is debt normal?

The other day, I was having dinner with a close friend.  We got on to talking about personal finance, and how we are doing. The friend's significant other's spending habits came up.  It turns out that the SO had quite a bit of debt before and my friend had helped him get debt free.  However, as soon as the SO's children from a previous marriage came around, the debt started piling up again. 

These grown children had no problem asking  demanding large sums of  money for things they could not afford.  What is worse is that the SO felt guilty for not being around to raise them and says "yes" without thinking about the ramification of his financial decision on the current relationship, and the fact that these children will come back again and again for more money.  So the friend said "that is so American", meaning that the SO and most of America live with the idea that debt is OK.  I would tend to disagree with the friend American comment - it's not only Americans that carry debt.  However, I do see the point about carry debt in America is seen as normal. 

Is it normal?  Should it be?  To some degree sure.  It makes owning things easier.  It sure as heck feeds the banking/mortgage industry billions of dollars.  But why do we need to own things?  Does it make things more stable to own things?  Let's take home ownership.  Is it really "safer"?  In the current economy, you can be put out of you house as easily as a rental place.  That's it's not really safer.  Is it for passing down to your children?  That seems to more of a pain to them when the inheritance tax and legal issues come up.  So why do we rack up debt to own things?  Not that I don't advocate it, just wondering what drives us to do so.

Rolling over

Remember when people still counted minutes on the usage of their cellphone service.  I do because I still do that.  I don't have an unlimited plan, so I am conservative with my usage.  And also remember the rollover plan some companies have with unused minutes.  What a great idea.  It's stuff you paid for, why should you throw it away?

Some times, I like to "roll over" the money I didn't use but was budgeted for.  For example, there is $50 budget for small repairs around the house every month.  If there is nothing to use it for, it gets added to the $50 for the next month so I have $100 and so forth.  So if I need to get a new water heater the next month, I have $100 already for it, so I am only need to add $200-300 more instead of $400.  I don't keep it in a separate account.  There would be too many accounts to keep track of, if I had one for every category.  But it would be nice to look at!

Not sure if anyone else do that or I am doing silly mind trick with myself.  If I rolled over my personal spending amount every month, it would give me more motivation to "save" for something that I want to splurge on.  Let's say I have a budget of $50 spending per month. Every month, I just have to stay under budget.  After 6 months, I could potential have $100 unused money rolled over in my personal spending.  Then I could splurge one something that is the amount in my rollover, in this case it's $100.  I wouldn't have to justify to myself that I am splurging once or feel guilty that it comes out of any other pile of money.  It's money I already "spent" or budgeted for but not used.  Or think of it as prepaid installments instead of credit card balance minimums after.

spending tracking addiction

In order to reign in my spending, I have started to track my every dime with a spread sheet. I break down all amounts spent to a few categories and look at the sums of each.  Then I realized that I was spending too much on things that I didn't need.  So I made a game and aimed to reduce the personal, dinning out, clothes, and misc spending by a small amount each month.

I think I have displace my addiction.  Every time I want to by something, I think about what category it would fall under.  If it's not something that's a need (diapers for my kid, food- not junk food, etc) I would put it  back.  When I do go to the store, I can't wait until I get to break down the receipt when I get home.  I want to see how much is that category adding up to.  I look at the calendar and see what the total is at the particular part of the month.  I feel good about keeping things low through the 1st half.  The game to keep it well below the budget AND the previous month.  Of course unexpected things come up, but that's OK if it's a need (busted water heater or fridge), cause I have been good.

So now, instead of spending, I am addict to looking at my bank account and spending spreadsheets.

Spending addiction

I know spending can be an addiction.  I have experienced it myself.  I didn't realize it until recently that when I went into a store I always feel like I have to come out with something.  There are a few reason why I would go into a store:
a) someone needs something
b) someone wants something
c) I am stressed about something
d) I had nothing else to do and/or want to procrastinate on something I don't want to do so I tagged along with someone else.

