Hey, that one actually makes sense! I have to admit, I don’t understand waiting at the post office to file your taxes on paper at the last minute. Why not just use a computer and push the “send” button. If you owe taxes, you can use the automatic withdrawal method to avoid the line, or actually fill out your taxes months earlier (it takes an hour if you have more than W-2s) and then mail the check the weekend before. No waiting necessary!

And with that bit of advice, we launch into the carnivals. This week we have three.

First, the Carnival of Personal Finance #200 hosted by MoneyNing. In addition to my post about how we save 25% of our income, I also recommend Automatic Finances’ post about establishing a “Once in a While Fund” for semi-annual expenses.

Second, the Festival of Frugality hosted by Stretchy Dollar. In addition to my post about frugal spring foods, I also recommend Recession Depression Therapy’s Frugal Egg Challenge – I’ve been wondering if backyard chickens really were cheaper.

Third, the Money Hacks Carnival #60 hosted by the Consumer Boomer. In addition to my post about how my parents taught me about money, I also recommend Prime Time Money’s post on a 4th grader’s perspective on the road to millions. Smart kid!

Macayle had an additional recommendation after reading my 10-10-10 rule post:”I use the 10 day rule so you can add this to you 10-10-10 rule, if you like. For more major purchases, and even some minor ones: If I want it I make myself wait for 10 days. Then if I still need (or want) it I can buy it. This really works, as after 10 days you are no longer subject to that impulsive buying urge and have had time to consider if there are other, more important purchases at this time.”

If you can’t quite make the 10-10-10 rule fit your particular purchase decision, the addition of a 10-day rule may just the perfect thing to help you choose between necessary and impulse spending.

Combining the 10-10-10 Rule with the 10-Day Rule
So let’s say you’re tempted to buy something, but it’s an impulse purchase or a necessity. You apply the 10-10-10 rule. The 10-minute impact is easy. The 10-month impact is pretty decent. You can’t see the 10-year impact without really stretching. That’s when it’s time to employ the 10-day rule.

Here’s an example from yesterday: Buying a pair of shoes. Rather than cheap shoes, which don’t even pass the 10-month rule, we’ll look at a pair of good shoes that will last a while, but could easily be an impulse purchase.

1. Ask if you can afford them right now without creating credit card debt. If yes, go to question 2.

2. Ask the impact buying the shoes will have on your life in 10 minutes. Well, you’ll have this great pair of shoes.

3. Ask the impact buying the shoes will have on your life in 10 months. If you buy them, you’ll probably still have a great pair of shoes, and hopefully you’ll still like them and they’ll still be in style.

4. Ask the impact buying the shoes will have on your life in 10 years. That’s a toughie. They’re shoes. They could last forever, but they may not. So now we get to question 5.

5. Wait 10 days, then ask yourself: Do I still want to buy the shoes. If the answer is yes, and you’ve answered yes to at least questions 1 through 3, then it’s probably the right purchase.

In most cases, you won’t even remember the shoes ten days later, or remember to ask yourself the questions. No fair writing it down as a reminder! This is a test to see if you want it enough to buy it. If you need a reminder to ask yourself if you want it, then you don’t want it enough.

I’ve never had to apply the 10-day rule because I’m rarely enamored of anything enough to want to purchase it, and it usually takes me days to convince myself to go to a store to buy something in the first place. It took me a year to decide to buy a Wii, for Pete’s sake. For those of you with an impulse spending problem, a 10-10-10-10 rule might be the first step towards changing your habits. Now that underspending is the hip, trendy thing to do, it should be a little easier.

The April issue of Glamour Magazine features a short piece by Suzy Welch explaining the theory behind the 10-10-10 rule. The rule is simple: before you make a decision, ask yourself: “What will the consequences of my options be in 10 minutes, 10 months, and 10 years?” Then act accordingly.

In her example, she describes a time she took her 2 young kids on a business trip to Hawaii, and it ruined the trip for everyone. If she’d thought about it, her kids would have been unhappy for ten minutes, but the closing the deal would have made her enough money to take them on vacation in 10 months, and in ten years they’d only remember the great trip, not her three-day absence.

