Jun 25

Charitable Giving While in Debt

poorHi Friends, today I’m bringing you a great guest post from Kayla over at Shoeaholic No More. Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at Shoeaholicnomore.

When I first started contemplating getting out of debt, I borrowed Dave Ramsey’s Financial Peace University from a friend of mine. One of the first things he said that really struck me was that you should NOT stop giving to charity while paying off debt.

I thought about this long and hard and in the end, I decided I was going to continue giving to charity while pursuing my quest to becoming debt free. Since I started my journey to becoming debt free, I’ve been giving to several fundraisers in my community for people who have been diagnosed with very serious illnesses, some are even terminal. I decided that if I stopped giving while I was trying to get out of debt, it’d be just that much harder to get started again when my debts were gone. Plus, giving makes me feel good!

Though I don’t give 10% of my post-tax income as Dave Ramsey suggests, I do allocate a small amount of cash each month to give away. Since I only give $10/month sometimes I wonder if this small amount is even worth it. Then I figured out that if everyone in my community gave $10/month to various causes, we’d have over $70,000 worth of donations made each month, and this is a conservative estimate! I finally decided that instead of being disappointed that I can’t give more, I should be excited that I give what I can.

Another key to my giving strategy is that I built it into my budget rather than just giving whatever I have “leftover” at the end of the month. Much like savings, I made putting money aside for charity a separate line item in my budget. This strategy really helps keep me accountable so I don’t spend the money on something trivial, like eating out or a new piece of clothing that I don’t truly need.

What about tax benefits? As I said before, I’ve been giving to fundraisers for individuals in my community, not qualified non-profit organizations with a tax ID number. To me, it’s worth it to give to these causes even though I’m not getting a “tax benefit” because I get to see the impact of my donation and the donations of other community members every day. Our donations are being used to pay expensive medical bills, hotel stays for the patients and/or their families, and in some cases are being used to help feed, clothe, and provide shelter since wages have been lost due to illness.

I’m sure if you try hard enough, you can find a few dollars in your budget to donate. Pick a cause that’s near and dear to your heart, one that’s important enough for you to make a few small sacrifices in order to save some money that can be used for donating instead of self-indulgences. Don’t get me wrong, I still splurge on eating out or a coffee every now and then, but I decided finding a little room in my budget for giving is important too.

I may not be able to give 10% of my income but I know I’m making a difference and once I’m able I want to give freely and willingly.

Do you think giving to charity is justifiable if you’re still in debt?

Note from KK: Giving is definitely a topic near and dear to my heart. I not only think charitable giving is justifiable, I also think it’s incredibly important. Although I couldn’t give a lot of money to charity when I was in debt, I could (and did) donate my time to a bunch of different charities and causes. I also donated clothing to a shelter for homeless women and used coupons to buy food for our local food pantry. If everyone gave a little the world would be a much better place!

 Image: Steven DePolo

Jun 16

Some Things are Worth Waiting For

3777205760_3e2af16512_m

I’ll admit it, I’m pretty impatient when it comes to waiting to buy the things that I want. For many years I was the queen of, “I want what I want, and I want it now!” Don’t get me wrong, I wasn’t out buying expensive items or making big purchases spur of the moment (that’s just not my style). But if I wanted a little something here or there, I figured, “I’m worth it.” and I bought it. Usually those purchases were take-out meals, drinks with friends, mid-afternoon “pick me up” smoothies, clothing and make up.

I mean YOLO right? WRONG! so wrong. Those little purchases added up and before I knew it I had several hundred dollars worth of credit card charges at the end of the month that I didn’t budget for. What’s funny sad is I never really had anything to “show” for all that spending, except for a bigger pants size (boo!).

Waiting saves you money!

