Every Day Finances

Move Faster on Your FAFSA

It’s that time of year again! I’m not talking about taxes.

You DO need your tax return, but that is only part of it. Any guesses?

It’s FAFSA – Free Application for Federal Student Aid. I personally applied last year at this time and here are some of the things I learned. If you are returning to school or have a child in going or in college, you need to read this.

Deadlines: There are several deadlines that you need to take into consideration – federal, state and the college you will be attending. The federal deadline is June 30. The Connecticut deadline is February 15. Deadlines for your state can be found at fafsa.ed.gov.

How to Apply: First, you need to go to the FAFSA.gov and start your application. Online application are easy, but as with anything, take your time and enter your information correctly. Don’t hit enter yet.

Double Check Before Submitting! If you didn’t qualify, it could be because of wrong or inaccurate information. Did you know that incorrectly filled out applications is the reason why most government grants are denied?

Do Your Income Taxes Right Now: You will have to link your tax return to the application.

“Sign” Your Application: How can you provide your signature on an internet document. You will use a PIN that is provided for you when you start the application process.

Need Help? Either contact the college or university financial aid office, read the instructions directly on the FAFSA’s website or call the number listed there.

First Come, First Served: Remember, that sometimes award monies are based on first application in – first application out. The earlier you submit your application the better, as the money goes fast.

Holiday Credit Mistakes You Don’t Want to Make

Getting ready for the holidays? That will put extra stress on your time and budget. Every time you shop, you’ll be facing temptations that could send your finances off the cliff. If you want to keep away from the edge , keep listening:

Every store will push their own card. They’ll offer a 10-15% discount if you sign up at the register. With your little pile of purchases in front of you, it will sound like a good deal. Don’t do it.

Why not? Because they’ll run an inquiry on your credit report, instantly lowering your credit score and costing you more money in the long run. Don’t forget that store credit cards charge the highest interest rates out there. Think about the temptation you’ll face. With one purchase safely tucked away on a new credit card, you’ll find some breathing room in your checking account for more holiday purchases. Before you know it, you won’t have enough left to pay the store card in full. In the end, that discount will have cost you over 15%, putting you in the hole.

You will be off your routine and forgetful. Between preparation, gatherings, and parties, something will probably slip through the cracks. You might even forget to pay a bill on time. Don’t do it.

Why not? Missing a due date will cost you a late fee – sometimes $35. If it’s a credit card payment, they could penalize you with an increased interest rate at a time you need it least. Worst of all, the late payment could end up on your credit report, lowering your credit score.

You will want to spend more than you can afford. Don’t kid yourself. Holidays are a time of giving and sharing. You will get caught up in the moment and spend more than you planned. You may even spend so much, that you won’t have enough left over to pay your credit card in full when the bill arrives. Don’t do it.

Why not? It could take forever to pay off. If you have a $500 balance and only pay the minimum amount due (typically 2%) then it will take you 85 months (or 7 years plus) to pay off the balance. That is assuming you don’t make any other charges. Plus, you don’t want to start the New Year with new debt.

Plan ahead and use cash for holiday shopping to stay within your budget. That way, you can enjoy the holiday season without facing budget busting debt in January.

Bedroom Makeover on a Budget

We’ve been updating the house for the past few years – on a budget. That means doing most of the work ourselves and finding bargains wherever possible. This year, I really wanted to tackle the bedroom.

Here are the details.

If you remember from #30Ways2Save, we painted our own bedroom in a weekend. It only cost a few cans of paint and was easy to do.

The carpet really needed to go. Our older home has small rooms, so we were able to find an inexpensive Berber carpet remnant, fully installed. We saved money by ripping up the old carpet ourselves (and moving the furniture). This was another weekend project that saved us money.

Finally, we really wanted new furniture. We’ve had the same bedroom set for 15+ years and it wasn’t high quality to begin with. It was past time for it to go. We didn’t need, or want, to pay for a full bedroom set, so we were open to different styles if they looked good together and the price was right. I grabbed my good friend Lori, and off we went. She’s an expert shopper and knows where to find the best deals. We were able to find a dresser and armoire, both on clearance, at two different stores. They look great together.

I am getting more comfortable with negotiating lower prices just by asking (and with touching up furniture). I was able to ask for additional discounts because of some minor scratches, which reduced the prices even more.

Bottom line: With time and effort you can have what you want at a cost that works with your budget.

For the Price of a Text Book…

Some of you may know this already, but I’m taking a few classes to finish my degree. For those of you going to college, have a child in college, or about to go to college, this may help your wallet.

I have talked about the cost of text books before, but this was my first experience as an adult in today’s market.

I took a class this summer. The textbook was $60 used or $40 for a rental. Thinking I’d like to keep it for future reference, I decided to buy used. Imagine my shock when I discovered that the college bookstore didn’t carry the textbook for a class the college was offering. I had to prepay and have it ordered in.

