Frugal Festive Opportunities

Have you planned your New Year’s celebration yet? A little short on cash? Consider giving a last minute shout out to friends and acquaintances --The more random the better. Those that accept, have them pair up to provide a course of the meal. Each take turns serving, with one pair volunteering to do dishes. What you have is a gourmet evening with good company for the cost of making one dish at home. The entree to our last impromptu gathering this week was a hit (Chef Daniel Boulud's Pork Shoulder with Guinness, Dried Cherries, and Sweet Potatoes). 

All in all, it makes for a very frugal – very fun evening out. Hope you are gearing up to enjoy wrapping up 2011.

From the Heart

During the gifting season, it is sometimes difficult to find the ‘perfect’ present. Some of the best are those from the heart. Like the garden stone with our grandchildren’s’ foot prints, framed photos of special moments from the past year, lovely scarves from faraway places we have traveled. Sometimes the best gift can be the offer to undertake a dreaded task, like cleaning out and reorganizing a storage room or offering your services as dishwasher for your parent’s dinner party.


The very best gift is the present of presence, being there for one another, either in person or in heart. And to think – it doesn't cost a penny. How grand.

Christmas Traditions

Every year, in place of buying gifts for one another, we take a family vacation for Christmas. This year was an exception. The year got away from us. With no extra funds set aside for travel, we decided to spend time together at home. To compensate for not traveling, we  exchanged gifts with one another. We made many of the gifts, but we still felt like we needed to buy everybody something. This was way more work than we remembered. Spending money in such a short window of time for so many people, and not knowing if it is something they would like, need or want --is stressful.

It was joyful being together and has been a very laid-back week. But we all agreed that from now on: 1) each Christmas, we will start planning for the next year's trip. When everyone is together, it is easier to negotiate the dates and destination selection. 2) We will budget a savings plan for the trip that stretches over a 12-month period. The ultimate gift you can give yourself is to pay for a trip out of savings vs. on credit. 3) We will go back to drawing names for a Secret Santa, with a dollar amount cap on spending.

We all agreed that in the future, if we feel tight on time or funds, we will find a way to at least take an overnight trip as a family. We didn't appreciate how much we enjoyed our Christmas vacations until deciding to not do it this year. What a great way to help us all gauge the value we find in the investment.

Hope all is joyful where you are at this holiday.

4 Days ‘til Christmas; 10 Days ‘til End of Year

As we rush around getting last minute gifts, we should also be mindful of the end of the year for tax reasons. Here are a few items to check off your list before 2012 rolls around.

- Last Minute Charitable Contributions: Time to get in the last minute charitable contributions for the 2011 tax year. Is it time to clean out your closet and make a donation to Good Will? Can you afford to give a little extra to a charitable cause? It has been a rough few years for a lot of people and your donation may be just what your favorite charity needs to help those in need.

- Unreimbursed Medical and Dependent Care Accounts: These are your "use it or lose it" accounts. You have to use the money by the end of the year or you forfeit your balance. If you have money in these accounts, maybe it is time to get your eyes checked or a new pair of glasses. Make sure you have paid all of your dependent care expense and that your balance is zero. 

- 529 or Educational Savings Deposits: In some states, your contribution into an educational savings account or 529 plan is a deduction on your state taxes. Do you need to add a little more for next semester's U-bill? Consider adding a little more to receiving the deduction?

- Taxes: Do you have any tax bills due in December or January? These bills might be deductible on your taxes. You might consider paying your January taxes in December to take advantage of the deduction.

- Medical and Dental Expenses: Did you have a lot of medical expenses this year or are you going to have medical procedures next year? You may be able to deduct medical expenses on your taxes if the amount is greater than 7.5% of your adjusted gross income (AGI) and you itemize your taxes. A little tax planning can save you a lot of money.

- IRA Contributions and Future Tax Planning: You have until April 15, 2012 to maximize your IRA contributions. However, an IRA or 529 contribution to someone else might be a great last minute Christmas gift.

