Wednesday, April 30, 2008

Best College Moves

There's another meme going around. This time, bloggers are sharing their best financial moves in college. Here's my story!

When I was a child, I wanted to be a veterinarian when I "grew up". Once the high school teen years hit, so did the hormones and some reality. I realized two things: 1) I wanted to be a stay-at-home mom someday and 2) veterinarians have about 8 years of schooling! Because of a love of organizing things, I settled on becoming an administrative assistant.

The first thing I did right in college was to go to the local technical college instead of a traditional 4-year college. I was near the top of my high school class, so many people thought I should go to a 4-year school and get a degree, even though I just wanted to be a secretary. I stuck to my guns and went into the administrative assistant program at the tech. I'm confident I would have ended up getting a job as a secretary in the end, anyway, so I'm glad I didn't waste my time and money on a college degree. Lesson #1: Go With Your Gut

The second thing I did right was to switch from a 2-year associates degree program to a 1-year technical diploma program after my first semester. At the time I was in college, the economy was booming. Jobs were easy to come by, and I already had a part time secretarial job in the evenings while I was in school. I quickly noticed that secretarial job postings cared just as much, if not more, about experience as education. My evening job was interested in taking me on full time, so I'd have no problem getting experience under my belt. I realized I could do just one year of schooling and very quickly have the 2-year minimum of experience that most employers wanted. That's what I did, and it has worked very well for me. Lesson #2: More schooling doesn't always mean more money and better jobs.

Obviously, a path of little post-high school education doesn't work for everyone. If your career interest only requires a technical school education, though, don't feel like you have to go to a 4-year college. Do what's right for you!

Also check out:
Mrs. Micah's meme
Cash Money Life's meme

Monday, April 28, 2008

Washington DC Trip: The Finances

My husband and I went on a whirlwind tour of our country's capital last weekend. We left late on Thursday for Raleigh, NC, drove to DC on Friday morning, drove back to Raleigh Sunday night, and left Monday morning! We had a blast!

As far as the financial aspect of things, I was actually pretty surprised.

Breakfast was either provided by the friend we were staying with or free at the hotel, but for various reasons, we ate out every single lunch and dinner. I knew that was going to get expensive, but I wasn't sure exactly how it would all come out.

We ended up spending a lot eating out, but almost nothing for entertainment (since all of the DC museums are FREE!). I think it came out as a pretty decent wash. Here's the breakdown:

Food: $175
Entertainment: $39
Parking: $44
Lodging: $100
Transportation: $415

The transportation costs were just the plane tickets. Our friend graciously paid all of the gasoline costs. We tried to make up for it by paying for some of his meals, but I think we got the better end of that deal :) (Thanks, Tom!)

I highly recommend vacationing in Washington DC. A lot of the awesome things to do there are free, and you could have a very frugal vacation if you were to buy your food at a grocery store instead of eating out like we did.

What's your favorite frugal vacation spot?

Friday, April 25, 2008

Favorite Blog Post 4/25/08

Since I took a little vacation to Washington DC last weekend, it's been tough getting caught up around here. I haven't been able to read and comment on as many blogs as I usually do. I did come across a few good articles this week, including a post from Cash Money Life about improving your computer's performance. It's not directing related to finances, but if you can keep your current computer longer, you will definitely save money!

Thursday, April 24, 2008

Milk and Miscellaneous

I wrote a post last week mentioning how much milk my husband and I go through. I received a couple of good comments about it. I thought I would mention that I do drink water, as well, though not as much as I should. I tend to drink more water in the summer when I often have an actual craving for it. In the winter, I crave the creaminess of milk. Still, I should work on this one!

Also, someone mentioned mixing half real milk with half powdered milk. I'm a little leery of liking that since skim milk is already so watered down. The comment did make me think, though, about mixing up powdered milk for baking. Does anyone do this? Can you taste the difference? Is powdered milk a lot less expensive than real milk?

The CVS and Walgreens rebates are finally paying off. I felt like I was spending a lot of money during the first month, but now I'm reaping the rewards by paying for everything with Extra Care Bucks and my Walgreens gift card. Check out the stuff I got today! I paid about $1 out of pocket, the rest was paid for with coupons, ECB and my gift card!

