Brainstorm with Me: Ways to Cut a Budget to the Bone

I have a confession to make. I love to spend money.

While some women may fantasize about their next shoe or handbag purchase, I am decidedly low-maintenance in those departments. Our vehicles are modest, paid-for (thank you, Dave Ramsey), and we plan to run them into the ground. I don't even wear my wedding ring on a regular basis, so jewelry is not a temptation of mine, either. But I do like to spend money on things that interest me - books, preparedness items, homesteading paraphernalia, and poultry.

Who knew poultry would hold such fascination for me? It's become a passion and a small business.

It is that crazy love for poultry that has motivated me to tighten our budget. You see, I really want to build a much larger poultry house that will comfortably hold more birds. Since we do not believe in going into debt, I've got to save up all the cash to fund my project ahead of time.

I started by brainstorming a list of ways that we could cut our budget significantly. Here's where the list stands. Try not to laugh if you have this frugality thing down pat!

Ways to save money: 

1) Stay away from frivolous, impulse purchases! No more tempting items from Amazon.com "just because". I also blow a lot of cash at Sam's Club on a regular basis. I get sucked into their magazine and book area and leave with a lot fewer $ in my pocket. I think I'll just need to stay away from that part of Sam's entirely.                                                                                                                                                                     

2) Try buying the kids' clothes at thrift stores or consignment shops. This will be a completely new experience for me, but I know this will cut quite a bit from our budget. We spend about $2,000 per year (gulp) on clothing for our four kids at the moment. Hubby Dear and I spend very little on clothing for ourselves but I'll definitely check out what they have for us as well.

3) Eat out less. We spend about $175/month on eating out. I will make an effort to eat at home even when it would be easy or convenient to eat out. 

4) Spend a lot less at Christmas. Hubby Dear loves to give gifts and he really spoils the kids at Christmas. We've already been talking to the children about how we have too much "stuff" in our house and that we are going to focus on the true meaning of Christmas this year. We plan to slash our gift budget and buy things for people in need instead. 

5) Coupon more. I am a coupon drop-out. I thought that it was taking up too much of my time for too little benefit. But when you are saving every penny, coupons can make a difference. Too bad we live nowhere near the stores where you can get the best "extreme couponing" deals.

6) Cut back on paper towel use. With four children at home, we go through a lot of paper towels. I am going to buy some more dish cloths and try to reduce the amount of money we spend on paper towels that way. 

7) Eliminate Cut back on pop consumption. I am a complete and total Coke Zero addict. I know it is unhealthy for me and it certainly is not cheap. I am going to try and drink less pop and substitute either iced tea or water with lemon. Pray for my family while I go through detox! ;)

8) Recycle all those aluminum pop cans for $. I'm not sure people still do this any more or if it is available in our area.  I'll need to check this out. 

9) Stop buying the pricey Omega 3 supplement for my chickens. It is $15 per bag and we use at least 3 bags a month. It adds up quickly and I'm definitely not making it back with egg sales. (It costs me $3.12/dozen to produce eggs and I'm only selling them for $1/dozen. Oops.)

10) Reduce processed, prepackaged foods in favor of cheaper alternatives. Bagged salads, gone. When we don't have salad greens growing in our garden, I'll have to wash and assemble my own salad. The Holy Grail of breakfast time at our house, cold cereal, is on its way out, too. My kids (and husband) inhale the stuff. I can make whole wheat pancakes and waffles ahead of time and freeze them in single-serve portions. I can make instant oatmeal packets directly out of our food storage. And of course we always have eggs around here. :) Snack foods are going to be a bit of a hard sell. I already make all our bread. 

11) Shop around for insurance. We've had the same car and home owner's insurance for 5+ years. Time to shop around and make sure we're getting the best rates. Hubby Dear is unsure of this one since he finds it very important to "shop local" and we don't have a lot of choices for insurance agents out here. He may change his tune if it save us a lot of $$. 

12) Find some budget-friendly meals. My family will not go for the Hillbilly Housewife's $70/week meal plan, but I can certainly be more cost-conscious of the meals I fix. I also need to pay more attention to planning meals by sales the grocery store runs. 