We wish you and your family a great and save safe holiday season. As always, check with your tax professional to see what strategies work best for your individual situation.

Upcycle Twinkle Time

It is the holidays and in the spirit of gifting and the joy of creating, make useful and fun things for family and friends this time a year. Tis the art of Upcycle: To make new from items that have lost their usefulness or value.

A few flavors of the day:

Paper bag stockings, perfect for gifts of movie passes, lottery tickets or gift certificates:

       Covering an old canvas so to gift a new painting:

Piecing together old jeans into a cozy blanket:

Everyone has a little elf inside them. Get out the glue and glitter and release your inner elf. Very fun. Very frugal.

OWS, Student Debt, Tuition Increases and Tuition Free Colleges

Higher tuition, more student loans, and greater access to higher education…what do we do? The Occupy Wall Streeters (OWS) say they are not going to repay student loans and are demonstrating on college and university campuses.  In today’s Inside Higher Ed daily updates, there is an article about how their energy might be misplaced.  This article argues that college and university administrator’s hands are tied because states are cutting funding to higher education and students are demanding quality student services and education.  They are feeling that their only or best choice is to raise tuition and fees, which ultimately increases the debt burden for college graduates.

According to DiplomaGuide.com there are 10 colleges and university with $0 tuition.  Yes that is right, $0.00 in tuition.  Perhaps we should look at these institutions to see if we can apply some best practices to reduce the cost of higher education.  Many require students to work on campus.  College of the Ozarks nicknamed “Hardwork U” requires 15 hours/week of work from the student to graduate tuition-free.  Berea College offers every student a full-tuition scholarship and a laptop computer while attending Berea and work-study to offset food, room and board.

Higher education is not free.  It is expensive to pay for buildings, professors, administrators, support staff, research and everything that makes college “the best years of your life.”  So the question is “how do we lower the cost of higher education without additional taxes and reduced quality of education and services?”

My answer is YOU!  Did you graduate from college?  Did you benefit from college?  If so, it is time to give back.  You can give back to a specific scholarship, start a scholarship, name a building or give to the general fund.  You can ask anyone who asks for donation, the amount is not important, but it is important that you get in the habit of giving.  We are all at different places in our financial lives, so whether you give $1 or $100 million, just give. This holiday season, think about giving your college or university a gift.  Contact your alumni association or foundation to see how you can help reduce the cost of higher education and designate your money to the area where you believe it would do the most good.

If you value higher education, and if our society values higher education, we need to put our money where our mouth is and give back.  College and university administrators, faculty and staff — You have a huge responsibility to do as your donors wish and be good stewards of the resources you are charged with managing.  That not only includes the fiscal responsibility, but the education you provide in the classroom and the support services in housing, recreational services and every service to the students. You are charged with providing the highest quality education and experience at a reasonable price.

I hope you have a happy holiday and take time to reflect on your personal values and where your money goes.  I’ve always said, “If you want to see what people really value, look at their checkbook and see where they spend their money.”  I hope your values and your checkbook are in agreement.

Frugal Fun and the Holidays

“Frugal Fun”', “Holidays”: The two topics go hand-in-hand.  So much of the joy of the holidays is the time spent with love ones and surprising them with something special. The something special does not have to cost a mint. Gifts from the heart can be the least expensive and the most treasured.


Frugal-festive examples from our homestead this year include packets of homemade monogrammed stationary:

Stockings made from a fabric stash and old costume jewelry:

And grandparents teaming up with the grandchildren to make extra special surprises for the parents. These activities make the holiday glow -- from the joy of the planning, the making and the giving.

From our household to yours, we hope your holiday prep this year is joyful, frugal and fun. :)

So Many Priorities, Never Enough Money

80-10-10: That is the budget we strive to achieve in our household. Live on 80%, save 10%, give 10% of our time, talents and treasure. We are not there yet but every year we get closer. Coming to the end of this year and heading into the next, we find that we have had, and will continue to have, more priority family fun than we originally budgeted for. How do we balance our priorities and our income?

