Saturday, June 10, 2017

Reflecting What You Value in How You Spend Your Money (and Other Resources)

Every few months, I like to go through all of my spending for a month, tabulate how every single dollar was spent, sort and group all of that spending in various ways, and look at the results.

How much did I spend on food? How much did I spend on particular types of food? How much did I spend on craft beer? How much did I spend on coffee? How much did I spend on writing supplies? How much did I spend on books? How much did I spend on board games?

It takes some time, but going through all of those questions – and many more – is worth it.

Every single time, I find that I’m disappointed in how I’ve spent some of our money.

I’ll compare how much I spent on books, for example, to how much I put aside for retirement. I’ll compare how much I spent on craft beer to how much I spent on nutritious foods. I’ll compare how much I spent on board games to how much I put aside for a long-planned family activity.

And I’m disappointed.

Time and time again, I chose a short-term poorly considered impulse over a better long-term option. I spend money on things that are practically forgotten within a day or two, and that money was essentially taken out of the hands of an option that would make my life better down the road. Is it really worth stripping money out of my retirement savings or my car fund if I literally have no memory of that expense at all in two or three days?

Even worse, the short-term choices I made were often not even good in the short term, either. I have no problem with making short-term spending decisions provided that they really add something of value to my life. That purchase should bring me to an experience that I couldn’t get any other way or provide more value in my life than the money I spent.

So, when I look at those spending choices, isn’t it just a big cesspool of negativity? No, it isn’t. It’s actually the opposite of that.

First of all, that initial wave of disappointment isn’t borne out of a sense that I’m a horribly flawed person who can’t do anything right. I know that I do quite a few things right with my money. I’m in my thirties and own a house with zero debt – that includes zero mortgage and zero student loans. My wife and I have so much put aside for retirement that unless something truly disastrous happens, we’ll probably retire shortly after our oldest child leaves the nest. I have made a lot of very good financial choices.

Instead, that disappointment comes from knowing that I can do better. I am not perfect with my money and I make mistakes, but those mistakes are fixable. They are mistakes that I don’t have to repeat in the future. I can always make better choices going forward than I made in the past. Understanding that adds a healthy dose of optimism to that disappointment, often completely covering up that disappointment.

Another part of the equation is that I don’t think that short-term choices are always wrong. Often, it looks like I decry any sort of short-term choice in my life, that I’m not spontaneous at all, and that if something is just purely fun or enjoyable in the moment, I don’t value it. None of that is true.

My criticism of short-term choices is that, in the moment when I’m considering doing something spontaneous, I’m looking almost entirely at the short term and nothing more. The long term impact of that choice isn’t even on my radar. I’m thinking solely about exchanging something I have for something I want right now.

Even worse, I’m often not considering other short-term alternatives. A great example comes with buying books. When I think about buying a book, I’m often not actively considering whether I could get that book from the library or borrow it from a friend or hunt around for a better bargain. Instead, I’m seeing this book that I want, paired with the realization that I can actually afford to buy it right now without a major short-term negative consequence.

The worst part, though, is when I don’t see my real values shining through with that spending. With purchases like books, I can at least see some long-term values peeking through in that expense. I value learning and knowledge. I value the process of actually reading. You can get that from a purchased book, even if there might be a better way of doing it.

What I’m frustrated most by are expenses where I can’t see my real values showing through, when I’m so caught up in the short-term thinking that I don’t even see the fact that there’s almost nothing in this for me in terms of my broader life.

Junk food is a perfect example here. The prospect of buying and consuming a sugary beverage or a pint of beer or a big mouthful of potato chips is almost purely a short term choice. It tastes good in that moment. That’s about it.

The problem with those choices is that it provides almost nothing for the long term in my life. I’m not a beer connoisseur who gets some long-term value out of making a beer-tasting video or writing a review or simply improving my palate. Instead, that beer tastes good for a few minutes and then disappears. All it does after that is raise my credit card bill and also add some calories to my diet which appears right around my midsection as a contribution to a beer belly, which adds to long-term health costs.

The only time where it adds some value is when it contributes to a social occasion where I’m building a long-term relationship with some friends. Sharing a beer with old friends and new friends, for me, is about that relationship. That’s the long-term value, there. My only concern with that is whether the beer is really necessary in building that relationship, which is why I often order a club soda or something like that when I’m at a bar. I can still hang out with and build relationships with friends – which is the part that I value – but without the long-term costs of the beer.

That’s basically my rule in terms of eating junk food. I’ll do it if it’s called for in the social situation I’m in, meaning I’ll eat something unhealthy served by a friend or I’ll share a beer with a friend. But when I’m on my own, that social value from consuming expensive and unhealthy food is basically gone, so I don’t bother. If a friend puts Doritos out on the table at a potluck dinner, I’ll grab a few; when I’m eating alone, I’ll just eat something inexpensive and healthy because I value long-term health and I value long-term cost savings.

What about the pleasures of life, though? That’s the question that many people ask when they go through this kind of thinking process. Doesn’t this kind of perspective eliminate a lot of simple pleasures in life? Things like the taste of a cookie or the feeling of buying a new hobby item are deeply enjoyable, aren’t they?

They are, absolutely. The thing is, there are almost infinite things in life that provide pleasure. I get a lot of pleasure from feeling the warmth of the sun on my skin when I take a walk. I get a lot of pleasure from making people laugh at a good joke. I get a lot of pleasure from solving a puzzle or integrating a new idea or perspective into my thinking. I get a lot of pleasure from standing on top of a tall hill that I’ve climbed, where I’m a bit out of breath but I can see an amazing view all around me. I find tons of pleasure in how I spend the resources of my life. Simply choosing to skip over a few short term pleasures because they don’t reflect broader values that I hold true does not mean a life deprived of pleasure.

Here’s the thing, though: ideally, I want every dime I spend and every block of time I spend to somehow reflect the big values I hold true in my life. I’m not perfect at this – no one is – but I know that I can get closer and closer to that goal when I reflect on my choices and try to do better in the future.

The first step in that process, of course, is clearly identifying what you value, particularly in the long term. What really matters to you? What are the foundations of a truly good life, in your eyes? What governs the best choices you make in life?

I value strong family ties. I value being a good parent and a good husband. I value strong friendships, preferring a small number of strong friends to a larger network of weaker friendships. I value learning and education. I value making things – food, writing, art, and so on. I value introspection. I value solving problems and the pleasure that comes in doing so. I value good health. I value humor and a quick wit. I value independence and self-reliance. At the same time, I value making sure that my community has some kind of a safety net, and I value stretching that safety net as wide as I can make it, so that people who fall for reasons outside of their control don’t crash. I value spiritual growth. I value communities.

You probably value some of those things, too, while others don’t really ring that true to you. You likely have other things that you deeply value as well.

Once you have a good bead on the things that you really value, reflect on how you spend your money (and time and focus and energy and social capital…) with regards to those values. How much of your time and money and energy are you spending each day that are right in line with those values? How much of your money and time and energy are you spending each day that isn’t in line with those values?

This isn’t always going to be a black-and-white categorization. There’s a lot of grey area here. The value is in recognizing what things you do are pretty strongly in line with your big values and what things are barely in line with your big values.

You’re going to be imperfect. That’s okay. You’re going to realize that you spend quite a lot of your money and time and energy on things that really aren’t fully in line with your big values, and that’s not a source of despair. It’s simply a recognition that you’re human.

I make mistakes like that all the time. So do you. We’re humans. It’s part of being human.

The value in thinking like this isn’t to beat yourself up. The value in this kind of thinking is to see areas where you could do better. It’s not to subscribe to perfection and beat yourself up when you don’t reach it. It’s to move a step or two in a direction where your daily choices line up perfectly well with your big values in life.

When you go through such reflection, it’s completely normal to decide that most things don’t really merit a change. What you’re really looking for are the two or three things that you could do better without really losing anything in the process – and those things always exist.

Take my book buying, for example. Quite often, I’ll reflect on it and decide that, all things considered, it really wasn’t a bad move. However, once in a while, I’ll recognize that I made a bad short term call and that I should have just checked that book out from the library.

Over time, some good “rules” emerge from this kind of thinking. You’ll start recognizing more sensible patterns to follow in terms of when it makes sense to spend money and time and when it doesn’t. For example, I often don’t buy novels any more unless I am dead sure I’m going to read and re-read them. If I haven’t read a novel, it’s almost always a mistake to buy it unless I’m literally spending pennies on it. However, novels that I’ve read two or three times and I know I’ll read again, like an old favorite, are ones worth buying. For example, George R. R. Martin’s A Song of Ice and Fire novels fall into that group, and I’m suspecting that James S. A. Corey’s Expanse series will get there, too, since I’ve reread the first few novels in that series quite a few times.

