Tag Archives: Simple Living

Simplifying our banking system

When Tony and I first combined our finances, we decided to open one joint account for the majority of our spending, bills, and other banking, and a personal account for each of us. The plan was to keep a small balance in our personal accounts and use them for discretionary spending, gifts, and other personal expenses.

It’s been almost two years since we combined our finances, and the personal accounts have turned out to be more hassle than we expected. We very rarely used the personal accounts. Last month a debit card mix-up almost cost us in overdraft fees. After that, we decided to go ahead and simplify our banking by consolidating our accounts.

The first step was the make sure we didn’t have anything linked to those accounts. Since the personal accounts were never meant for paying bills, this was relatively simple. Tony’s paycheck was being direct deposited into his personal account. Once the funds cleared, he transferred the money to our joint account. Why we made things so complicated by doing it this way, I have no idea. He alerted his payroll department to the change, and they set it up so that his paycheck will be deposited into our joint account from now on.

A 10-minute phone call today was all it took to transfer the tiny balance from our personal accounts and close them out. It felt pretty good to cut up the personal debit cards. Already our financial system feels much simpler.

Last week I received an email from ING Direct, the online bank where I keep all of our savings. Right now they’re offering a $25 bonus to savings account holders who open a checking account and make three purchases using their debit card.

I’ve been considering opening an ING Direct checking account for awhile. Since ING is online-only, it takes 3 days to transfer money from my savings to our checking account at Wachovia. By opening an ING checking account, I’ll have instant access to our emergency fund in case of an emergency. Transfers are instant, and I’ll be able to use our debit card to access the money. Of course, the $25 bonus just for using my debit card will be nice, too.

ING Direct also offers a relatively high interest rate for checking (currently 0.25%). I’ve considered moving all of my checking to ING, but even though I’ve never had an issue with their customer service (representatives are always helpful, friendly, and even available on the weekends), I still like using a brick and mortar bank for my regular banking. Maybe someday I’ll take advantage of the high checking account interest rate and switch over completely, though.

I briefly considered opening two separate ING checking accounts, one for me and one for my husband, so we could get two $25 bonuses. But then I decided I didn’t want to be back where we started with two extra checking accounts we don’t use. So we’re happy with one for now strictly for emergencies.

We’ll each receive a debit card for the ING checking account, and it will look completely different from our joint checking account debit cards, so we’ll be able to avoid any mix-ups.

I’ve been incredibly happy with my experience with ING Direct for my savings account. The interest rates are considerably higher than normal savings accounts (currently 1.5%). If you’re interested in opening your own ING Direct account, send me an email and I’ll send you a referral link. If you make an initial deposit of $250 or more you’ll qualify for a $25 bonus, and I’ll get $10 for referring you. Let me know and I’ll send it along!

I feel so much better now that we’ve simplified our money management. What about you? Is your system working for you, or is it time to reevaluate?

Living life under the frugal microscope

Since the economy tanked, it’s become a little easier to live a frugal lifestyle without facing judgment. No matter how bad the recession gets, though, we still face people who just don’t get it. We’re constantly answering rude questions about how we choose to live our lives.

“Why are you throwing your money away on rent when house prices are so low?”

Because we don’t have money for a down payment and we’re not ready to lock ourselves into a mortgage anyway.

“You mean you share a car? Why?”

We don’t want to take on the expense of an additional car when we can easily survive with one. Not only would another car mean an additional car payment, it would also mean more insurance, more gas, and more emissions.

“What do you mean you don’t go out to dinner or buy yourself things? You work too hard not to enjoy life.”

We do work hard, but we’d rather save for future goals than spend all of our money today on things that matter less to us.

“Why wait for the things you want? If you want to take a vacation or buy something, just charge it now and pay it down later.”

I’ve lived through the stress of high interest credit card payments. No thanks.

It’s frustrating to face this judgment from people around us. Our closest friends and family are supportive, but we still face a handful of acquaintances that don’t understand our choices. Instead of accepting that we’ve chosen to live differently, they treat us like we’re deprived and practically living in poverty because we don’t make the same choices they do.

I must admit that it can be tempting to give in. I would love to eat out a couple times a week, refurnish our apartment now, take off this summer for Europe instead of waiting another year, take advantage of a housing market that’s pretty much bottomed out. But I know we’d never reach our goals if we gave in, and those goals are more important to me than getting what I want right now.

Fighting the temptation is easier than facing the judgment, though. Maybe someday I’ll be that person that truly lives the life I want to live without caring what others think, but for now it’s just annoying.

I feel like living the frugal lifestyle puts us under a microscope. Because our choices are different, people feel like they have the right to comment on things that are none of their business.

