We lowered our health insurance premiums, and our new bill starting in January will be $341/month.  It had gone up to $498/month as of November, and we decided it was time to increase our deductible.  By raising our family deductible to $5000 (it was $3000), we save ourselves $1884 in premiums for the year.  That’s pretty much a no-brainer, considering that as of today our whole family is perfectly healthy.  The worst case scenario is that we end up having to meet the new $5000 deductible.  In that case, we’d only be $116 worse off than we would be if we kept our $3000 deductible (because the $1884 savings would be offset by the additional $2000 we’d have to pay to meet our deductible).  But the odds are better that we won’t have to meet our deductible (we’ve only ever met it once – this year – when my husband had knee surgeries).  In that case, we just get to pocket the $1884 savings.  We’ll be using that money to fund our HSA, just in case we do end up having to meet the deductible.

Sometimes it’s not so clear cut – it’s always less expensive to go with a higher deductible, but the savings might not be as close to the increase in out of pocket exposure.  It’s a personal decision about how much risk one is willing to assume and how healthy (and lucky) one feels.  But in this case, it was pretty obvious.  I’d rather keep the $1884 and maybe have to use it to meet the higher deductible instead of spending it for sure by having to send it to the health insurance company as premiums.

I just finished making another diaper for our son, and the process is getting much easier and faster.  This evening it took me less than a hour from start to finish.  I used a fleece sweatshirt I found at a thrift store for the liner (I should be able to get three more diapers out of that shirt, so for $2.50 it was a good deal), and an old t-shirt with a cool design on it for the outside.  I only make pocket diapers these days, as I find that they dry much faster and I feel like they get cleaner, since the insert and the diaper get washed in two pieces.  I used to make inserts, but I found that I can just fold a prefold diaper into quarters and have an instant liner.  Several people gave us prefold diaper burp cloths when our son was born, and we’ve been using them as all-purpose baby rags.  But now they’ve become diaper inserts, and save me time when I’m making diapers.  I retired one of his smallest diapers this evening, and replaced it with the new one I just made.   The rest of his diapers should last a few more months – I altered them all at the end of the summer, and gave him lots of room to grow, so they’re still working for now.  I’m trying to make a diaper every few weeks so that I can stay on top of the process.  I don’t want to find one day that he’s outgrown everything all at once and have to spend a whole weekend making diapers.

Last week we bought a desk at the thrift store for $15, and I moved it into our guest room as a permanent home for my sewing machine.  The sewing machine is a portable model, and I had been dragging it around the house, using it at my office desk, the dining room table, and the kitchen countertop.  And I had been storing my material and supplies in boxes and bags in the corner of the guest room.  Now everything is neatly housed in the new desk, and it fits perfectly next to my office desk.  The guest room gets used for guests maybe 4 or 5 weeks out of the year.  The rest of the time it’s my office and scrapbook room, and now it’s my sewing room too.  I like making good use of that space – our house is small and we can’t have a room just sitting there waiting for guests to show up.

We had a great day today – the only time we left the house was to go the gym and to take the dog for walks.  No spending, and lots of accomplishing.  Those are the best sort of days.  I did get a chance to do some catching up on my blog reading.  Miss Thrifty hosted the Festival of Frugality, full of great frugal ideas to inspire and encourage you on your journey.  Check it out.

Kristen has a post about a documentary called A Delicate Balance.  I decided I wanted to see this, and as a Christmas present to myself, I shelled out the five bucks and my husband and I watched it together after we put our son to bed on Christmas night.  It is a powerful movie – our motivation to be vegan is stronger than ever now.

In the Frugal Blog Network, Tight Fisted Miser details how he’ll be cutting expenses in 2009.  I love his plan to hike the Appalachain trail (for only $200/month) for a few months.

Kelly at Almost Frugal is on vacation this week, but is reposting some of her greatest hits.  I enjoyed her post about the problems with reselling cloth diapers.   For the people at ebay – what are you thinking?  We got some cloth diapers on Craigs list before our son was born ($3 each) and made the rest from recycled fabric.  We also got three as a gift from Kelly (thank you!)  I’m planning to hold onto mine in case we decide to have another baby someday.  After that, maybe one of my siblings will be ready to have kids, and I’ll be able to pass them on.

