Jana Says

Living life from cover to cover

Author Archive: Jana

If I Had $1,000,000

Sandy @ Yes, I Am Cheap has posed the question: What would you do if you inherited $1M from your cousin Bertha, a cousin who you haven’t seen since you were a baby?

The first thing I’d do is wonder why on earth this woman I haven’t seen in 34 years has left me $1M. Then, I’d call my parents to find out how I’m related to Bertha and if she’s legit and not something akin to the Nigerian prince schemes. Once I find out that she’s kosher (and a relative), then I start making a plan for the money. Here’s what my plan looks like:

  1. Hire an attorney. I’m not exactly sure why but I remember reading somewhere that if you win and/or inherit a large sum of money, you should hire a lawyer. So I’d do that.
  2. Pay my taxes. I’m not cut out for jail and I don’t want to go, even if it’s good enough for Wesley Snipes and Martha Stewart. I like not having a criminal record.
  3. Set aside money for retirement and my daughter’s college education. This is because I need to be responsible. $1M, while a lot of money, is not enough for us to retire on. Both my husband and I would need to continue to work but we could work a little easier knowing that our sad little retirement accounts and our daughter’s pathetic 529 have sufficient funding.
  4. Pay off our house, car, and my husband’s student loans. These are our remaining debts and I’m tired of them. So I’d pay them off.
  5. Donate some. There are several charities that I know could benefit from donations, so I’d give about $25K (each) to 4 different charities. I’d handpick them, and I wouldn’t make them compete for the money a la trashy reality shows. I’d just fork it over. ‘Cause I’m awesome like that.
  6. Be completely irresponsible. For one month. Lest you think I’d go all Brewster’s Millions, I wouldn’t. I’d buy clothes that fit properly for both my husband and I, outfit my daughter for the upcoming year, book my dream vacations, put aside money for my dream kitchen and buy Mets season tickets. And I go spend a weekend getting spa treatments.

(See, Dave Ramsey? Even in a hypothetical scenario, I still follow the spend, save, give mentality. It is at this point I kindly ask you to extract yourself from my head)

While I think that the Barenaked Ladies had an admirable plan, what with their macaroni and cheese and monkeys and green dresses and Elephant Man bones, I like my plan better. But I may buy some mac and cheese anyway.

Saving money on books OR why I love the library

As you can probably tell, I love to read. It has always been one of my favorite hobbies and will most likely continue to be one of my favorite hobbies. Unfortunately, books are expensive. With the way I like to read, I’d be spending a small fortune in books each year. That’s not exactly a wise use of money when you’re trying to pay off a home equity loan and a car.

That’s why I use my library. I love the library for so many reasons. I often have an extensive list of books on reserve. That list is culled from a master list I keep in a notebook of books I want to read (I’m also a huge dork and write down all of the books I have read). Since I live in a small state, I have access to every library in the state; this greatly expands the amount of books available to me. There are some books with only 1 or 2 copies available in the state. By being able to access the whole state’s library system, I have access to copies that may be housed downstate only.. We can also buy a membership to our state’s major university’s library for approximately $20/year. I haven’t done this yet. I just can’t see the benefit.

My library lets  me reserve and renew books online and is also kind enough to send me email reminders when I have books available to pick up and when they’re due. This is perfect for someone like me. I have a terrible tendency to forget to renew my books (yes, even though I can do it online) and the email reminders have greatly decreased the amount I pay in late fees. Even saving that $.25 or $1 adds up.

My library also now offers ebooks. For free. Since I’m still undecided as to whether or not to get an e-reader, this is a great way to try out some ebooks for free, as well as see what kind of selection is available. There are also eAudiobooks, which I can play through my iPod (or something like that. They still confuse me a bit). I plan to start using this feature as soon as possible.

There are times when I can’t get a book through the library. These times make me sad. It is on these rare occasions that I buy the book; even then, I’ll wait until it’s in paperback or if paperback is not possible, I’ll buy it used from Amazon. But the one source for books I have not tried is online book swap sites.  They make me a little nervous. They shouldn’t because a)they’re free; b)have lots of books; and c)I know plenty of people, whom I trust, who sing their praises. I just can’t get there yet.

Have you used these sites? If so, which ones? Would you recommend them?

Money Tune Tuesday: She Works Hard for the Money

In keeping with last week’s theme of honoring those who work hard, this week’s Money Tune is  Donna Summer’s “She Works Hard for the Money”. I can’t think of another song with a serious message that has such a good beat. (Also, I love Donna Summer. “On The Radio” is an awesome song):

The $20 emergency fund

The following is a repost of an entry first posted on my  other (and original) blog, The Empty Kitchen. I thought it was relevant here as well:

All financial experts agree on one point: an emergency fund is a must.  It’s crucial to have cash on hand in the event of an emergency such as an unplanned doctor visit, a flat tire, a service call on an appliance (if you own your home) or you simply need food or milk. However, the recommendations for the amount of money in the emergency fund vary from $500 to $1000 to 3-6 months of expenses. For people just starting out, living on a strict budget, or living paycheck to paycheck, that amount of money seems impossible to achieve. So for those of us in that situation, I propose another amount for an emergency fund: $20.

$20 does not seem like a large amount of money. I contend that it is. $20 can cover a co-pay for a doctor visit or an over the counter medication. $20 can buy several days worth of food. $20 can put gas in your car to get to work or buy a bus pass. $20 can buy many loads of laundry at a laundromat, including some detergent and dryer sheets. It can even buy you a cooler and ice if your refrigerator breaks.

