Archive for the ‘money’ Category

Open Enrollment

Medically insurance speaking, it’s Open Enrollment in this house.  When did things get so complicated?  Ah, yes, I remember now.  They got complicated when I stopped being single and started having more than 1 plan to choose from.

They got more complicated when we had kids and moved up into “Family” plans instead of “Employee” or “Employee + 1″.

They got more and more complicated when we had a baby last year and a head surgery — that will make you take “Max Out Of Pocket” really seriously!

Seriously, I had to end up creating the spreadsheet-to-last-through-the-ages to help us determine what our best options were.  Jeff’s HDHP?  My HDHP?  Cover Jeff as an individual, then do a family plan with my employer?  Cover me as an individual, then do a family plan with Jeff’s employer?  What if Jeff & I each took a kid onto our plan(s)?

AND…What are the results if we have practically no medical expenses next year?  What if we have another baby AND another head surgery?  What if every member of the family ends up visiting the ER 20 times?  What if?  What if?  What if?

The answer is different if we expect no medical expenses (which we don’t) compared to expecting every person to need a $50,000 surgery (we don’t expect that either).  So, I created a spreadsheet with all our options, all the possible coverage permutations and it allowed for inputs like expected medical expenses.

But, man, this used to be easier!  (Not complaining because we are truly blessed to have the medical insurance options that we do have in a place with excellent medical care and that we generally have good health.)

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Dave Ramsey talks about “nerds” vs. “free spirits” when it comes to money management/budgeting.

While I definitely wouldn’t say that Jeff is a “free spirit”, he’s also not the “nerd” that I am.

Last Friday, I made an extra payment on our mortgage.

In the amount of $95.99.

Why?  Just to see the balance be $9,999.99.  Under $10K!  And as a bonus, it’s all 9s!



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No Spend November?

Most of us are probably familiar with “No Shave November” where men intentionally don’t shave for the month of November.  Sometimes, they do it for charity.  Sometimes, just cause.  (Course, I’ve heard that it also leads to Decembeard.)  But I’ve decided to participate in “No Spend November”.  Now, I decided this a little late – just today on the 4th, so it won’t be a whole month, but close enough.

What this means (for me):

  • The idea, for me, is to not spend money that I don’t have to.  Even if the money is budgeted.
  • If I can put a purchase off until another month, I’ll do so.
  • If I can make do with what’s in my pantry, I’ll do so.
  • If I can use a gift card instead of spending money, I’ll do so.

What this doesn’t mean (for me):

  • Impacting Jeff’s spending.  The man is good with his money and my goal isn’t to reduce his spending.
  • Saying no to family events that we normally do – like eating out after church on Sundays.

Really, this is motivated by the fact that October was an EXPENSIVE month for us.  With having a baby and moving into a new house, we had a lot of expenses.  Especially with the move.  One thing just lead to another (scope creep!)  I mean, you decide to paint before you move in, which means removing the wallpaper.  But you don’t have a lot of time, so you hire friends and family to help you remove the wallpaper.  Then you discover that the wallpaper was applied directly to the drywall (meaning the drywall had never been painted) and thus, removing the wallpaper = removing pieces of drywall.  So, you hire a drywaller to get the walls back into shape.

And, then since you have everything off the walls and ceilings (because you’re painting), you might as well replace the light fixtures anyway.  And you’ve discovered that your tall-but-not-gigantically-so husband can’t actually see himself in any of the bathroom mirrors.  So you have to move the mirrors up on the wall.  Meaning that you have to move the light fixtures up on the wall too.

And you discover that there isn’t an exhaust fan in your master bathroom.  You don’t know why – the other bathrooms have them.  But it basically creates a sauna in there every time you shower.  And that can’t be good for the walls.  Enter an electrician to install a fan.

And you’re walking through the furniture store to price carpet and see a really neat kitchen table.  One that can fit a bunch of people.  Or just a few.  And that would fit into your kitchen.  Must have!  Purchased!

So, our savings account is down a little more than we anticipated.  Not an emergency or anything, but I thought I’d use it as a way of motivating me to see how little I can spend this month.  It’s meant not buying new mirrors just yet – instead, I’ll wait and see if that’s what I really want to do.  It’s meant not buying new towels to use in the new bathroom.  It’s meant looking at the freezer and pantry for meal inspirations.  It’s meant not driving through the drive through for a soft shell chicken taco.