Now that I read over the list, it seems pretty pitiful. I'm not sure a list of generalities is going to get me very far towards the chicken house of my dreams. Any ideas on more ways to save money and live frugally? I sure could use them!  

By the way, check out this Rural Revolution blog post. Patrice is collecting links to blogs with money-saving tips as well as sharing some of her own. 

The Money Saving Mom's Budget: A Review

I was really excited to be given an advance copy of The Money Saving Mom's Budgetby Crystal Paine, the author of MoneySavingMom.com. Crystal's blog is one of my favorites. I have saved a ton of money over the past few months by following tips I've found on her website, so I knew that her book would have to be dynamite. Let me tell you, it did not disappoint.

This book isn't another collection of money saving strategies, though you will certainly find plenty of those here. Crystal has seven rules to financial success and only two of those directly relate to couponing and cost cutting. The rest of the book will help you set goals, create a written budget, and live well on a small income. If this sounds a little bit like something my hero, Dave Ramsey, would espouse, you are correct. The section on couponing is extremely easy to understand, even for the mathematically challenged. And even though the topic of finances can be dull, this book was fun to read and full of great examples from everyday life.

Let's face it: everyone can stand to save a little money. This book can definitely help you make the right choices for your family's budget and help free up some cash to devote to preparedness. Remember, if you don't have your finances in order, you're not truly prepared. (I did a series of posts on this subject, in case you missed it. ;)

The Money Saving Mom's Budget is available for pre-order at Amazon.com and will be on sale everywhere on January 10. Crystal is giving all her proceeds from this book to Compassion International, an outstanding charity that our family also supports. Check them out!

A Visit by the Reverse Prize Patrol

I just love the Publisher's Clearinghouse Prize Patrol. I never get those sweepstakes entries in the mail, and if I did, I probably wouldn't fill them out. Still, I like to imagine that one day the doorbell will ring and some man will shove flowers and a check for a million dollars into my arms.

I have, however, been visited by the reverse prize patrol. What's that, you ask? The reverse prize patrol is when the doorbell rings and you find a large bill. Surprise! You owe $500.

Yep, that happened to me this week. I thought the doorbell was the UPS man when it actually was our propane delivery driver.

A 500 gallon propane tank is expensive to fill
Image from missiongas.com

Our conversation went something like this:

Me: "Gee, I thought we just sent you guys a huge check to pre-pay for our propane through April?"

Him: "Well, ma'am, that just covers you from September through April. We top off your tank before then.

Me: "......."

Him: "Ma'am, are you OK? You look a little pale and your jaw seems to be on the ground..."

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Crud. August was a tight month for us and I definitely didn't have an extra $500 just kicking around.

A few years ago, this would have been a crisis. We would've had to take a cash advance on a credit card or engage in who knows what kind of financial tomfoolery to get this bill paid on time. Today, I was able to smile (after course of smelling salts and a Coke Zero) because I knew it would be completely different this time around.

We started following the Baby Steps outlined in Dave Ramsey's The Total Money Makeover two years ago. As a result, we are debt free (other than our mortgage) and have an emergency fund in place just for occasions such as this.

Preparedness is not only about surviving an end of the world scenario. Preparedness means you don't have to make last-minute runs to the store for that forgotten item because you can cover it with your food storage. It means you have the ability to take care of your family and pay your bills no matter who is president or what's going on in the world at large. It means the reverse prize patrol is nothing more than a speed bump.  Preparedness makes a difference in my every day life and, boy, does that feel good!



If you don't have an emergency fund, start today. Little bits add up. If you don't have food storage, start today. Don't wait for the reverse prize patrol to come knocking! Can I get an amen from the choir?

Financial Preparedness, Part IV

This is the four part of my Financial Preparedness series. You can find Part I, Part II and Part III here.
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I'm debt free so now what?: The Rest of the Baby Steps and What that Might Look Like for a Prepper

You saved up $1,000 for a baby emergency fund and then you started working your debt snowball. You put your debts in order from smallest to largest and paid them off with lightning speed. You've made a budget and, remarkably, you even followed it! Congratulations! You're better than 95% of all Americans.

