The other day I was talking with a friend about how we pay so much each month for our mortgage payment, yet maybe 10% goes towards principal.  It’s frustrating, and often makes me dream of selling my house and being mortgage free.  Of course, then we’d have to pay rent and who knows if that would be better for us.  I told her how I had been paying extra on the principal to reduce the amount of interest we end up paying and to shorten the length of our mortgage.  She had some objections, and I listened to her while taking mental notes.  Here’s what she thought about us paying extra on the mortgage:

-Because we don’t plan on staying in this house forever, she thought it would be in our best interests to stop paying extra on the mortgage and to start putting that money elsewhere.  Maybe a Roth IRA, investments, etc.  Over the long term, she thought it would be better if we invested the money over it being tied up in (maybe) equity in the house.

-There’s not really a way to get the money back that you pay extra on your mortgage unless you take out a home equity loan, and that’s not really something I ever want to do unless it was an emergency.

-Cash is king.  If we take the extra money we’d be putting towards the mortgage in a savings account, we’d have access to that in case of an emergency.

-If our house value ever dropped dramatically and we wanted to walk away from our mortgage, the less money we had into the house, the better.  I don’t know if I could ever walk away from a mortgage, but with the economy roller-coastering like it has been the past few years, who knows what will happen with home values.  I don’t want to be stuck with this house and not be able to move or sell it.

I can understand why people would walk away from a mortgage.  My parents’ house in Michigan was worth at least $240,000 at one point and now is probably worth less than $100,000.  Had they had a mortgage on the house, it probably wouldn’t be worth paying the payments on a house they probably would never recoup the money.  Of course, their house has been paid off for years, so they’re only screwed if they go to sell, which I don’t see them doing in the near future.

Do you think you would ever walk away from a mortgage? What circumstances would cause you to do so?

If you’ve watched the news lately, there’s been news of inflation.  With as horrible as the economy is, something needs to change for the better.  Personally I don’t think that printing extra money is a good idea, but I’m not an economist, so I may not know what I’m talking about.  I have fears that hyperinflation is going to take place and it scares the pants off me.  I’m worried that if hyperinflation occurs, it will have a domino effect and worse things will happen.  Here are some of my concerns about hyperinflation:

1. Goods will become way too expensive.  Food prices will rise sharply, people will freak out and the grocery stores will be empty.  People will start buying food to hoard because of hyperinflation.  Other goods will cost a lot more money, which will mean that our current salaries will not go as far.

2. The stock market will crash.  After the news of hyperinflation breaks out and is a reality, people will respond by selling all their stocks to get out of the stock market.  After the stock market crash, who knows what will happen.

3. Money in savings will be useless.  Paper money won’t be worth anything.  People will start bartering more for goods and services.  Gold and silver prices will be higher than anyone would have ever imagined.  All that money that you worked hard to save over the fast few years?  Not worth anything any more.

4. Riots will break out as food and water become scarce.  The government will send out the National Guard to try to counteract the riots, but it really won’t help.  People become more angry.

5. Other countries will refuse to help the U.S. and China will stop purchasing bonds and investing in the U.S. economy.

6. Oil will become a lot more expensive, and the countries we get oil from will stop sending us oil.

Of course, these are worst case scenarios and it’s almost like Armageddon.  I’m not sure if hyperinflation will be the Armageddon or not, but I know that it wouldn’t be a good thing for the United States.  I know that one of my biggest concerns is not being able to pay for food or have access to enough food to feed my family.  It’s also disheartening to think that all that money that we’ve saved up will not be worth anything.  That’s a horrible thought!

I’m not an economist, and I try my hardest to stay away from the news.  Things in the country are scaring me right now, and who knows what’s going to happen.  I wish I had a magic wand to just make everything better, but I don’t.  I think I’m just going to keep on living life like I have because the only other alternative is to worry, and that doesn’t help anything.  We’ll keep gardening, living simply, and saving money because that’s what we always do.

What do you think will happen with the United States economy in the near future?  Do you think we heading towards hyperinflation?

