Censtible Home Managment Handout-Class #1

Before Getting Started:

“Time is money.” It's an old adage that we've heard so much, that we tend to pass over it. However when you really think about it-especially as it applies to society today, it is as true as truc can be. We like conveniences that save us time, don't we? That's why we buy all the cars, appliances, and gadgets that help us to do things faster That's why we pay more for pre-packaged food that promises dinner in minutes. That's why you pay more for groceries and sundries at convenience stores rather than go stand in line at the bigger supermarket. If you are going to pay for something, you'll either pay with your money, or your time and effort. There is tangible value for your time, and that's why it's important to use it wisely.

One way to do this when first incorporating the suggestions to follow, is to calculate your hourly wage to see if it's worth your time. How do you do that? It's simple.

1st-figure out the cost savings of a specific activity.

2nd-figure out how long it took you and how many times it can be repeated in an hour.

3rd-multiply the number of times by the cost savings to see your hourly wage.

For example:

I went to buy meet at the grocery store and saw that it cost 4.99/lb per individual package of lean meat, or 3.99/lb to buy it in the larger value pack. The trade-off is that I'm going to have to take the time at home to re-portion the meat into smaller packages. I go ahead and buy 6 lbs of the value-priced meat. At $1 less a pound, that's a $6 savings right there. It took me 10 minutes to portion the meat out and carry it down to the freezer. That means I could perform this job roughly 6 times an hour. So, $6 x 6/hr and you get a hourly wage of $36/hr? Is that worth my time? Yes!

This simple tool will help you prioritize which tasks will benefit you the most, and are worth your time. Antoinette Bosco says “When anyone asks you to give your time, they are really asking for a chunk of your life.” Wow! That's shooting straight, eh? But it's so true, and likewise, I don't want you to spend all the chunks of your life doing needless tasks in the hopes it will help your financial picture. Prioritize those tasks that will truly impact your bank statement, and leave out the little tedious ones.

Now please keep in mind that this only figures monetary cost-savings, and not intrinsic value.. I know that I can buy a loaf of whole wheat bread at Walmart for .99 and it costs me close to that to make it at home. However, there is a health benefit that I'm willing to pay for with my time to make it myself. As your prioritizing your tasks, you will have to decide which ones have a value that overrides the monetary savings (or lack thereof).

Now that we've got that all laid out, let's get Centsible!

Gonna Wash that Waste Right Outta My Home…(Laundry Room/Bathrooms)

Household Cleaners/Detergents

The cost for manufacturing and packaging cleaning products is exorbitant as compared to making your own. They are very simple to mix, and you can find more ideas than you will ever use by googling “cleaner recipes” online! Plus, you have the added benefit of knowing exactly what chemicals are in the solution you are spraying near your loved ones. Here are a few that I use regularly:

Laundry Detergent (YES! You can make your own!)

1c. Washing Soda (Note: NOT Baking Soda; 2 separate chemicals)

1c. Borax

½ bar grated soap (I purchased Dial last time because it was on sale, but pick whichever soap you prefer. Another soap you can use is Fels Naptha. It is actually considered a laundry detergent bar of soap. Available at Fred Meyer. Note-it's a much harder soap and takes a bit more time and elbow grease to grate.)

1 TBSP Dawn Dish Detergent-acts as a degreaser

2 c. Boiling Water

1 Gallon Hot water

Add finely grated bar soap to the boiling water and stir until soap is melted. You can keep on low heat until soap is melted. Pour the soap water into a large, clean tub/bucket and add the Borax and Washing Soda. Stir well until all is dissolved. Add 1 gallon of HOT water, stir until well mixed. Cover pail and use. Stir the soap each time you use it (will gel). 2 TBSP for ‘Large Load’ and 3 TBSP for ‘Super’

Cost Breakdown

2 c. boiling water (.01 for the fuel to heat it:)

½ bar of soap grated (.25)

Fels Naptha would be .75 as it’s 1.49 for whole bar at Fred Meyers..

