Less is More

Woman holding clothes on a hangerIn December, the calendar may say it is winter, but I am never in the mood to do wintery things (decorate, bake and eat comfort foods, etc.) until there is snow on the ground. The same is true for Spring which officially began March 21…almost 2 months ago. The last of our snow recently left and the grass finally turned green and I am now just finding myself in the mood to do spring cleaning…which includes digging out summer clothes and putting away the sweaters.

As I put winter clothes away, I discovered that most of the items in my closet are worn year round…like a short-sleeved t-shirt, jeans, a black dress, a white long-sleeved blouse, a black blazer and dress slacks.

The CAPSULE wardrobe, a term coined in the 70’s, refers to a collection of a few essential, quality items of clothing that never go out of fashion, do not wear out, and can be paired with seasonal pieces. The key is to make sure your essentials are well-made and fit properly…basics that you can wear daily and from which you can create different looks.

If done correctly, a capsule wardrobe should reduce the number of items in your closet — and thus, reduce the amount of time you spend organizing and cleaning out your closet and donating unused items.

Because it is now okay to wear white after Labor Day, to mix prints, and to wear navy and black together, you will find the items in your capsule can remain in your closet all year, eliminating the time-consuming task of removing, organizing and properly storing out-of-season items.  Reducing the number of pieces in your closet also makes it possible to keep all your clothes in your closet, year round.

If these aren’t reasons enough to create a capsule wardrobe, consider the environmental ramifications of cheap, “disposable” clothing. Poor quality clothes lose shape and look tired after being worn only a dozen times. According to a 2017 report we are wearing pieces fewer times before disposing of them. The study says that more than half of all lesser-quality clothes are disposed of in under a year. It also noted that less than one percent of the materials used are recycled; as a result, “one garbage truck full of textiles is land-filled or burned every second.”

Buying high-quality, well-made pieces of clothing that will last years instead of months is not only far better for the environment, but it’s also better for your pocketbook in the long term. And, the capsule wardrobe has great potential to reduce the amount of time spent organizing, storing and cleaning out your closets.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Care Co-op For Aging Parent

Financing Aging

A couple of years ago, I shared about my experiences as an adult child with an aging parent who came to live with me. One of the first things I did when I received word that dad would be coming was to look for support or companionship for him. Early on, he was able to be left home alone during the day (as my husband and I both worked) but I didn’t want his life in my home to be a lonely existence. My neighbor was on a similar journey; her father had also come to live with her. Dad and the neighbor became friends and most days, would walk downtown together for coffee. I appreciated the fact that the neighbor could make sure Dad found his way home. How lucky I was to know of my neighbor’s similar situation and their willingness to work together in providing quality of life for our parents.

My daughter, who lives in Boise, is very tech savvy. I enjoy hearing about her use of technology to solve problems or streamline tasks. To coordinate volunteers or donations of food for school celebrations, they use an online app called SignUpGenius.com. Accounts are free and reminders can be sent from the online app. Her close-knit group of friends uses another online app called MealTrain.com. When someone from their group has a baby, surgery, death in the family or other cause for support, the delivery of meals is organized utilizing this app.

While each of these apps was designed for a specific task, creative minds have found other ways to use them.  For example, one of my daughter’s friends had a parent going through chemo. The Mealtrain.com app was used to help organize rides and moral support (company during treatments).

Another app that came to my attention was called Komae.com. This app is used for community co-ops…babysitting coops or carpooling or…use your imagination. Membership in these co-ops begins with an application process to ensure new members are a good fit for the group and to clearly communicate the expectations of the group. In the case of childcare, the app records “deposits” of time you provide caring for the children of others, and makes “withdrawals” of time when your children are cared for by others. This ensures there is a balance of give and take.

What instantly came to mind for me was the growing number of adult-children-with-aging-parents in Iowa. What if adult children caring for aging parents formed a co-op where adult care could be provided for the members by the members in the co-op. Considering the huge expense associated with care for the aging, and the fact that there is a shortage of service providers, especially in rural parts of the state, this app would be very useful. Near the end of Dad’s stay with me, this app would have come in handy as I struggled finding care providers that were willing to come to my house and sit with dad. What solutions have you found addressing the issues of caring for an aging parent?

