Bailout Idea

Every where one turns these days there is yet another story on the bail out plan. Another $819 billion has been approved by the House and is going to the Senate floor. This got me to thinking, $819 plus $734 (previous bill) is $1.553 trillion. I can't even fathom the amount of zeros on that number. Then I read that we will need billions more for a full recovery. My mind started thinking, how can this money come directly to the American people. How many American people are there? I googled it, $384,505,000 people in the United States. Could we give the money directly to the American people?

So now here's where it gets tricky because I'm not really great at math and this is a lot of zeros to play around. If everyone in the United States got a check for $100,000 that would be $3 Trillion. So that would be more than we have allotted already. What if it was $50,000? That should be $1.5 Trillion so less that we already have allotted. If we give the money to the people, they could spend it, save it, invest it or pay off debt with it. All of these options will help to stimulate the economy while creating a "feel good" atmosphere.

1) If every single American spent the money our economy would spike and therefore the world economy would spike. If during this spike, companies continued to get lean we would emerge a world leader with lean companies who had money in the bank from the spike in sales.

2) If every single person saved the money, this would be quite an influx of money to our banking system which should open up their ability to lend again. Credit scores would rise because borrowers have the ability to pay back debt, banks would have excess cash reserves to borrow and the American population would feel like they have a safety net to catch them if this happens again.

3) Could you even imagine Wall Street if everyone invested these dollars? They would be going crazy trying to buy all these under valued $10 stocks before their prices rose. The market would rise again as everyone determined their buying strategies. People would be in control of how the money is spent. I wouldn't be investing in Citibank because I don't believe in how they have handled the money thus far however I would invest in Ford because they have a great management team that prepared the organization for a day such as today. I would invest heavily in American stocks because I believe in putting our money back into the society in which we reside. Yet I would still invest some in foreign stocks because in the end we are all connected in one big life circle.

4) I have a lot of debt. There is less than I had before however it is still there. To get an influx of $50,000 would pay off all my credit card debt and my small mortgage. Right now I can only dream of what this would feel like. The freedom to do what I want because my debt load is relieved. I continue to pray for this day and in this blogs fantasy world I can almost taste the victory that would be. For the economy, even if everyone paid off their debt, the disposable income this would provide families would be enough to spark the economy again.

This is all a dream but could you even imagine what our country could do if this amount of money was actually given to the general population instead of business as usual up in Washington. It will be interesting to watch our new President and how he handles this money. The first test will be if there are stringent checks and balances on the spending of our next bailout plan.

God Bless.

Brown Bagging It

The latest in my frugal lifestyle is brown bagging my lunch. Well it's actually a really cute pink and black lunch bag from Target boutique, but still brown bagging non the less. I started doing the math on my spending about 3 months ago, realizing that I needed to understand exactly where my money was going. Lo and behold, I found that I was spending on average $50 per week on lunches alone. If I added in the coffee and breakfasts, which I sometimes purchased, this could easily hit the $60 - 70 range. I almost got sick. That is a lot of money going to food, something I will never get a return on my investment. So for the last month I've been taking my lunch almost everyday and eating most of my breakfasts at home. This has been quite the change in that I go to the grocery store and spend about $100 per week so I wonder if I truly am saving money. However, the grocery bill is for two people for a week and includes dinners so yes, I am saving money. Then we need to actually eat the food that I purchased. This was difficult the first couple weeks but we have it pretty down pat now. I threw away a lot of food at first. I would purchase the groceries and they would go bad before we got to eating them. Now we truly don't go out so that is saving us money.

Now, don't get me wrong, it has been hard to watch my friends go out to lunch while I'm at the microwave heating up last night's dinner. There are moments when I feel left out of the conversations because I don't go to lunch and get the scoop. But then I remember that God doesn't want me gossipping, He doesn't want me spending frivolously and He wants me to have a great life. So missing the gossip and being a good steward of God's money, now that is where I want to be.

The extra cash has gone to paying down my debt. It is working too. I still feel stressed about the pending layoffs but I believe by the time I'd be let go, I will have my two smallest credit cards paid off and the last one on track for a large payoff once I get another job. So I say Bon Appetit my friends, bring the lunch and pay off your debt. It's amazing the freedom you find for yourself in this small act of frugality.

Greed

When President Obama was sworn into office and started his inaugural speech, I believe people cheered when he said that greed got us where we are today, not greed from everyone, but greed. I have to agree and disagree with this statement when I look at my financial records. There was greed when I got divorced, the greed of I deserve to live the lifestyle I had on two incomes on just my own income. That greed led to a mountain of credit card debt that after the denial phase, I am still paying off The worst word in the English language isn't a swear word, it's deserve. When people decide they deserve something that is when greed has comes home to roost. I didn't deserve to live on more than my income, I didn't earn it, I didn't need it and I certainly didn't deserve it, I wanted it. Deserve is another word for wants and we all understand the meaning of want, not something needed but desired.

So in my situation greed came home to roost for about 3 years of unabated spending and the life I deserve. Then reality set in when I couldn't pay for everything I deserved and now am making amends. I certainly earned the frugal lifestyle I'm leading and lucky for me frugal is in style now. So yes President Obama, greed got me into this mess and frugality will get me out of it. I pray the same for our country, that frugality will get us out of it and President Obama is setting the tone right for this path.

God Bless.

