Staying Motivated

It seems about once a month something does not go as planned in our budget.  Either something unexpected comes up or we just spend more than we should in a particular category causing us to make less progress than anticipated.  When this happens I can’t help but feel a little defeated and sometimes even feel like giving up. So how do I stay motivated to stay on track? 

Review Progress Already Made

I know that just by keeping track of our spending alone goes a long way to help us financially.  I can honestly say that since I found the perfect budgeting software for me, I have been keeping track of every penny and this really helps me to know where we stand at all times and also keeps us from spending uncontrollably.  I always remind myself that we have already made great progress since rebooting our effort with the new software just two months ago.  While our debt has not decreased drastically just yet, this is mostly due to the fact that we found a couple old debts we had forgotten about when we made our original list.  We have drastically reduced our spending and are currently paying $800 a month towards debt. On top of that, we have starting saving monthly for things like gifts, Christmas, car maintenance and repairs, and our Amazon Prime membership to avoid having these expenses creep up on us.  When our Amazon Prime membership comes due again, we will already have the money set aside for it. In fact, when something unexpected comes up, we think about whether that is something that we should also be setting money aside for each month to avoid the same thing happening again in the future.  I think that if we keep adjusting our budget as we go, we will have less and less unexpected situations arise.

Remember Goals

I remind myself what our goals are and I know that if we give up, we will never reach these goals and we will be right back where we started. I remind myself of our goals every day and every time I consider making a purchase of any kind. I even have motivational pictures saved on my phone and my laptop to view whenever I need to remind myself of what we are working towards. This is not because I am depriving myself and hating life at that moment.  It is more to keep myself on track and remember why it is silly to spend on items that are not meaningful to me.  If you do not already have your goals written down somewhere, you need to do this now!  Simply writing down your goals and reviewing them periodically is a great motivator.  Be sure to break large goals down into smaller ones so that you can feel progress being made.  Set goal dates as well so you will be pushing yourself to meet those deadlines. 

 Seek Support

This is a great time to post a little rant on your favorite forum to seek motivational support and guidance from others who are either in the same situation as you or, better yet, have previously been in your position and have already made great progress.  I also find this to be a good time to read success stories on my favorite personal finance blogs and forums.  There are always others out there who have started out in worse situations and worked their way out of it.  I know if they can do it, so can we. 

Prove Others Wrong and/or Make Others Proud

This might seem strange to some, but I want to prove to certain people in my life that we are strong enough to fight through this and come out on top.  If you have any judgmental people in your life, you know where I’m coming from here.  I try not to be around judgmental people, but sometimes it is unavoidable, especially when they are family.  There are also certain people in our lives who I know will be very proud of us if we can accomplish this.  I can’t wait for the day that we can tell everyone we know that we are retiring from our full time jobs to live our dream.  

Set an Example

If we are able to retire at an early age, our kids will be young enough to learn from that and start saving much earlier than we did and retire at a very young age.  I also want them to understand that living a normal lifestyle is not a smart lifestyle to live.  Wasting money on eating out, fast food, soda from the gas station, coffee, etc. all adds up very quickly and takes away from things they would value much more.  I want them to live a life full of wonderful experiences and memories that will last a lifetime.  Whether that means traveling the world, skydiving (yikes!), mountain climbing, whatever their hearts desire is all that matters.  The important thing is they will not be able to do any of this if they are wasting all of their money on meaningless things.  It is hard to preach something like this if you are not living it yourself. 

Accept Mistakes and Move On

So when I find myself feeling down because we aren't progressing quickly enough, I will do one or more of these things until I feel better again and understand there are going to be bumps in the road.  At the end of the day, I just have to accept that and keep moving forward.  We may not reach our goals in the perfect amount of time, but as long as we keep working at it, we will get there.  If we give up, not only will we end up right back where we started, but our situation will likely get progressively worse.  I have also found writing this blog has been a great source of therapy and helps me to stay on track.  I should also mention that if you have a spouse, you should be on the same page and help motivate each other as well.  

