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Viewing the 'spending' Category

Wants and Needs

June 20th, 2014 at 06:34 pm

So I want a new vacuum cleaner. I do not need one, but my standup vacuum cleaner is 12 years old and probably should be replaced because it smells when it vacuums. I have a Eureka Boss Smart Vac. However I don't use it as much as my lightweight 9 year old dirt devil corded handheld. It's basically a dustbuster with a handle. I bought it in 2005 on a black friday doorbuster from walmart for $8. It's semi broken with the suction piece unable to stay in unless it's being used. However it's still usable, hence why I use it.

Anyway I probably sweep or vacuum everyday 2-3x/day. There is so much dirt/sand in the winter from the dog, and sand/dust from the kids in the summer I can't stand it. I obsess about it and can feel it even in the winter through socks.

So last black friday I told my DH I wanted a light handheld. He said sure go get what you want, but I couldn't bring myself to spend $200-300 on a dyson. But yesterday after dinner at a friend's house I used her Dyson DC59 animal which is $399 on Amazon. I would love that but it's just too much for me to spend. I looked and the lower/older model is $219 reconditioned factory or $259 new.

I am definitely lusting after this vacuum cleaner. The problem is how to afford it? What can I sacrifice or how can I make extra money? Now it'd be easy to use the focus group money I'll be making shortly, $100 on Monday and $125 next month. But I think that's too easy. Maybe I should have a goal that if I can sell stuff on craigslist or a consignment store, I can buy the new vacuum. That would be a lesson in getting rid of stuff to get something new as well as delayed gratification.

How do you deal with wants versus needs?

Making bad financial decisions

June 4th, 2014 at 07:25 am

I have a friend in a very difficult situation. She and her husband are going to divorce eventually. They have three kids and I can't say I blame her. Long term cheating is the reason (4 years), but she's trying to get her life in order to leave.

I suggested that she really organize herself and finances before saying she wants a divorce. But it's hard obviously she's a stay at home mom, and she needs to get her license reinstated to work. She used to be a mental health counselor. I think she's a good person but seriously she's terrible with finances and I don't know if she can ever get herself righted.

She spends money like it's water. She only shops at whole foods and throws away food left and right. She said yesterday "I need to stop buying precut fruits and make an effort to cook dinner." I suggested buying frozen dinners and start from there to get into the habit of cooking, then learn after getting used to cooking.

But the real trouble? Both she and her husband make a ton of bad financial decisions and have no idea how much money they make or have.

Bad decisions
1. Bought a new to her Mercedes Diesel SUV 7 seater. Got a loan because she said they needed credit.
2. Spends on a credit card and just makes payments to have room to spend more.
3. Doesn't file taxes so her husbands paychecks are garnished by IRS for no payment.

Because she wants to leave I suggested to her that perhaps she start by collecting all paperwork to figure out how much money they make. And to file taxes. I even offered to help. I told her go around her house and collect any remotely financial paperwork.

But then she does things like get plastic surgery, go on week long yoga retreats to Belize; while saying she can't afford preschool for her kids. That paying $5k/year, what I pay for mine is too much. I couldn't help myself but I said one week in Belize cost more than $5k. She said it did. So right there was preschool tuition.

I don't know if she'll be able to get her act together. I don't know how to advise her to get on a budget or even to know what they make. Her husband gives her a cash allowance. She asks him for money when she needs it. Sometimes it's there and sometimes it's not.

She really has no idea about her financial house. I'm not even sure where she should start. Her husband works construction half the year. Then has his own business as a mechanic and plows snow in the winter. He has a shop but she has no idea how much he makes.

If she wants to leave him she needs to get her finances in order. But it will be a long process. I hope she can get herself pulled together.

Tips or ideas for someone really bad with money? I do worry about her and really have suggested that I help her with mint or just sorting paperwork. But the truth is that she says she'll get to gathering paperwork but never does.

what parents teach us about money

May 27th, 2014 at 04:53 am

This happened yesterday in the shoe store and I found it interesting in the perspective of money and kids.

