Middle Path Finance

Netflix vs the library: the fight for our entertainment dollars

I am convinced Hubby and I are one of three households in America who do not have cable. I bid adieu to that spendy luxury when I moved away to college at 18. After that, I couldn't even afford a TV until age 24 (and it was an in-kind exchange from a boyfriend who owed me money. Romantic), let alone a cable package.

Lately, with long days taking care of our 10-month-old, the daily hours of cleaning up after ourselves and said baby, long days trying to work, and plenty of working nights that begin the minute baby goes to sleep at 9:30 p.m., I've been seriously yearning for some mindless entertainment. Mostly, sitting in front of the TV vegging out for an hour or two.

We considered cable. Too spendy. Cheap runs thick in our blood. We don't have enough time to veg out to rationalize spending $60 or more on cable every month. That's when I started secretly lusting after Netflix. It started like a casual affair. I started walking by the site, throwing casual flirty glances at the monthly subscription prices. Then, it grew into a full-fledged affair, roping me in with its generous list of 1960s B movies and Bollywood classics. (Who would have guessed they had Corpse Grinders II??)

It almost turned adulterous when I filled out the membership information. Hovering over the send button, I just couldn't do it. For once, I was giving myself a bonafide Cheapache. Usually it's hubby who does that.

I was moping. Dreaming of DVDs dropping through the mailbox this week. We've had 12 inches of snow and for several days the city has been virtually shut down.We are under a level II snow emergency, which means everything is closed, and we can't drive anywhere. Miraculously, or sadly, Larry the mailman has faithfully delivered our junk mail flyers and tax forms every day this week, despite being knee deep in snow. Wistfully, I thought, he could be delivering our NetFlix videos, too. How awesome would it be to snuggle up with a movie now that we are trapped at home?

Only last night, when the snow stopped and the city started to dig out did I start to feel mildly better. I pulled on my boots. I needed to trudge to the public library to pick up Judith Levine's "Not Buying It." I have a story due next week on super frugality, and I am interviewing her on Monday. It's always better to read the book before you interview the author. Don't want to sound silly, after all. 

The basement of my local libary is wall to wall videos. I used it a lot when I was too pregnant to do much but get off the couch, but hadn't given it much thought since then. With more snow in the forecast, I thought it would be wise to peruse the selection and grab a handful of videos to get us through another potentially snowbound weekend.

Standing there, in the As, I made a pact. I would not pay for or sign up for a Netflix membership until I had watched all of the videos in this library. No, any video just because it's there, but all the movies I want to see, missed at the theater, were vaguely interesting, or would inform me of some piece of cinematic history or the cultural dialogue. I would make all of this more palatable by organizing library movie nights around themes, to make it more fun for me and the hubby I was going to drag reluctantly into this orgy of popcorn, quantity alone time, and free DVDs.

Tonight is French & Saunders night. A little BBC comedy from the creators of Absolutely Fabulous will set a nice tone, and give us a good cheering up. Saturday night is 1970s camp: Cannonball Run and Every Which Way But Loose. Hubby watched zero television growing up, and missed out on these <ahem> classic films. Now he'll have something to talk about with our friend Brian the movie buff, who is also the author of "Wild Beyond Belief: Interviews with Exploitation Filmmakers from the 1960s and 1970s."

He needs to have something to talk about with my friends, right?

Luckily, it looks as though we will have fuel for many theme nights to come. Next week? Diane Lane. Yes, the library even has a copy of "Streets of Fire."  

I'm sure Alfred Hitchcock night and Charlton Heston night will be part of our not too distant future. It looks like the library has trumped Netflix. At least for now.

The subtle beauty of the cheap Valentine's Day date

I really look forward to Valentine's Day. Yet, I would be horrified if hubby marked the day with roses or diamonds. This year, he knows he'll be in trouble if the day ends with any kind of chocolate other than that in the mushy pudding cake at the Ponderosa Steakhouse buffet.

By now, you must think I am crazy, and I am when it comes to this holiday. Seven years ago, on our first Valentine's Day, we decided we would always mark the occasion at a cheap restaurant. Something not dressy, not fancy, and where the average entree (nee, buffet) cost no more than $10.

So far, we've eaten at Shoney's (twice), Golden Corral,the Chinese buffet, the sushi buffet, and White Castle.

This year, we are going to Ponderosa. And not just any Ponderosa. THE Ponderosa, where I had my first job as a food bar attendant and waitress at age 16. This job was a doozie.

You haven't lived until you've watched hungry churchgoers during Sunday rush fight over the last chicken drummy. You really haven't.

At this point you are probably scratching your head and wondering why we insist on cheap Valentine's dates.

Simple. There is real joy in cheaping out on Valentine's Day. Real joy in spending $20 for dinner for two, sans flowers, on a made-up greeting card holiday that has so much pull that millions of teenagers, wives, and girlfriends are devastated if they don't get at least a dozen roses.

I say yes, mark the day. But like Christmas, remember the true meaning of Valentine's Day: To spend time with the one you love.

My theory is that all those people who yearn for flowers, for fancy dinners and diamonds aren't really after those things at all. All anyone really wants is to know the person they spend every day with, good times and bad, through honeymoons and arguments about dirty dishes and dirty diapers, still cares about them, still wants to spend time with them, and still notices them. If you choose to celebrate, it's a good excuse to spend one whole day recommitting to your honey. It's important for you to know and for your significant other to know that you would choose them all over again, if you had the chance. (If you wouldn't that might be a wake up call..)

You can have all of that at a cheap restaurant. It doesn't have to be at a cheap restaurant, of course, but that's the way we like to do it.

"It's always laid back and funny. There's never risk of unfulfilled expectations because you always know what you are going to get," hubby said of our yearly cheap date.

True. Because we laid the groundwork early in our relationship, we have never had one disappointing Valentine's Day. Okay, except one, and that was the first time we tried to go to the Ponderosa to celebrate. They were closed due to a water main break. That was the year we ate at White Castle, and we weren't the only ones on dates there either.

Instead of secret hopes being dashed, or a day of spendy trinkets, Valentine's has turned into a game for us.

