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Category: Q&A Tuesday

Q&A Tuesday: How do we prepare for a layoff?

We just got word my husband’s company will be totally shut down by March. How can we be proactive with this information months in advance? – Paula

Hi, Paula!

I’m so sorry that you had to receive such devastating news! My heart goes out to you! When my husband and I were facing his potential unemployment a few years ago it was such a difficult time in our lives.

At the same time, I’m so impressed with your desire to do everything you can to wisely prepare for this. Since you have around eight months, that’s a lot of time to get your family in a great position to weather the storms that might be ahead.

Here are some ways I’d suggest you prepare for this looming layoff:

1) Get on the Same Page with Your Husband

One of the best things you can do is to sit down and create a game plan together. If there was ever a time for you to be a united team, it’s now.

Take a weekend sometime in the next few weeks to make a master plan for the next eight months. Post this game plan in a conspicuous place and refer to it constantly as you make decisions. If possible, sit down and review it on a monthly basis together to make sure you’re still headed in the same direction and see if there are any tweaks or changes you need to make to stay on course.

2) Create and Follow a Budget

A written budget must be the cornerstone of your game plan. If you are not on a strict budget right now, creating a workable, realistic budget for all of your spending is of utmost importance to allow you to get as much financial traction as you can before March comes. In addition, it will help you know exactly how much money you need to live on.

3) Whittle Your Budget Down to the Barebones

Take your written budget and analyze every category: “Could we live without this in the short-term?” If you can’t live without it, ask yourself, “Could we lower our expenditures in this category?”

Again, this is something you need to do together as a couple. You both need to agree together to the short-term sacrifices you are making.

4) Put Every Penny You Can into Savings

Any extra money you can free up in your budget by reducing expenses should go directly into your Emergency Savings. The bigger your Emergency Fund, the better. Not only is it reassuring to know you have this cushion, but it may end up putting food on the table and paying the light bill next year.

5) Stockpile Food & Household Items

As you well know, I encourage people to practice the Buy Ahead Principle and have at least three to six months’ worth of food and household items on hand to save you from paying full price. However, in your case, I’d suggest buying at least a 12-18 months’ worth of all deals that are shelf stable and don’t expire for at least 18 months to two years.

If you can get shampoo for $0.30 per bottle or toothpaste for free, go ahead and buy enough to last you at least a year. That way, in case there aren’t great deals on some of these items or you have no income coming in, at least you know you won’t have to worry about paying for basic essentials.

6) Experiment with Side Income Streams

My husband and I are big believers in having multiple streams of income. The more income streams you set up, the less you have to worry if one is taken away.

If you think there’s even a remote possibility your husband won’t be able to get a job immediately after his company goes under, I’d strongly suggest beginning now to research and experiment with possible side income streams. The book, The Other 8 Hours, has some excellent ideas and encouragement for setting up income streams while still working a full-time job.

What suggestions or advice do the rest of you have for Paula? Share them in the comments.

Q&A Tuesday: Advice for first-time renters?

My husband and I will be selling our home soon and relocating for his job. We plan to rent until we know for sure if the new position will be permanent. Neither one of us has ever rented. Do you have any advice or tips for first-time renters? We have two small children so we envision a house or condo.

Would you recommend a storage unit for items not used everyday or a home with enough storage to accommodate those items? We would appreciate any advice you can give us. Thank you! -Beth

Hi, Beth!

A lot of people give renting a bad rap, but personally, I think renting can be a great financial move if you are just moving to a new city, aren’t in a position to put a large down payment on a home, or only plan to live in the same area for around two years or less. We rented for the first seven and a half years of marriage and my husband and I both have no regrets about our decision to do so.

Here are a few things I’d encourage you to consider as a first-time renter:

1) Make Sure You Have a Good Landlord

Whether you’re renting an apartment, house, duplex, or condo, your landlord can either make or break your renting experience. We’ve had great landlords and we’ve had really pathetic landlords (one who made many false promises and took over a year to deal with issues).

