Finance Isn't Just for the Fellas

Photo credit: Epsos

My class has been going over exponential growth and decay recently.  I had them read some Mr. Money Mustache, analyze the real cost of a car with a 60 month loan after researching different local bank rates, depreciation of vehicles, saving early vs. saving late for retirement, mutual funds vs. savings accounts,credit card debt, Check into Cash (there eyeballs fall out of their head when they calculate a 391% APR), etc.  During this unit I have talked with several adults in the building about how excited I am about this unit.  I had several people act surprised that I, a woman, would find any of that guy stuff interesting.  Seriously?!  Is it 1950?  Do I need to have an allowance for shoes?

Needless to say I informed them that I enjoyed working with finance and that it is what I like to spend some of my extra time doing.  I actually enjoy finance stuff more than my husband.  More surprise.

There are many women that work finance and it just saddens me when other people at school act like I am super strange mainly because I would hate to have the young women these people are around think that they don't need to learn finance.  The woman in Proverbs 31 clearly understood some finance as it showed that she had a business.  I guess I just worry about the young girls in my school getting the idea that they are supposed to be the stereotypical spenders that they see in movies/tv and that they don't need to think about money.

Many of those girls faces that I stare at each day will be single moms, on their own, within a decade if they follow current norms.  They won't have a man to be in charge of the family spending.  They are precisely who needs to learn these ideas the most.  I just hope that none of my students come back and say that this (basic finance) is what they should have learned because I am teaching it right now even if it doesn't seem to be sticking.  I am forced to teach conic sections and imaginary numbers, but this unit, exponential growth, is a unit I get to teach.  It is my baby.  Each year I tweak it and add to it and maybe steal a day or two from other units to turn this unit, this unit that I consider to be absolutely crucial, to bloom as nicely as the crocuses are this spring.  I do everything possible to get these young women and men to start thinking of the future, how their habits now will effect it.  They can dream big if they start now.  They don't have to be part of the herd.  Think differently and you might get a different result.

Every time I teach this unit I normally have a few of my male students stay after class asking more questions and wanting more information about how they can start investing now.  I have yet to have a female student do this.  So I wait..... Someday.  Someday.

Why My Students Will Be Reviewing Basic Multiplication Tomorrow

Tonight as we were leaving I remembered to pick up the mail.  While my husband was driving I scanned through it all junk, junk, more junk.  Then, I saw the a flyer for a furniture/electronics rental store.  This, of course, was junk, but I was intrigued.  We are currently working on an exponential growth unit and this might lead to some interesting discussions.

Here is a beautiful example of what I found in the flyer, an LG 60" Plasma TV:

It was on sale for $129.99 a month for 24 easy payments!  What a steal!  Gasp, laugh, gasp, laugh, okay I'm on the floor dying laughing now.

Tomorrow I will have my students do basic multiplication.  How much does this TV really cost?  Drum roll please........... $3119.76!  Now I'm not into TV's, however I happen to know some about their pricing because I'm good friends with someone that loves them.  I know the type of TV's that are over $3000, and this my dear friends, would be to those TV's, like a record player to an iPod.

I will have the students use their tablets/phones to search for similar items just in case they are not as knowledgeable about them.  They will find that a reconditioned one of these is $575 or a new model is a little over $800.  They will be surprised (that is my favorite part).

Basic math.  If only people would use it.

I will then have them do a bit of basic division to figure out how many months the owner could have "paid themselves" to save for one of those TV's versus the "I must have it now" mentality.  I might even put up a video like this to drive home how ridiculous the "I must have it now" thing is, although I don't think I could listen to it three periods in a row.

"But godliness with contentment is great gain" is what I'll want to say.  This is public school though, so it will be disguised a bit.

In case the state standard police are out I might have the students figure out the APR for this TV loan, since that is actually our state standard (basic multiplication is somewhere back in elementary, so long ago that people forget to use on real life stuff like this).  Somehow I think doing basic multiplication though will hit home more than APR.

Gosh I love my job:).

Frugal Newlyweds Financial Guide Part 4: Financial Checkups

If you are new to this series, welcome!  This series provides engaged and newlywed couples a financial guide to the road bumps that happen when you get married.  Here's a list of what you have missed.

Part 1: Gave information on learning about your own and your spouse's financial family tree.

Part 2: Use this spreadsheet or create your own to help you sort through each other's financial accounts.  Determine which accounts to save, which to close, look at changing and adding names and beneficiaries.  This is essentially the nuts and bolts of combining your finances.

Part 3:  Plan your future.  Look over your finances and determine your goals.  I gave a list of goals from most important to least important that you can use.

Today we finish with Part 4: Financial Check ups.  Just like it is important to regularly go see your dentist even if you brush your teeth every day, it is just as important to have regular financial check ups no matter how well you think you control your spending.  My husband and I do brief checks on our finances each week and a slightly more in depth look each month and then normally around New Years we reflect over the year and determine our new goals.  All in all it doesn't take that much time and by doing this we have been able to save about 50% of our income, while giving and living a great life.  Remember, I'm just a teacher and he works construction, so it can be done.