Applying the 10-10-10 Rule to Spending
That started me thinking: how could I apply this rule to purchases, both big and small. For example, buying tickets to the Billy Joel/Elton John concert. In ten minutes, I’d have the concert to look forward to. In ten months, I’d have this great memory of this fantastic concern. In 10 years, I’d still have a great memory of a fantastic concert by two men who may not be touring in ten years. Is it worth it? Yes!

Now let’s try another – buying a cheap pair of shoes that are trendy now. In 10 minutes, I’ll have a cute pair of shoes. In 10 months, I’ll have a pair of shoes that are going out of style and may have worn out already. In 10 years, I won’t have the shoes. Was it worth it? Not to me. I don’t expect a pair of shoes to last 10 years, but I certainly want them to last more than 10 months.

Why It Works
Applying the 10-10-10 rule is simple because it relies on your gut. If you have to spend a lot of time thinking of answers to each question, then that’s probably your answer right there. Of course, you can apply the question to major decisions, like: should I buy a car now or wait to save money for a larger down payment? If I buy now, in 10 minutes I’ll have a shiny new car and big car payments. In ten months, I’ll still be making large car payments. In ten years, I’ll be ready to replace it, but will have less money saved for the next car.

If I wait, in 10 minutes I’ll still have a car I hate, but no car payments. In 10 months, I’ll have saved up enough money for a large down payment, or maybe even a whole car. In 10 years, I’ll have one more year before it’s time to replace the car, and more money in my savings. Waiting is clearly the better option in this case.

The rule doesn’t necessarily apply to the most basic purchases, but if you’re trying to learn to control your spending or deciding how to prioritize your time, this is a great tool to rely on until the new habit becomes a habit. You could even ask yourself about your time-wasters. For example, should I watch the new episode of Heroes? In 10 minutes, I’ll be either amused or ticked-off by the show. In 10 months, I won’t care. In 10 years, I’ll barely remember it. Hmmm… maybe it’s time to give up on that show.

Do you use any tools like this? How do you weigh your financial choices?

Last year I presented a list of five good ways and five bad ways to spend a tax refund. This year, I doubt most people will be taking their refund checks to Giant Appliance Mart and toting home a big-screen, but here are ten more tips for putting this year’s refund to good use.

Catch Up on Your Mortgage
If you fell a month late because of financial crunch, but can afford your monthly payments otherwise, then use your refund to catch up with the bank. Yes, there may be late fees and penalties, but it’s a lot better than going into foreclosure.

Stash Your Tax Refund in Your Emergency Fund
If your job is even slightly at risk, it’s better to deposit your refund into your emergency fund than to use it to pay down debt. Reduced debt is great, but it won’t put food on your table if you don’t have a paycheck. Your emergency fund will.

Pay Down Credit Card Debt
If your job is pretty secure (or you have two incomes and at least one of them is secure), then your next best option is paying down debt. That will allow you to put more of your monthly income into savings.

Pay Off a Student Loan
While most loans are consolidated into bigger loans, some private loans can’t be consolidated. If you have some of these small nuisance loans, use your refund to pay them off, or at least make a solid dent. Large payments go to principal, which reduces the amount due on future payments. If you continue to pay at your budgeted level, your balance will gallop down without a lot of effort. We have one nuisance loan left and the latest statement said our next payment is due in 2014 because of this strategy. Needless to say, we’re still paying it on schedule.

Make a Charitable Donation
Not the whole thing, unless you’re really flush with cash, but use the money to buy some extra canned or dry goods and donate them to a food pantry. Use coupons to make your donation money stretch further, or stock up at the 99-cent store (their canned goods aren’t bad, really.)

Put It in Your Car Fund
If you’re planning to buy a new car in the near future, put the refund in a separate car fund. Then it will be available as a sizable down payment. If you save enough, you may be able to pay cash for your new car.

Fix Up Your House
In this market, you probably won’t be selling your house anytime soon, unless you don’t mind competing with rock-bottom foreclosure prices. Instead, make your house more comfortable to live in. Fix the leaking roof. Install a skylight. Replace the energy-guzzling refrigerator. Repaint the walls. Get the carpets cleaned. Do the small and mid-sized things that are relatively affordable and greatly add to the enjoyment of your current home.

Plant a Food Garden
If you have a yard, you should consider planting some food plants, like tomatoes, citrus trees, herbs, and other garden-friendly edibles. The up-front cost is on the high side, which makes it a smart choice for a refund, but the upkeep costs are lower and will eventually save you money on food.