Ideally, reflecting on those new “rules” retrains your instincts a little. I find that I no longer instinctively pick up novels I’m interested in (for the purpose of buying them) when I’m in the bookstore unless it’s something I’ve already read. If I do pick up a new novel, my instinct is to go request it at the library, because I know that the value of a novel in that first read-through is in the experience of actually reading it. Owning it only becomes valuable when I know there’s a strong chance I’ll return to it for a re-read in the future.

Over time, I’ve trained a lot of my short term desires in that way. I rarely buy beer any more unless there’s a social component to it, and in that case I’ll usually try something new to me so I can figure out if I want to make it or something like it myself; if I drink beer at home, I usually pull out some of my home-brew to share, and I don’t drink alone. Those are instincts that have been crafted over time through many social and beer-drinking situations, leading me to figure out what really works in terms of balancing my short-term and long-term desires. It’s instinct at this point – I don’t even think about it in terms of those rules. My mind just does it automatically when I’m in such a situation.

Remember, this isn’t just a one way street where you cut spending on things you don’t value; there’s nothing wrong with contributing more to the things you do value. For example, I value making things and I value my personal health, so I don’t mind buying things that make it much easier for me to make healthy foods I like at home. I now have an earthenware crock for making medium-sized batches of fermented and pickled foods at home – they’re low-calorie and tasty and great for your digestive system. This allows me to make my own pickles and sauerkraut, and I pretty much constantly have a batch in that crock. It was expensive, sure, but it felt like an item that was very, very much in line with what I value.

I value communities and solving problems and introspection, so I’ve slowly been devoting more of my time to getting involved with community projects and civic groups and, ever so slowly, into community governance. I’ve donated money to a bunch of different community projects because I can see the benefit that it provides to the community as a whole. I especially value the local food pantry, because that also falls in line with my long term value of helping people out when they fall, so I actively support it. The best part? I feel really, really good when I do these things. It’s not because I think they’re “right,” but because it feels really, really good to do things that are strongly in alignment with what you value.

A long time ago, I wrote an article about the shallows and the deep, in which I argued on behalf of cutting back on the things you don’t care about so that you can easily dive into the things you do care about. That’s what this type of reflection is really all about; when you become more and more clear on what you personally value, it becomes easier and easier to spend your money and time and energy on things that are in line with those values and it becomes easier and easier to not spend your money and time and energy on things that aren’t in line with those values.

As long as at least some of those values orient themselves toward long-term financial security, this whole process is going to inherently nudge you toward better personal finance decisions. Ever so slowly, with one or two little changes at a time, you’re going to start making short-term instinctive decisions that have a better long-term payoff. Those choices are going to seem completely natural, but they’re going to sacrifice short-term benefits that you don’t really care about in exchange for long-term benefits that you do care about.

You’ll say “no” to buying silly unimportant things, and say “yes” to bumping up your retirement savings.

You’ll say “no” to buying more and more hobby supplies that you’re not using, and say “yes” to buying high quality reliable “buy it for life” versions of things you actually use regularly.

You’ll say “no” to experiences that are completely forgettable and say “yes” with an open heart to the ones that are really meaningful.

Best of all, you’ll do it in such a natural way that you’ll wonder why you never made decisions like that to begin with.

That’s when you know you’re really on the road to the future that you want.

Good luck.

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Friday, June 9, 2017

Don’t Sweat the Small Stuff. Sweat the Big Stuff and the Frequent Stuff.

A friend of mine was visiting the other day – we’ll call this friend Donnie – and I offered Donnie a cup of coffee. He said he wanted one, so I asked whether he wanted it cold or hot. He wanted hot, so I pulled a pitcher of cold brew coffee from the fridge, filled up a cup with it, and microwaved it for just enough time to get it steaming hot.

He loved it. He asked where I had bought it. I told him the truth – I made it myself. It’s actually really easy if you have a water pitcher and an infuser – you just put some coffee in the infuser, fill up the pitcher, let it sit in your fridge for a day or two, and then remove the infuser and add a bit of water if the resulting coffee is too strong.

His response? “That’s too much work to bother to save a few cents on a cup of coffee. I just buy cold brew coffee at the store.”

This comment stuck in my head and I wanted to price it out for myself, so I went to the store, found a brand of cold brew coffee I’ve tried and liked in the past, and compared the cost of buying that bottle per eight ounce cup compared to the cost of making my own cold brew coffee at home. I found that making my own, using my preferred beans, is about $0.38 per cup cheaper than buying a bottle of my preferred cold brew coffee at the store.

Now, when I make cold brew at home, I make about six cups of it at a time. I just fill up an infuser with coffee grounds, toss it into about four cups of water, and let it sit for about a day and a half or so in the fridge. At that point, I remove the infuser, add about two cups of water to the pitcher (because it’s honestly too strong for me at that point and I need to cut it with water to get it to where I like it), and put the pitcher back into the fridge. Boom – six cups of coffee for about a minute of effort.

Sure, you say, but I’m really not saving much money. Thirty-eight cents isn’t that much money in the big scheme of things. It’s pocket change. I find more than that on the ground when I walk to the grocery store. (Seriously – the last time I walked to the grocery store, I spotted two quarters on the ground.) Isn’t this “sweating the small stuff”?

I’m not a fan of sweating the small stuff. I don’t do things like wash Ziploc bags because, honestly, the savings is too little per washing for my time. My time isn’t worth that little to me.

This situation is different. When I make my own batch, I’m actually making six cups of coffee at once. That’s not $0.38 in savings. That’s $2.28. Furthermore, the whole process takes about a minute using stuff I already have at home, so that $2.28 in savings takes about a minute of my time. It takes far longer for a bag of coffee beans or grounds to run out than it does for a container of cold brew from the store to run out, so I’m spending less time in the store actually shopping for coffee than if I bought cold brew, so it’s actually less than a minute to save $2.28.

Here’s the thing to remember: It’s not worth your time to sweat the small stuff, but frequently repeated things aren’t “small stuff.” Frequently repeated things add up incredibly quickly.

Let’s say Sarah and I each drink two cups of coffee each day for a year, hypothetically. (Sarah drinks more than I do, but it’s hard for me to assess how much more because she often drinks it when she’s at work or when I’m at work or when I’m doing something else.) Using that calculation above, let’s say it takes me one minute to prepare six cups of coffee using my cold brew method.

Over the course of a full year, that’s 1,460 cups of coffee. Let’s take that calculation above, that my coffee making method at home saves me $0.38 per cup versus buying similar coffee at the store. That’s $555 per year in savings by using my method. $555. That’s two car payments saved by using my method versus using Donnie’s method.

But isn’t that a lot of time? Well, over the course of a year, I would have to prepare 243 six-cup batches of homemade cold brew coffee. Each one takes a minute, but as I noted above, it’s actually a little less than a minute because I’m spending less time at the store buying coffee than I would be if I just bought that coffee. So, let’s round it down and say that I spend a total of 4 hours per year making cold brew coffee.

If I’m spending four hours and saving $555, that’s $139 per hour of effort saved by making my own cold brew coffee at home rather than just buying it at the store or at a coffee shop.

That’s why I sweat the “frequently repeated” stuff. If it’s something you do every day, shaving even a penny or two off of the cost of that expense adds up so fast that it begins to look tremendous over the course of a year.

To me, the two best ways to make a financial difference in your life is to sweat the big stuff and sweat the repeated stuff, especially the frequently repeated stuff. If it’s a small thing that doesn’t come up very often, it’s probably not worth your effort to optimize, not when there are big expenses and frequently repeated things on the table.

What are the big things? I worry about housing costs and mortgage payments. I worry about insurance costs. I worry about the cost of buying a car and all of the associated costs with keeping it. I worry about my career and income levels and how I can raise my income from my current methods and find new income streams.

What are the frequently repeated things? I worry about food costs. I worry about our energy usage, because we use energy constantly. I worry about every regular bill that comes into our home, from our energy bill to our cell phone bill to our internet bill to our Netflix bill. I worry about household supply costs, because we use things like dish soap and shampoo and bath soap and razor blades and toilet paper and laundry soap constantly. I worry about expenses that keep showing up on my credit card bills over and over again, because that’s a sign of a recurring expense I need to look at.

Those are the things I concern myself with. The big things are obvious – when you point at those individual bills, they each represent a lot of money on their own. The frequently repeated things seem small on their own, but they’re repeated so much that they add up to a lot over the course of a year.

It’s the small things that I just don’t sweat. I don’t freak out about financial apocalypse if I forget a $1 coupon or if I have to buy a name brand item because the store brand of that item is out of stock. I don’t sweat it if the girl who lives down the block knocks on my door and asks if I’ll buy some Thin Mints again this year (yes, indeed, I will buy those Thin Mints… mmmmm… Thin Mints). I don’t stress out if I rip the corner of a freezer Ziploc bag and have to toss it. I don’t carefully calculate whether I’ll save money by paying a dime less per seed bag at the other gardening store that’s further away from my home.

