• Like a bad penny, debt always turns up…

    unless we change how we interact with money, of course!

    The Bad Penny is dedicated to two pursuits: getting out of debt and staying out of debt! It recognizes that frugality and caring for our planet go hand in hand, and that our unsatiated need for stuff is hurting us in so many ways.

    Easier said than done!

    Disclaimer

    I am not a finance professional. I write about the world as I know it, and my advice may not be the best course of action for you! Please seek qualified advice for your particular situation.

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Tax Rebates!

I’m so glad to hear that they’ve passed the tax rebate.  Do I think it will stimulate the economy?  No.  But that’s not why I’m happy.

I’ll admit I’m being very short-sighted when it comes to the tax rebate.  But I’ll be honest in saying that we have two major expenses we need to come up with money for in the next several months, and the tax rebate coupled with our likely tax refund will not only cover these expenses, but leave extra money to put into paying down debt or paying up our emergency fund.

1. I mentioned this before, but we have to put new windows in upstairs.  There are three of them and they are single-paned, screenless, original 1940s windows.  Last summer they were painted permanently shut, but my husband managed to get one to open just as it got too cold to open them.  It was so hot in that room you would immediately sweat as soon as you went upstairs.  A few days ago, during a particularly cold time, I went upstairs to find that the windows had iced over – on the inside.

We pretty much keep this room closed off, but late this summer, this room will become my son’s new bedroom.  As such, we have to make sure the windows work (in case of an emergency as well as for circulation) and that they insulate the room from the cold – and the hot when it becomes unbearable enough to turn on the air conditioning.

We estimate about $200-$300 a window if we install ourselves, but we haven’t begun to price this yet, and the last time we bought a window it was pre-September 11th.  Prices have surely gone up!  We did see an advertisement on TV for windows – bought and installed – starting at $169.  It will be worth looking into, although I’m dubious those windows will be worth it.  I want to make sure we have quality windows if I’m going to pay for them.

2.  The other expense we need to look at is the supercharger in my car.  It’s quickly failing, and it’s costing us in gas mileage. We only use the car when my husband is at work and I have to run to errands or appointments.   I’m not sure what this will cost us.  It still runs and will continue to, but we will pay for the failed supercharger either in a new one or in gas!

Needless to say, this tax rebate is a blessing for us!  I’d love to be able to put the full amount toward debts, but these repairs are necessary, and hopefully we’ll have some left for debt!

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Changing Life!

Well, our lives are about to get significantly different once again – we’re pregnant! I’m wonderfully excited and hoping for a girl to match my boy. Hey, our three cats are boys – I’m really quite outnumbered here! I’m due in mid-September, so we have plenty of time to get ready.

I think the best part about having a second (or third, or fourth…) child is that we already have a lot of what we need. We saved a lot of our first son’s things, so if we have a boy, we have lots of clothes. We have a crib, changing pad, pack ‘n’ play, and pretty much everything else. If we have a girl, we’ll need some clothes. Either way we’ll need diapers, but I’ll be looking for cheap used cloth diapers at diaperswappers.com so we should be set by the time baby comes!

Thankfully, my husband has really excellent medical insurance that covers the whole family. Our church (my husband is a music minister) also provides the full amount of allowed contributions for a Health Savings Account each year. This has been such a blessing. After three years of really having to consider if we could come up with $200 to go to the urgent care for a strep test it’s an incredible feeling to just be able to go and know it’s covered, one way or another. (I was on Medicaid while pregnant with my son, and he was on Medicaid until we moved up here.)

So there are lots of new things to think about, but our main focus is still going to be paying down the debt. \

We have to figure out how to afford new windows upstairs as well. The original 1940’s single-pane painted-shut windows do not make a comfortable bedroom, and our son will be moving up there to make room in the nursery. With the cold snap this past week, the windows actually had ice on the inside. We generally keep the room closed off, and the oil heat is pretty much ineffective against the cold coming in the windows.

We don’t want to go into more debt, but if we can’t figure out a way to make this work, we may have to. So far, our plan is to buy them at the local home improvement store and install them ourselves. We have a few months to save up. Well, okay, my husband and a friend will be installing them! I’m not going up a ladder at 6 or 7 months pregnant!

