"Living Better...For Less"
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"The Dollar Stretcher" does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation.
In this issue:
Introduction
Calculating Expenses Using Quicken
by Karen Jones
Space Management Survival Guide:
Organize Your Holiday Wrap
by Michael G. Allen
Painless Financial Check-Up
by Gary Foreman
Ask Bob: The Automotive Answer Guy?
Winterizing Your Car
by Bob DeP
Tips, Quips, Quotes & Questions
THE REAL MEANING OF CHRISTMAS
A Christmas Story
http://www.stretcher.com/stories/961223b.htm
NEW TO THE WEBSITE THIS WEEK:
Variable Income Budgeting
http://www.stretcher.com/stories/971218a.htm
Organized to Save
by Bonnie Rice
http://www.stretcher.com/stories/971218d.htm
Eat Better, Spend Less
Lumberjack Skillet
by Julie Davis
http://www.stretcher.com/stories/971218c.htm
Converting Your Garage Into a Playroom
http://www.stretcher.com/stories/971218b.htm
UPCOMING CHATS
http://www.talkcity.com
in the Finance Center at 8:30 to 9:30 U.S. Eastern Time
12/24 - After Christmas Sales
12/31 - Financial New Year's Resolutions
Happy Hanukkah and Merry Christmas!
Hope your holiday preparations are nearing completion. And I hope you have some sanity and money left over, too! Even if you're still getting ready, you might want to take a view minutes for this week's newsletter. You'll find a few last minute gift ideas in the 'tips' section. And some advice on how to store the gift wrap after the last present is placed under your tree. So pour a cup of hot chocolate and rest a bit. Let's face it, you're probably ready for a break by now!
All the Best!
Gary
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Hi Karen,
Saw your article on the Dollar Stretcher website -- more importantly, the footnote about your expertise in Quicken.
I am not using the current version -- don't know what version it is. I think I have updated once -- probably about 2 years ago.
Anyway, I am frustrated with the budgeting mechanism. THIS IS THE YEAR that we will really get our money under control. I would like to start by examining last year's expenditures -- but the categories are so wacky! I didn't really set up categories (years ago) with a budget line in mind.
Question: Is there a way to go back through my '97 records on Quicken and recategorize -- particularly into FEWER categories?
--Rebecca
Rebecca,
Yes, there is a way to do this. In fact, that is exactly what I did when I started using Quicken 3 for Windows several years ago.
Start by doing a quick category report for each category in your list. If the report is very long, customize the layout with subtotals by payee (if too many details make you dizzy or confused, try clicking the "totals only" box when you do subtotaling). Those that have relatively few items (or payees) in them are candidates for being merged into another category. The User's Guide explains how to do this quickly and easily.
Then there are some categories than can be logically grouped together. These you can change into sub-categories of a larger category--this looks nice on reports because you get subtotals for the subcategories and a total for the group category. Simply add a new category name for the containing category, then change the categories you want to group together into subcategories of the new category. For my own Quicken file I have decided to put no transactions into categories that contain subcategories. This seemed less confusing to me when setting up the budget.
You should end up with approximately 15 to 18 major expense categories, which might consist of 30 or more including subcategories. Here is my list:
1) Charity (aka "Tithe")
2) Auto (includes 4 subcategories)
3) Clothing
4) College
5) Food (we rarely eat out; when we do it's "Food", or split with "Recreation")
6) Home (includes 6 subcategories)
7) Life Insurance
8) Medical (includes 2 subcategories)
9) Misc (see explanation below)
10) Professional Expenses (DH is self employed; includes 4
subcategories)
11) Recreation (except vacation)
12) Rental Expenses (we own rental property; includes 5
subcategories)
13) Federal Tax
14) State Tax
15) Telephone (includes subcategories for local and long distance)
16) Xmas, Vacation
If I've counted correctly that is 37 (expense) categories in all. I doubled up Christmas with Vacation--since one comes in July and the other in December, it works out "cashflow-wise". In the "Misc" category I include the following expenses: allowances, personal care (toiletries, hairdresser, drycleaning), Jamie (my DH), school & office supplies, books, subscriptions (newspaper and magazine), postage, gifts (birthday and wedding), and other (with explanation). I could have subcategories for each of these, but I put notes in the memo field instead. If I want to find out how much I've spent for one of these I can customize the "Itemized Category Report" by choosing the "Misc" category and by requesting a match in the memo field with one of those phrases. I include this as an example of how I have kept the number of categories to a minimum.
