Kay Iscah's Blog, page 4

A Time to Save – Part 2

You can read Part 1 here. On to the example...

(We’re using the example of someone who earns $1000 per month, and because they live with family only has $200 in regular expenses. However, they need to budget with worst case scenarios in mind.)

So let’s take that $1000/mo. Pretend you have to pay $720 for rent, $80 for food, and $100 for utilities. If you can think of other expenses independent living would create you might add them in too. So for us that comes up to $900, subtracted from $1000, it leaves you $100 for other expenses. This may be a far more realistic range for your “spending money”, even if currently your expenses are only $200. The difference between $900 and $200 is $700. If you can discipline yourself to bank that money into savings instead of spending it, you’re going to be in a much better position to weather life’s upsets. And if nothing bad happens...well, look at all the money you’re saving.

So while your living expenses are low, where should that $700 go?

This goes back to our 5 priorities:

Priority 1: Needs
Priority 2: Small Debts
Priority 3: Emergency Fund
Priority 4: Large Debts
Priority 5: Big Dreams and Entertainment

Even while prepping for your worst case scenario, you shouldn’t ignore your current needs. If medication and transportation, etc. mean that $100 in spending money is not going to cut it, that’s okay. Adjust your savings amount so that your current needs are still met. If your vehicle needs a $500 repair, it’s okay to take a break from savings to deal with that.

Small Debts are things you can pay off in a single month with a lump payment. So yes, take care of that speeding ticket, library fine for the book your dog chewed up, or $10 you owe your friend for pizza the other night promptly. That way they won’t be hanging over your head or accumulating additional fines and penalties if things do get worse.

Next is the emergency fund. Now, if you’re living at home so you can pay down your student loans more quickly, then yes, you should continue to do that. But it’s important to have some liquid assets that are quickly accessible for emergencies. So maintain the minimal payment on your loan until you’ve put away 6-months worth of living expenses. Let’s say your regular student loan payment is $350, (if you’ve taken care of the first 2 priorities) that leaves $350 for savings. If you decided that $7,200 is your ultimate EF goal and you’re starting from $0, then it will take you almost 2-years to save that amount. If you’re feeling pressure from your relatives or worried about student loan interest, you might stair step those goals.

For example:

For the first 2 months, $350 towards EF and $350 towards the debt.
For the third month, $300 towards EF and $400 towards the debt.
.....(EF now at $1000)
Continue for the next 8 months, $300 towards EF and $400 towards the debt.
.....(EF now at $3400)
Last month of the year, $200 towards EF and $500 towards the debt.
.....(EF $3600, so you’re at your half way goal)
Continue for the next 6-months, $200 towards EF and $500 towards the debt.
.....(EF $4800)
For the next sixth months, $100 towards EF and $600 towards the debt.
.....(EF $5400)

While not your ultimate goal at the same speed, it’s still a good cushion and you’re definitely knocking years off that student debt. You can continue the $100 to EF and $600 to student debt until you hit your goal or use that degree to get a higher paying job.

Once you have an adequate Emergency Fund, throw the full weight of your income at your large debt(s).

More details in Part 3 (told you this got long).

A Time to Save – Part 1

I was most active on this blog back when I was maintaining an apartment with roommates, and to a degree, that makes sense. There are a lot more financial issues to think about when you’re running a household.

But there are a lot of people who have moved in or who are still living with family. This encompasses both young people living with parents and parent or grandparents who have moved in with their children. These multigenerational households were fairly normal through much of history and still are in many cultures, and seem to be making a comeback in the U.S.

Particularly if you’re single, there are a lot of socially and financially smart reasons to live with your parents or other family members. Even if you’re chipping in to maintain the household, this is usually cheaper than maintaining your own place. The dark temptation is to view these savings as disposable income rather than a chance to build a nest egg.

Certainly it’s fine to have a little play money. However, it’s wise to recognize that life is unpredictable. For a number of reasons, you could find yourself suddenly needing to move out and maintain your own living space. To a degree, age and current savings play a huge factor in your budgeting. If you are retired and working a minimum wage job mainly for the physical and mental exercise, but able to draw social security and have a sizable retirement account, then sure go ahead and use your new income for trips and gifts.

However if you are a young person who isn’t independently wealthy or a middle-aged person with minimal savings, then you need to keep your potential and not just current circumstances in mind.

