Tag Archives: money

Money-Savin’ Mama: Don’t let your tech wants become expensive ‘needs’

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I’ve always been behind the technological curve.

My family didn’t own a VCR until 1991. I listened to cassette tapes into the mid ’90s. I didn’t have cable TV or a DVD player till college, or my own computer until 2004.

I still don’t have an iPod or iPad or GPS or smartphone.

People talk about how they “couldn’t live without” these newer devices, like they’re food or water. Somehow, I survive.

I also save, not paying for mp3s, apps and data plans.

That said, I understand the allure of technology and how once you have it, you can’t imagine not.

When my husband and I switched to satellite TV, we eschewed the digital video recorder add-on. We’d survived nearly three decades without DVR. Why pay $5 a month for it?

But midway through our contract, we began to rethink the decision. We’d spent a weekend with friends who had DVR and it was really useful, zooming through a Twins game and catching up on missed sitcoms.

So when it was time to sign a new satellite contract in 2011, we added DVR.

I’ll never go back.

I also can’t imagine life without my Kindle Fire, a 2011 Christmas present. My husband, Craig, feels the same about his iPod Touch, which he won at a conference the same year. He never would have bought one for himself, and even considered returning it for store credit. Now, it’s a constant companion.

However, we’ve both avoided what I view as a big financial risk with these items, the temptation to overspend on songs and books and apps. It’s so easy with one-touch purchasing and the faulty rationalization that it’s “only a dollar or two.” Those dollars add up in a hurry.

Instead, I download free Amazon apps and borrow digital books from the Fargo Public Library. Craig uploaded his CD collection and streams free podcasts.

We’re likely in the minority, though. Statistics cited at Statista.com show spending on mobile apps increased from $4 billion in 2009 to $16 billion in 2012, and is expected to increase to $35 billion in three years. Apple generated $4.3 billion in revenue from iTunes music downloads in 2012 (and $13.5 billion in total iTunes revenue), according to AppleInsider.

People tend not to consider lingering costs of their purchases. They save up for a 60-inch flat screen TV, and then feel compelled to get the expensive HD cable package and Netflix subscription. They get Xboxes and iPads and now pay new monthly fees. They buy a fancy new car and don’t factor in the increased insurance costs.

And then they’re over-budget but see no way to trim expenses because they “can’t live without” these new gadgets and gizmos.

They’ve turned their wants into “needs.”

To be clear, there’s nothing wrong with owning flat screen TVs and Xboxes and iPads. It’s simply a matter of making sure you have enough money in your monthly budget to add these things to your life.

And that’s exactly where Craig and I are now as we debate making the move to smartphones.

Our cell phone contract is up for renewal this spring. Smartphones have been out long enough that the novelty has worn off and they’re starting to become more essential in the workplace. But would we pay less for a better product and plan if we waited two more years?

For a while, I’ve been tracking what I call “smartphone moments” – those times when I would have used it. As I can update Facebook and Twitter with a text message and my Kindle lets me web surf and email anywhere there’s wireless Internet, I average about one moment a day, usually when I wonder about some inane bit of trivia while riding in the car.

Certainly, I can live without that.

Sherri Richards is a thrifty mom of two and reporter for The Forum. She blogs at http://topmom.areavoices.com

Lost money, returned

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It came! A while back, I wrote about my quest to reclaim $100 of unclaimed property. I filled out the form, sent in the required proof of ID and residence, and about four weeks later, I’ve got my money!

Me and my check! (Editor’s note – This photo has been retouched to remove potentially sensitive financial information. My enthusiasm, however, is genuine)

I figure it was money I forgot to pick up back when I donated plasma in college (perhaps bonus cash for referring friends?). At some point, it was turned over to the state and posted on the Department of Trust Lands’ Unclaimed Property website.

It’s a good idea to search the site (as well as a national database, like missingmoney.com) every six months or so.