When you’re considering a potential house or condo, do a search online to see if there is any information on the landlord or property management company. If we had thought to do this in one of our housing situations, it would have saved enormous headache.

If you’re renting an apartment or condo and there are on-site property managers, make sure you feel like they genuinely have your best interests at heart. They are the go-between for landlord and tenant, so if they truly care about their tenants, you’ll likely end up with much quicker service if your hot water tank breaks or your plumbing is clogged.

2) Consider Your Surroundings

For us, this was especially imperative because we had young children. You might love the house, apartment, or condo, but if there’s no place for your children to go out and play, it can become very difficult — especially if you’re squeezed into a cracker box house.

If possible, drive by the house, condo, or apartment at night and during the day to get a feel for what the neighbors and neighborhood is typically like. Also, ask your landlord or property manager what their policy is on loud or obnoxious neighbors. You definitely don’t want someone blaring their music in a room right next to yours at 3 a.m. in the morning if you have young children trying to sleep!

3) Look at the Fine Print on the Lease

Make sure you know the exact terms of your lease. For instance, some leases have strict rules about how many children or pets you can have. If you are planning on having another baby or getting a new pet anytime soon, they could require you to move out because you no longer abide by their rules.

Also, look at the details of what is and isn’t your responsibility as a tenant. What utilities do they pay for? What is their typical process if something breaks? Can you get out of your lease, if need be? What shape do they expect the house or condo to be in after you move out (we forgot to ask this once and ended up getting a few crazy things deducted from our security deposit that they didn’t tell us we needed to make sure and take care of before we moved out)?

4) Downsize Your Belongings

If you’re going to be downsizing in home, it’s the perfect opportunity to take a good, hard look at everything you own and see what you can get rid of. The price of storage units can add up pretty quickly, so it will save you money to just get rid of items you no longer love and/or use at least every few weeks.

Not only will this make your move simpler since you’ll have less stuff to pack and relocate, but de-cluttering your home will help you streamline your life and improve your productivity.

What are your best tips and suggestions for first-timer renters to consider?

Q&A: How do you budget for online deals?

I am trying to go to cash-only and just use the bank account for bills! But how do you budget for online deals? I love the idea of going cash-only, but hate missing out on all the deals! Is there a good way to do this or am I just not going to get the deals now? :(-Holly

Our family uses a “hybrid system” for our expenditures. We use cash envelopes for items we would typically buy locally (you can see a list of all our cash envelope categories here) and then we use debit cards or online bill pay for our utility bills, insurance and other bills which are paid on a monthly basis. This works well for us and, from the experimenting we’ve done, we’ve determined we spend quite a bit less by paying for the bulk of our expenses with cash than if we were swiping our debit cards.

However, the question people often ask is, “If you use cash only for clothing, food and so forth, does this mean you can’t purchase any items from your cash envelope categories online?” Well, actually, no.

We are on a strict written budget and cash envelope system and we only buy things which we have the money allotted ahead of time to pay for. We use gift cards accumulated through Swagbucks to pay for some of our online purchases or we buy online with our debit card and then refund the money from our cash envelope to our bank account.

It might seem like a hassle to refund the money to our bank account, but we’ve found that this actually encourages us to be a lot more thoughtful about purchases. Instead of just jumping on a good deal because we’re afraid it might not be available for long, it forces us to think through whether it’s something which is a good deal for us — meaning it’s something we need or have been planning to purchase, something we can afford in that budget category and something we will use. In many cases, because it is a bit of a hassle, we end up talking ourselves out of the purchase before making it!

If you don’t feel comfortable using a debit card online or don’t want to mess with refunding money from a cash envelope to your bank account, I’d suggest purchasing pre-paid cards from the money in each cash envelope category. Keep these cards in their designated envelopes and only use them for online purchases from that category. This allows you to protect yourself from potential debit card fraud while still sticking with your budget and using money you’ve specifically set aside for that budget category.

