Archives for 2016

4 Expenses Your Family Can Start Cutting Today

June 8, 2016 | 1 Comment

It wasn’t that long ago that we were living so close to the edge while I was on my (yearlong) maternity leave, that I was forced to have a good, serious, look at our spending. I knew there had to be areas to save but I didn’t know where to start. To save you some time I will give you five areas your family can likely start cutting today.

Beauty

One thing I was still doing was maintaining my short hair style, with a cut every six to eight weeks. I had long ago stopped coloring to save funds, now the time had come to evaluate my haircuts. I was spending almost $50 every two months to cut my hair. It wasn’t a terribly complicated cut, the truth was that I was friends with my stylist and enjoyed seeing her every few weeks. I sucked up her salon prices and continued.

It didn’t take me long to realize this was an expense we could, at the very least substantially cut down. I knew I would still want my hair cut just not for $50. I asked around to a few friends and family and found a lady who worked at a salon in the day but on weekends and evenings cut hair out of her house, for cheap. She’d cut my hair for $15. Done.

(Here are more ways to save on beauty.)

Clothing

I’ve never been a big spender on clothing but I still find ways to save. Unless it’s underwear or a staple like my husband’s undershirts or my tank tops, I almost always looking for second hand first. Between thrift stores and online classifieds I generally have quite a bit of luck (especially with woman and kids).

Food

This can be one of the hardest ones, but if done right it can be so beneficial.

Before we started budgeting, we really had no idea how much we were spending on food but I knew it was a lot. While I was on maternity leave we were forced to budget very well since money was tight and though we’ve loosened things up a bit in the years since, it was a great learning opportunity for us.

Transportation

If you have more than one vehicle, consider selling one. If possible, look into public transit or car share programs. Be conscious about how much gas you’re using. If you can carpool with someone maybe consider sharing costs. If you pay for parking and there are options around, look into parking options. I could park at work for $225/month but I can think of quite a few other things I’d rather spend that kind of money on, so I park at a free park and ride and take the bus the rest of the way in. The bus costs me $2 each way and saves on my gas and wear and tear. In the end, I’m only losing about 15 minutes by taking bus (vs driving the whole way).

Where, and how much, each family can cut will vary but these seem to be a few obvious ones most people can relate to and are a good starting point.

What areas has your family cut down or totally out to save money?

Catherine

Catherine is a first time momma to a rambunctious toddler. When she isn’t soaking up all that motherhood has to offer, you can find her blogging over at Plunged in Debt where she chronicles her and her husbands journey out of debt. You can also follow her on Twitter.

plungedindebt.com

How to Survive Camping With Young Children

June 1, 2016 | Leave a Comment

We love to camp. Four years ago our daughter was born in June and by August we were camping. Some people thought we were crazy but it’s something we genuinely enjoy and wanted to introduce our kids young. Even though we’re avid campers, camping with young children (under the age of five) isn’t exactly easy. There is definitely more planning required than before.

Infants

Camping with an infant is both super easy and super hard. On one hand they’re pretty easy because they’re small and portable, on the other hand they usually need stuff that we don’t normally bring on a camping trip. At two months old it’s not like we could sit her down on the picnic table or camping chair if we needed a second with free hands.

We didn’t want to lug around a whole pack-and-play or baby chair so instead we opted to hold her or place her on the ground on a blanket when needed. When we were walking around, a stroller wasn’t exactly conducive to the rough terrain of a campground so we carried her in a baby carrier and it worked really well.

Though we don’t always set up a screen tent, when camping with an infant it was a necessity. We needed both shade and bug protection. Since little ones can’t have sunscreen or bug spray on them, the screen tent was a huge help as somewhere to sit without needing to worry about much.

Toddlers and Young Children

The required needs of toddlers and young kids goes down a bit, making it a little easier to camp with them but as the list of needs goes down, the list of safety concerns goes up. They’re now very mobile and curious and there can be a number of safety concerns on a campsite if proper precautions aren’t taken. You now have to be much more careful!

