Does this look like the face of someone who wants to discuss good financial habits for her future?

I’m over at AlphaMom today talking about how no matter what I try to tell her about saving money, it’s my example that she’ll remember.

Read the post at AlphaMom and jump into the comments there to discuss:

See the comments for this post: Teach Kids About Saving Money

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I heard my friend say that line the other day, “Love doesn’t buy the groceries.” She was saying how she used to not be concerned about money in college. She was just going to live on love, but then she realized how important money was to run her household.

Then I received Tsh Oxenreider’s (from Simple Mom) new book Organized Simplicity in the mail. (It’s great, I’ll tell you about it soon.) There’s a part in the book where Tsh talks about coming out of college with a chain of student loans, having a strong work ethic but poor money management skills. She had never put much thought into saving money until she realized she wanted to make a change.

She wrote, “Because I wanted to work in the nonprofit industry, serving the underprivileged and making a difference worldwide, I even bought into the notion that saving money was something you did only if you loved money. I never had dreams of luxury living, so I wrote off saving money as though I just wasn’t cut out for it. I continued to live in the moment.”

Do you feel that way too?

I think that’s a temptation for a lot of people not to think about money management because you don’t want your life to be about the money.

But here’s the kicker:

When you don’t give thoughts to money management, then your life becomes all about the money.

Every decision, every situation, depends on where the money will come from, and the things that are part of regular, everyday life become stressful when they don’t have to be.

Making smart decisions by thinking about money for a short time saves you from thinking about money all the time with worry or none of the time through denial.

If you want the freedom of living life without financial barriers, then you have to invest the time and attention to managing your money. Then your money becomes a tool to bless others, instead of being a burden.

See the comments for this post: Love Doesn’t Buy the Groceries

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Anyway, when I got that first cell phone I signed up for a monthly plan, and I stayed with it for the next ten years. I canceled my home phone and felt modern with just my mobile phone.

In July 2007 our family decided to do our first No Spend Month. Since we weren’t spending time shopping, I had time to look carefully at our regular monthly bills. I noticed I wasn’t talking on the phone that much, but I was spending $40 a month for it. I decided to switch to a prepaid “pay as you go” plan from T-Mobile, the kind where you buy minutes in advance and refill them when you need to.

Three years later, I’m glad I did. I’ve been spending an average of $7.64 a month for my phone minutes, compared to $40 before. Over three years that saved me $1,165! Additional bonus? No contract.

This works for me because I’m not really a phone person; I use it occasionally. We also have a home phone now because where we live a home phone with internet service costs us less than internet alone.

Doug asked me if I wanted to upgrade my phone so that it would be easier to text, but I think I’ll stick with what I have and my $7.64 monthly cost.

You can text me, just don’t expect a quick response because I’m pretty slow at triple-tap. I should probably also figure out how to program phone numbers into it.

See the comments for this post: My $7 Per Month Mobile Phone Plan

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Have you ever wondered how much someone else spends on groceries to get an idea of how you’re doing with your grocery spending? No matter what amount she says, her family is different from yours, so then you have to do conversion math:

So that would be…

+ $100 per additional kid in your household

double if your kids are teenagers

- $38 if your kid only eats peanut butter

+ 50% for special diets

- 20% if you try to cook from scratch

- $15 if you save on household cleaners

+ $25 if you love Kettle chips

x 1.4 if you choose all-natural ingredients

+ 15% if your city has a higher cost of living

- 17% if you watch for sales

-$20 if you drink more water

then take the last digit of your phone number and place it at the beginning, and divide it all by 5.

When you finally get an answer to compare to yours, it might be higher or lower, but is that good or bad? Or does it even matter?

***

I used to be overly concerned about trying to make my grocery spending lower. I was caught in a game of grocery limbo: “How low can you go?” and while my motives were good (be a good steward of our money), the results were not what I desired.