But what if several of these things happen at once? After all, Murphy likes to not only knock at the door, he likes to come in, prop his feet up and have a snack. My best suggestion for that scenario is this: prioritize. Figure out what is the most important and spend the money on that. If you can take that $20 and spread it out over a few, then do that, too. For instance, if you suddenly find yourself with a vicious cold, a broken fridge and no clean clothes or undies, $20 can cover one load of wash (use a drying rack to save money on the dryer if you can), some OTC cold medicine and tissues and a few bags of ice.

So how do you start the $20 emergency fund? There are a few ways. One way would be to, on your next payday, rearrange your budget to allow for $20 to come out (if you have to, take $20 out of your grocery budget and eat from your pantry for a few days or find some free entertainment and take $20 from your entertainment budget). Another way would be to cash in your change jar, if you have one, and use that money to start your emergency fund (caution: do not use the machines in supermarkets. They take out an 8.5% fee. Try to find a bank instead). A third way would be to save the $20 over a few paychecks. For instance, take $5 or $10 from each of your next few paychecks and stash it away until you get to $20. And yet another way: see if you can find a babysitting, dog walking or some other odd-job type gig, even if it’s just for one day, and use whatever you earn from that to start your $20 emergency fund.

Once you have your $20, stash it somewhere, whether it’s in an envelope marked “Break only in case of emergency” or a compartment in your wallet or your jewelry box. Just make sure that you keep it somewhere you remember! It’s also extremely important that you do not use this $20 for something frivolous with the promise to yourself that you’ll pay it back. The one thing that I’ve found is when you make a promise like that, it’s hard to keep it. And I’ve also learned that when you need the money the most is exactly when you don’t have it.

It is also extremely important that if you have to use your emergency fund for something necessary, or any portion of it, that you pay it back as soon as possible. The $20 is there to act as peace of mind in case Murphy makes himself as home. There is nothing more unsettling as knowing you’re not armed for his visit.
I also suggest that, when possible, keep $20 as a house/personal emergency fund and a separate $20 for a transportation emergency fund. If it’s not possible at first, don’t worry. Just start with one general $20 fund and work your way up. This also will serve as the baseline for building a bigger emergency fund later on.

This $20 is not intended to be your entire emergency fund. I wholeheartedly agree with Dave Ramsey’s suggestion for $1000 baby emergency fund and eventually 3-6 months of living expenses. My family is working on our 3-6 months right now and it is hard and it took us a while to get to the $1000. But the $20 is a good place to start. It gives you a small cash cushion to handle many minor emergencies. And that peace of mind is priceless.

(Full disclosure: This idea is not entirely mine. Special thanks to Wendy K. for suggesting this!)

Memberships make sense (if you use them)

When most people are looking for budget assistance, one of the first suggestions made is to eliminate memberships and subscriptions: diet programs like Weight Watchers, gyms, Netflix, magazines, etc. While that is an excellent suggestion, there’s this to remember–what if you actually use those memberships? What if those memberships actually enhance your life?

Take the gym, for instance. I will agree that gym memberships can be expensive and if you’re on a very tight budget, it may not make sense to keep it. But what if you go to the gym every day? What if you use it not only for the health benefits but for a social outlet or a networking mechanism? You never know who you might run into while you’re on the treadmill or in a Zumba class! You might be a social worker in dire need of a job who just happens to strike up a friendship with the HR rep for a local counseling agency. You might be a high school graduate in need of some income who happens to run into a family who’s looking for a weekly babysitter. Not only that, but you might find out that your gym has an opening in one of its departments (this mainly applies if you belong to a YMCA-type place); that job might then come with a free or reduced cost membership. Let’s not forget the classes, programs and facilities that most gyms offer. Seems to me that the perks are worth the money, even on a very tight budget.

Netflix is another membership that, to me, is worth the money. The streaming feature alone will make you forget that you no longer pay one of the greedy cable companies. If you’re low on funds, movies and old TV shows may provide one of your only sources of indoor entertainment (board games and cards can get old if you’re playing with the wrong people), especially for date nights. In addition to movies and TV shows, there are also educational documentaries and exercise videos available. It’s a comprehensive source of entertainment that serves as the pepper to the salt of free TV through Hulu or streaming through the network channels.

Magazines are a tricky one for me. I used to buy my husband a magazine subscription every year for Christmas and he would do the same for me. But the magazines wouldn’t come regularly, we would get bothersome phone calls from a company selling one of the subscriptions, they would automatically renew the subscription even though we never selected that option, and most of the content is online anyway. Not worth the headache or the money. This year, though, my in-laws bought us subscriptions and I’m quite enjoying them (probably because it’s on someone else’s dime). I get a monthly subscription to Southern Living and I am in love with the recipes! I have a pile of recipes that I’m dying to try. My husband gets Money, Maxim and Conde Nast Traveler–nothing like an ecclectic mix of magazines with expensive tastes to give someone a case of the “I wants” (for the record, I don’t care that he reads Maxim. The pictures don’t bother me and some of the articles are really good. And funny. I was as surprised as you.) I can’t say that I would purchase a subscription for myself, but I can see why if you’re in a niche industry or have a very specific hobby why a subscription would be worth it.

Obviously, it does not pay to keep memberships if you don’t regularly use them. They become a drain on your budget and a waste of services. If you’re not getting anything out of the memberships–educationally, socially, physically–then dump them, stat! But if you do find value in any memberships that you do have, I would look to see other places to cut before getting rid of those. If it’s important to you, find the money for it. I promise not to judge your priorities.

What memberships do you have that are worth the money?