eating out

Tuesday’s Tip: Build a Rainy Day Fund

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When people ask me how my money management system works, I tell them that it’s a way to take the money they earn and put it where it needs to go so that their bills are paid in full and on time. They can also use the system to put money aside for other necessities, savings, or things they want. I strongly urge people to have a ‘rainy day fund’ for those unexpected things that pop up from time to time. If you think rainy day savings are unnecessary, think again.

Case in point: my family and I went on vacation recently to Virginia. We set up our camper in Williamsburg for a week and hit all the great tourist attractions like Colonial Williamsburg, Jamestown, Yorktown, and Water Country USA. Then, we headed to Staunton and set up camp for another week. We relaxed by the lake, fished, and hiked a few trails in the Shenandoah National Forest. We even took a trip  to Monticello (Thomas Jefferson’s home) – and that’s when trouble hit.

We’d been caught in a storm on the mountain, the roads were a little slick, and the grade of the road was a bit steep. Suddenly, the van’s gears wouldn’t engage. We heard a strange noise. We managed to pull over, turn the car off, then restart it. My husband put it in drive. It moved forward. We got on the highway and made it to our exit – barely. We ended up limping into the parking lot of an auto parts store. And that’s where she died. Old Blue wasn’t going anywhere. Reverse? Nope. Drive? No way. Fourth? Uh uh. Park was all that worked.

In the next 30 minutes, we scrambled to arrange for a rental car and a tow truck to haul Old Blue to the dealership nearby. We visited her the next day and the diagnosis sent us reeling: the transmission was shot. Gone. There was no saving it. She needed a whole new one.

Ugh.

To add insult to injury, we found out the axle was locked and had to be torched off. The parts wouldn’t be in for another several days. We were scheduled to leave for home the next day. After a lot of discussion, we decided we had to leave her there for a while so she could be fixed. We simply could not stay for an unknown length of time. (My husband likes his job and wants to keep it!) So, we secured storage for our camper, stuffed ourselves into a little sedan, and spent the next 2 days in virtual silence, trying to absorb all that had happened and figuring out what we were going to do now.

As it turns out, 2 weeks later, my husband and I had to fly out to Virginia, pick up Old Blue, get our camper out of storage, and drive home. I’m not going to divulge how much we’ve had to spend on a rental car, tow, repairs, plane tickets, a hotel room, and food, but suffice it to say that we were incredibly glad we had our ‘rainy day fund’. It literally saved the day. Now we don’t have to take money that’s supposed to go for paying the mortgage, our regular bills, or kids’ college savings. We’ll have to, basically, start all over again to build it back up, but I’m grateful we had it.

Now we can move forward . . . and so can our van.

Tuesday’s Tip: Take the Roadmap Challenge (Part 2)

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Well, it’s been a week since I introduced the first part of the challenge. Did you try it? How did it go? Did you notice anything about your spending habits? Were you surprised by anything? Many times we’re shocked by how much we spend. We don’t realize that those ‘little things’, the inexpensive items we buy on a whim, can actually add up to quite a bit when it happens on a regular basis. Think about what you saved in one week – and now imagine that on a slightly grander scale . . .

Which leads me to the next part of the challenge, in three steps.

Step 1: Take a good, hard look at your expense log from the past week. Is there anything you could stand to cut back on or do without? (Answer HONESTLY!!!) You may find that there are a couple of things on your list. That’s ok.

Step 2: Pick just ONE thing on your list and cut it out for the next 30 days. April 1 – 30. One month.

Step 3: Keep track of how much you save over the course of the next month.

I’m not asking you to give up every extra expense, just one. Pick one that’s the most frequent purchase. Or maybe one that’s the most unhealthy. Or the most expensive one. Whichever one you pick, do without it for the next month. On April 30, take the amount of money you saved and multiply it by 12 to see how much you can save in a year. Then ask yourself, What else could I do with that money? Pay down debt? Make an extra payment on something?? Pay something off???

Once you’ve done that, contact me and let me know what you cut out of your spending, how much you saved in a month, how much you’d save in a year, and what you learned from the experience. If you do, you’ll be entered into the contest and you could win a FREE consultation with me. You’ll get the Money Roadmap package which includes my book, a binder, and ledger paper, plus I will help you set up your own Roadmap and teach you how to use it.

There it is. The Roadmap Challenge. Try it. What do you have to lose? More importantly, what could you gain with good money management??