We choose the location of our cheap date months in advance. Sometimes a year in advance, and since it's someplace we never go, there is anticipation and excitement surrounding it. It's a new experience for us, even if it's cheap.We talk about our date for months, giggling excitedly and anticipating what it will be like.

And when the day arrives, we are never disappointed. Maybe it's time you, too, made the cheap Valentine's Date a family tradition.

Max it out: Get more for the money you already have.

 I seriously doubt anyone is going to get a pay raise this year, me included. We all know the economic news is bleak, lay offs, banks not giving loans, taxpayer bailouts, budget deficits, and of course the plummeting value of retirement accounts. It's enough to make your head spin.

Right before Christmas, hubby was moping around the house. He's not prone to the holiday blues, and finally admitted it was because he felt completely powerless over our plummeting retirement accounts and stock portfolio, and his doubt about his ability to keep a steady paycheck and health insurance coming to our household.

I told him that we can't control all of that. We can only control what we do. That's true for everyone. We can't control the stock market, but we can control how we react to the swings. We can't guarantee we'll have a job, but we can prepare for not having one.

This conversation led to a household reprioritizing. Things are uncertain, all we can do is prepare.

Since Christmas, we have made a significant effort to max out every dollar. Usually max out is a phrase associated with debt. I think it's time we revisit the concept of maxing out your money, and turn it into a tool for getting more out of what you already have.

We are still refining this technique, and I'm sure we will have many more tools in the arsenal come next year. In the meantime, I consider our efforts a beginning, a "Step 1" of the MPF way to max out your money. Here are the systems we have put into place so far.

We are chasing yields.

Last year my bank had the nerve to offer a measly .05 percent interest on their savings accounts. And we wonder why Americans don't save money. Insulted, I opened an Emigrant Direct online savings account and an ING Direct savings account. Both have been easy to use and have paid me an average of about 3 percent on my money in the past year.Unfortunately, thanks to the Fed and their rate cutting bonanza, that is down from 5 percent two years ago, and is dropping slowly.Today, Emigrant  and ING are both paying 2.4 percent APY.

Better than .05 percent, but I decided to see if I could get a better deal somewhere else. The first stop for any yield chaser should be Bankrate.com's list of the 100 highest-yielding savings accounts, which gives you a handy rating system for gauging a bank's stability. You can also search the highest yields by state.

FNBO Direct of Omaha, NE is offering 2.8 percent APY and recently was named Kiplinger's Best Online Savings Account in 2008. Everbank of Florida is offering 3.76, but it drops to 2.9 after 3 months.

So far, none of these yields are high enough to make the hassle worth switching, at least for me.

We are chasing rewards.

We have used an Amazon Chase Visa for several years. In that time, we have used the $25 gift certificates we occasionally receive to buy CDs, DVDs, software and computer games. It has been a great card for us, because we would rarely buy these sorts of treats for ourselves. This was our first rewards card, and since we were in the habit of charging almost everything just because it was easier than carrying cash, we figured we may as well get something for what we were already spending. The Amazon card has saved us some money. We upgraded the operating system on my computer for only $16, the rest was covered by rewards. We also bought a mattress for our baby's crib for only $7, with rewards covering the rest. We have used certificates to buy Christmas and birthday gifts, which has saved us some money. This has been great while it lasted, but the time has come to review our strategy.

Do we really need more CDs and DVDs? Or is there a rewards card out there that will give us something we need more?

In our search for a more profitable rewards card, I ran across two new rewards credit cards that could reap dividends, literally, if used wisely.

One is the Charles Schwab card, which actually deposits, in cash, an amount equivalent to 2 percent of your monthly spending into a Schwab One brokerage account. Of all of the cards we looked at, this may make the most sense for us. The market is down, and we would like to buy more stocks in the hopes that we can profit from a future upswing. We already have a Schwab brokerage account and have been struggling to find the extra cash to make deposits. The rewards are a larger percentage than what we are currently receiving, and you don't have to spend a certain amount before the rewards arrive. They are automatically deposited every month.If invested, these rewards could increase in value, due to dividends and stock appreciation. You don't get that with a DVD.

Our second choice was the CitiBank Thank You Rewards card, only because you can redeem points for a student loan payment of up to $100.

Our criteria for selecting a new rewards card is that the reward must help us meet one of our other financial or personal goals. We considered a travel-related rewards card because we hope to actually leave the U.S. on vacation soon, but were put off by the dubious value of airline miles and the restrictions placed on hotel bookings.

Maybe it's time you looked in your wallet and did a little credit card renovating. Clean house, look for better rates and better deals. The Schwab card may not be for you, but chances are if you haven't shopped around in a while there is something better out there, something that will reward you with something valuable, like cash back or money in your kid's 529 account. Visit Cardratings.com to look for and compare cards. 

The obvious caveat is that chasing rewards on a credit card makes zero sense if you carry a balance.

We are "stacking" rewards.

I firmly believe that "stacking" rewards is one of the most effective ways to stretch your budget. Stacking is using as many discounts, coupons and rewards offers as you can on a single purchase.

As an example, I recently bought some Gerber organic baby food. I had several 75 cent coupons. I went to Kroger because they double coupons, so my coupons are now worth $1.50 each. Kroger also happened to be having a special where for each $10 worth of Gerber baby food you buy, you get a certificate worth $2 off your next shopping trip. When I checked out, I scanned my Kroger card, which earned me 10 cents off each gallon of gas I pump there. Then, I paid with my Amazon card, earning me points toward the DVDs on my wish list. I earned a $4 off coupon, and I used two 75 cent off coupons that were actually worth $3. The next day, I rounded up more baby food coupons and went back. I used the $4 off coupon, plus several more of the $1.50 doubled coupons, used my store card for gas discounts and paid with my rewards Visa. It saved me quite a bit on something that I need to buy anyway.

There are as many ways to stack rewards and coupons as there are people. Here are some that I find particularly interesting:

• LizaJane over at SavingAdvice.com recently bought a laser printer from Staples. That's not that interesting, but how she used her money certainly was:

  "I signed onto Staples via Ebates, which had a 2% cash back reward instead of the usual 1%. My printer was $199, plus I bought a cord for $25 and an extra black toner cartridge for $57 (and then got $30 off because I combined it with the printer purchase), so the grand total with tax was $263. My 2% back will be $5.26. Ebates also has a $10 bonus, which this should qualify for. So, I should get $15.26 total back there.
  
