About those HENRYs

Last week, CNN and Fortune Magazine, published a fascinating article about the 'HENRYs' - a demographic of High Earners, Not Rich Yet people.  These are folks with high incomes, sure - $250k to $500k, but interestingly, none of them consider themselves rich.

The article caught my attention on a variety of levels.  First, because it came out just a short time before election day, and something I hear over and over again is discussion about 'real Americans'.  This is often used in the context that both high earners, or those coastal-state latte drinking liberal elitists don't represent 'real America'.    And if they are one and the same, they certainly can't be 'real Americans'.  I'm not sure what that makes people who fit that bill, but we'll get to that in a minute.  

It also fascinated me, because, while not HENRYs, my husband and I do earn well above the median, and our habits were well represented in some of the featured families. In other words, our spending and lifestyle habits do somewhat mirror the HENRYs.  Not entirely - private schools are not on our list for one, but somewhat.  

Lastly, it's because of the label 'rich' and how I define it - not by earnings, but by net worth. This too, mirrors the HENRYs beliefs. So I thought I'd take some time to explore my thoughts on the article.

I'll start off by saying anyone in that earning category who describes themselves as struggling is not using their resources wisely.  If you can't make ends meet on $500k a year, you are probably overspending on big ticket items, like housing, cars, and so forth.  But there's a huge disparity, between what $250k can do for you in say, Moline Illinois, vs. Manhattan.  There's also far less likelihood that you'll make that $250k in Moline.  

So why don't these people think they are rich?  Top of the list is taxes.  As of 2006, the data cited in the article, a high wage earner in this bracket, who averages $287,000.00 a year gross pays $57k in federal taxes.  If you live in a state that also taxes income, take another 5-8% of that, or between $14, 350 and $22,960.  Add to that Social Security taxes, medicare taxes, and you are talking about $90,000 of that $287,000.00 average earnings gone before you see these folks see a paycheck.  Yep, almost a third of their average earnings goes out the door.  And in most cases, due to the AMT, or Alternative Minimum Tax, these folks never see it back, not even in the form of the deductions that so many of us view as standard to tax payers.  

So it's pretty understandable how the HENRYs get a little resentful when politicians talk about them paying more taxes.  After all, they pay a tremendous percentage more of their incomes in taxes than those 'real Americans' already.  And because the primary tax base is on income rather than net worth, folks like Ross Perot average just 7% of their wealth in taxes, vs. the 30+% cited here for these high earners.  In other words, we don't tax the rich in this country, we tax the high wage earners.  Warren Buffett keeps a huge part of his money safe, simply because he isn't pulling it out of investments.  

In fact via taxes, the HENRYs are subsidizing the lower earners in many government programs.  Is this fair?  Well, yes.  And no.  Barack Obama is right - when wealth is spread, everyone wins.  Rising tides, correctly managed, raise all boats.  Unfortunately, over the last 25 years the disparity in taxation means that the HENRYs have actually born a greater tax burden, percentage wise, than the conspicuously rich Paris Hiltons of the world.  

And that's just taxes.  Add to that the simple math that higher income earners often enter their fields after prolonged education, and there can be a fairly large bite of their income going to student loans.  If a law student graduates with $100k in loans, hardly unheard of, that's about $1000 a month just in loan payments.  

Higher earners also are often congregated in higher cost of living areas - those coasts full of us latte drinking liberal elitists.  This means that housing costs are higher, as are the costs of some things like child care.  In my area, near Boston, the monthly cost of  daycare runs about $1200-$1500 per child, and this is the average, not the high side.  For some folks with multiple kids, it can be cheaper to get a live-in nanny than to pay $3000 or more in daycare each month. And that federal dependent care credit is what, about $4000?  Gone in 6 weeks for a family with 2 kids in these areas.   

Let me also toss in another couple variables.  Sure, the HENRYs save a lot for education, especially college for their kids, as well as large amounts for retirement.  But they also can expect little back in the way of assistance - they will probably not be eligible for much beyond loans for college for their kids, and they plan for what my generation mostly expects - that Social Security and Medicare will be means-tested by the time they retire.  Meaning they will foot the entirety of their retirement by themselves.   

