Stretchy Dollars Columns

Leaving Home 101

Mon, 01 Jan 0001 00:00:00 GMT

“Well, he’s run away from home and I figure he’ll hang out until dinner. Let me know when he leaves.”

He returned a little while later and announced, “Well, I’m back from running away, Mama! What’s for dinner?”

That afternoon Philip learned that leaving home wasn’t as easy as he had thought.

Fast forward a few years and Philip’s left home again. He didn’t run away, he earned a full ride to a major school and entered the first phase of his adult life. Before Philip headed off to college my husband and I took time to prepare him to be financially responsible – we wanted to ensure that our son would have a fresh – debt free – start in the real world after his graduation.

Here is some budgeting and financial advice I recommend as parents prepare to send their children away to college.

Budget Babies

Before your child leaves for school, make sure that you help them establish a workable budget. The categories should include

· housing;

· transportation;

· clothing (during the year);

· food, entertainment per week; and

· if necessary tuition, books and supplies.

If they will be taking a job, decide, up front, what they will pay for from their own work money and what you will cover. You can even ask them to send you a monthly budget report and review it with them. Look at this as an opportunity to coach them, but beware of funding their failures by bailing them out on a regular basis. Let them know that this is the time they should learn to live on their own in a healthy, responsible way.

Bucks and Money Cards

Your college bound student will need a banking account for checking and savings. Make sure to research banks (or savings and loans) that offer student banking programs. If you don’t want to establish a banking account for on-going spending, there are also other ideas. In our family, we also like to use Wal-Mart MoneyCards – and did even before I became involved in working with Wal-Mart this summer. They MoneyCard is a really cool idea, giving the our college kids have the benefits of a debit or credit card to use pretty much without the liability or temptation to get into debt. They can check their balances daily, helping them manage their spending in a convenient, safe and efficient way—plus we can reload funds onto their cards either online or at our local store.

Talk About Credit and Debt

Now is also the time to educate your child on the dangers of easy credit. They will have access to thousands of dollars worth of credit through a variety of offers that may show up in their student mailbox. Teach them to shred these credit card offers in order to help protect their identity and also direct them to order their free annual credit report from the three major credit reporting bureaus.

If you decide to help your children set up their own credit card, it’s a good idea to make sure that initially, they only have a $500 credit limit. As they charge and pay off the balance each month, they’ll build their own credit score as well. Our son, Daniel, as a senior in college has built enough good credit to prequalify for a townhouse! It all started with our involved effort to help him establish and build credit wisely—without getting into debt.

Bagels and Broccoli

My daughter, Bethany, will be graduating from high school this year and I decided to let her do our grocery shopping in order to teach her how to shop wisely when she’s on her own at college. When she got to the bakery department, she exclaimed: “Wow! I can get this bag of eight bagels for less than this other bag with only six!” She was so proud (and so was I!)

Be sure your kids know how to price compare and how to read the store labels as well. Show them the “price per ounce” on the shelf so that they can recognize value. Walk them through the frozen foods section to compare the difference between buying fresh broccoli versus frozen and let them see the savings in frozen convenience foods versus fast food pizza.

You can ask your child to take our Spending Style Quiz on this site and go over the results together to think about strength and weakness and be better equipped to shop wisely. There are of course loads of tips on this Web site too about shopping and saving that your student can benefit from reading.

Boxes, Baggage and Bookcases

The more essential items you can strategically purchase ahead of time, the less likely you are to overspend when you check your child into their student dorm room. Find out, from the college, what the room and window dimensions are and what furniture comes with the dorm or apartment. Make a list, check it twice, and then take advantage of free shipping opportunities if you purchase on-line. (Now available, I wish www.walmart.com would have had “Site to Store” back when my older child was in school.) Such programs help you buy everything to set our student up including appliances, furniture and mattresses! This not only saves loads of money on shipping and handling, but it can also help with better gas mileage by minimizing pounds transported in the car! Another advantage is that if the bookcase you selected doesn’t fit the room, you can return it to the local store and pick one with different dimensions.

Sending a child off to college for the first time can be costly and stressful unless you are strategic and purposeful in your planning. With the right moves, you can help your student finish well at home and start their new life with a healthy financial perspective.

