Focused Intensity

Goals are a great thing.  Having a place you want to get to or something you want to accomplish is a tremendous thing to have.  The problem is so often, we feel like we're meandering toward our goals.  It can feel not like we're a horse streaking to the barn after a long journey, but rather like we're a dog crossing a field, stopping to sniff every tree and rock while marking our territory along the way.

Then there is the joy of Focused Intensity.

Right now, my wife and I are in the throes of Focused Intensity.  We have our Big Goal -- being debt free -- and we have our smaller goals.  In this case, our current smaller goal is being rid of our student loan, which as of this writing sits at about $17,840.  We are doing everything in our power to eradicate this loan, focusing every ounce of our will and every dollar of our making toward it's non-existence. 

We've wanted this loan gone for a while, but now, we really want it gone.  We want it gone so badly, we're willing to put off pretty much every other expense in our lives (not our bills and mortgage, of course, but every expense outside of that) to make it happen.  We want every available dollar to be going toward that loan, and we do mean every dollar:

Extra Income: We can pay our bills and mortgage on the money my wife makes teaching.  That means that any of my income -- school income, church music director income, piano lesson income, composing income -- goes toward the debt.  $60 for a day's worth of piano lessons?  Put it toward the loan.  $500 royalty check for composing?  Put it toward the loan.  $400 from two weeks' work at school?  Put it toward the loan.

Snowflaking: This is a twist on Dave Ramsey's "Snowball" method of paying off a loan (I think I heard about this on The Simple Dollar, but I'm not sure).  You take every small, tiny amount of money you can, and you apply it toward the loan.  With the student loan, I can make one payment every day.  That means that every day I get any income, I put that income toward the loan.  In the past two weeks, I've made five payments.  Financially, this pays off the interest I've accrued since the last payment (sometimes as little as $1.72) and drops the principal, meaning the next time I pay, there will be a smaller principal balance accruing interest.  Psychologically, it means every time I look at that principal number, it will likely be smaller.

Snowflakes are anything, from the $5.72 refund from Verizon after I canceled my cell plan and got on board my father's, to the fact our Visa bill for the month was $100 less than budgeted.  No amount is too big or too small to snowflake it.

Frugal-ing: Anything we can do to reduce our expenses is extra money I can throw at the loan.  Even though the temperature today is going to get to 85, the breeze is nice and strong, so we've got the windows thrown wide.  Total cost to climate-control the house for the day?  $0.  Sure it's just a couple of cents, but it adds up.  Driving the car to school with the windows down has made a difference, too, as I've noticed an increase in our gas mileage, meaning I have to spend that much less at each fill-up.  As I write this, I've got a crock pot of chili cooking, which for about $7.00 in materials and electricity will provide about 4 meals for each of us, saving us a ton of money over what we could spend to eat out or on prepackaged "convenience foods."  The journey of a thousand miles begins with a single step, and the eradication of a student loan begins with a single cent.

Selling the umbrella:  I sat down with my Spreadsheet today and looked at our finances over the next few months.  In my spreadsheet, I've got not only our anticipated income and expenses, but also an interactive amortization table of both our mortgage and student loan.  I can see how putting various amounts of money toward a loan will change its life just by moving some numbers around.

I made the realization this morning that if we continue to put all our available money toward the student loan, the balance on it will be under $4000 by Christmas.  If we dip into our Rainy Day fund (i.e. Sell part of our financial "umbrella") we can give ourselves a nice Christmas gift of paying off the loan.  We make 1.1% on the Rainy day account and pay 3.25% on the student loan, so the math works in our favor; and since my wife is guaranteed a job until at least August, and my income streams are trustworthy, we can then take a month or two to repay the rainy day fund to its previous level once the loan is gone.  I know this goes against "conventional" advice for a rainy day fund, but for us, it works.


What other ways could we be focusing our intensity to make this student loan no more than a foggy memory?  Let us know in the comments section.

Own Your Home Faster and Cheaper

I was just over on the ING Direct site looking at a table of interest rates while lamenting the pathetically-low return we're getting on our savings and checking accounts over there, when I scrolled down the screen and did a double take.

Currently (as of August 28, 2010), on their Easy Orange 5 year loan, ING Direct is offering a rate of 3.125%, and on their new Easy Orange 10 year loan, the rate is 4%.

Let me say up front that neither my wife nor I own any stock in ING or have any affiliation with them beyond having our accounts there -- we get nothing from new customers or new loans.