Let’s say, out of your $1000/mo income after tax, you currently contribute $200 towards household expenses and your relatives are happy with that. That leaves you $800 for other things. It’s really easy to spend $800 a month if you don’t feel a pressing need to save. But have you bought into a lifestyle that you couldn’t maintain if you suddenly needed to move out?

Doing a quick search in my area (just outside of Nashville), the cheapest studio apartments are listed at $580 (and they fill up quick), and one-bedroom apartments are starting at $720. That’s a pretty significant chunk of $1000. If you take on a $425 car payment, then you may be living in your car if something happens to your current situation.

In previous posts, we’ve recommended you set your Emergency Fund Savings goal to cover 6-months of independent living rather than reflect your current expenses for 6-months. We’re also recommending you practice setting your budget to reflect independent living, particularly if you are hoping to get your own place.

This post got a little long, so we’ll continue with an example in the next entry.

Hola 2017

            So part of the reason I went dark after the last post is that I started a new job in April.  It’s still part time, but steady and a better hourly rate.  I’m making close to full time minimum wage.  It’s also back in childcare, so I’ve been putting in a lot of extra off the clock hours because one of my long term goals is developing a new curriculum/educational system.  (To be clear that’s not my boss asking me to do extra, that’s me doing extra for personal objectives.)
            The other thing keeping me busy was editing my first anthology.  There were almost fifty contributors, and that was a little intimidating.  Anthologies are rarely best sellers, but I think we produced a beautiful book.  Doing a giveaway soon, so I’ll give you more details when that happens.
            Most of my budget this year has been focused on savings.  I turned 35 this year and decided that I really needed to get more serious about my retirement account.
            This past week I’ve been making a lot of lists.  I’m not a big fan of New Years Resolutions, but I do like establishing goals for the year.  So I’ve been drafting shopping lists, to-do lists, buckets list, business checklists, etc.  I spent a large chunk of Christmas break sorting and organizing, and there’s an intimidating amount left to go through, a lot of it filing that I’ve been putting off.

            My friend’s father passed away last month, so my sister and I had a conversation about how we would need to adapt if one or both of our parents passed away.  Hopefully, it’s not something we will need to implement anytime soon.  But it was worth discussing.  We also were able to reflect that even though we occasionally get on each other’s nerves, living with the parents allows us to maintain a middle to upper-middle-class lifestyle even though our individual incomes would put us on the edge or just above poverty level if we were maintaining separate households.

            And I have been contemplating getting my own place.  However this would mainly be a mixture of book research and a sort of reality show/vlog.  I can’t say it would be an ideal financial move for me on a personal level, and we would have to make new arrangements for getting my nephew to school.  But in many ways, this year is starting to look like a good time to do it.

Why Do Homeless People Have Smart Phones?

One piece of advice we’re changing in the second edition of Living Single on Minimum Wage is our advice on smart phones.  Not because the old advice was bad, but because the technology and prices have changed dramatically in the past few years.  I’d certainly still advise carefully weighing your needs vs. wants and comparison shopping to choose the best phone plan for yourself, but I’m less inclined to see smart phones themselves as purely wants.

I hope none of you are homeless, but I know people who are or have been. And I’ve also heard a lot of cynical comments from people who aren’t when they see someone on the street begging for help and then using what looks like an expensive phone. So I wanted to go over some practical reasons why a homeless person might have a smart phone or feel like maintaining the phone is a good use of their limited income that aren’t just poor judgment.

How Can a Homeless Person Afford a Smart Phone?

1. They bought the phone when they were in a much better financial place. Before the jobs loss, before the medical bills piled up, before the fire that destroyed their apartment, etc.

2. Someone else gave it to them. Charity, friend, family member, kind stranger. Just because a poor person has a phone doesn’t mean they bought it.

3. A special promotion or payment plan. While paying for a smart phone upfront may cost you a few hundred dollars, many cell phone companies offer their phones for relatively low monthly payments, or at a reduced price with contract. While that can add up or even cost more over time, it’s more realistic that a poor person can scrounge up $20 per month than $200 or $300 in a single lump.

How Can a Homeless Person Afford a Dataplan?

