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.

Save

Ways To Save While Traveling

You know that one of our passions is to travel, and we do this as much as we can. I wanted to share with you ways that we are able to save money while traveling. This is in addition to using discounts, points, miles and other known ways.

Here are some things that we do:

Food / Drinks – at hotels, we always stay in a room with a fridge and coffee maker. This saves lots, we can buy our own healthy beverage and food choices at a grocery store vs. the hotel gift shop. If we are driving, then we bring everything from home. If we are flying, it’s a little research before you go to find a store near where we are going to be. While at the store, we pick up fruit and snacks for the trip. On some cruise lines, you are able to bring small quantities of non-alcoholic beverages – yes we do this too.

Exploring / Tours – do your research ahead of time. When we travel, I do a lot of research before we leave. When going to a new city, I check out guide books with suggested itineraries, search the internet for free tours, some libraries offer passes to attractions. If you have to pay for something, do a search for cost too – look for coupons and discount codes. Yes, this takes time but it can benefit your wallet. If we are cruising, we use a website that connects us with other travelers on the same cruise. Many times we have shared rides and tours with people we met online. We shared car service from Southampton, England to the airport with two other couples, we’ve split the cost of a cab in Bruges, Belgium with two other couples – all prearranged online ahead of time.

Dining Out – think about mixing things up – have your big meal at lunch instead of dinner (prices are usually less expensive on the lunch menu compared to the dinner one and the portions can be smaller). Check for discounts and coupons to reduce your cost. Also, think about smaller meals such as stopping at a bakery for breakfast or street or farmers market for snacks. Think outside the box and it may save your wallet.

These are some of the ways we save when we travel. Let me know what you do to save money while you are away.

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.

Different Types of Refinancing

We’ve all heard the word “refinance”, but what typically comes to mind is mortgages. Yes, you are correct. It also can apply to other areas of your finances such as car loans, student loans and credit cards.

As with any borrowing, you want to pay off the debt as quickly as possible. But sometime you cannot afford to purchase a car with cash, so you take a car loan. You may want to look into refinancing your car loan if you can get better terms – lower interest rate.

For student loans lower interest rate is probably not the answer. You may have several loans and several payments. It might be easier for you to keep track of and have only one payment per month, if you consolidate. Check out your options to determine if this is right for you.

Credit cards are a good example. You may be payoff debt and it may seem like it takes forever. It could if you have high interest rates. Refinancing a credit card balance to a lower or zero percent interest rate will help you pay back what you owe quicker and pay less in finance charges.

As with any financial transaction, do your research and compare all terms and conditions to see if this is the right move for you and your finances at this point in your life.

Making Budget Choices

You know that I think everyone should track their income and expenses to really know where they stand. We personally do this a few months of the year. But when I discuss this with others, I sense a resistance – maybe it’s too complicate, a time issue – I don’t know. So I am going to discuss budgeting from a different angle.

These are the things that we have chosen to give up, don’t have or do it ourselves – it’s our choice.

· No data plan on our cell phones – just calling and texting

· Driving older cars – they are 1995 and 2006

· Home maintenance – we do our own yard work, snow removal, house cleaning, etc

· Trash – we take our trash and recycle to the dump ourselves

· Personal care – I cut my husband’s hair and I stretch the time between haircuts. I do my own pedicures, etc.

All these are the choices we have made for our lives. These choices let us travel. We have been to most of the Caribbean, a good part of Europe and more. We are able to take yearly vacations all because of the choices we make day in and day out to do with less in our daily budget.

Budgeting is about choices – where you chose to spend or not spend your money. Everyone is different and has different values / priorities and will make different choices about what they do with their money. I wanted you to see how the money works in our household. Now you can see what we don’t do that lets us do more of the things we want to do.

How To Save Money AND Get Dinner On The Table Fast!!

20151106-Feature

From guest contributor www.VickiHeise.com

I’m often asked how I put together quick meals and save money on food. I cook at home and prep ingredients early in the week, so that meals go together super fast. At the end of the week, I use the bits and pieces of leftover veggies, meat and grains to make a quick frittata or soup.

By taking a little bit of time to do some home cooking, you can save money and feed you and your family delicious meals that go together quickly. Check out these 4 tips that you can start using today!

KEY ~ Feed Your Body
How To Save Money AND Get Dinner On The Table Fast!!

Did you know that not only can you save money by cooking at home, but it doesn’t have to be complicated? If you think you don’t have time to add another thing to your to-do list, with a little planning you can not only save money, but feed your family great tasting nutritious food and not spend lots of time in the kitchen.

