The Credit Card Game

Credit cards have their perks and they have their drawbacks. It is important you know both and what is best for you.
 
Perks
   · Rewards Programs
   · Easy/Fast – ALSO a drawback…
   · Don’t have to carry a lot of cash
 
Drawbacks
    · Spend more….face it, it is true!
    · Interest, if you carry a balance
    · Must remember to pay the bill
    · There is an electronic record of your purchases
 
Everyone cannot handle credit cards. Some people keep spending until they hit their limit. If you hit your limit and can’t pay it off when the bill is due, consider that GAME OVER….and you lose! If you hit game over it is time to cut up the card, pay off the debt and stick to cash from that point forward, unless/until you really change how you spend money.

So let me teach you how to play this game. Navigating through both the perks and drawbacks is key! My husband and I play this game every month. We have two major credit cards with all relatively low limits, we will call them Card A and Card B. Card B gets 2 percent back on gas every month and we only use that card for gas. Card A rotates their rewards, so some months we get 5% back on groceries, gas, home improvement, or a few other categories. If it is a month we get 5% back on gas on Card A, we switch the gas to Card A so we can make an additional 3 percent on our purchase. We want to make money when we have to spend money…who doesn’t right!?!?

Sometimes it can pay to use a credit card, even if it looks like you are spending more money. For instance:

The gas pump usually says a cash price and a credit price in Michigan (and a few other states):

Cash: $3.40

Credit: $3.50

If you are getting 5% back in rewards, even with the credit price you are essentially paying $3.325 per gallon, which is less than the cash price by a few cents per gallon. We all know money ads up quick in the gas tank!

However, if you are only getting 2% back you are paying $3.43 per gallon, where if you had cash you would only pay $3.40 per gallon, and again that few cents adds up quick!

It is important to calculate the credit card “penalty” price. If something costs more you need to evaluate if it is worth it. An easy way to calculate the final price is to multiply the price by the percentage you will pay after your get your rewards. So if you get 5% back you multiply the price by .95 and you get your final price. If you get 2% in rewards you would multiply the price by .98 and so on and so forth...

My husband and I put all of our utility bills (unless there are fees…watch out for fees) on the credit card. This way we get the rewards and the companies do not have direct access to our bank account. When it comes to other purchases such as groceries and other miscellaneous items, we make sure to keep a close eye on the bill(s), because we want to be sure we can pay it at the end of the month. Credit cards are by no means free money! It is important that you stick to your budget even though the money is electronic. After all, you still have to pay the bill at the end of the month out of your checking account!

If you want to spend less or have a hard time spending less with a credit card, but still want the rewards, then grab an envelope and every time you swipe your card, put cash in the envelope. This allows you to have the best of both worlds—you get the rewards and you are spending what you can afford to pay in cash.

Proceed in this game with caution. As we know, for every game, there must be rules.

1. If you can't afford to pay cash for it, don’t swipe your card, leave it on the shelf

2. Pay your full balance every month

3. When you swipe your card, rather than paying cash, make sure you are not losing money or paying more for something in the long run (see gas example above)

A Special Note:

If you are buying from a small business, please try to pay cash. They really appreciate when they don’t have to pay the credit card fee and it is always good to support your local small businesses! :)

 

Next Post: The Check-Up

 

 

Cable and Internet Savings

Price shop, there are plenty of options for cable and internet. Always keep your eye out for a better deal. My husband and I are constantly calling when we get a flyer in the mail for a lower rate, or after talking to a friend or family member with the same service who has a lower rate.

Chances are if you bring a lower rate to a companies’ attention and/or tell them you are going with another provider, they will do their best to meet your requested price. I do this about once a year, and when I am not happy with their service I call and complain, which typically results in a few dollars off the bill for my trouble. I am always really calm and nice when I call. My husband is usually in awe when I get off the phone and tell him the deal I just got.

Look at possibly cutting down to only internet and getting Hulu and/or Netflix to fill the void. Keep in mind that you can also find some of your shows on the network websites for free! This is not always worth it, but for some it does save a mint! I have several friends who cut their bill by $70 or more dollars per month by getting rid of their cable.

Make sure to keep a close eye on your bill, companies like to try and change the rates or add fees.  If you do not own your modem and wireless router, invest in them.  This may seem expensive up front, but add up that fee for the next year or two and you will see quite a bit of savings in the long run. 

I personally see cable as an optional item. If you are looking to save money, I see cutting cable as a great way to put a good chunk of change back into your budget or savings, especially since most of the TV shows are online.

Next Post: The Credit Card Game

Cutting Back Your Water Bill

Before my son was born our water bill was usually around $11 with an occasional high bill of a whopping $15-$20 per month.  Now since our laundry has increased due to cloth diapers and another person contributing to the mountain of dirty clothes our bill averages $15-$20 with $20 still on the high side, in the non summer months.   