1. They may not have one. Smart phones have gotten pretty smart. They’re really more like personal computers now. Even if a smart phone’s services gets cut off, it may still work as a camera, or connect to public wifi to check e-mail, or as a flashlight or apps that were download while the person did have a plan, still work even though the ability to make calls has been shut down.

2. They got a cheap plan. Data plans can run hundreds of dollars per month, particularly if you’re not careful about your usage. But not every phone is this expensive. Nor does every phone plan require a contract. They may be paying month by month, or have a very limited phone plan.

3. They have a job. Not everyone who is homeless is unemployed. Many homeless people are underemployed, meaning they do work but can’t get the hours or income they need to cover rent.

4. They’re part of a group plan. Many family and group plans can be significantly cheaper for the individuals splitting the plan than buying a dataplan by yourself.  Again this may be a family member helping them out.

5. They mainly use public wifi. Public wifi is less secure, but it's widely available now. Watching your data usage can help keep your phone bill low.

Why Would a Homeless Person Need a Smart Phone?

1. Weight. Imagine all your earthly possessions don’t have a safe place to stay, so you have to carry them on your back. A smart phone, aside from being a phone, can also be a flashlight, a book, a map, a level, a camera, a calendar, a notepad, a game, a calculator, alarm clock etc. Replace all those items with a single small one, and it leaves more room for important basic necessities in your bag.

2. Information. The local church may be giving away free hamburgers and winter coats, but that doesn’t do you any good if you don’t know about it. While libraries are great for getting information and internet access to the poor, they aren’t always open or close enough to walk to.

3. Job opportunities. It’s hard to get a job when you don’t have an address. Having a steady e-mail address and a phone number increases the way potential employers can contact you and you them.

4. Human connection. First and foremost, homeless people are people, and it’s a lot easier for people to get through tough times with other people to help them with advice and encouragement as well as in more tangible ways. Smart phones may help the homeless connect with distant relative or local support groups.

The point of this post isn’t to encourage anyone to run out and get a smart phone. If you’re doing well without it, save your pennies. But I’d seen enough snide comments about homeless people using smart phone that I felt like this needed to be addressed from a practical side.

The Thriftier Hamster

While some animals certainly work for their living, most pets are a luxury item.  In our book we encourage minimum wagers to invest in plants rather than pets, and I still stand by that advice.  Properly caring for an animal comes with a lot of financial expenses and time cost, and you shouldn’t get an animal unless you can properly care for it.  (We’re not suggesting you get rid of your loyal dog of ten years.  Just that it’s not wise to add another mouth to feed when you’re on edge financially.)

But I confess, I’ve always wanted a hamster.  I had promised my nephew a fish once he’d potty trained successfully.  Once we started looking at the pet store, I convinced myself a hamster would be just as cheap and easier to care for (you’re free to laugh at me now), so I talked my nephew into a different pet.

I’ll also confess that I’ve probably spent at least $700 on this Hasmter so far.  So no, I haven’t changed my mind about pets being a bad idea for someone on a tight budget.  Some of those expenses were necessary, some weren’t.  I failed to do proper research before purchasing my pet.  If I had, it probably would have saved me a good portion of that money.  However, in the meantime, I’ve learned things that have helped bring the cost of hamster care down, so I figured I’d do a post about those since there’s a fair chance many of you either have a pet already or ignored our advice on this subject.

This is Gryffin.  (He’s a Gryffindor.)  He’s a Syrian hamster and large for his breed.  He’s also apparently smarter than average and recognizes certain words and commands.




Tip One: Start off by buying the large, nicer cage.

I bought a Hamster Kit which included the cage, a wheel, a bowl, a water bottle, removable bedding tray and bedding.  In concept this was a good thrifty starter kit.  Except it was not a well designed kit.  The wheel was too small, the bowl was too large, the water bottle was huge and took up too much space inside the cage (online reviews said it leaked, but mine wasn’t too bad in that regard).  The bedding tray is actually a good feature since it protects the bottom of the cage from wear and tear, but the instructions weren’t clear that by “recycle” they meant wash and re-use, not put in with normal plastic recycling.

While hamsters like cozy places to sleep, they also have a lot of energy that needs to be burned off.  So space to move is important for keeping a happy hamster.  (Unhappy hamsters bite or chew through their cages.)

