Category Archives: Finances

How to Save $100 a Year

My husband was starting to look a little too cute this weekend, so it was time for a haircut. It costs about $10 for Eric to get his hair cut at one of the discount salons around here, so it’s not extravagantly expensive, but considering he basically gets it shaved off, why spend the money?

It curls... if we let it get much longer it would "fro"

A few years ago we spent a little over $30 on a Wahl Clippers set kind of like this one. It has served us well, especially considering it paid for itself after just 3 haircuts.

Cutting your husband’s hair is not as intimidating as it sounds. I was nervous the first time, but the kit we bought came with a great instructional DVD and the actual clippers are pretty foolproof. I use the size 4 comb all over his head first.

If it's warm, I cut his hair outside to skip cleanup.

Then I take the size 2 comb and clip the sides, fading up into the top by bending my wrist at the end of each stroke. Finally, I use the right and left ear pieces to clip around his ears, and lose the comb altogether to shave the back of his neck and clean up the sideburns.

Tah-dah!

I like the way the back of his head feels after I cut his hair. I told him I was going to write on my blog that it feels like peach fuzz, but he didn’t think that sounded manly enough. So we mutually agreed that officially, it feels like the coat of a black stallion.

And of course we need a token shot of Micah, who was watching the whole time from his premier seating area (the pack -n- play).

And yes, his binkie is purple.

Do you cut your family’s hair? Do you use clippers or do you get really creative (brave) with the scissors?

5 Comments

Filed under Finances

My Frustrations With Health Care

This is one of those topics that is really difficult for me to write about, simply because I feel so uninformed. Health insurance and all things related are way over my head. I do my best to read and understand the fine print, but the important big picture question, “what should I do?” is the one that stumps me. I just don’t know. I read about all the controversy about this health care reform bill and I wonder, “how will this affect my situation? Will it even help me? Will it be too late?”

Four years ago, I had great coverage. I worked for Walgreens and my insurance (Blue Cross Blue Shield) covered everything with a very small copay. My decision to leave that company was complicated, and because ties haven’t been cut altogether, I really shouldn’t delve into it, but as a result, I lost that incredible coverage. My next job was at a small company that could not afford to provide group insurance. (Moving to a job without group insurance was probably my first mistake.) My husband worked at the same company and was still a student. At that time, we decided to look into private insurance. We didn’t have a lot of money to spend on insurance, so we chose a plan with a large deductible through Assurant Health. The premium was still $175 or so each month with a $5,000 deductible. We tacked on maternity coverage since we planned on starting a family.

A few months later, my husband got a new job which provided group insurance. I chose not to apply for his policy at that time because we were told I would have to pay my own premium – that his employer did not cover the whole family’s premium, only his. The coverage was considerably better than our policy at Assurant, so naturally we assumed it would be too expensive.  My premium at Assurant went down to $120 a month. Midway through my pregnancy with Micah, we reconsidered (I can’t remember why – I think we planned on reorganizing our budget) and I tried to enroll with his insurance. I was denied because I was coming from a private insurance policy. Apparently I could have been added if I had applied in the first 30 days of his employment, but that was my only chance under current circumstances. I wasn’t about to get fired just to get insurance. I immediately regretted my decision to go with private insurance. Would I have been better off uninsured at that point? It’s possible but I’ll never know, I suppose. The next blow came when we added Micah to Eric’s policy and realized his paycheck stayed the same. So… we weren’t being charged extra for additional family members? Were we misinformed or did we misunderstand? I still don’t know. The third blow came when we got the bills from the hospital. Everything was charged on separate accounts, meaning the $5,000 deductible was barely met and Micah’s treatment costs were applied to a separate deductible. Some pregnancy/delivery related treatments were billed as non-maternity. Essentially, our “insurance” covered next to nothing. We racked up nearly ten grand in medical bills. I looked back on the thousands of dollars in premiums I had paid and wondered, ‘what was the point of all that?’ Nearly a year later, we still haven’t paid Micah off (though I’m hardly worried he’ll be repossessed, hehe).

