Holiday Tipping

The holidays are coming! The holidays are coming! You probably know this and the retail stores are starting the holidays off during the summer. From Labor Day weekend, I see the holidays all over the place in retail stores. I’m thinking the beach and heat and they are thinking December. While it’s not bad to plan ahead and be proactive, it’s too early for me, but it’s never too early to think about your budget.

Tipping is always something that comes up around this time of year. Here are my thoughts and what we do.

First, we don’t wait for the holidays. In my opinion, good service doesn’t have to wait until the end of the year. If someone goes out of their way or does an exceptional job, then by all means tip them. A while back we bought dining room chairs and the person in the store took the time to go out of his way. That deserved a tip then and there.

Second, give what you can afford. While it’s nice to give cash and to be able to give to everyone, that may not work for your budget. You can thank people verbally and express your gratitude with a conversation, special note in a card, contact the company or supervisor and express the great service you received, instead of cash. I have made calls to the airline to express how grateful we were for a particular person and the excellent service we received. Rarely do companies get calls like this and they can seem shocked at the call.

This is my plan of attack. Create a list people in your life and here are some examples:

Mail Carrier / Package Delivery
Personal Care (Hair, Nails, Massage)
Child & Elder Care
Teachers
House Cleaner / Lawn Care / Snow Removal Care
Pet People (Groomers, Walkers etc.)
Doorman / Maintenance Workers
Assistants / Key Employees

Then make a plan. If you were to tip everyone in one week, you would break the bank. I like to start after Thanksgiving and end this by New Year. Now if you have decided on an actual tip, it can take the format of the cash or possibly a cash gift card, unless you know them well enough to pick a specific merchant’s general gift card. Spreading out the tipping, helps my budget. Plus, I like to do this in person. So when I have a service done, that’s the time I tip, and again throughout the year helps my budget as well.

Finally for cash tips, make a trip to the bank and get nice new crisp bills and have thank you or blank note cards. People who get many tips need to know who they received it from, so a short thoughtful note handwritten in the card works well. It always is so much nicer to give a tip with a good presentation. I feel that the recipient thinks you took the time to think about them versus handing them crumpled bills from your wallet.

Not sure how much to give? That’s entirely up to you. There are many guides on the internet to assist you, but ultimately it’s your choice. Make your plan now so that you check one thing off your holiday to do list.

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Relationships & Finances

Finances don’t have to be difficult, but there are things you need to think about when you get into a relationship. You have a way of handling your finances and it’s worked great for you and you like the system.Your partner has a way of handling their finances and it works for them. Seems simple enough. Then you find out that you do things totally opposite. Now what?

You have to come to a compromise that both of you are comfortable with. First, start by really listening to your partner and putting yourself in their shoes. It’s hard to do, but it’s really important. Listen to their reasoning and why they do what they do. Then have the same conversation with the roles reversed. Now come up with a negotiated and agreed upon game plan.

This will take multiple conversations and time. If you both agree to the plan, you have conquered the first hurdle. Here are some of the questions you need to come to an agreement on:

$ What are our goals / what do we want to achieve?
$ How do we get there?
$ Who is going to be responsible for what? Think bill paying, savings, spending, bank reconciliation, credit, debt, investments, retirement, and more.

I have seen this work in many different ways. Here are a few examples:

They keep everything separate. Each person keeps their own income in their own bank accounts.They have agreed to who pays for what bills. Each handles their own investments and goals.

One person handles the big/long term items of the finances and the other handles the day to day finances. So long term is for the future – investments, retirement, savings, college, home buying, etc. and short term are more of the daily finances – bill paying, household purchases, routine items that are in the day to day budget.

The do everything together philosophy. All happens with a meeting of the minds and each person is involved in all aspects of the family finances.

No matter what you choose and how you choose to handle your finances, it all starts with communication and a game plan. All people should know what is going on, where to find the information and how to access it. After my mother died, my father had a hard time figuring out the finances, as he wasn’t involved with them.

Make your joint choices and know that you have the option of trying and changing until you find what is right for the both of you.

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Simplifying Your Finances

While I was at Columbia College during my Financial Literacy training, I had the opportunity to meet and speak with Harold Pollack, the author of the book, The Index Card. I have always liked simplification and ways to do things easier and more efficiently, and this is a great example of this.

Finances don’t have to be rocket science, you can make your finances simple and create your own rules. He is someone, like me, who learned to make better choices with his finances. It’s never too late to start and take that first step towards your goals. He has 10 steps that he wrote on an index card that he uses to manage his finances.

