Monday, December 31, 2007

Finding the right house for you--part three

My earlier posts part one and part two of finding the right home discussed the steps I took from starting the home buying process up to the accepted offer. The next steps involved home inspection, resolution of any issues found during the home inspection, plans for packing and moving, closing on the house and taking ownership of the new home.

Home inspectors are an important helper during the home purchasing process. They help identify problem areas on the house, show you where shutoff valves are, recommend maintenance for various appliances (yes, you do need to change that furnace filter) and are a great resource to ask questions about various aspects of a home. Your buyer's agent can recommend many people for the home buying process from a mortgage broker to a home inspector. I chose someone based on my seminar experience who was certified to the highest standard in my state, was part of an inspection agency and encouraged me to be part of the inspection process. My buyer's agent would have raised the alarm if the inspector did not allow this but following the inspector around will give you the hints and suggestions about your new home that are priceless.

My inspector was polite, fielded questions from multiple people well and started from the top of the house and moved to the bottom. He had a binder to hold the inspection report when done, which included maintenance task lists and information on home repairs. I walked away with the knowledge my potential home was sound with minor, fixable issues. My agent and I asked for and received a small allowance for the inspection issues and moved on to a smooth and successful closing.

While I may have budgeted for my mortgage payments and felt good about covering my closing costs, I had not realized I needed to pay earnest money (which did go to closing costs) and did not budget well for inspection costs. I closed on my house and paid for movers without completely emptying my accounts but it was closer than I realized. The downside to my quick home purchase was I could not save a lot more money befor closing. The one month delay on the mortgage payment eased some of the pinch but better planning on my part would have been ideal.

Closing involves paying the title company a lot of money and signing lots of paperwork. My closing was completed in less than two hours and without the former homeowner present. I closed on a Friday and moved into my house on the following Monday. The intervening days were filled with fixing small things (e.g., replacing the showerhead), painting (no more off-white walls for me!) and cleaning. My parents and friends were kind enough to lend a hand and that really allowed nearly every task to be finished especially painting before move-in day. My mom's experience and expertise really helped as well (she brought insulation for behind my outlets and light switches).

Moving was hard. I had to pack in less than a month, hire a moving company, get it all into my house and then unpack. The bed was the first thing assembled and it was lovely to lay in my bed at night and marvel at the silence in my house. That made it all worthwhile. Not only could I color the walls as I wanted, I had no neighbors sharing a wall (other than the garage) with me. I had resolved my noisy tenant situation.

Although I had no contingency based on selling my current house, I had an apartment to sublet with several months left on my contract. That was stressful getting the place rented. Not only did I buy my house during the off-season, I was trying to sublet my apartment during the off-season. I tried lots of advertising (rental-specific publication, craigslist, newspaper), but finally managed to unload the place with a heavy incentive before the dual rent-mortgage payments became fatal. Three months of rent after I moved and then I was free.

Homeownership is not smooth sailing. I am not fond of cutting grass, and shoveling snow is not a favorite task. However, it is nice to have my own home with a 30-year fixed mortgage. I have learned much about the buying process including I need to have more money on hand for those unplanned expenses before and after purchasing. I know more about what I do not want in a home (avoid sidewalks, fire hydrants and steep driveways) and what I do (a linen closet). My home satisfies my need for space and accommodates my lifestyle even if I would like to change a few things. My journey from first-time homebuyers seminar to home ownership was a smooth if atypically quick one. I made a good choice for me and other than some minor complaints, I have the home that fit my search requirements.

Sunday, December 30, 2007

Finding the right house for you--part two

As I mentioned in part one of finding the right home, I aborted my first home search before embarking on a second search three years later when my apartment living situation was too noisy for me to tolerate. I attended a first-time homebuyers seminar, was preapproved for a mortgage, made certain my monthly payments and my total home purchase budget were compatible and prepared to search for a buyer's agent.

There are many ways to search for a buyer's agent. I had the name of one agent just from my first-time homebuyers seminar. There is always the "pick the agent at random" or "oh, let's try the one that sent me a postcard in the mail". I decided to survey people I knew and ask who their agent was. I probably should have asked more questions about style, how comfortable the individual felt with the agent and other pertinent questions. I basically asked if the person liked the agent and what was it he or she liked about the agent. I listened to the answers, listened to the passion of the answers and chose the agent two of my friends used.

The woman was a very nice Century 21 agent, listened to my requirements, talked about how she loved her job (she had been in the business over 15 years and I liked the fact she was experienced) and let her lay things out for me. I told her I was looking for a place within 20 minutes drive to my work (I knew my tolerance for commuting), had two bedrooms (I had only had one-bedroom apartments) and a garage. My agent suggested looking at places with basements rather than none or only a crawlspace since basements have better resale value in the Midwest (they can be refinished, for example). She was mindful of my budget, encouraged me to ask her questions at any time and was quite responsive via phone or e-mail. I did not realize I had to sign an exclusivity contract for six months, but I had no problem with it since we could decide to end it if issues arose.

Once I had a realtor, she sent me MLS listings fitting the budget and other criteria discussed. I was also doing internet searches myself. There were a few places I was interested in seeing and my realtor set up viewing times for places that were agreeable. Be prepared for some less-than-enthusiastic homeowners. I could not view a house because of inflexible owners.

My first tour was an empty 1930s two-bedroom home. Since it was the first one I was seeing, I began to reconsider if I could afford I home I liked. It fit the criteria but the set up was awkward, the bathroom difficult to maneuver, the closet of a "bedroom" a joke and overall had a musty disused smell that I could not dismiss. The second home was in a different community so we drive for a bit before arriving. This was a FSBO listing I found and asked my agent to look into. It was a duplex but zoned so two different people could own each half. What a contrast to the house! It was a 1970s ranch-style home, nothing exciting but it just had a better feel and use of space. The duplex was also unoccupied but it seemed more livable to me. I came away feeling a lot more positive about the place. I ended up looking at one more location, a duplex being turned into a condo but it was a three-bedroom place (no basement) and it was just more house than I felt comfortable with buying.

So, I had been a prospective home buyer for less than a week and I found a home was interested in. After some time to consider and prompted by an offer on the table, my realtor help me set up my offer-to-buy papers for the FSBO duplex, placing a contingency based on the home inspection and using the knowledge she gained of the sellers interest (closing in 35 days with the other offer was attractive), I toured the place one last time to make sure yes I really wanted it and left the paperwork (including earnest money) on the counter.

Two hours later, I had an accepted offer. Color me stunned! It was less than two weeks after I started the process with my realtor that I went from house hunting to offer accepted. This is why my experience is atypical. I only saw three houses, the second one I liked and ended up purchasing in one month after the offer.

Please note I had looked at the houses before Christmas and after Christmas, my realtor called with the news the duplex had an offer on it. I had been thinking quite a lot about the place, what it meant to me, how I really liked it, could I see myself living there and the plans I had. My thoughts kept me up at night, really considering if this was the place for me. Home purchases are not an emotion-free prospect and considering all angles, emotional and financial, are important for a better home purchase.

Part three of finding the right house for you involves the home inspection (and what you can learn about your potential home), plans for your current place and the stuff you need to move and the aftermath of the home purchase.

Saturday, December 29, 2007

Finding the right house for you--part one

There are many lists on how to hunt for a house and how much house you can afford. I will take you through my experience that although atypical, helped land me a home that satisfied my budget, my requirements and my priorites.

I first attempted to look for a place to own in 2003, thinking that condos were the best fit for my budget. To learn more about the homebuying process, I attended a first-time homebuyers seminar hosted by my credit union. Using the information from the seminar, I meet with a credit union representative and received a prequalification for $135,000, a lot more than I imagined. I was looking at places around $100,000, contacting a realtor via e-mail and asking about condos in my price range. Then I just realized how overwhelming the amount of debt was and decided homeownership was not for me.

My second attempt at house hunting was driven by my untenable apartment situation. My downstairs neighbor had been replaced by a family that was up until the late hours of the night (usually past 11PM and many times even later) talking loudly, letting their small child run around (sometimes screaming) and just being insensitive to their neighbors. One time, I went downstairs to tell him to turn his television down and he had to turn it down before answering the door! The resident manager sent these insensitive neighbors letters notifying them of the complaints but I never noticed any behavioral changes.

Before my frustration boiled over, I did want to refresh my memory about the homebuying process. So I attended a free first-time homebuyers seminar hosted by my credit union. The seminar included presentations from a realtor, a home inspector and a credit union representative. The importance of a home inspection, the usefulness of a realtor and the variety of programs available for mortgages were among the topics covered. I attended this seminar in November 2005 and was struck by the graph the realtor showed. She said the market was switching to a buyer's market with more homes available, the graph reflecting the greater number of homes available versus buyers compared to even a year before. She also mentioned that November to January were off-season months for house buying. That piqued my interest because I knew I had a limited budget and wanted to minimize competition.

My next step was to learn if the purchase price I was considering was affordable and my financial situation healthy enough for a mortgage. Therefore, I met with one of my credit union's mortgage specialists and went through the mortgage preapproval process. The difference between a preapproval and a prequalification--a preapproval says the financial institution will lend the individual money; the prequalification says the individual is a good prospect for a mortgage. Your buying position is stronger if you are preapproved for a mortgage so I highly recommend having this in hand before looking at houses. The preapproval is good for at least three months so no need to get it renewed immediately. However, if you are just looking into the possibility of buy a home, a prequalification will give you some idea what a financial institution may lend you.

