Sunday, January 27, 2008

Zen and The Art of Packing A Lunch

I must be odd.  I absolutely love to bring my lunch to work.  

It seems like the easiest way in the world to save $6-$8 a day, and I really like the things I bring: for Monday of this coming week, I made a great salad, and on Tuesday, I'll take the rest of the clam chowder we had for dinner tonight (Sunday).  

Wednesday's lunch will be tomorrow night's leftovers, and so on.  Things get a little less organized after that, since I'm working late a few nights and probably will not make anything in particular for dinner - I'm the queen of cereal for dinner on nights like that.  But we have pasta and sauce in the cupboard, and I can put that together pretty quickly, or there's some cans of soup in the cupboard in a pinch.  Canned soup is a far cry from homemade, but I keep some around anyway, as it's good for those days when there is no time.

Then for snacks, there are granola bars, pretzels, dried cranberries and some oranges.  

My husband's lunch is easy - a ham sandwich and yogurt or cheese every day.  Makes him happy.

Maybe I like my lunches because I love to cook - not a lot of folks seem to bring chicken with roasted lemons, olives and capers on a bed of sauteed spinach in a tupperware...

It also might be that I once read that people who pack their lunch eat, on average, 300 fewer calories a day than those that buy.  I think this is probably true.  I make my clam chowder with 1% milk, I'm pretty sure that the cafe near my office adds something a tad fattier.  

But mostly, I like it because it's a simple way to tend to our goals.  We have lunches we enjoy, we never have to take time to go find something, and we're eating pretty healthy most of the time.  In addition, we've literally saved thousands - figuring 2 of us eating lunch approximately 240 days of the year at work - over the last few years.  Even subtracting the cost of buying foods for lunch, the savings is substantial.  

If you figure that the average lunch + drink costs about $7 per person, and we spend about $25 or so a week on lunch meat, bread, and snacks, or adding additional portions to dinners so that I can pack leftovers, we're still saving $45.00 a week.  Multiply that by about 48 5-day work weeks (the approximate amount we work after vacation time, holidays, etc), and it adds about $2160 in cash to our budget annually.

Over the years packing lunch has become routine.  Before the dinner dishes are washed, I put together the lunches.  His lunch bag fits in the fridge, mine usually does not.  So the components of my lunch go in separately, and in the morning I take them out, and put them in my bag, along with an ice pack.  

I also put bread in the toaster oven for a breakfast of toast for me, and set up the travel mugs next to the coffee pot.  My husband's job is the morning coffee.  He grinds the beans and fills the pot before we go to bed, and sets the timer.  In the morning, we add milk and our respective sweeteners, and off we go. 

I think it must be hard to imagine packing a lunch if you've never done it before, but really, it's easy.  The simplest way is to just make more of whatever you had for dinner.  Or soup, or a sandwich.  Even if you brought it 2x a week, you'd still save.   

Maybe I'm strange, but I like my homemade lunches.  It's a little way to bring home to work with me, and save at the same time.  For me, it doesn't get better than that.

For those who are interested in the chicken with roasted lemons recipe:
Frugal tip: Substitute the olives called for in the recipe with jarred sliced green olives. Normally I am something of an olive snob, but in this recipe the inexpensive type taste just great.

Saturday, January 26, 2008

Calculated Risk

I've been thinking about some of the things my husband and I do that don't exactly fit the 'recommended' approach to financial security.  The one area in particular we don't fit is in the 'Emergency Fund' arena.  

Emergency funds are typically 3-6, or more, months worth of living expenses set aside in a liquid but interest bearing account (read: Money Market) that is only to be used in the event of a true emergency - job loss, the car died, etc.

 I believe in them.  As someone who transformed from a $10-to-the-next-paycheck person into someone where the need to save has taken deep root, a large e-fund is high on my list of goals. 

Right now we have a couple months worth of expenses in savings.  I'd like 12.  But we've got some other money plans that are going to delay growth of our e-fund, and I'm okay with that.  A little nervous, but overall, okay with it.