The Cost of Forgetting to Pay Your Bills on Time

Recently, I somehow forgot to pay my rent before the due date and ended up paying a $50 late fee for being one day late.  It’s not that I didn’t have the money or I didn’t want to pay it.  I just simply forgot and it cost me $50. That was $50 that could have gone towards our debt and stupid mistakes like this really drive me crazy.  I have been notorious for this in the past also.  I don’t know how many times I forgot to pay the cell phone bill until they shut off our phones.  Somehow I wasn’t receiving the bills or being notified that we were past due and instead of looking into why that was happening I just kept paying the $45 reconnect fee each month.  I finally realized how ridiculous this was and figured out what the issue was and I now get notified when my bill is due and I have it set as a reminder on my phone so I am not wasting money on all of these late fees.  I have now set reminders for all of my bills so I will never pay another late fee again.  Once we have a good buffer saved up in our account, I will probably set these bills on auto-pay, but until then I needed something to remind me to pay them before they are due.  If I forgot to pay both of these bills every month, I would pay an additional $95 a month in late fees. That is only for two bills. Can you imagine what would happen if you paid all of your bills late?  The $95 a month alone adds up to $1140 a year!  If you think you can’t afford to pay your bills on time, you need a budget and you need to cut some wasteful spending out of your life.  

Review of the Automatic Millionaire by David Bach

This is, by far, my favorite personal finance book ever! I have read it at least 3 times. I remember the first time I read it straight through in less than 2 hours. I just couldn't put it down! The number one reason people don’t save money is because they are not disciplined enough to do so. David’s method solves this problem and is really very simple: make everything automatic. You don’t even have to budget (although I still highly recommend it). If you automate all of your finances, you don’t have to think about it, you won’t argue with your spouse, and you will be saving money and building wealth in the process.

David goes into great detail about 401k, emergency savings, debt, mortgage, and tithing. My favorite chapter is about an older couple he met that actually shared this method with him. They didn’t make much money, but they somehow managed to pay off two mortgages early, renting their first house out after paying it off, and save enough money to retire in their fifties. Their secret was making it all automated. You can’t spend what you don’t see. This is a very easy read. He makes it easy to understand and easy for anyone to accomplish. I highly recommend this book no matter what your financial situation is.

Is Couponing Really Worth the Trouble?

Coupons have been around for years and people have been taking advantage of them more than ever over the last few years with the rising cost of food and the troubling economy. So are you throwing away money by not using them? This really depends on a lot of factors. First, how much time do you have to devote to saving money on your grocery bill? To save the ultimate amount of money requires a lot of time. I’ve heard of people spending upwards of 40 hours a week couponing. This is, of course, very extreme.

I have tried couponing in the past and did get a lot of free and extremely cheap items in the process. I had a coupon binder, bought 2-4 newspapers every Sunday, spent countless hours cutting and organizing coupons, scouring the web for good deals, and then go to the store, coupons in hand, only to find that some of the items I couldn’t even get because other couponers beat me to it and cleared the shelves. It was kind of fun while it lasted, but I found that I really didn’t save enough money for it to be worth the 5-10 hours a week I was spending on it. Why you ask? A lot of the coupons out there are for expensive brands of processed foods, premade snacks, and junk food. I found that when I was couponing I was buying foods I wouldn’t normally buy and loading my family up with junk food that we didn’t need. On top of that, I was paying for these items! Even though I was getting them cheap, I still had to buy meat, dairy, and other essentials that there are never coupons for. I would get so caught up in getting such a great deal that I didn’t realize I was buying things we would never eat or that we didn’t need to eat.

 Then there are all the rules. Every store has different coupon policies. Drug stores, Target and Wal-Mart all have the same policy at all of their national stores, but the same grocery store chain can have a different policy at each location. You have to know which stores double, how much they will double, how many of the same coupon you can use in each transaction, and the list goes on.