The small things that aren’t frequently repeated are such small wins that they don’t add up to enough to really worry about, especially given the extra time that would be needed to correct them. The only real concern I have about them is that I don’t want them to turn into frequently repeated mistakes, but I honestly don’t think about it unless I see that same spending choice popping up again… and again… and again…

Honestly, though, those repeated expenses usually are made clear to me when I look at my credit card bills, which is something I view as a big thing, not a little thing.

The moral of this whole story is a simple one. Don’t sweat the small stuff. Sweat the big stuff and the frequent stuff. If something costs enough money that you notice, pay attention to that expense. If you add up the total cost of what you spend on a particular repeated small item over the course of a year and that’s a dollar amount you notice, pay attention to that expense.

Right there, you have enough on your plate to worry about. Worry about the big things. Worry about the repeated small things. Just getting those things in order, along with efforts to improve your income, will give you more than enough to tackle. Don’t spend your energy sweating over one thing that will save you a dollar one time. Use it on the big things and the repeated things instead.

Good luck!

The post Don’t Sweat the Small Stuff. Sweat the Big Stuff and the Frequent Stuff. appeared first on The Simple Dollar.

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Thursday, June 8, 2017

Nine Simple Lifestyle Changes to Ease the Challenge of Getting Rid of a Car

For the first few years of my post-college professional life, I didn’t own a car. I lived in a small apartment on the edge of town with very reasonable rent. That apartment featured a bus stop about a quarter of a block away and a grocery store about half a mile away. The only reason I had to ever own a car was to travel to visit family, so when the relatively rare situations came around where I needed to visit family, I simply asked around for a ride. A couple of times, I rented a car.

Looking back, that seems like such a simple and joyful time in my life, filled with some nice freedoms that I simply don’t have these days. Today, I have a wife and three children and a house and much greater demands on my time. The idea of living without a car today seems impossible.

Or is it?

The truth is that right now we have two cars at home. My wife uses one for commuting. I use the other one about once or twice a week, mostly to run household errands or to go to a different place to work (I typically work from home).

When I let go of my preconception that we need a car for some reason, I realize that it’s mostly just a matter of convincing myself that a want – the ability to be “free” to drive somewhere during weekdays – is actually a need. It’s not a need at all. In fact, we could sell that car, pocket the money, save on many things… it quickly becomes tempting once you actually look at a situation and recognize that living with one fewer car in your household really is possible.

Here’s the stark truth: If you’re looking at a single big move that can really help your financial situation, one of the best ones you can make is to reduce the number of cars owned by your household. In that one step, you eliminate fuel costs, maintenance costs, insurance costs, registration costs, and replacement costs, and you likely also put an immediate burst of money in your pocket from the sale of the car. That amounts to thousands of dollars per year.

Of course, getting rid of a car comes with some real challenges. You simply don’t have the freedom to get around that you had when you did own that car. You have to figure out some new lifestyle patterns to adapt to having one less car easily available. It’s easy to convince yourself in that situation that your car is a “need.” But is it really?

Now is the time to consider whether that car really is a “need.” Could you have an enjoyable life without it? How can you make such a radical transition work in your life?

Most of the solutions that people immediately envision when it comes to a change like this are complicated and challenging, but there are actually a lot of relatively simple changes you can make when reducing your car count. Here are nine such lifestyle changes.

Change #1: Sell your car when you move – and be smart about the location of your new residence.

One of the best times to eliminate a car from your life is when you’re moving and making a fresh start of things. You can choose a location that minimizes the impact of not having a car so that the change has much less impact on your life.

Some things to look for when moving that can really make downgrading your car count much easier include having a mass transit stop very close to your residence, having a grocery store close to your residence, having a library close to your residence, and having your work either near your residence or near a mass transit stop. Living in close proximity to friends and family is also helpful if you can pull it off. When you can access work, food, and entertainment on foot from your apartment or home, your options without a car get much simpler.

In particular, I encourage people without a car to try to find a place to live near a library. There are almost always mass transit stops near libraries, for starters, but beyond that, libraries are invaluable resources, providing books and DVDs and audiobooks to borrow for free, as well as social and community events almost every day of the week. A library near your house can be an incredibly valuable life resource.

Having such services easily available often does come at a premium, but when you start calculating the additional costs of keeping a car as well as the time needed to commute when you live far from your workplace, it often becomes very clear that not having a car really isn’t that big of a disadvantage.

Change #2: Get maximum value from mass transit.

Mass transit – buses, subways, and trains – can provide almost all the transportation you need to get around a city, provided you live near a spot at which you can get into that network. If you can ride a bus to a train station or subway station and then ride that system to a place that’s close to your work, then you have a very easy transportation system that you can just ride each day, giving you time to read or do other tasks while riding.

If you’re in a situation where you’ll use mass transit each day for your commute and for other purposes as well – visiting friends, shopping, and so forth – then buying a long-term mass transit pass is going to be a good bargain for you in almost every metro area. Most metro areas offer passes that cover use of all buses, trains, and subways for a certain price.

For example, a pass for city transport in San Francisco – one of the most expensive areas in the country – is only $73 for an entire month of unlimited use, as of this writing, and $91 if you add in BART service which takes you to other parts of the Bay Area (which includes Alameda, Contra Costa, San Francisco, and San Mateo counties). For comparison, a DART pass for the Des Moines area costs $48 per month and covers the full Des Moines metro pretty well. Those prices are far lower than the cost of owning and operating a car.

Once you have such a pass, it’s well worth your time to get to know the schedule, especially regarding routes to and from your house to frequent destinations like your place of employment, nearby stores, and the homes of friends and family.

Change #3: Get your exercise on a bicycle equipped with a bag, pannier, or rack.

A bicycle is a low-cost way to gain significant freedom in terms of how you move about the city. Many cities have bicycle lanes on roadways and other features that make it quite easy to get around on your bike.

To really maximize the value of using a bicycle, it’s well worth your time to get your bicycle equipped with a basket or rack that’s permanently affixed or a bag that attaches easily to your bike and can be carried as well (panniers are bags that attach near the rear wheel of the bike). Such attachments make it easy to do things like go to the grocery store for a few items or go to the library using your bicycle, as you can easily carry quite a few items in a bag or a basket.

Like anything in life, riding a bicycle effectively in a city or town takes some practice, but once you’re used to it, it not only provides a ton of freedom, it also improves your fitness and gets you moving around. You can run to the grocery store on your bike almost as fast as you can in a car, except that you’re also getting a moderate workout on the trip and you’re spending a lot less.

Change #4: Get additional exercise from walking/rucking.

As appealing as a bicycle might be, I personally enjoy simply walking to nearby destinations (within a mile or so, or a couple of miles if I’m hitting multiple places). I like seeing what’s happening in my neighborhood, listening to a podcast or an audiobook as I walk, or just thinking about life. I like to walk at a healthy pace so that there’s some moderate health benefits, too.

In fact, one of my favorite ways to exercise is rucking, which simply means walking or hiking or jogging with a backpack that has some weight in it. I actually have a weight that I sometimes put in my backpack just for extra weight (along with the normal items I carry) when I’m walking and thus extra calorie burning benefit.

A healthy-sized backpack can hold several library books or DVDs and several odds and ends from a grocery store with ease, plus you don’t have to worry about securing a bicycle when you go to the store. You can just go in, go shopping, buy your stuff, put it in your bag, and head out.

I often choose to walk to nearby destinations even when I have a car just because the experience is pleasant. I’ll walk to the grocery store or the library with my backpack on if I’m just buying a few things or grabbing a book or two or returning an item. It’s convenient, pleasant, and free.

Change #5: Shop with friends and share resources.

The first three lifestyle shifts work well for a single person who typically doesn’t carry a large quantity of items to and from their homes, but what do you do if you want to go on a big shopping trip? That’s when you utilize friendships in a way that’s mutually beneficial.

To illustrate this, I’ll give you an example from a friend of mine named Kenny. Kenny lives in an apartment by himself, but he still wants to take advantage of some bulk buying on things like toilet paper and soap and rice (which he seems to eat with every meal). He doesn’t own a car, so what does he do? He talked to a friend and bought a Costco membership for them to share. Once every few weeks, Kenny’s friend picks him up in his SUV and the two ride together to Costco. They use Kenny’s membership to buy items for each of their households, then Kenny’s friend drives Kenny home and helps him unload. The friend gets to use Costco for free; Kenny gets to bring home bulk buys without owning a car. They both win.