Not Made Of Money has some good ideas for a frugal New Year’s Eve party.  I’m just thrilled to have another short work week.

Frugal Zeitgeist has an article about turning 40 and her goals for 2009.  Lots of good stuff here, and I like seeing the high numbers on her savings goals.  That’s what happens when you pay off the mortgage – there’s lots of extra money for savings.

The Frugal Duchess writes about how a good number of us aren’t particularly savvy when it comes to finances (or basic math from the looks of it).

I hope you all had a good week.  Enjoy the last few days of 2008!

I hope that you’ve all had a good week, and are doing some relaxing and exhaling this weekend now that the hustle and bustle are over.  We had a very mellow Christmas with my family.  There were 11 of us here, lots of food, and of course lots of snuggles for the baby.  We went to a white elephant party last night, and then hung out with another group of friends tonight.  We’re normally homebodies, so this has been a busy week.

The house we were at tonight is beautiful.  We’ve known these people for several years, but this was the first time we were at their house.  They’re in their early 20s, but have a house much larger and fancier than ours.  And they have all sorts of great stuff – a treadmill, beautiful furniture, flat screen tvs…

Even though I love being frugal, and love our simple life, I’ll admit to a bit of coveting now and then.  Tonight I was loving the couch (a beautiful chocolate brown wrap around sectional), the treadmill, and the huge master suite.  For a minute, I found myself wanting those things too.  Then I reminded myself that I wrote a check today to pay and additional $2000 towards our mortgage in January.  I suppose we could have a new couch and a bigger house if we wanted, but we’ve decided that we’d rather own our house as quickly as possible.  That means that we’ll just keep on living the way we always have, buying only what we need, shopping in thrift stores, and keeping our expenses to the bare minimum in order to be able to put as much money as we can towards the principal on our mortgage.

Now that I’m back home in our comfy little house, I’m perfectly happy with our thrift store furniture and cozy rooms.  I like knowing that our house will be ours a lot sooner than it would be if we spent our money on things to put inside it.   And when I look at our son, I’m reminded that the best things in life aren’t things, nor can they be bought.  All we really want to do is be able to spend our time with him.  For us, that’s a huge motivating factor to live frugally, since it means that we don’t have to spend as much of our time earning money to pay for our lifestyle.  And it feels really good to know that we’ve managed to nearly triple our mortgage payment for January.  It required some scrimping, but it’s done.  Now to just repeat that process 11 more times next year, and avoid being tempted by wonderful couches…

When I wrote about our worms and ladybugs a few days ago, several people told me that they had been thinking of starting to compost with worms, but didn’t want to spend $100+ on the bin.  So I thought I’d take pictures of our $5 setup that my husband made.  He bought three big plastic totes at the thrift store for a total of $5 (they’re just storage bins – you probably have some lying around somewhere).  He drilled holes in the sides and bottoms of two of the bins.  The third he left intact.  They nest inside each other, which is key.  The one without holes is basically to catch liquid/compost/worms that come out of the holes in the other bins.  He put one of the drilled bins inside the intact bin, and that’s it to start.  We put leaves, shredded paper, cardboard, and a bunch of kitchen scraps into the top bin (the one with holes) with the worms, and they’re happy little campers.  Any liquid from our kitchen scraps bin drains out the holes in the bottom and we empty it periodically.  The fancy worm bins have a spigot in the bottom bin, but removing the bin with the worms so that you can empty the catch bin is worth saving $100.

The second bin with holes in it comes into play once the first bin is about half full of compost.  You just remove the lid of the worm bin, set the second drilled bin on top of the worms/compost mixture, and put the lid on top (so now you have three bins stacked up, with worms and compost in the middle bin and nothing in the top bin).  Then you start putting your scraps into the top bin.  The worms will start to migrate up there looking for food.  After a while, the worms will have all moved into the top bin, and your middle bin will just be full of really great compost. 