  The $100 Staples Easy Rebate will come in the form of a Visa gift card. Then, because I have a Staples rewards card, there should be some rewards money due to me at the end of the quarter. And, on top of all that, I used a credit card that pays me cash back. It's a small percent, but the small bits and pieces add up!"

• DisneySteve, another SavingAdvice.com blogger is also using perks wisely:

  "We went out to lunch today at a local restaurant that we like. They were having a special deal on gift cards: buy $100 worth and get $20 free. So we did just that. Not only that, but I charged them to my Discover card which has a 5% cashback bonus at restaurants through December, so I'll get $5 back on the purchase. That means I actually spent $95 and got $120 worth of gift cards. Coincidentally, our meal today came to exactly $25.00 which means the meal was basically free. We spent $95 (after the Discover cashback), got lunch for the 3 of us and walked out with $95 remaining on the gift cards."

Retailers have so far been reluctant to cut back on coupons and loyalty card programs because they know that a lot of people won't shop there if there is no special deal attached. Credit card companies are the most likely to trim rewards because the programs are expensive and retailers are threatening litigation over the merchant exchange fees they are charged every time someone pays with a credit card. In the meantime, get the best deal you can.

We finally came up with a smart monthly spending plan

I hate budgets. Hate. hate. Hate. But at some point, you just have to have one if you are going to really get ahead. We had to do something drastic to get our monthly spending in line and rethink our priorities, so we had a No Spend Month. You may not have to do something that extreme to get things under control. But for us, the result of No Spend Month was money in the bank and a renewed sense of discipline and purpose, two things that are very valuable in uncertain financial times. As a result of No Spend Month:

• We have an allowance. Hubby and I each get a $40 weekly allowance that we are allowed to spend on whatever we please. It is important to have fun money, even when you are on a tight budget, because it keeps you from feeling completely deprived and one day making a huge financial misstep because of that. The allowance has been fun. We use it to take each other on dates, which means more because we are using our "own" money. We also use it for things like cosmetics and video games, little indulgences that make us feel good but don't cost a lot. This way, we do not have to feel guilty.
• We have tamed the grocery budget. It's ghastly to admit this, but at one point we were spending $950 a month on groceries and eating out. For two adults and a baby. Ghastly. Our monthly budget is now $125 a week, for groceries, eating out AND gasoline for our two cars. We have cut our food budget in half, and added fuel to that category. Our grocery savings weren't magic. The biggest difference was that we started shopping for pantry-stockers at Aldi. We love it. We can buy a cartload of food and it never costs more than $40. We now clip coupons, but only for items where we insist on using a brand name. We look at the sale fliers for all of our local grocery chains and plan our weekly meals and match sales without coupons. Also, we cook more vegetarian meals. It hasn't been a sacrifice for us. Now that our budget is under control, we are making subtle changes. For instance, we have decided to eat less meat, but to pay more for the meat we do eat. i.e. grass-fed, hormone free meat from Whole Foods instead of CAFE meat from the store.We are also incorporating more organic foods into our diet, all without busting the budget. We never thought this would be possible.We also save fuel by running all errands on one trip and using our most fuel-efficient car for all trips longer than 5 miles.
• We save first, then live on what's left. This is a very very important. If you want to save but only save what is left over at the end of the month, you aren't going to get very far. Save first. We have set a high target: 25 percent of our take home pay every month goes directly to savings. We have the money wired out of the checking account and into one of our high-yielding savings accounts every two weeks. It's gone before we even wake up on payday. We have to live on the rest. No cheating. It's helping us significantly boost our cash cushion, which is our No.1 priority in this troubled economy.
• We're doing the cheap fix-its around the house. During No Spend Month I realized I had the materials for half a dozen home projects that need to be done, so I didn't need to spend any money to knock some things off of the to-do list. The rule now is that we won't buy supplies for a house project (barring a phenomenal sale) until we have finished the projects we already have supplies for. This may not seem like a big budget item, but every little bit helps.

We DIY as much as possible
The Wall Street Journal ran an article recently about the resurgence of DIY. Apparently I am not the only family that is now "insourcing" household tasks. OK, I admit we have never been the high-powered couple with the nanny and the housekeeper. I think it's a luxury to have a babysitter 4 hours a week.

But, we are expanding our arsenal of DIY projects. For instance, we have planned an ambitious veggie garden this year. To save money, I am starting most of the plants from seeds this year.

Also, a leaky toilet ruined the floor in our half bathroom. I had the original installer give me a quote to fix it. It came back at $500, about $300 more than I wanted to spend. Mind you this is a tiny bathroom. I will be attempting to do the work myself. If I get hung up and have to call the installer, I will at least have saved money by removing the toilet, sink and old tile myself.

Coupons Coupons Coupons.

I never was much of a coupon clipper until recently. I thought of coupons only as something at the grocery store. That was my mistake. Coupon deals have gotten much more generous in the last few months, as everyone from retailers to restaurants scramble to keep cash-strapped consumers coming back for more. Most of the coupons I use these days are for restaurants. Some of our locally-owned favorites have coupons in the Val-Pak and DollarStretcher packs that arrive at my door every week or so. And, since we now have a food budget, we generally only eat at restaurants that have coupons or a good special deal. 

Some of my friends have asked me what the point of all of this is. It's simple. I'd rather spend less on the things that aren't super-important to me so that I have the money to do the things that are super-important. Why spend 25 extra cents on each can of black beans when I could use that money to help pay for a backpack trip through Mexico? It's an extreme example, but drives to the heart of it. Little savings here and there add up to more money to do interesting, exciting things with our lives. And, to help us weather uncertain economic times.

The value of frivolous financial decisions

Let's be honest. No one can be thrifty and frugal all the time. Maybe it is possible, but a life without a few frivolous financial moves may just not be much of a life at all.

I made a frivolous move today. I spent $1,300 on plane tickets to New Orleans. I will be there for only 24 hours and am coming back home. Not the most judicious use of the travel budget, I know. But it's a decision that makes perfect sense for us and has made the hubby and I very happy. We are going to celebrate one of our best friends' 40th birthday, and all of our other friends will all be there. 

