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You’re Doing it Wrong! Rethinking Your Processes

October 7, 2010 By Shane Ede Leave a Comment

Habit. It’s a dirty little 5 letter word. I read somewhere that it only takes 6 times of doing something before it becomes a habit. Habit is a close relative to addiction, although somewhat easier to change.

If you’re like me, you’re a creature of habit. You like doing things the way you’ve been doing them and don’t feel very compelled to change them. That’s the way I was before I began taking control of my finances. I was a habitual spender of my paycheck. There was no saving involved. When I started this personal finance journey, I had to break that habit and begin a new one. One that involved paying off my debt and saving money. Like any other habit, it took time to really make it into a habit.

Within that greater habit, there are other habits. The habit of checking balances regularly. The habit of balancing the bank accounts. The habit of keeping the budget.

That last one, the habit of keeping the budget, is the one I’d like to focus on here. In the beginning (anyone else hear that choir?), I used only a copy of Microsoft Money (now defunct). As I matured in my budgeting, I adapted a spreadsheet based on the budget spreadsheet that Dave Ramsey created for his Financial Peace University. And that’s where it’s been since. I have spreadsheets going back several years, in fact.

Recently, my computer became ill. I ended up having to back all of my data off the hard drive and rebuild it. Not a lot of fun, but it’s sometimes nice to start with a fresh drive and get rid of some of the flotsam that it’s accumulated. Long story short, it took over a month to get it all sorted out and rebuilt. When I had gotten everything installed and ready, it had been nearly 6 weeks since I had last checked in on my budget. The process, if you’ll indulge me, is somewhat cumbersome. First, I would manually enter in transactions from the internet banking application at my credit union. With the version of Money that I had, I was never able to get it to properly import a file, so manual entry was my only option. I would then manually enter in any outstanding checks and bill payment items. Once the info was entered into Money, I would then manually, line by line, transfer the amounts from Money into the appropriate budget categories in my spreadsheet, using a calculator as I went to calculate the totals for each category. (This was necessary because I didn’t have the individual line items in the spreadsheet, so I merely took the existing total and added whatever the line item was in Money to it.)

So, you can see, 6 weeks of undone budget work was quite a pile of work. And like any good person with lazy tendencies, I put it off. Before I knew it, there was almost 3 months worth of budget to do. That was about the time that I decided that maybe my habit needed a bit of rethinking. I began looking into new personal finance software that might integrate a little bit better.

What I decided on was You Need A Budget. I’ll have a review of that coming up in the next week or so.

Telling all of you that was just getting us to this point. The meat of the idea. You’re doing it wrong! Somewhere, something your doing is being done wrong. Maybe not wrong in the sense that it’s incorrect (none of us make financial mistakes right?), but wrong in the sense that the processes that you are using are costing you; Time or money, or both.

If there’s one thing I’ve learned through all of this, it is that you must be vigilant. You’ve got to rethink your processes periodically. It doesn’t have to be all that often; Some will go overboard and spend so much time rethinking their processes, that they’ll suffer from analysis paralysis. Instead, set up a schedule where by you set aside an hour or two to go through your processes and try and discover new ways of performing those processes that might save you money or time.

In our case, moving to a newer software that made it easy to import our transactions and had the budget part of it all built in has resulted in saving us a lot of time. What about you? What processes do you perform that you’ve never changed? Take a look at them and see if you can’t find a way to save yourself some time or money!

Image Credit: Ledger by er1danus

The Financial Toll of Special Diets

September 29, 2010 By Shane Ede 6 Comments

Special diets (unlike regular old diets like Nutrisystem, Weight Watchers, or even simpler ones like the Slow Carb Diet) are almost always a result of some sort of food intolerance or disease. Lactose intolerance requires that the afflicted person refrain from milk and dairy product that contain lactose. Of course, there are milk and dairy replacements. You can buy soy milk or almond milk, for instance, to replace the commonly used cows milk. The difference is cost.

Another special diet is the gluten free diet. Gluten is one of the building block proteins in grass grains like wheat, rye, and barley (and others). Stop for a second and think about that. Do a mental assessment of your pantry. How much of that stuff has one of those grains in it? Now, add about 20% or so, because much of it that you wouldn’t think has those grains (or their by-products) in it, does. Soy sauce? Wheat. Soup? Wheat flour for thickening. Seasoning mixes? Wheat flour. There are replacements for almost all of those things. And, again, the main difference is cost. (well, some flavor too, but that’s another topic for another day.)

It’s how much?!?

