The Coupon Queen

So, this Saturday, I dared to take all three of my children to see my grandparents – their great-grandparents.  (And they truly live up to that title!)  This was the first solo trip back to the grandparents since Thanksgiving.  (Eli wandered off and we found him on the edge of the pond!!!  His guardian angel worked overtime that day!)

My aunt and uncle stopped by.  I’ve always thought of them as super-wise with money and most everything else.  (Except my aunt’s love of artichokes and mayonnaise…ugh.)  She produced a receipt nearly as tall as I was where she had saved over $100 using coupons!!!

Now I’ve saved some money over the years with coupons, but not hundreds.  My aunt is what I would call, A Coupon Queen.  She does this on a regular basis.  If you ever seen one of those specials on TV where they walk out with baskets of groceries for $2.34 – that’s her. 

Now, I don’t need a pantry full of deodorant or dryer sheets.  But she’s inspiring.  Over the last two weeks, I’ve done what she told me and probably already saved $150 on stuff we use and need.  I’m shocked. 

On day one, I promised I’d be honest so here’s my honesty.  Our grocery budget for a month is $500.  Some of you may be shocked at how high and some how low.  Remember there are five of us with two in diapers and one on special care, super expensive baby formula.  I’ve stretched that budget so ridiculously far in the weeks since I’ve followed in the Coupon Queen’s steps. 

I had never taken the time to clip out most all the coupons and match them up with sale papers.  (I still skip the coupons for the joint replacement supplements and elastic waist band jeans.)  

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But I was shocked at how much stuff you can get free or less than .50 cents just by using the right coupons in the right places.  I had always considered myself pretty smart with coupons, but I have to say, I’m almost embarrassed at the money I’ve left on the table by not couponing. 

There are a million websites to teach you the tricks of the trades, coupon databases, and even sites that match up the deals with the coupons for you. 

It takes a little time to clip the coupons, but an office supply freak like me, of course, has a paper cutter so it takes less time. 

Let this be a lesson to all of us.  Me, included.

Coupons equal more money in my pocket, and double the money, if I am shopping in the right places. 

It's the Most Wonderful Time of the Year

I’m singing the song in my head as I type. 

It’s tax season!!! 

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All return preparers hate their lives from about January 20 through April 15.  They don’t see their friends or family.  They’re working 10-12 hours, sometimes longer, a day.  But I enjoy tax season.  I love the questions, my phone ringing off the hook twelve times a day because someone’s aunt wants to know if they can claim their dog food as a business expense. 

You’re probably not surprised when I tell you that I’ve already done our taxes.  I start on them about in December to get an idea of what we’re looking at.  We are getting a whopping refund this year…it helps when you have three kids…in daycare.

But actually, getting a huge refund is a financial no-no.  A lot of us, me included, are so terrified of owing a dime to the IRS, we go overboard on our withholding.  Kinda like a forced savings plan.

Can you imagine giving $2400 to your mechanic, letting him holding it all year, actually investing it and earning interest?   Then at the end of the year, he only gives back the $2400. We’d cry thievery!  That’s our interest and earnings! 

Our Money!!!

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People, I am here to tell you that’s basically what you and I do when we get a refund.  They get our withholdings all year, “invest” it, earn interest & dividends, then, on April 15, give you back only the principal.  (Not a big fan of government “investing” anyhow.)

I once heard on the radio a guy complaining that he only got $4 back.  I called in and told him he was the perfect taxpayer! 

Rather than giving your mechanic the $2400, wouldn’t it be so much nicer to have an extra $200 every month?  You could pay off more debt, invest more, give more – whatever place you’re at – you’d have more, to do more. 

If you’re getting a large refund for 2010, you really should change your W-4 to have less withheld this year.  You can find the form (and a handy-dandy calculator) at http://www.irs.gov/ or through your payroll office.  Just complete it and give it to your HR manager.  You can file it any time. 

Now, back to singing…

Making the Leap – Switching from Credit to Cash

So yesterday, I got an excellent question – How do you make the switch from credit cards to cash?

I love these questions – makes my whole day.

I, of course, can't speak for everyone, but here's our story:

When we were first married, we combined our credit card debt and it totaled about $6000.  That was our wedding rings, couple of school payments, some honeymoon expenses (and truthfully, thousands of just plain waste.)  We worked diligently to pay off that credit card.  I still remember it was a Discover Card and had a 0% rate and we paid $600/mo on it.  It took us 10 months.  I remember emailing my mom and my sister, with such excitement, when we paid that last payment. 

