Beating Broke

Personal Finance from the Broke Perspective

Are Good Deals Putting You in Debt?

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We all love a good deal, right?  There’s nothing better than paying $2.40 for a pair of kids’ shorts that retail for $16 or paying $0.25 for Christmas wrapping paper at an after Christmas sale when it would cost you $2 or more to buy it new.

After all, buying things on clearance is what savvy shoppers do, right?  This is an excellent strategy for being frugal with your money, right?

Well, yes. . .and no. Are those good deals putting you in debt? Ask yourself these questions and decide if you really need that good deal.

Do You Buy More Than You Need?

Good Deals DebtWhen something is on clearance 80% off, it’s tempting to buy alot. . .more than you need.  After all, why buy one sweater at $5.00 on clearance when you could buy 8 for the cost of what just one would cost retail?  Besides, you’re not paying any more than it would cost to buy a $40 sweater brand new, and you’re getting 8.  What a deal!

But do you NEED 8 sweaters?  Will some of them languish in the back of your closet, with the tags still on, until you decide to purge your closet and give them away or try to sell them at a garage sale?

Can You Afford It?

Sometimes, you need to pass up good deals.  If you can’t afford the deal and put it on credit card, are you really saving money?  By the time you figure in the interest you’ll pay, that clearance sweater may end up costing you nearly as much as it would cost retail, or, if you pay only the minimum payment on your cards, even more!

Some people have gone in debt in pursuit of good deals.  Kristine Rogers, who was featured in Money magazine, explains that she went in debt buying children’s clothes on clearance: “Gymboree held a clearance sale in which every item was priced at $7.99. ‘I grabbed clothes my daughter didn’t need.  I bought four of the same coat in different colors.’  By the end of the day, Rogers’ compulsion had cost her $800.”  Rogers developed a full blown shopping addiction in the pursuit of sales and ended up with $50,000 in credit card debt!  Sure, she got good deals, but in the end, after interest, she likely paid much more than she would have if she’d bought the items at retail.

Are You Tying Up Current Cash Flow?

Assuming you don’t go into debt to buy good deals, you may still be tying up your cash flow.  If you spend $40 on 8 sweaters that you buy in May but won’t wear until November, you’re tying up cash flow.  If you don’t wear some of those sweaters at all, you’ve wasted money despite the good deal.

Be More with Less explains, “If you buy wrapping paper on December 26th and stock up on sale items year round, you are spending more than you would if you just bought what you needed.  Don’t be fooled by the cashier that tells you, ‘you just saved $22.00’ when you just spent $300.”

What do you think?  Is it worthwhile to pursue good deals, or can it be a slippery slope to overspending and debt?

Do you buy items on clearance?  Do you always use all of the items, or do you accidentally buy too much?

Your Children Will Grow and So Will Your Income

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Is your budget tight?  Have you slashed, and slashed, and slashed expenses but still find that there is no money left at the end of the month?    Do you find that your kids are eating more and more while grocery prices are increasing?  Do you despair at the news of rising egg costs?  Do you find that your grocery dollars don’t buy as much as they used to even a year ago?

Me, too.  I’m right there with you, but I’m here to tell you, don’t lose hope.  Things will improve. Your children will grow, but so will your income.

You May Not Have Thought You Could Survive the Baby Years

After I had my third child, I was overwhelmed, to say the least.  I was sleep deprived and exhausted trying to work from home to make money to pay down our debt, while helping my 7 year old with his homework and projects and caring for two kids under two.

Children will grow, so will your income
<small>Original Image by Ray Dumas on <a href="https://flic.kr/p/5T1uD3">Flickr</a></small>

I thought I would never get a full night’s sleep again.  I couldn’t imagine a day without endless diaper changes.  I was in the thick of things.

But little by little, my kids gained independence.  First, one potty trained and then the next.  Hello diaper free days!

Then, one stopped using the stroller so I could move to a single stroller instead of a double one.  Then both grew up enough to not need the stroller.  Suddenly we could leave the house without a stroller or diaper bag.  Hello sweet freedom!

Gaining a bit of my life back was a gradual thing.  Each day now, my kids grow more and more independent and rely on me less for immediate needs.