Good luck! I know you can do it! I can’t wait to hear from you!

Today is April 1st. Ready . . . set . . . GO!

Tuesday’s Tip: Take the Roadmap Challenge (Part 1)

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Ah, Spring! Aren’t you excited? More sunshine. Longer days. Warmer weather . . . ok, I choked on that one, too. (For those of us living in the Chicago area, we’re still waiting for that last one!) But still, when I think of Spring, I think of trees budding, flowers blooming, grass greening, and I’m filled with a sense of renewal. That’s what Spring is all about, isn’t it? Things beginning anew. Fresh starts. And . . .

SPRING CLEANING!!!

When I say that, most people think of the mile-long “Honey, Do” list taunting them from the fridge door: cleaning out the closets, going through the stuff in the garage, and washing windows, to name a few. But I’m talking about cleaning in a more financial way. The concept is the same though . . . go through your stuff, keep what’s necessary, and get rid of the rest. Think of it as clearing up and reorganizing your finances.

Over the years, I’ve had many people ask me what they could do to accomplish that particular goal and my answer is always the same: Grab a pencil and paper and keep track of all the money you spend in a month, then sit down, take a very close look at it to figure out where your money is going, and determine what you need and what you can do without. (Coincidentally, it’s one of the first steps outlined in my book!!) Most of the time, the reaction is the same – jaws drop to the floor.

“A whole month?” they ask.

“Yes. A whole month,” I reply.

“That’s a really long time,” they complain.

“Yes, it is,” I say, “But it’ll give you a solid picture of where all your money is going.”

“And we have to write down ALL of it?” they ask.

“Yes. ALL of it. Every dime. Bills, credit cards, EVERYTHING you buy in CASH. ALL of it.”

Again, jaws drop to the floor. What I’ve found, however, is that everyone who was truly serious about taking control of their finances followed my advice and were astonished by what they learned at the end of that month. They also learned that, by doing away with some of the extraneous items they didn’t realize were emptying their wallets and bank accounts, they were able to save quite a bit of money. In some cases, hundreds of dollars a month. Some people even told me that after just one or two weeks of tracking their expenses, they could easily see which unnecessary items they could cut back on, or cut out completely.

Don’t believe me? Ok. Let’s consider my friend, “Lucy”, who once told me that she’s addicted to a mocha coffee concoction and has to have it every morning on her way to work. She says she wants to get a good jolt to start her day, so she orders a large. Ok. With tax, she pays $3.58. Multiply that by 5 work days. That comes to $17.90 per week. Multiply that by, say, 49 actual work weeks in a year. The total now becomes $877.10 per year. Hmm . . . I can think of a few things that I’d rather do with $877 than drink coffee . . .

Still don’t think that makes a difference? Ok. Try this one on for size. Let’s say you go out to eat two times per week. For the sake of making it easier to calculate, let’s estimate that you spend about $50 per week. $50 multiplied by 52 weeks comes to $2600 per year. I suppose if you really want to get goofy, imagine you get a mocha coffee every day AND go out to eat twice a week . . . that’s almost $3500 per year that could go toward something else. And that’s just for two people. What about a family of 3? 4? 5? It boggles the mind.

So, here’s my challenge to you: Track your extra expenses for the next week and calculate how much money you could save per month and per year by cutting back or cutting them out. I’m not even talking about bills. I’m talking about those extra things you put on your credit card or things you pay for in cash. Those dinners out. Those lattes in the morning on the way to work. Movies. Drinks with friends every weekend. Try to focus on the extra little things that you pay for fairly often. Is there a habit forming?

Now think: What would happen if you went 30 days without them? Would it make a difference in your finances? Are you willing to find out?

Stay tuned for Part 2 of the Roadmap Challenge . . .

Tuesday’s Tip: Break the Bad

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Everywhere I go, I hear new year’s resolutions being flung around as freely as candy from a parade float. People are vowing to make changes to better themselves, their lives, their communities, and even the world. However, the most common goal, by far, was to lead a healthier lifestyle, which encompasses a multitude of different options ranging from losing weight to exercising more to breaking bad habits. And that got me thinking . . .

