Rising food and gas prices have given birth to the term stay-cation, meaning staying home for vacation.  What did you do this year?  As for me, I have been doing stay-cations for years and I love it.  So what do we do on our stay at home time, more importantly what do we not do? We do not pack, unpack, fight traffic, wait in security lines, spend on overpriced snacks, get annoyed, exhausted, or come home to a mountain of laundry.  This is what I did do.  I enjoyed a cup of coffee and an outdoor shower every morning.  In the evenings my DH and I sipped margaritas and watched the stars.  We enjoyed a fabulous prime rib dinner with our neighbors, which we all prepared together on an open wood-pit.  Talk about a five star dining experience.  The possibilities really are endless for enjoying your home.  You work hard to pay for a nice home, so why do you want to get away from it?  I have never understood this.

Take some time with your family and talk about all the fun and relaxing things you can do right in your own neighborhood.  Put together a movie night basket with popcorn and all the goodies.  Make yourself a spa basket packed full of pampering items such as candles, lotions, bubbles, wine or tea and a fancy glass or cup to drink out of.  Open your mind and your imagination and you can go anywhere in the entire “universe” right from the comfort of your own home.  So instead of feeling deprived because you feel that you cannot afford to go on vacation, treat yourself to the ultimate stay-cation and you and your finances will feel better than ever!

To anyone out there who is on the same quest as I am, check out this fantastic blog!

www.thesimpledollar.com

As I run across other blogs and articles of interest, I will be sharing them with you here.

One day out of curiosity and possibly a little boredom, I took the time to calculate what my debt costs me each day.  Each day, every day, seven days a week…..

I know most people that know me would probably describe me as more than a little “obsessive-compulsive”, but that is another post for another day.  So anyway, if you take the time to make those calculations it may just be a “wow, I could of had a V-8 moment”.  I will show you an example below.  Only a few simple calculations are needed and if you really love your spreadsheets and have a lot of bills you can organize a handy worksheet for yourself.

Multiply the outstanding balance by the annual percentage rate (APR) and divide this number by 365 (days).  That is the cost of your debt on a daily basis.

Credit Card          Balance $5000.00     APR 15%  ($5000.00 x 15%) = $750.00 /365 = $2.05 per day interest

Auto Loan                         $15,000.00 x 7% =$1050.00/365 = $2.88

Mortgage                          $90,000.00 x 6.5% =$5850.00/365 = $16.03

($2.05 + $2.88 + 16.03 = $20.96 in interest charges per day) Ah, the beauty of compound interest.

This exercise should give you a new perspective on where your money is going.  You have committed your future earnings to instant gratification.  A lot of arguments I hear is that mortgage debt is okay, everyone has a mortgage, who really pays for a house with cash and besides look at the great tax deduction you get. That is simply not true.  Debt is debt by any other name.  And yes there are people who pay cash or choose to rent rather than own.  As for the tax deduction, that is just a feeble justification, because you are spending $1.00 to get a tax deduction of 28 cents. And unless you have a large, new mortgage, the standard deduction is usually higher. So if you do not include your mortgage in this exercise then you are only deluding yourself.

Knowledge is power, so arm yourself with the truth about what your debt really costs you and you will make wiser, more informed decisions.  I make it a point to question everything.  I pay attention to how the credit card companies and banks calculate their interest.  Do not fall into the “victim” routine by not educating yourself.  Anytime during a conversation I hear someone say, “Well, they said…….

     the dow is down because…………………

     chargrilled food causes cancer………………………

     the baby boomers are living longer, that is why health care costs are so high…………………

and on and on and on.  I do not just accept this media hype as fact.  Question your belief system and stop running on automatic (that is a nice way to say, get your head out of the sand)  and stop being at the mercy of the next wave of nonsense that sets you adrift.  Take charge of your debt and take charge of your life.  You can do this by being informed, asking questions, there is no such thing as a dumb question, and challenge any and all beliefs you may have.  Happy calculating.

Right now, step away from the computer and get $1.00 out of your wallet.  Now, wad it up and throw it in the garbage.  How many people do you think did this?  Zero!  How many people do you think said, “Yea, right !!!.  How many people are still reading? Everyone, including you, because you need to know what the gimmick is.  Well, there is no gimmick.  Now go and spend an hour watching some mindless sitcom on the dish, or surfing the web for nonsense. (This blog excluded, of course)

So, what am I getting at?  The majority of people would never dream of literally throwing a dollar in the trash, but they think nothing of wasting an hour of their life!  The time you spend on meaningless tasks can never be recovered.  You cannot re-cycle wasted time.  You can, however, probably earn more dollars for the ones you frittered away.  How much money do you make an hour?  Let’s just say $20.00.  The new pair of jeans you are eyeing up run about $80.00.  You just spent four hours of your life on a faded, ripped, worn, although be-dazzled pair of pants.  Actually much more if you want to nit-pick with the taxes and such.

I can still make my point without all the math.  Re-consider how you spend your hours, and you may very well re-consider how you spend your earnings.

S – Save First

A – Automatic Debt Re-payment plan

G – Get off the treadmill of consumerism

E – Enjoy your life right now, this minute.

