I’ve Paid For This Twice Already…

Archive for the ‘budget’ Category

We all have to do it and we all hate it as much as the next guy. Traveling by plane can feel like a hopeless exercise in cutting through red tape. There is no way to escape the futile pastime of getting patted down, taking your shoes off, and surrendering your Fourth Amendment rights.

Another thing we give away freely at the airport is our money. When we finally bypass security and get into the waiting terminal, we are presented with all kinds of consumer choices that blindside us with their seemingly convenient location, then gouge our wallets with ridiculously inflated prices. Even before we pass security, the airport finds ways to rip us off and suck even more money from us. Here are some tips to save some cash while flying through the sky:

Eat Before Getting on the Plane

While the Cinnabon at the airport may seem like a good idea, it probably isn’t. You are not trying to carbo-load for a race. You are going to be sitting in the same position on the airplane for several hours in a very confined space. Try to eat some fruit or lean protein before boarding and if you must, bring an apple with you in your carry on.

Take a Shuttle

The airport shuttle is an excellent way to both save money and save the environment. It is in essence a carpool bus that people take to the airport instead of splurging on a cab. It has several destinations and usually drops 7-8 different people off at different terminals. If you are one of those who does not like riding with a bunch of strange people, then you probably don’t want to step aboard the plane.

Don’t Park at the Airport

Keeping your car at the airport for the duration of your trip can really start to add up. Most parking lots charge you by the day and charge exuberant prices which are consistent with everything else you find at the airport. Instead of leaving your car in storage, have a relative pick you up, take a cab, or call the airport shuttle as previously stated.

Don’t Check Bags

Unless you are going to an exotic location or plan to leave your city for a couple of weeks, there is no need to pack your life up into a bunch of suitcases. With clever packing skills and a little ingenuity, you can fit all of the clothes you need into one bag. Don’t bring things like toiletries along because you will be able to purchase them at your destination.

Bring Your Own Entertainment

Instead of buying magazines and books at the kiosk in the airport, bring some from home. It might be tempting to purchase the new John Grisham novel, but it probably won’t be at the manufacturer’s suggested retail price. Bring an iPod, tablet, or other device so you can watch or listen to media.

Don’t let the people at the airport trick you into buying things you don’t need. You already gave them enough money when you bought your ticket.

Our mortgage is still more than 80% of our home’s value (and a higher percentage every day it seems, as the value of our home plummets, but that’s another story) so we’re required by our lender to have an escrow account through them to pay our homeowner’s insurance and property taxes.  This isn’t a big deal, except that I’d rather handle the money myself, but I am patient enough to wait until we get our mortgage paid down to the appropriate level.

In the past two years since we’ve owned our home, we’ve had our monthly payment adjusted upwards twice from its origin due to projected escrow shortages.  There is a minimum balance required in our escrow account, and if our property taxes or homeowner’s insurance is higher than the bank expects, the minimum balance drops too low and then we have to put more money in (which is what raises our monthly payment).  It has never been a huge upward increase in our payment, but it has so far always been up.

So this year when I got the annual letter from the mortgage holder, I was less than excited.  But when I opened it, my tune changed immediately.  Not only does our monthly payment go down for the next year by $43.66, we also got a check for $996.86 because we have too much in our escrow account.  Our property taxes have gone down by over $500, which is where the escrow overage came from (the good side benefit of lower property values, I guess).

We discussed what to do with the unexpected windfall, both the check and the monthly mortgage decrease, and we’ll be putting both towards my student loan.  So this month I’ll be paying $1496.86 towards the student loan, and every month after until it is gone I’ll bump the minimum we pay up by $43.66.  We discussed the idea of putting it towards our mortgage principal since it came from the mortgage company, but decided we’d rather keep concentrating on that last non-mortgage debt and make it go away as fast as possible.

Sometimes the readjustment letter has good news, after all.

I’ve had a lot of questions lately pop into my inbox from new readers that found this site searching for frugality topics out of necessity, not necessarily desire.  With the economic climate in the US such as it is, sometimes people are making the choice to be frugal as self preservation, not as a desired lifestyle choice.

And I can completely relate to that.  Although I enjoy trying to be frugal with what I have and find ways to cut or eliminate expenses, it wasn’t always this way.  I never had super-extravagant tastes, but I did like to spend money on myself, and not always for things I needed.  Becoming a more frugal person has been a very eye-opening experience, and has taught me a lot about myself, but hasn’t always been easy.

The problem with any radical changes is that they tend not to last.  If a person tries to go from spending money freely and without any forethought, directly to spending only on a strict and controlled budget, that is a recipe for disaster.  You might stop spending money for a few days, or a week, but sooner rather than later you “slip”, and once you slip it is easier and easier to go back to your old habits.

Small steps are the key.  Here are some ideas for a few small steps to take to ease into a world of frugality – which to me is not about spending as little as possible, but instead about being self-aware about the choices we make with our finances and the effect they have over both the long and short term.

Date night can be a walk in the park.  Literally.

If you have kids, which I do, having a date night with your spouse doesn’t have to be an extravagant affair.  My spouse and I recently went on our first date night in quite a while, and honestly, it was fun just to hang out and not have kids pulling us in 16 directions.  Plan your date night with an eye to the atmosphere and not just something expensive.  A picnic in the park can be as fun (or more) than a fancy dinner out.  The second-run movie theater can be a great alternative to the newest releases.  And if you do have kids, trading babysitting with a friend can keep you from breaking the bank on child care.

Cutting coupons doesn’t have to be all or nothing.

Coupons are a great way to lower your grocery (or other) bills.  But you don’t have to spend hours and hours finding the best deals.  ease into using coupons.  Start with just scanning the Sunday coupon offerings and picking out things you were already going to buy anyway.  As you become more comfortable with the process, you can branch out.

