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Frugal habits

The not-enough-long-green blues

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{sigh} Over at Room Farm, Chance was  down in the dumps yesterday, worried about paying off the ginormous debt and feeling overwhelmed by all those little chores given to piling up if your attention is even briefly distracted. Annoying computer is again not letting me speak on Room Farm…some days it works, others it doesn’t. But her remarks do bring to mind the general summer doldrums, not the least of which is the not-enough-long-green blues.

In these parts, summer breeds cabin fever as surely as winter does for our snowbound brethren in the upper Midwest. Today the thermometer on my back porch reached a balmy 115 degrees…and believe me, you’d have to be balmy to go out in that. This leaves you inside the house, contemplating—what else? Your dreary budget and your prospects for penury, a horror show aggravated by the astronomical costs of an Arizona summer. The air-conditioner, set at 82, has been pounding steadily the entire day. Just to keep the potted plants alive, I’ve had to run water every. single. day for weeks—today being Saturday, it’s deep-watering day, so in addition to dumping the daily drench on all the potted plants, the roses and citrus need have water dribbled on them for hours. And a pool loses about an inch and a half to evaporation every day; that has to be replaced daily, lest the pump suck air and self-immolate. I’m going to have to borrow against my first-born child to pay this month’s water and power bills!

I’m turning into a mummified pickle sitting here in front of the computer all day. Other than work, work, and more work, there’s precious little to do. And boredom breeds inaction: the product of sitting on one’s duff all day is generally another day of sitting on one’s duff.

An unexpected visit from my neighbor Harriett reminded me of this. She knew the previous owners well and was curious to see how the house has changed since they left. As I was giving her the grand tour, I remembered that I hadn’t cleaned in four weeks! Old papers, junk, books, piles of shoes (bad habit: leave them on the floor wherever you slip them off your feet!), dog dunes, dirty dishes, unmade bed…eeeeeek!

I realized I need to get this place cleaned up, and then I need to get out of it. Sitting here in my own litter enjoying a blue funk is not a good thing. But…I also realize I can’t afford to spend money entertaining myself. Kathy and I are going to a chamber music concert next weekend, only ten bucks apiece—but that’s about it. I’m broke: can’t afford a cleaning lady, can’t afford to go out, can’t afford to travel, can’t even afford to fill my car’s gas tank without running the budget into the red.

Well, yesterday I scrubbed the joint from stem to stern, and that actually made me feel somewhat better. Then I decided to make a list of things I can do to avoid premature brain-death.  Here are a few ideas that came to mind:

Mall-walking. Some of the covered malls around here open at 7:00 in the morning for folks who would like to get a little exercise without expiring of heat exhaustion. La Maya and I have already started doing this; but it’s not necessary to have a walking buddy to enjoy this free activity. Just keep moving so you don’t have time to look at the (closed!) stores.

Free or low-cost community activities. Next Saturday I’m going on a photo walk with Paradise Valley Community College staff and students.

Take a hobby outdoors. When the extreme heat breaks (it will, as soon as the monsoon rains start), I intend to take a few pencils and a pad of paper to the park to do some drawing.

Invite friends to a casual (read “inexpensive”) dinner. M’hijito is entertaining me and friends at his house next weekend: smoked spareribs with whatever veggies and salad we can come up with.

Clean house. Yah, I know: bleagh! But it’s amazing how much a tidied-up and clean environment changes your outlook on life.

Visit a museum on “bum’s night.” Many museums open for no admission one day per week or per month.

Window-shop in commercial art galleries. Restrain yourself from buying, and this activity can be every bit as interesting as a tour through a contemporary art museum.

Take the dog for a walk. It’s free.

Play with the cat. Also free.

Wrap up your breakfast or dinner and go on an early morning or sunset picnic. Costs no more than you would have spent for food, anyway.

Volunteer. Serving up chow at the local food bank may make your own circumstances look pretty good while it gets you out of the house and into contact with other human beings.

That’s about as much as I’ve managed to dream up. What do you do to chase away the not-enough-long-green blues?