My car is also going to need an expensive repair in the new few months. It’s the supercharger, so it’s necessary. We’ll be figuring that out, too.

Selling our business on Ebay has actually done really well, so we’ll have some money to snowflake this month! It’s not lucrative, but we’re getting enough to cover the original costs of the jewelry after paying shipping and fees, which was our original intent. Hopefully, as we gain feedback, we’ll sell faster. 🙂 Thank you if any of you have patronized our Ebay auctions. We still have about 2/3 of our products on Ebay now – only 2000 more to go. Wow. Yes, it’s a lot!

So…give me tips – I need ideas for cheap, good windows!

You Might Be Living Frugally If…

Good morning all!  Yes, I’m happy.  I got a really good night’s sleep, after spending several hours traveling out to Minnesota to visit family and celebrate my niece’s second birthday.  (And if we are just a bit lucky, her little brother will be born before I have to get back on a plane.)  So if by any chance you were wondering why I haven’t posted much this week – I haven’t given up!  I’ve simply been busy with laundry, packing, and flying.

I wandered over to frugaldad‘s blog this morning where I saw a very clever list – Jeff Foxworthy style, as he puts it.  It was titled, “You Might be Living Frugally if…”   I highly recommend it.  I laughed when I recognized myself in some of his list!

I could think of several things frugaldad didn’t list, so I thought I’d add to the list in my own blog.  If you are a blogger, continue this list with more items on your own blog, and post a link here! Of course, if you prefer, just stick your idea in the comments.

Here they are, in no particular order:

You Might Be Living Frugally If….

1. Your idea of a nice “date” has become a free library video and a homemade pizza.

2. Your child has learned the lesson “don’t waste.”  He picks up any food he drops on the floor and eats it.

3. When gas prices are higher than normal, you only buy $10 worth of gas at a time.  When it’s priced normally, you might buy $20 worth.  $20 fills a quarter of the tank, so you’ll be buying gas again the day after tomorrow.

4. Instead of throwing away a pair of jeans literally falling apart at the seams, you buy a spool of jean thread and get to work!

5. Much of your home decor is “custom-made” – that is to say – you made it.

6. Your husband questions, “Why buy a snowblower when shoveling by hand is cheaper and good exercise?”

7. You actually consider the “One Square of hygenic paper rule.”

8. You’ve hacked your Swiffer Wet Jet cleaner container so you can put a vinegar/water solution in it.  And you use an old washcloth attached with safety pins instead of the expensive store-bought mop clothes.

9. Your guest bath has brand new towels (bought on Black Friday for $3 each.)  The master bath towels have large holes and stains, but you won’t throw them out because they’re still absorbant.

10. You add water to your bath products so you can rinse out every last bit.  And you cut your toothpaste tube open, because after the tube is completely flattened, there’s still a week’s worth of toothpaste in there!

The Winter Wind Storm and One Dead Grill

Well, it’s almost 10 p.m. and I’m just sitting down to think about the topic I wanted to write about today – Part 2 of my Paperless Home series. (But I won’t tell you what it entails, in the hope that you’ll stick around to read it!) I don’t know if I’ll get to it. I’m very sleepy.

And why am I so sleepy at 10 pm? Boy, what interesting night last night!

We went to bed at 11 pm, which is actually really early for us lately. The probability of a good night’s sleep was high.

Except for one thing. Some of you may have heard about the windstorm that hit northeast Ohio early this morning. And I mean early. I awoke at 2 am to the wind howling. Now, I’ve lived in coastal North Carolina for the past 5 years, and while we didn’t have any major hurricanes, I did experience a few category 1 and 2 ‘canes. My first thought was, “It’s a hurricane!” According to my friend, the news was stating that gusts did reach hurricane strength (which is at least 72 MPH.) I don’t know, because we didn’t see the news until this afternoon.

Then, remembering that I now live about 1000 miles from the ocean (that’s a rough guess,) I got up and went to the window. Outside, the trees were blowing just like the hurricane-bent palm trees in Florida! For reasons I can’t remember now, I went into the kitchen and turned on the back light – I know I was concerned about the glass-topped table we have out on the deck, and our 8 year old Thermos grill we got from my grandparents as a wedding present. They’ve tended to slide around a bit during high winds in the past. Even worse, while the table was still standing, the wind had managed to topple the grill right onto it’s front!

