Frugality — Beating Broke

You Need a New Money Mindset

February 8, 2017 By Thomas Bawdy 2 Comments

At last count, there were roughly 4.7 gazillion blogs(*give or take a few) covering money, saving, and wealth – this one included. And with great minds giving all-out efforts to helping people save up for retirement, stick to a budget, buy their first home, or find ways to save, there’s a message and a solution for everyone out there.

So, what gives? Why is it that over three-quarters of Americans are still living hand to mouth? With little or no savings to bolster their budget, they’re living in fear of what will happen when they lose work or have a sudden need for a large chunk of cash.

Why Your Money Mindset Must Change

Personal finance blogs proliferate because they can work. It doesn’t matter how far behind you are in the area of personal finance: it can be fixed and you can reach your goals with the right approach and a little guidance.

The problem is: too many people focus on the wrong things when they try and solve their money issues. The solution isn’t going to be found in cutting coupons or setting budgets aimed at whittling down debt a tiny bit at a time.

What has to happen, if you really want to improve your financial standing in the world, is you have to adopt a new mindset when it comes to money. That’s a behavioral change, and it ain’t easy. If it were, everyone would be debt-free, flush with cash, and right on track for retirement.

What a Difference the Right Money Mindset Can Make

The trick to winning at personal finance isn’t actually a trick. Rather, it’s a mind-change that starts with realizing what money is really for. I’ve known people who make almost six figures, and can’t figure out where all the money goes, and can’t pay their bills. Some of them don’t even have any kids!

On the other side of the spectrum, I have an artist friend who makes an annual salary in the low-$30s and he manages to max out his IRA contributions every year ($5,500 for 2016 but he’s 53 so he gets to put in $6,500) as well as live a debt-free, totally happy life.

What’s the difference? If you look at how my high-earning friends are spending their money, it’s pretty clear: their spending is out of control. They buy brand-new cars, for starters. Plus, they buy expensive cars- and most of them live right in NYC, where you don’t even need to own a car!

What is Money Really For?

Those are just examples- the things we buy, for the most part, are what bring us down, financially. Unfortunately, though, consumerism is built into our culture. We crave the new thing and we show status by displaying our nice things, whether it’s designer heels, a fancy car, or a home in the best neighborhood. We are what we own.

How to Adopt a New ‘Money Mindset’

Not everyone has to live that way, and in fact not everyone does. The people who figure this out early on in life are the ones who usually end up more financially secure, no matter what their salaries are.

Buying things is also a fast road to buying more things. People buy stuff and they enjoy the initial rush of pleasure they get from having something new. Then after a while they get used to the stuff and they want to experience that (temporary) happiness again. So they go out and buy more stuff.

Scientists have a name for that: “Adaptation level theory”. Recognizing this phenomenon in yourself is the first step towards developing the right money mindset. Once you master that, everything else is cake. You’ll have more money to put toward the important things in life like travel, retirement, emergency funds, living well, and even maybe someday leaving a legacy to your heirs.

Instead of buying “things” why not invest in yourself like learning more about financials, taking a course in trading, going to night college to gain a new skill to further your career.

8 Ways to Save on Halloween

September 26, 2016 By MelissaB Leave a Comment

Halloween is fun for kids of all ages, including adults who are kids at heart. However, what isn’t so fun is the hefty price tag that often comes along with the fun-filled day. In fact, a “new poll from the National Retail Federation projects that Halloween revelers will spend. . .an average of $82.93 per shopper” (USA Today) this year. That’s more frightful than the Halloween decorations that may cover your yard. Use these tips to help you save on Halloween spending this season so you can still have a fun Halloween without breaking the bank.

Halloween Decorations

8 Tips to save on halloween — Save on Halloween Spending

There are plenty of ways to get Halloween decorations for a fraction of the cost. My favorite way is to buy Halloween decorations at yard sales. (In fact, that’s how I buy all of my decorations!) Or, if you have patience and would like to buy new, you can check out the clearance sales after Halloween is over. That’s how I bought a good supply of Halloween and fall-themed towels, at more than 75% off.

Halloween Costumes

Halloween costumes bought new can cost anywhere from $25 to upwards of $100 for fancier costumes. Yikes! We have three kids, so to spend that kind of money on costumes is not practical. Instead, we employ a variety of strategies to save on costumes.

