Tuesday, June 30, 2009

An Interview With My Mom

This past Sunday it was my parents’ golden wedding anniversary. They have been married exactly 50 years and 2 days! I think it is a wonderful milestone for them and for our family. Having a stable childhood has certainly contributed to any success my siblings and I enjoy in our adult lives. Back in January, I interviewed my dad about his views on money and how he was able to save up a large portion of his income, buy a home, put three kids through college, buy us each a car upon graduation, and buy a second home. He did all this without a college degree, coming from a poor background, and being fatherless since age 10. In honor of my parents’ anniversary, I thought it would be a nice tribute to interview my mother, as well. Because, although she was not the breadwinner in our family as she was a stay-at-home mom, my family’s financial success was dependent on large part to my mom’s wise spending habits or lack thereof.

Michele: Mom, I want to interview you for my blog. Growing up, did your family have much money?

Mom: No, we lived in public housing. It was nice public housing, but it was a small one-bedroom apartment in NYC. I slept in my parents’ room when I was little. When I was older; I slept in the living room. I never had a bedroom of my own.

M: What kinds of things did you do in your childhood? Did you take vacations?

Mom: We went to the Catskills every year. My mother’s siblings rented bungalows each summer as they were more well-off than my family. They let us stay with them for a month each summer. Otherwise we couldn’t afford to take vacation. My mother paid them for the food we ate.

M: What about school? What type of school did you go to?

Mom: Public school through high school.

M: Then what?

Mom: I took a few college courses at night while I worked during the day as a bookkeeper.

M: So did you finish college?

Mom: No.

M: What did you do?

Mom: In 1955 when I graduated from high school, I got a job as a bookkeeper for Chase Manhattan and I made $44.50 per week. I worked there 2 ½ years and then worked in the garment center in NYC as a bookkeeper. While I worked there I met your father and we got married. After I got pregnant I quit. I worked there for 2 1/2 years also. I think I was making $70-$75 per week when I stopped working.

M: Did you save any of the money you made?

Mom: Oh yes. Every week I put $10 into a savings account. And I paid $10 per week to my parents to live in their home.

M: So how much money did you have saved up at the point when you got married?

Mom: $5000

M: Wow, that’s pretty impressive savings for a meager salary. What did you do with the money?

Mom: When we got married we bought a car ($1500) and the rest we left in the bank. About 5 years later we put money down on a co-op ($2500).

M: Did you ever work again?

Mom: No, I was always a stay-at-home mom after that.

M: How do you think you contributed to our family’s financial success?

Mom: I didn’t shop in high-priced stores. I didn’t have cleaning help like most of our neighbors. I cooked most of our meals from scratch. We ate out maybe once or twice a week, but nothing really fancy – places like the Hot Shoppe. I didn't have expensive hobbies or participate in lots of activities as that wasn't my style.

M: What do you know about investing?

Mom: Not much. I am much more conservative than your father. I would invest 90% of our money in CDs if I were in charge of investing.

M: Have you ever been in debt? Did you ever spend more than you earned?

Mom: We bought furniture on a payout plan, but we didn’t pay interest. We did that a few times when we were young marrieds. Other than that, we didn’t buy things we couldn’t afford. We had a mortgage on our home, but we always paid cash for our cars.

M: What advice do you have for people who are trying to save money?

Mom: Make up your mind that you will save a certain amount of money per week. Pretend that you don’t have that money. That’s the only way to save. But nowadays people don’t live like that. They buy whatever they want and don’t put away money. But you need to save money to make money. If you start when you are young, you will have a lot when you are older.

M: Thank you very much for talking to me today. And happy 50th, Mom and Dad!

Sunday, June 28, 2009

Our Family’s Vacation – Weekly Wrap-Up

Once per summer we spend a week in Cape May, New Jersey with our extended family. We budget $1200 for the trip (saving $100 per month all year long for this week). Following is a breakdown of the expenses we actually incurred. Since we were with family, they treated us to a few meals. We took my mother-in-law with us and she filled up our gas tank a few time. All of those expenses are included here to show an accurate cost of our trip.

Lodging: We stay in a hotel where rates go up on July 1. By staying there the week before we are able to take advantage of lower rates while still enjoying nice summer weather. The rates are slightly higher on the weekend ($140) than during the week ($120). Our total for a six-night stay including taxes was: $856.
Total: $856

Groceries: We ate breakfast in our hotel room each day and at least one lunch or dinner at the hotel. The hotel has a barbeque around the pool area that we used for a few meals. We brought a few groceries with us that are not included in this expense list since they were bought in prior weeks with our regular grocery budget.

We stopped at WalMart just outside of the beach and bought a few groceries: $12.56
We shopped at Acme Supermarket at the beach: $50.94
Total: $63.50

Meals Out: One meal was eaten out each day at a restaurant or takeout:
Lunch at Sub Shop on way down: $15 (mother-in-law treated)
Dinner of Pizza: $16
Dinner of Chinese: $23.10
Dinner at Restaurant (just myself and husband): $29
Dinner for kids of pizza: $8 (my parents treated)
Lunch at Pancake Place: $30 (mother-in-law treated)
Daughter’s dinner while we barbequed: $4.27
Dinner at McDonald’s on ride home: $13
Total: $138.37

We bought some taffy and fish magnets for my husband’s coworkers for a total of $10
We bought taffy and muffin mix for a couple of friends: $11.40
I bought a few things for our house: $6.76
I bought myself a shirt: $6
My husband bought a couple of t-shirts for his sisters: $8
We bought postcards: $3.50
My daughter bought a necklace for her friend: $2
Total: $47.66

Entertainment: We spent most days at the beach or the pool and went on a few bike rides with bikes we brought from home. At night we generally walked around the pedestrian shopping mall or around the town. For a few nights we treated the kids to some fun:

1 night of Miniature Golf: $12
2 nights at the Arcade: $10
2 nights of Ice Cream: $7.50
Total: $29.50

Gasoline and tolls: We had a full tank of gas before we left. We filled up once on the way, once on the way home and then topped it off at home to get an accurate total of dollars spent on gasoline. Our tolls come out of our EZ Pass account, but I think these are accurate.