For us, camping in a tent, if a little one has to go to the bathroom in the middle of the night, there’s a good chance we’re not going to want to walk to the bathroom which is why bringing a portable potty is ideal. Even for well potty trained children, a portable potty (lined with coffee filters for easy cleanup) makes those potential overnight bathroom runs much easier to handle.

You can never bring too many clothes either since they get super dirty. Extra socks and sweaters for sure. Make sure you bring pants and long sleeves for them to wear in the evening, even if it’s hot, to prevent bug bites. I don’t like putting bug spray on their skin so I usually spray the exterior of a sweater and socks instead.

We got stuck somewhere once with a kid having an allergic reaction and no meds to give her. The bottle we thought we had was forgotten and there were no open pharmacies. Especially with little ones, come prepared with a well-stocked first aid kit which includes child-safe meds.

Kids love camping. It’s quite a little adventure for them. Unlike us adults, they don’t care if they have an air mattress or a comfy place to sleep. They’ll curl up on the ground in their little sleeping bag and be happy with the day’s adventures (best part about camping is all the fresh air- bedtime is always a breeze!).

Have you taken young children camping? Any tips?

Catherine

plungedindebt.com

Things to Consider When Buying a Car Seat

May 25, 2016 | Leave a Comment

Car seats are a necessity with children. Though some parents scoff at the added expense, there really is no price to put on the safety of our children’s lives. We’d feel awfully bad if we were in an accident and our child was hurt due to a preventable scenario in buying a properly fitted car seat. In saying all this, it can be overwhelming when it comes to actually choosing a car seat for your child.

It’s been a few years since we’re had to shop around for a car seat but now that we’re in the process of buying a second vehicle we’re faced with the added expense of another car seat as well (because any parent knows how fun it can be to play musical car seats between multiple vehicles!). There are a lot of great resources out there on child car seat safety, helping to direct you in terms of exactly what specifications you need for your child, but I will also offer a few things to consider from a mom perspective.

Consider Price, But Don’t Let It Dictate Your Purchase

If you’ve ever shopped around for a car seat you’ll know that they can range anywhere from $100 to $1000, easily. The price alone can be overwhelming and you can’t help but assume the more you spend, the safer your child will be but that’s not true. While the $1000 car seat will likely have some nice options it doesn’t mean your child will be ‘’more safe’’ and that is the main point when it comes to car seats isn’t it? Find a few within your price range and do your research. Which brings me to my next point…

Do Your Research!

Like any important purchase, research will be necessary before buying anything. There are many resources out there to help you read up on the safety and/or known issues with the car seats you have selected. Also don’t forget to research car seats that fit will in your current vehicle. We researched car seats forever and finally settled on one only to receive it and find out it didn’t fit in our vehicle at all. The base was way too large so we had to return it and start our search over. Had we started with searching forums about seats that fit well in our vehicle it would have greatly narrowed our search down and saved us a ton of time.

Pay Attention to Expiration Dates

Car seats actually expire. There are a number of reasons manufactures choose to do this (and it really isn’t just a money grab), things like plastic breaking down and safety labels falling off are a few. When we bought out first infant car seat we got a great sale for a car seat/stroller combo only to find out the car seat would actually expire before we were done using it. Thankfully the store had another (with a longer expiration date) in store and exchanged it for us allowing us to use it for the almost full 18 months we intended.

Invest In a Seat Saver

At most major retailers (think Walmart or Babies ‘R Us), you can find car seat savers. They are essentially a pad you put in your car and can sit your car seat on. We didn’t buy one and regretted it. The car seat can make your vehicle kind of…gross. While nothing much happens during the newborn infant stage, the car seat (or base depending on model) can seriously indent the seat of your vehicle. Once kids are old enough to have snacks and drinks in the car it becomes a whole new world. You will find things under the car seat you didn’t know existed (food, water stains, toys…) having one of these seat savers will help you preserve your car. Bonus, they’re pretty cheap, I see them in sale for less than $20 quite often.