Hello No Spend November!


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Life Hacks: Automatic Payments

I was reading another gal’s blog and it was dedicated to how she manages her family’s mail.  She had a system for filing mail away and paying bills that worked for her family, but, to me, it seemed really complicated.  I also see lots of “family command centers” on pinterest that women use for doing similar things – managing the paper that comes into the house.  The command centers are really cute, but I just can’t see how they’d be useful to me.

I thought about it and realized that it’s because 95% of our bills are set up on automatic payments.  My bank is set up to send the utility companies a check once a month.  Same with the cell phone bill.  Same with the money we give to charities.

Our retirement accounts pull from our checking account or our paychecks each month.  The DiscoverCard that we carry pulls the full statement amount each month from our checking account.  We use Quicken to automatically import our transactions and produce a spending report each month – that feeds an Excel spreadsheet that I keep.  I probably spend 2 hours/month on financial things.

So when mail comes in each day, I just open it, make sure the amount seems right, make sure that they’re set up to pull the right amount and then put it in the “To Shred” pile.  Maybe 2-3 times a month will I need to actually take the bill and make a payment.  We only have 1 magazine subscription, so on a typical day we get 1 bill and 3 pieces of junk mail.  It’s fairly easy to come up with.

When our kids get older, I’m sure we’ll have more paper to process – forms to fill out and the like that need to go back and forth to school.  Maybe it will be then that we need a “Command Center”.

What else do people have to manage with their Command Centers?  Why don’t more people like automatic payments?

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Okay, another post on the things that I learned/was impressed by in the series of Thomas J. Stanley’s books that I finished reading not too long ago.  (They include: The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, The Millionaire Mind, and Stop Acting Rich…And Start Living Like A Real Millionaire).  This time, it’s on the fact that most millionaires aren’t DIY (Do It Yourself-ers).

Although most true millionaires are frugal people (considering their income), most millionaires don’t do many DIY projects – like landscaping or carpentry or fixing up houses.  Seems kind of strange since doing things yourself is usually a cheaper option than hiring someone else to do the work for you.  But that isn’t necessarily true – for this group of people, anyway.

  • Since they typically have higher incomes, it’s more cost efficient to hire a handyman at $25.00/hour than for them to do the work.  Reason? They can spend that hour making money and they’ll make far more than $25.
  • Additionally, since the millionaire isn’t likely skilled in that area or have tools for the job, a professional can do in 1 hour what might take them 3-4 hours to do.

The exception is if the millionaire likes to do that kind of work.  Some millionaires like building things or landscaping.  For them?  They’ll do the work themselves – not motivated by saving money, but motivated by spending their down time doing what they enjoy.

For us, we don’t DIY much.  Some, but not much.

  • I do our own decorating painting, but when we moved into our house, I hired someone to paint all the walls.  They could just do it much faster than I could and had the right experience for a bigger job like a whole house.  My time was better spent packing and coordinating everything else.
  • I did install our own ‘board & batten’ looking thing in our back entryway.
  • I do our own landscaping, but honestly?  To call it landscaping is quite a stretch!  It’s just grass and some hosta plants.

So, see!  I already act like a millionaire when it comes to DIY projects.  There’s just 1 problem: We’re not millionaires!  Which, since I’m not, I do want to do more DIY stuff, but mostly just the things that would save us money (ie: there’s no sense in me learning to re-plumb a house when I’m more likely to cause damage than to fix damage!) or things that interest me (like the board & batten type project).

I guess this is a good time to learn this – we just bought a new house this weekend!  We don’t close until end of September, but this is a house that will have lots of opportunities for me to DIY some things (should I decide to!)

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This House is Just Right

At least one more thought on the books I finished by Thomas J. Stanley on millionaires. (They include: The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, The Millionaire Mind, and Stop Acting Rich…And Start Living Like A Real Millionaire).

In all of Stanley’s research on the wealthy, he found that there’s an interesting relationship between someone’s income and the cost of their house. You might think higher income = more expensive house. And that’s true in a lot of cases.

Take one of the neighborhoods in your city and you’re likely to find a lot of the people that live there have big incomes (think hundreds of thousands dollars a year – maybe even a million dollars year).

