Thursday, December 16, 2010

Make Your Purchase And Savings Plans For 2011

Tip #280 - Make Your Purchase And Savings Plans For 2011. As 2010 is drawing to a close, it is time to start setting up your financial plan for 2011. I believe first you should come up with some general ideas of what new expenses you think you will incur in the next year, what big purchases you would like to make, and how much new savings you want to put away. These would generally be for things that were not included in your last year's budget. For example, if you are used to putting $300 per month toward home maintenance, you do not need to add this. However, if you want to add a new deck to your house, put in down on your list. During the next few weeks you can then make a formal financial plan and budget. For now, pull out a sheet of paper, and write down your general plans for next year.

Here is what a sample plan might look like:

Plans for 2011

1. Buy new dishwasher - $500
2. Preschool for son in the fall - $1200
3. Redo middle daughter's bedroom including furniture - $3000
4. Save toward older daughter's wedding - $2000
5. Start an IRA for wife - $5000
6. Put money to youngest son's ESA plan - $2000
7. Start a beach vacation fund: $600

Now that you have your new plans for next year written down, your next step will be to create a formal financial plan and set up a budget based on expected 2011 income. Both of these links are what I wrote about this topic last year, but frankly the ideas don't change from year to year, only the amount that we put in them do. This year I added this additional step of writing down your new expenses and savings as a way to get you thinking of where this money will come from when you start your formal budget. Either other line items need to come down, you need to make more income, or you need to revise your plans (decorate your daughter's room with furniture from Craigslist, for example, so the amount is only $1000 versus $3000).

Doing a simple exercise like this also starts you thinking about next year's finances and gets the ball rolling to write up your formal financial plan and budget. So why not come up with your list?

In Real Life (IRL)
- Over the past few weeks I've been thinking about expenses and savings for next year. What prompted it initially was a trip to Philadelphia for my friend's daughter's Bat Mitzvah. I always knew we would have this expense down the road with our children. But the road is getting shorter now that my oldest turned 9 in November. And the reality hit home when I attended the Bat Mitzvah - a DJ, cha-ching, flowers, cha-ching, clothing, cha-ching, lunch for 100+ people, cha-ching. I am not one to go overboard with events, but even with a simple affair, Bar- and Bat-Mitzvahs cost in the thousands of dollars. And we haven't started saving a dime for it yet!

So the first thing on my list for next year's expenses is starting a fund for daughter #1's Bat Mitzvah. I haven't yet come up with an estimated amount (I think I'm scared to figure it out). But off the top of my head I'm guessing we will need about $15,000 so $3000-$4000 might be a good amount to save next year for a 2014 Bat-Mitzvah.

Next on my list is joining a synagogue. Right now we belong to one but it is not really an ideal fit for us. We went synagogue shopping in the fall but put off joining since we were unsure if we'd even be living here in a year. The good news is my husband's boss told him the plans to close the office have been pushed off a few years (YAY!). That means it's time to join a synagogue where we really fit in. We're going to wait until the summer since my girls' Hebrew school is paid off through the rest of the school year. Anyway, the cost of a synagogue for a year including Hebrew School is about $4000-$5000. Ouch! Gosh between Bat-Mitzvahs and synagogue membership, being Jewish is not cheap.

Our last big expense that we might have for next year is braces. The dentist told my daughter that she needs to visit an orthodontist for a consultation. We don't know whether that will result in her getting braces yet - I hope not! - but we know it's an eventual expense anyway. We're hopeful that the costs are spread out over a few years. Plus we have expanded dental insurance that should cover some of the costs, so I am estimating a $600 cost to us next year. Hopefully, that will be put off, though.

Oh, and one more thing, we really need to start saving for another car. Our van is pushing 150,000 miles, and we've been having work done on it more frequently. And it runs fine, knock wood. But we know it's only a matter of time before we will not be comfortable driving that thing to Florida. I hope we can hold on to it for 3 to 4 more years, but only time will tell. We really should be putting a couple thousand towards saving for it per year. Oy.

Just glancing at my list above tells me we will need to bring in about $10,000 more in income to fund these new goals. All this leads me to finding a job in 2011 as my husband's job has a pay raise freeze, so the money won't be coming from there. And I don't believe our other expenses will be going down by much. I've been talking getting a job for a long time, and I was hoping to go back to my old job this past fall, but that did not pan out. Ebay selling is going very well, but there is only so much I can make that way. I can make much more somewhere else. I have something in mind, but it might not happen until spring or summer. After the holidays I will pursue that path. In the meantime, we have a couple more weeks to formalize our financial plan and write up a budget. I hope you will do it, too. Happy planning! For other financial ideas check out Frugal Friday.

Friday, December 10, 2010

Buy Batteries Online

Tip #279 - Buy Batteries Online. This doesn't sound like a money-saving tip that will get you rich. But, if your life is filled with digital cameras, MP3 players, books that play music, video cameras, or any other electronic or toy that takes batteries other than the usual AA batteries, it's so worth it to check out eBay.