Fill-up 1: $17 (MIL treated)
Fill-up 2: $24 (MIL treated)
Fill-up 3: $13
Tolls: $11
Total: $65

Chambermaid Tips:
We left $2 per night for the chambermaid. (Is that too low?)
Total: $12

Adding up all of the expenses, our total came to $1212.03. Our parents treated us to $94 of that, so we spent $1118.03. All in all, we were pretty accurate with our vacation expenses, and we will keep the budget the same for next year’s trip.

Saturday, June 27, 2009

How to Live Cheaply in an Expensive City – Part 3

Saving Money Tip #157 - How to Live Cheaply in an Expensive City – Part 3. In Parts 1 and 2 in this series, we discussed how to live cheaply in an expensive city with regards to housing, food, and transportation. In this last part of the series, we will discuss entertaining yourself cheaply in a big city.

Along with the big costs of a city often comes expensive nightlife as well. Clubs that charge $5 cover in the suburbs are $10 or $15 in the city. Dinners out and drinks are also often two to three times the price as well. But entertainment isn’t all about eating out or going to bars. The advantages the city has over other places is that there is abundance of things going on at all hours of the day and night. For anyone who has grown up or raised children in the suburbs or in rural areas, the refrain, “there’s nothing to do” is not unfamiliar with you. I cannot imagine a child (or an adult) in the city saying the same thing. Theatre, shows, concerts, stores, eateries, parks, special events, and historical sites are just a sample of places one could go to when living in the city. The best part about these places is that they don’t have to cost a lot of money, if any at all.

People visiting a big city such as New York or Washington, DC pay big money to stay at hotels to see sites that are everyday scenery for people living there. In DC you can take advantage of free museums through the Smithsonian Institution at any time. There are free concerts at the Kennedy Center, cathedrals, a world-renowned zoo, and special events such as fireworks and parades, miles of park trails and acres of green space. The cost? Zero! People living outside of the city cannot take advantage of such culture or entertainment without a lot of planning, costs of transportation, and lodging to experience the same things.

In New York, while world-renowned restaurants are very pricey, there are so many local mom and pop pizzerias and ethnic joints that are reasonably priced. One can take advantage of cheap Broadway shows that tourists from outside the city would need careful planning and time to do. At any time of the year there are special events going on someplace in the city. For the cost of a subway ride or by walking for free, you can experience arts, music, and culture at practically the snap of your fingers. A person on a farm in the rural Midwest would likely never get to experience something similar where he lives. In New York, a walk to an ethnic neighborhood is an experience that is entertainment itself. Participating in fairs, parades, and other events in these neighborhoods are not only entertaining, but educational as well. Then of course there is the chance to play tourist in your own city. By knowing the lay of the land, you can take advantage of cheap and little-known secrets that few tourists know – the best place to see the city lights, cheap ferry rides, and hidden gems. And then of course, there is one of the best-known city parks in the world. The cost to enter? Free.

In cities all over the world, there are similar cultural, ethnic, theatrical, and natural events available similar to those found in New York and Washington, DC. Each, of course, has its own special attractions, but none are without cheap or free entertaining activities. While it is tempting to give in to the pricier events available in a city, why not seek out the free or cheaper ones that you will miss when you move away? Most cities have local newspapers or magazines highlighting events around the city. Take note of the low-cost ones and take advantage of them.

In Real Life (IRL) –
I don’t live in the city but about 10 miles outside of DC. However, I worked in the city for 9 years. And since I had to pay the Metro to get into the city anyway, I often took advantage of activities that were available to me while I was there. Each spring I took a walk along the Tidal Basin to see the cherry blossoms in bloom. Many afternoons after work, I would walk to the National Archives and do genealogical work on my family. At lunchtime I would visit exhibit after exhibit at every Smithsonian within walking distance from my office. I walked in Chinatown, took a tour of the White House, the Capitol, and the FBI – all for free! I’ve seen concerts on the mall, fireworks on Independence Day, and attended a Presidential Inauguration and I didn’t spend a dime other than the Metro fare to get there.

Now that I live outside the city I don’t go in as often, but I still can take advantage of much that it has to offer that people who live farther away cannot. I take my kids to the free zoo, we check out the National Cathedral, and admire the city decorated for the holidays. On any given day, we can find a list of event that are family friendly and cost very little money, if any at all. And while living outside a major metropolitan area certainly costs much more than living in rural Nebraska, the entertainment possibilities are endless. Does it cost a lot of money to live near or in a big city? Of course it does, but there’s no reason that you cannot keep your costs down by taking advantage of all the great free and cheap events that the city has to offer.

Friday, June 19, 2009

I'm off for a week!

Just a quick note that my computer crashed last night. It actually came at a good time (if there is ever a good time for a computer to crash!) since we are going to the beach next week. I expect to be back and operational once we get back. Hopefully, our computer will be fixed by then. Thanks for understanding. Have a great week, everyone!

Thursday, June 18, 2009

How To Live Cheaply In An Expensive City - Part 2

Tip #156 - How To Live Cheaply In An Expensive City – Part 2. In part 1 of this series, we discussed how to keep housing costs (the biggest part of most people’s budget) low when living in an expensive city. Today we will talk about lowering costs of transportation and food while living in an expensive city.

Next to housing costs, a car is often the next biggest expense in someone’s budget. This is the one area of expenses that people living in a large city have got beat over people in the suburbs or rural areas. Many New Yorkers and residents of other large cities can get away with not owning cars. Besides the ridiculously high costs of parking one in a city garage, there really is no need to own a car to get around the city. If you cannot walk to work and other places, the subway will take you anywhere you need to go. For travel to areas surrounding the city, there are many commuter rail lines that will get you there. And when you want to travel somewhere else, the cost of a taxi, renting a car, or a flight will do the trick. Even the high costs of using these latter alternatives are cheaper than owning a car throughout the year, when you factor in gasoline costs, upkeep, and insurance. Not owning a car while living in a big city is one of the best ways to keep your transportation expenses low.