I read several times about how food is a very flexible part of your budget. You don’t always have control over your other expenses, but you can save money on food. So I tried it, and it wasn’t working. I was spending less money on groceries, but every time we opened the fridge we felt disappointed. So you know what we did? We went out to eat more often.

Two years ago when I started to understand the extent of the food intolerances that run in our family, I had a hard time getting used to the idea of spending more for special food that was dairy-free and gluten-free. The cost of yogurt was suddenly double. Muffins and loaves of bread, which are a cheap food for others, became an expensive special treat. I saved special foods for my little girl, but couldn’t eat them myself.

Time heals a lot, and I gradually became used to the higher cost of food. I also saw the ill effects and medical bills when someone in our family ate the wrong food, and not in the vague “you’ll regret this when you’re older” way, but later the same week. I’m fine with spending more money on food now. We have it, and I will spend less on other things. I know this is not an option for everyone, and I don’t take that lightly.

I still watch my spending, but I do it differently now.

1. Each month I look at how much I spent on groceries, but I don’t isolate that expense. I look at it as part of our complete budget, and I watch how much we’re spending on lunches and dining out too. (We definitely spend less on eating out now.)
2. I also watch the average amount that we’re spending on groceries during the year. If I spend more to stock up in some months, then I should be able to spend less during other months. This gives me a better idea of what to expect.

Even after hearing all of this, I think some people may still be curious to know what I spend, so I’ll tell you. I’m averaging $550 a month on groceries so far this year. There are four people in our family, and one is a baby. We’re gluten, dairy, soy, and corn-free, and that’s just the beginning of a long list of ingredients we must avoid. My husband can expense most of his lunches for work. I like to buy whole chickens that are already smoked, because dealing with raw chicken is just too medieval for me. We chose our apartment by looking at Whole Foods locations on a map and drawing a radius within a certain number of miles. How does this relate to your budget? I’ll let you do the math…

See the comments for this post: “How Low Can You Go?” and the Grocery Budget Dilemma

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There are always good sales in July.

Actually, these days there are good sales in every month, but I especially notice the good ones in July. That’s when I’m trying not to spend any money.

During a No Spend Month, I don’t set foot inside a mall. Not that I go to the mall very often during a normal month. In fact, I don’t even like to shop at Target. (Am I allowed to say that on the internet? It’s true. Please don’t throw things at me.)

One day last week I surprised my daughter with a trip to the mall so she could run around the children’s play area. All of a sudden, I saw lots of stuff that I didn’t even realize I needed until I saw them on sale. Especially sales for children’s clothes.

Just a couple of days earlier I had congratulated myself on having fewer baby clothes this time around. Maybe it’s due to having a boy instead of a girl. He has enough clothes for one week before the drawer is empty and I wash the laundry. Fewer clothes means everything is well-worn and there will be less to sort and store later.

It certainly doesn’t hinder the cuteness to have fewer clothes:

But that day I was faced with tiny pants at 50 percent off, and I started to waver.

I almost buckled. I tried to justify them. I tried to think of a reason to need them. Perhaps he didn’t need them right now, but what if I bought the next size up?

Fortunately, I knew what clothes we had in the next size. The way I store children’s clothes is quite likely organizational overkill, but it works and the clothes stay organized. (Maybe you noticed the boxes in the back room, on the left side.)

I chose not to buy them, and I thought about the clothes we already had instead.

It’s not easy to let go of the chance to buy something nice at a great price. There’s a thrill involved.

If I bought those pants, I could have saved 50 percent. By not buying them, I saved 100 percent.

Doug and I decided a while ago that we were done buying things for the apartment. We’ve decided it is good enough. We could still be thinking of improvements, or ways to change it up, but we think it’s done. That’s a benefit to having a small home: it doesn’t take much to furnish, and you don’t want it to be cluttered.

In the same way, I don’t feel like I need any more new clothes. I’ve been trying to put the theory that “less is better” into practice and wear what I have.

I even did less grocery shopping this month, so we could eat more of the food we have on hand.

You cannot have a simple life or a simple home unless you can pass up a sale or choose to miss a bargain.

