Creative Gifting on a Budget


I recently traveled to a friend’s mid-summer wedding. The ceremony was in a gorgeous meadow that had a labyrinth. The path was as wide as a lawn mower. When we arrived to the meadow, I picked wild daisies to make the bride a wreath for her head. Then I took photos of the surrounding area. Next thing I knew, it was time to sage and bless each guest before their entering the labyrinth.

IMG_5600This wedding got me thinking of gifts that can be given from the heart. First, there was the opportunity for every guest (17) to bring organic, non-GMO fruit, vegetable, or flower seeds for the couple to plant and act as a reminder for them to nurture their friendships. The couple also asked each guest to bring  something from nature. In addition to seeds and nature, guests were asked to write a poem or message about, or to the Summer Solstice and read it to the group.IMG_5589

Up until the point of finding an item of nature, I had confidence that as usual, I packed light, and smart. But then I found two rocks—each in the shape of a heart. Why couldn’t I be happy with a leaf or feather! Sticking to my original plan, I was also giving the couple a great chef knife. My friend loves to cook and entertain. So, this meant I had to plan ahead and ship off the knife, and pack the rocks along with wrapping paper (only to get scolded by the bride for using paper.) One guest gifted the couple with catering the simple but beautiful hors d’oeuvres. Another guest made a six foot wine bottle holder out of wood he’d found, adding shape and holes to the piece of wood.

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I’m on the good side of cancer—rebuilding strength. This was my first big trip, and I was determined to carry-on my bag rather than pay $25 for the same weight as some women’s purses. It wasn’t pretty and I ached from doing it, but I did it. It reminded me of a story I was told by a man years ago.

This man was staying in Africa for several months. He made friends with the locals. On his birthday, one of his new friends gifted him with a sea shell. This man knew his friend couldn’t have bought the shell, and they lived hundreds of miles from the coast. He said, “The ocean is far away. How did you get this shell?” His friend replied. “Long journey part of gift.” He’d walked a few days to honor his friend with a sea shell.

How can your journey gift someone? What can you do differently, or go out of your way to honor someone without a big expense on your part? I think my friend was more grateful for the head wreath, photography, and space clearing I did than the chef knife. For me, the big gift was the travel itself.IMG_5590

What is dollar-cost averaging?


investing 401 kimage credit: Good Search

What is dollar-cost averaging? Are you someone who wants to invest money, but doesn’t make a move until you’re “too late”—so, you don’t invest at all? If so, then maybe dollar-cost averaging is for you. It’s one option to get you saving.

Let’s say you have $5,000 available for investing. You could either invest it all one time and let it be, or, you could ease into the market over time in equal installments at regular intervals (every month, or every quarter.) The index price may move from $100 to $75 to $55 to $75 to $100. Let’s say you buy at $1,000 installments. You’ll buy more shares when the price is low, and fewer shares when the price is higher. You’ll have an average-cost per share $81. If you put the entire $5,000 in at one time, your average-cost per share is $100.

History favors putting in a lump sum of money because over the (very) long haul, markets have gone up.

However, with dollar-cost averaging, which is basically what you’re doing if you have a 401(k), or other employer sponsored retirement plan, if you put some of the money in at the wrong time, you’re bound to put some of the money in at the right time. If you put a lump sum in at the wrong time—it’s gone. With dollar-cost averaging, you’re buying stocks when they’re low. That goes against everything our emotions tell us to do. Buy more when prices are low, and buy less when prices go up. The advice, “Buy low, sell high” is fine until we’re sitting in the driver seat.

During the strongest markets, dollar-cost averaging came up short with 19.2 percent less wealth than lump-sum investing. During average or weak markets, dollar-cost averaging will cost you 3.6 percent of your holdings. However, the strategy of dollar-cost averaging may help you sleep at night rather than fearing you’ve dumped $5000 into a black hole. It minimizes regret.

Check Your Credit Report


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Unless you’ve had reoccurring issues with your credit file, it better serves you to avoid credit monitoring services, which can cost $180 a year. Even though many of  these services are owned by the credit bureaus themselves, they’ll do the same thing you do (for free) —discover the error on your record after it’s there. For free, you can get the same info monitoring services get. Go to AnnualCreditReport.com. You are entitled one free report from each of the three bureaus, Equifax, Experian, and TransUnion. If you’re applying for credit, a loan, or competing for a job soon, get all three reports now so you can look them over to ensure the information is correct. Otherwise, spread out the three yearly reports, requesting one report every three months: Maybe in January you request one from TransUnion. In May you request one from Equifax and in September, Experian.

