Upcycle: Build a Bag

Love up-cycling: Taking old clothes and remaking them into cool reusable bags you can gift to another is way fun!

1. From one gently used piece of clothing, cut 2 matching size pieces of cloth in the shape of the desired bag or one long rectangle piece that is 3 inches longer than twice the height of the desired bag 
2. Cut two 22 x 3 inch strips of material to be used as the bag’s handles
3. If two separate pieces of cloth, place right sides together and sew ¼ inch seam along the bottom
4. Pocket bottom seam between the front and back panels 1½  to 3 inches deep
5. Sew together the front to back panels along sides using a ¼ inch seam, catching the pocketed bottom so to create a nice bottom for your bag. 
6. Turn bag inside out
7. Roll top under by a double ¼ inch, pin and iron in place and set aside
8. Iron handles in half length-wise
9. Fold edge into center crease, pin in place
10. Pocket edges of handles inside by a ¼  inch and iron in place
11. Top-stitch both long sides of the handles
12. Pin one handle end, ¼ inch deep and 2-3-inches in from the left edge of the bag inside of back panel of the bag.
13. Pin the other end of the same handle ¼ inch deep and 3-inches from the right edge inside of the back panel
14. Repeat previous two steps to attach the 2^nd handle on the inside of the front panel of the bag 
15. Finish top of bag by sewing the top folded ¼ inch seam, catching the edge of the handles 
16. Top stitch the bag around the opening, which will help secure the bags handles 

Wala! You are now ready to go J

Is 2016 Your Year to Invest in Energy Efficiency?

A New Year and the end of blizzard-cold month: Two topics of no joy: 1) High Utility Bills and 2) Taxes. 

Want to take it on? Check out http://www.dsireusa.org/. At the site, you enter your zip code and see an extensive list of incentives, grant opportunities, tax credits and policies that support renewable energy and energy efficiency for your area. Some of the Federal Residential Tax Credits require you to make the purchases in 2016. It may be a good time to consider this the year to make that investment, reducing both your tax liability and your energy costs in the long run. 

The Perfect Salary

I often hear people tell me when they talk about personal finance that “I don’t need to be rich, I just want to make enough money where I can buy what I want without worrying.”  So….how much money it that?

To be honest, I don’t have a good answer.  A few years back the Wall Street Journal posted an article that it takes an annual salary of $75,000 before you have diminishing returns on the dollars you spend.  In other words, $75,000 salary is the minimum you can make to maximize your happiness.  But is that the answer for you.

I think that wealth people always worry about money and are constantly asking themselves is the value received for the dollars spent worth it.  They do not want to waste money on bad investments or buying things not of value to them.

I don’t define wealth as a dollar figure, or a net worth figure.  I define personal wealth as being happy with yourself, knowing your personal values, and living out those values….being happy where your feet are.  You are wealthy when you don’t have to worry about buying things, because you have saved for the items and they fit your personal values.

How do you get to this personal wealth?

1) Know what you value and where you spend your money.  If you want to see what you value, look at where you spend your time and money.  I encourage you to write down where you spend every penny for one month, evaluate it weekly, and reflect on if this spending is in accordance with what you value.

2) Look for little leaks where you spend money and receive little or no value.  Can you substitute spending money on this item for something else?  The little leak that is common for many is eating out, especially lunch.  You can easily spend $10 a day on lunch; $50 a week; $2,600.00 a year.  It is worth it or can you pack your lunch and save money.  

3) Set a budget.  Look at where you have spent money the past month, and categorize your spending, i.e., groceries, dining, fuel, electricity, Internet, TV, housing, etc.  Do you have enough money for all of your expenses?  If not, you either need to cut back or make more money.  Look for the little leaks in your spending where you can cut back without drastically changing your life style.  Ben Franklin said it best when he said “Little leaks can sink a mighty ship.”  You should stop as many leaks in your personal finances as possible.

4) Set goals. Setting goals keep you motivated.  Do you want to pay off your credit cards in the next 6 months?  Do you want to buy a new car?  Do you want to go on vacation?  Figure the cost and establish weekly or monthly steps to achieve your goals.  