Weekly Financial Check Up Basics:

Open up your Mint.com account.  It should have all of your accounts linked to it.  If it doesn't make sure to add them.  If you don't like Mint then you should have some other program like Quicken or use a spreadsheet system.  I have found that Mint has worked great for me for over six years, so I would recommend it to anyone.

Scan through all of your purchases for the week.  Make sure they have been categorized correctly.  Look at the trends section to see how your overall spending is looking for the month.  If you spent a lot this week, you might want to tone it back some.  Determine what areas you might cut back on.

That is all you really need to do each week.  If you do this step, it will really simplify to the other check ups.  I have to admit that sometimes we have gotten really busy and didn't check the categories in mint for a while.  We ended up with a bunch of uncategorized transactions and we couldn't remember what we had bought (Wal-Mart can mean so many different categories for us).  Make sure to stay on top of this!

Monthly Financial Check Up Basics:

This needs to completed with your spouse.  As with any conversation that is important, make sure you have both eaten and are relatively well rested.  It is amazing how much better it goes if you do those two things.

Open up Mint.com and get our your goal sheet.  If you had debt, look at whether you are reaching your monthly goals toward paying it off.  Celebrate if you actually were able to pay off an account entirely.  I have vivid memories of when my parents paid off their mortgage.  It was a big thing in our house and made a huge impression on me of what a positive feeling you get when you pay something off.

Check out your emergency fund.  Did you need to use it this month?  If so, you might want to plan on putting future savings towards building it back up.

If you don't have any debt and your emergency fund is in good shape, then look at how you are progressing towards your goals (future home, car, retirement).  In Mint you can create goals and it shows you graphs of how you are doing.  We currently have our early retirement goal in mint and it is fun to see how we are doing on the thermometer graph.  As a math person, I can't get enough of graphs.

Finally, reflect on your purchases and your happiness.  Were there any purchases that you made that were unnecessary and didn't really bring you much happiness?  Companies spend billions of dollars to convince you that you are unhappy and that you will only be happy when you have their product.  Be smart.  Analyze. Are you really happier?  The more often you do this happiness inventory to easier it will be for you to make smart purchases.  Be careful before dissing a purchase that your significant other made before they analyze the happiness level it gave them.  Never forget that your marriage should be priceless, so before getting into a discussion over something they bought determine if it is really worth it.

Yearly Financial Check Up Basics:

To be honest your yearly financial check up should just be a rerun of Part 3: Financial Goals.  It is so important to make goals together, because either you are working together toward the same goal or else you are slowly splitting up.  Make sure you can come up with things to work together towards.  It will bring you so much closer and make your marriage much more fulfilling.

What do you do if you don't have the same goals?  First, you should really pray about it if you have any faith at all.  I am a very strong willed person so I will be convinced of one thing and my husband might quietly be pushing for something different.  However, when I slow down, calm my brain and really think about it, many times I am surprised that I actually agree with him.  If it is something that is extremely far away in the future, put of the debate for a while.  Things might happen and your argument wouldn't even be needed.  A good example of this is a couple to argued about where she would have a baby when they would have kids (he wanted hospital and she wanted home or a birth center), but it turned out they weren't able to have kids at all and ended up adopting.

Make sure to reflect on how last year's goals went.  Maybe you had a certain savings goal and you didn't reach it.  This is okay as long as you reflect on what happened that year to prevent it (maybe a health issue, etc.).  If you are a compulsive shopper, find out what your trigger is for that behavior.  Once you have identified the trigger (maybe driving by a certain store), avoid that trigger like the plague.  What happens is when you go by that trigger your body pretty much goes into zombie habit mode and wants to finish the script that you have been doing every time that you go by that trigger.  A good example of this would be a habit of buying coffee every morning (I drive McD's and it is always packed, so someone must have this habit).  You need to start making the coffee yourself and maybe plan a different way to drive that avoids going right by your typical coffee place.  

If you reached your goals you really need to celebrate.  My husband and I saved for four years before we bought a house.  At the beginning saving was really new and exciting as we kept track of it in mint and I created a graph in excel.  In the middle though it started to lose that sparkle and we really had to create incentives to make it fun.  I promise it will be worth it in the end.

Summary:  

If you follow all four parts of the newlywed financial guide you should really have a rock solid financial marriage.  However a word of caution: Make sure money is not the only focus in your marriage.  Money is just a tool.  You can just use it for yourself or I believe you can make the better choice which is sharing it.  Find charities that you believe and donate not only your money, but your time as well.  You will get much more out of giving than just hoarding.  Good luck and let me know if you have any other ideas or tools that you would want added to improve this series!