Because politicians and the media get a lot of mileage out of pitting the well-off against the not well off, and because there's no small amount of misunderstandings and even jealousy from the have nots to the haves, there's this idea that these people aren't 'real Americans'.  Real Americans, as we all know, wear flannel, drive tractors and pickups, and are the teachers, farmers, truck drivers, restaurant workers and small town people of our heartland.   Like Sarah Palin, right?  Except the little detail, oft overlooked,  that she, too is a HENRY.  

But where does that leave everyone else?  Let's be real here, a lot of people live on the coasts. Millions and millions of citizens. Are they not 'real Americans'?  Do they not pay taxes, raise families, work hard, donate their money and time, and vote?  I personally know quite a few people that fit the definition of HENRYs, or are close to it, and most of them work very hard indeed.   All of them love their kids, and want what's best for them.  And all of them do very much see themselves as Americans,  even if they don't regularly wear flannel.  

I know few 6-figure+ wage earners that don't work long hours, who aren't handed Blackberries to ensure they are perpetually accessible, and who aren't expected to be able to pick up and travel as required for work.  In other words, there's a trade off for that fantastic income.  Sure, they may be in offices with free coffee instead of working in the fields, but that's small consolation when you have a week full of meetings that force you to kiss your kids goodbye before they wake up and kiss them goodnight long after they fall asleep.  No one would pick that to be the case, but sometimes it happens.  And because HENRYs and similar folks are human, they just try to do their best.  I see a lot of them burn out trying to make it all work.  

I think the idea that these people aren't real Americans is pretty revolting, and does nothing but alienate neighbors and friends in a pointless class war where no one wins.  We, in our perpetual money hypocrisy in America, simultaneously celebrate the small business owners and dedicated who work hard to get ahead, and then resent the hell out of the fact that they did, in fact, get ahead.  

I think that the HENRYs have it pretty good.  Most of them aren't sweating next month's mortgage payment, or making a choice between gas to get to work and food on the table - and that makes them pretty blessed.  But I also think we need to stop seeing this group through rose colored glasses - they have some pretty big challenges too, and their taxes subsidize a lot of the support that those less fortunate than themselves receive.  

While there are people who struggle a lot more with many basic decisions, such as gas vs. food, or a parent sending a sick child to school because of a lack of paid sick time, and their needs must be addressed, the HENRYs aren't exactly popping out golden goose eggs that can subsidize all the lower wage earners needs.  We need to stop our regressive tax breaks to the truly wealthy to find some of the money that our federal government needs.  We need to get some of our corporations off welfare, and make them responsible for themselves.  We need to start looking at all our options, not just the easy targets who don't have the lobbyists to help them.  

HENRYs are that easy target.  They earn a bunch.  They don't have lobbyists and legal help to build them tax loopholes - they just aren't quite that rich.  They aren't the CEOs, they are the VPs. Or the men and women who employ some of those 'real Americans'.  

They are an integral part of America, and it's time we started treating them like it.

Want to meet the HENRYs yourself?

http://money.cnn.com/2008/10/24/magazines/fortune/tully_henrys.fortune/index.htm

Preparing for Baby Part 1

As I pass into my 23rd week of pregnancy, the need to actually prepare for Baby MoneyPenny's arrival has become more pressing.  

So far, we've managed to order a glider and ottoman (a must-have according to the many sleep deprived parents I've talked to, who have spent hours pacing with a fussy infant) for the nursery, and order some cloth diapers from wildflowerdiapers.com.  We did custom order the fabric and wood style for the glider, but the total additional cost off the base price was $7, so we figured we did okay.  

We still plan to paint the nursery, and we need some nursery furniture. While Baby Moneypenny will probably sleep in in our room for the first few months, it's my desire to have him or her in the nursery by the time I go back to work after 3 months of maternity leave.  Which means a crib will have to be obtained at some point.  

That, and we created a registry.  I always have mixed feelings about registries, including my own. They seem to have become a symbol of greed - 'buy me stuff!', and yet, true to the mixed relationship Americans have with money, "Where are you registered" is one of the most common questions I've gotten so far, and I often hear complaints about those who don't provide a registry to 'help people choose'.  So I compromise by putting nothing on our registry that we aren't ultimately prepared to buy for ourselves.  