While both a and b are very valid reasons to go to the store, they still present a horrible excuse to over and/or unnecessarily spend money.  Why?  Because I always feel like I need to buy something.  Even if the store did not have was I was looking for to satisfy reason a or b.  I always feel like "since I am here, I should get something" or "wow, this is on sale, I should get it", or "this would be good to have" regardless if I or someone else need it or not.  Sometimes I return the stuff I bought, some times not.  The return trip will always bring on more buying.  I also spend a ton of time just browsing, because I wanted to buy something.

This is spending addiction.  At least to me it is.   Since I had made up my mind to reduce my spending, I started thinking about when, what, how and whys of my shopping habits.  That's when I started questioning this feeling of the urge to linger in the store when it didn't have the things I was looking for.  It was a strange revelation that I was lingering in the store so I can find something to buy.  WTF?  I think it's not just stores, but online shopping too, which can secretly creep up on you since you do have to out anywhere.

Realizing this, I decide that I need to break the habit.  I don't mean taking a vow to not buy anything or cut up my cards.  I mean tracking my spending on a spread sheet, then analysis compare it every month.  Then make a game of trying to beat the last month by reducing a small amount $10-$20.  Also, I budgeted in some free spending money that rolls over every month to satisfy some splurge urges.  Next time, I'll post about my progess.

Salon service for 1/2 the price

I usually only get my hair cut 2-3 times a year.  Most of the time I get a style that I can grow out for a little while without it looking ragged.  Going to a Hair Cuttery is okay.  The price isn't very expensive, but the quality of the cut is hit or miss.  Going to a nice salon will cost me $40+.   The quality is much nicer even if it's sort of a miss.

My solution to this is to go to a beauty school where they offer discount cuts by students.  I can usually get a nice hair cut for less than $20.  The student is monitored by a professional who will look over their work once they are done.  Often times, the professional will fix anything they think is not quite there.  So that means you will get a cut that is same as the professional service you get from a salon, for a student price.

The only down side is that it take some time for the student to cut your hair.  They tend to be very timid about cutting too much or too fast.  So they take their time to make sure the cuts are right.  The shorter the hair style, the longer they take to cut your hair. So if you have a little time to spare, give the student a try.  You'll be surprised at the money you can save for a great hair cut.

green and frugal: 10 tips for home and garden

being green and being frugal can go hand in hand.  Here are 10 tips for the home:

1. Use a 2:1 baking soda and water paste to rub out crayon marks on walls
2. Revive potpourri that's lost its scent by spraying with vodka, be sure to stir to saturate every piece
3. Rub candle wax on window sill to prevent dust and mold from seeping into cracks.  be sure to match the wax to window sill color
4. Rub a dime-size dab of petro jelly over a light bulb thread before putting into outdoor fixture to prevent rust
5. Remove sticky labels on hard surfaces using 1/2 vinegar 1/2 warm water soak.
6. Dissolve driveway oil stains by pouring baking soda on and rub with a wet hard-bristle brush
7. Use plastic lids as coaster for your cans so they don't leave scratch or rust marks on surfaces.
8. Clean you disposal by grinding vinegar ice cubes
9. Clean your microwave by boiling juice of 1 lemon combined with 1 cup of water in the microwave, let sit for 5 mins, then wipe.
10. Apply car wax to your patio furniture for easy cleaning and keep from fading fast.

Most of these things can be found around the house and are safe for use around kids and pets.

an inspiration to live thankfully

Mr LLF came across this video yesterday, and suggest that I watch it.  I didn't want to take time to watch some stupid video on YouTube.  He insisted.  So I sat down begrudgingly, look at how look the video was and thought 8-minute was too long.  However, after I watched the video, I was glad Mr LLF insisted.

The video is about a young man on the Korea's Got Talent show.  His story was that he had no family, lived on the streets for 10+ years, and worked to hard to survive.  His wish is to be able to sing well.  When he started sing, you thought you were listening to some opera sing who's been training for years.  That voice was a gift.  I was humbled. This young man can be thankful to just be able sing for people, regardless of his economic/financial health because he probably has none or very little to speak of.  This young man has a dream and pursues it because he had nothing else to lose.

