In the area where I live I am lucky to have many small locally owned stores.  It is nice having an alternative to the super centers of the world and I find there are many great benefits to being a patron at a smaller store.  First, if you are a repeat customer you might be able to build a relationship with the owner.  It is nice being able to go in and not only shop but have a great conversation.  Second, the owner might be willing to share upcoming deals on products or let you know when new products will be coming in.  Finally, many times you are able to find a unique product that you might otherwise not be able to find at your typical chain retailer. 

     Now you might be thinking, “Rachel you are always talking about making the most of your money and here you are telling me to go to a local store where prices generally are higher.  What gives?”  Well, for myself this is another exception to the rule.  I am not saying shop at your local stores all the time.  Many times you will find their prices are higher and there for it isn’t logical, but you will find on occasion it is actually worth the few extra dollars you might pay.  I tend to have better shopping experiences when I visit my local small town stores then the chain retailers. 

     For example, yesterday my mom and I went to a neighboring town to a local children’s store that I just love.  They have the most unique toys and some great children’s clothing.  I not only was able to find some great toys for my kids for Christmas, but I didn’t have to worry about a crowd.  In fact for a while my mom and I were the only ones in the shop.  Then to top it off they had more toys made in the USA.  That is a huge deal for me.  Overall, when I left the store I was just in a great mood unlike the “consumer crab” I find myself becoming after going it to an overcrowded, child screaming, cart crashing chain store.       

     The other main reason I don’t mind spending extra at a locally owned store is because I like to help out the little guy.  Think about our economy right now and how much people are hurting financially.  If we are having a hard time think about these small stores.  I would hate to see them go under when they have so much to bring to a community.  So, whenever I have the finances available I like to help them out.  In the long run I think they appreciate my money more then any super store around.  

     I think it is really hard to find a true balance when it comes to spending and saving your money.  I like to think that I know how to stretch a dollar.  However, I don’t want that to consume my life either.  Over the weekend I read an article in the St. Louis Post-Dispatch that highlighted a few families being “thrifty”.  Now, I am not saying there is anything wrong with being thrifty but just as overspending can be detrimental I believe so can over saving. 

     The first area you hear a lot about saving costs is when it comes to food.  I will admit that the cost of food seems to rise by the day, but I am still not willing to buy less nutritional food to save money.  I clip coupons and stock up when things go on sale but I will not skip on a healthy food that we love in order to save a buck.  To me having a healthy diet is worth the cost and as most people know it does tend to be that vegetables, fruits, and organic foods seem to come at a higher price.  Yes I could find cheaper alternatives such as one of the ladies in the article who cooked Barbecue Noodles which consisted of meat, diced tomatoes, two boxes of pasta, cheese, milk, and barbecue sauce.  But in all honesty I would prefer to skip an unhealthy meal like that and cook fresh salmon instead.

     I also cannot get past the whole “take a vacation in your town” idea.  I’m sorry when I want to take a vacation I want to go away.  Yes you can find neat little things to do in your town that maybe you have never done before but honestly that is not going to feel like a vacation.  For me that is more like a day trip and it doesn’t even seem comparable to a vacation.  Then the funniest part is many articles suggest you stay in a hotel if you want to feel like it is a true get away.  What!?  To me that is a bigger waste of money then saving up and going somewhere.  It is also important to remember that vacations are actually beneficial to your health.  It can be a much needed stress relief, break from work, or just break from you every day routine.  Many times vacations are made out to be a frivolous escape that isn’t necessary, but I beg to differ.  Yes maybe Disneyworld is not the most educational place to go but who cares!  Those are fun memories that children will remember for the rest of their lives.  If education is a factor trust me there are many places you can take your kids that will not only be a blast but also will teach them about the world we live in today.     

     So, as important as it is to save your family money, I really feel a balance needs to be found.  I know for some people they just love to save and that works out great for them, but I would say remember not to let it take over your life.  Make a big purchase every once in a while, take a trip you normally wouldn’t, or spend money on an all organic meal.  Saving for the future is an important part of life but don’t forget to cut yourself a little slack and have fun in the present when it’s possible.          

     So the other day I was at Target and I bought my first Christmas present.  Yes you read that right.  As crazy as it sounds I start shopping for Christmas very early.  In fact if I could get away with it the day after Christmas I would start shopping for the following year.  My husband thinks I am mildly crazy when it comes to Christmas, but all I know is I in no way, shape, or form want to have debt after the holidays.  So, in order to avoid post holiday blues I start shopping early to spread out the cost. 