I wish I was kidding when I say the very next month we ended up with a credit card bill of over $1000 that we couldn’t pay off.  We were credit card debt-free for less than one month.  I doubt we are the only ones out there that did this.  (Feel free to comment and make me feel better – lol!)  It  was a crushing defeat that began a slippery slope of even accumulating even more debt.

One of our main problems was that we used our credit card for everything.  We paid for groceries, gas, eating out, car repairs, etc. with our favorite plastic accessory.  (I even had a keychain credit card that was the IT item about as long as jellie shoes.) 

It’s hard for two people to be accountable when you do not have to keep a record – you just wait for the bill.  It was impossible to figure out how much was spent from each category.  We couldn’t keep track and before we knew it, our bill was way over our budget. 

The first step in our debt-free journey was to convert to cash.  Easier said than done.  If you think about it, your credit card statement is paid the month after you spend.  It can cause real problems when you try to pay your credit card and pay your monthly expenses because you’re basically paying two months worth of living expenses with one month’s income. 

For most of us, we wouldn’t have debt if we had savings.  As hard as it is, the only way to swing it was to pay only the minimum payment that first month.  It pained me to watch our debt load increase by $XXX (or maybe it was even $XXXX!!!)  But that was the only way we could do it.

Some people are lucky enough to have some cash saved away.  (No, this is not your FPU $1000 emergency fund.) If you are one of those lucky ones, it’s easy - pay off the credit card then start fresh the next month with cash.

(Side bar conversation – I always get baffled by the callers to The Suze Orman Show who have $30,000 in savings and $15,000 in credit card debt.  Seriously, what kind of interest rate are they getting on that savings to make it worth carrying that kind of debt load?  Anyhow…) 

We now pull out enough cash to last us two weeks and divide it up into our envelope system. (Heard of Dave Ramsey, ya'll???)  We pay the rest on bills and now that we have “leftover”, we transfer it to savings.  We leave enough in our checking account for gas.  (DR suggests even using cash for that, but I’m too lazy to go in stores – especially in sub-zero temperatures.) 

But one thing I learned from one of my new favorite shows, Till Debt Do Us Part, was when you switch to cash – WRITE IT DOWN!  Whether you write on envelopes (as DR recommends) or keep a “Budget Binder” (as suggested by Gail Vaz-Oxlade) – just write it down!  That way you, and your spouse, can look at any point in the month and see what was spent, where it was spent, and what you have left.  (And keep your receipts for 3 months.  If you need to return an item, without credit cards, most stores can’t trace your purchase.)

One Month Out, Eleven Months to Go

I love Christmas! 

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More than money – I love Thanksgiving through Dec. 25.  Everyone is happy.  My favorite radio station is playing Christmas music.  I have a tree.  Time off is coming.  Everyone (almost) is festive. 

One month ago today, we were all joyfully unwrapping gifts, spending time with our families and/or friends, and eating ridiculously amounts of amazing food. 

How many of us gained some weight in December? 

Now, how many of us gained financial weight? 

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It’s so easy to go overboard on Christmas.  I love, love, love Christmas.  I love finding the perfect gift and buying it.  Really, as an adult, I truly love giving gifts.  And my desire to find the perfect gift can easily mean overspending on it.

For me, it’s so easy to overspend on kids and spouses; but I know I will even go overboard on my other relatives.  Overspending means over budget and under funded.  And that used to mean burning up on plastic.  How many of us got our credit card statement this month from December?  OUCH!  I never want to feel that pain again.

So here we are – a month out – still cleaning up from Hurricane Noel.  Unless the Lord returns this year – Christmas 2011 is only eleven months away.  It will do no good to be “gazelle intense” and then have no money for Christmas next year.  It needs to be a monthly budget item!!! 

Sit down today, tomorrow, this week and plan your Christmas. 

As the saying goes, "Make your list and check it twice."

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List who you buy for and how much you plan to spend on them – estimate big.  I even include our tree, wrapping supplies, lights (you know the strands you bought last year are going to mysteriously burn out in the attic in July), even our Christmas pictures and postage for our Christmas cards.  Total it all up.  Divide it by 11.  And add that amount to your monthly budget. 

I do this for everything I know is coming!  We have a wedding this year.  I know I’m going to be spending at least $XXXX on it.  (Yes, it’s four digits!!!)  I have six months to save for it.  That is now part of our budget.

