• 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!


    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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A Little Savings Can Go a Long Way

My son has discovered money.

Now, he’s only two, and he hasn’t figured out money will allow him to take all those toys home from the toy store. But he does know two things:

1. Coins can be put in a video game or crane machine for a bouncy ball.

2. Coins can be put in a bank (though I think the pleasure lies solely in the actual act of putting the coins in.)

In fact, we just went to Cici’s Pizza last night, where the all-you-can-eat salad and pizza buffet is only $5 a person. In the back, there’s a game room, and it’s been a tradition for us to go and spend a quarter to get a small bouncy ball. After this, my son is usually just as happy “driving” the race car simulation game as anything, and we just let him play on the introduction without putting money in!

But I’ve noticed that when we get home, my son really likes to put his coins in his bank. Once his coins are all deposited, he begs us for more. So I’ve taken to saving my change to give to him.

And while saving change seems like a small thing to do, it’s actually very effective, especially when you are saving for something! I actually have my own change bank, which I emptied out right before we moved. After just a few months, I had $40 when I emptied it!

This was effective, but it was so easy to raid my piggy bank when I knew I’d want a Pepsi from the church vending machine or when we were taking the toll highway. I didn’t have a goal to save for, so the change was available for every whim. I’m sure I would have saved more if I hadn’t been playing the Viking!

Giving the coins to my son changed that. It’s absolutely gratifying and terribly fun to see how excited he gets putting a few pennies and nickels into his bank. And I feel like when it’s in his bank, it’s his money, so I don’t dare take any!

I don’t know what we’ll do with the money – maybe we’ll save it up for something big he’ll need in the future, but because it’s his it will stay there – except for when we go to the bank and deposit it into his savings account.

I’m still using my coin bank, but I’m also still raiding it. What would motivate you not to spend the money? Where could you put your extra coins when the day is done so they actually add up? If you don’t have a child, would a picture of what you are saving for motivate you to keep your hands off? What about a bank you’d have to break to open?


A little extra money never hurts

This month, we find ourselves in a much better financial position. Our Ebay sales have been great and we’re moving a lot of product. This means that we’ve been able to pay all our credit card minimums and more just from that money. Previously, paying the minimums and a few hundred extra on our personal Citibank card was all we could manage, and it took almost the entire second paycheck we get each month. So for us, liquidating our business inventory and equipment has been a really wise move for us. It also means we’ll pay off the cards that much sooner.

Because our paycheck didn’t have to go completely towards bills, my husband and I splurged a little bit. Last Saturday we spent $100 to pay for a babysitter and a nice meal at a Hibachi restaurant – something we haven’t done in literally years. And since we haven’t had a night out alone in almost a year, it was well worth the unnecessary expense. Could we have done it cheaper? Probably. Would we have? Well, let’s just say I think the money was well spent!

The extra money coming in was also perfectly timed with the arrival of our bi-annual car insurance premiums, so that $330 will come painlessly out of the paycheck – painlessly in the fact that we don’t have to figure out how to come up with it! (And yes, our rates are very low. We got that rate – about $330 a year per car – due to not only our clean driving records, but a good credit score and the fact that we have our Homeowner’s insurance with the same company. Plus we live rurally, so rates are generally lower.)

We’ve been thinking about how to best take advantage of the fact that through our business, our credit cards are basically paying themselves. And we’ve decided that for the next couple of months, we’re going to put as much of that extra paycheck towards our emergency fund as possible, and build that up. We’re also increasing our grocery budget to $150 a month, especially because pregnancy has made me very hungry all the time. 🙂 To be honest, I’ve been working with a “don’t spend anything” or $100 budget for so long, I’m a bit overwhelmed by how much extra money I have this month to use for groceries!

To be honest, that is where there is a problem.  I’m realizing that the urge to spend – when I have the money – is still there.  I’ve improved – a lot – but it still worries me.  Today I’ve found myself thinking it would be fun to go shopping.  But the thing is, I don’t need anything.  If I go to the store today, without an immediate need, it is very likely I will find something I “need.”

I do have one suggestion that works for this – it helps to make a list of things you will need in the near future – light bulbs,  towels, etc – things you need but you keep putting off.  When you get that urge to shop and give in, go shop for the things you will need, rather than shopping just to browse.  That way you waste less money (only the fact that you might not buy on sale will cost you) and you buy a need rather than an impulse item.

The only thing I can think of is yarn for a baby blanket.  But I need to put that off until I know whether I should get pink or blue!