Last month, my policy with Assurant was due to expire and I had the option of renewing, but at a 68% increase in premiums. Given our current financial situation, I had no choice but to not renew. Considering how much that insurance helped me, I did not mind dropping it. Especially because this past time around, I would have been better off as a self pay because I would have gotten those discounts. As it stands, I am currently uninsured. I’m not necessarily worried because I’m healthy, but we want to have more kids and can’t afford to take on any more medical bills at this point. Even if we could come up with 8-10K, if I ended up needing an emergency c-section, the bills would devastate us. I’m not sure how long it would take to recover from that. We would probably not be able to afford a third child then, and that would break my heart.

At this point, my only shot at getting insurance is through Eric either getting a new job, or his employer buying a brand new group policy with a different company (and even that is not a sure thing, I suppose). There is no way we can afford private insurance. Any plan that we can afford will end up costing us more than not having any insurance at all.

Why must affordable health insurance (that is worth anything) be tied to a job (at a larger company) and why is it so hard to get? Why are there so many exclusions? What are people like me supposed to do?

7 Comments

Filed under Family, Finances

My New Favorite Toy

There is something that I have wanted for years. I have had a digital SLR on my wish list for about eight years now, but they are pretty expensive. When Eric and I got married, we each had that dream toy we promised to buy each other. He wanted a big screen TV, and I wanted that camera. Last year, we finally bought the big screen. It probably wasn’t the best timing, but every time we got some money, he would push to buy the TV and then become incredibly disappointed when it didn’t happen. We always ended up having to spend the money on something else. It never failed, something would break and the extra money would go right out the window. He would bring up the fact that he had spent the money he had saved up for the TV on DATING me, and that guilt trip got really old really fast. Now you understand why I basically agreed to buy the TV so he would finally let it rest. He was so excited he looked like a kid in a candy store. He has thoroughly enjoyed the TV ever since.

The camera was my big screen, so to speak, except nobody was telling me no, but me. I always felt compelled to spend the extra money on other things, like sending in double payments on my student loans. The longer I put it off, though, the more I realized, I am never going to buy myself this camera. One day, I will be 50 and all of my kids will be moved out. There will always be something else. I will have never bought the camera, never pursued my dream of essentially becoming my own professional photographer and filling my photo albums with beautiful memories. I will regret it.

So when we got our tax return this past month, I told my husband, “I have to buy it now or I never will.” I have to make it priority because I want to enjoy it while Micah is still a baby, while there are still so many photos to be taken. Now is the time!

So I bought a Nikon D3000. I absolutely love it. I told Eric, “I want to make out with it.” Haha. Not really. This is one of those things I will never get tired of, just like Eric still really enjoys that TV. Yeah, I could have hoarded that money, but money is not just for paying bills (extra payments, I mean, you should always pay your bills), you have to enjoy some of it, too. It’s my last hurrah before we really crack down on the debt snowball (thanks to Dave Ramsey). From here on out, we’re going to be seriously throwing everything that comes our way towards our debt. The good news is that we can be debt free (including our mortgage) in under ten years if we stick to the plan, and that is if Eric never gets a pay raise. I’d really like to see us become debt free even sooner than that. That is my big dream: to have NO debt whatsoever.

2 Comments

Filed under Finances, Hobbies

To Save or Borrow for a Home?

Let’s say two families would each like to buy a nice house for $250,000. Both families have about $2000 that they can put towards housing each month. Family A, the Anderson’s, decide they would like to save up for their house and pay for it in cash. They rent an apartment for $750 per month and save the rest in a regular old savings account. (They are afraid of high risk investment, you see.) Family B, the Bailey’s, can’t wait that long to move into their house and everyone has told them that buying a house is an investment. They decide to take out a mortgage. They get a decent 7% interest rate on a 30-fixed-rate mortgage. The monthly payment is $1663.26 plus (the national average) property taxes of about 300 each month. So they are paying $1963.26 on their house each month and have $36.74 left over to put in their savings. They bank at the same place as the Anderson’s so they all have the same annual interest rate (compounded monthly) of .58 percent. The Anderson’s move into their nice little apartment and the Bailey’s move into their nice big house and life goes on as usual.

Fast forward 16 years assuming status quo on the property taxes, rent, income, etc. Who is doing better? Who made the better decision?

Here’s a little chart to keep things straight:

Do you think you know the answer? You might be surprised.

