Is the cost of hiring for chores worth the money?
There are two things Americans never seem to have enough of: time and money. So, how do you decide whether to save money by doing a task yourself or save time by hiring it out?
As a frugal freelancer with a job that can easily stretch beyond traditional working hours, I often struggle with this. Just in the past few months, I’ve had to decide whether to hire out various tasks: interior house painting (I was going to hire a pro but decided to do it myself), yard work (I hired a landscaper to get my wild yard under control, but plan to do the upkeep myself), and exterior painting (I’m hiring a pro due to lead-based paint issues.)
So, sometimes, deciding whether to outsource involves more than a simple numbers calculation. Here are four tips on how to decide whether to save money by tackling a task yourself:
- Hire someone if you can use the time to make more money. If you’re self-employed or have a side gig, consider outsourcing chores, then use that time to earn more money than you spend, the blog Suburban Finance points out. I’d add a caveat: Be honest with yourself. Will you really spend the extra time making money? Or will you park in front of the TV with old episodes of “The King of Queens” and a tub of cookie dough ice cream?
- Ask yourself: How well can you do the task? If the chore you’re considering outsourcing is easy, like mopping the floor, it’s a no-brainer. But what about fixing a leaky faucet or changing your brake pads? If you’re confident that you can do a competent and efficient job, you might consider DIY. But if you don’t have the skills, you could botch the job, end up outsourcing it and lose even more time and money. In my case, part of the reason I chose to paint the interior of my house is because I like painting, and I’m pretty good at it.
- Gauge your stress level. Maybe your to-do list is so overloaded that you feel you can’t take on one more thing. In that case, it might be worth it to hire a pro. Suburban Finance recommends you outsource if you’re not carrying debt, and if you have trouble fitting personal items like exercise or family time into your schedule.
- Look at your financial picture. This is critical: Don’t pay for a non-essential service with a high-interest credit card if you can’t pay your bill in full right away. If you’re struggling to get out from under high-interest debt, rolling up your sleeves and doing something yourself might be your best option. When my husband and I had high-interest credit card debt and he had a flexible schedule, he took on many tasks — such as yard work and growing some of our food — that we sometimes pay for now. Personal finance site Money Crashers notes that you can save $50 by washing and detailing your own car and even more by filing your own taxes.
When I was growing up, I learned the value of DIY from my dad, a guy who still changes his own oil and brake pads and recently fixed a 20-year-old vacuum cleaner by watching how-to videos on YouTube. So, outsourcing chores I could do still feels a tiny bit decadent to me, and I’m not sure I could ever bring myself to hire someone to clean my house.
But I’d argue that hiring a pro often has its place, despite the price tag.
The real secret to high credit scores
I’ve told you about my storied credit scores — they’re in the 800s.
My lender gushed about them when my husband and I recently took out a mortgage. Mo’s scores are actually higher than mine — he has an 831, which is apparently unheard of.
You might think with scores like those, we are obsessing about them, checking them multiple times a year through MyFico.com, and taking out cards that provide scores as a free service. But, nothing could be further from the truth.
What is our secret? How do we maintain enviable credit scores, get rock-bottom interest rates on our mortgage and obtain credit limit increases without asking?
It’s simply this: We forget about our scores.
That’s right. All we do is … nothing. No obsessing. No scheming. In fact, Mo and I didn’t even know our credit scores until two years ago.
We do check our credit reports, though, through AnnualCreditReport.com, a free service that allows you to check your reports annually at the three major credit bureaus, Experian, Equifax and TransUnion. We are primarily looking for incorrect or suspicious information. But the credit scores? We save those for the lenders to check.
Why? Because if you are doing everything right and checking your reports for suspicious activity, the great scores will follow.
Here’s what I mean by “doing everything right.”
Quizzle.com’s Ann-Marie Murphy breaks it down to six steps for the budding consumer. At the heart of her advice:
- Only charge what you can afford to pay off in full.
- Pay on time every month.
Do those two things, and the rest falls into line. You can take out more credit cards; you can vary your types of loans; you can avoid cash advances. You can do these things to improve your score, but what it really comes down to is paying on time and paying off your credit cards in full each month.
CreditCardGuide.com’s Editor-at-Large Erica Sandberg explains to one reader the best way to raise your credit scores, pointing out that the way you use your credit cards can make or break your scores.