Now what?

There are still five more Baby Steps to financial freedom if you follow Dave Ramsey's plan, many of which have implications for your prepping.

Keep working those baby steps!

Baby Step Three: Save up 3 to 6 Months of Expenses.

The next step is to save up some serious cash. Dave says that if you have a secure job and lifestyle (ie. no serious things looming on the horizon that could zap your cash), you can aim for cash to cover 3 months' worth of expenses. If things are more uncertain, you should have more money saved up. Other financial experts think you should have more like 8 or 9 months of salary saved up in this economy. Honestly, you really can't save too much as long as you are meeting your other financial goals (See Baby Steps 4-6).

It is important to note that this money is NOT to be invested. This should stay safe and easily accessible in a place like a Money Market Account. You should also have a good amount of it in cash at home. Obviously, you should not advertise the fact that you have a bunch of cash in your home. You should also buy a water- and fire-proof safe to store it in.

You might also consider your food storage to be part of this Baby Step. Hubby Dear does, and he has reduced the amount we are putting into Emergency Fund accordingly.

Baby Step Four: Retirement

Dave Ramsey says you should invest 15% of your income into a mix of growth-stock mutual funds with proven track records. No matter what the stock market is doing, Dave has consistently said that he believes in American capitalism and that all things will work out in the end.

Dave is against buying gold or other precious metals and certainly would not advocate putting some of your emergency fund in gold. In fact, he says gold is "the new Snuggie" - just a fad. You can read what he says about gold here.

What I didn't understand until recently is that a gold purchase isn't so much an investment as it is insurance. The difference is that you expect an investment to consistently increase over time. Insurance isn't there to make you money, its purpose is to protect what you already have. Read this piece on the SurvivalBlog for more about tangibles.

So with such different advice, what are we to do to prepare for the future?

Frankly, I doubt things like the Roth IRA are going to be around when we reach that age. The government is simply spending too much money to allow growth in Roth accounts to remain tax-free. I expect tax rates to increase exponentially.

We are going to hedge our bets and do a bit of both approaches. We're going to do some traditional investments and think about getting some tangibles as well.

Baby Step Five: College for your Kids

Many people make the mistake of taking care of their kids' college funds at the expense of their retirement savings. Your kids can find a way to work through college. Not so with your retirement!

We have 529 plans set up for each of our children. Our goal is to have enough money saved for four years at a state university. If our children choose to go elsewhere, great. They need to figure out how to make up the difference either with scholarships or by their own hard work. Hubby Dear and I were accepted to several "elite" universities but chose to go to a state school for financial reasons. We're doing just fine today, thank you very much! :)

Baby Step Six: Pay off your house

This is the Holy Grail of financial preparedness, in my opinion. Owning your house free and clear would give such peace of mind. Think about it. If you have no consumer debt, no mortgage, and a year's worth of food storage, how confident would you feel? If you lose your job or the economy tanks even further, you would be far more secure than the Average Joe.

If you currently have a 30 year mortgage or adjustable rate mortgage, you should think about trying to refinance into a 15 year fixed rate mortgage. You should take advantage of the low interest rates if you can.

Baby Step Seven: Build Wealth and Give

Dave Ramsey advocates giving during all stages of his plan. We believe in tithing and beyond, and I encourage others to do so as well. After you are completely debt free, however, you will have an abundance of money to give freely. You might consider buying extra food storage and supplies at this time. Should the SHTF, you will be in a position to give charity to others who are not prepared. This is also when you can really step up your investment in tangibles and other wealth vehicles.

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So that's my quick and dirty run-down of Dave Ramsey's BabySteps, prepper style. Read The Total Money Makeover for many more details and wise counsel.

Get debt free, and save, save, save. You can do it! We have paid off nearly $80,000 in the last 18 months and we're finally DEBT FREE!!! It feels awesome!

