Planting a Vegetable Garden to Save Money

Two years ago, my wife and I planted a vegetable garden. Although it was fun, we didn't get much produce out of it because my well-meaning sister who helped us planted things so close together that it was impossible to harvest some of our crop. We also made several mistakes, including planting root crops in our clay-laden soil. When the roots matured, try as we might, we couldn't dig or pull them out of the ground.

We didn't plant last year because we'd planned to travel. What was left of our vegetable garden turned into a tangle of weeds, especially because the next door neighbor boy we'd been hiring to mow our grass never bothered to mow over the remnants of the garden, even though we'd asked him to do so.

With all the talk of President Obama's vegetable garden and the resurgence of Victory Gardens, we decided to plant a garden this year.

"It might save us some money," my wife suggested.

I doubt it, at least this year.

So far, we've spent close to $700 in gardening tools, seed, plant starts, gardening gloves, hoses, compost, manure, mulch, weed barrier and paving stones to help make the garden more less work and more attractive.

I'm certain we don't have enough room to plant enough vegetables to sustain us, so I'm sure we'll continue to buy produce from the local grocery. Maybe in future years, if we save our seeds and won't have buy things like paving stones and gardening tools, we might break even and save a little money.

If nothing else, however, the project will give us something to do as a family. A little fresh air and exercise never hurt anyone.

Daily Money Management

I've always been fairly careful about how I account for my money, so I've made it a point not to bounce checks. During my adult life, it's only happened three times that I can recall. Once, when I was in college and my credit union "lost" a deposit, once when I was working and my bank made a mistake with an electronic deposit, and once when my wife wrote a check she shouldn't have because she wasn't paying attention.

Now I've had many close calls, but I've managed to avoid them simply because I make it a point to check my online account balances every day.

I have a routine set up. First thing every morning I open up my checkbook management software and instruct it to download transactions for all my accounts. Next, I go to the Web sites that don't support automatic transactions, and I manually download those. When all the downloading is finished, I look at each account, see what transactions have cleared and check to make sure everything is as I expect it to be.

Usually, things are as I expect. My wife has accused me of being "obsessive" about the checking account, but because I do this, I've avoided several potential disasters:

• One of our business credit cards was fraudulently used, and I discovered a $1,900 transaction had occurred in a foreign country I'd never visited.
• My credit union erroneously used my checking account to pay someone else's utility bill.
• Check my wife had written without telling me, which would have caused the account to be overdrawn.
• Deposits that were credited to my account, and then disappeared the following day.

Call me obsessive, but keeping an electronic eye on the checkbook seems to keep me out of trouble. Since it only takes a few minutes each day, the time is definitely worth the peace of mind.

The Service Call that Wasn't

Yesterday, I was once again reminded that just because a vendor seems nice and helpful doesn't mean they are.

For my 40th birthday, my father gave me a brand-new Electrolux canister-style vacuum. I was especially thrilled because I have owned one of these vacuums ever since I graduated from college. My last vacuum lasted for nearly 20 years, and died when the motor finally gave up. Since I couldn't find an authorized repair center, I bought a replacement motor on the Bay of E-ness, but it didn't work nearly as well as the original.

So my father bought me a new Electrolux for my birthday. He got what seemed like a fair deal. he bought the vacuum, all the attachments, plus a whizzy power head you can use for vacuuming furniture and stairs for around $600.

Now it turns out that Electrolux vacuums have undergone a bit of transformation. They are now selling what used to be the Eureka brand of vacuums under the Electrolux name, and the original, tank-style vacuums are now sold by a company named Aerus. This happened some time before my 40th birthday, which was why I couldn't find anybody to repair my original Electrolux vacuum.

Anyway, somehow my father managed to track down the folks at Aerus, and he bought me a shiny new Lux Classic, which was the new version of the tank style vacuum. I liked it, even though the entire thing was made out of plastic, and it did a pretty respectable job of cleaning the carpets. Even better, it had a 5-year warranty.

So, fast-forward 3 years later, and I noticed that the vacuum didn't seem to be sucking with as much power as it had originally. I didn't think much about it, really, until last week when I got an out-of-the blue call from the folks at Aerus.

