goddess of thrift

Thrift 101 -- Thrift Tools and Cost Per Use (Lesson 9)

     When we talk about acquiring tools of thrift, we have to carefully weigh whether or not the purchase of an item will actually save us money  in the long run.  This is especially true of major, big-ticket purchases.  To determine the merit of a specific purchase, it is often helpful to estimate cost-per-use.

     Let's use a small purchase as an example.  Imagine that I have been asked to be a bridesmaid (work with me here) and the high heels I am required to purchase for the wedding are chartreuse.  (Now, don't take this as an insult if you own and love a pair of chartreuse high heels . . . we're all trying not to judge each other.)  On my  feet, chartreuse heels would probably make a once-in-a-lifetime appearance; therefore, I'm going to pay as little as I possibly can for the shoes.  If I end up dropping $20 for the pair, that's like paying $100 for another pair of shoes and only wearing them five times.  In either of these instances, the cost-per-use for the item is too high, by my standards.

     If I am a runner, however, and faithfully run five miles every day, a pair of $60 dollar running shoes which last me 4 months would cost only $.50/per use.  Given the frequency of wear, and the need to avoid injury, it is a thrifty purchase to plunk down $60 for a well-made pair of shoes. 

     Now, let's look at a larger example from real life (for those of you who can't imagine me running five miles a day.)  We heat our home with wood, which we usually acquire for free, but often need to split.  Because the medical bills which would result from us splitting the wood with an axe would not  be thrifty, we rent a hydraulic wood splitter, paying $50/per rental for 24 hours, three times per season.  For a while we were saving to purchase our own splitter, which would enable us, we reasoned, to split wood whenever we chose.  Because neither of us is particularly mechanically inclined, we were saving for a new splitter.  The best price we found on one the size we needed was $1,200.

     But when we did the math, we decided not  to purchase our own splitter.  Assuming a comparable rate of use, it would take us eight years ($1,200 divided by $150/season rental fees) to break even.  We wouldn't be saving money by owning our own splitter until the ninth  year -- assuming that it still worked by then.  I realize that this equation doesn't account for possible increases in rental fees, but it also assumes that we would pay no additional money for repairs on a splitter we owned (which we would have to maintain and store ourselves.)

     So, acquire tools of thrift which will actually save  you money, but before you make a major purchase, do the math to estimate cost-per-use.  I am convinced that the majority of RV and camper owners, especially those who purchase new, spend more on the cost-per-use of these items than they would to stay at a nice hotel.  Given that, I'd opt for the Jacuzzi and the free continental breakfast every time.

--Susan Rodebush  ©  2009

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Thrift 101 -- Acquiring the Tools of Thrift (Lesson 8)

     The idea of spending money to save money seems to me like an oxymoron.  Perhaps I have this impression from watching hucksters on television scream things at me like "The more you spend, the more you save!"  "NO," I yell back, "the more you spend, the more you spend!"  (My husband of 26 years, sitting next to me, doesn't even look up from his magazine.  He is used to this.) 

     But, cheesy marketing attempts aside, there are times when spending some money can  save us money in the long run.  I would refer to these purchases as investment purchases, or "tools of thrift".  They are typically items we use repeatedly, over time, which enable us to save money by purchasing other items on sale, or by doing for ourselves something which we would otherwise pay someone else to do.  This is not an exhaustive list, but an example of some of the things we have justified purchasing because they have helped us save money:

--A freezer.  Typically newer freezers are more energy efficient than very old ones, and a chest-style freezer is more efficient than an upright.  (Knowing this, I still purchased an upright, as I didn't like the inaccessibility of items at the bottom of most chest-type freezers.)  I am confident that I am able to save hundreds of dollars a year by purchasing meats, milk and other marked-down items and storing them in my freezer to retain freshness.  (If you tend to "lose" things in a freezer, it might not hurt to tape an inventory of the contents to the outside.)  When we purchased our freezer, we found a floor model with a dent, and received an additional discount.  Apartment-sized freezers are available for smaller living spaces.

