Monday, November 17, 2008

Cheapskate Principle #5: No Compulsive Buying

I usually do not have a problem with compulsive buying. However, it is the holiday season and I know I will want to buy more for my family and friends than what I can really afford. The first goal I am making for this season is a list. Actually, I'm making two lists. One of those I want to get gifts for and one of the items I want to buy. Making lists is one way to cut down on compulsive buying. Trent at The Simple Dollar has created a list of ten ways to cut down on compulsive buying.

1. Keep Reminders of Your Dreams Next to Your Cash and Credit Cards
You may want to keep pictures of your kids or dream house in your wallet. If you do a lot of spending online, keep pictures or post its near your screen. The important thing is keeping the "main thing" the main thing and not losing sight of it.

2. Use Ten Second Rule
Whenever you go to purchase something, count to ten and consider how it fits in the bigger scheme of things. Don't just do this with major things. Our lattes and candy bars add up quickly. If you can save $10.00 a day, that adds up to $300.00 in a month. If you can save 10.00 a month, that becomes 120.00 a year. The key is to consider all purchases if they work towards your goals.

3. Keep Clean and Confident
Many times we stop striving for a goal because we loose confidence in ourselves. If we maintain our health and hygiene, then we will maintain our confidence. As parents, the first thing we take from the budget is our haircuts, dental appointments, and routine check ups. If we do not exhibit confidence in ourselves, who will?

4. Don't Take Your Credit Cards or Cash With You
This is great advice went you hit the malls. If you take more cash than you plan to spend, then you will probably spend. It may be as simple as stopping in at the food court to get a soda or a cheap jewelery store to get matching earrings, but you are still spending more than you budget for the trip. Don't take the extra cash nor the credit cards and you will build in the extra waiting period.

5. Avoid Situations Where It's Easy To Spend.
For me, it's an electronic store. Right now, Best Buy and Gamestop are offlimits to my son and me. We just want everything in the store and everything is "on sale". I know I can rationalize any purchase in my head, just not in the budget. So, I stay away from the electronic stores. For you it can be a drug store or an antique shop. Just stay away from where you are vulnerable.

We will continue the next five later today.

Thursday, November 13, 2008

Cheapskate Principle #4 Save at Least 10% of Income

According to an article on, more Americans have started saving more and paying their debt down. Towards the end of the article however, many said that it was only temporary response to the economy. A true cheapskate would save 10% of the income anyway. There are so many things to save the money for if you have children. We have retirement, college funds, larger homes, emergency funds, etc. and etc. I believe the key is to come up with a plan and stick to it in thick and thin. In the same article it mentions that those that are not despondent over the current economic situation are those with an economic plan, ie budget.

Tuesday, November 11, 2008

Teaching Children Entrepreneurship

While raking leaves today, my 12 year old son starts talking to me about the his personal business he wants to open. He wants to rake other people's yards in the fall and cut their grass in the spring and summer. Great ideas. Now we rake our yard by hand and don't have a leaf blower. So I ask him how much he is going to pay me to rent the rakes? He looks at me and says half. I said son that I only paid $10 for the rake. He goes "Whoa!" We settle on $1.00 an hour. I then ask him how much he much is he going to pay me for taking him to the job sites. He said $2.00 an hour. Now we live in a very small town and one of us would end up losing. "Micah you pay by", I started. "The mile," he finished. He started thinking about more costs of doing a raking business. I asked him what do most people use in raking leaves. He quickly replied, "A leaf blower." "How much do those cost?" I ask him. "200?" Something else for him to research. Now, if you are a customer, do you hire the guy with the leaf blower or the guy raking? He realized that if he charges by time, then he wouldn't be hired because it would take him too long, and it wouldn't be cost effective to charge by the size of the job. "What can I do?" he asks. How can you raise some capital?

Sunday, November 9, 2008

Christmas Spending

What are your family plans for Christmas spending? Usually we take a trip to family in Ohio and Iowa, but with the economy, medical bills, and tell-tale signs that the minivan may be giving us problems in the near future, we are sitting the "travel" season out. So how much are we going to spend on gifts? I don't think we will spend over 500.00 if that much. The kids realize this and haven't really bombard us with a list of wants. I'm very fortunate that my kids don't try to compete other kids and recognize how they really do have in life. Our goal is to give to others. We may try to do some online shopping and ship for free to our love ones in far off states. That is one way to cut costs as online retailers offer special deals with free shipping. The other things for our local relatives would be an exchange of services. Now, the thing I'm trying to concentrate on is making this Christmas a one shot deal and get my budget under control. The plan is start saving through out the year and not to cram at the end of the year. So, again how do plan your Christmas spending?

Cheapskate Principle #3

Cheapskate Principle Number #3: Living Ethically and Honestly No Matter The Cost.