I have some very rich friends. Very rich, we are talking the 1% or probably closer to the 0.5% easily. Very nice people and pretty normal in many ways.

But at the same time there are some stark differences. Now I will admit we are closing in to the 1% in income, but certainly not in assets. I openly acknowledge we live a very "nice" lifestyle and definitely upper middle class. And a lot of our income goes to savings so I do try to stretch every dollar we make. Every dollar not spent, means less we need to save.

But anyway as you know I went to stride rite and landed great deals on shoes. I bought 9 pairs of sneakers for $60. That works out to $6.66 a sneakers for stride rite!!! Cheaper than even thrift stores at least where I live. But I never buy shoes used because it's not good for developing feet to have used wear patterns. Even hand me downs between kids I sell if I think they are too used.

So as I was there on Monday getting more shoes (I bought 4 pairs Saturday), then "5" on Sunday. Anyway I ran into a friend who is "VERY RICH" and there because I told her about the sale. She was very excited to be buying shoes because her daughter needed them but to get on a deal was great.

I pointed out the cheapest options (ie what I bought) but she said her daughter wouldn't wear them. She said daughter is very picky, and will never buy the same shoe two years in a row. Also she's very particular about color and style. So the newest models.

She asked me how I get my kids to wear what I want, ie the cheapest, ugliest shoes in the store. She runs into the problem with clothes. Her kid won't wear stripes, no leggings with buttons, nothing but pink and purple, no zippers, etc. And always buys "high" end boutique clothes so she doesn't match other kids.

My answer? I told her that I tell my kids I'm not made out of money. They can pick their clothes out of the choices I give her (both our girls are 4) but that's it. I have X amount of $$$ and she's got freedom to pick from the clothes I offer up at the store or home, but at the end of the day we have to buy what we can afford. If she doesn't wear it and it's a gift, it's consigned.

I told my friend Mrs R, "I say we can't afford it. We can afford this and you can get this. You can wear this because that's it." She said how does she get it?

I said the "choice" is there is none. I give my kids choices because we can afford enough for choices. But I realize that if we had less money there are less choices. And even if we make more money I don't think I'll change.

I just can't fathom paying $16 for Hanna Anderson shorts for a 4 year old. Sure great quality, but seriously how long are they going to wear them? One season? Buy 4 target shorts for $20 and call it a day. At this age they wear clothes hard and for a shorter amount of time. People are going to say but it last longer. Really? Long enough that your growing kid can wear it for years?

I freak at the idea of paying $50 let alone $140 for a pair of shoes. Mrs R buys her kid uggs every winter and this season they were $140. I got knock offs from $20 from Walmart. At the end of winter her kids foot didn't fit and mine were worn. I bought winter boots kamiks for $10 from the outlet and she got whatever color was leftover. Mrs R bought new ones the color her kid wanted for $50.

Another example my kid gets to pick a snowsuit for $30 from Costco. It works fine and I'll use it for a hand me down for kiddo number 2. Mrs R buys North Face Jacket and fleece for her kid. We're talking $100 fleece and $200 jacket. I've got a lot of friends who do this. Seriously? Target and Costco. I mean one season! The kids don't stay the same size for more than one winter. At least I'd like to meet a kid who does.

But heck I will admit to getting some nice outerwear for my second kid from friends Smile Mrs R then has her older kid need shorts and she said her husband asked how much should they give their teenager. He suggested $20? She said that won't buy one shorts. It would if you shopped at Target. But A&F, AE, mall stores, etc all cost way more than that for one pair. Perhaps I'm in for it when my kids get older and want name brands, but I doubt it. Again I'll be on the "it's not in our budget wagon."

But Mrs R is shocked I'm so strict with my kids. That I would be so religious as to say we can't afford it and you don't have a choice. She knows we make a decent living and to be to frugal is a little odd. I don't think I'm being mean, I think I'm teaching them that we only have so much money and we are using it wisely. So they don't have name brands and even their swim suits and "carters" clothes come from costco. But I spend less than $50/month on clothes all year for my kids including shoes and seasonal wear because of deals and costco.

