Living Well On $25k Or Less: Financial Goals

It's hard to save money. It's even harder when your income is in the lower brackets. It can feel impossible to save up enough money for a new car, a house, retirement or a vacation when you barely have enough money to pay your bills on time. Unfortunately, delaying saving for the future until that distant day when you earn six figures might mean that you won't get there. The good news is that it is possible to not only save for, but meet your financial goals, even when your income level is low.

First, think about where you want to be. Daydream. What do you think will make you really, truly happy? What needs do you foresee? Here are some common goals:

* Buy a house.
* Get married.
* Have a child.
* Take a trip.
* Start a business.
* Replace a car.
* Remodel a room/whole house.
* Go back to school.
* Retire.

Next figure out a realistic time frame. How long do you think your car can last before it needs major, costly repairs? How long do you think you will be able to and enjoy working? 

Put a dollar amount to each goal. It doesn't have to be exact, but do try to be reasonable. Now, figure out how much you will need to save from each paycheck to meet that goal. Is that amount reasonable for your current budget? If not, can you push back the date or increase your income through a part time second job?

Make a reminder. If you want to buy a house, post pictures of houses you love around your apartment. If you want to take an extended hiking trip, post breath-taking scenes. If you're expecting a child, get those ultrasound photos up. Look at them often and allow yourself to daydream about when your goals will be met and how happy that will make you.

Open an interest earning account that charges no fees for small balances. You don't want to pay $3/month while you are trying to build up your balance. A savings account is great, but you could also purchase $25 savings bonds or open a CD that allows deposits. For the latter two, make sure that you won't need the money before the funds are available; these are best for moderate-term goals, 3-5yrs out. 

Make it automatic, if possible. I've found that it is much easier to save money if I don't see it. I save for retirement automatically through my employers 401k. Since it comes out of my paycheck, I never miss the money, but it sure adds up fast. Ask your bank about setting up an automatic transfer to your savings account. Otherwise, treat this savings goal as any other bill. Pay it before you start spending on entertainment or other non-essentials. 

Now I know that it is not easy to come up with big amounts of cash when you're making a smaller income. Saving a small amount regularly adds up very quickly, however, and it's relatively easy to do. Here are some ways that I have had success finding money to save:

* Clip coupons for groceries. Deposit the amount saved into savings.

* Redeem rewards points for cash back. My card nets me $20 about every month ($240/yr).

* Tax refunds.

* Birthday money. I only do this if the goal is really exciting for me (taking a vacation vs buying a new commuter car)

* Sell stuff that you don't want/need. Old books, movies, and collectibles can earn you a bit of savings money and you'll have more space.

* Whenever you get an extra paycheck in a calendar month, put at least half into savings.

* If your employer offers a match, take it (401k).

* Cut unnecessary services such as netflix, even if for just a short while.

* If you pay off your current car payment, continue to make payments, but into your savings account. Same with credit card bills.

* Take spend free challenges.

* Fill out rebate forms and deposit the checks, however small.

* Figure out how much it costs in gas to commute to work. Bike or walk and deposit the savings.

* Live below your means. Buy cheaper clothes than you can afford. Rent a cheaper apartment (as long as it is safe enough). Drive your car a little longer before replacing. 

* When you get a raise, deposit that little extra bit each paycheck. If you don't plan to save it, you'll quickly adjust your spending to use it all.

* Buy goods (groceries, clothes, household items) on sale and deposit the savings.

It may not seem like it, but these tiny amounts add up. If you use $10 worth of coupons per week, that is $520 a year. If your car gets 20 mpg and you commute 4 miles each way by bike, you'll save 2 gallons of gas a week ($4/gallon currently) for a savings of $32 a month. Several tips can quickly add up to a sizable deposit and get you closer to something that means a lot to you. 

So how does this work in real life? Actually, pretty well.