When I was paying off my student loan debt, I finally realized that my lack of planning and last minute impulse buys were killing me. So I made a strict budget and stuck to it. If I wanted to buy a new sweater and didn’t have enough money in the budget, I had to wait until it went on sale, or I enough money saved in my clothing budget. I gave myself a reasonable allocation for “fun” spending, and if I ran out of money before the end of the month, there was no more “fun!” Pretty simple and pretty effective.

Even though my student loans are now a thing of the past (thank god), I still practice patience when I’m trying to find a good deal. In the last month I’ve been waiting for a few photo gifts to go on sale. It’s never to early to think about Christmas shopping! In fact, I hope to have the majority of my shopping done by Thanksgiving this year.

Since I know photo gifts and prints almost always go on sale, I refuse to pay full print (or even half price) for photo gifts. With so many companies fighting for the same business, many of the major online photo competitors are constantly offering some sort of awesome deal.

Proof in point…around Mother’s day I received a coupon code for $20 off any purchase at Tiny Prints. I was super stoked and I put together a whole custom calendar filled with photos of pugs for my grandmother. When I was checking out, I realized the fine print of the coupon code said that I couldn’t use the code for a photo calendar because Tiny Print’s photo calendars are actually made by Shutterfly, crap!

pug calendarAsk for a discount, the worse they can say is, “no!”

So I did what any frugal-minded person would do. I chatted with customer service and asked if they could give me a discount. They said “no.” I said, “Thanks anyway.” and decided to “wait it out” until I could get a better deal. Sure enough, less than a month later, I found a code on one of my favorite coupon blogs for a free (yup completely free) calendar. So I opened up the calendar saved in my favorites, applied the code and happily paid less than $8.00 (for shipping). Now I have a custom calendar, complete with birthdays, anniversaries, and special holidays, to give to my grandma this Christmas. Can’t beat a free gift!

If you’re curious, I used my Tiny Prints credit to buy some fun custom post cards that I’ll use to alert people of our new address if/when we move. If we don’t move they’re pretty generic and will be fine for thank you, or “thinking about you” cards.

Free photo gifts are abundant if you think ahead

In the past I’ve scored free birthday cards, custom photo mouse-pads, mugs and more. In fact, I haven’t paid for Christmas cards in the last 3-4 years. Everyone (OK, my mom) always comments on how cute our cards are and how expensive they must be (custom photo cards can be pricy if you actually pay for them!).

Another deal I frequently take advantage of, is the is the “free enlargement” deals. Like the photo calendar, I scour flickr (under the creative commons license), which allows me to print and reproduce, photos that other people take. I search all kinds of things, “Shih Tzu, NYC, Maine, Ocean, etc.” until I find photos that I like. I then save them to my desk top in a folder called “prints” and when a great free photo deal comes along, I print them and put them in frames. I recently enlarged this photo to an 8″ by 10″ at Walgreens for free:

columbiaHad I not waited for the free promo, it would have cost me $3.99. Not exactly a big purchase, but I prefer free! I also take advantage of the free collage prints that frequently are offered at Walgreens. My parents and grandparents love getting updated photos of their grandkids (my niece and nephews), and I always have easy access to those photos because my sisters upload everything to online photo sharing sites.

Do you wait for a sale to purchase certain things? What things will you pay “full price” for?

Image: Samira

Jun 11

Renal Failure in Cats: Losing Patty

patty computer

Patty always helped me with my blogging

Last week was a very difficult week in our household. On Sunday we noticed that Patrick, our 12 year old Himalayan cat, better known as “Patty the fat cat”, wasn’t acting right. He was laying in strange spots (in the bathroom on the mat, under the bed etc.) where he never sleeps and secluding himself. He wasn’t interested in cuddling humping his brother and we couldn’t even entice him to come out for his cat treats. By Sunday evening things took a turn for the worse when we noticed that he was walking funny (almost like he was drunk).

On Monday morning, I was on the vet’s doorstep as soon as they opened. They did a series of blood tests and took some x-rays. Sadly, the results were not good. The x-rays showed that there was no food in Patty’s intestines, his bladder was enlarged and his kidney (they could only see one due to the angle) didn’t look normal.