Look for these types of synergies with your friends and family. You don’t want to simply rely on someone to drive you places without giving something in return, so perhaps you could purchase a Costco or Sam’s Club membership and share it with people in exchange for a ride (and bringing home any items you buy). Maybe you can go out with friends and occasionally buy drinks or something to repay them for driving you each time. Look for ways to give value to people in exchange for rides and you’ll find someone who’s quite happy to give you an occasional ride when you need it.

Change #6: Consider carpooling, too!

If you continue to think through the strategy described above where you share rides with friends, you’ll inevitably hit upon the idea of carpooling. Carpooling – in which you consistently go to a particular destination with someone who lives near you – can be a big time and money saver for everyone involved, particularly if the destination involves a location that isn’t easily accessed via mass transit.

For example, when I was in college, I carpooled regularly to my hometown with another student who had a car on campus. It added almost no extra effort for him – he would just drop me off at my house as he drove past it and pick me up as he was departing for school – but it enabled me to not need a car at school. I would split the cost of gas with him as well.

If there’s a remote destination outside of the realm of mass transit that you go to regularly – say, a home town or your workplace or some other frequent destination – see if there isn’t an opportunity for carpooling to that destination in your life. Look for ride sharing programs in your area; many universities operate such programs. If you live near relatives, you should definitely talk to them about carpooling to family events.

Change #7: Rent a car for longer trips.

Sometimes, there are events in your life that require you to drive beyond the bounds of where your regular options can take you, or you find yourself stranded at inopportune times. Those are the moments where renting a ride is the best option.

Renting a car is a perfect solution for a road trip. It’s pretty inexpensive to rent a car for a few days for driving to a wedding a few hours away or some other similar event. Rent the car, go to your destination, then drive back and return the car later on. It might be a little expensive, but since you’re doing this rarely, it’s not too bad. You can cut down on the cost by sharing a rental with a friend or family member (or two… or three).

If you’re just stuck in the city without access to mass transit (maybe you stayed out too late), just rent a ride from a taxi or Uber or Lyft. These services will provide someone to drive you to your destination for a reasonable price.

In both cases, you’re simply renting your ride to fill in a gap where your feet, your bicycle, or mass transit can’t help you with your situation. These solutions aren’t free by any means, but since it’s an infrequent solution, it’s pretty reasonable.

Change #8: Get an ‘everyday carry’ bag and stock it appropriately.

With all of these options, you’re going to be out and about without the convenience of being able to keep items temporarily in your car. That’s why it makes sense to get into the habit of carrying some kind of bag with you most of the time when you leave the house. That bag can contain items that you may need on a normal day out and about.

For me, this kind of “everyday carry” bag usually includes toiletries (a toothbrush, a bit of toothpaste, deodorant, etc.), a backup shirt, a water bottle, a snack of some kind (usually several), some notebooks and pens, and a book to read as a bare minimum. I usually have my laptop in there as well, unless I know I won’t need it and am worried about security in any significant additional way.

These items often keep me from making incidental purchases when out and about, so it actually saves money. It’s also convenient to always have a bag on hand so that you can easily collect and carry small items as you go, wherever you might be. I basically don’t leave the house without my “everyday carry” bag.

Change #9: Canvas your nearby area thoroughly for entertainment and social options.

Many people view the loss of a car as a loss of freedom of choice. They think of all of the things they might want to do that are now less convenient because of the lack of a car.

One way to combat that sentiment is to spend some time thoroughly canvassing all of the things that are available to you within a mile or two of your house. What public services are available? Libraries? Civic organizations? What stores are near you? What cultural centers or gathering points are near? What parks and recreation services and locations are nearby?

Spend the time to do a thorough canvassing of your neck of the woods. Explore every block and avenue to see what’s there and investigate anything and everything that seems interesting. Use tools like your community’s website and Meetup.com to see what kinds of interesting things are going on nearby.

You may end up discovering things you had no idea about. Even in my relatively rural small-town area, this strategy unveiled a number of services and activities and programs that I didn’t know about until I actively looked for them. In an area with a diversity of residential, commercial, and government facilities, there are all kinds of things happening. Find them and you’ll be glad you did.

Final Thoughts

Whenever most people think about getting rid of a car, they think immediately about the disadvantages and what they’ll lose in the process. What’s often overlooked is that many of the disadvantages can easily be mitigated with some little lifestyle tweaks – and some of those changes can uncover significant life advantages, too. You’ll be spending substantially less money, for starters, and you’ll have the opportunity to discover and truly enjoy some of the opportunities near you that you may have overlooked in the past.

If you’re on the fence about getting rid of a car, give these lifestyle tweaks some serious thought and see for yourself whether some of them may make sense in your life. If you find that at least a few of them are quite workable for you, then it may just be that selling off a car isn’t the big loss that you initially thought and that the savings and other benefits may end up being a surprising net benefit for you.

Good luck!

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Why Women Should Embrace Their Breadwinning Status (and Stop Complaining About It)

A few weeks ago, I was sucked into a rabbit hole of the worst kind – an article (and comments section) that piqued my interest in the most consuming way possible. A post about Conflicted Millennial Women Breadwinners offered a glimpse into the minds of younger women who earn more than their husbands or boyfriends, and seemingly hate it.

The author, Ashley Ford, a breadwinner herself, polled more than 130 other female breadwinners to find out how they coped with out-earning their partners. The consensus: They disliked earning more than their husbands and boyfriends. Asked how they would feel if they were the breadwinner forever, the female respondents used words like ‘tired,’ ‘exhausted,’ and ‘resentful.’

Some of the women claimed to be stressed out and overwhelmed, while also feeling pressured to stay in jobs they didn’t enjoy. Others lamented their breadwinner status could prevent them from pursuing careers they really love.

But, for some of the women, being the breadwinner was okay – at least for now. Ford herself reached the conclusion that she was fine with out-earning her partner as long as she “loved her work.”

She then went on to explore male and female roles within the home, including the fact that today’s women still do more than their share of “invisible labor” – a.k.a. household chores. Yet, at the same time, the piece shared studies that claimed women find men who do chores less attractive. Another study she cited claimed that men who earn less are more likely to cheat. Who knew?

But the final conclusion was probably the most telling. According to the author, “The general consensus of this group seems to be that the theory of being the partner who earns more is appealing to millennial women. They want their partners to feel happy and free and like they shouldn’t be expected to support the entire family unit simply based on their gender, but reality throws everyone for a loop.”

In other words, they like the idea of being the breadwinner, but not the in-the-trenches work, career sacrifices, or household discord it can sometimes involve.

Further, being a female breadwinner is a financial burden in a way that doesn’t apply to men. “Being the breadwinner, or sole earner, raises the stakes for these respondents internally, in the same way it does for men externally,” Ford writes. “For many men, having a wife who doesn’t work isn’t just a financial burden, but a social status symbol,” she writes.

After I read the piece, I felt both confused and angry. Why on Earth do we have a separate set of rules for men and women when we are supposedly (and rightfully) equal?

And, what about the gender wage gap? With women earning 83 cents for every dollar a man earns, shouldn’t we be celebrating the fact that some women are killing it? Perhaps the wage gap isn’t solved, but isn’t this a start? Women have spent millennia fighting for equality, the last hundred years or so spent on securing equal pay for equal work. Now we’re writing articles about women who struggle with earning too much? Gag me.

And, last I checked, wasn’t it taboo to date or marry a man for money anyway? By dating a man who earns less, aren’t they following their hearts? Isn’t that in itself the ultimate freedom worth celebrating?

Lastly, what about the men? I’m willing to bet millions of men have worked in jobs they hated and felt, weary, stressed, and quite possibly resentful. Where’s the article on that?

I had so many questions, most of which remain unanswered. But, I digress. After reading the piece and the comments, I reached the conclusion that the underlying issue these women face isn’t who earns the money – it’s that younger couples may see marriage differently than I do. Because, when you’re committed to sharing everything (not just money, but responsibilities, too), the way these people keep score is just plain weird.

How I Became a Generation X Breadwinner

The piece may have been about millennial breadwinners, but I’m not so far off. I’m 37 years old this year, which plants me in the tail end of Generation X. And yes, I earn more than my husband. And no, I do not care, nor do I care if you care.

And unlike some of the men in the article and the comments of the piece in question, my husband isn’t butt-hurt that I earn more, either. I would even go so far as to say he’s pretty darn happy about it.

Still, the disparity of our incomes is a fairly new thing in our marriage. When my husband and I first joined forces, I worked in childcare for meager pay. Within a few years, I was able to graduate to administrative work that garnered a bigger paycheck. However, enduring a pair of pregnancies, two maternity breaks, and two kids in daycare pretty much erased my income for a few years.

Did my husband complain? Never. He went to work every day with bells on despite the fact he worked 50 to 60 hours a week at times and was constantly called out at night. As a mortician, he often worked weekends, holidays, and late evenings while I stayed home with the kids.

