The Greenroom

Our latest guest post during our month of sharing comes from Trent Hamm, the writer behind The Simple Dollar,
a blog focusing on personal finance and personal development. Be sure
to check out his blog after reading this truly inspiring piece.

Every time you spend a dollar, you sacrifice a bit of your future.

Five years ago, I believed the above sentence was foolishness. I was
24 years old, working at a high paying job, and about to get married to
a wonderful woman. I had just spent almost ten thousand dollars on a
wedding ring and an exorbitant honeymoon in Europe, and I was actively
shopping for a new vehicle because, well, my current ride just
wasn’t quite good enough.

Roll forward three years. I had $17,000 in credit card debt and
literally not enough money to pay my bills. A good chunk of the debt
incurred for that honeymoon still sat on the credit cards. My wife,
son, and I lived together in a tiny apartment, trying to figure out
what we were going to do next.

Everywhere I looked around me in that apartment, I saw stuff I
didn’t need. Video game consoles piled high under the television,
along with a small mountain of games for the consoles. Over a thousand
DVDs. A gigantic television set that dwarfed our living room, looking
almost comically out of place. A huge collection of Magic: the
Gathering cards. So many books that half of our child’s bedroom
consisted of bookshelves. Two nearly-new cars sitting outside.

And yet I felt empty inside. I held my child close, thinking about all of the things I wanted to give to him, but instead I had chosen to spend all of my money on stuff

Every time you spend a dollar, you sacrifice a bit of your future.

Today, not only do I believe deeply in that sentence, it underlines
every choice I make in life. I turned that disastrous ship around,
realized that all of that stuff was standing in the way of my passions
and dreams, and in just two short years, I found enough financial
freedom to do what I’ve always wanted to do: quit my nine to five
job, stay at home, and focus entirely on my family and on my passion
for writing.

The name of this blog, Unclutterer, really underlines the
entire idea. Clutter exists in all aspects of our life, not only in the
way we arrange items in our office and in our home, but in how we
manage our time and manage our money. Clutter is distraction from the
big picture, in every way, shape, and form. Clutter can even blind you
and choke you if it grows out of control.

Financial clutter is a particularly insidious form of clutter,
because it winds through so many aspects of our life. Much of the
clutter in our office and home has a financial cost to it, meaning that
we actually spent some money to create that clutter. The cluttering of
our time is also financial clutter - if we waste our time on things
that drain our money or don’t earn as much as we potentially can,
we’re draining our financial plans of a great deal of vitality.

Here are six great steps that you can do immediately to reduce the
financial clutter in your life - and begin to open the path to a truly
remarkable life.

Calculate the true value of your time.
Figure up how much you earn in a year. Now, subtract from that the cost
of transporting yourself to and from work, the cost of work clothes,
the cost of income taxes, and any other costs that your job foists upon
you (like entertaining coworkers, for example). Now, figure up how many
hours you actually work in a year, and add to that the time spent
transporting yourself to and from work, the “extra” time
spent working when at home, the time spent buying work-related
materials, the time spent schmoozing with coworkers, the time spent on
business trips, the time you “need” to spend unwinding
after work, and any other time investments you make at work. Then
divide the calculated amount you make by the number of hours you work
for the year. That’s how much you really value an hour of your life. Know that number. Remember that number. It’s important.

Physically unclutter your living space. Go through all
of your possessions and ask yourself whether you actually use it or
not. Is it something that has honestly provided value for your life?
Look for books you’ve not read, DVDs you’ve only watched a
time or two, unplayed games, unlistened music, collections of things
that you no longer feel passionate about, and so on. Gather up all of
this stuff and estimate how much you’ve spent on it. Then divide
it by the value of your time that you calculated above, and if you want
to, divide that by 40 (so you can see this in terms of weeks).
That’s how much of your life you spent working so you could have
this stuff. When I first did this, I estimated that I had spent two years of work accumulating stuff I barely use.

The next step is to get rid of all of this stuff and make a clean
break. Eliminate the stuff that you’re not using, haven’t
used, and likely won’t use again. Get some degree of financial
return out of this stuff in any way you can. Don’t worry about
maximizing your return - you rarely will be able to make back the value
of your time by seeking out a slightly higher return for the stuff.
Then take that money and put it into the bank - it’s now your
emergency fund so you don’t have to turn to credit cards when
something bad happens.