I ran up a lot of my costs by replacing various components of the kit with better made ones.  New bowl, new water bottle, new wheel, and then adding tubes to expand my hamster’s space to move.  If I’d taken a little more time to research and read reviews, I could have bought him a much cooler habitat for the same amount of money.  (The tubes are all additions, all that's left from the initial kit is the cage at the bottom.)


Tip Two: Figure Out What You’re Going to Do With Him While Cleaning

Properly cleaning out all my hamster’s tubes takes thirty minutes to an hour.  Apparently no one told him animals go in the corner.  Dishwashing liquid seem sufficient for cleaning the cage and tubes, but the hamster can’t just run loose while I clean.  I have a travel cage for him where I keep his dust bath and an aquarium where I’ve set up a hamster retreat where everything is edible or gnawable, even the straw bedding.  He also has a ball, which he will happily run around in for 20-minutes solid, but after that he gets hungry and needs to take care of hamster business.  (P.S. I don’t recommend hamster balls on carpet.)


Tip Three: Supplement with backyard greens and fresh scraps.

Dumping any old scrap into your hamster’s bowl is not good care.  But there are a number of foods you can share with your hamster or pick from your yard (or any place you’re reasonably sure hasn’t been sprayed with chemicals.)

I did buy Gryffin a $16 bag of “gourmet” hamster food, which is probably varied enough to sustain him by itself.  But I managed to make that bag last for 6-months by ignoring bag instructions and supplementing his diet with fresh greens from the yard and scraps.  The bag suggested giving him 2 tbsp per day and tossing out the remainder.  My large Syrian almost never eats that much.  Usually I give him 1 to ½ tbsp of the mix, and place some vegetables on top.  He loves Zucchini, carrots, most any leaf, and apple cores (no seeds).  Since my nephew won’t eat apple core or skins, feeding them to the hamster makes good use of those scraps.  He’ll eat the zucchini stalk and rind that my mom trims off.

I don’t toss out the remainder unless there’s some sign he’s pooped or urinated in it (which he normally only does when it’s down to the pellets.  He doesn’t like those.)

Gryffin also loves dandelion leaves and wild violet leaves (both of which are safe for humans as well) and those grow plentifully in this area.  This may take some additional research, but it’s not a bad idea to acquaint yourself with backyard edibles.

Not every scrap or wild growing thing is good for hamsters.  Here’s a couple lists to get you started.

http://hamsterific.com/hamsterific-university/acceptable-hamster-food-list/
http://healthypets.mercola.com/sites/healthypets/archive/2010/11/11/common-harmful-pet-hamster-treats.aspx

Tip Four:  Buy Bedding in Bulk

For the first few months of hamster ownership, I bought 3-packs of bedding trays because it seemed easier and looked like as much as I would be getting in the bulk pack.  I didn’t realize how densely the bulk bags were packed.  The paper bedding in plastic trays came out to about $3.33 per week.  Whereas $7 bulk bag of wood curls lasted about 4 months.  One pack of the trays was probably a good investment.  I now clean and reuse those to help protect the bottom of the cage, but in general, the bulk bedding is much thriftier.

Unscented and unbleached toilet paper, ripped or shredded, might be acceptable cheap bedding, but not newspaper (ink is not good for them).  I’ve played it safe with the store bedding.  But toilet paper might be cheaper.


Tip Five: Dog Biscuits

I probably dropped $20-$30 on hamster treats before discovering that dog biscuits were hamster friendly.  (Here’s some guidelines on which ones are and aren’t: https://youtu.be/bRsBXSEYyiM.)  I purchased a $1 bag of dog treats at Dollar Tree with 5 different flavored treats, and my hamster loves them.  Since he only gets 1-per-week, this one bag should last for several months.


Tip Six: Make Use of Loyalty Programs

I bought my hamster and a lot of my hamster gear at Petco mainly because it’s the closest pet store to my house.  They have a great return policy, which was very helpful when my hamster escaped his new play pen in less than 10 minutes.  (The product would probably be great for most hamsters, but Gyrffin is larger than average and smart.)  I replaced it with a glass aquarium, bought during a sale, and set up a “play pen” for him, because I needed a secondary space where my nephew could pet him and clean him.