Well, I'm not sure if it was Aerus or not. The caller ID frame that came up listed Vacuum Express as the caller. I spoke to a very nice lady who told me that an Electrolux rep was going to be in the area on Thursday, and wanted to know if I wanted to make an appointment. I readily agreed, figuring the rep would be able to give my vacuum a tune up and send me on my happy way.

Well it turned out that this so-called "rep" wasn't at all interested in doing anything to fix my existing vacuum. He claimed that it was automatically out of warranty because the motor was rusting, and the reason that it was losing power was because the motor was overheating. He told me that my vacuum would soon be toast, and that the motor would need to be replaced.

I figured as much. When a vacuum starts to die, it's never anything inexpensive.

So then, he gives me the kicker: it was going to cost $500 to replace the motor in my $600 vacuum.

I couldn't contain myself. "Are you nuts?" I asked the guy.

He assured me that was the price, and there was nothing he could do. He told me that my problem was likely I had been vacuuming wet carpet (I hadn't) and claimed that if I used a home shampooer, the pad could remain wet for up to a week, and vacuuming over carpet, even if it felt dry, would suck moisture into the motor and make it rust.

Then he tried to sell me a $1,200 carpet shampooer. "I can give it to you for $799.95 if you buy it today," he told me.

I explained that my wife wasn't working and that we weren't in the market for a new shampooer. When our conversation drifted back to my ailing vacuum, he told me I would have to pay the $500 to get it fixed, or I could trade it in on a newer model.

Suddenly, I realized that this so-called "service" call wasn't a service call at all. Instead, it was a thinly-disguised attempt to sell me a new vacuum to replace my 3-year-old vacuum.

I told him no, thanked him for his time, and sent him on his way.

Then I called the folks at Vacuum Express and complained. They said they would refer this to their "verification department" and have someone get back to me. The woman I spoke to informed me that they hired independent contractors to peddle the Aerus vacuums, much like the way another, well-known, door-to-door vacuum rip-off works.

The sales man inadvertently showed me his pricing sheet, which showed he would make around $400 per machine he sold. I told that to the woman when I called to complain, and she said that she could understand why I was so steamed up.

I tried calling the Aerus corporate offices this afternoon, but they are already closed for the weekend. I'll call them on Monday and give them a piece of my mind.

But really, don't show up at my house claiming you are going to give my vacuum a service call and then try and sell me a brand new vacuum cleaner and carpet shampooer to replace a vacuum that's only three years old.

Disclaimer

I'm not a financial advisor. I have no credentials in accounting, finance or money management. In college, I majored in Computer Information Systems with a minor in Business Administration. This doesn't make me smart, nor does it make me particularly qualified to give financial advice.

I'm writing about the things I do for myself in this journal. If you decide to do what I do, if you decide to take any of my suggestions as advice, you do so at your own risk.

If you make a million dollars because of something I say here, great! Send me a note and I'll be happy for you. Likewise, if you lose a million dollars, don't blame me for it. Make your own financial decisions based on our own experiences and skill. Do your own research and decide for yourself what's best.

In other words: Free advice is worth what you pay for it.

The Comfort of No Credit Card Debt

This morning, I got an e-mail that advised me that the statement for one of my credit cards was ready for download. I opened a browser, typed in the link for the site, and checked my statement.

As I expected, the balance owed on the card was $0.00. It was a comforting feeling knowing that I owed nothing to my credit card company.

Now that's not to say that I haven't used the card -- I have. My wife and I use this card for grocery shopping, gas, the occasional meal out, and our online movie rental subscription. This month we used the card a total of eight times. Although that's not a world's record, the card did get used.

So, you might wonder, how did I manage to use the card and not end up with a balance at the end of the month?

It's easy: Instead of paying my credit card bill at the end of the month, I keep tabs on my spending and make frequent, smaller payments as I go.

