Emergency Preparedness: Financial Reserve

Emergency Preparedness: Financial Reserve

Not all disasters are natural disasters or ones that effect entire neighborhoods.  Some just affect your family.  When hard times hit it is comforting to know you can pay your bills and feed your family.

Way back when I began this blog it was because we knew our money was going to be tight for a few months.  As it turned out we needed our finical reserve to stretch for more than a year.

I have heard the recommendation of putting 10% of your income into savings every month for emergencies.

Dave Ramsey suggest getting a 1,000 dollar emergency fund, paying off all debt, if you have any, and then building your savings to a 3-6 month fund.

When the financial storms come you will also be surprised at all the things you are able to cut out of your budget.  You are simply able to live on less.

I've know people that have been out of work for months.  What a comfort for those that have- and a nightmare for those who don't have- a financial reserve. And you avoid more debt.

This isn't something you build up in one month- it happens over the course of many months.  Being consistent and aware of your money is the key.

Savings is worth it.

Confession: I Buy Brand Name Products

There are those brand named foods that until I get around to experimenting with making them myself I will continue to stock up on when they are on sale.  In my opinion, Bull's Eye BBQ sauce is the best and no knock off version has ever come close to its tasty goodness. However, I wait until a sale before stocking up.

My husband likes a certain kind of soap, okay, I'll get it.  Keeping husband happy is way more important than a few pennies saved.

I have also found certain brands just work better than others.  A good brand of dish soap last us much longer than a cheap brand. Ironically, the name brand stuff ends up saving us money in the long run.  Once again sales and coupons can often be found for these products.

Decluttering

One of the most tedious task when moving is what to keep and what to get rid of.  I once heard this advice:

When decluttering ask yourself two questions:

1. Is this item still useful?

or

2. Does this item add beauty to my home?

If the answer is no, get rid of it. 

I'd like to add a third question to be asked

3. Do I have a place for it?

  For us, when we moved to a smaller apartment, we got rid of our second set of couches.  Were they still useful?  Yes, but we had no place for them.  That goes the same for knick-knacks. Can they add beauty? Yes, but when they become more cumbersome than beautiful it is time to weed out the least favorites.

I have found clutter is so hard to clean!  There is no place for it all.  Getting rid of stuff actually makes life easier! Awesome!

Kids Can (and Should) Work

One of the greatest ways to love our children is to teach them skills they will need in order to succeed as adults. I believe children, even young children, should learn to work.

I am a mom, not a slave to clean up after everyone in my house. Sometimes I feel I spend my whole day cleaning and the house is still a mess. I know it won't always be this way; I have a little helper in training.

My toddler is not even two yet and she helps with laundry- she separates the socks from the rest of the clean load. She also puts her own clothes away. Someday I might have her fold them, for now she does what she can. Toddlers can do a lot more things than we give them credit for. My daughter puts her own dishes away (we put hers in a lower cupboard so she can do this) and she is learning to set and clean off the table. From the time she was walking she was Mommy's Helper.  She helps wipe up spills she makes and when crayon ends up on the wall, you can guess who gets to help me scrub it off.

Children are capable, but we must allow them the time to learn.  Work makes them responsible.

I love this old article on delegating work to children- Delegating Work and Responsibility to Children, LDS Ensign.  I particularly love the section about Our Attitudes and Methods.

Not every child is ready for the same amount of work. I started small to let her experience success. She carried one or two washcloths to the bathroom, now she brings me all of them. While she is still at the age she loves to help I will gladly let her splash in dish water or uncoordinatedly swing a child size broom. Does it take time? Yes.  Will the effort be worth it? Yes.

Someday she will do more than dump dish water all over the counters, push a toy vacuum, or sweep her broom around the kitchen (often sending dirt in the wrong direction).

Does it take work to teach a child to work? Yes. But then again, motherhood isn't about a sparkling clean house, it's more about raising children who are able to take care of themselves.

Costco- A Big Price Tag

It was a warm Saturday afternoon as I pushed my over-sized cart at a snails
pace behind a rather plump woman.  As I tracked up and down the over crowded aisle searching for a hidden item- if it was even there at all- I kept an eye out for a much needed store employee as this endless maze of products was unfamiliar to me.  They must have all been working the cash registers with Disneyland sized lines in front of  them, because all I found were other small vendors within this mass of a store.

My parents were elsewhere in the store shopping. I am an adult, and I needed my parents to come with me so I could get into this store. That is because they have this lovely thing called "a membership". How backwards I always thought.  Yeah, let me pay you so that I can go shop and give you even more money!  Yet, here we were fighting the crowd for "an incredible deal", you'd think it was Santa's workshop.

Now I have a confession, Costco may save you more money than the membership, and since I was there, I must have thought it was worth going. I now have enough garbage bags to last my family for years and I was thrilled at the price of string cheese.  That being said, bulk is not always better and it often comes with a hefty price tag.

With only nine items in my cart, the bill totaled well over a hundred dollars! That was practically our entire food budget for the month. Lucky for us it wasn't all food, therefore we weren't going to be stuck eating string cheese for every meal. I did however learn much from my shopping experience.