1c. borax (3.99/12=.33)

1c. washing soda (3.99-I purchased it on sale for 2.99/7=.57 or .43 sale)

1/8 c. Dawn (9.00/90=.10)

Total cost per batch: $1.25

Number of loads per batch (mixed ‘Large’ w/ ‘Super’-mostly ‘Super): 70

Cost per load (1.25/70) .017-not even 2 cents per load for liquid detergent versus .08 for cheaper commercial powder! Can you buy a bottle of liquid detergent at the store for

$1.25 for 70 loads? No way!

**Many websites and people I know have said that homemade detergent is great for front-loading washers as well. I, personally, have never tried that, and should something go awry, I don’t want you telling me I broke your washing machine! If you should try this recipe with your machine, omit the Dawn dishsoap and use Fels Naptha for your bar soap in order to assure that the detergent is non-sudsing.

Questions you may be asking (Or Just Good Things You Oughta Know)

1. Q: Is this stuff really as good as the powder at the store?

A: (per Appliance Samurai on fixitnow.com) There are many brands of commercially available detergents out there and they all [stink]. Why do they [stink]? Because they all contain fillers--inert, abrasive [junk] added to the detergent mix simply to take up space and to help clean your clothes or dishes by the abrasive action of the added silicates (read: sand). These fillers actually harm your dishwasher, washing machine, and clothes! Fillers in commercial detergents cause a whole host of problems including: clogging washing machine and dishwasher drain hoses, binding washing machine pumps, gunking up dishwasher impellers, creating foul odors in washing machines by providing nice homes for bacteria, creating leaks in dishwashers by working in between the tub gaskets and surfaces…

2 . Q: This is not as sudsy as I like. Is it still washing my clothes?

A: (Again, from the mouth of the Appliance Samurai) Suds do nothing to clean your clothes and are actually an undesirable by-product of the detergent’s chemical interaction with the water.

3. Q. OK, if suds aren’t the star of the show in a washer, how are detergents supposed to get the [soil] off my clothes?

A. The main job of detergents is to remove soils and stains. They do this by breaking down the surface tension of water, in effect, making water “wetter.” The water is what actually does the cleaning by slipping in between the [soil] and the fabric, separating them and suspending the [soil] in solution.

Detergents are designed to freshen, remove odors, and brighten fabrics as they clean. Another key detergent function is to hold [soil], and any dyes from colored fabrics, suspended in the wash water so they aren’t re-deposited back onto the cleaned clothes.

And now, we’re movin’ on…

All Purpose Cleaner (Green Version)

20 Drops Lavender or Geranium Essential Oil

1 dropper grapefruit seed extract

Water

Mix in a spray bottle.

Cost Breakdown

Lavender oil (8.29/60 batches): .14

Grapefruit seed extract (15.49/200 dropper full’s est.): .08

Water: free

Total: $.22 for a full bottle of natural, antibacterial spray!

All Purpose Cleaner (Ammonia Version)

2 oz. ammonia

Water

1 Teaspoon (a squirt or two) Dawn Dish Soap (acts as a degreaser)

Mix ammonia and water in household spray bottle leaving a little room at the top for the Dawn. After mixed, add Dawn, cap, and shake. Be sure to add Dawn after water, or else it will suds up when you add the water.

(Got if off the internet a long time ago. )

Cost Breakdown

2 oz. ammonia (1.99/64 oz x 2 oz.) .06

Water (Free)

1 squirt of Dawn dish soap –a few pennies

For under .10, you have a bottle of degreasing all purpose cleaner, similar to 409 or Fantastik!

Homemade Cleaning wipes or Baby wipes

You can also use either of those all purpose solutions to make house-hold wipes as described below:

1 Roll of strong paper towels

1 coffee can

Cut the roll in half to make two smaller rolls. (Hint: use a large cutting knife NOT scoerrated edged knife!) Remove the cardboard tube by grabbing the edge of it with a pair of pliers and twist as you pull. Set aside. Mix all purpose solution of choice in bottom of can using

2 ¼ c water. Pour out 1 c. and set aside. Cut a small “x” in center of plastic coffee can lid. Put paper towels in can. Pour over remaining solution to saturate the top half. Pull wipes through lid through center of the roll.

