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DRIVING DOWN CAR COSTS By Cheryl Gochnauer A few years ago, my husband, Terry, sacrificed his bass boat so I could stayhome with our daughters. I remember thanking him and saying, "Don't worry,Babe. We'll get you another boat someday." A few months ago, I made good on that promise, and we bought a boat. A few weeks ago, the only vehicle we had that would pull the boat, our11-year-old minivan, blew its transmission. A few days ago, I got sick of looking at our dead van and stranded boat. Itwas time to go car shopping. "FOUR HUNDRED dollars a month? For a USED car?" I sputtered, clutching thedesk at the local dealership. The salesman didn't blink. Neither did salespeople at the dozen other lots I cruised over the next weekand a half. A grand delusion had swept the dealerships in our city:Everybody else is in hock up their necks; you should be, too. Guilt-freeand zero percent down. Aaaacck! A few hours ago, I decided a $1,500 rebuilt transmission didn't sound so badafter all. Hey - our van may be old, but it still looks good and it'scomfortable. With a little TLC, we'll be able to eke another year out ofthis baby. (At least, that's what the transmission shop guarantees.) And it's the best financial decision for us at this time. After all, $125a month ($1500 divided by 12 months) for a decent used van beats any deal I've heard this week. In fact, after being floored with $400-plus quotes, Iactually feel like I'm saving money! It's all in your perception. For instance, I recently spoke with a mom whowanted to come home, but they needed to cut out a car payment first. Theproblem: they were "upside-down" in their loan. "We owe $10,000, but the car's only worth $8,000." She thinks they're $10,000 in debt, but take another look. If it were me, I'd consider selling the car for $8,000, immediately reducing the balance to$2,000. Since the car was collateral for the loan, my finance company will want theremaining $2,000 when the car is sold. So, I would either take the moneyout of savings, get a small home equity loan, or take a cash advance on mycredit card to pay it off. Better yet, I'd set a goal with my husband of saving the $2,000 differencewhile I was still working, then sell the car. If I needed a replacementcar, I'd concentrate on picking up something we could pay cash for. I'dstart networking with friends and family to find that elusive "little oldlady's car" or similar, inexpensive transportation. Here are some helpful online resources as you look to trim or control yourbudget: The Dollar Stretcher: www.stretcher.com Cheapskate Monthly: www.cheapskatemonthly.com Crown Financial Ministries: www.crown.org Miserly Moms: www.miserlymoms.com (Comments? Write Cheryl@homebodies.org , or visit her website at www.homebodies.org . Her book, " So You Want to Be a Stay-at-Home Mom ," isavailable through Dr. Laura#146;s Reading Corner . Copyright2001 Homebodies.Org, LLC. Permission granted for use on DrLaura.com.) More >>

Oh My, How it Adds Up! by Tawra Kellam The average American often feels overwhelmed by debt and doesn't know whereto start or how to go about getting out of debt. It's a misconception thatthe more money you earn the easier it is to save. My husband and I paid off$20,000 of credit card debt and medical bills in 5 years on an averageincome of $22,000 a year. Here is how you can save over $7,000 in just oneyear cutting a few things from your grocery bill. They are painless, simpleand add up over time. If you don't think that cutting out one bag of potatochips or one soda will add up, look at the numbers at the end of a year. Ifyou're trying to save so you can be a stay at home mom or dad or for a downpayment on a house, pay off some credit card debt or just have someemergency money, here are 13 ways to do it without depriving yourself. By eliminating one $2.00 bag of potato chips (not all just 1 bag) from yourgrocery bill each week you can save $104.00 per year. Cutting out onesix-pack of soda will save another $104. A weekly $4.00 box of granolacereal adds up to $208 a year. If you eat out one less time each week at$30 a meal, you can save $1,560 and ordering one less delivered pizza at$20, can save you $1040 per year. Similar annual savings can be realized by cutting out weekly purchases offruit rolls ($130), daily gourmet coffee at $2.50 per cup ($910), a dailyliter of soda ($365), snack cakes ($455), one less bottled water ($455), onecup less juice per person in a family of four ($546), 3 lbs. less red meat aweek ($390), and by eliminating a $4.00 lunch five days a week ($1040). By themselves, these efforts may seem small--but they add up to over $7,000a year you could save. Tawra Kellam is the author of Not Just Beans: 50 Years of Frugal FamilyFavorites . For free money saving tips and recipes or to purchase a copy of the cookbook: Not Just Beans: Your Frugal Family Cookbook visit our website at www.notjustbeans.com . Permission granted for use on DrLaura.com More >>

