Frugal gardening

It’s been about two months since we planted our garden now, and things are coming along nicely. We’ve had fresh peas for awhile now.  The cherry tomatoes are full size and turning pink. 

As I was weeding today, I thought about the role gardening is playing in many people’s budgets this year. With the price of food skyrocketing, many families are growing their own food to save a bit of money.  We have enjoyed gardening for several years, but this is the first summer we are growing food to replace groceries.  (Up until this year, we grew veggies in his parents’ backyard. We didn’t buy groceries back then!)

To make your own frugal garden pay off, consider the following:

- How much does this food cost?  I would estimate that we harvest about $2.50 (five storebought cans) worth of peas from a $.99 package of seeds. It takes a lot of shelled peas to make one serving! On the other hand, store-bought peppers cost about $1 each. We can harvest 4-6 nice peppers from a $1 plant. The same goes for tomatoes - nothing beats the taste or price of a fresh, homegrown tomato.

- Does your family enjoy this food? Our neighbors gave us eggplant seedlings. Generous, but I doubt the husband and I will eat all that eggplant.  We took the plants to be neighborly, and I’m looking forward to trying a few recipes. But we wouldn’t waste space or money on plants we don’t already enjoy.

- Do you have time for gardening? Plants need water, weeding and prompt harvesting. If you can’t dedicate a few hours each week, don’t disappoint yourself by starting a garden. It’s a great way to get exercise and save money, but the effort is pointless if your plants don’t survive to harvest time. 

Best of luck with your garden, and happy weeding!

Insurance bloopers

I was reading through my auto insurance policy today, thanks to a thought-provoking post by Blueprint for Financial Prosperity.  The theory is that auto insurance prices take a dramatic plunge when you reach age 25, and I was estimating how much of a difference this 10-20% discount would make.  (It’s about $10-$20 per month - happy birthday to us!)

Then I read the line, “comprehensive coverage - $500 deductible.” I paused, thinking I must be confusing “comprehensive” with another term. But when I looked it up, I saw that comprehensive covers thinks such as broken windshields, or a deer running into your car. 

We have older model cars, each with a Kelly Blue Book value of less than $2,000.  WHY do we have comprehensive coverage?  I thought our insurance agent had simply mirrored my old auto plan from before we got married, but it appears that he helpfully added a few perks. Those perks are costing us a few hundred dollars a year…

I am feeling pretty foolish for having paid for the policy. I did read the forms before I signed them, but we bought our new insurance a week after the wedding and three weeks after buying our first home. I was a bit overwhelmed, to say the least.  But ignorance can be expensive!

We really like our insurance agent - he’s helped both of our families through auto claims, and we really trust him. I’m sure he was doing what he thought best for a young couple. Needless to say, I will be sitting down with him in two months, when our policy comes up for renewal, and examining our contract more closely.

Gas increase

Welcome to July 2008!  Good news for all of you sole proprietors and business owners…  As of today, the business tax deduction for driving a vehicle is now 58.5 cents, up from 50.5 cents.  It’s the least they could do, with gas prices through the roof right now.

I am very grateful that my business car gets 30 mpg, which equals a tax deduction of about $17.50 per “gallon.” My husband’s boss needs a big ol’ pickup truck, and I’m not sure he even gets to deduct the full price of gas. Even with my fuel efficient vehicle, I find myself doing more phone interviews to save gas.

At least gas prices are stabilizing in our part of the state. Our local Exxon has been asking $4.03 for the past two weeks now.  It hurts, but it could be a lot worse.  We need to find an alternative to gas NOW, before prices come back down a bit and we all go back to our gas-guzzling lives. 

ING bonus

I am now a proud member of ING Direct!

I’d like to thank the blogger who shared a referral with me. ING is still running the $25 bonus program, where new account holders can receive a $25 bonus for opening a new account. I now have 50 bonuses to share with interested readers! Please email me at justgetting.started (at) yahoo.com for a bonus link.

The rules of the bonus game:
1. You must deposit $250 to your new ING Direct account to receive this $25 bonus.

2. To discourage rapid customer turnover, ING places a 10 day hold on your new account. You cannot withdraw your $250 deposit or $25 bonus for 10 days. After that, the entire $275 is yours!

3. I will receive a $10 referral once you open your account.  For each $10 referral, I will donate $5 to a local food bank.

ING Direct is an FDIC insured bank, currently offering 3% APR.

Updated goals

A lot has happened since I first posted our goals in April!  The Husband and I finally sat down and discussed our long-term goals, including retirement and early retirement. 

The Husband wants to retire at 45.  I’m not sure if we can do it, but it’s certainly an admirable goal!  We’re both fully dedicated to this goal now.

Because we only make so much money, we cannot continue to aggressively pay down our mortgage and student loans while still saving for an early retirement. Thus, our goals have somewhat changed.

Old goals
Goal 1: Build our retirement fund
Goal 2: Pay down the 30 year mortgage in 15-20 years
Goal 3: Pay down student loans

New goals
Goal 1: Build our retirement funds
We still plan to set aside $50 or more each month into a Roth IRA.

Goal 2: Invest for early retirement
We’re now setting aside $100 each month to invest in an S&P 500 index. We don’t want to touch our Roth until age 60 or older, so we need investments outside of our retirement accounts.

Goal 3: Pay down the 30 year mortgage in 22 years.
This coincides with our 45th birthdays, around the time we would like to slow down.