The vet was concerned that he was dehydrated, so the tech gave him subcutaneous fluids and tried to get him to eat a special high calorie food. He told me things didn’t look good, but he had to wait for the blood work to find out how we should proceed.

Around 5pm, I got the call I was dreading. The vet said that Patrick’s blood work showed that he was having serious renal failure. He told me our best option was to get him to an emergency vet where they could put him on IV fluids and do an ultrasound to see how bad the damage was.

It was horrible news, but we didn’t panic because we were hopeful that the damage was acute and he could recover.

patty tv

Watching other Himalayans on TV was one of his favorite past-times

As soon as Eric came home we rushed him to the Blue Pearl emergency vet, where he stayed until Thursday evening. What we know now, is the damage was chronic and he’d been sick for a long time. When the Internal Medicine specialist told me that his BUN levels were sky high, I felt like the worst cat mom in the world. How could I possibly miss all of the signs that he was feeling so bad?

I cried uncontrollably for a long time. Eric and my family tried to console me, but I was a mess. I couldn’t focus at work or at home and when I visited Patty each day in the cat “ICU”, it broke my heart. He was hooked up to a ton of machines and had an IV and catheter. When the nurses took him off the machines so I could hold him, he was disoriented and lethargic. He didn’t want to sit on my lab (Patty was the epitome of a “lap cat”) and would hide in the corner of the room.

Thursday evening, the vet called me and said there wasn’t anything else that he could do. He told me that we’d given Patrick every chance, but he didn’t think his levels would get any better. Furthermore, even if the levels got better, Patrick would not be the same cat he used to be and we’d only be prolonging a miserable life. That’s when we made the horribly painful decision to let him go to kitty heaven. Eric rocked him until he crossed the rainbow bridge while I had a meltdown in the lobby.

I know we gave him the best life a cat could ask for. But it still seems unfair we only had 5 years with him (he was 12, but we rescued him and his brother when they were 7). My parents had cats that lived into their 20′s, so 12 seems far too young.

What does this post have to do with personal finance?

Actually more things than you’d think. Throughout this process we’ve learned a bunch of things. I think they apply to both humans and pets, so here goes:

  1. Preventative medicine is almost always cheaper than treating a condition after the fact. If I’d been aware of some of the warning signs of renal failure (see below), I would have taken Patrick to the vet much sooner. If you can catch renal failure early there are a number of treatments that have been shown to be effective in slowing down the disease. That being said, I have been reassured by my vet (and Web MD for pets) that, “Cats with kidney diseases do not begin to show signs of uremia (renal failure) until about 70 percent of their nephrons are destroyed. Thus, a considerable amount of damage occurs before any signs are noted.”
  2. Research hereditary disorders and defects Himalayan and Persian cats are genetically predisposed to Polycystic Kidney Disease (PKD), which can lead to renal failure and death. We now know that ultrasounds, blood work and or x-rays can show abnormalities that would show warning signs for PKD. UC Davis also has a DNA test that will tell you if your cat has the PKD1 gene. Patrick’s brother Liam has a vet appointment this Saturday so we can do the appropriate testing to make sure that he isn’t showing signs of PKD. Our pup, Brooklyn will also be having a physical to make sure he’s OK (I can’t take another loss!)
  3. Consider purchasing health insurance. Thankfully, until now, I’ve never had a reason to think about pet insurance. All of our pets have been relatively healthy (a few expensive vet visits here and there, but no terminal illnesses). You can’t purchase pet insurance after your pet has been diagnosed with an illness (just like “people insurance”, pre-existing conditions are excluded). Hindsight is 20-20, but if I’d realized Himalayans have so many Kidney issues, I absolutely would have had pet insurance from the day we adopted Patty and Liam. The total cost of Patrick’s stay in the hospital was over $5000. Yup you read that right. I don’t regret the decision to take him to Blue Pearl and I’m incredibly thankful for their love and care to him during his final days. If Liam is healthy and doesn’t show any signs of kidney disease (we’re praying) we will sign up up for insurance immediately.
patty & liam

