Friday, March 5, 2021

Thursday, January 28, 2021

Frugality is Freedom!


Many people, when they think about frugality think of an austere, miserable existence. They perhaps envision huddling beneath a blanket in a cold room, eating an unheated can of beans. To me, this is not what frugality means at all. To me, frugality means........FREEDOM!

There are many ways in which frugality can mean freedom, but the way I think of it most is in time. Basically, when you work a job, you are selling your time for a fixed rate. Many people don't think of their jobs in this way, but in actuality, that is exactly what people do. Some people sell their hours for $10.00 an hour....some sell their hours for $26.00 and some sell them for $76.00. But no matter what you do for a living, you are selling your time for a fixed rate. Let’s say you need a new refrigerator and it costs $1000.00. Let’s say you make $15/hr. You may believe that that would take you 67 hours of your life; about a week and half working at your job to make that money. After that, if you are paying 16% interest over 5 years and you make $24 monthly payments you may think $24 a month isn’t bad! However, when you figure out what you will pay at the end of that 5 years, you will have paid a total of $1488.00. So, instead of it taking you 67 hours of your life to pay back this loan, not to mention just having a loan on your neck for 5 years, it will take you 99 hours of your life so…..that’s 2 and a half weeks of your life and that isn’t even taking out the income taxes you pay before you get your paycheck. It might be hard to do this at first because sometimes it takes time to turn things around a bit but if you buy a used refrigerator for $400 and you pay cash, that’s only 27 hours of your life to buy that refrigerator. You have to figure out if buying new or used is better for you but in the end, buying with cash is always better.

When you think of your life as hours selling time in order to pay for things you want or need, and turn these thoughts around, you can see that any time you save money on something, those are hours of your life you do not need to sell in order to get what you want. You can use that extra $488 dollars for anything you want. Paying down other debt with that $488 dollars is a great idea and gets you closer to financial freedom.

Once you get your head wrapped around this idea, you may find yourself wanting less. Wanting less is one way to having more freedom to do what you want. Another way is finding ways to save money or make money. If you make $10.00 an hour in your day job and you save $30.00 clipping coupons and the time it took clipping coupons was 1/2 hour, you save $25.00 or 2.5 hours of your time that you would have had to otherwise spend on your job making money for the same things.

I read a book recently that said "We can't retire, we went out to eat instead". The same concept applies with frugality and freedom. The more money you save, the less you have to work and the less you feel stressed about the money you don't have. This means freedom to perhaps work a part-time job instead of a full-time one. It could mean staying home with your kids. It could mean the freedom to start your own business. It could mean the freedom to retire early.

Frugality truly is freedom. It means options. It means empowerment and taking your life into your own hands rather than feeling like you have to do things a certain way. It all adds up and when it adds up, it means you have the power to do what you want more than you thought. Change your Think into a Thunk and Change your Life!!

Friday, January 8, 2021

Book Bites: The Millionaire Next Door

There is an interesting book called The Millionaire Next Door all about the behavior of millionaires AND you can read it for free!!