It wasn't easy to press the "Book Travel Now" button.

You see, we suffer from hyper-responsible syndrome. We are textbook cheapskates. We do everything "right". We put money in the 529 plan (which we opened before baby was even born). We save a good chunk of our income. We have no credit card debt, no car loans. We have an emergency fund, health insurance. We each get a small weekly adult allowance, spend no more than $500 a month on groceries, gas, and eating out. We save up and pay cash for home repairs and improvements, and take on extra work whenever we can to increase our income.We get movies and books for free from the library.

And do you know what? As our finances have become more secure, our life has become more boring. And, if we aren't careful, our super responsible frugal ways have the potential to turn us into boring people. A lot of frugals stay home because it's cheaper, and we started to walk that fine line. We forget that we once had a lot less than we do now, but still managed to travel overseas and live a full social life without going bankrupt. It's just easier, once you are in your 30s, have a baby and a steady job, to get complacent, to do what's easiest instead of swimming against the stream to have an adventure. Slowly, we have become lulled by the gentle rock of our daily routine.

How many people do you know who are so obsessed with saving a dime that they can never rationalize making their dreams come true? They never take that dream vacation, never open that business, never [insert dream] because it requires money that can be "put to better use" somewhere else.

Everyone's money can always be put to better use, at least when it comes to discretionary income. You could forgo the $4 latte and tack that extra money onto your student loan payment. You could skip the $3 DVD rental and put $3 in savings instead. Sure, we could all do that. But what life does that leave you with?

There is a time and a place for super thrift, but at some point you have to ask "What am I saving my money for?"

Retirement, yes. A noble goal you should save for. But does that mean you can't take a vacation during your working life, in order to save as much as possible?

I know a couple that did that, and then both of them got cancer at age 55. They could have worked all of those years, scrimped and saved, denied themselves all kinds of fun, and then died before they reached their goal. Fortunately, their story had a happy ending. That was 10 years ago, and they managed to retire and start to spend their money.

Some people would use a story like this as a reason not to save for a rainy day. That is the wrong lesson. Save for tomorrow,yes, but don't forget to live your life now. Everything in moderation, including moderation.

This brings me full circle to today, when I clicked "book travel now" on two obscenely-priced plane tickets.

I spent the bulk of my adult life in New Orleans and only moved because I was forced to by a natural disaster. I haven't been back in two years, due to work, pregnancy and the rigors of raising a new baby. We had originally planned to spend a week in New Orleans this month, but the babysitters fell through. I was dejected and sad, but then had an epiphany last night. Go anyway, even if it's just for a day, and no matter how much it costs. So we did it. The little man will stay with grandma this weekend, and the trip will be so fast that no one will have to miss a day of work, not even the hardest-working grandma in town.

Sometimes, being frivolous pays bigger dividends than a bigger savings account.

Reducing home energy use 101

Update: I figured out this weekend that the furnace shouldn't be burning this many killowatts. We had a malfunction in the installation that caused it to not cycle on and off properly. We had it repaired Saturday. This should help us reduce our electricity usage and keep our house at a cozy temperature.

Earlier, I outlined my plan to reduce our home electricity use by 10 to 20 percent by the end of the year. In a house already filled with compact fluorescent bulbs, this will be no easy task.

My most recent electricity bill arrived in the mail this week, so I now have my benchmark kilowatt numbers. It's enough to make me queasy. 

We used a total of 19405 KwH in the past 12 months. The average U.S. family uses 10,656 kilowatt-hours of electricity each year, or about 888 kwh per month. We were well below average before we installed our new furnace.

Our highest usage months were March, at 4,801 KwH (I think this is because our previous two bills were estimated, and didn't take into account our new furnace), December 2008 at 2,289 KwH, and August, at 1,520.

Our electricity usage has skyrocketed in the past year. I know what the culprit is.

In September 2007, we replaced our 1957 gas furnace with an electric heat pump. Electricity is not my first choice for home heating and cooling. But, we really wanted a geothermal system, which is supposed to be as earth-friendly as you can get. every month where we really needed heat or air conditioning sends our Kilowatt hours through the roof. Even our lowest use month is still twice what it was before we installed the new furnace.

Except for the huge amount of electricity it uses, the furnace has been great. I assume it's also more efficient than our old furnace, which at 50 plus years old was not the model of Energy Star efficiency. Although, I am not skeptical of geothermal's claim to reduce CO2 emissions and instantly turn your home into an Energy Star house. That electricity has to come from somewhere, and where we live, 78 percent of it comes from coal fired plants. But, we'll just have to deal with it and try to reduce our use in other ways. We aren't replacing it again.

In the interest of full disclosure I must admit we have another electricity loving vice: a hot tub. Not the model of efficient use of natural resources, I know. But we are clumsy and tend to get injured a lot playing sports, so we consider it therapeutic. We run the tub from September to July.

So, numbers in hand, our goal is to reduce our usage by 1,940 to 3,881 kilowatt hours a year. Our monthly average use is 1,617 kilowatt hours. Our monthly goal is to reduce usage by 161 to 323 kilowatt hours a month.

These are big numbers. As I said in my earlier post, we are planning to tackle this with a combination of upgrades large and small.

This month, We have already managed to implement part of our plan to reduce our kilowatt addiction.

• We installed the final three Energy Star windows in our house. We began this project last year, but because we are old fashioned, we only do what we can pay for out of pocket. We couldn't afford to do all of the windows at once, so we put off the last three (which we deemed to have less impact on our home's leakiness). Now, all of the windows are finished. The company also came out today to repair some window locks on the first set, so all of the windows should now be securely closed against the freezing outside air. This was our most expensive project, at $1,633.
• We have ordered the new doors for the kitchen. This doesn't sound like an energy issue, but it is. The door between our frozen garage and the kitchen is hollow and lets all that cold air right into the house. This is the second-most expensive project on our list, at $600. It is a close tie with another project slated for the laundry room.
• We have one final task: to find an energy efficient cat door. Put gingerly, the new thick door will cut off access to the "kitty loo", so we need to put a door in it. Hopefully we can find one that doesn't leak. Is there such a thing as an Energy Star cat door? I'm about to find out.