So far, I give us a B+ on not succumbing to tons of marketing.  We have thus far avoided completely a bassinet or co-sleeper - the bassinet top of a pack 'n play will do fine, and only if it doesn't will we then go seek something else out - realistically we could always put a moses basket in the middle of our bed too, although I'm nervous of the baby in the bed with us.  I'm guessing we'll be inundated by cute clothes and toys, so we've skipped buying those, although we will probably pick something soft and cozy out for baby to come home from the hospital in, and a toy to have too.  Books are something we want to eventually accumulate a collection of, but based on my observations of neices and nephews collections, birthdays and holidays will cover a bunch of that, and then we'll add to their collection of things to read over the years.  

As for gear, there are things that are either needed or entirely useful.  A carseat &  stroller, somewhere to sleep, diapers, wipes, and so on.  A place to sleep.  Clothes.   Baby gates.  

What we don't need are items like an $800 stroller.  A decent, well rated travel system and a couple carseat bases will do just fine.  So we won't be the most stylish stroller-toting parents on the block...I'm comfortable with that.  Over the last month, I stopped a few moms to ask how they like their strollers and then Sander and I took a look around together.   We ended up picking a system that is sporty looking and handles well, but relatively inexpensive.   

Same with nursery furniture - there are sites that offer gorgeous cribs that can run into the thousands.  But a nice-looking, functional piece of furniture can be just as good, if not better, seeing as kids often practice teething on their cribs, so they can end up looking like hamster cages after a couple years of use.  

Ditto this philosophy on expensive little baby outfits and other baby accessories.   While they are adorable and tempting, and I don't know that I'll be able to completely avoid temptation after the baby arrives, I'm trying to remain practical.  

And then there's the mom costs.  Nursing-friendly clothes.  A pump, if one should so choose.  And all sorts of other gear, some of which is even a really good idea.  I resisted the idea of a pump, as they cost between $200-$300, until I was offered one free but for the cost of postage.  New hoses, etc to the tune of about $30 will make it good as new.  Some of my maternity clothes are also nursing clothes.  

Our biggest decision left is what to do about a crib and dresser.  We need one of each.  We've been offered a few used cribs, and are considering those as options, and we've seen some new that we like.  We have a tendency to like matched sets, so this is the one area where our frugality and practicality have been challenged.  Our solution has been to defer making a decision for right now - the reality is, we don't need it yet.   

It seems that this is one of the best things that soon-to-be parents can do - defer making decisions.  After all, we don't know yet what will work for this new person entering our lives, and if our child is anything like us, Baby MoneyPenny will have opinions of his/her own.   Sure,  we'll need some stuff up front.  We'll get some ourselves, and we'll register for the rest, and if we don't get what we register for we'll evaluate what we need and want as we go along.  In other words, we'll be fine either way.  

I'll add another update when we're closer - we'll see if the resolve to remain sensible holds.  

Living Within Your Means: 8 Days of Food Life

People are getting a lot more focused on living within their means these days.  One of the easiest ways to cut costs is to cook from scratch and eat in more.  So I thought I'd share a 8 days of food life in our home - what we eat and how much we spend from a Sunday to another Sunday.

So for 8 days,  I  kept careful track of what we ate and how we spent for it.  I spent money on food outside of the house twice - once on lunch with my sister ($48.92 - yes a lot, but we're both pregnant, which leads to thinking appetizers are necessary), and at Starbucks ($8.77).  All remaining meals were eaten from home.

This month's grocery bill has been higher than other months, because I allocated extra to stock up the pantry.  For the month of October, we've spent $498.43 on all food, paper goods, soaps, toiletries, and so on, aside from meals out.  Our pantry is full, and our chest freezer is beginning to be stocked.

$498.43 breaks down to $16.07 per day for 2 people for all food from home and non-food items.  That means that we spent $162.68 on food and non-food items for  the 8 day period.  Since about 40% of that can be attributed to non-food items, that means we spent $77.17 to feed us, or about $9.65 a day.  Because 23 of 24 meals in that 8 day period came from home, plus all snacks, that means we spent approximately $3.35 per meal to feed the two of us - and it's probably less, as there's still lots of food stocked up for future meals.

So what did we spend that $3.35 a meal on?