Here are some pics of our setup.  The first one shows what we have now: a catch bin and a drilled bin with worms in it.  The second shows our third bin, which we’re not using yet because the worms are still working on the scraps in the first bin.  The third shows a glimpse of the inside of the bin where the worms are currently working.  There’s no odor at all from the compost by the way.  You have to stick your nose right down into the bin to smell anything, and then it just smells like really good dirt.

I hope the description and the pictures help make it a little easier for some of you to reproduce this setup for yourselves.  It sure is easier than trudging outside when it’s 2 degrees and snowing to dump the kitchen scraps into a frozen-solid compost bin.

If you’re looking for other great ways to be eco friendly, check out the Carnival Of All Things Eco, over at Focus Organic, one of my favorite blogs.

In other news, I saw a sweet high efficiency washing machine at our neighborhood thrift store yesterday, for $50 (!!).  But alas, it had a sold sign on it.  We bought our washing machine refurbished in 2004, after the 1980s machine that came with out house kicked the bucket (and did so in grand style, pouring water all over our floor, down the heating vents, and into our garage ceiling – I think we were up until 4am that night, tearing out insulation and drywall).  Anyway, our washing machine works.  It doesn’t work perfectly, and I sometimes have to put things back through the laundry to get them clean.  After spending two years living in Africa, I’m truly grateful just to have a machine that washes clothes for me, so I’m not complaining.  But I would love a new (to us) washing machine someday.  A high efficiency one would be awesome.  I’m just not willing to pay $1000 to get one.  So although I was bummed to see that someone had already snagged the one in the thrift store, it gave me hope that I will eventually find a good used washing machine at a price that doesn’t make me cringe.

In the Frugal Blog Network last week,

Tight Fisted Miser sold his car.  And I don’t mean traded it in.  He’s car free, something that more of us could be if we put our minds to it.

The Frugal Duchess writes about BOGO shopping.  Good ideas here, and if you only need one, it doesn’t hurt to ask if you can get one half off instead of two for the price of one.

Frugal Zeitgeist has a post about how to make your goals S.M.A.R.T – following her instructions will increase your odds of meeting your goals, whether they’re big or small.

Almost Frugal has a good compilation of frugal tips for college students.  Although I’d say that some of those tips will work for anyone, student or not.

Not Made Of Money has a good list of personal finance related resolutions for 2009.  Use this list to kick start your own ideas of where you want to be a year from now.  And whatever goals you set, make sure they’re S.M.A.R.T.

We have worms.  And ladybugs.  The worms live in my husband’s office, and the ladybugs live in our crawlspace.  We’ve been composting our scraps, leaves, and grass clippings for several years.  But during the winter, not much happens in our compost bins.  They freeze by about the end of November, and although we do get some warm days in the winter, and there’s a very slow composting action going on, it’s nothing to brag about.  So my husband ordered worms.  He bought them from this site, and they arrived in a box a few weeks ago.  He went to the thrift store and spent $5 on large plastic totes that stack inside each other.  He drilled holes and arranged the totes in what is apparently a dream home for worms.  We’ve been putting all of our kitchen scraps in with the worms, along with paper from our shredder, some leaves that we raked up from the lawn, and some cardboard.  They are happy little campers, and making all sorts of good compost.  My husband’s current project is making worm compost tea to use as nutrient in our hydroponic garden.  It’s a pretty good cycle: eat lots of veggies, give the scraps to the worms, worms make compost, compost tea goes into the hydroponic garden, garden grows lots of veggies that we eat.

We are fully committed to an organic lifestyle, and neither of us want any toxic chemicals on our food, our lawn, or in our house.  So when we started noticing whiteflies on our plants in the hydroponic garden, ladybugs were the obvious answer.  You can’t just go out and pick ladybugs off of bushes in December, so we ordered those online too.  They arrived in a bag inside of a box on Monday, and have been happily munching away on our whiteflies ever since.  We dumped them out into the hydroponic garden, and they seem thrilled to be there.  Just in case there weren’t enough whiteflies for them to feast on, my husband made them a concoction of yeast and h0ney that they seem to thoroughly enjoy.  Now I just have to be careful not to injure any ladybugs when I go down there to harvest veggies, but so far it’s working great.  Our outdoor garden with the homemade greenhouse on it has been staying above freezing (and is still producing greens, although at a slower pace than it does in the summer), so we added some ladybugs to that as well.  I think most of them will just hibernate for a while in the cracks around the bottom of the greenhouse, but we’ve seem them out and about during the day.