Tuesday, April 22, 2008

How NOT to Handle an Inheritance

After four years, she's finally done it. She's spent her entire inheritance.

Let me explain. I work at a financial services firm. A client of ours, let's call her Eunice, managed her finances well and left an inheritance of about $272,000 to her two children when she passed away four years ago. Both children were in their 40's and each received $136,000 when Eunice died. Both children also immediately began taking distributions from their inheritance.

The son started spending his inheritance money like it was going out of style. He passed away about a year after Eunice died. His wife received the inheritance and hasn't spent a dime more of it. She's saving it for her own retirement (very smart woman!).

Eunice's daughter, let's call her Jane, also began spending her inheritance immediately upon receiving it. About once a month, Jane calls us and says that she needs $2,000 (it varies every time she called, but probably averages out to monthly and $2,000 each time).

Jane also declares each time she calls that she needs the money "as soon as possible" for some bill or another that's due in 4 days. Because she needs the money so quickly, we have to wire it to her (costing her an extra $15 wire fee each time), and the process starts all over again in about a month. Jane never would agree to an automatic monthly withdrawal, which would have saved her the $15 wire fees.

Some of the inheritance money was in an IRA, so Jane has also had to pay taxes and early withdrawal penalties to the government on her withdrawals.

Well, Jane made her last withdrawal last week, just under four years after her first withdrawal. She's managed to blow through about $136,000 in four years, which averages out to $34,000 per year. Since Jane makes about $40,000 per year in her career, she has almost doubled her spending each of these past 4 years. And now it is gone. I have no idea how she plans on continuing her spendy lifestyle with the extra money.

Every time Jane has called "needing" more money over these last four years, I've wanted to grab her by the shoulders and shake her. Didn't she realize that if she kept the money untouched, she'd have a really nice addition to her (probably nonexistent) retirement funds ($633,000 at age 65 with an 8% return)? Didn't she ever think that Eunice would be rolling over in her grave if she knew how fast her daughter went through Eunice's life savings?

I was actually glad when Jane called last week to take that last distribution (wired to her, of course). I'll no longer feel that frustration every month at her poor management skills, knowing what "might have been".

I don't know what the message in this post is, besides encouraging people to think about the future and not be idiots ;)

Do you know people like this, people whom you want to scream at for their stupid money decisions? I'd love to hear about them!

Friday, April 18, 2008

Favorite Blog Post 4/18/08

I have a favorite blog post and a favorite blog quote this week!

Gather Little By Little told a great fact-turned-fiction story this week about two friends and the power of peer pressure. I thought it was well-written and thought-provoking. Go check it out!

I read an article this week at Frugal Dad in which he coined a new phrase that I really liked: “Sure, the grass is greener on the other side, but the water bill is higher, too.” I thought it was a neat way to be reminded that the "Joneses" don't always have it as good as we think they do!

Wednesday, April 16, 2008

The Budget-Busting Meme

I've noticed that there's a meme going around asking people to list their top 5 budget busters, so I thought I should join in the fun!

1. Vacations
Being newlyweds, my husband and I are still working on "frugalizing" our vacations (I think I just made up a word!). So far, our biggest issue seems to be that we vacation where friends are living and then take them out to eat. This is going to be our big expense with the vacation we're taking this weekend to Raleigh, NC and Washington DC. We'll be staying with a friend for two of the nights (which saves money), but we'll be going out to eat a lot more because of that. We're going to try to be a little more frugal than the last time we visited this friend. I'll let you know how it turns out!
Also at issue has been the number of vacations we've taken. We're working on that one, too. :)

2. Milk
My husband and I love milk, and we drink a lot of it. I buy about 4 gallons of milk a week just for the two of us! The good thing is that we drink less soda because of our love of milk. The bad thing is that milk is more expensive than soda. This is a budget buster I can live with since I'm pretty sure we'd drink more sugary drinks if we didn't give ourselves free rein with the milk.