See, we want children.  At 34 and 35, we're not waiting on it.  We met in our 30s, and have achieved a great many  of our goals together, including buying a house in the spring of 2007.  

What that means is that our largest amount of savings outside of our retirement funds, which are untouchable, is directed to covering a maternity leave, which I will take unpaid.  We're in the process of building this savings up so that we still come out of a maternity leave with two full months worth of expenses saved.

I am sometimes clammy-handed in my awareness of how quickly two months can go by.  

But we will not push off a family.  Nor will we stop our renovations, which have shifted to much-needed infrastructure renovations for the most part - new wiring, new oil tanks, additional insulation, and rebuilding a small barn on our property. 

We can juggle all of this, and we will, God willing and the creeks don't rise.  It is a calculated risk, literally spent running numbers and scenarios, day after day, week after week.  

Is it the smartest decision?  Oh, I don't know.  For the financially faithful, diverting other money, like say, from the barn, might be the better option.  And in quite literal fact those folks are right.

But, see, here again is that personal aspect of personal is the right decision for us.  We will still be saving up in our emergency fund, although the funds going in have slowed from a stream to a trickle.  We have been slowly discussing what additional items can get cut or reduced from our budget.  

But I've become comfortable with our decision.  It's right for us at this point.  I've never been one of those people, who, like my husband just know it will work out. I loathe when I hear 'If you wait until you are ready for a baby you never will be'.  It's so shortsighted.

I am the type to sit there with a calculator and run every scenario.  But I'm learning to see the benefit in just a touch  - 10% maybe - of 'It will all work out'.  Because despite all my projections and calculations, it really always does.  While I've made him more frugal, he's made me worry just a little less.

I'm hardly ready to throw out my calculator.  And that e-fund is always present in the back of my mind.  

But, if we wait until we're ready for a baby, we never will be.  Ahem. 

Wednesday, January 23, 2008

Don't Panic...Yet

So everyone is panicked about a recession, or so it seems.  People are talking about pulling their money out of the stock market, cutting costs, and worrying about their jobs.

On some level, I'm relieved to see people cutting back.  Our current consumer economy is unsustainable from both an environmental and economic perspective.  As many have said before me, we were once citizens, we are now consumers.  Consumers, to me, sounds unpleasant in the way a swarm of locusts is unpleasant.  Whereas citizens - engaged, upright and thoughtful - is a term I can get behind.

But (you knew there was a but here, didn't you?) economic downturns have a negative impact on everyone, even the frugal wash-out-your-baggies types.  And while market corrections have their place, the fallout can be very personal.  It's hard to get behind an economic downturn as part of a necessary cycle when you are the one in the unemployment line.

And that very personal perspective is the one that I think are the most important.  Still, it's not time to panic just yet.  We are by no means in the Great Depression II yet.  We still have some positive opportunities financially, all of us.  

The first positive opportunity is in your IRAs and 401ks, and any other investments.  Prices are down, so you can buy more.  That means that if you get more shares now, when the prices go up, you do better.  That said, this is a good time to go to and check your portfolio.  If it needs a few changes, make them.  Then sit it out, especially if you have a lot of time before retirement.  

The second positive opportunity is that there is going to be much less pressure to spend.  Chances are, if you feel a pressure to decorate your house, or get a flat screen TV, whether that pressure is internal or external, you now have the perfect excuse not to buy.  Ride out the economic uncertainty by putting off non-necessary spending for a bit.  I promise you'll live, and you might even be happier.

The third positive opportunity is to pay down your debt.  Especially if you are one of the ones without job security.  Chip away at it, don't add to it.  The smaller your debts, the less you have to fear.  So if you are afraid for your job, save some, yes - I hope you've been saving all along, but really focus on owing as little as you can to as few people or institutions as you can.  It will be a huge relief if the axe falls on your career for a bit to know you can stay afloat on unemployment.

The fourth positive opportunity is that mortgage rates are down.  That means if you want to buy a house, it's a really good time for you.  And if rates are a percentage point or more less than when you bought, consider refinancing.  Even with the fees, it may be worth your while.  Crunch some numbers and see.