The next most expensive part of most people’s budget is food. Food can be tricky when you live in a large city. Depending on where you live, many times there are only small grocery stores available, rather than large supermarket chains. There may be very little competition, and the grocer can often get away with charging high prices. In this case you have to be creative in lowering your food costs.

--For fresh produce look for a farmer’s market. They are often plentiful in cities, offering higher- quality produce than you can get in a supermarket.

--Travel to some ethnic neighborhoods such as Chinatown which often have lower-priced grocery stores.

--Talk to people in your building or your neighborhood. Find out where people shop for groceries. People are often your best source for gathering new information.

--Travel outside the city (even to a suburban supermarket on the subway line) to stock up on items from a warehouse store or lower-priced supermarket. Or anytime you are outside the city, bring home food from lower priced grocery stores.

--If you have close relatives visit you often (such as Mom and Dad or a sibling), ask them to bring you supplies. Keep a running list of necessities so it’s easy for them to shop for you.

--Look online. While I generally find groceries to be more expensive on places like Amazon, it may not be more expensive to someone who lives near high-priced grocery stores. Utilizing search engines such as Swagbucks can earn you gift cards to Amazon, which could translate into low-priced or free groceries.

--Grow a container garden. There are many small plants you can grow that can yield food for you to eat. Look online for resources for container gardening. Alternatively, many cities have community gardens that you can participate in. Living in the city does not mean you cannot grow fresh food.

--Take advice on lowering your grocery bill that is common sense no matter where you live. Don’t buy convenience foods and cook from scratch as much as you can. These options are almost always cheaper, not to mention healthier.

In Real Life (IRL) – While I have always had a car, I could have gotten along without one if I were to have just needed it for work. While I lived outside the city, I took the Metro (subway) everyday for 9 years to my job downtown. I always lived near public transportation that got me to my job. In fact, I can count on one hand the number of times I drove into the city to work – two. And I can’t remember why I needed to on those two days. I loved not being dependent on my car. Weeks would often go by where I didn’t use my car at all. But being that I did not live directly in the city and I drove back pretty frequently to see my family in Philadelphia, I still owned one. For me the expense of a car still made sense. But it usually doesn’t if you live directly downtown.

As far as groceries, when I first moved to the DC area, Giant foods seemed to have a monopoly over the grocery store scene. While there were a few other chains around, they weren’t as big or in as many neighborhoods. So I was often stuck shopping in a high-priced grocery store where I lived. Whenever I went home to visit my folks, though, I would go food shopping. The prices on the food there were often much lower than my store. So I stocked up on non-perishables and brought them home with me. And when I was running errands in farther out DC neighborhoods, I would often stop on the way home at cheaper grocery stores.

Now that I live out in the suburbs and more grocery stores have come into the DC area (Yay, Trader Joe’s! Yay Whole foods!), I can see how the competition has lowered the prices at Giant. And my access to more grocery stores is greater, resulting in lower costs. It is something city folks in DC can take advantage of. Taking the Metro out to Arlington can bring them to bigger supermarkets with lower prices than the corner grocery store in DC. While prices are often higher in the city, it just takes a bit of creativity and effort to lower your costs.

In the last segment of this series we will discuss lowering the cost of entertainment in big cities.

Wednesday, June 17, 2009

How To Live Cheaply In An Expensive City - Part 1

Tip #155 - How To Live Cheaply In An Expensive City – Part 1. It is easier to live cheaply in a place like Wichita, Kansas than it is in New York City. Even though wages are higher in a place like New York City, it usually does not make up for the cost of housing, which is generally the largest chunk of anyone’s budget, as well as many other expenses that are higher in the big city. By looking at a cost of living calculator, a home in Wichita, Kansas that costs about $250,000 would cost $1.1 million in New York City. Going by that alone, one would need to make more than 4 times the salary in New York City than in Wichita. So how does one make it in a large expensive city like New York without going into debt? Like everyone else – by saving money on expenses. It just may be a bit harder to do in the big city than in other places.

Since housing is the largest chunk of most people’s budgets, when living in the city you need to find a way to keep your housing costs low. There are several ways to keep your housing costs down.

--One popular way – especially if you are young – is to find a roommate to split housing costs. A two-bedroom apartment is less than twice the price of a one-bedroom place. You also don’t use twice as much utilities, saving you money there as well.

--Find a place near public transportation, if you are working in the city. Prices of homes near subway and bus lines are usually more expensive than those that are not. However, if you factor in the cost to park at a bus stop or the cost of the extra transportation to get to the subway, then it may be more economical to live within walking distance.

--Find an older home. Older apartment buildings and older houses generally cost less than a new home. You might have to give up on some amenities, but be honest with yourself whether you would really use the exercise room in the swank new condo or if you need granite countertops in the new home. By forgoing some of these extras, you can save a bundle.

--Look for a private rental. Apartment buildings may not be flexible with their prices if they are in demand. But individual owners may be willing to rent their basement apartment or whole house for less than corporate buildings. Presenting a clean rental history with solid references and a professional appearance will go a long way with potential landlords. Landlords are often willing to sacrifice a bit of rental income to get a good tenant.

--If you are new to the city, wait to purchase a home. In large metropolitan areas, there are usually dozens, if not hundreds, of neighborhoods and towns to choose from to live in. Get to know the city before you commit yourself to buying in an area you may not like when you get to know the city better. Realtor fees and moving fees will drive up your expenses quickly if you want to move to a section of the city that you like more.

--Try to stay in your apartment as long as possible. Moving around often costs a lot of money. In addition to the cost of movers, there are start-up costs for turning on your utilities each time you move – this may include separate fees for water, gas, electricity, cable, and telephone. There also may be move-in/move-out fees associated with your apartment. And you may have to pay for temporary quarters as well as storage if your move in and move out dates don’t line up.

