spending

Questions, Questions . . .

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Got some for me? Questions about The Money Roadmap program? About me? How about a previous post on the site? Or maybe questions about money management in general? Advice?

Just ask!

I’ll be adding another feature called “Q & Amy”. If you have a question for me, simply go to the ‘Contact’ page, fill out the quick online form and send it. Or, you can now email me at amy@themoneyroadmap.com! I’ll do my very best to answer your questions as soon, and as thoroughly, as I can. I will post the questions and answers on the website. Who knows, your question may help someone else! And don’t worry – I won’t use your name. I promise. And if you’d rather keep the question between us, just let me know. Not everyone wants their questions posted and I completely understand.

I hope to hear from you soon!

 

Please keep in mind that I will only answer questions related to the subject matter on this website. I will not entertain solicitations, spam, profanity, or otherwise inappropriate material.

TMR Tip: Get Back to School for Less

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Ah yes . . . just when summer really gets rolling, it comes to an abrupt halt. Time for school!

And back-to-school shopping.

That task alone is enough to send some of us into hiding. Or a panic. I, personally, don’t like shopping of any kind. My motto: Get in, get it, and get out! Which is why I’m always looking for shortcuts. You too? These tips might help . . .

  1. Figure out what you actually need. My kids sort all their unused supplies and check them against their new supply lists. They highlight only the things that they need. That instantly reduces how much I’m going to spend at the store. Why buy things we already have?
  2. Check out all the ads. Every retailer has deals on school supplies. Glance through the ads to find the best prices. (By the way, Gregory Karp of the Chicago Tribune says that if a store puts a limit on how many you can buy, then it’s a really good deal.)
  3. Spread it out. I usually favor the once-and-done tactic, but if I find a great deal at another time, I buy it. Not everything goes on sale the same week and some weeks I can find better deals than others. You just need to keep an eye out for them.
  4. Use coupons and/or discounts. Whether you clip coupons or subscribe to a retailer’s email program, use them to your advantage. Find the best deal, then break out the discounts.
  5. Look where you least expect to find a deal. Karp suggests looking at places that aren’t on the typical back-to-school radar. He says places like Menards can have awesome deals on supplies that end up being free after the rebate.
  6. Take advantage of your smartphone. There’s at least one app (and I’m sure a few more) that lets you scan the bar code on an item and instantly compare prices as you’re standing in the store. My hubby thinks this is really cool and has a little too much fun with it.
  7. Get it tax-free. Many retailers are offering “tax-free” days. You can load up on school supplies and save money simply by not paying sales tax. Check the papers and online ads to find out which stores participate.

Hopefully these tips will help alleviate some of the anxiety that comes with shopping for school supplies – and clothes, for that matter. Apply these same strategies when trying to dress your children for the next big step. Happy shopping!

TMR Tip: From Faded to Fabulous

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My husband and I are what you might call DIYers. We enjoy doing things ourselves. We take on projects usually for two reasons: 1) for the challenge of it – and that awesome feeling we get when we succeed and 2) to save some money. In this “disposable world” we tend to toss things in the trash when we don’t want them or, sometimes, because it’s cheaper to get a new one rather than get the old one repaired or upgraded. But sometimes I feel that it would just be a shame to throw something away, especially if it seems to have a lot of usefulness left in it.

So, when we decided to have the families over to celebrate our children’s promotion from 8th grade, we took one look at our patio set and knew we needed to make a decision: toss it (and buy a new one) or DIY it (and save some serious cash). My husband looked at me and said, “What do you think? Can we save it? What could we do with it? Or should we just buy a new set? Can we afford it?” I thought about it. And I thought about it. What I really wanted to do was buy a new one. This one was about 12 years old and the metal frames were incredibly faded from the sun. Plus, I had a lot to do anyway to get ready for the party and knew it would just be soooooo much easier if we just went out and bought a new one. But this one was still in good condition. We hadn’t abused it. It hadn’t rusted at all. I cringed inwardly and had to admit that it probably could be saved. I sighed, put my selfishness aside for a moment, and told him I could try spray painting it. He thought that was a great idea. We headed to the hardware store and picked out a color that would match the fabric.

And so it began. I tried the paint on one of the chairs. It looked great. I kept going – a little at a time until I’d finished the table, the umbrella stand, and 6 chairs. There they were in all their Spruce Green glory. I’d spent more than I wanted to on paint, but saved hundreds by not buying a new set. And the results were terrific. In fact, someone at the party asked if we’d gotten a new patio set. Go figure.

It’s something anyone can do, really. The sense of accomplishment you feel when you’re done and it looks great? Aaahhhhh. And it might just save you a bunch . . .

Here’s a picture of the before and after . . . Happy DIYing!

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TMR Tip: Does it Pay to Sign Up for Retail Rewards?

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How many times have we heard, “Do you have our rewards card?” I don’t know about you, but I’ve lost count. It seems that virtually every retailer has its own rewards program nowadays. They offer everything from percentage and dollars off to money back and store credits. There are so many – too many – and it can leave us confused and frustrated. So how do we decide which ones are worth signing up for? Here are several things to keep in mind when standing at the checkout, trying to make a split-second decision about that rewards program . . .