Foil debit card hacking and balance inquiries

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Did you know you can use your debit card without entering a PIN? Identity thieves hacking into merchants’ hardware and software and stealing customers’ PINs have made using a debit card risky business. And some merchants, such as gas stations, transmit balance inquiries each time you use a debit card, racking up bank charges. Here’s an easy way to foil them:

When you get to the merchant’s cash register, swipe your debit card, then select “credit” on the keypad and sign the receipt. Your money still comes direct from your checking account, but when you sign for your purchase, you don’t have to enter a PIN. So, even though you’ve used your debit card, you haven’t put your PIN into the system.

This bit of intelligence comes from the Arizona State Credit Union and is confirmed by another credit union in Virginia. The Virginia credit union adds that the strategy also will avoid balance inquiry fees, which occur when you shop at places like gas stations that transmit balance inquiries when customers use debit or ATM cards, because such merchants don’t do balance inquiries when you select “credit.”

Alternatively, you can tell the cashier that you want to sign for your purchase. She or he will ask you to sign the receipt, as you would do with a credit card.

According to The Consumerist, selecting “credit” with a debit card sends the transaction through a different network than the one used for PIN transactions. Banks like you to do this because merchants have to pay more money for signature debits. But it doesn’t cost you a thing.

Image: Channel R, Wikipedia Commons

Olive oil soothes sore, cracked heels and callused feet

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At the risk of promoting olive oil as some kind of miracle elixir, I’d like to tell you about another small discovery. If you wear sandals a lot, you’ve probably experienced the cracked heels that come when dry summer weather takes after the calluses you get from barefoot or sandaled walking. The other day one of my dainty little paws developed a crack so deep it bled. Did that hurt! Every step made that sore heel yelp in pain.

Ouch!
Ouch!

{sigh} I’ve tried sooo many nostrums to deal with dry, cracked heels that I’ve about given up. Hand creams, cow teat ointment, horse hoof ointment, special cracked heel creams, Vaseline, callus scrapers, even prescription gunk. Not a one did any good. Usually when this happens I have to plaster on a giant bandage over a blob of antibiotic ointment and limp around until the split heals.

So I’m sitting there studying yet another brutalized heel when it occurs to me that if olive oil works on your face and works on your hair, maybe it would work on your feet. So, I hauled out some gear and went to work.

Feet & gear
Feet & gear

First, I added a little scented bubble bath to a bucketful of warm water and, after removing the raggedy toenail polish, soaked the victimized feet until I could scrub off all the dirt and dead hide  with a nail brush and pumice stone.

Luxury foot bath
Luxury foot bath

This felt pretty good, though I had to be careful not to cause another squawk of protest from the injured heel. After everything was as clean and smooth as I could make it, I applied about a tablespoon of olive oil to one foot and massaged it in, paying special attention to the calluses around the heel and on the sole and toes. Quickly put on a ped-sized socklet, to keep the oil on my foot and off the floor and furniture. Repeated the same with the other foot.

The next morning, my foot felt a lot better. It wasn’t fully healed, but at least I didn’t have to wear a bandage to walk around.

The following evening, I rubbed more olive oil into each foot, especially around the heels, and covered up with small, light socks again. Each night I wore the socks to bed, mostly to keep any oil from rubbing off on the sheets but also to protect the feet. Truth to tell, by the time I went to bed the olive oil had soaked into the skin (or the socks) enough that it probably wouldn’t have stained the sheets. But who can afford to buy a new set of cotton sheets just because her feet hurt, eh?

On the second day after the initial treatment, the cracked heel seemed to be fixed. As I did the preceding day, I wore shoes with socks (ugh, in 110-degree heat!!) instead of sandals. Again that evening, I massaged in some more olive oil.

By the third morning, the difference was noticable. Far from perfect (oh, to be 20 again!), but improved enough that it doesn’t hurt. At least.

After another olive oil massage and overnight rest, the feet looked pretty good, and the split in the heel was all gone. Given a toenail repaint, the effect is not bad, for an old bat:

DCP_2608

Note that this is absolutely, positively not an instant fix! For three full days, I didn’t even think about repainting the toenails. It took that long for the olive oil to soften and soothe the dry, callused skin.

Also take note that it does, yes indeed it does make you smell like a walking tossed salad. It’s probably not appropriate if you have a lover in the house, unless he or she doesn’t mind having you spend a few nights in the guest bedroom. 😉

Funny’s other uses for olive oil

Hair conditioner
Facial cleanser
Update on skin conditioning

The great no-‘poo experiment!