How long are your showers?

If someone in your house loves to take 20+ minute showers you have a few options;

·         Get a smaller hot water heater; no one likes cold showers. 

·         You could tell them just how much their extra long shower is affecting the budget, and take money away from part of the budget that directly affects something else they enjoy.

·         Get a low-flow shower head.

Growing up my brother was a serious offender of this, who am I kidding, he still is.  The day he has to pay his first water bill, I think he will be changing his ways. 

Is something leaking or running? 

Check your toilets, faucets and pipes for leaks.  A new faucet or toilet guts could pay for themselves in a month or two.  These could be doing serious damage to your budget if left unattended.

This is very informative about checking for leaks...
http://www.youtube.com/watch?v=OBz--mdovkI&noredirect=1

How green can your grass be?

My dad had to have the greenest grass on the block growing up, but there are ways to conserve water and still have a beautiful lawn. 

·         Water in the early morning

·         Check the weather, and skip rainy days

·         Have shorter cycles for your sprinkler rotation

·         Water every other day

·         Make sure you are using your sprinklers to their maximum efficiency and not watering the neighbors’ lawn(s) or the concrete. 

Do you leave it running?

Don’t leave the water running when you are shaving, brushing your teeth or washing dishes.   Next time you are running water, just picture dollar signs going down the drain.  If your spouse is the big offender, stand behind them while saying “cha ching cha ching….”

Just A Reminder…

Don’t forget to check the billing dates when monitoring your new utility bills.  Make sure you know how many days are affected by your changes, then you can monitor your savings and if they are worth it to you or not. 

 

Next Post: Cable and Internet Savings

Busting Up Your Electric Bill

 

There are several ways to lower your electric bill, but they are not all convenient. My first words of wisdom on this topic; UNPLUG EVERYTHING!!!!!!!! 

When items are plugged in, even when they are not on, they are still sucking power. Chargers are the worst offender and will run up your electric bill very fast. As soon as your item is charged unplug it from the wall. This also saves your battery life! J Computers are also big power sucker, avoid leaving them on all the time and plug them into a power strip. When the computer is off turn the power strip/surge protector off. 

It sometimes drives me crazy constantly plugging things in, however when I get lazy and leave stuff plugged in, I pay. When I unplugged my coffee pot and my husband’s Play Station our bill dropped $5 per month. 

You need to use common sense when unplugging items. If you use a lamp every day and the plug is behind the couch or a pain to get to, leave it plugged in, it doesn’t save you that much to unplug a lamp. If it is not easy to plug in something you use often, don’t unplug it. 

Items with digital clocks often have “power saver” settings, use them! Everything seems to have a clock on it now and although sometimes it may be nice to know the time every time you turn 15 degrees it is not necessary if you want a lower electric bill. 

Use Energy Efficient Light Bulbs

 

These can be pricey, but if you put them in your most used lights, you will see the results on your bill.

Turn Lights Off

Use the least amount of light possible. My husband and I use one lamp to light our living room, and that is very often the only light on in the house. It is also great to get in a habit of opening the blinds and using as much natural light as possible. In the middle of the day you will find you put lights on as a force of habit, even though you don’t need them. Watch that flip of the switch and you will see results on your bill!

 

When no one is home at your house, there is no need to leave any more lights on than you would normally have on when you are home. Some people only put their outside lights on when they are gone, while others leave lights on in every room of the house. 

 

I know exactly what it feels like to have your personal space invaded by someone you did not invite into your home. It is a horrible feeling, but leaving more lights on won’t necessarily deter them. Try cutting down the amount of lights by leaving a talk radio station on just loud enough that the possible intruder would think it was a conversation. You could also have a few cardboard cutouts and pull a home alone type of stunt with toy trains and pulley systems, but again keep an eye on what is running. ;-)

Stay Clean and Stocked

If your freezer and fridge is full it will run more efficiently, just don’t stuff it too full and block the fan. ;-)

 

Once a year clean the coils of your fridge, vacuum the coils and every crevasse on the outside of your fridge to keep if running more efficient. The yearly cleaning will also help your fridge last longer.

Air Conditioning

 

There is no need to live in an igloo in the summer. Use fans to circulate the air flow. If you have an attic fan put it on in the early morning and after the sun goes down, open all the windows and suck the cool fresh air in. It helps to sometimes close some blind in the middle of those very hot summer days, to keep the cool in and the heat out. Lastly, use a programmable thermostat to save energy while at work or out of the house.
 

Cut Down on your Oven and Dryer Usage.

 

Refer back to my previous post on Lowering your Gas Bill to cut down on your oven and dryer usage.

