alancleaver_2000/Flickr
This list intrigued me because I continually ask myself if I am spending and saving responsibly. If many of these behaviors ring true it is time to consider changing your ways. How many of these habits are you guilty of? See my answer below.
The following list comes from Billshrink, a site that compares plans for cell, cable, and other services to see if you are getting the lowest price.
1. You charge group dinners on your card and keep your friends’ cash to spend.
2. You spend more than 40% of your total income on rent.
3. You’re constantly transferring your balance to get 0% interest on your credit card debt. (more…)
Illustration by OConnorCartoons.com
This is a post by BargainBabe.com writer Yazmin Cruz.
Reader Gabrielle wins my review copy of “Cash, Credit, and Your Finances: The Teen Years,” for her funny comment about needing the book not only for her spoiled children but her husband as well. She wrote:
My teenager, you mean my hubby. I need this for my teenage like husband! HAHA!! No, but we have two pre-teens whom my mother-in-law has spoiled to no end & ruined any attempt I have put in to teach them about money, saving, & spending when needed instead of on any little thing they can afford.
Gabrielle, I love your honesty about your kids being spoiled. It is my hope that this book helps them learn about money and the importance of saving. Although the book is aimed at teens, I’m sure your husband will also learn a couple of things. When reading the book, I was reminded I had to set money aside from my freelancing paychecks to pay for federal and state taxes when the time comes around. I’m no longer a teen but the learning never stops.
If you missed my review of the book, author Jill Russo Foster says that teaching teens about money is the key to avoiding debt. Her easy-to-read book includes information from creating a budget to avoiding identity theft. This book is the first in a series of three books on personal finances by Foster.
Gabrielle, email me to claim your prize and include an address where I can ship the book to.
If you didn’t win my review copy and would like to get the book for your teen or you’d like to brush up on the basics, Amazon has it for $15.25.
My $37.89 credit card regret.
My credit card bill is due in a few days and while reviewing my charges from the past month I found one that I really wish I could take back. While stopping at California winery for a tasting in July, I bought a handmade vintage mini-quilt to hang in my office. The cloth, folded so a fourth of it shows above, can also be used as a table covering.
Purchase price? $37.89.
The cloth has picket fence edges and the material is very sturdy and soft. I like thinking that a woman used her creativity to sew a beautiful work of art that is entirely practical.
When I inspected the cloth more closely at home, however, I found a small stain and realized four circular embellishments were added to cover an inch-long rip. You can see one of the embellishments in the top right corner of the photo. I still adore the vintage cloth, but I think I could have found something similar at a thrift store or flea market for less than $10.
So if there is one credit card purchase I regret this past month, it is this mini-quilt. I was a bit tipsy when I made the purchase, and saw so many cute things in the shop (like cherry earrings for $10) I wanted to take home something. The earrings were only worth $5 to me, but maybe if I had bought those I would have passed on the cloth. At least I didn’t splurge for the vintage $25 waist apron. It was so adorable I never would have worn it!
What do you regret buying this month?
If you are the parent of a teen and have been looking for the right time to talk to him or her about money – now is the time. Jill Russo Foster, author of “Cash, Credit, and Your Finances: The Teen Years
I’ve come to believe that financial education is the key for everyone. The sooner you start learning about money and personal finance, the sooner you can take control of your own finances. This book will start you off in the right direction and teach you how to build good financial habits.
Foster, who is now in the mortgage industry, started her financial career right out of college when she began working as a bank teller in an affluent neighborhood. She recounts that most people she saw at the bank wore designer clothes, had the latest car and were also on the overdraft list.
In the book, Foster uses examples of five teens that were given her book to read and later tells of the changes they made to change their money habits. The teens’ stories and her own – she admits to having 27 credit cards at one point – make the book easy to read. Your teen will be able to relate to the teens’ stories and learn from their success and failures.