I had a particular payment in mind including taxes, escrow and PMI as I did not have a 20% downpayment. My purchase price and my monthly payment matched up well and there was a first-time home buyers program that would allow me to buy a home with a 3% downpayment. With my preapproval in hand, I approached my next step: finding a buyer's agent.

Part two of finding the right house for you covers how I chose my buyer's agent, what I wanted in a home and how the search started.

Friday, December 28, 2007

Secondhand bookstores and the frugal reader

I love secondhand bookstores. Next to libraries, they are the best place to get the greatest book value for the dollar. I discovered the joys of secondhand bookstores when I attended graduate school. It was a way for me to acquire books I enjoyed (I filled out much of my Isaac Asimov collection from such places) without breaking the budget. I did not have much money to spend on frivolous items so spending just a few dollars for a book I would read more than once was a great deal. I also had a library card but if I really liked a book or an author, I would acquire my own copy.

Not only can you buy books from a secondhand store but they also purchase your books from you. My favorite secondhand bookstore gives its customers cash or credit toward book purchases. I usually take my books, DVDs, CDs and videos to the secondhand store first, see what they will pay for and usually take credit as they are more generous. My last trip there, they offered $12 cash or $15 trade. I took the latter as I found a cookbook I liked. Any items not taken by the bookstore then are donated to the thriftstore and used as a charitable deduction for my taxes.

Therefore, not only do you save money patronizing bookstores, you can supplement your book spending by bringing books, DVDs and CDs you no longer use and apply the cash or credit to buying other items you are interested in owning. Ideally, you can keep your bookshelves from being overwhelmed by getting rid of unwanted books and DVDs before purchasing new ones. Practice may not be so easy but eliminating the books, DVDs and CDs you no longer enjoy minimizes clutter. And if you take the cash, you can add it to a savings account for a future purchase. That makes secondhand bookstores a win-win situation!

Thursday, December 27, 2007

Assessing my current financial state

I have seen many personal finance bloggers noting their net worth and what their goals are for 2008. Since I have only been keeping track of my net worth for two months, I am still figuring out how much the stock market fluctuations affect the number. In addition, I have not made a large capital investment in my home in the last two months so it is difficult to see how that loss in savings affects the final tally.

In fact, I intend to assess my year-end numbers and then consider where I want to go. Is a 10% increase in net worth a realistic goal or could I push it higher? Is adjusting the value on my car every three or four months sufficient? I think so. What about financial updates I only receive once a year? I will put it in and try to ignore a big jump at the end of January.

I have put myself in the best situation I can with the knowledge I have. Since I received a nearly $800 refund back from the federal government for 2006, I increased my pay withholding to keep more of my money. I made sure I donated clothing and money to charity to add to my itemized deductions and paid my property taxes before December 31, 2007 for the same reason. I am finishing up the second year of a 30-year mortgage so the itemized deductions will be more than the standard deduction. My income rose compared to the year previous. I received a 7.5% raise as I was promoted at work, and nearly $1,000 in bonuses for the year. In addition, I opened three different high-yield savings accounts so I imagine my interest income has risen at least 50% compared to a year ago.

These changes to my financial situation mean I will keep a close eye on the numbers when I file my taxes. Will I need another deduction? Or will the Energy Star deduction be a short-term item and I should not adjust my withholding? What does my end-of-year net worth tell me? Where will I invest my time and money to improve my situation?

I believe I am on good footing. I have saved enough money for the window replacement planned this year. My auto fund is automatically added to every pay check and the current car maintained. January 1 means an increase in health insurance fees and an increased contribution to my FSA. Therefore, my budget will need adjusting to accommodate the decrease in income without compromising my savings. However, the percent or number goals for the year will need some time to work through before I create them. I know I want to save more money--how much more? I want to increase my net worth--by how much? Therefore, I will wait until all the numbers come in and then determine my goals for 2008.

Wednesday, December 26, 2007

Merry Christmas!

I hope you enjoyed your celebration (if you celebrate Christmas). I enjoyed time with my family even if the small ones got a bit out of control (there was much stomping and crying at the end). I received items I wanted and gift certificates to cover the items I was not as lucky to receive. I am glad to be in my own very quiet home even if I am out of milk.

I found more joy in watching others, namely children, get excited by the items they unwrapped and exclaimed over than my own gifts. I like getting things but the feelings are fleeting. I will have to reconsider both how I wrap gifts (to be less wasteful) and what I request to receive next year I think. Reflecting on my values, what is important to me will guide my choices for the future.

I enjoyed good food and good time with family. May you be blessed with what you wanted for the holiday season.

Sunday, December 23, 2007

A special gift for my sister

I am the oldest of five children and my sister is the youngest. Thirteen years separate us but there is one thing we have in common--we are both the only ones in our family who graduated from college. While our degrees are worlds apart, we both had really clear ideas about what we wanted to do. She wanted to get a job as a legal secretary and I wanted to go to graduate school. It took my sister six months after graduation to find the job she wanted but she is excited to be working for the lawyer she is and revels in her new job. While I attended graduate school, I decided a Ph.D. was not for me and left with a Master's degree, worked at the same university I received my degree from then jumped the academic ship for industry, where I have been for the last 5.5 years.

I started working when I was 27; my sister is 22. I knew I wanted to save for retirement but did not do anything until I had a job. I put about 6% of my pretax income in my 403b plan starting in 1999. Unfortunately, this meant I bought while the market was high so my portfolio lost half its value. I left my job in 2001 and waited until 2007 before the plan value matched what I put in to roll it over into an IRA. I wish I had known better and placed more of my pretax money into retirement. Presently, I invest 16% of my income for retirement and will keep increasing that percentage as I receive raises. Hopefully, this will get me to a comfortable retirement. I would like to think so but it is hard to predict something 30 years in the future.

Since my sister has the opportunity to invest in a 401k with her new job and they do have some matching, I know she is planning on joining the plan as soon as she is allowed. She also has a student loan to pay off but she was smarter than I and does not have credit card debt. Currently, she lives at home with our parents and drives the family car to work, a 40-minute commute.

I want her to start off on the right foot, start saving for retirement and get herself on the right track for the future sooner than I did. I was never truly in a bad place but I see now as an opportunity for my sister to situate herself well earlier than I managed to do. Therefore, she is getting a gift of a personal finance book for Christmas from her wonderful older sister. The book I chose was based on The Simple Dollar's recommendation for recent grads: Automatic Wealth for Grads. I included a card with a handwritten note listing my wish for her to get off on the best financial foot possible. I hope she reads the book and learns some techniques to apply to her situation.

The more sensible my sister is with money now, the more years she has to double it for the future. She already has an ING Direct account and plans to save for a car of her own. Living at home gives her a great opportunity to save without other expenses. Our brother stayed at home until he was married, and he and his wife put a nice down payment on a house.

Saturday, December 22, 2007

Visit the thrift store--now!

Today, I walked into my local charity thrift store and was excited to see my Corelle dish pattern there. While not in as good a shape as I would like, 50 cents a piece was quite a bit cheaper than the dinner plates were going for on eBay. In addition, I found a shirt (brand new!) and a sweater to add to my wardrobe.

At the end of the year, charity thrift shops are inundated with donations from people looking to lighten the load both on their house and on their taxes. Businesses also like the tax writeoff and donate stock (e.g., clothing) that did not sell to the same charity stores. That means the stores have a lot of stock and a lot more variety than during much of the rest of the year.

With so much new stock and both storage and floor space at a premium, this is a great time to visit your thrift store. As my experience demonstrated, I found items I have been looking for but did not hope to find (i.e., the Corelle dishes). I usually make a Saturday run to the thrift store, but since I have time off between Christmas and New Years, I plant to drop into the thrift store several times. Selection changes every day and I want to maximize my opportunity to find those storage containers or salt and pepper shakers I have been looking for!

So, shop the thrift stores! You may find some last minute gifts and some great buys for yourself.

Friday, December 21, 2007

Successful Christmas gifts given and received

My most frugal gift this year was 24 skeins of four different colored yarn and some silver jewelry that I only cost me some time and wrapping paper. My friend loved it all (as I suspected she would) and an unexpected bonus--the jewelry inspired her!

I enjoy receiving sweet goodies from colleagues for the holidays, but I really like two of the gifts I have received. My very artistic friend gave me silver earrings with freshwater pearls. I love it because she made it herself with her own talent. My wonderful coworker gave me a frame she etched with a fun pattern. However, I really liked the whole presentation. She wrapped it in tissue paper (used) and placed it into a small gift bag (again used). The picture frame was free as our company gave it away, but she removed the company-specific logo and put her own design on it (reusing an item and making it new). This is what I like to experience--the creative and personal touch with items on hand.

I hope you receive some gifts you like and are both frugal and environmentally kind.

Thursday, December 20, 2007

White elephant gift exchanges--how I won this round!

