#1 – Stop Spending
It’s pretty incredible how drastically many of us can cut our budgets if we really needed to. I could eat from the pantry, stop buying things, and find the cheapest food. Cable, expensive call phone plans, and other luxuries would have to go. And that wouldn’t mean sitting at home all the time to avoid spending money  - there are lots of free community events, the park, the beach, hiking, etc – all which are completely free. Picnics could replace eating out, and I could dig out the ice cream maker to replace our favorite treat – going to the local frozen yogurt bar. (I should do this – my daughter would love it!)

#2 Housing
Making a change in housing is a huge life change, but unless a financial rough spot is clearly short term I think it’s important not to wait too long before examining this option. Since I own my home possibilities would include talking to the mortgage lender about a loan modification or selling the house. If I owed more than the property is worth there’s HARP (at least until December 2013) – the Home Affordable Refinance Act, which allows homeowners to refinance even when “underwater.” If I was renting things would be even simpler, and a good option could be to look for a less expensive place. It could involve breaking a lease, but with the strong rental market my guess is many landlords and property management companies would be fairly understanding in the case of a true financial emergency.

#3 Income
Would I look for a second job? When I worked for a company with a lot of commissioned sales people I often saw people who were underperforming take on a second, generally low paying, job. It never ended well. Trying to fit in both jobs usually meant their sales were even lower at their primary job, and they were exhausted and even more stressed than before. I think I would instead focus all available energy into being successful in my current job (assuming I was employed) or on finding one position that would allow me to make ends meet.

#4 Assistance
This is a tough one – accept help. I could check to see whether there were any government assistance programs my family would qualify for. I know from talking to people in this situation that there is often help available even when you’re financial situation isn’t as dire as you might think it needs to be. There’s unemployment, food stamps, help paying for child care, health insurance, or medical treatment. There’s even job training, financial counseling, and language classes offered in many communities.  Assistance can come from federal state, and local programs as well as non-profits. If anyone feels it hurts their pride to accept help I would suggest keeping track of the amount received and vowing to donate at least that amount to charity once back on his or her feet. Just don’t let your family suffer in the meantime.

I would hope that I would also ask for help from family and friends if I needed it. This doesn’t have to mean asking for money – it could be help watching the kids to go to a job interview (or grocery shop without “helpers”), ask for help repairing something in the house or car from a friend with expertise in that area to avoid the cost of a pro, etc.

How do you feel about this? Does this scenario seem like a nightmare or manageable? What would you do, or have you done, to weather a financial storm?

Check out my most recent post on saving money with a weekly meal plan: http://www.mommykatandkids.com/category/features/annas-budget-tips

Having favorite and often used items whether it’s clothing, accessories, coffee mugs, or beach towels on display is wonderful for so many reasons -

• Easy access – no digging through drawers or overstuffed closets.
• Simple beauty – when truly featured, rather than simply left out they can really add to the look of a room, and let you enjoy these treasured items more than having them packed away most of the time.
• Save money! You save both on artwork or other decorative items and on storage space and products.

Here are the examples I loved from Gaw’s space:

Photo From The Everygirl

Photo from The Everygirl

I can just imagine grabbing one of those great hats off the wall and heading out to the beach, and the pops of color from the functional items all around the sewing desk make it a beautiful space.

Do you have any examples from your home? Anything special you’d love to bring out of hiding and put on display?

The Benefits of a Costco Membership
Justin at Money is the Root talks about his new found love for the warehouse club. Having just written about why I like to shop there, but questioned the savings potential I was very curious to read his take on this.

Financial Advice I Will Never Follow
Aloysa of My Broken Coin takes aim at some of the popular money saving advice that just doesn’t do it for her. See where you stand on some of these – good advice, not worth it, or just plain crazy?

How Much Money is Enough?
Erika at Newlyweds On A Budget tries to answer this tough tough question. How do your financial and lifestyle goals compare?

Trying to Eat Healthier (Again)
The Penny Frugalista comes up with a great way to get more veggies in her toddler’s diet – Broccoli Balls. Going to have to try this one!

How to Get Your Spouse More Involved in the Family Finances
Melissa explains on Free from Broke how to  get the “financial geek” and the uninterested spouse on the same page when it comes to finances.

I am a big fan of Costco and buying in bulk, but I have never really found that I save a lot of money by shopping there. There are certain items I know I can get much cheaper when compared to the prices at the regular grocery stores near me. A few of our favorite items we know we save big on are boxes of chicken stock, flat bread, hummus, artisan bread, bagels, and sparkling water. With other items the difference isn’t so big – I find that beef, chicken, and seafood isn’t generally that much cheaper, and is often more expensive than those items on special at the grocery store.