Now it may seem stupid, but every time I make a credit card purchase, I record the amount in my checkbook register like I would a check. Then, whenever is convenient, I set up an online payment to send the money to my credit card company. When the bill arrives, it's usually paid off, or if it's not, I know that a payment is already set to go.

Because my credit cards are always kept paid off, I don't sweat when the statement arrives. Sure, I still review it for errors and to make sure vendors who bill my card aren't trying to rip me off, but I never have to think about whether or not I'll have enough money to pay the bill.

I don't have to worry about it, because the money has already been sent.

I haven't always lived my life this way. Before I filed bankruptcy, I carried some pretty hefty balances because I was using credit to make ends meet. After my bankruptcy (I re-affirmed one card) it often seemed like there was always some emergency or some reason I had to carry a balance. Although I was much more careful with the amount of debt I was carrying, it was still there, hanging around my neck like a dead albatross.

It took a very long time to get to this point. My wife and I had to exercise some very strict discipline to accomplish this goal. Here's how we did it:

1. We agreed that carrying a credit card balance was no longer acceptable.
2. We stopped making purchases on cards that were carrying a balance.
3. We had one card (a certain green credit card that Karl Malden used to pitch during the 1970's and 1980's) that didn't allow us to carry a balance. We used this for convenience purchases such as gas and groceries, and kept it paid off every month.
4. We made minimum payments on all the credit cards, and used our extra cash to hammer down the others.

Now there are several theories on how to pay of credit cards:

• Pay off the card with the highest interest rate first, since it makes the most mathematical sense and will save you the most interest.
• Pay off the card with the lowest balance first, since it will seem like you are making more progress.
• Pay off the card that has the heaviest emotional load first, because the debt bothers you.

Math experts will certainly argue that paying off the highest interest rate will save you the most money, and you can't really disagree with that fact. From an emotional standpoint, however, the other two options might feel better.

In either case, I don't think it matters a great deal. Pay off your credit cards, however you can, as quickly as you can.

Because when you get a statement in the mail that says:

Balance Due: $0.00

It feels terrific.

Avoiding Financial Disaster

As I wrote last week, my wife is no longer working, which means our business will bring nearly half of what it brought in before. The reduction of income, in combination with losing our entire emergency fund to taxes this year, has really left us feeling pretty darn anxious.

The good news in all of this is that my contract, at least for the next eight to nine months, appears to be stable. Still, we've had to make a lot of cuts to bring our budget back into balance.

Here's what we've done so far:

1. Contacted the telephone company and asked how we could cut our bill. By switching calling plans, I was able to shave 25% off our personal telephone line, and 50% off our business line.
2. Did the same with the cellular company with similar results.
3. Called our bottled water delivery service (necessary because our tap water tastes foul) to cancel. They offered to cut the bill in half.
4. Applied for a 20% discount on our utility bill. Our daughter is receives the Adoption Assistance program, which makes us eligible for this discount.
5. Canceled our downloadable music subscription.
6. Cut our Netflix subscription. We disconnected our satellite TV service two years ago to save money, so that cut has already been made.
   
7. Fired our gardener (who was doing a crummy job anyway) and hired someone else who will do more work for the same amount of money.
8. Planted a vegetable garden.
9. Stopped using our credit cards. Fortunately, they are already paid off.
   
10. Quit eating out.
11. Canceled my guitar and piano lessons.
12. Halted additional principal payments on my mortgage and auto loan. For now, we'll make the minimum payments.
13. Cut our grocery spending.

I'm sure we'll be making more cuts over time, but here's the initial group.

Bye Bye Emergency Fund

I haven't touched this blog in over two years because I stopped having things to write about. I know it's lame, but I've been working on a lot of things, especially work.

But now, it looks like I'm facing another potential financial crisis. After both of us having steady contracts for the past two years, my partner has lost her contract. Our business' montly gross revenues will drop by half as of tomorrow.

It's a scary time, because my partner (well now my wife) and I are just 21 days shy of adopting a child, and our financial picture has changed a lot. Some of it, like finally paying off all our credit cards, is very good. Some of it, like the fact that we are about $25,000 upside-down on our mortgage, is not so good.