5) Celebrate. When you achieve your goals, you now have enough money to do the things you want without worry because you have have the resources for them.  You are now wealthy.  You don’t have to make a lot of money to be wealthy.

Six Years of Car Payments Sounds Like A Student Loan

I just saw a TV commercial where they were offering 0% financing on a new car for 72 months; that's right - six years. The rule of thumb is to never finance a car for more than three years or 36 months and keep the car for at least six years. If you do that and then continue the amount of the car payment into your savings account for three or four more years, you will be able to pay cash for your next car.

We all know that money is not free, so if there is cash back offer or 0%, pay cash and take the discount.

I don't know about you, but ten years to pay off my student loans seemed to take forever. I personally couldn't stand for paying for a car over a six year period.

The problem with debt is that you are pledging future earning to the banker. In simple terms, you are enslaved to your lender. Vehicles depreciate over time –a vehicle is not an investment. At least with your student loans, it's an investment that pays off.

When you are debt free, all the money you make is for you (and the government in taxes). Being free of debt liberates you to pursue your passions and work for less doing something you love.   When you can turn your passions into profit, you never have to "work" a day in your life.

Be careful of low monthly payments. Dave Ramsey says "poor people ask how much down and how much a month. Rich people just ask how much."  Here it to you becoming rich and debt free.

Student Loan Repayment – Know Your Options

For the May graduates, 6 months from graduation is time to start repaying your student loans.  The Federal government wants its money back and provides many options for repayment.

First question you need to ask yourself: “Should I consolidate my student loans?

·        PRO: Consolidated loans simplifies your loan repayment by centralizing your loans into one bill, providing one payment, and can lower your monthly payment by providing you up to 30 year to repay your student loans. 

·        CON: You may lose any benefits offered with the original loan.  Once you combine your loans into a Direct Consolidation Loan, it’s a done deal and they cannot be unconsolidated.

After you decide if you are going to consolidate your loans or not, you need to choose a repayment plan.

The Federal Student Aid provides all the information you need to know for Federal Student Aid, Work-Study jobs and grants. Listed below is an overview of Direct Loan and FFEL (Federal Family education Loan) Program Loans repayment plans, noting information regarding repayments, deferments and forbearance. 

There are many companies out there who want to take your money to enroll you in government plans that you could do yourself.  Take caution of offers that seem “too good to be true” --because they probably are.

Overview of Direct Loan and FFEL (Federal Family education Loan) Program Loans Repayment Plans