Day 1, Sunday: 

Breakfast - Cheerios with milk in the early morning for me, followed by coffee, scrambled eggs, turkey bacon and toast with Sander a few hours later (milk, sugar and splenda added to the coffee in varying quantities)

Lunch - leftovers from Saturday - keilbasa and veggies

Dinner - Chicken pot pie with mashed potato crust (not one of my greatest cooking feats), homemade bread

Day 2, Monday:

Breakfast - English muffins with low fat cream cheese and a banana for me, oatmeal for Sander, coffee for both of us

Snacks - Granola bars, crackers, apple

Lunch - Salads

Dinner - Homemade clam chowder and homemade bread, made on Sunday

Day 3, Tuesday:

Breakfast - Same as Monday

Snacks - Apples, yogurt, granola bars

Lunch - Salads

Dinner - Sander was at friends, I ate leftover clam chowder

Day 4, Wednesday: 

Breakfast -Toast with cream cheese, granola bar, oatmeal, coffee

Snacks - Apples, crackers, granola bars

Lunch - Leftover pot pie

Dinner - Pasta with parma rosa sauce

Day 5, Thursday: 

Breakfast - English muffins with cream cheese, bananas, oatmeal, coffee

Snacks - Yogurt, apples, crackers with the last of our hummus, granola bars

Lunch - Leftover pasta

Dinner - Catchall night, since I worked late.  Sander nibbled, I had the last of the clam chowder and some cereal for dessert

Day 6, Friday: 

Breakfast - Same as Thursday

Snacks -  Apples, oatmeal, granola bars

Lunch - Rice and beans with cheese (made on Thursday night)

Dinner - Breakfast for dinner - scrambled eggs, toast, corned beef hash

Day 7, Saturday: 

Breakfast- Cereal, toast, coffee

Snacks - Banana, beer (Sander, while he helped my brother in law roof their house)

Lunch - Pizza (Sander, provided by my sister and brother in law) and a burger, fries and a shared ceasar salad at The Cheesecake Factory with my sister for me

Dinner - Nothing really, I had some chips with homemade salsa, Sander had cold pizza 

Day 8, Sunday:

Breakfast - Cereal, bagels, coffee

Snacks - Bananas, whatever we could scrounge in the fridge

Lunch - Toasted cheese sandwich, chips and salsa, banana

Dinner - Autumn squash soup with ham and garlic croutons made from our homemade bread (soup recipe adapted from The Cooking of Southwest France by Paula Wolfert - it's a house favorite)

I also made another double batch of clam chowder that went directly into the freezer, since we've been inundated with leeks from our CSA, and the recipe I use conveniently calls for leeks.

Was our menu glamourous?  No, not really.  There are some really 'wow' recipes in there, such as the squash soup and clam chowder.  But there was also a lot of simple items and leftovers too.  We're both gone for long days during the week, so our more intricate meals fall to the weekends.  But we do eat well, and reasonably healthy.  

Just by packing lunches, we save probably about $10 a day, or about $50 in the 8 day period I chronicled.  Over the course of the 5-week month of October, that adds up to $250 worth of savings, which is nothing to sneeze at.

Eating at home doesn't have to be fancy.  Try it for a week - plan some meals, prep the coffee pot at night, pack your lunch.  You just might like it.

Autumn Squash Soup With Ham and Garlic Croutons (a somewhat cheaper adaptation of the original) - makes about 6-8 servings

1 medium butternut squash & 1 small acorn squash

3 tablespoons olive oil

1 tablespoon butter

1/2 an onion, finely chopped

3 medium potatoes, peeled and cubed

3 garlic cloves or 1 teaspoon of chopped garlic

32 oz (4 cups) chicken broth

Dash of nutmeg

Dash of cayenne pepper

1 cup 1% milk

3-4 slices of prosciutto or thin sliced ham, cut into thin ribbons

12-15 small cubes of bread, or slices of baguette

A sprinkle of chives, fresh or dried

Preheat your oven to 400 degrees.  Wash the squash, halve lengthwise, seed, and lay cut sides down on a lightly oiled pan.  Bake for about 30 minutes, until soft.  Turn the squash, turn off the oven, and let them brown and soften some more (about 10 min).  

Once the squash is cool, cut away the skin and place the squash in a dish, set aside. Note: bake your squash early in the day, and let cool for a few hours, then do the rest of the prep work just before dinner

Heat the remaining olive oil in a heavy stockpan over low to moderate heat.  Add the onion, potatoes, and 1/2 the garlic.  Slow cook the vegetables until soft, and golden, about 15 min.  Add the chicken broth and simmer for 30 min.