You won’t be surrounded by a lot of extra stuff, and that’s worth more than discounts.

Besides, there will always be another good sale.

See the comments for this post: Is it a good buy? Or just a bargain?

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It’s been good for us. So much so that this year when I asked Doug if we wanted to do it again, neither of us were sure.

“Well, if we do No Spend Month again, what would be the point? What do we want to be different about our spending?” I asked.

“I like our spending the way it is.”

“I do too.”

So with that, we decided not to do a No Spend Month this year. We’ve reached that happy balance of needs versus wants, of being mindful with our money, and knowing that if we had to, we could make do without an income for a long time.

But what if people hoped I would write about it again this year?

Truthfully, No Spend Month was never supposed to be a blogging stunt. It began long before this blog was created, one night late in June 2007 when I noticed I was spending my free time looking at Craigslist for vintage furniture that never would have fit into my small apartment in the first place. I found myself using shopping as entertainment, and I didn’t want to be like that. To break the habit, I decided to completely cut off spending for the next month. And just like that, July became our No Spend Month.

If I had known at the time that hundreds of thousands of people would read about No Spend Month here at Small Notebook, that I would talk about it on television and the radio… well, I probably would have given it a name that was more literally and grammatically correct. One guy was disappointed we were spending a little, and not living in a van and foraging for food.

How We Do It

When we have a No Spend Month, we limit ourselves to the basics of all discretionary spending. Even the groceries are limited because of how easy it is to satisfy our wants with food. (Potatoes? Fine. Chips? No.)

I took our grocery budget at the time (which was about $300 a month), reduced it by $100 because of the food I had in the pantry, and decided that for the entire month of July, $200 would cover all our discretionary spending: groceries, gas, clothing, household, eating out, entertainment, and coffee. (The next year we increased the budget to $250.)

Of course what was not included was our rent and bills, business expenses, health care, tithes and gifts. We weren’t willing to suffer a health problem for a challenge, and we didn’t face any big catastrophes like a major car repair.

But for the rest of it, we just stopped buying it. Everything that was a choice, that we had conscious control over, we made it fit into the budget or else we didn’t buy it.

And then an amazing thing happened. We suddenly had lots of free time. Shopping takes an extraordinary amount of time. I used that extra time to look at other bills. I changed my cell phone plan. I changed our car insurance. I found more ways to save money, and we still reap those savings benefits every month.

I thought once the month was over we would be desperate to go out for coffee or to go out to eat, but it wasn’t the way you would think. An entire month is long enough to change your perspective about spending money and what you get from it.  You can change your habits. You suddenly realize the value of a dollar when you have to stretch every single one and make it count.

I think some people make this challenge too complicated. I hear questions like, “What if you run out of printer ink?” Um, don’t buy any. “What if your coworkers invite you to lunch?” Go next month. (Yes, someone else buying your lunch is kind of cheating.)

You might have to find something new to do for fun. Invite friends over. Go to the library. Have a picnic.

No Spend Month has changed the way we use our money. Since we do it together as a family, it’s made us different.

The first year we finished with a nickel and three pennies remaining. During the final days we talked about if we should spend three of our last few dollars on a gallon of gas or more food. The second year we made it with twenty cents left over. The third year we did even better.

If you want to try it yourself, if you want to see if you can do it, here are some past articles to get your started:

No Spend Month July 2008 with weekly updates

No Spend Month July 2009 with weekly updates

The Takeaway: What I Learned From No Spend Month

Resisting the Desire to Acquire

Your family is different than mine, your needs are different, so adapt this plan to suit you. Spend as little as possible during the first week so you have more if you need it later. The third week is always the hardest. Try to keep grocery treats at home on the weekends so you don’t feel deprived. Use cash. You can do this.

“When we take a break from spending, we learn to appreciate what we have. The convenient restaurant dinners become a special treat, our favorite foods are savored, and every time I put gas in my car I am thankful to have the money to do so. We stop taking things for granted.” — July 2009

Even though my family is not having a No Spend Month this year, I still find myself thinking about saving money in July. It’s become a natural habit. I’ll be writing more about money this month.