The company division that my department is a part of had a holiday party today that included a white elephant gift exchange. Both my boss and I took to heart the white elephant part--take something from home that the individual would never use and did not want, and use this opportunity to foist...I mean allow another person to take it home. Last year at my family's gift exchange, I chose (and could not get another to take) an unopened box of a vintage 1970s hostess set including cow creamer, sugar dispenser, and salt and pepper shakers. I considered eBay as a way to make money and get it out of my life, but then I would have to post the listing, hope I get enough money to make it worth my while and then get to the post office to mail it. I am lazy so in my house it sat.

Then I received this party invite including a white elephant gift exchange and thought "Ah ha! I can get rid of this piece of clutter!" The damn thing haunted me and I just did not want it but could not throw it away. I was considering posting it on craigslist until this opportunity came along. Still, once I was at the party, I had to avoid getting something I despised even more and would only swap one piece of clutter for another bit of clutter in my house. Thankfully, I managed to downsize extremely well. I came away with a set of almost tealight-sized, Christmas-shaped candles. Small, usable and best of all, a lot easier to dispose of.

The gift I "received" is not completely earth friendly but compared to the entirely petroleum-based vintage set I had, I am thankful. Besides, I like candles and the size of the package is a tenth of what I had. I was able to avoid items that were completely useless to me and would only add to the clutter in my home. Besides, I already have an item I intend on using for the family gift exchange and would not want to displace that. Now if I could only be so successful Christmas eve (find something I like and no one steals it). Tall order I know. Here is hoping!

Frugal Christmas gifts

With Christmas creeping even closer, I have been taking time to do some baking. The recipients of my gift include my colleagues, my grandparents and my neighbors. Since today is the last day the majority of my colleagues will be at work, I needed to get all my baking done in time. My current selection includes gingersnaps (a favorite of my mom's father and I like their bite), chocolate peanut butter cookies (Reese's chips in a chocolate cookie) and Danish cookies. I made a fourth cookie but most of them were a failure. I am not sure where I went wrong but when I try something different, the results can be mixed.

However, my most frugal gift is to a friend at work. She likes to knit and create silver jewelry among other arts and crafts. My aunt had tried to crochet, decided it was not for her and then asked her relatives at Thanksgiving if anyone wanted the yarn she purchased. I took it because I thought of my friend. She had a tall kitchen garbage bag full of yarn in four colors. I also asked if anyone in my family had any silver jewelry they no longer wanted and my sister contributed two rings. Other than a cost of a few minutes of my time, I am giving my friend a gift of free stuff but they are all items she will use.

I intend to bake two more batches of cookies and two loaves of lemon poppy seed bread to make sure I have enough for my neighbors and family. My neighbors are getting gifts because they have been kind enough to help me throughout the year whether snowblowing out my driveway, mowing my lawn while I was overseas or allowing me to borrow a wheelbarrow. These efforts save me time, money and my body so I want to show my appreciation.

Other than baking, all I have left to do is wrap three more gifts, pack up the baked goods and write out a couple cards. Despite my tone, I am feeling some stress and am looking forward to my time off. Hopefully, you are dealing successfully with holiday stress and enjoying being with family and friends.

Monday, December 17, 2007

My reflections on Congress mandating CFL as standard

After reading the post on Consumerism Commentary and then reading the more on how the provision is a little known one, I have mixed feelings about the potential change to our light bulbs. On one hand, this is a step to reduce the energy consumption of a nation. On the other hand, why pick on the light bulb and nothing else?

Already, the Democrats backed down on a provision requiring 15% renewable energy generated by utilities by 2020, a requirement I think could have a greater effect on the environment and certainly make the United States of America more energy independent. While converting people to a standard bulb like CFLs will cut down on greenhouse gas emissions and energy usage, reducing usage alone is not enough. I am disappointed the Democrats gave up on a renewable energy standard. Of course, I also think we could get higher CAFE fuel standards for our cars than 35 mpg by 2020. My 1997 Dodge Stratus with a V6 engine can reach 30 mpg now (average 26 mph with winter and summer temperatures).

While creating energy standards that reduce our consumption of electricity is good, the energy bill seems compromised without renewable energy added to the mix. In addition, I would prefer that educating consumers about the correct disposal of CFLs would be part of the bill. What is the point of saving energy when more mercury is released into the environment and infiltrates our groundwater? Each CFL only has a small quantity of mercury, but because of this element, CFLs are hazardous waste and must be disposed of correctly. I know many people treat CFLs bulbs like incandescents--throw them in the garbage. More people buying more CFLs and disposing of them incorrectly sounds like a real hazardous waste issue to me. How will Congress address that problem?

I am all for reducing your impact on the environment and I appreciate the US government wanting to show it can make a difference with higher energy standards. However, this bill seems weak at best. I know a $40 billion savings for customers is nothing to dismiss but I want more stringent and wide-sweeping standards, not half-hearted ones that do not address the heart of the energy consumption issue: use of products that keep us dependent on others and cause havoc with our world.

What are your thoughts?

Sunday, December 16, 2007

Federal interest rate cuts and the struggle to save

After volunteering for my city's holiday fund event where low income people were able to get gifts for their children and boxes of food for their holiday meals, it put my life and my situation in perspective. I had a great time meeting so many different people and I walked away feeling like I had spent three very rewarding hours of my time.

But then I read articles like the one on The discussion on who wins and who loses with the most recent quarter point Fed rate cut just strikes me as shortsighted and only a temporary fix. The people who benefit: those who buy on credit and maintain credit card balances. Borrowing money to buy a car or using a home equity loan to fund Christmas all will be cheaper. However, for those crazy individuals like me who want to save money, the hope that interest rates will be high enough to meet or even beat inflation was defeated.

I do not understand how people who live within their means and save money are penalized and those who use credit in all sorts of creative ways are allowed to keep spending into an even deeper debt hole. There has to be a point where the overspending and overuse of credit just collapses on itself. I do not see a way that savers will escape unscathed. Hard earned and saved money will then have to be spent but not on the items/future needs for which the money was being saved.

For people looking to buy a home or refinance, this may be an opportune time. I have a good fixed 30-year mortgage and the numbers are not low enough for me to consider refinancing. Talk to me when a 30-year mortgage is around 5%. There will always be someone who gets a better deal or better percentage than I. It is just difficult to take when my hard-saved money loses its earning power.

My savings accounts rates:
ING Direct dropped 0.1% to 4.10% APY.
Emigrant Direct stayed at 4.75% APY.
iGoBanking dropped 0.1% to 4.90% APY.
Credit union savings steady at 0.75% APY.

I am sure my CD rates will also decrease. The credit union adjusts rates every week and I have not seen them hold the rates when the Fed rate is cut. My savings rates are not bad but considering I opened my ING Direct account in March 2007 at 4.50% APY and the iGoBanking one in September 2007 at 5.30% APY, it seems like quite a few points were erroded from the numbers. The amount saved in these accounts are not large so I only losing pennies not dollars, but it is still painful for me to see.

I am thankful I am not in a precarious financial situation but I fear that other people's overextension of their money and their credit will hit my pocket even harder. Here is hoping my doom and gloom thoughts do not come true.

Saturday, December 15, 2007

Frugal snow removal: the ongoing saga

Today, we received another 3 inches of snow in my area. It seems to be the light fluffy stuff so I am hoping me and my shovel can handle it without difficulty tomorrow morning. However, my electric snowthrower is still not repaired. My interpretation of the situation: the repair shop did not really understand or want to deal with the snowthrower. I was told the problem (needs a new assembly) was not covered under warranty as I had "jammed ice" into the snowthrower.

As a refresher, I had purchased the Toro PowerCurve 1800 snowthrower in February 2007, never used it and finally brought it out a few weeks ago and it stopped working after less than two mintues. At my father's suggestion, I looked in the owner's manual (I keep them and read them!) There are warnings not to electrocute yourself or not to stick your arm into the moving parts but no warning that heavy snow or ice are incompatible with using the machine. When I informed the Toro-authorized repair shop manager of this, he indicated Toro warranty only covers manufacturing defects. After I asked, he said that gas-powered snowthrowers with this same repair would also not be covered and that he had fixed four other [gas-powered] snowthowers with this same "jammed it into ice and broke it" problem.

Then the power in my snowthrower was denegrated (electric does not have any power) and I finally just said reassemble the snowthrower and I will pick it up. This was the third phone call to the place, I had difficulty finding someone to talk to and I felt so dissatisfied by the treatment in trying to get answers. I did not jam my machine into the ice--I was moving heavy snow. How can a machine be considered free of manufacturing defects when it stops functioning after only two minutes? I have an electric lawnmower that has worked flawlessly for two years. As my dad pointed out, if the electric snowthrower was so under powered, how did it break? I intend on trying another Toro-authorized repair shop and hope my experience is more satisfying than the one in my city.

Until the snowthrower is repaired, my secondhand shovel and I will be putting in more hours.

Thursday, December 13, 2007

Being frugal (and green) with home water usage in the kitchen and outdoors

Please read the earlier posts Part 1 and Part 2.

In the kitchen, I wash dishes by hand and only run water to rinse them when I have a clean, soapy dish. I also save a gallon or so when starting to fill with sink with soapy water. I start washing dishes even with only an inch of water in the sink and then rinse the dishes in the same hot water I am adding to the dish soap to get sufficient depth for more dishes. I can get a few dishes done in this method without separate rinsing that just goes down the drain.