At this point, we are grateful because other than our mortgage, we have only one debt to service. We owe $7,900 on one of our cars, but that vehicle shows a private party sale blue book value of nearly $12,800. I'm fairly certain, since the car has extremely low mileage and is in excellent shape, that we'd easily be able to sell it for more than we own on the loan if we get too hard up.

The other good news is that if things go too far South, our truck and trailer are paid off. If we found ourselves both without work, we could move into the trailer and still have a place to live. It wouldn't be pleasant, since the RV is really designed for weekend camping. My wife and I lived in it as a couple for nearly three years, so it could be done. I think it would be much tougher with a 13-year-old child and four pet parrots.

I'm going to hope I don't lose my contract as well.

Our emergency fund savings aren't as ample as we'd like. Though I have more than $13,000 set aside, it turns out that every penny needs to be sent to the state and federal government on April 15th. I though we'd done especially well this year, and we'd managed to make all of our estimated tax payments on time in 2008. I figured we'd come out just fine at the end of the year, but when our CPA told us we owed even more money, I thought I might cry. It was especially depressing when she told us what we were going to owe in estimated taxes, though that number will most certainly drop now that my wife doesn't have a steady contract, and she'll be picking up smaller jobs from a variety of clients.

So, bye, bye emergency fund, it's been nice knowing you. I guess we start all over again after April 15.

Emergency Fund

A hat tip over Trent over at The Simple Dollar for including a couple of posts in his morning roundup that discuss emergency funds. This is something that I'm working on, and something that everybody should work on.

Here are links to posts in Trent's roundup that I thought were especially good:

• 21 Strategies for Creating an Emergency Fund and Why It's Critical
• Barriers, Again or: The Emergency Fund, Vindicated
  

It's hard to argue that an emergency fund is a good thing. If you ask most people, they'll all agree that having that emergency fund is important. However, if you ask those same people whether or not they have an emergency fund, I suspect a significant number of them will mumble, shuffle their feet and look away.

How much money is in your emergency fund?

Now I'm finding that there's not a lot of consensus out there in the world of financial advice that says exactly how much you should have. Some will say that having up to a year's salary socked away is a good plan. Others will say that just enough to cover a small "emergency" is enough. Others think three to six months of living expenses are enough.

In my "perfect" world, being that I'm self-employed, I think having roughly a year's living expenses would be just about right, but that adds up to a lot of money. I live in an expensive part of the country, and my three biggest bills (mortgage, health insurance and car payment) add up to about $2,700 a month.

That's a lot of dough. If I start to think about how much I'd need to sustain myself for a year, it starts to get pretty overwhelming. Instead, I'd like to set the number at something a little more reasonable, say $5,000.

If I had $5,000 in the bank, I wouldn't have to worry if a client pays late, or if my bank puts a 14-day hold on one of my deposits.

So for now, that's my short-term goal.

At the moment, my partner and I have just about $2,000 in our joint savings account, so we are about 40% of the way there. If we count my savings, we are already there, but I want to keep my money out of the mix, since I'm tired of it always falling to me to bail out the collective.

So how do we get some savings in the bank this month?

Our biggest struggle, I think, has been the use of credit cards to buy gas, groceries and other stuff. Every month, my mouth falls open a little wider, and I scream a little louder when I see our credit card statements. For this month, we are trying something new -- we are only using cash, our checkbook or an ATM/debit card to buy gas, groceries and the other miscellany of life. Hopefully, this constraint will keep us a little more mindful about what we are spending, and we won't get an ugly surprise bill at the end of the month.

This will mean two things: 1) we won't be adding to our credit card bills, and 2) we won't owe any more money at the beginning of next month.

We'll see how it goes. I will, of course, keep everyone posted.

Banking Changes and Planning

Last month, my partner and I decided to switch banks. We'd been with the same locally-owned bank for about six years, but decided to bail when a huge multi-national bought them out. Even though most of the same tellers and managers were scheduled to remain, we decided to move because we didn't want the profits from our money to be funneled away from our city, county and state and placed in the pockets of another country.

So we moved to a locally-owned credit union.