So after reading his book, we made our own list for where we are right now with our finances at this stage in life. We thought about these key areas:

$ Savings – emergency, retirement, goal savings, etc. – set a goal.
$ Debt – face your debt and make a plan to payoff.
$ Insurance – make sure you have the coverage you need.
$ Investments – contributions and money management – really understand what you are doing. Don’t do this blindly.
$ Tax Advantage Savings – understand what is available and take advantage of it.

Now create your index card and post it somewhere you can see it all the time. Finances don’t have to be complicated. Start your journey today.

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Low Or No Cost Summer Fun!

As you know, Dave has been home for three months unpaid, with his shoulder replacement and my position ended with Norwalk Community College. It’s summer time, there is so much we wanted to do and we need to do this on the frugal side.

Summer is perfect here in CT. We have access to great beaches, parks and entertainment. So this is the place we want to be.

So this is what we have done so far.

We have gone to the Stamford Museum for free, the Connecticut Beardsley Zoo for $5 each (66% discount over the regular pricing) and walked at the Audubon Center (free). All this thanks to our local library which offers free or discounted admission to many local attractions. That’s a great budget saver for us and could be for you too.

One thing we crossed off our bucket list was the Essex Steam Train and Riverboat. On one of those hot days, we took the train ride from the shoreline into CT, then took the Riverboat from Deep River, CT and back on the train to were we began. It was a great day trip and a surprisingly cool way to spend a half day.

We have gone to our local beaches. One of our beaches (an island) requires a 20 minute ferry ride and we brought a picnic to the island. It was a beautiful day so we rode the ferry an extra trip – love the sunshine and the salt water! This is a minimal cost as a resident.

One of my favorite things to do in the summer months, is to watch a movie in the park. Our town, as well as other towns in the area, do this. We bring a picnic dinner or take out, sometimes the dog and watch a movie under the stars.

We have dinners outside at home with the vegetables from our garden. There is nothing better than growing your own, picking it and having it right away – just delicious. Salad is always from the garden. Our tomatoes are starting to turn red and the string beans are there for the picking. All for the minimum cost of a packet of organic seeds.

We are exploring our area and doing some of the stay-cation things in town and across the state. With more nice weather weekends ahead, there is so much more on our list of places to explore so stay tuned. What are you doing this summer?

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Financial Independence Part 3

We’ve all heard the saying “Don’t keep up with the Jones”. What does it really mean? You are fine with your sofa and all is well with your family. Then your friends gets this really nice brand new sofa that is gorgeous. Then you start to think, my sofa is older, starting to look its age, maybe had a stain in the corner, you start to rationalize that you need a new sofa too.

Just because someone else gets something new, you don’t necessarily need that too. That’s keeping up with the Jones’. All of these steps are hard to do. You have friends and family showing you their new things, marketing showing you the bright shiny items that you love to own, but do you need it?

Needs and wants are a hard subject to learn. You have to come to some balance of what you want and what you can afford. So in my example above, you can do some thinking – there are choices in etween the current sofa and the new sofa:

Current sofa
Clean the sofa
Buy a slip cover
Reupholster the sofa
Buy a second hand sofa
Buy a new sofa

See how many choices that I just wrote out between the current sofa and the cost of a new sofa. Some of these in between steps may work better with your budget. You don’t always need to have the latest, greatest new item.

If financial independence is something that you aspire to, then you need to work on all three of these steps, to get your finances in order once and for all.

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Financial Independence Part 2

This is part 2 of 3 of obtaining financial independence.

Spending less than you earn, sounds easy – but is it? The basic principle is if you earn $100 then you need to spend less than $100. That’s the general rule. But there are times in our lives that this isn’t possible. When you are just out of school and your rent, utilities and student loans are almost your whole paycheck, you may experience times when you are not working – in between jobs, can’t work for medical issues etc., these make spending less than you earn a challenge.

If you have been reading this newsletter, you know that my husband had been home from work after shoulder surgery and is not getting paid while he is recovering. So what is our household supposed to do to spend less than we earn? The answer for us is to reduce our expenses and to fund the shortfall with our savings. Luckily this was a planned surgery, so we had time to plan ahead to save. But this may not be possible for everyone. First, you have to have a savings to fall back on to get through whatever life throws at you.

Spending less than you earn is critical to financial independence, as you have to save on a regular basis, putting a regular amount from each and every paycheck into savings first – pay yourself first.