A tip I received after writing the column: Be vague in your search. Don’t include your zip code (especially if you’ve lived multiple places). Put in only your last name, or even just part of your last name.

About the same time I was digging into unclaimed property, I received a newsletter from Cass County Electric Cooperative. Inside was a pages-long list of former co-op members who were owed “Capital Credits,” extra monies allocated to each member. And it’s up to those members to claim the money. The same holds true with other cooperatives.

It’s your money. Go get it.

Money Savin’ Mama: Seeking money? State may have some of yours

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One of the first Money-Savin’ Mama columns I wrote was about finding “free” money: Matching grants for college savings, incentive cash for opening a bank account, half-price gift cards for businesses you patronize anyway.

But there’s another type of free money that might be waiting for you out there. And it’s already yours.

It’s unclaimed property. Uncashed checks, forgotten bank accounts or credit balances turned over to the state.

Each state and four Canadian provinces hold unclaimed property, as well as federal agencies like the IRS and other organizations, including some insurance companies. Combined, it’s estimated to total $58 billion, according to a recent CNN Money story.

I’ve known about North Dakota’s unclaimed property website for years. But it was only earlier this month, as I prepared to write about the topic, that I find my own name there.

And I was excited, because if your name’s on the website, the amount owed to you is at least $50.

I called Linda Fisher, administrator of unclaimed property under the North Dakota Department of Trust Lands, to talk about the state’s unclaimed kitty, which totals $32 million. That money belongs to about 72,000 North Dakotans, she says, a number accumulated since the program started in 1975.

So what’s my share? Fisher peeked at my record and found out it’s $100. Based on the name of the entity that turned the money in to the state, and the Grand Forks address attached to it, I’m pretty sure it was some forgotten money earned donating plasma back in college.

I immediately set about reclaiming my Benjamin.

I printed the claim form from the state’s website, and signed it in front of a notary at my bank. I mailed that to Bismarck this week, along with a copy of my driver’s license, documentation of my Social Security number, proof that I lived at that address and, because my name had changed, a copy of my marriage license. It will take six to eight weeks for the state to process the claim, Fisher says.

Other people may have an easier time filing a claim than I did. I haven’t lived at that address since 2001, so had to dig through my filing cabinet, eventually finding it printed on an academic record from the university. Plus, my legal name change required an additional document.

If the company that turned in your funds provides the state with your Social Security number, the process is even easier, Fisher says. And, she says her department works with people. They once accepted a decades-old Christmas card envelope as proof of address.

Even so, a lot of dough just sits there. (Actually, it’s held in the Common Schools Trust, which supports the funding of K-12 schools in North Dakota, Fisher says.)

Fisher has hand-delivered forms to people, never to have them returned. Her office has set up shop at the State Fair, helping fair-goers fill out the forms and notarizing them. All the people had to do was send in a copy of their ID, but still nothing.

“You can lead a horse to water,” Fisher says.

The whole idea of reclaiming this money reminded me of the parable of the lost sheep, which my church’s Sunday school tackled this month, too. To be a good steward of your money, you’ve got to keep track of each dollar, and go after those that get lost.

ONLINE

Looking for lost money? Search for your name on these websites:

• North Dakota’s Unclaimed Property site: www.land.nd.gov/UnclaimedProperty

• National databases of state-held money: www.missingmoney.com or www.unclaimed.org

• IRS’s Where’s My Refund tool: www.irs.gov/refunds

• Pension benefits: http://search.pbgc.gov

• U.S. savings bonds: www.treasuryhunt.gov

Money-Savin’ Mama: Ready to swipe again after all-cash diet

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For Christmas, my 4-year-old daughter picked out a new wallet for my gift. It’s exactly the kind of wallet a 4-year-old girl would choose: bright pink and covered in swirly hearts. A silver heart pendant hangs from the front clasp.