Comparison shopping is helpful too, but my Pet Pals card has given me rewards and access to relevant coupons.  There’s no rule saying you have to buy all your pets supplies at the same store, but if there is a store that’s reasonably priced and convenient, consider signing up for their loyalty program.


Tip Seven: Hamster Potties and Dust Baths

You can buy hamster potties.  I’ve bought two, one with a cover and the other for the corner of his cage.  But I haven’t been able to train him to use it as a potty.  I think they’re a worthwhile attempt, but the litter is probably more expensive than the bedding.  He loves the variation in texture, but I haven’t managed to convince him of the advantages of using the toilet in one spot.

I did see a suggestion recently to use toilet paper instead of litter, and may attempt that, since it’ll be easier to spot when he’s used it and cheaper to replace.

His first potty has been transitioned into a dust bath.  I bought a spray shampoo, but Gryffin hates it.  The dust bath and a brush is probably sufficient since hamsters groom themselves regularly and don’t need soap and water baths in the same way some other pets do.
 

Do you have any thrifty pet tips?  If so, please leave a comment below.

Tax Time is Now, Not April

Happy leap year, everyone.  Use that extra day in February to get your taxes done.  All your paperwork should come in this month and getting your taxes done early will help you get your refund earlier, or give you more time to plan and/or double check if you have to pay.

I’d also suggest checking out the freefile option on irs.gov.  For most of us, a paid tax preparer is an unnecessary expense(, but it's okay to use one if you've had a complicated year).  Most of the freefile websites will walk you through the process step by step.

When you free file, I recommend taking the direct deposit option to get your refund more quickly.

Remember our 5 priorities for unexpected income.

Priority 1: Needs
Priority 2: Small Debts
Priority 3: Emergency Fund
Priority 4: Large Debts
Priority 5: Big Dreams and Entertainment

For me this year, most of my refund will be going to a phone upgrade, which is a situational necessity for my business (Priority 1 & 2…I already have the phone and this will allow me to pay it off early).  I need a better camera and a video camera for projects, and means to use a square reader so I can take credit cards at events.  The rest will go towards rebuilding my emergency fund.

Do you have a plan for your refund?

Crowdfunding for 2016

I had a brilliant plan for 2015, a reasonable time line set up for all my projects. And then a huge wrench got thrown into the plan, so a big project that should have been released and generating income in August had to start almost from scratch in September, which means the fall schedule got condensed into December, and I had to change my book release strategy and move some of it over to this year. And the new edition of Living Single on Minimum Wage that I had hoped to release last year is getting pushed to later this year.

To help get this year back on track, I've launched an Indiegogo Campaign.  Among other things, you can pre-order a copy of the 2nd Edition of Living Single on Minimum Wage for $8 (shipping included)

http://igg.me/at/AmoebaInk2016

Now, I get it. This isn't the blog for people with tons of excess cash, but I have ways for you to help which includes you getting free stuff (or cheap). If you have Kindle Unlimited, please go download, read, and review (negative reviews help just as much a flattering ones do, just be honest) my new fantasy novel Horse Feathers. http://www.amazon.com/gp/product/B019YWBE2W

You don't need a Kindle Device to read Kindle books, they have apps that will work on most computers, tablets, or phones.  And if you want, you can use a Kindle Unlimited free trial to borrow the book for free (This will work for the current edition of Living Single on Minimum Wage too).  Click here for a Kindle Unlimited Free Trial.  If you want to download the book on a more permanent basis, it's only $2.99.

You can also help by sharing the campaign on various social media (facebook, twitter, Tumblr, etc.) or sharing individual products from the company with people who you think would like them.  Along with books, Amoeba Ink does design work for Print on Demand items like T-shirts, journals, cards, phone covers, rugs, shower curtains, bedsheets, etc. through Cafepress and Zazzle.

Thank you in advance for any help with the 2016 kickoff.  I hope to get back to regular posting soon.

Healthcare Marketplace Reminder

Just a reminder that December 15th deadline for 2016 Insurance coverage through the government marketplace is tomorrow.

https://www.healthcare.gov/

Particularly if you don't already have insurance, you should fill out the application and see if you qualify for a stipend.  But even if you do, it may be worth a look.

My project pile for December is high.  I'll try to get some things off my plate and back into regular posting in January.