Excerpts from the book The Millionaire Next Door (free PDF book below)
Who is the prototypical American millionaire? What would he tell you
about himself?)
  • I am a fifty-seven-year-old male, married with three children. About 70 percent of us earn 80 percent or more of our household's income. (* Our profile of the typical millionaire is based on studies of millionaire households, not individuals. It is, therefore, impossible in most cases to say with certainty whether our typical millionaire is ahe or ashe. Nevertheless, because 95 percent of millionaire households are composed of married couples, and because in 70 percent of these cases the male head of the household contributes at least 80 percent of the income, we will usually refer to the typical American millionaire as "he" in this book.)
  • About one in five of us is retired. About two-thirds of us who are working are self-employed.
  • Many of the types of businesses we are in could be classified as dull-normal. We are welding contractors, auctioneers, rice farmers, owners of mobile-home parks, pest controllers, coin and stamp dealers, and paving contractors.
  • About half of our wives do not work outside the home.
  • Our household's total annual realized (taxable) income is $131,000 (median, or 50th percentile).
  • The typical (median, or 50th percentile) millionaire household has a net worth of $1.6 million.
  • On average, our total annual realized income is less than 7 percent of our wealth. In other words, we live on less than 7 percent of our wealth.
  • Most of us (97 percent) are homeowners. We live in homes currently valued at an average of $320,000.
  • Most of us have never felt at a disadvantage because we did not receive any inheritance. About 80 percent of us are first-generation affluent.
  • We live well below our means. We wear inexpensive suits and drive American-made cars.
  • Most of our wives are planners and meticulous budgeters.
  • We have a "go-to- fund." In other words, we have accumulated enough wealth to live without working for ten or more years.
  • We have more than six and one-half times the level of wealth of our nonmillionaire neighbors, but, in our neighborhood, these nonmillionaires outnumber us better than three to one. Could it be that they have chosen to trade wealth for acquiring high-status material possessions?
  • As a group, we are fairly well educated.
  • Only 17 percent of us or our spouses ever attended a private elementary or private high school.
  • As a group, we believe that education is extremely important for ourselves, our children, and our grandchildren.
  • About two-thirds of us work between forty-five and fifty-five hours per week.
  • We are fastidious investors. On average, we invest nearly 20 percent of our household realized income each year.
  • We hold nearly 20 percent of our household's wealth in transaction securities such as publicly traded stocks and mutual funds. But we rarely sell our equity investments. We hold even more in our pension plans. On average, 21 percent of our household's wealth is in our private businesses.
  • As a group, we feel that our daughters are financially handicapped in comparison to our sons.
  • I am a tightwad.

Wednesday, December 23, 2020

Post Holiday Blues

Christmas is now over and all the presents have been given, the food has been eaten. You saw the joy on the faces of your loved ones as they opened the Christmas presents you gave them and it was wonderful!

Now, however, you may be sitting looking at your credit card bill, wondering how you managed to spend that much. Again. You just couldn't let little Suzie or little Johnny down. (Or maybe Big Suzie or Big Johnny!) So, although you have great Christmas memories, you also have the bills to show it.

Last year after Christmas you said it wouldn't happen again. You were going to budget. You were going to buy on clearance throughout the year. You were going to get those debts paid down and yet, maybe time got away, maybe your mind was on other things. So, what to do now? The first thing to do is to put the whip you have on your back down. Let bygones be bygones. Shame has a way of actually keeping us from change and sometimes, ironically, the more we castigate ourselves the less gets done. 

So, shame aside and let's get to what needs to happen. Depending on your income and outgo, you may need to get a second job for a while and pay debt down. If you are worried about what others may think (and this is what keeps many people from getting their finances in order), remember that you don't need to explain anything to anybody! Or, if you feel a need to explain, just remember that 66% of Americans would struggle to pay for a $1000 emergency. There is no need to feel shame about trying to not be one of those 66%. As a matter of fact, it is a reason to give yourself a good old pat on the back! 

There are other ways to get rid of this debt or any debt. You also need a small emergency fund to start so you don't end up putting money on a credit card when you hadn't intended to. $1000 is a good step for a starter emergency fund. Here are some ideas on getting started on this:

1. If you can't pick up a second job you may just do a side gig for a while. Take the talents you have and do a little side work.

2. Sell an overpriced automobile. Many people have a lot of money in their vehicles. Just think of how freeing it would be to sell your vehicle, take the cash left and buy a vehicle outright. You can get many good running automobiles that are reliable for much less than you may be paying now. 

3. If you have enough cash laying around to refinance your home and you have an older, higher interest rate, now is a great time to refinance. Interest rates are low right now and this can make your monthly payments less. However, you would be best off to keep paying the same amount, if you can. 

4. If you have too much house, the market for selling is really good right now. It's not a great time to buy because the market is very hot. But downsizing right now may be a good option for you depending on your circumstances.

5. Another good way is just plain old tightening your belt. Many times people think they can't tighten it further but usually, that's not the case. What are some ways of tightening your belt? 