Repayment Plan	Eligible Loans	Monthly Payments and Time Frames	Quick Comparison
Standard Repayment Plan	Direct subsidized and unsubsidized loans   Subsidized and Unsubsidized Federal Stafford Loans   All PLUS loans	Payments are a fixed amount of at least $50 per month.   Up to 10 years	You will pay off your loan in a shorter amount of time and you will pay less interest, however your payments could be higher.   Consider this plan if you can afford higher payments
Graduated Repayment Plan	Direct subsidized and unsubsidized loans   Subsidized and Unsubsidized Federal Stafford Loans   All PLUS loans	Payments are lower at first and then increase, usually ever two years.   Up to 10 years	You will pay more for your loans over time than under the 10 year plan.   Consider this plan if you expect your income to start off low and then grow over time.
Extended Repayment Plan	Direct subsidized and unsubsidized loans   Subsidized and Unsubsidized Federal Stafford Loans   All PLUS loans	Payments may be fixed or graduated.   Up to 25 years	Your monthly payments would be lower than the 10-year standard plan   Must have at least $30,000 in outstanding Direct Loans OR $30,000 in FFEL Program loans.   Direct Loans and FFEL loans must remain separate.  You cannot combine Direct Loans and FFEL loans to reach the $30,000 threshold.   Must be a “new borrower” as of October 7, 1998   You will pay more interest over a longer period of time than the 10-year plan.   Consider if you have over $30,000 in qualified loans and cannot afford the 10-year or graduated repayment plans
Income-Based Repayment Plan (IRP)	Direct subsidized and unsubsidized loans   Subsidized and Unsubsidized Federal Stafford Loans   All PLUS loans made to students   Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents	Your maximum monthly payments will be 15 percent of discretionary income, the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply).   Your payments change as your income changes.   Up to 25 years	You must have a partial financial hardship   Your monthly payment  will be lower than payments under the 10-year standard plan   You will pay more for your loan over time than  under the 10-year standard plan   If you have not repaid your loan in full after making the equivalent of 25 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven   You may have to pay income tax on any amount that is forgiven.
Pay as your Earn Repayment Plan	Direct subsidized and unsubsidized loans   Subsidized and Unsubsidized Federal Stafford Loans   All PLUS loans made to students   Consolidation Loans (Direct or FFEL) that do not include Direct or FFEL PLUS loans made to parents	Your maximum monthly payments will be 10 percent of discretionary income; the difference between your adjusted gross income and 150 percent of the poverty guideline for your family size and state of residence (other conditions apply).   Your payments change as your income changes.   Up to 20 years	You must be a new borrower on or after Oct. 1, 2007, and must have received a disbursement of a Direct Loan on or after Oct. 1, 2011.   You must have a partial financial hardship.   Your monthly payment  will be lower than payments under the 10-year standard plan   You will pay more for your loan over time than  under the 10-year standard plan   If you have not repaid your loan in full after making the equivalent of 20 years of qualifying monthly payments, any outstanding balance on your loan will be forgiven   You may have to pay income tax on any amount that is forgiven.
	Direct Subsidized and Unsubsidized Loans   Direct PLUS Loans made to students   Direct Consolidation Loans	Payments are calculated each year and are based on your adjusted gross income, family size, and the total amount of your Direct Loans.   Your payments change as your income changes.   Up to 25 year	You'll pay more for your loan over time than under the 10-year standard plan.   If you do not repay your loan after making the equivalent of 25 years of qualifying monthly payments, the unpaid portion will be forgiven.   You may have to pay income tax on the amount that is forgiven.
Income Sensitive Repayment Plan	Direct Subsidized and Unsubsidized Federal Stafford  Loans   FFEL PLUS Loans   FFEL Consolidation Loans	Your monthly payment is based on annual income.   Your payments change as your income changes.   Up to 10 years	You'll pay more for your loan over time than you would under the 10-year standard plan.   Each lender's formula for determining the monthly payment amount under this plan can vary.

 

Summer Savings

The garden is in and we are beginning to harvest the fruit (and vegetables) of our labor.  With this in mind, I got thinking about the benefits of a home garden.  You can do this even if you live in an apartment, using container gardens, or a small raised bed.  We are fortunate that we have the space for a big garden and even a coop for free reign chickens who provide us with fresh eggs.

With a little bit of time you can save big at the grocery store by planting what you eat.  Tomatoes are easy to grow and one to three plants will feed a family all summer. Leaf Lettuce and Swiss Chard will grow continuously till frost. If you have more than you can keep up with,  you can freeze or can to save them for winter.

Lettuce, beets, spinach and Swiss chard are now being harvested and it makes for great salads. We will be able to put in a second planting so we have these vegetables fresh going into fall.

Besides the fresh vegetables, other benefits include:
Ø  You save money by less shopping at the grocery store
Ø  You eat better with higher quality fresh vegetables
Ø  You have time to enjoy working in the garden and harvesting what you planted
Ø  You may loose weight because you are exercising more and eating better
Ø  You have a stress release from your busy workday.

To see what we are up to, check out our other blog:  https://walkerhomesteadcsa.blogspot.com

Happy savings, gardening, eating well, stress reducing, being healthy and happy.

The Envelope Observation

We made it. For fun, we spent the last month going back to using the envelope system to help stay on budget. The theory is that having a personal relationship with each dollar spent increases the likelihood that you will not pithier it away.

I had been in the habit of charging at least three coffees a day against my next month’s payroll check. Running between meetings, it easy to have the barista swipe my staff ID badge to keep caffeinated. This habit comes to $8.00/day or $160.00/month or $1,920/year.  Think of what I could do with an extra $2,000?