In the summer, I take water I have boiled for various purposes (e.g., cooking pasta) and pour it in the cracks in my cement driveway. The weeds are cooked with the boiling water and die off. No chemicals used and I have not poured the hot water down the pipes.

Outdoor usage is a challenge. One painless reduction in use: I do not water my lawn. It can bounce back after drought and stress when rain hits it even if it looks brown. The only plants I water are my newly planted trees (less than two years on my property), my landscaping plants and my vegetable garden. This is where rainwater harvesting and storage systems will come in handy. Your utility is unable to measure your usage of rainwater, which saves you money. Many gardening web sites also state that the naturally softened rainwater held at ambient temperature does not shock plants like the cold, unsoftened utility water does. Most rainwater systems are based on gravity so soaker hoses and watering cans are generally used. I can imagine a pump could be used to give more power to the water dispensing and use the rainwater in more traditional sprinkler systems. However, that adds more cost to the rainwater usage. Consider that the water that comes out of the outdoor faucet is potable--drinkable. Do we really need to be wasting drinking water on our lawns? Would you take bottled water and water your plants with that? Graywater and rainwater are perfectly acceptable methods to reuse water outdoors and preserve drinking water.

These are just a few of the ideas that can be implemented without much change in your routines. Consider how you might conserve water and what might work for you. Even taking an old soda bottle and using it to chill tap water in the refrigerator would save a few gallons from being run down the drain just to get water cold enough to drink. Small steps can add up. My average water usage a month = 1,200 gallons. This is significantly less than the average on my street and the number quoted to me by the water softener serviceman (average usage: 100 gallons per person per day).

Wednesday, December 12, 2007

Being frugal (and green) with home water usage--laundry

This is the second of a three-part series on how to conserve water at home and save a bit of green as well. First post is here.

My first post talked about conserving water in the bathroom and included some unorthodox tips. This part will cover how to conserve water when washing laundry.

One way to reduce the number of loads of laundry done each week: do not wash anything unless it is dirty. I change my bath and hand towels once a week. Unless the towels are dropped on the floor, they are used to dry a clean body. No need to wash after every use. Bedding is changed every two weeks. There may be health issues in some households but this is how my mother did it and I can only see benefits to changing it every other week. I wear my jeans more than once before they hit the laundry basket. Same goes for shirts, sweaters, etc. unless food was spilled on the clothing. Most items of clothing (I exclude underwear) can be worn at least twice before needing to be washed. If your lunch ended up on you instead of in your mouth, please wash the clothes before wearing again. However, extending the life of clothes by washing fewer times saves you money, and washing three loads of laundry instead of five every week will save you money and water.

For washing clothes, I recommend a front-loading washer. It uses less water than a top-loading washer and gets them cleaner in my opinion. I also use an ice cream bucket to capture some of the rinse water. I use it to rinse dirty cat items in the basement or in the summer, to water plants outside. Be cautious how much is used on the plants. They may not like the diluted detergent. I usually capture two to five gallons of water for reuse. Storage of this graywater is not recommended, but I have not had an issue for the timeframe I use it (three to five days). Since I am also handling animal waste, I do wash my hands thoroughly and this may be good practice with the graywater as well.

The third post will conclude tomorrow with tips on how to conserve water in the kitchen and for use outdoors. Part 3 here.

Tuesday, December 11, 2007

Green and frugal snow removal

My trusty shovel, a hand-me-down from my grandfather who moved from his house into a condo as age was slowing him down, has served me well in the nearly two years of home ownership. Although a bit bothered by the dissonance of listening to birds chirping as I shoveled yet another round of snow today, I did finish the job even if my streets department had not. I am not looking forward to backing out into eight inches of snow in the street.

While I appreciate the low expense of my snow shovel, moving more than a few inches of snow from my inclined driveway and sidewalk can be time consuming. I looked into electric snowthrowers as I had a fairly short driveway and did not want a large machine I had to lug gasoline and oil to make it work. I finally purchased a Toro PowerCurve 1800 from in February 2007 and it arrived just after a big, heavy snowfall. Subsequently, there was never enough snow to allow me to use it so it was only recently I finally moved it from my basement to the garage for the first snowfall of the season. I was encouraged by its immediate reponse to turning on the power. My neighbor's boyfriend was still trying to get his machine started so I felt a bit superior.

The snowfall was a heavy one, mixed with sleet and freezing rain on top of the 4-5 inches of snow. Shoveling it was a bear and while I did not think my electric snowthrower could handle such a heavy load, I thought I would try it. Darn if the heavy wet stuff was thrown several feet! I was encouraged even if it was slow going and my chute kept needing adjusting because of the force of the heavy snow. Unfortunately, the snow stopped throwing less than two minutes later. I thought it was just too much for the machine to handle and left it sit in the garage to thaw. My neighbor's boyfriend did get his monster machine started and was kind enough to remove most of the snow from my driveway. I cannot say anything bad about the kindness or the power however polluting.

However, the next snowfall was light powdery stuff so no problem right? No, the snowthrower does not do anything at all except make a lot of noise. My snowthrower, that I had purchased at $100 off retail and shipped to me free, was an inert piece of mostly plastic. With the several rounds of snow since then, I have regreted purchasing the snowthrower. It gave me hope to spend a little less time clearing snow and more time indoors. However, it is now sitting in a repair shop supposedly covered by a warranty and should be functional in a week--just in time to miss all the snow we have gotten.

So it is back to the secondhand shovel that allows me to move five inches of snow in almost two hours. My body is getting a bit tired, but it is good exercise and I have some spectacular snow piles around my driveway and sidewalk. How frugal do you think my snowthrower purchase is?

Monday, December 10, 2007

Being frugal (and green) with home water usage in the bathroom

This is the first part of three posts. Caution: some of the ideas in this post are not suitable for everyone. In fact, some may find my methods objectionable. Continue at your own risk. This warning is not meant to scare you off, but some of my practices are not for the faint of heart. That said, let us move onto some options for water conservation.

Water is an increasingly scarce resource. While water may cover over 70% of the earth, most of that water is salt water. Only a fraction (~3%) is freshwater and much of that is locked up in glaciers. Freshwater resources are increasingly threatened by chemical runoff from fields and lawns, inappropriate disposal of chemicals and raw sewage. Therefore, any steps we take to conserve resources is not only better for the environment but the pocketbook as well.

Half of my home water conservation tips are used in the bathroom. Water restricters are one way to reduce the amount of water used in the shower. However, a simpler method that works for me (and prevents pain to sensitive body parts) is to turn down the volume of the water coming out of the faucet and shower. Fewer gallons are used with little loss in washing efficiency. If the showerhead has a valve to turn off the water, use it. Wet yourself down, turn off the water, lather up and turn it back on to rinse. I wish I had this option but I can only control the water from the faucet. This is an inefficient method to get the water to the right temperature and volume as I use a lot of water to get it exactly where I like it.

Also consider if you need a full shower every day. I wash my hair every other day and sometimes do not take a shower on the weekends if I will be working at home. For those who would like to feel cleaner, a washcloth bath of strategic locations may be enough to carry you through the day without using 10-20 gallons of water for a shower.

Since the water that first comes out of the pipes is cold, I have an ice cream bucket that I put into the bathtub and use to capture that first bit of water. This can be later used to flush the toilet, water plants or cook without additional water usage. You have already been charged for the water so reuse it for another purpose.

Speaking of the toliet, I also use the "if it's yellow, let it mellow; if it's brown, flush it down" philosophy. Some people find this replusive, but I generally save three to five flushes a day. That is a savings of at least 9 gallons a day. That can add up over time. My utility charges per 1,000 gallons and I can monitor my usage with the water meter in the basement. Saving 100 gallons or more per month can help me stay at 1,000 gallon usage per month instead of pushing me to the next level and costing me more money.

For the bathroom sink, I only run the water to wet my toothbrush and shut it off as I am brushing. The hot water pipes have also been insulated to help retain heat better. This means less running of the water to get it to the temperature you want. Again. less potable, usable water going down the drain and a few more dollars in your pocket.

Two more posts will cover water usage in the kitchen, outdoors and for laundry. The second post on laundry is here.

Sunday, December 9, 2007

Saving with a purpose: separate accounts really can help

I love to see the numbers in my savings account increase. I do not notice the small dings in my savings account, but the big ones I do. For example, I will be replacing two of my single-pane windows in 2008 at a cost of ~$1,800.

Initially, I had two accounts at my credit union: a savings account and a checking account. When my savings account got to a certain level, I opened a CD. After taking a budgeting seminar and realizing how to better allocate my money, I started to set up separate savings accounts. My credit union makes it easy to set up separate savings accounts even without going into a brick and mortar branch. It takes a week and involves USPS, but then I have a shiny new account with whatever amount of money I have transferred.

Once I moved into my house, I set up an account for housing expenses. I call it a "house savings account" but it is one of the most liquid savings accounts I have. Like my standard savings account, a certain amount is automatically transferred from my checking account each pay period. This gave me money earmarked for specific category purchases and could help me save for a larger purchase like a lawnmower. One of my friends likes to keep track of his money in a spreadsheet including amounts set aside for a particular item. I do not find spreadsheets quite as satisfying. I like to have specific accounts for a specific purpose and watch the money grow.