This 84-page book will teach your teen about the basics of managing their money – think allowances and babysitting money – while thinking of long term goals like saving for college and short term goals like buying an iPod. The book is divided into five chapters that are filled with worksheets and practical examples for teens to understand. The chapters include information on creating a budget, the banking system, establishing credit, strategies for paying for college, avoiding identity theft and making major purchases.
This book is the first in a series of three books on personal finances by Foster. If you would like to win a copy of “Cash, Credit, and Your Finances: The Teen Years” for your teen, leave a comment explaining why your teen needs to read this book. If you can’t wait to get a copy, you can buy it on Amazon
Buying a copy supports BargainBabe.com.
By Bobbi Burger Brunoehler of Bobbisbargains.
HikingArtist.com/Flickr
I have just 25 minutes to speak about budgets at an upcoming conference – such a short period of time. As I started to prepare my talk I realized staying on budget and out of debt has only five key points.
1. You have to want it. No seminar, book or popular online money management software will help you to stay on budget unless you really want to. It’s like quitting smoking cigarettes. You must make a firm and true decision to DO IT!
2. Spend less than you make. Oh so easy to say but that is the bottom line. Somehow you have to increase your income and/or decrease your outgo until you are spending less than you make. It’s simple math.
3. You have to spend time looking at actual numbers. Our finances have become so automated that you can get paid, buy your food, pay your bills and transfer money to your significant other’s account without ever having to actually confront your economic condition. I spend at least one day a month going over my finances with a fine tooth comb. I examine all the receipts and evaluate where we are spending money. I balance every month’s statement and earmark money for upcoming expenses (like my daughter’s birthday or a new mattress.) I do most of my accounting with pen and paper. Bargain Babe has a 15-minute budget that is fairly simple.
4. Spending should not be an emotional decision. I don’t buy something (like a $750 leather jacket) because I “just HAVE to have it” or I “can’t live without it.” If I want it so badly, I should plan for it. Most often, all the items you buy on impulse won’t stand the test of time. Of course, I have a slush fund built into my budget that allows me the luxury of buying a little something (like a pretty hair clip) for myself when I see it – IF I really want it.
5. Ensure that the entire family understands and agrees with the above four items. It is vital that everyone is on the same page when it comes to budgeting. If necessary, have family meetings to go over these points until you have agreement. It just won’t work if everyone isn’t on board.
I’d love to hear any of your budgeting tips.
paalia/Flickr
A recent survey by CESI Debt Solutions found a whopping 80% of us hide purchases from our partners. Ouch! Some 18.5% of married couples have credit cards their spouse don’t even know about! I’m not sure how that is possible. Wouldn’t they see the bill, notice transfers out of a bank account, or wonder where new items around the house came from?
According to the survey of more than 200 Americans, spouses are secretly buying:
- 34.5% clothing and accessories
- 24% food/dining
- 19.5% beauty/personal care items
- 16.5% gifts
- 13% alcohol
- 9% entertainment
- 9.5% music/cd/mp3
- 8.5% childcare/items for children
The last item makes me think the survey included in the “secret” category purchases not explicitly mentioned, which would inflate these numbers. The survey was conducted by a company that makes money from helping people pay down credit card debt so I suppose the more people overspend, the more their business is necessary. But forgetting to mention a purchase is different than keeping something secret. You took the kid to JC Penney for new underwear? Not exactly scintillating dinner conversation.
Most financial cheaters kept their spending on the down low to avoid problems at home, the survey found. Ya think?! Oh honey, I forgot to tell you I owe $6,000. Guess we won’t be going on vacation, after all.
- 46% are currently paying off the debt and feel s/he doesn’t need to know
- 43% want to avoid an argument
- 27% will never tell their spouse about their spending
- 19.9% are concerned it would end the relationship
- 11% plan to tell their spouse, but are not ready yet
So the question is not whether you have cheated financially on your partner, but what purchase were you hiding? Or perhaps you have a story to tell about discovering a secret purchase?