A car seat is an important purchase for your family and there is a lot to consider when buying one.

What was the biggest influence on you when deciding on what to buy?

Catherine

plungedindebt.com

Having a Baby Doesn’t Mean Your Life is Over

May 11, 2016 | Leave a Comment

The other day a friend on Twitter was making a bunch of comments about how many things she had to accomplish before the baby was born because once the baby came, she’d never have time. While this is partially true in some regards she was referring to things like eating out, going to a movie with her husband, enjoy exercise.

Planning for Life with a New Baby

The reality is though that your life doesn’t actually end when your baby comes. I remember being exactly where she was, frantically trying to plan my new life but in actuality there is no point in trying to plan anything until your baby is actually here. I’m also here to tell you that despite how it may feel, your life isn’t actually going to end when the baby comes, it just changes. Life is certainly different once you add an extra person to care for but to assume you’ll never do things like going to a movie again is ridiculous. If anything, you can use the baby as an excuse to spend more time together.

You can assume that the first few weeks will be spent close to home. There is an adjustment period for everyone. Finding your routine will take time but it doesn’t take long to start finding your groove and venturing out a bit more. New babies are actually easy to take places. While they do have a lot of gear they sleep a lot and are usually easy to calm with one of two things, sleep or food, both of which can be taken care of just about anywhere.

You can be sure to have friends and family who will be all too willing to come over for some baby cuddles while you and your spouse spend some quality time together- something you will both need-to feel some normalcy again. Take them up on this offer! The first time you leave your baby it will be difficult and you will spend most of your time thinking about them but, in my opinion, it’s good for you and baby to get used to being apart for short durations. It allows them to start recognizing that you can be apart but that you’ll eventually return, this is good prep for back to work and/or things like pre-school.

I don’t know where the notion that once you have kids your life ends but it’s not at all true. It is true that your life changes, but to assume it will end, is unfair. Kids actually have a way of making most things more enjoyable. You will find joy in things that you had totally forgotten about; parks, museums even things like going for walk are more enjoyable with a little one to share in the experience.

If you’re expecting your first child, don’t waste your time trying to accomplish a bunch of ‘’before baby’’ list items because your life isn’t ending, it’s just changing. You’ll still do the things you enjoyed before baby, it will just be different, and for the better in my opinion.

Did you frantically plan before having a baby?

Catherine

plungedindebt.com

Would You Buy a Home For Your Child?

May 4, 2016 | Leave a Comment

I work for a successful dentist. Part of his success definitely comes from his frugality which I admire. When most think dentist, they think big beautiful home, fancy cars, great work schedule and exotic vacations on a regular basis. While his house is nice, it’s large by necessity not lavishness, he and his wife have four kids and live well within their means. He’s been in practice for 30 years, still works five (long) days per week, by choice, until recently he drove a 16 year old van and when he does take time off it’s usually incorporating a little work with a little play.

He’s extremely modest, except when it comes to his kids.

I totally respect parents who can afford to put their children through school. While I don’t think it is the parent’s duty to do so, if you’re able to afford both putting them through post-secondary while taking care of your own long term financial goals, that’s great. What I can’t wrap my head around is parents who, beyond post-secondary years, continue to financially support their children. For so many reasons I think this is a terrible idea.

Should You Buy a Home for Your Child?

One of the dentist’s children is getting ready to graduate from university this month. He’s finishing with a degree in engineering and already has a job lined up with, what I’ve been told, is a good competitive salary- even better given he has zero debt to manage. He is in a much better position than most all of his peers that’s for sure.

Needless to say I was a little shocked to hear the dentist say he and his wife were considering buying a house for this son to live in, rent free.

