Potential Paths to Success

The kid got her permit today.

She’s over the moon with the achievement. She intends to acquire her driver’s license, invest in a vehicle, and get a better-paying job.

Late last night she discussed her options with me. She asked if I would mind if she lived with me, splitting the expenses until some time in 2020. This would allow her to have a support system when her fiancée is deployed overseas this year.

While the mom in me was like really? the frugalista in me was cheering.

It opens another option line for my future.

If the kid remained living here my bills would continue to be low. I could piggyback off of her, using her vehicle to re-acquire the license I gave up while writing The Car Free Experiment. This would allow me to get one step closer to my long-term goals.

We discussed the option of getting a factory job together. We would both save money by splitting transportation costs. We could almost double our hourly income with this route; the extra hours we would receive would mean that our weekly income would more than double.

I could invest $500-$1,000 a month if we went that route.

In order to receive a base amount of money to live on ($500/month), I need to have $60,000 invested in dividend stocks at a 10% return. Not including rolling over my dividends and chipping in my royalties, I could have that socked away in less than 10 years by simply investing that minimum $500 a month; less than five years if I managed to invest $1,000 monthly.

I could work in a factory job for 10 years. It would be rough, but I could do it. I may not even have to work in one for that long, depending upon how my overall investments, my book royalties, and other options pan out.

No one knows the future, of course, but I find that exploring options is a worthwhile exercise. It allows me to brainstorm potential paths towards my long-term goal and to weigh potential pitfalls as well as what steps I would need to take in order to hedge my bets.

If anything, this path would allow me to turbo-charge my investments and allow me the income needed to acquire a vehicle of my own, as well as the money needed for any classes as I work out the best career to settle in for the long-term. I have no real desire to work in a factory until the day that I die.

What options are you considering to achieve your long-term goals? Please share your stories in the comments below.

The Reason I Read

Did you know that the most successful entrepreneurs are the ones who are the most risk-averse?

I didn’t until I started reading this book.

I always believed that successful entrepreneurs were the ones who leaped in, all hell-for-leather, burning their bridges behind them.

Come to find out, I’m completely wrong. They like to hedge their bets in all aspects of their lives.

Just like I do.

I’ve stuck with the low-wage jobs I have for a reason. I like the security of knowing that, if anything happened to my current position, it would be really easy to walk down the street and replace that income.

When I had my computer repair business I continued working in low-wage public jobs for security. I wanted to know that I always had a certain amount of income to live on even if my computer jobs dried up. The computer repair business served as a backup plan for my public job in the same manner and also gave me the confidence to stand up for myself with abusive managers.

I keep a safety net, a financial cushion that has saved my behind more than once over the years. Even now I’m hedging my bets in another manner. Instead of just counting on my book royalties to provide for my needs in the future I’m investing the income to provide yet another layer of security.

I’ve wondered many times over the years if I was being too cautious; too paranoid for my own good. Now, thanks to a random book I scooped up at the local library, I’ve discovered that maybe I’m not being paranoid.

Maybe I’m just being smart.

This is why I read. I read, not only to learn more about the world around me, but to learn more about myself in the process.

What are you reading today?

Thinking of Long-Term Goals

Last night I fell asleep thinking about my long-term goals. Eventually I would like to own my own home and perhaps build a small real estate portfolio in order to provide yet another stream of passive income.

I’ll have to build my credit if I want to accomplish that.

I don’t like credit. Credit makes it far too tempting to overspend and the interest rates charged…well, I’m cheap.

That said, a good credit score would open doors and opportunities for me that otherwise would be closed should I decide to pursue home-ownership and real estate investments.

I’ve been discussing this fact with my beloved Auntie, who has become my financial counselor as of late. She offered a suggestion that I would like to run past you in order to hear your opinion.

Auntie pointed out that credit cards do not charge interest if you don’t carry a balance. She shared that she keeps a credit card that she uses to make her everyday purchases that she pays in full each month. This not only helps keep her credit in good standing, it provides a layer of protection in the event her card information is ever stolen, since she never uses her debit card. This keeps the money in her checking account safe.

I have no need for credit at the moment; living beneath my means the way I do means that I don’t require it. That said, I know from experience how challenging it can be when a credit card thief empties your primary bank account.

An extra layer of protection would be a nice thing to have. I am a firm believer in hedging my bets when it comes to finances and I have become extremely cautious about using my card in unfamiliar stores. I carry cash with me to avoid using my card these days as a result.

If I took Auntie’s advice I would not only gain a layer of financial protection, I would begin building my credit score. This would allow me to secure credit should I require it in the future to achieve my long-term goals. I could use the card for my everyday purchases, budgeting accordingly as I already do, then pay off the balance each month. This would allow me to avoid any interest fees. At the most, I would have to pay an annual fee on the card until I figured out a way to eliminate that.

What is your opinion? Do you think it would be a good idea to apply for a credit card and use it in this manner? Please share your thoughts in the comments below.

Employee Motivation

Little things means so much to employees.

Once upon a time I worked in a restaurant. On this particular day, the owner was leaning against the wall as the store crew navigated the lunch rush.

I was manning the front counter that day, taking orders as fast as I could for the crowd when one of my regulars stepped forward.

“Hey, Mrs. R!” I called out happily. “You want your usual? How’s work?”

The woman smiled, nodding as she shared a slice of her day while I punched in her order.

“Annie, come here,” the owner called out when I finished. Expecting trouble, the manager motioned for one of the other workers to replace me while I obeyed the request.

“Was that lady a friend of yours?” the owner asked.

“No, sir,” I replied cautiously.

“But you not only knew her name, you entered her order without her even telling you what she wanted,” he persisted.

I brightened. “Yes, sir! Mrs. R comes in every weekday for lunch. She always orders the exact same thing so I’ve got it memorized.”