Erica also explains that multiple types of credit help your score, and it’s true that Mo and I have had diverse credit over the years. But we didn’t do it intentionally. We just lived our lives, paid our bills and kept our jobs. (I might add that there is hope for the at-home mom. I was at home for a decade, and my score was actually above Mo’s when we finally checked them two years ago.)
Let’s say you don’t want to have credit cards, which, owned correctly, are the easiest way to build your credit. There are alternatives such as using installment loans responsibly, as Experian‘s Maxine Sweet explains to a reader. Geoff Williams goes into more detail about how to build credit without credit cards in his article for US News & World Report.
Mo and I have pretty much kept our financial affairs simple over the years, and I believe that has been key to our great scores. We didn’t even know about the FICO score until two years ago, much less how it’s calculated. (To learn how the FICO is calculated, read Erica’s piece on the subject.)
As tempting as it might be to check our scores often, now that we know that ours are great, we are resisting the urge. We’ll just keep living our lives, paying our bills and only borrowing what we can afford to pay back. It’s really that simple.
Budget for gifts or pay the consequences
For many years, my husband Joe and I never budgeted for gifts. Then, every gift-giving occasion caught us by surprise. This seems like a small issue, but it caused assorted problems for us. For example:
- It messed up our budget. This wasn’t a big deal if we just needed to grab a bottle of wine or a gift card for a casual friend’s birthday party. It was a bigger deal if we had to give multiple gifts in the same month, or a pricier gift, such as a wedding present for a close friend or relative.
- It caused stress. It doesn’t matter whether it’s flowers or an oil change: When you fail to budget for something, weird things can happen psychologically. In my case, I’d put off making a decision about the gift since it wasn’t budgeted. The whole thing became more complicated: How much should I spend? What category should the money come from?
- It caused resentment. Failing to plan for gifts annoyed me and made gift-giving more of an obligation than a joy.
But last year, Joe and I sat down and tried to eliminate vagueness in our budget — for example, we had been shoving things we didn’t plan for into random categories after we spent the money. We did this with gifts.
Now, we keep a “gifts” line item on the spreadsheet we use for our monthly budget. We plan the budget at the beginning of each month, and that line item forces us to think about upcoming presents. If there are none, we put down $0, leaving the category as a reminder for the next month.
Recently, when it was time for me to PayPal my sister $50 for my half of our traditional Mother’s Day gift of fresh morel mushrooms (our mom hunts morels, but doesn’t always find them), I didn’t stress. We had the money budgeted.
I think we also buy better gifts because we have time to plan — after all, thoughtfulness counts for a lot. Think of the best gifts you’ve ever gotten: The thought that went into them made you feel understood and loved.
Do you have wedding, graduation or birthday gifts to give this season? Here are three tips from personal finance experts on how to fit those presents into your budget:
- Make sure you budget enough. If you’re giving cash, it’s easy to know how much to budget. But if you’re giving a tangible gift, you might want to budget a little extra, according to Miriam Caldwell, blogger for the Money in Your 20s section on About.com. And, if you’re mailing the item, add in postage costs.
- Don’t forget the office. If you work in an office, you’ve probably experienced the surprise of getting hit with a birthday pool request. It’s smart to plan for these occasions so you’re not short of cash, Caldwell recommends.
- Be kind to your budget. Just because you hear about someone else giving a $100 or $200 gift every time someone gets a degree or ties the knot, doesn’t mean you have to, too. Broke Girl’s Guide offers a list of nice but budget-friendly wedding gifts, and The Dollar Stretcher offers ideas for frugal graduation gifts.
Just the act of budgeting will allow you more creativity with gifts — and I can tell you from experience that last-minute gifts tend to cost a lot more than ones you have time to plan.
Financial planners are our friends … really
For the past year, I’ve been saying I want to sit down with my husband, Joe, and a fee-only financial planner to look at our overall financial picture. I want advice on what we can be doing better — especially in terms of retirement investment. But, I keep putting it off. Why?
A fee-only financial planner is a professional who charges for services but does not accept any commissions for selling products. You can find one via the National Association of Personal Financial Advisors.
Joe and I were somewhat financially irresponsible in our 20s. Then we both made major career changes (he went back to grad school to become a college professor, and I went into freelance writing) and the recession hit. Now that we’ve come out well on the other side, I know we have some catching up to do.
Getting all that sorted out will be a relief. So, why am I dreading it so much? I can break it down into several reasons:
- General anxiety about opening up our finances, and possibly being judged for mistakes.
- Fear that I might have to spend hours gathering financial information to prepare for the meeting (the same reason I hate tax season).