--A hair cutting kit with clippers, scissors, combs and clips.  We are now on our second kit as a family -- the first lasted about 12 years, so I figure, for us, that is the life expectancy.  I still cut my husband's and adult son's hair, and although I don't have a cosmetology degree, I do a decent job, partly because I have gotten to know where their cowlicks are and which styles work for them.  Some kits come with instructional videos; there are also videos on cutting hair available at the library.  If you start when your children are small, by the time they are old enough to care how their hair looks, you'll be good at cutting it. 

--An oil filter wrench, ramps, and other basic car repair tools.  You can save money if you have even basic mechanical skills, and most of these tools are relatively inexpensive. 

--A sewing machine.  My machine is mechanical, not electronic, and is over 30 years old, but it still runs well and can do everything I need it to do.  Over the years I have sewn quilts and simple children's and adult's clothing (like pajama pants), made many gifts and home decor projects (like curtains and pillow covers) and have done an abundance of mending. 

--A few basic power tools.  Again, your skill and experience will dictate what you need, as well as your specific circumstances.  We purchased a cordless tool set when we bought our current home:  drill, circular saw, large flashlight, battery charger and two batteries.  I cringed a little at the price when we got it, but in the four years we have lived in our home, there haven't been many weeks when we haven't used at least one of the tools in the set, and we often use all three.  It has definitely been a good purchase.

     There are many other items which, for you, may be tools of thrift:  a computer with internet access, a rototiller, a DVD player, a compressor, a bread machine or a garden tractor are just some examples.  But before you spend money on an item -- especially an expensive item -- there are several guidelines to follow:

--Determine your need for the item.  Will this become a "thrift tool", or is it really just a "thrift toy"?  If your yard is a quarter acre, you may  not be able to justify purchasing a riding lawnmower!

--Research the item you want to purchase.  Look on the web and in Consumer Reports, and talk to people you know who have a similar item.  Find out what they do or do not like about their item, and whether or not they would recommend it.

--Borrow or rent the item first.  If you rent a power-washer to clean your deck, you will learn a lot about using one, and it will also help you to determine if it's a tool you will really want or need to own.

--Save up and pay cash for it.  Setting aside $30 -- $40/month can yield money for a new freezer in just 10--12 months.  It's not a "tool of thrift" if you have to pay interest to acquire it!

--Consult with your spouse, if married, to see if you are in agreement with the need for the purchase.

--Weigh the difference between purchasing new and used.  I regularly see seldom-used bread machines and other electric kitchen gadgets deeply discounted at yard sales. 

     One other consideration when making a large purchase is cost-per-use.  Because this is one of the big factors which determines the difference between a cost-effective tool, and an expensive toy, we'll go over that in depth in the next lesson.  Meanwhile, you can assess the tools you already have which could help you save money, and which ones you might want to acquire.

--Susan Rodebush  ©  2009

All materials in this blog are copyrighted and may not be reproduced or distributed without permission.

Thrift 101 -- Thrift and Organization (Lesson 7)

     My first year of teaching art, I had no classroom, no supplies (to speak of) and much of the time, no idea what I was doing!  Planning and organization became essential for me to provide a quality education for my students.  My random assortment of cardboard boxes and paper bags of donated supplies grew as I was able to procure materials, but I found it aggravating to open 3 or 4 bags or boxes before I located what I needed . . . and I often forgot what materials I had available.

     A trip to the discount store yielded a solution:  there, for less than a dollar apiece, were clear plastic shoe boxes with white lids.  I started by purchasing a dozen of them, and began sorting my smaller supplies:  one box for crayons, another for oil pastels, a third for scissors, and so on. I printed out paper labels on the school computer and fastened them to the ends of the boxes with clear packing tape.  The boxes worked well because they were stackable, space-efficient, and easy to handle.  I grouped like-types of materials together:  drawing materials, painting materials, and tools.  Once I had the supplies sorted into containers, I didn't have to be the one who retrieved every supply one of my students needed.  I could simply say:  "look in the scissors box on the second shelf of the end cupboard" and my students (with my permission) could get what they needed themselves.