Single Parent Homeowner The Dollar Stretcher by Gary Foreman www.stretcher.com Dear Dollar Stretcher, I am in the process of a divorce and want to keep the family home. Are there any programs out there for single parents that would offer a more favorable interest rate for re-financing? Sarah N. Sarah's question brings good news and bad news. The bad news is that she's not likely to find anyone to offer her a lower rate because she's a single parent. The good news is that there are some things that she can do to stay in her home. Only a non-profit agency would consider a special rate for borrowers like Sarah. Some do offer help for needy home buyers. But I'm not aware of any that will help with refinancing. The reason that a regular mortgage company doesn't have special rates is simple. Her ability to repay the mortgage will be hurt by the divorce. The mortgage company looks at a borrower's total assets and liabilities. They also compare the amount of income to monthly expenses. Sarah's income will be going down. Even if she was the major family breadwinner, she's probably going to be taking a big income hit when her husband leaves. Unfortunately, Sarah's expenses won't be going down as much as her income. Sure, some things like auto expenses could be cut in half. But it costs just as much to heat and cool her home as it did before. In fact, some expenses could go up. The kids might still be covered under Dad's medical insurance at work after the divorce. But Sarah will have to pay for her coverage unless it's provided through her work. What can Sarah do to be able to stay in her home? The biggest hurdle is to have enough income to afford it. Sarah needs to keep her housing expenses to less than 33% of her take home pay. That includes utilities, maintenance, property taxes and home repairs. Some people in the mortgage industry might be willing to lend her more. She'd be foolish to do that. Remember that those who encourage her to spend more on housing won't be scrounging to find the money for the mortgage every month. Do the math. Suppose she spends 33% of her income on her home. Add an additional 15% for auto and 15% for food. At this point she's already consumed 63% of her take home pay. That leaves 37% for things like child care, insurance, clothing, medical/dental, entertainment and everything else. Trying to take another 5 to 10% for housing will make her budget unworkable. So how can Sarah increase the odds of success? Nothing flashy, but there are some simple things that she can do. First, Sarah will want to set up a 'rainy day' fund for unexpected expenses. The truth is that they can be expected to happen. We just don't know exactly when they'll occur. She should put some money aside every month that it doesn't 'rain'. Not only will there be surprise expenses, but Sarah might find that her income isn't secure. Even court ordered child support and alimony is not guaranteed. If she doubts that, she can check with a few divorced friends. Her Ex could face a layoff. He's likely to pay his own rent before sending her a check. She'll need to have a plan for handling home maintenance and repairs. Routine maintenance can keep a small problem from turning into a major expense. That's important when money is tight. Unless she has a very good income, Sarah can expect to sacrifice other desires to provide extra dollars for the house. She may find that she can keep the house if she's willing to give up an annual vacation or drive an older car. Increasing her income is another option. One way to do that would be to share the house. It's possible that she could find another single woman or mother that could move in and help share expenses. Finally, she should consider what it would take to convince her that she shouldn't keep the house. Better to make a thoughtful decision now rather than an emotional one later when the pressure is on. Sarah needs to be careful that she doesn't slide into being 'house poor'. The first sign will be that she's a little short each month. Then an unexpected bill for auto or home repair pops up. If she uses a credit card she'll only delay the consequences. Borrowing money isn't the answer, it's the beginning of a serious problem. Am I trying to scare Sarah? In a way, yes. I don't know the circumstances of her marriage. But I can tell her that every day questions come in from single parents who are worn out from the continual struggle with bills. Most families with children need two incomes to make ends meet. Some are able to make it on a single income if one parent stays home and uses their home management skills to reduce expenses. But it's very hard for a single parent. For instance, cooking from scratch isn't realistic if you're working full time. It's understandable that Sarah wants to stay in her home. And, naturally I'd like to see her have the best for her family. But she'll needs to be very careful to make sure that she makes an intelligent decision and doesn't let a house drag her family down into financial quicksand. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website. You'll find hundreds of free articles to help stretch your day and your dollar. Permission granted for use on DrLaura.com. More >>