We signed up for our Easy Orange 5 year loan back in April and haven't looked back.  The closing costs were comparable to other closing costs on the refinance, perhaps even a bit lower that what I would have expected.  You make a payment every two weeks, and you have to do it electronically through their web site -- if you send a paper check, they sock you with a fee ($15, I believe).  Your payment amount is based on a 30-year repayment schedule (they figure out what you would pay per month over 30 years, and then divide it by two, giving you your every-two-week payment), though the loan is only for 5 or 10 years.

Your rate is locked in for the term of the loan, and at that time, you either owe the remainder of your balance, or else -- for a fee equal to two of your monthly payments -- you can lock your rate in for another term at whatever the going rate at the time is. 

The best part (and part of why I love ING Direct so much), is that they encourage prepayment of your loan and paying your mortgage off sooner rather than later.  Their only prepayment penalty occurs if you pay the loan off within the first year you have it -- after that you're home free. 

Having used the Easy Orange for several months now, I can honestly say this is the nicest loan I've ever tried to exterminate from the face of the Earth.  If I make a payment from another ING Direct account (usually my checking), the payment applies immediately, as in two seconds (literally) after I make it.  I can make extra principal payments at any time (I once made three in one day, just to test the theory).  If you're not a crazy debt-reduction-ninja like my wife and I, you can also set up recurring payments to happen every two weeks so you can just forget about it and let it go on its merry way.

So, as someone who has used the Easy Orange, I think it's a great way to try to obliterate your mortgage.  Go to the ING Direct site, click on "Learn More," then click on Easy Orange, and you'll find some calculators to help you estimate your closing costs and monthly payment.  Compare it to your current loan and rate and see if it's worth it, then start kissing that mortgage goodbye!

If you have any questions or comments, just post them below.

What do we do with our extra car?

When was the last time we drove our old car?  That's a very good question.  We think it might have been back in May, but we're not quite sure.  We do know the check engine light came on last time we drove it, and we've not done anything about it since.

Jason and I go to many of the same places each day, so carpooling only makes sense.  It saves money on gas, and it gives us time together during our hectic schedule.  It's a great time and place for us to talk about our day, our future, or just about anything else we need to talk through without the distractions that await us at home.

We've kept our little red car that served us faithfully for years even after we purchased a second car (a new Honda) in case our new car ever broke down or there might be a time when carpooling would be impractical.  However, the carpooling is just about always practical for us. 

However, the cost of insurance and license fees over the course of the year add up to more than we might spend on a car rental if an emergency arose.  So, why are we keeping it?  We don't know.  What are your thoughts?  Please let us know in the comment section below.

Yeah Toast!

I hope Bob and Tom don't mind me stealing their song title for this posting, but I just really love toast.  It's cheap, easy to prepare, and goes with just about everything.  This summer, Jason and I enjoyed a lot of easy, frugal, and delicious meals because of this crunchy treat.

The first thing to consider?  Every time you throw away food, you throw away money.  This includes the moldy leftovers, the residue on the inside of a condiment jar, and those heels of bread that no one seems to want to eat.  It is a very rare occasion that Jason and I put food into the trash can.  I can't put food into the trash without visualizing the money that it represents.

For example, you can add milk to an "empty" chocolate (or any other flavor) syrup bottle, shake it up, and have a fabulous drink right out of the bottle.  (It feels so wrong, but it tastes so right).  You can add a little olive oil and vinegar to an "empty" mustard container to make a tasty salad dressing.  Actually, most condiments can be turned into salad dressings under the right conditions.  It's fun to get creative with it!

But this posting isn't about salad dressing.  It's about toast!  (Did I mention I love toast?)  Bread kept in the fridge tends to stay good for a crazy long amount of time.  I don't think I've seen mold on my refrigerated bread in the ten years of our marriage.  I'm also not fond of my PB&J served on the heels of the loaf, so we tend to get a collection of them in the fridge.  Here are a few uses for our doughy friend:

• French Toast
• Cut them into cubes and make croutons
• Toast them until completely dry, roll them with a pastry roller, and have bread crumbs for recipes
• Use to keep baked goods fresh at home or when shipping a care package
• Bread Pudding (Yum!)
• Fancy Meals

What I mean by fancy meals is cutting my toast diagonally so I get four triangles.  I place them in my toaster oven so they get nice and crispy.  While it's toasting, I wander around the kitchen looking for things to go with my fancy toast points.  Just about any left overs work.  I also like beans (Beans on toast is great British Recipe.  Look it up and try them).  We also like to use hummus, guacamole, sliced avocado, melted cheese, cold cuts, etc.  You get the idea.  The point is to get a delicious, healthy, fun meal without buying anything special.  It's best to just use what you already have around the house.  I place a priority on any leftovers that might spoil soon.

