Some love for a frugal summer

It’s already the middle of July. Summer is flying by so fast. I wanted to take a few moments and give some love to summer. Summer is a pretty frugal time in our house. Things slow down from the hectic nature of semesters teaching and tax season. Summer is my time to regroup, reflect and save some cash.

Saving on Gas

Since I’m not commuting back and forth to school, we are saving a ton of money on gas. I also group all my errands so I can do them on one or two days during the week. Instead of filling up the car every 5 days, I’m filling up once every two weeks. This saves us about $120 a month on gas. My new job, starting in September, is also closer to my house than my previous one so I hope to keep some of those savings going forward.

Saving on Groceries

The price of groceries, especially meat, is giving me heart palpitations. Am I the only one? With my extra time, I’ve been spending more time in the kitchen making things2014-07-03 15.22.42 from scratch.

My husband’s job just moved him to a new location, which means he can’t come home for lunch anymore. I’ve been very creative making him inexpensive snacks, like cookies and jello fruit cups, to save some money.

We have also been smoking inexpensive cuts of meat, like pork shoulder, and using that to make all sorts of things. Last week, I made pulled pork chili which he absolutely loved. Tonight, I’m going to make pork enchiladas. On nights when we need a quick dinner, pulled pork sandwiches and potato salad have made it on the menu.

The garden is starting to produce some vegetables. We planted four different types of tomatoes, two types of peppers and cucumbers. So far, we’ve picked 10 cucumbers, one very large pepper and two tomatoes.

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There are hundreds of tomatoes on the vines and the cucumbers just keep coming. We have about half a dozen peppers and more popping each day. We invested about $25 in the garden so I think we should see a good return on our investment.

Repairs and Cleanup

Summer is a good time to get to those household projects you’ve been waiting on all year. So far I’ve cleaned out the linen closet and my desk downstairs. We cleaned up the basement and the laundry area. I’ve brought a few bags of linens to Goodwill which really helped clear some space. I love clean organized spaces. They make me happy.

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I sold a bunch of books to Amazon and I’ll use the gift cards to purchase additional things we need for window screen repairs and new heating vent registers. We are also painting the spare room. That should be finished this week.

Now I start to turn my attention to the kitchen and getting everything organized in there. I also have three classes to prep for in the fall. Luckily, I have taught them or similar courses before so I’ll be looking for new creative ideas to make the class more interesting.

How is your summer going? Do you find you spend more or less money in the summer? What are your frugal summer tips?

Could you live with less stuff?

Do you feel like you have too much stuff? If you do, you aren’t alone. In a recent study, 50% of people polled said they could live happily without most of the stuff they own. Two-thirds stated they get rid of stuff they no longer need at least once a year.

Why do we accumulate all this stuff just to get rid of some of it every year?

I’m tired of accumulating stuff. We spent years accumulating stuff and trying to find somewhere to put it. We’ve got books, electronics, and the ever dreaded nick-nacks. All this stuff uses resources: electricity, space, time to organize and clean. It accumulates dust and it clutters up our space.

One of the reasons I hated cleaning my house was because there was so much I had to do before I could actually clean my house. I had to pick up all the things that didn’t belong in the room, organize everything, move things, dust around and under things. It took forever.

Over the past year, we’ve gotten rid of a lot of stuff. We’ve simplified things and I’m looking to do even more. My summer project is to simplify our lives. That means going through things, selling stuff, donating and giving stuff away. Over the next few weeks, I’ll be chronicling our journey. Hopefully, the summer will end in a tag sale to generate some extra cash. Either way, we’ll end up donating a lot of stuff.

So far, I’ve cleaned out the dreaded linen closet. It was a complete disaster. We couldn’t find anything in there. I’m really happy with the result!

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I pulled out about two garbage bags worth of stuff to donate to charity. There were some curtains that I was given that I will never use. There were lots of flat sheets, which we don’t use.

I swear karma is pushing me in this direction. In today’s mail, I got a postcard from the Boys and Girls Club stating that they are doing a pick up in my neighborhood on June 30. That gives me just short of two weeks to get as much done as I can. Not having to drive all the stuff to the donation center is a huge motivation.

Do you have too much stuff? How often do you purge stuff? Do you donate or sell things you get rid of?

A frugal weekend

We are finally getting some sun here in Connecticut after a cold, rainy spring. This weekend, I had a lot to do. Now that tax season and the spring semester are over and my summer class is running, I’ve got some time to get some things done around the house.

Homemade pastaFriday and Saturday, I did some cooking and prep for the week. I made a double batch of enchiladas. We had some for dinner on Friday night and I’ve got another pan for dinner tonight or tomorrow night. I also made some spaghetti, with my KitchenAid Mixer and pasta attachment. This pasta is half whole wheat. My husband is not a fan of whole wheat pasta but when I make pasta with whole wheat flour in it, he will eat it. I also made fresh tomato sauce, which I’ve found my husband will eat pretty much anything if I cover it in tomato sauce. salad

I also had a ton of lettuce in the fridge so I decided to make a big salad for the week. If I have salad in the fridge, I’ll eat it for lunch and with dinner but if I don’t prep it, my lettuce will go bad before I find time to eat it. I add shredded carrot and celery to the salad plus I cut up a red pepper so I can have salad very quickly. Salad makes me happy. I even made Russian dressing. Making the salad and pasta took about 2 hours on Saturday. I made the pasta first and while it was drying, I made the salad, the tomato sauce and cleaned up the kitchen a bit.