See the comments for this post: The No Spend Month

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A budget doesn’t help you unless you use it. Much is said about making a budget, but what do you with one after you’ve got it?

Doug and I sat down together this weekend since it was the end of the month, and we looked at our budget and spending. It didn’t take much time, because there shouldn’t be any surprises.

Here is what we discussed:

1. We didn’t go anywhere because it was so cold outside, so my gas expenses were down.

2. I think our food costs are high. Doug says to keep it the same, because he likes our food and we don’t go out often.

3. There’s a dentist bill I don’t like very much. Moving on…

4. With spring coming, what do our wardrobes look like? Can last year’s clothes make it through the end of this summer? Does anyone need shoes?

5. We made a decision that it’s time to replace our old car. Our old car is twelve years old, and our “new” car is eleven years old. We plan to buy one with cash and avoid debt, so we talked about what kind to buy and how much we can afford.

When looking at a budget, whether it’s for you or it’s you and a spouse, there are a few key concepts to keep in mind:

Add grace to your budget.

There are bound to be accidents and mistakes. How do you categorize them? We literally have a line item in our budget called Grace. It helps us to not be mad when one of us does something wrong. (Read more about adding grace to your budget.)

There will be expenses you don’t like.

Chalk them up to the “cost of living.” Acknowledge them, but don’t dwell on them.

Plan your actions for next month.

Your budget needs to be tweaked from month to month. What will you try to do differently, and what purchases do you plan to make?

A budget isn’t supposed to make you feel trapped or constrained. It’s not there to make you feel bad. It isn’t something you use to pick fights with your husband. It isn’t someone standing over you questioning your every expense.

It’s a planning tool, and it’s yours. It’s there to put you in the driver’s seat so you don’t have to wonder where your money went at the end of the month. It’s there to help. Use it.

See the comments for this post: You’ve Got a Budget, Now What?

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Photo by Photos8.com

The following is a guest post from Jamie at Steady Mom. Her blog is a gem and one that I read regularly.

You don’t need me to tell you that times are tight. Frugality is an important part of making life work in today’s economy, especially as a mother.

Yet sometimes I find that the pressure of needing to save money leads me to feelings of deprivation, focusing on what I can’t do.

Instead, I prefer to think about investing our family’s money, choosing with intention the items that will bring the best return on investment — in time, financial savings, and quality of life. This helps me feel empowered, not stifled. I enjoy knowing I’m spending our money in ways that reflect our top priorities.

So here are three ways to buy without feeling guilty afterwards:

1. Invest in your family’s health.

Photo by K Lachshand

Quality, whole food costs more than mass-produced, processed food – there’s just no getting around that fact. Saving money on food is possible, but it isn’t worth sacrificing quality to do so. Most families in the United States spend less of their income on food than those in other developed nations. While that sounds positive, it’s sadly true that those in our nation also spend more on health care – in a large part due to illnesses caused by the cheap, overly processed food we tend to eat.

Michael Pollan, best-selling author of In Defense of Food, advises people to spend more on food, but buy less. This strategy evens out the cost. I’ve found in our home that since we began investing in high quality food, we’ve naturally lessened the amount of money spent at Starbucks and similar spots. This has meant less of an impact on our budget as we choose what’s best – healthy food for our bodies.

When you invest in nutrition for your family, your body isn’t the only thing that feels better – your mind does, too. I love the feeling I have after shopping at our natural food store. Instead of handing over my family’s hard-earned dollars to the Mega Big-Box Grocery Store, I’ve supported a local business adding sustainable value to the world. What a return on my investment.