"Recreation" is one of the categories that can include a great many types of expenses: video rental or music CD's, sport events, movie or concert tickets, cost of bowling, golf, health club (or other club) dues for yourself or spouse, ballet lessons for your four-year-old, or soccer league fees for your twelve-year-old, developing and film for the camera, craft supplies, etc. You get the idea.
Do not have a category called "Cash". Instead, set up a Quicken account and track all of your cash purchases in it, just like you do for checking and charge accounts. Note: I keep the details in a ledger book, and weekly update the Quicken cash account with summary (split) transactions.
Make "utilities" a subcategory of "Home" and include in it electricity, natural gas (or heating oil), sanitation (trash pickup), water and sewer, instead of "utilities" as a separate category with subcategories. You eliminate two or more categories and on reports "utilities" is grouped with other "Home" expenses where it belongs, instead of down at the bottom (alphabetically arranged). If you want to know how much you spent on each type of utility you can customize a category report with subtotals by payee.
Another way I have reduced the number of categories is to set up Quicken "accounts" for things like "Savings", "Prepaid College Fund", or for liabilities like "Home Mortgage". Payment on the principal is a "transfer" to the liability account, reducing the outstanding balance, while interest paid is charged to "mortgage int", one of the subcategories under "Home".
IMPORTANT NOTE: If you do this you will have to budget for the transfers when you set up your Quicken BUDGET, and you do have to set up the liability accounts through the "Set up Loans" screen accessible from the ACTIVITIES drop down menu. (You have to fill in several different screens, so be sure to follow directions in your "User's Guide").
Karen Jones answers your questions about budgeting and using Quicken. If you have a question please email her at JJones@xtalwind.net.
Have the holidays gotten you crazy yet? Have you fought with the wrapping paper, scissors, ribbon, and tape and felt that you lost the battle? Holiday wrap and ribbon is expensive and none of us can afford to let it go to waste due to neglect (ripping or getting dirty) or just plain not being able to find it. In this article, I hope to share with you some ideas that you can use now to make next year less hectic. We will address several methods for organizing your holiday wrap and ribbons.
For many years, my family's holiday ribbons were shoved in boxes, bags, and drawers in our "craft room" (the basement). Wrapping gifts necessitated a frantic search through numerous piles of leftover holiday accessories, which was very time consuming. Wrapping gifts has become considerably easier now that I use a ribbon box. To make one yourself, take an ordinary sturdy box (a shoe box works great) and insert a thin dowel through the middle going the length of the box. Poke holes through the box so the dowel is removable and you will be able to more easily change the ribbon in the future. Make sure the dowel is 2-3 inches from the bottom of the box so your rolls of ribbon can spin. Cut slits in the long side of the box for the ribbon to be dispensed through. Insert your rolls of ribbon on the dowel and pull the ribbon through the slits. For a nice decorative touch, wrap the box and its top in festive paper before putting the dowel inside (cutting slits through the paper, of course). Your holiday ribbon will now be neatly together and easily dispensed!
Organizing gift wrap was another problem I used to have, but no more. Have you seen those clips advertised that hold wrapping paper together so it doesn't unravel and tear? You can easily make your own very inexpensively by using a cardboard paper towel or toilet paper roll and slitting it along one side lengthwise. Fold this cardboard roll over your wrapping paper roll and it will not unravel and will dispense much more easily.
Rather than store all of your holiday gift wrap at the top of a closet or in a bag in the basement (I know that's where you put it!), why not use a hanging gift wrap organizer and save some time next year when wrapping gifts? You can easily and inexpensively create an organizer with just a wire or plastic clothes hanger and a couple of yards of fabric. First, obtain 2-2 1/2 yards of one fabric pattern and 1 yard of another. With the larger pieces, sew them together right sides facing, leaving an opening at the top for the hanger to fit through. Turn the material right-side-out and insert the hanger. Sew up the hole and you should have what looks like a fabric garment bag.
Cut a slit vertically in the middle to one side so you can place bows and ribbons on the inside of the "bag" for storage. Put bias tape on the edges of this slit so that the fabric doesn't unravel. Attach ties to the sides of the slit so it can be tied shut. Attach long vertical pockets with the coordinating patterned fabric on the same side as the vertical slit. These pockets will hold your long rolls of holiday wrap securely.
Turn the hanging organizer over and on the other side create pockets horizontally for gift tags, scissors, tape, gift bags, etc. Tailor these pockets to your individual needs. That's all there is to it. You will be amazed next year when you go to wrap gifts and all of your holiday wrap is neatly stored in one place. This kind of organizer also works for birthday/wedding/baby shower wrap and has numerous other uses. I hope you try it.
Happy Holidays and wishing you the best in the New Year.