Scrape the squash into the pot if you have an immersion blender (these are great tools, I highly recommend the investment) or blend with a little soup broth in a food processor before adding to the soup mix.  Season the soup with salt, pepper and the nutmeg to taste.  Add the cream slowly and bring to a boil, stirring pretty regularly.  Reduce the heat and simmer for 5 min. 

In a skillet, melt the butter with the garlic.  Add the ham and bread cubes, and sprinkle with cayenne pepper - a little cayenne goes a long way.  Saute until everything is slightly crisp.

Serve the soup garnished with the bread, ham, and a sprinkle of chives.

 

  

 

Worried? Yeah, Me Too

One thing is fairly clear on the financial front these days - the worst is not yet over. I've known this for a while, but now even CEOs and the most optimistic of journalists are agreeing: more bad news is yet to come.

Why? Even though there's movement in Congress, nothing yet has been truly done to slow the arterial bleeding caused by the foreclosure mess. Layoffs are increasing. Many people are overleveraged on their credit cards and car payments - never a good thing in a rapidly slowing economy. And all of it is becoming not just a series of waves, but turning into a tsunami of epic proportions.

The reality is, there's not much most of us can do about keeping our jobs except to work really hard, volunteer for things, and, quite frankly, pray if you are so inclined.

But in the meantime, prepare. Stop unnecessary spending. Save. Save some more. Cook in. Invest in things that will save you money.

Will we all ride this market out unscathed? I doubt it. But since I can't control the future, I'm putting my energy into the things I can control. How hard I work. Saving. Spending time with friends and family. Cooking in.

The current economy is a scary place. Anyone who thinks we're just going to get over it quickly and move on with our lives is probably delusional. Things have changed. Maybe ultimately for the better - but it's going to hurt while we're on the way to this new place we're going.

Hang in there.

When the Budget Goes Off The Rails

Recently, a few big whammies hit us, one right after another. First, I got pregnant. While I was thrilled, after a long haul with fertility issues, it definitely took me by surprise. I honestly wasn't expecting a positive blood test, so when it did happen it startled me. That was followed by the items I chronicled last month on the costs of maternity. Right on the heels of those changes came a forced pay cut - that I was informed of on my birthday, no less. A month or so later my car went dead on the way home one night. Then our washing machine died a sputtering, water-filled death this past weekend, and off to get a new one we went (it wasn't repairable).

Added together, along with some cost overruns on house projects, such as: our dangerously unstable barn came down this summer, but the dumpster rental cost more than originally quoted, and rising costs of fuel, food, and other basics....it was a tough few months.

I have to admit here, I hate surprises. Hate them. My idea of a personal hell is being thrown a surprise party. So you can imagine how much I like surprises that cost me money. Especially since we had already been working to squeeze in a few things that hadn't made it into the spreadsheets.

And surprises when I have an unpaid maternity leave coming in 5 months? I'd rather have a root canal, thank you very much. Without painkillers.

But the only way past a budget derailment, or series of them, is through it. So we fixed my car,which was fortunately not a costly repair, adjusted to the pay cut, and replaced the washing machine (I am secretly thrilled about my soon-to-arrive front loader, but still grumpy about the unplanned spending). We adapted to the higher grocery prices by compromising both on the budget and in what we bought.

We cut in other areas to compensate. And where we couldn't, we adjusted our savings expectations, and I worked some extra hours - which, given some upcoming deadlines, was necessary anyway. But instead of that overtime money being 'squoosh' in the budget, it started to make up a shortfall.

Watching more money go out than come in for 3 months straight has been painful. I was relieved when October 1st came, and we could start a new month. Of course, then the washing machine died, but we'll still be adding to savings this month, not taking from it. Sure, we had the money to take care of all the items I've listed in cash, which was nice. But it stung to watch all that hard-earned money go out the door.

Every now and then, life throws us surprises. Sometimes they are wonderful - meeting Mr. or Ms. Right is a nice kind. A longed-for positive pregnancy test. Realizing that, yes, in fact you can afford your first home, and then spending the first night in it, as just happened in the life of a friend of mine.

Sometimes, though, not so nice. These things happen to all of us - and for some odd reason, they seem to group together in short periods of time. Maybe it is that bad things happen in threes, as the old saying goes. Maybe we just notice the bad stuff more once one bad thing does happen. For whatever reason, I've noticed they pile up when they do come.

So what do you do when life throws your bank account a curve ball? Plow through. Deal. Get it - or all the its - over with. Repair, replace, as best you can. The sooner it's dealt with, the sooner you can move on.