Next Post: Cutting Back Your Water Bill

Lowering Your Gas Bill

Before I had my wonderful son, my husband and I kept our house at 59 degrees while we were home and 55-57 degrees while we were at work or sleeping.  Yes, we were a little crazy, and yes, we did turn up the heat when people came over, but we didn’t like to.  Having heating bills under $100 in the winter was a tall order, but that was our goal, so we put on comfy (warm) clothes to lounge in. 

Sometimes I do go a little crazy with the budget. One time we got an outrageous heat bill (probably $190) for one month.  I couldn’t take it!  I immediately had breathing issues when I saw the bill.  I called my dad and asked “Dad, how high does the heat have to be so the pipes don’t freeze?”  He said 45 degrees, but come on that is LOW folks!  So I put the heat at 50! For two weeks we wore thick sweats, warm socks, robes, winter hats and gloves.  After two weeks we had had enough of being chilled to the bone and decided to go up to 55.  When the next bill came, we had a credit!  They had estimated our gas bill for that high month and we didn’t see another one for 3 months.  The moral of the story, you should never have to have your heat at 50 degrees, it is really chilly! J Also, always check to see if your bills are “Actuals” or “Estimated”.    

I strongly advise against the budget plan that some companies offer, it does not really allow you to see how adjusting your usage affects your bill.  You can budget by the time of year, in the summer you will have higher electric bills (if you use your air-conditioning), and in the winter you will have higher heat bills.  You can also take the last twelve bills, add them up and divide by twelve to get a better number for your budget. 

If you have kids, lowering your heat is not really an option.  You can try lowering your heat 2-3 degrees at a time and see how your kids fair (depending on their ages.)  So if you keep your house at 70 try lowering it to 67 or 68.  Every little bit helps the budget. 

Go around your house and run your hand along the edges of all your windows and doors to check for cool air.  Try putting plastic on your windows, opening your blinds to let the sun heat your house as much as possible, put a new seal on your door(s), caulk your windows, and/or put a door draft on the bottom of your door.  I know some of the options may not win you any home decorator awards, but they will help lower the gas bill. 

Watch your hot water usage, the more hot water you use, the more gas you burn! 

Instead of using your gas dryer (or electric, to cut your electric bill) to dry every load, try hanging clothes outside if it is nice, or if you have an area in the house to put a clothes line (basement) this will save you a few bucks!  I love clothes after they have been air dried outside! There is nothing like them! J   

If you don’t want to hang your clothes, start pulling out dry clothes every few minutes out of the dryer.  By constantly decreasing the clothes in the dryer you are insuring that those jeans may actually only take one dry cycle, or possibly less!  Lastly, and my husband is a huge culprit of this, fold the clothes immediately and avoid the “freshen-up” cycle.

If you have a gas stove (or electric, to cut your electric bill) and/or oven, try to condense your baking and cooking as much as possible.  You have to eat, so don’t go nuts here. When cooking dinner, try to have things that cook at the same temperature, to avoid having the oven on for a longer period of time than you actually need.  Also, if you can bake a meal ahead do it!  If you don’t mind day old bake potatoes and you have a casserole that cooks at 350 for an hour-- BAM two meals for the price of one!  Your own little “buy one get one free” deal!  Just the other day I was baking my husband’s birthday cake on the top rack, and on the bottom rack I had some sweet potatoes for my son.  Remember, the more you have to put your oven on the more gas you burn just getting it to temperature.  Most importantly, don’t forget to turn it off! Yes, I speak from personal experience. I actually did this just this past week. Luckily, it was only 20-30 minutes after pulling out my meal. J

When you are done cooking and have turned off the oven (never use the oven to heat your house), crack it open to let the heat out.  Hey you already paid for it, might as well not waste it! If you have little ones, make sure to block the area, and use common sense with this trick!

If you are cooking for one or two, or just cooking something small, look into investing in a toaster oven so you don’t have to turn on your big oven as much.  We did this with our garlic bread a lot (up until our robber “friend” broke it when he so kindly broke through our kitchen window)!   We will be investing in another one shortly, or it will be on my birthday list, because they do save you money.

Next Post: Busting Up Your Electric Bill

Disclaimer

I really like to laugh and add humor to my writing.   I genuinely want to help you get your finances on track, so please don’t take any of my comments too personally.  My comments are not meant to be judgmental they are meant to be a little bit of tongue and cheek with a touch of tough love.

The intention of this blog is to help you make your money work better for you both now and in the future.  I will offer a lot of advice on this blog and would like you to keep in mind that all of my ideas may not be the best solution for your situation.  I may see the data plan on your phone, as a good way to cut cost; however that could be something you are not willing to part with.   Most of you do not have to change your entire lifestyle over night; you can take your time and cut some luxuries while keeping others. 

As you continue to read these tips keep in mind that it is okay to take some and leave others.  Life is worth living, everything should not be about money.  Do what you need to get out of debt and/or stay out of debt, but please live your life!  Life is short, you need to take time (and yes sometimes money) to enjoy some of God’s wonderful gifts! 