  • Putting a stop to going out to eat. If you feel you need to because of time constraints, the dollar menu at a fast food place is much more inexpensive than a regular restaurant. Also, skip the drinks and get water. Not only will it help the finances but it will help your health and waistline too. 
  • Learn to use a Crockpot. Meals in the crockpot taste wonderful and you can make many frugal meals with a crockpot. 
  • Buy chicken thighs, dried beans, potatoes. Skip the steaks, prepackaged meals, and expensive frozen dinners. Learn to cook. Not only will you be saving money, you will be healthier, which will in turn save money on doctor bills.
  • Shop once a week or even once a month. The more you go to the store, the more you will spend. 
  • Instead of buying fancy gadgets, ask yourself if there is an easier, simpler way to accomplish the same goal. Oftentimes, there is. Think of people in the great depression who used what they had. They had a saying "Use it Up, Wear it Out. Make do, or do Without." They often went without, which is something we are not used to doing in today's time. Our culture tells us we must have all these things but that is why the average family has $16,000 in credit card debt at 16% interest. At the regular 3% minimum payment rate, that's $480.00 per month. If nothing else was purchased, it would take 3.75 years to pay it off. The question is, which person do you want to be? The person who works to be different and is maybe seen sometimes as odd, drinking water at restaurants or working a second job? Or the person who is "average" in America? Personally, I don't want to be "average" when it means giving my money to the rich. Change your Think into a Thunk!
  • Stop buying clothes for a while. Ask yourself if you really need that new pair of running shoes when you have 3 pair of somewhat scruffy ones in your closet? Maybe a cleaning rag and some shoe shine will do. If you feel good about it, buy used. Some people can't stomach this, but I almost always buy used. My philosophy is "Let someone else spend $50 on a shirt, wear it once or maybe not at all and then I will pay $4.99 for it-which supports a job for someone else and helps the environment as well". Change your Think into a Thunk.
  • Find free entertainment. There are lots of things to do for free, hiking, reading etc. Pro-tip: Shopping is not s free hobby. 
  • Cut out cable or netflix or anything you are subscribed to that you don't want or need. 
  • Look into your home and auto insurance and cell phone company to see if you can these things cheaper elsewhere.
  • Eat your leftovers.
  • If you have to buy something, buy used.
Think of the things that you really need to spend money on right now. You need: 1. A roof over your head (electricity etc). 2. Food that sustains you. 3. Transportation to your job. We don't need much more than that.

Once you get some of these basic things down you can get that small emergency fund and get rid of that-on average $16,000 in credit card debt. After that, you can work on the next step. 

So, a summary on changing your Think into a Thunk: 

1. Don't beat yourself up for past mistakes.

2. Look for ways you can change things so you have more money each month-either by earning more or saving more or both.

3. Only spend money on what you really need-Food-Shelter-Transportation. 

4. Save up an emergency fund and pay down debt. 

5. If you find yourself feeling like you are comparing yourself to others you see around you who seem to be spending freely, remember that 78% of people live paycheck to paycheck and the average credit card debt is $16,000 and 16% interest. Now do you want to be average? Do you? Change your Think into a Thunk. 

Monday, December 21, 2020

I Am a Certified Financial Coach!

 I have recently become a Certified Financial Coach! I made my first video and uploaded it to YouTube. 

I am taking the blogs off of this site and making them into videos. Without this blog and my readers here, I am not sure where I would start! This has given me a great place to launch from so thank you for reading! I hope you will check out my videos. 

I also have a website here: 

Thanks for reading! 

Happy Savings!

Wednesday, June 10, 2020

Pennies, Pennies Everywhere! Use it Up, Wear it Out, Make it Do, or Do Without

There used to be an old saying "Use it up, wear it out, make it do, or do without!" that our grandparents lived by. In our age of abundance, we have sometimes gotten away from that and sometimes it's good just to have a reminder of what we already know. 

I just used the last bit of toothpaste that I could squeeze out of the tube but I knew there was more still! I took a pair of scissors and cut off the end.

I can usually get about three more teeth brushings out of a tube by doing this. 

Another way to use things up is to never throw away soap slivers. You can take the old sliver, which is usually too small to hold and press it into the new bar and by using water as cement, voila! it's easy to use up all of the soap from the sliver. 

There are pennies everywhere and when we remember to do what we can to keep them in our pockets, we can save a little every day. 

~Happy Savings!