Growing up my mom gave me a annual clothing budget and said this is it, make it last. So I had to shop sales and see how to stretch my dollars. I had what I had and that was it.

I think I'm teaching them not how to be cheap, but how to maximize income. I get we can afford "more", but honestly do kids really need name brand? And I buy stride rite because I think good shoes are important. And my kids feet are ridiculously wide. But even then I try to wait for deals and buy when they are on sale. I keep the receipt in boxes until we use them just in case they grow and skip a size. But otherwise? Target, Costco, Walmart, Marshalls, Kohls are my places for clothes. And even then I'll wait until serious discounts.

What are you teaching your kids? At least where I live everyone is a little fashionista, even boys. I can't imagine knowing what I know about prices of clothes how so many parents can spend so much on kids clothes. It's more than I even spend on myself.

questioning a high cost of living...

May 23rd, 2014 at 05:30 am

Is it worth it to live in a HCOLA? Does the income you can potentially earn outstrip the costs? Maybe.
But the truth is that there are more expenses than just a large mortgage although I'll get to that later.

I hadn't realized all the extra expenses but the small stuff all adds up. Our heating expense are $3k/year, $2500/year electricity, $4800/year for gas for cars. Small differences in price could give us financial freedom somewhere else. Saving on heating and electric bills or even gas could be diverted to paying for an individual health insurance plan.

But what really made me start looking at our financials and future plans was we decided to look at houses. We've been in our townhouse for 9 years now. Bought at the peak in 2005 and we've been happy. As I explained in an earlier post we never expected to stay here past 1 kid. Turns out we're still here with two.

But the truth is we started looking at homes this year. We decided why not make the jump, we've been prudent, paid down our home and increased income. Truthfully we can't afford it. Insane you say? I agree.

We looked at our monthly budget and decided okay we'll increase our payments a little, loosen the purse strings, and cash in some home equity. We bought our current townhouse for $575k and can sell it for $729k low end. With what we owe I estimate we'd have comfortably $300k in equity to put down on our next place or 20% and bank the rest.

Well we started our budget search at $750k. After looking around we realized no way in hell were we going to be able to buy a house. We upped it to $800k and started to finally see homes sort of. We looked a house 0.5 miles from us 3 bd/3ba 1500 sq ft on a 3400 sq ft lot listed at $749k went in a bidding war the first weekend with 10 offers, 3 over $800k and settling at $830k. Um no thank you bidding war.

Well that meant our budget needed to head to $900k to get into the market at an "entry" level home that might need work. So we stepped back.

Trust me as you read you're probably screaming move the f$*% out LAL! You're insane. But my DH I think wanted to cry because he loves his career, he wants to continue at it, but the reality of us living here is a tough pill to swallow. Yes DH loves his job, but even if I go back to work we'd be one job loss away from losing the house if we took on a huge mortgage. And honestly we'd be working for what? To make more money to spend it on housing and living expenses. I pointed out we are constantly chasing a lifestyle that people in lower COL already have. It was time to reevaluate the true financials.

Honestly I wasn't comfortable spending so much and getting so little. I didn't like the idea of DH or potentially me being a clown car commuter where he drove at least 1 hour or at "least" an hour on public transit. What's the point of having a family you don't see? Why should he get up and leave the houose at 7 before the kids do to come home by 6 and maybe see them 1 hour??? Why live so far way to afford a home? Then we'd be better off staying put. But do we want to raise our kids in a townhouse forever? Do we want to yard or indoor playspace?

These questions are what ultimately lead us to the hard decision that we need to move. That we need to reevaluate and restock our life. We need to consider working smarter. We've amassed a pretty sizable pot of money, perhaps it's time to maximize what we can do with it.

The next step? Early retirement...but not quite what you think.

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