One of the biggest fights I ever had with a significant other was when I discovered he had purchased a TiVo in secret. The purchase price was not the issue, however. I was strongly against a TiVo as I was convinced I would watch too much television if we had one. He was strongly for the TiVo as it would allow him to easily record shows he liked. A great sale came up and he couldn’t resist. I found the thing in the closet about a week later and blew up – it felt like he had lied to me. Looking back, we both could have compromised and avoided the whole argument. Sigh. Live, and learn.
jekert gwapo/Flickr
This is a post by BargainBabe.com writer Yazmin Cruz.
I have a confession to make. I am addicted to coffee – the pricey frapps and ice blended drinks. But that’s not my only problem. In order to keep up with my caffeine addiction I’ve been charging the drinks on my credit card. Not smart at all, especially when I carry a balance.
I didn’t realize how bad it had gotten until I was reviewing my e-bill and noticed almost half the charges made were at coffee shops. My addiction began about six months ago when I took on more responsibility at work and couldn’t get out of the newsroom until 10 or 11 p.m.
Waking up extra early didn’t help either. By 3 p.m. I needed a pick me up and walked to a local coffee shop for my fix. If I didn’t have cash on me I would simply charge my $4 drinks. In no time my habit added up to $20 a week. Now I pay for my indulgence plus interest.
I shared my dilemma on the Bargain Babe Facebook page and many readers offered solutions that I am implementing. Here’s my plan. First, I’m going cold turkey. I had my last ice blended drink this weekend. I am not frequenting any coffee shops for a while and most importantly I am working hard to pay off my credit card debt. Note to self, don’t use plastic to pay for food or drink!
I am also fighting my expensive coffee addiction one tea bag at a time. Compared to coffee, tea is less expensive and doesn’t add extra calories (unless you add cream). I am using my coffee maker at home more often, as reader Janna suggested:
“I make my own cappuccinos now. I have a Senseo, which I *love* ($.25 per cup). I warm up some milk in the micro, then foam it up with an Aerolatte; simply awesome. For the counter space saved over a home espresso maker and the cost you can’t beat it.”
Having worked at a juice bar, I have enough experience to tackle making coffee at home. I also have an Aerolatte so I just need to commit to doing it myself.
Related posts:
What tempted me to use my credit card this month
spiderpop/Flickr
At least one reader was shocked by my disclosure that my monthly budget is $1,200. In a comment about whether a $533 mattress purchase should come out of my budget or my savings, Cindy said, “If you easily have $1200 free cash to spend in a month…wow! That’s not being very frugal.”
Let me explain my budgeting system and why I give myself so much leeway.
I have tried many, many budgeting systems, from tracking every penny to estimating monthly costs by category. None of them worked because they all relied on past purchases to predict future ones. What I spend my money on varies widely. One month a plane ticket may eat up a good chunk of my dollars. During another month a wedding or home project may account for much of my spending.
What does not change is my total spending, certain fixed bills, and my income.
I decided to use this information to create a forward-looking budget (the pdf is safe to download). I start with my income, subtract my fixed bills, and am left with a monthly spending amount (my budget).
My fixed bills include basic necessities and any bills that must be paid including my rent, savings contribution, 1-tank of gas, student loan payment, cell phone bill, and regular prescriptions. Everything else comes out of my monthly budget.
- groceries
- second and third tanks of gas
- gifts
- travel
- clothes
- coffee
- movie rentals
- toiletries
- meals out
- drinks with friends
- hair cuts
- yoga classes
- gardening supplies
- car washes
- vacations
- anything else
Still think $1,200 sounds like a lot?
I gave up credit and debit cards this month to try to reduce my monthly budget. Previously, I went on a spending moratorium to learn new habits. My 15-minute budget may or may not work for you. The first month I used it I reduced my credit card bill by $2,000. Give it a try and let me know what you think.