We’re loving our organic winter gardening methods.  It’s great to be able to harvest fresh veggies (peppers, tomatoes, kale, spinach, and swiss chard) every day, even though there’s snow on the ground outside.  And although we did have to pay $22 for the worms upfront, they’re earning their keep by making us amazingly rich compost and compost tea for free.  Same goes for the ladybugs – we paid $15 for them, but they’re keeping our gardens from being infested by bad bugs, without any nasty chemicals.  And that’s worth a lot to us.

I know that the wool diaper covers look a bit odd, and I got a request for a picture of how they actually fit on the baby, so here it is:

They’re not going to win any fashion awards any time soon, but they work perfectly.  You could make these covers without adding the cuffs from the sweater to the leg holes, but I find that having a little extra wool extending down his legs helps contain leaks.  We do have diaper blowouts every now and then, but they’re always contained within the diaper cover – the blowouts very rarely make it as far as his outfit.

It is a cold snowy Sunday here today.  Perfect for sitting on the couch sewing felted wool sweaters into diaper covers.  Later on we’ll head to the gym, but other than that we’ll be staying indoors today.  I’ve been using my Moby Wrap to exercise with our son lately, and it’s working great.  Our gym has an indoor track and a set of stairs with 28 steps going down to the level below the track.  I put the baby in his wrap, grab two 9 lb weights, and hit the track.  I just walk laps, and I go down the stairs and back up on each lap.  I carry the weights while I walk, doing all sorts of bicep curls, tricep kickbacks, military press, etc.  We’re usually there for about 90 minutes, and by the end of that, I’ve had a great workout.  Nothing fancier than walking, stairs, carrying the baby and some light weights.  But it works well.  When it’s nice outside, we do the same sort of thing outdoors.  But today is a good day for the gym.  I love being able to get in a workout and snuggle my baby at the same time.  And it’s all free, since my job at the library includes a free gym pass.  Even though I’m just a sub at the library now, I still get the free gym pass. 

I’m getting much better at making wool diaper covers.  After I blogged about the one I made last week, Alissa left a comment with a link to a very simple wool cover pattern (thanks Alissa!)  I tried that pattern and I’ve made two covers this weekend.  I’m sewing them by hand with thick crochet cotton, and they’re turning out great.  It’s very relaxing to sit on the couch and sew by hand.  And the combination of the wool and the thick cotton thread means that they come together really fast.  I’d say it took me about an hour to make each cover.  Here’s a picture of the one I just finished this morning:

I’m still using old sweaters that a friend felted when she was making covers for her son.  I have two sweaters that I haven’t cut up yet, which should make four more covers.  That ought to do us for a while.  And I can also make long wool pants using the arms of the sweaters, so I probably have enough wool to make diaper covers to last until our son is out of diapers.

Last night I went shopping with a friend, and we ended up at the thrift store near our house.  I bought an extra-large men’s fleece sweatshirt that I’m going to make into diapers.  I’ve found that fleece is a great fabric for the inside of the diapers, since it’s soft and doesn’t stain the way knit cotton does.  I got the shirt for $2.50, and should be able to get at least four or five diaper liners out of it.

Around the Frugal Blog Network,

The Tight Fisted Miser writes about how he and his girlfriend divide their expenses.  She’s not as frugal as he is, but they’ve both compromised a bit, and it works for them, which is all that really matters.

Almost Frugal has written about her guilty pleasures.  We all have them, and frankly (unless your guilty pleasure is a Ferrari) I think they’re worth it.

The Frugal Duchess has a post about some of the financial schemes to which people are particularly vulnerable during bad economic times.

Frugal Zeitgeist has a very helpful post about getting promoted.  Any tips that lead to a promotion or a raise are good right now, considering how tough the job market is.

Not Made Of Money has details about some things you might not know about your credit score. 

I got a comment today on my post about our financial goals that I thought was worth further discussion.  Dave wrote:

“I don’t know much about you but it seems like you folks have plenty of money. Anyone know of a blog directed toward the working poor? Somebody making / surviving on $30K a year?”