Even though I’ve only been using the wallet since late December, I realized soon into a month-long plastic fast how my spending habits had conditioned the way I use it.
Each time I went to make a purchase, I automatically unsnapped and flipped open the wallet to the now-empty credit card slots. It took a few weeks before I’d trained myself to unzip the wallet’s cash compartment first.
I joked I was having swipe withdrawals.
Last month, I wrote about how credit cards, when used responsibly, are useful financial tools. But they do have downfalls. Mainly, people tend to spend more when using credit versus cash.
I wanted to see if I could operate without my cards, a social experiment as well as test of financial willpower.
Now at the end of my self-imposed challenge, I’m ready to unsnap and swipe again.
That said, there were benefits to my plastic furlough.
First, I found I could operate fairly well on cash. Clerk s didn’t bat an eye as I counted out my bills. I saved 3 cents a gallon on gas by paying cash. I was also far more aware of my purchases, and forced to make some either/or choices. This, I think, is the true benefit of cutting out the cards.
I did cheat once on Giving Hearts Day, an online fundraising effort. I gave my husband one of my twenties and had him make donations with his credit card on my behalf.
While my month-long challenge wasn’t meant to be an exercise of self-deprivation, my low-balled weekly allowance of $140 made it feel like one. I bought groceries and gas, paid babysitters and dined out twice with that money, and that’s about it. I didn’t bother going to department or big-box stores. Good thing I was stocked up on diapers.
Still, I only spent about $482 for the four weeks, staying under budget three of the four. In Week Two, I went off-list at the grocery store and needed to write a check, too embarrassed and stubborn to put any items back. I deducted my overage of $28 from the next week’s budget.
Without a card, I had to pass on several online daily deals that could have saved me 50 percent at those vendors. Of course, not buying them in the first place saved me 100 percent.
During the four weeks, the only activity on my credit card was one automatic payment to our Internet provider, a rewards credit and two payments, paying off the January bill and smaller February statement.
It is liberating to know I don’t owe Visa any money. And this past month I did spend less because I couldn’t spend more.
But cash also cost me. To pay bills, I needed to mail a check instead of paying them online, adding the cost of a stamp and check blank. I also sacrificed the 2 percent cash back rewards my card offers.
For purchases in which the dollar amount wouldn’t change based on my choices, it doesn’t make sense to use cash, only because I do pay off my balance in full each month.
Even on that discounted tank of gas, my rewards credit card would earn 7 cents per $3.50 gallon.
I also learned how important it is to write every expense down when working with cash. An envelope system would have helped me a lot.
So would have tucking all my receipts into my pretty pink wallet.

Sherri Richards is a thrifty mom of two and reporter for The Forum. Read weekly updates from her plastic fast at http://topmom.areavoices.com

 

Plastic Fast, Week 4: Ready to swipe

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My four-week plastic fast has come to an end, though I still haven’t actually used my credit card yet.

I’m a bit relieved to be through it, while still processing what I learned from my swipe hiatus.

In week 4, I spent about $115, including $38 plus change on gas, a smaller-than-average grocery store bill of $20.08, $20 to charity, $4 on Girl Scout cookies (Huzzah Thin Mints!), and $15.58 on lunch with a friend.

For the month, I spent about $482 of my alloted $560 cash for groceries, gas, household supplies and entertainment. This doesn’t include checks I wrote for daycare, a clinic bill and dentist appointment.

I’ll wrap up my month-long experiment in Friday’s Money-Savin’ Mama column. Look for it in the SheSays section of The Forum.

Plastic Fast, Week 3: Choices

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In Week 3 of giving up my credit cards, I faced a choice: Put gas in my car or buy a case of Mike’s Hard Lemonade.

I chose Mike.

That probably doesn’t speak well of my priorities, but with a blizzard coming, I figured my husband and I would consume more of one than the other.

That snowstorm and a sick little girl kept me home-bound and under budget in Week 3 of my plastic fast, a feat I’m pretty proud of considering I’d cut my weekly allowance.