Considering we are midway through out first month, I think we are making a decent bit of progress. It's going to become more of a challenge once the big projects are out of the way, as it will be harder to find places that we can cut. 

On the agenda for this year, to help with this goal,

• We hope to purchase a front-loading Energy Star washer.These are a good bet all around, and should be much more efficient than the top-loading model we bought when we moved into this house. I will do some research on brands and post my findings here.
• Invest in some LED lights, to replace some of the much-used CFLs we have around the house.

Who knows what we will need to do. It seems like every project we do leads to another project we hadn't even thought of before. it seems our house is an onion.

Here are a few resources for those of you like me, who would like to use less electricty:

• Powerscorecard.org has this handy list of 20 things you can do to reduce your electricity usage.
• The U.S. Department of Energy has these tips, organized by power source.
• Wikibooks has a long article of tips, although some are of dubious value.

Strategies for paying off student loans

It's snowing today. Flakes that look like disheveled Q-tips have covered the neighborhood with a six-inch white blanket. It's got me thinking about my student loan.

I am a very debt averse person. I used to believe in good and bad debt. No more. I think the only good debt is no debt. I have eliminated all debt from my life, except one. My student loan. Those pesky things are just impossible to get rid of. Maybe because when we are all deciding which debt to pay off, we usually put student loans at the bottom of the list.

It's the low, fixed interest rate (unless you have private loans, which are predatory in my book), the allure of the tax deduction. Something more pressing always seems to win out over paying those loans.

But, looking back, college has had a significant impact on my finances since 1999 and mostly in a not positive way.  College is supposed to help you make more and have a higher standard of living, but that isn't always true unfortunately. At least not for me.

I graduated from college with $40,000 in student loan debt.That's more than twice the average loan debt students graduate with these days. My dad was disabled and my mother a Catholic school teacher with no money to help me pay for school. And, despite graduating first in my department, my college did not give me a scholarship.

To compound the pain, I took a 50 percent pay cut to work a professional job in my field once I had graduated.Who knew journalism paid so little?

The sad part is my debt could have been worse. I paid part of my tuition in cash every month, using a university payment program. About $200 a month to the bursar, and I paid cash for all of my books and supplies all while paying for an apartment and all the accoutrements of an adult life. I was an adult, non-traditional student.  I worked full-time in college, averaging 60 hours a week as a Bourbon Street bartender in New Orleans. It was very trying.

Graduation gave me no more relief because I then had to pay all of my existing bills, plus a new $300 a month student loan payment, all on half the salary.

But I managed, and I even managed to pay a little bit extra every month.

I now owe $11,000 on my student loans.That's still a lot, considering I have been paying them faithfully since 2002, but I would still owe whole lot more if I hadn't dedicated some time and energy to paying them down. 

I want to share my strategies for paying down student loan debt.

• Consolidate into a low-interest federal loan, and consolidate directly with the U.S. Department of Education. I was lucky enough to do this right before my repayment began, and I locked in a 4.25 percent interest rate.
• Enroll in automatic payments. I received a .25 percent interest rate deduction for having my payments automatically deducted from my checking account.
• For several years, I did as much freelance work as I could handle in addition to my full-time professional day job. I put every penny I earned in extra money toward the student loan. Some months, I managed to pay an extra $700 toward my loan, over and above my regular payment. I am still using a similar method to pay off the remaining balance.
• Use the Debt snowball method. Write down how much you owe, the interest rate, and to whom you make the payment. Order this list from smallest loan balance to largest. Send only the minimum payment to all loans except the smallest. Pay extra-- as much as you can afford-- on the smallest loan, until it is paid off. Then, add all of the money you used to send to the first loan, to the second loan's minimum payment. When the second loan is paid off, send the total you sent to loans one and two to the third loan. Do this until all of your loans are paid off. The idea is that the payments grow, like a snowball rolling down hill. Once you eliminate the smaller debts, you have more resources to pay off your larger debts.
• Use the Debt snowflake method. This is similar to the $20 challenge. Make an effort to earn as much extra money as you can. Every little bit-- even if it's $10 you made selling something on eBay or Craigslist-- can be used to make a dent in your debt. This month, I have sent $40 extra to my loan, from money I earned through Etsy.com.
• Pay biweekly. This can save you money two ways. It cuts the amount of interest you pay on the loan, as most loans calculate and add interest to your balance daily. Second, you will unwittingly make an extra payment by the end of the year.
• Don't be afraid to send small amounts. Extra payments don't have to be huge. Even sending $5 or $10 at a time adds up. I've done it. And so have many others.
• Take advantage of rewards programs. What do rewards programs have to do with existing debt? Plenty. For example, you can use money you earn through UPromise to pay off your student loans. (Upromise is the college savings rewards program that gives you money back when you buy the products of participating companies.) Also, CitiBank's Thank You Rewards program allows you to use your credit card rewards points to pay down your loans. 10,000 points can be turned into a $100 student loan payment. This is only good option, of course, if you carry no balance and don't go hog wild spending on your card just for points.

I'm sure there are more ways to tackle student loans, but this is a short list of what has worked for me. Of course, I am still plugging away at my balance. My goal is to send $3,600 in extra payments this year. The long term goal is to have the loan paid off, somehow, within three years.

Food gardens that pay dividends

Last August, I drew out this plan of what I wanted the gardens on our half-acre lot, surrounding our 1957 ranch house, to be like. I live in the city, on a typical used-to-be-suburbs but now I'm in the city limits lot. I grew up in the country, in wide open spaces with plenty of sunny room for a garden. Not so here, but despite its limitations, I am determined to convert as much of our land to agriculture as possible.

I was discussing this last night with a friend who has never had a yard. He grew up in a condo, with no grass, and said he didn't understand why he felt compelled to grow things. He dreamed often of farming. It makes perfect sense to me. For thousands of years, people grew food. It's only the last two generations or so who have been so far removed from where dinner comes from. You can't breed such an important trait out of a species in only two generations.

So yes, our plan is ambitious. I dug about half of the new beds in September. With a shovel. Every night when hubby would come home, I would hand him the baby and head outside to dig beds. Our first two summers in this house we had only one row of tomatoes on the right side of the house, and a small bed that holds Peonies and sage that is hemmed in by a concrete sidewalk. Considering how many beds I have left to dig, I have made the executive decision to rent a sod cutter in April to clear the rest.