Spotting the right sale is like a beat the bank game show.

I scan circulars for sport, I admit it.  I like to try and beat the advertising at its own game.  It is all a matter of mindset.  If you think something is drudgery – it will be.  Inject a little fun.  Have a contest with yourself to get the best deal (or a better deal than last time).  You might like it!

What has to go first – what needs to go next – what’s left is negotiable.

Changing everything today may not be possible.  Take a realistic look at your finances.  How much needs to be cut back?  Prioritize.   If you need to eliminate $150 from your monthly budget, start by cutting $150 of your spending, not $500.  Work your way up bit by bit instead of all at once, and the road will be easier to stick to for the long term.

Looking at the world through a frugal lens does take some work, but ultimately can be very rewarding.   Looking at frugality as a task to be enjoyed, and ultimately as taking control over your financial life, can provide needed encouragement to keep on the path to a better financial future even when that road seems steep.

My spouse and I don’t often argue about money anymore.  But it wasn’t always this way.  Back when we first were married and merged our finances, we would quite often have minor disagreements that sometimes turned into full blown wars over how we spent (or didn’t spend) our money.  The underlying cause was of course a lack of communication about the reasons behind our differing positions, but it wasn’t because we didn’t talk.  We both assumed the other was aware of things that they really weren’t, and based our arguments from that position instead of really getting down into the underlying financial realities.

Once we started talking about the actual facts of our situation, instead of making assumptions that were incorrect, we became a team in handling our finances instead of adversaries.  This is the process we took to get there.

Make Sure Everyone’s Aware of the Actual Situation

I was (and still am) the primary handler of the day to day finances.  I paid all the bills, so I had a much better idea than my spouse of how much money came in and went out and how they related to each other.  I assumed he was as aware as I was, but he wasn’t.  Most of our arguments stemmed from that simple fact – our expenses and our income were very close to the same, but since he didn’t realize that, he wanted to spend more money on non-essentials than we really could afford.  Once I drew up an income/expenses sheet (with a list of our monthly expenses and how that compared to our monthly income, broken down into types) and explained it all to him, he was much more in tune with our financial reality and much more willing to put off or forego a non-essential expense – and much more on board with working towards becoming more financially stable.

Compromise is the Name of the Game

Sticking to your position with no room for discussion rarely ends well.  You may have to, depending on what your situation is, but there is usually some room for compromise.   Try not to react immediately in the negative to the other’s position.  Listen, reflect, and figure out a middle ground you can meet in.  Maybe you want to have the ability to spend how you choose.  Maybe your partner does.  And maybe there isn’t really any flexibility in the budget to allow you to spend.  You may have to start with a tiny bit of flexibility, like $5 a week (or even less, we’ve done it!) and as you work towards improving your financial position, slowly increase the flexibility.  Things only get better if you accept reality and work from there.

Long Term Goals Vs Short Term Realities

Understanding what you are working towards is important.  Saying “I want an allowance to spend how I want” or “We can’t spend money on anything until things get better” might be valid points, but working short term realities into a long term scenario shows why what happens now is important for the future.  Be specific – try to avoid things like “until it gets better” or “I want to spend what I want”.  Draw up a detailed plan for how what you are doing now with your money will improve the future, and also how you can get to a place where both of you are having some of your needs (to spend or to save) met.  Specific benchmarks such as certain income, savings, or debt reduction milestones can work wonders for motivation and get you on the same page.

Getting to a place of agreement about money management may not always be easy, but if both people are willing to listen and do the work, it can be done.  Working together towards your common goal is a much smoother ride than working at cross-purposes.  Put yourself in your partner’s shoes and then start opening those lines of communication today.

When setting a financial goal, whether it is to pay off debt, save an emergency fund, save for another objective, or anything else that takes an extended timeline, changes in what you are currently doing, financially, will usually have to be made.  Be it adjusting a budget, creating a budget in the first place, or simply figuring out what you take in and spend, a reallocation of your current funds is in order.  But how to find the money to start working towards those goals?  Here is my three step process to seriously looking at the big-picture items in my spending (generally recurring bills and other like items) and finding where I can squeeze a little extra to go elsewhere.

Try to reduce expenses without eliminating desired services

My first step is not to cut anything classified as a want and not a need, but generally try to reduce the costs of both wants and needs.  This can be as simple as making a call to your telephone or cable or insurance company to insure that you have the best rate for the coverage that you desire (and are not paying for services you do not use) or as complex as refinancing a mortgage or other adjustable rate loan.  Examine every recurring expense in your household and make sure that you are paying what the service is worth, not what you are being charged.  Reductions here can keep your quality of life the same while increasing the flexibility of your budget.

Determine what remaining services are wanted vs needed

Maybe shaving some of the excess ff your already existing costs wasn’t enough to have the flexibility to meet the new goal. Once you’ve got the best prices available for the services you have, it is time to take a good look at what you want vs what you need.  This is different for everyone.  For some, our high-speed internet would be a want, but for us, it is a need since my spouse is required to have 24/7 internet access for his job.  But there are definitely items in our budget that are a want vs a need.   Figure out what in your list of expenses are a must, and what is a luxury.

Prioritize wants and act accordingly

I am not saying one should cut every “want” 100%, but prioritize.  There are definitely things that are less painful to eliminate than others.  Figure out what you can do without – you might after a few months wonder why you thought you needed it!  As long as the goal you are trying to accomplish is more important to you than whatever you’re eliminating, the pain is worth the effort.  Keep your eye on the prize!

Not everything needs to be cut to the bare bone to work towards a goal.  But if you examine where you are, and where you want to be, it might be clearer than you think what things you’d rather give up so you can meet another, more important goal.  Just don’t forget to keep having a little fun.  Frugally.