Looking back, I’m 100% sure my husband was not “living his dream” or “pursuing his passions” as he prepared the dead for burial and dealt with grieving families. He loved the work, but the hours and the constant pressure took a toll on all of us.

Within a few years, I decided to dive into writing and start my own website alongside my husband. At first, I created content part-time while forging ahead in my full-time job. My husband worked on our blog while I wrote. That often meant working 40+ hours at work and another 20 at home. Was it easy? Not at all. Would I do it again? In a heartbeat, I would. I wanted something better than what I had before, so I went for it.

Do you know who eventually let me leave my steady and decent-paying job to pursue my passion?

My husband. I always had his unwavering support, and he always had my back.

Fortunately, we succeeded at building something sustainable and, a few years after that, my husband was finally able to quit his mortician job to work at home with me.

These days, I create content for top publications, own my own money-making website (with my husband), and have my own course for freelance writers.

And, you know what? I regularly earn 400% more than my husband does. And it’s totally cool with both of us.

How I ‘Cope’ With Being a Female Breadwinner

It’s funny what happens when you share your money. For us, sharing means we don’t have to care who earns how much. When my husband used to get bonuses at work, I always celebrated as if they were mine. “What should we do with your Christmas bonus?” I would ask him. And we would sit together and dream and plot something fun, like a vacation or weekend trip with the kids.

Now that I’m earning more, we do the same thing. When we have a particularly good month, my husband literally radiates with happiness and pride. Who cares which one of us earned which share of the money? Because everything is “ours,” we both get to win.

And no, I don’t feel resentful. I feel proud – proud I am doing my part to take care of my family, and proud my earnings made it possible for my husband to leave a very difficult job. He still works his butt off like he always has, but he now does it from home without all the hassle and stress. I am so glad I was able to support him in ways I never dreamed of, just like he was there for me when I needed him to be. And it’s all possible because we share everything, including every cent we earn.

Sharing our finances makes everything easier, but it’s not all we do to make our household fair and equitable. We both work full-time, but we’re still equally responsible for the kids, the dishes, and the laundry.

We don’t split each chore evenly, however. Instead, we split up responsibilities based on our strengths. For example, I cook dinner while my husband helps the kids with their homework. Once we’re done eating together, we clean up together. I never take out the trash or the dog, but I do all the grocery shopping. My husband fixes everything that breaks and I make sure the kids have everything they need for school. Together, we make the whole thing work.

You know what else helps? We hired a housekeeper to deep clean our home every four weeks. Instead of bickering over who cleans the bathrooms and mops the floors, we pay someone $120 to do a bang-up job once per month. In between, we both sweep, mop, and wipe down counters as needed. For us, splurges like hiring a housekeeper are an essential part of maintaining a happy marriage.

But, the biggest thing that’s helped our marriage is the fact we are committed to being life partners. More than anything else, we know we are in this together. Sharing kids, a house, and our money is a lot easier when you’re someone’s teammate instead of their adversary. We don’t keep score because we absolutely refuse to. I am not my husband’s critic; I am his cheerleader and his #1 fan. And he is mine.

How to Embrace Your Role as a Female Breadwinner

If you’re a female breadwinner who’s resentful about your higher salary, step one to saving your marriage is getting over yourself. Yes, I went there. Please, for the love of God, realize how privileged you are to be a woman (or a human, even) with the capacity and talent to bring in a big paycheck. You’ve made it, and you should be proud!

Second, take an introspective look at your relationship and why you might be feeling resentful. Perhaps the problem isn’t the fact you earn more, but instead, how you view your situation.

Consider the possibility of sharing everything – including your money. Sit down and dream together; come up with life goals you can work toward as a team. Instead of “keeping score,” ask yourself how you can both utilize your talents to become the best “us” you can be. Celebrate one another and your collective achievements, monetary or otherwise. Remember, it’s easier to celebrate each other’s “wins” when you see your partner’s successes as your own.

And if your partner isn’t doing their share of the household work and childcare, call them out. It’s perfectly okay to earn less, but it’s not okay for one spouse to do all the cooking and cleaning and child-rearing. Also consider hiring a bi-weekly or monthly housekeeper. Even if you’re frugal, you may find it’s well worth it to pay someone to deep clean every few weeks. For us, it has been nothing short of life-changing.

Lastly, stop feeling resentful and replace those negative feelings with pride. You are smart, accomplished, and capable of earning enough to support yourself and your family. You have choices in life that millions of women around the world could only dream of – including the option to be with someone only because you love them.

For heaven’s sake, stop complaining and start owning your success.

Holly Johnson is an award-winning personal finance writer and the author of Zero Down Your Debt. Johnson shares her obsession with frugality, budgeting, and travel at ClubThrifty.com.

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Are you a female breadwinner? If so, how do you feel about it? 

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Wednesday, June 7, 2017

10 Smart Ways to Use Leftover Rice (Smart Staple Strategies #1)

For the next few weeks, we’re going to talk about some smart strategies for using leftover staple foods – things like rice, beans, pasta, and so on. Here’s what you do when you cook a bit too much and don’t know what to do with the rest!

Rice is one of those staple foods at our house that shows up in everything. We’ll fill up the rice cooker and use the contents for some arroz con huevos and arroz con pollo … and then we’ll find that we have a ton of leftover rice sitting there in a big storage container. We overestimated how much rice we’d need and now we have a ton left over.

What do we do with it? It’s an absolute waste of time and money to throw out rice, so instead we find some creative uses for it.

Strategy #1: Freeze it in a small container.

This one’s simple. Just measure out the amount of rice you need for a specific recipe that you might make in the future, then freeze that amount of rice in an appropriately labeled container. Let’s say, for example, that we’re going to have etoufee sometime soon, so I’ll dig out our usual etoufee recipe, figure out exactly how much rice will be needed, measure that into a small freezer container or freezer Ziploc bag, label that container, and pop it in the freezer.

Then, the day before or the morning before we’re going to eat that recipe, I’ll just pull the container out of the freezer and pop it in the fridge. It’s thawed by the time we’re going to eat, so then I just need to warm it up a little. It actually rebounds from freezing really well, especially if it wasn’t overcooked to begin with.

Strategy #2: Add it to a soup.

If you’re making almost any kind of soup, just add a cup or so of cooked rice to it near the end of the cooking so that the rice can absorb a little of the flavor and mix in with the soup. We’ll add rice to everything from chili to tortilla soup, from vegetable soups to chicken noodle soups, from lentil soups to broccoli cheese soups. It just bulks up that soup and adds a little flavor.

Quite often, adding a cup or two of cooked rice from the fridge to a pot of soup stretches it from enough soup to feed our family to enough soup to also have a leftover container or two for Sarah and I to use for lunch the following day. In effect, it turns leftover rice into an actual tasty leftover meal. Many of the ideas below function in a similar way – a recipe is expanded by the addition of rice, enabling us to use it as a source for a “leftover lunch,” which is a giant money saver.

Strategy #3: Use it to add bulk to a casserole – or serve as the backbone.

Many casseroles are quite delicious with the addition of a small amount of rice. I’ll add rice to things like our enchilada casserole or even to things that involve pasta sauce without even skipping a beat. Again, that addition just bulks up the recipe almost without notice.

If you have a lot of leftover rice, you can actually use the rice as the backbone for a recipe. One of our favorite family recipes for a very quick and easy meal – often lunch – is the combination of diced cooked chicken and/or mushrooms, cooked broccoli, a cup or two of cheese, and cooked rice in whatever quantities happen to be convenient. It’s delicious and incredibly easy to fix.

Strategy #4: Make rice fritters.

I use something akin to this recipe for the rice fritters, except that I use 2.5 cups of cooked rice rather than the 1 cup uncooked rice that it calls for and I just skip the rice-cooking part and just move right along to making fritters.

This is a great way to turn leftover rice into incredibly tasty finger foods, perfect for a small appetizer or as a side dish for many different meals.

Strategy #5: Or make rice cakes.

Another, very similar strategy for converting rice into finger foods is to make rice cakes with them. All you really have to do is take a bunch of leftover rice – 3 cups works well for the other ingredients here – and season it however you’d like (soy sauce is a good one, but you can use cheese or other things and even use sweet additions), then add a couple of beaten eggs as a binder, add half a teaspoon of oil, mix it up thoroughly, and spread it out until it’s about 3/4″ thick on a piece of parchment paper and cut the mix into three inch squares. Separate the squares a bit, then bake them right on the parchment paper (with a baking sheet under it) in the oven at 350 F for about 10 minutes. Boom – you have square rice cakes.

These make for great after school snacks, and it’s so flexible. You can make savory ones or sweet ones. You can do all kinds of crazy things to it. It’s an easy and convenient snack, too – all you have to do is grab one from the fridge and munch on it. It’s already seasoned and ready to go!

