Hope for your financial life and beyond

The Hidden Costs of College: How to Manage the Incidentals

costs of collegeMy alma mater, Cedarville University in Ohio, has a favorite destination that attracts students each and every day while school is in session – Young’s Dairy in Yellow Springs. It’s definitely one of the hidden costs of college because I had no idea how much time I would spend there. It seemed like once a week someone in my dorm would yell, “Hey, we are making a Young’s run. Who’s coming?”

Boy, that was always tempting. Seemed like it always came at the right time too. You know…at 9 o’clock at night when your punching out that term paper and your stomach is rumbling. So what college student could resist a grilled cheese, fries and milkshake in that moment?

Defining Hidden Costs of College

Those late night snack runs are one example of the hidden costs of college. They are hidden because we miss factoring them into the overall expense of college. Students and parents focus on the big college numbers that are causing so much trouble: tuition, fees, room and board and forget there are a bunch of little incidentals that, when taken cumulatively, add up to big dollars.

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Back to School Savings I Don’t Care About

Back to school shopping at TargetI don’t know the schedule in your neck of the woods but in five short days my kids go back to school. Oddly enough, for the most part they are looking forward to it. In a way so am I as it will mark the first time that I will be home alone as a stay at home dad. It’s going to be eerily quiet around the house but I’m anticipating that will benefit my writing.

Of course back to school means shopping. Ugh! That dreaded time when you realize the kids have grown two inches over the summer and the school pants that fit in May are now riding up their shins. And of course, the mile long supply list the school sent with all it’s specialty items has your mind spinning. What in the world is “Mod Podge” and where can I buy it?

Helping Consumers Save on Back to School

Some retail stores do a great job this time of year revamping and organizing their floor space to make it easier on the back to school shopper. Our two destinations – Target and Office Depot – had school specific zones where we could easily shop and pick up our items. And naturally they got the word out through advertisements on how we could save on back to school items at their store. Amazon does a great job of this as well, offering specials discounts on school items and free shipping for college students if you purchase items on their site.

Local and state governments also get involved to help consumers save a little bit of money during the back to school season.

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5 Life Changing Moments That Lead to Lifestyle Inflation

In simplest terms the concept of lifestyle inflation refers to a person’s spending going up as their income goes up.

lifestyle inflationSome lifestyle inflation may be unavoidable but it’s a good thing to keep it in check as much as possible. Otherwise you end up living paycheck to paycheck and having little or no money let over to pay down debt, save for retirement and use for other investments.

When a person is at that point, with no money left to create a cushion, life gets really stressful.

Moments of Lifestyle Inflation

We can be drawn to increase our lifestyle at any point in life. As I see it though, there are five instances when we are most susceptible to increasing our spending. Here’s how it often works.

1. After college graduation at the first real job

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This One Trick Started Our Process of Doing Successful Budgets

successful budgetsThe first attempt we made at budgeting years ago was a nightmare. Our intentions were good and what we did seemed logical at the time. However, after a few short months it became apparent we could not put together successful budgets.

For those first budgets, we calculated what we wanted to spend per category for the entire year. These numbers were based on our income and what we knew (or thought) our expenditures would be. The next step was to divide by twelve to get the budget number for each month.

Seems easy enough, right?

Well, there was one big problem that showed up rather quickly that forced us to conclude this type of process was not going to work.

Every Month Is Not The Same

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Why I’m So Excited to Spend Money Again on Cable TV

cable TV

I revealed last week in “The Fear of Spending Once the Debt Is Gone” that my wife and I haven’t begun to wildly spend now that we have paid off all of our debt. It was a relief to know the discipline that drove us to pay off our mortgage early has continued to define our post-debt lives. We have no inclination to spend, spend, spend now that more money is available in our monthly budget

In all honestly though, we have loosened the reins on our spending a little bit.

We’ve brought back cable TV!

What? That’s blasphemy in the frugally-minded personal finance world. Cutting cable TV is always the first expenditure to go in those “10 Ways to Save Money and Pay Off Debt” posts. I’ve surely even said that before myself.

If cable TV is the first thing to cut, why can’t it be the first thing to bring back? Seems logical to me.

Needless to say everyone in the house is thrilled with this decision.

Short Term Cable TV Sacrifice For Long Term Gain

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The Fear of Spending Again Once the Debt Is Gone

fear of spending“Can We Ever Step Off the Gas With Our Finances?”  That’s a question I asked just over a year ago on this blog. That post looked at when it might be appropriate to loosen the reins on the budget and relax the tightfisted control we have over our spending as we pursue certain financial goals.

My answer left open a great deal of room for debate. I concluded that “it depends” on many factors, such as:

…the depth of the person’s dreams.

…the levels of debt still to pay off.

…if a person is facing an expensive medical issue.

…if there is some form of crisis on the horizon.

…how large the bank account/investments have become.

…how old a person may be.

To reach any financial goal requires intense focus and discipline. The debt payoff journey may be the hardest of them all. When you are waist deep in it, the finish line may as well be half a world away.