I gave myself only $112 to work with instead of $140, a penalty for going over budget in Week 2. I spent $103.28. That included two trips to the grocery store, a drop-in daycare appointment and my husband’s Valentine’s Day present (also purchased at a grocery store …), plus the Mike’s.

My hubby had to pick up some of the slack. His workplace had planned a potluck, and he asked if I’d make my scrumptious fruit pizza. I told him I’d gladly make it, but I couldn’t afford to buy the ingredients.

I also lucked out. Owen had a doctor appointment that comes with a $25 co-pay, but the receptionist didn’t request I pay it then.

I’m excited to get my full allowance to fill up the car and get some groceries, but am facing a bit of a dilemma. This Thursday is Giving Hearts Day, a 24-hour fundraising effort for 177 local nonprofits during which donations of $10 or more are matched. But it’s online, which equals plastic.

It’s a worthy enough cause to break my fast, but I’m looking to see if I have another choice.

Plastic Fast, Week Two: In over my head

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It was not a good week in the land of cash.

A convergence of expenses — mainly an empty gas tank and dog dish and an impulsive grocery store outing  — left me holding the bag with not enough bills. So I wrote a check to cover my assets.

In the second week of giving up all my plastic, I spent $28 over my self-imposed $140 cash allowance.

While I didn’t use my plastic (technically a success that way), I discovered operating on cash doesn’t work well without some sort of structure, like an envelope system. I also slacked on writing down my outlays, so had to spend more time figuring out my weekly totals.

I filled up my car’s gas tank on Tuesday, earning a 3-cent-per-gallon discount by using cash. I only had one squirmy kid with me and there was no line in the convenience store, so it wasn’t as big of a headache as I’d feared.

On Wednesday, I needed to get more prescription food for our pooch. That cost $27.08. Also, I paid $13.50 in cash to the drop-in daycare, where Owen played while I visited the dentist (a check-up paid for by check).

I planned to spend about $45 when I went to the grocery store Thursday. I knew I was limited in cash, but shopped like I wasn’t. I was lured by excellent prices on produce, pop and Pop-tarts, and went off-list not considering the consequences. As I watched the total climb at the register, I quickly realized I was in over my head. My total was $60.86, more than I had in my wallet. I was too embarrassed and stubborn to put anything back, so I wrote a check.

A neighbor girl helped me out with the kids after school, so I needed to pay her. I’d promised Eve lunch at McDonald’s on Friday. And my favorite thrift store had a 49-cent sale Saturday, where I spent $3.14. That put my week’s total at $168.19 (not to mention my husband’s supermarket trip for Super Bowl snacks).

I suppose I could justify that I was $44 under budget in Week One, but my goal was to spend less than the $140 target each week. So this week, I’m penalizing myself for my extravagence. I’ll have only $112 to work with. I already spent $10.49 at the store this morning, a desperate run for toilet paper and coffee creamer.

Time to pinch my pennies.

Plastic Fast: Week One

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In Friday’s Money-Savin’ Mama column, I wrote about my newest personal money challenge: to live without my credit card for a month. I officially started my challenge last Monday, right after I finished writing the column. Mainly because it was 4 p.m. and I hadn’t used my credit card that day. Score! One day down, 29 to go.

Now one week into my fast, I’ve already asked myself many, many times, “Why am I doing this?”

At times, it’s been a frustrated question, like on Wednesday when I had to turn back halfway to the grocery store after remembering I still hadn’t withdrawn my weekly cash allowance. I had to retrieve my debit card from its secure hiding spot, go to the bank, get the cash, then go to the grocery store and spend said cash. “Why didn’t I just swipe my debit card at the store?” I asked myself amid all the driving around.

It’s also been a question of worry, like on Saturday, as I drove to Grand Forks, N.D., without the safety net of a credit card. What if something happened? Would the $54 and few check blanks in my wallet be enough to cover me?