The owner of the store frowned. “But how do you know her name?” he persisted.

I blinked. “She wears a nametag. I always call people by name when I can work out what it is. Nametags make it easy,” I replied.

He asked a few more questions about the practice. I explained the tips and tricks about using names to cultivate rapport in response.

Then I stood there for several long moments as he gave me a long look. Did I do something wrong? I wondered at the unusual examination.

The man motioned for the general manager to approach.

“GM, give Annie here a five-cent raise on her next paycheck,” he informed the woman. “Annie, let me know if it’s not there. I want to show you that I appreciate the effort you go to in order to make the customers happy. Thank you.”

Five cents isn’t much for a part-time employee. It translated to a mere dollar a week, less than that after taxes. That wasn’t the important part, however. The important part was that he’d noticed me and had rewarded my efforts in some small way.

I worked even harder after that.

Employers, Take Note

It doesn’t take much effort to say that you appreciate the efforts of an employee. It doesn’t take but a moment to pat someone on the back and say “well done.” It barely affects the bottom line when you toss someone an incremental raise.

Yet those tiny things mean so much to us workers.

It encourages us. It shows us that we are noticed. It demonstrates that we are appreciated.

And it benefits your bottom line because it motivates us to work even harder.

You think about that. Happy workers translates into loyal workers. Loyal workers are the ones that will bust their ass for you when you need it. They are the ones that will come in when you call on their day off. They are the ones who will look out for you and prevent shrinkage when they catch it. They are the ones who will show up, each and every shift, determined to do the best they can to make your business grow.

Remember that the next time you catch one of your workers doing something awesome.

***

Readers, share this post with your friends. Share this post in a place where your boss can see it because I suspect that many small employers don’t realize just how important the little things are to us, and how tiny little efforts can motivate us to work even harder and increase employee retention.

It will benefit all of us to increase awareness.

10 Reasons Why You Shouldn’t Save Money

In light of how many people I see on a daily basis who refuse to save money, I started asking myself why this was a thing. To me, it makes perfect sense to live beneath my means but in my world I am in the minority.

I thought I’d brainstorm to determine if perhaps my path was the wrong one.

  1. Treasure Hunts are fun! It’s a wonderful feeling to find loose change in your couch cushions or beneath the seat of your car when you need to buy a roll of bathroom tissue to make it to payday.
  2. Late fees and overdraft charges are a normal part of life. Why try to fight them? Just pay the money and move on. You can always eat beans or charge your grocery bill as you recoup the losses.
  3. GoFundMe Pages are in style. Who doesn’t like having their very own GoFundMe page to finance a move or to pay their bills when they lose their job or get hurt? It’s a badge of honor to crowdfund in this day and age.
  4. The Government will always be there to help if you really need it. All you have to do is ask and they will deliver. This safety net is a wonderful thing.
  5. It is fun to apply for food and financial assistance. Government agencies are always delighted to help anyone who applies for help. They make it so easy. You provide your bank account records, pay stubs for the past few months, information about everyone living with you, and statements from all of your neighbors to prove that you’re not housing a secret millionaire at your home and poof! Money just starts rolling in.
  6. You learn how to survive on less sleep. It’s a good thing to toss and turn when you receive a shutoff notice on your heating bill in the dead of winter. Who cares if you have to go to work in the morning? You can use that extra time to binge-watch your favorite show or go hang out with your sweetheart.
  7. You have something in common with all of your friends. Since everyone around you stays broke as well, you can all commiserate on how expensive life is. It’s lonely being the only one with money in your circle of friends and they tend to get upset if you point it out.
  8. It’s less work. Instead of wasting your time trying to stretch your dollars you can veg out in front of the television every evening and enjoy your life instead.
  9. It’s so enjoyable to one-up your friends. Want to make them jealous? Buy the latest and greatest phone that just hit the market and show it off. Get the lastest mega-package from your cable company so you can brag about watching all the hit shows. Cruise to work in a brand-new car and brag about those low monthly payments. Move into a nice big house in a great neighborhood so you can make fun of your friends who are stuck in the ‘hood. Watch their faces color with shame because they’re not as successful as you are. The ones with the most toys wins!
  10. You only live once. If you take it with you, your kids will fight over the money you left behind anyway. Why not eliminate the drama and die broke? You’re the one who busted your ass to make the money so you should be the only one who gets to enjoy it!

Did I miss anything? Share it in the comments below.

Paid Vacation

Yesterday I received a treat that I’ve not had for many years:

My vacation slip.

In my years of focusing upon my children, I would stay at home during summer vacations, taking so much time off from jobs that I rarely ever saw one of these.

In fact, I do believe I worked through the last paid vacation I earned. I needed the extra income in order to survive.

I squeed when I held that paper in my hands. It’s such a little thing to many but it represents something I’ve not experienced for far too long:

Freedom.

I am free from the burdens of child care, of worrying about anyone else but me. I am free from financial struggles and fears for the first time in longer than I care to remember. I may not be rich, but I’m doing rather well on my tiny little income.

This might be the very first paid vacation in my entire life where I’ve not had to worry about money.

I am going to enjoy every single minute of it.

I requested off the week of my 49th birthday. I didn’t even ask for specific dates; just asked for any time during that week, a small stretch of time in a row. That week I intend to totally, completely, take some time off from my life.

I am going to rest. I am going to read. I will hang out in the local coffee shop, visit the library, and explore the new businesses popping up in my little town.

I am going to spend that entire week giving thanks for the incredible life I’ve been given. While I’m sure I’ll end up piddling around the house and writing a bit, my primary goal is going to be the simple act of appreciation.I intend to give myself one physical birthday present to mark this year, to show that I’ve survived and triumphed. To celebrate the fact that it will be the first anniversary of becoming an investor I intend to acquire another small piece of precious metal for my collection. It may be a piece of jewelry. It may be some bullion. It may simply be a jewel. I don’t know what it will be yet; something will call to me around that time and I will buy it. I want something else to hold in my hand, wear on my person, or carry in my pocket for continued inspiration as I move forward.