 Now that I have told you about all the cons of couponing, I will give you some pros. If you have a little time to spend, I do still like to take advantage of some of the Walgreens and CVS deals once in a while. Occasionally you can get free items by paying up front and getting a coupon at the register for the same amount off of a future purchase. As long as you know you will remember to use these coupons in the future before they expire, this is a good deal for items you would normally use in your household. Sometimes you can even make money on these items if you have a coupon for the item itself. I will also say that I had quite the stock pile of toothpaste, toothbrushes, dental floss, razors, shampoo, conditioner, laundry detergent, paper towels, dish soap, and other items that don’t expire and will get used up eventually. I think my daughter will have enough panty liners to last her a lifetime (all free)! These are things I can’t really complain about because they will always be used and these are deals I would never pass up. I have also donated things I got for free that we will never use so that’s certainly a good thing.

 With all this being said, I will tell you that I don’t coupon much anymore. I just haven’t had the time to devote to it. I do try to load digital coupons and use the free Kroger coupons that come in the mail. I will also stock up a little on items that are at a good sale price so that we don’t have to overpay for these items in the future. We also don’t buy much premade foods and cook mostly from scratch. We really try to limit how often we eat out. It amazes me how expensive that can get!

Couponing can be worthwhile if done right. Find the system that works best for your family’s needs, stick to only buying things that you really need, don’t get carried away with all the great deals to be had, stock up only when an item is the cheapest you know you will ever get it for and you know it will get used before the expiration date.

 Some of my favorite couponing resources:

CouponMom.com
DealSeekingMom.com 
WeUseCoupons.com

Review of The Total Money Makeover by Dave Ramsey

Dave Ramsey's book, The Total Money Makeover is one of the first personal finance books I ever read. While I don't agree with everything Dave preaches, this is a great book for anyone who is trying to get out of debt. He is a little extreme and believes that you shouldn't spend any money on anything other than absolute necessities until you are completely debt free. I think everyone needs to indulge once in a while or you will just fall completely off the wagon.  By indulge, I don't mean go out and buy a new car, but maybe go out to dinner once a month or buy a new outfit once in a while. I like to make myself meet certain goals before doing this so that I know I am still coming out ahead. 

Dave also has a 7 baby step system that consists of building an emergency fund, save 3-6 months expenses, paying off all debt (including mortgage), college savings, retirement, and building wealth. I think his system works great for those who do not have self discipline. For others, like me, it is helpful to use bits and pieces of his advice to fit your own personal needs.  He doesn't like this and if you've ever listened to his radio show you know what I mean. Those who follow him religiously tend to stick to every detail of his plan and scold those who don't. However, if you are serious about getting out of debt, his "My Total Money Makeover" online forum is a great motivator.  It is free to view the forums, but if you want to join the conversation, you will need to pay a monthly fee (currently $9.95/month or $89.88/year). They are very active forums too with lots of daily activity. 

Another thing that not everyone agrees with is the way Dave teaches how to pay off debt. His method is to pay off the smallest balances first. You will save more money in the long run if you pay off debts with the highest interest rates first. However, the reason Dave teaches the method of paying off smallest balances first is to keep you motivated. You will pay off your smaller debts quickly leaving you with less total debts and you will feel less overwhelmed. Also, with each small debt you pay off, that's more money you can apply towards your next debt. 

Even though I don't agree and follow every detail of his plan, I still believe this is one of the best personal finance books out there and everyone could learn something from it. 

Introduction to a Personal Finance Addict

I have always had an obsession with money. I have probably read every personal finance book out there and scoured blogs and websites looking for answers to many questions. If you are here looking for an easy answer to all of your problems, you're not going to find it. In fact, you won't find it anywhere. Believe me, I've tried. There is no easy answer to making lots of money or how to manage your finances. Every person is different and has to figure out what works for them. I think that all of my research will help others learn how to save money, find useful tools, earn extra money, etc. That's what this blog is all about. In the near future, you will find book reviews, useful tools, and lots of tips that I have learned over the years. Thanks for stopping by and I hope you find something useful here!