- The fee — even though I know it will pay for itself many times over, actually paying for advice isn’t cheap.
It turns out I’m not alone. In fact, in February, USA Today ran this headline: “Do you have ‘financial adviser anxiety?’”
In the article, financial psychologist Brad Klontz says that shame around money keeps many Americans stuck.
The article cites an Australian report that found almost half of adults surveyed expressed mild anxiety about meeting with a financial adviser, while about one quarter had moderate to severe anxiety.
But Marv Kaye, a certified financial planner, writes that clients shouldn’t worry.
Financial planners are “accustomed to seeing clients with dysfunctional financial backgrounds,” Kaye writes.
In fact, a good financial planner will look at your situation objectively and try to be sensitive and detached while making recommendations. So, your initial nervousness should quickly turn to relief, he writes.
If you want to seek the services of a financial planner, but you’ve been putting it off, certified financial planner Jeff Rose provides tips on the personal finance blog Get Rich Slowly.
He gives great advice on how to check your adviser’s background and qualifications. For example, he advises you to not only check the planner’s credentials, but to understand what they mean.
Just don’t use checking out the adviser’s credentials as a way to procrastinate even longer.
Now that I know what I know, I feel a little silly. I’m not sure anymore why I worried about meeting with a financial planner. What’s my next plan of action? I’m picking up the phone to make an appointment right now.
Google Hangout on Air about business cards
We use them to pay for our cell phone bills, getting points in the process. They get us into airport lounges when we’re traveling so we can avoid the screaming babies. We even use them as financing, although we know we shouldn’t.
Credit cards are huge in the U.S. for the small-business owner.
In fact, only 16 percent of small-business owners told the National Small Business Association that they don’t use credit cards. And a third of the businesspeople polled, who were interviewed in January 2014, said they had used cards as a form of financing in the last year to meet capital needs.
Yes, credit cards are a big deal to American businesspeople. But understanding them isn’t easy. There are small-business credit cards and personal cards. There are corporate cards. Some aren’t protected by the CARD Act and the Truth in Lending Act. And you can be personally liable for the debt incurred, even if it’s a business card. That’s why CreditCardGuide.com decided to take on some of the work for you by asking the tough questions.
Catch our Google Hangout on Air when our guest, Greg Meyer, the Credit Union Guy, tells us about the ins and outs of business credit cards.
Greg has 30 years of experience in banking and lending. Today, he is Meriwest Credit Union‘s community relations manager in San Jose, Calif., helping Silicon Valley families with credit, retirement and banking problems.
Greg talks with our dynamic editor-at-large, Erica Sandberg, about everything you need to know before you choose a business card.
Some of the information Greg shares:
- What you should know about the CARD Act and business cards.
- When a business credit card comes in handy.
- How to know if you need a higher personal credit score to get a business card.
- The differences between a corporate and a small-business card.
- Whether it’s harder to get approved for a business card and what card issuers look for.
- If there is a time when a personal card is best.
Old house’s shine loses luster with expenses
I love old houses: In fact, mine was built in the 1880s. It’s an adorable little yellow Victorian cottage.
When I post pictures of it on Facebook, my friends say they’re jealous. But they wouldn’t be if they saw the not-so-cute maintenance costs I’m facing.
My husband, Joe, and I bought our house less than three years ago, but the paint on the exterior already is flaking. We have to get it repainted, and it’s pretty urgent: If we don’t, wood will rot, leading to even greater expense.
Painting a house exterior is a big job, but I was ready to roll up my sleeves and save us some money. Then I learned that houses as old as ours almost certainly have lead paint underneath the surface layers of color. So, the repainting is best left to a pro certified by the state in lead paint removal.
We got some quotes and — thanks, in part, to the fact that the painters have to follow special procedures for the lead, including putting down a tarp to collect all the paint that chips off — we’re looking at almost $8,000.
On top of that, we have another urgent problem — leaks in our roof, which is made of pressed metal shingles that I thought were oh-so-sweet when we bought the house. So, tack on another $2,000. This is another repair that can’t wait.
According to OldHouseWeb.com, most old houses have at least one major system — electrical, plumbing, roofing or heating — in need of a major update.
Now, Joe and I, having just shelled out a bunch of money for a remodel of the interior of our house, have had to wrestle with our options for funding the outside repairs: credit card vs. loan.
While we’d love to wait a little while and save up, that’s not an option. Both of our repairs make Consumer Reports‘ list of five home repairs you shouldn’t put off, lest they become bigger issues that could cost you even more money. (They are gutter problems, roofing or siding issues, pest problems, mold or mildew growth and foundation cracks.)
