Category Archives: Saving money

How the Last Recession Prepared Me for the One that’s Coming

It’s been a while since I’ve had the time to check in. To say that this Spring has been among the strangest, and one of the most unexpected time in our lives, would be an understatement.

It’s been about eight years since I started this blog; just a few years after being forced to adjust my life to a new normal. Like so many people who are dealing with that today, the recession of 12 years sent the economy tanking, the housing market tumbling, small businesses closing, and corporations downsizing. Massive layoffs, unemployment, company bankruptcies, house foreclosures, and lots of uncertainty. And even as we slowly came out of it, thousands of people remained underemployed for years after; having to learn how to live with their new career and smaller salaries.

Millennials graduated into a shaky economy, where they struggled to find jobs, or accepted ones far less than the salary they expected their college degrees to help secure. Some of their Baby Boomer parents never found new employment (ageism), while many Generation Xers had to transition into positions far less than their expertise, prior experience, and career positions had previously demanded. We were all in this together; trying to figure things out, move forward, stabilize the economy, and get back to as close to normal as possible. 

And we did. We succeeded.

It was painful, and a lot of what was, would never be again. But the economy came back. Jobs came back. New small businesses emerged. Entrepreneurship grew. We survived.

But here we are again. This time dealing with something much bigger than the loss of a job or home. We’re being thrust into a new normal where we must deal with that and the ever increasing, globally impacted, loss of life in this pandemic they call COVID-19.

There is an old saying that Handsight’s 20/20. But I think Foresight can be as well; especially when you start to see familiar signs; warning bells.

One of the things my four years in the last recession taught me was the importance of planning and preparation.

Planning is creating a type of road map that outlines what you will do in an emergency, or when you see a catastrophe (natural or financial) heading your way. It’s what children learn in school from the fire department when they ask every to create a fire escape plan at home. In Public Relations, we call them crisis management plans which outlines what a company or organization should do in the event of a crisis. If they follow the plan, it usually helps them get through the crisis without stumbling and causing more harm.

Preparation is putting into action your plan, and collecting the resources needed. If the forecast is for a foot of snow in a place that barely receives an inch, then ask yourself, what do you need to do if you end up being “snowed in,” schools out, and you know you will be unable to get to work due to road conditions? A prepared person would probably grab the folders and files they need from their office so they can work from home; encourage their kids to bring their books home from school that day; and by all means, stop at the grocery store to pick up any items they have on the monthly shopping list, that they weren’t planning to do for another week. At home, someone preparing for a major snow storm might also take the time to check the batteries in their flashlights, pull out their candles or secondary light sources, and make sure all of the important devices are fully charged.

It’s too late to check for batteries once your power goes out. Or to realize your pantry is mostly empty, after the roads have closed. And yes, if you only have one pack of toilet paper in a house of four people, you should probably be mindful to pick up another one “just in case.”

About 10 million people applied for unemployment benefits, in the wake of the Coronavirus related layoffs, business closings, cancelled public events, and a volatile stock market. While a number of companies have instituted pay cuts to keep their employees. Rent, mortgages, groceries, medicines, utilities, and other bills are coming due, with many people lacking the funds to cover them.

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According to Bankrate’s Financial Security Index, nearly three in 10 (28 percent) U.S. adults have no emergency savings. One in four have a rainy day fund, but not enough money to cover three months’ worth of living expenses.

Sadly, there are a lot of Americans, literally working paycheck to paycheck, with no room in the month for emergencies or unexpected hits to their finances. This is a particularly difficult time for millions of people. But for many others; especially those who have always had a steady income, your habits, your lifestyle, and planning, or lack of planning, does still matter. What you have today doesn’t guarantee your tomorrow.

I’ve watched an industry I thought was invincible, screech to a grinding halt. And related companies institute pay cuts across the company. 

So what can you do now if you’re one of the people whose rainy day funds are not sufficient to cover you in the event you’re next to lose your job?

  • Stop spending frivolously.
  • Start saving immediately.
  • If you’re not already a coupon user, start shopping with them now.
  • Utilize rewards programs for groceries and gas to get extra savings.
  • If you don’t need it, don’t buy it!
  • Even as you desire to support local restaurants, limit how often you’re eating out.
  • Go through your bank statements searching for automatic withdraws, and stop the ones you don’t need/use. If your gym is closed right now, are they still charging you a monthly fee?
  • Get rid of duplicate services (do you really need both Hulu and Amazon movies; Spotify and Apple Music?). 