Cost Breakdown

1/2 roll of paper towels (Kirkland-80 sheets per roll) 1.65/2=.83

Solution .75 or .22 depending on which you brew

Container-free w/ purchase of coffee or other similar shape cont.

For $1-1.60 you have great wipes versus $4 for 75 store cleaning wipes!

You can use this same process to make baby wipes by saturating paper towels with the following solution:

2¼ c water

2 T. baby shampoo

1 T .Baby oil

Round wipes container

Censtible Mopping

I love my mop with the disposable pads, but it really costs to replace those cleaning pads and bottles of solution! Here's a couple of fixes that work for me and save me some $$$:

-With the exception of wood floors, you can refill the solution bottles with one of the homemade solutions above. I've actually gotten to where I don't even do that, but just use my spray bottle of solution to just spray down the floors as I go.

-Get some basic Gerber cloth diapers (the shorter thicker ones with a pad down the middle) and cut them in half crosswise. With your sewing machine, zig-zag the raw edges. Voila! Reusable cleaning pads that can be thrown in the laundry. I was able to score mine off our local freecycle yahoo group, and so they didn't cost me anything but a little time.

Easiest Glass Cleaner to Make!

Water

Paper Towel

Dampen a part of a paper towel with water. Wring out well so just damp. Wipe mirror. Seriously.

Automatic Dishwasher Soap

I know this is for the kitchen, but we're going to jump over there while we're on the subject of cleaning products. Mix equal parts Borax and Washing Soda. Store in a covered container and use 2 heaping teaspoons for each load. Some people in online forums complained of spots or a film, so I just keep a little decanter of vinegar by the ssink and add some to the jet-dry compartment on my dishwasher. It's been working like a champ!

Additional Laundry Tips:

*Try to do your loads of laundry in succession on the same day. As soon as your dryer sounds, remove the clothing and set aside while you immediately load the next batch. By keeping your drum hot, you don’t have to spend a portion of the time in the next round re-heating the drum. In my case, when I do a ‘super’ load and dry it by itself it takes 60 minutes each time. However, if I do them in succession, I’ve noticed I can do the first load for 60 minutes, and then do the subsequent ones For 40 minutes each! That’s a 30% reduction in electricity usage! I have found that if I set aside an afternoon 2x a week to hang around and be attentive, the loads are not overwhelming. If I do have that one stubborn item that isn’t quite dry, I just toss it in along with the incoming load.

*Check your dryer’s ventilation! Not only is it a safety issue, but it also makes a HUGE difference in drying efficiency! After my husband addressed the ventilation on our dryer (including the fixture on the exterior wall), we noticed that our dryer suddenly returned to the good ‘ol days of hot zippers and warm fabrics. It was like it got a second life! Here is a link to one website my Hubby has found helpful for appliance tips and repair. This link specifically goes to the page where he (the Appliance Samurai) discusses proper ventilation.

http://fixitnow.com/appliantology/dryervent_ultimate.htm

*Air drying clothing can be a great idea-especially for certain fabrics (see next tip), but be aware that drying large amounts of clothing indoors can work against you in that it can introduce large amounts of moisture into the air which causes your humidity level to rise. This brings with it mold, mildew, etc.

*Know proper fabric care. To make flannel and fleece items last the longest possible without pilling, wash in cold water and air dry. Also, try to air dry all sweaters as well as pajamas that have sheer trim (i.e. little girl princess nightgowns).

*Give your clothes a new shade. For lighter colored garments that are stained beyond repair, or for darker ones with bleach spots that can’t be blended with a marker; try dying them with Rit Dye from the store. Also, save pairs of jeans in varying colors rather than throw them out. That way you will have some on hand for patching kid jeans.