Homemade

My son went as a knight one year. We found the vest at Goodwill for $5. We pared that with black pants and a white shirt that he already had. Then he made a shield out of cardboard from a large box and covered it in tin foil and put a design on it. He actually wore that costume for two years in a row.

Bought on discount

Our girls typically like fancier costumes, so we tend to buy them immediately after Halloween is over at a steep discount. Our favorite stores to shop are Disney and Gymboree. I can find cute Gymboree Halloween costumes for less than $10 immediately after Halloween.

Use what you already have

Another idea is to use what you already have. If your son has a baseball uniform, why not go as a baseball player? If your daughter is taking ballet class, why not go as a ballerina?

Halloween Candy

If you live in a subdivision, you likely get a lot of trick-or-treaters. The price of candy can really add up, but it doesn’t have to.

Buy the candy at a warehouse store

If you’re a member of Sam’s Club or Costco, you can buy candy in bulk for less than your local grocery store chain sells it.

Buy cheaper candy

You don’t have to buy expensive candy for trick-or-treaters. Instead, buy cheaper candy like suckers, Smarties, and candies like that.

Have a limit

Set a budget for how much you want to spend on candy and limit your purchase to that amount. When you run out, turn off your outdoor light and don’t answer the door anymore.

Halloween is a fun-filled holiday. You can still be festive without spending a fortune.

What are your favorite tips for saving on Halloween décor, costumes, and treats?

To Grow Wealthy, Stay Where You Are

May 27, 2016 By MelissaB 1 Comment

When I was little, I devoured the Little House on the Prairie series. I felt bad then for Ma and Pa. I felt bad for the way they struggled financially, facing setback after setback. I felt bad that they always had to move just as soon as they were settled.

But then I read the books again as an adult. Then I read them one more time to my daughters. Now I realize, as much as Pa was a loving father, he was responsible for a lot of his family’s financial hardships.

Life in Wisconsin was good for them. But once Pa got the itch to go west, his family never had a stable environment. They never got more than a few years into getting settled and making a life for themselves before they moved again.

Does Moving Now Cause the Same Financial Difficulties?

Most people would argue that life was different then, and moving around now doesn’t cause as much financial hardship, but as someone who recently completed a 2,000 mile move, I would disagree.

My husband and I had lived in Chicago for 14 years before we made the move last July to Tucson, Arizona. We went for my husband’s work and because the move would give us a lower cost of living and a pay raise for my husband. On paper, everything looked good.

We foolishly thought we’d stay for two to four years. Now, I’m not sure we should move so soon if we want to prosper financially.

Even though my husband’s employer paid for the move, we still had many expenses like setting up the utilities and paying deposits on them, buying a few new pieces of furniture, etc.

Breaking Even and Getting Ahead Takes Years

We bought a house when we moved here, knowing that we weren’t sure how long we’d stay. We’ve had our mortgage for 15 months now, and in that time, we’ve paid down $4,300 on principal. Our home has increased just $1,100 in value during that time. That gives us a cushion of about $5,400, but I’m guessing if we were to sell our house next year (which would be two years that we’ve lived here), we’d be losing money thanks to realtor fees.

We’ve also just reached the point where we’ve started to discover ways to save money in our new city. Now I know where the cheapest places are to buy groceries, secondhand clothes, etc. Our first few months here we spent much more than we normally do on groceries because I didn’t know which stores offered the best deals.

We also have finally found decent doctors and dentists. Our first few months here, we found out my daughter need 6(!) cavities filled. We had to go to four different dentists before we found one that we liked and could trust. All of those different visits cost us a little less than $200 out of pocket, and that was before her cavities were even filled.

Of course, I’m not saying never to move. In our case, the decrease in cost of living and my husband’s raise made it possible for us to own a house, which we couldn’t afford to do during our 14 years living in Chicago. However, the whole story isn’t just on paper. When you move, there are many incidentals that add up. Moving repeatedly can cause you to struggle financially.

It’s no surprise to me that the only time in life when Pa and Ma flourished financially was after Ma put her foot down and refused to move from DeSmet, North Dakota. Without the constant moves, they could finally get established and become comfortable financially.

How often do you move? Do you agree that frequent moves are detrimental to your finances?