     When I saw how well the system worked at school, I brought it home.  Having a large variety of art materials in my own studio, I need to be able to find what I want quickly in order to accomplish anything.  My clear plastic bins hold quilt fabric sorted by color, thread, drawing materials, tape and glue, and a wide range of other materials.  They are also labeled by item, with the exception of the fabrics, which I can see well enough through the containers.

     Gradually, I added clear plastic containers to my closet, storage cupboard and pantry.  They now hold everything from cocoa mixes and marshmallows to bar soap, toothpaste or vitamins, as well as greeting cards and gift wrapping supplies.  For non-perishable items, the boxes help me set arbitrary limits for how much I store at one time:  when the soap box is full, I don't buy more soap, even if the price is good.  As I empty the box, I watch for sales on soap.  I rarely run out of anything using this system, and it makes it easy for me to know what I have so I don't purchase unnecessary duplicates.  I am also convinced that I save enormous amounts of time and stress by not having to constantly search for something I need.

     Let me add a word here about plastic.  For environmental reasons I try to limit my purchase of plastics, and the bins I have bought are recyclable in some areas, but not where I live.  However, I have boxes I am still using which are over 20 years old and every bit as functional as new boxes.  I use some glass jars for some food storage and for beads and buttons in my studio.  However, square-cornered containers are more space efficient than round ones, and have the benefit of being unbreakable.

     Whether or not you use plastic, the principles of organization still apply: 

--Use see-through containers, when possible, for easy identification of contents.

--Use stackable containers for space efficiency.

--Group items by color when appropriate.

--Group items by type (all pasta on the same shelf, for example) for easy location.

--Use labels, when needed, to enable quick differentiation of items.  This also makes it easier for others in your household to locate things when you are not around.

--Let your reasonably-sized containers help you set limits for what to purchase.  I don't have a problem storing 12 -- 15 bars of soap in a box, but I don't need 300.

--Use recycled containers when appropriate.  I soak the labels from plastic, 18-oz. peanut butter jars, and use them for storing small items in my studio and classroom.

--The same system of sorting, labeling and grouping applies to files of papers in your file drawer, accessories in your closet and tools in your workshop, thus helping avoid a trip to the hardware store to  purchase wood screws or picture hanging wire when you know you already have some somewhere.

--Start in one area and organize gradually.  If the idea of organizing things is overwhelming to you, begin slowly with office supplies, for example, or one shelf of a cupboard.  The sense of order will help you build momentum to organize other areas.

     It's not imperative that you use my system, but it is important to have a system, especially as you build a pantry and purchase essentials on sale before you need them.  While you may spend some money on containers, over time, you will save time and money by knowing what you have and being able to locate it quickly. 

--Susan Rodebush  ©  2009

All materials in this blog are copyrighted and may not be reproduced or distributed without permission.

Thrift 101 -- Building a Pantry (Lesson 6)

     Years ago, when my Grandma Edie was a little girl, summertime and fall were busy with the chores of harvesting and canning.  Rural families routinely canned produce to store over winter, and most homes had a pantry or larder, root cellar or smokehouse. The task of stockpiling food was a necessity, and assured that the family would have plenty to eat in months ahead.

     Fast forward to today, and we can -- for a price -- have just about any food delivered to our homes at just about any time.  We have 24-hour mega-markets, internet grocery service and a wide selection of prepared foods available for quick pick up or delivery.  Few people use a pantry the way their grandparents did . . . in this age of just-in-time delivery and overnight shipping, who needs to?  Yet, reviving the pantry is an important strategy for saving on grocery and household items, because it allows us to purchase and store items for future use when we find them at the best price.

     What if your house or apartment doesn't have a "pantry" -- a special closet designated for the storage of food and supplies?  Try to think of a pantry not as a place, but a system.  A shelf in the basement, an extra cupboard in the garage or a storage bin or two under the bed can contain surplus staple foods and non-perishables which you purchase at a savings. 

     What goes in a pantry?  Obviously, you will tailor yours to the items your household regularly uses. Ours holds staple foods in sealed containers, like gallon glass jars of white and brown sugar, flours, pastas and rice.  We have rows of sale-purchased canned goods and non-refrigerated foods, as well as inedible items such as toiletries, cleaning supplies and household needs, like batteries and paper products.  We also keep a supply of over-the-counter medicines, bandages and gauze, which means we never have to run to the store at 2:00 a.m. for Tylenol.  (We certainly don't miss doing that.)