1) Make sure it’s FREE. If it’s not, forget it. Walk away now.

2) Find out what the rewards are. Dollars off? Percentage discount? Points? Rebate or reward checks?

3) Find out what you have to do to earn the rewards. Do you accrue the rewards with every purchase, over the course of a year, or only if you spend a certain amount? (Or all of the above?)

4) Find out how you can redeem the rewards. Are there restrictions on what you can buy? Can you combine it with sale prices or other discounts? Is there a time limit? Is it in-store? Online?

5) Find out if there are other perks associated with the program. Do you get extra opportunities to earn rewards? Do they offer cardholders/members a higher percentage off? Do you get to shop the sales earlier than the general public?

6) Consider how often you shop at that particular store. Do you rarely make an appearance or do they know you by name?

It only takes about 30 to 60 seconds to find out this information. You alone can determine whether or not to sign up for a retailer’s rewards program. I don’t recommend jumping on board for every one that you’re offered. Too many cards and you won’t be able to close your wallet or fit your key chain in your pocket. But if you can find a few that save you money and give you a little something to show their gratitude for being a loyal customer, (and a reason to go back!) then go for it. It’s your time and money. You do have control.

Tuesday’s Tip: Take a Retirement Quiz – Part 2

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In Part 1, I posed the question “Are you ready for retirement?” If you’re like me, you answered “YES!” right away. But it’s really kind of a trick question. More of a 2-part math problem to solve. First, ‘do you have enough money’? Hopefully you’ve had a chance to visit the website I mentioned to find out the answer. Second, ‘do you know how to make it last’? A much tougher question, which I’ll address today.

Let’s begin by talking about how long retirement will last. No, we can’t predict it, but we have to start somewhere, so let’s say it’ll last 30 years. Based on that, many financial planners suggest following the “4 percent rule”. According to Gail MarksJarvis, it “refers to how much you can afford to remove from your savings each year . . . and avoid the risk of running out of money”. Here’s the basic idea: you take out (use) 4% of your savings the first year, then adjust the next year based on expenses, inflation, and general cost of living. For example, if you have $500,000 saved up, you’d use $20,000 that first year, then take a look at your finances and decide how to proceed. Do you need a bit more? Could you do with less?

Be careful about taking more, though, says Gail. Taking 5-6% per year could spell disaster later on, and yet 16% of the retired people who took that original quiz said they thought they’d be safe taking 6-8%. Chances are they’d run out of money. Not good.

There are steps you can take to help ease the uncertainty of making your money last. First, don’t put all your eggs in one basket. Bill Bengen, creator of the “4 percent rule”, says a more diverse portfolio is best. Invest in stocks and bonds, for example, instead of just one or the other. (And don’t just let it sit in the bank – the return is terrible!) Second, Gail MarksJarvis says that you need to consider how much things will cost. We don’t know exact numbers now, of course, but we can make an educated guess based on current prices. Third, keep in mind the effects of a spouse’s death because that could mean getting reduced Social Security and even the loss of their pension. That will most definitely affect what you can spend. Finally, MarksJarvis suggests waiting until you’re 70 years old before starting to collect Social Security. If you’re healthy and family genes point to a long life, you’ll be better off if you wait.

Of course, in my opinion, good money management is key to making sure you set aside enough throughout your working life to live on during retirement, but also to help you make it last. And I feel it’s never too late to start. Luckily, there’s a book for that.

Tuesday’s Tip: Give Yourself Some Wiggle Room

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How many of us have begun a diet with gusto, resisting all the foods we’re not supposed to eat, vowing never to give up . . . only to chuck it to the curb when we’ve slipped a bit, indulging in 1 or 2 (or 3 or 4) no-nos and ended up feeling guilty? How many of us have embarked on a new fitness routine, promising to find time to work out 3, 4, or 5 days a week so we can shed those winter pounds and not be embarrassed to walk out on the beach or show up at the pool . . . only to quit when we didn’t reach our weight goal or missed a few workouts and wallowed in our disappointment in ourselves?

We, as humans, tend to take on enormous pressure to achieve certain goals that we’ve imposed on ourselves. We also, many times, find ourselves dining on self-loathing when we fail. It’s happened time and time again. So what’s the cure?

1) Set reasonable goals.

2) Give yourself some wiggle room.

It may be somewhat safe to assume that the majority of us have heard the first one before. If you set goals that are impossible, or can’t be reached within the time frame you’ve given yourself, then success is always going to be the proverbial ‘dangling carrot’ you can’t quite capture. While setting priorities is important, you also have to know yourself and what you’re capable of, which is why it’s sometimes better to start off small and add to it once you’ve established a routine and know you can manage it.