Addicted! The Dollar Stretcher by Gary Foreman gary@stretcher.com Dear Dollar Stretcher, I need some help to deal with my husband's and my addiction to spending. We are currently $60,000 in debt on top of our mortgage. This includes a second mortgage and tons of credit cards and personal loans. It got so bad that we turned all the unsecured debt over to credit counseling and are paying through them. My husband makes a very good income at his regular job and had to take a part time job. I work part time and I don't make a lot but it is all I have been able to find. The problem seems to be that as soon as we have extra we spend it on dinners out or things we don't need. Then when we need the money we are behind again. So all my husband's overtime and his second income plus my paychecks are just being spent instead of being applied to bills. It doesn't help that I work in a craft and sewing store which are my two weaknesses. And my husband works in a tool store which is his weakness. Should I change jobs? Should we seek counseling for addiction? I am at the bottom and don't know where to turn. We have thought of bankruptcy but only as a last resort. Also did I mention that my grocery bills are astronomical and its just us two! And most of the food goes bad before we eat it because we are always eating out. Any suggestions or advice would be appreciated. June June is in pretty deep. But she has plenty of company. Consumer debt in the U.S. reached a total of over $1 trillion in 1999. Credit card debt was over $500 billion. Over 1.2 million Americans filed for bankruptcy in 2000 according to the American Bankruptcy Institute. That's up from 330,000 in 1980. So even if you're not overwhelmed with debt, it's possible to learn from June's situation. If you regularly carry a balance on your credit card you could be in June's place in a few years. As she suggested, there are two ways to address this problem. One is to consider the psychological aspects. The other is to physically stop the spending. They'll need to work with both. Let's begin with the psychological. It's often been said that if you want to really know a person examine their checkbook and credit card statements. The reason is simple. People will spend money to satisfy the needs that are important to them. You'll notice that I didn't say that they spend on the things that are important. But, rather they spend for the needs that they feel will be satisfied by the purchase. Hopefully, by studying their spending, June will find a pattern. There's a story about children at an orphanage right after World War Two. The doctors found that the children slept much better if they were given a piece of bread at bedtime. They didn't eat the bread until morning. To them the piece of bread was assurance that they wouldn't be hungry in the morning. June might find that they buy groceries for the same reason that the orphans hung on to the bread. Whatever the reason, understanding why they spend will allow them to eliminate spending for imaginary needs. June and her husband may well be demonstrating addictive behavior. Only a trained professional can diagnose that. If they are, professional psychological counseling would be appropriate. But, even addiction is no excuse for not starting to control their spending now. June and her husband appear to be allergic to cash. As soon as they come in contact with it they spend it. One way to solve that problem is to not have any cash available to spend. Direct deposit could be a good idea. If that's not available, they should deposit paychecks on the way home from work. An allowance could be helpful. That way each of them would know what they have available to spend on a regular basis. It could also allow them to learn to ration their allowance throughout the week. Once they've taken the cash out of their hands they'll need to protect savings. Reducing debt and emergencies should be the only reason to take money from savings. June and her husband will need to decide what constitutes an emergency well before they face an actual decision. Otherwise they'll convince themselves that a non-essential expense is an 'emergency'. Both of them will need to make a commitment to each other not to spend any money where they work. And, if they find that they can't keep that promise, they'll need to find new part-time jobs. It could be like the dieter who works in a bakery. Even the most disciplined person will crack if enough temptation is present. Finally, they'll need to decide whether they really want to solve this problem. It's not going to be easy. It will take a willingness to make hard decisions. But, June's right about the alternative. The next step for them if they fail now is probably bankruptcy. Hopefully they'll avoid that consequence. Gary Foreman is a former Certified Financial Planner who currently edits The Dollar Stretcher website www.stretcher.com/save.htm . The site contains hundreds of free articles to help stretch your day and your dollar. Permission granted for use on DrLaura.com. "The Dollar Stretcher, Inc." and DrLaura.com does not assume responsibility for advice given. All advice should be weighed against your own abilities and circumstances and applied accordingly. It is up to the reader to determine if advice is safe and suitable for their own situation. More >>

 Expensive Legal Documents The Dollar Stretcher by Gary Foreman www.stretcher.com gary@stretcher.com Do you have any recommendations on how to set up a living trust without paying high priced lawyer fees. I figure by the time we are done working with our local lawyer who has a good reputation it will run just over $1,000. We have children and need to make plans just in case. Julie in MI  Julie is to be congratulated for making 'just in case' plans. Far too many parents assume that nothing will happen to them and fail to take the necessary precautions. Unfortunately, the simple answer to her question is "no" I don't advise trying to set up a trust without a lawyer. But let's look a little deeper into Julie's question. Perhaps it won't be as expensive as she thinks.  We'll begin by considering a frugal truism. Avoid making expensive mistakes. A problem with your will or some trusts are almost impossible to correct. There's a reason that they call it your "LAST will and testament". Once you're dead you cannot amend or revoke it.  Being a sharp consumer doesn't mean always taking the least expensive alternative. In fact, doing that can sometimes cost you more in the long run. This is probably one of those cases.  In fact, not only should Julie contact an attorney for her will or trust, she'd also be wise to find one that specializes in estate planning in her state. There are some nuances that an attorney who works in another area of law or another state might not know. In fact, if you move to a new state it's important to see if your estate plan should be updated.  Let me be clear about this. I'm not a big fan of attorneys. Wills and trusts are more complicated than they need to be. And attorneys are a large part of the reason that they're so complicated.  But the unfortunate truth is that it does take specialized knowledge to do them so that problems don't crop up after your death. Not only with federal taxes, but also with state laws. And much as I don't like paying lawyers, the cost of doing it wrong could be very expensive for my children. So finding a lawyer who knows estate planning is likely to produce the right document at the lowest cost.  Julie might be tempted to consider some of the do-it-yourself will kits available. No doubt that some are quite good. Just remember that you'll die believing you did a great job. A problem won't come out until some judge says that your will or certain portions are invalid. So make your selection carefully.  So what should Julie do? She doesn't say so, but it could be that her concern is simply for her children's welfare. If that's the case a living trust probably isn't required.  A living trust is often used to avoid federal estate taxes. And that usually isn't a problem until you have over $500,000 in assets. So if Julie's goal is simply to make sure that if she and her husband die that the money goes to her kids and that she gets to select the children's guardian, then a living trust isn't necessary. Typically a will, which costs less, can handle the job.  Selecting a guardian is important. Remember that each state sets an age where a child is considered an adult. Until that age they cannot manage their own financial affairs. The guardian could be an individual (for example your sister, friend or attorney) or a corporation (a bank or trust company). There are various ways, including trusts, to set it up legally. You also have the option of letting the guardian control the money even after your children reach adulthood. Discuss it with your attorney.  Another reason this process, called estate planning, is important is that if you don't make your wishes known in writing before you die, the state will follow its own laws and make the decision for you. Not only as to managing the money, but who will raise your children. Your irresponsible bachelor brother could be asked to care for them. This is also a good time for Julie to talk with her choice and make sure that they're willing to accept the responsibility.  One final word of caution. I am not a lawyer and this isn't a place for amateurs. All I can do is warn you of the potential dangers. So before you make any decisions, contact the appropriate experts. Yes, experts do cost money. But this is one area where saving can be very expensive.  Gary Foreman is a former financial planner who currently edits  The Dollar Stretcher website  and newsletters subscribe@stretcher.com  You'll find thousands of articles to help stretch your day and your dollar. Copyright 2003 Dollar Stretcher, Inc. all rights reserved. Permission granted for use on DrLaura.com. More >>