If you do not have a personal financial crisis plan, consider developing one now.

If the last recession taught us anything, it’s that what may have taken only months to get in to, took the majority of people and various industries years to climb back out. How are you preparing yourself now for the long-term?

 

 

What Will You Do in 2020 to Make Your Difference Financially in 2021?

So, in my last post, I mention the four major areas I plan to focus on in 2020:

  1. Personal Life
  2. Home Life
  3. Financial Life
  4. Professional Life

I said that I’d be sharing some of the things I’m doing, learning, and planning for myself in this new year. No particular time table. No scheduled challenges. No added pressure contributing to the stress.

Even though I was planning to write from my own experiences, I couldn’t pass up this opportunity to share an awesome story with you from one of my BFFs adult daughters. I think you will find it very inspirational, even if the nature of it doesn’t specifically apply to you.

For the sake of this blog, I will call her LW, a 30-something year old, recently divorced, working mom of two kids. And like many of you reading this, she is in debt; a lot of debt. And like a number of you, she decided to do something about it.

calculator and pen99.999 percent of you will never win the million dollar lottery. And almost as many will likely never receive a multi-hundred thousand dollar settlement or inheritance. So the reality is that if you are living with debt that you can’t pay off each month, and you want to change that, then you have to be willing to change you. And by changing you, I mean, change your mindset about debt.

Debt isn’t something that just poor or middle class people struggle with. The simple definition of debt is owing more than you earn or have. Break-even means only spending what you earn/have. So if you earn (or even win) one million dollars, but you spend one and a half million; then you’ll find yourself in debt to the tune of $500,000. That’s why you often read about athletes who received huge multi-million dollar contracts, ending up broke just a few years into their retirement; or lottery winners losing their millions less than five years after their win.

But debt doesn’t always come about as a result of mismanagement of money. LIFE sometimes throws us a curve ball, resulting in unexpected expenses, a shift in lifestyle, or downturn in the economy. A bad investment, a business deal gone wrong, job loss, mounting medical costs, and lots of other things can impact your financial life. How you respond, and your willingness to adjust your lifestyle to your new normal, may determine the future of that financial life.

Here is LW’s story. The “bold” is my emphasis.

In 2019 I was finally in a position to take control of my finances, and I’m taking a moment to celebrate what I’ve accomplished. 

On 1 Jan 2019 (after my separation but before my divorce was finalized), I had $120,814 of debt to my name. The number made me physically ill to look at, and I was burdened by 6 different minimum monthly payments on credit cards, a personal loan, a 401k loan, a car loan, and one (large, consolidated) student loan.

In July, my divorce was finalized.

Today, on 1 Jan 2020, my total debt is now $68,891 – just my car loan and student loan. I paid off $51,923 of debt in 2019, focusing on the lowest balances first, and snowballing those monthly payments into the next-highest debt as they were freed up. 

I didn’t accrue any new debt. I’ve been so blessed by family – I lived with my parents rent-free for half of the year, then moved into a family-owned condo where I pay very low rent. I’m blessed with a good career and good income (that I work hard for), but even outside of that I worked my ass off

I sold a LOT of my stuff. I started reselling gently used clothing on Poshmark and delivering for Shipt. I’ve never really had problems controlling my spending, but I tightened my belt even more this year, trying to focus on reducing fast food and restaurant meals and cooking at home instead; using what we have instead of buying new; continuing to use coupons and rebate apps like ibotta, and using our local “Buy Nothing” Facebook page. I didn’t buy any Christmas presents this year except for my girls (sorry, fam – next year!). 

And it feels amazing; freeing, empowering.  