Brotherly love

Signs of renal failure in cats include: (according to Web MD for Pets)

  • Apathy and sluggishness
  • loss of appetite and weight
  • dry haircoat
  • brownish discoloration to the surface of the tongue
  • ulcers on the gums and tongue.
  • bad breath
  • Vomiting
  • Diarrhea
  • Anemia

Thanks for listening and if you notice any of the above signs and symptoms in your kitty please get him/her to the vet right away to rule out Polycystic Kidney Disease and renal failure.

Jun 08

“All or Nothing” Thinking is Holding You Back

perfectionFor as long as I can remember, I’ve always been an “all or nothing” thinker. Something about my “type A” personality makes me neurotic about being the best at everything. If I’m doing something at work or at home I want to do it 110%. Sometimes to a fault.

Maybe you were thinking, “But isn’t that a good thing?” or “Shouldn’t you want to do everything to the best of your ability?”. And I’m right there with you thinking the same thing, or I was until recently!

Here’s a true story about the last month of my life. One of my May goals was to work out 15 times. What I didn’t really say in the post was my “real plan” was to work out Monday-Friday and take the weekends off. Because I can’t bare to be a failure in front of all of you, I wrote that my plan was to work out 15 times (foolish, I know!). Everything was going well Monday-Thursday, but when Friday came around a friend asked me to go out for drinks. It had been a LONG week and I couldn’t didn’t want to say, “no”.

If I can’t be perfect, I don’t want to play!

Normally, that’s where the goal would end. I’d “blow it” by missing my Friday workout and on Saturday morning I’d sleep in, eat bacon, eggs and toast for breakfast and call it quits on the whole “working out and getting healthier thing”.

But a funny thing happened this time. I forgot to turn off my 7am alarm, and when I woke up Saturday morning, I wrangled on a pair of running tights and got my butt out the door. 3 miles and 300 calories later (thanks Nike fit!), I came home feeling pretty good about myself. Instead of beating myself up for missing Friday, I substituted a workout on Saturday instead.

If you’re someone who is flexible about changing plans, this probably sounds foolishly simple. And it is! But for someone like me who’s always done everything “all or nothing” it was an epiphany moment.

Other “all or nothing” attitudes that get me in trouble:

  • If you’ve already “ruined” you diet with one cookie, you may as well eat the whole bag.
  • If I can’t save $1000 this month, I may as well call it a month and buy those shoes I’ve been eying.
  • If I’m not going to reach my goal of paying off $500 in debt each month, I may as well pay the minimum payment.
  • If I can’t work out for a whole hour, 30 minutes isn’t even worth bothering.
  • I haven’t written a blog post in a week or commented in 2 weeks, maybe I need to take a blogging break

I think you probably see where I’m going here. Imagine if all those times I gave up, I’d kept plugging along. Instead of giving up on the diet or buying those shoes I’d stopped after one cookie, or “only” saved $800? Something is better than nothing, right?

I now know, that “all or nothing” thinking was negatively impacting my saving, my weight and my overall happiness. Nobody’s perfect and the desire to be perfect was holding me back.

Has “All or Nothing” thinking ever held you back?

Image: Jennifer

Jun 02

How to Start Saving for Retirement at 30 Years Old

pictureThe post comes from My Money Design, a blog that is all about getting you ready to live a rich and wealthy life.

If you really want to get serious about investing or saving for retirement at 30, one of the best places you can start is with your retirement savings. Though retirement may seem like a long ways away, there are a lot of things about it that can be helpful to building up your fortune. Plus the earlier you start saving, the easier it is to hit your goals and the risk you have to take on to achieve your goals.

But with so many books and blogs on this topic, where in the world are you supposed to start?