Having to draw the dollar bills out of my envelope and slide them across the counter was much more painful than I thought it would be. Many times, my previous cup of coffee was not yet empty, just cold. For two bucks, I’m ok with nuking it for 30 seconds.  When drawing your spending money out of an envelope, there is much more a sense that money is a finite resource, not an endless stream. It now feels very irresponsible to throw out cold coffee.

Waste not. Want not. Thank you envelope.

Control

Hello Blog.

Maslow's theory suggests that the most basic level of needs must be met before the individual can address higher level needs. Our ability to give attention to creative outlets such as this blog (Self-Actualization) was trumped by the task of addressing logistics of a move to a new home (Safety).

In a nutshell, that is the hurdle to many budget dilemmas - energy to control, especially if your foundation is shifting. When life gets hectic, it is more difficult to tend to the detail of budget on a daily basis (Bob’s preference) vs. blast a flash plan when new needs present and attempt an ‘auto play’ strategy, hoping it is executing well until you can tend to it again(Kristy’s preference).

When your foundation shifts (a move, your health, a new job, a relationship change), there can be so many unknowns that your historic estimates are thrown to the wind and you are overcome with a great sense of uneasiness over the lack of control. Decisions sometimes have to come fast. You may have little control on the options and hope that the contingency fund (and if need be, the emergency fund) covers the unknowns.

It is interesting that no matter your age, your job, your salary; you will find yourself in situations where you are overwhelmed by changes coming fast, where you grasp for control and you will not feel content until the basic security of control is restored.

We look forward to completing the move and gaining back ‘control’.

Waiting for Spring

February always seems like the longest month of the year; all 28 days. This February seems longer than ever. We have had more snow this month than all of winter and the cold days are not going away. In fact, we are in the midst of another winter snow blitz as we post this blog. We are peppered with a warm day every now and then, where you can shed the winter coat, but it is just a tease of what is to come. Perhaps that is why it is such a long month.

I’m also looking at seed catalogs and dreaming about a bountiful harvest from my backyard garden. I’m anxious to start to work in the dirt, plant seeds and see nature take its course. The taste of fresh tomatoes, sweet corn, lettuce cut from garden is something I’m longing for. A back yard garden is not only good for your health; it is good on your wallet. You can harvest loads of fresh fruits and vegetables for pennies comparatively.

The sun is coming up earlier and setting later. In walking the dogs over the gardens in the snow, I can visualize the vineyard I am going to plant this spring, and the straight rows of corn in the field.

Maybe all of this dreaming of what is to be -is making February longer; but it is my way to get through the longest month of the year…February. Let us know how you get through February and what your dreams are for Spring. It will be here before we know it.

MarketPlace Money Fun

From Barbara Bogaev on Marketplace Money, “We're still fresh off of our love hangover from Valentine's Day here at Money this week, so we've invited a couple of personal finance experts to answer your questions about money and relationships. Bob and Kristy Walker ..."

The show airs this weekend (2/15/13) on most National Public Radio Stations. If you don't find it on your local NPR station, here is a link where you can listen: http://www.marketplace.org/topics/your-money/letters-how-can-i-budget-when-im-self-employed

It is a great show, regardless if we are on or not so we highly recommend you tune in weekly to enjoy and learn. -Happy Listening

Can’t Buy Me Love – Happy Valentine’s Day

As Valentine’s Day quickly approaches, I think back to the Beatle’s song “Can’t Buy Me Love.” The Wall Street Journal was also thinking of the little things that show love in their article “Small Acts, Big Love.” By putting the other person’s needs above yours, spending a little time, and being creative in your approach, really shows that you appreciate and care for them and you don’t take them for granted.

Some key things to remember when you demonstrate your love through actions:

• Don’t expect a pay back

• Think about what your partner would like, not what is easy for you

• Put your partner’s needs first

• Show respect and appreciation

Here are a few little things that say ‘I Love You’ every day of the year:

• On cold days, start their car and scrape the ice off the windshield

• Make the bed

• Pack their lunch

• Open doors

• Leave the toilet seat down

• Leave the bathroom sink clean

• Pick up after yourself

• Empty the dishwasher

• Make a meal

• Say “thank you”

• Anything that your partner usually does for you, take your turn and do it for your partner

Show your love and appreciation 365 days a year, not just on Valentine’s Day. It doesn’t have to cost a penny and to quote the Beatles “Money can’t buy me love.” Happy Frugal Fun Valentine’s Day – every day of the year.