-Michael
Michael Allen is a part-time planning consultant and professional organizer in Denver, Colorado. He offers workshops and organization services to homes and businesses to help people get and stay organized and maximize their personal satisfaction and professional productivity. For more information, contact him at michaelallen@juno.com.
What's the quickest way to check your financial health? If you don't like accounting, math, and bank statements you've probably never really taken your financial temperature. But is there a fast and painless way to get a feel for whether you're in financial trouble?
Yes, there are a couple of techniques that you can use. Obviously, they're not going to give you as much information as if you took the time to do a personal balance sheet and budget. But they will let you know if you're heading for serious financial trouble.
One way is to take a look at your checkbook. One biographer said that when he started to do research on a person, the first thing he wanted to know was how that person spent their money. He felt that if he could look at their checkbook he'd learn more about that person than if he went to interview friends and relatives.
We can learn a lot about ourselves in the same way. What's the biggest check you wrote last month? If you still have a mortgage that should be it. If the biggest check went somewhere else you might want to ask yourself 'why?' It might be OK. Paying for college is expensive. But if your car payment is that high you could be heading for trouble.
Maybe you don't have a mortgage payment. Perhaps you're a little older and have already paid it off. If so, the biggest check could be written to your retirement saving account. Or are you taking that money and using it to pay for a boat or other luxury instead?
Then take a look at the other big checks that you write. How many of them are to pay monthly bills for things you bought long ago. Are you still paying for the furniture that's been in your living room for three years? What about TV's, stereos and electronics? Making monthly payments on those types of items is a danger sign. You could be heading for trouble.
Now let's do a little rough math. Take a look at your deposits for the month. Then compare those big unavoidable monthly bills. You know, for your mortgage, car payments and utilities. Do those payments consume more than two thirds of your deposits? You're in dangerous territory. A closer look is in order.
Don't forget about the little checks either. Are you writing a lot of smaller checks to credit card companies? Maybe you're spending too much time in the mall. What about checks for cash or ATM transactions? Are you always just a little short of cash? Time to take a look at some of that 'miscellaneous' spending. Those five and ten dollar lunches can add up over time.
What about your credit card bills? Are you among the 30% who pay off all their purchases every month? If so, you probably have your spending under control.
Take a quick look at the credit card statements. Can you remember what you bought with each charge? If you can't remember what you bought, there's a good chance that you didn't need it. Think about all the ones you do remember. Were you buying things that you really needed? Or was it for something that you just wanted at the time? Have you used all those things since you bought them?
Here's a quick test for you. Are you just paying the minimum each month on your credit card account? Flash the warning lights! Look at it this way. For every $1,000 you owe on your account you're paying $200 each year in interest payments. That's $20 every month that doesn't bring any food, clothing or anything else into your house. Do your own math to see how much is flying out your window every month in interest.
Finally, how do you feel about money? Some people look at money as 'fun tickets'. They think that you buy stuff and happiness follows. Those are usually the people with long credit card bills. Others view money as a measure of their success. They need to earn more than their neighbor to feel 'fulfilled'. Their income (and what they buy with it) determines how happy they are. Since they're always on a quest for 'more' they can't be happy with what they have. It's a great formula for a lifetime of unhappiness.
Well, there you have it. A quick check-up on your financial health. I hope you found yourself in tip-top shape! But if not, remember that we were just looking for the symptoms today. It's up to you to take a few more tests and find how bad the illness is.
See, that wasn't so bad, now was it? Don't forget to make an appointment for your check-up next year!
Bob,
What are the most important things you should do to get your car winterized?
--B.
B,
Well this is a very good question and I am surprised that no one has asked that before. Plain and simple here it goes:
1) Make sure your battery is good and strong. It takes a lot more power to start your car when it is really cold outside.
2) Make sure your tires are good. Without traction, you might lose control and we don't want that.
3) Make sure that your coolant system is operational. Even though it's called coolant, it also keeps your car warm. You cant imagine how many cars overheat in the winter because of this problem.
4) Make sure that your fuel system is clean. Have some "dry gas" in the gas tank. This will help displace the water so it does not freeze.
5) And finally, just like any other time of the year, make sure your car is properly tuned up.
Good Luck!
Drive Safely!
Bob
The Auto Answer Guy?
note from Bob:
To all readers of my column, if you would like me to respond to a problem or question, you must have a valid email address. All invalid email address will be deleted from my inbox. You see, I have been getting spammed by people sending to askbob@stretcher.com. In order to end this, all email addresses are verified. If they come back invalid, I send a letter to their ISP notifying them of possible spammers. This process is mostly automatic. Thank you for your cooperation and continue to enjoy the column.