I have a long way to go and a lot more work to do. And in other ways this year was full of more ugliness than I’d ever wish on anyone. But it feels incredible to see the quantifiable progress I’ve made in this one area. I’m on track to be completely debt-free in 2020

2019 was for recovering, stabilizing, and rebuilding. 2020 is for flourishing, living generously, and teaching my girls how to do the same 

— LW

 

Being Prepared for the Aftershocks

Yesterday, on Independence Day, Southern California experienced a 6.4 magnitude earthquake. The USGS describes an Intensity 6 as being “Strong.” The epicenter of the quake was in Ridgecrest, CA, a small city described as a “desert town.” Fortunately, as of this writing there’s been no reported deaths, and the destructive damage was relatively low. Several people attribute that to the strengthening of the building codes in California, understanding that living there means being prepared for when, not if there will be another earthquake.

One of the things I also heard many emergency personnel and members of the media refer to was a reminder to everyone about the importance of having their “earthquake preparedness packs,” since there is an expectation of potential strong aftershocks. The contents of the earthquake packs aren’t that different from a general survival kit ready for any emergency — tornadoes, hurricanes, city-wide power outage, or even an economic downturn. It’s better to be adequately prepared for any kind of emergency, even if you never end up having one, than to not have anything, and then experience an emergency and not have the basic means to survive.

That reminder got me thinking about a post I’d made several years ago talking about the theme of Catching Raindrops in Water Buckets, and why everyone should have personal water buckets.

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Your water buckets are those things you use to catch the “rain” of blessings that you’ll need to sustain you, not for today, but be at the ready in the future. While you can’t know every possible scenario that could happen in your life, you can have a plan to prepare yourself for how to deal with most circumstances as they come.

Maybe it’s learning how to turn your hobby into an income stream for your family, or starting a second business for your retirement. Perhaps as a single adult, you take in a roommate so that you can put the extra funds away. Water buckets are basically ways to save money and resources today so that you have them to use later when you might unexpectedly need them.

If you’ve been through a divorce, and suddenly found yourself dealing with the shock of returning to just one income — perhaps your spouse carried you on their insurance, and now you’re having to pay for your own, along with the mortgage, and that new car that at the time seemed like a good idea — then you understand the concept of having the benefit of having something in those buckets.

Maybe you’re single, just lost your job, and now there’s no second income to fall back on; no one else to help pay those bills or provide for the health benefits that you just lost. 

Perhaps you still have your job, but with the cost of everything increasing, you’re just barely making enough to cover your monthly expenses. But then the brakes go out on your car — out of warranty, of course.

If any of these scenarios sound familiar in your life or someone you know, then you understand that life is full of surprises and unplanned stops in the middle of places you never imagined yourself ending up. And while we can’t control some of the circumstances that may happen to us, we can control how well prepared we are to take on those events when they happen.

Being prepared for life’s unexpected turns means being willing to create a plan now, so that you are where you need to be, have what you need to have, or are on your way to accomplishing steps to help you when a crisis enters your life.

So when it’s raining outside, the grass looks green, the flowers are colorful, and all the trees are thick with foliage, don’t worry about your neighbors or friends looking at you strangely because you’ve placed your water buckets outside the house to fill them up. Maybe they haven’t checked the forecast to know that there’s a drought coming. Be thankful that you’re going to be ready when it hits.

Why You Should Peel Your Own Potatoes!

Have you ever noticed how much you’re paying for that small container of chopped watermelon compared to the cost of a whole one? If not, then you should stop and take note. Or how about that veggie tray, with the handful of cut carrots, celery, and the top of one broccoli? You’ll notice that you’re not just paying more for those items, but most of the time, you’re getting less.

You are basically being charged for your laziness!

Sure, we all like the convenience of saving a little time from having to peel and chop our fruits and/or vegetables. But an extra 50 cents here, and a dollar and fifty there, can start to add up to as much as ten dollars in one month; and start to grow to almost a hundred dollars or more in a year’s time!

Don’t believe me? Test it for yourself the next time you go shopping. Take your phone and capture the cost of that head or bunch of lettuce, and then go over to where they keep the bag of lettuce and take a snapshot of that. That’s where you’ll also find the bag of sliced bell peppers, snapped green beans, and chopped onions — conveniently located for the grab and go! And you’d be right, in terms of saving some time. But once you get home and pull up all of your comparison photos, write down how much money you would have spent purchasing the pre-packaged items, and what you would save purchasing the whole produce.