The good news is that retirement planning does not necessarily have to be so complicated. Unless you plan to run your own business or make millions of dollars, you can actually concentrate your efforts on just a few important topics.

Figure Out What Your Retirement Goal Really Is:

Before you travel anywhere, you have to know 1) where it is your going and 2) how far away you’ll be traveling.

Retirement planning is very similar. None of what you’re doing will help unless you’ve got these two things figured out first.

To get yourself prepared, simply pick:

  1. How much money you think you’ll need every month during retirement. For me, I’ve decided that my target is $5,000.
  2. When you’d officially like to BE retired. My wife and I decided that this would be age 45 for us.

Once you have these figures, now you’ll have the basics of a plan. For example: You might ask yourself how much do I need to retire at 55 years old?

  • Let’s suppose to retire by age 55 you’ll need $5,000 per month (or $60,000 per year). To figure this out simply multiply this number by 25 to figure out how much savings you need. $60K x 25 = $1.5 million.
  • Now let’s say that age 55 is 30 years to save. Simply using Excel we can estimate that we’ll need to save about $13,241 per year if we want to hit this target.

Maybe you’ll hit these targets or maybe you’ll need to adjust them according to how your plan shapes up. But the important thing to remember is that you at least HAVE a target to shoot for!

Learn About Your Savings Options:

What sounds better to you – saving your money after taxes have been taken out or before taxes have been taken out?

BEFORE of course! And the reason why is because that way you’ll get to keep MORE of your money.

For most people these plans will be either an IRA or an employer sponsored plan. Though there are a lot of differences and similarities between an IRA vs 401k plan, the good news is that you can use the benefits of both to really maximize your savings efforts and give your retirement plans a boost.

Are you a freelancer or self-employed? The IRS has options for you too. You could look further into a simplified employee pension IRA (also called an SEP IRA) or Solo 401k plan to get very similar benefits.

Learn About Taxes:

Don’t just assume that during retirement you’ll be paying the same amount in taxes are you are now. In many situations your tax situation could be potentially much lower than what you’re paying right now in your 30’s!

For example: Did you know that the taxes paid during retirement on dividends and capital gains are lower than what you’ll pay on your 401k withdrawals or side job? Suppose you don’t want to pay taxes at all when you retire. Then it might make sense to setup a Roth IRA or Roth 401k plan for yourself.

It doesn’t really matter how you decide to set it up. The important thing is that you actually are aware of the rules and educate yourself on how you can benefit from them.

Learn Smart Investments from Foolish Ones:

How do you expect to hit your retirement goals? Through hot stock tips? Lots of big real estate investments?

The answer – probably not.

Unless you truly know what you’re doing when it comes to stocks or real estate, I wouldn’t expect to do any better than the market average.

BUT that’s not necessarily a bad thing when you consider that the long-term average annualized market average for stocks is around 8%!

So make your life easy. Get ready for retirement by simply picking index funds that emulate the S&P 500 market average. Not only will you trail the average market return, but your expenses for owning these funds will be undeniably lower than everyone else’s!

Saving for Retirement at 30 Should Be Automatic:

Want to take the pain out of saving and investing? Automate it!

For anyone who is truly serious about saving for retirement at 30 or older, this is really the best habit to get into it.

For years the way I’ve invested in our IRA is to have our financial provider simply take an automatic withdrawal from our checking account every month. This helps us to incrementally hit our goal of $11,000 for the year (two IRA’s at $5,500 each). We also do something similar with our 401k contributions.

By having the money get deducted in this way, we learn to live without it and adjust our budgets to accommodate it. Over time I forget that I’m ever actually making investments or that the money is really leaving our accounts.

KK’s input: great info here! Retirement is something that’s so important, and something I got started a little later than I’d like to admit. Many thanks to MMD for this great guest post!

Have you started saving for retirement yet?

Image: FreeDigitalPhotos.net

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