While housing is the largest expense in most people’s budget, especially for those who live in big, expensive cities, in the next part of this series, we will discuss ways to cut down on other living expenses while living in a large city.

In Real Life (IRL) – While I have never lived in New York City, my family hails from there, so growing up we visited my grandmother and other relatives quite often, and I got a first-hand taste of the high costs of apartment living in New York. I grew up in the Philadelphia area, but lived in the surrounding suburbs, rather than the big city so have no real world experience of living in that city. After college, I moved to the Washington, DC area where I got a pretty good taste of the expenses of big city living. While I didn’t live directly in the District of Columbia, I lived just outside the city limits in various types of housing, garden-style apartments, high-rise apartments, and townhouses and commuted into DC for my job.

I was able to save money on housing in the DC area by using several methods I highlighted above. I started out having roommates – at some point as many as four roommates! There really is no better way to cut down on housing expenses than by sharing expenses. And when you are young and single, it’s often more fun to live with friends, anyway. The lowest rent I paid (this was the early 1990s) was about $250 when I was splitting an apartment with two friends. As I got older and was making more money, and had frankly gotten tired of sharing living space, I decided to move out on my own. Costs had more than tripled to live on my own! My rent was $800 per month! That was a huge difference in my monthly expenses.

Monthly rent for a one-bedroom apartment for $800 might sound like a lot to someone in Kansas, but it was a bargain – even for the 1990s. Going rates at the time in comparable commercial apartment buildings were about $1,000, but I was able to rent a condo from a private owner who lived overseas. He may not have been aware of how much housing was, so when I found the deal, I grabbed it. (Today the same place would probably rent for $1500.)

Most of the time I lived near the subway (Metro) line. Because I was commuting into the city, the higher rent still made it worth it to me. Saving a few dollars each day in parking, gas, and insurance fees made up for the higher rental cost (and saved a lot of hassle of driving in traffic as well).

I lived in older buildings. The high-rise condo I lived in wasn’t as fancy as some of the newer ones. And there were no washer/dryers in the units. But living in an older building saved me about $300 per month (factoring in the going rental rate, rather than my discounted rate I was paying to my overseas landlord) over comparably-located newer buildings.

I waited to buy a home once I got to know the city better. I was tempted to buy a condo a couple of years after I moved to the DC area. But in addition to not wanting to be tied down, I was unsure for several years about which part of the city I liked best to live in. And when I finally did figure it out (Bethesda for those familiar with the DC area), I met my husband and needed to relocate to a different part of the city as his job is in the outskirts.

The only advice from above that I did not follow was to not move around often. In fact, since moving to DC 20 years ago, I have lived in 7 different places – the first 5 were in the first 10 years. There were many reasons – the first place was temporary housing. The second place was in a neighborhood that I didn’t really like. The third place got crowded with too many roommates. And after the fourth place I wanted to branch out on my own. So I suffered the consequences and put up with moving costs as well as all of those utility deposits and turn-on fees. But overall, I have done okay with housing in this big, expensive city I live in by following most of the advice I gave in the first part of this post.

Monday, June 15, 2009

Save On Your Beach Vacation - Part 2

Saving Money Tip #154 - Save On Your Beach Vacation – Part 2. In the first part of this series we talked about how to save on travel and hotel for your summer beach vacations. Today let’s discuss saving on eating out and entertainment.

Food - Eating is part of everyone’s budget whether on vacation or at home; so some of your money from your food budget can be diverted here. Of course, being that it’s vacation, many people like to splurge a little if they can afford it. When picking your accommodations, keep in mind your food needs and wants. Hotels with refrigerators are great for keeping snacks and drinks. Suites, efficiencies, or apartments that have full kitchens are perfect if you want to cook most or all of your meals. But again, then it might not seem like much of a vacation. And if that’s the only reason you are getting a bigger place to stay, you have to figure out if it’s worth the extra cost. You can also do a combination of eating breakfast and lunch at your hotel/condo and eating dinner out which will give you a break for the big meals but will save you money on the easier ones.

Since most people drive to the beach, you can bring groceries from home at prices that you are used to paying. Most supermarkets in beach towns will be higher priced, adding to your food cost. Another option is to go grocery shopping on the way to the beach before you hit the tourist area. If you decide to eat your meals out, then shop around. Many hotels or apartments that cater to tourists carry menus of surrounding restaurants. Compare prices. Ask other hotel guests around the pool. When you walk around, look at menus posted outside of windows. Also, most beach towns have discount coupon booklets at hotels, the Chamber of Commerce, and outside other venues. Pick them up and go through them the first day you are there. You may find some valuable coupons inside. Food doesn’t have to bust your budget on vacation. Pizza, sandwiches, and burgers are all great options for lunch and dinner. If you want to treat yourself, pick out one or two nights where you go to a nicer dinner for seafood, Italian, or other great meal that you like. A last option is to do take-out. Many hotels have seating near the pool where you can eat a meal. Getting food to go at a restaurant avoids you from paying tip. Also, you can supplement your meal with your own drinks and other goodies.

Entertainment – The great thing about the beach is that the entertainment that you come for is, well, the beach. And other than in New Jersey, most beaches are free to access (you need beach tags to enjoy the beaches in most New Jersey towns). Besides the beach, there is the pool at one’s hotel or condo, walking on the boardwalk, and people watching that rank right up there with great beach activities. The best part is that all of these activities are free. Then, of course, there is miniature golf, the arcade, and amusement rides that many kids expect to do on vacation. Boat excursions, hang gliding, parasailing, and other adventurous activities are also popular (but expensive) at beach resorts.

Decide in advance how much you want to spend on these extra activities. If they are not in your budget, then don’t do them. Make sure you tell your family in advance that you won’t be doing those sorts of things. If they know in advance then they won’t be disappointed. Spending time away from home, swimming, and walking around in a different town should be vacation enough for most people. If you have the money in your budget, then decide whether you are going to do miniature golf, arcade, and amusements every night with your children or if you can do each one once. Alternatively, have a dollar amount that you can spend and let them decide what they want to do. And you can always ask them to bring some of their money if they want to do more than you are willing to spend. Many people can get away without doing the more adventurous activities on a beach vacation. But if you are not one of those, then plan for it and budget for it. Keep in mind, though, that when you spend money at the beach on extra activities, you are taking time away from some free activities that are available. Don’t forget to look in the coupon books for discounts on many of these types of activities.