Here’s the thing. The kid has already gone through life never having a ‘real’ job, he’s made money doing some sports coaching stuff casually but his only responsibilities were to do well in both school and sports, again given his upbringing that’s fine and I’m not judging, but continuing to baby him beyond university is setting him up for failure. It’s high time he takes care of himself.

If they were genuinely interested in investing in real estate in this city (second highest in our country), because they planned on living there or something, maybe I get it but the kid shouldn’t be allowed to live there rent free that’s for sure.

Thankfully the wife of the dentist spoke some sense in to him and explained where my head at is well, basically that it’s not their responsibility to provide for him anymore and instead are going with him to see a finance person about how he can save for his own place should he choose to stay there (he’s thinking of going back to school).

Though his children are well taken care of, they really do understand how fortunate they are and see how hard their father works to provide for them (probably why of the four kids not one went into dentistry). This story had the potentially to end tragically- like it does for so many families of parents to hold onto their kids way too long, but thankfully they came to their senses and backed out of the idea.

Would you buy your kids a house to live in?

Catherine

plungedindebt.com

How to Find Good Deals on Kids Sports Equipment

April 27, 2016 | Leave a Comment

So far our daughter has been involved in both soccer and ballet classes. We’re pretty fortunate that neither has been overly expensive but the fact still remains that we’re still at the point of needing new equipment every year because kids grow so fast! Last summer we managed to get away with only needing a soccer ball and outdoor cleats for kiddo and this year was a bit more expensive adding her ballet gear (suit, tight and slippers). Compared to my husband who can spend $50 on a pair of soccer cleats and get a few years out of them, we spend close to $40 for kids cleats and are only able to use them for a few months.

At the end of her soccer year I looked at her cleats and realized they looked brand new. They were literally on her feet for a total of about 15 hours and now, one year later, they don’t come close to fitting her. I figured if she’s in this boat, there has to be other local kids who are too which is how I started my search for less expensive sports equipment.

Facebook groups

This seems to be the best for me locally. There are many (usually private) Facebook groups advertising the sale or swap of all things related to kids. Though they tend to be heavier on baby items there is definitely a good selection of other things. It also gives you an opportunity to reach out to a group of parents with young kids for inquiries about what you’re looking for, if someone in the group doesn’t have any of the equipment that you are looking for they may know someone. I’ve seen many successful transactions in the mommy groups I am a part of.

Online classifieds

I have looked both internationally and locally at different classifieds for stuff that we needed and in there were deals to be found, but in the end we had more luck with Facebook and word of mouth. Still definitely worth checking out.

Local Kids Swap

This is a huge help if you have access to one. Every year one of the huge arenas on town hosts a weekend long kids clothing and ‘’stuff’’ swap. You can attend looking to set up a table and sell or swap your stuff or you can gain admission to buy things that you may need. These tend to be hugely successful and you can find some amazing deals the only downside is that they are usually very busy especially if they’re advertising that they have a ‘’multiples’’ section for twins and triplets (a hot commodity).

Word of Mouth

This is probably my favorite way to find things we need. How successful you are will depend on how connected you are though so it may not work for everyone that well. At my work I see tons of patients every week and I’ve grown to form quite a few relationships with people. When I couldn’t find shin pads that fit kiddo last year I started asking parents whose kids I knew played soccer and in a few days I had a brand new pair sent to me at work from a kid who never used them. It never hurts to ask around! Moms at dance also swap dance gear between kids as new kids start and older kids grow out, though it’s not advertised the receptionist at the studio usually keeps a list of dance gear people have looking to swap if asked.

I feel that it is important to involve children in all kinds of different activities, and while they’re young and have a lot of energy, sports especially. It can be overwhelming when it comes to equipment but don’t let equipment cost alone prevent you from having your kid try a different sport out!

How do you save on your kids sporting activities?