Sometimes Getting Your Finances in Order Does Mean Fewer Lattees

At some point, I may seek out Suze Orman’s “Young, Broke, and Fabulous” and do a proper book review, but when I read the back cover a few years ago, the summary turned me off rather strongly.  One thing I felt was an outright lie was the book claiming that getting your finances in order didn’t mean fewer lattees, because sometimes that’s exactly what it means.

But before you think I’m just randomly picking on Suze Orman again, this is really a self check.  I have not been very thrifty this summer.  To a degree this is okay.  I took on a part time job, which has given me some extra cash and allowed me to make a lot of purchases that I had been holding off on for the past few years (I’ve been making significantly less than minimumwage).  Some were altruistic; I filled four shoe boxes with gifts for Operation Christmas and bought my brother a couple pieces of furniture.  Some were practical; I bought new shoes and a couple outfits for interviews.  Some were bucket list splurges; restaurants I wanted to try, places to go (Dollywood and that big pyramid in Memphis), and I bought a hamster (which I’ll cover in more detail in another post).  And some of it was a lot little splurges, eating out with the nephew and/or friends, buying snacks, sodas, and knick knacks, etc.

My spending spree was not a complete loss of reason.  I made a list and prioritized it.  I bargain hunted.  One of the furniture pieces was a large display cabinet I found for less than $20 at a thrift store.  I got the new clothes off Goodwill’s dollar rack.  We used a coupon for the Dollywood admission.  And the stop in Memphis was part of a business trip.

But I have hit a point where I realized I’ve been spending too much and need to reel in the spending and focus more on savings.  I don’t have any guilt about my bigger, planned purchases.  They were things that significantly improved my life or someone else’s.  But I regret letting my spending on small items start to build.

Lattees specifically aren’t my weakness.  But sodas and snacks, little after school dates with my nephew and the occasional restaurant, individually were not big purchases, but they were adding up and burning through money that should have been directed to my savings account.  I am going to use lattees as an example of how these little purchases can eat through your income.

Let’s say your lattee of choice is a $4 drink at your favorite coffee shop.  You could probably duplicate a similar drink at home for 50 cents, so let’s look at the price difference over time.



Cost Per Year
5 per week
2 per week
1 per week
1 per month


$4 Dollar Lattee
$1040
$416
$208
$48


$0.50 Home Version
$130
$52
$26
$6


Skip it
$0
$0
$0
$0

As you can see cutting back or finding a cheaper substitute can make a huge difference in your spending and saving power.

And I know I've done some similar examples in previous blog post, but it helps me to see it like this and be reminded.  I hope it helps you too.

P.S. If you'd like to support my new creative project I'm editing, check out the Tomato Slices facebook page.

Go Easy on Caffeine, and It's now time to Enroll at Healthcare.gov

My grand plans for steady blogging have yet to pan out, but we took my brother to the ER this past weekend so I felt like talking about a health issue.

First off, it's good to have insurance.  If you don't, head over to https://www.healthcare.gov/ and see if you qualify for an insurance subsidy.  The Open Enrollment and Reenrollment deadline is December 15th, but I recommend enrolling this month and avoid the site crashes that may happen in December.

Second, please take some time to educate yourself about caffeine, both about the general symptoms and conflicts it may have with certain conditions and about how much you're taking in with particular drinks.

My brother is ok now, but he went to the ER with a heart rate almost double what his resting heart rate should be.  Combined with other symptoms, dehydration was probably his main problem, but that was likely kicked off by too much caffeine and too little of other fluids.  Caffeine can contribute to dehydration (as can sugar which is another part of your diet to track).

Caffeine is not all bad.  In moderate doses (like the natural amount in tea) it may have health benefits.  However it may also aggravate certain medical and psychological conditions.  For me (and others I've known), it brings relief to my bouts of depression, but for someone with anxiety or bipolar, it could make their symptoms worse.

WebMD has a good over view of safe verses unsafe caffeine uses and that may help you recognize potential side effects and make the personal decision as to whether you should cut back.  Or at least how to balance your caffeinated beverages with other fluids like water, milk, and juice to avoid dehydration.

Chameleon Cold Brew Coffee has 2160mg per 32oz bottle... so if you follow their 4oz recommended serving size, you'll probably be fine at 270mg per serving, but it's not a bottle to try to sip down one in a single sitting.