What do you have to look forward to with the coming year? Please share your stories in the comments below.

The Importance of a Financial Buffer

The United States government shut down the other day. Regardless of your personal beliefs on the issue, one thing that we can all agree on is that the pay suspension for many Federal workers is causing many families to suffer. So many people the world over live from paycheck to paycheck; even a delay in the receipt of their income can be devastating.

The fear of financial insolvency has colored the choices I’ve made for decades. It’s one of the primary reasons that I favored low-wage, “disposable” jobs in industries such as fast food as a single mom. I selected those positions because I knew that if I lost one job that I would be able to secure another position within a matter of days.

It is much better to have financial security than it is to have a higher paycheck.

As I grew older and wiser I realized that job security wasn’t enough. It’s obviously not enough for the Federal workers currently suffering the political fallout from the current situation in Washington and it’s not enough for anyone with a family depending upon them. Things happen. A kid can become ill, forcing a parent to stay home and provide care, a car can break down making it impossible to go to work, a refrigerator can die, or the heat in your home can fail in the dead of winter. You can even become ill or injured, forcing you to take time off of work in order to heal.

This is why I began the practice of keeping a financial buffer.

My current buffer would provide three month’s of comfortable living in the event of an unforeseen disaster; five months in a pinch. Even with my determination to invest every penny I can I’ve still managed to continue increasing the amount of money I keep stashed in my emergency fund.

Everyone needs to keep a financial buffer. With our current political situation, this buffer would have allowed these families to continue providing for their families for the duration of the Government Shutdown with minimal disruption. It wouldn’t be fun, but it would be a helluva lot better than facing homelessness or food insecurity.

I don’t care how little money you make; if you don’t have a buffer of safety stashed away in a bank account or a lockbox at home you are taking a foolish, downright stupid chance with your financial security. Shit happens. When it does, your paycheck is usually the first thing you lose. Unless you want to live in a cave like Daniel Suelo you need to keep a stash of cash just to survive.

It’s not fair but that’s just how it is.

So suck it up Buttercup and face reality. It is not the world’s job to support you. Most people won’t even care if you lose your paycheck, they’ll just offer platitudes and go on with their day. It’s up to you to support yourself and your family; to do that you need to keep some cash on hand in the event that the unthinkable happens.

You can start out by saving your spare change. Instead of tossing your pennies on the ground, put those suckers in a jar at home. Roll them occasionally and stick them into a bank account you won’t touch, or convert them to cash and stash it in a lockbox at home or a safety deposit box at the bank. Put it somewhere you won’t be tempted to touch it when you stumble upon a sale of your favorite whatsit.

Instead of blowing money on a tattoo or getting your hair professionally done or a fancy manicure, take that money and stash it away. What’s more important to you? Is it more important to keep up with the Jones’ or is it more important to keep a roof over your head and food in your belly?

I don’t know about you but I prefer to eat any day.

You can splurge on the extras once you know you’ve gotten a buffer built up and will be safe in the event you go to work one day and discover your job has closed. It is much better to be safe than sorry when it comes to your finances.

***

Do something good today. Share this post on social media. You share cat photos all of the time; this post could be the wakeup call someone needs to prevent a financial disaster. Help your buddies help themselves for a change. Thanks for caring!

The Stock Market is Tanking

Just as I suspected earlier this year, the stock market has continued to drop as the Fed increases their rates. Here is a quick screenshot of the S&P 500 demonstrating the phenomenon:

Just look at that line! It’s amazing! You don’t even need the numbers that I forgot to clip with it to see how far it has fallen.

Unfortunately, that means my Dad would be begging me to re-think my strategy if he could see the current value of my little investments.

I’m not even mad. I’m over here, cheering on the sidelines because the Fed announced two more potential rate hikes for next year.

By fishing at the bottom of the barrel I’ve limited my losses. There is only so low the values can go, after all. Before this is over my portfolio will end up looking much worse before it gets better but once prices begin to go back up I’ve no doubt that they will leap beyond the piddling prices I’m currently paying.

I’m basing my current strategy on historical information. In the past, the Fed raised rates until something broke in the economy. Occasionally we have entered a recession as a result of this break.

I will be fine if we enter a recession. I work in the discount grocery industry; people will need food regardless. Less money to spend means that more shoppers will visit my little store, so my job is secure regardless. I walk to work so I’ve no worries about fuel costs, and I keep my recurring expenses as low as they can go so I’ve got a bit of wiggle room if prices rise.

Even better on the financial front; Katie’s move has been delayed. We’re not sure when she will be able to marry her beau at the moment, so until she gets things arranged she will be staying here indefinitely. This means that my monthly expenses will remain low throughout most of the winter.

That will give me more money to invest. I intend to invest every penny I can to take advantage of this drop in prices.

Time will tell if my game plan will be profitable in the end.

When Life Takes A Left Turn

My life has taken a really strange turn since Thanksgiving. Not only has my ex-husband passed away but certain aspects of my personal life that concern the situation have also gotten very, very strange.

The worst part of the whole situation is that I can’t share what’s going on yet. Things are still in motion; I might jeopardize the outcome if I say too much online. I’m writing it all down in my journal because I want to share the story with you when all of this is over. Truth is much stranger than fiction in this situation.

Even with the chaos, I’ve got to regain my focus. I have something I want to achieve and I’m not going to do that if I allow my mind to keep thinking about a situation that is mostly out of my control.

With that in mind I’ve made myself start reading again. I’m not reading much, but every little bit of knowledge I glean will take me a step closer. I just need to focus on what I can do right now, with what I have, and let the rest fall into place as it can.