I am spending cash like a maniac and have little idea where it is going. Five days into my month-long cash-only experiment, more than $200 has slipped out of my hands.
That’s partly because I feel more generous with a fat wad of bills in my pocket. I’ve fronted a bar cover for friends, paid for breakfast at a coffee shop, and treated myself to a package of beef jerky at a roadside stand. Tasty – but pricey! There was a tank of gas and…I can’t remember the rest.
I’m used to having a neat record of all my purchases at the end of the month on my credit card bill. With cash I forget to ask for a receipt and often the cashier forgets to give me one. How much money at the end of the month will be unaccounted for? I’m guessing almost half.
As I said in an earlier post on preparing to go without plastic, I hid my credit and debit cards in my jewelry box. Later that day I opened a letter from my Alma mater asking for money. I thought, “I can charge this donation and get cash back!” (My credit card has a 1-3% cash back deal). When I pulled out my wallet to retrieve the 16 digits to write on the form, I remembered my credit card moratorium. Oops! I will have to wait until May to send my school a contribution.
The next day I pulled my debit card out of its hiding place. I was going on a solo road trip and decided to carry it as a backup, just in case. If for some reason my car broke down, I would most likely need more than $300 – my cash allotment for the weekend – for the fix. Not that I plan to spend $300 in one weekend. I’m carrying around extra cash because I’m worried about not having enough money, which leads me to spend more because I have so much money. How ironic!
I’m not quitting, however. Support from readers has helped, including this email from Ellen, who saw my column in the N.J. Star-Ledger:
I read your column on going plastic-free (a.k.a. sans credit cards) and wanted to throw you some words of encouragement from someone who’s been there, cashed that. About ten years ago I successfully completed a credit card counseling program, one which required me to surrender all my plastic for the duration it took me to pay down my debt.
It was a small price to pay for getting my payments consolidated, interest rates lowered and getting those pesky collection calls to stop clogging my voicemail. So for three years, I went plastic-free all while I got my debt in order. Every transaction that required a credit card–like buying an airline ticket online–I simply used my debit card which contained a Visa logo. This win-win allowed me to make online purchases and have the money directly withdrawn from my checking account.
When I finally received the letter declaring me debt-free I eased back into just one credit card which I pay in full or darned-well near try. Since I’m still on a strict budget, I still try and use my debit card only. Good luck on your cash-only venture.
I’m rootin’ for ya.
Brithanglishman/Flickr
Time to play that game again where I review my monthly credit card bill and pick one purchase. That I really. Should not. Have bought.
Groan.
This month’s dishonorable mention goes to the $10.99 I spent getting my car washed and vacuumed. Yes, my mother was coming to town and I wanted her to think my car is always neat and tidy.
But making time to wash it myself at the drive-in car wash would have done the job just as nicely – and only cost $4. Last month’s regrettable credit card purchase was a USB postal scale that cost me $8.10. Readers had plenty of spending problems, too.
On a happier note, my credit card bill last month dropped significantly – a few hundred dollars. Was it tied to the self-induced public credit card bill flogging? Perhaps!!
What do you regret buying this month?
UPDATE: Christine regrets a sweet birthday purchase.
Oh boy! I’ve got a doozy! My daughter turned one year old this past weekend and we were having a SMALL party. Nothing fancy, just cake and appetizers. I was in a hurry and had heard about a great bakery in Canoga Park. I went in and spent $70 on a cake for a one year old. I must have been out of my mind. I could have gone to Costco and spent $16.99. ARGH!!! DUMB, DUMB, DUMB. The cake was good, but not THAT good! Lesson learned!
Mike has NO regrets. Kudos to you!
This is my favorite post of the week. Because it makes me look back on my week and go “what shouldn’t have I bought?” I did good this week! I only bought necessities! Go me!
alancleaver 2000/Flickr
My friends at AOL’s Lemondrop blog (I blog for AOL’s WalletPop) wrote a helpful article about how exactly to pay off high-interest credit card debt. I don’t carry a balance and I found this article fascinating. The story offers five approaches to paying off the debt, some of which might help you.