     When buying grains, such as flour, rice or oats, it's best to freeze them for 24 hours or so before storing, to avoid the development of insect activity.  If you purchase these in bulk during the winter, you can simply store them outside in your car for a day or two when temperatures are below freezing.  Allow grains to return to room temperature before pouring into glass jars to avoid moisture buildup, and keep all foods in a cool, dry area to maintain their quality.  Either label items, or stock them according to purchase date to avoid spoilage.

     Items we use frequently, such as sugar or salt, we store in a smaller quantity in the kitchen, and replenish them with what's in the pantry.  When the pantry supply runs low, we shop for sales on that item.  If we have a work layoff or financial setback, we could eat from the supply in our pantry for several months.  By monitoring what we typically use --  for example, how much spaghetti we normally eat per month -- we build a sense of the optimal quantity to store of each item, and avoid over-stocking.  

     One of the best things about keeping and rotating stock in a pantry is that we never rush to the store in a panic when an impending winter storm is announced on the news.  The savings allow us to use more of our money for other things that are important to us, such as donating to hunger programs or helping a neighbor.  

     We didn't build our pantry overnight, but gradually, over time. In the early days, we bought an extra can or package as we found things on sale.  Now, we will often buy 20 lbs. of pasta or rice at a time, because our pantry has helped us to build surplus in our grocery budget.  Beginning to create, and then maintaining a pantry provides not only savings or convenience, but also peace of mind.  I like to think Grandma Edie would be proud.

--Susan Rodebush  © 2009

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Thrift 101 -- Fine Tuning (Lesson 5)

     Congratulations!  You have listed and prioritized your financial dreams, tracked your spending and put together a monthly spending plan.  Let's look now at how you can fine-tune that plan to make it work on an on-going basis.

     First, every month is different.  Therefore, while a "master" budget can be a guideline, it is just that -- a plan which you adjust to monthly variables.  You have to spend your specific take home pay for each month, not a total of what you make for one year, divided by 12.  If you have bonuses, overtime, irregular income or a bi-weekly pay schedule, you won't be working with the same amount every month.  If you tend to run short in certain areas, like Christmas or vacation savings, plan now to use those occasional "surplus" amounts you receive to keep you from spending more than you make.  Our 3-paycheck months (2 per year) provide for Christmas gifts, vacation, and the never-ending category at our house, home repairs.

     Second, pay as little interest as possible, preferably none.  By saving ahead for purchases, rather than charging them, you may have to wait a little longer for some items.  On the other hand, you will have more of your income to spend if you're not paying interest on previous purchases.  It is possible to live debt-free if you are willing to make spending choices and delay gratification.  What!!!  In AMERICA???  Although we are marketed the "buy now, pay later" method, we often end up paying way too much later for what we are buying now.  Is that really where you want your money to go?  It's your choice.  As Milton Berle said:  "It's amazing how fast later comes when you buy now!"

     Third, put any budget item which occurs occasionally, but not monthly, on the monthly budget, dividing the annual total by 12.  Keep a running total of what you save for each category.  Then, when the quarterly water bill or annual homeowner's insurance premium comes due, it won't be a surprise and you will have the money.

     Forth, start aggressively paring down spending in B and C categories in your original plan.  Research ideas on how to spend less; use common sense and be creative.  For example, if you love your home, but are stretched by your housing costs, consider the following ideas:

     --Share/rent space:  find a roommate; rent half of your garage for boat or RV storage; carve an unused upstairs into rental space for a college student; board pets for friends when they travel; rent garden space to a friend or neighbor.  These changes don't have to be forever, but they can make a difference while you get your financial house in order.

     --Get rid of excess stuff and cancel your lease on your self-storage unit.  With the money you save not paying the rental fee, you could probably replace whatever you are paying to store.  Stop spending extra money to store stuff you don't need.

     --Refinance:  shop interest rates and closing costs, and calculate payback time.  If you plan to stay in your home for several years, and the break-even time on your closing costs is 10 months, (costs divided by monthly savings) it's probably worth doing.