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Check out Chance’s new project at Room Farm: an experiment to spring free of commercial shampoos! Can’t wait to see how this works out.

Some Blogger sites refuse to recognize my existence in any permutation, and Chance’s is one of them. So I’ll try just adding my two cents here:

Back in the Cretaceous, we had shampoo but no one shampooed every day. We didn’t have conditioners of the sort available today—to get rid of the frizzies and tear-jerking tangles, we used this pink liquid (don’t recall the brand name) that you squirted on with a pump sprayer and combed through your hair. While it did get rid of mare’s nests and static fly-away, it left your hair kinda limp.

In the absence of hand-held blow dryers, washing your hair was a major project: you had to set your hair with bobby pins (twisting little pincurls allll over your head!) or, in later years, with rollers, and then you either slept in them overnight or you sat under a bonnet dryer for anywhere between one and three hours, depending on how long and thick your hair was.

Women in recent years have been bamboozled into dousing their heads with various chemical brews every day, when really it’s not necessary. One’s hair did start to get a little greasy-looking after a week, but the truth is most women’s hair can go for three days or so before really needing to be washed. 

In the past, I’ve used Neutrogena bar soap on my hair. It’s a little harsh, but it will get your hair clean. I found it drying, and if you get the stuff in your eyes it hurts like the dickens…probably not a good sign. Baby shampoo works quite effectively on women’s hair and is pretty mild. Like grown-up shampoos, it contains many ingredients straight out of a chemistry lab. 

Hair conditioner alone can be substituted for shampoo, at least for a few washings. It tends to build up in the hair like liquid fabric softener in the washer, not surprising since we’ve discovered that you can use hair conditioner in place of fabric softener. Here in the Southwest, ordinary bar soap makes a mess of your hair, because most areas have pretty hard water. This can be ameliorated to some degree by rinsing with diluted vinegar or lemon juice.

I’ve also used dish detergent in a pinch. It works exactly like shampoo, with exactly the same results…not surprising, since shampoo is your basic detergent. Clear Ivory dish detergent behaves just like shampoo, except at the cash register.

It’ll be interesting to see how Chance makes out with the baking soda-&-vinegar treatment. If you could use that on your hair and olive oil on your face, you’d go a long way toward breaking the grip of the cosmetics industry on women’s everyday lives.

A little frugality goes a long way

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Well, I was about to say “I amaze me with my frugality,” but the truth is, I haven’t been pinching pennies any more rigorously than usual. That notwithstanding, despite almost $1,000 in “extraordinary” (read “not in the budget”) expenses, I’m only going to have to pull about $245 out of savings to cover this month’s charges. 

dcp_2529Yes. This month I ran amok with the extraordinary expenses. To kick off the budget cycle, a Talbot’s junket racked up an $86 debit when I succumbed to the lure of the Sale! tag. Got a cute little top at B’Gauze, also allegedly on sale at the bargain price of $47. Then we chose this month for Mrs. Micah to migrate Funny to BlueHost, which was quite the project. Her fee was amazingly reasonable, but it also could be viewed as outside the realm of ordinary costs. Next, nothing would do but what I had to harden the security on my office right this minute, in light of the swarm of burglaries the neighborhood has seen: $295 for purchase, delivery, and installation of a solid-core door plus $281 for purchase and installation of a pick-proof, drill-proof lock and metal door guard. (Gulp!) Moving on, the locksmith profited further when Bila the Painter couldn’t figure out how to remove the (very involved!) antique Baldwin lock from the front door at the downtown house: $150 for two visits, one to get it off the door and one to put it back on. All these added up to an astonishing $969.67 in extraordinary expenses.

Gasp!
😯

My de jure budget now has me spending $1,200 on ordinary, day-to-day expenses, such as gasoline, food, household goods, and whatnot. That amount should cover one or two out-of-the-ordinary costs, such as a visit from the plumber or a trip to the veterinarian’s office. Against the desired $1,200 limit, I’m actually $396 in the red. But the de facto amount that goes into the credit-card piggy bank (a money market checking account earning a little interest) is $1,500; anything that doesn’t get spent out of that sits in the account and serves as emergency back-up. Against the $1,500, I’m “only” about $245 in the red. As a practical matter, the accrued cushion in that piggy-bank account will cover it, so I really won’t have to transfer a dime from savings to pay for this month’s spending extravaganza.