It's super simple, but you have to be in the mindset that you will not tolerate waste.  It isn't just about saving money.  It's about being responsible with the resources we have available to us.

What other fun uses do you have for the heels of bread, or any other item that might normally get thrown away?  Let us know in the comment section below!

Farewell Land Line

For a while, we've wondered if we really needed our land line.  Jason carries a cell phone, and that seems to be how we do most of our telecommunicating.  We had two obstacles.  1. We got a better deal on our DSL because of the land line.  2. If one of us was at home and the other was out with the cell phone, we'd have no way to call 911 if the house caught fire, became burglarized, or was invaded by insane aardvarks.

Our Crazy Cell Phone Scheme

We looked at some other options.  First of all, Jason's dad already had a plan through Verizon that would allow him to add a line for 9.99.  He had made us an offer to do that in the past, but we declined on principle.  On what principle, we can't remember, but it seemed like a good idea at the time.  We decided to compare what taking him up on his offer would do for our bottom line to what we were currently paying.  Here is how much we paid for DSL, phone line, and a cell phone:

Phone (Including taxes and fees) - $33.55
DSL High Speed Internet - $28.00
Verizon Wireless (one phone, including taxes and fees) - $46.13
Total Cost - $107.68/Month

To lower this cost, we went with Jason's family to Verizon and added two lines to their account.  The first one was Jason's current account, and the second went on one of our old cell phones we'd never gotten around to donating.  This second phone will replace our land line for emergencies, but has features our land line does not have such as voice mail and the ability to leave the house, city, state, etc.  Jason also upgraded on his phone the number of texts he can send/receive.  With the upgrade, the second line, taxes, and fees, we expect to be sending Jason's dad about $40/month (less that what we're currently paying for one phone with a less comprehensive plan).

This morning, we called ATT to cancel our land line, knowing our internet would likely go up $7/month.  After we got that set up, Jason asked the representative if they could give us a little "something extra" for being such loyal customers.  The result?  We get the first 3 months of service for $14.95 instead of $35.00.  That price includes everything, so there are no added fees or taxes to consider.  Here are our new totals:

DSL High Speed Internet - $14.95 for three months, $35.00 after that
Verizon Wireless Cells for Home and Away - $40.00
Total - $54.95/First Three Months - $75.00/Thereafter

Just those two action will save us $30-$50 per month, and will add up to $427.31 over the next 12 months.

The Next Step

You'd think I'd be satisfied with that result, but I'm not quite done.  When these three months are up, I'm going to call ATT back to see if they will continue us at the promotional rate.  If they won't, I'm going to ask if we can sign up for a 2-year "term."  Oftentimes, there is a better rate available if you ask for this, although they tend not to advertise it.  This is not like a cell phone's 2-year contract.  Instead, it just shows you intend to stay with them, so they guarantee you a better price for two years.  However, you can cancel at anytime with no penalty.  Be sure you check the terms before you agree to any add-ons or special rates.  It might be good in the short term, but there can be a nasty surprise later down the line.

If you know and trust someone who has the kind of wireless plan that lets them add someone new for cheap, it's worth looking into.  If nothing else, you could each get the same plan together, split the cost, and probably both of you would benefit from a lower bill.  It should go without saying, however, that your relationship needs to be the kind where you can deal with money together without it hurting your friendship.  

In short, there are a lot of creative ways to save money.  Jason told me at lunch that this latest action made him feel we were really serious about eliminating this debt.  I have to agree.

How else can we all save money on a month-to-month basis?  Let us know in the comment section below!

Travel Frugality

Jason and I just returned from a trip to Nashville, TN.  It wasn’t a trip we were originally planning or budgeting to take.  However, Jason won a handbell contest in May, which paid for about half of the expenses to experience Pinnacle (a national handbell convention).  Given that his career as a handbell  composer/arranger is still in the developing stages, we saw this trip as more of an investment than an expense.  Still, we wanted to keep costs as low as possible.

Food on the Cheap

For those of you who follow the blog, you know Jason makes our money work for us, and I try to find as many ways to save as possible.  To save money on this trip, we tried to spend as little as possible on food.  First, I called the hotel and found out the “full-service” hotels supposedly do not offer refrigerators or microwaves in the room.  Nor do they offer free continental breakfasts.  (They also don’t offer free wireless access in the rooms, but that’s beside the point).  However, they would provide a microwave and refrigerator upon request, if there were enough available.  We requested.