Lastly, don’t forget about souvenirs. If you are not going to be buying them, tell your children in advance. Again, they won’t be disappointed if they know up front. If you are going to let them pick something, shop around the whole time you are at the beach, so your children can make a wise choice at the end of the vacation. Don’t let them buy the first thing they see.

In Real Life (IRL) – As we are coming up on our annual beach vacation, I will share some of the things that we do to save money. As I mentioned in the last post, we stay in a hotel with an efficiency kitchen. It’s not big enough to cook meals in, but there’s a fridge and a microwave, and a stove. To cut down on costs, we eat breakfast and lunch in our room. We bring groceries from home and buy some things at the local supermarket. Cereal, bagels, and deli sandwiches are perfect breakfast and lunch options for this arrangement. We eat dinner out every night. Sometimes, it’s just pizza. Other times it’s a bit fancier. By eating out just one meal each day, we cut down on our expenses, but it’s also more convenient for our family with three young children to just eat in our room or around the pool.

For entertainment, we spend the majority of our time on the beach or at the pool. After all, that is one of the main reasons we go to the beach – to swim. We have found other free and cheap activities where we go to the beach. There are nice bike rides to go on (we bring our own). There is a lighthouse that is inexpensive to climb, and a nature museum that is free. My husband takes our oldest fishing off the pier with gear that they bring with them. We generally take them to the arcade a couple of times – each time with a dollar limit that they can spend. And we do miniature golf usually once. Most of the time we just walk in the evenings and enjoy an ice cream cone. Frankly, just being in a new environment is vacation enough for us.

We have found that we can spend almost half of what another spends for virtually the same vacation just by incorporating some of these tips discussed here. And while we might not be dining on lobster tail and sleeping in a luxurious hotel, our experience is just as much fun. How do some others save money on a beach vacation?

Friday, June 12, 2009

Save On Your Beach Vacation - Part 1

Saving Money Tip - #153 - Save On Your Beach Vacation – Part 1. Summer is almost here and many people are planning vacations to the beach. Beach vacations can be expensive. Travel, hotel, eating out, and activities all add up. But you can save money on a trip to the shore if you plan well. As with everything else, creating a plan is usually your best bet to keeping costs down. Let’s break down vacations into four: location, accommodations, food, and entertainment.

Location: First you must decide where you are going. If you live on the coast, you probably have many options available to you. If you live farther away, you may not have as many choices. But either way before you decide where you are going, look into as many locations as possible. Be aware that each beach town is not created equal. Some have a more family feel to them, while others seem to cater to teenagers and a partying crowd. Read up on your choices before you decide and talk to other people as much as possible to get their opinions of different seashore towns. Keep in mind the difference in flavor often means that some beach towns are more expensive than others, even if they are literally next-door. For example, in Delaware, Rehoboth Beach is generally more expensive than neighboring Dewey Beach. But Rehoboth Beach has a more family-friendly atmosphere, while Dewey has more of a college-kid vibe. Also, some whole areas have more expensive beach towns while others are much cheaper. For example, the North Carolina beaches are much cheaper than the New Jersey beaches. If you live in between the two, you can choose a North Carolina Beach if you want to save money. Even if North Carolina is a bit farther for you, it still might make economic sense to make the longer drive.

Accommodations: After you decide where it is you are going, you need to figure out where you are staying. Many people automatically think hotels as a place to stay at the beach. But you can also rent a condo or house, stay in a bed and breakfast, camp, or choose another accommodation. Look into all of your options and take in to consideration location, maid service, amenities such as a pool, kitchen facilities, washer/dryers, etc.. If you have kids a pool might be a necessity. Sure, there’s the beach, but it’s nice to have the option of swimming right outside your hotel room, too. If you are going for a longer stay, a rental home or condo might be cheaper than a hotel, especially if you have a large group. Renting a bigger place for more people is often cheaper than renting several motel rooms. If you want food as part of the package, a B&B might do the trick and may even be cheaper than a hotel with a pool and other amenities that you might not use anyway. Keep in mind the type of vacation you want and which amenities offered you would really use.

Once you decide what type of property you want to stay in, make sure you shop around. Accommodations even within a certain locale can have wildly different pricing. Furthermore, if you are staying on the cusp of the in-season rates, you might find that hotels have differing opinions of what is considered in-season. Staying at an out-of-season hotel will often be much cheaper. Book early. Hotels that are good deals often fill up first. Sites such as Trip Advisor will give you an idea of which hotels are ranked well. Remember, though, that people are more likely to complain than compliment, so don’t be too put off by negatives that you see in your choices. And once you are on your vacation, shop around for next year’s beach vacation. It will help you immensely to see accommodations in person. Even if you decide to check out a new beach town for the following year, it may be worth it to take a short drive while you are already nearby to check out the accommodations that you want.

In part 2 of this segment, we will discuss food and entertainment at your beach vacation.

In Real Life (IRL) – Growing up, we went to Atlantic City ever summer. This was well before gambling came in. We stayed in the same hotel year after year. Then the area started getting a bit seedy (which is why gambling came in the first place), so my parents moved our summer vacation down a town to Ventnor, which is a quiet beach locale that few people outside of New Jersey or Philadelphia probably ever heard of. Problem was, there wasn’t a whole lot to do there, so a few years later we decided to scout out a new location. Farther south “down the shore” was a seashore resort called Wildwood. I don’t know how my parents concluded we should check that one out because Wildwood really was “wild”. There were teens everywhere. Although, I will say that there was a lot to do. We stayed there one summer and my parents decided it wasn’t for us. Finally, someone at my dad’s work with recommended Cape May. Today Cape May has almost become a household name, but back in the late 70’s, it was unheard of outside the South Jersey area. We took a short drive from our home in the Philadelphia suburbs to check it out. And we fell in love. Quaint Victorian homes lined the streets. A picturesque shopping plaza centered the town. And although there were no rides or a large boardwalk, we found the town very charming. Pricewise, it was more expensive than other Jersey shore locales, but we found it to be worth it.