The fifth and final opportunity I see is to take some time to find inexpensive or free things to do with your time.  Maybe that's taking walks on the weekends with your spouse, or cuddling up in front of the TV for the evening instead of the movies.   Maybe it's training for a 5k, or simply finishing that quilt you started eleventy-seven years ago.  Do all those things that you talked about doing, the ones that don't involve being first in line for a first run movie.  

Sure, the economy is not doing well.  And yes, you may have some things to worry about.  But see the opportunities through the negative press, and not only will you possibly be wealthier, but happier as well.  

Now, aren't you thrilled Apple stock is more affordable?  


Monday, January 21, 2008

Swiffers, the Environment and Economies of Time

One of the components of us working on our 10 year plan, and very small homestead is to also be considerate of the environment.  

This means that we bring coffee and lunches in reusable mugs and containers - every day.  
It means that we buy used when it makes sense and meets our needs.  
It means that we will practice organic gardening, and buy our food and whatever else we can locally whenever possible.
It means that we use cloth napkins, and are slowly switching to using 100% rags instead of paper towels for cleaning.
It means we drive our cars for at least 10 years, and buy fuel-efficient sedans rather than big SUVs.
It means that we use environmentally responsible cleaning products (I'm still trying to wean my husband off Tilex though, this is a long-haul process).
It means that we make an effort to just stay home one day a week to reduce our driving and carbon footprint.
It means a lot more things, too many to list.

But then one day as I was lugging around the mop and bucket for our 2300 SF, hardwood floor filled house (I'll get to why we bought so much space in a later post), during one weekend where I'd spent about 4 of the previous hours cleaning, plus a morning of running errands, cooking/prepping meals for the week, etc, I hit a wall.

I was tired.  Exhausted.  We'd been renovating our old, much in need of love 1933 home, unpacking, clearing space for the garden, working in the yard,  and so on for months on end.  On top of that, we were trying to cook in, pack lunches, etc etc....and I commute 3 hours a day, 5 days a week.  And my husband commutes 1.5-2 hours a day. 

Clearly, it was too much.  

I went out and bought a Swiffer Wet Jet.  It was that or a cleaning lady, and the Swiffer was $23.00 plus refills, versus $200 a month.  To this day, I'm not sure it was the right thing.  I have a love/hate relationship with it.  Environmentally, it's not something I'm proud of.   I'm irked at myself every time I pull it out of the closet.  

Timewise though, I love that little cleaning tool.  I mean I love it.  Adore it.  

It's little, it weighs nothing.  I no longer lug a bucket of water from room to room, except for those few times a year when we use Murphy's Oil Soap to brighten the floors.   
Some of you may rinse out your mops in your showers or sinks to avoid the lugging factor.  All I can say to that is yuck, good for you, but yuck.  Not for me, thanks.

I've compromised with my conscience by periodically refilling the cleaning solution with a more environmentally friendly solution, and going a use or two before throwing out the pads. 

I struggle often with convenience vs. the environment.   Not a week goes by where I don't encounter a personal ethical dilemma about it.  But I am trying to balance creative thinking about how to avoid environmental impact with respect for the little time we do have. Sometimes the answer is an imperfect one, like with my Swiffer.  Other times I come across the perfect solution.  

Now excuse me, I need to go mop the floors.  

My Philosophy on Prepaying Your Mortgage

I believe in debt freedom.  We're still many years away from that, as we finally bought our first house this year, but I believe in it.  One of the best ways to simultaneously achieve debt freedom and financial independence is to pay off your mortgage.

Imagine a day when you had nothing to pay but your monthly electric, phone and cable bills, along with some groceries.  When your expenses dropped by thousands a month.  When no matter what happened, you owned your home free and clear.

"I can get better returns in the stock market"

I maybe buy that.  Maybe.  For some people, some of the time.  I believe that paying off your mortgage is just as important is investing, for two very good reasons.