Catherine

plungedindebt.com

We’re Trying to Raise Independent Kids

April 20, 2016 | Leave a Comment

Before getting pregnant for the first time, my husband and I agreed that we would raise our children to make their own choices, to experience things both good and bad and learn from their mistakes. We feel it is the best way to define yourself as an individual, as it can be just as important to find out what you don’t like in life as it is to discover your passions.

Our daughter has already shown an affinity for dance, sports and all things mechanical. She loves her weekly ballet class and spends the days between showcasing her newly-learned moves to anybody she runs into. She loves soccer, and is looking forward to playing again this summer. On her “team” last year, you can tell which children were into it and wanting to participate, and the ones that were, let’s say, indifferent. She is among the former.

Likely due to the conversations with her Daddy, her love for planes, trains and automobiles (any machine or vehicle, really) shines through. To wit, when it comes to screen time, by far her favourite show is Paw Patrol, featuring puppies operating high-tech rescue vehicles.

As long as she continues to show a passion for these things, we’ll continue to support her. Sports and tech are easy things for us to support, and though dance is a new one for my husband and I, we love how much of a positive impact it has had on her already.

Though my husband and I consider ourselves to be fans of music, neither of us play an instrument. That said, if our daughter came to us wanting to learn an instrument, we’d absolutely do everything we could to support her.

There are some things that we won’t budge on in terms of development. First and foremost, reading is a big part of our daughter’s life. Every night before bed, she gets two books read to her, and at various times throughout the day we’ll read to her. We’ll promote reading once she begins school, and will continue to ensure she develops her communication skills. Good communication skills are crucial as both a person and professional.

Another thing we will not be variable on is time spent outdoors. We grew up camping, playing in the woods and spending time under the stars at the family cottage. Our daughter will spend time doing the same. She won’t be a child that spends all of her time inside. Luckily for us, to this point she’s shown a love for the outdoors, and as she gets older we’re excited about the thought of things like canoe trips, orienteering and other such adventures.

We very much want our daughter, and any other future children, to be their own people. It’s important for them to have unique personalities and to be unafraid to embrace and express their passions in life. We’ll be behind them no matter what, and though we’ll be staunch on communication skills and the outdoors, our children will be able to choose their own path hopefully knowing who they are as a person, and knowing their mom and dad love them and are there for them through it all.

How do you nurture independence in your kids?

Catherine

plungedindebt.com

The Benefits of Doing Your Own Taxes

April 13, 2016 | Leave a Comment

This post is part of the TaxAct #DIYtaxes blog tour which empowers you to take ownership of your finances by doing your own taxes. TaxAct provides the tools and guidance to help you confidently file your taxes easy and fast. Do your own taxes today at TaxAct.com. You got this.

For many people taxes are a total pain. I get it. Once a year you’ve got to scramble to gather up all of your documents, then sit down and sift through numbers and try to figure out what’s going on. Just the thought of it can stress you out.

However, if you choose to look at doing your own taxes in a different light you’ll see that there really are some major benefits and that filing yourself is not as hard as you may think.

Here are the biggest benefits of doing your own taxes.

You’ll Get a Closer Look at Your Finances

Would you be shocked to learn that only 40% of US adults keep a written budget or track their expenses and almost two-thirds of American families live paycheck to paycheck?

Having a better awareness of your financial situation is the first step in making improvements to your personal finances. Doing your own taxes can help you get a closer look at where you stand.

When you file your own taxes you’ll be taking a good hard look at how much you and your spouse earned last year, the investments you’ve made and any capital gains you’ve earned or lost, how much you’ve paid in interest on your mortgage or student loans and so much more.

You can get a big picture of where you stand in one day by simply doing the work yourself. This is an enormous benefit.

You’ll Learn A Lot and Be More Prepared for Next Year

Tax software these days is pretty great. It walks you through the tax filing process step-by-step all while teaching what you need to know to make the most out of your tax situation. You’ll learn about credits and deductions and will be more prepared when it comes to do your taxes next year.