The second one isn’t very common. It’s kind of like forgiving yourself – we frown upon that. A lot. Our expectations are so high that when we slip up, we beat ourselves into the ground, admonishing ourselves for being careless, stupid, weak . . . you choose the destructive adjective. But it doesn’t have to be that way. And the way to do that is to establish a goal with a range. While dedication is paramount to successfully managing your money, you have to be flexible, too, and understand that Life has a funny way of messing with everything you’ve planned. That’s where wiggle room comes in.

Let’s say, for example, that you’d like to save up for some kind of home improvement, special vacation, whatever. You decide to put $300 away every month so you reach your goal. It goes well until you need to replace the hot water heater and you’re unable to set aside the money that month. You’re not happy. That puts you behind. So you may think, then, that you’ll need to double it the next month so you can catch up. Well, guess what? You can’t quite scrape together enough. You panic, thinking that now you’re even further behind. How are you ever going to reach  your goal?! Finally, after a few months of beating yourself up, you give up and say, “I just can’t do it.”

Now try this on for size. Set a range for your goal. Instead of setting a strict time frame, give yourself a few months or so as a buffer. So, rather than 12 months, set your goal at 12 to 16 months. If Life tosses you a zinger, it’s not the end of the world. You’re still within your time range. And don’t think you need to double the amount the next month. Maybe try just putting a little extra over the course of a few months to make up for it.

Setting a range works with the monthly amount, too. You’d like to set aside $300 every single month, but we all know how Life works and it may not always happen. So how about giving yourself a range of, say, $100 to $300 per month? That way, if something happens and you can’t put the full $300, you can still shoot for as little as $100. And, coupled with the time range, you can still reach your goal and enjoy whatever it is you were saving for.

Yes, it takes a little patience. Yes, it takes dedication, too. But if you build in a buffer to allow for Life’s little surprises, you can accomplish your goal and revel in the feeling of success.

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: Redefine ‘Minimum Payment’

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A few days ago, my husband and I were sitting at the kitchen table taking care of a few household things like bills, etc., when he kind of chuckled. It was more like a derisive snort, actually, so I looked up from my work and asked him what was wrong.

“Nothing,” he replied. “I just find it interesting that this bill says that if we pay only the minimum payment each month, it’ll take us 19 years to pay it off.”

I did one of those cartoonish head shakes and said, “Umm . . . what?!” It’s true.

Last December we bought all new kitchen appliances: a fridge, dishwasher, stove/oven range, and range hood. It was time. We were, literally, waiting for the day when they would just up and quit on us. So we researched brands, stores, and prices, and settled on a whole set that cost us $3589.96, which included tax, delivery, and installation. It was a good deal on some great appliances, and to top it off, we took their offer of 2 years interest-free financing.

So here’s the thing. On the bill, it says that the minimum payment is $100, and that it’s required. Okay. It also says that if the balance isn’t paid within those 2 years, “interest will be imposed from the date of purchase”. That means that 2 years of interest will then be owed. Ugh. Now, here’s what my hubby found ‘amusing’ . . . it informs us that if we pay only the minimum payment, and make no other charges on the account, we’ll pay it off in about 19 years and it will cost approximately $12,649. WHAT?!?!?! Holy cow! Seriously? We both shook our heads in disbelief. We’d pay $12,600 for something that’s only $3600??? That’s 3 1/2 times the original purchase price! How does that happen? Well, they tack on the 2 years of interest and keep adding interest every day until it’s paid off. Sneaky, huh?

Were we surprised? Absolutely. Were we scared? Not in the least. Why? Because we don’t figure our ‘minimum payment’ the same way the store does. Let me explain . . .

When we talked about buying new appliances, we estimated what the total cost would be before we even went shopping, and figured out what we could comfortably afford. Then, when we found what we wanted and sat down with the sales associate, the total came to $3589.96. We knew the terms of the promotion: we had 2 years interest-free financing. That’s 24 months. We rounded it up to $3600, then divided by 24. That came to $150 per month. That’s our minimum payment. Not $100. We know that if we pay $150 per month, we’ll pay off the $3600 within 2 years and won’t have to pay the interest. Simple.

So if you’re looking to buy something and take advantage of some kind of financing, don’t rely on what they say is the minimum payment. Figure out your true minimum payment so that you can pay it off in plenty of time and avoid fees and interest that could end up costing you way more than it’s worth. Here’s the equation: Round the total price to the nearest hundred (or thousand, depending), then divide by the number of months defined in the financing terms. This will give you the amount you’ll need to pay each month. For example, let’s say you’re thinking of buying a living room set. The total cost is $1487.32 and you’re going to finance it for 18 months. Round it up to $1500 and divide by 18. That comes to $83.33 per month. If you make monthly payments of $85, you’ll pay it off in time – without penalties or fees. Just remember to ask yourself if it’s something you can afford. If not, then I suggest you reconsider. Either don’t buy it or find something in your price range.

It’s simple math, but it could end up saving you thousands.

The Roadmap Challenge – Your Turn

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It’s been a month already. Wow. Time flies. Did you take The Roadmap Challenge during the month of April? If so, I’d like to hear from you! Who knows, you could win the free consultation with me . . .

Fill out the form and let me know how you did!

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I look forward to hearing from you!

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!