Did I Do the Right Thing?

Like many girls her age (four), my daughter is pretty obsessed with Disney princesses. Even if she hasn’t seen a particular character’s movie, she loves her and wants all of the related merchandise. Each time we go to Target, she begs to walk through “the princess aisle”.  While I think she knows I’m not going to buy her anything, she still asks begs for pretty much everything there.  Last summer I started responding, “Let’s put it on your birthday/Christmas list”, which worked surprisingly well. Instead of asking me to buy things for her, she would say, “Can we put this on my birthday/Christmas list?” I’ve noticed lately, though, that she’s back to just asking me for things – or better yet, longingly saying, “I wish I had one of these…” Clearly I have to resurrect the, “Let’s put it on your list”, line!

As soon as I told her we were going to Target a few days ago, she asked if I would buy her a princess doll. Never mind that she already has countless princess dolls, including the seven she received last Christmas alone! I was not going to buy her one, but I said that if she wanted to spend some of her piggy bank money, she could buy one for herself. Naturally, she was excited and agreed.

Before we left home, we counted the money in her piggy bank, which totaled $19.56. (Significant monetary gifts are deposited into her 529 account, and gifts of more than $1 or so are deposited into her online savings account. Her piggy bank contains mostly change that she’s been given.) We then headed to “the princess aisle”, where she proceeded to point at nearly every item and ask if she had enough money for it. The fact that she doesn’t really understand numbers in relation to each other yet, works to my advantage, and allowed me to maintain control over the situation. In the end she chose a Belle ballet doll, which happened to be on sale for $6.49. It was a completely unnecessary purchase, but one that I could live with.

Here’s my question: Did I do the right thing? My husband doesn’t think I should’ve let her spend her money on such a frivolous purchase, and I understand where he’s coming from. However, I want to teach her good money habits early, and hope that spending her own money will make her think twice about what she wants and how badly she wants it.

What do you think?

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Last Week’s Frugal Highs

I hope you’re enjoying a wonderful Memorial Day weekend, while taking time to remember those who fought for the freedom and rights we enjoy as Americans.

Here are last week’s frugal highs:

  1. Received my first payment for items sold through my Amazon store.
  2. Updated my trash/recycling account so the payments come out of my bank account, rather than being charged to my credit card.
  3. Read The Complete Cheapskate, by Mary Hunt, and How to Get Out of Debt, Stay Out of Debt, and Live Prosperously, by Jerrold Mundis (from the library, of course!).
  4. Updated the credit card on my EZ Pass account from the one I’m paying off first, to another, lower-interest one. (EZ Pass only allows payment via credit card.)
  5. Cashed in some points in my MyPoints account for a $10 Home Depot gift card. We’ll use this the next time we have to buy salt for our water softener.
  6. Purchased a mattress/box spring set for our daughter during a Memorial Day weekend sale, at the store with the best prices in our area, 40 minutes from our home. Avoided the $89 delivery fee by strapping them to the roof of our car and driving home VERY slowly. (I nearly needed a Xanax for this last part of the trip!)
  7. Dropped some items for sale off at a local consignment store, and picked up a $58 payment for previously sold items.

What Made Me Think This Was a Good Idea?

I’m currently reading the book, How to Get Out of Debt, Stay Out of Debt, and Live Prosperously, which is based on the principles of Debtors Anonymous. Yesterday I read a portion that seeks to help people identify the personality traits that have made them vulnerable to debt. For example, there are people who buy things because they believe they deserve them, people who buy things to comfort themselves, and and people who buy things to maintain a certain image. There are many more “types” covered in the book, but none of them really fit well with me. As a result, I found myself wondering how I managed to accumulate so much debt. Sure, there are the practical considerations that I considered here, but what made me think this was a reasonable path for our family?

My parents are both extremely frugal and major savers. They paid for two children’s private college educations completely, including prepaying all four years of tuition at the beginning of my first year, in order to avoid tuition rate increases in the following three years. When I was growing up, we didn’t eat out very often, and when we did, we never ordered drinks, appetizers, or dessert. It wasn’t until I went to college and went out to eat with friends that I really understood that this was an option! My parents always pay cash for cars, and they NEVER carried a credit card balance. And while I wouldn’t say that they really gave us learning opportunities about money, they heavily indoctrinated us in living below one’s means, eschewing brand names, and living without many things.