Because we weren’t certain that there would be appliances for us, we tried to pack food that would work for us regardless of what was available in the room.  We packed grapes, bananas, sandwiches, pretzels, granola bars, and nuts.  Those foods worked well for the drive down (no stopping for lunch) and would work with our cooler if no refrigerator arrived.

When we got there, we requested the refrigerator and microwave three times.  After the fridge came with no microwave, we figured that was good enough.  We headed to Kroger to buy:

1 Loaf of Fresh Italian Bread - $1.00
4 Packs of Deli Meats - $1.96
1 Pack Provolone Cheese $3.99
1 Container Hummus $2.00
1 Box Cereal $3.99
1 Container Mini-Donuts $1.00
1 Quart Non-Fat Milk $1.39
Tax - $1.22 (apparently groceries are taxed in TN)

Total - $16.95

These groceries were enough for us to have 5 breakfasts, 2 lunches, and a dinner for each of us.  This comes out to about $1.06 per person per meal.  That's even with fancier items like hummus and provolone cheese.  If we tried, we could have gotten this even cheaper, but we figured we were on vacation and deserved a few fun items. 

If we had spent just $4 dollars in each of those meals, we would have spent an extra $47 on the trip.  While that doesn't seem like a lot, if you saved $47 on one trip each year, invested into an account earning just 4% interest, in 30 years, you would have $2,883.16!

What other money-saving travel suggestions do you have?  Tell us about them in the comment section below.

Up In Smoke

Driving home last night from my folks' house, I quickly lost count of how many fireworks exploded within my field of vision, or how many cracking reports I heard from behind me.  After a minute or two of this, my mind invariably turned to money, and I realized something truly mystifying -- I wasn't seeing and hearing fireworks; I was seeing and hearing money going up in smoke.

Now I'm not a huge fan of fireworks so that does prejudice me just a bit.  I haven't set foot in a fireworks store or looked at a fireworks display in the local supermarket in years.  But it still occurred to me that what I was seeing was a tremendous waste of money and resources.

Math time -- Even with some of these outlets offering buy-one-get-six-free deals, you have to figure that for the sort of up-in-the-air cloud-burst fireworks I was seeing, we're talking minimum $.50 to $1.00, probably more.  Again, I'm making assumptions here because I have no idea, but I think that's a conservative estimate.  For each firework, figure that to light the fuse, run like mad to get out of the way, watch it fly in the air, then explode, we're talking ten seconds.  That means that, for an hour's worth of continuous firework excitement, we're talking ten seconds a shell, six shells a minute, 360 shells for an hour, at a cost of somewhere around $180 to $360 an hour.

Again, this is hideously rough math: if the shells are more expensive, the cost goes up.  If you take longer to fire a shell, the cost goes down.  I also realize that nobody is going to fire off these shells one after another after another for an hour straight -- the number is just a per-hour cost, nothing more.

Now, let's look at some other per-hour costs:

Dinner - Meal for two, nice restaurant, figure an hour's worth of time and, with drinks and dessert, perhaps $60 or so.  That makes the hourly cost about $30 a person.

Movie - Ah yes, that cheapest of pleasures (he said sarcastically).  Figure $9 for a ticket and another $12 for a vat o' popcorn with drink, you're talking $21 for a two-hour movie, or just over $10 an hour.  Your costs may go down if you share the popcorn, up if you go for a 3-D movie.

Video Games - This is one I'm gravitating to more and more.  My wife just bought me a Nintendo DSiXL for my birthday (a few months early, but who's complaining?), at a cost of about $190.  In that time, we've bought a handful of games, at a cost of maybe another $130 or so.  Total of $320 on a new video game system.  However, the longer we play it, the less our per-hour cost runs.  Even if we only used the system for an hour, we're still only near the high end of our fireworks example.  In the month we've had it, however, we've probably spent, between us, a good forty or fifty hours playing it, at a per-hour cost around $7.  The key is to get a system you'll actually use, and then buy games with lasting play and re-play value.  Our most frequently-played games?  Mario Kart DS (even after you've competed the Grand Prix mode, you can still play online for free with people from around the world), and the EA Sudoku game (which we downloaded for $2.00 from the DS online store).  Even factoring in recharging costs, it won't be long before playing this gets as low as a buck or two an hour.

There are so many more examples I don't have time to go into here, but you get the drift: fireworks may be fun, but the per-hour cost is a killer.  My family and I stood in their driveway for ten minutes and just watched the shells exploding in the sky all around us.  Cost to us?  Nothing.  When it comes to celebrating independence, seems to me that getting that much bang for your buck is right on the road to financial independence.