Above are my four basic steps to achieve “simple wealth”.  You have to start somewhere, sometime, so it might as well be now.  Step #1. Save first.  This means each and every week you are to pay yourself first.  This is as important as any other financial commitment you have.  You need to keep a portion of the money you earn for yourself.  I don’t care if you start with $5.00 a week, the important part is to start and to make this a habit.  For now, it is not important where you put this money, as long as you know it is savings and not to be touched. With todays wonderful world of online banking and direct deposit you can make this a simple priority.  What you don’t see, you won’t miss. I use ING Direct, which for no fees and no minimums, automatically takes money from my checking account and deposits it to my savings account.  I do not have to think about this or worry about it, and it is kinda ”cool” to see your savings grow.  I guarentee you will get hooked on this before you know it.  Step # 2. Automatic debt re-payment.   Okay, now that your savings are on auto-pilot, do the same with your debts.  Pick one bill that you have and focus your efforts on paying it off.  You can have automatic withdrawals, or you can just decide to add $5 -10 or 20 extra dollars on it each month.  Choose a credit card with the highest interest rate, or to keep you motivated, concentrate on one with the smallest balance so you see quicker results.  When this bill is paid off, add the minimum payment plus your extra 5, 10, or 20 to the next bill in line.  Do this all the way up to and including your mortgage.  You will be amazed at the results of this basic, simple, automatic plan to become debt-free.  Plain and Simple, it “WORKS”.  Step #3 – Get off the treadmill of consumerism.  Stop spending money you have not earned yet, to buy things you do not need, to impress people you do not like.  Which came first, the chicken or the egg?  Which lasts longer, the new car smell or the payment book?  You know the answer to the latter.  Step #4 – Enjoy your life right now.  Stop wishing for things to be better in the future, a better job, a nicer house, etc. (See the post titled “Gratitude”) Find ways to enjoy today.  You have set up a plan of action for savings and to pay down your debts.  Be proud of yourself, and stop focusing on anything negative. Stick with this very basic, but effective plan, and you will see amazing changes in your attitude, the attitude of people around you, and your entire life. Aren’t you and your family worth it?  Of course you are.

Are you grateful for what you already have in life?  Do you wake up each morning and feel happy and content with where you are at in this stage of your life.  Most people I talk to will answer with a “No”. Herein is where a lot of your problems lie.  If you cannot feel gratitude for what you currently have, (which you are responsible for creating by the way-a whole other subject) how can you be grateful for what you will recieve in the future?  You really need to do some soul-searching on this one. Learn to appreciate everything that you currently possess and you will be amazed at the difference in your life.  Stop wishing for everything to be better in the future, when today is what really matters.  If you cannot find pleasure in your daily life right now, you are losing a precious part of your life.

Think back to different times when you said to yourself, “Oh when I get that job, I’ll be so happy.  When I get that house I will be so happy.  When I get that raise, etc. and on and on and on.  Get over it!!  Be grateful for everything you have right now, today, and get on with enjoying your life.  Every morning when you get out of bed, simply put one foot on the floor and say out loud “thank”, put the other foot on the floor and say “you”.  Try this, make it a habit, and I promise that great things will start to happen in your life.

When was the last time you looked at the clouds?  Or even thought about clouds?  Taking time to notice the clouds is what “simple wealth” is all about.  It is taking time to relax and let your mind wander, forget about all the obligations of our ridiculous lives, and be in a moment.  And, it’s free!

Do you frequent dollar stores and/or warehouse clubs such as Sam’s?  These types of shopping venues have their place, but unless you are an extremely disciplined, stick to the list, buy only what you need kind of person, these stores spell disaster to your finances.  The dollar store mind set is, “well it’s only a dollar” , so you buy things that you do not need just because its cheap.  Many people go there during the holiday season for stocking stuffers and spend twenty dollars on junk that only clutters up someone’s life.  Stop this madness.  Your hard-earned money is being wasted and you don’t get it. 

Same deal for warehouse clubs.  You over-buy in bulk, products that you do not need or cannot use up before the expiration date.  You also wander the aisles and buy things not on your list because you have convinced yourself that it is a fantastic deal.  Stop lying to yourself.  You are giving up your freedom to this kind of spending.  Stop and analyze your shopping habits before it’s too late.

s.t.u.f.f.  stops you from fun.

s.t.u.f.f. stifles you from freedom.

Sit down and take some time to calculate how much of your precious time is spent on stuff.  You spend time to research buying it.  You spend time shopping for it.  You spend time maintaining it.  You spend time storing it.  Are you starting to see a theme here?  Do you have any time left to enjoy your stuff, your family, your life?  Now all you have is a bunch of “stuff” consuming your life, and no money to enjoy your life.  Get off the buying treadmill and start paying attention to what really matters in your life.  Family, friends, pets.  Isn’t that what you would save first in the event of a fire or flood?  Start making small changes in your life today, cut back on your consumerism, and really think about what matters most.

When you hear the term simple wealth, you may think of the horror stories that you hear from “tightwads” that rinse and re-use their dental floss. EWE-GROSS!  Simple wealth is not about that at all.  Yes, being conservative and sensible about your finances is a part of it, living in misery is not. I don’t call rinsing dental floss a very enjoyable and wealthy (let alone healthy) way to live.  Simple wealth is also not a get rich quick idea.  Other than a lottery win or the publishers clearing house van in your driveway, there really is no such thing.  Simple wealth is more about a healthy balance in all areas of your life. No unpleasant frugalness and no excess consumerism.  If the idea of living a lifestyle of more freedom of your time and assets appeals to you, join us for the exciting journey called “Simple Wealth”.