After the class was over, I was shocked again when the bookstore wouldn’t buy it back. The college is offering the same class with the same book, so why not? Wanting to recoup some of my costs, I sold it online for $11.75 (postage was paid by the publisher).

Now I am taking my second class and that textbook was substantially more – $200 to buy new and $100 to buy used. I did my research and checked a number of websites for the best deal (remember to search by the ISBN number to get the correct edition). I decided to rent it for $40. On the first day of class, the Professor mentioned that we could have used prior editions. Knowing that ahead of time would have saved me a lot of money.

Lessons learned:

1. Don’t shop at the college book store.

2. Compare prices (new, used, or rental) from several online retailers.

3. Check for digital editions depending on your learning preference.

4. Plan ahead so you don’t have to expedite shipping. The cheaper the shipping the better the deal.

A couple of hard lessons learned that I will put to good use for the remainder of my classes. Textbooks are expensive. Learn from my mistakes to cut a nice chunk off of college costs.

You Can Be Frugal AND Buy Organic

I like to save money, but I have my limits. Sometimes the high-priced item is better (or just preferred). That means I have to be frugal in other areas of my life so I can splurge on the things that are important to me.

We spend more on groceries than most people we know. We prefer organic – fresh when we can get it. We prepare most of our own food at home, then take our lunches, snacks and beverages to work with us.

Where we splurge

You might be thinking, “that sounds frugal,” but it’s not (for us). Meal planning and grocery shopping is time consuming and can be costly. We’ve learned a lot about the food industry over the last few years and have made significant changes to our eating. That means we’re buying more organics and fewer processed foods. Unfortunately, the healthiest choices are often more expensive. Therefore our food budget can seem like a splurge.

Where we’re frugal

We make similar choices with our cleaning ingredients, but here we’re able to save money. We’ve learned to make our own cleaners with vinegar, Castile soap, baking soda, etc. This is time consuming but it is cost effective.

With the warmer weather, we can grow our own vegetables. This year we are growing several types of lettuces, tomatoes, peas, broccoli, herbs and berries. This helps cut our food budget significantly in the summer months, and (depending on the bounty) we are able to freeze items to have well into the winter months. This reduces our food budget for part of the year.

This is how a balanced budget works. If you spend more in one area, you have to reduce in others. Your spending should not exceed your income. If it does, you may end up in debt, and that’s not a healthy choice.

#30Ways2Save for Financial Literacy Month April 2014

I’ll add a video here each day in April. The newest video will be on top. Scroll down for all budgeting tips you can handle!

How to take the trip of a lifetime (cheaply). For more details on our amazing trip (and our amazing savings) go here

What do you do when you checkout at the grocery store? Look at the gum, the magazines, talk to the cashier? Here’s what you should be doing.

How to get deals on concerts and events

What about rewards cards? Are they worth it?

How to negotiate a lower price

Where to find free videos, music and audio books

Which foods are always 50% at the grocery store?

What’s your bank charging you? Find out how you can avoid bank fees in today’s #30Ways2Save tip.

Have you ever run into a store for just 1 item, and come out with 20 instead? Those impulse buys can be budget killers. Here’s the best way to stay on track

Eating on a budget? Turn 1 healthy, filling meal into 2 healthy, filling meals

Get Matching Funds to Double Your Savings with This Program (If You Qualify)

How to keep your frequent-flyer account active and earn miles – without flying!

Lower your electric bill with this easy trick

How to find free workouts in your neighborhood

What to do when your rates increase

Where’s Your Unclaimed Money?

Use Cash to Avoid Overspending in Grocery Stores and Restaurants

Prescriptions – Can You Get Them Cheaper?

Shop Off-Season for Beautiful Clothes on a Budget

Free Movies and Entertainment (without pirating)

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.

Forgive and Move On – The Wise Money Path

I caught up on my emails last week. Some were personal, some were business, and some were newsletters. I love reading email newsletters – I subscribe for much needed inspiration, and to receive free tips, recipes and deals.

As I was writing this newsletter, I had just read Cheryl Richardson’s newsletter on forgiveness. You may be wondering what forgiveness has to do with finances.

Many of us have struggled with our finances at some point in our lives. We made mistakes because we didn’t know how to manage our own money. Why is that? It’s partly because finances aren’t considered a polite topic of conversation. It’s unthinkable to ask questions about a topic you never hear anyone discuss freely and openly. We’ve had to learn about money as we go, and that means learning from our embarrassing mistakes. Those missteps may have cost you dearly – both financially and emotionally.

Forgive yourself and move on.

Now is the time to forgive ourselves, and others who have hurt us, for our financial missteps. You may need to forgive the person who never repaid the money you loaned them, or you may need to forgive the person who damaged your credit because they reneged on a loan you cosigned. You may have to forgive yourself for overspending in the past and now you wished you had saved that money instead. You cannot wave a magic wand and change the past. Somehow you have to find a way to move forward. You do that by forgiving yourself.