Her sitch: In June 2008, Tiffany owed $14,611.47. She’s managed to chip away at the balance by using gift money, tax refunds and watching her spending, but she still owes close to $8,000, and she’s not sure what else to do.
“I don’t have any real system,” she says. “I tried fun Excel spreadsheets and advice from friends, but nothing really panned out. In the end, I just kept throwing any money I could at it, from $50 to $200, as often as I could. But I’m hoping to move in the upcoming months, so I won’t be able to set much aside to pay off the debt. Help!”
How’d she rack it up? Tiffany lives in a college town and has had trouble committing to long leases, so she’s moved five times in as many years. “Every time I moved, I would put extraneous costs on the credit card, telling myself I’d pay it off right away,” she says. “But one new thing always leads to another when you move into a new place.” On her expense list: paint, shower curtains, rugs, cleaning supplies and lots of takeout food. “It always caught me off guard when it added up,” she says.
The glitch: Tiffany has plans to move to New York City in May, where she’ll look for another nonprofit job. Currently she works for a women’s transitional home and brings home about $1,750 a month after taxes. She expects to make $35,000 to $45,000 in a similar position in New York. “What I make now is barely anything, and in general the pay isn’t great for nonprofit work,” she says. “Having a salary that can just wipe the debt away is unlikely. What do I do?”
The expert’s take: First of all, the fact that Tiffany has shaved more than $6,000 from her balance in less than two years is fantastic. But her plan to move to the Big Apple with $8,000 still hanging over her head raises th e eyebrow of Boston financial planner Cheryl Costa. “I would suggest she look long and hard at whether she can afford the move to New York,” Costa says. “Does she have an appreciation for how much it will cost her to live there? If she makes this move, it may take forever to pay down her debt.”
Keep reading to see what five steps the expert recommends for Tiffany.
cesarastudillo/Flickr
I was not the only one who regretted making a particular credit card purchase last month. Readers had plenty of regrets themselves. Post your own regret as a comment to be automatically entered to win a hot pink BargainBabe.com T-shirt. The contest ends Thursday at 11:59 p.m. PST so leave a comment today. The winner will be announced Friday!
Becki can’t say no to flowers:
I not only bought flowers I didn’t need, it is too cold to plant! I love pansies, and they were only 67 cents apiece, but now they will sit till it gets warmer, and then they will die when it’s hot…if only I had bought them last fall…It’s an addiction I have, I have to stay out of the nurseries!!!!! Someone please help!
ChrisM is kicking herself for paying shipping:
My 17 year old daughter wanted a pair of TOM’S shoes for her birthday in February, so I went on line, ordered them, paid for shipping. $17 for shipping–only to realize they came from Valencia and —we live in Sylmar.
Wish I’d looked into shipping fees first.
Tami regrets her hasty purchase:
Our microwave suddenly ceased to work after having it for about 6 years. We thought we couldn’t live without one, so we rushed out and bought a generic microwave oven at Target for $80. Fast forward to a week later and we noticed one for $20 at the local Goodwill shop. Goodwill stands behind their products and will refund purchases if you bring in the product/receipt, so by being hasty, we wasted $65. Next time we’ll comparison shop.
Blakely fell victim to a sale for something she doesn’t need:
I purchased a waffle iron at Kohl’s. It was only $25.00 with a $10.00 mail in rebate. I haven’t used it yet and I haven’t found anywhere to store it. It was something I wanted, but not something I needed.
This post is brought to you by CouponCactus.com, a great source of online coupon codes for taxes, groceries, and more.
BargainBabe.com readers are above average – way above! A whopping 75 percent of readers pay off their balance every statement, according to a recent poll in which 161 readers voted. Wow! The national average is 59 percent.