When I was saving for a trip to Germany, also in a separate savings account, I discovered the world of high-yield savings accounts. The credit union is great financial institution, but it is difficult to beat the then rate of 4.5% APY from ING Direct. I set up a new account and transferred all the money in my Germany account to this new interest-bearing account. It was nice to have a few extra dollars by the time I left on my trip. I saved so well, I paid for my entire trip AND boarding my cats with a bit left over. At that time, the US dollar was about 1.38 Euro so I lost some buying power going overseas.

With the German trip accomplished, I decided to redirect the money into padding a few of my spending categories and start saving for a car. My ten-year old vehicle is serving me quite well. I take it in twice a year to be looked over and change the oil every three months. With two minor exceptions, my car has performed flawlessly in the five years I have owned it. I am hoping to reach at least the average lifetime on a car (150,000 miles) and even a bit more to maximize my savings. I have not paid cash for a car yet but I am striving to do so.

Then I realized opening subaccounts on ING Direct is even easier than new accounts with my credit union. I just decide I want a subaccount, determine how much to open it with and within a few days, I have new subaccount! Even though I am frugal, my spending plan usually incorporates these choices and I do not realize the savings in extra money. However, I decided I would open an ING subaccount for "found money". This would include portions of the unexpected bonuses from work (not large amounts of money but I did not want to just spend them), rebates and gains from selling items. Since none of these are regular income, I decided to see how much I can save from just these occasional sources. I was able to save $75 in one month in this account. My goal is to keep adding to it and open a Vanguard account with the money. Since the minimum for investment is $3,000, it will take years, but I have a goal and a place to watch my "found money" increase with compounding.

I have found my separate and subaccounts satisfying in my quest for increasing my savings. It prevents all my saved money from being mixed up in one pool, which I do not like, and I can see how regular deposits can increase the amount in each account. Since my spending plan is much like an envelope system for budgeting, I have appled the same principle for my savings accounts. Keeping track of all these accounts may not be helpful for everyone, but consider if this may be a technique you could use for your financial endeavor.

Saturday, December 8, 2007

Being frugal with home lighting

Many posts, blog and otherwise, have been written on the benefits of compact fluorescent light (CFL) bulbs and how they save energy, money and time (e.g., changing the darn things). I have several bulbs in my home that are CFLs, but not all fixtures and lamps are converted. I am a big believer in being prepared and have purchased several CFLs for when the incandescent bulbs give their final pop! Unfortunately, the previous owner believed in low wattage incandescent bulbs. Needless to say, when I replaced some of the bulbs in the light fixtures, the situation improved as the CFLs give off more light with fewer watts of electricity consumed (even compared to the 40W light bulb).

Many people are concerned about both the cost of purchase of the CFLs as well as the disposal. As my brother-in-law so eloquently demonstrated, many people still throw them out in the regular garbage. Since there is a small amount of mercury in the vapour trapped inside the twisty bulbs, CFLs are considered hazardous waste. Contact your city hall or private waste disposal company to ask how to recycle CFLs. I am lucky as the hardware stores in my city take back all fluorescent bulbs. The added benefit: my utility company will give a customer $1 credit per returned bulb toward the purchase of a new CFL. Check if your utility company has a similar policy. My utility requires each customer to download a form, fill it out and turn it in the same time the dead CFLs are recycled. Unfortunately, I found out about the form after I returned two CFLs for recycling.

When I moved into my house, two of the three outdoor fixtures were in need of replacement. My dad was a great help and replaced both with the fixtures I purchased. While both fixtures have incandescent bulbs, they are also motion sensitive (sometimes too sensitive), going on only when needed. Both also can be set to go on from dawn to dusk, but I refrain as it is unnecessary. The fixture by my front door is a relic of the 1970s, but once my dad and brother-in-law diagnosed the issue of bulb replacement (someone left the metal screw-in portion in the socket thus preventing me from putting in a new bulb), I put in two CFLs. The light is bright and more energy efficient. The cold does not bother the CFLs and it can get into negative numbers in my area. I was disappointed one bulb only lasted a year, but I read somewhere that having the bulb upside down may cause a problem with the ballast. However, my neighbor's CFL bulb (upside down in an identical fixture) is going strong for at least two years.

While saving electric costs is always a frugal measure, buying fixtures frugally is also worthwhile. I purchased a $10 used floor lamp for my living room from an ad on craigslist and a new lamp shade on sale at Target to replace the one that disintegrated on my table lamp. I am also looking to replace light fixtures in the dining room and bedrooms, and have been watching both sale flyers and classified ads for some. I am in the consideration stage, trying to find a fixture I like, deciding how easy it would be for me to change a light bulb and my backup plan if I am unable to install it myself. Hopefully, I will settle all these issues by the time garage sale season starts. I may find fixtures I like then, giving me another option.

When I first moved into my house, I received a new homeowner's packet of coupons to help me spend my money refurbishing my home. While I ignored ones from Linen and Things, I did use the 20% off my entire purchase at Bed, Bath and Beyond coupon and a 10% off my entire purchase at Home Depot coupon. This saved me money on things I needed as well as stocking up on items I would need in the future. There are likely similar programs in your community and you might plan purchases but not buy until you receive similar coupons. Ten or 20% off your purchase especially if you stock up on things that are consumable and you will use (e.g., CFLs) will ease some of the pinch of maintaining your home.

While my home does not lend itself to using them, try the solar lights along the walkway to your door. Other than the initial purchase cost, the lights do not cost any money to run. I have also seen LED lights powered by solar for outdoor lamp posts. While a higher purchasing cost than the garden or walkway solar lights, the LEDs are certainly brighter and might be something to have right by the door to eliminate fumbling with keys and lock.

Thursday, December 6, 2007

Greener living the corporate way

Ever since my utility company came out with the the ability to purchase a block of renewable energy in the mid 1990s, I have purchased one block. These blocks of renewable energy help subsidize the greater cost of renewable energy technology versus conventional means, and are available from many utility companies. Having renewable resources to generate energy is important to me so I choose to participate in the program. Even when I purchased my house and would be under the jurisdiction of another utility company, I was thrilled to purchase one block of renewable energy for my electricity especially as it was cheaper than my previous utility company. I had been contemplating buying a second block, raising the block amount from 150kWh to 300kWh, but I do not need to! My utility's web site indicated they are increasing the kilowatt hours of a single block from 150 to 300 without a corresponding increase in cost.

What does one 300kWh block of renewable energy do for the environment? According to my utility's web site:

The purchase of one 300kWh block of renewable energy each month for a year will reduce greenhouse gas emissions by over 8,000 pounds annually. This is equivalent to the amount of emissions produced by driving a car 7,400 miles or a sport utility vehicle 5,200 miles.

Buying one 300kWh block of renewable energy each month for a year will save 4,200 pounds of coal annually.

Purchasing one 300kWh block of renewable energy each month for a year will prevent the same amount of carbon dioxide emissions removed by nearly half-acre of forestland annually.

Since I thought energy had to be purchased in blocks of 150 (now 300) and there are months where I do not consume 300kWh, I did not purchase more renewable energy blocks. However, the web site also indicated customers can opt to have all their energy generated from renewable resources. "Customers that would like to participate at 100% of their monthly electric consumption are eligible to purchase blocks of renewable energy greater than their 12-month average requirements to the nearest whole block."

Sometimes, I just need that extra bit of information to motivate me. Knowing that I can have 100% of my electricity purchased from renewable sources has me excited, and I intend to call my utlity and ask about this option. From November 2006 through October 2007, I consumed 4,045kWh of energy, which comes to 337kWh per month. Using the new block quantity, I do not need to purchase any additional blocks of renewable energy to cover my usage, thus not affecting my cost (an extra $36 on top of the typical usage and distribution charges). I think that amount of money is worth easing the burden on our natural resources.

Check with your own utility and see if you can participate in such a program. I think it is a worthy cause in the pursuit to generate electricity using alternative, renewable resources.

Tuesday, December 4, 2007

Next steps to being green

While I compost, recycle and decline plastic bags, there are certainly additional steps I can take to be green. What are my next goals? After reading the Fake Plastic Fish blog, I know I have a long way to go to reduce my use of plastic. Her list of plastic items she does without is quite impressive. Her campaign reminds me plastic is everywhere and I should reconsider items that come in plastic packaging. So says the woman putting plastic on her windows to keep out the cold. I intend to be more mindful of the items I purchase and how much plastic I am adding to my household.

I have two cats and for years, I have used Feline Pine and Swheat Scoop cat litters. They are biodegradable, are not artificially scented and the cats like them. I know I pay more, but I have disliked clay litter more and more so I made the switch about seven years ago. However, it was not until I moved into my house that I could really use the litter as mulch around the property. While experts advise against using cat litter in the vegetable garden for fear of toxoplasmosis, the soiled litter (sans solid waste) is spread around the nonedible plants. The wheat and pine break down and there is less litter going to the landfill.