Review the on-time payments listed on accounts you know you have. Check for addresses listed as yours, and spelling of your name as well as variations of your name. Most importantly, check for records of debt that aren’t yours, and for inquires for loans you haven’t applied for. This could be a sign of identity theft, or a legitimate mistake, perhaps a mix-up with similar Social Security numbers. Either way, according to Money magazine and SmartCredit.com, this issue is the most difficult to get fixed.

If it’s your issue, call the bureau with the incorrect information immediately. Ask them to put fraud alert on your file. Also, go to Consumer.ftc.gov.

If you find an error on your credit report, let the appropriate bureau know. You can do this online, or by mail. If you have documentation, mail may be best. Make copies, highlight the relevant, correct information, and briefly and clearly explain (type if your writing isn’t really easy to read) what the error and correction are. Make sure you have copies of what you’re sending before you send it certified mail, requesting a return receipt.

Again, check your three credit reports regularly. AnnualCreditReport.com is the official site and is free. If you want your credit score, go to MyFico.com. There is a fee for the score. It’s good once in a while to check in on your score. It’s about $20.

Ground Rules for Vacationing with Friends


splitting cost on vacation image credit: Good Search

Taking a vacation with friends can be fun—or not. Time together is all fun and games until squabbles over costs come into the vacation and memories. It’t hard for some people to talk about money, but it’s often harder to repair friendship over money issues that arise while traveling.

Before you go:

Discuss where you’ll go, who is going, and when. If you want to go to Italy in the Summer, and they want to go to  Ireland in the Fall, make sure no one feels “You always get your way.” If there’s a since of that from the start, suggest another trip, another time, but let it be known you’re going to Italy in the Summer—and you’re going to have a wonderful time!

If everyone decides to move forward from there, begin to put your plans in writing. Everyone going on the trip can get together and share ideas of what their ideal vacation looks like. Are you a four-star hotel type? Or do you like hosteling? If you earn points from hotel stays, and your friend earns them with a different hotel, what do you do? What if you have different frequent flyer airlines? These are the things that need to come up early in the planning stage. Maybe you’re both okay with not earning miles, and grabbing the least expensive flight, but if one of the two of you has enough miles for a trip on an expensive airline, you may not be traveling together.

What’s your vacation budget? Know it before you leave home and stick to it. Talk this stuff through with your friend. If you’re with someone who wants to experience high end restaurants but you plan to buy food from the local grocery shop, eat from food stands, or patronize the local mom and pop restaurant— You’ll want to have that discussion before the trip. Maybe you agree to one expensive night on the town. Get an idea of that means. I had an experience in Lapland, Sweden. A puny scoop of ice cream, a tiny piece of brie cheese, and a small vodka came to $75.00. Are you both on the same budget? Even if you are, it may not impact you the same. Maybe you say to your friend, “If you want to go to that restaurant, are you willing to without me, even if that means going alone?” Or have some days and evenings where you each do your own thing.

Once you have an idea of what the trip looks like, put it in writing. Include (researched) estimates of costs, timelines and budgets. If you can, either each pay for your airfare separately, and each send in half of the accommodations on your own—or try to have only a few bills and split all of them in half. (I don’t like to do this at restaurants, because my bill is usually much lower than others’.) If you’re eating meals at the beach house rental, equally pitch in for food, or totally do it separately. If they drink wine and you don’t, that’s not on your bill. If you insist on drinking soy milk and they can get by with less expensive cow’s milk, it sounds like a menu review may be needed before you get too far.

It’s really important to know your travel partner is saving for the vacation. If you save money and book your trip, and they don’t save, and decide they have to back out, you may find yourself in hot water (and I don’t mean at a spa in Hawaii.) I’ve had this happen to me twice. Once, there was a double occupancy requirement. My friend who hadn’t saved and backed out did pay the difference for me to go alone. Nothing was going to stop me from my trip.

Traveling together is a lesson in budgeting, communication, compromise and friendship. Go! Have fun!

Teachable Money Moments with Your Child


teachable momentsImage credit: Good Search

Chances are, you weren’t taught about money. If that’s the case, hopefully you’re changing that pattern with your kids. No matter how old they are—even if they are at college, or raising kids of their own, it’s not too late to teach them. This of course, comes only if they’re willing to hear you out. There are ways to take advantage of teachable moments. If they’re not willing to listen, back off—but then don’t give in to kiddie tantrums or phone calls for money. I recently read that baby-boomers are far worse off than their parents when it comes to knowing how to save money. Their parents may not have had as much, but they knew how to save—and did. Begin now to teach your kids and your grandkids easy ways that add up.