The worst part is, when I answer their questions, they tend to act defensive. I’m not judging their choices, and would never compare their situations to my own, but when they ask me why we live the way we do and I explain myself, there is always a feeling that I’m judging them for not saving, living on credit, or taking on a mortgage they probably can’t afford.

How do you handle the frugal microscope?

Spring cleaning can help you make (& save) money

clutter
photo by florriebassingbourn

One of my goals for the next few weeks, despite my busy schedule, is to get myself motivated to get some real spring cleaning done. We’ve been living in the same apartment for two years, and we just signed the lease for another year. We’ve got some serious clutter build up that I’d like to clear.

My weaknesses are closets, drawers … anywhere that I can stuff things to deal with them later. It’s a terrible habit, and every few months or so I have to whirl through the house clearing away all the things I don’t really need that I stashed away “just in case.”

For some reason I insist on keeping things for much longer than I actually use them. That’s why I’m really pushing myself to get organized and get rid of everything we don’t use, including books, CDs, and DVDs.

Since I’ve been so busy, it’s pretty easy to push something like cleaning aside for other, more lucrative pursuits. In an effort to motivate myself (and hopefully some of you), I’ve thought up some ways that cleaning can actually help you save and make money.

Your clutter may be worth money.

Your junk may be worth something to someone. Every month that it sits in your closet collecting dust is a missed opportunity for extra income.

A clean house leads to better focus.

Have you been struggling with work and home life? Do you feel scatter brained and unorganized? Clutter reduces productivity, which could be preventing you and your spouse from reaching your maximum earning potential (not to mention getting the most out of home life). Hidden under all those papers and junk mail could be bills that may go unpaid, leading to late fees or worse. Getting organized will leave you freer to make more money and maximize your income.

You may find something that you need but forgot you had.

Do you have a list of spring and summer items you need? A fan, summer clothes, your kids’ Easter baskets? Before you run out and purchase them, make sure you’ve dug through all the clutter in your closets, attic, where ever you store things. You might find something you need that you didn’t even remember storing away. If you already have it, you won’t have to spend the money to replace it.

If you can think of any other ways that a clean house can improve your finances, please add them to the comments! I need all the motivation I can get. :)

Reducing stress a little at a time

I’ve got a busy couple of months coming up. We’re taking a mini-vacation to Washington DC at the end of the month, then we’re expecting several visitors in March and April. In addition to that, I just found out I’ll be going on a business trip at the end of March.

When I get busy, it’s more important than ever that I keep stress levels down. I find the best way to reduce stress is avoid it by staying on top of this a little bit at a time. Even if it’s something small, every little bit helps.

Here are some of the little things I do to keep things running smoothly and reduce stress:

  • Make my lunch and lay out my clothes before bed to avoid rushing around in the morning.
  • Spend 15 minutes a day tidying up to avoid a major mess at the end of the week.
  • Do one load of laundry every night to avoid a pile-up.
  • Plan a menu for the week.
  • Avoid letting clutter pile up on flat surfaces (tables, shelves, etc.)
  • Keep a small notepad with me to make notes and monitor my to-do list.

Avoiding stress a little bit at a time works for me. What little things do you to to avoid stress when you’re busy?

Organizing my finances electronically

Everyone has a different method for paying bills and keeping track of spending. For a long time, I struggled to find the right method for me. I used to track spending with my online banking system, but that didn’t allow me to create a budget. I was constantly looking at my balance and mentally subtracting bills that I knew were coming up. It was stressful and dangerous.

Then I started paying my bills on payday. This helped me avoid the constant fear that I wouldn’t have enough to pay my bills when they were due, but it often left me with a dangerously low balance at the end of the pay cycle.

Now that I’ve been budgeting consistently for about 6 months, I’ve developed a method for bill paying and financial organization that works really well for me. So I thought I’d share it with all of you.

My checking account is for bills and living expenses only. I keep enough to pay my monthly bills with a little cushion for human error, but the rest of my money goes into savings where it can earn interest and stay safe from impulse purchases. When there’s extra money in my checking account, it gives me a false sense of wealth. When I have just enough to cover my bills, I’m not tempted to spend.

Every month on the 1st of the month, I create a zero-based budget using Mint.com. Every penny of income for the month is assigned to a purpose. By this time, I’ve usually already received the bills that fluctuate from month to month — like the electric bill and gas bill. I set all of our fixed expenses first, then I balance our discretionary spending amounts for food, entertainment, and savings based on what’s left over.