Set some big goals - and remind yourself of them all the time.
This is an effective way to de-clutter your mind. Sit down and figure
out what your true big goals are. My goals were to spend more time with
my children and write for a living - that’s what I really wanted
to do more than anything else. Your goals may differ, but spend some
time really searching within yourself to know what they are. Focus in
on just one, two, or perhaps three goals that really speak to the core
of your life.

Once you’ve figured out what you’re really shooting for,
let most of the other stuff in your life melt away. If you’re
focused on becoming a full-time writer, don’t burden yourself
with chasing promotions at work. If you’re focused on being a
great parent, don’t spend your mental energy worrying about
social obligations in the neighborhood. Focus in on your goal and use
all of your energy to reach that goal.

The best way I’ve found of keeping on focus with the goal is
to put visual reminders of the goal all over the place. My desktop
wallpaper is a picture of my children, and I keep pictures of them
everywhere. I also keep notepads everywhere to make it easy for me to
jot down thoughts - and also to remind myself of my writing dreams.

Use the true value of your time - and those visual reminders of your big dreams - every time you consider making a purchase. Let’s say the true value of your time came out to be $5 an hour (it can easily
be this low, even at a “good” job). You’re at the
store and you’re lusting after buying a Nintendo Wii - it’s
$270 after taxes. That’s 54 hours of your life spent working for
someone else so you can buy something else to clutter up your home.
Even better, that’s $270 - or 54 hours - taken away from your big
dream.

This works well for small purchases, too. Is that latte worth an
actual hour of your life spent working? Is one latte a week for a year
worth 52 hours of your life - more than an entire work week? Might that
$270 not go better helping you save to make that dream come true,
perhaps by helping you build up the financial cushion you need to quit
your job and follow that crazy dream?

Go through every. single. monthly. bill.
Many of the bills you receive every month have some sort of extra fee
in it. Look at your cell phone bill, for instance. Are all of those
features something you really need to pay for, every single month?
Figure out what you don’t need - what’s just
cluttering up your bill - then ring up your cell phone company and get
those “features” dropped. Look at your credit card bill. Is
that finance charge ridiculously high? Call up your credit card company
and request a rate reduction. If the first person you talk to says no,
ask to talk to a supervisor.

Even better are bills you can eliminate entirely. We used to
subscribe to Netflix, but we were scarcely watching two movies a month,
so we cancelled the service. Now, if we get the itch to watch a movie,
we just go rent one or download one — it’s far cheaper than
the Netflix grind. We used to be members at a gym, but now we get most
of our exercise at home or by jogging around the block, so there goes
another substantial chunk of financial clutter.

De-clutter your debt. Make a list of every
single debt you have - credit cards, student loans, car loans,
mortgages, and anything else you have. Write down the total amount you
owe and the interest rate you’re paying on that debt. Order them
by interest rate. Then, each month, make the minimum payment on each of
them, then make a substantial extra payment on the highest interest
debt. When that debt disappears, move on to the next one on the list
until they’re all gone.

The best way to do this is to create a “virtual bill”
for you to pay each month. Figure out an amount that you can afford
without too much hassle - say, $200 - and then each month give yourself
a bill for that amount. That bill is payable to whichever debt is on
top of the list.

I was
surprised. I thought her advice would be something like,
“Remember to say ‘I love you,’” or “Be
sure to say ‘Thanks.’” I couldn’t imagine why I
would have to leave things unsaid.

Well, now I know. And I realize that this advice was tremendously useful.

I
only manage to follow the advice part of the time, but just in the last
few days, I’ve left unsaid the following statements:

 I’ve told you that three times already.
 You said you’d try to come, but are you really going to try?
 Can’t you do it this time?
 Don’t stay up late tonight and then, tomorrow afternoon, tell me that you need a nap.
 Can’t we talk about this now?

And these are just the statements I can think of off the top of my head.

Research
backs up my friend’s advice to “leave things unsaid.”
Studies show that one fact of human nature is that people have a
“negativity bias”: we react to the bad more strongly and
persistently than to the comparable good.

For example, within a marriage, it takes at least five good acts to repair the damage of one critical or destructive act.