I vaguely remember getting into bed and expressing concern to my husband that the propane tank attached to our grill looked slightly askew, and would it blow up the house? After being assured that it was both closed and empty, I went back to sleep.

Until 4 am, when the LED display on my alarm clock and my personal clip-on fan decided to play chicken with us, turning off, waiting until we were just about asleep, and then turning on again in all their clicking and whirring glory. And again, as we drifted off, they would suddenly turn off, the void jerking us awake again. Eventually they turned off and didn’t come back on.

At 6:45 am my son woke up, and frightened by the howling wind, started crying. At this point, you would have found me rummaging in the dark for the emergency candles and matches. As he got really scared, and I still couldn’t find a candle, Daddy braved the dark and brought him into the living room, where we started a fire in the wood stove and tried to sleep on the couch and floor in front of the wood stove until dawn.

Our power turned back on about 12:30 this afternoon. My husband uprighted the grill, but he told me it was a total loss. All I can see through the kitchen window is that the grill lost it’s cover handle and a lot of insides! Insurance will “cover” it, but we have a $500 deductible, so it’s off to Craigslist! (Well, maybe closer to summer, anyway. We don’t use the grill in the winter anyway.)

So long story short, this eventful (and sleepless) night reminded me of why I prepare for things like this. We had wood in our woodbox, a flashlight hanging at the top of the basement steps, emergency candles and matches above the sink (though I do need to keep candle holders in there, too – finding those in the dark was the hard part!) and food in the cupboards that can be eaten without things like milk, so we didn’t have to open our fridge.

And this was without really planning – we didn’t know this storm was going to come up because we weren’t paying attention to the weather. If we had planned, I would have made sure we had also stored water to drink and flush toilets, because our water pump requires electricity.

A good friend reminded me that we should invest in a generator, because in this area – the snow belt of the snow belt – power outages are common in winter. We used my father-in-law’s generator in North Carolina, because he had an extra. We’ll have to consider buying one in the future, but I hate them because they are loud and gas-guzzlers. A better idea would be to eventually use solar panels as a backup (or primary!) source of electricity.

Boy, though, am I glad I was as prepared for an outage as I was!

My poor grill. 😛

Money Marriage

I’ve read that one of the biggest challenges for any marriage or partnership is money. If you are married, that comes as no surprise! After all, money is one of those things that permeates nearly every aspect of our lives.

Even after being married seven-and-a-half years, my husband and I still fight about money – usually when one of us doesn’t like the way the other spent it! In fact, it is because of this that we’ve laid some ground rules I think are important for any couple:

1. Allowances. Each month we each get a portion of the paycheck for our own discretionary spending. We can spend it on anything we want, and the other person isn’t allowed to say a word about it. In the past we haven’t had much money, so it’s been $40 a month. Lately, we’ve had even less, so we are currently getting $20.

It’s not a lot of money, but it’s enough that we don’t feel deprived if we want to buy a soda when we’re out and about or more yarn for me!

2. The $50 rule. Any time we want to buy an item more than $50 out of the household budget, our rule is that we have to talk to the other person. There are some exceptions – if I’m buying a lot of groceries, for example. Or paying bills.

This has been very helpful to make sure both of us know what is being spent! In fact, it has come to the point that we discuss nearly every purchase that comes out of the family budget – groceries being the exception, again.

3. The 24-hour rule. Along with discussing expensive purchases, we buy very little without waiting 24 hours to do it. Many times, by not buying an item on impulse, we’ve saved money – we waited until the item went on sale, or we found a better price elsewhere. We’ve saved the most money when we’ve realized we didn’t really want to buy it after all!

4. Read contracts closely and be picky about wording. In the past couple years, we’ve had several companies who didn’t keep up with their end of the contract. One of these companies gave us a terribly written contract that we signed. When they didn’t do the work, it ended up costing us, although we did get about 60% of our money back. The rest is reflected as about $1000 in credit card debt, plus interest for the past 3 years. If we had refused the shoddy contract for a better one, we may have been able to get it all back.

