From the category archives:

cutting expenses

Refinancing for the New Year

by Kelly on January 14, 2010

photo credit: bloomsberries
It’s a New Year, and at this time of year many people are thinking about ways to save more money this year. You may be tempted to slash your grocery budget by only cooking at home, or cut back on monthly expenses like car insurance. If you haven’t tackled your biggest expenses though, this effort is misguided.

When we first started on the path to fiscal fitness we started with tracking our expenses. We followed that with our first No Spend Month. Since I wasn’t spending money, I spent a lot of time making a detailed budget that included everything we had spent on in the last year. I was shocked by the money we had spent in some areas, but looking at out budget it quickly became apparent that our largest expenses were our mortgage and car payments.

Around this time rates started dropping, so we decided to take a look at mortgage rates to see if we could reduce our biggest monthly expense. Rates had dropped but to enough to justify a refinance. A few months later rates plummeted, and we were looking at refinancing at a rate as low as 5%. The issue was our mortgage lender led us to believe they could get us a lower rate, and we paid to have an appraisal, and then they turned around and said we didn’t qualify. We started exploring other options and found our credit union could offer us great rates (5%), and the customer service was fantastic.

If you haven’t refinanced yet, use this simple rule of thumb. Closing costs should not exceed 12 months of savings for your mortgage. For instance: a savings of $300/month means you shouldn’t spend more than $3,600 on closing costs.

Despite talk of rates rising, you can still find rates hovering around 5% if you have good credit, and a good amount of equity. If you are struggling though, call your lender and see what they can do. Some companies are able to work with you depending on your situation, while others won’t work with you until you miss several payments.

You can find info about your local credit union at Credit Union National Association. Our credit union, Franklin Mint Federal Credit Union is fantastic. Find out if you qualify for membership here.

Have you refinanced in the last year? Are you thinking about refinancing? Or are you a renter? Learn more about negotiating your rent from Mary Pilon.

Kelly

{ 8 comments }

sale mail email account

by Kelly on November 16, 2009

in cutting expenses,organization,spending

I wrote a guest post on Consumerism Commentary titled “How to Spend Smarter this Holiday Season.” One of the ideas I mentioned was creating a “sale mail” email account. I got a ton of responses about the idea so I wanted to share it with you. I have been using a separate folder in my personal gmail account, but thought I should follow my own advice.

In 3 easy steps you can have a sale email account. The benefits to this are:

all your sale info is in one spot, it’s easy to find
you can keep yourself from purchasing impulse buys when you get your emails by creating a passive barrier
you never miss a sale email

1. Sign up for a new email account.

Screen shot 2009-11-16 at 10.20.01 AM

Signing up for an account is easy, you just need to choose a name, password, security ?, and link it to another email account in case you forget your username or password.

I chose kellysalemail which was open.

2. Set up filters.

I like gmail since they make it easy to set up new accounts, delete bulk emails, and use filters. I personally don’t use the filters a ton, but you could set up one for each category: Home, Kids, Women’s, Men’s, etc. Or you could use one filter or tag for each place you shop: Pottery Barn, Rue La La, Nordstom’s, etc.

3. Get emails!

After your account is set up you can go to your favorite sites, and add the new email address. I went to my new favorite sale sites like Gilt, Rue La La* (click on the link for a $10 credit!), and HauteLook and changed my email. I also signed up for emails from my favorite stores.

Screen shot 2009-11-16 at 10.36.26 AM

Over the next month whenever I get a sale email they go into a folder in my personal account, and I can click on the links at the bottom of the newsletters or sale emails and change my email in the preferences on the site. I have had 2 sites already have no option to change my email address (or at least it wasn’t obvious) so I just deleted my account, and then signed up with my new email address.

For now my inbox is empty, but as it starts to fill up I may start putting other filters or labels on emails. Typically I would check it once a week (like I do with my folder in my personal account) and delete old emails with one swipe. Just choose them all and delete, since many of the offers will have expired.

Hopefully this tip will keep more money in your pocket by decreasing impulse buys, and letting you look for relevant discounts and sales.

Do you have a sale mail account? Will you set one up?

Kelly

* If you click on the link for Rue La La, I get a $10 credit, and so do you!