Saturday, I also planted my garden. I plant a tomato sauce garden (I’m a bit focused on Italian food). We planted four types of tomatoes, two types of peppers, four types of herbs and cucumbers. I promised my husband that I would not put cucumbers in the sauce. The cucumbers are for my salads which make me feel better about all the Italian food we eat. garden

I’m not the greatest gardener in the world but I do okay. We should have enough tomatoes to make sauce that will last about a year. We paid $24 for the plants which should save us a few hundred dollars that we would have spent on produce and sauce. With the rising price of groceries, I think it’s a decent investment and it gives me something to do outside in the summer to get me away from the computer.

helicopters

Speaking of outside, am I the only one who goes insane when the helicopter seeds start falling from the trees? They are everywhere! On the ground, on the deck, the lawn and all over my floors in the house. Sunday, I decided I should probably vacuum the hundreds of helicopters that have infiltrated my house.

I HATE cleaning. It is probably my least favorite thing in the entire world. To keep myself going, I decided to see if Pandora had some music to keep me distracted. I found an awesome channel called 80’s Cardio in the workout section. That channel got me through four hours of cleaning and laundry. FOUR HOURS! I don’t know that I’ve ever spent four hours cleaning in a single day. I must say that cleaning is much more fun dancing out to Young MC.

My husband let me know that while I was jamming out with my headphones on, two of our neighbors were talking to him in the driveway and heard me singing Bon Jovi while dancing like a crazy crazy. Hey, at least I was productive even if the neighbors do think I’m nuts.

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I did so much laundry yesterday that I had to make more laundry detergent. Yeah, I make that, too. I told you it was a frugal weekend. I love how the soap curls when you shred it. Hey, after cleaning for four hours, soap curls would amuse you too!

By Sunday night, I was sore from all the dancing, gardening and cleaning. I was pretty pleased with all the progress I had made. The house was relatively clean, a lot of the laundry was done, food was prepped for the week and I even had a few dinners in the fridge for the week. I went to bed feeling very pleased.

I woke up this morning and the first thing I saw when I entered the kitchen: more helicopters.

more vacuuming in my future!

I see a lot more vacuuming in my future!

Did you do anything frugal this weekend? Do you listen to music when you clean? What keeps you going when working on a task you hate?

All About Life Insurance

Life insurance is confusing. There are so many options out there: term, whole life, universal life. Do you need life insurance? How much insurance do you need? What type of policy should you buy? I’ve been doing a lot of research on the subject lately and I want to share with you what I’ve learned.

Do you need life insurance?

What is life insurance?

Life insurance is an insurance product that pays a lump sum of money to someone, called a beneficiary, when you die. You can have multiple beneficiaries if you wish. The amount that is paid is based on the face value of the policy. The money transfers to the beneficiary tax free and is not considered part of your estate (for will or probate purposes).

There are essentially two types of life insurance: term life insurance and whole life insurance (also called universal life insurance).

Term life insurance is available for a certain term length, typically 10, 15, 20 and 30 year terms. You pay a level premium for the length of the term and when the term expires, you no longer have life insurance. This is like car or homeowner’s insurance with a longer term. This is the least expensive way to get life insurance.

Whole life insurance is meant to cover the insured for their entire life, as long as the premiums are maintained. The monthly premium can increase over your life. With whole life, you will pay more each month to build up cash value, which is a savings account inside the policy. This savings account can be borrowed against or used to offset the increases in the premiums as you get older. If you borrow against the cash value and die while the loan is outstanding, the amount of the death benefit will be reduced by the amount of the outstanding loan. Typically, whole life insurance is 20 times more expensive than term insurance because of the cash value that is building up inside the policy.

Who needs life insurance?

You purchase insurance because you cannot afford to pay for a loss that might occur, like the loss of a car or home. You have health insurance because you cannot afford a major medical event out of pocket. Life insurance should work the same way. You need life insurance to take care of those who rely on your income should something happen to you because you don’t have sufficient assets to take care of them if your income was lost.

Typically, we think of taking care of a spouse and young children when we think of life insurance and you absolutely need life insurance in that case if your family cannot survive the loss of your income. You should have about 10 – 12 times your annual income in life insurance so that those who are left behind can live off the proceeds if they are invested wisely. If you currently make $50,000 per year, a $500,000 – $600,000 policy invested at 10% would replace your income without touching the principle.