     --Build Equity:  Do the low-dollar/high reward maintenance things, like painting, landscaping and keeping up with repairs, which give you top-dollar appraisal value for your property.  (I realize that some repairs are more expensive than others, but often, the longer you wait to fix it, the more the repair will cost.)  This increase in equity might enable you to drop Personal Mortgage Insurance (PMI) when you re-finance by moving your equity position above 20%, lowering your monthly payment.  It will also allow you to get the most for your home when you do sell.  Just be careful not to over-improve for your neighborhood. 

     --Do the little things, over time, to lower energy costs.  You know most of them already:  unplug electrical items with phantom loads; line-dry rather than machine-dry at least some of your laundry; shut off heating/cooling to unused rooms; take shorter showers; weatherproof your house; install a programmable thermostat.  This is not an exhaustive list, just a starting place.

     These are just a few ways to cut housing costs.  As with housing, there are multiple strategies for trimming costs in every area of your budget.  Fine-tuning your spending means, ultimately, examining every spending category and, over time, adjusting your spending for maximum savings.  Every category has potential savings, if you are willing to look.  As you discover ways to cut costs, you will have more money available to pay off debt and to build savings toward both your short- and long-term goals.  What a great feeling!

--Susan Rodebush  © 2009

All materials in this blog are copyrighted and may not be reproduced or distributed without permission.

Thrift 101 -- The Door or the Curtain? (Lesson 4)

     The game show host appears ageless . . . a feat he accomplished, you suspect, more from selective surgeries than flawless lifestyle choices.  "JOE!" He booms, in a voice which reaches the far corners of the audience, "Which will it be . . . the DOOR, or the CURTAIN???"  The background din of voices yelling "door" or "curtain" sounds, in your head, like the pounding of the surf.  You have to give the right answer . . . you want to win the best prize . . . which will you choose?  You know that if you make a lame decision, it will haunt you for the rest of your life . . .

     The force against the middle of your chest knocks the air from your lungs, as your overweight feline alerts you of feeding time.  You have never been so thankful to be jolted awake by Bonzo (even though you suspect it would be in his best interest to skip a few meals.) It was just a dream!  You don't have to worry about making the wrong decision!  You can stagger out of bed, and into your day, with the comforting thought that you didn't screw up your future, after all.

     Every one of us wants the best life possible for ourselves and those we love.  We are careful (usually) to select occupations which match our skills, friends who share our interests, and mates with whom we will share (we hope) a lifetime of compatibility.  While we may have stumbled upon a career direction or relationship accidentally, we usually give a fair amount of thought to the large life decisions we make.

     When it comes to spending money, however, we are often negligent in weighing our choices.  A new six-panel door will enhance the curb appeal of the house . . .the beige damask curtains will really dress up the living room.  We often make our purchasing decisions guided by our hearts, not our heads, without really considering what other options might have been available.

     The great thing is, as Americans, we have a huge range of choices available to us.  The frightening thing is, as Americans, we have a tendency to buy the door without ever looking behind the curtain.  How does this apply to thrift, a spending plan, and meeting our financial goals?  At some point we have to acknowledge, for our own good, that every spending choice we make affects every other spending choice we make.  Only a minute percentage of us have unlimited spending options . . . although many of us live as if we do.  By allowing our goals, rather than our impulses, to direct our choices, we have the potential to actually meet our goals.

     So, now that you have tracked your actual spending for the past month, review your expenditures in light of the list of goals you set.  Remember, these are your goals, the big picture of what you really want for your life.  To the list of expenditures you tracked last month, add any category which wasn't on the list, but which you want to add as one of your financial goals (such as saving for your child's college fund.)  Look at each category of spending, and give it a grade:  A, if the spending amount is in line with your goals; B, if you want to keep the category but alter the amount to come nearer to your goals, or C, if you want or need to eliminate the category completely in order to put that money toward meeting your goals.  The C category may include items you can lose right away, like a magazine subscription you never read, or the cigarettes you have been wanting to eliminate from your lifestyle.  It may also include consumer debt, which you will need to phase out as you pay off your balance.