There are other important considerations, too, that aren’t specifically rules for the household :

1. As young(er) adults, we realize we’re not going to have everything our parents have, and we don’t expect to. We have old appliances, old hand-me-down cars, and Walmart clothes. Our parents have spent years building up a quality wardrobe and maintaining their appliances so they’ll last. Not to mention they’ve been working in their fields for years, so they make a lot more than us!

We can’t expect right off the bat to maintain the same standard of living on well less than half of what one of them makes! (Incidentally, this was very hard for us to understand early in our marriage. Thankfully, we didn’t manage to run up debt then!)

2. We need to continually plan for the future – paying down our debt, saving for big ticket items (instead of charging them) and saving for retirement and college.

I’m sure there are more, but I can’t think of them right now. Anyone else have some ideas for this list?

The Disappointment of Debt

In my December Progress Post I mentioned I was disappointed that between new purchases and payments on our credit cards, we’d only managed to pay off a positive amount of $600, especially because that’s basically the minimum payments on our four credit cards. Several of you commented to me that I shouldn’t be disappointed, because $600 is a lot. One person even took the time to calculate that at $600 a month, we’d be debt free in three years!

I’ve been thinking about that a lot. Really, I’d just love to see this debt disappear. To suddenly win the lottery or some other lump sum of money – to pay it all off and raise my net worth from a dismal double negative number to something that at least doesn’t appear in red! (The sale of our previous home will help that, too, of course!)

But would that change the way I interact with money? Probably not. In fact, coming into enough money to pay off our debts may be the worst thing I could have happen to me.

Paying off this debt is a learning process – not a punishment. And the time it takes to pay off this debt may very well be proportionate to the amount of time it takes for me to realize that having the debt paid off is not what will make me content with life.

So part of me is still very disappointed that it will take up to three years to get out from under our credit card debt. To be honest, that part of me was shocked that this couldn’t get done in a year, although it is a rather unrealistic part of me. It’s even harder to think about the fact that my student loans are the same amount as the credit card debt, and our mortgage is 4 times that size! (Can you tell I’ve become accustomed to immediate gratification by the fact I want it done now?)

My practical side is starting to see that this is a great opportunity to be forced into doing something good for me – something I want to do, but would never accomplish on my own without some kind of coercion. Each step we take is one more step along the right path – a path toward financial and material freedom.

Talk about baby steps! Sometimes the fact that I am waiting until I go out to run my weekly errands to get an item I want instead of going out just for that item is an accomplishment (there’s that immediate gratification being nipped in the bud.) Other days it feels great to find a new way to repurpose an item to fill a need, or to know the value of hard work.  Other days, it’s a struggle for me to not be depressed at the hole we’ve dug ourselves.

So I’ll keep on going, because this path is a long one. Thank you to everyone who has encouraged me and reminded me that I am accomplishing quite a bit!

Happy New Year!

Happy New Year everyone! Our year started out with a big snowstorm and a lack of plows. I managed to get my visiting parents to the airport, but we’re expecting several inches over the next day-and-a-half or so. Being in the snow belt of the snow belt, our cars are already pretty much stuck unless we want to spend some time digging out, so we’re being wimps and relaxing in the warm house.

Of course I’ve come up with some New Year’s Resolutions, as I’m sure many of you have. I’ve come up with ones that are along the lines of what I’ve already been doing, with a few extras thrown in:

1. Continue to live thoughtfully – spend less, reuse more, recycle and compost what I can, etc.
2. Pay off our personal Citibank and our Suntrust credit cards by the next New Year. (According to our snowball calculator, these should actually be paid off in October. Nothing like setting your goals low, lol.) Hopefully we’ll be well on our way to paying off our business Citibank card by January 1, 2007, but I don’t want to set the goal too high and fail when we have a surprise bill.
3. Put at least $50 into savings each month.
4. Stop drinking pop on a regular basis – this includes not having it in the house unless we are having a party.

In addition to these, my husband and I have decided we will not purchase high-sugar foods after we eat what we have (we’re too frugal to waste even junk food!) We will also avoid healthier foods with refined sugars and flours, as I suspect these may be partly to blame for some chronic health issues I have had. Our diet will contain more proteins and vegetables, some fruits, and a few grains. Hopefully. 🙂

Other than that? I just hope to live more thoughtfully, continually thinking of ways to reuse what I have, recycle what I don’t need, and make what I do need myself!