Bob answers your auto questions. If you have a question for Bob just send it to him at: AskBob@stretcher.com.
I love popcorn and I also like the convenience of using the microwave to make it. I don't like the prices of the microwave popcorn though. I have heard that regular popcorn can be made in the microwave but can't find out how it is done. I couldn't find the info on the site, can you help me?
--Barry
My husband and I always liked treating ourselves to a fast-food restaurant once a week, until I was laid off this June. I heard there is a cookbook that has been written on how to make fast-food style restaurant foods, like the Big Mac and Pizza Hut Pizza. Does anyone happen to know the name of that book or the author? I would love to find out! That way hubby and I can still enjoy a Big Mac or Pizza Hut right from my own kitchen
Thanks!
SLG
I live with my mate and three children in a three room shotgun house. The kids are constantly under foot, there is NEVER any peace and quiet at our house. We are currently using the front room as a living room, the second room as a bedroom for the five of us- this is not working well, I have to sleep in a separate bed from my mate because when we put kids to bed that takes up all the room. The 3rd room is our kitchen and this can`t be changed. If anyone has any ideas on making life more livable please let me know.
Thanx,
--A.
If you are looking for a unique gift idea for a young reader that is also inexpensive, this is for you!
Ask your young reader for their favorite books from school or home. Kids love to talk about this! Then, find the book in the library or buy one from a bookstore. Make a photocopy of one of the illustrations that clearly shows the subject or character. Then, use a tracing machine (available through craft stores) or use a transparency and overhead projector to trace the image onto a t-shirt or sweatshirt. Use acrylic paint and small brushes. To go the extra mile, buy the matching book for the child. Kids will proudly wear this to school to show their friends! I made matching shirts for my one-year-old niece and sister for Christmas and they are adorable. You could also do this as a wonderful gift for your child's teacher with one of the books they have read in class.
--Vicki S.
Elementary School Teacher
For the children in the family I am making "pocket buddies" and "bed buddies".
Basically what I am doing is to cut 2 squares of fabric (hand size for the pocket and approx. 12" x 6" for the bed). Sew with right sides together, turn and fill with rice. I still need to make-up an instruction card (I was thinking about a poem) with the instructions for microwave or freezer. Make sure that you use heavy material so it won't get too uncomfortable for their little hands.
Christina
Blacksburg, VA
(editor's note: for the uninitiated, 'buddies' are used to apply mild heat or cold depending on whether they're prepared in a microwave or freezer.)
My mother is very hard to figure out a gift for as she is so frugal that she literally doesn't need anything! Anyway I thought that I could get my children to make placemats out of paper with anything you could think of on them. (Artwork, cutouts, poems, etc...) then get them laminated at the local photocopy outlet. They could be wiped off and reused and the one thing that always seems to please Grandma is a handmade gift from the little ones.
--RV
For those old tired Christmas trees: don't throw them away. Trim the branches and remove green needles. Use soft pliable branches to weave or braid or twist into door wreaths for next year that look like grapevine wreaths. When they dry, they harden and you can add bows, ornaments, etc. Meanwhile, use the pine needles to mulch rose bushes and such. I also take the bigger branches, remove pine needles with a jackknife and then slice the branches about 1/4 inch thick. These dollar-sized slices make nice wooden beads for jewelry or wall hangings, and also great wooden buttons to go on homemade vests. Peel the bark off, please. Then, I recycle the trunk of the tree into a walking stick since all the branches are already removed. I peel the bark off, carve designs, names, dates, or initials into the trunk, carve a fancy knob such as an animal head or flower and then let it dry. After drying, I sand it smooth, doesn't take much, and then stain and shellac it. I sell my wreaths, wooden buttons and sometimes my precious walking sticks. I am a recycler deluxe. Now my Christmas tree pays me, instead of me buying it and tossing money out the door every year.
--Mary
Amarillo, Texas
I have heard of two methods of budgeting in this situation. The first is to budget normal expenses (rent/mortgage, food, etc.) according to your low-income months, and use the high-income months to pay the occasional expenses-- car insurance, etc., and savings.
The other method, and the one I believe is more effective, is to budget for a year rather than a month. Look at your total income/expenses for the past 12 months, adjust for expected income/expense increases & decreases, and divide by 12 to get a monthly budget. On the months that you get $4000, you only spend your $2000 budget, putting the extra $2000 in a savings account. Then, when you only get $1200, you can withdraw the extra $800 from your savings account and still cover your $2000 budget. (Obviously, these figures are only examples.)