     Now, create your plan.  After you have deducted the individual amounts of the A-list items from your monthly take-home pay, divide the remaining money across B items you want to keep but reduce, and C items you want to eliminate, but need to phase out.  If the numbers don't work at first, don't quit.  Take a deep breath, and rework the numbers until you spend on paper what you have made, but not a cent more.  Remember, this is about your goals, and a goal-driven plan, to be successful, must make those goals a financial priority.

     Once you have the spending plan in place, you can start applying other thrift strategies which will make your numbers work.  For now, tough it out through the planning stage, knowing that making a plan is the first step in following a plan.  After you have your master plan (budget) completed, we will look at allowing for monthly variables, and at individual categories where changing the way you spend can free up more dollars to make your goals, over time, a reality.

--Susan Rodebush  © 2009

All materials in this blog are copyrighted and may not be reproduced or distributed without permission.

Thrift 101 -- Locate Your 'Whereabouts' (Lesson 3)

     It's 1:30 in the afternoon on a beautiful June day.  You are walking -- well, staggering, really -- having just gotten off of the "Lunch Launcher".  You're supposed to meet the rest of the group at 2:00 to ride the "Hurl-A-Meal", which you have a vague idea is roughly located at the opposite side of the park.  Finally, you see what you've been searching for:  a giant map showing all of Banners Over America, with a big yellow star marked "You Are Here."

     If your goal is to find a group of people in a large, unfamiliar place, it is extremely helpful to refer to a map. Along the same vein, if you are trying to make a major change in  how you approach your finances, you are not likely to experience success until you first determine where you currently are.  This "you are here" of personal finance is the record of your current spending habits.

     I know, I know . . . everyone doesn't enjoy numbers, or working with details, or keeping records . . . that basically describes me.  But I also know that you can't get where you want to go financially unless you first figure out where you have gone, or, more precisely, where your money has gone.  This means you have to keep track of your spending, keeping receipts and recording any spending for which you don't receive a receipt.  You can't figure out if you are overspending on egg rolls if you don't record the fact that you purchase them, on average, four times a week. (I don't blame you . . . I love egg rolls . . .but this isn't really about me.)  So your starting place, to determine your financial 'whereabouts', is to track your spending . . . each and every dime.  Do this for a minimum of one full calendar month. 

     The next step, once you have tracked your consumption spending, is to list your living expenses which occur on a repeating basis.  Calculate those which occur regularly -- every month -- and those which occur irregularly, like semi-annual insurance premiums or quarterly water bills.  Look at your checkbook register, or several past bank statements, to make sure you haven't left anything out, like seasonal sports fees or gift expenditures for June graduations.

     Finally, on a master sheet, assign categories for all of your spending -- from utility bills to egg rolls -- and total the amounts you have spent for that month in each category.  This is your current financial "you are here".  Now that you have a picture of where you are, your next step will be to evaluate your current spending in light of your goals.  We'll discuss that in Lesson 4.  But first, a note of caution. . .

     If you really want to meet your long term goals, you have to tell yourself the truth.  It doesn't move you any closer to your ideal spending plan (or your ideal dietary plan) if you lie to yourself about how many egg rolls you eat.  This is about you making changes that will benefit you by helping you spend your money in sync with your goals.  No one is saying you can't eat egg rolls.  It is up to you, and you alone, to figure out how many you can purchase in light of your other priorities.  So be honest about the egg rolls, and all of the other expenditures you have made.  In the next step, you can determine how much money to put in each category of your spending plan.  For now, let your financial map sit for a day or two.  We'll return to it soon.

--Susan Rodebush  © 2009

All materials in this blog are copyrighted and may not be reproduced or distributed without permission.

Thrift 101 -- Circle the Date (Lesson 2)

     You now have listed your dreams and goals, and have chosen a fairly easy, short-term goal.  But before you launch a strategy to measure and meet that goal, let's talk attitude.

     Millions of people end the year each December wanting to see changes in their lives.  They over-eat during the holidays, or over-spend.  They know their health could be better, along with their relationships, their organizational skills, or their marketability as employees.  They realize that they need to make some changes, so they pick the category which is bugging them most at the moment, and turn it into a New Year's resolution.

