The “Sweet Rims” concept makes it’s TV debut [video]

Yesterday while driving on I-5, I hit a bit more traffic than I’d bargained for. A shooting/crash had all lanes of the freeway blocked for over an hour. The silver lining on this cloud is that I was interviewed on local news (click that link if you don’t see the video embedded below).

Longtime readers will note my subtle reference to the sweet rims concept — things in your life that you spend an inordinate amount of money on.

I was taking the boys to see the B-17 that my dad helped restore. It’ll be at Seattle’s Museum of Flight through Wednesday. You should check it!

How Urban Homesteaders Figure Out Their Food Costs

Yesterday I had lunch with a friend who’s a Foundry in the Forest reader, and she commented on my family’s food budget, which is a modest (though not totally low) $922 a month, including groceries and dining.

While talking about it, the fact dawned on me that we sneakily get food through other spending categories, namely “gardening” and “chickens.” I did a blog post on the actual cost of a dozen eggs from backyard chickens.

We also have a modest garden, which Venessa puts a lot of work into. Like the chickens, it doesn’t save us any money vs buying comparable products at a farmer’s market, but it’s a fun pastime that keeps us in touch with nature, and gives us some very fresh and tasty veggies every season.

So in the interest of full disclosure, here is our true monthly food spending (averaged over the past year), for a family of 5:

Groceries:*	$656
Entertaining:**	$33
Restaurants:	$233
Chickens:	$31
Garden:	$6
Total:	$958

Our non-restaurant food spending has decreased over the past few years, even taking inflation into account. Not sure how we did that.

* This still puts us well below the “thrifty” spending plan as outlined by the USDA.

** I keep keep a separate category for entertaining, since it’s fun to have friends over to eat, or to buy a friend a drink at a bar. I like to see how much I’m spending on social stuff like that as opposed to just buying food for myself.

Lost my first post to the angry internet gods

Sorry about the lack of posts. As you can see from the photo to the left (taken by the talented Mrs. Foundry), our family was on vacation the past few days.

I guess it’s bound to happen. I had a great post all written, and then I must have done the internet dance incorrectly, because now it’s gone. It was about a letter I got regarding the post on dealing with medical expenses. I’ll just post the letter and call it a night.  Sorry.

Name: Hayley J.
Comment: Hi Joe,

I’m interning at the Washington Health Foundation and a co-worker forwarded me Cathleen’s inquiry on dealing with medical expenses. If you would like, I believe it would be to Cathleen’s benefit to learn of our Personal Health Advocates, as this is a service we provide which assists those precisely in Cathleen’s situation.

The Personal Health Advocates is a phone service where advocates work with callers to provide personalized health advising; they answer questions on insurance coverage, help callers with any issues they may experience in receiving health care, and work with callers to find the best health coverage available to them, among other things. As we are a non-profit, not an insurance company, the Personal Health Advocates have no ulterior motives, so clients really can trust that they are receiving honest advice and guidance- working with an advocate that is purely on their side in the complex world of health care.

Cathleen also mentioned that she’s struggle with covering expenses because of the small size of her work, to which I would like to point out that this is one of the main reasons why our Personal Health Advocates exist- to help those who don’t already have someone navigating the world of insurance for them.

I hope this information is sufficient if you choose to relay it to Cathleen. If you would like to learn more, please feel free to contact me at [email address removed. Contact me if you’d like to get in touch with Hayley]. Thank you for setting up this blog, I’ve been browsing around and already find many of the past posts quite useful! Thanks for doing what you do!

-Hayley J
Intern at the Washington Health Foundation

Personal Health Advocates: (855)-WA-HEALTH

I sent Hayley a few follow-up questions on whether the service is offered to those outside Washington state, and if there are any qualifying criteria. I’ll let you know when I get an answer.

Not having an Emergency Fund IS an Emergency

This is my first guest post, from lucky writer Allen Long. Alan enjoys writing about economic news, finance, and employment verification, and long walks on the beach. Take it away Allen…

Financial emergencies are not only common, they’re inevitable. Whether you lose your job, acquire sudden medical expenses, your car breaks down, or a water pipe explodes, making your home inhabitable, unforeseen circumstances can easily make having an emergency fund necessary. Not having the funds to handle a situation like this can cause you to lose your home, lose your job, or ruin your credit rating. Being prepared is part of being financially responsible. The following guidelines will help you begin an emergency fund to ensure your future financial stability should you face an emergency situation.

How Much Do I Save?
The general rule of thumb has always been to save at least 3 months’ worth of living expenses. With the current state of the economy however, it could be beneficial to aim for 6 or even 9 months instead. If you should lose your job, it could take some time to find something else. Unless you want to have to settle for something you really don’t want to do, saving enough money for a sufficient job search is the only way to fully protect yourself.

Don’t Mix
It’s important to know the difference between an emergency and other forms of savings. You don’t want to mix your emergency funds with your vacation funds, for example. If you’re saving for a wedding, keep the emergency money separate. The best way to do this is to have separate accounts for the two. Keep your emergency funds somewhat liquid without making them too easy to access. Don’t get a debit card for the account. This way, it is there when you need it, but not easy to grab when you don’t.