Homemade baby food The BIG secret: It takes less than 30 minutes per week By Cheryl Tallman and Joan Ahlers Making baby food is healthier for your baby, and offers your baby an introduction to foods rich in variety, flavor, color, taste and smell. All of your friends (and your mother-in-law) will think you are a super parent for making your baby's food. The big secret -- it is super easy and takes less than 30 minutes per week. A common approach to making baby food is called the "ice cube tray" method. The concept is simple: make large quantities of basic food purees using a standard blender or food processor and freeze it in single servings (1 ounce) in ice cube trays. With this method, you only need to make baby food once, maybe twice, per week. Over time you build up a large variety of single-serving baby food cubes in the freezer. Here are the four basic steps of making baby food with the ice cube tray method: Step 1: Prep - Depending on the type of baby food you are preparing, you will need to wash, chop and peel the fruits and vegetables. You should not use detergent or bleach when washing fruits and vegetables because these chemicals can leave a residue that will be absorbed by porous food like produce. If you are using frozen produce, simply open the package. Step 2: Cook - Cook the food in the microwave or use a stovetop method of steaming. We prefer microwave cooking for several reasons: saves time because foods cook faster; retains more nutrients than other cooking methods; and it is easier clean up. If you prefer the stovetop method of cooking foods, you must use a steamer basket. DO NOT boil food, boiling food reduces nutrient content. Foods must be cooked well. They are done when the can be pierced or mashed easily with a fork. Step 3: Puree - Pour the food and cooking juices into a food processor or a blender and puree. Food consistency is created during this step. You want your baby to have food that is soft and velvety in texture. You may need to add water to some foods to get the right consistency. Although water will slightly dilute the food's nutritional value, the difference is not significant enough to worry about. Step 4: Freeze - Pour the food puree into ice cube trays. Cover and place them in the freezer for eight to 10 hours or overnight. Pop the baby food cubes from the freezer trays. Place the cubes in a freezer storage bags or stackable containers (Label the bag/containers with the date and the type of food), and return them immediately to the freezer. Baby food cubes stay fresh for up to two months. Sample Recipe:APPLE PUREE 6 medium golden delicious apples Step 1: Prep - Wash, peel, core and cut apples into one-inch (3 cm) slices. Step 2: Cook - Place apples in a microwave safe dish. Cover. Cook 5 minutes and let stand for 5 minutes. Cook an additional 5 minutes. The apples are done when they can be pierced easily with a fork. Step 3: Puree - Place apples and cooking juices into a blender or a food processor. Puree to a smooth texture. Step 4: Freeze - Spoon into So Easy Baby Food Trays or ice cube trays. Cover. Place in freezer eight to 10 hours or overnight. Remove cubes from trays, place in storage container or freezer bag, and return immediately to the freezer. Makes 24 1-ounce servings. Stays fresh for two months in the freezer. To serve, select frozen apple cubes from the freezer, defrost and warm, check the temperature and feed. Age to introduce: About 6 months Serving homemade baby food Using the ice cube tray method of making baby food makes it is easy to create a large variety of food cubes in your freezer. When it is time for feeding, simply select the food cubes from the freezer, thaw them and feed them to your baby. You may want to warm the food first. Baby food can be served cold, at room temperature or slightly warm. Never serve hot food to your baby, and always check the temperature of food or drinks before feeding them to your baby. Baby food should have soft, velvety consistency. If you are just starting solids, thinner food is better than thicker food. If you defrost the food and see that it is too thick, you can easily thin it by adding some breast milk or formula. This also adds a little extra nutrition too. If the opposite happens, and the food is too thin, you can easily thicken the food by adding a little baby cereal, mashed banana or plain yogurt. After your baby has been introduced to a variety of single flavor foods and he is a little older, you can begin making meal time more interesting and introduce your baby to array of tastes, by combining different foods to create medleys. Here are some examples of foods cubes that taste great together: Green peas and sweet potatoes Green beans and white potatoes Broccoli, cauliflower and melted cheese Butternut squash, corn and mashed tofu Peaches, pears and rice cereal Mango, Papaya and banana Raspberries, apples, yogurt and ground walnuts About the authors: Cheryl Tallman and Joan Ahlers are sisters, the mothers of five children, and founders of Fresh Baby ( www.FreshBaby.com ). Raised by parents who love fresh foods and entertaining, their mom, a gourmet cook, ensured that they were well-equipped with extraordinary skills in the kitchen. Both with long track records of business success, they decided to combine their skills in the kitchen with their knowledge of healthy foods and children to create Fresh Baby. Cheryl and Joan put a modern twist on the conventional wisdom that when you make it yourself, you know it's better. Their goal at Fresh Baby is to make the task of raising a healthy eater a little bit easier for all parents. Fresh Baby's breastfeeding accessories and baby food making supplies provide parents with practical knowledge and innovative tools to support them in introducing their children to great tasting, all-natural foods - easily and conveniently. Visit them online at www.FreshBaby.com and subscribe to their Fresh Ideas newsletter to get monthly ideas, tips and activities for developing your family's healthy eating habits! Permission granted for use on DrLaura.com. More >>

