Florist Tip

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After unwinding from all the stress on a beautiful beach with warm blue water and bright white sand as far as the eye could see, I came home and started catching up on emails. One of them was from my venue asking me when I was going to pick up my flower vases. I was very confused why I still had 30, yes, 30! flower vases waiting for me almost 3 weeks after the wedding. I called the florist asking why they didn’t pick them up. Come to find out, they didn’t need to because I now owned them. Confused, I asked if I could return them for a refund because, let’s be honest, unless I open a glass shop, what am I ever going to do with 30 cylindrical flower vases? Absolutely not. I could not return them. They are now mine to keep.

It turns out that I contracted to buy rather than rent the vases. So my florist price, which I thought was so great, would have been even better if I had taken 5 seconds to ask: “Do you rent them or do I have to buy them?” Since I didn’t, I now have this tripping hazard in my basement waiting to cause an injury. It also means that I didn’t get the best price I could have. This goes to show that even if you’re normally a stickler about contracts and spending, you can never get too comfortable in the planning process. Towards the end, there is always something that can fall through the cracks because we are certainly way too busy to be on alert about every detail.

My tip today? Ask if you’re buying or renting the vase. Try and negotiate a rental (while keeping in mind that you’re on the hook if it breaks) to save money and storage space after the wedding. I promise that once, your registry items start coming in, the last thing you’ll want to waste space on are flower pots.

Do you know anyone looking for vases? I’m willing to unload mine for a marginal cost… Call me! 🙂

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“Two Seats have been Reserved in your Honor…”

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I never liked that wording. I could never put my finger on why exactly but it’s not my cup of tea. I’m a fan of the more traditional “The honor of your presence is requested…” In part because I’m all about efficiency. The first one requires you to go in and note a number for every single card. We have enough details to attend to and this shouldn’t be one of them. However, this has also opened the door for people to decide your guest list by making executive decisions and inviting who they think you may have left out.

I received an RSVP card 2 days before the deadline from a husband and wife pair who decided that they were not satisfied with simply checking off the “Will Attend” box on the reply card. Instead they went back, scratched out the check mark and wrote “FOUR” on that line. Who are the other two people? I don’t know them. Maybe they wanted to invite their kids. It could be that 1 set of in-laws live with them. Hell, for all we know, their distant cousin Tim might be in town temporarily, on sabbatical from his Alaska fishing job and they decided to add him and his lady friend of the month to the invitation for a free night out, courtesy of my wallet.

For starters, I specifically addressed the invitation to Mr. and Mrs. Smith*. Not to The Smith Family. That may have gone over their heads, but it was a calculated move. Furthermore, while I think they have kids, their kids are at least high school aged. If they don’t attend my wedding, I’m certain they can watch themselves while mommy and daddy are away for a few hours since they only leave about 15-20 miles from my venue. Given the fact that I was paying per person for each guest, I think it was quite presumptuous of them to assume that I must host their children (or whoever, because frankly, I don’t even know who they intended to save the other 2 seats for) if I invite them. There was no attempt made to call me or ask if it was ok. Just a change to my invitation and my guest list count without my input/permission. Maybe they were hoping they could sneak it in without me noticing.

I set the card aside and I contacted them about this “evident mistake” they’ve made in “accidentally” sending a card back with the “incorrect number of guests” (hehe). I eventually heard back and was advised it was for their (as I suspected) teen aged children. Since I am a take-no-prisoners kind of person, I dealt with this the best way I know how: I sent an invitation for two. Not 3, not 4. TWO. I will either have 2 of them at the wedding or 0. They declined. The attendance of the Smith family was 0.

To be clear, Mr. and Mrs. Smith are distant family friends and were not invited because of their direct connection with me. They were invited as guests of my other family members. So they’re essentially guests of guests, inviting other guests. What do we call that? 3rd hand guests? Which makes the situation even more ridiculous.

People love to tests your limits. This is why I am a firm believer in setting boundaries and remaining consistent. Otherwise, we run the risk of putting people’s comfort so far ahead of our needs that we find ourselves in precarious circumstances that may impact us for a long time. If I allowed every couple to bring 2 additional guests, I would have had a 500-person guest list, a 6-figure wedding and a massive amount of debt.