With perseverance the day will eventually come when all the debt is gone. When that happens so many choices open up. One of the biggest is how to spend all the freed up money that was going towards debt.

Having recently paid off our mortgage early, I can attest that the “no debt world” is a great place to be. However, something else is at work that was totally unexpected.

I’m finding it difficult to relax my spending.

The Fear of Spending Again

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How We Are Paying For Summer Vacations With Cash

summer vacations

Niagara Falls

Our school is out for the year, so for me that means summer has arrived. I know the official start date of summer here in North America isn’t until June 21st. The astronomers and weathermen can push that date all they want. Once the kids start sleeping until 9 am or later, I know something has changed.

Summer brings with it summer vacations, which our family thoroughly enjoys. We usually take one big trip (a week+) and one short trip (3-4 days) each summer. This year will be no different as we will be embarking on a week long trek from Atlanta to Niagara Falls and back, followed later in the summer by a weekend cruise to the Bahamas.

Neither of those trips will be cheap, although we did get an incredible deal on the cruise (more on that in a moment). Nevertheless, we won’t be going into debt for either of them. All our vacation expenditures will be paid for in cash (through using our debit card).

How are we doing that?

Two words: “planning” and “saving.”

Summer Vacations With Cash

Here’s how we pay for all our summer vacations with cash:

Early Planning Leads to Deals

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When Conventional Wisdom About Money Clashes With Conviction

Today, I’m honored to be a guest contributor at My Money Design. I’ll be sharing how I lost my disciplined spending habits through the use of credit cards and the issues that arose because of that.

In the middle of my problems two things occurred that caused me to rethink what I was doing. In those moments, my new found beliefs came in conflict with my behaviors. What would I do?

To read my post at My Money Design, click here.

Next Post: Why We Don’t Give Our Kids Allowances

Prior Post: Stay the Course: Our Success Happened One Step At A Time

How Shopping for Shoes Changed My Financial Life

shopping for shoesIt’s Financial Literacy Month and I’m pleased to be part of an awesome blog carnival today hosted by Shannon from The Heavy Purse. In case you are unaware, Shannon’s passion is all about helping parents raise financially confident and responsible children. Her perspectives on that issue are some of the best I’ve read. I highly encourage you to check out her site, especially today and see what all the other carnival participants are writing about.

The topic for her financial literacy blog carnival is our biggest money “A-ha” – that moment when you realized things had to change. Well, I’m in no competition with my fellow bloggers today, as I’m sure they will share great moments in time and lessons that spurred them to change. I’m pretty sure though none of them will be talking about this…

Shopping for shoes.

That’s right…my financial life really did change one while shopping for shoes.

My Life Altering Moment While Shopping for Shoes

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Spring Break: Glorious Rite of Passage or Undisciplined Waste of Money?

spring break

Having a blast on spring break?

This week and next, thousands of high school and college students will embark on the annual ritual known as spring break. They will fill hotels, crowd beaches and party in clubs long into the night. With the sheer number of young people present in these locations – the majority of which will be slightly to heavily inebriated – anything can happen.

That anticipation of the unpredictable defines the allure of spring break. And the alcohol…and the chance to “hook up.”

I’ve participated in three spring break trips in my life. The first was my senior trip in high school to a resort in the Bahamas. The next two were in college. One was with a group of guys (and my dad) to go caving in central Kentucky. On the other trip, I went with a co-ed group of friends and the future Mrs. Luke1428 to visit her father in south Florida.

None of those trips were to what I would call party central locations.

Each trip cost me hard earned money that could have been used for other purposes. I considered them worth it though for the memories they created. After all, isn’t the creation of memories a fundamental aspect of taking a vacation?

I can remember my spring break trips with perfect clarity…a hilarious photo of my high school friend sunbathing next to a gorgeous woman in the Bahamas…the onset of panic when one of my stout college buddies became stuck in a tight crawl of a cave…Kim and I enduring the ear shattering buzz of an air boat ride as we dodged alligators in the Everglades.

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My Fight Against Bandwagon Consumer Syndrome

medical injectionDo you suffer from constant cravings or restlessness? Easily excitable…prone to follow the crowd…worried about being left out? Can you become quickly dissatisfied with your possessions?

Do you have an uncontrollable desire to buy what everyone else is buying? Is your time being spent in the activities of the masses just to feel connected and valued?

If any of the above descriptions sound familiar, you may have contracted BCS – Bandwagon Consumer Syndrome. Seek help immediately.

BCS is a condition that affects millions of people worldwide (note: statistic estimated, not actually calculated). It’s the tendency to spend excessive amounts of money or overly engage in activities that have become fashionable within culture. If not treated, it can sabotage budgets, wreck financial futures, waste time and ruin relationships.

Total immunity to this syndrome is rare, as anyone can develop a moment of weakness. However, with the proper medication you can ward off occurrences and resist the onset of BCS 90% of the time (non-calculated statistic #2).

My Personal Fight Against BCS

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