Summer Musings The Dollar Stretcher by Gary Foreman gary@stretcher.com It's summer. When the days are long and lazy. And you have time to think about unusual things... Recently I glanced at some notes that my wife was taking. She had written 'reflected', but due to my "getting-older" eyesight it looked as if she had written "deflected". That completely changed the meaning of her notes. The dictionary gives multiple definitions for reflection. Among them is "efficiently reflecting light, heat or radiation". A second one talks about thinking deeply about a subject. Some people seem to reflect opportunity. Taking the time to think allows them to see possibilities clearly and explain them to others in a way that makes sense. They make the most of what comes to them. On the other hand, other people have an uncanny knack for deflecting opportunity. Even when they're in the right place at the right time something always comes up to prevent them from cashing in on good fortune. Somehow good things bounce off of them. How can you become a "reflector"? The first thing is to hang around reflectors. They're the ones who seem to be "lucky". The next thing is to build some time into your busy schedule to think. Henry Ford said that thinking was hard work and that's why so few engaged in it. Old Henry was a reflector. Speaking of opportunity, here in Florida we have a state lottery. The state has purchased billboards that stress the size of the current jackpot. It's usually in the $10 million dollar range. I know that they're trying to get people thinking that the jackpot is an opportunity. But, I can't help looking at that big number a little differently. I know that they pay out less than they take in. So to pay out $10 million, they'll need to collect somewhere in the neighborhood of $14 million. What that means is that my chance of winning the whole jackpot is much less than one in 10 million. Pretty long odds. I know that a ticket is only a buck. But it sure seems like a waste to me. Guess maybe I'm especially frustrated because that's not the only way that the lotto is misleading. People voted for the lottery because they were told that the money raised would all go to education. No more trouble paying for schooling. You guessed it. Years later we're still scrambling for school money. And now we're starting to see people with addictive gambling problems. On the other side of the coin every so often you hear something that really rings true. Here's one. "Opportunity only knocks once, but temptation leans on the doorbell." Unfortunately, I don't know who said it, so I can't give them credit. But they've spoken the truth. Most of us only get a certain number of real significant opportunities in our lives. Temptation, however, is always around us. Temptation to cut corners. To just sit back and let someone else do the work. To avoid the risk that comes with opportunity. It's funny. If you study people who have had large, public failures they usually didn't make one very big, very bad decision. Mostly they made a small, bad decision. Then followed it up with another small, bad decision. And kept doing that until the consequences of those decisions built up and came crashing down on them. The morale of the story? Everyone will give in to temptation some time. That's just being human. But when you're going the wrong way, turn around as quickly as possible. Although it's easier said than done, don't make a habit of giving in to temptation. On a whole different path, I admit that I get a kick out of the ads for psychics. Often there's a disclaimer that says their advice is for 'entertainment purposes only'. Of course it's in small print. Much more prominently displayed are promises that they'll help you find the right mate, riches and happiness. I've got a couple of questions for them. If they can see the future, why don't they buy tomorrow's winning stocks today. Then they'd have plenty of money and could offer their services for free. Wouldn't that be a better way of helping people with their special abilities? Or how about this. When you call in they'll ask for your birth date and credit card number so that they can charge for their services. If they know so much why do they need to ask? Maybe I'm just being too hard on them. But it would seem like divining someone's age would be easier than predicting how their love life is going to turn out. Ah, well. It's time for another iced tea and more summer contemplation. Gary Foreman is a former purchasing manager who currently edits The Dollar Stretcher website www.stretcher.com/save.htm You'll find hundreds of free articles to stretch your day and your dollar! Permission granted for use on DrLaura.com More >>