So,
by refraining from making an obnoxious comment, I’m actually
doing a lot more to preserve the happiness of my marriage than by
making a nice comment. The negative drags us down farther than the
positive lifts us up.

Another fact of human nature is that, although we think that we act because of the way we feel, we actually feel because of the way we act. By changing our actions, we can change our emotions.

If
I act critical, annoyed, or resentful, I’m going to feel
critical, annoyed, or resentful. On the contrary, if I act considerate
and patient, I’ll feel considerate and patient.

And
the huge benefit is that not only do I feel nicer—by acting in a
nicer way, I provoke a nicer response in my husband. Together, we
change the atmosphere of our marriage.

As you might already know, I’ve got a big family — the
wife and I plus six rugrats. Plus a cat and a dog. We can go through an
awful lot of food. Groceries (along with the rent and car and gas) are
one of our biggest expenses. I allocate as much in our budget as I can
to groceries, simply because I want to make sure we’re never
short on food. Also, cooking our own food is just so much less
expensive than eating out.

And as I figure that most of my readers, whether they have big
families or not, go grocery shopping now and then, I thought I’d
pass along some of my favorite tips. These are not all my original tips
— I’ve picked up dozens over the years from magazines,
books and websites. But these are the best of them, plus some
I’ve figured out on my own.

So pick and choose from among these tips, which I hope will be of use to you and your family:

