Millionaire Mommy Next Door » Giving

Seriously, If You Don’t Have The Money, Don’t Buy It!

Millionaire Mommy Next Door — Wed, 23 Dec 2009 03:07:05 +0000

‘Tis the season for buying, buying, buying. And then, if you’re like the typical consumer, you’ll spend the better part of next year paying, paying, paying for it! My suggestion? If you don’t have the cash set aside specifically for purchasing holiday gifts, then don’t do it. It really is that simple.

I know you worry about what your family and friends will think if you show up empty handed, and I know that your kids might whine for a few minutes on Christmas morning. But there are plenty of ways to enjoy the holiday without expensive gifts. Instead of shopping, spend time together caroling, baking cookies, and spreading good cheer. A cheerful attitude is easier to come by when you aren’t stressed out by spending money you don’t have.

But you say you’ve bought the gifts already? And wrapped them? It’s not too late — unwrap them, return them to the store, and have the cashier put the credit back onto your card. This year, try giving your love instead.

Happy Holidays!

Video: How To Stay Out Of Debt, a funny Saturday Night Live piece starring Steve Martin.
(Email subscribers, you’ll need to visit my website to view the embedded video.)

Don't miss anything: Subscribe to receive free email or RSS notifications every time I publish a new blog post. (No spam, no risk, and it is easy to unsubscribe should you ever change your mind.) Follow me on Twitter (@MillionMommyND) where I share interesting articles, opinions, quotes, tips and other bite-sized tidbits relevant to success, happiness and financial freedom almost daily.

The Economy Relies Upon You Being A Good Consumer!

Millionaire Mommy Next Door — Wed, 25 Nov 2009 22:42:08 +0000

You are an individual. But you are also a member of a global community. Most important of all, you are a Consumer. As a member of this community, it is your DUTY to consume.

Why?

Because the system would collapse if you stopped spending and the consequences would be AWFUL. The system that runs your country relies upon you being a Good Consumer. This film will show you how:

I jest, of course! Before you head out at the break of dawn this Black Friday to gobble up merchandise, do yourself a favor and watch this fabulous video. (Email subscribers, you’ll need to visit my blog to view the video embedded in this post.)

Should you choose to go shopping anyway, perhaps you’ll remember the turkeys you watched here and it’ll help you curb your spending. Or print the following list of questions and suggestions and review them before exchanging your hard-earned dollars for crap products:

Before you buy, ask yourself:

Will I change my mind? Advertisers and retail stores are notoriously skilled at making shoppers believe that they need something– even when it isn’t true. When I find an item I want, I leave the store to think about it for a day or two. During this brief period of time, I usually find that I stop wanting it.
Can I buy it for less? Comparison shop. Find it on sale. Negotiate. Look for a recycled one in the newspaper, at garage sales or consignment stores, on ebay or craigslist. Avoid the mall. I bought all of my daughter’s Christmas gifts through craigslist last year and filled the space beneath the tree for a total of $30.
How long am I willing to pay for Christmas? Your loved ones would rather spend quality time with you during the holidays than have you run up your credit card balance and pay for it all year long. Give the gift of time instead.
Can I trade something for it? Swap with a friend, neighbor or family member. Ask a seller if she wants something you have in exchange for the item or service you desire. We’ve traded plumbing repairs for health club dues, computer work and pizzas. Create a toy exchange with other parents. We’ve traded “new-to-you” toys for our kids.
Can I borrow it from someone? Borrow books, music and movies from the library. Ask your neighbor if you can use her seldom-used yard tools or specialty cooking appliances. Just make sure you are willing and able to repair or replace damaged or lost items.
Can I share the expense with someone? Co-op with your neighborhood to buy one set of yard maintenance equipment. Consider car-sharing. Ask your babysitter for a reduced hourly rate for watching your child along with another.
Can I cut back on another budget item instead? If what you want to buy doesn’t fit into your budget, choose to spend less on something else for awhile. Use the money you’re saving on that budget category towards what you want to buy instead. I often cut back on dining out the month before a vacation because I’d rather use the savings generated to enjoy special meals at our travel destination.
Can I sell something to come up with the extra money? Sell an item you no longer use, then use the money to purchase the item you want. Try a sales listing on craigslist, ebay, community bulletin boards or your local classified ads. Here’s an idea for toy-hungry kids (or adults!): declutter, hold a garage sale, then buy something new with the proceeds. Better yet, make “found” money go further by using tip #2 above.
Can I make a green choice? Look for products that make less impact on our environment. Choose a less toxic alternative, one with less packaging and more recycled content, or something that can be reused for something else when you’re done with it.

