went from barely squeaking by to saving a small amount of money every month without increasing our income.

By saving or earning an extra $160 a month, you could build a bare bones emergency fund of $2,000 (plus a little extra with interest) in one year. But how? Through a combination of spending less and/or earning more. Here are some ideas.

Spend less

Line-dry your clothing. The clothes dryer is one of the most expensive appliances in your home. By line-drying some or all of your clothing, you could noticeably reduce your electric bill.

Weatherproof your home. Seal drafty doors and windows with weather strips, update window treatments to insulating curtains or blinds, and take other steps to better insulate your home to cut your heating or cooling costs.

Add one or two vegetarian meals to your weekly menu plan. Reducing your meat consumption can make a huge difference in your grocery bill.

Lower monthly payments. If you have a lot of minutes left on your cell phone plan every month, you might be able to save some money by reducing your plan. Call insurance and utility companies to see if you qualify for any discounts.

Use Netflix, Hulu, and Redbox instead of cable for entertainment. Hulu costs anywhere from $0 to $8 per month. Netflix can cost as little as $9 a month. Cable costs $40 and up. You might be surprised how little you miss cable.

Downsize. Move to a smaller, less expensive house or apartment. Trade your fancy car for a reliable used vehicle with a lower (or no) payment. Become a one-car household.

Use cash for weekly expenses. This was the easiest thing I’ve ever done to cut spending fast. Set your weekly budget for daily expenses like gas, groceries, etc. At the beginning of the week, withdraw the amount of cash you’ll need. You’ll be amazed at how little you spend when you’re not unconsciously swiping your debit card several times a day.

Earn more.

Sell your stuff. Do you have shelves and shelves of DVDs and books and you don’t watch or read anymore? What about clothing you haven’t worn in years? Jewelry you don’t wear? Have a rummage sale or start liquidating your unnecessary assets at consignment shops, resale stores, or online.

Think like a teen. Clean houses, mow lawns, babysit. Start thinking of the ways you used to earn money as a teen. They may still be viable sources of income even as an adult.

Sell crafts on Etsy.

Find a part-time job for evenings and weekends.

I realize it’s easier said than done, but even if you can’t get to $160 or more per month, cutting expenses and earning more can help you start saving something, and that’s the first step to building your emergency fund.

What suggestions do you have for people who want to start saving to protect themselves from financial emergencies?

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