1. Always go with a list. If you go without a list,
   you may as well just throw your money away. Better yet, donate it to me
   — I probably need it more than you. :) Seriously, though, you
   need to prepare a list of everything you need, pulling from your weekly
   menu (next tip) and checking to make sure you don’t have it in
   your pantry, fridge or freezer. Make sure you’re not forgetting
   anything. Now stick to that list.
2. Plan out a weekly menu. This is the best way to
   ensure that your list is complete, and that you have enough to serve
   your family dinner for the week. I often plan a weekly menu and then
   duplicate it for the next week — this way I can shop for two
   weeks at once. Be sure to plan a leftovers night.
3. Don’t go when you’re hungry. This is a
   common tip, but it’s true: when you’re hungry, you want to
   buy all kinds of junk. You’ll end up spending a lot more. Eat a
   good meal first, and you’ll be more likely to stick to your list.
4. Have a budget. When I go to the store, I know
   exactly how much I can spend. Then I try my best to stick within that
   limit. If you don’t know how much you can spend, you’ll
   certainly spend too much.
5. Do a rough running tally. Related to the above
   tip, if you want to stay within your budget, it’s best to know
   where you’re at. Then, when you can see you’re going to go
   above it, you can decide whether you really need that 10-lb. box of bon
   bons. I keep a running tally on my grocery list, just rounding off so I
   can do some quick math. An item costs $1.85? I say $2. Then I
   don’t need a calculator or all those complicated math skills.
6. Keep a list on your fridge, and write things down immediately.
   When you run out of something, don’t leave it to your memory. Jot
   it down immediately, and you’ll never have to run back to the
   store because you don’t have eggs.
7. Make a pantry checklist. Make a checklist of
   everything you normally stock in your pantry. Keep it posted on the
   pantry. Put a slash next to each item for the number of items you have
   (if you have two cans of stewed tomatoes, put two slashes). Then, when
   you use something, turn the slash into an x. This makes it much easier
   when it comes time to make your list.
8. Keep things stocked for quick-n-easy meals. Easy
   meals for us might be spaghetti or mac-n-cheese or a quick stir-fry.
   We’ve always got the ingredients on hand, so we can whip
   something up fast when we’re feeling lazy.
9. Buy in bulk when it makes sense. If you can save
   money, over the course of a month or two, by buying in bulk, plan to do
   so. But be sure that you’re going to use all of it before it gets
   bad — it isn’t cheaper to buy in bulk if you don’t
   use it.
10. Keep your receipts, then enter into a spreadsheet.
    This will be your price list. Use it so you know when bulk or sale
    items are a good deal. It’s also a great way to comparison shop
    between stores — buy your baking goods in Store A but your fresh
    fruits in Store B. The spreadsheet can also serve as a checklist to use
    when you’re compiling your shopping list.
11. Buy frozen veggies. While fresh veggies are a
    little better, frozen veggies are almost as good, and much better than
    nothing. And since you can keep them in the freezer, they rarely go bad.
12. When you’re running low, write it down.
    Don’t wait until you run out. when you see there’s only
    three toilet paper rolls left, put it on your list. Because when you
    run out, it will be too late. :)
13. Cut back on meat. Meat is expensive. We have
    vegetarian meals several times a week (think pasta or chili) and for
    other meals, you could just use a little meat as a kind of seasoning
    instead of the main ingredient — think Asian, Indian and other
    such cultural food. Actually, I eat vegetarian all the time, but the
    wife and kids do a little of each.
14. Pack your own lunch snacks. Buying pre-made snacks
    is convenient, but a big waste of money. Buy little baggies and buy the
    snacks in bulk, then it will take just a few minutes to pack some
    snacks for lunch each day.
15. Make leftovers for lunch. Plan to cook a bit extra
    for each dinner, so that you’ll have leftovers for your lunch and
    for the kids’ lunches. Pack it right away, after dinner, so you
    don’t have to worry about it in the morning.
16. Cook a lot, then freeze. Alternatively, you can
    cook a whole mess of spaghetti (for example) and freeze it for multiple
    dinners. A great idea is to use one Sunday and cook a week’s (or
    even a month’s) worth of dinners. Plan 5-6 freezable dinners and
    cook them all at once.
17. Always have batteries, toilet tissue and light bulbs.
    And other necessities that you always seem to run out of — buy a
    whole bunch when they’re on sale, or buy in bulk. Be sure to
    check to see if you have these items before you go to the store.
18. Try crock pot dinners. We discovered these in the
    last year, and they are easy and cheap and tasty. Cut up a bunch of
    ingredients, throw them in the pot in the morning, and have dinner
    ready for you when you get home. Can anything be more perfect than
    that? I submit that it cannot.
19. Clip coupons. I know, sometimes they seem like too
    much trouble. But it’s not really that hard to clip a few coupons
    and toss them in a coupon envelop to take on your grocery shopping
    trip. And you can save 10-20% of your bottom line with coupons. Check
    store entrances, newspaper and flyers for coupons.
20. Only use coupons for items you were already planning to buy. Don’t let them trick you into buying something that’s not on your list, just to “save” money.
21. Look for specials. Every store has specials. Be
    sure to look for them in the newspaper, or when you get to the store
    (they often have unadvertised specials — look on the higher and
    lower shelves for deals). Don’t buy them unless they’re
    things you always use.
22. Try the store brands. Brand names are often no
    better than generic, and you’re paying for all the advertising
    they do to have a brand name. Give the store brand a try, and often you
    won’t notice a difference. Especially if it’s an ingredient
    in a dish where you can’t taste the quality of that individual
    ingredient.
23. Cut back on your “one-item” trips.