TIP: Tax time is almost here.  (Me: “Gasp – yay!”)  If you can’t stretch your budget any further, than take part of your refund, if you’re getting one, and go ahead and fund that Christmas account.  You can set up an online savings account (we use ING) and let it earn some interest.  Financial gurus will tell you this is a no-no since you’ll probably pay more in interest on debts than you’ll earn, but it’s better than not saving at all.

Christmas is coming!

Love,

The Eternal Optimist

It’s Not That Bad

There was a point, about two years ago, when it seemed everyone was losing their jobs, consumer debt was at its peak, and the sky was simultaneously falling, and we all freaked out. 

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The country (not the government, obviously) cut our spending, started saving and stockpiling - just waiting for the hammer to fall.

I have to admit, there was even some mild panic in my household.  Government jobs have always been stable.  Even if the public servant is underpaid, at least the job is fairly reliable.  But police officers, teachers – even they were losing their jobs.  What would we do if we lost everything?  Our house, cars, jobs, insurance…Where would we live?  How would we eat?

Someone I know of got the word last week that their 4 year old daughter’s cancer had returned and there was nothing further the doctor’s could do.  Makes financial trouble pale in comparison, doesn’t it?  Something hit me two years ago and I’ve repeated it to my brother-in-law, Techy, at least twelve hundred times.  “As long as you have your family and your health, what does it matter?” 

Yes, bankruptcy would be terrible, wouldn’t wish it on anyone.  I can’t imagine what it would feel like to watch your all your worldly possessions be sold off to the highest bidder.  But there are people out there whose children have leukemia.  They’d gladly trade places with someone who was only dealing with a foreclosure.

So yes, we’re all here to help each other get out financial trouble.  And there will be moments that it’s hopeless, frustrating, overwhelming and maybe down right devastating. 

Just take a moment - thank the good Lord, and remember there are people out there who would gladly step in your shoes.

Debt Free Livin’ in 2011!

After a lot of pushing and prodding, my sister has convinced me to start a blog.  She tried this once before and I think I may have updated it twice.  But this time, I'm going to try blogging about something I'm very passionate about...money.

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Doesn't that sound horrible?  I'm passionate about money - but, yes, I am.  Since I was a child, I've loved forms, numbers, and office supplies.  In college, I fell in love with taxes.

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In my tiny circle of life, I’m kinda known as the money gal.  Most of you know that I work with taxes for a living and I see such a wide spectrum of personal finance situations.  It’s really given me the desire to share my experience and the (little) knowledge I have.  I love personal, small business, and church finance. 

I’m a big fan of Dave Ramsey and worked through his Financial Peace University. 

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It’s the debt free plan that we used, but by no means is it the only plan.  It is what I would recommend to people who don’t know where to start.  But whatever method you use to get out of debt – whether the snowball, blizzard, avalanche...getting out of debt is the first step to any kind of financial freedom.

I refused to start any kind of blog, Facebook group, or website till we actually completed our debt-free journey.  We completed that on 1/14/11.  Before I posted that on Facebook, I had no idea how many people in my tiny circle were walking down the same road. 

There is strength in numbers.  I want to use this blog and the corresponding Facebook group as sort of a support group for those of us on our way out of debt (or trying to stay out of debt.)  You can get the same thing at various websites, but I’m not good with strangers.  J 

So feel free to join if you agree to the following:

1.                  I am a Christian and try to go at things from the believer’s perspective – another reason I am a Dave Ramsey fan.   I believe God knows your name.  He wants to hear about your life and wants you to ask for His help – even with your checkbook. 

2.                  You can be vocal or quiet.  You can share everything, nothing or just some things.

3.                  Financial problems can be extremely embarrassing.  (Just like weight loss.)  I’ll be the first to raise my hand to admit I’ve done some dumb things with money.  There will be no judgment.

4.                  I will not gossip about anything told to me in confidence.  Please respect each other’s privacy. 

5.                  I’ll be honest about the challenges and pit falls we faced – be prepared. 

6.                  You can use this group for support, accountability, or just a laugh. 

7.                  I don’t guarantee that anything I say is original.  Really – money has been around since Moses and so has debt.  But I’ll give credit where credit is due. 

8.                  Most importantly, if it’s something serious, you should always seek the advice of a CPA or lawyer. 

So sign on the dotted line with your social security number….just kidding!