Once our new summer beach location was decided upon, we checked out various hotels. And what my parents came up with was an old Victorian hotel that served meals in the their old-fashioned dining room. Hotel rooms lacked air conditioning or televisions, but that was part of the charm. We were staying there to go to the beach, not to watch t.v. And we figured the ocean breezes would suffice for air. We stayed in that hotel summer after summer until one year when the owner decided to sell the place and the new owners fixed it up, raised the prices, and stopped serving meals. Since then we have stayed at four other locations in Cape May. We’ve stayed in standard hotels and condo-tels with full-service kitchens and washer/dryers in the apartment. As our family has branched out, we have decided to each get our own accommodations in Cape May. To that end, my family has found a hotel that has out-of-season rates at the end of June, while other hotels we previously stayed at are considered in season. The one we picked is two blocks from the beach, but near the pedestrian shopping mall, so it is less expensive, but also convenient. And while it doesn’t have a washer/dryer like the condo-tel we have stayed at, it has a baby pool that the condo-tel didn’t have. That is important to us. The room has an efficiency kitchen. And for nearly half the price of the condo-tel, the price difference is worth it to us even without the washer dryer and full kitchen. Each summer, my family discusses the possibility of checking out cheaper beach locales in other states, but we really like it in Cape May and by learning the area, we have found out not only a bargain hotel but we know where to eat and what to do for entertainment on a budget, too. For other frugal ideas, check out Frugal Fridays.

Tuesday, June 9, 2009

Decrease Your Wants

Tip #152 - Decrease Your Wants. In an effort to save money or get out of debt, you need to either increase your income or decrease your outgo. While increasing your income is a viable way to build wealth, many people just end up getting accustomed to their new income and spend the extra money they earn, without actually saving more or pulling themselves out of debt. We can talk about that in another post. Instead let's focus on decreasing your spending. As part of lowering what you spend, I recommend creating a budget, buying used, and calculating your cost per unit, among other things. But sometimes just cutting down on our usual expenses isn't enough. Sometimes we need to change our mindset as well.

If you are only trying to sail through a debt reduction plan or a build your wealth plan by living life as you have always lived it with slight modifications, you may not succeed. If you are eating rice and beans counting the days until you can eat steak again, you may not meet all of your financial goals. Depending on how far in debt you are or how much you need to build up your savings, you may need to dramatically change your expenses. While some fixed expenses may be more difficult to change - such as your housing and transportation expenses - discretionary spending, also known as your "wants" should be easier to change. These are things such as your eating out, entertainment, hobby, and other "fun" expenses. If you think you can cut down on buying two pair of shoes per month just until you have your debts paid off or if you think you can forgo one of your bi-monthly manicure appointments until you have money put away for your son's college, you may fail in your desire to save money or get out of debt.

Part of drastically reducing your debt or radically increasing your savings is changing your lifestyle by decreasing your wants so that you aren't putting a temporary fix (for example, eating rice and beans for six months until you get back on your feet), on a long-term problem (having champagne tastes on beer budget, as the saying goes). In order to increase your wealth, a big change in your wants for the long-term is necessary. You need to embrace major changes in your spending habits in order to succeed in your financial goals.

In Real Life (IRL) - One of my purposes of doing my weekly financial wrap-up is to be accountable to myself and my family. I'm sure most people don't care how much I spend at the supermarket or whether I paid $8 for a t-shirt for my daughter's school. But by doing a weekly diary of our expenses, it gives me a good sense of where our extra money is going. If other people do a similar exercise, I think they will come to the same conclusion. When other people look at our spending, I am sure that many think we don't spend very much. And I would have to agree. In the 2 1/2 months that I've been writing out our expenses, I have confirmed to myself that I am just not a big spender. I guess I don't have many wants, which is probably how I've been able to build up a large amount of savings.

Other people I know who are not saving much money or are in debt seem to have many wants - they buy clothes that are designers. They want fancy cars or cleaning help (okay, I'll admit I want that too!). But the main reason they are not saving money is because they have too many wants for their income. Creating a budget, cutting coupons, and comparing costs will help them reduce their spending. But until they change their mindset on what things they really want to spend their money on, I think many people will fail to reach their financial goals -whether it be to get out of debt or increase their wealth.

Monday, June 8, 2009

There Will Be Setbacks

Saving Money Tip #151- There Will Be Setbacks. As you begin the process of getting out of debt or building up your savings, there will surely be setbacks. Unexpected expenses will come up. Things will happen that will make you want to throw in the towel. My advice is to keep up with your plan. An unexpected expense or unforeseen circumstance will set you back. But that doesn’t mean you should go down a different road – one that doesn’t lead to getting out of debt or to greater savings. Even falling behind is better than not going down the road to financial freedom at all.

For example, suppose you are paying $500 per month toward getting out of debt. Then the unexpected happens and you break your leg. You can’t go to work and you lose income for a month. It would be so easy to fall back into your old ways and forget about the debt repayment plan. After all, you just wasted a month’s income. It is frustrating to have come so far in paying off debt only to start to fall behind. It would be so easy to give up at that point and say getting out of debt isn’t worth it.

But don’t fall into that trap. Before you even start on your financial goals, know that there will be setbacks. And then take them in stride. Instead of being debt free in 2 years, it may take 2 ½ years, but that doesn’t mean you should forget the good habits that you’ve worked hard at building up to this point. All roads to any goals have stumbling blocks. Handling them is just part of the journey.