The real question now has become: How do I make the most of the garden? I can only make the beds so big, because I have to consider the neighbors. It has to be pretty and feed us. Our backyard is pure shade, thanks to two beautiful silver maple trees that keep spitting out saplings faster than I can dig them up and post them on freecycle. (Three silver maples have gone to new homes thanks to the local freecyclers.) The backyard garden is out, unless something unfortunate happens to my trees.

Now, with seed catalogs in hand, I must decide what to plant. Our system may help you make the most use out of your limited growing space as well.

My first stop is Bankrate.com. They have a handy article about home gardening and a list of what fruits and veggies cost the most at the grocery store.

This list is quite handy if your primary goal is to lower your grocery bill.Here are the spendy veggies and fruits.

•	Mushrooms.	•	Blackberries.
•	Collard greens.	•	Raspberries.
•	Cherry tomatoes.	•	Cherries.
•	Green peas.	•	Blueberries.
•	Okra.	•	Apricots.
•	Turnip greens.	•	Strawberries.
•	Asparagus.	•	Pineapple.
•	Mustard greens.	•	Grapes.
•	Kale.	•	Plums.
•	Cauliflower.	•	Avocados.

Of course, there is no sense growing foods your family doesn't love, no matter how much they cost in the store. But the list is a handy guideline. Several of the things we'd like to plant this year are on the list, which simply reinforces our decisions.

How do you grow a garden that will pay you dividends?

• Plant the foods that will save you the most money, or will provide you with a food that you like but normally don't purchase because it is too expensive. Growing foods that can be preserved for winter use, such as hot peppers, potatoes and tomatoes, can help you stretch your grocery budget well past the summer season. Plant foods that can be frozen or canned, and don't waste anything that your garden produces. By mid-September, it can be tempting to let those last green Roma tomatoes rot on the vine. That is not the way to make your garden pay off.

If you, like me, are just starting your food garden, remember that some foods take a long time to pay off. For instance, fruit. Raspberries and blackberries can be faithful fruits for small backyards, but generally take at least a year to bear fruit. If you plant a fruit tree, it can take three years or more for you to collect your first juicy dividend.

Asparagus is another patience-tester. Asparagus can take two to three years to produce a decent crop, but once established, that bed will produce for another 20 years. Strawberries take two years to produce a good crop.Fill in the wait by planting a variety of annuals that will provide a good harvest this summer, like peppers and tomatoes. 

It is important to remember

• The garden is a work in progress. You probably won't be able to accomplish everything in the first year, nor will you necessarily be happy with the choices you make in the first year. Through the seasons, you will learn what grows best on different parts of your property. For instance, we grow tomatoes on the right side of the house. When we tried green peppers in that spot, they didn't do well. It's almost as if they got too much sun. When we moved them to the less sunny left side of the house, the peppers did very well.  The beauty of the home garden is that every spring is a chance to start fresh.
• You must mix instant gratification with long-term production. Annuals can be great if you like replanting your entire garden every year (and paying for plants every year).  Me? Not so much. So I am mixing annuals with perennials and longer-term plants like fruit trees, because in 5 years I hope to have a varied harvest, and a garden where something new ripens every couple of weeks.
• Don't spend a fortune on your garden if you plan to move, or if your main goal is to save money. Don't skimp on bargain seeds. Buy good ones, yes. But don't go crazy and spend $500 or more on tools and gizmos. That can get out of hand quickly, and eat up your profits.
• And when you are picking what to plant, don't discount something just because it's very cheap at the store. Cheaper foods like potatoes can be worth growing. Chances are anything you grow at home will taste a lot better and be more nutritious than what you can buy at a grocery store. And, you can choose to grow pesticide-free as well, an added health bonus.It all depends on why you want a garden and what you hope to accomplish.
• Be creative in your use of space. The aforementioned potatoes can be grown in a space saving trash can, if you don't have room for a long row of them.
• If you are going to do this well, you have to visit the National Center for Home Food Preservation web site. If you grow anything that you hope to eat after summer is over, it helps to know how best to preserve it. Freezing isn't always as simple as just tossing stuff in a Ziploc and putting it into the freezer.
• Make room for animals and insects in your habitat. It's always good to plant something for the honey bees, the butterflies, and other denizens of your habitat. The goal should be to tread lightly. You may also want to refrain from using pesticides. You might be surprised at how well your garden does without chemical assistance.

Now that I have said all of that, I'll tell you what I am going to plant on my modest lot, in the flower beds I have reclaimed from lawn.

• Mary Washington asparagus. An heirloom variety, to establish a bed.
• a hot pepper garden, so that we can dry them and use them to flavor our food all year long. We have chosen to grow Kung Pao hybrid, long red slim cayenne, false alarm hybrids and hot lemon heirloom peppers. We'll also plant one or two green pepper plants.
• five each of heritage everbearing red raspberries and royalty standard purple raspberries.
• red pontiac potatoes. We will be 'forcing' these in a trash can, like my grandpa used to do. By stressing the plant you can get great yields without wasting precious space.
• six Roma tomato and six cherry tomato plants. I don't know what variety, as we buy these from my former grade school every year during their plant sale fundraiser. They have always been good producers.
• the herb garden will consist of cilantro,pesto perpetuo basil,and Greek oregano.
• a patch of Ozark beauty everbearing strawberries.
• bloomsdale spinach and nantes carrots, for my raised bed and fall coldframe. I use these to extend the growing season. This will be my first year trying to extend the fall harvest into winter with the coldframe.
• green beans of a yet undetermined variety, at the request of hubby, who could live on these alone.
• the obligatory zucchini plant, also from the school fundraiser. I may get ambitious and plant two, even though I know I'll be up to my neck in zucchini. I have two new recipes for zucchini, and it always makes a great extender for sauces and such, so maybe I can keep up.
• A butterfly garden, including five varieties of echinacea, two types of bee balm, and some butterfly weed. I will frame this flowerbed with butterfly-friendly annuals, and maybe with lingonberries, which are delicious on Swedish pancakes, unusual, and look like an ornamental plant.
• Luffa. Yes, the luffa sponge is a squash, not something that is plucked from the ocean. This will be a fun experiment. They grow as a vine, so with staking shouldn't take up too much space in the garden.
• English lavender, for its aromatherapy qualities.