Forgiveness is not an easy process.

You can make the decision to forgive, but it takes some work to actually let go of the shame, guilt, anger or regret that is keeping you from moving forward. It’s a process. I would encourage you to read books or speak to an expert about the path to forgiveness so that you can get closure in your life, move on, and claim the wisdom earned from experience.

Resolve that today is your first day on the Wise Money Path and that you are going to forgive the mistakes you made while you were on the spend-thrift freeway. You are going to take expert advice when you need it and make informed choices that work best for you and your family from now on.

Remember that I support you in your journey.

Finances: An Honest Look

My finances weren’t always in great shape – too much debt, weak savings, with some self-indulgent spending for good measure. To stay on top of my finances, I have had to take the occasional “honest look”. I think of it as a 3-way mirror view of my situation. By that, I mean that enlightening view you get in the department store changing room where you find out how people see you from the back on a bright, sunny day.

First, I encourage you to step in front of that mirror and take an honest look at your spending and debt. You may want to stick your head in the sand. Please don’t. I can assure you that no matter where you are with your money, with action you can firm up your finances.

You need to ask yourself these questions:

Are you using credit cards for your basic expenses?
Are you making multiple transfers from savings to cover your checking account?
Are your wages running out before the end of the month?
Are you avoiding your bills by not opening your mail or emails?
Are you only making partial payments on utilities and credit cards?
Are your credit card balances going up versus down?

Answer these questions honestly – either alone or with the person you share your finances. Again, Be Honest. You may be thinking, “It’s the economy” or “I wouldn’t be in this situation if not for…” You have to face the reality that is, not what should have been. You cannot change the past. All you can do is to pull your head out of the sand and address the issue now by taking action.

The first thing to do is to track your spending. Keep a list of all that is coming in (income) and going out (expenses). That is the only way you can determine how much of a shortfall you have.

Once you know, you can begin to make changes. You will see where your money is going and can cutback and eliminate unnecessary spending. If you need help, I offer coaching packages that can get you through this.

You want to take action on the overspending now, Trust me, in my 20s I had maxed out many credit cards and had to pay off all that debt. At times, I worked three jobs and it seemed like it would never be paid off, but I did and you can too. The sooner you start the better off you will be.

Start today before it’s too late, and it snowballs into something so big that you cannot manage it, and the only answer is bankruptcy.

How We Cut Costs So We Can Afford Great Food and Travel

Saving money is a passion of mine and all these snow days have given me more time at home. Instead of online shopping, I stayed inspired by watching TV shows on frugality, doing some online research, and reading many books.

After learning about all the creative ways a person can cut costs, I wouldn’t say that I’m a cheapskate. I just scrimp and save in some areas, so I can splurge in others.

Reuse and Borrow

We do reuse and borrow versus throwing away or buying. I suppose that some people might think it’s pretty miserly to rinse and reuse a plastic baggie, or to save packing peanuts. But it works for me. We also like to lend equipment amongst close and family members. We don’t all have to own our own tile cutter or a rotor router – it’s easier and cheaper to borrow from someone you trust.

Recycling – Including Rainwater and Kitchen Scraps

We are avid recyclers. Our town accepts all plastics, glass, metal, newspapers and other paper at the dump. It doesn’t seem like work to me. Honestly, my mother was a recycler and that’s just how I grew up. We have a rain barrel in our yard for watering the flowers and garden. We have a compost bin for our fruit and vegetable scraps, which is a really great fertilizer for our vegetable garden.. We have cut down our trash to about a bag a week.

The extra work saves us money on our water bill, fertilizer, and our trash bill. And, it makes me feel good.

The Thrill of a Great Bargain

Buying on sale is kind of a thrill. The new curtains we bought for the bedroom were on sale – plus we had a coupon! The curtains originally sold for $39.99 a panel. They were marked 75% off to $10 and we had a $5 off coupon. So they became $7.50 per panel. Trust me; I didn’t buy them for the price. We only bought them because we liked them and they would look great in the room. But getting them on sale with a coupon is a great feeling. It was a great find.

Where We Splurge

Yet there are things that we are not frugal about. If you have followed this newsletter, you know that we travel. It’s true that we are able to get great deals when we want them, but sometimes we want to travel at a peak time when the weather is great and the price is higher. We’re also not frugal on our food choices; we spend extra on grass fed meats, wild seafood and organic vegetables.

The Bottom Line

Bottom line is that you need to be comfortable with your choices. But if you are an over-spender (stay tuned for next week’s newsletter on overspending), you should try to find ways to cut costs on things that aren’t important to you so you can afford the things that are.

Tell us, what’s your favorite cost-cutting trick and your favorite splurge item.