     Now some of you might be thinking why don’t you just save the money though out the year with your budget and buy gifts closer to the holiday?  Well, I do have a subaccount for gifts, but in order to stretch my money as much as possible I like to shop early.  At the end of summer you can find some killer deals on toys which means if I buy now I will be able to get a little bit more for my kids.  I can also find some great deals on shoes and clothes to buy for my husband.  The hardest part for me is finding a place to hide everything for 6 months!

     Anyway, if you aren’t thinking about Christmas, Hanukkah, Kwanzaa, or whatever winter holiday you might celebrate you are now so start saving or shopping!  Trust me you will feel so much better giving if you know you won’t be receiving credit card bills in the mail.

     Whenever I go to make an expensive purchase I research it to death.  I know many people will say go with your gut but that just isn’t my style.  I want something that is a good price and good quality.  For those reasons alone that is why I hate car shopping.  Everybody knows when you buy a new car and drive it off the lot the value has dropped significantly.  You will never get out of your car what you put into it no matter if you buy new or used.  I feel like there is no way to get the most out of my money when I am buying a car and I think that is why I despise the idea of having to buy one.   My motto is if it can get me to from point A to point B and is reliable I am a happy camper.   

     So, the other day my husband and I were at Target and we bought this table that was too small to fit in either of our cars.  Mind you we have a Honda Accord and a Honda Civic.  Anyway, we had to call my mom to come pick up the table and take it to our house.  Granted how often do we really buy big items?  I always told myself we can always borrow a larger vehicle on the few occasions we need to haul something.  Why pay for the gas everyday when you really only need a bigger car every once in a while?  Yet, then I got to thinking that I hate always having to rely on other people.  What if nobody is available when we need them?    

     The second issue that is coming into play is the age of our cars.  My husband Civic is a 2000 and my Accord is a 1999.  Now I know that really isn’t that old but both cars have around 110,000 miles on them.  I know Honda’s can run forever but my worry is what if they both die around the same time?   I mean the questions I keep asking myself are endless.

     1.  Would we be smarter to start making payments on one car now and then by the time the other car dies we would be finished paying off the first one?  Then that would leave us only making one car payment at a time. 

     2.  Should we just keep driving our cars until they die and hope by that time we would be able to make two payments?  Despite the fact we could use a larger car now.   

     3.  Would it be smartest to just start saving money and if both cars go out we would at least have quite a bit to put down on one of them or maybe even enough to pay one of them off?  That is if we didn’t have to put money towards a major repair on one of the older cars. 

     4.  Is it really worth buying a new car over a used car?  I like the idea of used because many times you can find a decent one with very few miles and I don’t feel like I would lose as much money.  However, I like the idea of the reliability of a new car.

     5.  What car would I really want to buy?  I am not a minivan type of girl, the SUV is just to gas consuming, and I don’t really like the huge trucks that would be big enough for the family.  I think I would go with a smaller SUV but would that really give me more space?  My Accord has a pretty big trunk but with the SUV I figured we can lay seats down, take out seats, etc. to make more space. 

     Did I mention I hate car shopping! 

     I have always been a saver. My husband on the other hand has always been a spender. It has really worked out nice for us because we have finally been able to find our balance. When we were first married my husband wanted to be in charge of the finances. We said we would work on them together but he always ended up taking charge. I really didn’t mind other then the fact we were living pay check to pay check. I also hated that we never knew how much money we had to spend. Yes we got our bills paid but how much did we really have left? It was pretty much a guessing game. It finally got to a point where I said enough was enough and I took over our finances.

     Now I must say I didn’t start out knowing exactly the best way to deal with our finance either. As my husband spent all of our money when he was in charge I saved all our money. In some ways this was just as bad. We were saving some but we never had any money for the “extras”. That is when I went on a search for a new way to manage our money. When I was searching I found that there are so many different plans out there. It is no wonder people are confused as so how to save. Which way is the right way? Of course you have the big names out there like Dave Ramsey and Suzy Orman. But is their plan really the right one for you and your family?

     As I did my research I found that it is actually really simple. Doing something is better than not doing anything at all. If you are really struggling with debt just pick a plan and follow it. If you don’t really understand how to budget these plans lay it all out for you. You don’t have to take time to plan and think about how to fix your situation. You just follow the plan and generally most people can turn their financial situations around. As time goes on, and you actually become in control of your finances, you can then adjust the plan to fit your life style. The key in any plan you choose is that you actually have to follow the plan! It is two different things to actually be on a budget or to just say you are on a budget.

     In my quest I actually put a few different ideas together to come up with a budget that would fit the needs of my family. You can read more about our budgeting system in my previous post Modified Envelope System.

Recently Lifehacker polled their readers and compiled a list of the Five Best Personal Finance Tools.  If you are still searching for a budgeting option you might want to check these out and see if one might be right for you. 