Saving for the Kids

My two-year-old son’s savings account has nearly $700 in it.  I had no idea it had climbed that high, but I just got a statement from the bank.  We started the savings account shortly after he was born, putting $25 into his account each month through a direct debit from our checking account.  (This is our checking account in North Carolina at the Credit Union which has our emergency savings fund and into which my father-in-law deposits his half of the cell phone bill.)

It has never occurred to me to use that money for our debt.  The money is off-limits to us, because it belongs to my son.  It’s important that we continue saving for his future, just as my parents did for me.  When I married, my mom gave me some savings bonds to cash that she took out for me when I was a baby.  It wasn’t enough to buy a semester’s worth of books, but  it was enough to buy my husband a handsome gold band.  (And my parents helped a lot with my college expenses, too.)

I want to be able to do that for my children.  I want them to have some money to help get them started – whether they use that money for college, for job expenses, or some other item.

I hope to teach my children the value of investing.  I hope that my husband’s and my guidance will teach them to use that money wisely – for something that will add to their value – an education or an non-depreciating asset like a house.  I’ve been reading a lot of blogs in the past few days that talk about teaching kids about money, and I think they are well worth reading.  In fact, several bloggers have been very age-specific!

Madison at MyDollarPlan talks about teaching infants and toddlers about money.  We’ve got to get a will together, and she mentions investing in a 529 (which we have, but need to contribute more) and not buying life insurance for the kids.

If you have preschoolers, check out PaidTwice’s article on Teaching Preschoolers About Money.  She’s got some really good points.  A personal favorite of mine was the article she wrote about how she taught her three year old the value of two dollars – I was amazed that her son was able to forego immediate gratification to get what he wanted more!

Lynnae at Being Frugal talks about Personal Finance for School-Aged Children (specifically ages six to nine and nine to twelve.)  While I don’t have kids that age, I’ve worked with them as their teacher before, and I think Lynnae’s ideas are perfectly suited for each age group and what they understand well.

Check out these blogs if you haven’t heard of them before – I always enjoy reading them.  Their comfortable style of writing and good grasp of the issues really make them useful in a journal to financial freedom!

On the Path to a Paper-less Kitchen

One of the principles of both environmentalism and of frugality is easy: “Don’t waste.”

If you don’t waste it, you don’t have to buy more. You don’t have to use up more resources. You don’t have to throw more away.

In that mindset, a few months ago I started avoiding the use of paper towels and napkins, among other paper products. In fact, I went so far as to go out and buy a pack of bartender’s cloths at Walmart for several dollars.

The Bad Penny's

I’ve also salvaged dish cloths, including many my mother-in-law gets during Christmas from her 3rd grade students. It’s not a pretty picture, but you can see my towel drawer above.

I avoid using these for the really icky things – the mice the cats like to kill and leave for us, blood from hamburger meat that gets on the counter. In the case of the blood, I don’t trust that our washer gets hot enough to kill any pathogens involved, and as for the mice, well…the thought of something touching my counter that picked up a dessicated mouse – no matter how many times it’s been washed – is just really disgusting!

I keep a small plastic wastebasket under the sink, and I throw the used cloths in there (another reason not to use it for hamburger blood!) When I go around collecting laundry, it’s just another stop.

To be honest, it’s so ridiculously easy, I don’t know why I didn’t do it before. It really doesn’t add any strain to my workload, because normally the small cloths will nicely fill up the last little bit of the washing load. And it sure beats going up to the Sam’s Club every couple weeks to buy another pack of paper towels!

But does it save money? Definitely.

We were buying about 4 – 12 packs of Bounty paper towels at Sams Club every year.   That’s $60 a year of paper towels. We were going through about a roll every week.

In the past six months since we’ve started using cloth, we’ve only had to buy a pack once – when we moved into this house. We still have about 5 rolls left. That means we’ve used about a roll a month! We’ll only buy one pack of Bounty in the entire year, saving us $45 (and considering our grocery budget right now, that’s a large amount.)

Of course, we have to look at the cost of the cloth, too. I can’t remember exactly how much I paid for our 10 bartender’s cloths, but I want to guess it was around $7. The rest of the towels were given to us or we’ve had them for years. Washing doesn’t cost any extra, because I’d be running that load with or without the cloths, so there’s no need to add anything for that.

This year on paper towels, we will save a net amount of $38 compared to last year. Next year, we’ll spend even less since we won’t have to buy more towels. Not to mention the amount of trash reduction! (It scares me to picture taking three of those 12 roll packs and just throwing them away. That’s a lot of trash!)

I’m keeping my eyes open for more dishcloths that  people are getting rid of!