We are expected to be responsible and spend only what we can afford. Bride and grooms are often criticized, by the very people they hosts, for having a lavish affair. Yet, they continue to insist on creating a situation where we overspend on the most expensive portion of the wedding. No thank you and be gone.

The only people invited are the ones listed on the invitation. If you’re a guest, please refrain from “suggesting” anyone else unless you’re writing me a check.

*Names have been changed to protect the guilty and etiquette violators.

Path to a Million: 2017 Q1

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This is my first update since the initial posts (announcing the start of the series and the pilot post). Things are going well, maybe better than I expected because a great thing happened: tax season! *eyeroll* (take some time to read this post about why it’s not a windfall you should rejoice in).

However, in my case I can rejoice just a little. Part of my big refund had less to do with my lax W4 allowances, but because we had some credits for energy efficient updates, primarily in the form of solar panels and we were able to use the cost of depreciation to offset our rental income.

Tax season came through for some serious debt reduction which had a snowball effect on our net worth. It will reduce our liability (once I get around to actually making the large payment) and free up cash that was normally going to satisfying my monthly student loan payments, to put towards investments/savings. This really does show the positive effects and importance of eliminating debt. Of course, we continued to pay down all our other obligations as well, but using our refund to all but eliminating student loans will make the most significant impact.

 

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Last quarter, I recorded my net worth at $369,922. This time, it’s $389,213, up $19,291. This represents an average increase of just under $6,500 every month. Although most of that is achieved by reducing debt, it’s a start, and a very good one. Debt plays significant role in our financial struggles and if we can consistently decrease our debts over time rather than add to them, we have the right attitudes and the necessary tools to build wealth, because the idea is that, once the debt is gone, we can use the same disciplined approach towards investing to gain even more speed towards financial independence.

*See Pilot post for more info on loans.

Frugal Fridays: Reception Details

This is my version of throw back Thursday: Some of the best finds from my own days of wedding planning.

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It’s the little expenses that creep up on us. That’s what every couple is told to watch out for. You budgeted $2,000 for your dress but the slip is $120, the bra is $80 and a veil is $300. Oh you think that garter is cute? That will be $30. It never ends. And that’s not just your dress. The reception costs will sneak up on you as well. Your keepsake box will run you $15 to $30. Don’t forget taxes, shipping for the things you can’t get in town, etc.

I couldn’t allow the unexpected to bust my budget, so I hunted for deals like a man lost in the Sahara hunts for water. Here are some of my deals:

1) Small gift bags for my favors: less than $70 for 100 from Amazon
2) Matching color tissue papers to stuff them: $9 for 100 from Amazon
3) ‘Mr. & Mrs.’ wood chair hangers: $15 (50% off sale) from Amazon (I never actually used those as I forgot I bought them!)
4) Personalized hanger* – $3.99 (+$10 for shipping). This was a one-day sale. These are usually $19.99-$25.99. from Etsy

*All items except for the hanger were shipped for free, saving me a lot of money as well. 

Wedding Finance Tips: Getting Hitched in the Black

I live in the northeast and spring has officially started, although you really can’t tell just looking at the weather (it’s supposed to be a brisk 25 degree day today). Unlike our more favored friends in the south, true wedding planning doesn’t begin until spring as many brides do not like planning for winter weddings. Because of that, I decided that the change in season should help usher in some new topics: Weddings! At the very least, they will be in season, at most they are expensive and you might find some tips to help you save thousands.

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The average cost of a wedding in the US is approximately $25,000. It certainly doesn’t help that, we are not taught to haggle for anything unless we’re buying cars or houses. We see a price tag and we are sure that we either have to pony up or find a store we can afford. However, that’s what the sales people want us to think. If we don’t haggle, they make more money so they’re not going to tell us that we can get any kind of discounts. When it comes to weddings, things are even worse. They play on our emotions to better deplete our bank accounts (or for the more impulsive among us, inflate our credit card balances).