You’ll also know exactly what you need to file your taxes and will be able to prepare accordingly.

As a bonus most tax software comes with maximum refund guarantees and accuracy guarantees if you’ve entered in all of your information correctly.

You’ll Save Money

Hands down, it’s cheaper to file taxes yourself than to pay an accountant to do it for you. You can save yourself a few hundred dollars by preparing your own taxes. (And who doesn’t like to save money?!)

It’s Easy

Filing taxes yourself is a very simple process thanks to tax software.

With good tax software, like TaxAct, you’ll be given prompts that will tell you exactly what to enter from each of your tax forms. When you’re done you’ll be able to run alerts which will scan through your information and look for any potential problems.

If you’ve got a simple tax situation filing taxes yourself is a very straightforward process. Even if your situation is slightly more complex you can still easily do taxes yourself by following the prompts and answering the questions.

Tips for Getting Started

If you’re ready to started here a few tips to make the filing process go smoothly:

Collect Everything You Need – Before you sit down to do your taxes gather up all of your documents so that they’re right in front of you. This includes things like income documentation, interest and investment tax forms and personal information of any dependents you’ll be claiming.

Choose the Right Software – Look at all options on the tax software you’ll be using and select the one that is most applicable to your situation right from the start. This will save you from having to upgrade half way through the process.

Check Your Numbers and Run Alerts – After you’ve entered all of your information go back through and double check your numbers and then run all alerts. Fix any problem areas and then file.

After that you’ll be done with your taxes and can walk away with a better understanding of your financial situation and the sense of satisfaction that comes from doing something yourself.

Beating the tax deadline doesn’t have to be stressful. With TaxAct, everything you need to confidently prepare and e-file your taxes is right at your fingertips. You got this. File your simple federal and state return FREE today with TaxAct.

Brian

Brian is the founder of Kids Ain’t Cheap and is now sharing his journey through parenthood.

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What To Do When You Find Our You’re Pregnant

April 13, 2016 | Leave a Comment

Taking a pregnancy test is, without a doubt, one of the most intense moments of any woman’s life. When you do finally see the result as being positive, your mind races, like a million miles per minute in many different directions. Your brain definitely goes into a bit of shock when it does see those two little lines, so if you do find yourself holding a big fat positive in your hand, here’s what to do next:

Tell your loved ones

Obviously if you haven’t already, tell your significant other! Some people have fun ways to tell all pre-planned for when the day comes but I wasn’t that thoughtful with my daughter, I just showed him the test, assuming he’d know what it was or how to read it. I’d also consider telling the ones closest to you (mom, best friend), people who you’d want to know both good and bad news. I’d hold off on telling the rest of the world until you get the clear from your doc (around 12 weeks).

Call your doctor

Your family doctor will likely be the one to order the initial bloodwork. Your first appointment will likely be basic stuff like vitals, possible urine sample and a few questions (like when was your last menstrual period). Some family docs may even follow you through the whole pregnancy and delivery, or choose to set referrals up to have you established with an obstetrician. They will also figure out your due date.

Look into your insurance

You may want to have a peek at your insurance coverage so you know what kind of coverage you have. Some plans cover specialists who you may need to start researching now (like a midwife). It’s also good to know as pregnancy goes on as other professions may come into play like potential physiotherapy, massage therapy or acupuncture.

Start thinking about telling work

I know you just found out but in some jobs it may be advantageous that they know early especially if you have a lot of appointments. Depending on what you do for a job, you may literally need close to nine months to start getting someone else ready to take over for your maternity leave as well. Some employers would appreciate as much notice as possible to fill your vacancy.

BREATH

It’s emotionally overwhelming to see that positive, whether it’s your first or 5^th so do your best to relax and not get too overwhelmed. Nine months is a long gestational period and everything will find a way to work out.