Here are 4 tips to get you started:

Use whole foods. Buy whole foods, the ones you find around the outer edge of the grocery store. That’s where you’ll find the fresh herbs, fruits, vegetables, meat, chicken, fish and dairy. Add some things from the bulk bins like grains, beans and nuts (a huge money saver) and if you’re really pressed for time get some canned beans and frozen vegetables.
Prepare them simply. You don’t need lots of recipes with long lists of ingredients. Save the complex, full of ingredient recipes for when you have the time to enjoy the whole cooking experience.
Make large batches ahead of time of the things that take a while to cook like beans, grains and rice. Yes they do take time, but it’s on the stove cooking time, not you actively being involved time. By making these ahead of time, you’ll have ingredients ready when you get home so you can quickly put all the pieces for dinner together. If you’re making soup, make extra to so you’ll have leftovers for lunch or dinner the next day or later in the week.
Prep and freeze ingredients to save time later. What do you use often in your meals? Onions, peppers and other veggies? Chop these and put them in meal sized portion freezer bags. You could even cook bacon and freeze it to use as a garnish in recipes. When you’re ready to cook soup in the crock pot, just take out what you need and you’re ready to go! Also consider freezing meat, poultry and fish in meal size portions. My husband and I have different tastes, so I’ll freeze individual portions of beef and pork for him and fish for me. It makes for a drama free meal!

10 Minute Scrambled Eggs

I love making budget friendly 10 Minute Scrambled Eggs for dinner, using one pan and some freezer ingredients. There’s no chopping or prep time!

20151106-food2

~ Saute frozen peppers and onions, in a bit of coconut oil.

~ Add frozen, already cooked, chopped bacon, then fresh or frozen spinach until it’s wilted.

~ Finally add the eggs with a bit of cheese if you want, and scramble it all together.

~ Serve with a favorite fruit and a piece of toast.

This is a dish that you can easily add in bits and pieces of leftovers from the fridge too.

Take a little time to plan ahead to save yourself time and money starting this week!

If you’d like other recipes ideas, you can check out over 1000 of them on my Live Your Healthy Life’s Pinterest page.

If you’re looking for weekly ideas to Live Your Healthy Life, you can sign up to receive my weekly email newsletter.

www.VickiHeise.com

Is Your Home Improvement Project Worth It?

couple-blueprints As the weather turns to Spring, homeowner’s start to think about home improvements. Several years back, we did a major home improvement to our home and we had to make some tough decisions about what improvements to make. Do we make changes that will make our lives easier? Do we do something that would bring added value to the home? These are the tough decisions we had to make as homeowners.

First, do the improvements that will ward off problems. For example, it’s better to replace a roof than to wait until it leaks. Once it leaks, you have to repair interior water damage on top of replacing the roof. In my opinion, regular maintenance and preventative maintenance are your top priority.

But what about the other things you want to do around your home. According to Remodeling Magazine, here is a chart about average cost and what portion of that cost can you expect to recoup in value.

Which home improvement projects pay off?

Project	Job Cost	Resale Value	Portion Recouped
Entry door replacement (steel)	$1,162	$1,122	96.60%
Minor kitchen remodel	$18,856	$15,585	82.70%
Window replacement (wood)	$10,926	$8,662	79.30%
Basement remodel	$62,834	$48,777	77.60%
Major kitchen remodel	$54,909	$40,732	74.20%
Bathroom remodel	$16,128	$11,688	72.50%
Roofing replacement	$18,913	$12,777	67.60%
Backup power generator	$11,742	$7,922	67.50%
Home office remodel	$28,000	$13,697	48.90%

SOURCE: Remodeling Magazine 2014 Cost vs. Value Report, mid-range projects

So, what if the improvement you want, isn’t just something that will make the house look or feel nicer. I personally don’t think the choice is as easy as picking the project most likely to recoup your expenses. The first question you need to ask yourself is, “How long to do I expect to live here?”

couple-homeimprovement If you are planning to sell in the near future, then recouping your expenses is a major factor in your choice. Talk with a realtor and discuss what improvements will increase your home’s value and recoup your money.

But what if you are planning to live in the home for a long time? Then choose the project that will make your life more enjoyable. If you are handy and have the time, you can do some improvements yourself. A fresh coat of paint always makes a home look better and most people can do this themselves. If you want to tackle a bigger project yourself, then your home improvement store can be a big help with how-to classes.

In case you were wondering, we did some major improvements – renovated the kitchen, remodeled a bath, added an additional bath, updated the electrical, etc. We worked within a set dollar budget and did a lot of the work ourselves. Bottom line, think about what you want to do, and do your research first. Your kitchen remodel may be affordable if you reface the cabinets instead of replacing them. It’s something to think about.

Why Financial Envy is a Waste of Time (Update)

You see this happen all the time. You are in a situation with other people and someone mentions his nice vacation plans. What is the first thing that pops into your head? Are you genuinely happy for him or do you automatically think about how much he’s spending (that includes jealous thoughts of the “he must be making more money than me” kind). You know what I mean.

But in the past few years, I have learned to stop comparing my financial situation with friends and family family (I’m not perfect but I am improving). I have come to realize that I am projecting my values and beliefs onto other people. What I think or believe about another person’s finances has no basis in reality. I am not in their shoes and don’t know what their situation is.

People spend money on things that are important to them. I know that some people may think I travel a lot. When one vacation ends, I am already planning the next. I personally always want to have a trip to look forward to. You might be thinking thoughts like “how can she afford it?” or “where does she get the money to travel?” You may even be envious. But you won’t know exactly how I make my little dreams come true because personal finances are just that – personal. .