Frugal Newlyweds Financial Guide Part 3: Mutual Goals

Source: eems1986.tumblr.com via Math on Pinterest

Today we are going to continue down the path to starting a financially healthy relationship.  In Part 1 you were to meet up and learn about your fiance or spouse's financial genealogy.  Your childhood experiences with financial matters will come out in your relationship and it is good to learn and understand that your backgrounds may be different, but that is ok.

In Part 2 you were to meet up and work on combining your finances.  This requires a level of vulnerability that can bring you closer. You learned the nuts and bolts of combing through each of your different accounts and what you can expect as you work on name change paperwork.  I included a helpful spreadsheet to make this step easier.  Hopefully you started a mint.com account and have been tracking your finances.

Today we begin part 3, setting mutual goals.  This step is a step that successful marriages come back to often.  It is not something to be checked off a list.  Today you need to set some mutual financial goals to work on together.  I cannot emphasize enough the importance of writing these goals down and putting them up someplace in your house.  As a math teacher I love graphs, so I have kept track on a combination of mint and a basic excel spreadsheet.  Here are a list of goals that (I think) you need to tackle in order of importance.

Goal #1: Eliminate debt.  Debt can be a huge boulder in your marriage.  It can rip your marriage apart faster than you realize (I'm talking Indiana Jones type of boulder action).  The worst part is that it can be a wedge to drive you apart, but instead you need to work together to kill it.  The basics for eliminating debt are as follows.  List all of your debts along with the % interest.  If you have a really high rate on one credit card and a low rate another see if you can transfer the debt over.  Start attacking full force the debt with the highest interest rate.  You want the miraculous power of compounding interest working for you not against you.  Once that debt is gone choose a new one to attack.  Another method is to work on the smallest debt first.  Dave Ramsey has a lot of good info on removing debt.  He has a CD called Dumping Debt: Breaking the Chains of Debt that delves deeply into this touchy subject.

Goal #2: Create an Emergency Fund.  Poop happens (that is my school rated version;)) and you need to be ready for it.  Cars crash, pipes leak, appliances randomly stop working, trucks break down, etc., etc., etc.  You don't want to be in a bind every time one of these things happen.  These situations are enough stress as it is for a marriage so you don't want to add financial stress on top of it.  

Talk over with your partner what you think is a comfortable cushion.  Don't be surprised if their number is a lot different than yours.  A common amount suggested is three months living expenses, however in this economy you might want a bit more if either of you are in an unstable career.  If you are the type to pull from this fund for non-emergencies put the money in an account with a bank that is far from you and only keep an atm card (not the credit card/atm combo), that way you have to drive across town to get the money.

Goal #3: Start saving for your house/car.  If your car is on its way to the parking lot in the sky, don't wait until the end to start thinking about your next car.  Start saving now specifically for your next car.  Essentially make car payments to yourself that way you don't have to get ripped off with interest.  I can't imagine not paying cash for a car.  You might even get a discount for paying in cash.  I know someone who wrote what they would pay for a car (in cash) on the back of her card and walked away.  They called her the next day.

If both of your cars are in good shape and you plan to buy a house in the future, start saving for your house.  If you are happy renting, don't worry about it.  I think there is too much of a push to buy a home most of the time.  My husband and I didn't buy a home until I was able to get a job closer to where we live.  I used to commute and it just made more sense for us to wait to buy until we were more certain of where we wanted to live.  During that time we had a lot of discussions about saving for a house and retirement- you can read about it here.

Goal #4: Save for retirement.  I really debated combining this with goal #3 because the power of compounding interest shows how important it is to start saving for retirement early.  I could write and write and write about this (my students get to hear me rant on this all of the time), but I think this chart says it best.

Source: am.newuvision.us via Math on Pinterest

I just read Smart Couples Finish Rich and although I think the title is really tacky it was one of the most refreshing finance books that I have ever read.  The author emphasized the importance of determining what your values are before figuring out how you are going to save for retirement.  He also encouraged making yearly goals that put those values in your life now.  For instance, if you value was "freedom" he might encourage that while you continue to save for retirement, that you also save for a vacation from work or start looking into jobs that will give that freedom now rather than having to wait.

I liked that take on it because sometimes the early retirement blogs kind of bring me down because they make it seem like all of the fun is only during retirement.  This book helped me see how to bring the values that I look forward to in retirement (freedom, creativity, security, giving back) into my life now.

Goal #5:  Fun stuff!  It has been said that "All work and no play makes John a dull boy."  My husband and I always go on spring break with his family.  I did not grow up going anywhere during spring break, so when we first got married this seemed like the most frivolous expense.  However, now we really look forward to it.  We have made some really good memories together as a couple and with his family during that week.  I wouldn't trade those past vacations for anything now.  They were worth every penny.