     My budget once again came through for my family this weekend.  Sunday morning my husband went to run our dishwasher and it was dead.  As frustrating as it was washing my dishes by hand and deciding what new dishwasher to buy, I had no other worries.  I knew we had plenty of money in our budget to cover the cost.  It is so nice to be able to spend money on something you need without having to worry about paying off credit card bills or for that matter not having to wait to buy something because you don’t have the money. 

     It is funny because my husband and I were just discussing putting new siding on our house.  The siding we have now is the old wood kind and after a few rough winters we have had some damage that we were hoping to fix with new vinyl siding.  It is a little disappointing that now some of the money we were going to use for siding has to go towards the new dishwasher but at least I know the new dishwasher is very much needed and we have it paid off.  Also, I must say that after writing my post this weekend about using products till their full life expectancy I feel pretty good about our new purchase.  At least I know our old dishwasher lived a nice long life.

     Saving for a large purchase is not an easy task.  As I have talked about in a previous post I use the modified envelope system for all my expenses and savings.  http://www.fit-family.net/post/Modified-Envelope-System.aspx  I have a home repair subaccount that is used for just this type of situation.  Now I can’t say all the money in that account was only from our normal paychecks.  Many times I will pad these accounts when we receive a larger sum of money like our tax refund or money from side jobs.  None the less, having that money already in place saved me and my husband unnecessary stress and worry.  So, how do you and your families save for big expenses and emergencies?    

     So, today I made my first ever purchase off of Craigslist.  I bought a sit and stand stroller that I found for a really great price.  The stroller is in wonderful condition so I am happy to give it a new home where it will get plenty of use.  I honestly don’t know why it took me so long to buy something off of Craigslist because it is right up my alley.  I love the idea that things are being recycled and reused. 

     It really is amazing how we are now such a throw away society.  Things used to be built to last forever and once you bought it you owned it for life.  So, what happened?  Why do we now see things as less valuable so quickly?  I think part of the reason might be that since technology develops so quickly we are always looking for something newer and better (check out my video game post and see how many gaming systems I have had in the past few years http://www.fit-family.net/post/Video-Games-Promote-Healthy-Relationships.aspx ).  I also think part of the reason is the fact that we really have no choice.  Things are made cheaper and really just don’t last as long.  However, I think one of the biggest problems is that people are just not content with what they have.  How many people buy new appliances because the color doesn’t match the new paint in their kitchen?  Or how many people buy new cars after a few years just because they were tired of the one they had even though there was nothing wrong with it?

     I think all of use are guilty at one time or another for buying things we don’t need, not reusing items that still have life left in them, and not trying our best to recycle our products when we are done with them.  By making an effort to try and not fall into these pit falls I hope my family will be able help the environment by not producing as much trash and we will be able to save money.  My new goal is to start using Craigslist more when I need to purchase items or sell items.  I have also just started using my local Freecycle Network.  It really is the same idea as Craigslist accept for you give thing and get things for free.  If you no longer need something you give it away, but if you are looking for something you might just get it for free.  It is a really excellent idea and I wish I would have found out about it sooner.  Just remember one mans junk is another mans treasure.

http://www.freecycle.org/

http://www.craigslist.org/about/sites.html

     Well, in my quest to become financially fit I have caved and bought into ones of those bundle packages against my better judgment.  I have always been somewhat against bundle packages because I hate having all my eggs in one basket.  Unfortunately, I felt I was really left with no choice.  So, I am trying to stay focused on the fact that this package "should" save me money in the long. 

     What is so aggravating is the lack of options when it comes to your cable, internet, and telephone providers.  Where I live the only two options are AT&T and Charter Communications.  For two years we have been using Charter for our internet and cable and AT&T for our home phone.  This set up worked fine except for the fact that every 6 months we had to call Charter and get a new "package" deal in order to keep our bill low.  Well, now that they have added their new phone service the only good deals they have include adding their phone service to your package.  Now of course I am sure I could complain, talk to a manager, get a better deal, etc.  But I really don't want to take 2 hours every six months just to keep my bill low!  It is ridiculous that I can't just have their service and not worry about wasting my time calling them to keep my bill at what I consider to be a decent price. 