Go Out to Dinner
If you’ve been eating at home since the recession started, it’s time to go out to dinner. You don’t have to spend the entire refund, but you should treat yourself now and then. Not only will you support a local restaurant, but it will make you feel like you can still enjoy life.

Stock the Freezer and the Pantry
If you like beef, and have a large freezer, consider buying a quarter or half of a cow from a local farmer who raises pastured cows. You should be able to specify the sizes of your cuts and the meat will be properly sealed and frozen for long-term storage. Then you can have grassfed beef anytime you want for a fraction of the store price.

If you have enough storage space, you can also watch for sales on dry goods like beans, canned food you eat frequently, and pasta. Then stock up so you have them on hand when you need them and buy them at the best price.

Tax refunds are great tools if you use them properly. Of course, my preference is to withhold properly and not get one, but some people prefer them to receiving the money in small bits that will just be added to the budget. If you’re one of them, plan carefully so you can spend it wisely.

Adam commented on my post about how we save 25% of our income. “I am just in the process of getting married, and learning about the whole process of combining our finances.”

To help Adam, and any other couple, here’s a quick outline of the process. My husband and I agreed that we would set up a joint checking account after we got married. We could have set it up earlier, but we wanted to wait until after we had the piece of paper just to be safe. When combining your finances, there are a few things you must do as soon as possible after the wedding, and a few you can save for later.

Changing Names
In most states, you can change your name on the marriage license. In some situations, you must file a name change petition later. I didn’t change my name, so I didn’t have that hassle. The process is straightforward if the wife switches from First Middle Maiden to First Middle Husband’s-last or First Middle Hyphenated-name. A name change petition may become involved if you want to change to First Maiden Husband’s-last, as many women do.

Marriage Certificate
Whichever route you take, you must wait until you receive your marriage certificate to change your name on most accounts. If you change your name, order at least three extra copies of the certificate at the time you file the license. If you don’t change your name, one or two copies will do.

Driver’s License and Social Security
Your first step should be updating your driver’s license and social security file with your new name. You’ll also need to change your address with the DMV if you move after you marry. This process will take several weeks, so make sure you buy honeymoon tickets in your maiden name.

Joint Bank Accounts
Most banks don’t require you to provide a marriage certificate to set up a joint account. Simply go to the bank and tell them you want to change the names on the account. When we married, we decided to add me to his account and close my account because his account was drawn on a Southern California bank and mine was located in another part of the state.

Credit Cards
Changing the name on your credit cards may require sending them a copy of your marriage certificate, but some will accept a copy of a driver’s license as proof. Ask if you can add your spouse as a co-owner of the account. Most will fax or email you a form to sign and return. I had a better credit history, so we made my husband co-owner of two of my cards and an authorized user on the third, because they only allow one owner. He cancelled many of his own cards.

Health Insurance
If you plan to add your spouse to your plan and have employer-provided insurance, contact your HR department for the proper forms. If you have individual plans, like we did when we married, compare plans to find the new best rate for a joint health insurance account. We added my husband to my plan and chose a new deductible level. They didn’t require a marriage certificate because California recognizes domestic partnerships for all couples. Insurers in other states may have different requirements.

Life Insurance
Once you marry, your spouse is automatically your life insurance beneficiary, as required by law, but you should contact your insurer to file an updated form with current information.

Auto Insurance
We already had auto insurance from the same company, but opted to combine our policies to get the two-car discount. This was the only account that required a copy of our marriage certificate, but the process was simple. They sent us forms that we returned with a copy of the certificate and a week later we received our new cards. If you renew every six months, consider waiting until the policy is about to make the switch easier.

Investment and Retirement Accounts
You can choose to merge your investment accounts, or hold them separately. Retirement accounts remain separate. In both cases, you should file updated forms designating your spouse as the beneficiary. If you don’t, the original party listed on your account will be the beneficiary after your death, regardless of any directions included in your will.

Student Loans
By law, your student loans cannot be merged. This is for your protection because student loan debts die with you, unless there is another name on the account.

Cell Phone
Save money in a flash by switching to a family plan. You will have to go to your carrier’s local store to make the switch, but it’s easy once you get there.