*Avoid matching sets. No, I’m not talking socks-I’m talking appliances! According to the Appliance Samurai, and other sites my hubby has found, It is a common consensus that the only people who truly think that you will recoup. your money on a new dryer (via energy efficiency) is the salesman. Dryers have gotten slightly more efficient through the years, but not to the point where you will recoup any savings to make it worth the investment. The only reason to buy a new dryer when yours is working is if you just HAVE to have an aesthetically pleasing matching set.

*Vinegar is a great fabric softener and –don’t worry-it won’t leave your clothes smelling a bit like a pickle! As with all detergents/soaps, you really don’t want it to get right on the fabric itself, so you add it to the rinse cycle. I have been using it in my Downy ball, and it works great-I just fill it to the little line and toss it in. By using vinegar in my remaining loads, the static is gone, and it has the added bonus of removing a lot of the residual soap that gets left in clothing over time.

Helpful Bathroom Tips:

* Put a small amount (about a tsp) of conditioner in the bottom of an detangler (or other squirt) bottle. Fill the rest of the bottle with water. Cap and Shake.

*Instead of putting a dollop of conditioner in your hair and rinsing out, try using a dime sized (maybe more for longer hair) glob and work through your hair as a leave in conditioner.

*(This one isn’t as applicable up here where our water is free, but pass this Tip along to your friends & family down south). For toilets that are not classified as ‘water savers’, place a closed quart size jar or two in the tank of your toilet. Be sure it does not get in the way of the mechanics of the toilet. These act to fill space in your tank so that you are not having to pay for so much water each time you flush and your tank refills.

* Refill liquid hand soap containers and save! Dilute liquid hand soap half soap/half water in a dispenser. Shake and use. If you have ever seen the dispensers sold that allow you to make your own foaming hand wash, you’ll see that you actually use a ratio of less than 30% soap to water. This shows that a 50/50 ratio is more than enough for effectiveness, as well as the fact that when you buy commercial, foaming handwash, you’re mostly paying for water and fragrance! Note: The soap will be runnier, and will kind of ‘shoot’ out, so be sure to angle the bottle down into your hand.

* Add a sprinkling of Baking Soda to Bubble baths. Not only is it a natural cleaner for your tub; it will also give you those luxurious bubbles w/minimal soap. Then you can reward yourself for all of your money saving work by pretending to be Julia Roberts in Pretty Woman!:) You can also make a baking soda paste to clean your tub if it's especially grimy. Smear it on and leave 20-30 minutes, and then rinse off.

Time To Get Down and Dirty in the Garage!

*Recycling! Yes, it’s a money saver! For a family of 5 (including when we had one and a half kids in diapers), we are able to pay for a one can pick up. We have 3 totes in the garage (if no garage, put outside with good sealing lids and bungees if possible. Be sure to rinse out any food items before tossing in bins). I have a garbage can in my kitchen next to the regular one, but this one says “recycling” all over it to help my kids distinguish. I put anything recyclable in that, and then when it’s full, I go empty it downstairs. When the bins are full I make a run. I went from paying arrow refuse $69/3 cans to $46/1. That’s a $23 savings! Plus, when you first start to recycle, go into the main office at the site, and ask for a dump-run card. Each time you recycle, stamp the card with the date stamp they have there in the recyclling area. After 20 stamps, you get a free dump run and save $20 more!

* “Standard 40 gallon hot-water heaters work like this: they always stay filled with water; they heat the water to the desired temperature; and then they keep it perpetually at that temperature. Manufacturers sometimes set hot water temperatures higher than they need to be—even to the point of making dangerously scalding water. You can easily take matters into your own hands by turning the knob to a lower temperature.

Consult your water heater owner’s manual for instructions.

Generally, the process of adjusting the temperature is straightforward. Simply look for the thermostat dial near the bottom of the tank and turn it to the appropriate temperature.

See how low you can go. Try setting your water heater as low as 115 degrees F or lower until you find the tipping point at which it is no longer hot enough. Then you’ll know you’re saving as much energy and money as possible.”