Q&A Tuesday: What do you do when you don’t feel like being frugal anymore?

Frugal fatigue hits me at least once a month. I get tired of making food from scratch and think about how much easier it would be to just go to the store and purchase it. If I have to go to the mall, it really hits me as I love fashion (until I get sticker shock from the prices that is!)

What do you do when you don’t feel like being frugal anymore? -Michelle

1) Focus on the Best Return On Your Investment Of Time

Don’t try to implement every money-saving idea you run across. Otherwise, you’re setting yourself up for failure and burn out.

It’s really and truly okay if you don’t make everything from scratch, or don’t plant a huge garden and preserve 200 pounds of vegetables or don’t save 85% off all your grocery bills. You can’t do it all.

Concentrate your efforts on where you’ll get the biggest savings and skip the smaller money-saving ideas if they don’t work for your family or aren’t something you enjoy.

2) Allow Some Breathing Room in Your Budget

This goes hand-in-hand with point number one. Don’t beat yourself up if you’re not pinching every single penny you possibly can. The purpose of frugality is not to be a miser; it’s to be a wise steward.

If you can, include at least $10 to $20 in your budget each week for something fun: a treat at the coffee shop or ice cream shop, dinner out, pizza and a movie or whatever else you or your family especially enjoys. If it’s budgeted, you can guiltlessly enjoy it and look forward to it.

Want to make this budgeted money go farther? Sign up for the Groupon emails in your area and purchase a few deeply discounted vouchers to local restaurants or attractions.

3) Reward Yourself For Achieving Goals

I’m all about setting financial goals and working hard towards accomplishing them, but don’t forget to celebrate milestones along the way. Plan a party or go on a special family date every time you pay off a credit card. Put $5 in a special “Family Vacation” fund jar every time you save another $50 dollars in your savings account. Or, maybe make a commitment as a family that if you all stick to the budget for an entire month, everyone gets $10 in “blow money” to spend on whatever they want (be sure to budget this in, of course!).

Knowing there’s a reward at the finish line can give you much greater motivation to keep pressing forward.

Related: After I had written this post last week, my friend, Heather, sent me a link to her post on How To Combat Frugal Fatigue. She had quite a few other additional ideas.

How do you combat frugal fatigue? Tell us your strategies in the comments.

Q&A Tuesday: How do you save money on groceries in rural areas?

I’m writing to you to see if you have any suggestions for people who live in rural areas, far from Walmarts, Targets and Walgreens. My husband and I live and work at a Baptist camp in the Panhandle of Texas with our sweet baby girl. We try to use cash for everything, and have tried to narrow our budget down as much as possible in order to eliminate. The nearest of any of the stores I mentioned above are at least two hours away. I can use coupons and things like that at the local grocery stores, but things are so much more expensive here (for example, sometimes $6 or $7 for a box of cereal).

I am also trying to be healthy for my family: whole grains, lots of fruits/vegetables and little processed foods. That, however, also adds up. Healthier foods are often more expensive, and the produce sections can be really shabby. Do you have any suggestions or advice?

Lacey, it sounds like you are doing a great job already, so be encouraged!

I’ve never lived far, far away from big box stores before, but my advice would be to “think outside the box”. You’re not going to be able to score some of the amazing deals other readers here do, but you can still keep your grocery bill rather low. Here are a few ideas I had (many which you’re probably already doing!):

Stick with simple meals. It sounds like you are not using a lot of processed foods, which is likely helping you keep your grocery budget low. If your husband is okay with it, you could plan a weekly meatless night where you have burritos or beans and rice. A weekly breakfast for dinner, a weekly soup night and a weekly homemade pizza night are a few other simple ways to keep dinners inexpensive. If you serve meat as a condiment rather than the main thing, you’ll usually greatly reduce your grocery budget. (Mary Ostyn writes more about this in her book, Family Feasts for $75 Per Week. Excellent book, if you’ve not read it yet!)