3. Bath and Body Products
This one is all me. I like the Bath and Body Works shower gels, lotions, and hand soap that have the same scent, and Bath and Body Works isn't exactly the cheapest option out there! I combat this budget buster by trying to only buy what I need when I need it, and to watch for sales and coupons. I also add some water to the products when they near the empty mark to help them last longer.

4. Scrapbooking Supplies
Another one that is completely my fault! If I could own every scrapbooking sticker that Hobby Lobby sells, I probably would :) I try to keep this one under control by only going to Hobby Lobby when I need something in particular. I also try to go when the scrapbooking supplies are on sale.

5. Tools
Like many men, my husband loves his tools. We're working on a bathroom remodel, so we've bought quite a few tools since we've been married. The nice thing about tools is that once you have them, they should last a long time. I feel like we're in the "acquiring" stage now. I'm hoping we'll soon move to the "maintenance" stage of tool ownership. Considering the look of awe and wonder on my husband's face every time we walk past the tool section at Home Depot, that might be wishful thinking. ;)
I'm a very strong proponent of quality when it comes to tools, though. I always encourage my husband to buy the high quality tool once he's informed me that he can't possibly live without *insert tool here*. We also agree to have a large tool purchase (like a power tool) become his birthday or Christmas present to save some money (and frustration on my part). It works for us!

Here are some other answers to the budget-buster meme:
What Busts Mrs. Micah's Budget
Mommy Gets PAID's Budget Busters

Now it's your turn!

Monday, April 14, 2008

...Ok, So I Lied

It's confession time! I told you two weeks ago that I was giving up on CVS Pharmacy. That was before I read about this deal at Money Saving Mom. I couldn't help myself, I had to check it out!

I stopped by CVS on my way to the grocery store and, what do you know, they actually had the deals I was looking for!

Here's what I got:

This is how it worked:

2 Covergirl Foundations: $18.98
1 Pepcid EZ Chews: $7.99
-$1.00 Covergirl coupon
-$9.49 Buy one, Get one free Covergirl coupon
-$2.00 Pepcid coupon
-$5.00 CVS $5 off $15 coupon
=$10.58 with sales tax

In return I got $17 in Extra Care Bucks plus I have a mail in rebate for the Pepcid EZ Chews that will net me $5.09 after postage. I spent $10.50 and have $22 to spend later.

I couldn't resist!

Friday, April 11, 2008

Favorite Blog Post 4/11/08

My favorite blog post this week was from Mrs. Micah. I really need to get a little more organized with an "alien abduction manual". This is a fun way of saying that you (and I) should have our financial paperwork organized in case something should happen to us. That way, our spouse (or whoever will take over our finances if something happens to us) isn't at a complete loss during a difficult time.

I'm off on another vacation next week. I'm heading to Washington DC (which, ironically enough, is where Mrs. Micah lives)!

Wednesday, April 9, 2008

A Gambling Lesson

No, I'm not going to teach you how to gamble!

As I mentioned last week, Dave Ramsey was interviewed by Dr. Dobson on the Focus on the Family radio show last Thursday. Toward the end of that broadcast, Dr. Dobson and Dave went off on a little tangent about how gambling in the US, specifically the lottery, is an exploitation of the poor. They had a lot of neat statistics and stories to back this up, but one statistic really stood out to me.

The Claim

The average lottery player spends $35.84 per month on the lottery. Dave went on to say that if you invest that $35.84 in a decent growth stock mutual fund from age 22 to age 72, you'd be a millionaire.

How funny is that? People are willing to spend $35 a month trying to become a millionaire via the lottery and only one in about a billion will succeed. If you take that same $35 a month and invest it instead, you're practically guaranteed to be a millionaire!

Checking It Out

I was a little skeptical of Dave's math, so I decided to look into his claim. Since I work for a financial services firm, I randomly chose two funds I knew had been around for 50 years, which is the number of years Dave's calculation of ages 22-72 would work out to.

I entered two American Funds into my calculator, Investment Company of America (AIVSX) and the Washington Mutual Fund (AWSHX). I tried to enter in everyone's favorite, the Vanguard 500 Index, but it's only been around for about 30 years. Also noteworthy is that AIVSX and AWSHX are actually growth and income funds, so a growth fund like Dave mentioned should perform even better!