Dave, you make a very good point, and one that I’ve thought about a lot as I write a blog focused on frugal living.  But as as recently as 2004 we were indeed living on about $30K.  That year, our savings amounted to $100/month into our IRAs and that was it.  We were frugal out of necessity.  When we found out that my husband would need $5000 worth of dental work that year, I took a second job at the library, shelving books for $8/hour to pay off the dental bill.

When I started this blog in 2006, we were still in debt and although our income had increased a little beyond $30K, it still wasn’t huge.  Over the last couple years our income has increased further, but our lifestyle has stayed about the same.  Yes, we could spend more money now.  But we choose not to, because we’d rather save for the future than spend everything we have right now.

We’re actually earning a pretty typical income for two college-educated professionals in our 30s.  But we’re still in the same modest house we bought six years ago (we plan to stay, and are paying off the mortgage as quickly as possible).  We still drive cars that were made when nobody outside of Arkansas had ever heard of Bill Clinton.  We buy all of our clothing in thrift stores (and rarely shop at all, even at thrift stores).  I think the last time we went out to eat was in September when my in-laws were visiting.  Yes, we have options – we could choose to drive new cars, upgrade our house, shop at the mall, and go to Starbucks.  But instead we’d rather pretend that we still earn $30K and save the rest.

In order to make our goals happen next year, our family of three will have to keep our monthly expenses to about $2500, including the mortgage and health insurance, which amount to about $1500 together.  I feel confident that we can do it, because we’re used to living frugally.  Being forced to make do on very little money in the past taught us that we really don’t need a lot of money at all.  Now that we have more money, we’re able to give to causes that matter to us and save for the future, since we’re still perfectly happy with our frugal life.

I remember when I started blogging, I read NCN’s blog and was amazed at how much money his yearly savings amounted to.  I remember thinking that he was saving nearly as much as we were earning in a year.  And that served as a huge motivator for me.   The nice thing about being committed to living frugally is that if you work hard and focus on increasing your salary, chances are it will go up as the years go by.  But although the cost of living will increase too, frugal habits will mean that your expenses won’t increase as much as those of the people around you.  I’m sure that people see me pulling out of the thrift store parking lot in my 91 Civic and assume that I’m poor.  And that’s fine with me.

I’ll open the rest of Dave’s comment up to my readers:  what are your favorite blogs written by people who are working to stretch small incomes?  And what about your own experiences – have you found that frugal habits you developed years ago have stayed with you even though your income might have grown to the point where you don’t have to be frugal anymore?  Anyone finding that well-ingrained frugal habits are helping them weather the current recession?  I think this is a great topic for discussion – are you frugal because you want to be, or because you have to be?  For us it started out as a necessity, and then just became a way of life.  My guess is that a lot of other people find the same thing – once they get used to living frugally, they notice that big TVs and shopping at the mall and cars and fancy houses no longer hold much appeal.

Last night I made Christmas ornaments for our five nieces and one for a family friend.  I think this is the seventh year that I’ve made ornaments for our nieces, and it’s a tradition that I really enjoy.  This year I used fabric that I bought in Africa ten years ago when I was a Peace Corps Volunteer.  It’s great fabric, but it’s just been sitting in my closet all these years.  Now that I have a sewing machine, I decided that fabric ornaments would be quick, easy, and cute.  I found a bag of fiberfill stuffing at the thrift store a few weeks ago for 25 cents.  That’s all I spent to make the ornaments, plus an hour or so of my time.  Here’s a picture:

Each ornament has the recipient’s name and the year written on the back in fabric paint.  Last night my husband and I decorated our tree, and it was fun pulling out all of the ornaments from our own childhoods, especially the ones that had our name and the year written on them.  I’m going to package these up and take them to the post office today.  An added bonus with ornaments (especially fabric ones) is that they are lightweight and will cost very little to mail. 

For those of you who are knee deep in Christmas shopping, this is your lucky day – Macy’s is offering my readers their Friends and Family discount, which amounts to 20% off most merchandise, from December 10th to December 15th.  Here’s the coupon you can use to get your discount:

Happy Shopping!