How to Start
You don’t want to start off by dumping half your paycheck in the account. This might trigger a financial emergency earlier than it has to be. Start out small. If you generally have trouble saving, try putting 5 percent of your pay into the account. Chances are you won’t notice this amount, and you can always bump it up later on. Don’t get discouraged; it will take a while to accumulate 3 or 6 months’ worth of expenses. The important part is to start saving as soon as possible and save something every single paycheck. If you are particularly short on cash one week, throw $10 in the account. Everything adds up, and once you convince yourself you can skip one week, you’ll quit putting money in altogether. Stay consistent.

Don’t Spend It
What’s the point in having it if you can’t spend it? I know the temptation is tough when you’ve got that money sitting there and you want to take a much needed vacation. However, you must resist. Dipping into your emergency fund for non-emergencies is the fastest way to spend the money before an emergency happens. This fund needs to be limited to real emergencies, such as the loss of a job or another financial disaster. Be tough on yourself.

Having an emergency fund will give you peace of mind and lessen your stress should an emergency arise. Don’t take it for granted. If you do lose your job, it’s not going to benefit you to wait the 6 months before looking for another job. Use your funds sparingly, even during an emergency. Just remember how long it took you to save up that amount, and remember you will have to replenish it once you get back to work.

Thank you, Alan! Great article. The only thing I would add is that if you’re in debt, limit your emergency fund to $1000-$2000 and then work like mad to get out of debt before adding more to the emergency fund.

Is it worth driving to farmland to get cheaper produce?

[This post was copied over from my old blog, so apologies if you already read it there.]

It’s yummy fruit season again here in the northwest. Last year, some friends took a trip to Yakmia, WA to take advantage of the cheap produce in farmland. Is it worth a drive like this, in order to save money? Let’s run the numbers:

It’s 140 miles from Seattle to Yakima, and driving costs about $1 a mile. In order to recoup the cost of the round-trip, you’d need to save $280 in produce.

Last year, we took part in a bulk-buy of organic, heirloom tomatoes. We got around 40 pounds of juicy goodness, at $2 a pound. Venessa froze them, which apparently is easier than canning and just as useful (the chest freezer pays off again).

In Yakima, similar tomatoes can be had for only 40 cents a pound, a savings of $1.60 a pound. So one would need to buy 175 pounds of produce to recoup the money it takes.

Our 40 pounds of tomatoes fit into two boxes, which easily tucked into one corner of our car. Our friends are taking a pickup truck, so it’s not a stretch to imagine them coming back with 175+ pounds of produce.

Other considerations:

* Time: it’s about 5 hours round-trip, plus the time spent in Yakima, so you’re looking at a full day journey. Depending on how you value your time, you might need to take the opportunity cost into account. Also factor in the time it takes to can, preserve, freeze, etc.
* Experience: on the other hand, taking a road trip with a loved one is a lot of fun, and whenever you ate the produce you could think of the experience.
* Cost: do you have enough money to afford the up front cost of all that produce?
* Space: do you have enough space for all this food?

There are so many variables to determine if this is worth it for you, but if you have the time, space, and money, it does save money to drive to the heartland to buy a bunch of produce.

Give Away 100 Things: Challenge Update

The month is half over, so let’s see how I’m doing on the July Challenge to give away 100 things. I have to admit that I stretched the definition of “give away” and recycled or threw away a few things that weren’t fit for donation. I thought of it as giving them away to the the earth (hopefully) or landfill (unfortunately).

You can see a photo of the Goodwill run I just made over the weekend. I lost track of the number of items, after packing up two boxes of books, two bags of clothing, two bags of housewares and some other assorted items. I’m going to estimate that this was about 100 things, but this is stuff from both Venessa and me, so we’re only half way done. And this was the easy stuff. The low-hanging fruit, if you will. So we have the second half of the month to dig deep into the corners of our house and find the next 100 things each.

Wish us luck!

Frugal School: Sophomore Year

[Frugal School is my fun way of maintaining a book list. It has 12 books total, meant to be read one book per month. You can check out the introductory post about Frugal School, and see the entire syllabus.]

Sophomore Year – Getting Started

Welcome back to Frugal School. Hope you enjoyed your Freshman year and didn’t get hazed too much. These Sophomore Year books form the foundation of understanding your relationship with money, perfect for getting started on your own frugal journey. This year only has 3 books because the first book takes some time to digest.

	Your Money or Your Life by Vicki Robin and Joe Dominguez This book is the big one. Remember when you finally picked a major in college, and you took that intro class for the major and it totally opened your mind to a new way of thinking? That’s this book. I wrote a longer review of it that goes through each of the 9 Steps. You should read that post.
	I Will Teach You To Be Rich by Ramit Sethi Ramit has a unique writing style that might turn off people older than 30. But once you get past that, his method for automating your finances can’t be beat. Learn step-by-step how to get your financial life in order, how to negotiate on the price of major purchases, and how to invest for retirement.
	The First National Bank of Dad by David Owen This book isn’t just for dads and it isn’t even just for people with (or planning to have) kids. It’s a primer on the meaning and value of money, investing, and the stock market. If you don’t have kids you can skip the second half of the book, which details the author’s method of helping his children learn to invest without forcing any particular value system down their throats.

Once you’re through reading these books, you can continue on to Junior Year of Frugal School.

Foundry Mailbag: Dealing With Medical Expenses

Here’s the first edition of a regular column I’d like to do, called Foundry Mailbag, where I write about topics or answer questions that people have sent in. Today’s Foundry Mail comes from Cathleen, who writes:

I love your blog and would love to see a post about dealing with medical expenses. Personally that is my biggest challenge, trying to work expenses in if you have a chronic condition can be difficult to budget. (I’m not even going to go into what it’s like if you have an employer like mine that is too small to offer health insurance) I figure with all the hubbub about the recent Supreme Court ruling, it’s on many other peoples minds as well.

Keep up the good work!

First off, thank you for the kind words.

Medical expenses are like a horrible lottery that everyone has to play. Not only do you get sick or injured, but you sometimes have to pay huge amounts of money in doctor bills. Here are a few tips for dealing with them:

1. Set up an emergency fund – This is the single biggest piece of advice I can give to anyone who’s getting their financial life in order. The size of the fund is up to you, but as a rule of thumb it should be a minimum of $1000, if you’re in debt or have other emergency spending needs. A healthy-sized emergency fund for someone with no debt is 3 – 6 months of living expenses. Store the fund in cash. Even though you’ll be getting a crummy return on investment, this is not money you want tied up in illiquid or volatile investments
2. Expect the unexpected – I have a savings account named Doctor Bills into which I stash some money each month. When medical expenses do arise, I can tap into that account before draining my emergency fund. Think of this as being your own health insurance company. You’re paying yourself a monthly premium, and when something goes wrong, you get your bills covered by your own capitol. But unlike a real insurance company, you’re in control of the size of the premium, when you pay out, etc.
3. Stay healthy – They say prevention is the best medicine, and I couldn’t agree more. Money spent on eating well, and time spent exercising and getting enough sleep will pay huge dividends down the line in the form of a healthy body, which means fewer doctor visits and reduced medical expenses. This also includes keeping a healthy attitude and eliminating stress from your life. A bike ride is my favorite way to stay healthy and de-stress.
4. Negotiate your bills – None of the above tips will help Cathleen, or anyone else already saddled with large medical bills. But this tip might. Bills can be negotiated on two fronts: the medical provider and your health insurance company. I admit I’ve never done this myself, but I know it’s possible. Ramit from I Will Teach You To Be Rich is an amazing negotiator, and while he doesn’t discuss medical bills specifically, his general negotiation tips have saved me some money.
5. Optimize for insurance – Now that the Supreme Court upheld Obamacare, people with pre-existing conditions can’t be denied insurance. That means you can shop around for a new job and make your decision of where to work based on the insurance plans that various would-be employers offer. Easier said than done, but it’s one extra tool in the financial tool box.

Hope I was able to help Cathleen, and maybe some other readers as well. Feel free to contact me if you have any questions.

Welcome MMM Readers

Welcome MMM readers! This is a blog about urban frugalism written here in Seattle, USA (pictured to the left). Take a look around the site, I think fellow “Mustachians” will find a lot to love. Here’s a bit of background about the blog name.

A confluence of internet things is bringing a nice amount of traffic to my humble blog, from Personal Finance blogger Mr Money Mustache, and his readers. I wrote about him a couple posts ago, and let him know (since I was using his topic ideas after all). In return, he tweeted a link to that post, which brought some of the traffic. As if that wasn’t enough, he linked to his twitter account prominently in a recent blog post, which brought even more traffic here. MMM’s post is about sucking at things, but I’m sure that isn’t related to his opinion of my blog 🙂

Hope a few new Mustachians stick around!

BTW, a post like this is called a “catcher’s mit.”* It’s a way to retain an influx of new traffic. I’ve never had any influx of traffic so I’m new to writing them. I learned the technique from Ramit at I Will Teach You To Be Rich.

* I also added a miniature catcher’s mit to the top of my aforementioned post.

Why people are bad at math

Only have time for a quick, drive-by post this morning (yesterday was my birthday).

I really enjoyed this article about how business prey upon the freaky way our brains think about money. The article dances around the point that I make over and over again, so I’ll repeat it: it’s hard for us to wrap our minds around the concept of money until we realize that money is simply what we trade our time for.

In terms of our shopping behavior, the article puts it in these terms:

Consumers aren’t just hunting for products. They’re hunting for clues that products are worth buying.

Instead of “clues”, we usually get mind games, such as quantity over quality or anchoring — displaying an expensive product up front so the rest of the products seem reasonably priced in comparison.

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PS: I hate the term “consumers” as a synonym for “people.” It makes us sound like pigs at a trough…