However, there is still the issue of feline solid waste. Currently, plastic bags are used for holding the waste before being flushed down the toilet. I just recently found that worms can compost cat feces and am seriously considering purchasing a Pet Poo Converter. This would cut down on the trips to the toilet, the need for a supply of plastic bags (the cats are my greatest consumers of plastic bags) and I would have an enriched soil amendment. My outdoor composter is currently too cold to do anything and it likely on the two year plan to produce compost. The worm composting would give me an amendment for soil more quickly. It is an expense and I would have to plan for it, but it would lessen the water and waste footprint of my household.

I have made steps toward using fewer paper towels, but there are some messes, usually generated by cats, that I cannot use towels or cloths for. However, I have purchased some cloth napkins in a thrift store and am using those more than paper towels at home. I still find myself using paper towels at work so my next goal is having more reuseable items there. I already have glasses, dishes and silverware, but no cloth towels for drying said dishes. And if my Christmas wishes are not fulfilled, I plan on purchasing handkerchiefs. I have not used them since I was a girl, but realizing all the Kleenex I throw away each day is just wasteful, I have my heart set on washable handkerchiefs. I will still have the disposable Kleenex for colds, but everyday usage can be satisfied with a handkerchief.

I also plan on purchasing or getting much of what I need secondhand. For example, I am determined to get a used bicycle and not a new one for my experiment in short-trip commuting without gasoline. Plus I like the older styles with fenders better than the mountain bikes. I usually haunt craigslist and a local electronic classified listing to find items of interest. Otherwise, the local charity thrift shop and summer garage sales are the places to be. My goal is to purchase at least 50% of nonfood items used rather than new this next year. I may have to fire up a spreadsheet to help me keep track of all these purchases.

So these are my next steps in green living. I will likely come up with a few more as the new year progresses, but these encompass some areas I really want to focus on. Here is to less garbage and a less heavy step on the earth.

Monday, December 3, 2007

The once monthly grocery shopping trip

I do not enjoy going to the grocery store. I have to drive there, find a parking spot, search out the items I want (trying not to get too many things I do not need), check out and haul the load home, fighting people and cars to get out of the parking lot. Then I have to unload the car, put it all away, drop on the sofa and eat junk food to numb the pain. Okay, I have eased up on the last part, but the sentiment remains the same. My feelings did not always reflect such a dread. I used to even run to the store just to satisfy a junk food craving. Now I practice getting as many errands out of one trip as possible to conserve time and gasoline.

To balance out my need for food to feed myself and my less-than-enthusiastic response to grocery shopping, I came up with the once monthly grocery trip. As my current spending plan stands, I spend less than 4% of my gross monthly income (excluding those "extra"paychecks I receive twice a year) on groceries. There are four weapons in my arsenal: 1) meal planning for the entire month, 2) my calculator, 3) my grocery list, and 4) a large grocery store (great selection with warehouse prices). I do not have a price book and I rarely use coupons.

To facilitate my once-a-month trip, I learned that planning on meals that should get me through the entire month was the big key. I do not calculate the serving size and how many meals. That is likely to be a better method than my "that number seems right" sense, but as I am a single person feeding myself and I have done this for a few years, this works for me. I usually have three to four big recipes (e.g., beef parmigana), two or three quick recipes (e.g, fixings for a homemade pizza), a sweet treat or two and a new recipe I have not tried before. There are several recipes I really like on heavy rotation and it can get to the point I just get tired of them. Trying a new recipe expands my horizons and may add a new favorite to my lineup. Since I am feeding one person (me) and the recipes can be anywhere from three to ten servings, I have leftovers for lunches and dinners. Hence, a few recipes can go a long way.

With a frugal grocery budget, I have learned that making my own meals really does save money. I do purchase some convenience foods, but they are a treat, not a necessity. In fact, my purchase of a bread machine has really helped with my bread expenses as well as introducing me to pizza dough (a staple in my house) and a wide variety of breads I never would have experienced otherwise.

With the list set, I choose an evening after work to visit the large grocery store. My work is closer to the store so to minimize the gas usage, I plan a trip on a weekday evening. Following the list, I punch in the cost of each item into my calculator and cross the item off the list as it is added to the cart. For items where there is more than one size choice, I use the calculator to divide the size by the price to figure out which is the better deal. I use the store brands for some items (e.g., condensed soup), but there are not always generic choices or I decided I like the tast of the name brand better. My calculator not only makes sure I have the best deal on items, it also helps me keep on my budget. Especially at the end of the trip, I know whether I can get that last item or if I have to decide to put back an item or two to keep within my budget. As my pantry has become better stocked with staples like flour, sugar, various condensed soups (for casserole dishes) and pasta, my budget has more ease in it for treats like soda or chips.

While I do only one major trip a month to the grocery store, I usually make at least one more trip for milk or other items at the end of the month. I drink at least three gallons of milk a month and fitting more than four in the refrigerator is difficult. I do not eat a lot of fresh fruits or vegetables, but I am working on improving my diet and these items are perishable, likely needing a second trip to replenish my supply. Depending on the items I need, I may choose to visit Walgreens, which offers milk and snacks as well as cold remedies.

These practices have kept me within my grocery spending plan for over year. It took me some time to get it down and learning that the less I spent on convenience foods, the more ease there was in my budget so I did not run into the red. Consider planning your meals for a week and then shopping for those meals rather than grabbing a few items for dinner that night. You might find that it saves you money, time and aggravation. You might end up in the once monthly shopping plan as well! It simplified my life and I cannot say I have nothing to eat!

Sunday, December 2, 2007

Emergency preparedness

Yesterday, my area was hit with all sorts of precipitation: snow, sleet and freezing rain. As my mom clearly reminded me, ice-coated power lines can spell trouble for people as enough weight can bring them down. She recommended I take a shower while there was still power and to stash water for use. Electricity runs many things in my house including the furnace, lights, DSL modem and stove. So are you prepared for a few days without power?

Since there was ice coating things last night, I brought out candles for lighting and make sure I knew where lighters and flashlights were. I did the laundry during the day to ensure I had plenty of clean clothes to layer if need be. I have a down comforter on my bed and plenty of blankets to add if the cold was an issue. The cats and I could also lay next to each other and conserve body heat. In addition, I filled an empty gallon jug with water and left next to the toilet to ensure it could be flushed. My pantry (and refrigerator) had food that could be prepared without heating so I would not need to worry about a stove or using my charcoal grill. Thus, I could get through at least one day if not two without power.

I have very slowly started to gather an emergency preparedness kit. I have three gallons of purchased drinking water in the basement along with a couple gallons of tap water to be used for cooking. I have some bandages in my stash, but that is about all. My cats drink distilled water so I usually have two gallons of that for them along with a reserve of their food. I also make sure I have a few days supply of my medications so I do not have to worry about running out. My emergency kit is not currently portable, but I plan to rectify that in the future.

Would you be able to survive two or three days without electricity? The FEMA web site has a list of items that should be part of an emergency survival kit. Keep your pantry stocked with food that is edible without heat. Granola bars, canned fruit and veggies, or even MREs (meals ready to eat) would be useful. If your emergency may involve leaving the area, not only have a packed kit, but make sure to have copies of important documents like birth certificates and property deeds to bring with you. Have cash available for purchases during emergencies. A mix of large and primarily small bills are likely to be useful for most emergencies. Since I use my credit and debit cards for nearly every purchase, I tend not to have much cash and will need to start a stash for emergencies. Without electricity, access to accounts using a ATM or debit card is gone.

Friday, November 30, 2007

Hand-me-down treasure

When I was growing up, one of the small joys in my life was receiving a bag of clothing from one of my aunts and seeing what items I might like to wear. Not only did I instantly add to my wardrobe, but I was wearing clothing that my older aunts wore. How great was that? I was wearing adult clothing and I was still in junior high and high school! At that time, I was of a like size to two of my aunts who sent clothing for me to try. One was a businesswoman and I ended up with a couple suits that I liked and wore to my high school a few times. I felt very professional and grown up. I did not stay the same size so the clothing ended up going to a local charity thrift store, but I still have fond memories of the "new" clothing that I could wear courtesy of my older family members.

I wish such clothing sharing still went on in my family, but we are of different sizes and tastes in clothing as adults. However, I believe sharing clothing is a frugal way to get new clothing and empty your closet. If you have friends of a similar size, suggest a clothing swap. Have a party and try on new clothes from another person's closet. I may be tired of that shirt, but it still looks great and you may find it both just what you were looking for and it works well with other ensembles you have.

Children grow out of clothing before the clothes are completely worn out. Organize a swap or send it to a friend or neighbor with younger children than your own. It gets the unwanted clothing out of your house and the friend or neighbor would appreciate clothing that still has wear in it even if only for playing outdoors or at home. Buying clothing for children is expensive because they grow so quickly. Being able to receive hand-me-down clothing might ease the pinch in some family budgets.

If you have younger family members that are of a similar size, consider giving them first viewing of your discarded clothing before sending it off to a charity thrift shop. I welcomed additions to my closet as that meant I did not have to much spend money on clothing. Clothes take a good portion of a teen's budget. Free or cheap clothing means more money can be saved for college, for example.

Consider other ways your clothing can be used before donating them. The tax writeoff for charity can be nice, but your discards may be another person's treasure. A well-dressed person feels better about themselves and no one else has to know how little they spent on the clothing that others admire.