{ 15 comments }

just keep swimming, just keep swimming

by Kelly on May 11, 2009

in cutting expenses,patience,savings

If you’re visiting from The Money Hacks Carnival- Welcome! Please stop by my About Me page, my Media page, and consider subscribing to my RSS feed. You can also follow me on twitter. Thanks for stopping by!

photo credit: Silvio Tanaka

First, let me say a Happy Belated Mother’s Day to all the moms out there. I know how hard you work every day, and how much it means to your family. We had a sick day yesterday, so while I did get an awesome breakfast, and lots of napping time I didn’t spend the day exactly as I had planned. (still the napping was awesome!)

The girls have some kind of flu/cold and I feel like I’m fighting it off. We spent a lot of time resting (and watching TV) yesterday. We’re continuing the trend today since they are still pretty ill and I feel like my brain is not functioning.

I spent some time planning and reworking our budget for the next 28 days on Saturday. We need to adjust our budget to bulk up emergency fund again, meet several other goals (completing a will, mulching the gardens, planning our trip to San Francisco), while continuing to pay off debt.

Sometimes it feels like we are taking 2 steps forwards and then 1 step back. But I’m trying to take the advice of the kid’s favorite fish, Dory, and “just keep swimming.” Eventually we’ll get there, it just takes time, and I’m not exactly the patient type.

In the meantime we’re redoubling our efforts to spend less, and earn more. There’s no downside to having more money in the budget!

Here are a few ideas if you are facing a situation where you need to bulk up your savings quickly or trying to make ends meet.

1) Declutter: If you’re like 90% of people you have too much STUFF. The first step is to stop buying stuff-we’re placing a moratorium on buying stuff other than food. The second step is to go through the stuff you have one shelf/bag or box at a time and find things you are willing to part with. Some items might get listed on Ebay, some on Craig’sList, and you can also host a yard sale.

2) Maintain your stuff: Since you’ll have more free time, spend some time maintaining the stuff that is important like your AC unit, or the dishwasher. Regular maintenance means less replacement costs.

3) Cook: Cook at home. Pack your lunch. Eat leftovers. Use your freezer.

4) Find change: It seems silly but if you go through your home and find all the change you may be surprised by how quickly it adds up. We have $50 in change sitting in our Disney jar. I may cash it in to bulk up the emergency fund and pay it back later.

5) Work more: Whether you work on creating a side business, work overtime, or get a second job bringing in more money is never a bad idea. Just remember you won’t be able to work 80 hours a week for forever. Guard against getting burned out.

6) Spend less: I admit that while I was working we spent over half my income on related expenses, and convenience foods. If I can back to watching ever ¢ as close I did in the past, we could save a bundle.

7) Do an expense audit: Go through your fixed expenses and see if anything can be trimmed. It’s been 3 months since I last did this, so I’ll take another look and see if anything else can be lowered/dropped.

What do you do when you need to earn more/spend less? How do you “find” extra money in your budget?

Kelly

{ 2 comments }

cutting the cable update

by Kelly on April 3, 2009

in cutting expenses

I previously posted that we cut our cable. I had been hesitant at first since we were in a “contract” and they would charge us a cancellation fee, but it was our last fixed expense that we could cut, so we took the plunge a few months ago.

I am REALLY glad we did. First off, Comcast never charged us that mysterious cancellation fee. They were QUICK to turn off the premium channels, and it took about 5 days for someone to come out and cut the cable altogether.

After spending some time on the phone explaining to the customer service rep that we did NOT want basic cable (several times), we thought all was well. It was sort of amusing when the Comcast “guy” (do they have a job title?) came to the door explaining that he was downgrading us to basic. We reiterated we didn’t want ANY cable, and then had to place another call to make sure the correct changes were made to our account.

We have missed some of our favortie HBO shows, but we’ll rent them or pick them up on DVD for a marathon viewing. I prefer to watch some shows that way.

Second, we have been using the internet for viewing a few programs, and the kids can use sites like Cartoon Network, NickJr, and Playhouse Disney to access their fav shows.

We eventually want to put an antennae on the roof. We tried a smaller antennae around the time of the Oscars and I was BLOWN AWAY by the quality of the picture. I wondered why anyone would pay for the crummy, degraded Comcast signal when they could see most of their TV that clear. We opted to return the smaller antennae since it did not get all the channels, and the quality on one channel was only so-so.

The big bonus to using the antennae is being able to hook up our TiVo again. I miss our TiVo and the ability to skip commercials (you have to watch several while viewing TV online).

Have you cut the cable? Do you think you could?