Of course, the seeds aren't ordered yet so this could change. It is overly ambitious, I know, and I haven't even included the two sweet dwarf cherry trees I'd like to plant. But through clever use of space, we hope to grow all of these things in abundance in our small garden, in plain view of the neighbors, without raising their ire.

No discussion of an economical garden would be complete without suggesting ways to save money in the garden.

• We use rain barrels to collect water for our plants. It saves money and the collected water is better for the plants because it doesn't contain the chemicals in treated water.
• We compost. You don't need an expensive set up, but you do need patience. It can take a year or two to turn waste into rich compost, but when it is ready, your garden will pay you back with lots of love, disease resistance, and delicious fruits.
• Save seeds, or at least let a few veggies and fruits fall into the dirt. This netted us some lovely volunteer cherry tomato plants that sprung up and gave us tomatoes just like the plants we bought every year. 
• Skip the pesticides and fertilizer. We have never once used either in our garden. Instead, we try to take good care of our dirt via mulch and compost, and we don't get too upset if a slug eats a tomato or two. There is enough for everyone.
• Don't waste a single veggie or fruit. Last year, I had two marathon sessions turning Roma tomatoes and green peppers into pasta sauce. I froze about a dozen bags of it, which will feed my family all winter. You will have to have some marathons too, whether you are in the mood or not, to get the most pay off from your money-saving garden.

Miller High Life beer bread

I was in cooking overload mode on Sunday. I had some baby-free time on my hands, and wanted ot make sure we had something to eat in the fridge, in case of emergency hunger.

I made vegetarian chili, a pot roast in the crock pot, and if that wasn't enough I decided to make bread from scratch. Since it was about 8 p.m. when the desire to make bread hit me, I didn't have the luxury of making something fancy.

So, I made beer bread. The only problem was that the only beer we have in the house is a case of Miller High Life. What can I say, we're classy. Although Miller High Life is the hipster beer of choice at the old Rock n Roll clubs we frequented in New Orleans.

Here is the recipe I used to make quick, easy whole wheat Miller High Life bread.

• 1 1/2 cups all-purpose flour
• 1 1/2 cups whole wheat flour
• 4 1/2 teaspoons baking powder
• 1 1/2 teaspoons salt
• 1/3 cup packed brown sugar
• 1 12-fl. oz can of Miller High Life

Lightly grease a 9 x 5 bread pan. Preheat the over to 350 degrees.

1. In a large mixing bowl, combine all-purpose flour, whole wheat flour, baking powder, salt and brown sugar. Pour in beer, stir until batter is stiff. Scrape dough into loaf pan.
   
2. Bake in preheated oven for 50 to 60 minutes, until a toothpick inserted into center of the loaf comes out clean.

And you know, the bread isn't half bad. I wonder what it would taste like if I made it with Schlitz...

Why you should give away most of your stuff

Here’s something marketers don’t want you to know: Stuff cannot and will not ever make you happy. In fact, stuff can make your life more complicated and miserable than you can possibly imagine.

I learned this lesson a really hard way. I nearly lost everything in Hurricane Katrina.

I say nearly because we didn’t know what happened to our house and everything in it until more than one month after the storm hit and broke the levees in New Orleans. We didn’t know if we’d lost everything in a flood or if our house was even standing.

To our surprise, my husband and I mourned very few of our possessions during that time. The flat-screen TV? Nope, not a thought about it. The fancy stand mixer in the kitchen I thought I couldn’t live without? Nope. Didn’t care about that either.

All we wanted were our photo albums, the quilt my mother-in-law made out of my wedding dress, the bird feeder my late grandfather had made for us, and Squeaky, the semi-ferile yard cat who flat-out refused to get in the carrier when it was time to evacuate.

Realizing we didn’t care about all the other stuff we owned was profound. It wasn’t what we expected. And it caused us to seriously rethink our relationship with stuff.

We had never spent a lot of money shopping. Big-ticket items were few and far between, but I admit that I used to fill the void left by my crappy job with knick knacks and furniture. My husband would buy lots of books and CDs. All those little purchases added up to a lot of stuff over time.

Then, in a time of disaster, to realize we didn’t care about the little things that we bought to make us happy was profound. Especially because it turned out that none of our stuff was ruined, and we had to lug it all from our house in New Orleans to our new house in the Midwest. It’s no fun to lug hundreds of heavy moving boxes full of stuff you no longer care about onto and off of a moving truck.

That moment we knew we had to change, and our realizations about stuff turned into action.

We began to simply get rid of our stuff. For free. Yes, some of it has sold on eBay and Amazon, but most of it has gone to families who needed or wanted it more than us through our local freecycling group. We’ve given away a full-size bed, lamps, clothes, garden tools, and computers, just to start. We’ve also donated myriad items to the local Salvation Army. We’ve given things to friends who truly appreciated them more more than we did.

Our goal is to get to the point that we only have what we truly need, plus a few objects that give us a significant amount of joy, rather than dusty boxes and shelves filled to the brim with a lot of things that we thought would make us happy, but that have since lost their luster.

We still have a lot of boxes of stuff to give away, but with every item that goes out the door, we feel more free, like a great burden has been lifted off of us.

Giving away your possessions changes your relationship with material goods. When it’s gone, you realize that you don’t miss it. This has a cascading effect. It’s good for the spirit and good for the pocketbook.

You no longer want that must-have whatsit, because you can see that you don’t really need it. Or, that you won’t be interested after a month or two. You also become aware of the stories you tell yourself in order to rationalize a purchase, or to rationalize keeping something that is no longer useful to you. We are very tricky, telling ourselves we need things we never or rarely use.

Having fewer possessions shows you how much upkeep owning lots of things requires, from space to store it, to money to pay the Visa bill you ran up buying it, to maintenance and insurance costs on big stuff like extra cars or boats. When a box of stuff leaves my house, I am relieved because I no longer have to find a place for it, dust it, and I am no longer responsible for its well being.

You can live more comfortably in a smaller space when you have less stuff. And smaller spaces come with lower bills.