Oh - and plan for the bad things. That's why you have an emergency fund, right? If you don't, you need one. See, bad things happen. To people as nice as you and me, even. Jobs get lost, cars break down, washing machines spring a leak and flood all over the basement on a Saturday afternoon, just as your tired, pregnant self is heading up for a nap (that never got taken). If you have a 10 year old car like I do, plan for it to crap out on you or need more maintenance than a new one. Plan for 1-2% of your home's value to be spent in maintenance and repairs every year. Most of these things, while never happening at convenient times, are truly predictable.

And then, after the mess is cleaned, and the repairs and replacing are done, breathe a sigh of relief. Sure, your bank account will be smaller than you would like. Maybe close to empty even. But because you saved for things to go wrong, you probably aren't paying off a high interest credit card as a result.

Things happen. You can't plan for everything. But if, like the Boy Scouts, you choose to be prepared for the eventuality that something, sometime will go wrong, when it does you'll be grumpy, but not broke and grumpy.

How to Prepare for a Loss of Income

Unless you've slept like Rip Van Winkle through the last few months, you know the economy is on very shaky ground.  

Job losses are climbing.  Retirees and soon-to-be-retirees are nervous and watching precipitous losses in their assets.  Small businesses are hurting.  It's not pretty out there, and it may well get worse before it gets better.

Losing your income is terrifying, even if it only happens for a short time.  But there are things you can do to offset the loss, if you start planning before the income stream cuts out. 

Sometime in March, unless it's a bit earlier than expected, I'll leave the workforce for 3 months to take care of our newborn.  As a consultant, this time will be entirely unpaid for me.  As part of a dual-income couple, and as someone who has worked since age 15, this is a little scary to me, even though we've saved and planned for the eventuality.   While I'm fairly certain I have a job to return to, with recent market swings, and the likelihood of a prolonged recession, I'll admit that I'm nervous.

So I'm taking some steps to prepare.   A maternity leave isn't a vacation.  It's staying home to take care of a helpless child, until such time as I'm healed enough and the baby is not quite so newborn and able to be cared for during the day by others, in my case, by family.  

Sander and I have been planning and saving for this maternity leave for a long time.  But that doesn't make walking away from a weekly paycheck less nerve wracking.  Still, we're mitigating the concerns we can control, such as:

Saving up

We'll have 3 months of living expenses, in addition to our existing emergency fund to live on during the time I'm out of work.  We've worked pretty hard to try and calculate what the time will cost us, and save accordingly.

Cutting back

We're not buying anything that doesn't need buying if we can prevent it while I'm out, but also now, as much as we can.  Over the last 4 months, some of our budgeting efforts got derailed by unplanned side effects of my pregnancy, a recent forced pay cut, and a large appliance dying on us.  While we're working hard to regroup from those things, the fact that we're cutting back as much as we're willing to is helping as well.  New things, unnecessary home projects, and other spending can wait.  Ensuring our savings will cover the lack of income is far more important.

Stocking up

Just as we're stocking up our cash reserves, we're also stocking up the pantry and freezer.  A 14.8 cubic foot freezer joined our household this summer, and it's meant to be a workhorse. Soon to be filled with local chicken, piles of pre-prepared meals, and other items for us, it's part of our overall plan to be as well stocked as we can, to reduce our outlay for groceries when the littlest MoneyPenny joins our clan.  

The freezer is not the only tool in our toolkit either.  I shop sales, and I track prices.  When I find a good deal, I'm not averse to buying very large quantities.  Over the next few months, I'll be spending a lot of time doing just that - to heavily stock our already full larder.   My goal is always to be able to eat for a few months from my pantry.  I intend to double that resource between now and then by shopping smart.  Yes, I've allocated some extra money in the budget now, while the income is flowing, but I'm also working hard to buy cheaply and in season....in quantity. 

Putting our bills on autopilot

After we moved, I got a little distracted, and never signed up for auto pay for some of the new bills.  As a result, I've had to keep track of them - something I do relatively well.  But even now, occasionally I lose track of something.  Sleep deprivation from a newborn is not likely to improve that, so direct debiting our recurring bills is key.  