If one of you owns a home, you may wish to add your new spouse to the title via a Quit Claim Deed or other title conveyance. Contact a real estate lawyer for guidance. Adding a spouse to your mortgage may require refinancing, so contact your bank for advice.

If you rent, you’ll need to add your spouse to the rental agreement. Contact your landlord to complete the process.

Be sure to add your spouse to any homeowner’s or renter’s insurance policies you have.

Miscellaneous Accounts
You can, if you wish, add your spouse to your cable, utility, and telephone accounts, but it’s not absolutely necessary. Most of these companies will speak to a spouse without having him or her on the account as long as the spouse has the account number.

This list of accounts seems like a lot of work, but it’s really not. Set aside an afternoon to make all the necessary calls, and prepare a form letter that you can customize. Some accounts should be updated immediately, but most of the rest can be tackled over the first few months of your marriage.

I’ve tried several methods for cooking dried beans, and have had mixed results. Then I happened upon this method, which produced tender beans in about three hours. I use this to cook a whole 1 pound bag of beans at once, then I freeze them with their soak water in the same portions as canned beans (about 15.5 ounces.) When I need them for a recipe, I defrost the beans, drain, and use as usual.

Sorting the Beans
Unlike canned beans, dried beans are not perfect. When you open the bag, the first step is to sort the beans. Look for beans that are broken or wrinkled. Dried beans should be smooth. A few knicks here and there won’t be a problem, but beans split in half or missing chunks should be tossed.

Rinse the Beans
Next toss the beans into a colander and rinse quickly with cold water.

Quick Soak the Beans
I’ve tried soaking beans overnight, but it took a long time and it didn’t measurably improve the beans. Instead, I use the quick soak method. It still takes about three hours to cook the beans, but you don’t have to use as many bowls. Simply put the beans into a large, wide-bottomed pot. Add 8 cups of cold water for every pound of dried beans. Bring the beans to a rapid boil. Boil for 10 minutes, and then turn off the heat. Cover and let sit for one hour.

Cook the Beans
Drain the soak water and rinse the beans in a colander. Return them to the pot and add 6 cups of water. Add salt, usually about 2 teaspoons, but I don’t measure. Put the lid on the pot, but tilt it or set it to the side so some air can escape. Simmer for an hour and a half to two hours. Start checking for doneness after an hour. If the water level gets close to the top of the beans, add another couple cups of water. The beans are done when they’re tender.

Cool the Beans
Let the beans cool in the pot. Use what you need that night, then divide the rest among freezer bags with some of the cooking water.

I keep all of my bags of beans in a gallon-size freezer bag. I have black, white, red, and kidney beans in there more of the time. They work just as well as canned beans at a fraction of the cost, and usually with less sodium. Most stores sell beans for $1 to $1.50 a pound, depending on the type. Watch for sales to snag them at lower prices. The 99-cent store also carries beans, if your store is overpriced. The cheapest I’ve seen canned beans was 50 cents a can. You can get at least three cans worth from a bag of dried beans.

Yeah, that one doesn’t really work, but that’s what I’m going with anyway. This week we have three carnivals to share, including an editor’s pick.

The Festival of Frugality hosted by Ask Mr. Credit Card chose my post about farmer’s markets as an editor’s pick. I also recommend Think Your Way to Wealth’s advice for setting up a container garden. Hmmm, maybe I could buy a townhouse after all.

Next, the Carnival of Personal Finance #199 at ABCs of Investing. In addition to my post about donating to charity, I also recommend Get Money Energy’s tips for prospering in this economy. Simple, but a good reminder.

Finally, the Money Hacks Carnival #59 hosted by Greener Pastures. In addition to my post about setting up a toy exchange, I also recommend the Greenest Dollar’s tips for bartering.

As I mentioned the other day, we’re saving about 25% of our monthly take-home. We didn’t start out there, but we’ve come a long way since I started this blog. Back then, we spent every dollar we earned either on debt payments or living expenses. Now we save a substantial portion. As part of financial literacy month,  here’s a look at how we made the switch over the course of a year.