I initiated a transfer from my savings account today, emptying it for the next round of investments. That account only collects a portion of my royalties but it’s enough at current stock prices to increase my holdings a tad. That will allow me to make some more progress while I get through the holidays. Once those are over I’ll analyze my finances and invest a bit more.

I’ve also discussed having a will drawn up by a local attorney. I have a price now; I’ll work that money into my budget next year. I want to make sure that anything I leave behind goes where I want it to go, especially in light of what I’m witnessing since my ex-husband has passed. I may not have much right now but I’m no longer in the mood to take any chances.

Since 2018 is now waning I’m in the process of making a list of things I want to accomplish next year. The end of this year may be traumatic but it will pass. I see no point in allowing my current situation to derail me. I’ve waited far too long, had far too many false starts on a goal I’ve had in my head since I was a child to allow anything to stop me now that the fog is slowly lifting from my path.

I have a sneaking sensation that 2019 will be even more eventful than this year has been. I’ve grown so much this past year; I’ve experimented, made adjustments, and learned more about myself than I ever have in times past. I intend to continue that progress.

I will write more as time allows.

 

Financial Surprise

As I caught up on the task of logging the money I’ve spent this month I discovered that I’ve done a lot better than I anticipated when it comes to reducing my spending. Even with stocking up this month on pet food and supplies atop of saving some money back for the upcoming book/surplus sale the local library is hosting soon I will have more money left over at the end of this month than I anticipated.

Between that, the fact that I still have last month’s royalties stashed away, an extra paycheck coming this month, and a new round of dividends hitting my account I might be able to afford another round of investing. The stock market is down at the moment; prices on my favorites are at a delightful low. If I could afford to toss another hundred dollars into them that would allow me to inch a bit closer to financial freedom. The extra dividend income may come in handy once Katie moves out but if I don’t need it I would have that much more to reinvest once winter ends.

I’ll know more at the end of the month. For now, it gives me hope that I’ll be able to survive the winter without being forced to suspend my goal of financial freedom entirely.

It’s always a treat to discover that you’re doing better financially than you thought.

Have you ever looked at your finances and realized that you’re doing better than you thought you were? Please share your stories in the comments below.

Live Beneath Your Means

The other day an acquaintance approached me for a loan to pay their overdue water bill. They knew that the bill had been due on the 10th of the previous month; instead of paying it then they decided to do some other things with the funds since their water wouldn’t be shut off until the first of this month and the city only charges a five dollar late fee.

I was approached for the money the night before their water was due to be disconnected.

This is a common occurrence in my life. I watch people spend money eating out, buying gadgets, ripping and running from sale to sale only to approach me when their bills are due because I am notorious for living beneath my means.

Seriously, folks–it is time to grow up.

Bills Come FIRST

If you know that you have a bill coming due, reserve the money from your paycheck to cover it. Period. If you don’t have enough money coming in to cover all of your bills, you need to either reduce your expenses or increase your income because if you can’t afford to pay your bills now, borrowing money is going to make it even harder to pay your bills next month and the months after that.

It is simple math. You cannot spend more than you earn. It doesn’t work that way, no matter how you juggle it. It’s not fun to go without when all of your friends are buying like crazy but tough! That’s life. Suck it up and move on. Yelling at the friends who refuse to support your profligacy is not going to help you one bit. We live beneath our means to best provide for ourselves, not to help people who refuse to control their own spending.

As for the person I referred to earlier I have no idea if they sorted the issue. I’m tired of being cussed out by idiots.

Have you ever been attacked because you refused to enable someone’s spendthriftiness? Please share your stories in the comments below.

 

The Necessity of Facing Reality

Now that I’ve had time to breathe, it is time to face my current reality. I need to know what I’m facing in order to move forward.

Facing our current reality is a necessity. Burying your head in the sand won’t help one bit. You must know exactly where you stand, regardless of how shaky the ground so that you know what you are dealing with. That is the first step in overcoming any challenge you may face.

I’ve sorted my reality into a list of advantages and challenges. I’m leading with advantages first since good news always helps to soften the blow of the bad.

Advantages

  • I currently have a public job that brings in a bit less than $600 these days due to a cut in hours. Worst case scenario, I can live on that year-round once Katie moves out, though it will be rather tight during the winter months due to increased utility expenses.
  • I have my writing business, which is my passion. It brings in anywhere from $50-$120 a month, depending upon sales and runs a couple of months behind of my actual earnings. For instance, the royalties I receive in November will be from sales in September.
  • I have a checking account with roughly $1,000 in it; $500 is my pillow, and the rest covers my bills for the upcoming month.
  • I have over $1,700 invested in the stock market at the time of writing. My investments aren’t currently valued at that due to the slide in stock values, but it still brings in a bit of money each quarter.
  • I have a small investment in silver that can be sold if needed.
  • I have marketable skills in computer repair and sewing that can be utilized to earn extra money if needed.
  • I have no debt that I need to worry about paying off.
  • I have the amazing ability to live on very little money when necessary.

Challenges

  • I am facing the emotional upheaval of my daughter moving away. This may affect my reasoning if I’m not careful.
  • My expenses will double when the kid moves out. More than double from my current budget, since expenses are much higher here in the winter.
  • I have no idea what to do with my life as I move forward.
  • I possess neither vehicle nor drivers license, so employment options are limited if I need to seriously increase my income.
  • My cash padding is reduced due to my stock market investments, so I am running a bit leaner than I like as I head into the coldest months of winter. That makes me nervous.
  • I’ve realized that I have an unhealthy relationship with money and things that I need to deal with. I tend to focus on money (since my spending is under my control) when other facets of my life seem out of control.
  • I have realized that dental issues have been causing the exhaustion I’ve experienced this past year. If I don’t attend to this issue the infection could kill me in time. Since I have no intentions of leaving this world for some time to come, this is something urgent that I need to address.
  • I have very little saved up for retirement.