1. Security.  The less debt you have, the less at risk you are in an uncertain world.
2. Equity.   The more equity, the greater your net worth.  The greater your net worth, the more security you have.

Our approach to paying off our mortgage early is to automate biweekly payments through our mortgage company.  Because some months have 3 Fridays, each year we make an extra mortgage payment.  This costs us some money in fees, even though we could do it ourselves by just adding money to our mortgage payment every month.  Still, it's worth it, and here's why:

Over the life of the loan, fees associated with biweekly mortgage payments come to about $700.  $300 of that was a one-time setup fee, and the remainder is the debit fees.  This is a total moneymaking scheme by the mortgage companies, yes.  Still, after running the numbers, that $700 is going to save us $122k in interest payments, and shave 6 years and 9 months off our loan.  

I will contentedly spend $700.00 to save $122,000.00.  

"So why not just add money to your mortgage payment each month?"

I know me.  I know us.  Most months we would, sure.  But then there would be those 'tight months' where we decide it just doesn't work for us that month.  Or we'd really rather get a rug for the living room.  I can think of many reasons why we would choose not to add extra principal to our mortgage payment 'just this once'.  So I've taken the decision out of our hands.

"But what if you aren't in your house until it's paid off?"

We are still building equity.  Our net worth is increasing, and on some level paying off the house early is like forced savings.  And who knows what the future will bring?  This, at least, is as sure thing. 

Incidentally, David Bach advocates this approach in "The Automatic Millionaire"

Sunday, January 20, 2008

Why I love 'The Tightwad Gazette' Even Though I'm Not a Real Tightwad

The Complete Tightwad Gazette by Amy Dacyczyn is one of the best books on frugality ever written, if not the best.  I don't say that lightly.  

Back in the early and mid-nineties, Amy published The Tightwad Gazette as a newsletter.   Then came three books created out of her newsletter articles, the Tightwad Gazette Volumes 1, 2, and 3.  Finally along came The Complete Tightwad Gazette, which is a compilation of all three books, plus some of the articles from the final issues of the newsletter.  She closed it down after about 4 years, when she, along with her husband Jim and their 6 - yes 6 - children, had achieved financial independence.  She retired, and as far as I know, still resides happily in Leeds, Maine.

Even if you aren't going to turn your dryer lint into a halloween mask, this woman has a story worth telling.  On a single income of less than $30,000.00 a year, she and her husband managed to save $49k for a down payment on a house, all while she stayed home to raise their kids.  This woman is called the frugal zealot, and not for nothing did she get that moniker.

I love my issue of The Complete Tightwad Gazette.   So much so that it is literally falling to pieces.  But while I'm working towards financial independence, I by no means practice what she calls 'black belt tightwaddery'.  

So why do I like it so much?  

First and foremost, because it saved my financial future.  Many many many (let's not discuss just how many) moons ago I was living paycheck to paycheck, on a small income, with debt and with a boyfriend  that had lost his shirt in a business venture.  

Because of the frugal choices I made as a result of reading her books, I dug myself completely out of debt, managed to feed us on very little per month while he was digging his way out of the $10k in debt he'd accrued and looking for a job, and even to start socking money away. 

Even though my situation - and the man in my life - has changed dramatically, I still pull this book off the shelf every month or two, flip it open and begin to read.  I no longer have to count every penny, but I believe that frugality is an amazing tool my husband and I can use to get us where we want to go.  

Most of all I love this book because of her philosophy that 'Tightwaddery without creativity is deprivation'.

All too often when I see 'help!  We're in debt!" posts on a message board I frequent, those of us who are regulars ask the poster to put up their budget.  And then we start suggesting places to cut costs - cable, cleaning lady, and so on.  

Resistance to these ideas happens in almost 100% of the cases.  The reaction is dramatic and immediate 'I couldn't do THAT'.  That, of course, meaning all that poor person, penny pinching stuff.  

But you know what?  You really can do that stuff, and it's smart to.  It's a lot easier than declaring bankruptcy, or not being able to pay the heating bill.  Trust me.