Three years ago, Trucker and I decided that we wanted to buy a house. We wanted space, hardwood floors and a huge backyard for gardening. We spent this time stretching our dollars to the limit. We deposited money into our savings account as soon as I got paid, and learned to live on what was left. Sometimes we didn't go out to eat when we wanted to. We learned to enjoy cheaper or free entertainment. Any extra money we received was deposited into our savings account. Sometimes it was hard. Sometimes we felt like we'd never save enough for closing costs and down payment.

Yesterday we closed on our house. It is roomy, and has hardwood floors and a big backyard for me to plant veggies. We were able to reach our goal through hard work, even while our income was well below the $25k mark. 

Don't wait until you get a better job to start saving for your future. Start now to work towards the things that matter to you.

So let's hear your story. What savings goal have you met? What did you do to make it happen?

Apple Processing Day

My mum has a couple apple trees on her property. At harvest each year, she gathers the clan together for apple processing day. We spend the day talking, listening to music, and usually order out a pizza from our favorite local pizza shop.

Just some of the harvest.

This year we got everyone together: mum and dad, my sisters and their beaus, my grandparents, Trucker and me. We spent six hours working, and produced enough that each family was able to fill their freezer with apple goods. We all pitched in whatever we had access to: apples, freezer bags, cinnamon, sugar or snacks for the workers. We spent around $5 for ingredients and another $5 for freezer bags by shopping sales. We each brought our own knives, cutting boards and a large pot to supplement Mum's kitchen.

Mum picked the apple trees before we arrived so we could get started immediately. She filled a wheelbarrow, 4 5-gallon buckets, 2 large coolers and three large boxes. 

Each family received two plastic grocery bags full of apples to eat out of hand. The rest were processed into slices for pie, applesauce, and apple juice. Next year, we hope to try out some new items such as apple jelly, dried apple rings, apple butter, fruit roll ups, and perhaps some hard cider! 

I filled up two sinks with water. One sink was filled with apples and we gently scrubbed them before moving them to the rinsing sink. We cut out any really nasty spots.

We peeled, cored and sliced most of the good apples for mum's famous apple pie. We packed the slices into gallon-sized freezer bags. These will save her a lot of money over the holidays as she bakes dozens of pies for parties, family gatherings and church/social functions.

Next came the applesauce making. All of the not-so-pretty apples (odd shaped, small, bug-bitten or fallen) were chopped into large pots. We weren't concerned about having white applesauce, but if we were, we could have added lemon juice to the water while slicing to prevent browning.

We added a small amount of water (about 1/4 c per pot) to help in steaming the apples before they released their juices. We added a lot of cinnamon to each pot. Since some of us have blood-sugar concerns, over half of the apple sauce was left unsweetened. To the remainder, we added about a 1/2 c of brown sugar to each pot. The apples cooked until fork-tender, and then I pureed them in the blender until smooth. By using the blender instead of just mashing the apples with a fork, I could leave the peels on without compromising the texture of the sauce. This saved a lot of time and had the added benefit of a higher fiber content.

Pots and bowls of applesauce were placed on cooling racks all over the kitchen. Once the sauce was cool, we ladled it into quart sized freezer bags. We marked each with the date and whether it was sweetened or unsweetened. The applesauce is great to eat as is, or warm with a scoop of vanilla ice cream (oh my!). We can also use it in baking cookies, muffins, breads and brownies. 

We also made some amazing apple juice. I hope to eventually get my hands on a cider press, but they are so pricey. For now, my dad and I both supplied our juicers. We juiced the cores and peels and ended up with several gallons of juice. This went into one-gallon freezer bags to drink warm during chilly winter evenings.

Any rotten apples as well as the pulp left over from juicing went into the compost bin. How wonderful to know that none of the apples grown went to waste!

I look forward to this day every year. It's a great way to spend time with my family. We also all get to have some amazing organic applesauce and juice almost for free. Not only that, but we are also learning about food preservation and increasing our self reliance.

Reposted on: Homegrown.org

And an expanded version is published here: Homegrown.org Five Ways to Preserve Apples








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Spend-Free Challenges

How much did you spend last month? How much did you really need to spend? Most of us have a tendency to spend without thinking. We spend money on things we don't really want and then we have to work longer hours and don't get to attain our goals.