Remember: The borrower is slave to the lender (Proverbs 22:7). You should be no one's slave.

Financial Preparedness, Part III

In the previous installments of this series, I've covered Dave Ramsey's Baby Steps One and Two. Today I'll discuss budgeting.
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Budgeting. The dreaded "b word". Few words can cause simultaneous consternation and boredom like the word "budget" can.

Budgeting causes wailing and gnashing of teeth, but it's the only way you can take control of your money. And it's definitely the only way you're going to accomplish Baby Step One (saving $1,000) and Two (paying off your debt).

Hubby Dear, being the sexy geek that he is, put our finances into Quicken for years. He'd categorize all of our expenses and enjoyed shocking me with some of the facts of our excessive lifestyle.

"Hey honey, did you know that we've spent $2,500 on dining so far this year?", he'd say. My hair would stand on end, we'd promise to do better next month, and then promptly forget all about it.

Then I started listening to Dave Ramsey. We've been following a budget for 16 months now and seen the power of writing out a budget ahead of time and sticking to it. Budgeting has allowed us to make sure we have extra money each month that we can put towards savings or debt.

So how do you make a budget? It's one of those things that can be intimidating to approach, but it's not really that hard. Sit down with your honey and decide how much money you will spend on each category of life during the next month.  Look back at what you have been spending, think of anything you can do to economize, and then write the resulting number down. Don't forget to keep some money in your budget for prepping. It's not officially part of the Dave Ramsey plan, but as I heard directly from the man himself, he's OK with that.

Here is a link to Dave's online budgeting forms:
http://www.daveramsey.com/tools/budget-forms/

This is a great place to start. Dave's book, The Total Money Makeover, also has a bunch of these forms and much more information on budgeting.

You might wonder what is a reasonable amount to be spending in each budget category. You can plug your monthly income into this calculator and get an idea of what your food allowance should look like, for example.

When Hubby Dear and I were first married, our goal was to spend about $75 dollars or less on food and toiletries per week. That was OK for a couple of childless twenty-somethings in the 90s, but that would definitely not work for us today! Sometimes people (usually men) think you can feed and clothe a family for pennies. If you can manage that, more power to you, but try to be reasonable in what you allow for each category in your budget.

The first month you try budgeting is going to be tough. You'll want to meet with your spouse frequently and review how things are going. It does get easier as you go along, I promise!

If you're not already budgeting, take the time to learn how. Then tighten up your spending and put your plan into action. It's the key to getting debt free and moving on down the road towards financial preparedness.

Read much more about the Baby Steps in The Total Money Makeover. You can buy it on amazon.com or daveramsey.com. You may also be able to listen to Dave on his syndicated radio show. I love me some Dave Ramsey!





Coming Soon: Financial Preparedness, Part IV: I'm debt free, so now what?

Financial Preparedness, Part II

Previously, I discussed the first Baby Step towards financial freedom: a starter emergency fund of $1,000. Today I'll pick up with Baby Step Two: Paying off all your debt except your mortgage.
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Debt will drown you.

In America we have this idea that debt is OK and a natural part of life. This attitude has only been around for the last 60 years or so. Credit cards as we know them did not exist until 1950 when Diners Club was introduced.

Credit cards may be convenient, but I think having real money in my pocket is even better! Some people try and play the system. They will charge up a low interest rate card and use OPM (Other People's Money) to invest and hopefully turn a profit. Others use credit cards for frequent flyer miles or rewards points and promise they will pay off their card faithfully every month.

I was one of those people, too. That was until I realized that until you are debt free, you cannot truly have financial freedom. Dave Ramsey often quotes Proverbs 22:7: "The rich rule over the poor, and the borrower is slave of the lender." This is very true and the more debt you have, the more true it will become for you.

What if you lost your job? What if that monthly payment got lost in the mail and all of a sudden your cushy interest rate gets jacked up sky high? What if you decide to have a mid-life career change and you have to go back to school? What if you get tempted at Pottery Barn and charge up way too many useless knick-knacks? Debt puts far too many "what ifs" in your life. Preparedness is about getting rid of as many "what ifs" as you can and debt has no place in the equation.