One teachable moment can be offering choices. “The two things you want are out of your budget. You can get this toy for $1 today, or save and get that toy for $5 another day. For older kids, you can give them an allotted amount for clothing and tell them “This if what I’ll put toward your shoes. If you want the more expensive ones, you need to make up the difference.” If you send your teen to the grocery store for an errand, give them guidance. Send them off with a coupon for what you want, give a price range, “Get bananas if they’re less than .50 lb”, or give them directions to buy what’s on sale, “If bananas are more than .50 lb, see what’s on sale. Check the prices on strawberries.” If they have a cell phone, you can always ask them to call you from the store if they have questions. If retired husbands can do this, so can kids. For the child who moves back home and still spends money. Have them pay rent to you for the purpose of you putting the money in a special account to be given to them when they’re back on their feet, and have enough money put aside to move out.

You get more bees with honey. Praise your kids for things done right. If you can, do this in front of someone else. This includes good behavior and wise money choices. A phrase like “You’ll be so proud of  Joey for how well he handled his $1.00 at the store today” is a better reinforcement than, “You’ll never guess who behaved at the store today!” Make sure your praise is genuine and not sarcasm, or a left-handed compliment.

Eat before you go shopping. I remember as a kid and into my teens going shopping with my mom. If it was around lunchtime, we’d always eat at home before heading out. Two reasons: To save money. To keep blood sugars and therefore emotions in tact. As I got older, I’d insist I wasn’t hungry, and that I’d be fine. We’d pull into a parking lot and sure enough, I was hungry! I wasn’t interested in eating out, I just had a high metabolism, and if I hadn’t recently eaten, hunger pangs and crankiness set in. Like magic, my mom would pull a cut apple or some other form of portable sustenance from her purse. As an adult, I know I can go from not hungry to head-spinning hunger. If I’m headed out the door, I’ll bring food with me. A banana, a cut apple, some crackers, cuties or a sandwich for mid-trip. If you tire of a cranky child, try staying a jump ahead, offer a snack at home or in the car on the way to your errands.

Everyone will be better off.

People Who Feel Poor Take More Risks


Save-Money-300x290 Image Credit: Good Search

Meir Statman is a finance professor at Santa clara University. According to Money magazine, he’s one of the most influential experts in behavioral finance (how your emotions and beliefs affect your decisions about money.) Statman thinks America needs to move from the polite nudge of encouraging people to save for retirement, to perhaps a push, and maybe even a shove.

Statman states, “People who save end up supporting non-savers.”

I’ve seen it. The parent who saved all their life, and their kids who are in constant need of support. Finally, the kid moves in with the parent. The agreement is for the adult child to put aside money, to build a nest egg while the parent helps them out. That’s not always how it goes. The adult child gets new clothes, travels, and spends time with their buddies doing activities that cost money. The parent has lost the deal, and most likely, the adult child has little money saved, even with their bills being paid.

People who are savers will save with a push. Just a nudge will do. They get the concept of needing money to function in this money-barter system we as humanity have agreed upon. More than half of the population, however, seems to be in crisis mode. They have no plan. They go for instant gratification rather than saving for something, especially retirement, which seems so far off, and so vague. What does “retirement” mean? For some it’s only about big vacations, or living a long time. And people will justify their lack of saving with, “I don’t travel.” “I won’t live forever.” “I’ll re-marry rich.” Oh, really? And then they meet the person they want to spend the rest of their live with. That person has saved money (for one), likes to travel, plans to live into old age, and isn’t rich (by the non-saver’s standard.)

Here’s what Statman proposes: Set a low minimum (8%) for a mandatory savings plan off one’s income. Other countries such as Israel and Australia set 15%. This would be on top of social security. People scream foul. They say it’s paternalistic. But, if they’re not saving, they’re relaying on others to carry them. By having a mandatory savings program, people are prevented from temptation now, to have it later.

Let’s say someone is honestly, super tight on money. Don’t start at 8%, but start somewhere! So many people say they can’t. It’s not the guy who socks away $10,0000 every couple years who comes out ahead. It’s the guy who consistently socks away $50. or $200. a week.

Statman says, “When people are feeling poor, they are willing to take more risks. You can have two people each earning $100,000 a year: One of them says, “This is plenty.” The other feels behind. That one is more willing to risk losses in the hopes of reaching his or her aspirations.”