A great practice that I commonly participate in is Spending Free Months. For the entire month, I don't spend anything except for utilities and rent. No going out to eat. No groceries. No shopping. No gas except to commute if the weather is particularly nasty.

It takes some planning to pull this off. Before the month, I make sure I have food in the house, especially staples such as flour, sugar, cheese and milk. I fill in any obvious gaps (such as no pasta), but don't spend extra to stock up. I make sure I have refilled any prescriptions and filled the gas tank. In general, I make sure my basic needs are met. Also, in preparation, I may put a temporary hold on services such as Netflix, if possible.

Once the month begins, I plan meals around items in my pantry. It helps me to grow as a cook and I try lots of new recipes. I particularly like to use up any items that have been in the pantry for awhile. On a recent month-long challenge, I found a can of garbanzo beans that I had forgotten I had. I made hummus for dipping and veggie sandwiches. Once I roasted a 15 lb turkey that I had bought during the Thanksgiving sales for $7. That made for many sandwiches stir-fry, casseroles, omelets, wraps and a big pot of amazing turkey noodle soup.

I don't spend a penny on entertainment. I go to free concerts or movies in the park and free community theater productions. I go for bike rides and hikes. I have friends over for dinner or tea instead of meeting them out. I also look online for free fun in my city such as festivals and free days at local museums. I check the free local daily for any announcements of giveaways at restaurants (Once I found that a large coffee chain gave away free coffee if you bought a travel mug).

Since I am not spending time in stores, I have lots of time for frugal tasks. I darn socks and replace buttons. I harvest wild foods to supplement my pantry or to stockpile for winter. I work in my garden. I walk or bike to work when the weather is cooperative. I clip coupons and dumpster dive.

I visit the library often. I get lots of free entertainment. I check out a lot of good books and will pick a new skill to learn or subject to explore. I check out movies and documentaries. I check out CDs, and try a few new bands each time. I can also read the newspaper or magazines. Some libraries have free concerts, lectures, movies or classes.

The benefits of these challenges are great. I save around $600 extra each month that I complete a challenge. In the next few months, I am more aware of my spending, and as a result, don't spend as much as I did beforehand. This enables me to save an extra $200 a month for a few months after. I learn what things mean a lot to me that I missed greatly (having coffee at my favorite locally owned coffee house) and which things I didn't miss at all (commuting by car).

By doing a challenge every 4-6 months, I keep my spending in check all year round. This helps me speed up my savings for big goals. When I am not up to a full-month challenge, I may take a week-long or weekend-long challenge. Since my days off are usually my biggest-spending days, taking a two-day challenge has a high yield for the duration.

By doing a challenge every 4-6 months, I keep my spending in check all year round. This helps me speed up my savings for big goals.

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Preparing for a Big Move

A couple of years ago I moved two states away using only my large car. I didn't have enough space to bring everything, so I used this as an opportunity to clear out the clutter. I used up everything possible in the weeks before the move. I made meals out of items in the pantry and freezer and didn't buy any non-perishable groceries. I used up the last little bits of lotion, shampoo and perfume so I could throw away a few bottles, rather than bring several half-full bottles.

I threw away any non-essential papers and scanned those that I needed. I burned these to a disk and also emailed copies to myself as a backup. I recycled all those magazines that I thought I would read again, but never did. Old gifts that were no longer enjoyed (or never were) were donated. I sold books, CDs and DVDs that I no longer wanted to the secondhand stores around town to clear out space.

There were many items that were falling apart and needed to be replaced. A wobbly pizza cutter, thread bare socks, outdated clothing, and a terribly ugly lamp were all items that I desperately needed to replace. I used them until we moved and threw them away the morning I left. I replaced them after the move.Some items were so big that it would be more costly to move than to replace, such as my mattress and old couch. I threw away the mattress and sold the couch and armchair. The first couple of days in the new home, I was sitting on the floor, but I soon found a nice set for a low price.

Even if you rent a truck, by simplifying you can rent a smaller truck to save money. You'll also save the cost of boxes, tape, and the chiropractic bill after loading and unloading all of that stuff!