Sometimes you have to take a break from frugality and splurge, however you shouldn't do this willy nilly!  We plan ahead for this expense every year that way it doesn't add any extra stress.  Don't ever pay for a vacation like this by going in debt.  It just isn't worth it.  You could create your own vacation by enjoying some things that are closer to you home and cheaper.  We enjoy free entertainment for most of the year (free concerts, free athletic events at the school I teach at, free lake beach, library, etc.), so we decided it is ok for us to spend a bit to go with his family some place nice.  I don't suggest an expensive beach vacation unless you have reached goal #1 and #2 and have talked about and started working toward goal #3 and #4.

My husband and I plan to have kids some day and I want the ability to stay home for a while (I'm not sure whether I will, but I don't want to be forced to go back to work).  We put kids in the "fun stuff" category.  We know that they will bring with them lots of expenses, although I don't think near as much as the media likes to portray it.  However, we look forward to that time of our lives and have put them in our goal #5 category.

That's pretty much it.  Attack the debt, prepare for the unexpected, save for the big things, plan for retirement, and save for fun things now!  Next time, we will look at the importance of financial check ups.  Good luck!

New Car Rant

Source: mrmoneymustache.com via Math on Pinterest

When I open my browser I always have yahoo finance pop up, mainly so I can check my stocks.  Well today it had a treat for me.  "New Cars Increasingly Out of Reach for Most Americans" is full of fun facts.  "According to the 2013 Car Affordability Study by Interest.com, only in Washington could the typical household swing the payments[of a new average priced $30,500 vehicle] the median income there running $86,680 a year."

I have to tell you my first reaction was, "GOOD!  Maybe then so many people won't be so dumb!"  My next reaction was that I should move to Washington:).  I seriously can't imagine paying that much for any vehicle even if I was a millionaire.

Now I could give a really really good rant on this subject, however I believe someone else has done a better job than I ever will.  You can read a really good rant here at mrmoneymustache.

Note to self:  Add in car financing into my Algebra II curriculum.  I try and sneak in what I call "financial common sense standards" in with all of the crusty state required standards and hide it under the guise of "math applications."

Valentine's Day Soapbox

My poor students.  They didn't know the bees nest they were getting ready to step on last week when they asked something along the lines of what my husband and I were doing for Valentine's Day and something about gifts and Valentine's Day.  I think my eye twitched a bit.  I asked them whether they really wanted to know.  They assured me that they did.

I paused, got out my imaginary soapbox, dusted it off, and stepped up on it, took a deep breath and gave them all I had.  This might be my only chance to impart on them something that they that I think is more important than the quadratic formula (which is all they think that I think about) and could change their lives.

"Valentine's Day is a holiday where people spend billions of dollars to make you unhappy."  I think all of the single kids agreed at this point and there might have even been some "Woot, woots!", but that was not where I was going. "They are not making you unhappy for reasons that you may believe now.  No, they are making you unhappy so that they can pick pocket your money.  You are most vulnerable to pickpocketers when you are unhappy, not just on dark deserted streets."

"For those of you who are single, they try to make you feel awful and unloved.  Then you might go to eharmony or some other advertised site and hook up with someone.  When you go on a date they will control your mind and you will do some things that they want you to do that I will discuss later.  Let's say instead of that, you do another thing that they want you to do.  You think you are bucking the trend, but it is all a part of their evil scheme to take your money."

"You will go and 'treat yourself' to a spa day, special food, special drinks, flowers, special jewelry, etc., etc., etc.  All things that you wouldn't have paid money for if they hadn't spent millions of dollars to make you feel like a piece of poo for being single on this one day a year.  They try to steal money from you by making you feel sad and alone, because we all know those 'treats' that you gave yourself don't do much to fill the void that they have created by bombarding you with their propaganda.  Yet they will yell at you in the ads they pay for on TV, the internet, the radio, and even the storylines in tv shows that you have an illness called singleness that can only be cured with paying money for their stuff."

"For those of you who aren't single, or are single and fell into the trap of going on a date with some stranger just so that you won't be alone, they will trap you as well.  To girls they will make you feel like the only way that a guy can show you that he loves you is with stuff.  What a load of C-R-A-P!  We ARE NOT that shallow, but some are because they have bought into the lie.  They actually think that a guy who gives them an expensive ring likes them more than the guy who gets them a ring-pop.  Who knows, maybe the guy with the diamond ring has cheated on you and is hoping the diamonds will shut you up.  Maybe he is trying to buy your way into your pants.  All of this stuff he get you will take up space, it wilts and dies, or it's full of empty calories, or it ends up leaving him in the Red and I don't mean Valentine's Day love red, I mean the Dr.Evil red ink of debt that leads you to unhappiness one monthly payment at a time.  Eventually if you stay together all of that lovely red ink of his will become yours.  Isn't that a delightful thought.  Because this red ink thing has now become a tradition you will get the love of Valentine's Day together with 12 easy payments for the rest of the year FOR THE REST OF YOUR LOVELY LIVES TOGETHER."