So how did I end up allowing myself to accumulate over $50,000 in credit card debt? (It pains me every time I type that number!) I think I made the classic mistake of expecting a certain lifestyle, even when the funds weren’t available to support it. I grew up with a successful, professional father and a SAHM mother, went to a private college, and all of my friends were also on a professional track. As a result, I had and still have many financially successful friends, whose lifestyles are what I want for myself. (Let’s set aside the fact that some of them may also secretly be in debt.) I believe that I have allowed myself to get so carried away with having the same things and lifestyle for myself, that I lost track of whether or not I could really afford it. And not only that, but I didn’t stop to think about how the debt would impact our family until it was really huge.

To Dave, or Not to Dave

When I started reading other blogs dedicated to personal finance, frugal living, and paying off debt, I noticed that Dave Ramsey kept coming up. People seemed to really like him and to believe in his message, so I decided to familiarize myself with his philosophy.

I immediately took a few of his books out of the library, and have now read four of them – Financial Peace Revisited, The Money Answer Book, Total Money Makeover, and How to Have More Than Enough.  Financial Peace Revisited was my favorite, perhaps in part because it was the first one I read, and there’s a significant amount of repetition in his books. But I also really like the tone and message, and his emphasis on achieving peace as we gain control of our finances. After having read these books and considered Dave Ramsey’s approach, here are some of my thoughts:

  1. His seven “baby steps” distill a frightening process – paying off debt, funding retirement and college, and investing – into an easy-to-follow process. It felt inspiring and manageable to read, and I’m far from the first person to have this reaction. His approach truly has given thousands of people the blueprint they need to achieve financial peace.
  2. That being said, his approach is very rigid, and does not leave room for much individual variation. I’m a big fan of structured guidance, but I don’t think that all of the baby steps are necessarily the right fit for everyone. As a small example, Dave’s insistence in the first baby step, that we save $1,000 and no more or less, does not sit well with me. That’s just under half of my family’s mortgage payment, so the thought diverting most of our funds to paying off debt aggressively, without having at least one mortgage payment saved for emergencies, is terrifying. I understand that baby step 1 is not about funding a full emergency fund, but I simply need more than $1,000 in savings to sleep at night.
  3. His tone can, at times, be abrasive and even borderline-insulting. (I found this to be especially the case in Total Money Makeover.) Maybe it’s because he’s sold millions of books and guided thousands of people onto the path of debt-free living, but he can come across as a little too full of himself and judgmental. Several things I’ve read about him elsewhere have reinforced this impression. (Here’s one of the most off-putting – to me, anyway.)
  4. On a related note, his emphasis on religion could be a turn-off for some people. I don’t practice any religion, but was raised as a Christian, so this part of his message never bothered me, but it also didn’t really speak to me. However, I could see how this could be a real turn-off for people who are not Christian.
  5. Some people have an issue with Dave’s “snowball method” of paying off debt, whereby debts are paid in order of smallest to largest dollar amount, without consideration of interest rates. The common criticism is that it’s too simplistic, and ends up costing people money over time.  Dave acknowledges this push-back in his books, but (wisely, I believe) points out that personal finance is 80% behavior and only 20% “head”. As someone who has knowingly racked up over $50,000 in credit card debt, I couldn’t agree more with the idea that head and behavior are not always working in synchronization. And now that I’m getting serious about paying down that debt, I love the idea of paying off the cards one at a time.

So, while I disagree with some of Dave Ramsey’s smaller points, I think his overall approach is a good one. Just don’t be afraid to tweak some of the elements to get it to fit with your individual beliefs or needs – I’m not!

What about you? Do you love Dave, hate him, or fall somewhere in between?

Last Week’s Frugal Highs

Happy Monday! (It’s so much easier for me to say that when it’s spring!)