I was surprised to hear in the story that a recent study found the grocery savings are pretty big on average, “it’s about 30 percent less than your typical big supermarket.” Wow! I tried to find the details of the study but couldn’t put my fingers on it. I have to imagine that they calculated the savings based on buying the same brands available at the warehouse. For example if the warehouse store carries a certain name brand of paper towels the savings might be 30% over that same brand at the grocery store, but when shopping at the grocery store you could also choose to buy the generic paper towels which might be the same or even less than the warehouse price.

The same is true for electronics, toys, appliances, and other big ticket items. I find that Costco carries high end options in these categories, often at a big discount – but if you don’t want a top of the line computer or stand mixer you could find other choices much cheaper somewhere else. It really all comes down to whether you are in the market for the exact items carried at the warehouse club, or whether it’s your budget that is driving the decision.

And then of course there’s the impulse buy temptation at the warehouse clubs. If you’re craving chocolate at the grocery store you might toss a 75 cent candy bar in your cart and indulge on that one treat on the way home. At Costco you end up with 24 full size candy bars tempting you from the pantry for weeks! (Not that I’m speaking from experience or anything… )

Like I said, I am a big fan of bulk shopping, but more for the convenience than for the savings. I try to only buy things I know we will use before the expiration date, and I comparison shop to try to find the items that I can save on, or at least am not paying more for. I love having a huge stockpile of paper towels and tp and not having to get them every time I run to the grocery store for milk, eggs, and produce.

How about you? Are you a member of one of the warehouse clubs? Do you find you save money? What are your favorite items?

Listen to the full story from Marketplace or read the transcript here: http://www.marketplace.org/topics/business/are-wholesale-clubs-worth-membership-price

If you’ve given the government a tax free loan all year and just got a refund, how about sticking it in savings? Much less fun and much less shiny than a new big screen tv, but it’s often far easier to save that lump sum and just pretend it never existed than to try to save the same amount by saving it month by month out of your every day living expenses.

Of course if you diligently save all year, are on track with your emergency and retirement savings and other financial goals there’s nothing inherently wrong with having a little fun when a little unexpected money comes your way. I think I mostly object to retailers turning the tax refund into another obligatory buying season.

What are your thoughts? Will you be saving or spending your tax refund if you got one? How?

Given that my phone is my home, work, and mobile phone, and is on a shared plan with mu husband (who also uses his phone as the only number for his business) it’s probably no more than we would have paid back in the day for a home phone and two business lines – but still – it’s a LOT.

I did some searching around, and unless you only want a phone for emergencies and don’t actually plan on talking on it I didn’t uncover any crazy cheap option. But, there are certainly some cheaper (and interesting options) out there.

One I hadn’t heard of before was Boost Mobile (www.boostmobile.com) who lowers your payment over time as long as you keep paying on time. An individual plan starts at $50 a month (unlimited mins, text, and web, cost is higher for smartphones) but can get as low as $35 a month after making 18 on time payments. I don’t know anything about their level of service, but I didn’t find anything cheaper and I’m intrigued by the concept of rewarding customers for paying on time. Though it is a little strange – like paying on time is optional??

Consumer Cellular offers a plan for seniors only for $30 a month for 700 minutes. Add 100 texts for $2.50. Most of the major cell phone companies offer senior discounts so it might be possible to match this price with one of them on a basic plan.

Of the major carriers T-Mobile (www.t-mobile.com) seems to have the cheapest cell phone option – $39.99 for 500 mins, unlimited text, and no data.

I’m not sure whether I’m encouraged or disheartened to know I’m not drastically overpaying for my cell service. We have so many more “necessities” these days when compared to a few generations ago, and they tend to increase our productivity, stress levels, and budgets! Still – I’m not at all ready to ditch my smartphone and internet access and head to some remote spot to live off the land.

Do you think that you are paying too much for your cell phone service? Would you be open to trying one of these lesser known companies? Do you know of any cheap cell phone options I missed?

Here’s what I came up with:

1. Place for baby to sleep (crib, co-sleeper, bassinet, or pack n play.)
2. Sheets and blankets for the place to sleep.
3. Diapers – either cloth or disposable.
4. Wipes or washcloths for diapering.
5. Car seat (if the baby will be travelling by car.)
6. Onsies
7. Blankets, sleep sacks, or swaddlers.
8. Infant thermometer
9. Baby book with infant care, first aid, and medical information.
10. Infant soap or shampoo.