So don’t be a turkey… Have a Happy Thanksgiving!

Don’t miss anything: Subscribe to receive free email or RSS notifications every time I publish something new.

Giving holiday gift cards? Give someone the power to change lives!

5 Things The Marshmallow Test Can Teach You About Money Management

How to Make Money Management a Family Affair

Debt Is Slavery

photo credit: Zellaby

Plan A and Plan B

Millionaire Mommy Next Door — Mon, 06 Apr 2009 19:46:02 +0000

In response to my recent post, Will your parents’ financial decisions leave you holding the bag?, Steve wrote,

I agree with the premise that a person’s retirement should be taken care of before saving for a child’s education, but saving enough for one’s own future seems to be a moving target.

When does a person ‘have enough for retirement’? I am 27, with a 6 month old baby. Besides $15,000 in student loans (@ 2.6% interest rate), and a mortgage, my wife and I are debt free. We contribute to our 401k’s up to the match, and we contribute $100 a month to a Roth IRA. Since we are so young, we feel secure in our ability to save enough for retirement, so we also contribute to a 529 plan for our child.

Even though we feel secure, anything could happen at any time. Maybe one of us gets injured, and we can not work anymore. Maybe this happens to both of us. We never know, therefore I am inclined to save more. But when is it enough? If I max out my 401k, is that enough? I am 27…I may have 60 years of life left…$15,000 will not be enough if something happens next year.

I struggle with the concept of taking care of myself first, then take care of others, when there exists so many potentially negative unknowns. If I am not saving for my daughter’s education…should I not be giving money to charity? Take care myself first, right???

What is the sweet spot for annual saving for yourself, vs saving/giving to others?

Yes, the future holds many unknowns, making it difficult to be completely accurate with long-term financial planning. This deep recession, for instance, has all but destroyed many well-laid plans. The key, however, is to plan for the best while preparing for the worst. In other words, create Plan A and Plan B.

Plan A is what you hope to have happen. You hope that you’ll remain healthy and able-bodied, fully employed, happily married, able to donate money to charity, and able to save for your child’s future as well as your own.

Are you saving enough? It all depends on how much you spend now and what you anticipate spending in the future. Plug your financial considerations and planned life events into a Lifetime Financial Planner software or an Excel spreadsheet and tweak it until the numbers work.

Plan B considers what could happen; the what-ifs. You, your wife, or your child might become ill or disabled. Your marriage might not last and your assets and income could be divided in half. You might join the growing ranks of the unemployed. You might hurt someone in a car accident, get sued and lose all of your savings and everything you own.

How can you protect your finances from catastrophic incident? Buy high-deductible insurance policies, namely disability insurance, term life insurance, personal liability insurance, health insurance. Maintain and improve your job skills. Run a sideline business from your home. Consult with an attorney for additional “what-if” planning.

Additionally, save as much as you can today while you are young. Use your youth to exploit the power of compounding growth. And stay far, far, far away from consumer debt so that if something bad were to happen, you and your family could afford to live on little income.

Where does charity come into play? This is a very personal choice. Until I knew that our financial future was firmly on solid ground, I chose to donate my time rather than my money. I’ve always served as a volunteer in one way or another and not only does this help others, but it improves my set of skills, introduces me to a network of new people, and makes me feel great. This crazy busy world needs more of the gift of time from volunteers.

Should you contribute to your child’s 529 Plan? Most of us have heard a flight attendant recite these words as part of their safety spiel prior to departure: “Please secure your own oxygen mask prior to assisting children or others”…