Cleaning Up

Have you ever thought about making your own laundry detergent?  The other day, we were shopping at our local farm/home supply store and found coupons that had all the items necessary to make your own laundry soap on sale.  The total cost to make the detergent for 288 loads was just under $15.00 or about 5 cents per load, about 3 times the savings over commercial laundry detergent.

We tried the laundry soap and it works great!  Kristy is excited because she feels it works better and it is how her grandmother made laundry detergent. The directions:

• 2/3 bar Fels Naptha soap*
• ½ cup Borax
• ½ cup washing soda

Grate the Fels Naptha soap. Mix in the Borax and washing soda.  Store in an air tight container.  Use 1 – 2 tablespoons per load.  Can be used in HE washers.

* Freeze the Fels Naptha soap prior to preparing the mixture to keep it from clogging the grater. 

Happy Washing!

PS. We have had questions following this blog posting asking for the liquid form of the detergent:
• 1/3 bar Fels Naptha Soap
• 1/2 cup Borax
• 1/2 cup Washing Soda
• 2 gallons water (32 cups)

Grate Fels Naptha Soap. Heat 6 cups of water and add grated Fels Naptha until soap melts. Add Borax and Washing Soda. Sir until dissolved. Remove from heat. Pour 4 cups of hot water into 2 gallon bucket. Add soap mixture and stir. Add remaining water and stir. Let sit for about 24 hours until it gels. Use ½ cup detergent per load of laundry. Can be used in HE washer.

Are You Prepared?

As hurricane Sandy hit the East Coast, with the flooding this past weekend on the West Coast and listening to the struggles of those affected by the disasters, I am wondering how prepared I am for a disaster. Living in the Midwest, I have to worry about tornados, floods, droughts, ice, snow storms, and straight line winds. Granted, we are not talking hurricanes, earthquakes, active volcanoes, forest fires, or tsunamis, but I still wonder if I am prepared to go a week or even a month without electricity or disrupted transportation.

FEMA has at http://www.ready.gov resources and information to help you ‘Ready. Plan. Stay Safe’. It includes what to do before, during and after an emergency, how to prepare plan and stay informed for emergencies, how to build a kit for disasters to be prepared, ways to be involved, information for businesses and fun and games for kids.

What would it take for you to be prepared for a disaster? We are not talking “Doomsday Preppers” mentality, but are you ready for a week without power? How much cash would you need if you could not access your ATM or credit cards? How empty is the gas tank on your car? These are just a few questions that we are considering as a family.

Hopefully we will never have to put our plan into action, but ….just in case.

Above Average in Student Loan Debt?

The numbers are out for the class of 2011 and two-thirds of the graduating class graduated in debt. If you are an average borrower, you owe $26,600, exceeding the class of 2010 by 5%, Was it worth it? In 2011, the unemployment for college graduates was 8.8% while unemployment of high school graduates was at 19.1% so the employment number would say yes.

So you decide to go to college. How do you reduce the amount of money you will borrow, have a good time, and graduate? Here are a few ideas.

1. Graduate on time or early. An extra year of college can cost you can $50,000 or more. To calculate the cost of that extra year, add your tuition, fees and books to your potential starting salary. Say that your tuition, book, and fees are $20,000 and your starting salary is $30,000; that extra year cost you $50,000. This number could be higher or lower depending on where you attend college and your career. Just for fun, calculate your own cost of an extra year of college. If you were to graduate in 3 years, you just saved $50,000!

2. Go to a college you like with a major you like. Transferring from one school to another can cost you an extra semester or year, depending upon what credits transfer and how credits are applied. If you do transfer, check with your advisor or Registrar’s office to make sure that all credits transferred and were applied correctly.

3. Do your homework when picking a college to find out what the average student loan debt is for that institution. Some colleges work very hard to offer students work-study money and enabling students to graduate either debt free or with small student loan amounts. College of the Ozarks, Knoxville College, and Berea College are strongly committed to students graduating debt free.