If I was to add a few things you could get by without, but I think make life a lot easier they would be:

1. Baby monitor
2. Stroller
3. High chair
4. Pacifier (if you want your baby to use one)

My thinking was that this would get the baby through the first 3 months or so.

I looked at the lists provided by a few major baby stuff suppliers and they ranged from 75 items to 135 items! I was amazed that out of all that only 10 made it on my minimalist baby list. And of course there are lots of wonderful moms all over the world that do a great job raising babies without even these “essentials.”

What do you think about the minimalist list? Did I miss something important? What was the baby item you couldn’t do without, or one that was a total waste of space and money?

Borrowed Books

One of my favorite money saving strategies is to borrow and lend items in order to avoid purchasing them new. A wonderful friend loaned me this stack of great books that I have had so much fun reading my way through. Not only was it completely free (not even a library late fee to worry about!) but the books came with her recommendation.

I have also been incredibly lucky to receive LOTS of hand me downs for my daughter from a few family members and close friends. I can’t even begin to add up how much they have saved us over the years! And of course I pass them along to other friends with littler ones when my daughter has outgrown things that the original owner doesn’t want back.

Books and baby clothes are probably are probably some of the “most borrowed” items among women – and I’m guessing tools top the list for the guys, but that is just the beginning. You could borrow or lend just about anything – furniture, grown up clothes (particularly for a special occasion where you’d only be wearing something once), sports equipment, household items, and even homes.

Borrowing or lending items doesn’t always go smoothly. I have come up with the following “Borrowing Best Practices” to avoid frustration or hard feelings:

• Only lend items that it wouldn’t overly upset you if they got lost or damaged. In college I loaned a dress to a good friend and when I saw her getting a piggy-back ride home from her date and then heard a loud “riiippppp!” I was very glad I had set my favorites aside when she came to choose an outfit. (The good old days huh?)
• When you loan an item be very clear about whether you’d like it back, and whether you need it back by a certain time.
• Put a sticky note on each borrowed item with the name of its owner so you can remember to return it. For multiple items (such as baby clothes) ask if it’s ok to put their initials on the tags so you can easily sort through them. If the sticky note is impractical – maybe for something that will be used repeatedly, keep a list or reminder somewhere you’ll come across it periodically.
• Stick to close friends and family members to borrow from or lend to. If you lose touch it can be difficult to return items. If you have something you no longer need that an acquaintance could use it might be simpler to just offer it as a gift.

What have you borrowed that has saved you money? Any stories of borrowing gone wrong?

The best investment advice I’ve ever received is a very simple sentiment offered to me from my grandfather: Two pennies for me first, then one penny for them. Considering that I was 5 years old when he shared this tip with me, it makes sense that it’s rather elementary as I hardly understood the value of money at the time (I was much more focused on learning the perfect technique for devouring Oreos and what the Number of the Day would be on Sesame Street). But even now, some 25 years later, I often find myself thinking about this phrase and how it’s impacted my current financial situation.

The beauty of this simple phrase is that it alludes to a few major tenants of personal finance: Pay yourself first, save enough that it hurts, and maintain an emergency fund. Here’s how I currently apply my grandfather’s wisdom to my financial decisions and goals:

• Two pennies for me: I have automated deposits set to max out my Roth IRA, contribute to my 403b, and funnel money from each paycheck into long-term savings. Additionally, my emergency fund is intact and sits at a healthy $20K. These transactions are mindless because they happen without any effort on my part, month after month, but they are vital as they are the building blocks for what I hope will be a very successful financial future. In keeping with the 2:1 ratio my grandfather championed, I work hard to maintain a savings rate of 50% of my income or more.
• One penny for them: After all of my automated savings deposits are made, I next divvy up the remaining funds according to importance. First up is the mortgage, insurance, condo fee, and food. Next, the utilities and miscellaneous expenses such as gasoline and pet care. Finally, the small sum leftover is earmarked for fun. If extra income comes my way, it’s automatically put towards one of my various savings goals and I strive to keep my expenses as low as possible in order to continue to boost my savings rates (not having cable, packing my lunch, not shopping mindlessly, etc.)

While I certainly fell off the financial savvy wagon in my early 20s (I once had over $14K in credit card debt but paid it off in less than a year once I finally pulled my head out of the sand), I’ve never lost sight of my grandfather’s advice. I’m happier than ever with my financial progress, and I continue to work hard in order to keep those two pennies for myself.

What’s the best financial advice you’ve ever received?