So what is the best way to pay down your debt? There are several schools of thought about this, but I subscribe to Dave Ramsey's plan. Baby Step Two is paying off all your debts, in order, from smallest to largest. Once you have paid off your smallest debt, you add the amount you were paying for the first debt to the minimum payment of your next highest debt. This is called building a debt snowball. Over time, the amount of money you will have available to attack each successive debt will grow, enabling you to pay off those big debts like vehicles and student loans.

Some people object to this plan and say you should pay off the debt with the highest interest rate first, regardless of how much it is. This does make sense in that you will save money in interest if you follow that plan all the way through. The problem with that isn't the math, it is you (and me and every other person out there who thinks it's more fun to spend money than pay down debt). If you pay off your debts smallest to largest, you will build momentum. You get quick gratification as you swiftly move through your debt snowball. If you start with the debt at the highest interest rate, you may stagnate if it happens to be one of your larger bills. It's like going on a diet and not seeing any change in the scale for 2 months. I'm much more likely to stick to my diet if I'm consistently losing a little bit every week rather than losing a big chunk all at once at the end of the two months.

This is the Baby Step Hubby Dear and I are currently on. We've been working our debt snowball for the last 18 months and we'll be done by the end of this year, having paid off nearly $80,000. Gulp. Momma knows how to shop.

Although we are not yet done with this Baby Step, we are already starting to have a greater sense of peace and control over our income. We have gotten rid of all of our credit cards and only use cash and debt cards.

Get rid of your debt! Pay off those bills permanently and don't get back into debt again.

Read much more about the Baby Steps in The Total Money Makeover. You can buy it on amazon.com or daveramsey.com. You may also be able to listen to Dave on his syndicated radio show. Dave's the man!


Coming Soon: Financial Preparedness, Part III: The Dreaded "B" word.

Financial Preparedness, Part I

The American people are feeling pretty light in the pocketbook at the moment. I don't have any solutions for our national economic problem, but I do know a way you can build a strong financial future for your family. Dave Ramsey has come up with a common-sense plan you can use to become financially prepared. Over the next few weeks I will be discussing Dave Ramsey's Seven Baby Steps and applying them to preparedness.

Baby Step One: Create an $1,000 emergency fund

The first step towards achieving financial freedom is saving money for an emergency. Dave says you should start with the amount of $1,000. You are not to touch this money unless it is a true emergency.


Your furnace dies in the dead of winter = EMERGENCY
Your car needs a serious repair = EMERGENCY
You lose your job = EMERGENCY
You run out of Diet Coke Zero and you have spent all the money you budgeted for soda = NOT AN EMERGENCY

That is something I have to repeat to myself regularly.

The reason you should start with this step instead of immediately tackling your debt is that the unexpected WILL happen. We have had a ton of medical expenses in my family this year. Some were expected (the birth of Baby Dear), some were not (two family members needing an MRI). If you don't have any money on hand to deal with life's little (and big) emergencies, chances are you will add to your debt. You'll never climb out of the pit of financial insecurity if you don't build an emergency fund. Keep in mind that this is only a starter emergency fund and you will need to save even more money after you become debt free.

Now for the prepping aspect of Baby Step #1. Having cash on hand is essential for preparedness. Consider this:

• During the Great Depression, FDR declared a bank holiday. All banks throughout the country were closed for several days. If that was to happen today, you would definitely want to have cash at your fingertips.
• If the grid goes down in a short or long-term emergency, cash or barter will be the only way you can buy goods. ATMs won't work and neither will your debit or credit cards.

I do keep the bulk of my emergency fund in the bank, but I am starting to keep a stash of cash at home. Some of it will be in our BOBs and in our vehicle kits. The rest of it will be kept in a fireproof safe hidden in my home. You should make sure that the bulk of your cash is in small denominations unless you relish the prospect of paying for a $7 pack of batteries with a $50 bill! There may not be change available when you need to use your cash in an emergency.