(courtesy of: http://www.sustainablechoices.stanford.edu)

Do, keep in mind, though, that some of us with radiant heat may only be able to turn the water heater down a little in the winter, and more in the summer (when the heater is off) since the water has to be warm enough to heat the house in the colder months. Also, you can purchase a timer that allows you to be able to turn you water heater off during the night, and have it come back on in early morning to have water ready to go for your morning shower.

*Be diligent about car maintenance. If at all possible, have you or your spouse learn how to change the oil yourself. It’s not complex at all-if you can unscrew and screw things on, you can change oil. For our suburban, it costs my hubby about $21 to change our oil (purchasing the case of oil at Costco) vs. paying Les Schwab $63.50-that’s right at a third of the cost!

*Consider cost of maintenance into car purchases. Imports cost more and their parts cost more-sometimes 2 or 3x an American, but last much longer. Minivans/Vans are extremely hard to work on, and cost much more in labor to a mechanic. When you are buying a used car, keep the mileage in mind. If the car is close to 100,000 (or over 5 years in Alaska), and the alternator, starter, timing belt/chain, water pump, battery, and spark plugs & wires have not been replaced, then get the prices and figure them into the price of your car. These parts are actually referred to as “100,000 mile parts” for a reason.

*”…You can’t afford a new car unless you are a millionaire and can therefore afford to lose thousands of dollars, all in the name of that neat new car smell…A new $28,000 car will lose about $17000 of value over the first four years you own it. That is almost $100 per week in lost value. To understand what I’m talking about, open your window on the way to work once a week and throw out a $100 bill.”

(Dave Ramsey in The Total Money Makeover, pg. 37)

That being said, your best bet when buying a car is to find one that is 2-3 years old with low mileage. Often, they will still be under the factory warranty, and cost thousands less than off the dealership’s lot!

Making Your Home Office Make Cents!

*Use website games/software that streams vs. programs that you load on your computer. This will reduce your need for constant upgrading and doesn’t bog down your computer as much. If you really want to save on your operating software and hardware, convert your system to Linux. (Many countries and states are doing it to get out of the constant need for forced upgrades). It looks and navigates similar to Windows, but it's much less invasive on your system so you can run older machines much longer. Plus it's FREE!! Also, check out other open-source software like Picasa (photo editing), Gimp (more in-depth photo ediiting), Open Office (office suite), etc.

*Plan ahead! I buy seasonal gear/kids clothes a year ahead at the end of the season for huge discounts. I also buy gifts all year long as I see sales. I have a storage place for all gifts, and I wrap them in grocery sacks and put the recipients’ name on it. That way when it’s time to send it, it’s easy to find, and I remember who it’s for. I also keep a basic spreadsheet on excel to help me keep track who I’ve bought what so I don’t overspend. If you can't keep all the gear or gifts in one place, be sure to make a note on your spreadsheet of where each item is! I've had a lot of people say that they have tried to do this, but ended up forgetting where they stashed the item when the time came to use it.

*USPS online-not only is it a huge time saver, but you get a discount by shipping via their website vs. in the post office. Delivery confirmation is included for free. Plus, if your package is small enough to fit in your mail box, then just put it in there and put the flag up, and you’ll save gas money! However, the downside to the website is it’s for priority and express shipments only. To save the most money, plan ahead and ship parcel post. Plus, with parcel post, you don’t have the 12x12x12 size requirements that you have with priority/express.

*Adjust your tax withholding. Go to the IRS.gov website. They have a Calculator on there to help you figure out your proper tax withholding-Even adjusting for what you’ve already contributed year-to-date. Brent Just did that and we got a $300/month raise in monthly income! There is no reason to keep your money with the IRS all year in order to get a lump sum back in February. That is like putting it in a bank account that pays zero Interest to which you have no access to your money in a pinch. After seeing California withhold their residents’ tax refunds, it’s made us think that too much tax withholding is akin to putting it in a high-risk bank account with zero interest paid! The only thing that the calculator did not account for was our PFD’s. So, we know that we need to set 20% of them into an account on the side to pay the taxes in the spring.