Goal 4: Pay off student loans… eventually.
My loans are now at 4.25%, down from 5.25%.  We will pay the minimum each month.

I sometimes feel like we are micromanaging our finances and goals.  Am I the only one?

Have you examined your goals lately?  Have they changed in any way?

A return to sanity

Thank you to the my first “Getting Started” readers, who have been peaking back to see if I’m writing anything new. I realize that this is my first post in a few weeks, and I do apologize. 

My new writing career is beginning to take off, although I did have to focus a lot of time and energy into it over the past two months. I’m hoping now to get back to blogging on a fairly regular basis, and hope to start posting again on Monday morning.

I have been keeping up with reading other blogs, and I can’t wait to start writing again!  There have been some great conversations out there.

Until Monday…

Budget overhaul: Income

As I discussed yesterday, our income-to-spending ratio is about equal: We spend nearly every dollar that we bring in, although we do budget a few dollars for retirement and extra debt payment.

For a recap, our income each month:

Husband’s salary: $1793

My minimum income: $600

Total income: $2393

There have been a lot of blog discussions lately on the “spend less than you earn” OR “earn more than you spend” philosophies. In our case, earning more than we spend is the key to making our budget work.

Before I gave my 2-weeks notice at the retail job, we sat down and figured out how much money we spend. (It’s about $2,385, including the mortgage and necessities.) Then we added our income, and saw that our income and expenses are pretty darn close. We can make it work, but there might be some tight months.

The great thing about being a freelancer writer is that I can always ask for more work. If my income for the month is falling short of what we’re spending, I can increase my workload. I consider myself fortunate that we have such flexibility.

That being said, I’ve already asked for a bigger workload. My goal for the next few months is to make $800-1,000 monthly, although if I fall short of that goal the bills will still get paid.

My long-term goal is to be making $1,500 per month by the end of 2008. Meeting that goal will take some hard work, and I’ll have to reach out of my comfort zone in terms of selling stories and larger workloads.  But if I can meet my goals and use our money to tackle debt and improve our long-term lifestyle, it will be well worth it!

Do your income and expenses mesh well together?  If not, what are you going to do about it? 

 

Budget overhaul 101

Since I’ll be quitting my day job to write full-time, now seems like a great time to give our budget a thorough overall.  We’re aiming to reduce overall spending, and throw any extra money into our debt. Comments, suggestions and criticism are welcome!

I’ll outline the basics today, and then examine each category over the next few days.

It’s worth noting that we work on a bi-weekly budget system. Each budget lasts for 4 weeks, or 2 pay periods.  This allows us to make 13 “monthly” payments on our debt each year.

OUR FAMILY BUDGET

Income
His salary	$1,793
My income	$600
Total	$2,393

Expenses
Mortgage/escrow	$1,045
Student loans	$50
Groceries	$200
Dining out	$40
Auto upkeep/gas	$250
Home improvements	$150
Internet service	$15
Phone	$30
Electricity	$75
Medical	$20
Cell phone	$15
Total:	$1890

Annualized expenses
Estimated taxes	$50
Insurance	$120
Health insurance	$125
Oil money	$100
Total:	$395

Misc.
Roth IRA contribution	$50
Emergency money	$50
Total:	100

Total expenses:	2385
Income - Expenses:	$8

That’s right, folks.  We have $8 left at the end of each month now.  It’s time to cut the fat! 

Please keep in mind that I tend to make more than $600 each month. My income fluctuates greatly, and we wanted to be sure that we could still pay the bills during a “down” month.

Don’t quit your day job?

I mentioned before that I work part-time in retail to help pay the bills. To be more specific, I work one day a week as a pharmacy tech. I’ve had this job since high school and college.

The part-time job has been working well. But things have started to change, and it was time to reevaluate our choices.  My job was super close to college, but about 25 miles away from home.  Now that I’m out of college, my round trip commute was 50 miles.

Then we moved a bit further away - almost 10 miles. Now my commute is up to 70 miles round trip. With the price of gas and tolls, each work day costs about $10.

Contrary to popular belief, pharm techs don’t make a lot of money.  After taxes and commuting, I was bringing home about $35 per week - $3.89 an hour.  I’ve looked at transferring to a more local pharmacy, but none of them are hiring.

My retail job was also cutting into the freelance newspaper assignments that I could cover. It seemed that every available assignment was during that one day I worked away from home, so I lost a few assignments each month to my $35 retail job.

We finally did some soul searching, and crunched the numbers. It does not make financial sense to continue working. We make enough money to pay the bills without this job, and the $35 pay doesn’t justify the miles I’m putting on my car each week. If we run into money trouble down the road, I can always find another retail job. I’m sure I can match $3.89 an hour!

The exciting news now is: I’m going to be writing full time!

My first order of business is to thoroughly examine our bi-weekly budget. Together, we’ll go through each item (groceries, gas, debt) to see where my family (and yours!) can cut back. Any new-found money will be snowflaked into the mortgage.

Stay tuned. This is going to be exciting!

Snowflake update: April

Each month, we spend a bit less than we budget. I’ve vowed to roll this money into our debt and see how much faster we can pay down debt.

We’ve tallied the numbers.  Are you ready?

This month, we’re $203 over budget.  :-D  We made $56 more than expected (the hubby got a small raise), and spent $147 less than planned on food, gas and house expenses.

Since the mortgage is our highest interest debt, we’ll apply the whole thing to the house.