I’m able to determine how much I can afford to put into savings, and go ahead and put it away before we pay any other bills. I’ve tried to wait until the end of the month to contribute leftover money to savings. The problem is, there’s almost always nothing left by the end of the month. If it’s in my account, I’ll spend it. It’s easier for me to determine how much I can save, and save it right away to eliminate temptation.

Because I don’t keep a huge surplus in our checking account, I stagger bill payments with pay periods. Tony receives his teaching stipend at the end of every month, but pretty much all of it goes to rent and savings on the 1st of the month.

I’m paid bi-weekly, so I base our bill pay schedule on my paydays. The bills that are due in the first half of the month are paid on the 1st. Bills due in the second half of the month are paid on my second payday. I use Mint to keep track of what’s been paid.

Every other day or so, I check our spending in Mint. I try to make sure we’re on track to avoid overspending. We have very few discretionary spending categories, which makes it easier. I really only monitor food, miscellaneous expenses, and entertainment.

Pairing zero-based budgeting with electonic spending tracking and a consistent bill pay schedule allows me to stay on top of spending. It also lowers my stress. Because my budget is zero-based, I know I’ll always have enough to cover my bills and expenses. That works for me.

Think a month ahead to save time & money

Each week, I plan a menu and a to-do list. In an attempt to reduce stress and plan ahead for the holidays (including a 2,000-mile road trip), I decided to try monthly planning.

In addition to using Mint to plan a zero-based budget based on our income (which I do every month), I also mapped out a month’s worth of meals, a pre-holiday/vacation to-do list, and I’m still working on planning a month’s worth of blog posts.

Using Notepad, I saved three documents on my computer desktop last weekend: December budget, December menu, and December blog schedule.

When it comes to my blog, I’m not so good at planning ahead. Between my full-time job, spending time with my husband, and home management, the blog typically takes a back seat. It’s not uncommon for me to sit down to write the next day’s blog post with absolutely no idea what I’m going to write.

This month, I’ve been pushing myself to stay ahead of the game. Not only am I attempting to plan ahead for blog post ideas, but I’ve been writing more on the weekends and scheduling posts ahead of time.

I have to say, monthly planning has made my life a lot easier.

In the past, I’ve tried similar planning using calendars and date books. For some reason, these simple little Notepad documents have worked better than anything I’ve ever tried. Maybe it’s because I spend so much time in front of my computer, or maybe it’s because they’re so incredibly simplified, like a little electronic Post-it note.

I finished my budget and menu plan last weekend. Even though my blog post schedule isn’t finished, I have a head start on the month’s posts. Most importantly, I have a place to put those ideas that randomly spring into my head.

My premature new year’s resolution is to keep it up. I tried this method to make the holidays easier, but I can see how it could save me tons of time and money the rest of the year, too.

Having a monthly menu plan has made it easier to take advantage of grocery sales on nonperishables. For example, we’re making vegetable beef stew in two weeks, so when we found beef stock on sale for 50 cents a can last week, we picked up four cans. It saved us $2.

In the future, I plan to use the previous month’s menu plans to simplify my planning process even further. Because we have many favorites that we like to make over and over, I can refer to old menu plans when I need ideas for the next month’s meals.

My monthly to-do list has made it easier to manage my time. I know what I need to finish each week, so I won’t end up with a million things to do the week before we leave town.

It’s also made my weekend a lot more enjoyable. I didn’t feel stressed Saturday morning before grocery shopping, because I knew our menu plan was already finished. I also didn’t feel rushed or guilty thinking about what I should be doing. My to-do list dictated a few tasks I needed to finish to stay on track. Once they were done, I was free to relax.

I can’t wait to perfect this monthly planning process to maximize my savings and productivity. That definitely works for me.

My favorite frugal fall pleasures

Photo by emzee

In North Carolina, fall comes late, but it’s worth the wait. The leaves are finally changing, the sun shines every day, and the temperature has fallen to perfect sweater weather. This is my favorite time of year, and I decided to take some time to reflect on why I’m thankful for fall.

Here are my favorite things about the most beautiful season. The best part? They cost nothing.

fall leavesHot cinnamon apple oatmeal for breakfast.

Long walks on brisk mornings with the leaves crunching beneath my feet.

The sweet anticipation of family and holiday tradition.

Bundling up on soft sweaters and my warm winter coat.

Healthy, comforting soups and stews that stretch our grocery budget even further.

Cozy nights at home cuddled up in sweaters and blankets.

More time to work on my handmade flannel quilt.

Comfy socks and slippers.

Hot chocolate and tea before bed.

Sleeping soundly in a chilly room under my down comforter.

What about you? What’s your favorite part of fall?