4. Apply for scholarships and grants. Grants and scholarships do not have to be repaid. Great places to check are fastweb.com as well as with local organizations or employers who might grant scholarships. If you were to calculate the time you invest in researching opportunities and the funds you receive, you will be surprised at your hourly wage.

5. Take 15-18 credits per semester. To be classified as a full-time student, you must be enrolled in 12 credit-hours per semester. However at many colleges, you can take 15 or 18 credit at the same cost of taking 12 credits. That is like getting two classes a semester for FREE! You will have to work harder and you don’t want your GPA to slip, but consider maximizing your schedule so you can graduate early or take extra classes for a second major.

6. Take college level classes while in high school. In many high schools, student can have dual enrollment in both their high school and in a college. Many of these partnerships are with local community colleges. The high school pays for the class and the student can graduate with college classes. Who knows, you might be able to graduate high school as a college sophomore, completing enough college classes while in high school.

7. Talk to your admissions counselor and financial aid representative. These two contacts can be worth their weight in gold in looking for strategies for reducing college debt and increasing scholarships and grant awards. They know the inside and are usually more than willing to help you put together a plan to pay for college.

8. Take classes at your local community college. Most institutions will transfer in 62-64 credit hours if transferring from a community college; some institutions will take more. Work with the institution that you want to transfer to when you register for your community college courses. This will ensure that the courses you take at the community college will apply directly for your degree completion at the 4-year institution. I would encourage you to save the e-mail or have it in writing on what courses will transfer. Not every advisor is up to speed on transfer courses.

9. Create and live by a budget. College can be very expensive with a lot of extra-curricular activities. College should be fun, but some of that fun can be expensive. Know the opportunity cost of your fun and look for inexpensive alternatives. With your budget, you may not need all the money from your awards letter. It is okay not to borrow all the money you can while in college.

10. Start a 529 College Savings Plan. The earlier you start savings, the more time the money has to grow. Saving for College.com has details on every state’s 529 plan and college savings plan. Do your research and start saving early. An old saying states that “The best time to plant an oak tree was 20 years ago. The next best time to plant an oak tree is today.” Get started today saving for college.

There are many different routes to your college education and they don’t all have to be expensive. Take time to choose the right one for you.

What other strategies do you have for lowering your student loan debt? Leave us a comment and share your idea.

Living off the Grid

It has been six weeks since we sold our house and moved into our motor coach. If you read our previous blog "Homeless" you know it was quite a shock moving from 3,000 to 300 square feet. The idea of living in our motor coach for 6 to 9 months while we build our next home was a great plan as we sat around the dining room table of our old house. The good news is that it gets better.

To bring you up to speed, we now have electricity as of two weeks ago but still do not have running water. When we were showering in the motor home, our 85 gallon water holding tank would last us about one week. Tuesday was our day to take the motor home out to empty our tanks and fill up with fresh water.

We changed our ways two weeks ago. We now get up at 5:00 am to head out to the Campus Wellness and Recreation Center (CRWC) for a work out and morning shower. We can now stretch our 85 gallons out for one month.

Lessons learned over the past 6 weeks:

1. Running water and electricity are great luxuries. There is nothing like a long hot shower.

2. We have a new appreciation for space. Bob misses his home office and fast Internet. Kristy misses her closet and room to get ready in the morning.

3. Living in a small space makes every other house seem enormous. We spent time at Kristy's parents’ house and our kids’ house and they both seem gigantic! Such a luxury to spread out and have separate rooms.

4. Public libraries are great places. Without a home office, Bob has been spending time working at the Coralville Public Library and he appreciates free Wi-Fi.

5. Laundromats have free Wi-Fi and you can do a week of laundry in less than two hours. They also have cable television and we can watch channels that we don't have.

6. Why did we pay so much for cable? We are using the antenna on the motor home and the reception is great. We get 27 channels from our pasture.

7. Living off the grid is frugal but the 'fun' varies.

8. Life is good. It's not the space you have but the people in your life that makes life good. When we are with family or friends, the space never feels small. For all our family and friends, we are very thankful.