I originally published this as a tip at The Dollar Stretcher as part of their "Yes we can help this reader" section. You can see the original publication as well as other reader responses at http://www.stretcher.com/stories/00/000117a.cfm

Not-so-Extreme Couponing

Extreme couponing fever is everywhere. At the grocery store I see a lot of newbies trying to get free stuff. Most of them don't know the rules well enough to do it correctly; others try to break the rules and get mad at store managers when it doesn't work out. I have been couponing before the TV show, before the madness, although I have never devoted 20+ hours a week to clipping. So here is my guide for you. Here's how to apply EC tricks to save you a decent amount on your groceries, occasionally get freebies and still have enough time for a life.

Source coupons. If you get the Sunday paper delivered, you already get coupons weekly. If not, you have to try a little harder to find them. In some cities, you receive a weekly delivery of sales papers for local grocery stores and coupons. Ask friends, neighbors and relations to save the inserts for you. Print coupons from manufacturer's websites or sites such as Coupons.com, and  Red Plum. Women's mags often have kid's foods or cleaning supplies coupons. Look on specially marked packages of food you already bought, store shelves or sales ads. Write letters of complaint or praise to manufacturers. Only clip coupons for items that you like and that fit with your goals (don't clip ice cream coupons if you are trying to lose weight).

Cut coupons whenever it works for you. Watch a documentary or listen to music while clipping. Trucker and I like to play a CD and sit on the floor and clip and talk. It really doesn't take much time.

Organize your coupons and keep them organized. The system that works best for me is a large index card box. I sort all of my coupons into the following categories : Dairy/refrigerated foods, frozen foods, meat, breakfast items, ethnic foods, general shelf stable, cat stuff, beverages, hygiene, household, and "Too good to pass up" (this holds freebie coupons and other great finds) I sort these into small envelopes that are marked on the front and these fit perfectly into my file.

Read over your sales papers with a highlighter. When you find an item that's on a great sale, flip through your coupons to see if you have a matching coupon. If so circle the item on the sales paper and mark a C next to it so when you are shopping you remember to use your coupon.

Carry your coupons with you when you shop. You never know when something will be on an unadvertised sale or on clearance. Also carry the sales paper so you remember to check out great sales.

Unless otherwise stated on the coupon or on the store's coupon policy, you can combine one store coupon and one manufacturer's coupon for one item. You can also combine these with a good sale price. Let's say Post cereal goes on sale for 2 for $3. You have a manufacturer's coupon for $1 off of 2. That brings your price down to $1/box. If you have a store coupon that offers $1 off 2 boxes, it becomes $.50/box. I have found that it isn't common to have both a manufacturer's and store coupon for the same item at the same time, but it does happen sometimes.

If you shop at a store that doubles coupons, you can really save. Using the previous example on Post cereal, let's say your store doubles coupons up to $1 face value. You have two coupons for $.75 off one box of cereal. The coupon doubles to $1.50 making the item free.

Shop clearance racks. When an item is dented, crushed, discontinued or changes packaging size, the item is often marked down and put in a back corner. Often the items are marked down 50% or more. Even though they have been marked down, you can still use a coupon. Example: Pantene shampoo was marked down on clearance for $2/bottle. I had several coupons for different deals ($3 off 2, $1 off 1). I used every coupon I had and cleared away enough shampoo for a year's use for my family and my parents at an average of $.75/bottle.

I do not go to three stores a week; I go to one. I look at the sales papers for two stores near me (Meijer and Kroger) and pick whichever has the best sales that week. I do not spend hours in the store; it takes me around a half hour to forty-five minutes depending on how much I'm getting. I don't walk out with $250 worth of groceries for a nickel. I do, however, save between 40-80% off my total. Usually I spend $20-25 for $50 groceries on a standard trip. I don't buy anything I wouldn't use anyway (I have no need for 100 half gallons of ice cream).