Pregnancy is an exciting and interesting journey. Enjoy it and don’t be afraid to ask for help when needed! I was too stubborn at times and more than once overdid it. It’s amazing how hard easy tasks like grocery shopping can become. Try to not wish the next nine months away and enjoy the whole experience.

What was the first thing you did when you found out you were pregnant?

Catherine

plungedindebt.com

Three Things That Are Worth The Splurge

April 6, 2016 | Leave a Comment

As much as I love saving money, there are a few things in life that I believe are worth spending money on. Most of the time I’m more than happy to buy generic products or forgo buying something altogether, but when it comes to a few areas in my life, quality services and products are non- negotiable and here’s why.

Skin care products

Since I was a teen I have struggled with various skin issues. Acne as a teen, sever pregnancy-induced rosacea as an adult and still, as a non-pregnant adult, oily acne prone skin is still present. I can’t even begin to tabulate what I’ve spend on internal and external products looking to help me with my skin issues, almost always being dictated by the bottom dollar.

In the last while though I have started paying more attention to quality products instead of just how much they cost and have noticed a huge difference in my skin. I’m not spending hundreds of dollars or anything, but my $40 cream and $25 facewash is about 5x what I was spending on my cheap stuff which I used for years. It didn’t take long to convince me that spending the money is well worth it.

Bedding

Have you ever slept in a bed with crappy bedding? The kind of bedding that can actually keep you awake because it’s rough and scratchy or doesn’t stay on the bed and rolls up around you? It’s incredibly annoying and considering how much time we spend in bed, quality bedding is worth it!

Quality bedding doesn’t have to cost boatloads of money though. Sure you could easily spend $500 on a nice sheet set but when you can buy name brand sets at discount department stores, why would you? Stores like Marshalls and Winners sell name brand bedding at a fraction of the cost. Just this past summer I bought new sheets which originally retailed for $199.00 for the set, I paid $69.00. While I could get cheap generic sheets at Walmart for probably half the price it’s just not worth wasting the money.

Vacations

Vacations and time away are important to our family. We enjoy spending time together and making memories during our new experiences. We make sure we have the funds to enjoy a little time away every year. It doesn’t mean we’re going on international excursions every year though. Some of our best memories have been from quick road trips not far from home. While we’re working on major financial goals (for us right now it’s debt repayment), lavish vacations aren’t an option but we still make sure we have some money in our budget for something, even if it’s a quick weekend away. Vacations as a whole though are an expense we prioritize and when we do plan a getaway (even if it’s a camping trip) we make sure we don’t leave ourselves feeling short and enjoy time away. Here are 7 great tips to save money on vacation.

This list has changed drastically for me over the years. It wasn’t that long ago that I would have included hair cut and color, something I used to do religiously every six to eight weeks. I stopped doing it when funds were short while I was on maternity leave, I found a cheaper haircut option and let my natural color come back, four years later and I still don’t miss spending the money.

We all have different priorities and I try my hardest not to judge how anyone does or doesn’t spend their money what is important to me may not be for another person.

What are areas that you don’t mind spending a little more on?

Catherine

plungedindebt.com

Should You Co-Sign a Loan For Your Children?

March 30, 2016 | Leave a Comment

When I started university the way federal loans were issued in Canada was much different from how it is today. Long story short, I didn’t qualify for any form of student loans because, on paper, my mom made too much money. They didn’t care that she was a single parent, they looked at her income and the fact that my father should have been paying child support. It didn’t take long for them to change the system but it didn’t help me at all for my undergraduate degree.

I wasn’t not going to university so my mom took me to the bank and got me a student line of credit. Given at a decent interest rate (prime plus 1%). Only real downside was that my mom had to co-sign the loan. Student lines of credit (for the most part) are issued with the collateral being, well, my mom.

Should You Co-Sign on a Loan for Your Children?

I have to be honest I’m not sure I would have done the same thing as my mom. I don’t know what I would have done giving the constraints we were under but I don’t think I would ever co-sign a loan for my child.