What Are Your Biggest Dreams?

I recently watched a documentary on Netflix called TINY: A Story About Living Small.  It was a story about a couple who built their own tiny house on wheels.  Watching this made me think about how much housing really costs and how much space and stuff we truly need.  We currently live in a three bedroom, two and a half bath, 1,334 square foot town home with a one car garage and no basement. We have two adults and two teenagers living here. With two teenagers, I can’t imagine having less space than we currently do.  But when they grow up and move out, I don’t see a need for a bunch of empty space.  I also started to think about how much money we could save by downsizing to the bare minimum and how that savings could fund things that we really enjoy.

What are your dreams?

One of my biggest dreams is to travel the country and I am fortunate enough to have a husband who also shares this dream with me.  We would love to actually live in an RV and travel until we either get tired of it or find a place that we just can’t leave.  My youngest child will leave for college in four years. This means we need to knock out $60,000 in debt and save a lot of money in the next four years. We also need to find other income streams so that we can afford to quit our full time jobs when the time comes. We’ve come up with some goals to help accomplish this.

Goals for Reaching our Dream of Traveling

• Pay off all debt in the next year. This is going to be a major challenge that will require us cutting out all wasteful spending and applying every dime we can towards debt. We know this may not be entirely possible, but we will keep at it even if it takes longer. The key is to not give up when things take longer than you hope. If you give up, you will never get there.  
•  Develop other income streams that can be done from anywhere. I’m hoping this blog will be one of those income streams, especially since I love helping other people save money and accomplish their dreams. We may start other blogs and possibly even try to write a book. I love photography and am thinking we will probably add a travel blog once we are on the road.  I think the most important part of this goal is to actually enjoy what we do.
• After paying off all debt, we will apply every possible dime into savings for our RV, travel, and living expenses. We also need to research where to store this money where it will earn the most interest, but not charge a penalty for withdrawing before a certain age.  I’m sure Mr. Money Mustache has some good articles on this subject on his blog.
• Find a lower cost home between now and then. We currently rent and our rent isn’t outrageously high. In fact, it is the lowest rent for 3 bedroom apartments (or homes) in our school district (except for the low income housing, which we do not qualify for).  However, I still think we could probably find something cheaper if we keep looking. 
• Don’t fall into the eating out trap. We have been doing pretty well at not eating out lately, but it takes discipline and planning ahead to stick with it. We have to keep it up if we want to accomplish our goals in a reasonable amount of time.  The good news is I have a small garden this summer so that is motivation to try to use up those vegetables.
• Cut out more unnecessary wasteful spending. We have already cut back a lot in the last few months, but I know we still have a ways to go. I still smoke cigarettes (although I figured out how to reduce this cost by 65%) and we still drink a lot of soda. I think I’m going to start cutting out my soda by drinking from the free water cooler at work instead of hitting up the vending machine. I also will try to start exercising, which will cause me to drink more water, even if it just means doing some sit-ups or going for a walk each day. This is something I need to be doing anyway and I think it will help my water intake as well.
• We need to start decluttering. We have a lot of junk in boxes in the garage that we don’t ever use. I will be taking a week off of work in a few weeks and that will be my goal for that week. We need to sell what we can and donate the rest. We can’t take all this crap on the road with us when we go and we could apply the money we make towards our debt.