     So as you can imagine I really wanted to get away from Charter.  I was going to get DLS, the dish, and keep my phone with AT&T.  AT&T has always had much better customer service then Charter and we have never had a problem with our phone.  My husband called AT&T to go ahead and get it all set up and come to find out DSL is no longer available in our area.  I was shocked because a few months ago I called to get all the information from AT&T about what they had to offer and at that time DSL was available to us.  So, my husband asked the lady why it was no longer available and she said they only have so many lines going to a certain area and they were all used up.  So, now we were stuck.  We could keep doing what we were doing but Charter was going to charge us more each month to keep our internet and cable.  Getting a bundle with AT&T was no longer an option since we couldn't get DSL.  So like I said, against my better judgment, we went ahead and got the bundle package with Charter.  I just couldn’t bring myself to pay more money to Charter for the same service we were already getting for less. 

     The Charter guy came out today to get it all set up and so far the phone is working fine.  The only problem is the fact that Charter said we would have a back up battery which would be used during power outages included with our new phone service but when the guy was here this morning he didn't give us the battery.  That means we will once again be on the phone with Charter.  Let’s hope I save enough money that I wouldn't regret my decision. 

                When I was searching for a budgeting system for my family I realized there are so many different options out there.  It seems like everybody has their own idea of the perfect way to balance your budget.  It was hard to decide which one would work best for my family’s needs, but I finally settled on a modified envelope system.

                I am sure many of you have the general idea of how an envelope type of budget works, but for those of you not familiar with it I will give you a quick rundown.  The idea of an envelope system is basically you have an envelope for each of your financial categories. (Example: savings, electric, phone, food, gas, recreation)  Each time you get paid you put a certain amount into the individual envelopes.  The trick is once the money in that envelope is gone; you can’t spend any more in that category until you get paid again.  You cannot borrow from another account or charge extra expenses.  This system really trains you to not overspend. 

                When I actually went to put our envelope system into play I decided to modify it some.  I did not want to physically have a ton of envelopes lying around the house.  My grandmother used the envelope system with physical envelopes until their house got robbed a few years back.  My grandparents didn’t even realize they had been robbed at first because their house was still in great order.  It wasn’t until they went to the envelopes and realized they were all gone that something was wrong.  The robber didn’t even have to worry about taking anything else because he got a load of cash out of the envelopes.  After hearing that story I realized having a lot of cash lying around was not going to be the right option.  However, I loved the idea of having individual categories. 

                So, I actually ended up taking a great idea from the book, “America’s Cheapest Family” http://www.homeeconomiser.com/   What I did was take a three ring binder and use tabs to divide it into my categories or what I call my subaccounts.  Now I should throw in here that I have a subaccount for everything.  Not just main bills but little things like haircuts, clothing, vacation, or the Christmas fund.  Anything you will be buying you will want to make a subaccount for.  You will also find subaccounts will change over time and there is nothing wrong with that.  Your budget will work better if you have some wiggle room to change things around.  By using the binder I actually leave my money in the checking account and just use the binder like a registry.  But instead of deducting from the account as a whole I deduct from the subaccounts.  If I add up all my subaccounts it should be equal to the amount in my checking account.     

                Next you take your income and divide it into your subcategories.  Now this takes some time getting used to.  Like in my case my husband gets paid twice a month.  So, what I have to do is take our bills and divide them in half and then take that amount from each check.  For example let’s say our cell phone is $75 a month.  I would take $37.50 from each check and once I have the full amount I pay the bill off.  Now you might be wondering what you do for a bill like electric that is an adjustable account and changes from month to month.  In a case like this, you take the average from the previous 6 to 12 months and use that amount as your base.  So, let’s say your average for 6 months is $150 a month.  You will put $75 from each check into your electric subaccount.  You will pay your bill and then what is left over stays in that account!  That is the important thing to remember.  You have to keep yourself from using that money elsewhere.  It would be easy to say well we have extra here let’s just use it for something else.  But the problem you will run into later down the line is that you won’t have enough money in that account if you bill is more than $150.  So, if you have extra you keep it in the account to save for later months.  If you don’t want to have to worry about adjustable accounts, keep in mind that many places have a budget billing plan where they will basically do the work for you.  They will average your bills and then you will just pay a set amount each month and not have to worry about carrying money over.  As for all other spending, I just keep all of our receipts and deduct the amounts from the correct subaccounts. 

                I personally like having the binder and something tangible to keep track of my finances.  However, I found a really cool program called PearBudget that is essentially the envelope system online.   https://www.pearbudget.com/wizard  I think for those of you who would like to implement this system but don’t want to set up a binder, PearBudget might be the perfect option for you. 

Now I know some of you might be thinking it sounds like a lot of work.  In all honesty to get a budget set up is going to take a little bit of work on your part.  Any budget is going to be work at first because it is something out of your comfort zone.  But just remember over time being on a budget will actually make you feel more free then having no budget.  Knowing exactly how much money you can spend on items will give you confidence in buying and also make spending a stress free fun experience!