Evaluation

Overall, looking over this list I’m not doing too bad. It seems scary but the challenges are far from insurmountable. I’ve faced much worse in the past. History indicates that I will sail through this winter just fine. It might be tight, but it is workable. To be safe I won’t invest any more money into the stock market unless I know that I can definitely spare the funds. I will hold on to that money just in case I need it to pay bills this winter.

In the meantime, I need to keep a close eye on my spending. I need to reduce the amount I spend to adjust to the fact that I will have less free money in the future. It isn’t a pleasant reality to face but I have to deal with it. Fortunately, I have a few avenues available to make extra spending money if needed. I can take in sewing work by doing repairs and alterations. I can repair computers. I can even work on MTurk in my spare time.

I am already taking steps to correct my dental issues. As a result, I’m already noticing an increase in my energy levels. All I have to do is continue my current action plan and this issue will be eliminated. I will have to save up for a pair of dentures but I’ll figure that out as I go along.

I’ve realized that I do have an unhealthy relationship with money; understanding that you have a problem is half the battle won. I’ve altered my focus a bit to compensate. That said, that unhealthy focus will actually benefit me in the upcoming months since I may have to get creative to stretch my limited funds. I’ve got lots of experience with saving money as a result of my previous obsession with keeping expenses low.

I’ve formed a basic game plan to help deal with the emotional fallout of Katie leaving. I invested in a nice journal to provide a safe, pleasurable place to work through my emotions. I’ve altered my focus to the person I want to become instead of making financial goals at the present time. Once Katie moves out I’ll keep busy by sorting and rearranging my home to accommodate. I’ll be able to sleep in the bedroom and I’ll have more room overall once she’s gone. That is an advantage I want to keep my attention on. I will handle things better if I have something to look forward to.

I’ve got a nice stack of books in my “read” pile. These will keep me occupied and provide ideas and inspiration for the cost of free since I already own them. This will not only be cheap entertainment, it is educational as well.

I will eventually need to work out a definite goal but that is not an urgent need. I’ve waited twenty years to begin saving for retirement; a few months is not going to change things much. In fact, it might even benefit me. I may come up with ways to increase my income that don’t rely on working full-time.

Hmm. Thinking about it, that is actually a reasonable and safe goal to shoot for. Take this time to regroup, research, and brainstorm in order to increase my online income to the point where I can not only invest in my future but to supplement the income from my part-time job. I do like my job so I would like to remain working there; if I can arrange things to do so, while improving my standard of living, I would be much happier than I would be if I had to trade 40 or more hours of my life each week to earning a paycheck.

That is definitely something to keep in mind moving forward. I would like to work less, not more.

do want to improve my standard of living. I’ve thought about it, and I would like to invest in certain items like a small washer and dryer at some point in the future. I would also like to invest in a few items purely for decorative purposes over time. I’ve realized that I enjoy a bit of bling in my life so it is time I embraced that aspect of my personality. Minimalism be damned; I’ve settled into this home, I’ve no plans to move in the immediate future, so I see no point in deprivation so long as I can afford the occasional treat.

In Summary

By facing the reality of my current situation, I’ve realized that things aren’t as bad as they first appeared. I know where I currently stand. I know what I’m facing in the immediate future. I’ve got a workable plan for the short-term and a hazy long-term goal. It’s a start, which is all I need.

Have you ever sat down and thoughtfully analyzed your situation and the challenges you are facing? Please share your stories in the comments below.

The Prom Pickle

Earlier this year my beloved Katie excitedly prepared for the prom. She shopped and shopped for the perfect dress. One evening she emerged from her bedroom with a troubled look.

“Mom, my prom dress is going to be way too long,” Katie announced.

“Can you get someone to hem it?” I asked.

She frowned. “If I get the seller to hem it, the dress won’t arrive in time and the price goes up significantly,” she replied. “Do you know of anyone in the area that does alterations?”

I didn’t. The last person I knew who did alterations passed away several years ago. In this age of off-the-rack clothing, it is a dying art.

That said, I used to be pretty decent with a needle back in the day. I taught myself how to sew after my mother died as a way to remain close to her. I used to sew clothes, quilts, costumes, curtains, and could even craft custom-fitted furniture covers. Here are a few pictures I have on my computer that were taken during that time.

My oldest daughter as “Queen Cabbage” in a school play.

 

Middle Daughter’s school play outfit. I made the legs a bit long since she was in the midst of a growth spurt. She wore those overalls for years.

 

I sewed the baby quilt the kids are stretched out upon using gifted and clearance fabric.

 

A baby quilt I made on a whim once.

 

A quilt I made after being inspired by the fabric.

 

The Lone Star quilt I made in memory of my mother.

 

“Mom, do you think you could hem it if I got you the thread and stuff?” Katie asked when our search for a seamstress came up empty.

“I’m not sure. I’m a bit out of practice,” I replied, hesitant. I’d not sewn on so much as a button in years; between that and the fact that my daughter and grandson have liberally raided the few sewing supplies I kept left me wondering if I had so much as a single sewing needle to my name.

“Would you try?” Katie persisted.

I nervously agreed. Katie set about replacing my missing straight pins and sewing needles while she located the right color and quality of thread. Before I knew what was happening she was up in a chair, patiently still as I pinned the skirt to a proper length.

I had one week to hem this voluminous monster and fancy fabrics have never been my forte. Even worse, once I began the project I discovered that the method the manufacturer had used to assemble it…

…Let’s just say that my inner pirate came out. In order to hem the dress properly, I would have had to partially disassemble the skirt to hand-sew both the skirt and lining as different sections. The manufacturer had hemmed the lining and skirt first then assembled the section by sewing them both together along the side seams.