Everyday, we work hard to have the life that we have, so we can spend the money to live better.  But what really is our goal?  To amass wealth? To what degree?  Have I been thankful that I have a roof over my head or do I take that for granted?  I think most people take it for grant it.  I sure do.

I am not advocating that we all take a vow of poverty, or not care about finances.  I am saying we should be thankful for the things we do have before considering the things we don't have.  I think if we appreciate the thing we do have, we will want less, thus waste less time and money chasing our wants. 

are sales really sales?

I often wonder about sales at stores.  Are they really sales?  More specifically, are items on sale really marked down compared to what they should cost?  Sometimes I feel like the store mark up the normal prices just so they can mark it down again to call it a sale.

For example, pasts sauce.  When it's not on sale it's $2+ a jar for a non-premium brand.  On sale, can get as low as $1/jar for the same thing, without using coupons.  These sales are usually every other month.  If they go on "sale" so often, why would any one buy it when it's not?  There is no limit to how many you can buy and the exp is 6months+.

Another example, appliances.  They have holiday sales for these things every holiday you can think of.  And these "sales" sometimes lasts a month long.  Unless something broke and you can't wait like 3 weeks for the next sale, why would anyone buy it at "regular" price?

The only truly sale items I have ever seem is things that are about to expire or new models coming out and they want to move the old ones.  I often wonder why people will buy "full price" items.  What's the reasoning?

small sacrifices add up

I have been lazy lately and don't really want pack my lunch in the morning.  I have also wanted to get ice coffee or blended drinks every day.  Does warm weather make people lazy?  It seems to make me that way.  So I have been telling myself to stop every I wanted to buy something. 

I told myself that I will not buy anymore clothes unless I need it.  And when I meant need, it's not want.  It's I don't have anything at all to cover my body so I can be decent in a public place.  So I have been good for the last month about buying anything clothing related.  But now it's food.

I have to constantly remind myself that it's the $2-$7 purchases that add up to $200 - $300 of necessary spending.  If I spend $2 on coffee everyday when I am at work that's $45 for the month(2x22days).  Also, $7 on lunch is $154.  Which is $2340 per year. Which is That's on the cheaper end.  If I am not vigilant about the small purchases, the money will just drip away like a leaky faucet. 

Sometimes you have to treat yourself, and budgeting that in will keep you from forsaking it altogether.  Like a cheap day on a diet. So I tell myself everyday, OK we can budget for buying lunch once a week.  Coffee, nothing more than $2 a week.  $10/week is about $520/year.  That's much better than $2300+/year.  What will I do with extra $1800+? It's a nice problem to have. We'll cross that bridge when we come to it. 

Splitting the bulk.

I love the warehouse stores for bulk items like toilet paper and laundry detergent.  It's good quality.  It's lower in price when the other stores don't have sales, and you don't have to wait for coupons and sales if you are in a pinch.  They can be a time saver too.

However, I don't like to get food there so much.  It's great if you are entertaining or have a big family that will eat the food in bulk fast.  The problem in buying food in bulk is that you may not eat it fast enough before it goes bad.  If part of it goes bad and you throw it out, then you would have wasted some money.

Let's say you wanted some hummus.  It comes in a big tub.  Well, not everyone on your family will want hummus.  For a dollar less, you can get 1/4 of the hummus at the grocery store.  You want to eat hummus, but not every day for the next 2 weeks to a month.  Do buy it at the warehouse store? Or do you buy it at the grocer er? Same with salads, dip, and any other perishable.

My solution is to split it with someone.  Since my family live very close and are very close, we will split the bulk food sometimes.  If I get a tub of dip, I would give 1/3-1/2 to my mom.  This way we can have variety, not waste food and money, and keep the cost lower.  I know that this isn't a solution everyone can use, but are there friends/neighbors that are willing to split the items?