Just-Cash June

Want to join me on a little experiment I’m trying next month? I’m going to only spend cash in the month of June. It’s called “Just-Cash June” (unless someone can think of a better name).

Everyone who participates is allowed one non-cash expenditure. I’m not sure what mine will be yet. For many, I assume it will be rent, but I pay my landord via popmoney so I can save mine for something else.

I figured I’d give everyone advance notice so you can get to a cash machine in time.

FAQ

What are the rules?
If you choose to accept, you can spend only cash from June 1 to July 1. Everyone gets ONE get-out-of-jail-free card, where you can use any payment method you want. Optionally, blog or tweet about your experiences. Did your spending habits change? Was it freeing or annoying? Let me know in a comment below if you’re joining the experiment.

Why are you doing this?
I’ve experimented with Credit Card vs Debit Card spending, and found that I spend less when I use a Debit Card for everyday spending. So I want to continue the experiment to see if I’ll spend even less if I have to physically hand someone cash to make a purchase. I’m still a big fan of credit cards, especially sign-up bonuses, but I’m also a fan of spending less and conscious spending.

What about online purchases?
Unless you can figure out how to pay e-merchants with cash, you have to shop online now or wait till July. Humans somehow survived for 10,000 years without online shopping, so I think we can do another month.

What about bills?
Most bills have an auto-pay feature, which I highly suggest you sign up for anyway. It deducts the amount due from your checking account each month, so you never need to remember to pay bills any more. This is one step to “automating” your finances.*

How will you track your spending for June?
I’ll use Mint’s mobile app, which integrates with their website and lets you add cash purchases. You could use a piece of paper in your pocket if you want to go low-tech.

* The other main step is automatic savings plans such as having your 401k deducted from your paycheck, or setting up a monthly transfer from checking to savings. Set these things up too and you’ll be well on your way to automated, worry-free finances.

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Turn onesies into t-shirts

Lillia is potty training now, so she can’t wear onesies any longer. It would be a shame to get rid of them, so we just cut off the bottoms and turned them into regular t-shirts. Bam! New wardrobe!

That zig-zag pattern is accomplished by cutting with pinking shears, and it helps prevent the fabric from fraying. If you don’t have a pair of pinking shears, get a solid used pair and they’ll last forever. They probably feature in a craft project at least once a week around here.

(Dudes, I know it has the word “pink” in it, but they’re just scissors with sawtooth blades and that’s pretty manly when you think about it.)

When it comes to timing your retirement, only two questions matter

The names in this true story have been changed to protect the innocent.

At our Mother’s Day BBQ, the conversation turned to finances and Facebook’s IPO. The consensus among family members was that nobody was going to buy IPO shares in the company. But Aunt Marsha told me that a friend of hers was considering moving her entire 401k savings into shares of Facebook, at which point I almost choked on my BBQ Salmon. I explained that putting a large portion of capital into any single company is too risky, and advised Aunt Marsha’s friend to put the money in a low-cost index fund, and keep it there.

Then Aunt Marsha said, “Thanks for letting me know, because she’s got a lot of money in her 401k. Like $30,000.” Keep in mind Aunt Marsha is almost 60 and her friend is approximately the same age. We got to talking about what it means to have that amount saved up for retirement at that age, and I explained the following:

Anybody can retire at any time they want, but there are two variables in the “can I retire?” equation:

A. How much do you plan to spend per year in retirement?

B. How much do I have saved up?

If the answer to Question A is 4% or less than the answer to Question B, then hand in your pink slip! Otherwise, you don’t necessarily need to keep working (but you probably will need some more capital somehow). You can:

1. Minimize spending.

2. Maximize income.

3. Increase savings rate.

4. Go into partial retirement (which will probably reduce spending but will also reduce income). I’ll write about this last one (including a book review) later.

A Supposedly Frugal Thing I’ll Never Do Again (or: How To Make Your Own Laundry Detergent)

This conversation happened over google chat yesterday…

Venessa: please buy laundry detergent on your way home
Joe: no need, I’ll just make some
Venessa: ok

So I was officially on the hook for making laundry detergent myself, lest the dirty laundry start to pile up. And we’re potty training Lillia these days, so we’re talking major laundry.

I found this recipe by Trent at The Simple Dollar, which I planned on doubling*. Seems simple enough, and we already have all but one ingredient: washing soda.

Luckily, I found out from Penniless Parenting that you can make washing soda from baking soda. It’s as simple as 2NaHCO3 —> Na2CO3 + CO2 + H2O. Or “bake it for a while at 400” for the non-nerds.

But how long to bake it? The blogger at Penniless Parenting is strangely mum never timed it, so I don’t know how long it takes to turn baking soda into washing soda. I timed it while mine was cooking and I found that it takes a little over an hour to turn 2 cups of baking soda into washing soda at 400 degrees. I put it in an oven-safe pie plate and stirred it every 15 minutes or so.

While that was baking, I’d like to tell you that I was grating the soap since that would have been a sensible thing to do. But that would be a lie, because I was actually hanging out with Venessa.

I grated the soap later, and put all the ingredients together. This was actually the worst part, unless you enjoy borax and washing soda in your nose, throat, and lungs. Personally I don’t. I guess this is how cocaine addicts feel, with all the dripping and the white powder.

Trent claims that making laundry detergent saves him $37 a year vs. generic powder. We use Trader Joe’s powder which is $10 for 64 loads, or $0.16 per load. I estimate the batch I made took about 30 minutes to make, and made about 48 loads at a cost of about $0.05 per load.

We do about 200 loads of laundry a year, so I’m saving about $22 a year for 2 hours worth of work (4 batches), or $11 an hour and 4 facefulls of borax.

In conclusion: not worth it.

PS: The lady with 19 kids has a recipe for liquid laundry detergent that looks like it’s worth trying.

Update: I tried the liquid recipe mentioned above, and it’s pretty good!

* Instead of using two bars of soap, I used one large bar of Kiss My Face Pure Olive Oil soap. Pros: it only contains olive oil, water and salt. Cons: it’s really sticky and gooey. (Additional con that I just discovered while making this recipe and blogging about it: Venessa thinks it smells like baby crap. And now our laundry is going to smell like it for 48 loads.  Oops!)