I didn’t have time for that. I had less than a week by this point and would have to work on it between my shifts at work.

I examined the beast, madly brainstorming a solution. If I adjusted things just a bit, I’d be able to treat the lining and skirt as a single item. It wouldn’t be my best work but it was do-able with the time limit and the fact that the two pieces had been hemmed before the dress had been assembled. I explained my dilemma to Katie and demonstrated my solution.

She agreed so fast my head spun. She didn’t need perfect; she just wanted it to look nice.

I spent four days tethered to that dress. When I wasn’t at work I sat in the kitchen, stitching madly to hem the dress. Katie kept me company when she was home and a friend kept me company via speakerphone otherwise.

I completed the task with one day to spare.

 

The story of that adventure is making the rounds in our little town. Since prom I’ve been approached to alter wedding dresses and today a friend is dropping off a jacket that needs a zipper replaced.

Katie is now convinced that I need to start hanging out a shingle. She’s even volunteered to leave her sewing machine behind when she moves so I would have another tool in my arsenal.

I’m considering it. I will have space to create a work area once the kid moves out and I will definitely need something to keep my mind occupied. I already have the skills and there is a shortage of seamstresses in the area. The extra income would make things easier as I adjust to life alone.

Do you think I should try this?


Have you ever helped someone out of a situation only to discover that you had a marketable skill? Please share your stories in the comments below.

 

The Diderot Effect

The Diderot Effect has been used as a lesson against mindless consumerism since the minimalist movement began. The moral of the lesson is always the same: buying something nice will lead to us buying other nice things until we’re broke and miserable.

I was right on board with that thought from the beginning. Why should we strive to buy better things when we’re all poor in the first place? I reasoned. Wouldn’t it be better if we used what we had instead?

It would definitely be cheaper, I thought.

So that’s what I did for years. I scrounged around for free or cheap stuff and made do in order to save money. I kept it clean, used it till it died, and scrounged replacements as time went on.

Diderot’s complaint was that a gift of a fancy robe caused him to upgrade his entire home to match. He spent far more than he felt was appropriate and regretted his decision. His rant has been used as an argument against consumerism ever since.

Let’s poke at him with a stick. If we strip away the consumerism aspect his theory is simple: if we allow ourselves to upgrade one aspect of our lives, in time we will upgrade other areas to match.

Does this work in both directions? Let’s use my life as an example. Here are some pictures of my home before I became extremely frugal:




 


 

 

This is my bedroom now:


new bed

Note that every single item in all of those photos was paid for in cash. I purchased the furniture in the first photos secondhand. I didn’t break the bank to achieve the first look; I used what I had and accentuated it when time and money allowed.

And if I allow myself to be honest with myself, the first set of images suits who I am inside much better than the photo of what I’ve become.

In short, I am a living example of the Diderot effect. By focusing solely on what I could scrounge and exploring how low I could go financially, my external environment deteriorated as well.

What Can We Learn From the Diderot Effect?

We can see from my example that the Diderot effect works in both directions. In the first set of images, I started out by purchasing a bedroom set from a friend and accentuated accordingly. In the second…

…I’m not so sure how to explain the last photo.

While there is a risk of allowing ourselves to buy more than we can afford, if we curb the temptation to overspend, I believe that we can harness the Diderot Effect to improve our living circumstances over time.

An upgraded wardrobe, purchased used (or new when money allows), would provide improved job opportunities.

An upgraded home would improve our quality of life and allow us to attract, not only a different set of friends but a completely different lifestyle than the one we currently have.

So repeat after me:

There is Nothing Wrong With Improving Your Life

There is nothing wrong with wanting to improve your financial circumstances.

There is nothing wrong with affordable luxury.

We need money in order to live. That is a fact of life that, try as we may, we cannot escape in our modern society. There is no sin in improving your wardrobe bit by bit to gain a better paying job, and there is no sin in upgrading your home as you can afford it.

I’m preaching to myself as well here. Until I started this post, I’d no idea how far I’d fallen.

Oddly enough, my income hasn’t even changed much between the two photos. I had changed, and I hadn’t even realized it.

Harnessing the Diderot Effect

I’ve decided that it is time that I went back to the woman I was when I snapped those photos. She wasn’t ashamed of owning nice things; she bought what she could afford when she could afford them and savored those luxuries in her life.

She didn’t tolerate useless clutter but she allowed herself occasional treats. She enjoyed scented candles, incense, and a monthly box of inexpensive bath salts that she split with her kid.

She didn’t feel guilty when she went out to eat. She didn’t feel guilty when she bought a pretty dress at Goodwill. She carefully budgeted her money but allowed herself the little splurges when money allowed.

She wasn’t perfect; she allowed herself to be persuaded to live above her means around the time those photos were taken. She took out some credit cards and financed a washer and dryer that caused her to struggle. I suspect that attempt to move too far and too fast is what started her on the journey to where I stand today.

But if I learn from that experience, if I harness the Diderot Effect in a responsible manner, I should be able to improve my life dramatically.

I can go back to who I was again.

Confession and Challenge

This post ended far differently than how I originally envisioned it. I imagined that I would rant against consumerism like I have so many times in the past as I sat down at my keyboard. I worked myself up to a white-hot rage against my previous self…

…until I looked at the date on the original photos.

I wasn’t a mindless consumer back then. I had started down the path of minimalism, true, but I had used the philosophy to curate my life for the better. I had stumbled upon minimalism before it was a thing and I used it to better my life before I got swept up in the pissing contest of less is more.

I don’t like what I see that I’ve become. I’ve allowed myself to settle for less and less until I lost sight of who I truly am. I was so driven to live on less that I forgot that there is value in moderation.

Maybe Katie was right. Maybe I did deprive her in my desire to live cheap. I did it with the best of intentions but I can’t argue with the truth I see in those photos.

Seeing these photos made me realize a truth I’ve avoided facing for far too long. This post is the reason I decided to press the pause button on my blog and my life in order to rethink things.

I can’t change the past but I can learn from it so I’ve set myself a challenge. I am going to identify one item that I’ve denied myself for ages; an item that I could never justify purchasing under my previous mindset. An item that cheapskate me would never buy because it was far too expensive and served no practical purpose other than to provide me pleasure. I am going to buy it, just because, in order to prove to myself that I am worthy of owning beautiful things once more.

After that, I will begin to use the Diderot Effect to reclaim my life.


Have you noticed the Diderot Effect in your life? Has it been a positive or a negative change? Are you happy with the results of the effect? Please share your stories in the comments below.

Unjustifiable Luxury

I want a washing machine. I really do. I would like few things more than to be able to sit at home and do my laundry whenever I desire.

With this in mind I pulled out my trusty ledger and checked to see just how much I spend each month at the laundromat in hopes that I could justify the purchase.

I spend $15-$20 a month.

A new portable washing machine ranges in price from $100-$300 depending upon size and features. The cheapest model that I like (that would fit in the small space I have) costs $173.00. It would take approximately nine months of laundry savings to pay it off.

That’s not bad, not really. If the machine held together for a few years I might even come out ahead in savings. I could wash what I wanted, when I wanted. Of course, knowing me I’d eventually splurge on a little dryer to match. In roughly 20 months I would have paid for them in laundry savings and convenience.

But can I justify it in light of my goal? If I spent $300 on a washer and a dryer I would gain convenience, but if I invested that money I would be almost a day’s wage closer to freedom, even more as I reinvested the dividends.

In light of this I am forced to ask myself which do I want more? Do I want the convenience of washing my laundry at home, or do I want my freedom? As much as it stinks, I am forced to make this choice: convenience now or freedom later?

And you know what? I want my freedom. As much as I would love the convenience, I want to go back to the days when my time was my own once again. I want to wake up when I want to wake up. I want to immerse myself in my writing or my house cleaning without having to stop in the middle to go to work just to pay the bills. I want to work because I want to work, not because I have to work. If that means that I have to suck it up and drag my tired butt down to the laundromat and deal with a bunch of screaming kids then so be it. If that means I have to wash my laundry in the bathtub and dry it with a box fan then I will do just that.

I will do whatever it takes to achieve financial freedom. The rich buy assets; the poor buy liabilities. I have to remember that. As much as my tired, ornery butt dislikes dealing with my laundry I will suck it up and move on. I will allow the owner of the laundromat to deal with repairs, maintenance, and higher utility bills while I invest every penny I can spare to regain my freedom.

That said, there’s a spoiled little girl deep inside of me stomping her feet in frustration. She wants a washer, dammit! She wants a washer and a dryer and while I’m at it I need to throw in a couple of pink unicorns for her as well because nothing else will do. She’s tired of being poor. She wants to have at least some of the things that normal people have.

But the voice of logic reigns. I won’t be poor forever, not if I apply myself each and every month to my future. If I focus on my writing, rebuild my book royalties and invest the funds I will have a much safer, better future than the one in store for me if I surrender to contemporary pleasures.

In the meantime I’m not in the mood to deal with people today so it’s time to dump another basket of laundry in the bathtub. Mama needs a clean pair of panties.

Is there a desire in your life that you can’t currently justify or afford? How does that make you feel? Please share your stories in the comments below.

 

Two Hours Closer to Freedom

Today was the day for my latest stock purchase. My transfers had arrived at my brokerage and I had a day off to savor the experience of growing a tiny bit closer to freedom. I targeted Blueknight Energy Partners (BKEP), a tiny company in the Energy Sector that I’d been eyeing for months. I’d researched them, noting several things I liked about the company as I waited for them to officially slice their dividend. I’ve learned my lesson about buying stock prior to a dividend cut so I held my hand and waited.

Sure enough, the stock price tanked when the cut was announced. I watched it, waiting for it to hit bottom so that I could calculate the new dividend yield based on the lower price. When I was satisfied with both the price and the yield I began purchasing shares in the company.

This month I managed to buy 54 more shares. At the new dividend rate I will receive 32 cents a share per year which works out to $17.28 in annual dividend income thanks to today’s purchase.

I’m over two hour’s wage closer to my goal.

In total I now own 138 shares of Blueknight. I’ve spent $388.04 on the investment, which includes my brokerage fees. This investment will provide $44.16 a year in dividends.

For the moment I’ve decided that I absolutely adore companies that decide to slash their dividends in order to pare down debt or to expand their businesses. Investors hate companies like this so they flee in droves, allowing cheapskates like myself to sweep in and purchase shares at bargain basement prices.

I have finally found my niche.

What risks are you taking in order to achieve your goals? Please share your stories in the comments below.

 

 

 

 

Rock Bottom

I do believe I have now officially hit rock bottom as far as expenses go. With my daughter as my official roommate, she splits half of the household expenses with me. Here is a breakdown:

Rent: $250 a month
Electric: $50 avg. in summer
Water/Sewage/Trash: $39.88
Internet: $30.59

Total: $370.47

My Half: $185.24

As usual, I am not including the amount we spend on food. We buy in bulk during sales and stock-up periods and then don’t purchase much of anything for quite some time until we use up what we have. On top of that my daughter now takes turns with the grocery expense; I have no idea how much she spends when she pays for groceries on her own.

I’m not going to calculate how much our bills go up in winter at the moment because, let’s face it; they are half of what I was paying previously. Even worse, I know that they will go up once the kid moves out.

I still don’t own a car. I walk to work, the store, and order online when it makes financial and physical sense. I currently use Google Voice for my phone, though my daughter has a cell phone that she pays for herself. If I went with her route I would pay $50 a month for phone service.