It’s also much more relaxing to live in a house filled with few objects you really enjoy than with a lot of things you only kind-of like. Physical de-cluttering leads to mental de-cluttering.

You start to truly understand that once you get to a certain level of comfort economically and physically, owning more doesn’t appreciably improve your happiness in the long or short-term. In fact, once you have shelter and some basics, you can live a comfortable and happy life without all the extra stuff. I didn’t fully understand this until I thought I had lost everything.

Stuff for the sake of owning stuff is worthless. It saps your energy and your pocketbook.

Why give it away? It feels good to share what you have with others. And if you are serious about unloading years worth of purchases, it’s a lot faster and easier to give it away than it is to sell it.

This is how we’ve made peace with our stuff, and made a lot more room for Squeaky, who has had a serious change of heart when it comes time to get in the cat carrier.

A personal energy plan for the new year

This year, I wanted to do something a little different with the New Year's plan. I set the typical goals:
Put money in the savings account, fund the Bean's 529 plan. Pay down $3,600 on the student loan. Lose that 10 pounds of baby weight that is holding on to my belly for dear life.

But I wanted to do more. Something sufficiently green to try to get our day to day life more in line with our values. After some thought, we decided to generate a list of earth-friendly resolutions as well. Or rather, an earth-friendly plan.

1. Reduce our electricity usage by 10 to 20 percent by the end of the year.
The next electric bill we receive will set the benchmark we will use to gauge our progress. It lists our month-to-month usage for the past year.

Hubby and I both would like to put solar panels on our house, but frankly, our electric bill is enough to make your jaw drop. That's not particularly conducive to solar panels. The first thing the installer will tell you is "Conserve." It saves you money on your solar installation because you'll need a smaller system to cover your needs, and it's much cheaper and easier to save energy than it is to generate it.It'll also save us money on our bill, and considering our utility plans to raise rates 45 percent in the next three years, why not start now?

The question now becomes how do we reduce our usage? We have developed a short plan, that I am sure we will have to add to later.

• Insulate the garage door. We have an electric heat-pump furnace (a geothermal system, so it's the most eco-friendly you can get, but it still burns a lot of electrity.). It runs constantly in the winter, in part, because the garage chills our kitchen to the bone. We have only a hollow-core door standing between the kitchen and the freezing garage. Step one is to replace that door with a solid door, and step two is to insulate the garage. It should cost us about $200 to $300 to do this, and will increase our comfort in summer and winter.
• Replace three windows with Energy Star windows. Last winter, we replaced most of our single-pane aluminum windows with Energy Star replacement windows. But, being finance geeks, we only do what we can afford to pay cash for, and we couldn't afford to do all of them. We chose three windows that had the least impact on our energy bills, and decided to wait on those. This is the year to finally replace those three windows. We have put in the order, and it is going to cost us $1,644 to have those windows made and installed.
• Invest in a Kill-a-Watt and use it to find out what our biggest energy drains are, and address those.
• Tackle vampire electricity. The energy your appliances and electronics suck on when they are supposedly turned off is probably adding a huge sum to our energy bill. We have a lot of electronics, so the plan is to hook them all to power strips and shut the power strips off when we aren't using the electronics in question. This will probably seem like a hassle until we get in the groove.
• Replace our washer with an Energy Star, front-loading washing machine. When we bought this house, we were living out of a storage space and recovering from Hurricane Katrina. Our house didn't come with any appliances, so we had to buy all of the big-ticket items at once: fridge, washer, dryer, etc. I admit I probably didn't buy the most efficient on the market, because I had to keep an eye on the price tag. Now that we are settled, I want to replace our washer with a more efficient version (a la scratch and dent to save money).
• Add laundry lines to the basement and the backyard. Dryers eat up a lot of energy. They don't even have Energy Star dryers. Hubby loves to line dry. Me, not so much. I guess I hate having crunchy towels and underwear. Call me old fashioned.But I do recognize that dryer use adds up, and to encourage line-drying I need to make it easy and ample. As an added bonus, every time we line dry I will add 25 cents to the vacation fund.
• Switch from compact flourescent to LED lights. This may not be practical in every lamp and socket, but one by one I'd like to change out the bulbs that make sense. It may also be a slow project, as LED bulbs are very expensive. There comes a time when we can even do better than compact flourescent bulbs. They are a great technology but if you want to go greener, you've gotta move to LEDs.
• Pay for an energy audit. I'm sure we've missed something. We may be able to insulate or plug up leaks and do even better. 

We also have some other green goals for the year. 

• Produce 100 pounds of veggies and fruit. I want to grow a lot of organic, lovely veggies at home this year. We enjoy eating out of the garden and it'll be good for the Bean to see where food comes from. I'd like to plant dwarf sweet cherry or apple trees for future fruit production, but I'm not sure where to put them. I want to  build planter boxes for the front porch, which will be used for a kitchen herb garden. My goals is also to preserve or freeze everything we grow this year. No waste. This will mean I have to learn some new skills, but it should be interesting.
• Plant a row for the hungry. I will plant extra veggies and donate it to the Mid-Ohio Food Bank. I also hope to get my neighbors involved, by asking everyone in my neighborhood to drop off excess produce at my house twice a week, and I will then drive it to the food bank. I don't know if they will be willing, but it can't hurt to ask.
  
• Add three more rain barrels. If I can find food-grade barrels at low cost, I will attempt to make these myself. If not, I will buy them. Water rates are rising 10 percent next year, which is added incentive
• Make a second composter. One composter isn't enough. We have had to throw away compostable material while we have waited for our current batch to finish. I'm not sure if we did something wrong, but hey, it was our first try.
• 
• Foster habitats for native species. The only way I know to do this is a butterfly garden, and making a bat box. I will search the OSU extension office Web site for more tips.
• Further reduce plastic bag use. We need to be super vigilant and remember to take reusable bags with us everywhere. This may mean acquiring many more reusable bags and stashing them everywhere, so no matter where we are, we have a bag. My favorite so far are the DIMPA bags from IKEA. They are strong, cheap, pretty and hold TONS of stuff.
• Reduce the amount of garbage we produce. Can we do better? Probably. This means thinking more about packaging, about reusing before we recycle, buying in bulk, etc.The composter will help with this, but it's not the only solution.
  

Do you have any eco-goals for 2009?