When people talk about different kinds of saving, there are a lot of terms that get thrown around. “Sinking fund” is a term that’s frequently used, but often gets misunderstood. I love sinking funds and they can be a great way to avoid debt, so I thought I’d clear up some of the confusion.
Archives for September 2016
Disclaimer: I am not a CPA or a lawyer, and this post should not be taken as legal or financial advice.
I like to talk about taxes because taxes matter A LOT when you’re trying to figure out how to optimize your finances. I’ve talked before about why you should care about taxes and why different kinds of tax-advantaged accounts are better than others (and how there’s only one unicorn account!). As we get closer to the end of the year, I’m going to be discussing more tax topics. Before we delve deeper, I need to cover some basics. Let’s start with the most important lesson…
The most important thing you need to understand about income taxes is the difference between a tax deduction and a tax credit. [Read more…]
When I talk about “cutting the cord” of cable TV, the most common objection I hear is sports. How can someone possibly watch sports without spending a small fortune on cable TV service? There are a number of ways: [Read more…]
Many people who don’t budget still have a Christmas savings plan. They know that Christmas can get expensive with all the gift giving and they diligently put away $50/month into their Christmas savings account. While I applaud this effort and it’s certainly better than doing nothing, many of those same folks end up with a huge credit card bill in January. Why? What happened? [Read more…]
I remember reading a story about a young woman living on a family cattle ranch out west. Her grandmother had been living and working on the ranch all her life. The woman was curious about her grandmother’s household chores and asked her how often she washed the wooden floors of the house. The grandmother looked at her in confusion and asked what the point of washing the floors of the house would be. After all, raising cattle is hard, dirty work. There wasn’t time for unnecessary chores and the floor would be dirty again in minutes. She swept out the dirt and leaves, but scrubbing would be pointless.
Can you imagine if someone today admitted they NEVER wash their floors? At least here in the suburbs, I think they’d get some sideways glances. Even if you don’t have time to do it yourself, you can hire a cleaning service to do it for you, right? [Read more…]
Latest update 8/29/17
For many years, my husband and I budgeted with a homemade spreadsheet, some cash envelopes, and a bunch of savings accounts. I knew it was a clunky system, but I didn’t know of any viable alternatives. For the last few years, I’d heard about the software called You Need a Budget (YNAB) and last fall, I decided to give it a try. It was a lot of work to set up, but once it was running, it was incredible! I felt like someone had created a tool to help me do what I’d been trying to do on my own, but it was SO MUCH BETTER!
A side effect of using YNAB was that it allowed my husband to be more involved with the budget. With the phone app, he could easily check how much money we had available and enter all of his own transactions, without me being involved. Our previous homemade system was too complicated and I had to manage it all myself.
Although I adore YNAB, it’s not perfect or free, so I decided to check out other options. Two major competitors to YNAB are Mint and Dave Ramsey’s Every Dollar. All three options have their pros and cons: [Read more…]
When my kids were little, another mom and I started swapping babysitting for date nights. We could have some dates with our husbands and wouldn’t have to spend a dime on babysitting! It seemed like a great solution and it worked really well for a few months… but it wasn’t perfect. Sometimes I wanted a date night and she didn’t need a sitter for a couple months. I also wanted to swap babysitting at other times, like for appointments during the day. We had a few other friends who were interested in our babysitting swapping idea, but we weren’t sure how to keep it organized and fair. I started reading about the idea of a co-op group (or cooperative) and thought it might work for us.
That’s how my babysitting co-op was formed, about 5 years ago. I got together a few mom friends that I knew from a mother’s group and set up the group and the rules. It’s been running pretty smoothly with very few bumps along the way. The co-op was a wonderful resource for me since I didn’t live close to any family. It helped me to feel a lot less alone in the very tough job of parenting.
Sounds pretty good, doesn’t it? Here’s how to set up your own babysitting co-op: [Read more…]
I’ve heard the arguments why living debt-free isn’t a good goal. It’s better to leverage the bank’s money or we could earn great credit card rewards or we could beat the returns of paying off low-interest debt by investing that money instead. I do see the merit in those arguments from an intellectual standpoint, but I think there’s so much more to money than knowledge. Money involves a lot of psychology, emotions, and relationships. I certainly feel that my life is better now than it was when I had consumer debt.
Here are the reasons I love being debt-free: