living expenses en-US Emergency belt-tightening <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/emergency-belt-tightening" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Firetruck" title="Firetruck" class="imagecache imagecache-250w" width="250" height="244" /></a> </div> </div> </div> <p>Typical personal finance advice would have you divide your budget categories into two groups:&nbsp; Your fixed expenses and your discretionary expenses.&nbsp; I generally don't like that distinction much--how is your power bill more fixed than your grocery bill?&nbsp; When you reach the point of emergency economizing, though, it's a useful way to structure your thinking.<br /> <a href="/manage-your-fixed-expenses"><br /> Fixed expenses</a> can be reduced, but those reductions often require long lead times (waiting for a lease to run out, so you can move to a cheaper place) or they require an upfront investment (buying a more energy-efficient refrigerator).&nbsp; Even when you can cut them, it's generally not practical to reduce them to zero, (except for those few people living off-the-grid).</p> <p>So, in a financial emergency, the first place to look is at your discretionary expenses.</p> <h2>Start with zero</h2> <p>If you've got a <a href="/refactor-your-budget-categories">budget</a>, go through the non-fixed expenses and plug in zero for every number.&nbsp; Then, go back and adjust up the ones that are really essential.&nbsp; (<a href="/a-better-way-to-create-a-budget">Starting from zero</a> and just budgeting what your household needs is, by the way, always a good idea.)</p> <p>You've got to have <strong>food</strong>.&nbsp; In an emergency, though, you can cut your food bill by a lot more than you probably think.&nbsp; (And, as a bonus, <a href="/healthy-frugal-eating">cheap eating</a> is probably healthier than what you were eating before, even if it may have to be less organic and less local.)</p> <p>You've got to stay <strong>healthy</strong>.&nbsp; If you've got medical insurance, keep it in effect if you possibly can.&nbsp; If you're being treated for a medical condition, call your doctor's office and inquire if the treatment you're getting is the lowest-cost treatment that's available.&nbsp; (The phone conversation--typically with a nurse or physician's assistant--will probably be free.)&nbsp; In a financial emergency, it probably makes sense to delay even things that are important, if they're not urgent--eye and dental exams, routine check-ups, etc.</p> <p>If you've still got a job, you probably need <strong>transportation</strong>.&nbsp; In an emergency, though, you should zero out any transportation expense that isn't earning you money.&nbsp; Every trip should be either to work or from work, with stops for errands along the way and not trips of their own.&nbsp; Reducing the number of cars your household supports can save a huge amount of money--<a href="/think-you-can-afford-more-house-in-the-exurbs-think-again">each car costs thousands of dollars a year</a> in fuel, insurance, and financing expenses.&nbsp; Consider things like carpooling, public transport, walking, bicycling, and so on.</p> <p><strong>Education</strong> is tricky.&nbsp; If you're not in school, zeroing out your education budget doesn't save you much money.&nbsp; If you are in some sort of degree program, disrupting it might reduce your future earnings by vastly more than you're saving--and yet, that might be the right choice in an emergency.&nbsp; On the other hand, if financial aid is paying most of your education expenses, or if your health insurance depends on your being a full-time student, your education expense may be too good a bargain to pass up if you can possibly afford it.</p> <p><strong>Debt payments</strong> generally can't be escaped, except by filing bankruptcy, which is obviously a last resort.&nbsp; There may be a few exceptions--student loans can be deferred under certain circumstances, there are moves afoot to develop programs for restructuring mortgages.&nbsp; For debts that are tied to some specific thing (such as a car), consider selling the thing and putting the money toward the loan.&nbsp; Doing that will generally leave you out of pocket, but getting the monthly payment off your back can still leave you ahead--the sort of hard choice you sometimes have to make in an emergency.</p> <p>That's about it.&nbsp; Every other discretionary expense should go to zero:&nbsp; recreation, eating out, vacation, travel, clothes, shoes, etc.</p> <h2>Defer what you can't avoid</h2> <p>Many expenses that can't be avoided can be deferred in an emergency.&nbsp; Generally, don't replace (or pay to repair) things that break or wear out.&nbsp; For example, instead of getting a broken dryer fixed, <a href="/make-your-clothes-last-longer-without-spending-big">dry your clothes on a drying rack</a> until the emergency is over.&nbsp; (As a bonus, the clothes will last longer.)&nbsp; You probably can't get away without fixing your furnace or hot water heater, but you can get by without lots of things that you're used to using every day--microwave, toaster, TV, stereo, iPod, etc.&nbsp; Make them last as long as you can, but when they go, do without until the emergency is over.</p> <p>Sometimes proper maintenance will save a lot of money in the long run if done promptly--replacing a roof before there's water damage--but in an emergency, it's often necessary to accept that you won't be able to make the choice that's cheapest in the long run, because you're short of cash in the short run.&nbsp; That's the nature of emergencies--you do what has to be done, and then do what you can to mitigate the harm after the emergency is over.</p> <h2>Ask for necessities</h2> <p>If you have relatives who give you gifts, ask that they give you necessities instead of luxuries.&nbsp; Nobody wants to get socks and underwear for Christmas--except people with holes in their socks and worn-out elastic in their underwear.</p> <h2>Use your time</h2> <p>If your financial emergency is due to the loss of a job, you've now got time that you didn't used to have.&nbsp; Some of it--most of it--should probably go toward finding a new job.&nbsp; But there's still time that can be used in place of spending money.&nbsp; Cook cheap meals from scratch (much cheaper than prepared meals).&nbsp; Do stuff around the house that you might otherwise have hired someone else to do.&nbsp; See if you can't do stuff for neighbors--helping in their garden, showing them how to create a website, and tutoring their kids can keep you on a more even footing when they're sharing produce from their garden, giving you rides into town, and letting you use their tools.&nbsp; Make things (sweaters &amp; scarves, jellies &amp; jams, beer &amp; wine, cakes &amp; pies) that you can give as gifts or barter for stuff you need but can't make.</p> <h2>Look ahead</h2> <p>Don't dismiss the fixed expenses entirely.&nbsp; For one thing, even small measures like adjusting your thermostat and turning off lights you're not using will definitely save dollars, even though they won't reduce your utility bills to zero.&nbsp; For another, even &quot;fixed&quot; expenses are only fixed in the short term.&nbsp; Depending on how long your emergency lasts, some (or even many) of your fixed expenses will become unfixed.&nbsp; Know when your lease is up, when your cell phone contract is up, when the term ends for your kid's private school.&nbsp; Look especially at annual fees that will get charged automatically if you don't cancel something.&nbsp; Figure out <strong>now</strong> when you'll have to put the wheels in motion in order to switch to a lower-cost option at the next opportunity. &nbsp;</p> <p>If you're not in debt, it's pretty amazing how low you can push your expenses on an emergency basis, simply by zeroing out all your discretionary spending and deferring other spending (including essential spending) until the emergency ends.&nbsp; As in so many other areas of life, it's really debt that's the killer.&nbsp; In fact, I'd go so far as to suggest that, in the current economic situation, having any significant debt means that you're already in a financial emergency--even if you've got a good job and a solid <a href="/figuring-the-size-of-your-emergency-fund">emergency fund</a>.&nbsp; I recommend some preemptive belt-tightening and getting that debt paid off.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Philip Brewer</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">Raise your standard of living by focusing your spending</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">15 Ways to Stay on Budget — Even With Your Spendy Friends</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">It takes a frugal spouse to make a frugal home</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">What&#039;s the Right Way to Save?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">Beware of These 5 Signs You&#039;re Becoming Less Frugal</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living budget budgeting cutting expenses emergency financial emergency fixed expenses frugality living expenses reducing expenses Fri, 07 Nov 2008 23:33:47 +0000 Philip Brewer 2573 at Plumas County: Hidden (Cheaper) California <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/plumas-county-hidden-cheaper-california" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="" alt="Move to Plumas County" title="Move to Plumas County" class="imagecache imagecache-250w" width="250" height="250" /></a> </div> </div> </div> <p>I’m going to let you in on my biggest secret to living large on a tiny budget. Five years ago last month my husband and I –lifelong coastal Californians made the big literal move to a part of California we never heard of –the northeastern corner and Plumas County. You know, that place on the map of the state that’s square up in the corner? Nearly three hours north of Lake Tahoe? Way, way, way up there? Yup, that’s still California.</p> <p>We were prompted by many things: the impending birth of our first child, the lack of space in our tiny studio apartment, me wanting to stay home with our kids, and a need for slightly less competition in our fields so we could focus and concentrate on making the family thing work, rather than killing ourselves trying to be corporate. While friends and family members were snagging up half a million dollar fixer uppers without yards in L.A., we found a great house under 200K on an acre of land with a view of a valley spotted with cows and teaming with migratory birds and awe inspiring mountains.</p> <p>While rural living is probably not for everyone, there are certain frugal and lifestyle advantages to it. In 2002, while pregnant with my son I realized that none of the things I moved to San Francisco for I was still doing. I wasn’t writing, I wasn’t going out on the town. I couldn’t afford to do anything but pay rent, basically. My husband was feeling a similar pinch in Los Angeles and though we’d been lobbying for each other to move to the other’s city, my son’s birth was around the corner and we still hadn’t come to a decision on where to live as a family. </p> <p>Enter my mothers. What about trying the mountains? My moms had moved to Plumas the year before and bought a nice house that sat in a quiet, upscale neighborhood with a meadow on one side and national forest on the other for under 150K. A whole house rented for $500 a month, there was (and still is) a shortage of professionals for a variety of necessary jobs, and our kids could start life breathing fresh air. We were broke, had nothing to lose, packed the U-haul and headed north. I mean way north. A brisk 11-hour drive up the I-5 from Los Angeles—and that’s if you are starting from Santa Monica.</p> <p>First the positives in the pocketbook. Plumas County—one of those tiny little northern California counties started in the Gold Rush—needs you. The industries of yester year: mining, logging, milling, are long since gone and there are a number of towns that were built around these industries still standing and looking for revitalization. Most of the areas original inhabitants leave the area upon graduation for Chico, Reno, the military. Rentals are hard to come by these days but they still exist—and where else in the state could you rent a whole house for under $1000 without it being a ghetto crack head neighborhood? This is probably the only place in the state where a mortgage won’t be two-thirds of your budget. Utilities other than oil are about the same as anywhere else in the state and lots of properties are zoned commercial as well as residential so if you are wanting to start that business venture…</p> <p>If you are a recreational shopper and you need your hands spanked, this is also a great place to live. There&#39;s not that many places to shop and unless hardware and general stores are a big turn on for you, you&#39;ll save money just by virtue of there being much less to spend it on (though I&#39;ve dropped plenty at an antique store in Greenville, Bookstore in Chester, the Co-op in Quincy). </p> <p>But the biggest positives are what I call the social and lifestyle improvements. Picture no waiting. For anything. Ever. I still recall with horror not having health insurance and having to go to an ER in Los Angeles and having to wait a month with insurance to get seen in San Francisco. Here it’s ‘can you make it in this afternoon?’ Have you wanted to be actively involved on a committee to oversee something in your town but couldn’t ever find a vacancy on a board? We need you. And not just for volunteer positions. Virtually all federal, state, and county jobs will be opening up in the next five years as most if not all are now held by baby boomers reaching retirement. Ever wonder what it would be like to leave your house and not have to factor in traffic as part of how long it will take to get somewhere or how long it will take to find parking? Ever wonder about not locking your doors?</p> <p>Add in the kid factor and there is a considerable advantage: no traffic for them to accidentally run into, everyone in town will know that your baby belongs to you—parents here still run into the post office while baby is asleep 10 feet away in the car. Sending your kids to a good private school won’t cost an arm and a leg. And the average daycare cost per child is the county is about $3.00 an hour. Add to this being able to raise them around horses, wild turkeys, and having a national forest as their backyard and suddenly being able to walk three blocks to the city park that’s fenced in on all sides like prison and urban childrearing starts to sound silly.</p> <p>But you are a life long urbanite---not unlike my husband and I and this is probably sounding way too cute and quaint. Not so. The biggest seller for me when I moved up here was the chance to live somewhere slightly economically depressed while not having my income tied to such a local economy. Enter the age of the telecommuter. Thanks to a zippy fast DSL connection, I’m doing the same work I was in the city and still getting paid my city wage. And with Internet Radio and iTunes I get to listen to KCRW and NPR in the afternoon (complete with traffic reports about people stuck on the 405) instead of some AM honky tonk station I would have gotten a decade ago out of Reno, NV. My husband, an IT guy without a degree was faced with the dotcom crash on the coast but here he’s never out of work and usually has a backlog. And while it’s true that this corner of California votes like it’s Alabama at times, that’s changing too. Morally bankrupt Rep. Doolittle (®) who never faced serious challenges to his seat is now holding on to it for dear life and is expected to lose the next election. (Yay!)</p> <p>And you won’t be alone in your move here. One out of three families I encounter here aren’t from here. They are usually ex-Bay Area residents with at least one telecommuter in the family with a smattering of southern Californians. My neighbor is from Burbank. Another neighbor is from Tustin.</p> <p>Still, I can hear the skeptic in you—not unlike the skeptic in me—screaming, yes but what about culture?! Team sports? The stuff of Little Leagues and Friday nights of our suburban youth? To this I add we have two thriving art organizations and apparently our girls’ basketball team is kicking ass all over the northern part of the state¬––Go Greenville! There are the same mommy and me-ish things, same crappy California public education, a local community college, etc. But there’s lots of cool hidden stuff too. I work out with a couple of women in a cool private gym I never knew existed. Mountain Maidu culture (the original inhabitants of this area are the Maidu) still prevails and helps distinguish the area and give it its diversity. There’s lots of camping and fishing stuff up here that apparently people come from all over to experience.</p> <p>My dealings with getting the kids some culture was making a commitment to bring them to San Francisco on a quarterly basis and Los Angeles twice a year. We pack in those short weeks with museums, movies, family, and the big one---Asian cuisines. And since we save so much by not eating out (not that many restaurants up here worth eating at), we finally get to splurge on food in the big city—something we couldn’t afford to do anymore when we lived there.</p> <p>Now as we look back and also hear the struggles of other parents of preschoolers in urban areas, we are still happy with our decision. Though there have been some hidden costs we did not anticipate well enough. The biggest one is the horrible combination of the high price of oil combined with a long winter. In 2006—a short winter—we spent $500 for the year on oil to heat the house and water heater. In 2007 winter started sooner, lasted longer and the price went up—we’ll be lucky if we get out of this winter for under $3,000. But this is kind of a freaky year for that sort of thing so we try not to take it personal. I only fill my car up once a month since I telecommute and my husband is in a carpool in a Prius.</p> <p>Still the benefits are overwhelming for the telecommuting worker or family. You get a home office that overlooks snow-capped mountains and air so clean that visitors from the city feel like their lungs are collapsing from the freshness. Your kids get to experience seasons and self-sufficiency of gardening and making things that go with the seasons, and they learn first hand what farm and wild animals look like instead of learning these things from picture books. At Christmas time you get to chop down your own tree with a $10 permit. And my goodness, if you are having children, don’t you want to afford to spend more time and less money being with them?</p> <p>So, show of hands. Who&#39;s up for the move? </p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="">Maggie Wells</a> of <a href="">Wise Bread</a>, an award-winning personal finance and <a href="">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="">Live Where It&#039;s Cheap</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">5 American Cities Where You Can Retire On Just Social Security</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="">5 Money Moves That Will Ruin Your Mortgage Application</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="">8 Questions Real Estate Agents Hear Most Often</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="">What You Need to Know About Homeowners&#039; Associations</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Real Estate and Housing cheaper housing costs childcare costs living expenses Plumas county rural living telecommuting Sun, 02 Mar 2008 11:44:51 +0000 Maggie Wells 1873 at