$35/month invested for 50 years with dividends and capital gains reinvested brought AIVSX to a value of $1,079,117. Investing into AWSHX would also make you a millionaire at $1,078,581.

The Conclusion

It works! I found it to be completely amazing that a mere $35 can get you to a million dollars eventually. This information should be posted at all locations that sell lottery tickets. Do you think it would make a difference?

Monday, April 7, 2008

Saving Money on Your Wedding: Wrap-up

I've come to the end of my "Saving Money on Your Wedding" series. Today I'll mention a couple of miscellaneous ideas that I didn't cover in previous posts. I'll also link to each article in the series so that it's all in one spot.

Miscellaneous Ideas
-Keep the guest list small.
-Skip the party favors.
-Involve relatives and friends who have skills in needed areas (cake making, photography, decorating, etc.). Either pay them or let it be their wedding gift to you.
-Have your wedding on a Friday evening or Sunday afternoon.
-Make sure you get the negatives and/or the rights to your photos.
-Elope ;)

Check out this post at Unclutterer for more ideas. There are tons of them in the comments!

Do you have additional "miscellaneous" wedding-saving ideas? Leave them in the comments :)

Saving Money on Your Wedding Series
Bridal Gowns
Bridal Accessories
Hair & Make-up
Groom's Attire
Invitations and Stationary
Flowers and Decorations
Attendant Gifts

Friday, April 4, 2008

Favorite Blog Post 4/4/08

This week, I'd like to bring your attention to a blog I always check out when I need a good laugh. Nick at Punny Money writes some really funny stuff about personal finance and the world we live in. So if you want to know about the kind of crap people are buying on Amazon or if you'd like to find out what Nick is willing to do for a bored millionaire, you really need to check him out!

To see a little more serious side of Nick, read about how you can ignore homeless people and not feel guilty about it. This post was very timely since I'll be going to Washington DC in two weeks on vacation. I've already donated to the Salvation Army, so I'll be sure to leave the cash at home :)

Thursday, April 3, 2008

Attention Dave Ramsey Fans!

I know there are plenty of fans of Christian personal finance guru Dave Ramsey out there. I thought I'd let you all know that Focus on the Family is doing a two-part interview with Dave Ramsey that is airing today and tomorrow. If none of your local stations carry Focus on the Family programming, you can also listen to the interview as a podcast.

According to the website, Dave is going to be discussing how listeners can avoid impulse spending and unnecessary debt. The title of his discussion is Let the Buyer Beware.

I've never read his books, so I'm looking forward to hearing him speak!

Wednesday, April 2, 2008

I'm Giving Up On CVS

For the past couple of weeks, I've been checking out a lot of blogs on saving money and getting good deals on my household shopping. I've discovered that drug stores like CVS, Rite-Aid, and Walgreens can provide some nice free-after-rebate items and other good deals if you do it right.

There are a ton of Walgreens in my area, so I've been having a lot of fun finding all the freebies and other good deals at Walgreens. There are, however, no Rite-Aids in my area and only one CVS.

After reading sites like Be Thrifty Like Us, I *heart* CVS, and Money Saving Mom, I decided last month to check the local CVS out. It's on the other side of town and not very convenient for me, so I went there when I was in the area for other errands. I went in the middle of March and noticed that all of the "freebies" were gone. Not too surprising, I guess.

I went back to CVS this past Saturday because I had found out that Extra Care Bucks on Softsoap were printing early. I was able to find and buy some Softsoap and got $9.98 in Extra Care Bucks! I was pretty excited.

Today, the April freebies started. I went to CVS after work and they were completely out of everything that was a really good deal. I was pretty bummed. I guess that's what happens when you have one CVS for about 150,000 people. I used up my $9.98 in Extra Care Bucks on some groceries and went home dejected.

So, that's my story and that is why I'm giving up on CVS, for now at least. If I find out about any more good deals that are printing out before being advertised, I'll still probably head over there to pick them up. I'll stick to Walgreens, though, for my monthly fix of freebies :)