There are many thrifty wedding blogs out there. However, I struggled to find advice that was sensible. It seems that there was very little balance between having a nice wedding and having a cost effective wedding. Some of the advice ranged anywhere from “don’t invite any of your cousins” to “make your own wedding dress”. I felt that some of the tips were not always helpful. What if I like (most of) my cousins and I am not crafty enough to make my own place cards, let alone a wedding dress? Wanting a cost effective wedding doesn’t mean I have to walk down the aisle with paper flowers or ask my guests to bring their own cakes. Furthermore, most people will tell you that what you save in the little DIY projects is not enough to offset the stress of time constraints and the million other things you can’t outsource. The truth is, while weddings are big business, couples still have leverage and that leverage can be used to hold on to some of our hard earned money.

1) Negotiate yesterday, negotiate today, negotiate tomorrow. No price is set in stone. Everything you pay for can be negotiated to a better price or something else of value can be added to your package. Here are some things I negotiated for and got:

  • 10% off the catering
  • Complementary up lights from the venue
  • My photographer had a Picture/Video/Photo booth package. I didn’t care for the photo booth and requested he replace it with a DJ. (He never said that was an option, I asked.)
  • I negotiated for a bigger flush mount album
  • The baker was offering 10% off for anyone who booked their wedding on the day of the wedding show

2) Look for packages. They want and need people to come and spend money. So if you do the leg work for them they will reward you.

  • My groom gets $40 off his tuxedo for every adult rental. There are 7 males in my wedding party. With only 1 boy, the 6 men add up to a free tux for him.
  • My make-up artist will give me a discount for every one of my girls.

3) Remember that you’re not the only one who needs a break. Weddings are expensive for everybody. Not just the bride and groom. Remember that your attendants have to spend a lot of money to be a part of your special day and they are doing you a favor. Be kind to their budget.

  •  My female attendants got 20% off for buying their dresses at the same store I got my dress.
  • I told them what color but I did not impose uniform shoes on them because I wanted them to be able to use what they had in their closet if that option presented itself.

4) Learn to say ‘No’. Unless someone is financially contributing to your wedding, do not allow them to dictate what happens on your day. Many people do not have boundaries and will try to give their 2 cents regarding who should or should not be invited. How this centerpiece would look better than that one, etc.

5) In direct contradiction to #2: be careful with the packages offered. It is important to consider the packages. However, not all of them will be for your benefit. Some packages need to be assessed against other non-wedding related options. Wedding stores tend to have a huge mark up on everything. While something like a bridal gown can’t really be found elsewhere, other things like your shoes and jewelry are easy to purchase from a non-wedding vendor. Because I wasn’t hasty, I was able to discover that the 20% discount offered on accessories from the store I got my dress from was not the best deal in town. I ended up finding my accessories for 1/2 of what the dress maker sells them for.

6) Give yourself time to shop around. We waited too long to get the MOB dress so my mom ended up paying a surcharge for a rush order. On the other hand, I shopped around for my dress, tried them on and knew exactly what I wanted. But because I had time, I was able to wait until there was a tax-free week-end in my state to make the purchase. This tip not only gives you time to find options, but it also gives you the bargaining power. Being pressed for time will stress you out and the people you deal with could take advantage of your situation to upsell you on things you don’t really need.

The tax rate in my state is 6.25%.

7) Remember that some things will only be used for a few hours and are really not all that important. *GASP* Did I just say that there might be something in your wedding that may not be that important? Yup! And I’d say it again. Do you really need to spend $50-60 on a card box? You will use it only for the purpose of collecting congratulatory cards from your guests. Unless Bill Gates is one of your guests and you know his renown generosity might attract a thief so you’re looking to get a finger print scanner hooked to that thing, what’s wrong with a $15 one? Keep it close to you and have one of your parents drop it off in a secure location for you. Once you’ve made your rounds and closed the box it has no more value. Same goes for a garter that your new husband is going to throw at a bunch of guys tackling each other for a piece of your undies. It serves no other purpose and you shouldn’t get anything over $12. There are many small expenses like these that can add up, be mindful.