401K Loan and why I did it

Every financial advisor on the planet will tell you don't do the 401K loan because you lose the compounding interest on your money. In the end this loan will probably cost me $100,000 in retirement funds instead of the $20,000 I borrowed. However, if your financial advisor has never been swimming in debt, avoiding calls from creditors and unable to get it together they have no idea the freedom that comes from not seeing one big bill a month. It was July 4 years ago when I couldn't make ends meet. It was a time when I knew I needed to get serious about my finances and I tried for a year with no success. It was depressing to see these bills coming in and paying $5 or $10 extra on a $20,000 bill really didn't impact it. My thoughts were I know it will cost me 4 times the amount of the loan in retirement but I'm going to pay a whole lot in interest (29%, because I was late so many times) while I'm working. So the jump start to my financial freedom came with my 401K loan because with this my credit score increased and I was able to renegotiate interest rates on my other credit cards to a manageable 9.99%. Now when I pay my extra $10 or $15 on the card balance, I can actually see it making a difference. My confidence level has grown with every bill paid off and believe it or not that snowball effect really does happen, when one card goes away, it's ten times easier to pay off the next card.

There are some things I learned about a 401K loan that I didn't know when making the decision. First, you can't pay additional $10 - $15 to pay it off sooner, if you want to pay it off sooner you need to save the money and pay the entire balance left at one time. Now I don't know if this is just our plan, but it is something to consider if you are thinking about this process. Second, you must pay back the loan within 90 days of leaving the company whether you are laid off or quit. During this tumultuous time, this is something to truly consider. I have felt trapped at my current job many times during the last 4 years because of the loan and gone home crying out to God to help me to leave.

I know that many financial advisors are cringing at this blog post but for me the loan was the best thing I ever did. First the timing was perfect. I took out the loan and 3 years later the stock market and housing markets have crashed. My loan is paying paying my 401K 9% in interest that my stock is losing right and left. It is the only thing increasing my portfolio right now. I know it took away for 3 years but this last year it has been a blessing. I have paid off most of my loan before my company is going through their layoff process so to be laid off won't affect my loan, I have enough to pay the entire balance within 90 days of my final day. There is a freedom in all of this. I now have the ability to look elsewhere without the "stuck" feeling of debt. God certainly blessed me when I took out this loan and paid back my debtors instead of trying to get out of what I charged. My life has been given back to me through this 401K and the strength to control spending after the loan.

God Bless.

Discretionary Funds Going Fast

Well, the discretionary funds made a wide turn left this weekend when we decided to head out for dinner on Friday night because I let my sugar levels go down and I didn't feel like cooking. It was wrong of me and bad of me to do that but life sometimes happens. So $20 later, with gas another $10 we are down to $60. Then I realized as I was going over my bank statement (which I do daily) that my tithing check from church hadn't cleared yet so that's another $50 taking us down to $10 and we are supposed to go out for my best friends dinner on Wednesday night and somehow get her a gift. I know I shouldn't hit the savings but I am this week. A $75 transfer and we are good to go. I've already told my husband that we have to order the cheap things from the menu and drink water Wednesday night. I'm hoping for the stimulus package to come soon (LOL) but really I'm proud of us that we truly are getting through this paying off credit cards and maintaining a pretty good lifestyle in the process. I'm proud of the frugal lifestyle we are leading, I know it sounds weird but it makes me happy to know that through everything we can manage and laugh some too. I do like that part of this experiment. Frugal doesn't mean frumpy, frugal means smart! And since we are masterpeices of God's creation I would say we are smart, because what He makes is good!

God Bless.

Ebay here I come

Well, as it goes when you start to pay off everything and get a little excited about the prospect of being debt free sometimes one goes overboard. So okay, I went a little overboard with my payments and now I'm a little tight for these two weeks. Everything is paid and we have $290 for two weeks for two people. Grocery's will cost us about $200 ($100/week) leaving a grand total of $90 in discretionary income for the two weeks and that will include gas. So it looks like we will be using the gift certificates that we have recieved over the Christmas holiday for fun and we will be creating our own fun somehow. I think this week I need to plan my menus out completely so I only buy what is needed at the store and I will get two of my Longaberger baskets out to sell on Ebay. Hopefully people will still be buying out there. This will give us some extra discretionary income for the next couple weeks so we can have a little fun (grin). My thing with becoming debt free is that I don't want to be so tied to payments that I can't have some fun. I believe life is partially fun so we need to enjoy it and live it while we pay off our debts. So extra income can come in the form of selling books, dvds, cds, clothes, household goods, and collectibles. This week I'm going with the collectibles on Ebay. Listings will go up tonight when I get home from work. Here's to having fun while becoming debt free.

God Bless.

Article on spending to save

So I was reading this article today on spending money to save, for instance purchasing a bread maker so you don't have to buy $4 loaves of bread or a coffee maker so you can make your own coffee both of which are said to save $1,000 in a year, not including the costs of material to complete the task. My problem is that as American's we tend to work on waves as my husband says. We have a wave where we will make our own coffee and bring it to work for about 3 months and then we miss a day here and there. Soon we are purchasing all our coffee at one of those expensive coffee shops while our coffee maker collects dust in the corner. But if we can make a commitment to this, I know it truly does make a difference. There is something about walking past that shop and into the office with your own coffee that creates a feeling of self pride that you aren't succumbing to the corporate marketeers but then I think those same marketeers keep me employeed...ugh this is a catch 22...but I guess the thing to think about is that coffee shops were designed for treats or for the rich to have their coffee made for them. It is a luxury not a need and right now as we are facing pending layoffs, stock market crashes and the weakening dollar, we need to think about "needs" and "wants" in a more realistic way. Well, happy brewing and bread making to each of you!

God Bless.