Although in a few weeks,, I will shed some light on how we travel.

The other side of comparing your finances is the presumption that you are somehow morally better or worse than others. Grim tales of credit card debt are all over the news, often mixed with stories of foreclosure and homelessness. You may feel good about yourself because your debt is lower, but do you know why the person on the news has the debt? Was it really insane overspending, or was it a medical emergency or a layoff. Maybe the credit cards were used as a last resort to pay bills?

I have heard it said that “to compare is to despair.” This thought process of judging others is detrimental to you. You have no idea whether another household spends more money than they have, is in debt to their eyeballs, or has planned ahead to achieve their desires. You don’t know how much they earn or how much they give to charity. It is much easier to judge someone else than look inward at your own spending habits.

In the budgeting process, people track their daily expenses to see how much they spend and in what category. This can be a great exercise. Once you see where your money is going, you can make life-changing decisions. Where do you want to spend? What do you want to save for?

There are no right or wrong answers. There are only personal choices. Maybe you choose electronics over vacations. Maybe you choose decorating and entertaining over both. Maybe you choose to give your children spectacular holidays or birthdays over everything else. These are the kind of choices your neighbors, friends and family members made when they did something that impressed you and made you envious. They simply chose to spend their money in a different way than you.

So the next time you see someone order an expensive meal at a five star restaurant, purchasing the latest greatest electronics, or buying a designer outfit, don’t judge them. Not only is the thought process destructive, but it is a total waste of your time.

Save Money with Simple Habits

….

You know how to spend less on your purchases – shop sales, use coupons, buy used, or trade with a friend. But you don’t want to, because you’ve found that it takes a lot of work and your time is valuable. I complete agree – that’s why I keep it simple.

I am not someone who buys things just because the price has been reduced. I don’t spend hours cutting coupons or scouring sales fliers. I only buy what I need, and I only check for sales and coupons in the Sunday paper.

But, I have found that simple habits have made a big difference in our expenses.

My toothpaste habit: When we need to buy toothpaste, we always look for a sale at the local grocery or drug store. Typically, we can find a standard size tube of brand name toothpaste for 99 cents on sale. Then I check the Sunday coupons and usually find a 35¢ off coupon that the store will double (if it’s the grocery store). When I’m lucky, I only pay 29¢ for toothpaste – compare that to the normal $3-4 dollar price! It’s so easy. I know what I’m looking for, where to find it and it’s there when I need it.

My hairstyling habit: I used to get my hair cut locally, but my friend was shocked at the price I was paying. She suggested I go out of town to a less expensive area to get my hair done. That alone saved me 50% of the cost. But I didn’t let it stop there. I stopped getting my hair colored at the salon, (more money saved) and then I did some research and looked at beauty schools. I can get my hair cut at a school for about $25 including tip. Yes, they’re students, but I trust them because they’re working under the eyes of a professional. In addition, I try started waiting longer between appointments. I now try for quarterly instead of every 8 weeks (4x per year instead of 6). I went from spending $1,400 a year on my hair to $100 – not bad! And I love the way my hair looks.

My library habit: I love my library! Libraries aren’t just for books. You can borrow the whole season of a popular TV show on DVDs, borrow a music CD, audio books (DVD or mp3) and books (paper or for your device). All free. We log onto the library website to research what they have and place holds (saves us time and gas). Our library has free classes, speaking events, and now it offers free passes to local tourist spots. You can borrow a pass to go to the museum for free (or discounted). I can’t say enough good things about libraries. They’re the cornerstone for reducing entertainment expenses.

My friend habit: Our friends traveled to same vacation spot that we’re visiting this summer. They were nice enough to loan us their travel books and brochures so we can benefit from their experience. Then, a friend introduced me to someone who is actually from one of the countries we are going to. She shared her “must see and do” list with us and loaned us a DVD to watch. These are perfect examples of borrowing from friends.

I wasn’t always like this. I used to overspend. I’m good with my money, but I didn’t wake up one morning as a savings convert, going full throttle after deals like a fiscal zealot. It’s all the little steps that add up to big savings. And, I add new steps when I find that they’re convenient and fit into my routine.

If this is something that interests you, you’ll need to think outside the box. Find the little savings habits that are right for you. If you can’t think of anything new to reduce, recycle or reuse to lower your expenses (and reduce your clutter), then do a little internet research or try one of one of my favorite frugality books: Amy Dacyczan’s The Complete Tightwad Gazette or Judith Levine’s Not Buying It: My Year Without Shopping. If you haven’t read Amy’s book, it’s a quick read with tons of tips Judith’s is more of a journal of her year, chronicling what she did and didn’t do.

These are just a few examples of how little habits can make a big difference. I could go on and on.

And if that isn’t enough, in the next newsletter I will discuss increasing your income.

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

KEY ~ Feed Your Body How To Save Money AND Get Dinner On The Table Fast!!

10 Minute Scrambled Eggs

Which home improvement projects pay off?

KEY ~ Feed Your Body
How To Save Money AND Get Dinner On The Table Fast!!