Examine your expenditures. Where are you spending the bulk of your grocery money? If it’s on household products, consider making your own cleaners, using cloth diapers or and eliminating paper products.

Look for great deals online. Based upon the price of cereal in your area, I’m guessing the sales at Amazon are usually always going to beat your local prices. You could also look into ordering from places like Mountain Rose Herbs or other online sites. Watch for specials, free shipping offers and coupon codes.

Consider growing a garden for as much of your produce as you can. If you don’t have a green thumb, see if you can find a friend who grows a garden who might be willing to sell you produce or barter their extra garden produce for your willingness to bake them bread or babysit.

Buy in bulk. If you’re eating mostly whole foods, I’d suggest making a trip to the nearest town every few months to stock up in large quantities. It would totally be worth a drive of an hour or two both ways to save $500 on your groceries. You’ll want to calculate in the cost of gas as well as the wear and tear on your car, though, when considering how much this will save. And remember that your time is valuable, too, so I’d only recommend a big day trip like this every six to eight weeks.

Keep a positive attitude. Maybe you can’t get great deals on groceries where you are living and you’re probably going to have a higher grocery bill than others, however, I’m almost certain that living where you live is providing you opportunities to bless and minister to others which are worth the extra costs.

What ideas do the rest of you have for saving money on groceries when you live in rural areas?

Q&A: Stockpiling Food

I have a questions about stocking food. I currently have the “drugstore” game mastered and have a great stock on personal/household items. I currently am working very hard at lowering the grocery bill at the same time eating more whole foods. I have in the past read your post about your weekly shopping and notice that most grocery items are for the week. Do you stockpile food? I know kinda hard to do with eating more whole food. But things like meat, pasta, frozen veggies, etc. -Melissa

I get asked this question a lot and the truth is, I’m always “buying ahead” — just not usually in vast quantities since I’m more of a minimalist and typically don’t like to store more than what I’ll be able to use in the next three to six months. We also have a smaller family so food lasts longer around here than it would if we had five teenagers. 🙂

For instance, last week I stopped by the health food store to check on their markdowns. I ended buying four loaves of bread, two packages of hot dog buns, two packages of chicken hot dogs and a gallon of milk. These were all marked down to less than I can get at Aldi or on sale with coupons so I bought them and put them all in the freezer since we don’t need any of them for our menu last week. I’ll incorporate them into our menus over the four to six weeks or so.

In addition, last week I purchased three bags of turbinado from the bulk food store. This will likely last us for the next four to five months, since I try use sugar rather sparingly.

I had the extra cash to purchase these items and I knew they were all things we’d use, so I went ahead and purchased them. This is typically the way I stockpile: in small quantities here and there as I come across great deals or opportunities to buy food in bulk and have the cash to purchase them.

While we might not have rooms stuffed to the ceiling with cans and boxes of food, we always have quite a variety of food on hand, we are able to keep our grocery budget lowered since we aren’t paying full price for most items and I have a number of different options on hand to use as the basis for planning our weekly menus.

If I have the time and coupons, I also occasionally will do a major stock-up of something — such as the 31 tubes of toothpaste I got for free last year! — but by and large, I usually just buy ahead in small quantities as part of my weekly grocery shopping trips.

In all honesty, as we’ve shifted more to a whole foods diet, I’m using coupons less and focusing more on buying markdowns at the health food store and loss leaders at the grocery stores. This has simplified my shopping routine a great deal — I clip and organize fewer coupons, don’t have to spend a lot of time planning out my shopping trips and I make fewer trips to the store.

This method of shopping and stockpiling is working well for our family right now, but I can see as my children grow older and their appetites increase, we’ll likely be tweaking this in order to accommodate the need to buy more groceries. For now, though, I’m enjoying keeping it simple!