Tuesday, April 26, 2011


Budgets are no fun to do, but they are very effective. When I first started dating my husband, his finances were a bit of a mess. He was separated from his wife and children and was having trouble keeping up with support. One weekend I sat him down and we accomplished two important things. First we laid out a budget and then we put together a good resume. Both the budget and the resume were eye opening. The resume helped to uncover marketable skills, while the budget highlighted the unexpected expenses of everyday life. We found that his car cost approximately $5000.00 a year to run. That included gas, routine maintenance and replacement value. It came as a shock but also concentrated my partner's mind on the need to save for a better car. Within a couple of months we were both working and setting money aside for the future.
Budgets are hard work and no one likes to set one up. But for growth in real wealth there is no substitute for a budget because it clarifies expenses and allows for focus on what really matters in terms of money. If you're currently spending $5 or $10 a day on lunch and breakfast at work, doing the math for how much that adds up to over the course of a year can be shocking and instructive. A budget helps concentrate the mind and see where the money is really going. I never wanted to throw money away on eating out. I always made it my business to bring my own food to work. First I did it as a matter of budgeting, but later I noticed that it was also a matter of health. Most of the quick, cheap food that was available was also loaded with salt and fat. I t was bad for my body and my wallet. I was able to forgo the quick and bad for you foods and at the end of the week afford a decent dinner out instead. I would go to Applebee's which is inexpensive and satisfying. My thing was to save money in order to get something better. Any budget must have a goal, a purpose to give it impetus. Save for a house, a good vacation, that big TV whatever. Always give the budget a little breathing room, a little mad money. For me the mad money is $20 a week for tag sales. Sometimes that money becomes an investment when I turn around and sell something on eBay and make money, which goes into the Florida Fund. Remember play money is important too. Saving money should not be an exercise in deprivation. It should a way for getting what really matters in life, whatever that may be.

Monday, April 25, 2011

Rewards Points

Nobody gets rich on rewards points. Truth is, most of the time, they're more trouble than they're worth. Having said that, this Easter I got a free ham with my Shoprite card. I almost never make it up to the spending threshold for these things and we were a little short until we bought some toilet paper on sale. But when we got the free ham, it felt good and we were happy. A few years ago while we were saving up for a house and driving around looking for a good town, we racked quite a few hotel rewards points. Our next vacation will be free except for airfare and meals. We have a free weeks' stay at any hotel in the world, courtesy of Marriott. That's going to feel pretty good too. When we fixed the house, we bought everything with the credit card and got plenty of points there. We ate out for months on it even though we paid little interest because we paid it off quickly. The lesson here is: if your are going to use a service anyway, then get the most bang for you buck. But don't use a credit card just to build up reward points. Nobody gets ahead like that, except the credit card companies. Get what you can but stay out of trouble. Never carry a balance on a credit card. But if you do have to put more on your card than can be paid off by the end of the month, then at least try to get a good interest rate. I put an expensive leather couch on my card this winter and got a phenomenal 1.99% rate which meant that I could pay it off in three months and pay only an extra $10 in interest. And get points for a free dinner to boot. Pay cash as much as possible. And keep track of where it goes. Steer clear of credit cards.

Thursday, April 21, 2011


So say you really really want a designer bag you just can't afford. I never wanted these things. I always thought of them as expensive "mug me" signs. However I have an aunt who loves them. So every now and then I try to pick one up for her. Lately, my source has been the Goodwill. They either keep them up front or in a glass case by the register. I like to ask the workers about these things. Talking to people really works. It also gets me the scoop on which color is going to be half price next week, etc. You can buy a lot of designer stuff at those places, so pay less for your glam bag and get it at the Goodwill. But be careful because there are a lot of fakes out there. Don't try to sell these things on eBay, you'll get busted. Good luck and happy saving. Speaking of saving, there has to be a purpose to it. What are you saving for? I was always frugal, always a saver, I bought time with my savings. As a teacher, I worked eight months a year and was off all summer. As an adjunct college professor, I didn't make much money but I only worked two to three days a week. I had everything I needed and I had time to read and write and just hang out. It was a great life, but I did have to be careful. I had to be able to pay my expenses even when I wasn't working. It wasn't easy but it was doable. I wondered why more folks didn't do the same. Then I remembered that money can be very seductive. When I first got out of school and made some decent money, all of a sudden, I wanted things and I wanted to go out and spend money at restaurants. I didn't need any of that and I never even missed it when it was gone. At a young age I read YOUR MONEY OR YOUR LIFE by Joe Dominguez and Vicki Robbins and it changed everything for me. I found that there was a way to to beat the system of WORK TILL YOU DROP. You could easily take back your life and fool everybody. You can have it all.
I had to be careful about money because I have been sick all my life. I have a congenital heart problem. I worked as much as I could and paid my own bills. I have never been on services. I have savings and my own everything and people think I'm rich or something, which is fine by me. I like having money in my wallet. I like watching my bank account get bigger. I like buying real estate, though selling is even better. So my advice to young people is "pretend to be poor."Act as if you don't have money, save as much as you can and buy everything, including a house, with cash. That way when it's time to raise a family, someone can stay home with the kids. Living well has very little to do with money in the end. I know a lot of strong, healthy people with lots of income, but no money. I know people who spend more but have a lot less. I never lack for any thing. I've made less money in my life, but I have held on to more of it and in the end that's the real trick to being truly rich. It's not how much you make, it's how much you spend. It's all about how much you keep.

Wednesday, April 6, 2011

retirement planning

The truth is that I never made a lot of money, but I was always able to live well. At work, strangers would come in and assume I was the boss because I dressed so well. I lived well because I put a cheap roof over my head. Lots of my friends insisted on living in Manhattan. I didn't want to pay the high rent. I got a place with an easy commute and kept my money in my pocket. I was never house poor. I always could afford HBO and cable. I had no complaints. My apartment maintenance included heat, gas and electric. I had one bill to pay and it was always the same. I miss my little apartment. Now I have a house which is paying us an income, putting money in our pockets.
Anyway retirement is looming and I can tell that I won't be able to afford to live in my house because of taxes, heat and bills. My goal this year is to buy something to live out my golden years. I have been thinking of Florida. Prices are rock bottom and even if I have to pay maintenance for the next ten years, it will still be cheap and I can escape the cold for a couple of weeks each winter. It'll be cheaper than a cruise. We banked our entire tax refund check and I'm selling all my jewelry and banking that as well. Any extra cash gets thrown into the pot. By Christmas I figure we'll have enough to fly down and take a look around.
Once we buy a place we'll set it up slowly and be ready for retirement. This will work for us because we don't have grand plans for retirement. I don't want a Tuscan villa. I don't want a big house. I want something small enough that I can take care of myself. We'll live mostly on Social Security supplemented by some real estate sales and rental income. But mostly we'll make do with what we got. As long as we can put good food on the table and be comfortable with heat and air conditioning, it's nobody's business how much money we've got stashed away. Nobody will ever know. People get in trouble trying to be bigger than they are. Retire to a golf course? That's just not me and I never wanted that. A lot of people lost loads of money during the financial meltdown and now think that retirement is impossible when It's really a lot closer that it used to be in some ways. For example the apartments and houses I'm looking at were 80,000+ in 2005. Now they're 12,000 or less. I can afford them now, which I couldn't five years ago. The trick is to see the world as it really is. The most important thing in this world is to have a cheap roof over your head. All the rest of it, golf courses, Tuscan villas, apartments in Paris, is just cultural noise, drowning out what's really important. What's really important is being warm and dry and having good food on the table. That's all that really matters