Strategy #6: Make a rice bowl for lunch.

If you have just a cup or so of rice left over, just put it in a bowl and top it with whatever ingredients you have on hand that seem tasty. I’ll often throw whatever leftover vegetables happen to be around on top of it. I might toss on some sauce or some cheese or even some salad dressing – almost anything works. I’ll heat it up when I’ve added everything I want to be hot, and then I might add another cold ingredient or two on top afterwards.

There is no set recipe here – the goal is to flavor that rice into something yummy for a quick lunch. If you’re doing this in the morning before work, you can just put the rice and whatever ingredients you want into a microwave container and take it to work with you. It’s just that flexible.

Strategy #7: Add it to a salad.

If I have half a cup of leftover rice, I’ll add it to almost any kind of salad to change the texture profile of that salad. Yes, anything from a traditional lettuce salad to a chopped salad to a fruit salad. Unseasoned rice is a pretty blank palate upon which you can paint any flavor, and such rice can add bulk to almost anything.

I especially like adding it to salads that contain bits of fruits and nuts bound together by something sweet. Rice seems to disappear into this, only adding a bit of texture and making the salad a bit less over-the-top sweet.

Strategy #8: Make some fried rice.

Take some diced onions and diced green peppers and even a bit of minced garlic. Toss them in a skillet with a bit of oil until it’s sizzling beautifully and the onions have just started to brown. Then, toss in just a bit of water or soy sauce – a teaspoon or two – and follow it with that fully cooked rice, stir it around thoroughly, wait until the rice is hot and coated in the onion and pepper drippings, and serve it.

This stuff is delicious on its own, but it can also be served on the side of lots of different meals. I often eat this kind of simple fried rice as a standalone lunch, to tell the truth, as it’s a great way to use a bit of leftover chopped onion and green pepper (which I always save) and a bit of leftover rice.

Strategy #9: Wrap it in a tortilla.

There are many, many different tortilla-based dishes that are wonderfully accented with plain leftover rice. We’ll take rice and use it as a taco filling or a burrito filling. We’ll add it to our enchilada mix and fill up enchiladas with it. We’ll even use leftover rice in wraps where we’re stuffing a tortilla with lots of vegetables.

Again, rice accentuates everything, so it works well in all of these contexts. My personal favorite is to mix some in with black beans to make a black bean and rice enchilada mix. That’s practically manna from heaven for me.

Strategy #10: Sweeten it and eat it for dessert.

If all else fails, you can use it when you have a sweet tooth. Just put half a cup or so of rice in a bowl, warm it up, and coat it with a teaspoon of sugar and a half-teaspoon of cinnamon. Mix it around and enjoy.

Those two simple additives turn plain leftover rice into a wonderful sweet dessert. You can season it with other flavorings as well, but for me few things beat sugar (or brown sugar) and cinnamon. It’s a great very quick warm sweet treat.

Next time, we’ll look at some slick strategies for using extra beans!

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Do Smartphones Make Us More Impulsive Shoppers – or Less?

When it comes to the way they influence consumer spending, smartphones are double-edged swords. On the one hand, it’s undeniably great to have more computing power in our pockets than the computers used to put the first man on the moon. That power allows us to scan bar codes with our phones, make price comparisons, call our friends to see if we’re getting a good deal before buying something, and even take pictures of items so we can review them later to see if we really want them.

But, smartphones also make it a whole lot easier to buy things on impulse — even when you’re nowhere near a physical store. The mere existence of the Amazon mobile app can be a stumbling block for even the most frugal among us. I would be lying if I said the “Buy it Now” button hadn’t cost me several hundred dollars in regrettable, impulse-driven purchases over the course of my life.

So, which is it? Do phones make us more likely to spend money carelessly — or less? Let’s dig in.

Smartphones Encourage Bad Spending Habits

There’s no denying that smartphones are changing the way we shop. Every year the percentage of online sales via smartphone increases, with holidays seeing particularly strong activity. In 2016, there were $4.61 billion in smartphone purchases from Thanksgiving through Cyber Monday. That’s a whole lot of money to spend in five days.

The obvious reason for the surge in purchases is the convenience that comes with using your phone to shop. There are people who think this lack of friction between the thought I want that and the realization I can buy that right this second can cause serious problems.

They would argue that the supposed convenience of smartphone shopping is a trap. Sure, we can buy things faster, which frees up time for other activities — but faster isn’t always better. Just look at fast-food establishments. They make it easy to get food, but certainly don’t contribute to our health. Mindless shopping, like mindless eating, will cause issues. One notable analyst at a tech research firm thinks that online shopping is “now so embedded in our existence, we don’t even think about the fact that we pulled out our phone and bought things.”

There is evidence to back up the notion that we’re thinking less about what we buy. A survey of over 12,000 shoppers found that 42% of them use their mobile phones to “make frequent purchases on a whim.”

And if those purchases are made on credit, people might be causing themselves to go into debt. Or more accurately, to dig themselves even deeper into debt. The average American adult with a credit card has racked up $5,284 in debt.

Interestingly, consumers are self-aware that the easier it gets to buy things, the more they are likely to spend. Consumers in the U.K. seem especially worried that their phones might encourage them to overspend. A full 38% go so far as to say that they would “like a cap on tap-and-go payments in order to curb their spending.”

Unfortunately for those Brits, such a cap is unlikely to be a main feature of mobile shopping anytime soon. Overall, the trend toward shopping via smartphone shows no signs of slowing down. There are many social media sites, Pinterest chief among them, that are almost perfectly designed to get us to part with our cash on a whim. It feels like we are fighting an uphill battle.

Yet, despite the compelling evidence that our smartphones lead us to spend our money more impulsively, there are still several ways those same devices can help us to become savvier consumers.

How Smartphones Can Save You Money

I was recently helping my little sister get some decorations for her apartment. As we perused the wares at Bed Bath & Beyond, my sister came upon a lamp that she loved. Before she could toss it in her cart, I whipped out my phone and opened up Amazon’s bar code app.

A quick scan revealed that the same lamp could be found at a significantly cheaper price if she made the purchase online. Sure, she’d have to wait a few days, but she was in no rush. She decided to hold off on purchasing the lamp and instead put it on an online wish list. The act of practicing delayed gratification through the use of wishlists is a tried and true ways to reduce impulse buys.

This example shows that smartphones are not necessarily evil little machines that suck money from our bank accounts by overriding our frugal impulses. In fact, used wisely, they can provide a powerful one-two punch: We can use them to search for the the best available price, and as a way of slowing down the purchase process.

The act of slowing down should not be underestimated. Even the small act of taking a deep breath before mindlessly buying something can allow us the space to really consider what we’re doing. We might find that we don’t actually need the thing that, a moment ago, we truly thought we wanted.

Furthermore, despite all the hype about smartphone spending, we are still more likely to make impulse purchases in stores than on a phone — and it’s a wide gap between the two. A 2017 survey found that “68% of U.S. consumers said their primary location for making impulse buys was in person in a store.” If your smartphone shopping habit is keeping you out of a physical store, you may be coming out ahead in terms of total impulse dollars spent.

Even when you do find yourself shopping at a physical store, all hope is not lost. In fact, brick-and-mortar retailers are becoming concerned about consumers who have “mobile blinders” on when they’re in the checkout line. That term refers to our habit of fixating on our phones while we wait in line — which reduces the chance we’ll be seduced by the candy bars, gum, magazines, and other tempting point-of-purchase goodies positioned near the register.

Checkout aisle revenue is a $5.5 billion-a-year business, so you can see why retailers would be concerned about the growing number of people who would rather play “Plants vs. Zombies” on their phones than be enticed by a tabloid magazine. If you’re feeling bad about your Candy Crush addiction, take solace in the fact that it could be saving you money in the long run — as long as you don’t start spending as much money on in-app purchases as you would have on a Snickers bar.

The more interesting version of this scenario is to consider the person who might be standing in line and staring at their phone, but they aren’t playing a game. They’re reading an e-book, or updating their budget on Mint.com, or learning about a new credit card that will earn them a free flight. In those circumstances, they’re not only avoiding temptations, but they’re harnessing the wonders of technology to accomplish things that would have seemed like magic 30 years ago.

Summing Up

There’s no clear answer as to whether smartphones are improving or corroding our spending habits. That being the case, it might be helpful to think of smartphones like any other tool: The degree to which you use a tool properly will determine whether you get the outcome you desire.

For instance, a kitchen knife is a tool. A sharp knife will chop vegetables faster, but it will also do more damage if you cut yourself. If you’re careful and methodical, you’ll be fine. If you’re reckless, you’ll get in trouble.

It comes back to the adage made famous by Spider-Man: “With great power comes great responsibility.” We can ultimately boost our savings rate if we can be mindful about when and how we use our increasingly powerful devices.