Here’s how to start:

Take a calendar out and mark your paydays.
Determine the amount that you want to save. It’s okay to start small ($10 a week) and then increase often.
Set up automatic system. There are two ways to do this – with direct deposit have your paycheck split by your employers so that the amount you want to save is directly taken from paycheck and deposited to your saving.The other way is to set it up with online banking and have a transfer from your checking to your savings.

There are some suggestions to making this work. Make sure not to link your savings account to your ATM card. You may want to have this savings account in another bank or credit union – not where your checking is located. You want to have access if you need the money but not have easy access to use if when you just want something. It’s too easy to transfer money without thinking.

So for that $100 you earn, you will want to save money first – pay yourself first, then live off the rest. The rest is what you pay your bills with, shop for your necessities and the money to have fun with. Yes, that’s a lot, but I know you can make it work. You want to be conscious of what and where you spend your money, so that you can make choices. Do you want to purchase that now or have that money saved for later? The choice is yours.

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Financial Independence Part 1

In honor of Independent Day/Fourth of July, I want to talk about many people’s ultimate goal of financial independence. According to Wikipedia, financial independence is described as “generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income that is greater than their expenses”.

Yes, we all probably want this and therein lies the problem. How do we attain this?

There are some generally agreed upon principles that are good practices that we all should attain to:

Avoid consumer debt
Spend less than you earn/Pay yourself first (save)
Don’t keep up with the Jones’

These are all great suggestions and work really well, but what if you need to work on some of these steps. In my opinion it all goes back to budgeting. Budgeting is the road map of your finances. You can see where your money is going and then make the necessary steps to eliminate consumer debt, reduce your spending, save by paying yourself first and break your habit of keeping up with the Jones’. It may sound simple but it isn’t. So with this issue and the next three I will tackle these issues.

Today, let’s look at avoiding consumer debt. This can be difficult to attain. But on the other hand, this is so important – too important not to strive for.

There have been times in my life that I have had more debt than I would like to admit. Yes, this happens to me too. In my opinion, there are two steps to start on the path to being debt free. First, you have to stop creating debt. Yes, you heard me. You need to do whatever it takes to avoid adding more to the debt. With that said, you can’t put every extra penny towards your debt and not have an emergency fund. Otherwise, the next time an emergency happens and you don’t have a fund to fall back on, you will create more debt.

In May and June, my husband had surgery and was home from work for a month without pay. We only had about 6 weeks’ notice to plan for this. We got through this period with the help of the emergency fund and savings to cover the shortfall. This was the key to us being able to live and pay the bills. Without the savings to fall back on, we would have had to use credit cards and create debt. So you can see how having an emergency savings plays a big part in getting rid of debt.

Back to the debt. Second, there are many ways to tackle this. Start by taking an honest look at your all your debt. Make a list including how much you owe, the minimum payment, interest rate, etc. I understand this is hard, but it’s necessary.

Now make the plan. You can payoff the smallest debt first to eliminate one debt (gives you momentum). You can payoff the debt with the highest interest rate (saves you money). You can plan to get more money (bringing in more income) with many options to add to your payment. Take some time to brainstorm what will work best for you and then put that plan into action.

You’ll need to stop creating additional debt and to create or increase your emergency fund. Next issue, I will discuss spending less than you earn/pay yourself first.

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Negotiating Medical Expenses

I am pulling back the curtain and showing you how I negotiated discounts on my hand surgery.

Back at the end of last year, I needed to have a medical procedure. It wasn’t urgent, so I chose to wait until work slowed down and my out of network deductible was met and I had vacation time to use. I wanted to use my doctor, whom I know and trust. We have been patients of the practice for years, and he has done a few surgeries for the family, but he was out-of-network.

I have admit that insurance sometimes baffles me, but I was bound and determined to figure it out. After discussing the details with my doctor, I chose to have the procedure at the hospital’s surgery center – which that cost was in-network. First step done easily and I wouldn’t have to pay for anything.

Next, I contacted the surgeon’s business office to discuss the fee. I knew I would have to pay something and the 80/20 isn’t really 80/20. I had a lot to learn here. I learned that an out of network provider doesn’t have to get prior approval from my medical insurance, so they couldn’t tell me what I would owe ahead of time. They could only tell me the surgeon’s cost. Then to understand this better, I spent well over and hour on the phone with a really helpful person at the insurance company. I found out what the insurance would probably cover – that was actually about 58% of the cost – not really close to the 20%. I was now two business days before the surgery and still trying to figure out if I have the money to pay my part or was I going to cancel the surgery at the last minute.