• Want to pay for it in cash and continue to keep our credit card balance at zero each month? -Yes
• Want to take out of our savings or reduce our savings rate? -No
• Consider backing down on our giving? -No.

Ideally, we should bring our life style within the limits of that 80%. Selling off an asset, such as an extra automobile, is one option we discussed. We have three vehicles (car, truck, van) between two drivers. For the most part, the truck and the van sit in the garage as we typically car pool. Why is it hard to part with assets we seldom use even though they cost us money? Even if a vehicle is paid for, it still costs you in maintenance, license, insurance and depreciation.

It’s hard. Yes, a van is handy at times and we love ‘Chitty’, with her ‘Truly Scrumptious’ navigation voice and leather, heated seats, back-up camera and warning sounds when her bumper gets close to another object – which makes parking in tight spots such a breeze. We named her ‘Chitty-Chitty-Bang-Bang’ because with her laser speed control, we felt she practically drove herself.

To balance our budget, do we:

Take from savings? Take from giving? Carry a credit card balance? Sell Chitty? Change spending habits elsewhere?

Whether you are striving to live on 90% of your income and save 10%, or aiming for the 80-10-10 split --how do you keep an every changing lifestyle balanced and in budget?  What recommendations do you have?  Thank you for sharing.

Look Who’s Trying to Collect from Beyond the Grave

What happened to your debts when you die? As seniors increase their debt during retirement, you should know what happens to debts when you die.  According to FoxBuisness.com “Nearly 40% of all seniors say they have accumulated debt in their retirement years with no plans to pay it off in their lifetime.  Are the heirs and next of kin responsible?

There is not an easy answer and it all depends on the situation.  The first thing to do in all cases is to notify all creditors of the death. Normally, the estate and the executor who handles the estate will liquidate the assets, pay creditors and distribute the proceeds according to your last will and testament or it will be distributed according to state laws.

If there is not enough money to pay all creditors, the general order of who gets their money is:

1.  Funeral expenses, taxes and administrative fees

2.  Secured creditors such as mortgage loans, car loans, etc.  These creditors have the rights to the assets securing the loan.

3. Unsecured creditors…if there is any money left.  If there is no money left, the creditor will contact the co-signer and the co-signer is legally responsible for the debt.  If the debt was just in the deceased name, most credit card companies will write off the debt.

 

However, more and more credit card companies are outsourcing their collections and contacting the next-of-kin trying to collect based on “moral obligation.”  Saturday’sWall Street Journal has an article describing how collection firms are targeting survivors to try to collect at least some of the debt.  According to this article, “Collectors are starting to realize just how much money you can get from someone when they are at their most vulnerable.” Many survivors pay some or all of the debts just to stop the collectors from calling and bringing on recent memories of the deceased, even though they are not legally obligated to pay.

Here are some of the facts you should know:

• The Credit Card Accountability, Responsibility and Disclosure (CARD) Act of 2009 prohibits creditors from charging late fees or annual fees during estate settlement.
• Not all monies are available to creditors.  Retirement accounts such as 401(k)s and IRAs don’t pass through the estate, but go directly to the beneficiary.
• Under the FairDebt Collection Practices Act , collectors cannot do the following:
•  Call before 8:00 a.m. or after 9:00 p.m.
•  Call at work if you ask them not to
• Harass you, use obscene or profane language or threaten the use of violence or other criminal means to harm you, your reputation, or your property
•  Conceal his or her identity on the phone
• Lie or falsely imply that you have committed a crime
• Disregard a written request from you to cease further contact
• Falsely represent the amount, character or legal status of debt
• Continue to contact you if you ask them in writing to stop

If you feel you are being harassed, contact your state’s Attorney General’s office and the Federal Trade Commission with the details of the phone call or harassing activity.  You may not be liable for the debt and you have rights to keep you from being harassed.