Meir Statman’s 2011 book is: What Investors Really Want

Dinner on a Budget


5-ways-fight-food-inflation-1-intro image credit: Google

Dinner on a budget, fighting inflation, making money go further at the grocery store. Call it whatever you want. Here are some tips for healthy eating and saving money.

We only need three ounces of protein a meal, and it doesn’t need to come completely from meat. By cutting down on meat intake, you’ll save money, and depending on how much meat you’ve been piling on your plate, you may be doing your body a world of good. Have a small portion of meat and a high-protein side dish, such as beans, lentils or grains.

Check your cupboards and refrigerator. I have a fit if I have to toss food. Often, I’ll turn one meal into another meal to use up what I have. I may have roasted vegetables one night with leftovers. The next night, I may have soup with the leftover roasted vegetables in it, Or add cheese and pasta sauce to the vegetables. Use ingredients before they expire. Get creative without going to the store. Maybe you’ll find a can of diced tomatoes, a can or bag of frozen corn, and a can or bag of frozen green beans. By adding rice or pasta, spices and some meat, you’ve got a meal you can make in one pan. Or, add chicken broth and you’ve got soup. For great soup, you could use the bones from a rotisserie chicken and use up “tired” vegetables from the refrigerator. (Celery tops, onion chunks, carrots, parsley—whatever you have.) Add enough water to cover the bones and cook for an hour or so. Take out the bones and vegetables and add new/good vegetables to the broth.

I used to buy black and Northern beans in cans. I didn’t know how to use the ones from the bag, and didn’t want to have to plan ahead so far to soak them for hours before cooking. I have a 94 year old neighbor who was upset with me when I told her I never “made” beans before. She brought me a bowl of Northern beans and spaghetti (no sauce) and told me the beans were from a bag, and she cooked them for one and a half hours (no soaking.) I thought they’d be hard and tough. They were delicious. The beans were far better than the caned ones, and I’ve learned they last longer in the refrigerator than canned ones. Stored the un-used cooked beans in a jar with some of the water they cooked in covering them. You’ll be happy how easy and inexpensive beans form a bag are to prepare.

Take advantage of the grocery store sales. If you’re low on something, but not out of it, consider buying it before you run out, when you may have to pay full price. You may need to cook up the sale meat that day, or freeze it, but if it’s something you’ll eat anyway, it’s savings.

Buy oatmeal in the drum rather than the packages. Or, if you’re okay buying from bulk bins, scoop up savings that way.

Buy smaller amounts to keep things fresh. I love what Nabisco has done with the Original Saltine crackers. Fresh Stacks are packed in smaller portions, so they don’t go stale. Rather than having four long packs of crackers, this box has six packs. I think you get two ounces less of crackers and pay about fifty cents more. It’s a bit more expensive—or is it? None of my saltines go stale anymore.

The Average Cost of the Prom


th-13 image credit: Good Search

A new Visa survey says this year’s prom will on average cost $1,139.

WHAT?!

The survey didn’t break the spending down, but it includes dresses, tuxes, shoes, prom tickets, limousines, hotel or after dance events, corsages, jewelry, hair, makeup and extras.

In the last two years, prom cost has gone up 40 percent. As usual with this type of event it’s the lower income households that are being hit the hardest, and unfortunately, they are spending more money on the prom than those who can more easily afford to. According to the Visa survey, families with income less than $50,000 are planning to spend $100 more than the national average on prom. Single parents are spending double the amount of married parents ($1,563 versus $770.)

Of everything I’ve read and heard on this subject, Nat Sillin, Visa’s head of financial literacy, put it best. “It’s [the prom] become a social arms race. It’s an opportunity for parents to engage their teens and have a conversation about budgeting.”

I applaud Sillin’s comment, and am amazed to read and hear parents saying, “I never thought I’d have to spend so much” and “How am I going to afford all of this?” You do not have to spend so much. A choice is being made. You’re supporting your child in their financial illiteracy by spending their college money, or whatever else spending $1,100 could help ease your mind. Some say the prom is the new wedding, since people are getting married later. Okay. . . the average wedding is now $20,000 and many couples either start, or go further into debt. So, maybe in that since, the prom is the new wedding.

Full disclosure. I didn’t go to my prom. I wasn’t dating anyone, and saw the prom as something for those in serious relationships. Yet, I thought those in serious relationships were nuts to spend tons of money playing let’s dress up and pretend, and be part of the stories flying around school the following week.

Instead of prom, four of us—two guys and two girls —all friends, went bowling. None of us were bowlers, but we wanted to go out and have fun. We had a blast.