My mom has nothing to worry about, I’m a good responsible child and despite our differences I would never default on the loan, forcing her to make the payments. Though I very well could do that, I wouldn’t. I also make sure I have the co-signed loans insured so if, God forbid, I die my mom doesn’t become automatically responsible for their repayment.

My best friends parents did something a little different. Rather than taking out student lines of credit in their names (the children), they (the parents) opted to borrow from their home equity (paid off mortgage) in the form of a home equity line of credit. This way the loans were never in the kids names despite the use being for their education. The kids were asked to sign a repayment agreement in the (very) off-chance they decided to skip town and not pay off their responsibilities. Though my friend borrowed over $20,000 for her education, the day she graduated, according to the bank, she was debt free.

I’ve known people who have needed their parents to co-sign mortgages for them. I would NEVER do this. If the bank doesn’t think my child can afford a mortgage based on their own financial situation I am not mixing myself up in it.

Whether or not you should or should not co-sign a loan really depends on the situation and people involved. I have seen seemingly perfect families ripped apart over monetary issues and I’m sure it’s not the last time I will. You need to protect yourself and your assets.

Though I would hope your child (ren) would never deliberately screw you over with a co-signed loan, it happens for millions of different reasons. While my situation worked in the aspect that I’m diligently paying off my loans, some students are unfortunate when it comes to getting a job and it takes years to pay them off, this debt continuing to follow the parents around.

Though I hope I am never in a situation where I would need to consider this, would you or have you co-signed a loan for your kids?

Catherine

plungedindebt.com

The Difference Between Being Cheap and Being Frugal

March 23, 2016 | Leave a Comment

The other day two of my patients were arguing in my room while I was treating their daughter. The parents were arguing about their upcoming house purchase and what they needed to finish up before closing. The conversation quickly turned from excitement to a full-blown argument about how cheap the wife was. The husband wanted to buy all new furniture for one of their rooms while she wanted to use what they had for a while longer. Her argument was that she wasn’t cheap, but rather frugal, and had the family’s best interest in mind.

This differentiation is one that many people confuse. Though they may seem like similar terms, they’re actually quite different in their meaning. To help clarify the issue here are a few instances concerning being cheap and being frugal.

Dining Out

A cheap person may eat out frequently but elect to never tip. If you can’t afford to properly tip when dining out, don’t bother going, it’s cheap to not tip service.

A frugal person may elect to not eat out at all, or much more infrequently, as they would rather spend their money elsewhere. When they do make the decision to eat out they pay for everything, proper sized tip and all.

Product Selection

If a cheap person needs a new mattress for example, they will go out and buy the first cheap mattress they find, the deciding factor being the dollar amount. Even if this mattress falls apart in a few months they see nothing beyond initial dollars spent.

A frugal person will elect to not buy the mattress until they have saved up a dollar amount that will allow them to buy a quality product that will last them years. While they are saving for their upcoming purchase, they may elect to forgo other activities they don’t feel are as important as buying the mattress they need.

* This was the argument the wife in my office was trying to make. She didn’t want to buy the cheap couch her husband wanted but wanted to wait until the new year and buy a better quality one even if it meant moving into a brand new house with ‘crappy old furniture’.

Socializing

When it comes to socializing with friends and family, a cheap person may elect to go to events where they know (or assume) someone else will pick up the tab, or avoid going out, ever, because they don’t want to spend the money. This eventually leads to alienation from friends and family.

Someone who is frugal will go out but will likely be pickier about when and where they go but they won’t avoid socializing all together. They will also likely come up with alternative social ideas like taking turns hosting a nice dinner in, rather than spending money at a restaurant.

Frugality is a way of life. It can be very advantageous when used wisely and lead to many more opportunities in your life. Being cheap however usually ends up in wasted money and missed experiences. Only one of these ways of life knows the true value of a dollar earned.

Catherine

plungedindebt.com

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