"For the men there are two horrible things.  First, what do you pick?  The industry will always push the most expensive because $$=love, right?  WRONG!  You must go to a fancy restaurant, give her more flowers, give her jewelry with more diamonds, go to a resort with more amenities, etc. etc. etc.  Do you know what this leaves you with?  The idea that all women are this shallow.  That we have all been brainwashed by this consumerism lifestyle.  I am hear to say, WE HAVEN'T!  What you are always looking for in a gift is a gift that will make an impact.  The jewelry salesman is definitely ready and waiting, 'Oh no, that ring is so plain.' He eyes you who he sees as Mr.Gullible and thinks to himself that Mr.Gullible is practically handing me his wallet.  'I'm sure she only wants a one-of-kind ring that has a bajillion diamonds and other shiny doodads because you know your wife is really a raccoon and only likes shiny things.  Here, let me hook you up to our transfusion machine while we use your blood to write your bill in all of the lovely Valentine's red ink monthly payments that will suck the life out of you and eventually your relationship.'"

"I don't think any of you even knows what a gift with an impact looks like."  I walk over to my computer and pull up a few stats.

"For those of you who were excited because this is math and you have some how gotten me to talk about something non-math related (or so you think), I am going to pull in some numbers.  Many people around the world do not have access to clean water."  Then I read off a bunch of stats from thewaterproject.org .  "'Worldwide, 1 out of every 5 deaths of children under 5 is due to water-related disease. 443 million school days are lost each year due to water-related disease. It is no wonder that these countries are lagging behind.    Girls under the age of 15 are twice as likely to be responsible for fetching water, which takes time out of their studies.  For every 10% increase in women's literacy, there is a boost of 0.3% in the country's whole economy."

Finally, I pulled out two of the most important numbers.  "Do you know the approximate cost to bring clean water to the world?.......10 billion dollars."

"Do you know how much we spend on Valentine's Day? Seriously, take some guesses."
"10 million!"
"No even close!"
"100 million!"
"Higher."
"$500 million!"
"Higher."
"ONE BILLION!"  yelled a kid from the back with a smirky grin.
"Higher."  He looked a bit deflated.
"Five billion?"
"Sadly, higher.  We spent 13.1 billion dollars on Valentine's Day last year alone.  Just soak that in for a second."

"We could solve the world's water problem and still have 3.1 BILLION dollars left to spend on this evil day.  Yet, the flower, jewelry, restaurant, and in general STUFF industries have taken this away.  I have called them evil all along because it is more fun to think of it that way, but in all reality they are just doing their jobs, which is to make as much money off of you as possible.  It is you who are letting them tell you where to spend your money."

"I say, this Valentine's day, think about a gift with a real impact.  An impact like a rock hitting the water that leaves ripples.  Water for a community, means less money spent on the sick, means more time in school, means more literacy for women, means more money for the economy, means less war, means less violence, and on and on.  All because you decided to draw a picture of a rose for your honey instead of spending tons of money on flowers that will wilt anyway.  Or maybe compromise- give one rose instead of 2 dozen."

"The key is though, not to just be a cheapskate and not spend anything on Valentine's Day, but to instead decide with your honey or just by yourself that you are going to give a gift that really makes a difference.  If your valentine isn't cool with that, you might want to reevaluate who you are with.  Just saying."

"So as far as my husband and I go for Valentine's Day here's what we normally do.  We go to the card section of a store and pick out 10 cards each for each other.  We read them and laugh, and then leave.  Not having spent a cent."

"We don't have a fancy dinner, because it is all marked up for the holiday anyway and there's too many people, which gives long lines, which does not give us happiness.  We'll probably go to our usual hole-in-the-wall authentic Mexican place and spend the same amount that we always do, which is not very much."

"We don't drive to the city to spend the night at a hotel, because we like our house.  We have a comfortable mattress that we like better than any hotel's."

"We don't go to the movies.  Instead we go to the library and pick out a movie and bring it home to watch on our super comfy couch.  I don't have to worry about sticky floors or sitting on popcorn, or paying for ridiculously over priced popcorn, or being cold, sitting on my coat and scarf, having the movie be too loud or too soft, sitting behind tall people (a serious concern as am 5'2 and a half), having to pee and not wanting to miss a part, being annoyed by people dinking on their cell phones, etc.  Instead we sit on our couch with a comfy blanket eating whatever yummy snacks (that are normally healthier) that are cheap and high quality because they were bought at Aldi, with a perfect view of the screen and full control of sound and pausing.  The best part is if we both get tired, we can stop the movie and go to bed.  The money saved on this holiday we donate to something, maybe thewaterproject or to bring education to the world.  Normally we like to give "sustainable" things, so that we don't promote an culture of 'toxic charity.'  That is a speech for another day.  So that is my thoughts on Valentine's Day.'"

Then, I quietly stepped off of my imaginary soapbox and put it away.

Happy Valentine's Day class!