“Investment Spending” with Unexpected Money

Mon, 01 Jan 0001 00:00:00 GMT

I guess that is just a byproduct of living with a value-minded mom. I’ve trained all of our kids to shop with an “investment spending” mentality – something that comes in handy as they branch out on their own and learn how to spend their own money wisely.

I developed the idea of investment spending when we were first married and I would occasionally get an unexpected check in the mail, such as a birthday check from my grandma or an insurance refund check. Our first thought was to make sure we spent it on something that could be considered an investment purchase, rather than just blowing it. Today, Americans are getting stimulus rebate checks and I’ve been offering the same advice to them. Take this unexpected money and invest your spending through strategic product purchases.

I’m not talking about investing in gold boullion or buying a rental property. Most of us cannot venture into those kinds of investments on a regular basis. I’m talking about the kind of spending we all do, but considering how you spend that helps you in the long run financially. The items acquired are not necessarily appreciating assets, but they are purchases that will help a family stay out of debt, provide for a need or have the added value of investment personally into family time and relationships. I categorize investment spending techniques into three basic areas: Debt Free Investments, Savings Investments and Lifestyle Investments.

Debt Free Investments

When you get your rebate check, an unexpected insurance refund, a performance bonus from work or even a small inheritance, if you plan to spend, think about purchases that will help your overall financial picture. Debt free investment spending is the use of these funds to purchase necessary items that you feel you need at a stage in your life that normally you would have purchased with a credit card, and then ended up paying interest. For example, if you have a student going away to college, they will need a laptop computer. Or you may have a new baby and really want to invest in a digital video camera. Other items that fall into this category are tires that you need to replace within the next few months. Taking a portion of those unexpected funds and paying cash for these items you would normally have bought keeps you from accruing further debt and interest, and be ahead financially.

Savings Investments

These are items that you have saved for, and the money for them is in your regular savings account. For example, you need a new refrigerator, air conditioner, or a washer and dryer because you are moving to a new house. Or, your old appliances are wearing out and require frequent repairs. When you get an unexpected check, you can also put this money or a portion in your savings account where it can grow to pay for these future needs. Some people set aside money into savings for new bikes for the kids, baby items for a new child, or even a family vacation. Paying cash for these when the time comes feels great and you don’t drain your savings account unexpectedly!

Lifestyle Investments

The final category is a moderate to major purchase that your family is willing to make in order to add to its entertainment, recreational or changing lifestyle and values. For example, buying nice patio furniture or playset is a lifestyle investment because you are providing meaningful ways for your family and friends to spend time together at home. I remember when we bought a quality playset when our kids were little –even though the initial investment was several hundred dollars (they are much less today!) and a bit of a budgeting stretch, we were able to get more quality time with our kids playing outside. Not only did it keep our children active and healthy, but my sanity also benefited as the kids worked off their energy close to home. Even though the economy is tough, some people say that is why they still feel the purchase of a big screen TV for the family room is an investment that helps them save on entertainment dollars in the future – enhancing the experience at home instead of paying $60 or more to go to the movies. Having a big family myself, I can vouch for the fact that at-home movie night of family fun, or watching the game with friends over, saves especially on the food costs!

No matter how you choose to handle your unexpected funds, keep in mind that there are certain ways to spend your money wisely and get the most out of your spending. I’ve never regretted taking these saved or unexpected dollars to buy the investments – like the playset or the laptop computer – that mattered to my family’s future. They were all purchased wisely and we received more than our money’s worth!

Eggplant, the Environment and Eco Friendly Savings

Mon, 01 Jan 0001 00:00:00 GMT

I didn’t realize, until my adult years, what a “green” gardener my Abuela was and how important her eco-friendly style of living was to our environment. She used to make her own mulch from grass clippings and actually collected horse manure from stables in our Texas town. I thought it was totally gross at the time, but it was totally great for the environment—plus she saved our family money by growing her own fruits and vegetables.

There are a lot of ways that you can save money and help save the environment by going green. Here are a few simple changes you can make to help keep costs down for gardening and energy, helping you save money and live better.

Green Gardening

If you choose to repurpose a section of your lawn for a garden, you’ll find that it’s really quite easy to align a green mindset along with your green thumb by incorporating some natural ideas that promote sustainable gardening. For example, leave the grass clippings on your lawn in order to return up to 50% of the required nutrients back into the soil. An added benefit is that there are no clippings to bag. Another part of being a sustainable gardener is to use compost – or use natural fertilizers such as seaweed and kelp – which will encourage plants to grow at a natural rate and also have the added benefit of keeping pests away. Additionally, if you plant your garden in closely packed hexagonal shapes, you’ll find that you use less water and weeds are less of a problem.