8) There’s a right way and a wrong way to borrow for your wedding. If you’re putting your wedding on credit, stop. Just. Stop. You probably can’t afford it. Consumer debt is a huge problem in a consumer-driven society. People continue to get things they can’t afford at the expense of necessities. So far I’ve paid for everything on my credit card BUT a) I pay the balance in full every month (resulting in no interest) and I get 1.5 points for every $1 I spend. After 25,000 points (which take 5 years to expire) I get $250 in cash deposited into the account of my choice. So I’m essentially getting paid to use my credit card. If you are getting charged interest at the end of the month and/or you don’t have an incentive from your credit card company, you’re doing it wrong and the wedding is costing you more than you think.

The interest rate on credit cards can be as low as 7% for those with good credit and as much as 21%+ if your credit is not that great.

9) Know your (artistic) limitations. Overconfidence can make you penny wise and pound foolish. The people on etsy and pintrest, make it look easier than it is. Just because you think you can follow instructions from youtube on how to do that elaborate pop-up invitation doesn’t mean it will look the way you want it to. If you end up buying high end paper, ribbons and an industrial grade laser printer only to turn around and have to place a rush order for your invitations because your product was hideous, you end up spending more than you would if you had simply purchased the invitations to begin with. If you got a lifetime membership card to the talentless club at birth like I did, cut your losses and don’t attempt what you most likely cannot do.

I was able to save $150 on my invitations. I talk about that a little more in this post.

10) Cut out transportation costs. If a place of worship is not critical to your wedding proceedings, or if your religious officiant is willing to go anywhere you request, you can eliminate the need for your limo by having your ceremony and reception at the same place. Some places charge you an additional fee for the ceremony set up, so you can probably try to negotiate a further discount on your venue by asking if they will offer you a package deal/price.

Most limo companies run packages between $375-450.

These are you 10 tips for today. I hope they serve you well. They’ve certainly helped me. I am having the wedding I want to have, while savings thousands. Saving doesn’t mean I have to “settle” for things I don’t want. Ultimately, this is a one-day celebration of your love. The rest of your life is what matters most, don’t start it in the red.

Budgeting 101: Start, Stick, Succeed

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Your budget is at the root of your financial success or failure. Having the right budget can be the determining factor in the outcome of your personal finances. Often times we hear about people who earn significant more than the median national income, yet they are struggling. These are the people who, regardless of what they make, manage to spend much more of it. I would think that people smart and fortunate enough to earn a good salary would know the importance of a budget. But knowing is half the battle. You must stick to you budget for it to work. If you bought a treadmill but did not run, you wouldn’t expect to lose weight. Budgeting is not that different.

Five ways you can stick to your budget

Be honest: The first step in having a successful budget is being honest with yourself. Don’t be unrealistic about how much money you’re going to make. Your overtime pay is not your salary. Hours can be cut at any time due to budgetary restrictions or new hires to fill the missing position. If you’re used to making an extra $5,000 a year in OT, don’t say your salary is $60,000. It’s $55,000 because the extra $5k is not guaranteed. Any budgeting that’s based on your OT pay, can create serious problems. My cousin once got a car repo’d after she included her OT income to determine whether or not she could afford it. When the company started cracking down on OT around the time of the recession, she couldn’t make her payments and lost the car.

Change your vocabulary: It is time that we learn to use the correct terms when we talk about a need versus a want. You don’t NEED these shoes. You want them. The only time you NEED shoes are when you have a hole in the ones you have. For example, just the other day my mom  bought a coat rack online. When it was delivered she said: “I’m so happy! I needed this.” When I said: “No you didn’t. You wanted it.” She tried to go into this lengthy explanation about how important it was for her to have a coat rack. That’s an artificial need. You went years without a coat rack. It’s not a need. Needs are shelter, clothing, food, health care and the things that go along with them like heating your home, etc. Everything else is frivolous.