Dedication to Paying off Debt
First, we were both committed to getting rid of our credit card debt and at least two high-rate student loans. We still have sizable student loans, but those will take 30 years to pay off. Instead we focused on what was doable. Our primary goal was to reduce our debt-to-income-ratio so we could buy a house. We managed to take our monthly debt payments from about $2100 to around $1100 a month. A large chunk of that was credit card debt and the two student loans. We’ve also seen reductions due to declining interest rates on auto-debited loans.

Increased Income
We’ve been fortunate to see our income grow substantially in the last year, which also helped. My husband made a job change before I started this blog that saw a 40% increase in salary (he was grossly underpaid before.) We’ve both received sizable raises since, which resulted in a total income jump of about 60% in the last two years. We never would have gotten here without that, and we both worked hard to achieve that.

Financial Windfalls
The $28,000 in windfalls we received really put us over the edge. They allowed us to pay off a substantial portion of our debt. Of course, we also had to pay a third of them in taxes, so we had to dedicate ourselves to saving up money for that. As soon as the debt was gone, the need to pay the IRS really kicked us into saving mode.

Reduced Spending
We haven’t just reduced our spending on debt, however. We’ve also reduced our spending in several other areas, including clothing, auto (thanks to falling gas prices), and groceries. In addition, we eat out less and watch movies at home more often. My husband would probably like to go out more, but we have a backlog of 200 movies on our Blockbuster queue and the tyranny of the list, as we call it, keeps us home.

A Clear Savings Goal
We both want to save up an emergency fund and agree on the importance of that. We also need to buy me a new car soon. But the thing that really has us saving is the short-term goal of buying a house by the middle of this year. We have a hefty down payment already, but every extra dollar helps with closing costs, upgrades, and moving expenses. I imagine we’ll have a burst of spending after we close on things like paint, carpets, appliances, and flooring, but then we intend to return to our frugal ways to save up for the car down payment.

All of this boils down to one very important key to saving money: both spouses have to agree to save money. It won’t work if one saves and the other spends it all. It’s important that you sit down and work out your goals together.  Then neither of you will feel like you’re suffering or wonder why the other is so determined to save.

If you do one thing this month, sit down with your spouse (or a piece of paper if you’re single) and create one financial goal that relies on saving money. If you’re out of work, then the goal is clear – stay afloat until you’re employed again. If you have a job, then the goal might be bulking up the emergency fund, but it could also be saving up the cash to buy something that has benefit to you and your family. Once you have a goal, formulate a strategy for getting there.

Once you start saving, it becomes a habit that rewards you every time you look at your fat bank balance. Trust me, it worked for my husband.

As you know, my husband and I are looking for our first house. Right now is a tricky time to buy, especially in the Los Angeles market. If you’re in the market or thinking about it, it’s not a bad time to buy. Just be prepared for the frustrations, and probably to get a little bit stabby.

Skittish Lenders
Every week, some new development crops up to make it even more difficult to get a loan. First, there are Fannie and Freddie, who went so far into lax lending that they’ve now gone overboard with regulation. In addition to demanding high credit scores (which is good) and some cash on the table (which is good), they instituted new fees for borrowers with lower scores, less than 20% down, or anyone buying a condo. They also refuse to back loans for any condo where the development has more than 20% of the owners behind on dues or that is not 80% sold out.

Fears of Mortgage Brokers
Now, several major banks have announced that they will no longer work with mortgage brokers. On the one hand, I understand this. There were many brokers who presented false information to banks in order to get loans approved and pushed borrowers into bad loans. But not all brokers are bad. The brokers who remain in the business are reputable brokers who took good care of their borrowers. A flat refusal to work with them will make the loan-hunting process more difficult and more expensive for borrowers.

Dwindling Real Estate Agents
Again, this is probably a good thing. There were way too many agents out there who knew nothing about buying or selling houses. The agents who are left are experienced and knowledgeable. We’ve found a great agent (by referral) who’s been a great guide. However, the smaller agent pool does mean that it can be harder to find a real estate agent who is a full-time agent and prepared to work very hard for you.

Finding the Right Price
Finding the right price is probably the hardest part. No one knows exactly where prices will land. The best you can do is buy a house you can afford today and comfortably live in for the next 10 years. That will give the market enough time to level off and then hopefully rise by about 3% a year.