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Tuesday, June 6, 2017

Six Strategies for Deleting Stale Spending from Your Life

A few days ago, I was reviewing my credit card bill and I noticed some expenses that surprised me. Two of them were annual renewals for services that I rarely use and honestly hadn’t really thought about in weeks, or even in months. Some of the other ones were for silly little things that I honestly didn’t even remember doing because that spending had been so automatic and thoughtless.

Those little expenses added up to well over $100, and that really troubled me. That money essentially vanished into thin air because I had been utterly thoughtless in my spending. It wasn’t being used for anything really meaningful or valuable in my life. Perhaps at one time those things had been meaningful or valuable, but they really weren’t at this point.

The truth is that all of those expenses had become “stale spending.”

“Stale spending” is a term I like to use to describe any and all expenses that are no longer meaningful and have become routine and thoughtless. If I’m spending money on something (beyond a core, highly essential item) without any real thought, then that spending has become “stale” and deserves to be reconsidered. Quite often, your life is better off without that stale spending, because at that point it’s become purely a money leak, causing dollars to drain out of your life without returning any real value to you.

Of course, there are times when “stale spending” is something that you want to keep in your life, but in the simple process of carefully considering that spending, you’re refreshing it and making it new again.

So, how do you find “stale spending” and how do you root it out of your life? Here are several strategies that work well.

Strategy #1: Maintain a list of paid subscription services you use and review it regularly.

This is a wonderful strategy that I’ve started using in the past several months and it’s helped me to identify and eliminate some subscriptions that weren’t providing any real value to me before those subscriptions renewed.

It’s really simple. Just start a note for yourself somewhere where it’s easy to retrieve (I use Evernote for this, for these reasons) and in that note, list all of the subscriptions you have, what they cost, and the date when it will renew (or need to be manually renewed).

So, for example, let’s say you’ve signed up for an annual subscription to Evernote Premium and it renews on Nov. 2. You’d simply list “Evernote Premium” followed by the dollar amount of the subscription and the date, Nov. 2, as one entry on the list. All other entries would follow the same pattern.

Once a month or so – I actually have this as a monthly recurring to-do on my to-do list – go through that list of subscriptions and ask yourself whether that subscription is really giving you value. Focus in particular on anything that’s recurring in the next month or two. Ask yourself seriously whether that subscription is really giving you any value in your life at this point and, if it isn’t, immediately go and cancel the subscription.

If you’re not sure whether it’s giving you value or not, ask yourself whether or not that subscription has actually been used by you in any memorable or significant way recently. Are you actually reading that magazine, or are you just a fan in concept and the issues are piling up on your end table? Are you actually going to the gym, or have you convinced yourself that just having the option to sometimes maybe go to the gym is worth a huge dollar amount each month or year?

As you switch to this simple system, you’ll probably have a subscription or two that slips through the cracks – Netflix, maybe, or a magazine subscription or something. Don’t sweat it or beat yourself up over it – just add that subscription to your list as you discover it from a credit card statement. Eventually, this list will contain all of your subscriptions and it will be a very valuable review tool.

Similarly, when you decide to start a new subscription of some kind, add it to this subscription review list immediately so that you can evaluate it later when the subscription is about to renew.

A subscription review list can be an incredibly useful tool for keeping routine and automated spending in check, eliminating the things that don’t bring you value and keeping the things that do. (In fact, if I had those two subscriptions I mentioned at the beginning in my subscription list, I wouldn’t have been dinged automatically for their renewal…)

Strategy #2: Look through your credit card bill and bank statement and consider carefully any expenses that aren’t instantly clear to you.

This is such a simple core financial step that everyone should be taking. You should be walking through your financial statements each month when you receive them and evaluating each and every item that’s on there. It’s an invaluable tool, not only for your overall financial awareness, but because it is so useful for dredging out stale spending.

It’s really simple. Just go through your bill and highlight any and all items on there that you don’t immediately recognize and see as something useful and worthwhile. If you don’t recognize it, highlight it. If you can somewhat guess what it is but it’s not bringing up any specific memories, highlight it.

Once you’ve highlighted those items, start walking through them one by one. For each item, do your best to figure out exactly what the purchase represented. Then, ask yourself whether or not that specific purchase brought any real value into your life, or whether it was something you did almost automatically without thinking about it.

For example, whenever I see a charge from a gas station that isn’t around the usual amount that I spend fueling up (I usually pay at the pump and only go inside to use the restroom if needed), I immediately highlight it and evaluate it. What did I buy there? Why did I buy it? Was it something bought completely without thought or completely due to a routine? Did I get any real value out of that purchase? What could I have done differently?

This exercise is meant to point out specific things that you’re doing where you’re spending money without really thinking about whether or not that expense adds value to your life. Reflecting on that choice now, when you’re sitting outside of the actual spending situation and you’re looking at the money you spent, gives you the chance to really decide if that purchase was worth it or not.

If you find that it wasn’t worth it, then ask yourself what you can do to cut out that stale purchase going forward. What exactly can I do to avoid buying a salty treat at a gas station? When I’m on a road trip, I tend to crave salty things and I’ll often end up buying a bottle of water and some salty snack without thinking about it. How can I avoid that? One way is to simply make sure that I’ve packed a salty snack to take with me on that trip, along with plenty of water. That way, I can still have that salty snack and water that I crave without paying the crazy high impromptu gas station prices. In fact, I’ve even started keeping a couple such snacks in the glove compartment in case I forget and I leave an empty water bottle in the car, too.

Strategy #3: Also, consider carefully any expenses that are frequently repeated.

Another thing to look for as you’re moving through your bank statement or credit card statement is frequently recurring expenses. Obviously, there are some expenses that recur out of necessity; you’ll probably find several grocery store visits on your list. At the same time, you may find yourself identifying some recurring purchases that aren’t quite as essential and actually represent fairly frivolous purchases. Things like coffee shop visits, hobby shop visits, after-work stops at a fast-food joint for a quick snack, routine expensive lunches, and so on are all things that can crop up in the midst of such a review.

Whenever you see such a recurring expense, you’ll probably find yourself remembering some of them and not others, and that’s fine. The question isn’t a black or white question of whether you should completely eliminate this expense from your life, but whether it might make sense to eliminate the “stale” instances of this routine. For example, you might really get some personal value out of a coffee shop visit or a lunch with coworkers once or twice a week, but the rest of the time, it’s kind of done out of a routine and you don’t really think about it.

Try putting a sensible cap on that spending. Restrict yourself to a smaller number of those expenses in the coming month, striving to eliminate just the stale and thoughtless expenses and keeping the ones that really add value.

This requires some regular focus on what you’re doing, so what I like to do when I’m constantly evaluating my own choices during a period of time is to add a reminder to my to-do list that simply says, “Think about whether you should be doing X today,” and changing X to whatever habit I want to be mindful of. I leave that on my to-do list as an urgent thing all day, so I see it several times, and it keeps that concept front and central in my brain. At the end of the day, it’s an easy thing to cross off my to-do list. I call this a “mindfulness to-do”; it’s just a reminder that I want to be mindful of something specific during the day.

Strategy #4: Go through every item in your grocery bill a day or two later and ask yourself if that item was a worthwhile purchase.

Whenever you go grocery shopping, grab that receipt and toss it in your pocket. Then, a day or two later, sit down with that receipt and go through it item by item.

Don’t worry about the items that came off of your grocery list – those were carefully considered already. Don’t worry about the items that you actually thought about for a while in the store – those were considered, too.

Instead, look for items that were impromptu buys, items that wound up in your cart without you really thinking about whether those purchases made sense. Look for items you snagged in the checkout aisle or out of a cooler without thinking about it at all, just as a matter of routine. Think of snack items that looked tasty and bounced straight into your cart without thinking about it.

That’s pure stale spending, right there. Those items were bought reflexively, without any real thought, and aren’t all that meaningful or valuable. It’s just another typical snack item or just another beverage to drink on the way home, nothing special, nothing memorable. It’s just money that goes away without leaving a trace in your life.

Total up the cost of all purchases like that, then ask yourself what you could have done with that money instead, things that are actually meaningful for you. Even if you spent that money on other non-essential items, at least those items would have been worthwhile and impactful instead of nearly forgotten as soon as the money was spent.

Then, the next time you go to the store, remind yourself of the mistakes you made during your last shopping trip. Remind yourself of the $20 or $30 or $50 that just evaporated the last time you went to the store. When you consider tossing something in your cart, ask yourself if it’s really adding anything to your life. If you like to eat a snack on the way home from the store and really value that treat, take one with you before you go and leave it in the car while you’re inside – a Thermos with homemade coffee in it is way cheaper than a Frappuccino from the cooler, for example. If you really value having a salty or sweet snack on hand in the cupboard or the freezer, think about it before you leave and put it on your list. Make sure the things you buy are actually meaningful and have a real positive impact on you.

