Being prepared

That's a boy scout motto, isn't it? Always be prepared.

In 2008, right as the stock market was beginning it's decline and banks seemed to be going under on a regular basis, we were in the middle of having some major work done on our kitchen. We had saved for this work for many years. That savings, although earmarked for the kitchen remodel, was our cushion against any unforeseen circumstances. I always felt we were financially safe. Our mortgage was about to be paid off that year as well. We were secure.

Then it hit me. We were spending that savings on the kitchen work. Our safety net was slipping through our hands. We still had investments. But with the downturn in the markets at that time, selling stocks would not be a good move. That was when the thought occurred to us to build some new savings cushions, 2 in fact. One for medical emergencies. And the other for any other emergency that could come up (like the engine in the car just drops out the bottom, or some other such financial surprise). The medical emergency fund amount was based on how much our out-of-pocket for 1 year could possibly amount to, with our then current insurance. Having spent just 1 day in the ER a few years before, I knew how quickly medical expenses could add up. So the medical emergency fund was the priority. I reworked our budget to allow for hefty contributions to that budget item.

The other fund has grown more slowly. I add a little bit every month, even if it's just a couple of dollars. Over the years, that has grown to over $1000. All of that money is still there, untouched. Even now, with our current financial changes, I don't feel it's time to use that money. I feel there could be even greater challenges, as a possibility.

Several months ago, call it intuition or God's guidance, I felt compelled to cut our spending further, and bank more of my husbands income. So, basically for this year, we have been living on a good deal less than our income. As I draw up each month's budget, I simply don't allocate all of the income from the previous month's paychecks. I carry forward some of this income, in a "Surplus" category. While the total right now is not huge, it is something. We have surplussed about $3500 since the first of the year, Some of this is due to extra hours my husband was able to pick up, and the rest just living below our means.

I guess you could say that I'm a compulsive saver. I have always saved a little bit, no matter how small my income was. Some folks like to live right up to the edge. They are comfortable spending every last penny they earn. Other folks like to live well beyond the edge. They are actually comfortable accruing debt month after month. (You can tell by my use of words that this baffles me.) And then there are those of us who feel most comfortable when they are accruing a surplus month after month. I fall into the latter category. It's my comfort zone.

When some people see a surplus, they immediately think "whoopee! Here comes that dream vacation, new car, sailboat, etc." I know that for our family, we are better off just being prepared for the unforeseen.

I suspect that I am a more extreme saver than my husband. Although, at this point, I think he can see the benefits to my compulsive saving nature. In the next several months, we'll still try to maintain that surplus, as long as possible. We'll be growing our income and cutting our expenses, and likely dip into the surplus in the tighter months, so that we can stay on track for retirement and our kids' university expenses. Simply put, our bigger goals outweigh fleeting pleasures.

Life is keeping me incredibly busy!!

Hi all!
Life has taken a turn that is keeping me incredibly busy, too busy to get online to write to you.

First off, it's summer, which means harvest and preservation of all that grows here. I'm working my frugal behind off taking care of it all.

And second, my husband's work situation suddenly changed, and we're facing a 30% drop in income.

I've been reworking budgets, brainstorming ways to conserve further, and looking into how to grow our income.

I have slashed our budgets across the board, including dropping back to a one-car family, reducing the grocery budget to well below $200/month, heating the house less, leaving lights turned off unless it is truly dark inside, and we're even considering selling our home and downsizing to a much smaller (and cheaper to maintain) home.

One of the helpful things I am doing is keeping a log of ways that I save money, on a daily basis, and how much each activity saves. For instance, I started Christmas and fall birthday shopping the other day, shopping a clearance sale at Lands' End. I bought 3 gifts for my son (2 for his birthday and 1 for Christmas), which had been on my list for him anyways, and saved about $40 over what I would have been willing to pay, had I waited until the fall to shop. (There's a big difference in "what I'd be willing to pay" and what the store claims is a savings, for my purposes. I only calculate savings on a what-I-am-willing-to-pay basis.) That shopping took me 2 hours online, for a wage of $20/hour. I am also shopping for winter jackets for my two daughters, for their Christmas gifts this coming year. Shopping in the off-season will save me a substantial amount on gift-giving, which will be a great help, as I cut the gift-giving budget in half for this next year.

I also hung a load of wash to dry in the sun, for a savings of 50 cents. I spent about 20 minutes hanging and checking the drying, for a wage of about $1.50/hour.

I refurbed a pair of very worn shoes the other day. I was hoping to replace these shoes this summer, but a refurb job using only what I had here at home, may prolong their life by a year or two. In case you're wondering, I painted a pair of faux suede sandals, with acrylic paint. The faux suede had worn off in patches, leaving a mottled finish everywhere.

Time will tell if my efforts were fruitful, if the painted finish looks good after wearing a few times. If not, my cost was nothing but time. And anyways, they couldn't possibly look worse than they did before. If I delayed the purchase of a new pair of shoes by 2 years, I estimate my savings to be about $5 or so (for those two years of extra wear). I spent about 1 hour in total on the painting of the shoes, for a wage of $5/hour.

I trimmed my hair the other day, instead of going to a cheap haircut place. I extended the life of my haircut by another 6 weeks by trimming it myself. I look for the super cheap coupons of about $8 or $9 for a cut, no style.  One will usually surface in mid to late August (for the back to school crowds). I spent about 1 hour on the trim, saving about $10 after coupon and tip, for a wage of $10/hour.

By logging all this info, I can easily see which activities will save us the most money for the effort. However, the high hourly wage activities are not available every day.

So, we need to grow our income. I have been putting together my resume, and am looking for employment. Unfortunately, having been out of the main workforce for the last 26 years impairs my hire-ability for many positions.

I have also been researching taking in a boarder, to boost our income. Technically, paid lodgers go against the ordinances for our neighborhood. As do home day cares.

I do believe it will take a combination of all three of these areas (changing the budgets, conserving more, and increasing our income), to keep us progressing towards our future goals for retirement.

So, that's where I have been these past 10 days. Life has been keeping me incredibly busy. (And you thought I was off on some beach reading a fun novel!! LOL! Couldn't be further!)

I hope your life has been much more relaxing than mine. If not, and you find yourself as busy as I am these days, know that you are in good company! Have a great weekend, and I'll try to keep you posted on the various ways I find to cut our spending and increase our income. This is the value of blogging -- sharing information can be mutually beneficial for all of us.