And at other times the “why” question has been more philosophical, a question of refinement and focus, to really pinpoint what I can learn from this experiment.

Giving up my plastic is not an indictment of modern banking. It’s not necessarily an exercise of self-deprivation. My goal is to become more aware of my spending habits. To become closer to my cash. To see if I spend less.

It’s also a bit of a social experiment. Can we operate on cash in today’s paperless world?

And finally, it touches on something I read once, about how kids today aren’t learning the concept of personal finance, of exchanging money for goods, because they never see us make such exchanges. Instead, they see us swipe a card and put that card right back in our wallet. Hopefully my daughter can learn alongside me this month.

So, one week in, here’s my tally: I started with $45 plus change, withdrew $100 from the bank, and spent a total of $95.65. That included a trip to the grocery store to restock my cabinets and buy some infant medicine for a feverish Baby Owen.

I did like that I actually had cash on hand to pay the sitter and send a couple bucks to Eve’s preschool for the upcoming Valentine’s Day party. I did feel the pinch at the grocery store. I lined up purchases up on the conveyer belt in order of importance, so if the total got too high I could put the final items back.

But I’ve also noticed how operating on cash is costing me. I got a bill from the clinic, which I’ll need to write a check for and mail (adding the ever-increasing cost of a stamp). I had to pass on a couple daily deal promotions for half-price gift certificates (though I can argue equally well that this saved me money.)  I desperately need to fill my tank with gas, which may save me money (if the station gives a discount for paying in cash) but adds the risk of impulse purchases inside the convenience store (“Mommy, pleeeeeeease can I have it?!?!?!”)

I’m starting Week Two with a bit more focus and intention, a fresh stack of bills, and an empty gas tank.

Money-Savin’ Mama: Going on a plastic fast

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I applied for my first credit card, a MasterCard, shortly before starting my freshman year of college. My limit was $200. The first time I used it was that spring break, to buy a shirt. I still have the card in my wallet, nearly 15 years later.

My parents drilled solid financial advice into me when it came to credit cards. Save it for emergencies. Pay it off in full every month. Don’t buy something with it unless you have the cash in the bank to pay for it right then and there. Only get a card if it has a long grace period to avoid interest and fees.

I didn’t fall prey to the “sign up for a card and get a T-shirt” tables in the student union. I stayed in control of my spending.

Confession: I did pay interest and fees, once. I needed cash, so used my credit card at an ATM. My bank didn’t offer debit cards yet. I had no clue how expensive cash advances were. I never did it again.

Follow-up confession: I needed the cash because I was at a bar and wasn’t yet 21, so obviously couldn’t write a check. I don’t think I did that again, either.

But through the years, I did start to use my card more and more. My credit limit increased. I got a Visa card that offered rewards. Businesses stopped taking checks. Banking became paperless. Today I use my card for everything, still paying it off in full every month.

In general, I’m a fan of credit cards. They help build your credit score when used responsibly. They’re convenient, letting us pay some bills automatically. They offer rewards, basically a discount on everything you buy. A piece in the Dec. 24 issue of Forbes magazine suggests cash-back credit cards, when paid off in full every month, are one way to capitalize on others’ financial stupidity.

But, as I wrote in an article about credit card traps in Thursday’s SheSays section, many people don’t use them wisely. They use them to live beyond their means.

Gail Vaz Oxlade puts people she counsels on her TV shows on a cash-only diet, confiscating their plastic. Financial guru Dave Ramsey draws a firm line against credit cards.

While I don’t fully agree with Ramsey’s take on cards, one of his points hits home: It’s easier to spend more when you use a card than when you use cash.

Ramsey’s website cites a study of credit card use at McDonald’s that found people spent 47 percent more when using credit instead of cash.

You can “feel” cash leaving you, Ramsey says. You’re more aware of your spending when you use real money.

