I am thrilled and flattered to find out that I’m a finalist for a Plutus Award for best frugality blog.  The Plutus Awards were created by Flexo, of Consumerism Commentary fame, to honor all sorts of aspects of the financial world.  There are a ton of great blogs that have been nominated for awards – I’m in good company!

The finalists were chosen by the personal finance blogging community, including writers and readers, and I’m honored to be among the frugality blogs that were selected as finalists.  Voting begins on Wednesday, February 24th.  If you enjoy my blog, I’d love to get your vote.

The Carnival of Personal Finance is live over at Budgets Are Sexy.  There are tons of great articles, but here are some of my favorites this week:

Money Beagle asks if the bank forced you to sign your mortgage.  Prepared to get fired up – there’s lots of discussion in the comments too.

You Have More Than You Think explains how friends don’t make friends overspend, when it comes to weddings.  My husband and I got married on top of a mountain in our hiking clothes.  I love this article!

No Debt Plan explains why doing your own taxes is a good idea.  I’ve been doing my own taxes for years.  Back in the day, it was simple – just a W2 and a 1040EZ, and I was all set.  I would do my own, and my husband’s (back before we were married) in about an hour each year.  Then we became self-employed and our taxes got much more complicated.  Instead of one W2 for each of us, we had about ten 1099s each, and tons of business expenses.  A few years later, we incorporated our business, and I had to contend with a corporate tax return, in addition to our personal return.  I thought about throwing in the towel and going to an accountant.  But I have a strong DIY nature, and more importantly, I wanted to really understand what the heck was going on with our taxes.  I didn’t want to just dump a bunch of paperwork off at the accountant’s office and come back a few weeks later to sign our returns.  So I poured over the tax laws, reading and re-reading things until they made sense.  There were some frustrating moments, for sure.  But I just finished our 2009 taxes, and it does seem to get easier every year.  I now have a very solid understanding of tax laws pertaining to an S-Corp (granted, only for our particular situation, where we have no employees – but hey, I’m not doing anybody else’s taxes, so that’s really all I need to understand).  I know how various expenses will impact our taxes, and I understand how the structure of our business and compensation impacts our personal return.  Yes, I have devoted a lot of hours to taxes over the years, but the knowledge I have gained seems well worth it to me.

Check out the carnival when you get a chance – I’m sure you’ll find lots of interesting reading.

Dawn at Frugal For Life has written an article about overcoming frugal fatigue.  Given the economic problems of the last couple years, chances are a lot of people have been frugal by necessity for a while now, and Dawn’s article is aptly timed.  Ever since I was a child, opening my first savings account, I’ve gotten more of a thrill from saving than from spending, so I’ve never had a problem with frugal fatigue.  But I do remember the early years of our self-employment, when we were deeply in debt from starting our business (a combination of business debts and debts incurred to buy things like groceries while we were earning diddly squat for income).  I had huge amounts of debt fatigue.  I had all of our debt amounts listed on a yellow legal pad, and I would sometimes just stare at them for ten minutes, wishing that I could get the numbers to go down faster.  Each month was like a puzzle, and I would figure out how much we could put towards each debt, and where it would make the most sense to put extra cash.  We were completely focused on paying off our debts, and it absolutely resulted in fatigue.  I would imagine how amazing it would feel to see zeros all across my legal pad, and mentally fast forward ahead a few months to picture reduced debt.  On one hand, being so focused was what got us out of debt relatively quickly (we paid it all off in about three years), but it sure was mentally tiring.

These days, our only debt is our mortgage.  While it’s a much larger debt than our business debt was, it doesn’t feel as oppressive – although we still want to be rid of it, and are working to pay it down as fast as we can.  But the mortgage is just one aspect of our long term financial goals now; the rest is focused on retirement savings, cash savings, college savings, etc.  We’re just as focused on saving now as we were on paying of debt several years ago, but saving feels like fun.  There’s no fatigue from working to grow our nest egg, the way there was when we were digging out of a hole.  Both are satisfying, and both have the effect of increasing our net worth, but what we’re doing now feels a lot less stressful.

If you’re feeling fatigued by frugality – especially if you’re focusing on paying off debts – maybe it would help to divert a little bit of your extra money away from debt repayment and into a savings account.  For the first year that we were paying off debt, we didn’t save a dime – no emergency fund, no IRA contribution – everything went towards debt.  I wonder if maybe it would have been less exhausting if we had opened a savings account and put a little money into savings at the same time.  In the end, it all evens out, but if you’re considering giving up on frugality because you’re tired of it, taking a mini break now and then might do the trick to keep you on track long term.  Same goes for debt repayment:  As long as we keep the long term goals in sight, a little deviation now and then might be just what we need.