Seriously? 17.5% unemployment? Yes, if the government would measure unemployment as they did 80 years ago.  The government’s calculation of 7.2% unemployment does not take into consideration millions of Americans who could not find a job or could not get full time employment.  So, if you’re that person with the master’s degree that’s working part time at your local grocery store, you’re not included in the calculation.  Technically you have a job.

The government also tracks the “U-6″ rate, which includes discouraged and underemployed workers.  Right now it’s 13.5%.  Currently we’re at a 15 year high for unemployment.  The number of Americans filing for unemployment is at its highest level in a quarter of a century.

During the Great Depression, unemployment hit 25%.  But that wasn’t until 4 years after the stock market crash.  1 in 4 Americans was out of a job.  We think 7.2% (or 17.5%) is bad?  Hopefully we won’t see 25%.  That would be devastating.   My advice?  If you’ve got a job, thank your lucky stars.  Keep saving all you can, and be as thrifty as possible.  You can never have too much money saved!

source

Bartering can be one of the most fun and interesting ways to save money. What is bartering? Bartering is an exchange of services or goods. Bartering not only can help you save money, but it also can cut down on your consumption and help you get rid of clutter.

photo credit: StevenGroves

A few weeks ago, I shot a family portrait session for one of my friends. She said she would pay me but I didn’t feel right charging her. A few weeks later I needed someone to let my dogs out at night when I was unable to, and asked her if she would be interested. I offered to pay her, but she declined. We called it even. It was a win-win situation!

Are you interested in bartering? There are many ways you can get connected with like-minded people. One idea is to check Craigslist. There are many people that list items on there that are interested in trading. Who knows- that old hutch you have in the garage may be worth someone else’s pony!

Your friends can be untapped resources when it comes to bartering. Do you know how to cut hair? Do you enjoy decluttering? Chances are, you are good at something that another person values. Find out what they are good at and exchange services!

Bartering can help create a strong sense of community and friendship. You can save money and help someone out, and that makes everyone feel better.

Have you ever tried bartering?

If you haven’t heard about the Gulf Oil spill, you are probably living under a rock. When I see pictures or hear new stories, it saddens me.  The other day I heard of a some great ideas to help clean up the oil spill.

Matter of Trust is organizing ways to help with the cleanup of the oil spill.  There are many ways you can help, including:

-Donating money. You can send checks made payable to “Matter of Trust” to

Matter of Trust, Inc.
99 St. Germain Avenue
San Francisco CA 94114

-Donating Hair, fur, and recycled nylons. As silly as this sounds, think about it.  Why do we wash our hair?  Because it gets oily.  Hair absorbs oil and can help clean up the oil spill.  I’m going to donate some of the tons of dog hair I sweep off my floor every day!  I’ll collect it and send it in an envelope.  Hair is light, so it won’t cost much to send.

-Spread the word. If you can’t afford to give money, you can help by spreading the word!  I’m sure there are a lot of pet owners that would be willing to donate hair (and even some people!)

Would you donate hair to help clean up the Gulf oil spill?

photo credit: Speaker Pelosi

How many times have you heard someone blame the economy for something? I hear it daily, and I can’t help but wonder just how much we can blame on the economy. Should we blame everything on the economy? After all, it does affect pretty much everything. Should we take responsibility and say that we can control our lives?

I know that personally I make many decisions based on “the economy is horrible.” I won’t cut back on my hours at work because I need job stability. I am afraid to seek other employment because the economy is so bad that no one is hiring. I’m afraid to look into selling my house and moving because the economy is so bad.

Is it all a bunch of excuses? Or am I being smart in erring on the side of caution? Sometimes I feel like I’m letting the economy dictate what is going on with my life. I let it control my happiness. There was a time where I was so scared to even have kids because I thought the economy was so bad that I’d lose my job, my husband would lose his job, etc.

I’ve since then learned that there’s only so much that I can control. I can keep doing my best at work, keep trying to increase my income on the side, and save money in case something does happen. That’s about all I can do.

It’s no secret I would like to sell my house and move from where we are currently living to be closer to family.  I let the economy scare me into staying put and not checking into the possibilities of moving.  I’m afraid we can’t sell the house, we won’t be able to find jobs where we want to move, etc.  Is that silly, or responsible?  I’m not sure.