Set specific attainable goals: If you make $12/hour and are drowning in debt, don’t say something vague like “I want to be a millionaire.” Instead, start small and specific. Maybe you can say: “I want to pay off my credit card debt.” The difference between those 2 goals is that one of them is realistic and specific while the other is vague and appears unachievable. This is not your mom saying you can be and do anything you want in the world. This is real life. You have to learn to start small and work your way up. I won’t tell you to shoot for the moon. You will not end up among the stars. You will be frustrated at your lack of success and give up.

Re-train yourself: Give up on instant gratification and do it immediately. “I deserve this.” You also deserve to not live in squalor in retirement. You also deserve to not be hounded by creditors. You deserve to save money on your loans by having a favorable interest rate and good credit. But instead, you focus on what you think you deserve now and not what you deserve in the long run. Instead, keep your eye on the prize. Invest in financial freedom and not stuff.

Live by the 48-hour rule: This is the best way to kill your inner impulse shopper. If you see something you want, sleep on it for 48 hours. If you wake up in 2 days and the excitement has worn off, then it’s something you can go without and you shouldn’t buy it.

Debt vs. Savings: What to Prioritize

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Two of the building blocks of personal finance are saving money and paying off debt. Everything flows from these two principles. You can’t invest, start a business or retire if you are not saving and/or you are crippled by a mountain of debt. In an ideal world, we’d be maxing out our 401k and crushing our debt, getting ever closer to eliminating them every month. Alas, we live in the real world with tons of responsibility and a finite amount of money to work with. So how do we prioritize?

While the exact answer might vary from person to person depending on their respective situation, the steps we use to reach the appropriate conclusion are the same. To make it easier, I will eliminate the variables in a hypothetical situation by using myself as an example.

Currently, I have 3 savings account: one is a CD where I get the best return I’m going to get in this interest environment. It pays me 1.25%. The other one is a money market account that pays 0.05%. It’s not as lucrative as the CD but my money is accessible with few penalties. However, money markets have an important restriction. While you can deposit money any time you want, they cap how many times per month you can withdraw before you incur a fee. It’s a fantastic tool that forces you to keep your hand out of the honeypot. But life happens and we sometimes need to access money more often than we want to. That’s where my regular savings account comes in. Hold on to your hat folks, this return might blow you away: 0.01%. I’ll try not to spend it all in one place. If you’re wondering what this has to do with anything, be patient…

The debt that is currently the biggest thorn in my side is my student loan debt. As much as I would love to keep fattening up my savings, the interest rate on that debt is 5.16%. That means, for every hundred dollar I chose to add to my savings (let’s assume we’re talking about the CD since it offers the best rate) over paying off my student loans, I am getting a return of 1.25% that is costing me 5.16%. That puts me in a whole of close to 4% annually on that $100. Of course, student loan interest is tax deductible if you itemize (which I do), but you don’t get all of it back. The IRS caps it at $2,500 gradually decreasing it as your income goes up until it disappears. So we’re talking a saving of 1% to maybe 2%, and I’m being generous, which will then net you a negative return of almost 2% and we aren’t adjusting for inflation.

So what do I prioritize?

  1. Having an emergency fund: This buys you peace of mind and keeps you from falling into debt when tragedy strikes. How much you need depends on your particular situation. But I recommend a minimum of 6 months.
  2. Saving for retirement: The most important part of saving and investing for retirement is time. The longer you save, the more time that compound interest has to work in your favor. Also, the more time you have to recover from dips in the market.
  3. Paying off high interest debt: My student loan debt at over 5% is in stark contrast with this loan I took out for an energy efficient central AC which is a 0% loan. I am in no rush to pay that off. If they want to extend it 10 more years, I’ll take it! However, I am very aggressive with my student loan debt where I send every extra unexpected funds to Nelnet. Whether it’s a raise, a bonus or a tax return check, it goes towards my student loans. I have paid off over $23,000 in the past 18 months and I have no plans of slowing down until it’s gone.

While your situation might be different, for me, this is the least expensive and most sensible order in which I can allocate my funds. If I do anything else, I am not maximizing all of my dollars. Have you taken the time to consider if your debt repayment plan and your savings strategy are optimized?