Living Richly with Homemade Sweet and Sour Mix

Source: grouprecipes.com via Math on Pinterest

This weekend I was getting ready to enjoy a nice glass of wine and my husband was going to enjoy a lovely Long Island Iced Tea at home when, gasp, we were out of sweet and sour mix. What to do, what to do. We were tucked in and not willing to go out in the cold or to waste gas to drive to town to buy some.

I looked online and lo and behold there was a sweet and sour mix recipe. My mouth dropped open when I realized how easy it was to make and how cheap the ingredients were. It was pretty much sugar water with a bit of lime and lemon juice. Sugar is about $0.50/lb and lime and lemon juice aren't that expensive either. I couldn't believe I was paying $5 a bottle for essentially Koolaid! If you would like to see the recipe we used you can find it by clicking on the picture above. It isn't too bad, although we might tweak it a bit.

Now if you are wondering how drinking involves being frugal here are my excuses. My husband and I don't drink much and aren't too picky, I mainly enjoy a bit of wine and he likes Long Islands. If we went out and had drinks it could easily cost us $10 just to each have a drink, or at some places his drink alone could be $10. Instead, we enjoy our drinks at home. I can get a good bottle of wine at Aldi for $2.89! That means each glass of wine costs me about $0.50. My husband buys a premixed Long Island mix that just requires adding sweet and sour mix and a splash of cola. It isn't very expensive considering how many drinks he gets out of it. We used to buy the sweet and sour mix to go with it. We used to be happy with that and think we were being frugal. Now, we know better.

If you are the type to go out for drinks I challenge you to look up the ingredients for your drinks.  You may find as we did, that it is best to make them at home.  We can make the drinks exactly how we like and be happy knowing that we're spending less on an "adult beverage" than we would getting soda!

Living Richly with Old Man Winter

It's that time of year again where the white stuff comes down and makes some of us curse and some smile.  I am definitely one that hates the cold.  If I could convince all of my friends and family to move, we would definitely not live here.  For now though, I haven't had any takers (apparently there are scary bugs down south, but that wouldn't bother me), which means that since it is February I live in a mainly white world.

I am not very outdoorsy this time of year.  Normally I try and wear so many layers that I don't notice the cold and I just stay inside and huddle for warmth under a blanket.  I definitely go into hibernation.

After this weekend of incredible super bowl eating (you know they say the only day you eat more than the super bowl is Thanksgiving) I was feeling like I needed to work out.  I just wasn't up to Jillian tonight.  I looked out the window and saw our neighbors using a snow blower to clear their driveway.  I looked over at our driveway with quite a comforter's worth of snow and I got two thoughts.

First, I really should go out and get a free workout with benefits (and by benefits I mean a clean driveway).  This is actually enjoyable because for the last 4 years we lived at a house with a driveway that was a tenth of a mile long and was gravel.  We had to pay a lot for gas to plow it and the 4-wheeler that the owner's had us use to plow it was always breaking down.  Now that we have a nice short driveway it is still a novelty to go out and shovel- even to me, a non-winter person.

Second, wouldn't it be fun to run the expense numbers on a snow blower?  I'm a math teacher/investor so I'm weird that way.  Here is what I found.  Snow blowers have a wide range in prices- I would say a good median price would be around $700- amazingly some are $2000.  I did a bit more research and found that it is easy to use a half to a full gallon of gas for a driveway, so figure about $2-$4 each time it is used.  Furthermore, they need annual maintenance which would be about $45.  Although my husband does amazing things with homes, he only does a small amount of engine work, so we would probably pay this.

So tonight I used my ergonomic (fancy- and worth it) snow shovel ($15) and my own power to clear our driveway.  I had on enough layers that even I did not notice old man winter.  I listened to my favorite NPR investing show Marketplace while burning up to 400 calories/hour and getting a bit of much needed Vitamin D in this dark dark winter.  I considered it a win win win since I am healthy and smart enough to use the right tool and not over do it.  Slight side note, make sure you remember where you keep your extra key in case you get locked out of your house, not that that happened to me tonight or anything.

Although I know not everyone's back can handle it, I would push anyone that I can to take the time to enjoy the outdoors, listen to your favorite tunes/audio book/radio show/nature, burn a few calories, tone your tummy and tush, and end up with a clean driveway and sidewalk.

Fun calculation (I realize this is a lot of if's and not the most accurate, but still fun for me):  $700 initial investment at 10% (low end of my returns) with $80 annual contribution for 25 years= $15452)
Second fun calculation:  Clearing snow just 9 hours a year would burn one pound of pure fat.  

In Response to Mr.Money Mustache "Get Rich With: Universal Men's Grooming Device"

If you have not read Mr. Money Mustache's blog post "Get Rich With: Universal Men's Grooming Device" do so now.  Don't worry, I can wait.

Ok, now we are on the same page.  If you are a wife and you are like, no way Jose will I ever do that, (completely with snaps and head swishing), hold on for just a moment and let me tell you a story.