Comps are perhaps the trickiest part, unless you’re looking in an area with relatively recent sub-divisions. The neighborhood where I grew up has 5 models, so you can pretty easily determine that a house with no upgrades is worth X, while the same house with upgrades is worth Y. That’s harder to do in a market like Los Angeles, where every house is different. There are basic floorplans that are typical, but you can’t compare apples to apples. Instead you have to work off some metric of price per square foot plus degree of upgrades and quality of neighborhood.

Foreclosures and Short Sales
The Los Angeles market is 70% foreclosures and short sales. Most of the foreclosures need a lot of work, and short sales take 4 months to close, if the bank agrees to the sale. You also have to contend with the rate at which the banks release the assets. For example, a slew of foreclosures hit our market in January and February. Now those have sold off and there is almost nothing available. We’re stuck in a holding pattern while we wait for the banks to release the next set of foreclosures, hopefully at the end of this month.

The other issue with foreclosures and short sales is the quality of the homes. We’ve seen several that had either never been updated, and therefore needed a lot of work, or were mid-upgrades, and therefore needed a lot of work. We’ve seen one that was completed – it was gorgeous but it was also a former flip with some strange design choices that ruined the flow.

If you’re ready to buy, have a good income and a stable job, are willing to do some work on the house, and have cash on hand, then now is a good time to strike. It will continue to be a good time at least through the end of the year and well into next year. However, be prepared to look for a while and to see a lot of junk mixed in with the jewel. It will be exhausting, it will be frustrating, but in the end you’ll have a home.

As part of financial literacy month, I decided to really think about the various ways my parents taught me about money. Some of them were active lessons, others were things I picked up throughout my childhood. Those lessons stuck with me and form my own attitudes and actions towards money.

My Piggy Bank
Like most kids, I started with a piggy bank. Every time I got an allowance or money as a gift, it went into the piggy bank. I learned how to count my money and then they’d take me to the store to buy small things with it. Really small – nickel candy and the like. Once I saved up enough for a Peaches & Cream Barbie doll – I still remember that doll, with her beautiful peach ball gown.

My Savings Account
When I was five, they took me to the bank to open my very own savings account. It was a very exciting day. I handed my cash over to the woman behind the desk and she gave me a passbook with my new balance stamped inside it. It was a tangible lesson about how money grew. Back then interest was around 5%, so my money really did grow. I loved that passbook – and I hope kids today have them. Looking at an online balance doesn’t seem as tangible. I was a minor and didn’t have an SSN yet (not yet legally required for all children), so my dad was the primary on the account.

My ATM Card
ATMs were available when I was in my early teens. I was able to take money in $10 increments. My parents got me the card and I learned how to withdraw money myself, but I also learned that I couldn’t withdraw all of it at once. It was a tangible lesson that money is finite.

A Shoplifting Lesson
I’m ashamed to admit it now, but I had “sticky fingers” when I was small. One particular instance I recall was when I stole a nickel candy from the box near the register. My mom saw me eat it and took me back into the store to pay for it with my own money and apologize. It was an important lesson in morals, as well as a lesson in learning to think about whether that candy was worth paying for. It cured my sticky fingers pretty fast.

Dinner Table Discussions
In addition to those physical lessons, I learned various lessons about money around the dinner table. My dad told me when I was about 15 that my generation would not be as well off as his. I scoffed, but he was right – my generation has to work harder to gain the stability his had at younger ages.

Money was never a taboo topic at the table. We discussed what things cost, what we as a family could afford, and why we couldn’t. We were never the first family to have something. We won our microwave in a Christmas raffle and we didn’t get a VCR for several years after they came out. We only had cable because there was no antenna reception in our neighborhood. When my dad was laid off, we discussed how to afford things and where we needed to cut back. My parents never shielded us from financial concerns.

My First Checkbook
When I was 16 and had my first job, I decided I wanted my first checkbook. At the time, my original bank wouldn’t give me a checking account, so I switched to the Bank of America next door and got my own fee-free checking account with ATM card and checkbook. For the first time, my dad’s SSN was not on the account.

By late high school, I’d learned most of the important lessons that I carry with me today. I have never bounced a check. I hate debt and tried to pay it off as quickly as possible when I had it. I think carefully about how to spend – maybe too carefully. My dad is frugal, and that was passed on to me. When my relatives hear about this blog, not one of them is surprised.

How did you learn about money? What were your most important lessons and experiences? Was money a taboo topic in your family?

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