Lastly, I learned from my insurance company that I could be responsible for the anesthesiologist as well, if they were out of network. I contacted the surgical center and was given the number for the anesthesiologist and contacted them. Since they were in network, this step was fairly easy. But, they did bill me for the full amount after the surgery. So back on the phone with the insurance company to straighten out this bill, that I wasn’t supposed to pay for.

Now I still had to deal with the surgeon’s fee. I decided to contact the doctor’s office and explain my situation. I really wanted to the have the surgery and I wanted it with that doctor, but I was struggling with the portion of the fee that I would have to pay. (My portion would have been a couple of thousand dollars) After 24 hours, the office got back to me, and the surgeon reduced his fee to a number I was comfortable with and that I could afford. Yes, this took a lot of effort on my part but my budget said thank you.

Bottom line, you can negotiate with all types of services and possibly come to an understanding. I did it this time, with several calls and a few hours of my time. For me this was worth the time and effort, to end up paying a few hundred dollars, a number my budget liked.

Stretching Your Dollars With Discounts

Are you looking to s-t-r-e-t-c-h your dollars with a discount? Here are some ideas you may not have thought about:

1. Free food on your birthday – many restaurants offer you something on your actual birthday (some during your birthday week).

2. Using your situation discounts – I am talking more than senior discounts. There are others such as military, memberships, student, government worker, etc. I have used my student discount for admission to museums, my senior discount to pay less for hotels and more.

3. The day after discount – if you shop the day after a holiday you can usually receive a 50% or more discount on those items. Think more than wrapping paper and greeting cards the day after Christmas, there are other holidays throughout the year.

4. Double dipping your coupons – some stores will let you use multiple coupons for the same item to get an even bigger savings. I have used the case price discount and a manufactures coupon for items on sale to save even more.

5. Don’t forget to ask for price adjustments and coupons. It never hurts to ask if there are any other discounts or coupons available at the checkout. Sometimes a sales person has that ability to give you even greater savings. If you get a coupon after the purchase, go back and ask for an adjustment for the original purchase within a certain time limit.

6. Remember to buy off season. With the particularly warm month of December here in the northeast, winter merchandise seemed to go on sale even earlier. When you buy a snow blower in the spring or swimsuit in October you can save money.

7. Sign up for emails (remember to use another email address) as there can be many emails to deal with. Companies offer coupons and discounts to their subscribers.This works for more than products, I have received discounts for concerts too. You can also try leaving items in the cart without checking out. Sometimes they will email you with a discount to place the order.

8. Free Stuff – there are so many special days in a year it’s impossible to keep track of. National days such as donut day will give you a free donut, ice cream day etc. National Parks days throughout the year will waive the entrance fee. You can get some prescriptions filled at your local supermarket for free. The list goes on and on.

Let me know what you do to get discounts and free stuff.

Saving For Retirement

We all want to save for retirement, but there never seems to be enough money left over to save. Does this sound familiar?

The first rule of saving for retirement is, if you are offered free money take it. If your employer sponsored retirement plan offers you matching funds, take it. Contributing to a retirement plan through your paycheck is a great way to get started on the path of regular automatic saving. The earlier you start this habit the better off you will become. On the other side if you haven’t done this, it’s never too late to start now. In this case, free money is a good thing

Next you want to manage your debt. Debt is the enemy to your budget, so you want to avoid it at all cost. I am not saying don’t borrow or use credit, what I am saying is to use it wisely. Don’t become a slave to your debt and that you live paycheck to paycheck trying to keep up with your debt payments.

Charge wisely and only amounts that you can pay off easily. If you find yourself with an emergency and you have to borrow money, evaluate your options and make the choice that is best for you and your budget. Pay back the debt as quickly as possible to avoid as much of the finance / interest charges as possible.

Lastly, gratification – are you someone who needs instant gratification? Do you buy without a payback plan? Look at the food cost (groceries, dining out, take out etc.), shopping, memberships, entertainment etc. These are the expenses, that where the instant gratification that can harm your budget. These are the first defense against the leaks in your budget. Plug those holes to have more money for your retirement.

Think about your finances then make a plan to implement these strategies one by one. Once you master one, start the next. Remember that your finances will not change overnight, be patient and remember it takes time.