Many people who want to seem wealthy, buy big houses. But there are problems with that. Bigger houses mean not just a larger purchase price, but they also mean more maintenance expenses. And you’re likely surrounded by neighbors that also spend as if they are wealthy. That means private schools, boats, cleaning services, fancy furnishings, faster cars.

It’s not that you’re required to do those things, it’s just that you’re in a pool of people who do those things and thus, you’re more tempted to think that’s normal. People expect it of you.

And doing all those things require money. So you make lots of money, but you spend lots of money too.

But if you step down a notch or two and go to less expensive (but quality built homes), and that’s where you’ll find the real millionaires. Some of them even live in the same neighborhoods that they did as children. Few people know that they’re wealthy and, so, there is no pressure to keep up. Public schools are good schools. No one else has a boat, so why would they? They can clean their own house, mow their own yards and why replace perfectly good couches and bedroom sets just because they aren’t new? If you buy a good car like a Toyota Camry, it’ll last at least a decade. It’s quite roomy too!

He found housing costs to be correlated with wealth. The more wealthy a person truly is, the less of their wealth they’ll spend on their housing. They know the value of quality and safety and, more importantly, good enough.

It made me appreciate the house that we have (even more). Conventional thinking out there says that we could buy a house 3 to 4 times the price of the house we have. When we were looking at houses (and as I continue to keep my eye on the market), that isn’t close to what we’re looking at. We aren’t even looking to double the cost of our house.

It just reminded me to value quality and to know what is good enough when it comes to housing. Right now, I have a house that’s not too big, not too small. It might not be in line with our income, but it’s just right!

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Big Hat, No Cattle

I just got done reading a bunch of books by Thomas J. Stanley on millionaires. (They include: The Millionaire Next Door: The Surprising Secrets of America’s Wealthy, The Millionaire Mind, and Stop Acting Rich…And Start Living Like A Real Millionaire).  Characteristics of them, mostly. It was super interesting (though I wouldn’t necessarily recommend reading several of his books back-to-back – it tends to get repetitive!)

Anyway, he had several points that I, in particular, found really interesting. One of the phrases that he used is that many people are “Big Hat, No Cattle”. It’s a Texan term, apparently, but easy to understand. It’s the concept that many people look like they’d have lots of cattle, but they don’t. Many people look like they are wealthy, but they aren’t.

They do things that they THINK wealthy people do. They buy things that they THINK wealthy people buy. They wear things that they THINK wealthy people wear. But, they themselves are not wealthy. And chances are, the things that they think wealthy people do, buy and wear aren’t really things that the truly wealthy do.

The typical/average/common millionaire has many different habits than they are stereotyped for. They don’t buy $10,000 watches, wear custom made suits, or even drive $50,000 cars. The chances are really high that they:

  • Have their shoes re-soled instead of buying new ones.
  • Drive a Toyota, not a Porsche.
  • Spend $20 on their haircuts.
  • Have a stay-at-home spouse (not part of a 2-income family).
  • Have never inherited any money or won the lottery.
  • Became millionaires in their 50s.
  • Don’t work insane hours.
  • Don’t own a boat or a vacation house.

Many people who want to be millionaires mistakenly think that real millionaires spend extravagantly. And since they want to be millionaires, they want to imitate them. But they’re doing many of the wrong things to get there. If they want to get there, they would do things much differently.

Millionaires buy cars that suit their lifestyle and that they consider good buys. A Porsche is not a good buy, but a Ford F150 is great for fishing on the weekends.

They might have high incomes (but typically not the highest incomes). A huge percentage of them own their own businesses, invest their money well (but don’t take huge risks on stocks; they tend to play it safe) and work hard, but not 80 hours a week insanity.

Instead, they make wise choices (compared to their incomes). Sure, they have more expensive watches, houses and cars than I have, but considering their income, they are not extravagant. They likely live in a neighborhood with people who aren’t nearly as wealthy as they are and their neighbors would have no idea.  They buy suits that are on sale at Men’s Wearhouse, Kohl’s and JC Penney.

It was interesting reading to me. While there are millionaires that do spend lots of money, it’s not the norm.  Those are exceptions rather than the rule.

I’ll share some more thoughts on it just cause I found it interesting. We’re not set to become millionaires or anything (that’s not even our desire)…I just found it really fascinating to think about.

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