Breaking a bad habit is tough to do. I know, first hand, how hard it is, but I also know how wonderful it feels to be successful – in more ways than one. I confess that I used to smoke. (There it is, folks.) I tried to quit several times, but always seemed to give in eventually. I was smoke-free for quite a long time before having kids and during my pregnancy, then started again when they were about 6 or 7 months old. It was easy to blame it on stress, of course. Then, when they were almost 2, I finally managed to quit altogether and have been rid of the habit for over ten years. Don’t get me wrong, there are days I seriously wonder why the heck I ever quit! Then I think about all the progress I’ve made as a runner, how much I love it, and how smoking would completely ruin it, and I decide it’s not worth it. So, you could say that I’m enjoying the health benefits of being a non-smoker.

Just recently, I noticed a sign at the corner gas station advertising a sale on cigarettes: $6.85 per pack. Wow! I couldn’t believe it. That’s a lot more than I used to spend over a decade ago. And that got me thinking about the cost of being a smoker now. What would I be paying if I were still smoking? When I got home, I grabbed a calculator and did a little experiment to find out the financial benefit of not smoking. I know the cost per pack varies depending on location, but I live in the Chicago suburbs, so I’m going to use the average for this area, which is about $7.50. Ok. Let’s see. I used to smoke about 10 cigarettes per day. That means it would cost me $3.75 per day . . . times 365 days . . . that comes to $1,368.75 per year. If I smoked a pack a day, then the cost rises to $2,737.50 per year. Really? I was amazed at the numbers starting at me from the calculator. I instantly thought of a few things I could do with an extra $2,700 per year. Then, just for kicks, I multiplied that number by 5 . . . $13,687.50 saved in 5 years. Holy cow! Then I took one step closer to ridiculous and calculated the savings for 10 years. I nearly fell off my chair! $27,375. Amazing! Do you know how much house you could pay off with that money? Or you could buy a nice little car! You could save it for a rainy day . . . or college . . . grad school . . . vacations . . . retirement . . . The list goes on and on.

And what about other costly habits? I could think of a couple. How much could people be saving by kicking those bad boys to the curb? They don’t even necessarily need to be bad for you, like smoking was, for me. What about that iced coffee on the way to work everyday? Or eating out for lunch everyday? Or even twice a week? How about takeout dinners? Shopping every weekend? Blah, ba-blah, ba-blah . . . Please understand that I’m not suggesting we all become hermits, eat ramen and rice for the rest of our lives, deprive ourselves of things we need, and never do anything fun – we gotta live, right?! The trick is to be sensible about it.

Moral of the story: breaking a bad habit, or any habit that drains your pocketbook, could potentially save you more money than you think. Don’t believe me? Pick a habit . . . do the math. See what happens. The truth lies in the numbers. Cutting out a habit, or at least scaling way back, could mean some serious extra cash in our pockets. I don’t know about you, but I like that!

Tuesday’s Tip: Find the Freebies

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The other day, someone mentioned my post about buying memberships, but hinted that it’s not exactly feasible for her and her family at the moment and asked me if there was something else I could recommend. There is one thing . . .

FREEBIES!

During certain times of the year, including summer, holidays, and slow months, there can be a multitude of specials the whole family can enjoy. Here are a few tips:

1) Check out coupon sites online. There are lots of sites that have things like buy 1 Get 1 sales or free products and services – just be sure to do a little research first and pick the sites that offer things you like to do.

2) Check websites of your favorite museums. Many times they’ll offer free admission on certain days of the week. Usually it’s midweek, or a day that’s typically slow for them. If you can manage a day off, it’s worth it. There’s less traffic and smaller crowds to deal with!

3) Many communities are now offering events like ‘Movies in the Park’ or summer festivals that offer free admission. Sometimes you can even bring your own food and picnic there.

4) Research places that offer free things for students. You’d be surprised how many places will give kids a price break if they bring their student ID!

5) Last, but not least, check out websites for free things to do in your area or a closer, major city. Type something like free things to do in fill in the city name here and see what happens.

The point is, you can have a good time without completely emptying your wallet. If a membership isn’t in the cards for you right now, that’s ok. But you don’t have to stay at home everyday wondering what to do to keep your kids from murdering each other. Yes, it takes a little bit of effort, but here’s another tip: if you’re part of a social network, see what you’re friends are up to, what they’re doing, and where they’re going. You might find some good ideas and great deals.

Happy summer!

Tuesday’s Tip: Cook

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As you may have noticed, there’s a slight trend with my last couple of posts. They all have to do with food! So, I figured I’d continue the food theme and give you one more money-saving tip: COOK! I know it’s tough to work all day and then have to come home and cook, but it can be done and here are a few reasons why you should consider home cooking more often . . .