It’s amazing what our laziness is costing us. Like paying $2.49/lb for red onions that have already been peeled. Versus paying only 89 cents per pound for the same red onion that you go home and peel yourself. During my recent shopping spree, I picked up a head of lettuce for $1.49 versus the bag of the same type of lettuce for $2.99.

And it’s not just fruits and vegetables.

Peeled shrimp will cost you as much as two or three dollars more per pound than buying the shrimp with the shell. Unless they’re running a specific sale, a whole fryer chicken is much cheaper than the packaged one with separate pieces. The funny part is that you actually get more having the whole bird than just the cut up pieces.

And if you have a food processor, why don’t you chop your own nuts?!

The point is that you’re probably carelessly spending extra money each shopping trip, if you’re not taking the time to check prices, and stop going for what seems easier and convenient. Just like checking for sales, coupons, and discounts is important before you go shopping. So is making the effort to save money to buy the same product, unprepared or packaged, and not go for the pre-sliced/chopped/peeled ones.

Remember, the more money you save grocery shopping today, the more money you can put aside in your savings account for that raining day fund, or something fun you plan for yourself in your future.

Think about it.

Forget Paris. Focus on Your Own Fashion Week!

Two weeks ago, high temperatures where I live were in the 40s for several days; with low temperatures below freezing a couple of those days. Last weekend, my friends in Cleveland, OH experienced another epic spring snowfall, while many in the upper central plains continue even today with their cold temperatures. The calendar might say “spring” but the weather doesn’t always align with our hopeful schedule of the four seasons.

I learned a long time ago to dress for the weather not for the season. And with that, I have to say that shopping “out of season” is one of my favorite things to do. You see, retailers don’t care what the weather is doing outside. They will try to force you into dreaming of whatever comes next, inside, filing their stores with what they want to sell, rather than what you may need to buy. Autumn-colored clothes quickly follow the red, white and blue of July. Winter coats fill racks in September. Spring’s pastels are plastered everywhere in January. And the sleeveless tops of Summer make their debut before the Ides of March!

Because of retailing’s over-anxious, and sometimes obnoxious attempt at rushing each new season, they are equally motivated to get rid of the last season’s leftovers to make room. And fortunately for us bargain hunters, it can be a clothing gold mine of great finds; perfectly useful outfits with still weeks worth of wear to go. And for people like me, who’s more concerned with function than with what some fashion magazine tries to tell me is in or out at any given time, those bargain finds can last not just a few more weeks, but years after!

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Recently I went shopping to update my wardrobe, with great results. I got all five of these tops for only $32.00; and that’s with sales tax! No, I didn’t get them from a discount store. But I did get them at a tremendous discount. Their material is thin enough to wear comfortably, with or without a light jacket, through the next several weeks, but their “colors” are meant for Fall (which is when I will gladly take them back out of the closet and begin getting even more wear from them). So off to the sale rack they went!

All but one of the shirts was regularly priced well over that total of $32.00 spent. They actually had been repeatedly marked down over the weeks, and these were some still left. I happened to go into the store when they were having their “final” Final Sale! Everything on the sale rack, whose price ended in $.98 was further marked down to $9.98! Yes, that meant the $29.95 shirt was now less than ten dollars; the $34.95 one was also $9.98; as was the almost $60.00 one! Five shirts for less than the cost of what the higher one of them would have cost me alone — if I was the type who paid full prices for my clothes!

What drew me to that store, on that day, was the $25.00 off coupon I had off anything $50.00 or more. It was getting ready to expire. I had waited as long as I did to use it because I knew I would find some great deals in the transition of the seasons at the store. And so I did! With my total coming to just under $50.00 (a purposefully deceptive  practice by this particular store that I’ve just come to accept), I was forced to purchase one other thing; unfortunately a five dollar item to make up a difference of mere cents; but that’s no accident. I’m convinced the main retailer knows exactly what they’re doing when they run those coupons — you can never get right to $50.00; always will have to go over to use it!

It was still worth the trip and the cost to pay so little and get so much; not just for the sake of shopping, but to end up with clothes I have already worn, and will continue wearing, including later this year and most definitely into next and beyond.

My advice to other bargain shoppers who are looking for deals and wanting to maintain a budget?