In his book, The Total Money Makeover, Dave relates the story of one of his listeners who put her $1,000 emergency fund in a cheap glass picture frame. She wrote "Break in case of emergency" on the paper she displayed in the frame. The frame was then hung on the wall behind the coats in her coat closet.

Many survivalists and preppers think that precious metals are an emergency fund essential. That is not a priority for me at all. I have way too many other things I need to spend my prepping money on at the moment and I'm not sure gold will end up being a quality investment outside of preparedness over the long haul. Read more about why you may or may not need to buy gold here. Dave Ramsey doesn't think gold is a great investment, but then again he thought I was a nut for storing food.

Saving money for an emergency is key, whether that emergency is TEOTWAWKI or simply everyday life.

Read much more about the Baby Steps in The Total Money Makeover. You may also be able to listen to Dave on his syndicated radio show. Dave's the man!

Breaking News... Hubby Dear gets roped into prepping! Sorta.

Well, after our big talk with Dave Ramsey, Hubby Dear has agreed to allocate $300 a month in the budget towards prepping plus an additional $50 in the grocery budget for food storage. I can get quite a lot accomplished with that kind of budget. I'm happy, he's placated, all is good.

Hubby Dear is making a trip into town today to get preparations for a little July 4th gathering that we're having and I threw a bit of a monkey wrench into the mix.

Here's how the conversation went at the Harried Homemaker's Acres:

"Hubby Dear, you need to get some Product X", I told him, batting my eyes and wearing my most charming smile.

Product X, of course, is a pseudonym for an item that can be decidedly embarrassing for a male to purchase.

"Aw, sweetheart, I don't think I can buy that!", he cringed. It just wasn't a manly sort of purchase. Going to the store to buy strawberries, marshmallows, and Product X??

I replied, "Well, you know, I saw they have some drinking water safe hoses in the RV department at Wal-Mart. That ought to butch-up your shopping cart quite a bit. Why don't you pick up a couple of those as well?"

And so he did. :)

Woohoo! Dave Ramsey says I'm right!

Hubby Dear and I have been going back and forth a lot on the subject of prepping. Honestly, it has descended into flat-out fights several times. Hubby Dear and I are the kind of couple that usually make people sick because we're so lovey-dovey even after over a decade of marriage, so that is very unusual. It was after one of those fights that I got all steamed up and emailed Dave Ramsey. Little did I know that I would quickly get a reply from Dave's producer, Lara Johnson, and actually talk with the man himself live on national radio.

In case you do not know who Dave Ramsey is, he is THE financial guru. His slogan says it all: "Debt is dumb, cash is king, and the paid-off home mortgage has taken the place of the BMW as the status symbol of choice". We have been following the Baby Steps as set out in his best-selling book, The Total Money Makeover, for over a year. I knew if anyone could solve this problem Hubby Dear and I have, it would be Dave.

When we put our problem before Dave, he was impressed to hear how much debt we had paid off in the last year. Lee told Dave that he didn't want to spend money on prepping until we paid off the remainder of our debt. Dave Ramsey told Lee that it would be fine to set a budget for prepping as long as we stick to it. Dave noted that preparedness obviously must be something important to me since I was willing to call in to a national radio show!

After he stated his opinion on our question, Dave asked me why I felt the need to, in his words, "store up a bunch of food in the basement". I briefly explained my reasons for prepping. Dave said he wasn't worried about ever having trouble feeding his kids, but said what did he know - he stocked up on certain kinds of ammo when Obama came into office.

Overall, I was very satisfied with the call, even though Dave isn't a prepper. Hubby Dear and I are finally on the same page with our budget and I get to spend money on prepping.



* By the way, they said our location as Kansas City. I'm proud that I was quick witted enough to give a phony location. I didn't break OPSEC! ;)

The Marriage Ref - Dave Ramsey!

Well, Hubby Dear and I still aren't seeing eye to eye on spending money on prepping. So I called in the big gun - Dave Ramsey! I'll be speaking to Dave on his radio show around 1 pm central time on Monday. We'll see whose side of the argument Dave falls on!