The Complete Tightwad Gazette has something for everyone though, not just the folks in debt.  Her creativity is something to admire and emulate.

And besides, even billionaires should wash out their baggies.  

Found Money

I was thinking this morning about some money that we have coming in over the next few weeks.  It's not exactly a breathtaking sum, but it is enough that I'm surprised we've left it this long.  And it made me think about money I've left sitting on the table, so to speak, in the past - all the surveys I haven't sent in for a coupon, all the times I didn't bother to return something.

Part of our slow march towards financial independence, which is at minimum, ten years away, is being more financially honorable towards ourselves.  And that means picking up the money that belongs to us.

This time the money was related to our health insurance.  I had called to ask about something, and the customer service person on the phone reminded me of some benefits we had that we had not been taking advantage of.  The first was the $150 per person health club reimbursement.    Three minutes out of my life to fill out a form, and we're expecting a check for $300.00.  If you think about that in terms of hourly worth, you'd have to make $6k an hour to net $300 in three minutes.  And since we use our gym regularly, this is just making a good thing better.

The other reminder was that our copays are eligible for reimbursement from our health care FSA.  So we've got another $85 coming back to us as soon as I drop the form in the mail on Tuesday.  

So in total, I think I spent about 10 minutes on the phone with my insurer, plus another 10 minutes in filling out paperwork, and netted us $385. 
That's the last time I forget to send in a form, or just not return something.  I've probably left thousands on the table over the years.  It is worth my time.

My Suburban Homestead Part 1

January is 2/3 over, and that means that soon it will be time to start my garden seeds.   

This year, the garden will be something special, because it will be the first in our home, instead of a garden we have to leave behind when we move from apartment to apartment.  This one is for keeps.  

Last spring, we only managed to get in some asparagus roots and some raspberry bushes.  We were drowning in renovation projects, and the garden just had to wait.

This year, we're working on turning our little .66 acre spread into a homestead.  It's a multi-year project, one I hope that will culminate in producing the bulk of our eggs, chicken, fruit and vegetables from our own patch of earth.

We're not the typical homesteaders.  For one thing, we live in a rural town 20 miles outside of Boston.  We both have lengthy commutes to corporate jobs.  On the outside, we're pretty typical yuppies.

Or maybe not so typical after all.  Two weeks ago,  we wandered out into our yard to pick the perfect spots for the first four fruit trees, which will arrive in the spring - a dwarf cherry, two apple trees and an apricot tree, the last being a housewarming gift from my older sister.  Next year, four more trees will come - two more apples, and probably two peaches.  I haven't yet  found space for the two cornelian cherry trees I lust after, but maybe in 2010....

Our garden seeds are sitting in a closet, waiting just a few more weeks to get started.  I tried not to buy too much, but I'm sure I have.  I lost count at seven kinds of lettuce.  

My husband has committed to read our copy of Square Foot Gardening by Mel Bartholemew in the next couple weeks, so that in the early spring we can put together our own square foot potager garden.

We're slowly putting together a long term plan to scale back and work less, to produce our own food, and to achieve financial independence.  None of this is going to happen quickly, we're probably 10 years away from a true downshift.  And who knows what will happen in ten years anyway?  All we can do is plan, and save, and plant our seeds and our trees.

The journey of a thousand miles begins with one step, and the self-sufficient homestead, even just a little teeny homestead, begins with one flat of seedlings.  


Some Really Good Personal Finance Books

I'm a fan of personal finance, and what frugality and economic security can give a person.  And I really like to read personal finance books - even if I don't learn anything new, I always appreciate a new perspective.

Here's my top 5 faves, and why:

1. Smart Couples Finish Rich by David Bach
This is hands-down the best book on the basics for couples, in my not-so-humble opinion.  He really knows how to negotiate the emotional minefields surrounding couples and money.  His simple solutions really work, and the latte factor is a wallet killer for many of us.  