  • Stop worry about what’s coming down the runway during Fashion Week. The fashion designers, sellers, and retailers are trying to make money convincing you that it’s not cool to wear “last season’s” stuff. In reality, unless you work in the fashion industry, your friends and coworkers are not keeping up with when or where you bought your clothes, or what’s suppose to be “in or out” for the average woman!
  • If you need to do some shopping, do it during a time, and with the retailers who offer you something in return (i.e. store cash dollars, coupons, reward points). They’re doing it to get you back into the store. But you’re doing it to take advantage of the savings on your next shopping trip.
  • If you can split your shopping needs up. Purchase half of what you need when those retailers are offering coupons (the old, spend $50 and get a $25 rewards coupon for your next visit). Then return to pick up the rest of your items using the coupon or points you earned the last time you were there. Four weeks ago, I bought two pairs of pants that I needed for a trip, which is what earned me that $25 coupon that was used to help buy those five tops later.
  • Sign up for the emailing lists of the retail outlets you visit the most. It might seem bothersome to start getting all their emails, but that’s the best way to keep up with when they’re having a major sale. Then choose that time period to do your shopping. Just be sure to confirm that the retailer will allow you to use that coupon on items marked down on sale. Another tricky thing you have to watch out for.
  • Never go shopping when you don’t need anything. But always remember that you can make purchases for the birthdays, anniversaries, graduations, and other special occasions of other people in your life; and still reap the benefit of bargain shopping and savings for yourself!

 

Make April Your Month of FREE

It’s the start of another week; the beginning of another month. April is here! I love this time of year for many reasons, but feeling like it’s the start of something fresh and new is one of the main reasons. I can tell myself, okay, now’s the time. Do this or that, but do something and stop putting it off! What do you have planned? What are you going to do with this new opportunity?

Recently I posted on my Catching Raindrops Facebook page about my March month of FREE. I listed a number of freebies I’d been rewarded with through various retailers and restaurants where I’m a member of their clubs or rewards programs — for free, of course. Because I don’t believe in paying to be a member of a program that then pretends to “pay” you back with freebies, when in reality you’re already paying for it.

So someone asked me where I’d gotten some of the items, and how I was able to get so much. I told her, from just going through my regular life. I believe that if you’re already shopping regularly at a particular grocery, and that store happens to have a program where you can automatically save money on your gas purchases, and receive points every time you buy groceries, or go to the pharmacy, or fill that gas tank — WHY WOULDN’T YOU WANT to sign up and get even MORE?

If you’re a frequent visitor at the same restaurants or shop at the same clothing store, or buy a lot of your make up from the same beauty products place, or your household goods from mostly the same place, and they’re offering you a customer loyalty card with discounts on purchases, and freebies for birthdays, and surprise gifts throughout the year….GET THE CARD!

I’ve posted about my freebies and savings many times before on that same Facebook page. But every time I do, I still have some followers asking me how I did it. I tell them the same thing…start joining these rewards programs. And if it’s a place that offers coupons on top of savings, take advantage of that as well! I love the convenience of Kroger’s digital coupons, their Friday Free downloads, and some of the weekend only specials they’ve been doing lately.

This past weekend, I was in line at a World Market, getting my free bottle of olive oil, when the woman behind me asked the cashier if the olive oil as free to everyone. She told her no, just for Rewards members. So I turned to her and said, but it’s free to join and you can do it today. And I proceeded to tell her about the birthday rewards and special gifts throughout the year; bragging on the bag of coffee I’d gotten a couple of months ago. She said her birthday was coming up in two weeks, and so I said “All the more reason to sign up today!” And so she did. You’re welcome #WorldMarket

There is no magic to it. But there are some rules I try to follow. 

  • Don’t get cards to places where you don’t already frequent.
  • Don’t make purchases on thing you don’t need just to drive up your points. You’ve already lost the benefit of the FREE!
  • Don’t drive across town to redeem a free reward. If you’re spending five dollars in gas just to pick up that five dollar bag of coffee, it wasn’t free!
  • Create a separate email address to use when you sign up. Then once a week check it. This will help eliminate your fear of them spamming your business or personal emails. I use an old AOL one I’ve had forever!
  • Never pay for the membership cards. Free should start with you not paying to be member.
  • Do be sure to include your birthday information, as most businesses with customer loyalty programs often start by giving you something on your birthday.
  • Remember that even when it’s something you don’t want, it might be the something someone else needs. Rather than ignore the freebies, I like to gather many of the free food items, take them to school, and give out to hungry and broke college students.