16 years later…
Savings:
The Anderson’s have saved up $252,796.52, quite enough to purchase the house they dreamed of with cash, with enough change to buy some new drapes and maybe a sofa. The Bailey’s have a whopping $7430.20 in savings. They decide to blow it on a used car for their teenage son. (Or not, you decide.)
(You might say, “hey dummy, that means after the Anderson’s buy their $250K house, the Bailey’s have more.” Well… let’s do some more math, shall we? Stay with me, you’ll love this.)
Housing:
Both families own a home originally valued at $250,000. To be fair, the Anderson’s house might be a little smaller because of inflation. The difference is, the Anderson’s own their home free and clear. From now on, they can pay their little $300 a month on property tax and continue to save the remaining $1700 of their budget or spend it on whatever they wish.
Meanwhile, the Bailey’s still have a loan balance of $231,728.88. Even if the Bailey’s won the lottery and were able to pay off the balance immediately, they have already shelled out 16 years worth of payments, putting their total at $608,674.80.
 
I don’t care how much their house has appreciated in value over the past 16 years, they’ll never be able to sell if for that figure! They have paid $101,483.33 in interest. In comparison, the Anderson’s have spent $144,000 in rent. (Before you say, “The Anderson’s have nothing to show for their rent,” please keep reading.)
 
Let me recap. Both families are living in a house now, since the Anderson’s have just moved in and just about depleted their savings. Both families have put $2000 a month into housing (whether into a mortgage, rent, or savings account) for the past 16 years. But one family completely owns their home, and the other still owes 93% of the original purchase price.
Another 14 years later…

Savings:
For the next 14 years, the Bailey’s will continue to shell out $1963.26 on their house each month and have $36.74 left over to put in their savings. The Anderson’s have the option of saving $1700 each month for the next 14 years at the same low interest rate.
If they both continued to save the remainder of their $2000 housing budget, the Anderson’s will have $300,473.86 (assuming they didn’t spend the $2796.52 left over from their home purchase) at the end of 30 years and the Bailey’s will have $14,486.76 (assuming they never spent their savings at all).
Housing:
At the end of 30 years, the Anderson’s and Bailey’s will both own their home free and clear. The Anderson’s will have paid $250,000 for their home (or $300,400 if you add in property taxes) and the Bailey’s will have paid $598,773.60 (or $706,773.60 with property taxes). Someone would have to rent a $750 apartment for 78 and a half years to match what the Bailey’s have spent over 30 years on their house.
Let me recap yet again…. Anderson’s: House + $300K vs. Bailey’s: House + $14K
Even if the Bailey’s were some how able to increase their monthly payment by $500 and completely pay off their mortgage during those first those 16 years while the Anderson’s were penny pinching, they still would have paid $167,033.13 in interest. Can a house appreciate that much in 16 years without any renovations or additions or changes to the home? I doubt it.
The Moral of the Story Is….
Despite common assumption, it is better to rent and save than to borrow. (Obviously, you need to save more than you spend on rent for it to be timely.)

I did not know this 2 years ago when we bought our house. Now that we are trying to move to a new town, if we are able to sell and move, rather than take out another mortgage for another house, we plan on renting and saving up for our second home. After seeing these figures, I just can’t justify doing it any other way. Maybe getting to live in a house right now is worth paying double for some people, but I’d rather put my quarter of a million dollars towards something else. If for some reason, we cannot move, I plan on doing everything I can to send in extra payments and decrease the amount of interest we pay on this house.

And by all means, internet, please, if you can give me a reason – and show me the math – of why it’s better to take out a mortgage than to live in an apartment while you save for a house, do it. 
Disclaimer: I based all my figures on average prices of rent and homes in my city. All calculations were done on Bankrate.com. I am not a financial advisor, I’m just a woman who knows how to use a calculator.

6 Comments

Filed under Finances

Love and Gratitude

This post is about how much I love (LOVE!!) my husband. I would say something really poignant about how our love “withstands the fire and trials of life” to go with the above picture, but then you would hear me laughing across the expanse of the internet. Not that it isn’t true…

Eric and I are certainly not the only people holding on for dear life during this economical death wave the news is calling a recession. You know, the one which is supposedly over? Yesterday I saw a man driving down our street in a white van with our city’s logo plastered on the side. He parked across the street to slip a red notice over the neighbor’s door handle. I’m assuming that means we are not the only ones struggling to pay our water bill (among others). I paid mine online yesterday morning, otherwise that might have been our door he tagged. It was probably just a scary threat… “YOU’LL NEVER HAVE RUNNING WATER AGAIN if you don’t pay the $18.53 that is 30 DAYS delinquent.” That pretty much sums up the attitude my city has towards its residents.