So, if you’re facing one of these urgent repairs, like we are, your financing options include:
- A credit card. If you use a credit card, it’s important to calculate how quickly you can pay off your balance and how much interest you’ll pay. If you can get a 0 percent deal, that could be a good option — if you know you can pay off the total within the introductory period.
- A home equity loan or line of credit. These loans use your home as collateral. With a home equity loan, you get the funds in a lump sum, whereas in a home equity line of credit, you can take out money as you need it. The Federal Trade Commission offers a guide to home equity loans and credit lines; it points out that you could put your home at risk if you can’t make payments.
- A cash-out refinance of your mortgage. This replaces your current mortgage with a new one, for a certain dollar amount higher than what you owe. You use that amount for home repairs and, ideally, you get a better interest rate on your mortgage. At TheMortgageReports.com, blogger Dan Green explains cash-out refinancing. It’s worth noting that it can be complicated and comes with closing costs.
- A personal loan from your credit union or bank. This option is unsecured, so the interest likely will be higher than with a home equity loan.
We’ve crunched the numbers, and we’re planning to use some money from our emergency fund, then take the remainder of what we need as a home equity line of credit from our bank. They’re running a special of 1.99 percent interest for a year, and we know we can pay the loan off in that time period.
In the future, I’ll be rethinking my love for old houses. Or, at the very least, I’ll make a list of expected home maintenance projects and crunch the numbers before I sign on the dotted line.
Is frugality the new ‘in’ lifestyle?
As the daughter of Depression-era babies, I witnessed frugality of a bygone era.
Mom carefully folded and saved wrapping paper after presents were opened on Christmas Day. I remember going through the living room and picking up the ribbons and bows for her while she cut and pressed the wrapping paper.
And Dad didn’t turn the air conditioner on — in Florida summers. If the unit was turned on, it was only during the day. Floor fans were used at night.
My parents said with pride that cars were like washing machines for them — devoid of status symbol. They got their first microwave oven after I moved out in the 1980s. I grew up with the black-and-white TV that they had grudgingly bought in 1959 after the pleas of my eldest brother, who wanted to be like the other boys on the block.
Their families had lived comfortably in the 1930s, but my parents were products of their time. My mom told stories of homeless men coming to the kitchen door of her mother’s home to ask for a plate of food. The men would then mark the sidewalk so others knew that my grandmother’s home was a place that would provide a plate to those in need.
Although more sheltered, my father had his own Depression and wartime experiences, and grew his own victory garden as a boy, which launched a lifelong love of plants and gardening.
They grew up to be careful with their things, and more careful with their money. A car was driven until it had absolutely no life left. A toaster, as beat-up as it might look, was kept as long as it could be repaired.
Contrast that to the 1980s to 2000s. Consumerism was the norm and even encouraged. Malls were the hangouts of choice for at-home moms (I know… I was frequently asked to go) and teenagers (a place my boys wouldn’t be caught dead in today). A girlfriend of mine and our friends proudly wore shirts that read “Veni Vidi Visa… I came, I saw, I shopped.”
Until the Great Recession, it was routine for families to live beyond their means. Credit cards were maxed out and second homes were bought. But foreclosed homes and lost jobs took a lot out of us. People began buying and renting smaller dwellings, such as Penny of Penniless Parenting, whose family of four downsized to a 525-square-foot apartment in 2010. And we are steadily cutting back on credit card debt, as a TransUnion study shows.
Part of this push toward frugality is necessity. For example, there has been a steady decline in homeownership since 2004, according to the Census Bureau, with median asking prices up overall during that same period. Food, natural gas and more are getting more expensive, as the Bureau of Labor Statistics reports.
But necessity is only part of the picture. There’s a return to simplicity in the younger generations. CreditCardGuide.com blogger Allie Johnson shares a car with her husband. At my previous jobs, employees commuted with their spouses rather than driving separate cars, and more than one person rode his bike to work.
You’ll hear pride in people’s voices when they talk about sharing a car with their spouse or buying an older, smaller home in an area that encourages walking. It’s almost as though people enjoy the challenge of cutting costs. One of my younger former coworkers was known for his cost-cutting techniques, even turning them into articles.
So, my parents’ mindset may seem old-fashioned to Baby Boomers, but Gen Y and Millennials are embracing the simplicity of frugality. There’s value again in maintaining a simple life.