I realized this last year when I took on a grocery spending challenge, limiting myself to the federal thrifty meal plan food budget for three. I used cash envelopes to keep on target. But one day, absentmindedly, I used my card.

While I could tell you to the penny what I spent on the grocery trips where I paid cash, I had to consult my receipt to remember how much I spent when I swiped.

Plus, my 2 percent rewards card isn’t doing me much good if I’m spending more than I otherwise would.

So I decided to take on another personal challenge: to live one month without my cards.

I’ll spend cash for all the things I typically use my credit cards for, like groceries, household supplies and gas. I’m dreading having to take both my squirmy kids inside the station to pay.

My plan is to take $140 from the ATM each week, aiming to spend less. If a major expense comes up, I hope I can write a check.

Because my challenge is for only a month, I won’t cancel the one auto payment on my card (our Internet provider). But I won’t pay other bills online or over the phone. I won’t shop online. I’ll try not to cheat by having my husband pay instead. I’ll have to hold extra tight onto my usually cash-void wallet.

Goodbye, Visa and MasterCard.

Hello, George, Abe, Andrew and Ben.

Sherri Richards is a thrifty mom of two and employee of The Forum.

Money-Savin’ Mama: Living paycheck to paycheck? Think again

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Money-Savin’ Mama has some tough love for you this New Year. It stems from a phrase I hear employed professionals utter far too often. “I live paycheck to paycheck,” they lament.

Sorry, but I don’t buy it.

There are people who do live paycheck to paycheck. They typically work long hours for low pay, support kids and have faced unthinkable, unfortunate life circumstances.

But if you buy fancy coffees at a coffee shop on a regular basis, you do not live paycheck to paycheck.

If you go out to the bar or eat at restaurants, you do not live paycheck to paycheck.

If you always upgrade to the latest and greatest tech toys or fashion trends, you do not live paycheck to paycheck.

If you spend money on trips, cigarettes, mani/pedis or sporting events, you do not live paycheck to paycheck.

And if you put more than a third of your paycheck toward housing or more than 10 to 15 percent toward a car payment and other transportation costs, you are not living paycheck to paycheck.

You are simply unwisely spending the money you do earn.

Does this mean you make enough money to do everything you want? No. That’s why you need to prioritize. Learn to distinguish your needs from your wants.

In his 2004 book “The Automatic Millionaire,” personal finance author David Bach explained the genesis of his most famous principle, The Latte Factor. A woman named Kim called him to the carpet, saying his advice to save $5 to $10 a day was unrealistic because – you guessed it – she was “living paycheck to paycheck” and “barely making ends meet each month.”

Bach walked her through a typical day’s expenses. First, she stopped at Starbucks for a nonfat latte and muffin. At 10 a.m., she bought a supplemented juice and PowerBar. Before lunch, she had already spent $11.20.

He showed her that, through the magic of compound interest, her daily latte would cost her nearly $2 million by the time she retired.

If you can trim the fat (and nonfat lattes) from your budget, even for a few months, you’ll likely find enough money to snowball a debt payment and/or stash some cash in an emergency fund. Track your expenses for a month or two to see where your dollars are really going.

Still struggling? Financial guru Dave Ramsey suggests getting “gazelle intense” – trim every last bit of fat until you are a lean, mean, money-saving machine. Because in truth, you can’t afford not to save for your future.

Here’s the key, though. It’s more than just making the numbers work. It’s your attitude. If you think you have no money, you will have no money. You won’t treat the money you earn with the respect it deserves. Realize the power of your paycheck.

Too many people fall into the trap of thinking that spending cuts are painful. That not spending money on non-necessities is a deprivation. Instead, you need to adopt an attitude of abundance and prosperity.

Look at what you have instead of what you don’t. Be grateful for what your money does allow you to do. Appreciate the things in life that don’t cost any money. And learn to love the money in your bank account more than the cup of coffee in your hand.

Sherri Richards is a thrifty mom of two. She blogs at topmom.areavoices.com