Could I have exercised some restraint?

Well…yeah. I needed some summer clothes, but you know, there’s no law that says just because a store is advertising a sale you have to run right in and buy stuff. The clothing purchases could have been deferred to the end of the month, at which time I would have been out of money and so wouldn’t have bought the shirts at all. Staying out of Talbot’s and B’Gauze would have cut the deficit by $133, leaving me a modest $112 in the red. 

But some of these things really needed to be done now: I wanted to install the door and lock while I still have an income from the Great Desert University. And theoretically the locksmith’s work on the downtown house could be included in the cost of the paint job, which is coming from a different piggy bank. The project to monetize Funny needed to start soon, so I would have some time to learn how all that works and possibly to improve earnings from the site before I’m out of work. Eight or nine months seems like a pretty short lead time, really: that was a sooner-the-better proposition.

So, I don’t feel too bad about all this. Riding the train (and taking two weeks of vacation time, eliminating a bunch of endless gas-guzzling commutes) eliminated one gas fill-up. Thanks to the stash in the freezer, I haven’t had to buy much food. And the stockpiling strategy allowed me to put off purchase of a few household items into the next budget cycle. 

Once I’m retired, of course, $1,200  will have to be the real maximum expenditure limit, and not a pretend “can I really live on this” figure. As a practical matter, I’ll have to come in well under $1,200 in most months to get by. That will be a challenge as inflation rises. But right now I’m spending significantly less than that in ordinary, day-to-day expenditures. If I spent about $970 in extraordinary expenses and overdrew the $1,200 budget by only $400, that means regular, routine costs consumed about $570 less than budgeted ordinary expenses. (I think: arithmetic is not a science that serves me well.) 

Whether that figure is right or wrong, it’s pretty clear I can eat, drink, and make merry on less than $1,200 a month. Meanwhile, with the Renovation Loan now paid off, recurring monthly bills drop from $840 to $670, a figure that will drop another $30 when I cash in a whole life policy in January (because I have to pay taxes on the proceeds, I’ll need to put that off till I have no earned income to speak of). 

So let’s say I can expect to spend maybe $1,000 a month on routine living expenses. That plus the remaining $640 in recurring bills comes to $1,640 a month, or $19,680 a year. Think of that: a retired person can (in theory) live on less than 20 grand! For me, investment income alone will almost cover that.

Of course, we still have my share of the downtown house’s mortgage: $9,600/year. The net on $13,944 in Social Security benefits should cover that, but if not, I’ll earn more than $9,600 teaching at the community college. So, even after taxes, any freelance income will be pure gravy.

Although some observers might regard my lifestyle as ascetic (I refrain from spending on cable TV or a cell phone, for example, and I rarely go out to eat), I don’t think of myself as extremely frugal. I never clip coupons, I don’t pursue freebies from CVS, I buy my clothes new, and any day I’d  rather own a book than borrow it from the library. I eat like the Queen of Sheba and do not stint on wine and beer purchases. 

The trick is to get out of debt, including mortgage debt. Once the house and the car are paid for (and you’re not trapped under a load of revolving debt), you’re home free—given decent retirement savings. Without a huge cost for the roof over your head, a very moderate level of frugality will allow you to live quite comfortably.

Budgeting and strategies for saving

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Some time ago, a financial advisor who was helping me figure out what to do with a small inheritance remarked that I have a special talent for accruing savings by bits and pieces. Well, that does appear to be the case. As we noted the other day, by the end of this year my emergency fund will exceed $24,000—above and beyond the $21,000 squirreled away last year to pay off the Renovation Loan for the downtown house. 

So…how d’you do that?

Truth to tell, I don’t know how others would do it. But here are the basics that work for me:

1. Get out of debt and stay out of debt.

At the outset of my financial journey, I paid off a five-year car loan in 18 months by adding principal prepayments to each regular monthly payment. This freed up the $300/month payments to put into savings. Within a few years, I also paid off the $80,000 mortgage on my house, partly by renting space in my home and using the income to deal with the mortgage.