Need help figuring out what type of food to invest in? Check out these links:

• The Dirty Dozen: Top 12 Foods to Eat Organic
• Healthy Homemaking: One Step at a Time by Stephanie Langford

2. Invest in your home library.

Call me old-fashioned, but I think books never go out of style. Your local library is a wonderful place to use regularly, but every inspiring home needs its own shelves of tried-and-true favorites. I’m not referring to stocking up on too many 25-cent finds from tag sales. Remember: It’s about quality, not quantity.

So take the time to make sure that the books you have inspire you and your little people. Books like Honey for a Child’s Heart and The Read-Aloud Handbook are fabulous resources to point you in the right direction.

Once you’ve found titles worth keeping forever, don’t feel guilty for devoting a little of your family’s budget on them. Books are truly an investment – in our children, in our imagination, and in our education.

3. Invest in experiences, not more stuff.

Most of our homes don’t need any more stuff. That’s why so many books and blogs have been written to help us organize our possessions before they consume us.

So when it comes to special occasions – holidays or birthdays – think outside the box. Instead of spending money on more toys for our children or ourselves, let’s invest in experiences.

Photo by Steve Evans

The possibilities are endless: memorable vacations together, tickets to the ballet, or maybe taking our kids to a new ethnic restaurant. Spending money this way invests in our relationships and in valuable memories the family will never forget. Try to get that same return on investment from another plastic, disposable toy off a store’s shelf.

Money itself is nothing to be afraid of, even in lean times. It’s just a tool – a powerful one we can use to bless our family. Yes, at times we’ll sacrifice in order to meet a higher priority. That’s okay. With each dollar we spend, we input into the type of atmosphere and culture we want for our loved ones. By investing intentionally, we reap the benefits of a closer, healthier family.

Jamie writes about her journey toward becoming a more intentional, professional mother at her blog, Steady Mom. Topics include getting organized, retaining enthusiasm, learning together, and making memories. She candidly presents the successes and struggles of doing life with her six-year-old daughter and two four-year-old sons (not twins!). You can find her with a cup of hot tea in one hand and a satisfying book in the other. Jamie’s upcoming book, Steady Days, will be available this winter.

See the comments for this post: 3 Great Ways to Spend More Money

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Photo by Adam Scheuermann

I’ve been spending a few days reflecting on last month’s No Spending Challenge and thinking about how to carry some of those new habits forward. (Because why would I save money all month and then toss it at the end?)

This was our third year to try this family challenge, and each year was definitely easier than the one before. The first year we learned the hard way that even something as small as $15 on dinner out made it difficult to meet a $40 weekly food budget. This year we were committed to making the most of every dollar.

Here is what helped me the most, and what I plan to carry forward:

Skip the weekly grocery shopping once every few weeks, and take the chance to use up the food accumulating in the pantry and freezer. It can be hard to skip the weekly sales, but stores will always have more sales.

Create a wish list instead of buying instantly, and wait a couple of weeks before making purchases. After waiting a while, I ended up crossing a few things off my list instead of buying them.

Finish up current projects before buying supplies to start new ones. This one is tricky for me, because I love the inspiration of new ideas, and new projects always seem more appealing than the ones I haven’t finished. This month I was able to accomplish a lot of projects that had been sitting around and taking up space.

Always have a few quick meals in the freezer so you don’t rely on takeout for the hectic days.

I didn’t send my husband to the grocery store alone. There are a lot of things that he can do better than me. For one, he’s a better cook. He can fix things. But between the two of us, I’m the more price-sensitive shopper. He doesn’t go to the grocery store often enough to know when something is really on sale or when it’s just a promotional sign.

Establish a routine errand day. By grouping my errands and shopping into one day a week, I saved gas and time by consolidating trips. I made a well-planned list ahead of time of what to buy, and I didn’t make extra quick trips to the grocery store that would have enticed me to bring home more than we needed.

Find your favorite cheap meal. When we’re on a beans and rice budget, we get tired of beans and rice. Neither of us want the leftovers. I found out we both enjoy scrambled eggs with salsa and baked potatoes. We could eat it every week without getting tired of it.

Keep good food at home, especially having favorite snacks on the weekends, to avoid the temptation of going out and spending more.