*My brother-in-law is a rugged man who is hard on his cell phones! Even with the insurance plan from the cell dealer, they were paying a pretty penny for replacements. This last time, they went to Walmart, bought a Pre-paid phone that was w/ the same company as their contract, andreplaced the SIM card out of the old phone!

Another option is to check the website for your cell provider and see if they sell refurbished phones. My husband replaced his phone for $12 ($20 with 2 day shipping) versus paying $50-$75 at the store.

*Debt-While this is just a short overview of saving money around the House, I would do us all a great disservice if I did not at least mention one of the greatest wastes of money that there is: Finance Charges. There is a maturity and self-discipline that must be present to be able to recognize that lack of affordability and to follow that intuition rather than give into vain wants. There is also a self-confidence that must be present to feel secure enough in your identity and situation to be honest and say “You know what? I can’t afford that as much as I would like it” vs. faking the lifestyle but running yourself into debt. Going into debt, whether secured or unsecured will put you in bondage to the lender. The longer, and more often, you incur debt, YOU ARE PAYING SOMEONE TO ENSLAVE YOU! There are a few tools that I highly recommend for getting out of debt ASAP:

1. A Total Money Makeover-While there are many solid financial advisors out there, I personally endorse Dave Ramsey’s plan for getting out of debt more than the others I’ve seen or researched. Why? He’s straightforward, unattached to corporate entities, and aims to help us get back to basics. He has many budgeting ideas that may/may not work for you, but when it comes to his “Debt Snowball” and “Gazelle Intensity”, I can honestly say it’s the one approach that has finally worked for my husband and I. At the core of this method is being educated about basic finances, setting serious financial goals, and getting relentlessly intense to achieve them. What’s the secret to his approach? Tough Love, Baby!

2. A Debt Prepayment Calculator-This handy, online tool has you enter your balances, finance charges, and minimum payment. Then it shows you how many payments you have left to pay off that account and how much you will pay in total finance charges. Just a warning-that number can be eye-opening and scary! Next you enter in the amount that you can pay in addition to the minimums towards your debts, and it calculates the adjusted total finance charge paid and the number of payments remaining. Here is one calculator I found:

http://www.calcxml.com/do/det07

3. Line Chart-My husband asked me to make a line chart to give him a visual idea of the size and repayment process of our debt. I made a simple grid with the $ amount going up the sides (y axis), and the names of the months across the bottom (X axis). Then the amount of each account has been plotted and tracked in a different color. Not only did this give him a visual, it became a huge accountability tool for us as a couple-especially me as the bookkeeper. As a line went up, it was obvious, and there had better be a good reason. And now (since our credit lines are closed), if a line does not go down in as steep a slant as we’d planned, I had better have a good explanation for where that extra money went that month! I have not been the most disciplined person in regards to turning down a “Good Deal”, so what I have realized through this chart is that what I lack in self discipline, I must make up for in accountability.

   
   

4. Some sort of Cash Based Budget-Whether you use a computer tool, envelope system, or just “cash on hand” budgeting, be sure to use a system that involves paying with cash as much as possible. When you plop down cash for something vs. just handing the plastic, the ‘cost’ of it is a very real thing at that moment-not later when you’re balancing your checkbook.

“Dunn and Bradstreet did a study which made this comparison, and the results that they found were quite surprising. Statistically they found that on average you will spend 12-18% more when making a purchase with a credit card as opposed to cash. They also discovered that the average McDonalds transaction increased from $4.50 to $7.00.”

(courtestyof: http://www.associatedcontent.com/article/142336/do_we_really_spend_more_with_credit.html?cat=3)

We have found that paying with cash also has the side benefit of eliminating wasteful, exorbitant bank fees. Limited account activity reduces the probability for making mistakes in your bookkeeping.