Debt consumes an enormous amount of your income. Freeing yourself of debt payments effectively “increases” your income even if you never get a raise—you end up with more money to spend or save.

2. Build savings into your budget.

“Pay yourself first” is the operative principle here. This is another way of saying “spend less than you earn.” As I was paying off car and real estate loans, I also set aside a small amount for savings each month. Bare minimum has always been $200 a month. As debts dissolve, some or all of the amount you’ve freed up by paying down debt can be added to the monthly savings.

When you create a budget, an effective way to create savings is to find a place to put every dollar of income. In other words, rather than estimating what you spend on each category (such as food, housing, utilities, transportation) and stopping when those categories are accounted for, build a set categories that will account for your entire net income. One of the categories should be “monthly savings.” This approach is sometimes called “zero-based budgeting.” 

My own approach to budgeting was to carefully track expenditures for a month or two, using Quicken or Excel. This provides a picture of where and how much you’re spending. Expense categories become evident after a month or so of observation. This exercise not only allows you to see where your money is going, it gives you some clues to where you might rein in unruly spending habits (for example, have you run amok at restaurants? did you really need all those clothes?). 

Once I understood my spending patterns, I established reasonable amounts for each category, including a category for savings. Any difference between income and expenditure was added to the “savings” category. Raises in pay resulted in raises in savings; although I might not devote the entire raise to increasing saving (you do have to get a life sometime, after all), I did pay myself better savings on the rare occasions the university gave me an increase.

3. Build side income streams.

Find ways to earn above and beyond the income from your day job. A master’s degree in anything will get you an adjunct teaching job at a community college. Night courses are a lot of fun to teach, because they’re full of adults who are there because they want to be there. Such gigs are not well paid, but every buck counts. I put all my net pay from teaching directly into savings.

You’re not forced to stop with just one side job. If you have a marketable hobby, if you enjoy collecting junk and selling it in yard sales, if you can trade a skill or a product for someone else’s skill, products, or dollars, you can create income that also can build your savings account. In addition to adjunct teaching, I also indulge in freelance editing. Every penny that comes in from that endeavor goes…yep! Right into savings.

Besides helping to build savings, secondary income streams have an enormous potential benefit: you still have them if you’re laid off your day job. Having the experience and contacts in teaching and editing will allow me to ramp up both those enterprises in my coming enforced retirement, and, as we have seen, will support me in the manner to which I intend to remain accustomed even if I never get another full-time job.

4. Take full advantage of your employer’s 401(k) or 403(b) plan.

If your employer  matches contributions to a retirement plan, for heaven’s sake, go for it! Every dollar your employer puts in means twice as much long-term savings for you. 

Allocate these investments intelligently, putting 50 or 60 percent in stocks and 40 or 50 percent in bonds and the money market. You have to assume some risk to make money in your investments; keeping it all in so-called “safe” instruments means your total savings will not keep up with inflation. Though the market does drop every now and again (sometimes with operatic drama!), over time losses and gains level out and and your investments build principal. Put your money in low-load funds to the extent possible (if your employer allows you to invest with Vanguard or Fidelity, these are good choices), because management fees eat into profits at an amazing rate.

Outside of an employment-related plan, go for Roth IRAs. Although these are after-tax instruments, they have the advantage that withdrawals after you reach age 59 1/2 are tax-free, which is huge. Also, they allow you to pass money to your heirs without the nasty tax gouges inherent to 401(k) plans and traditional IRAs. Here, too, set up your IRA with a low-load provider such as Vanguard or Fidelity.

5. Cultivate a frugal lifestyle.

Try to stay sane about this. You don’t really have to live like Our Hero, Scrooge McDuck. But on the other hand, neither do you have to live like an investment banker riding high. Get over the temptation to buy every new gadget just because it’s out there; to accrue stuff because all your friends, relatives and neighbors accrue stuff; to own bigger things and more things than you really need. Learn to distinguish between want and need, and then train yourself to appreciate the nonmaterial riches of life.

Frugality and simple living are the keys to living within your means. Spending less than you earn makes it possible to build savings and, eventually, to achieve financial freedom.