I’ve just spent the last hour on a website I just discovered, and am so inspired I wanted to share it with you.  Early Retirement Extreme is my kind of site.  The guy who writes it (Jacob) is in his early 30s and financially free… without ever earning a six figure income or coming into any sort of inheritance or windfall.  He is an extreme saver, saving 70 -80% of his income during his working years.  He now works about four hours a week on the computer, which provides enough income to cover his expenses.  I love reading stories like this; they inspire me and motivate me.

Jacob lives in an RV, and leads a very simple – and happy – life.  My family has a house with 3/4 of an acre of land, but we also lead a simple, happy life.  Our expenses are quite a bit higher than Jacob’s, mainly because of the house.  But we have a 15 year mortgage with a fixed 4.625% interest rate, and we’re working hard to pay it off in less than half of the scheduled time.  Once we do, our expenses will drop considerably, since our mortgage accounts for about half of our monthly expenses.

We’re also working towards our goal of growing most of our own food, which will further reduce our expenses (food is our highest expense after the mortgage).  Buying a house with a large yard was a big part of our long term plan, and it feels great to make extra payments on our mortgage every month, knowing that we’re working towards owning our own mini-farm someday.

Right now, we’re saving about 50% of our after-tax income (I include the extra we pay toward the mortgage in this figure).  I’m so impressed by Jacob’s story, and inspired to keep focusing on our long-term goals.  Retirement means different things to different people, but I think that everyone would appreciate more time to devote to things that they love rather than things that they must do in order to earn money (for a small percentage of people, these are one and the same, but for most people, there are plenty of things they would rather do than whatever it is they do to generate an income).  If you’re interested, check out Jacob’s blog and get inspired to start saving for your own independence day!

Hello all, and Happy Sunday!  I wanted to share a couple of links with you, to sites that I’ve been using a lot lately.

I’ve mentioned that we’ve been transitioning to a mostly vegan diet, and I’m focusing a lot on raw food.  It makes sense, given that the vast majority of what we eat is veggies, fruits, and seeds.  When I shop, just about everything in my cart is from the produce department (which makes me really excited for the summer, when we will hopefully be growing most of it ourselves), and recipes for simple raw foods fit very well into our lives.  The Sunny Raw Kitchen has become a standby for me.  I love that there are so many recipes available on the site, for free, and categorized nicely in an index.  I also love that so many of them don’t require a dehydrator.  We are planning to get a dehydrator  in the summer, once we are ready to start preserving our produce, but for now, we don’t have one and I love that so many of the recipes on The Sunny Raw Kitchen don’t need one.  The “where’s the beef?” carrot mixture quickly became a staple around here, and I’ve been making it every few days for the last month or so.  It’s much more interesting than plain carrots, very inexpensive to make, and a great addition to salads and tacos.  Both my husband and my son love it, and it only takes about 3 minutes to make using a food processor.

I’m also loving Debra’s List, which is an amazing resource of eco-friendliness.  Debra has been green since long before it was cool, and her site is a wealth of information.  I especially like the section where she explains a lot of the things that she does around her own home.  It inspired me to spend a lot of today deep cleaning our house.  We can’t afford to spend thousands of dollars on mattresses and furniture without toxic chemicals in them, but I can spend a few hours vacuuming all the nooks and crannies of our house (including the mattresses, an idea I got from Debra’s site) and washing our rugs and bedding.  In general, everything I’ve done to rid our house of toxins has been inexpensive or free.  The cupboard under our sink is full of bags of baking soda and jugs of vinegar that I use to clean pretty much everything, but I’m not going to spend $5000 on a new couch made of organic hemp.  I love that Debra’s site has ideas you can put into practice regardless of how much money you have.

I hope you can find something useful on one or both of these sites – they’ve both been fantastic resources for me, and I thought I’d share.

Pretty much everything in our house was used when we got it – even our dog and cat.  But I haven’t ever taken the time to photograph and catalog most of the great deals we’ve gotten over the years.  So I’m quite impressed with the Thrifty Chicks for their latest project – an album of 201 photos of awesome thrifted stuff.  It’s like a Christmas catalog of unique stuff.  You can’t order from the pages, but you can be inspired to go out an find your own awesome stuff, for far less than you’d spend at the mall.