Need strong passwords? These tools help
Do you cringe every time you sign onto your online banking or check your credit card balance because your password is something ridiculously easy to guess, such as rover1?
You know using your beloved childhood dog’s name makes your password vulnerable to hackers, but you haven’t gotten around to changing it because you like being able to remember your password and log in easily.
That’s how I was, until last week, when I finally got tired of worrying and decided to create strong passwords for every site I use.
Keeping your information safe online is more important than ever. A poll from the Pew Research Center shows that 18 percent of adults have had important information (for example, their Social Security number or bank account information) stolen and 21 percent have had their email or a social networking site hacked.
In fact, I got a huge shock last year when a writer friend emailed to tell me my professional website had been hacked. For a short time, it was taken over by a Pakistani militant group. My web hosting service investigated and found that the hackers got access to my site through a compromised password.
I knew I needed to fix my weak password situation, but I was torn between security and trying to make a gazillion passwords easy to remember.
Throw in the recent Heartbleed debacle — a problem with software that’s supposed to make websites such as bank and credit card sites more secure — and the first two letters in www should stand for “Wild West.”
Here are two steps you can take to increase your passwords’ security, without forgetting them and getting locked out of sites:
- Create a different super strong password for each site. On her blog at Komando.com, digital expert Kim Komando recommends using the first letter of each word from a sentence, substituting numbers and characters for some words. She gives the example of a song lyric: “Tramps like us, baby, we were born to run” becomes “tlI_I,BwwB2R.” She recommends using consistent rules for capitalizing certain letters and replacing some words with symbols or numbers. Lifehacker.com recommends that you outsmart increasingly clever hackers by creating passwords that are unique and unpredictable.
- Use a password manager. Kim Komando recommends KeePass, a free password manager. Or you could use Abine’s MaskMe, as I did. MaskMe stores the passwords, so you can sign in and retrieve them whenever you need to. (No more clicking on “forgot my password” for the 10th time.) Apple’s iCloud Keychain stores passwords across all sites when you use Safari as your web browser. Top 10 Reviews offers a review of various paid password managers that range from about $10 to $30. Bonus: These services will generate random passwords for you, so you don’t have to spend time thinking up crazy sentences or remembering song lyrics every time you want to create an account.
So, go do it now, and don’t procrastinate the way I did. You’ll feel much better — especially when the news of the next big security breach comes out tomorrow.
Just how safe are banking checks?
Since I started using online banking several years ago, I have barely used my checkbook Lately, I’ve been wondering: Is it even safe to write checks?
The question came up a few weeks ago when I called a lawn service I’d never used before. Our lawn mower broke down just as my husband was about to cut our overgrown lawn, and a friend was arriving from out of state that day. My friend had never seen our house, and I wanted it to look nice.
The lawn service I chose took cash or check. I had work deadlines to meet before my friend arrived, and there was no time to run to the ATM for cash. So, I reluctantly pulled out my dusty checkbook.
As I handed over the check, with my full name, address and bank account number on it, I wondered how big a risk I was taking.
Personal finance blog FiveCentNickel raises the same questions. After all, FiveCentNickel points out, the information that sometimes gets compromised when retailers have data breaches is often similar to what’s printed right on your checks.
FiveCentNickel recommends avoiding checks for certain types of transactions, such as eBay purchases, paying a random guy to mow your lawn (in my case, it was a company with the business name emblazoned on the side of the truck, but still) and even pizza delivery.
I’ll add one more: Craigslist purchases. Cash works out better for both parties, and most sellers don’t even take checks. (But, I recently sold an antique table for $30, and the woman who bought it was so sweet that when she pulled out a check and started painstakingly writing it out, I didn’t want to tell her no. I did wonder at her trust at handing over her personal information to a total stranger.)
Blogger Lainie Petersen at MoneyCrashers.com argues you can find yourself in situations when a paper check is the best choice: some companies don’t take debit or credit cards, while others charge you a fee to swipe plastic. For example, we’re getting the exterior of our house painted soon, and the painter charges a 3 percent fee for a credit card transaction. (It’s a fee he has to pay, so he passes it along.) The job is too expensive for us to safely use cash, so we’ll probably write a check.
So, how do you use a check and keep yourself safe from fraud? Personal finance experts offer several recommendations, including:
- Use checks only when you have a good reason, MoneyCrashers.com recommends.