• Stores that require a memberships take a certain amount of purchases before the membership has paid for itself and you actually begin saving money. Living on scratch, I buy very little. I'm not even sure a membership would ever pay for itself much less save money.
• As I wandered the store I noticed the bulk items were all name brands (except a few select Kirkland items). A little math, a knowledge of generic prices items at other stores, I discovered buying in bulk, while cheaper than the small name brands in the stores, was not cheaper than the generic brands.
• Impulse buyers beware! I buy things that are not on my list, I admit it. Difference is at a regular store the items are like $1-$3.  At a bulk store like Costco, that impulse buy is going to cost you more like $15.  Ouch, and then you wonder how you grocery bill got to be so high.
• If it will go bad, the price you pay is for wasted food.  I walked by the fresh fruit, but honestly, we don't need 8 pounds of strawberries.  It would be cheaper to buy 2 pounds, that I know we will eat then pay more money for food that will go bad.  In that regard, the "good deal" becomes 3 times more expensive than the smaller package.
• Similarly, will you really eat it? Look at expiration dates.  You have to buy a lot, will you use all of the syrup, mac and cheese, or yogurt before it expires? If you don't eat mac and cheese very often, don't buy it in bulk, you'll end up overpaying for the portion you actually did eat.
• Be prepared for a big price tag. If you really will go through 50 pounds of flour, five dozen eggs, or 60 string cheeses before it expires, be prepared for a big price tag.  You pay a lot up front, so hopefully you will not have to go to the store very often.  
• They also only accept American Express credit cards.  I don't know if you have to get credit card to have a membership, or if you can pay always pay with a check or debit- certainly you don't want to walk around the store with hundreds of dollars in cash.  Be leery of getting another credit card, it invites more opportunity for debt and lowers your credit score- something to keep in mind if you are going to be making a big purchase (like a house) in the near future.
• For those that like to use credit, make sure your don't rack up a bill that you can't pay off. Wasting money though interest is worse than having to buy your way into a store in the first place.

Beware when people advertise "great deals" for the whole store. Remember, they are making money somehow.

Soap Box

Apparently have a lot of rants about budgets, kids, home made living, shopping, etc.  That is the reason I've created my soap box; for all those things I want to say that aren't about making things and that don't really fit as a "money moment" although I love those rants as well.

Soap Box

All those random things I talk about just got their own label. Isn't that exciting?

*Some of my past post have been added here.

Gratitude

Recently I have been so full of gratitude.  Yes, I'm sure a certain holiday this month has helped bring blessings to my mind.  We have been given so much.

My husband is finishing his last semester in school.  Finances have been stretched, and I have learned so much by learning to stretch along with it.

One day I was frustrated by feeling like we has so little.  God sure opened my eyes. I realized that though this semester, by finding cheaper ways to do/make things than just run to the store, I have learned things that will save our family thousands of dollars in the future.  They are not that difficult of things either.

 I  also began to look around at all of the blessings and things we did have. Technically, because of our student income we are considered "poor".  We have everything we need and a lot of our wants too. We are so blessed, we have plenty of food, housing, clothes (a lot of them), transportation, entertainment, and no debt. None of the things we own or do are particularly fancy, but it works and we are happy to have them.  Poverty?  This is not.  A one room shack with three families living in it, with no oven or running water, that's poverty.  Access to only two or three types of food and never enough to fill your belly. That's called poor. And I hear when people travel to impoverished countries they find people who are happier than us with all our stuff.

Sometimes we live such inflated lifestyles, needed all the latest gadgets the day they arrive on the store's shelves, stuffing ourselves at all-you-can-eats, buying new clothes every season,  and entertaining ourselves with things that suck away our paychecks.

I am grateful for the many blessings we do have.

Happy Thanksgiving Everybody.

Saving Money by Staying Home

This isn't one of my normal post days- which are Tuesdays and Thursdays- but I had this topic on my mind.

I know staying at home saves money, yes having no income may even save more money than what your lost income brought in.  I understand not everyone has the luxury of staying home, but for two parent families this may be something to consider.

Here is a great article of how much one family saves by a parent staying home- $29,000 dollars in savings. Written in 2007 so figures may be even higher now.

The Simple Dollar- The Real Value of Stay at Home

• When I had our little one I chose to stay home, our food bill dropped by about $50 dollars too. (And keeps getting lower as I have time to learn to make the scratch.) 
• We did not go the cloth diaper route, but even being home with disposable saves money.  Many Day Care centers are required to change a diaper every two hours whether the kid needs it or not.
• Speaking of day care, the cost has gone up, in my state the average spent for in home care was $5040- and it was higher for a day care.  The low end is $2-4 dollars an hour, out of your paycheck to have someone else raise your child.
• Our gas bill dropped too, probably by $75 a month, instead of increasing for the extra travel time it would take to get our child to a day care.  Plus, as the article mentions, it saves on wear and tear on the car.
• Staying at home also allowed me to breastfeed.  A low estimate for how much it takes to formula feed a child for one year (all other food excluded) was $1138.50.  If you don't have time to make baby food it's not cheap either.
• Plus you have the benefit of being the one to raise your child, knowing what happened in their day. Watching them learn and do things for the first time (huge in the first year).

People can live on less than they think they can.