This is difficult if you start your budget during the lean months instead of during the fat months, but can be worked, perhaps with a combination of the two methods, until you reach your high-income months.
--Tim.
We also live with the same situation. What I do is, figure out what our basic needs are each month. If we have a big month, I try to put money aside for "basics" as far ahead as I can. I also set some aside for bulk grocery shopping at a warehouse, or buyout store. I may pick up 10-20 pounds of flour (at 69 cents/5 lbs.), or stock the freezer with meat on sale, etc., or canned goods on sale. When we have a tight month, I know we can do OK because the freezer is stocked, the money is set aside for many of the bills, and the cupboards are full. Also, if possible, I usually take a "chunk" of money when we have a really good month and set it aside for big bills like insurance, taxes, etc. It's really just a matter of self discipline--if you don't know what is coming in every month, you cannot go "hog wild" when you have a good amount of cash come in. My husband and I are both self-employed, and truthfully, it gets awfully slow in our business Jan-March or April. On top of that, if he works in April, we usually don't get our check for 30 days after that. So you can see, if we didn't put some aside in the other months, we'd be in a big mess.
--Helene M.
(editor's note: more good suggestions for variable income budgeting on the website at http://www.stretcher.com/stories/971218a.htm).
I needed to ship a Christmas gift to my aunt across the county in Oregon. I did not have the time to package the present (a stereo I was no longer using) and ship it so I tried out one of those shipping services (Mail Boxes Etc.).
What I found out was their shipping material price was three times what it should have been. In addition, they mark up the standard UPS charges, in my case by about 32%.
Do yourself a favor: make the time to "do it your self and save"! I could have bought the boxes and packaging materials, packed it, and carried it to UPS, and my savings would have been about $118. Not bad for a couple hours work!
--A Smarter Consumer
Planning for future use now could really save time/money down the road. Plenty of outlets, as well as cabling for phone/audio- video/computer can be a godsend.
Something I wish had been done when the previous owner converted my garage to a room is include a wall of storage cabinets/closets (do you currently store more than just a car in your garage? Where's it all gonna go now?).
A portion of my original garage was framed in to be a small storage room (accessed from outside, bummer), and a laundry room as well (this just happened to be located where the old hookups were in the garage - no plumbing change).
Add plenty of windows - garages are notoriously dark, and nobody wants to play in a dark room.
Insulate Insulate Insulate!
Consider a pull-down ladder to access attic for storage if this is a separate space.
Get permits if required. At least where I am, if you go to sell and there aren't permits on file for renovations done since the last change of ownership, somebody's gonna pay! (usually you)
Consider uses and plan materials accordingly. For instance, are there certain materials for flooring/wall coverings that will make arts & crafts cleanups easier?
Can it be heated/cooled by adding to your current system?
--Al B.
(more ideas for a garage to playroom conversion at http://www.stretcher.com/stories/971218b.htm)
Concerning getting laundry white, an old neighbor of mine from the Canadian west gave me a great hint that I have used ever since. When the weather is freezing put your wet and rinsed wash in a basket or some kind of clean container and put it outside until it freezes. When you bring it in, and it has thawed out, dry as usual. It will be as white and fresh as if it had been hung outside in the sun.
Of course it only works if you live in the northern states or Canada as I do.
--Sylvia C.
I would like to comment on Jack's issues with CCCS.
I found that they DID include ALL monthly expenses in calculating paybacks and payoff times. They honestly discussed budgeting with me and were concerned that my budgeted amounts be real-world. Also most of my creditors are reducing the interest on their finance charges.
Also to note is that if you don't have enough income to cover all your bills, CCCS won't touch you. They require that your "ins" be greater than you "outs." I found this to be a realistic view.
As for the extended payoff time and increased finance charges paid; yes - a reduced amount repayment schedule will cause you to pay more in finance charges, BUT what value can be placed on the psychological relief that one gains by knowing the bills are being paid? That is, you've been given hope back...
Maybe there's more to the CCCS idea that just fiscal recovery. The CCCS office here is under the umbrella of a family counseling center and I would venture a large number of CCCS clients start out with marital and family problems. But the root of the issue is financial.
I agree with Mr. Mann that CCCS isn't a cure-all for everyone but they do fill a need for many people. I would be interested to know whether Mr. Mann's current auto was chosen strictly on the factors of MPG and safety or was comfort an issue?
--JW
(editor's note: a couple of readers had comments similar to JW. Having made positive mention of CCCS in the past, I felt that it was appropriate to allow for another point of view. The goal here is not to only provide views that the editor supports, but to give you different ideas so that you can make the best possible decisions for your own situation.)
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