The main thing is to get started. And then remember to redeem the rewards! I hate it when I let a freebie expire because I wasn’t paying attention.

Why I Don’t Shop on Black Friday Anymore.

I woke up super early on Thanksgiving morning. It wasn’t by choice; it just happened. I tried to lay in bed in the hopes of falling back to sleep, but when it didn’t happen by 4:30, I decided I was suppose to get up. So I did, and started my morning routine. It had been a month since I was at the gym, thanks to a nasty cold that wouldn’t go away (remnants of which still remain). So out of the door I went just after 6 o’clock in the morning, with predictably almost no traffic, and only about a dozen of other early morning risers in the gym already working out.

I was happy to learn that the gym would be closing early so that the workers could be home with their families that evening for Thanksgiving dinner, and that they wouldn’t reopen until 7:00 on Friday morning. Though my intentions were to wake up early and get my workout out of the way, I actually overslept a bit after turning off my 6 a.m. alarm. Funny how that worked out. The morning I wanted to sleep in, I woke up super early, and the morning I wanted to wake up early, I overslept!

 I was expecting a larger crowd at the gym. While there were more people there than the crazy time I arrived on Thursday, there still weren’t as many there as I thought might be following all the overeating and high calorie foods from the day before. But the parking lots of Kohl’s and Walmart sure were full!   

I’m not knocking anyone who decided to get up early to shop, although I question those who camped out, given the temperatures last night. But I do wonder how many of the people out there have just gotten caught up in all of the buzz and “excitement” of the whole Black Friday phenomenon.

I’ve been part of that Black Friday frenzy in the past. If I were to be honest, I loved it! Back when my nieces and nephews were younger; at that age where they were expecting something from their Auntie, I would go out and try to find good deals. Sometimes I would even shop on behalf of my mom, who didn’t care for the Black Friday crowds, but liked the Black Friday prices; especially since she had so many grandchildren to buy for. Now, all but one of them are young adults in their 20s and 30s, and in general, sadly, we hardly ever get to spend the holidays together anymore.

But today, just as with the past four or five years, I simply asked myself, “Is there anything out there that you need that you don’t already have?”  The answer of course was no. When I calculated the fact that there was also nothing out there I was planning to purchase for friends or family that just had to be bought today either, it definitely wasn’t worth it to me to be out there. 

Moreover, I wonder how many people; namely, the early morning shoppers, even know the origins or meaning behind “Black Friday” and where the term came from? According to History.com:

The first recorded use of the term “Black Friday” was applied not to holiday shopping but to financial crisis: specifically, the crash of the U.S. gold market on September 24, 1869. Two notoriously ruthless Wall Street financiers, Jay Gould and Jim Fisk, worked together to buy up as much as they could of the nation’s gold, hoping to drive the price sky-high and sell it for astonishing profits. On that Friday in September, the conspiracy finally unraveled, sending the stock market into free-fall and bankrupting everyone from Wall Street barons to farmers.

The most commonly repeated story behind the post-Thanksgiving shopping-related Black Friday tradition links it to retailers. As the story goes, after an entire year of operating at a loss (“in the red”) stores would supposedly earn a profit (“went into the black”) on the day after Thanksgiving, because holiday shoppers blew so much money on discounted merchandise. Though it’s true that retail companies used to record losses in red and profits in black when doing their accounting, this version of Black Friday’s origin is the officially sanctioned—but inaccurate—story behind the tradition.

So basically, when you run out to shop the day after Thanksgiving, buying a lot of stuff for the holidays — often things you “want,” rather than what you “need” — simply because the items have been discounted, you’re basically supporting the retail industry making profits at the expense of your own bank account and personal budget taking a loss.

As I’ve said to many friends and family members, it doesn’t matter how great a sale is; if you’re spending money on things you don’t need, you’re still wasting your money.

Be careful that your Black Friday shopping doesn’t turn into Red Saturday regrets, and January depression as the credit card bills start to roll in.