How to avoid high luggage fees at the airport

Photo by geishaboy500

It’s bad enough that airline tickets have skyrocketed in the past two years, but recent hikes in luggage checking fees have made travel even more expensive. Some airlines, including American, Northwest, United, and US Airways, are even charging for your first checked bag.

Here are some tips for avoiding these excessive fees, or at least reducing their impact on your travel budget.

1. Be familiar with the airline’s policies before you buy your tickets.

Online ticket brokers like Expedia.com and Priceline.com have made it easy to compare major airlines’ prices before purchasing tickets. (Keep in mind, they also charge fees for their services, so I recommend purchasing your tickets directly through the airline.)

Unfortunately, when buying through these sites, it’s easy to forget extra add-on fees in your quest for the cheapest price. You may purchase a ticket from United because it’s $15 cheaper than Delta, but you’ll end up paying the same after you check your bag.

This handy chart from Travel Insider compares all of the checked luggage policies of major airlines as of July 2008. Be familiar with these policies, and bear in mind the length of your trip, how many bags you’ll have to check per passenger, and the likely weight of each bag. Figure all of this information into the final ticket price so you’ll have a better comparison when purchasing.

2. Avoid checking luggage all together by carrying on if possible.

According to this carry-on luggage policy chart, all of the major airlines still allow a free carry-on bag and “personal item” for each passenger. Personal items include purses, laptop cases, backpacks, etc. It should be easy to fit all of your necessities in a carry-on and personal bag if your trip is short. Take advantage of this, especially if your airline charges for your first checked bag.

The airline we’re traveling on doesn’t charge for the first checked bag, but we prefer carrying on anyway to eliminate the risk losing our luggage during a layover. Luckily for us, our trip is short. We’ll only be staying for three days. So all of our luggage will be with us for the duration of the trip.

3. Minimize your toiletries, especially for carry-on bags.

Staying in a hotel? Then you probably don’t need to worry about toiletry items like shampoo, conditioner, soap, and mouthwash. Most hotels will provide these for you. This is good news if you’re carrying on since current Transportation Security Administration restrictions limit liquids in carry-on bag.

We’re staying with my sister, so we’re bringing our own toiletries. No problem for frugal folks like us. We’ve been collecting free samples for months. We also have some leftover hotel toiletries from our honeymoon. Samples easily meet the 3 oz. or less requirement for carry-ons, and they’re compact enough to fit into the TSA-approved quart-sized zipper bag. Plus, it’s fun to try some new toiletries on vacation.

Here’s three day’s worth of mini toiletries:

And look how nicely they fit in a 1-quart bag:

4. If you must check luggage, weigh your bags before you leave.

The surcharges for extra weight can cost a fortune. You can refer to this chart again for luggage weight limits and costs. Save yourself some trouble, and money, by putting your suitcase on a scale before you leave for the airport. Move some items to your checked luggage or to a backpack that you can carry on as a personal item if your bag weighs too much. If you can’t get around the extra weight, at least you’ll be prepared for the high fees when you check your bag.

5. Pack light!

This one is last on the list because, well, duh. The best way to save money on checked luggage fees is not to check luggage, even for longer trips.

If you’re very careful about how and what you pack, you should be able to get a week’s worth of necessities into a carry-on suitcase and personal bag. Notice, I said necessities. Obviously you can’t scrimp space on items like underwear and socks, but everything else is up for negotiation. Do you really need more than one pair of shoes? What about that extra sweater?

For long trips, most hotels offer coin laundries as a courtesy to guests. Doing laundry might not seem lik a fun vacation activity, but it’s certainly a lot cheaper than paying $15-$25 per checked bag. That money could go to something a lot more worthwhile on your trip, like a nice restaurant meal or a museum admission. Take that into consideration when deciding whether it’s really worth it to check your bag.

Clean out the refrigerator before you put away your groceries

Have you ever found leftovers shoved in the back of the refrigerator and forgotten for weeks? Um, me neither. OK, so I have. But not for a very long time, because we have a simple system for clearing out the old stuff these days.

Every week before we go to the grocery store, we clean out the refrigerator. We check all expiration dates, get rid of uneaten leftovers from the week before, and make room for the new groceries.

Not only does this ensure the removal of dated food, it also eases the process of putting groceries away when we return from the grocery store. Because we’ve already shifted and organized everything, it’s easy to fit all of the week’s groceries. It’s also a good opportunity to take stock of your freezer and condiment inventory and make additions to the grocery list if necessary.

Putting away groceries is a lot less stressful when we’re not trying to make space in the refrigerator at the same time.

Looking for more kitchen organization ideas? Check out this week’s Works for Me Wednesday carnival at Rocks in my Dryer.