I know of no one else on the Internet who lives on less than I do unless they happen to be homeless. I rent a home, I have basic utilities, I never go hungry and I have money left for small extras every month. I am able to live comfortably on the $600 a month I earn in my public job, which now allows me to save every penny of my book royalties to invest in my future.

Let’s face it: there’s only so low you can go on your monthly expenses before you negatively affect your quality of living. I have no desire to go any lower than I already have. That said, I’ve no intention of going on a spending spree and buying everything in sight. I am taking advantage of my current situation to put money away to regain my financial freedom.

Out of curiosity, if you happen to know of another frugality writer who lives on less than I do, please point me in their direction. I’d love to learn their secrets.

Frugality is Not Enough

As I write this my home looks like there was an explosion in a clothing factory. I’ve spent the past few days washing laundry in my bathtub to save a bit more money this month. It is times like this when I dream of owning a washer and a dryer; it would be absolute heaven not to have to drag a heavy cart to the laundromat or wash things out by hand.

After I rinsed out the last round I sat down and priced some simple, small washing machines. I could probably buy one next month but if I did so my investment goals would suffer. Do I really want to delay my financial freedom for this? I asked myself. Every hundred dollars I invest brings me an hours’ wage closer so can’t it wait?

Yes, it can.

I know I could go to the laundromat; I’ve enough money in my pocket to pay for it easily enough but I’ve gotten to the point where my dream has become real to me. I’ve realized that I can really, truly achieve financial freedom through investments. Unfortunately, my income is so low that, in order to achieve my freedom, some sacrifices must be made. I am literally stealing from my present in order to finance my future.

This has caused me to realize that frugality is not enough. When your income drops below a certain amount immense sacrifices have to be made if an emergency arises or you would like to acquire something that would make life better.

I am tired of living at that level of forced sacrifice. It’s time to make some changes.

What do you sacrifice when you want to save money? Please share your stories in the comments below.

My Stock Market Investment Strategy

After a lot of thought and research I finally settled upon a specific set of criteria to use while searching for stocks to invest in. While I do allow the occasional exception, for the most part this is how I locate stocks for purchase.

My Stock Market Black List

These are the reasons I pass up investing in a lot of companies.

  • Index Funds and ETFs. If the market seriously tanks I’ll reverse my decision but for now I avoid them. I believe that they are currently overpriced.
  • Non-dividend-paying stocks. My goal is to build passive income through dividends. With one exception (I’ll discuss this in a later post), I have avoided them.
  • Stocks in the Finance Sector. Finance companies make money through loans or investing in groups of loans bundled up in packages. I have personal issues with the use of credit. I’m also honest enough to admit that I don’t understand derivatives and other financial jiggery-pokery well enough to make investment decisions in this sector so I am avoiding them entirely. If I learn enough to feel safe, this limitation will be lifted as well.

What I Search For In A Stock

  • Companies with a history of paying dividends. A decade or more is preferred.
  • Companies with a large volume of insider buying. If insiders are purchasing on the open market it is usually a sign that the stock price will go up in six months to a year. I don’t include stock options that have been issued in this analysis, though I do investigate further if an insider is selling a large amount of stock.
  • Companies with a significant amount of major investors. I take note if I discover that the big dogs are scooping up shares. They have access to more information than I do so I like to ride on their coattails whenever possible.
  • Companies trading for $5 a share or less. This is a budgetary restriction.
  • Companies with excitement in the voices of their board members. I close my eyes and listen to their voices on their conference calls, noting the emotions. Any company that doesn’t display obvious hope or excitement for the future, who has board members that seem bored or disgruntled, are eliminated from my list. I do keep an eye on them, however. One company I recently invested in went from sounding hopeless to excited about the future as they described how they had managed to pay down millions in debt over the course of a single quarter. I jumped on that stock as soon as I noticed the change.

Since I am investing on an extremely limited budget I focus on companies that have fallen out of favor with investors. I search for companies that have reduced their dividends in order to pay off debt or expand their businesses. Investors hate companies that slash their dividends so this usually causes their stock prices to tank. Since major exchanges will only allow stock prices to go so low before they are de-listed, these companies are motivated to do whatever it takes to keep from slashing dividends further and will do whatever it takes to increase their stock price over time. I love locating companies that are reallocating dividend money to pay off debt. I take that as a positive sign of fiscal responsibility despite the fact that most investors disagree.

My criteria severely limits my stock selection but that’s okay. It’s a start. I’ll be able to lift some of the restrictions as I learn more and work out ways to increase the amount of money I have available to invest. It will just take time.

Do you have any specific criteria for your personal stock market investments? Please share your stories in the comments below.

 

My Financial Freedom Game Plan

Despite the fact that I spent more than I like last month I still managed to have money left over for investment. I took the $67 I received in royalties and added $63 from my paychecks to it in order to scrape up $130 to invest this month. I plan to stick every penny into a single stock I’ve targeted.

This will increase my annual dividend income by over an hour’s wage.

My Game Plan

  • Keep my expenses low to maximize the amount I can invest each month.
  • Invest in stocks that fit the criteria I’ve worked out (I’ll write more on this later).
  • Reinvest any dividends received.
  • Repeat.

In time this method will allow the annual dividends to grow to the point where they match the annual income from my day job. I mark my progress by my original hourly wage of $7.25 an hour. Every hour’s worth of dividends I receive takes me closer to freedom.

So far, factoring in the dividend cut from my miscalculation on the one stock, I’ve managed to build my investments to the point where the dividends are close to a single week’s wage. I only have fifty-one week’s worth of wages to go in order to achieve financial freedom.

Not bad for a beginner.

Do you have a plan to achieve financial freedom? Please share your stories in the comments below.