On a typical week I spend 15 minutes clipping and organizing coupons (while doing something else), 15 minutes perusing sales papers and a half hour in the store. I save $25 on my groceries, which means an hourly rate of $25/hour tax free. It is worth my time to do this. Those "extreme couponers" who save $200 on a trip may spend 20+ hours getting ready for it, which is around $10/hour and they might not use the items they buy.

Combined with seasonal shopping, gardening, and meal planning, couponing can help you get your grocery bill down to free up some extra cash for saving or paying bills. You don't have to make couponing a lifestyle to use it to save money.

Living Well on $25k or Less: Clothing

According to an article I recently read on Psychology Today (here), households spend between 2.1 and 3.4% of their income on clothing. If your income is around $25k, that means $525-850. That's hard to work with once you factor in shoes, work clothes, special occasion wear and undergarments. Here's how we clothe ourselves affordably:

Develop a strong personal style and stick with it. Keeping up with all of the latest fashion trends means that you will be spending a lot of money on clothing and getting rid of a lot of clothing that still has life left in it. Decide what style you like to wear and build a decent wardrobe around that. Each item in your wardrobe will go with lots of other items, so you can put together more outfits.

Think of how and where you will wear an item. Sometimes it's best not to spend a lot on an item if it is going to be subject to abuse. A coworker at a food service job bought a pair of $45 khakis and spilled fruit juice all over the front after wearing them twice. Because I knew that stains would happen, I spent less than $2 on each pair. If, however, you are buying  something to wear when you need to make a good impression, such as a suit for a job interview, invest in it.

For some items, you really do get what you pay for, so invest in high quality. Examples are work shoes (especially if you're on your feet all day), bras, jeans, coats, boots and socks. Other items don't warrant paying big bucks if they won't be subjected to wear or won't be worn long: accessories, flip flops and trendy items.

Thrift stores are great sources for affordable clothing. While new jeans start at around $25, I often find jeans for $2-5. An added bonus is that they are already broken in and very comfortable. I also find lots of quirky t-shirts for $1-2. Many thrift stores have color-tag sales when all items with a particular tag color are discounted 25-90% off. I make a point of buying all of my work pants when on sale and usually only spend $1-2. Ask the cashier about end-of-month sales, holiday sales and bag sales for greater savings.

If you must buy clothing new, shop the clearance racks. This is an easy way to save 25-90% on your clothing. Sure, it's a season or two out of style, but if you plan your outfits carefully, most people won't notice.

Create an all-season wardrobe. Many items of clothing can be worn year round, and careful planning means that you need to buy fewer items. A t-shirt can be worn alone in warm weather or over a long-sleeved shirt in cold weather. A pair of leggings makes a short dress appropriate even in fall; you can also wear the leggings under pants in the winter for added warmth. A winter coat with a removable inner lining can be worn from autumn to early spring, whereas a regular winter coat is only useful from November to March.

Seasonal shopping. If your weight stays relatively the same, buy clothes for next year at the end of the season this year. Savings can be phenomenal; expect 75-80% off. Look for winter boots, thick socks, coats, sweaters, long underwear, gloves, hats and scarves in February or March. Buy swimsuits, shorts, tank tops and sandals in September. Sometimes thrift stores have end of season bag sales. You fill a bag of off-season clothing and pay a set amount per bag (often $2-5 for a paper grocery bag).

Alter found/cheap/old clothing. Sometimes you can modify an existing piece that just doesn't work and make something great out of it. A delightfully quirky t-shirt that's a size or two too big can be taken in to make a more snug fit, or turned into a dress. Jeans with ragged hems can easily be made into cut-off jean shorts or capris. You can even find instructions online to make underwear out of old t-shirts (here).

Make your own trashy accessories. If you are crafty, consider every item before you throw it away; you just might have the perfect material for your next piece of jewelry. Magazine pages can be cut and rolled into beads. In high school I used to make necklaces and bracelets out of junk I got at the scrap yard. I've seen earrings made out of pencils and bracelets out of computer parts.