I was raised in a really frugal home.  My husband.... wasn't(at least not compared to my family).

When we got engaged we were in that stage where you are more afraid to speak up when your significant other makes a crazy suggestion, and thank goodness we were.

Let me set the stage.  We are over at my future in-laws for dinner.  We've just had a nice dinner together.  I am fairly comfortable with them, but still a bit nervous because I feel so young (I was- I hadn't even graduated college- his siblings were married/kids).  Anyway, we talked about college, about my husband's job, you know, the norm.  Anyway, all the sudden my husband rubs his thick dark head of hair and says to his mother, "Do you think you have time to cut my hair?"

Gasp.  She cuts his hair?!  What?!  My family as super cheap as they were still had all the boys in my family go to the barber to sit with the men and have their hair cut, unless it was summer and then my dad just buzzed my brothers' hair.  Cutting hair was for the sorcerer's of the barber shop.  It was not a task to be taken on by normal folk.  It required mystical powers.

I waited for my mil's response.  "Sure, just go get a chair and a towel and I'll get the trimmer and scissors."

Is this really happening?  Is my mil who I know goes to get her own hair done every 6 weeks going to cut my fiance's hair?

I proceeded to watch as they put a chair in the kitchen, my husband took off his shirt and wrapped his shoulders in a towel.  She started by cutting an inch or so off his dark locks on the top with scissors.  My jaw must have been on the floor.  She was doing this like it was the most normal thing in the world.  Then it happened.  My fiance said to his mom, "Mom, you need to teach her how to cut my hair."

No, no, no.  This can't be happening.  I was one who could barely do Barbie's hair, much less cut a grown man's hair.  Uh, oh.  My mil is turning to me, "How about you come and I'll tell you what to do and you cut his hair this time.  I've been cutting it over 20 years and it is time for you to take over."

Oh no.  I am the most klutziest gal around and you are trusting me with scissors and his beautiful hair?  Now looking back I am glad that I was too nervous to say no, otherwise we could have wasted hundreds if not a thousand dollars so far on chopping his hair.

Needless to say, I did walk over and she started by having me use scissors to cut his long curls on the top of his head.  Ssssnnnippp.  I was the slowest cutter ever, and yet, ssssnnnippp- oww!  Somehow I cut my finger and blood started pouring out.  Where are those fast acting clotting mechanisms when you need them? It felt like I bled forever.  It was bad enough that I ended up having to go get a tissue and wrap my finger so that I wouldn't bleed everywhere.  Talk about embarassing.  Trying to keep a tissue around a bleeding finger does not exactly make you feel super confident.  Then, she brought out the electric clippers.

I didn't matter that I must have been shaking from nerves by this point.  My mil just kept plowing on, not bothered a bit by my clumsy bloody mess I had made of my finger.  She just turned on the clippers, buzzzzzzzzzzzzzzz, and handed them to me.  Then, with the patience of Job and the confidence of Cleopatra, she showed me how to buzz the lower parts of his head.  That didn't go to bad.  I was feeling better after I used those.  In fact I started imagining myself on top of a riding mower chopping a field of dark brown grass (yes my imagination is weird like that).

After I climbed off of my mental lawnmower and put down the electric clippers, my mil pointed to his ears and his bangs.  Apparently we were supposed to go back to using those evil scissors and I was supposed to cut around his ears and cut his bangs straight.  At this point after my previous incident with my finger I was sure my husband was going to be the next Vincent Van Gogh.  I looked over to the scissors.  Clint Eastwood music was playing in the background.  I gave the scissors mentally my best Clint squintly eyed glare and told them (inside) that I was going to ... take... them... down.  And I did.  It ended up working out alright.  After my last clip, my mil pulled me back and had me look at him.  "We are the champions" started playing in the back of my head.  I did my touch down dance, in my mind.

During this whole traumatic event I realized I hadn't looked him in the eyes, but when I finally did I saw a man that had put his full confidence in my wobbley shakey hands and was smiling at me.  He looked great.  His hair didn't look half bad either.

Now, four and half a years later I am sitting on the couch writing this.  Looking over at him (he fell asleep during his tv show again) I think about how it is about time again to get out the clippers and the scissors and give it a trim.

Moral of the story:
If I can do it, anyone can do it.  You will save a bunch of money over the long run.  Also, he will get a consistent cut. Finally, don't judge your in-laws prematurely. You never know what secret tricks they've got up their sleeve:).

Good luck!  May the force be with you!

House or Retirement Savings?

Photo credit: Neosnaps

For those of you who are wondering whether to save for a house or put money in retirement I want to tell you our story.  At the beginning of our marriage I was lucky enough to have a very down to earth professor/grad student recommend moneysavingmom.com to me.  I can't imagine where I would be today if I had not started reading that blog.  It is not to say that it is Money Saving Mom alone who has lead my husband and I down the frugal and simplicity road.  When I found Money Saving Mom, I found a whole world of people who were financially responsible and happy.  I found people that were living like my parents, like the way I had been taught.  