  1. Used a $16 Staples Rewards credit to purchase a new black ink cartridge for my printer. With tax, my out-of-pocket cost was under $3. (Almost all of my printer ink is used printing coupons.)
  2. Earned a $2 Staples credit for recycling an empty ink cartridge.
  3. Read The Money-Saving Mom’s Budget by Crystal Paine from moneysavingmom.com, and Money Rules: The Simple Path to Lifelong Security by Jean Chatzky (from the library).
  4. Renewed our membership in our heating/AC company’s preferred customer club. This cost $199 (paid via check!), and means our twice annual system servicings are free ($123 each, otherwise), and we receive a discount of up to 50% on any necessary services throughout the year.
  5. This is another one that required an outlay of funds (via check!), but I purchased a variety of gently-used clothes for my daughter, from a neighbor. Her daughter is about 18 months older than mine, and before she takes her outgrown clothes to the consignment store, she lets me go through them and purchase items at garage-sale prices. For $98, I got four nightgowns, four skirts, three pair of leggings, three pair of shoes, two pair of pajamas, four dresses, three shirts, and a bathing suit. I’ve been doing this for several years, and most seasons I don’t have to buy any clothes for my daughter. (My mother also loves to buy new clothes for her, which helps!)
  6. Requested and received an extension of my current Sunday newspaper subscription rate. The cover price for a Sunday paper is $2, and my ten-week subscription rate  was $20. However, I received a statement with a new ten-week rate of $45 (?!?). Thankfully, my $20 rate was reinstated.

How was your week? What were some of your frugal highs?

Thank You!

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  It’s officially been one month since I started this blog! I’ve already learned a great deal – about personal finance, blogging, and more! Thank you for reading, commenting, and supporting me on this debt-payoff journey!

The Trouble With Summer

Here in the northeast, it was a long, cold winter, and early spring wasn’t much better.  Thankfully, it has finally warmed up, the trees have leaves, and the gardens are coming back to life.  I love spring and summer every year, but have a special appreciation of them this year. But spring and summer also bring financial challenges, requiring extra vigilance about spending.

  1. Income. The biggest financial challenge for our family is that my job is only during the school year, so I don’t have a regular paycheck during the summer. My income is a very small percentage of our overall household income, but it does cover several bills each month, and we miss it. This year I’m making a conscious effort to bring in several hundred dollars in income each month via my small business and other side hustles.
  2. Meals. Is it me, or does everything taste better in the summer? We love to grill and eat outside on our deck for as many months as the weather allows. But grilling typically means meat and/or fish, both of which can be pricey. For the first time, I’m really tracking meat prices at our stores, and stocking up when I can get it for great prices. (Fish is trickier, so we’ll probably only be having it as a treat once a month.) We also have a BJ’s membership this year (purchased via an amazing Groupon deal), and  will buy in bulk when that’s a better buy. And, while I’ve dabbled in vegetable gardening in the past, this year I’m doing it with an eye toward replacing as many produce purchases as possible. I’m attempting succession gardening, meaning planting things throughout the growing season, to maximize the harvest.
  3. Activities. Both my daughter, who’s four, and I will are home over the summer. She has five weeks of morning camp, but there will still be several camp-free weeks, plus afternoons, to fill with activities. There are many great things to do in the warm weather, and it’s easy to be tempted to participate in non-free activities. Fortunately, we have quite a few great playgrounds in our area, a wonderful farmer’s market twice weekly, a fantastic library, and lots of friends. We’ll also be maximizing our membership to the local children’s museum.  (I did pay for the annual membership last fall, but it has already more-than paid for itself. Using it weekly this summer with just be icing on the cake. ) I’m not saying we’ll never spend any money on activities this summer, but it will be done in a much more intentional way.
  4. Treats. Ice cream, snow cones, and lemonade – oh my! This is a particularly difficult challenge for me. I love summer treats, and my daughter inherited this trait. While we will be indulging in these treats periodically, I will also be making sure to carry lots of snacks with us when we’re out and about, as well as timing outings so that we’ve had a meal beforehand.

I’m confident that I can have a more frugal summer this year with additional planning, plus ensuring that I’m supplementing our income to pay for the occasional indulgences.

What about your family? What challenges does your budget face during the summer? What strategies have you developed to keep costs down and still enjoy the summer?