By choosing hardy plants that are well adjusted to your climate, you’ll be able to feed birds and attract other wildlife as well. During the times when your garden is not producing fruits and vegetables, you might want to consider planting alfalfa, oats, clover or other grains. These will naturally replenish the soil, which means you’ll have a higher yield next season.

Saving Your Energy

The latest report from the 2008 Consumer Expenditure Survey indicates that energy costs have risen 16.6% for people living in urban areas, which means many American families could pay over $3,600 this year in utilities (as estimated in a recently reported Marketwatch survey, May 21, 2008). Here are five simple steps you can look into today to reduce your energy usage and save money:

· “Time of Use” – Electricity is a big expense in the summer and some states are offering a special discount for those who are willing to restrict their use of electricity during certain times of the day. A programmable thermostat is a great investment that helps you not waste air conditioning when you don’t need it, and money saved could be up to $180 per year. You can also save on electricity by waiting until night to run specific appliances, like dishwasher or swimming pool pump.

· Energy Survey – Most utility companies also offer a free energy survey. Since this is tailor made for your home and utility usage, it’s also the very best way to target specific areas that could save energy and save money. Go to your electric company’s website for more information.

· CFL Bulbs -- Installing compact fluorescent light (CFL) bulbs is one of the easiest ways to start making an impact on your energy bills. Not only do you save money and energy, but you contribute to a cleaner environment by reducing fossil fuel usage. Modern compact fluorescent light bulbs, use 75 percent less energy, save more than $30 in energy costs over the life of the bulb, and last up to 10 times longer.

· ENERGY STAR Rated Products – If you want to save up to 25% in energy costs, then begin to look for the ENERGY STAR rating on everything from hair dryers and other small appliances, to refrigerators and other larger appliances.

· Seal and Insulate – Stopping those air leaks and insulating your home properly can save you up to 10% annually on your electric bills, and again, save energy. See a helpful guide and tips for homeowners at www.energystar.gov. You should also check your air filters regularly to ensure they are clean and not overworking your unit.

By doing our part, little by little, we’ll find more green in our pockets and make a greener earth at the same time—that’s something my Abuela would have been proud of!

Cash for Trash: How to Maximize Your Garage Sale

Mon, 01 Jan 0001 00:00:00 GMT

When I saw her, I knew I had to try it. The crew member who was with me was surprised and asked, “Are you going to do that in heels?”

Yes, I was.

And I did.

It was frightening and exhilarating at the same time.

I look at life as an adventure—especially when it comes to stretching my dollars and finding creative ways to make and spend money. Sometimes we need to have the ultimate adventure—a garage sale!

Paying a dime on the dollar for a product still in its original box is a thrill. Not only do garage sales simplify your life by helping you de-clutter, but they also provide a way to keep more change in your pocket and teach your kids the value of a buck.

Here are my top ten tips to host a successful garage sale. If you follow them carefully, you’ll find yourself flying high—without the bungee cord!

Collect – Throughout the month, throw stuff in a big box (or boxes) marked, “Garage Sale.” Not only will you relieve clutter, you’ll soon have enough diverse items to host a sale. Of course, other members of your family (particularly husbands!), may remove items from the box.

Location – It’s great to buddy up with a friend whose house has a better location than yours in order to maximize drive-by traffic. Or, ask a neighbor (or two) on your block to host their own sales—you could attract three times the garage sale traffic with your combined sales.

Advertise – When you create garage sale signs for the neighborhood, use brightly colored poster board and a good contrasting color. Keep the lettering brief and legible and tape some balloons on it. Go in with your neighbors on a small ad in your local paper, it will really help bring people to your sale.

Pricing – If you put a price on your product, you are more likely to sell it. Most people don’t want to ask, “How much for this?” However, even with the price marked, there will be some who will haggle with you—but that’s to be expected. If there are certain items you’re willing to accept a lower price for, mare them as “or best offer.” Begin pricing items weeks before the sale, placing them in a “finished” box in your garage.