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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E-cigarettes

It’s strange to hear marketing promoting the use of e-cigarettes. Legislation has restricted  campaigns promoting tobacco products for many years.  A frequently-used e-cig marketing approach targets smokers who feel their habit has forced them into self-imposed  isolation to hide their habit or protect others from second hand exposure.  Web sites declare the product is for individuals who already smoke, offering them a safer alternative.

Nicotine is an addictive substance and e-cigarette ads or commercials clearly state its presence. E-cigarette use often leads to use of tobacco products. Among individuals who smoke, nine out of ten started as teens.

A 2016 report by the Surgeon Generals Office pointed to data indicating a rapid increase in the use of e-cigarettes (also known as “vaping”) by teens and young adults.  In research designed to measure whether youth understand the risks, the findings clearly indicate that teens and young adults view e-cigarettes as safe. Flavor options are attractive, and natural curiosity are reasons given to try e-cigarettes.

Tobacco product use in any form, including e-cigarettes, is unsafe for adolescents. Lifelong addiction is costly, not only in health terms, but also in financial terms. E-cigarette pods, equivalent to a pack of cigarettes, cost $4-$5. The device to use the pods is around $35.  When a substance is addictive, as e-cigarettes are, users will typically increase consumption over time. This is a bonus for the companies selling the products. Even with low use (2 pods a week), the habit will cost $500 a year.

Running a calculation of what $500 a year could become if it was saved provides an argument against vaping.  A modest $50 deposited monthly into an account earning 3% a year with annual compounding (I’m being intentionally conservative here…) from the age of 16 until age 65 would result in  cash assets of $65,000.  Unfortunately it’s hard to make this example exotic enough to hook individuals on saving instead of vaping.

 

 

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Defining Unexpected Expenses

Life is full of surprises and events that sometimes shatter our daily routines and our finances. 

Conventional wisdom says that the money in an emergency fund would be earmarked for “unexpected expenses.”  That is true.  However, let’s think about what expenses actually are (and are not) unexpected.

Expenses that are not unexpected: monthly and annual bills

  • Regular annual or semi-annual expenses are not unexpected: these include property taxes, car insurance premiums,  annual life insurance premium, eye exams and other once-a year expenses.  You can plan and prepare for these expenses by setting aside a fixed amount each month.  Since you know these expenses are coming, they cannot truly be considered emergencies.
  • Occasional maintenance or repairs, such as a leaky roof or a dishwasher breakdown are not fully unexpected. either.  The same is true for other ordinary home repair, care repair, and moderate medical bills.  You may not know exactly what expenses will come up, but if you have a body, a car or a home, you need to expect to spend money on maintaining them. Setting aside money each month will build a fund for home repair and maintenance, car repairs, and  ordinary medical bills.

What expenses are truly unexpected?

An emergency fund is intended for expenses that fall outside the categories of “annual bills” or ordinary maintenance of home, car, and health.  Unexpected expenses are events like losing your job or being struck by a massive, out-of-the-norm health-related bill beyond what insurance will cover.  Emergency funds are designed for expenses that are highly unusual, not for common occurrences.

Bottom Line: It is possible that the savings account you were labeling as an “Emergency Fund” is actually your “Yearly Expense and Maintenance Fund.” That’s a good fund to have. But perhaps you also need an emergency fund.

 

 

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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A Book to Read

How’s your New Year’s resolution going?  Maybe I can help. Add a short term goal to read one book about money or personal management by the end of January and use the content to improve your original plan to improve your well being. Here are few I recommend:

The Millionaire Next Door identifies seven common traits that show up again and again among those who have accumulated wealth. If your resolution was to slow down the purchase of stuff, adopt a minimalist approach to life, or start recycling/reusing what you have, the book could give additional reasons to stick with it.  Authors are  Thomas Stanley, PhD and William Danko, PhD

 

 

Loaded by Sarah Newcomb, PhD, introduces you to behavioral finance. The book explains how our experiences with money have a psychological basis and can often run counter to what we’d like to accomplish. She explains that money is just a tool and how we use it is entirely a matter of personal choice.  The book offers advice about overcoming negative behaviors, so if you are concerned that you might fail to follow through with plans to change your use of money in 2019, this book offers tips that could help you change your goal and make it more achievable.

 

Charles Duhigg is a business reporter. The Power of Habit describes why habits exist and how they can be changed. Your resolution might be failing because you haven’t really examined why you are repeating the same behavior loop over and over again. Taking advantage of his tips to find your weak links and embrace change could lead to success.

 

Finally if you use this suggestion and read one book before the end of January, don’t forget to celebrate.   One short term resolution accomplished!!!

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Auto-Pilot vs Mindlessness

Two cardboard boxes delivered to a residential home wait outside a black metal front door on a brick patio, Midwest, USA

We have frequently talked about strategies for making good financial habits. One strategies is to “make it automatic”. For example, if I want to save 10% of my monthly paycheck, I would have a greater chance of making it happen if I were to set it up with my employer. Each month, a portion of my paycheck could be auto-deposited in a savings account while the remainder of my check would go directly into my checking account. Basically, I made the decision once and it happens monthly without me having to remember to transfer money from my checking account to my savings account.

For the last couple of years, I have done a lot of on-line purchasing, including a large portion of my gifts and a few household consumables. Within the online shopping platform, I have always compared prices, companies, and options. I would also check Consumer Reports to compare brands and quality reviews. I considered myself to be a good shopper. When this online platform first arrived on the scene, I was diligent in comparing prices with our local stores to make sure I am getting the best deal.  In recent months, though, I haven’t done much comparison shopping;  …I just assumed…which I am sure is what online “stores” were counting on.  They hook consumers with the price, convenience & variety, and then later, when the prices rise, we either don’t notice or don’t care because we are hooked on the convenience.

This past week, a new study revealed that when compared to local store chains, this online shopping platform (the one I had gotten used to using) was not always a less expensive way to shop. This is NOT what I wanted to hear! I LOVE the convenience and the speed at which things arrive at my home. I WANT (but I don’t need) more brands to pick from.

So I have a mixed scorecard as an effective consumer. On the plus side, I have been effective in putting my savings account deposits on auto-pilot; but on the minus side, my desire to save money while shopping has slipped as it became a bit mindless. Now the I have to decide if the convenience is worth a slightly higher price.

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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Five Minutes to Make Your Home Healthier

With the upcoming time change (from Daylight Savings back to Standard Time), take a few minutes this week to make your home healthier for your family.  Here are six tips:

  1. Test your smoke alarm and replace the battery. Using smoke alarms in your home cuts your risk of dying in a fire in half.
  2. Wash your hands with warm, soapy water for at least 20 seconds – enough time to sing “Happy Birthday” twice. Each year about 48 million Americans get sick from eating contaminated or improperly prepared foods.
  3. Make your home smoke free. Never let anyone smoke anywhere in or near your home. Parents are responsible for 90% of their children’s exposure to smoke.
  4. Program the number for poison control into your cell phone: 1-800-222-1222.  If you use a land line, post the number near the phone.  Each day in the United States over 300 children (ages 0-19) are in emergency rooms for poisonings.
  5. Do a 3-minute “clean sweep” Pick one small area of your home- like your junk drawer or stairs and take 3 minutes to sort the items. Get rid of what you do not need. Clutter can collect dust, mold, and other allergens and gives pests a place to hide.  If clutter is on the floor or stairs, it can cause you to trip and fall.
  6. Check your locks. Make sure locks function correctly and that a child can operate them in an emergency.

 

Susan Taylor

Susan Taylor

Resources are important whether you are looking to rent your first apartment, pay your bills, buy your first home or send your child to college. There are many ways to save money to reach your goals, and hopefully ISU Money Tip$ will be one of them. I enjoy traveling, needlework and am a novice gardener.

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Cost-Cutting vs. Saving: Not the same thing!

Most of us have dozens of ways we “save money:”

  • We “save” by using coupons and shopping sales.
  • We “save” by saying NO to ourselves and others when temptation arises.
  • We “save” by cooking at home instead of eating out.

Are you wondering why I put the word “save” in quotation marks in all those examples? Here’s why: even if we did all those things every single week, there is no certainty that our savings account balance will increase.

All those steps are ways we reduce costs, but do they automatically lead to deposits to savings accounts? No. Take me, for example: I have never once taken the money I did not spend at a restaurant or grocery store and deposited it into a savings account as a direct result of the decision not to spend. Instead, the money I “saved” would usually just get spent on something else!