In Real Life (IRL) – As I mentioned on Friday, my husband was in a fender bender. He called me soon after it happened and told me that a woman pulled out in front of him from a parked space so it wasn’t his fault. Unfortunately, the woman saw the situation differently and denies that she was pulled over and had just stopped to make a left turn while driving. Because of the conflicting stories and the fact that my husband was the car in the back, our insurance company has agreed to pay out the claims. In other words, they are not faulting this woman or are not finding it worth it to challenge her insurance company, which would end up costing them more in the long run if they lost rather than just paying it out to begin with.

It was a frustrating day on Friday. First because of the accident and realizing we need to rent a car while ours goes in the shop. Second because our insurance is going to pay the claim meaning we have to pay out our deductible. Third, my husband has a court date because the police (who my husband called!) could not determine the cause of the accident, so they are leaving it up to the judge. This will involve court costs and a possible fine. And then there is the likelihood possibility that our insurance costs will go up. As the dollar signs started adding up in my head, I was feeling some anger. Here I work hard at saving a dollar or two here or there only to be set back several hundreds of dollars in one instant.

And it made me want to just say, “the heck with it!” Why bother trying to get strawberries at a bottom-dollar price? Why try so hard to look for cheap activities for my kids? Who cares if dinner out costs $50 instead of $20? Why even bother with all of the hard work I do in keeping expenses down when we have setbacks like this. But then as my anger and frustration melted away later in the day, I step back and look at my overall plan – to keep saving, to have money put away for big future expenses, and to prepare for retirement. And I realize that there will always be roadblocks. And while it is easy to get frustrated and give up, it doesn’t make sense to do so. So we’re back on track mentally and I realize that I buy my meat on sale because it means I can handle unexpected expenses (even if I don’t like them).

Saturday, June 6, 2009

Our Family's Finances - Weekly Wrap-Up

Expenses – I did a big WalMart shopping trip this week. I spent $31 for portraits for my daughter’s 4th birthday and another $35 stocking up on things we need around the house and some food, all of which are much cheaper at WalMart than stores I usually shop at. My husband went to some yard sales! I wasn’t in the mood this week. He spent $10 (or so he says). I went to three supermarkets this week and spent about $50 (I think).

I spent $50 on gift cards for teachers and $5 for a potted flowering plant for my daughter who had her piano recital on Sunday. We went out to dinner afterwards and spent about $20 (with coupon!).

Deals – As we were leaving my daughter’s piano recital, another family invited us to go to dinner with them. Being I didn’t have any plans for dinner (it was a crazy, running around day, we said yes). We were lucky that when we got in the car out Entertainment Book had a coupon for this restaurant. It only saved us about $5, but it was something.

Income – I finally put some things up on eBay. I have bids on 3 items that will end next week.

Investments – I have $2,000 I need to invest before the end of June but I’m not sure it will happen. We go on our yearly beach vacation in June and we will have some unexpected expenses from my husband’s car accident. So I will probably get behind investing. As long as I get it all in by the deadline, I don’t really care. Also, we found out my husband will be getting a higher paycheck at the end of the year because he has contributed too much to his 401(k).

Giving – Other than throwing some money in a tin can outside the supermarket, I don’t think I did any giving this week.

Friday, June 5, 2009

Money Will Only Get You So Far

Tip #150 - Money Will Only Get You So Far. Having money is great. It will buy the clothes on your back, the roof over your head, and the food in your stomach. It will be there for you when the air conditioner breaks down or when you need a new car. Without a doubt, having money is easier than not having money. When you have money, there is no worry about where your next meal is coming from or how you will pay for the water bill. It will pay for a trip to the beach or a getaway to the mountains. It will pay for your doctors’ visits and for a day at the hair salon.

But money will only get you so far. It will not help you find love. It will not keep you from getting sick. It will not make you happy. Yes, your life will be easier if you have extra money in your pocket. It might get you to the best hospital if you are ill, but it won’t prevent you from contracting a disease. It might help attract someone of the opposite sex, but does not guarantee that you will be happy with that person. It might buy you a large, fancy home and a fast car, but it will not make you happy.

So while we should all be responsible about money - having enough for basic necessities and saving for a rainy day, money should not be the sole goal in life. Having a job you enjoy, people you love, and enjoying them both in good health will make you a much happier person than money will.

In Real Life (IRL) – For the past nine months that I’ve been writing this personal finance blog, I have become much more attuned to our finances. When I was young, single, and fresh out of college with a finance degree, I was the same way. I had an Excel spreadsheet of my finances, showing my current state and my expected future earnings. I had a date in the far future that showed when it I would have a million dollars. Then life got busy - I went to graduate school, met my husband, and had children. While I was still spending wisely and saving money, it took a back seat to all that was going on in my life.

Now that I’ve been writing this blog, I’ve been concentrating more on money. I have become much more aware of our daily expenses, how much we are saving, and when we will be able to retire. Each day I read other financial blogs and compare what others are doing. And sometimes I have a hard time focusing on things that are more important than money. Then I read about someone with a sick child or someone who loses a spouse and it brings me back to reality. Money is great to have, but there are many more important things in life. Once you reach a certain point of contentedness (no debt, healthy savings, and living within your means), then the focus should be on other things, not money. Life is not a race of who will have the most money before we die. Ironically, as I am writing this, I just got a call from my husband that he was in a car accident on his way to work. Nothing too major and he’s fine, but it solidifies what I just wrote.

Wednesday, June 3, 2009

Invest In Products That Last

Saving Money Tip #149 - Invest In Products That Last. When spending money on things, invest in the future. Buying things that are just one time use are often not the best use of your money, unless of course you will never use that item again. Instead, buying things that can be used over and over will give you a better bang for your buck, even if the initial outlay seems to be high.

For example, buying a one-time use camera each time you go on vacation or to an event seems foolish. At $5 or more a pop, you will have spent $100 after just 20 events. Instead, spend $100 on a camera that will last for years. After about just one year of use, the initial outlay will be much less than paying for a camera each time you use it.