2. You Don't Have to Be Rich by Jean Chatzky
I love this book not for what it teaches, but for what it tells us about people and money.  Chatzky provides data from a survey she sponsored, and it is absolutely fascinating, especially the very clear stats on how money can't make you happy, but it can make you very UNhappy. 

3. The Overspent American by Juliet Schor
Schor, a Harvard professor, is also the author of The Overworked American.  After she wrote that book, she got many questions about how to get out of the cycle of 'work and spend'.  And she began to research why our desire for consumer goods is so insidious.  It really made me think, and it is a book I've gone back to several times.

4. The Automatic Millionaire by David Bach
This book is a fluff read, and much of what he says here is repeated from Smart Couples Finish Rich.  So why is it on my list?  2 reasons.  The first is that the story of Jim and Sue McIntyre, the original Automatic Millionaires, is so compelling.  If you think you don't make enough to save or become wealthy (or heck, even financially solvent) then read their story.  Then come back and tell me the same.  Number 2 is his approach to prepaying your mortgage, and I'll tackle that in a different blog.  Get this one from your library, it's worth it.

5. The 9 Steps to Financial Freedom by Suze Orman
Okay, I can't listen to her talk on TV, she annoys me.  But before she was the Suze Orman Juggernaut, there was this book, and it is good.  I especially appreciate her 'people first, then money' approach - meaning if you owe any person - say a parent or a sibling - pay them first, before you tackle the other debts.  Money can kill relationships, and she talks a lot about how to not do that.  

Why DIY is often better than Buying

Yesterday I spent 6 hours sewing with my Aunt.  My husband and I bought our first home this past spring, and while we really would like to have it completely decorated, we've made a firm commitment that all renovations, furniture and decor will be completely paid for in cash.

Because if we can't buy it outright, we can wait.

This is sometimes really really hard.  Our list of desired renovations, furniture, rugs, etc - well, it's lengthy.  

But we've made  a commitment, and we'll stick to it.  And that has meant that the living room has been curtain free since we moved in.  Thankfully, our nearest neighbor couldn't see in without binoculars.  Which we sort of hope she doesn't have.  

In December I found a really great deal on some really great fabric.  I got 20 yards of a high quality damask for $6.73 a yard.  So I hit up my Aunt, who is an amazing seamstress, for a day or two of her time, and off I drove up to her house yesterday.  We chose her 'festoon and jabot' pattern, which she bought about 20 years ago for $5, and has produced curtains for at least 5 houses that I know of.  

One of the curtains is done, we have about 3 more hours of sewing and putting together next Saturday, and I'll have my living room windows decorated with treatments that look like they cost thousands.  

If you factor in the gas, tolls and the small gift I brought her in thanks for her time, I'll have probably spent about $175.  

While I was up at her place, cutting and sewing, my husband was down in our basement, pulling down a ceiling.  We're rewiring the house, you see - and this ceiling is where the bulk of the wiring will run through.  He's back down there today.

We don't have a ton of free time, so I sometimes get questions about whether all our DIY projects (so far since we moved in we've refinished our kitchen cabinets, painted several rooms, my husband built gorgeous built-in bookcases in our living room, and put up crown molding) are really worth it.  I mean, time is money, isn't it?

Well yes....and no.  

In some cases, spending money is better.  Case in point is the snow blower we're going out to buy tomorrow - we have the money, but we've been reluctant to spend it.  However, after spending 9.5 hours in a single week clearing snow from our our unfortunately-lengthy driveway, we've realized that the investment in a snow blower is worth our money.  It will grant us time to do other things we value more.

But for other things - like the curtains, which will probably hang for 10 years, the time spent is worth it.  Similar window treatments run $400-$500 per window - I checked.  But it's not just about the cost.  It's also about the joy of being able to say "Yeah, I made that."

So while we will outsource some projects, or spend on things that save us some time, I think in the end that spending time on DIY projects is eminently worthwhile.  It not only helps us buy our long-term goal of financial freedom, but it gives us the satisfaction that we built it/fixed it/made it ourselves.

Which is worth every minute.