Improving Your Finances Is a Gradual Process

I’m realizing, that even though my husband and I are in the thick of things financially, this time, too, shall pass.  Right now between braces, increased appetites, extracurricular activities, etc., we’re spending a lot of money.  Our budget is T-I-G-H-T.  But, in 13 years or so, all of our kids will be out of the house and on their own.

Not only will our life be our own, but our money will, too.  Just like I couldn’t imagine a full night’s sleep when my kids were little, I can’t imagine a month when our budget is not straining.  But I know it’s coming.

Once the kids move out, there are so many ways expenses go down.  You can move into a smaller house, if you’d like.  A minivan won’t be necessary anymore; a sedan will do just fine.  Two people eat much less than five, so groceries will be lower, too.

But it’s not just the increased expenses that will improve your bottom line.  There are the financial increases.  You and your spouse will continue to get raises.  If one parent stays home with the kids now, that parent can go back to work.  Having two incomes when you’re used to one can help you catch up financially, and quickly.

So, parents, don’t despair.  Finances will get better, especially if you remain disciplined and don’t upsize your life as your income increases and your expenses decrease.

Are you a parent of older or grown children?  If so, how have your finances changed over the years?  Are you a parent of young children?  Is your budget stretched, and stretched, and stretched?  Share your experiences!

 

How to Manage the High Cost of Back-to-School Expenses

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Do you remember the back-to-school excitement?  Your parents likely took you out shopping for new clothes and new folders, pens, pencils and other supplies.  While you couldn’t wait to get out of school in June, you were equally excited (at least temporarily) to go back in August or September.

Yet, now, many parents may dread the back-to-school season because of the financial burden.  Yahoo! recently reported that the average back-to-school price tag for a high school student is $1,402!  That includes the cost of back-to-school supplies, musical instrument rentals, sports and field trips.

If the high cost is concerning you, especially if you have more than one school-aged child, there are plenty of ways to save.

Back to School Supplies

manage back to school expensesWhen it comes to back-to-school supplies, there are several cost-cutting measures you can take.

Shop the sales.  Target, Walmart, Office Depot, they all offer back-to-school supply sales.  Cherry pick the best deals, and you won’t have to pay much for school supplies, especially when you can get notebooks for .05 a piece!

Check out the dollar store.  Your local dollar store will have school supplies at a fraction of the cost of retail.  This is a great one-stop shopping place to go if you don’t have the time to cherry pick sales.

Clothes

Buying your kids new clothes for school can really eat into your budget.  Try these strategies:

Take inventory first.  Before you buy any clothes, take inventory.  You and your child can look through her closet and see what clothes are still in good condition.  You  may find you have very little to buy.

Stagger your purchases.  There’s no rule that says you have to buy all your child’s back-to-school clothes the week before school.  Buy some jeans and long sleeve shirts before school.  Then, in October or November when the weather cools, buy some sweaters.  Stagger your purchases based on need and sales.

Buy second hand.  Another option is to buy second hand, either through a consignment store or a place like Goodwill.  You can also try joining and buying from Facebook groups selling the brands of clothes you like.  You’ll save a bundle!

Extracurricular Activities

Extracurricular activities are important for your children’s development, and in the high school years, participation also helps to round out their college application.  Yet, extracurriculars can be expensive!  The key is to find ones that your child enjoys and that you can afford.

Look for free extracurriculars.  Especially when children are younger, look for things that they can do for free.  When my son was young, choir was free, but after school gym cost money every month.  He joined choir, and then later he also joined Art Club, in part because it was free.

Choose one extracurricular.  As your kids older, choose one extracurricular activity that they excel at.  Have your child focus on that one.  Then, you only have one expense to pay versus three if he was on a sports team every season.

Have your child become a teacher.  Has your child been taking piano since she was five years old?  If she now has 10 years’ experience, she could start offering lessons to younger students to help pay for her own lessons.  There’s nothing wrong with a high school student helping to pay for her activities and interests.

Combine these strategies, and you’ll find your back-to-school expenses are much more affordable.

What are your favorite strategies for saving on back-to-school items?