This will be a post that I will refer back to often as we try to accomplish each of these goals. Think about what your ultimate dreams are and discuss them with your spouse. If you can find common goals, you will find a way to work together to accomplish those goals. It took my husband and I several years to find a common goal to work towards and that was mainly because we weren't looking at the big picture and communicating about it. I kept trying to say I needed to go back to school so that I could earn more money, but going back to school would put us even deeper into debt and I wasn't thinking about what would really make me happy. Making more money isn't always the answer. The answer can simply be to only spend your money on things you truly value. Stop thinking about what normal society spends money on and think only about what you want out of life and you will be much happier. If my husband and I want to accomplish our dream of living on the road, going back to school is pointless and wasteful spending.  If you have been dreaming of owning a large home, why do you want to own a large home? Is it just the idea of having it or is that what you truly want? Sure I would like a large house, but I wouldn't want to do all the upkeep myself and I definitely don’t want to pay someone else to do it. If I really want to travel and I don’t want to be home much anyway, what is the point of having a large house? I would just spend more money trying to fill it up with things I don’t really need and I would probably have to work the rest of my life to pay for it. That does not sound like fun to me!

Follow These Steps to Accomplish Your Dreams

• Think about your ultimate life goals and discuss them with your significant other if you have one.
• Make a plan and stick with it. Put it in writing in a place you can refer to often as a constant reminder.
• Break your big goals down into smaller goals.  When you set smaller goals, you can accomplish them one at a time in a reasonable amount of time and each one of these you accomplish is a step closer to meeting your larger goals.  Celebrate every goal you accomplish (in a cheap way of course).
• Remind yourself of your biggest goals every time you consider purchasing something that isn’t a necessity. You would be surprised how often you will put things back when you do this and you will feel good about it!
• Track your spending and use a budget. This is probably the most important task of all. If you don’t track your spending, it becomes hard to reduce your spending and keep track of your goals efficiently.  See my post about my favorite budgeting software, YNAB.

Below are some pictures of places we have traveled to in years past. 

Las Vegas Strip

Niagara Falls

St. Augustine, FL

Washington D.C.

How to Save 65% on Cigarettes

Let me start off with the disclaimer that I do not promote smoking at all.  I wish I had never started and if you are not currently a smoker please do not start!  If you are a smoker, please keep reading.

That picture to the right used to be my brand of choice.  I was 16 when I first started smoking.  I started out on Marlboro Lights and switched to Camel lights.  Then at about the age of 19 I switched to Basic Lights because they were cheaper.  I smoked Basics for years, even when they became more expensive than Marlboro and Camels because I was hooked on that brand.  

After several failed attempts at quitting, I decided to at least find a way to reduce my cost on cigarettes until I am ready to quit.  I am not proud to be a smoker and I do wish I had never started.  However, I know that I really have to want to quit before I can really do it and I guess I’m just not there yet.  A friend at work was rolling her own cigarettes for a while and I thought they were OK, but I just never tried it myself.  I didn't think they were as good as my brand and I didn't realize just how much money she was saving.  She said it was also a pain to roll all the cigarettes.  She used a little machine to do it, but had to do one at a time.

The other day, I thought I would at least give it a try because I was tired of spending $190 a month on cigarettes and with all the debt we have to pay off I had to try something.  I stopped into my local tobacco store on my way home from work and learned that there is a machine that rolls a whole carton of cigarettes in about 8 minutes for you.  You have to join a club to use it and it was located right next door to the tobacco shop.  I believe they can’t legally keep it in a tobacco shop.  It costs $5 each time you use it.  I spent a total of $22 and about 20 minutes of my time to get a carton of cigarettes.  This was exciting enough, but I was afraid of what it would taste like and worried that I just wasted my money and would go back to buying my Basics.  I was wrong!  I actually enjoyed them just as well as my Basics (if not more).  I can’t believe I didn't try this sooner.  I just went from spending $190 a month to $66 a month for a savings of $124 (65%) per month!  That will equate to $1,488 a year and $5,952 savings in the next four years (if I don’t quit before then),  

Ask around at your local tobacco stores and at least give it a shot.  I live in Ohio so I am not familiar with the laws in other states and countries, but if it is an option, you will most certainly save money.  And I do believe the laws regarding the roll your own cigarettes are the same countrywide.  If you do try it, let me know how it works out for you in the comments below.  Did the quality of the cigarettes meet your expectations?  How much did you save?