Another group that increasing needs life insurance is recent college graduates. More and more college graduates are leaving school with cosigned student loans. When you die, your assets would go to pay off your debts first. If there are any outstanding debts left after your assets are liquidated, the debts go unpaid. That is true unless you have a cosigner. While some student loans are being forgiven, most private loans are not. If you have a lot of private student loans, it may be wise to get life insurance to pay off your student loans should something happen to you. You can name the cosigner as the beneficiary of the policy.

If you have a large nest egg, no debt and your family would be fine financially should something happen to you, you probably don’t need life insurance. You should speak with a financial advisor to evaluate your situation. Make sure to ask questions and make sure you really understand what you are purchasing before you buy.

What type of life insurance is best? 

I have always heard Dave Ramsey say that whole life was a bad choice because it was so much more expensive than term insurance. After doing my research, I completely agree with him.

I got a quote for term and whole life insurance. For a $1,000,000, 20 year term insurance policy the rate was $50.45 per month. For a $1,000,000, whole life policy the premium was $1,020 per month. Quite a difference there. So let’s say that you purchased a 20 year term policy and invested the other $970 per month. At the end of the term policy, you would have approximately $939,000 in investments. Not quite $1,000,000 but pretty close. If you let that money grow for another 20 years, you would have over $9 million. If you had purchased the whole life policy, you would have paid over $1,000 a month for 40 years and your beneficiaries would only get $1,000,000 when you die. $9 million sounds a lot better to me. Even if I’m half wrong, your beneficiaries would still get $4.5 million.

But what about that cash value that builds up? When you die, the insurance company keeps that. If you take out a loan against the cash value and you die, the amount of the loan is subtracted from the face value. Kinda sounds like you really don’t get much for that cash value, huh?

Do your homework!

Never buy anything because your investment advisor, your insurance advisor or anyone else (including me) tells you to. Do your homework! Look at all of your options and make an informed decision. I am not an insurance advisor and have based this post solely on my research. I got an insurance quote (both quotes were actually from the same company) and used an investment return calculator to see how much money I would have if I invested the difference. Your numbers might work out differently.

What questions do you have about life insurance? Do you have life insurance? 

 

An easy way to immediately curb your spending

Curb your spending

 

There are two items that traditionally keep people from getting ahead financially: income and/or spending. While there are a number of things you can do to increase you income, generally those changes are not immediate. Spending is something you do have immediate control over. With debit cards and credit cards, it’s very easy to overspend. There is a very easy way to curb your spending.

Use cash.

Yup, that is the brilliance of the plan. Put cash in an envelope for the categories you tend to overspend on. One category that we had a lot of trouble with in the beginning was food. It is so easy to overspend on groceries and eating out. Once we started using cash and I had to stare down that envelope, we quickly got our spending under control.

Every two weeks when we got paid, we would take out enough cash for food for the next two weeks. Once that money was gone, we had to make due with whatever was left in the house. I remember one night, after we ran out of money before the next pay day, I made a box of mac and cheese, a box of stuffing and a can of peas for dinner. Did I mention we quickly learned to make that money last for the entire two weeks?

If you are worried about carrying a lot of cash, just carry the cash you need. Only carry your grocery money when you plan to go grocery shopping. This will also stop you from making unplanned trips, which generally lead to overspending. Need to pick up a few things after work? Just take $10 or $20 with you, again to limit impulse items.

What if you buy a lot online? Cash won’t work for that. Well, there are some alternatives.

  • Most sites accept Paypal. Transfer money to your Paypal account to limit your spending.
  • Purchase a prepaid debit card at Wal-Mart, Target or another local retailer. These are similar to gift cards but can be used anywhere Visa or Mastercard are accepted. Load your budget onto the card. You can reload it when you’ve got more money to budget for that category.
  • Use gift cards. If you shop at Amazon or another online retailer on a regular basis, purchase a gift card for that retailer to limit your spending.
  • If your bank allows you to have a free checking account, open another account for those spending items and use that account to limit your spending.

These methods to not require you to do extensive budget tracking, but can help you save a tremendous amount of money each month. Give it a try. You’ll be amazed how easy it can be to curb your spending.

How to avoid take-out

Ramen Lo Mein - avoiding take-out

Ramen Lo Mein from mealsoutsidethebox.com.

It happens every tax season. We order a ton of take-out. After teaching all day then meeting with clients or working on tax returns, the last thing I want to do is spend an hour making dinner. Take-out is easy. We could pick it up on the way home or just have it delivered. It was easy but tough on the wallet. We would spend 100’s of dollars each month on take-out, fast food, and delivery.

A few days ago, I realized that we had made it through tax season without ordering take-out, delivery or fast food. This seemed extraordinary to me, considering we really didn’t make this a goal. It just happened. But how did it happen?

Need to increase productivity? Get your timer out!

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Yesterday, I was working on a writing project. I spent about two hours sitting at the computer attempting to write. I say attempting because I only got a few pages written. I kept getting distracted by email, Facebook, Twitter, laundry, cats, thinking of other projects, checking on dinner and just about anything else I could think of so I didn’t write. Today, I decided to try something different.