5. Like Minded Friends-I have learned to avoid surrounding myself with people that are not a good influence; just like with any other habit that needs breaking. Not only do I limit how much I am around people who are busy “keeping up with the Joneses” themselves, but I try to spend my time with people that I know are in similar situations as we are and can support my lifestyle choices rather than ridicule them.

Finally, begin looking at financial obligations as Risk Management. Dave Ramsey often makes the point that “Debt equals risk”. Elizabeth Warren, a Harvard Professor and author of The Two Income Trap reinforces that concept with the explanation that the longer you contract to finance something, the longer you are putting your family, or self, at risk for financial disaster:

“Pay particular attention to timing. In finances, long term commitments are the most dangerous kind. Sometimes they are unavoidable such as when you buy a home, or go to college. But wherever possible, go for a shorter commitment since that will give you what you need most in times of trouble-flexibility...If that drives the price up too high, then heed the warning-you cannot afford this...and should opt for something cheaper…Details may vary on any loan, but think of every long term commitment as walking a tightrope-the longer your family is on the rope there is the risk of disaster. Take the shortest walks you can.”

When I speak of risk management, I want to take it beyond just loan payments. I'm also referring to any form of contractual obligation that will bind you to pay on something regardless of employment. A good example of this is cell phone contracts. Since the economic downturn, I've heard from a couple of financially challenged people that they wish they could get rid of their cell phone, but unfortunately they were locked into contracts. You see, those providers don't care if you prioritize food and shelter over paying their bill; they don't. To them, all they care about is that you fulfill your contract and they get your money. Yes, you may get a discount on a phone, and they may even roll the cost into your contract, but basically what you did for that discount was go into debt, and I can guarantee you that if you had cash, you would have been able to buy that phone for a better price. Most cell providers now have some sort of no-contract plans, as well as pre-paid cell plans. You do not need a contract to get a good deal on a phone and a decent plan. I'm proof of that. I got an unlocked Blackberry on craigslist for $100. I use a pre-paid plan in which I pay for the minutes as I need them (unlimited mobile to mobile and .10/minute otherwise), $10/month for text-messaging and $5/month for data with roll-over options. Since I don't use my phone constantly, I can put $25 worth of minutes on it, and depending on what's happening, that will last me a month or 3! Then I just pay $15 for the other features as I want them-no contract!

What it all boils down to is that when you sign a contract, you have basically guaranteed your tomorrows, and none of us has the omnipotence to do that. We have no idea (and no right!) to pledge that we know what will happen in the days ahead. I have personally had friends and loved ones that have contracted leases and loans for business equipment in order to get the tax write-offs. Yes, on paper it looked great, but what the financial advisor failed to take into consideration was the risk factor, and suddenly when their business dried up, they still had these obligations, but no income to pay them. Regardless of how well the formula adds up in your ledgers, you must consider the risks and how it would affect your finances if your income disappeared immediately. To quote Elizabeth Warren once again “...every long term commitment as walking a tightrope-the longer your family is on the rope there is the risk of disaster. Take the shortest walks you can.”

*Beware of financial gurus who are all about your credit score, and who say there is such a thing as good debt vs. bad debt. While your mortgage may be for a good item, it does not mean that paying a lending company interest on a mortgage for 15 or 30 years is good! (Pay that sucker off ASAP just like any other consumer debt. Can you imagine how amazing it would be to not have a rent or house payment?) Yes, there is a difference between secured and unsecured debt, but debt still equals risk, and I can’t think of any riskier way to jeopardize the security of your family than to put their financial well being at risk indefinitely-as we are seeing on the news every night these days.

*One last item on the concept of debt: Stuff is really worthless. You get a big realization of that when you look around your home for things that you could re-sell to get money. We were trying to figure out what we could liquidate in order to pay off our cards faster, and most of the ‘stuff’ I just had to have and charge on my credit card, has little or no resale value. Talk about serious depreciation!

Posted by Hillary at Home at 2:03 PM