A decision not to spend is a key step in saving. But by itself, that decision is not enough; it only turns into saving when we actually move the money into a savings account (or to a dedicated savings location such as a piggy bank).  When I come to a coffee shop or an ice cream store and I go on by without stopping because I want to save that money, I should probably just stop right there and transfer money from one account to another. Or I could carry a “saving” envelope in my purse and move cash into the envelope every time I resist temptation. That would be the way to make sure the actual saving occurred.

Saving is a two-step process. It involves deciding not to spend and  putting money in a designated location. Either step can come first. I can decide not to buy something and then save the money; OR I can put the money away first and then (out of necessity) spend less than I otherwise would have spent.
Note: many of us do better if we put the money in savings first!.When there’s no money in your billfold or your account, it’s easier to resist temptation to spend! 

Do you sometimes wonder why you aren’t getting ahead, despite your efforts? It may be because you’re skipping one of the steps.  How can you turn your cost-cutting into true savings progress?

 

Barb Wollan

Barb Wollan

Barb Wollan's goal as a Family Finance program specialist with Iowa State University Extension and Outreach is to help people use their money according to THEIR priorities. She provides information and tools, and then encourages folks to focus on what they control: their own decisions about what to do with the money they have.

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Stocking the Grocery Pantry

I threw a list of Pantry items together in 2004 and went shopping. My goal was to confirm or dispel what participants in my budgeting classes would argue: that it was cheaper to purchase groceries at larger markets, especially those in larger towns where there is more than one grocery store.

What I challenged them to consider was the cost of transportation and the added time it took to make a 1 hour round trip each week for groceries; especially if the sale items were the same price in a local store.  Did they save enough to off-set those costs? Even though the cash register receipt is lower for the same items, it wasn’t enough savings to cover the cost of transportation.

I took my list shopping to the local grocery in 2007 and again today.   Here’s what I’ve learned from the comparison:

  • The cost for store brands, 2004-2018, increased 54.7%, the national brands increased 34.3%.
  • The margin between the cost of buying a store brand and buying a national label continues to erode. In 2004 the difference was 30%, in 2018 the difference is 24%. Store brands still cost less, but not as much.  Quality becomes more important.
  • The changes in package sizes has slowed. I found several items in smaller packages between 2004 and 2007; but only Oat Cereal was found in a smaller package in 2018.
  • Some items are lower priced. Brand name stick margarine is priced lower than the 2004 cost and the store brand is equivalent to the brand name price. Oat Cereal, when broken down into price per ounce, is 27 cents today. In 2004 it was 26 cents an ounce.  Brand name green beans have declined slightly since 2007, with store brands getting close to equivalent price.
  • Items on my pantry list with a larger than average increase in price are: a 2 lb. block of processed cheese food – the national brand increased 100%; a 5 lb. bag of national brand flour increased 61%.

A new player in the pantry shopping list is a local dollar store.  My grocery sack included a combination of store brands and national brands. The sizes were equivalent. Not everything on the list was available. Some items were lower, but others were higher in price. In the end my combination sack cost the same as the store brands at the local grocery.   If you have the time and pay attention to prices you could lower your total grocery costs by shopping at both stores if they are close to each other.

Visit the Spend Smart, Eat Smart website for low cost recipes and other tools to manage your grocery dollars.

 

Joyce Lash

Joyce Lash

Joyce Lash is a Human Sciences Specialist in Family Finance who wants to keep you ahead of the curve on financial information.

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Rechargables Make Cents

In a kitchen cupboard, we have a box full of rechargeable batteries of every size. My husband uses them in the sound-cancelling ear protection he wears in the barns. I have several small, battery-operated motion-sensitive lights I use in the rooms where grand kids sleep. I also have a digital camera, Christmas lights, a battery operated pencil sharpener and other electronics, keeping our battery charger busy.

If I were to buy a four-pack of Duracell AA batteries each week (which sells for $6) to keep my husband’s hearing protection working, I would easily spend $312 a year. For $10, I can buy a four pack of rechargeable batteries. These batteries will last between 2 and 3 years. By using rechargeable batteries, we are keeping between 400 to 600 batteries out of a landfill…and that is just for the AA batteries my husband is using.

It used to be that rechargeable didn’t work well with some technology.  Today,  I do not find any difference and I greatly appreciate the savings. What has been your experience with rechargeable batteries?

Brenda Schmitt

Brenda Schmitt

A Iowa State University Extension and Outreach Family Finance Field Specialist helping North Central Iowans make the most of their money.

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