If you’re a parent of a teen who will be prom age next year. Start talking now. Start talking about values, money, and choices. To put a $500 dress on layaway while some of it goes on credit card, some paid off by check, and some by family pitching in, is mind boggling to me. Is a $500 dress worth it? That’s just the dress. Do you really need a limo? $800 shoes? (I heard a guy bought them.)

$1,139 could be a month or two of rent; a semester of books; an Alaskan cruise or a flight overseas; a down payment for a car — or, yes, one high school event called the prom.

Add Two Zeros Savings Plan


terramundi-age-21-money-pot-375 image credit: Good Search

I came across a great “retirement plan” idea from a magazine article. The idea can be altered a bit for someone who’s just begun the workforce, too. It’s fun, easy to remember and can really add up into some serious savings.

Here’s the idea: Save your age plus two zeros every year. Whoo-Hoo 21! means putting aside $2,100 that year. The next year would be $2,200 and at Hello 50! you put aside $5,000. You can do this over the year-long period, or as a single, big birthday gift to yourself. You can also set it up with your bank to automatically transfer the funds into your retirement account with a preset schedule.

If you can’t set aside the two zeros for retirement now, put aside your age every week. ($35 per week when you’re age 35.) It’ll add up to half as much as the two zero system, but half is half more than nothing!

If you’re planing to wait until your birthday to begin this, write it down, set it up as a reminder and with your bank or you won’t do it. If it’s not important enough to do this week, it’ll fall to the land of could’ve, would’ve, should’ve. Be pro-active. Set it up now.

Quick and Easy Ways to Save Money


3_x_3_happy_house image credit: Good Search

  • Do you smoke? Quit! It’ll save about $2,000 a year — and your life. If you’ve tried but “it” didn’t work, call American Cancer Society for help: 1-800-227-2345 (1-800- ACS-2345).
  • Eat at Joe’s—Not. Eat at home! It’s healthier for you and your bank account. I love to grill. I used to be a vegetarian. Now when I do eat, I grill it. It’s easy clean up, keeps the smell of meat and fish outside, and it changes up my routine of cooking. Depending how often you eat out, this could save you $1,000 just cutting your dining out in half! For the last two years, for Mother’s Day lunch, I grilled filet mignon and lobster tails, boiled some rice and put together a green salad. All under $25. for two of us! (And I knew there wasn’t any msg seasoning, or hidden fatty something to any part of the meal.)
  • Wash your clothes in large loads, which saves water, and energy. If you just have a few colored clothes and are doing a load of whites, use Clorox Color Catchers. They really work. You can combine all your laundry rather than doing two small loads. If your clothes aren’t needing hot water, use cold or warm water. It gets them clean, is easier on your clothes, and saves energy. Air dry your clothes on a clothes line, or clothes rack. It’s easier on your clothes, too. This’ll save you $200 year, and your clothes will smell fresh-air great!
  • Three different people told me last month they were insulating their homes. It’ll save them money in the long run. So will insulating your water heater, setting its thermostat at 120 degrees and installing an automatic timer to turn it off when not in use. Doing all of this can save about $500 a year.
  • Unplug it. Did you know even when appliances are off, they still use energy? They use 5-10% of the  total household electricity costs—when not in use! If you can’t be bothered with unplugging them after each use, use a power strip that can be turned off. This super simple act can save you $200 a year.
  • Do your own lawn care. Mow the grass, pull the weeds, rake the leaves. Exercise and money saver all in one. It’s relatively easy for the average person. Now, people have flashy landscape, and someone else to tend to it. Think back. Most people didn’t have gardeners 30 years ago. (I was the one raking the leaves, 20 years ago, I was the one pushing the lawn mower — and the front yard looked fabulous!) Do it yourself could save you over $500 a year.
  • Peeww! What’s that smell? I like a clean house. I hate the smell of cleaning supplies. To some, the smell means a clean house. I say it’s a cover-up; a waste of money, product and lack of effort on the person doing the job. Cleaning products can also shorten the life of your floors, tables, etc. Use less, if at all. Got stained coffee mugs? Use a teaspoon of baking soda and water to clean them out. Dust. No spray involved, and it spruces up the house way more than a smelly spray. Mop the floor with a little bit of cleaner. Sometimes the eco-friendly stuff isn’t as good, but it depends on the product you have, it’s purpose, and your commitment to the environment. Cutting back on using cleaning supplies could save the average American $1,000 a year. (That’s a lot of stinky stuff!)