     If you check back with most of these people in February, they have long since abandoned their resolutions and reverted to their previous behavior.  But if you examine the situation more closely, something else has happened.  By loosing their resolve, they have also reinforced the belief that they really can't change that specific area of their lives, making future success even less likely. 

     I believe that much of this failure is due to the fact that the motivation to change, in the first place, was a vague feeling that they should, with no real awareness of a personal goal which would be met by making that change.  Thus, we return to the dream.  If you look ahead to the end of your life, how important will your personal dream have been?  In order to commit to a dream which requires a change of behavior, the dream has to matter . . . it has to be essential to who you are.  Once you realize that this commitment is about who you are becoming as a person, you can focus on taking the individual steps needed to make the change without loosing your resolve to turn your dream into reality.

     Once you have committed to your dream, circle the date on your calendar.  Decide that, from that day forward, you will do what it takes to meet your dream.  Find someone of like mind, and share your dream with them . . . and ask them to gently but firmly hold you accountable to making that dream a reality.

     Now you need to break the dream into pieces.  Build some easy successes for yourself by making some small changes.  If you spend too much eating out, and want to save some of that money for a college fund for your newborn, cut out one restaurant dinner this week and open a savings account right away with the money you set aside, even if it's only $10.00--$20.00.  You can move the money to a better investment later . . . the idea is to begin.  Gradually trim additional restaurant meals until you find a level where your short-term spending lines up with your long-term plan.  If you're tempted to lose your resolve, remember your commitment . . . and picture your child graduating 22 years from now with no college debt. Not only are you providing resources for future expenses, but you are becoming a person who made the commitment to give your child the best opportunities possible.

--Susan Rodebush  © 2009

All materials in this blog are copyrighted and may not be reproduced or distributed without permission.

Thrift 101 -- Start With a Dream (Lesson 1)

Dear goddess of thrift--

     I'm not really sure I get this thrift stuff.  I mean, I've been saving orange peels, but it doesn't seem to have made a difference in my financial situation.  Is there something else I should be doing?

--Fiscally Bewildered

Dear Bewildered--

     Great question! You are correct . . . there is much more to thrift than just saving orange peels.  I'll try to give you some general guidelines for developing your thrift skills.  There are some major changes you can make in your approach to your personal finances, as well as learning a lot of minor strategies, like saving orange peels.  But where do you start?

     One of the best motivators to making positive change in your life is having a compelling reason to change.  If your doctor says you can avoid a painful and expensive medical procedure by making alterations to your diet, you will probably feel like it is worth it to you to eat differently.  In the same way, having a good reason to change your spending habits will make it easier to learn a new approach to money.

    So what is your dream?  It may be an immediate need, like getting caught up on bills or being home more with your kids.  It may be a purchase you want to make, like a big-screen tv, a vacation to Italy or a down payment for your first home.  You might want to save to create a college fund for your two-year-old.  Maybe you want to be debt-free, or to decrease your living expenses to be able to work a lower-paying, but more fulfilling, job.

    Letting yourself dream, and then making the realization of that dream a goal, is the key to staying motivated when changing your habits.  Instead of being annoyed by large and small changes in spending -- and the choices which go with those changes -- each dime or dollar saved is moving you a step closer to realizing your dream.  (By the way, I've always heard that goals have to be both measurable and attainable.  Dreaming you'll be crowned the next Queen of England may not be attainable if your were born in Pocatello, Idaho.)

    So sit back with a notebook and pencil and jot down your dreams.  Let your mind run away with all of the changes, large and small, you would like to make in your life.  Think about the present as well as the future. When your list gets big, go through it, and rank the items in order of their importance to you.  If you can pinpoint a short-term goal -- something you can accomplish in about a month -- meeting that goal can help you to build momentum to work toward future goals.  Don't worry about how you will make the dreams reality.  Deciding what you want is the first step in pursuing what you want.

     Once your list is complete, we'll discuss your plan of attack.  That's lesson two.  Until then, I remain, Humbly yours,

--goddess of thrift

--Susan Rodebush © 2009

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