If you need a button-cell battery or one for your cell phone, head on over to Radio Shack and price the battery. Then log on to eBay and you may find that the battery prices are 1/10 of Radio Shack's prices. Usually on eBay, the batteries are coming from Asia, and you may have to wait a week or two to get them. So, it's best to order them in advance of needing them. I'm not busting on Radio Shack, that just seems to be the most popular place to go to for batteries. But eBay will likely beat other stores' prices, too.

Again, it may not make you wealthy, but with all of the "toys" (adults' and children's alike) that many people have today, the cost of batteries is not inconsequential. Sometimes it's the small things that add up that prevent people from building up wealth, and the cost of batteries would fall into that small things category that people don't give much thought about, but does affect one's bottom line.

In Real Life (IRL) - Several years ago, my daughter had a toy that took a certain button cell battery. We have a Radio Shack within walking distance of our home, and my husband walked up there and priced the battery. He came back and said the cost was $9 for the battery. Ouch. I don't think the toy was worth $9. Then we looked on eBay. For under $2 including shipping, my husband ordered a whole pack of button cell batteries - about 20 of them! Over time we have used most of them for various electronic toys. Had we continued to buy them at Radio Shack, the cost to us would have been over $100! Although, I'm pretty sure we would have gotten rid of some of the toys rather than pay for overpriced batteries.

Over the years, eBay has been the go-to place for these types of batteries. Recently, my husband needed a battery for an electronic do-dad of his. I don't know why, but again he went over to Radio Shack to price the batteries. The cost was $15. Again, he came home and checked eBay. And the price was $1 including shipping! He bought two!

We have never had any problem with the quality of the batteries we have received from Asia. And I doubt they are any different than the ones that Radio Shack (or Best Buy or Wal-Mart) sells. The only difference is the lack of markup. Happy battery shopping! For other frugal ideas, check out Life as Mom.

Thursday, December 2, 2010

I Am The Lamest Blogger Ever

I just wanted to put a post out there that I am the lamest blogger ever. I don't know how other bloggers post on a daily basis. I'm just trying to keep up on a weekly basis and am failing miserably.

Okay, now that that's out of the way, I want to add that I haven't been thinking much about money lately specifically saving money. If anything, I've been thinking about how to spend money. It kind of goes against my nature but it is how I've been feeling. Two weeks ago, the rabbi, where my children go to Hebrew school, passed away. It wasn't sudden, as he had been ill for a few years. But he was 34 years old. Thirty-four! Gosh, it makes one stop and think. He left behind a wife and four young children. There is a website dedicated to his memory, and I have found myself looking at it from time to time, browsing pictures of him from happier days. And when I see pictures of him smiling at family events or when I read stories about him telling jokes to his congregants, I think to myself, does saving money really matter when it all comes down to this?

Well, yes I still believe it does, to an extent. But there is saving, and then there's going overboard. Put money away for emergencies. Yes. Scrimp every last dollar you make. No. Save money for retirement. Yes. Turn off the heat each night before you go to bed. No. Put money away for your children's education. Yes. Don't ever take them on a vacation. No.

None of us know how many years we have left on this earth. G-d willing, we will all live to 120. But if we die tomorrow, will we be sorry that we didn't order that steak dish that we love so much at our favorite restaurant? Will we be sorry that we never took that vacation to Paris? Will we be sorry that we didn't spend money to learn how to play the piano?

On the other hand, if we live to 120, G-d willing, we do need to live on something other than boxed noodles. And we cannot depend on the government or others to take care of us. So we do have to put money aside in case something catastrophic happens. And we need to have a plan to pay for medical expenses for ourselves. So I will always think saving money is smart. And I do think we should all be doing it. But, let's not become a hoarder of money. Once you have an emergency fund, are happy with your retirement savings, and feel comfortable with the amount you have saved for your children's education, spend freely on what you enjoy. Take that trip to Paris or bring your kids to Disney World. Eat out at your favorite restaurant on special occasions. Sign up for piano lessons.

As far as we know, we only get one chance at life on earth. And sometimes that life is short. Many times it is not. So, save wisely, but enjoy yourself, too. As none of us know which life expectancy camp we fall into. For some, the length of our life is not nearly long enough as was the case with our beloved rabbi. Fortunately, he was a great role model for living life to its fullest. He seemed to enjoy every moment on earth and every person he was in contact with. While one can certainly live a full or even fuller life without spending a lot of money, I have found myself loosening my reins a bit on our spending because of his untimely death. I don't want to regret not doing things because I didn't want to spend the money - money that we had to spend. Saving just for the sake of it is not always the best option.

So I am looking at our savings and spending with new eyes with the idea that if we can afford it, and it will enrich our lives, then we will do it. Having said all that, I know that the best things in life are free. My family and friends, and the beauty of nature don't cost a dime. Although, that plane trip to see nature's finest might. Thanks for being a good example, Rabbi Levi. We miss you.