Just a smidge – 22 percent – of BargainBabe.com readers carry a balance. That is half the national average of 41.37 percent of Americans who carry a credit card balance. Another 3 percent of readers chose the ambiguous “other” option, including Danielle, who said “I can’t get a credit card, because I don’t have a credit card.” Hmm, really?
These impressive stats got me thinking…are BargainBabe.com readers above average savers?
Vote first then I’ll tell you how you compare to the national average on the next page!
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This post is brought to you by CouponCactus.com, a great source of online coupon codes for taxes, groceries, and more.
My spending has gone crazy over the past few months. A new set of gears for my bike ($90), yards of brown suede for new curtains ($88), two new outfits for a trip to NYC ($152), and a pricey sushi lunch ($34).
Sure, I have reasons behind each purchase (I’m doing a race in May that requires additional gears, buying fabric is cheaper than buying curtains, I had a gift card and a rare coupon for the clothing store, and I hadn’t seen my friend in months), but this kind of spending is not sustainable.
My credit card bill, which I pay off in full each month, has risen on average by a few hundred dollars. Not good. Here are two things I’m doing to shift my habits downward.
1. I only buy groceries on Wednesday. I started this two weeks ago and it has made me more aware of how much money I’m spending on food because it is easier to remember my total purchases from one day. Two weeks ago I spent $92 at Trader Joe’s, which included many staple items, beer, and wine. Last week I spent $27 on groceries. My target weekly grocery spending is $25.
Toward the end of the cycle I challenge myself to create tasty meals with what is left and finish off the last vegetables before they go bad. There is a lot you can do with beans, onions, and garlic!
2. I single out an item on my credit card statement that I didn’t have to buy. This month the dubious honor goes to an $8.10 purchase at Stamps.com. I got sucked into their $100 offer for newbies: sign up and get a $5 supplies kit, $45 in free postage (which is strung out over four months), and a free $50 postage scale (which actually sells for about $20 and is useless after my 30-day trial period unless I join Stamps.com for $16 a month).
I don’t buy enough business postage to make it worthwhile to join Stamps.com for $16 a month. So when I read the fine print the $100 sign-up package evaporated into nothing. At that point, I had already spent $8.10 to get the “free” scale mailed to me. Blerg!
I wish I had been more skeptical of the $100 intro offer, which really was too good to be true. Being greedy cost me $8.10.
What do you wish you hadn’t bought in the past month? Leave a comment and the reader with the best story wins a hot pink BargainBabe.com T-shirt, above. There are only about a dozen left!
Just got some interesting economic factoids from the website BillShrink.com. Are you part of the savings trend?
- 46% of credit card holders paid their bill in full each month in Feb. 2009
- 59% of credit card holders paid their bill in full each month in Feb. 2010
- The average American family had $2,000 in unexpected expenses last year
- Americans have reduced their debt by $101.2 billion in the past 14 months ($1,874 per household)
- We are currently saving at record rates, setting a 15-year high (Check out BillShrink’s super cool graphic about American’s personal savings and debt, which goes back to 1960).
- We still over pay for lots of stuff, including ATM fees, credit card late fees, and dealership auto maintenance (though I’m seeing coupons from dealers these days)
To get this data BillShrink surveyed 154,000 users on its site from February 2009-January 2010. The pay off rate has been steadily increasing each month, according to the responses below.
Yes, I pay off balance each month No, I don’t pay off balance each month
02-09 46.03% 53.97%
03-09 45.92% 54.08%
04-09 41.75% 58.25%
05-09 43.19% 56.81%
06-09 46.28% 53.72%
07-09 46.92% 53.08%
08-09 48.72% 51.28%
09-09 51.21% 48.79%
10-09 51.99% 48.01%
11-09 54.73% 45.27%
12-09 57.25% 42.75%
01-10 58.63% 41.37%
I’m curious how BargainBabe.com readers compare to the national average.
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