How much effect does the economy have on your goals?

*The image has nothing to do with my political views, it’s just a random one that was selected on Flickr.

photo credit: TheTruthAbout…

Have you ever wondered what “good” money is? Is there a such thing as “bad” money? I don’t think so.  I hear the term all the time, in various instances.  “He must make good money.” I’ve never heard someone say “He must make bad money.”  Unless it was someone talking about a poorly made counterfeit bill.

It makes me wonder exactly what people view as “good” money.  I like to think I make a decent salary, but I don’t know if I’d consider it good money.  It pays the bills, and I have enough that I can pay down debt and focus on saving money at the same time.

I know that there are wide salary ranges depending on the certain career path and location.  For example, a customer service representative in Milwaukee, Wisconsin may make $12 an hour, while a doctor there makes $100 an hour.  In California, the customer service representative may make $20 an hour and the doctor makes $200.

I’m a firm believer in it’s not how much you make, it’s what you do with it, so good money to me may not be good money to someone else.

I think a decent salary is around $45,000-50,000 a year, plus benefits.  Where I live, the cost of living is decent, so I could make that go pretty far!

What do you consider “good money” when it comes to salary? Where do you live?

photo credit: gagilas

The other day I went to one of our local health foods stores in search of some jojoba oil for my hair and skin. I found it and when I realized it was $14.99 for 4 ounces, my eyes bugged out, I put it back on the shelf and decided I would look for it elsewhere. I came home, looked for it on amazon.com and found 4 ounces of organic jojoba oil for around $6. With shipping, it came to around $11, and I thought about it for a minute.  I didn’t end up ordering it.

It’s a few dollars cheaper online, but I felt bad ordering it from a stranger online versus supporting my local health foods store.  I love the atmosphere (even though it’s pretty small and expensive), the people, and I would hate to see them go out of business.  I felt bad that I didn’t buy it in the store!

I’m a big believer in supporting local businesses whenever possible.  My husband works for an independent restaurant in the city, and we try to limit our dining out experiences to locally owned and operated restaurants.  Someone’s got to support the small guys.  They are what keeps our communities going!

Truth be told, I still haven’t made a decision on where I’m going to buy it from.  Part of me thinks that it’s an unnecessary expense because I can use coconut oil for skin and hair, but another part of me wants jojoba oil.

How do you balance being frugal versus shopping locally?  What is more important to you?

I’m going to be really brave here, and going to do something maybe a little crazy. I’m going to donate $1 to the Haiti relief efforts for each new subscriber and comment made on this post. So, if you are not subscribed yet, please do so via this link. It will track how many new subscribers I get starting today and you will essentially have donated $1 to help Haiti.

If you are already subscribed, you can recommend a friend to subscribe to my feed and also leave a comment letting me know which charity you think I should give the money to.   Let’s raise some money for Haiti!

image from money saving mom

This afternoon after a coworker got back from lunch, I noticed a large yellow cup sitting on her desk. It had the Home Depot logo on it, so I questioned her if she had gone to Home Depot for lunch and when did they start selling drinks?? (Yes, I am blonde, but in my defense, some of them sell hot dogs.) She laughed and said that she went to Wendy’s. There was Home Depot advertising on the side of a Wendy’s cup.

Now, you may think I’m living in the dark ages, but I haven’t seen this. I’ve noticed advertising popping up in the weirdest places lately, but not at a fast food place. You have to remember, I’m not big on fast food. I prefer to drop my cash in small amounts at places like Walgreen’s.

What’s even more strange is that the other day when I went and got a hair cut, at the bottom of my receipt was an advertisement for football of all things. I made sure I kept that receipt so I could take a picture and share it here. I am hoping that I’m not the only one that’s noticing advertisements in weird places. First on a Great Clips receipt (I went to Great Clips this time instead of Super Clips!), and now on a Wendy’s cup. I think it’s a great marketing scheme, because you know people are going to see it both on cups and on receipts. At the same time, it’s sad because now you can’t really escape it.

Have you noticed advertising in weird places lately?