Despite the drama of bill collectors and the tears we’ve shed over not being able to eat at the Chinese Buffet anymore, our money “problems” have only united us. A lot of couples end up fighting, but some how we’ve managed to learn how to laugh at our situation. We also share a perspective in that we recognize that we have led privileged lives, and the luxuries we’ve been forced to give up have never been a reality for many.

Most of the credit goes to Eric. He is the calm one.  In the five years that I have known him, he’s lost his temper maybe one time and even then it paled in comparison to my past explosions. He’s also very level headed and always has the perfect words to immediately extinguish any panic or frustration on my part. God created hot springs, sunsets, soft breezes, and crackling fires… and then he created Eric.

On top of that, he adores our baby, and everyone knows that while a way to a man’s heart is through his stomach, the way to a woman’s heart is through her children. When he comes home for lunch, Micah lights up and can’t take his eyes off of him, and neither can I. He swoops Micah up to play airplane and the little guy can’t stop grinning from ear to ear. In a few years, they’ll be inseparable; there’s no doubt in my mind.

As Thanksgiving approaches, I want to take time to really consider how the Lord has blessed me and sincerely thank Him for everything. By far, one of the biggest gifts in my life is Eric. Not only is he the love of my life, but God has used him to mold me and teach me over the years. He has helped me to become more disciplined and more patient. Through our marriage, God has blessed us with an adorable son, who steals my heart every morning when he greets me with smiles and squeals of delight. I have found a life-long friend in my husband; a person who I can count on and love for the long haul. Even though we are broke (for now), we have the Lord, our health and our family, and that carries much more value than all the money in the bank.

1 Comment

Filed under Family, Finances, Marriage

Baking Things

I’ve never been much of a baker or a cook, but lately I’ve come to the realization that there is a whole lot more food in my pantry than what meets the eye… I just have to make it!

From fried rice to giant ginger cookies (shown in the photo above), there of tons of things I can make from scratch and save a lot of money in the process. It just requires a little extra creativity and a little searching (through my cookbooks) to find what I can make from the various basic ingredients I already have.

Leave a comment

Filed under Finances, Food

Another Season

In my last post I mentioned that Micah had no teeth yet. I spoke too soon! Saturday afternoon, I noticed that my fussy little boy had a “split” gum – and in that little opening was a tiny tooth coming through! This morning he was in much better spirits; the hardest part is over. Today I could feel the sharp little point with my finger. Pretty soon it will be big enough for me to take a photo. I can’t believe it’s happening already! People always tell you how fast children grow, but you never realize how true this is until they sprout right before your eyes.

The temperature around here is dropping fast. I pulled out Micah’s snowsuit and we wore it to church this morning. I discovered that he loves it, and it is a surefire way to get him to doze off. He is so snuggly in that thing! We went to a harvest party last night and our little guy didn’t end up going to bed until 10pm or so. As a result he was very tired today, and ended up passing out for over three hours this afternoon. For a little boy who usually sleeps 30-40 minutes at a time, this was shocking! I didn’t know what to do with myself during that time. I ended up reading an entire magazine while waiting for him to wake up. My house was already clean so basically I had nothing to do but lounge and wait for him to wake up. I guess I can’t complain about that!

Our family is going through some big changes right now. We are hoping to move 30-45 minutes north of where we are currently, but the housing market may prevent that. I want to live closer to our parents now that we have a son. He needs to be close to his grandparents! We have also been hit pretty hard by the recession. The increased cost of living combined with me working only part time from home has made things financially tricky. Moving would mean lower expenses, as well, so I’m hoping that works out. But, I know that God has everything under control and he might have something better in mind for us, so I’m keeping an open mind. In the meantime, having our house listed means it has to be spotless 24/7. This is perfect for me – it will force me to make keeping my house clean a habit, something I’ve been wanting to do for a while. I’m tired of cleaning in spurts and then letting things get messy again. I have found that it’s much easier to maintain a spotless house than a “ruffled” one.

I am really looking forward to November. Not only is Thanksgiving in November (my favorite holiday), but my birthday is in November as well. It’s not the same as it was when I was a kid, but it’s a fun excuse to get together with my family, eat my favorite dinner and indulge in birthday cake.

Leave a comment

Filed under Family, Finances, Home