First, and foremost, it’s much less expensive than take-out or going to a restaurant for dinner. For example, at a popular restaurant (that shall not be named) I priced a fairly simple dinner. Chicken Caesar Salad for an entrée ($9.90), a non-alcoholic beverage ($2.30), and treated myself to a chocolate shake for dessert ($4). (I know the shake completely contradicts the salad, but go with me on this one. It’s hypothetical.) That’s $16.20. With tax and tip, this meal costs around $20. Just for one person! I just happened to make Chicken Caesar-ish Salad for dinner tonight, at home – with my family. I used Romaine lettuce, grape tomatoes, big croutons, baby carrots, chicken breast strips (sautéed in olive oil, with basil, marjoram, and a squeeze of lime!), a few sprinkles of Parmesan, and drizzled Ranch dressing on it. For dessert, we had pudding parfait. Even with overestimating the cost of the ingredients, the total came to about $10 . . . for the entire family. Divide by 5. That’s $2 per person. So . . . $20 . . . or $2? Hmmm . . .

Second, cooking at home gives you much more control over what goes into the meal. If you’re aiming for healthier eating, the experts say you should eat lots of fruits and vegetables. Thankfully, those are fairly inexpensive to buy. (It’s the meat, pork, or poultry that jacks up the cost of any meal – especially when you’re dining out.) Not everything is in season all year, obviously, but you can change up your menu throughout the year by getting the items that are in season and on sale. You can also add or omit flavorings, spices, etc. based on your own tastes or needs instead of hoping the cook behind the counter doesn’t dump half a cup of salt on your fries. As chef, you have total control.

Finally, making meals that can be eaten as leftovers, or frozen, can help lower your food costs by spreading it out over more than one night. For example, I’ll make something like lasagna (from scratch!) and freeze half of it for another time. It makes for a quick, home-cooked fix when you’re short on time. Other great multiple night meals include homemade soups, spaghetti, pizza, Mexican, and even roasts or turkey. I knew a gal who used to cook meals for a whole week on the weekend, then freeze them. She didn’t have to worry about cooking during the week – she just grabbed something and heated it up. A real time-saver!

I know it’s much easier to hop in the car and have someone else cook for you, but if you think about the time it takes to get there, be seated, order, wait, then eat, pay, and drive back home, you could’ve cooked, eaten, cleaned up, and be on to the next activity – even if that’s lounging in your favorite chair. Who knows, by cooking at home you may discover your inner chef . . . or have fun with your family. And if you have kids, it teaches them some valuable lessons they can take with them when they’re on their own.

Tuesday’s Tip: BYOL

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Bring Your Own Lunch! It only takes a few minutes to throw a lunch together and you can make it hearty and healthy so it fills you up for the rest of your day. If you’re short on time in the morning, try making it in the evening. Hubby will sometimes make his lunch for the next day as we’re cleaning up from dinner. He packs the leftovers, then puts it in the fridge. Done.

You may also want to consider buying a “lunch system”. I’ve seen them sold as a whole system, but you can put your own together based on what you like to eat and what kind of food containers you may already have in your cabinet. (You know, the booby-trapped one where all your plastic ware falls out when you open the door.) A lunch system consists of a thermal lunchbox or tote, a small bottle for a drink, a plastic sandwich container, and one or two other plastic containers for snacks and fruit. I even send my kids to school with a lunch system and just wash it – including the plastic spoons. I bought an all-in-one salad system that has a covered bowl complete with a snap-in dressing container and a snap-on fork. Pretty nifty for $2.50.

While you may spend a little money up front by buying some of these things (unless, of course, you have these things already!), you’ll be saving money in the long run because you won’t constantly be buying paper or plastic bags that you throw away every day. You can just wash and reuse your system. And with no daily waste, you’ll be helping the environment, too! You’ll also save money by not paying for take-out one, two, or (EEK!) five days a week. Even if you buy the cheapest things on the menu, you’ll be paying at least a few bucks, and over the course of a year, you’re spending $250, $500, $750 or more! Go to a sit-down place, and you could spend twice that much! Yikes!

So, before you order from another menu, grab a calculator. Estimate how many times per week you eat out and how much you spend on lunch. Then multiply that number by, say, 48 to 50 (depending on how many weeks of vacation you get) and see what your take-out number is. Once you’re over the shock, ask yourself, “What else could I be doing with that (fill in the number here)?”