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.

Tuesday, November 20, 2007

A few additional thoughts on financial decisions

I was rereading my post from yesterday where I expounded on how I was upset about my choice to spend $11 that I did not need to. I can easily see other people thinking "What is the big deal? It is only $11."

I agree--it is not a large sum of money. However, it was the first time in a long time that I truly regretted the financial choice I made. I chose laziness and convenience rather than frugality. The choice to purchase the pizza using the "great" coupon and filling up my gas tank using gas $0.05 more per gallon really bothered me even into the next day where I proceeded to rant about it to my colleagues. I was disappointed in my choices and it reflected in my attitude.

I have wasted large sums of money before. I spent over $1,000 on laser hair removal that was not a permanent solution. I graduated from college with credit card debt that remained many years afterward as I attended graduate school and had little money to pay down consumer debt. Looking back, I am not sure what I purchased to end up with ~$2,000 in credit card debt, but likely I had to have it at the time.

While I expound on my virtuous budget, I have used money from my savings account to cover my overages. These tend to be only a few dollars a month, but not always. But the decision I made that evening and ended up a blog posting really bothered me. While the sum is minor in the scheme of things, I understand I that have to improve my self-control and stop letting laziness dictate how passive I can be. It is easy to order a pizza. It takes more effort to decide on what to eat and then cook my own meal. Reasons to take the easy way out include: I forget to thaw the meat or don't realize I need an ingredient missing from my pantry or misjudge the amount of time needed to prepare the food. I strive to do better each day and each day I am more or less successful than the day before. The general trend is improving, but back sliding will happen. Hopefully, this recent mishap will motivate me to do better.

Monday, November 19, 2007

What was your most recent poor money choice?

I pride myself on keeping within the limits of my spending plan, which enables me to save nearly 16% of my gross income (not including 401k and Roth IRA contributions). One of the harder sections is my "dining out" budget. It is not large ($50 per month) and I am generally in a squeeze by the time half the month is over. However, I came under budget in October so I was happy to go to a movie with a friend and treat him to lunch. (The theater serves pizza so we watched "Elizabeth: The Golden Age" and consumed our lunch. ) It was a bit expensive for one meal, but I was glad to spend time with my friend.

However, the poor choices came on the heels of that more-expensive-than-average meal. One of the local pizza joints had a coupon for $10 for a 15" two-topping pizza. I had just eaten pizza, but the coupon expired in a couple days. It was a good deal and I thought I recalled the pizza was quite good. (I had it once before ironically with the movie-attending friend.) Since the theater pizza pie was nothing special, I was tempted to order the pizza. I told myself it was better to save the money, that just because I had a coupon did not mean I had to use it. I resisted for about two days before I called up the pizza place and placed an order for pickup. It's about nine blocks away so I thought "I can combine getting gas with picking up pizza." In fact, the gas station/convenience store is two storefronts over from the pizza parlor.

To back up a bit, the price of gas had just recently took a jump. I had $2.77/gallon gas in my tank and most places were around $3.09/gallon. As I drove home from work prior to ordering the pizza, I passed a station that had $3.09/gallon, but decided I did not want to make a left turn into the place to get gas. So I went home, ordered the pizza and decided to make it a dual trip--gas and food.

I was surprised to find the gas at the convenience store at $3.14/gallon. I figured gas would go up another nickel overnight and while I was kicking myself a bit for not getting gas an hour earlier, I thought it was going to go up again so no big deal. I filled the tank, walked over to the pizza place, paid for my pizza and drove home. End of story, right?

Um, no. Turns out I chose the most expensive gas on my driving route. My usual gas station did not raise its price to $3.14 for another three days! The cheaper price taunted me for the next three work days! I lost out about $0.50, but my spending plan for gas is a bit tight as I am trying not to increase the budgeted amount for another two months. And the pizza--not so great. It was more than I needed, did not taste like I remembered and combined with the overpriced gas, really soured me on my lack of fiscal control.

Moral of the story: Get gas the first time I need to fill (even if I have to turn left onto a busy highway) and forget the carryout pizza even with a coupon. I could have saved myself $11 if I had only thrown the coupon away. That is $11 that could be used for house maintenance, future investing or saving for new used auto.

Sunday, November 18, 2007

Holiday spending--what's your budget?

So, the gift-giving season is looming and the credit card debt that can go with it. While some people plan what they will buy on Black Friday (the big shopping day after Thanksgiving), I intend on driving from my parent's home back to my own and avoiding the aggravation of getting up early and elbowing other people in line for a great deal. Most of my gift shopping is done and should end up costing me about $100. How am I doing this?

I have seven nieces and nephews (currently none on the way but that could change at any moment). That means seven gifts for children age 12 months to six years. I still have purchases made from last holiday season that I thought babies might like (a wooden puzzle and a cloth book) and two books purchased a couple years ago waiting for a child of the right age. In addition, a garage sale find, a winning eBay bid, a thift store book and a purchase from my first trip overseas will supplement my gifts so that I have spent $45 over two years for this Christmas's gifts.

The adults in our family exchange names with a $20 per gift limit. That reduces the number of gifts from nine to one. This saves both money and time figuring out what to get each person. Family purchase this year: $20 gift card. His one non-gift card request exceeded the monetary limit.

There are only a few friends for which I want to buy gifts. One woman I know is looking at her first home. So a mix of second hand items (a sheet that can used as a paint dropcloth and a six-outlet plugin--items I no longer need) and new (paint rollers, caulk with caulking gun and outlet/switch insulators) will be her gift, items I know I used in my house when I first moved in. Another I am looking to buy scrap sterling silver from eBay for her jewelry making. Another friend I have combination of used and new items from various locations. One friend is a real mind buster especially as I don't want to give clutter to people, which is making me reconsider at least one gift. These various endeavors have made me spend $15.25 so far with another $30 in my future.

There are a few other gifts I will give: homemade treats to the kind retiree neighbors and aloe plants to colleagues. Those have very little cost associated with them and have been accounted for with previous purchases or in the food budget.

Total holiday gift giving budget: $100.25

Much of this was spent prior to November, but I also have a monthly gift budget of $30 that has not been completely spent. That left me with nearly $80 going into November. The combination of secondhand items and keeping the children in mind as I visit garage sales has really helped me keep out of debt. I try to spend only $10 per child per gift-giving time (holiday and birthday) so sale items and lots of books end up in the nieces and nephews' hands.

My holiday is debt-free and stress-free because I either paid cash or the amount was budget for, and I am not running to a store with thousands of other people doing their holiday shopping.