    They waste gas, and almost inevitably, you buy more than that one item.
    If you plan ahead, make a weekly menu, and shop with a list, this
    should drastically reduce the number of trips you make for a small
    number of items. But if you still find yourself running out for a few
    items, analyze the reason — are you not making a good list, are
    you forgetting some items from your list? Stock up on the things you
    frequently go out for.
24. Sugar cereals are a bad buy. Lots of money for no nutrition. Look for whole grain cereals with low sugar. Add fruit for better flavor.
25. Be watchful at the register. Keep an eye on the scanner — you’ll keep the cashier on his toes, and catch any mis-priced items.
26. When there’s a sale, stock up. Sale items can be a great deal. If it’s an item you normally use, buy a bunch of them.
27. Comparison shop. Look at the different brands for
    a certain type of product, including store brands. Sometimes there will
    be a significant difference. Be sure you’re comparing apples to
    apples — you need to divide the price by the amount (ounces,
    pounds, etc.) in order to get the comparable unit price.
28. Go during slow times. One of my favorite times to
    shop is late at night. But during working hours or other non-peak times
    is good too. Avoid right after 5 p.m., on paydays and near major
    holidays.
29. Know when the store stocks its fresh fruits and veggies.
    In my area, that makes a big difference. Fruits and veggies can go bad
    quickly, because they have to be shipped. So I know that the store
    re-stocks on Thursdays, and so I usually go on Thursdays or Fridays,
    otherwise I’ll be getting old items.
30. Plan one big trip a month for bulk staples. You
    can get fresh items at another store on other weeks, but doing a big
    bulk trip will cut back on the expense and amount you have to carry for
    the other three weeks. Avoid buying on impulse at the bulk store too
    — just because they sell a lot of it doesn’t mean
    you’re saving, if you weren’t planning on buying it in the
    first place.
31. Avoid trips to the corner store. Or the gas station! These are some of the most expensive stores. (Ranking right up there with airport stores.)
32. Try co-ops. You can often save a lot of money at these types of places for staples.
33. Consider shopping at two stores. There’s no
    store with a monopoly on savings. Each has savings on different items
    on different weeks. You might switch between two stores on alternate
    weeks.
34. Think deep freeze. If you really want to save,
    you’ll need a big freezer. Ask around — someone you know
    might have a relatively new model they don’t need anymore. You
    can use freezers to stock up on meat, frozen veggies, and similar
    staples, and to freeze big batches of pasta, casseroles, and other
    dinners you prepare ahead of time.
35. Use everything possible. Got a bunch of leftover
    ingredients (half an onion, a bit of tomato, some pasta, a few other
    veggies?) … combine them for a quick meal, so that these
    don’t go to waste before your next grocery trip. The more you can
    stretch the food, and the less you waste, the less you’ll spend
    in the long run.
36. Don’t waste leftovers. Have a list on your
    fridge of what leftovers are in there, so you don’t forget about
    them. Plan a leftover night or two, so you’re sure to eat them
    all. Pack them immediately for lunch, so they’re ready to take
    the next morning.
37. Don’t buy junk food (or buy as little as possible).
    Junk food not only costs a lot of money for about zero nutrition, but
    it makes you and your family fat and kills you. Talk about a bad deal!
    Opt for fruits and veggies instead.
38. Rain check. If an item is on sale but the store has run out of stock, ask for a rain check.
39. Go when the kids are in school. When you bring
    kids, they will pester you and pester you until you buy some kind of
    junk food. Even if you’re able to stick to your guns, it’s
    not pleasant saying no 10 million times. In most cases, you’ll
    save money shopping without the kids.
40. Go for whole foods. The processed kind is lacking
    in nutrition and will make you fat. Look for things in their least
    processed form — whole grain instead of white or wheat bread,
    fresh fruit instead of canned or juice, whole grain cereal or oatmeal
    instead of all other kinds of cereal. You get the idea.
41. Read labels. Look for trans fat, hydrogenated
    oils, high amounts of sugar, saturated fat, lots of sodium,
    cholesterol. Then avoid them like the plague. Look instead for fiber,
    good fats, protein, vitamins, calcium.
42. Clean out your fridge. You’ve got stuff
    growing in there and turning from solids to liquids. The leftovers have
    begun to organize their own political party. Toss em out and make room
    for the new.
43. Stick to your list. Avoid impulse buys. They are
    almost always bad, and even if it’s just a couple dollars, they
    will add up to $50-100 for a trip. Over the course of a year, that can
    mean thousands. Tell yourself you will not buy anything that’s
    not on your list unless it’s an absolute necessity (why
    isn’t toilet paper on my darn list?).
44. Use store savings cards. These can add up to big savings over the long run.
45. Cut back on your restaurant eating. It’s
    never cheaper or more nutritious than eating at home. Plan your dinners
    (see above tip) and bring your lunches to work and save a ton of money.
46. Avoid frozen dinners or prepared entrees. Again, these cost way more and are usually much less nutritious.
47. Drink water. If you regularly drink iced tea,
    Tang, sodas or other types of drinks, cut those out completely and just
    drink water. It’s much better for you, and much cheaper.
48. Prepare your grocery list by aisle. If you
    regularly shop at the same stores, organize your list so that you can
    easily find and check off items as you walk down the aisle. We always
    shop from right to left, so we’re not constantly running back and
    forth in the store.
49. Get cloth grocery bags. You’ll save tons of plastic over time, and help the environment tremendously.
50. Pack healthy snacks for the kids. Whole wheat
    crackers, popcorn, cut-up fruit, raisins, and other kid-friendly snacks
    are much better than the junk you often see in kids’ lunches. And
    cheaper.