How much of a price difference are we talking? Around here, a gallon of 1% fat cows milk costs about $3.50. On Amazon, right now, you can buy an 18 pack of 8.25 ounce Silk Soy Milks for $20. Let’s compare ounce for ounce. The cows milk costs about $0.028 per ounce. ($3.50/128 ounces) The soy milk? $0.135 per ounce. ($20/148.5 ounces) That’s a difference of over $0.10 an ounce. There’s 128 ounces in a gallon. How many gallons of milk do you and your family use in a given week or month? If you want to talk about gluten replacements, the average price for a loaf of gluten free bread is about $6. I bought wheat bread at the store the other day for $1.29! Pasta is just as bad. A package of gluten free spaghetti is usually about $3-5. The wheat stuff can be found, on sale, for about $0.25-$1.00 for an equivalent size package.

Budget Breaker

It doesn’t take an accountant to add that up and figure out how much of a difference in your finances a special diet can make. Or, how much of a skewing factor it plays in a budget. Suddenly, your budget for food has to be quite a bit higher than it used to be. And, of course, the financial toll is that it sucks up funds that could easily be used for something else should the diet not be necessary.

Planning for the Extra Cost

If you have to eat a special diet, you probably know the added cost that it adds to your budget. But, what about someone just venturing into a special diet? How do you budget for the extra cost? You can either do your research and get a really good idea of what it will cost, or you can just leave yourself a very nice cushion until you know for sure. Researching is probably the more likely choice, I would think. Take a look on Amazon and see what some of the replacement items will cost. Compare to what you normally buy. That should give you a rough guess as to how much your costs will increase for certain items. Using your normal expenditure as a starting point, you can then make an educated guess as to how much you should budget for in the coming months as you begin your special diet.

Eat Fresh

Another way to offset some of the cost is to eat more fresh food. Adding more fruit and vegetables into your diet won’t increase your cost any more than the new special diet food and will likely make you healthier for it.

Photo Credit: wheat by sky_mitch

When Being Green Is Frugal

September 27, 2010 By Maria Rainier 4 Comments

The green industry is great for the planet, but it’s still an industry, and some argue an elitist one. Switching to hybrids and shopping solely from Whole Foods are neither frugal nor often green options (if you’ve read The Omnivore’s Dilemma by Michael Pollan, you’ll know that Big Organic is a lie).

Concentrating wholly on frugality, however, can also be damaging both for our bodies and the planet. Yes, the dollar menu is cheap, but it’s a first-class ticket to heart disease and perpetuates the evils of urban farming. For those of us looking for a happy medium, read on.

Support local farmers at your farmer’s market.
Meat can be more expensive here, but most family farmers have healthier, happier animals than those in CAFOs (Concentrated Animal Feeding Operation), which means healthier final products. Try also to buy whole chickens instead of just legs so you’ll get more for your money. Vegetables are often cheaper at these markets than at local grocery stores. You’ll save money and help boost your community’s economy.
Cook your own meals. It’s hard to do with our busy schedules, but the payoff is worth it, since you’ll be saving money on produce you buy from the farmer’s market and getting less packaging, which means less trash. Since basic supplies like flour, sugar, salt, and such are cheap and go a long way, you’ll find that you save money even by making your own pancakes in the morning rather than buying packaged ones from the store. If you don’t have time in the morning, make the batter and keep it in the fridge overnight. Even the kids can toss a batch on the frying pan by themselves, saving you cents and time.
Cultivate your own garden. Basic herbs like basil, rosemary, and thyme are low-maintenance and can be grown even on your apartment patio. If you’ve got land, though, try your hand at tomatoes, garlic, onions, green onions, carrots, and the like. It’s better to spend your time with the earth than with cable TV, anyway (as long as you wear that sunscreen). This brings us to our next point:
Get rid of your cable. Most TV shows are online these days, anyway, and one HD cable can hook your laptop up to your TV. Seeing as a monthly cable bill can cost anywhere from $30 to $70, you’ll make up for the cable in two to four months, tops.
Stop going to see movies and renting them at Blockbuster. There are plenty of movies on Netflix you can get for just over the price of one movie ticket a month. You’ll save on gas money, too.
Learn to sew and DIY. Ripped your pants? No need to go out and buy a new pair. If you deem it irreparable, at least go to a thrift store first so as to limit waste.
Go easy on the spray cleaners. Most of the things in spray cleaners are horrible for the water system and the environment in general, not to mention your own lungs. Varying mixtures of vinegar, baking soda, lemon juice, and essential oils do the trick in most cases and will cost you less.
Use towels, not paper towels. Americans have become obsessed with disposables. Everything is disposable now. Are we too good to use the same thing twice? Throw a dish rag into the washer and use it again, and when it gets old, use it as a cleaning rag. We’ve spoiled ourselves enough—isn’t that why we’re in a recession, anyway?

Photo Credit: http://www.sxc.hu/photo/1077158