Think about why you’re shopping. I learned early in the first week how often I was tempted to do the shopping as a way to procrastinate other work. Shopping is time consuming, and even though it’s good to buy things for your household, it can often wait.

What Others Said

It’s been fun to read the comments and insights of others who have taken on similar challenges. Here are just a few:

“We did our own version of the no-spend month… It was so awesome to be forced to really evaluate each and every dollar we spent, and it also helped us to reach our goal of paying off our car in full by the end of that month, which was the absolute last of our debts. Since then, we’ve been able to save, save, save, which is just such a good feeling!” — Stephanie from Keeper of the Home

“We did a no spend month last October and though it was hard to go through, it really did open our eyes to how much we spent on the “little things.” It also gave us more strength to say no to spending in other situations once the month was over.” — Jenni from Life from the Roof

“Coupons and gift cards don’t save you any money if they cause you to spend money you weren’t planning to.” — Holly from STL Chases

“The biggest benefit we’ve experienced this month is we’re getting much better at sticking to our grocery budget… If that’s the only skill we’ve learned through cash budgeting, I’d say it’s absolutely worth it.” — Karen from Living Well on Less

What Do You Think?

See the comments for this post: The Takeaway: What I Learned from Our No Spend Month

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I don’t think Lane ever noticed that it was No Spend Month.

When the last day of No Spend Month finally arrived, I still had $67. We’ve never had so much money at the end before. I even had a half tank of gas in my car.

I went grocery shopping during the morning. Doug requested chips, and I bought a few other treats and some of the ingredients I needed for the batch cooking I want to do this week.

The pantry contains less now, but that’s a good thing. I wouldn’t call it empty, but it’s certainly decluttered. It reminds me of when I cleaned out the spice cabinet. When I toss dried basil that’s ten years old, I don’t need to replace it, since we were obviously never going to use it. A lot of the food in the pantry was being passed over every week, and now that we’ve finally used it up, I don’t want to buy more.

So what are we going to buy now?

Doug wants a hair cut. He needs it, but he wasn’t brave enough to let me do it to him for him.

I plan to buy a new soup pot, because the one I have is warped and doesn’t cook the food evenly. That’s a purchase that was delayed during this month. Waiting to buy it didn’t save me any money, but it did give me a few weeks to think about it and make sure I really want it.

Those delayed purchases are the exception though, because as I look at my budgets from previous months, most of the discretionary expenses we avoided this month are things that we would have consumed. I’m sure I’m not alone in this. Restaurant dinners, entertainment, impulse shopping at the grocery store, coffee stops, and extra car trips to go pick up this or that. The money we didn’t spend on those activities is truly saved. We don’t want to suddenly go eat out twice as much now to make up for the dinners we didn’t eat out this month. In fact, we usually eat out less in the following month, because that’s what we’ve become accustomed to. I am looking forward to having a bigger budget, but my habits have already changed.

By evening, after grocery shopping, we still had $10 left. I saved it in case we wanted to go out and do something fun to celebrate. Should we go out for coffee? No, the coffee at home tasted better. Did I want a milkshake? No, I had a better smoothie at home. See, that’s the problem with No Spend Month. It makes going out and spending money not seem like quite as much fun, because the money doesn’t go very far.

Stopping spending is like going without sugar. It’s kind of hard at first. Have you ever given up a soda habit? I really like root beer, but there have been seasons when I’ve stopped drinking it. Later if I treat myself to a root beer in a tall frosted glass, it never tastes as great as I hoped. It’s too sweet. Yes, it still tastes good, but it’s not as satisfying as it once was.

We decided to stay home instead of going out to celebrate, so we sat out on the balcony and talked while we watched the rain come in.

I didn’t think that No Spend Month could go this well. Thank you so much for your encouraging comments. It certainly helped me to be accountable each week. I learned a lot too, some things I had forgotten, but that’s something I’ll have to tell you about next time.

See the comments for this post: No Spend Month Update: The Final Day

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