Thursday, November 29, 2007

Reevaluating my 401k

My company decided to take their current 401k plan to the next level--bring in a financial firm to help them choose great funds and design portfolios to get the best return for various investment strategies. The firm recommended funds currently in the company's core group be removed and added some better performers to the core funds. There were several meetings to explain these changes and why they were being made. In addition, employees could also meet with one of the financial associates fora 30 minute individual session so I signed up.

I have six funds in my portfolio: a large cap, a mid cap, a small cap, international, government bond and a lifecycle. Some of funds I really did not want to give up to match the aggressive growth portfolio designed by the financial firm--Fidelity Contrafund and Fidelity Overseas fund. Both had been performing well for me and I liked them. The person I consulted with basically recommended I get rid of the bond fund and lifecycle fund. Since my retirement horizon is 30 years, she said a bond fund was not really necessary as its yield is generally less than stocks and only there to tame volatility. Since I want to maximize growth, more stocks, the better. Here is the portfolio I walked into the meeting with:

Selected FundContribution
Fidelity Contrafund (large cap growth)20%
Fidelity Overseas (international)20%
Fidelity Low Price Stock (mid cap blend)20%
Wells Fargo Small Cap Value CL Z20%
Fidelity Freedom 204015%
Fidelity Institutional Short-Intermediate Government5%

As of 11/28/2007, the YTD return was 12.2%.

The woman I spoke with did say I did a good job of covering all the bases. Still, getting better returns and doubling my money sooner is nothing to dismiss. Therefore, I walked out with this more aggressive portfolio:

Selected FundContribution
Fidelity Contrafund (large cap growth) 20%
Allianz NFJ Dividend Value Inst CL (large cap value)10%
Fidelity Overseas (international) 24%
Fidelity Low Price Stock (mid cap blend)20%
Wells Fargo Small Cap Value CL Z16%
Columbia Mid Cap Value Fund Class Z10%

Hopefully, I will get a better return for this new portfolio. I really want to maximize growth of the dollars I put into the 401k. Right now, I contribute 10% of my income to this pretax shelter and my company matches 50 cents on the dollar up to 6%. I have never left this money on the table and never will as long as I work there. I am also contributing to a Roth IRA in an index fund and slowly growing that. Between my 401k and my Roth IRA, I am contributing 16% of my gross income to retirement funds (19% if I include the company match). My goal is 20% into retirement funds in the next five years along with maxing out the Roth IRA contribution.

I want to ensure my comfortable retirement and financial independence. I will take advice I believe is sound to help me on this path and hopefully, end up in a good situation for the future.

Wednesday, November 28, 2007

Being a bit greener and riding a bicycle

When warmer weather rolls around, so do the garage sales. I chart a route using the local paper, pack myself into my car and hunt for items of interest. This year, I considered riding a bicycle to some of the sales--get some exercise and use less gas. The roadblock--I have no bicycle. So, I went on a quest for one. I had a target amount ($20) and the bike "for sale" category on Craigslist to hunt. I occasionally looked for bikes but not with serious intent until late summer. That was when I discovered my budget was inadequate or maybe my expectations were overblown. Since I was not sure if bike riding was the way for me to go, I did not want to put much money into it. However, I also wanted something I could ride immediately.

Just tonight I looked at a Schwinn Breeze with a two-speed automatic hub. You know what the most embarrassing thing was? I could not ride the bicycle. Excluding my confusion about shifting and braking with the bike pedals, I literally could not even pedal three feet before losing my balance. That adage about never forgetting how to ride once you learn--pure bull. Of course, I was wearing a winter coat and some Merrell shoes that really distanced me from the feel of the pedals, but I could not ride the bike. It was a horribly humorous experience I just had to share with my mother and blog readers. So, not only will I have to find a classic cruiser with hand gears and hand brakes, but I will have to relearn how to ride the darn thing. See why my budget is small? What is the point of buying something I will not use because I am unable to keep upright?

I learned a bit about my limitations tonight, but my quest continues. Continual refinement of my goal is a good thing. And I am still determined that me and my reusable bags can travel via bicycle to places in my lovely town--even if it is to the library and back.

Tuesday, November 27, 2007

Reducing the number of disposable bags in my life

As part of my frugal and green lifestyle (with some training by my ever-practical Mom), the plastic bags I receive from various stores are reused for lining trash cans or carrying lunch or various other uses. The bags have never gone into the trash immediately. I am disappointed that I cannot recycle them in my curbside program, but stores like Wal-mart do have bins to collect plastic bags for recycling so there are options.

It is quite easy to accumulate more plastic bags than one person needs. Even with carrying cat waste from the basement to the toilet in my house for flushing does not get rid of them easily. When I complained to friends that I was almost out of plastic bags, I received donations from others. And then I found another stash that I had forgotten about. Between these two supplies, I will not need plastic bags for months.

After reading about plastic bags are made from a nonrenewable resources, how they do not degrade in the environment, how animals eat the bags and die and just the sheer number of bags consumed by the world (see this site for more information), I decided to reduce the number of bags I used. This reduction decision also included paper bags. While they are made from renewable resources, converting trees to paper bags involves use of a lot of energy and chemicals, both which are known negatively affect the environment.

To reduce the number of plastic bags I consume, I refuse one at checkout especially if there are only a few items that I can carry in my hands. I received a cotton tote as a gift when I was in Germany and I have used that for carrying items instead using a new plastic bag. The cotton bag folds up for easy carrying in my purse and holds the same amount as an average plastic bag. I like refusing a bag and packing my own items in the reusable bag. Of course, the last time I was in Walgreens, I was saddened by the lack of a plastic bag. Their small bag fits my bathroom trash can perfectly.

For my once monthly grocery shopping, I have also brought back the paper bags in which the food was packed. Most of the baggers were amenable to using them, but I think one was so used to his routine, I ended up with a few new bags. Still, I have enough to last me a while (I use them for paper recycling and to line the plastic kitchen garbage bag) and for the forseeable future, I am not adding to the number.

I have just made my first purchase of eight reusable hemp totes and four cotton produce bags and am looking forward to their delivery. I had not realized how many plastic bags I pick up in one shopping trip until I was at the grocery story last night. Between the produce and the meat, I picked up five new bags. It will take me two weeks to reuse them, but I plan on reusing the produce bags for the next grocery trip. Unfortunately, my grocery store does not offer an incentive for reusing bags, but the issue of disposable bags is important enough that I will continue to reuse bags or bring my own cotton or hemp bags for all my shopping needs.

Think about what happens to the grocery or shopping bags you receive next time you are in the store. Do you need another bag? Or can you leave some in your car and ask the baggers to reuse them instead of giving you a new one? While some plastic bags find new life as a trash can liner, do you reallly need to pick up five new liners every week when doing grocery shopping? With petroleum becoming more scarce, think about other ways to reduce the use of this nonrenewable resource.

Monday, November 26, 2007

My debt story

I have read a lot of personal finance blogs like The Simple Dollar, Get Rich Slowly and Make Love, Not Debt. Many people have these incredible stories of huge consumer debt (five digit figures of credit card balances) and large student loans looming over them, hitting a crisis point and then fixedly paying these debts down. Some of these numbers are truly jaw-dropping in number and I applaud everyone for not only acknowledging these hefty debts, but focusing on getting the debt monkey off their back.

My only current debt is a 30-year fixed mortgage. I was determined to find a place in my price range and I found one. It is not perfect (is any house?), but it suits my needs for a garage, a quiet location not more than 20 minutes from work, and my own space. In fact, if I had waited a few more months to purchase my home, I could have been completely debt-free. How unAmerican, I know! I was still paying off my student loan and decided to pay off the entire last $1,000 as a lump sum. It was a great feeling to get rid of that debt!

However, graduating from college was not a debt-free experience. In 1995, I had almost $11,000 in student loans and about $2,000 in credit card debt. While I did earn a stipend in graduate school, it was not enough to pay much more than the minimum on the credit card. My recollection of my credit card debt is vague at best as I recall doing the usual card hopping for lower interest, paying regularly an amount more than minimum, but not getting very far until I found my first job.

While my consumer debt dogged me through graduate school, my student loan repayment was deferred until six months after I graduated. This meant since I was attended graduate school, my undergraduate loan stayed in the background and would not bother me for a while. My first job doubled my income in one fell swoop. That is heady stuff for 28 year old. However, I was determined to pay down my credit card. Since I was still living on a graduate student budget for the most part, I could throw a lot of money at the credit card. In less than a year, I had gotten rid of my credit card balance and decided never to carry one again. There was one incident with a 0% check written against the credit card that I ran afoul of, but I had the cash to pay off the balance after realizing my mistake. Since then, no balances. Excluding the one incident, I have paid off my credit card in full since 2000. I am quite proud of that accomplishment.

Unfortunately, student loan did not disappear so quickly. I did have lifestyle inflation, but not too badly. I was able to pay $200 or more per month toward my student loan when it only required about $125 per month. However, it took me nearly seven years to make the final payment so despite determination and extra payments, I needed more than five years (my original target timeline) to pay it off. I did start paying my loan at 9% interest and it dropped to 4% over three years. I may have been able to deduct the interest on my taxes, but having such a high rate at the start of the loan means less of my payment went toward principle.