Strategy #5: When considering a purchase, think about whether you could borrow that item instead and get the same value from it.

One of the real challenges when it comes to stale spending is figuring out whether a nonessential purchase that you actually enjoy is actually stale or not. For me, a purchase is stale when I’ve stopped considering what value I actually get out of the purchase and just accept that I’m getting something positive when I spend that money.

A great example of this, for me, comes from bookstore visits. When I go into a bookstore, I enter a wonderland of temptation. I know this and am aware of it, so I usually enter a bookstore only when I’m looking for a particular book or have a gift card or something akin to that. Of course, given that I’m so easily tempted in there, I often find myself picking up more books and talking myself into buying them.

The thing I should be asking myself, though, is whether I merely want to read that book, not to buy it. The value in that book from a reading standpoint is the content between the covers; the value in owning it is solely as a collectible or as a reference. What that means is that if I merely want to read a book I’m unfamiliar with, I’m better off getting it from the library. Even if I suspect I may end up wanting it as a reference volume, I should still wait until I can visit the library first, take the book home from there, evaluate it, and then decide if I want to permanently own it for reference.

In other words, I ask myself what additional value I am guaranteed to get from owning this book rather than just borrowing it first and then deciding to own it later. Unless the price is absurdly low, I usually can’t come up with anything at all. I get virtually all of the value out of a “first reading” of a book by checking it out from the library. I can then buy it later if I decide the book has enough value that I want to have it around for reference.

Take that same philosophy and apply it to almost every non-consumable purchase that you make – books, Blurays, tools, equipment, and so on. Can I get the value I need out of this by just borrowing it? Simply asking the question keeps the purchase from being a stale reflex purchase, where you’re just buying something because you perceive a need or want in your life in the most shallow way possible. Ask yourself a bit more, figure out what that need or want actually is, and then ask yourself if you can just borrow something to fulfill that need instead of buying it.

Strategy #6: When considering a purchase, think about other, less expensive ways of acquiring the item (or something similar).

You can actually engage yourself in a very similar thinking process with almost everything consumable that you buy, too. In that case, it’s difficult to strictly borrow the item – you can’t really return something that you consume – but you can often find a much less expensive way of getting that item in your hands or into your belly.

I like to use the example of coffee here. I like drinking a cup of coffee in the early afternoon. It helps me extend my ability to focus well into the latter part of the day, especially when I pair it up with a cup of green tea shortly afterwards (I get the focus benefit of a highly caffeinated drink, but the tea takes away the jittery side effects).

Now, there’s a splendid little coffee shop about three blocks from my house that I often walk by when walking our family dog or getting some exercise and it is really tempting to just jump in there for a cup of coffee. However, when I think about it a little more, I realize that most of those visits only produce the value of one cup of coffee for a $5 or $6 price tag. I can go home, open up a container from the fridge, pour myself a big cup of coffee, warm it up in the microwave if I want it hot (I usually don’t), and enjoy it at home for about 10% of that price. (I just make sure to make a regular batch of cold brew coffee every few days.)

The same thing is true for my wife in the mornings. She could certainly stop at a coffee shop on her way to work to get a pick-me-up, but most mornings she just makes herself a small pot of coffee and fills up a to-go cup and a thermos with that coffee with just the sweeteners and additives she likes for a tiny fraction of the cost of what a coffee shop stop would set her back, and it’s just as fast because she’s not waiting in a drive-thru.

We both value that cup of coffee sometimes. However, we know we can get that value way cheaper at home.

So, do I ever go to a coffee shop? Sure, but when I do, I go there for the experience. I’ll buy a cup, but then I’ll spread out on a table with my laptop and some materials and get some work done in a different environment, which often spurs creativity. To me, that’s the additional value I get from buying it at a coffee shop. If I’m just grabbing a cup from a coffee shop without thinking, it’s a stale purchase because I’m not getting any value that I couldn’t easily get at home. It’s just a thoughtless, stale reflex.

Apply that philosophy to your own purchases. Are you going out to eat out of habit? Why not just prepare something similar at home for a fraction of the cost? If you do it smartly and build some cooking skill, it doesn’t take long and it doesn’t require much cleanup for most simple dishes. Are you going to the movies out of habit? Why not watch one of a million movies in your collection or on Netflix at home? You can just wait a month or two and that movie you’re thinking about will be available for rent or streaming, so you’re really just paying a big premium for a few months of impatience.

Final Thoughts

Stale spending happens when you get so used to making a purchase that you check out of the process mentally and just trust the rhythm of routine and instinct. When that happens, you open the door to lots of spending mistakes, where you’re spending money on things that aren’t really delivering a good value to you.

It’s well worth your time to step back and look for stale spending in your life. By all means, don’t cut away at spending that isn’t stale, but ask yourself that question about the ways in which you spend your money and you might find that you can trim your spending really easily without cutting out anything meaningful.

Good luck!

Related Articles: 

The post Six Strategies for Deleting Stale Spending from Your Life appeared first on The Simple Dollar.

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Spring Cleaning for Your Credit

As the weather warms in spring, you might give your home an annual deep clean to clear out the remnants of winter. But I believe the phrase and practice of spring cleaning shouldn’t be limited to your home. If it’s been a while since you checked up on your credit reports, you may find that they’re in need of some attention.

In all seriousness, your credit reports and scores have a huge influence over your financial life. Just sitting back and assuming your credit is in decent shape is a dangerous approach. I strongly suggest you follow these five steps, none of which will cost you anything more than a few minutes of your time, to give your credit a thorough cleanup.

Step 1: Check Your Three Credit Reports

Step one is to check a copy of all three of your credit reports. It is practically impossible to build an effective plan to improve your credit without first understanding the current condition of your credit reports. Thankfully, it’s easier than ever to get copies of your credit reports.

You have a lot of options when it comes to where you can access your credit reports and scores. First, you can claim a free, no-strings-attached copy of all three of your credit reports once every 12 months at AnnualCreditReport.com. There are also many free and fee-based credit monitoring services which will offer you access to some or all three of your credit reports and scores. I’m a firm believer that if you’re entitled to free credit reports, you should claim them all.

Step 2: Dispute Errors

After you’ve secured copies of your three credit reports, it’s important to see if there are any errors. In other words, you should check every line of your credit reports for mistakes. If you discover inaccurate information on any of your credit reports, then you have the right to dispute the validity of those items with the credit reporting agencies (CRAs), at no cost.

Once you’ve initiated a dispute with a CRA, they will have to investigate your claim. The disputed item must either be validated by the data furnisher (the company that reported the information to the CRA in the first place) or deleted from your credit reports, generally within 30 days or less.

Step 3: Pay Down Credit Card Balances

One of the most actionable ways to polish up your credit is to work on paying down your credit card balances. FICO and VantageScore, the two most commonly used credit scoring models, focus on your credit card accounts and how much of your credit limits are utilized in the form of a balance.

The higher your balance to credit limit ratio climbs, the lower your scores will fall. Paying down – or, better yet, paying off – your credit card balances will not only save you money in interest fees, but can also give your credit scores a nice potential boost as well.

Step 4: Make Sure Personal Information Is Accurate

In addition to information about your account management habits, your credit reports also contain a lot of personal information as well. For example, your name, date of birth, Social Security number, past and present addresses, and your employer all might be found on your credit reports.

The personal information section of your credit reports will not impact your scores in any way. However, if you have addresses that do not belong to you, or an incorrect date of birth, name, or Social Security number, it could possibly be a sign of a problem such as attempted identity theft.

Disputing incorrect personal information with the CRAs is a good idea to clean up any mistakes in this area of your credit reports. Point being, getting your personal information correct should be easy.

Step 5: Make a Monitoring Plan

Like cleaning your house, checking your credit reports really shouldn’t be limited to just once a year. That’s like checking your bank statements or credit card bill once a year. Even twice a year is not enough. With so many websites offering you free or inexpensive access to your credit reports and scores, there’s really no reason you can’t make a plan to easily track your credit reports at least on a quarterly basis, if not monthly.

I’m a firm believer that you should check your reports monthly. Here’s why: Every 30 days, your credit reports go through a series of updates from all of your active creditors. As such, every month your credit reports are going to look different than they did the month prior. I’d want to see those changes every month, just to make sure they’re all correct.

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John Ulzheimer is an expert on credit reporting, credit scoring, and identity theft. He has written four books on the topic and has been interviewed and quoted thousands of times over the past 10 years. With time spent at Equifax and FICO, Ulzheimer is the only credit expert who actually comes from the credit industry. He has been an expert witness in over 230 credit related lawsuits and has been qualified to testify in both federal and state courts on the topic of consumer credit.

The post Spring Cleaning for Your Credit appeared first on The Simple Dollar.

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