My goal is to help the follow people:

 

·         People with what I call an inverted budget (more money going out than coming in)

·         People who are trying to get out of debt

·         People who want to save more money

·         People who want to track and be conscious of their spending

·         Anyone who is looking for any type of budget tips

And lastly, since I am married to an attorney…

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This policy is subject to change at anytime.

 

Next Post: Lowering Your Gas Bill

 

Starting Your Budget

Well I apologize; the last year has gotten away from me!  But I am a firm believer that every day is a fresh day with no mistakes in it. 

Money and budgeting is one of the leading stressors and causes some of the biggest arguments.  So, lets work on getting you out of debt and on track to a mostly stress-free money situation.

Creating a budget is not an easy thing (that is one of the reasons I have procrastinated on this post).  Be prepared to sacrifice.  Unless you are the extreme penny pincher (in which case you probably won’t need a lot of my tips) you are going to have to give things up for now.  It is important to know why you are budgeting in order to be successful. 

Okay enough pushing it off…let’s get you on a track to financial “freedom”!  I use freedom lightly because once you learn the budgeting basics...usually you don’t go back to your old habits. 

Just like finding the right diet and exercise for your weight loss you have to find the right budget combination for your family.  Don’t be too hard on yourself.  If you can ease into the budget process, do it!

FIRST STEP: Track Your Spending

If you purchase everything on a credit card you can start your budget today, all you have to do is look at your past couple of statements to see where your money is going. 

If you pay in cash, check, or a combination of cash, check, charge, and debit.  I want you to track your spending for the next three months.  Chances are by the end of the first month you will see where your major areas of spending are. 

Main Categories:

·         Auto Repairs
·         Bills (Energy, Gas, Water, Phone, Cable, etc.)
·         Debt (Student Loans, Mortgage, Credit Card, etc.)
·         Dining out
·         Donation
·         Entertainment
·         Gas
·         Gifts
·         Groceries
·         Insurance
·         Mortgage/Rent

 

SECOND STEP: Analyze the Results

After you look at where your money is going you can then assess where you need to cut your spending. 

If you find you are spending $150 per month on dining out, sorry folks that is a luxury and if you have debt and you want to get rid of that debt and pave your way to a better financial future there is an easy way to save some money.  It is time to dust off that apron and get in the kitchen!  If you are not a good cook or lack the ability to make even macaroni and cheese from a box; it is time to reach out to a friend who knows their way around a kitchen or bring out your very knowledgeable friend…the internet.  You can learn ANYTHING on YouTube or a search engine!

I will give you tips on each category as time goes on!  I have to keep you coming back some way.  I understand most people aren’t like me and get excited about talking finances. 

 THIRD STEP: Making Your Budget

All of your expenses are categorized for the past 3 months, and you have analyzed the results of your spending, so you know (even if you don’t want to admit it) where you need to cut spending.

Add up your monthly income (if you are trying to make a parent stay at home, only use the income you will have when that happens).  If you have bonuses, DO NOT factor them in. 

If your spouse brings home (after taxes) $2000 and you bring home $2000 per month you have a monthly income of, yep you guessed it $4000 per month.  And NO you can not spend it all!  Remember eventually you need to retire, and there are always unexpected expenses.  

Fill in the chart below (please tailor it to your needs, if you need help email me):

Item	Paying Out	Coming In	Balance
Monthly Income		$4,000	4000
Gas	$300		$3,700
Groceries	$200		$3,500
Insurance	$260		$3,240
Minimum Debt Payment	$400		$2,840
Mortgage/Rent	$700		$2,140
Other Budget Items	$300		$1,840
Utility Bills	$225		$1,615
Monies Left or Over Spent			$1,615

Anyone who knows me will tell you I am an Excel nut!  I LOVE LOVE LOVE working in Excel, so, of course that is where I track my budget.  Figure out what works for you, if you find an app you can use on your phone, Word/Pages, or good old pencil, paper, and calculator. It’s your budget sheet you need to be comfortable with it!  If you need a template, email me or if there is a tech savvy person out there who wants to help me post it on this page, I would appreciate the help!

On the chart above, I listed the absolutely necessary categories; meaning if these bills don’t get paid, you will be out on the street, in the dark, no car, and/or no food.  These are must have items to live.  All other budgeting expenses go under the “Other Budget Items” category.  Cable is not a must have item, nor is dining out or entertainment.  If you are calling me bad names right now, you have to ask yourself what your goal is.  If your goal is to be out of debt, then yes I am the big bad money monster, but in the end you will love me, and I will be that cute little teddy bear you just want to hug! J

In my next post I will go into more detail about how to cut areas of your budget, get things cheaper and focus more about getting an exact budget to get out of debt!  Next time is next week, I promise, no more procrastinating, I have a job to do!  Let’s get you on track to financial “freedom”!