Many of you say that this is not a problem. I don't rob, I don't steal, I don't cheat, I go to worship services. No problems. I have one question for you: What about debt collector phone calls? If you have caller id and see the phone number for a debt collector calling, do you answer it? Many times in the past I haven't picked up the phone. What can I tell them? "This isn't your month to be paid because I don't know how to budget properly." That will go over really well. You must know your budget so that you don't drive yourself nuts trying to avoid the calls. Someone may be asking, "I have rights don't I?" You're right, but if you don't discuss with your creditors your situation, they can't work with you and find a solution. If you are not making an effort to work with them, why should they try to work with you? They didn't overspend on that credit card. Call your creditor and work out a solution. Most will cooperate if you are truthful- be honest with them. You will be amaze how well it work for you. I was.

Saturday, November 8, 2008

Good Morning

Good Morning,
I ended up taking a few days off due to sickness and life. Trent over at The Simple Dollar suggests typing a few entries in advance, but I haven't quite made it there yet. In the past 24 hours a couple major things have happened that will greatly affect my budget. One is the second job. I am working for a major retailier during the holiday season. I will be working in the back with merchandise. I didn't want to see the floor due to being a high school teacher, my students would continually hound me. This is just a seasonal position, but the online tutorial position I applied for is progressing well with their background checks and should meet their 3 month timeline of allowing me to start working :-/. Fingerprints and criminal checks need to be completed in New York while I live in North Carolina. The online tutorial is the job I'm wanting but the food needs to be placed on the table and bills paid so I will do the seasonal job for now.

The other major event is my daughter is going on her first college tour. Her preparations for college has really rung my bell, late as it be in life. What are some thoughts about who to pay for college, the child or the parent? I have read both sides so I'm still looking for perspectives. Thanks.

Tuesday, November 4, 2008

One of those days. People have always...

One of those days. People have always wondered why one of those days come along. It is one of those days you feel is wasted. You don't really accomplish anything. You wonder what can you learn from that day. I had one of those days Monday. Day at work was ho-hum. Took my sixteen year old around the community to apply for jobs. No one is hiring. Finished reading Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not!'>Rich Dad, Poor Dad. (By the way a must read if you are serious about getting out of debt.) I hadn't listened to Crown Financial's Broadcast today. It's 1:30 in the morning, the alarm is set for 6:00 and I realized I hadn't blogged today or listened to the broadcast. I start the broadcast and begin to blog. John Nardini with Denali Ice Cream is the guest talking about earning extra money. He mentions a site I barely catch called I figure what the heck, lets see if I have any missing money. I get on the site and lo and behold Allstate is trying to get me over $100.00 to me. (An old insurance policy that I let the premium lapse on.)Yes! God is Good! Lesson learn: Even in the deepest despair concentrate on God and surround yourself with information that help you achieve your goals!!

Sunday, November 2, 2008

Cheapskate Principle#2: Spirit of Giving

Cheapskate Principle #2 A Spirit of Generosity: This one may be the hardest to understand on a budget. The premise behind the principle is the belief that its not ours. What is "it"? It can be time, money, gifts, or talents. The thing to realize its not ours to control. Remember the whole principle behind budgeting is preparing for emergencies. We can't predict what is to come our way, so why should we hoard things. (There is a difference between hoarding and saving.) I may not have money to give someone else, but I may have some time to give them. Think about the amount of time we waste watching TV or other frivilous things in our life. What a difference we can make in kid's life if we coach a little league baseball team and spend time with them? How would a widower take a person doing some extra chores around their house? All of these things do not involve money.

Another benefit of this spirit of generosity keeps our eyes from focusing on our problems and being concerned about others. Sometime when we wallow in our own grief, we may spend more to make ourselves feel better. If we are trying to stay on a budget, that is not a good situation to be in. Remember, we can't change yesterday, we can't control tomorrow, but we can help today.

Saturday, November 1, 2008

Cheapskate Principle #1 Spend Less Th...

Cheapskate Principle #1 Spend Less Than You Make. This principle is the heart of financial life. We see many people breaking this principle everyday. Believe it or not, it is the principle I'm having a hard time with right now. If an emergency came up, I would just whip out the credit cards and take care of the problem. I will just pay for it later. I was the federal government and my family was the banks and insurance companies. They were in trouble and I was bailing them out of it without regard of the costs. My kids want a dog- no problem. I will pay for the vet bills if they happen. 

Many times we violate this principle when we have two in the family spending the money. An example will be when the husband pays the bills on the computer and the wife needs to buy groceries. She just uses the debit card and brings home the bacon. She gives her husband the receipt to enter into the computer software. She has spent more than the husband has available after paying the bills. Technology is great, but communication is better. My suggestion to solve this problem is go back to cash for groceries. If the cash is out of the bank account, then the one who does the online bill pay won't spend the money that is not there and groceries are still taken care of and the family can eat.

The greatest way to make this principle work is get on a budget. Dave Ramsey and Crown Financial have great stuff online to help. They also have percentages for typical family sizes. Remember though, it is for typical families and I haven't met one of those yet in my life. Use the percentages for ballpark figures and not absolutes.