Cash – Have at least $20 in coins, 50 one-dollar bills and 6 five dollar bills. Keep your money box in a safe location and never leave it unattended. Bring each $100 earned into your house for safekeeping.

Checks – Never take a check from someone you do not know. This isn’t just a matter of trust, it’s one of responsibility. Most people know to bring cash.

Hold – Never hold an item without a substantial non-refundable deposit. If you hold it for free, then the customer might not return and you’ve lost your opportunity to sell that item.

Marketing – Place furniture and bikes that will draw attention by the curb where people can see them. Try marketing ideas such as “buy three books/get three free.” It’s amazing how well this works—people respond to the word “free.”

Clean –If an item looks newer because it’s clean, you’ll be able to get as much as 50 percent more for it. Run sturdy plastic toys through the dishwasher, spot clean the armchair, wash and hang clothes on a hanger, and polish wood furniture—it’s worth it!

Expand – Let your kids get in on the action by selling lemonade on hot days or coffee and donuts on cool mornings. Let the kids go to the store with you to buy cups, donuts, napkins, lemonade and sugar. Be sure they understand how to make change and how to be courteous to customers. Who knows? They may earn enough to fund their college education (or at least buy a new bike!).

Good Investments in Summer Vacation

Mon, 01 Jan 0001 00:00:00 GMT

No, this is not a secret meeting of the deranged and demented, it's our family sitting around the campfire shouting lines from our favorite movies (the above quotes are from Back to the Future, Princess Bride, The Sandlot and Dirty Harry) It's one of those family traditions that make forever memories. Camping was and is a family vacation that our family enjoys and it is both affordable and budget friendly.

Staycation Savings

Today, with higher gas prices, many families are choosing to invest their vacation dollars in purchases that will last a lot longer than a three day trip to a themepark and cost about 1/10 as much. For example, some families are buying the kids a swingset or waterslide, and investing in new backyard furniture that will last many seasons to come. This summer, if you feel the need to create a “staycation” by saving money and staying closer to home, there are plenty of ideas to stick to your budget and still make great memories, even if it’s for a brief weekend trip to a favorite spot right in your own backyard. Here are a few ideas on how to maximize your summer vacation fun on a smart budget:

Plan Day Trips – The majority of New Yorkers I’ve talked to who live in Manhattan have never visited the Statue of Liberty. Most of the families that live in Fort Worth, Texas (my home town) have never seen the historic Stockyards, a true remnant of “Cowtown’s” wild past. What historic, interesting or fun adventure is within a few hours of your home that you’ve never visited and can make a day of it? Go to your local Chamber of Commerce web site to find unique hiking trails, interesting museums, historic landmarks or even discount tickets on local attractions and amusements. The National Park Service (www.nps.gov/) also has an online directory, so find a scenic treasure near your own backyard. Many of these are absolutely free and just waiting to be explored by an active family with a healthy picnic lunch and an eye toward adventure savings.

Camping In – I grew up in the city and wasn’t sure about the whole idea of camping for fun. But the studies I read said that the most common element of healthy and happy families was—you guessed it—camping! You may not want to invest in a camper or camping gear until you’re sure your family will enjoy it. So start slowly by investing in a modest tent and sleeping bags. Let the kids go to the camping section with you at the store and pick a fun camping accessory that they want to try out, like a heavy duty flashlight (to make faces with in the darkness) or a pair of binoculars. Then make a first trip to your backyard, where you learn how to set up and break down camp and still have fun as you cookout and sleep under the stars.

Theme Days – Our kids love community plays and theater, they also like getting into character as often as possible. That is why our family has established “Theme Days” in the summer. We create costumes, cook food and invest in a few good movies. For example, we celebrate my mom’s Spanish heritage on “Hispanic Days” when we cook tacos, burritos, and refried beans while watching fun movies like “The Three Amigos.” Another theme might be Western. Younger kids love dressing up as cowboys and eating hamburgers with baked beans. The movie part of the fun could include City Slickers or a classic such as High Noon or a John Wayne flick. Don’t forget to talk like a cowboy and say, “Thanks ya’ll.” Another fun theme which is great around the Fourth of July could be “Patriotic Days” with red, white and blue décor and maybe even a military theme. Our youngest son has camoflouge that he loves to find an excuse to wear and play “Army Dude.”The most important part of a vacation is building family memories and we have found that the experiences our kids remember the most oftentimes cost the least.