- Don’t write additional identifying information — such as your driver’s license number — on the front of your check, MoneyCrashers.com says. According to the U.S. Social Security Administration, 29 states either use a driver’s Social Security number as the driver’s license number, or show it on the face of the license — a scary thought from an ID theft perspective.
- Write checks only to established, legitimate businesses, MoneyCrashers.com recommends. (While this is no guarantee of security, since many employees might get a chance to glance at your check, it’s better than writing them to just anyone.)
- Stick with cash for small purchases, recommends John Marklin, owner of Marklin Financial Services.
- Carefully monitor your checking account online.
If you don’t feel comfortable writing a check, and plastic isn’t a choice, what are your options? As FiveCentNickel points out, you can always use a money order. Or, you can use a cashier’s check. MyBankTracker.com explains the differences between the two.
If we choose not to write a check to our house painter, a money order could be an option. I’ve never used a money order, but this might be a good time to try.
How getting out from under debt changed my life
Two adults, two teenage boys and an 80-pound collie in a 1,300-square-foot home. That’s where my family lived two years ago.
We were falling all over each other. The boys had their own bedrooms, but the rooms were tiny. Our single great room doubled as a game room and living room. Complicating things was my insistence that we keep only one TV in the house. This encouraged the kids to spend more time with us, but it made for little privacy.
But lack of privacy wasn’t why we sold our little house. We were in a hot residential area of Austin, Texas, and a real estate agent had approached us about selling. What tempted me? Getting out from under our debt.
We had $14,000 in credit card debt, a loan on my van and the mortgage. Not a lot of debt by American standards, but I hated it. Add to that, we didn’t have much in savings. If we sold, we’d have enough equity on our house to be debt-free, we’d have some cash set aside and we could save more to perhaps buy a bigger house down the road.
It was a culture shock for my husband, Mo — we hadn’t been renters in more than 20 years. But I had read about people going debt free, such as Jaime at Eventual Millionaire, and I really wanted to try it. In the end, we agreed to get out from under $160,000 in combined credit card, mortgage and car loan debt, and live a more straightforward life. I wanted to continue using credit cards to keep our credit scores up, but pay them off each month.
We found a rental that was well-cared-for, 400 square feet bigger and, as a bonus, we would be able to save money for our next house. My biggest worry was that I would let myself fall into credit card debt again. This is what I did to prevent it:
- I set a goal of saving $60,000 for a down payment on a bigger house. I revamped our budget, something Joan Otto of Man Vs. Debt advises, cutting out expenses such as the gym and lawn services. Add to that, we didn’t have maintenance expenses, the car loan and card payments. I was able to cut our costs by $1,200 a month.
- I already had our budget on a spreadsheet, but I never seemed to meet it each month. I realized that I was being unrealistic about expenses. For example, I was taking the kids for breakfast tacos every Saturday, but I wasn’t including it in the expenses. I also wasn’t budgeting for occasional items such as medicine. I decided to break out my card expenditures on a separate spreadsheet. I would now be able to compare them to my card statements.
- This new spreadsheet forced me to think about every expense, but I needed to cut us some slack. What if we wanted to see a movie at the theater? Or what if Mo, who loves to cook, wanted to buy an exotic ingredient that didn’t fit in my well-planned budget? I decided to allow for $400 on the credit cards that could go to these kinds of expenses, as well as things such as haircuts and car washes.
- Credit cards were my downfall before, so I wanted to make sure I didn’t fall into the same traps again. Every Saturday after breakfast tacos, I checked each credit card online and made sure it aligned with my spreadsheets. This encouraged me to be more mindful of how the cards were being used and ensured that we were on budget throughout the month.
- Finally, I created a running tab of how much we would save each month from my salary after bills and expenses. I found this to be a tremendous motivator when the kids begged to eat out. I figured out that if Mo and I said no to a restaurant twice a month, that would save us $150 a month or $1,800 in a year. Or if we bought ice cream from the grocery story instead of eating at Amy’s, our local ice cream shop, we could save $20 a week ($1,040 a year). Monica On Money has some other great tips on how to cut costs, such as canceling cable and driving safely to avoid traffic fines.
Two weeks ago, Mo and I closed on our dream house. We were able to go bigger in size, in large part because we had saved enough for a generous down payment. We have debt again, which makes me nervous, but I’ve shown in the last two years that we can live card-debt free and that my spreadsheets work. We hope to have the mortgage paid off in seven years (it’s a 15-year mortgage) by putting bonuses and other extras toward the principal.
I’ve learned in this journey that debt serves a purpose — if you control it, and not let it control you.