What if you want to do an activity that will give you exercise and get you back to nature? You could easily rent a kayak or canoe or bike each time you want to go out. And until you figure out what it is you are very passionate about, that makes sense. But once you know what you like, it usually makes sense to buy the item, even if the initial outlay seems expensive. The cost of initial outlay of maybe $300 for a bike might seem high. However, bikes can easily last 20 years. The cost of renting, while the outlay each time is lower, would cost much more in the end.

Of course there are many times where buying one-time use products or renting would make sense. If you don’t plan on using a product very often then renting may be a better financial move. Or if you truly will only use a product one time, then go for a one-time use product to save money overall. But once you figure out that there is a product that you will use on a regular basis, then it makes sense to spend more money upfront for a good quality product that will last a long time. This idea can be applied to big items such as cars (buying versus leasing), homes (buying versus renting) or everyday items such as batteries (investing in rechargeables that can be used over and over versus buying regular ones that are one time use). Think long and hard about the item in question before you make the big purchase. But when you figure out it’s an item for the long-term, then the higher initial outlay will end up costing you less down the road.

In Real Life (IRL) – I recently started riding my bike again after a short hiatus. I rode it up the grocery store yesterday to pick up a few things. And the minute I got back on my bike, I felt at home. I bought this bike about 15 years ago! I bought it brand new (this was before the days of Craigslist or I’m sure I would have looked for a deal on there). And I purchased a nice, mid-level quality bike from a bike store for about $275 along with some extras. That $300 investment took me on bike rides throughout the countryside week after week all spring, summer, and fall for about 3 years. Each summer, I brought it to the beach with me for our family’s week-long summer vacation. Now I bike it around town for errands or for short rides with my children. The upkeep costs are minimal and I expect it will last another 10 years or so.

Was $300 a good investment for me? I think so. It wouldn’t have been plausible to rent a bike each time I wanted one. And while I could have bought a cheaper bike from a store like WalMart, it wouldn’t have held up as long or been as easy to ride. It has saved me from renting a bike at the beach and paying gas for short car rides when a bike will do. It has given me entertainment over and over again with each bike ride I go on, saving me money on alternative forms of fun. And its useful life isn’t over yet. Investing in this quality bicycle has saved me money over the long-term.

Another item we have invested in is a steam cleaner. At first we were renting them from the grocery store for $20 each time we wanted to clean our carpets. The costs added up. Instead, we got a steam cleaner (which was actually free) that needed some fixing up. My husband bought the replacement parts and now we own a very good steam cleaner. Even buying one new for a couple hundred dollars would have been worth it. We steam clean our carpets about four times per year. In about two years, an investment in a new cleaner would have paid for itself over the cost of renting one at the market.

Last example is our moonbounce. Even though we only paid $25 for it at a thrift store, we would have easily saved money by buying one new for $250, as well. For each birthday party we have at our house (3 parties per year), we set up the moonbounce. For a carnival camp we held at our house, we set up the moonbounce. On long holiday weekends or when friends from out of town are visiting, we set up the moonbounce. While we wouldn’t have rent one for each of these occasions, just three rentals (once per each child’s birthday) would have cost more than the initial outlay we would have spent retail. And it saves us from having to purchase other entertainment for our kids.

While I know it doesn’t always make sense to make big investments in products, it oftentimes does. It pays to do your research and know truly how much you will be using your product before you buy it. But once you determine that this is a product that you will use for many years, it makes sense to put up that high initial outlay and then reap the benefits later.

Monday, June 1, 2009

Find A Job You Love

Tip #148 - Find a Job You Love. One of my favorite sayings is “Do what you love and you’ll never work a day in your life.” I believe that is so true. Unfortunately, we all can’t be drummers or actors or interior decorators. While we should be realistic in our goals, working in a field we love will make a huge difference in the quality of our lives. Doing something that we are passionate about will be much more enjoyable than doing something that pays better money but is a job we do not like.

How many of us can imagine staying at the same job for 25 years or 40 years? Or how about 50 years? Probably not many of us. But those of us who truly love our jobs can’t imagine not doing it. Many of us put up with jobs that we don’t really like to make the “big” money (or at least better money), so that we can retire early and do what we really want – such as gardening, or painting, or writing. Well, how about incorporating gardening or painting or writing (or whatever it is we love) into our careers? It might not pay as much, but we will probably enjoy it more, and not mind putting in more hours or working at it for a longer period of time. Many of us work hard so we can retire early. How about finding something we are passionate about and not caring when we retire? Something to ponder.

In Real Life (IRL) – I want to introduce you to a wonderful human being. Her name is Mrs. V. and she is 91 years old. More than 50 years ago in the mid-1950s she opened up a preschool in her home in the town that I live in. She would have been in her late 30s at the time. At age 91 she is still running the preschool that she started! Imagine all of the change she has seen – having young children in the 1950s wearing formal clothes everyday to children in the 1970s in large flower-print clothes to children today wearing anything goes. From a school with no technology to one that has computers. The presidency in the United States has been through Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Regan, Bush, Clinton, Bush, and Obama all while Mrs. V. is educating children. What a feat!

While I do not know the status of Mrs. V.’s finances, I think I can say with 99.9% accuracy that she is not working because she has to financially. She could have sold off three-quarters of her land years ago and retired in style to a tropical island. But that is not what she loves to do. She is working because she loves children. And children (and everyone else) love her, too. Everyday when I dropped my children off at preschool, I saw the gleam in her eye being around all of the kids. When I drive around town and see her driving her lawn mower tractor on the grounds of the school, I see a strong person who takes pride in what she does. Has working at what she loves extended her life? I don’t know the answer to that question. Would she have lived just as long if she were an accountant behind a desk? I don’t know the answer to that question either. But I do know that her extended life has allowed her to keep doing what she loves. I hope one day I can find a job that I love doing so much that I won’t want to stop doing it, even if I live until my 90’s. Mrs. V. is truly an inspiration as someone who does a job she loves but hasn’t worked a day in her life. G-d Bless Mrs. V. May she live another 91 years. (In the picture, the woman in the red dress is Mrs. V. She is running the annual May Day celebration at the preschool - a true carryover from the 1950s.)