The move has been a pretty strange experience. We've received great service from the member service representatives who opened our business and personal accounts, and they've done a nice job of making sure that our accounts were opened correctly. A couple of the member service representatives already know us on a first-name basis, so if we need something, we can call them and they'll take care of things for us.

Sadly, the tellers don't know us yet. The other day, after I'd closed out my last account at my old bank, I came in to deposit about $500. I was a little nonplussed when they asked me for ID when I was making a cash deposit.

Say what?

"We need your ID to make sure the money gets into the right account," the teller told me.

I sighed and handed her my ID. I had a pre-printed deposit slip, shouldn't that be enough proof of the right account number?

Whatever.

So now that I've got my accounts all set up and ready-to-go, and I've enabled online banking and synchronization with Quicken, I can sit in front of my computer, click buttons, and obsess over my checking account balances.

Great.

Now obsessing over my checking account is fun and all, and it makes me feel in control as I watch my individual checks clear, but it's also a little depressing. As the month wears on, my checking account balance dips lower and lower, and I feel less and less encouraged about my financial progress.

So rather than just stare at my bank account balances, I'm trying to put together a targeted plan. With that in mind, I have three goals in mind:

1. Create An Emergency Savings Account - Although many financial advisers will tell you to pay off your debt first because of the accruing finance charges, it seems to me to be the most prudent step to get at least a small emergency fund together before I start hacking away at the debt. Paying off debt won't do me any good if my client pays late, and then I'm stuck trying to pay all my bills with credit cards and cash advances.
   
   
2. Increase My Income - Although I do have a financially sound business, my partner and I are both starting to tire of the work we do. Eventually, we would like to move on to other things, so we are trying to make that transition slowly. We are hoping that by doing things to bring in "extra" money, we'll improve our financial situation and easy that transition to new careers.
   
   
3. Pay Off My Debt - This, of course, will be both the simplest and most difficult step. It's simple in that it's clear what needs to be done, but difficult in that it is going to require a significant amount of self-discipline to get it done.
   

Of course these three goals are just for starters. I'm going to need to also work on things like spending less, saving more for retirement, and making better investment choices. But for now, these are the big three.

Opposites Attract

One of the reasons that I think I've lost ground on the debt side of our financial equation is the fact that my partner and I see money very differently. I see it as something to be saved for a rainy day (especially after having to file bankruptcy ten years ago) and she sees it as a tool to obtain things that she wants.

I abhor debt. She doesn't care.

I like big balances in my savings account. She views money in a bank account as permission to buy large-ticket items.

We fight about money, a lot, and our differences are reflected in the balances of our various savings accounts. My account, as of this morning, has a balance of $3,655.56. Her account contains only $5.00. Our joint savings account has a balance of $2,192.17.

It bugs me that out of all our accounts, my savings account is the one with the most money in it.

Even though I was the one that had to file for bankruptcy ten years ago, I think I've been the one to do a better job of managing my money overall. Between my 401(k), rollover account and SEP IRA, I have over $100,000.00 in assets. My partner has just under $10,000.00.

I realize, though, that my $100,000.00 isn't going to be nearly enough to cover my retirement. It's a start, but I'm almost 42 years old, and I don't think it will be enough by the time I'm 65 unless I get busy and put a lot more money away. As for my partner, she's of the mind that she's going to work until she's dead.

I don't see this as a good strategy.

I've been trying to get our collective overspending under control for quite some time, and it doesn't seem to be working. Every time we gain a little ground, we slip further back. When we have a hard slip, it always seems like it is up to me (by borrowing from my retirement account, or dipping into our savings) to make up for the shortfall.

It's scary and I feel vulnerable, and I'm trying as hard as I can to get my partner to adopt more thrifty habits. At the same time, I'm doing more and more to partially separate our finances (it's hard to create a complete break, since we own a house, two cars and business together) so that perhaps my partner's spending habits will at least cause me less stress.

But I'm scared, because I owe more money now than I did when I first declared bankruptcy. The only difference is that the bulk of my debt is in real estate that I could sell for more than what is owed if necessary.