Sometimes you'll find an item that is perfect. It fits perfectly, is comfortable, the color compliments your complexion and it goes well with your wardrobe. In this case it is sometimes a good idea to stock up. For example, if you find a pair of work shoes that is perfect and 40% off, buy 3 pairs.

When it comes to cleaning your clothes, obviously it is better to have an item that can be machine washed rather than dry cleaned. If you do have items that need to be dry cleaned, consider the at-home dry cleaning bags for the dryer. Wash full loads of clothing. Line dry clothing to save on electricity and to prevent excessive wear. Some items (e.g. jeans) don't need to be washed after every wear, especially if it is only worn for a few hours and it's not excessively hot.

Mend everything. Don't throw something away just because it's damaged. It's easy to replace a button (you did save the little button that was attached, right?). Sometimes at thrift stores I find big jars of buttons for $1 and those have saved many items of clothing. If a pair of pants is too long, sew an quick hem to keep it from dragging on the ground. Mend little tears before they become huge gaping holes. Darn socks. Treat stains. Your clothing will last much longer and save you the replacement costs.

For work clothes in an office setting, or other nicer items, shop at consignment shops in nicer neighborhoods.  Prices are a little higher than at thrift stores, but the items are of high quality and in good shape. At a consignment shop I used to frequent back in my banking days, the owner would keep an eye out for suits in my size and style and give me a call when something came in.

Look for coupons in the Entertainment book, newspaper, local weeklies, or on bulletin boards for dollars off your purchases. Sign up for mailing lists or loyalty clubs for stores that you shop at; some will send good coupons for your birthday.

Use It Up: Stale Bread

Many things are tossed into the garbage can when they still have lots of good life left in them. Use It Up is a section on how to use this "trash" to make new, useful items for your home or to re-purpose items to avoid a purchase.

I love a good loaf of artisan bread either made from scratch or purchased at my favorite local bakery. Since my bread isn't packed with all sorts of gross preservatives, it gets stale quickly. Given the higher cost of good bread or the loving hours spent baking it, I don't want to let a crumb go to waste. Fortunately, there are a ton of amazing dishes to be made with bread, and they work best with slightly stale bread.

French toast is a common stale bread recipe, but that doesn't mean it isn't wonderful. Beat together egg, milk, a pinch of sugar and a dash of vanilla extract. Coat each side of the bread with the egg mixture and fry in a skillet. To serve, top with butter and syrup. For a truly decadent breakfast, add a pinch of brown sugar and sprinkle with berries or toasted walnuts.
Bread pudding is a favorite in my household. It is decadent fresh out of the oven or cold from the refrigerator over the next couple of days. When I have company, I like to make bread pudding for dessert. As soon as it comes out of the oven, I place individual servings into a bowl and top with a scoop of vanilla ice cream and a sprinkle of cinnamon. To make just tear up bread into bite-sized pieces until you have four cups of bread. Heat 2 cups of milk or half and half with 1/4 cup of butter. Mix with bread; add 1/2 cup of sugar (brown or white), 2 eggs, 1/2 tsp cinnamon and a bit of vanilla extract. Bake at 375 degrees until it is set in the middle. You can add raisins or other dried fruit if you like.

Toad in a hole (also known as eggs in the basket) is a fun breakfast I used to make as a kid. Cut a circle out of the center of a slice of bread. Butter one side of the bread in a pan and brown lightly. Crack an egg into the hole and cook until set. 

Croutons are great for snacking or to add to soups and salads. My quick and easy recipe is to cut bread into cubes and toss with just enough Italian dressing to coat. Spread onto a sheet pan and sprinkle with the herbs of your choice. Bake at 350 degrees until it is browned on the sides.

To make bread crumbs for topping casseroles or to coat chicken, toast thin slices of bread. Toss into the blender and pulse until it is fine.

Garlic toast is a great side for pasta or soup. Butter and sprinkle with garlic salt. Place under the broiler until browned.

Lyn on Facebook shares....Our animals here in Spain love our old bread even the cats. I soften it with water

Feel free to comment with your favorite ways to use stale bread.

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Wildcrafting Wednesday

Reposted on: Homegrown.org