Paying ahead on a few bills

Now, this is something that I don't recommend if a) you don't have a fully funded emergency fund of at least three months of living expenses, and b) if you are one of those people who wants every cent of interest possible on every dime you have.  But if you are going to be out of work, a few months without a heat or electric bill might just give you breathing room, if only just psychologically.   Sure, you are giving up the money now, but now it's replaceable with a paycheck.  Later it won't be.  

Making new habits

The no-knead sourdough bread I've been making over the last few months has significantly reduced our outlay for store-bought bread.  We still do buy some, but not nearly as much.  And given rising prices, that's a very good thing.  Even with the cost of flour, it's much cheaper to make bread than to buy it, and I can bake a loaf or two a week of bakery-quality bread.

That's just one of the habits I've been working on now, so that when I am a tired and overwhelmed new mom, I won't need to think about it - I can just do it.

And it's not just bread - I've slowly been adding new, frugal habits, such as ironing vs. dry cleaning a larger portion of my clothes.  I hardly think I'll need to iron while out on leave, but I'll have a lot of nicely pressed clothes to return to work in.

Taking stock

Sander and I have had a lot of conversations lately about whether we really need certain things over the last few months.  I expect more will come.  We're thinking about what we're willing to cut now, rather than later.  Under the gun, cuts can feel more painful than if they are well thought through choices.  

We've tried to balance our cuts with some fun for spending that we know we won't be doing once the baby arrives, such as a spontaneous weekend getaway, or dinners out.  But within reason, and within budget is the key.

I've said it before and I'll say it again - living within your means takes planning and forethought.  If your means are about to get reduced, take some time to think about what you might do to increase your savings, reduce your bills, and cover the lean times now.  You will thank yourself later.

Domestic Bliss

The last two weekends for the first time quite some time, we have spent the bulk of the weekend at home with no plans.  Our goal - to relax, rejuvenate, and get some housework and projects done.  We still managed to meet some family for lunch, go to the local fair, and purchase some much-needed maternity clothes for me, but the focus has been on being home.  

With all the chaos in our economy, and uncertainty about what's next, I see more and more people becoming focused on doing things at home.  For many, perhaps, this feels like a sacrifice. They can no longer afford to take the economic risk of shopping for fun, or spending a lot on eating out and so on.  But if what one can't do can be looked past, there's a little secret to be discovered - a home-centered life can be really, really enjoyable.  

Not in the sense that there's nonstop excitement enjoyable.  Instead, it's the pleasure taken in small things: dinner together in front of the fire.  Roasting peppers and then freezing them for some future winter pizza night.   Sleeping in.  Catching up on reading.  Even cleaning and tidying up provide a sense of satisfaction that can't be bought.  

I'm not saying I enjoy cleaning bathrooms.  Honestly, if I never had to clean another one for the rest of my days I wouldn't be unhappy in the least.  But there is something nice about taking something not-so-clean and tidy and making it clean and neatly sorted.  

Today my husband is out in the garden - digging up our crop of sweet potatoes, which, fingers crossed, will be on the table for holiday dinners and cold winter nights, and pulling out the rest of the dying vegetable plants.  We'll plant garlic in a week or two, mulch over everything, and tuck the garden in for winter.  I have a little fall lettuce growing, but that's about it for us until it's time for the grow lights to go up in February.

Meanwhile, I'm puttering around the house, and cooking.  I started sourdough bread yesterday, and it will bake this afternoon.  It's due to be cold tonight, so I'm thinking soup.  I'm also planning to make a chicken pot pie for tomorrow night's dinner, and salads for lunches.  

I have learned to take pleasure in the domestic arts.  We try to sit down to dinner together as often as we can, and we prefer it home-cooked.  Even when not working on house projects or cooking, we have home-based hobbies, such as woodworking (him) and needlework (me).  I'm planning to learn to quilt over the next year as well.  

Time at home doesn't have to be a sacrifice made just for the sake of saving money.  As a matter of fact, it doesn't always save money - for us, the more time at home, the more we seem to cook up house project ideas.  But it can be both enjoyable and a money-saver; like all things frugal, it means looking at things with a focus on what you are doing vs. what you aren't.  

Over time, you may realize that watching a concert or event on TV at home is as nice, if not nicer than going out.  For one, you don't have to buy expensive tickets.  The seats are comfy, and drinks of choice are both available and affordable.  And the pause button works wonders.

A home centered life shouldn't replace all social activity, but nor should it be dreaded as a thing to be done because you can't do other things.