During the student loan repayment, I also took out a modest auto loan ($5,700) and paid that off in less than three years, quit my job and took a severe pay cut for several months, found a job in industry rather than academia that required more driving, and gave up my inexpensive apartment I had since graduate school to move to a $200+ more expensive apartment closer to work. I had to pay the minimum loan payment a few times, but generally, I paid more than required amount to reduce the repayment time.

My debt hole may not have been a big as others, but I am proud that my student and auto loans as well as my consumer debt are paid off. I do pay a bit extra each month for my mortgage and am saving for a newer used car. Right now, my car is quite reliable and I do not anticipate any changes in the next 3-5 years. However, rather than being unprepared to replace my car, I make regular payments into a high-yield savings account so I can pay cash for my next car rather than needing a loan.

Sunday, November 25, 2007

How I tamed my spending

Ever since I earned a stipend for graduate school, I have used a budget to let me know how much I could spend. The categories included "rent", "groceries", "gas", "bus pass" and "cable". I would save a little money, but would be surprised by expenses like a birthday gift or my car insurance.

My credit union offers various free seminars, and I noticed there was one on creating spending plans and signed up for it. This seminar was an incredible eye opener for me. For instance, the people leading the seminar encouraged the attendees to create categories both for known expenses like rent and utilities, but also for irregular expenses like gifts. And instead of having to raid my savings account every time the car insurance bill was due, I could allocate money for it every month. These sound like simple steps, but attending a seminar on how to create a spending plan was just the catalyst I needed to get my spending under better control.

To determine where the money was going, I and the other attendees were told to keep track of expenses for at least two weeks, a month if we could do it. A worksheet broken out into categories like this is helpful. The instructors recommended posting the worksheet in a prominent location to be sure we would write down the expenses every day. For example, as I tallied the various expenses on my worksheet, which was taped to a door in the kitchen, I could see how those runs to the vending machine added up and sabotaged my ability to save money. Since I only had a food category of "groceries", the eating out and snack portion came from money I designated for savings. However, the amount allocated never made it to my savings account or if it did, it was quite diminished.

I did keep track of my expenses for three weeks and worked up a spending plan. Prior to the seminar, I had 11 categories in my spending plan; after, I had 20. I was a homeowner about a year after the seminar before I learned to to "pay myself first" and automatically transfer the money I wanted to save into a separate account. Regardless, once I had the spending plan, the additional categories really helped tame my spendthrift nature. Now I had money designated for clothing, car insurance, car maintenance, gifts and eating out. Once I added automatic transfer into a savings account, I not only kept within my plan, but the savings account started to add up quickly.

Since I bought a home I knew I could afford and started on an automatic savings plan, I found homeownership was a lovely addition to my life. Writing out the mortgage check every month is not onerous (even if mowing or shoveling snow might be) and has helped enforce greater discipline on me.

A spending plan is not set in stone either. I have adjusted mine as my needs changed or expenses have increased. I was able to save money for a trip to Germany over the course of a year after figuring out where I could take a few dollars in several categories. It was a pleasure to know I had more-than-sufficient funds for my first overseas trip. Currently, I am being stubborn about increasing the amount of money allocated for "gas", but as my health and dental insurance expenses increase starting January 1, 2008, I will need to reevaluate both my categories and the allocated amounts.

I encourage you to put together your own spending plan. And yes, that does mean when the money runs out in the category, no more spending! Really examine how you spend your money and especially if expenses add up to more than income, see where you can decrease the amount of money (e.g., eat out less often). Ensure you are not spending more than you earn first on paper and then put the plan into practice. I take a few minutes every day to subtract the amount of money I have spent from the relevant categories. Then I know that I only have $5.34 left in my grocery fund to spend for the rest of the month and I will probably need one more gallon of milk in that time. No potato chips this month!

If personal finance books are not your favorite reading material, I encourage you explore the web site of your banking institution. My credit union has several seminars a year on topics from budgeting to long-term care to retirement planning. I have attended several and all have been helpful to me. It is nice to ask questions of real people, not possible with a static book. There are also many resources on the web including blogs, that may be useful in your quest for financial control.

Saturday, November 24, 2007

Living green

My excursion into living green seems to have come hand-in-hand with purchasing my home. I have described some of my plans for native plantings in an earlier entry, but this is not my only avenue to pursue sustainability.

The lists of suggestions for going green and saving a bit as well have been documented in many other posts like this. I practice most of these 42 points including being in the first year of my three plan to replace all my single-pane windows with double paned ones. It is not an inexpensive proposition even in my 836 square feet home, but with the lack of trees around my home for shading in the summer and the amount of cold that infiltrates in the winter, the energy efficiency can only improve.

Recently my green efforts have included bringing my own bags when I go grocery shopping. I always get the brown paper bags and I have more than I can use for a long time. Just in the last couple months, I have brought back my own bags and the baggers have been amenable to using them. I have a small cotton bag that I take with me for quick grocery store runs or for trips to the thrift store. It replaces at least one plastic bag, is more comfortable to carry and folds up nicely in my purse. Future plans include buying some recycled cotton bags for groceries and produce and using those instead of paper or plastic.

I feel a bit like the odd one in my neighborhood as I not only hang out my laundry in warmer weather but I have a composting bin and a rain barrel (currently stored for winter). I use all my fallen leaves for mulch around my home (and supplemented the quantity by raiding piles of leaves from neighbor's curbs). My lawn is treated twice yearly with corn gluten meal and mowed with an electric mower. I attempted to grow a garden in the raised bed on the property this year. Turns out my poor growth was due to a lack of nitrogen so I will have to heavily supplement my growing attempts next spring.

My plans for 2008 include purchasing a second rain barrel, installing two rain gardens and finish landscaping the area in the front of my house using native plants. I may also add to the raised garden bed space to grow more food, and have a company come in and aerate my lawn. The poor thing has been neglected for a long time, hence the greater crop of dandelions than my neighbors' lawns. I look forward to having less lawn to mow--not one of my favorite jobs as a homeowner.

Friday, November 23, 2007

Choosing native plant species for your landscaping

Why choose native plants? They are already well adapted to the area, they tend to require less water than nonnative species, they are more ecologically sound (e.g., not an invasive species), they invite birds and butterflies to your property and help preserve biodiversity. Prairie plants can provide color from spring until fall and help feed birds even in the winter.

When I bought my home nearly two years ago, there was one mature tree on the southeast corner of the house, but not much else that could be called landscaping. Some that were present, I chose to remove as they were ugly (juniper bushes), diseased (cotoneaster) and poorly placed (Korean boxwood bushes).

It took a friend saying "why don't you plant native species" and my aunt, who evaluates land for the USDA, to make me to think about my choices for what to plant. I chose some plants without realizing they were not native: hostas (native to China), daylilies (likely from Europe), and tulips (native to the Middle East). My aunt suggested a basswood tree when I asked her what native species she would recommend. I did some research, decided I agreed with her choice and picked up Tilia americana 'Redmond' from a local nursery. I was very proud of my first planted tree.

I delved further into native plants and found a mail-order nursery that specializd in plants and trees native to my state. I ordered two blueberry species bushes, two Rosa blanda bushes as well as two native trees, mountain ash (Sorbus americana) and ironwood (Ostrya virginiana) as bare root stock. This order would make all the trees planted at my home native (the mature specimen is green ash).

How did I determine what species were native and what to plant? Much of native plant research centered on my local university's horticulture web site as well as the state Department of Natural Resources web site. These gave me information about statewide distribution, what are considered invasive species (e.g., Norway maples, which are overly planted in my city, are considered such) and size. Other sites like the University of Florida's Tree Fact Sheet is a great index of information on each tree including site requirements, longevity and any diseases that affect it. For example, my basswood tree was 40% defoliated by Japanese beetles, which find this species of tree quite attractive. Since the basswod is not much more than six feet tall, this was an issue.

Another great resource is the local university extension office. When I noticed spots on my rose bushes and described the condition of one of my newly planted trees, the agent had some bad news (the tree is dead because I did not water it enough) and good news (the leaf spots were treatable with a solution). There may be additional local resources such as a gardening club or a local nursery that carries native plant species in your city or state. I know there are a few places in my area that raise and sell praire plants and seeds. Consider making the choice for native plants in your landscaping. You may find you like them as much as or even more than many of the commercial plants.

Wednesday, November 21, 2007

Reasons to be thankful

I am thankful for my wonderful family and friends, my ever-helpful colleagues and my supportive supervisor. I am glad for my good health and the actions I am taking to continue being healthly. I am thankful for the companionship of my cats and in having my very own house, my home. I am thankful for plentiful and tasty food, for the wonder of gardens, for the sheer variety of plants and trees in the world. I am thankful I can work toward my financial independence and decrease the heaviness of my tread on the earth. I am thankful for sunrises, sunsets and beautiful stars. I am thankful for the smiles of strangers making me feel welcome and the infectious laughter of children.

I do not always appreciate what I have--a good life, a good home, a good job and the means to work toward my goals as a single, independent woman in this world. However, this holiday season reminds me to reflect on what I have rather than what I do not or the fears I have for the world. Hopefully, your Thanksgiving day will be rewarding as well.