I found people that wanted to pay cash for a house.  This was a new idea to me.  My husband thought I was crazy after reading and drinking their koolaid, but he went along with my saving craziness.  I don't think he really believed that we would get as far as we did.  

This is not to say that before Money Saving Mom I was a big spender, by any means.  Money Saving Mom brought up many things that my husband and I discussed.  We planned, we researched, and we did the numbers.  

After four years of marriage, my husband and I successfully saved for 100% of our house. This was my BIG GOAL.  We also saved a small amount each month towards retirement, yet that was definitely not our main focus.  We did not pay for the house in cash because it was a foreclosure and needed a lot of work.  We also wanted to keep a certain amount out as an emergency fund and to invest.  We ran a lot of numbers trying to decide how much to put down.  We looked at several things before deciding.  

First, we decided how much we wanted to keep in our checking account (earns a little over 2%) for daily expenses and our emergency fund. 

Second, we looked into what we wanted our monthly payment to be and shopped for mortgage rates.  This involved discussions about our future and children.  I do not know for sure whether I will stay home when we have children and for how long (if I do), but I do know that I want the ability to stay home at least for a while if I so choose.  If we had a low payment it would not be hard for me to stay home. I researched rates online.  We found that the bank we got our loan from did not show up in search results, so if you are in a rural area, you might want to call around.  After getting rate information, we were able to use online mortgage calculators to get some good approximates on monthly payments.  A good calculator is mortgagecalculator.org.

Third, we researched and decided how much we wanted to save for investments.  We determined the minimum that we needed to put down in order to get the monthly payment that we wanted.  We didn't want to put any more into the house than we needed to because right now our interest rate on the house was a bit under 3% and we can make much more than that in mutual funds/stocks.

We ended up putting a little over 50% down on the house and took out a 15 year loan at an extremely low rate.  We were renting from family previously and had very low rent because my husband did maintenance in return for our rate.  Because we were able to put down 50%, our monthly payments on our house are only about $15 more than our rent was previously (and that is with just a 15 year loan!).  This makes it really easy to plan how things will work if I try and stay home for a while.

We also called about insurance.  We have an insurance agent that works with a lot of different insurance companies.  Because we bundled our home and auto insurance, our payment is actually less than our renters and auto insurance was before.  That was a nice bonus.

After we bought the house it was a whirlwind of moving and renovation.  We ended up moving in without a countertop or appliances.  Later we got an amazing deal on appliances on craigslist and my husband has been hard at work putting sweat equity into the house.

As 2012 came to a close, I started feeling antsy again.  I have always been a very goal driven person.  When I don't have some larger goal in mind I just feel like I am mindlessly drifting along.  Around this time, my brother recommended a blog to me.  I am sure that he had recommended it before, but I never actually went to it.  Also, about this same time (Christmas break) I got a the book Smart Couple's Finish Rich out of the library.  It seemed to complement the blog very well.

The blog he recommended was mrmoneymustache.com.  When I started reading through the articles I found a whole new "other" world of frugal people.  Moneysavingmom is mainly a blogosphere of moms that are trying to get by, which I enjoy reading.  Mr. Money Mustache focuses on early retirement and the frugal/simple life needed in order to make it work.  Reading both of them gives me balance.

I was hooked within a few posts.  Since then I have gone back and read a good portion of his posts.  I was inspired and have new financial goals.  My husband and I have had many good talks about things I've read on his blog.  After reading the blog and the book from the library and running some numbers, we were inspired to take the jump and fully fund our Roth for last year for both of us.  When we were saving for the house I was always worried that I would wish that I hadn't put all of that money into the retirement account so we never fully funded our Roth's.  Now that we have a consistent view of our financials, we have decided that we can really dig into investing.

At this point we are looking into investing 25% of our income into investments.  This money will go to fully fund our Roth's for this year and the overflow will go into our "early retirement" account that does not have tax incentives, but will not have penalties for pulling from prior to age 59.5.  We are planning on retirement without considering teacher's retirement or social security.

In summary, my advice for people who are trying to decide whether to save for a house or for retirement is 

1.  Make a 5-10 year plan.  We knew that I wanted to be able to stay home, so that meant I wanted a lower monthly payment.  We also didn't like the idea of a 30 year loan.  If I hadn't wanted to stay home we would not have sunk as much capital into the house, but would have instead invested it.

2.  "Play" with an investment calculator such as this one on Dave Ramsey's website.  Look through your finances and try different amounts of savings and change the time line.  The general rule is that you can pull 4% off of your retirement each year and it will virtually last forever.  For example, if you have saved $1,000,000 you could pull $40,000 each year.  

3.  Discuss with your partner your plans of retirement.  Do you want to retire early?  What do you want to do in retirement?  Use this information to help guide you as you dink around with the retirement calculator.