Kelly

{ 4 comments }

how to: take charge of your finances

by Kelly on March 12, 2009

in cutting expenses,money,organization,paying off debt,savings

I’m no expert (and really why would anyone listen to an “expert” these days?) I’m not one of those frugal people who has lived all my life with no debt, and saved tens of thousands dollars. We’ve been focused on raising our family, and when emergencies hit we had no safety net so things got put on credit.

We started our family young so we’ve only ever had one income, and we’ve always lived just beyond it. I understand now what it means to spend less than you earn. No matter how much your income changes over the years if you keep adjusting your lifestyle (and the cost of things keeps rising) you’ll always be spending more than you earn.

We moved into a more expensive home about 18 months ago. It was a chance to start over and get things right. But somehow I just couldn’t make ends meet, and we were constantly spending a little bit more than we earned each month.

In August 2008, I finally wised up. I wish I could say there was some revelation, but there wasn’t. I became a member of Wesabe, and started reading about personal finance. First, I created a financial snapshot.
It included 3 items:

list of all debts
general yearly budget
calculated net worth

This was scary enough, and it took me awhile to organize those items, and play with them a bit. (I like numbers so this is kind of a fun thing for me plus it was a distraction that kept me from really accepting what those numbers meant!)

It was obvious when I ran the numbers that we had more going out than coming in. So I started working on finding expenses to cut (since getting more income seemed more difficult).

I slashed everything I could. I started with the obvious stuff. Take-out, convenience foods, the hubby’s lunch each day, Target, expensive outings with the kids, etc. were the first to go. If we were paying for services, IE house cleaning, gardener, etc. now would have been the time to cut them. The easiest way to see how this added up was downloading my account info to Wesabe. Mint is another great site, or you can always use your bank account’s website, Quicken, QuickenOnline, or a good old-fashioned paper and pen.

Next I looked at the biggest expenses.
Most $ in our monthly budget is spent on the mortgage, so we refinanced that this month (after a 4 month wait!) and lowered our interest rate by 1.675%!

We have a car loan, but I’m unwilling to refinance. I’m over halfway through it, and refinancing would only add more interest and make us owe more than the car is worth. The other car is paid for. (YAY!!)

Before the big credit freeze I transferred a bunch of smaller balances onto 0% cards. We have one card at 8.99% and one at 12.99% and the rest is at 0%. Our average APR is less than 4%.

I cut auto insurance costs by raising our deductible, and changing some of our coverages. I checked into switching homeowner’s insurance (it wasn’t worth it), and saved money on life insurance by setting up automatic payments.

I looked at our energy usage, (cue dramatic gasp) it was way too high. I started turning up the thermostat when the AC or heat was on, turning off lights, unplugging appliances and lights when they weren’t in use. I installed some power strips at key areas. I started using less water when washing the dishes.

We also cut grocery expenses. We knocked off about $400 in expenses by shopping sales, buying whole foods (no convenience foods) among other tricks.

Finally after all of that was done, I was given the fantastic advice to look at ways to increase our income. We upped our W4 deductions to give ourselves a pay raise. Then I started working part-time (first 2 hours a week, and now 2 hours plus another job with 13-19 hours a week). I work hours that are convenient for my family so we don’t have to pay for daycare or after school care.

Another tactic is to sell stuff we don’t need/aren’t using. Mainly this consists of books, DVDs and household items we no longer need. I have netted about $1500 from this over the last 6 months.

A few weeks ago, I sat down to go over the yearly budget, and update our net worth and debt spreadsheets. This is something I do monthly. I decided to make a chart and hang it on our wall so we can see how much debt there is and every time payments are made I can mark off our progress to the big $0 at the end. I think having a visual reminder will keep us motivated.

Next up I’ll discuss what method we’re using to pay off our debt, and the various schools of thought about paying off debt and why we chose the method we did.

Kelly

{ 0 comments }

11 ways to save on auto insurance

February 12, 2009

photo credit: Damian Morys Fotos We started with a policy that we were paying $750/6 months for 2 vehicles. That included loads of discounts (multi driver, low mileage, etc.). We are insured through USAA which has consistently been the cheapest insurance option. Most insurers can’t come close to their numbers, and I’ve always had excellent [...]

Read the full article →

cutting the cable

February 10, 2009

We finally pulled the plug, well mostly. The one holdout on our monthly expenses was the cable “bundle”. We (stupidly) signed a (stupid) contract that had us at $99/month for phone, cable and internet for a year, and then it jumped to $144/month for the second year. We also have a TiVo which I adore [...]