I’ve already mentioned that we’re planning a super low-key Christmas around here.  Our son is only a year and half old, and could care less whether it’s Christmas or the 4th of July or November 20th.   As long as we spend our evenings playing with him, and take him to the playground during the day, he’s a happy camper.  But there are a few people for whom I enjoy getting presents.  I’ve been pondering various homemade options this year, and I’m also going to go to the thrift stores a little more often for the next few weeks and see if I spot anything that reminds me of those people.  I’m making a commitment that all of the gifts my family gives this year will be either homemade, secondhand, or donations to a charity that is close to the recipient’s heart.  No mall stuff, no online shopping, nothing mass-produced unless I’m giving it a second life.

What about you?  Anyone else out there who is willing to get off of the crazy retail train that somehow manages to take over a good chunk of the country for the last month of the year?  If you have Black Friday off work, perhaps you can spend it thrifting for wonderful unique gifts, or sorting through things you already have on hand that can be turned into homemade gifts.  I’m thinking about making wooden blocks for a friend’s toddler by cutting up a 2×4.  Or I might felt an old wool sweater and use it to make a her a little purse.  Lots of possibilities, all more fun than spending the day at the mall racking up credit card debt.

So head over to the Thrifty Chicks site for some inspiration, and then challenge yourself to see how much of your Christmas shopping you can do without buying new stuff.  And whatever you do, promise yourself that you won’t go into debt for Christmas, since that takes all the fun out of it.

For a couple years now, I’ve had Colin Beavan’s blog – No Impact Man – on my blogroll.  His site is both interesting and inspiring, and I’ve always enjoyed it.  I  just finished reading his new book (also titled No Impact Man), and highly recommend it.  The focus of the book is on Colin and his wife and daughter as they work to eliminate as much as possible of their carbon footprint for a year.  No transportation except their feet and bikes, no food that isn’t local, no electricity in their apartment, no elevators… it’s quite an impressive feat.  Especially since they live in a 9th floor apartment in NYC.

The book is inspiring from an environmental perspective, but my frugal side was inspired too.  Colin and his family transform themselves from a typical TV-watching, Prada-buying (well, maybe that part isn’t typical…), taxi-riding, Starbucks-drinking family to something much more simple, and much more pleasant.  In the process, they stop buying new things (thrift stores are fair game, as used merchandise is always a green option), start riding bikes and walking everywhere, give up their TV and hang out playing games in the evening, and gather around the kitchen to prepare fresh local food rather than order take out.  All told, it seems that nearly all of the changes they made would have a dual effect of both lessening their environmental impact, and also reducing their spending.

The book is far more interesting than just a simple journal of their progress or a how-to list for environmental action.  Colin does an excellent job of weaving introspective musings in between the details of his life, and the result is a more thought-provoking read than many of the environmentally-focused books I’ve read.  If you’re looking for a book that will give you some ideas and inspiration for living a life that is a bit more gentle – on yourself, your wallet, and the planet – I definitely recommend No Impact Man.

I’m guessing most of my readers are fellow thrift store fans.  The Thrifty Chicks have turned thrift store shopping into an art and science all rolled into one.  If you haven’t visited their site before, I highly recommend it.  And now, Ms. Shopping GoLightly is in the running to be the next “Green Girl” – a spokeswoman for the green industry.  Voting continues through tomorrow, and it takes about three seconds to cast your vote.  I really think that she would do an excellent job with this position.  If you agree, or if you’re just curious, head over to her blog and see what all the fuss is about.  All of the info is on her blog, but you can go straight to the voting page here.  All you have to do is click on the stars under her picture.

Today’s article is a guest post from Ann Smarty.  It’s been a crazy busy week around here – updates coming soon.  Thanks for filling in, Ann!

Imagine the situation: you come to the mall to buy some tiny thing. You are walking along the shelves considering various products. Then you choose something… and something breaks. You feel like buying more. You just can’t stop. You no more consider, you just keep putting things into the cart.

Has this ever happened to you? This process of going from deliberation phase to acting (buying) phase is called shopping momentum. This is the most effective way to manipulate the consumer’s behavior and make you spend more.

Now, let’s learn how you can break the shopping momentum and avoid extra (unnecessary) purchases.

1. Pay in cash: It is a well-known fact that counting actual money makes you think about what you are doing. So leave your credit card at home, take only cash with you (another effective way is to take exactly the amount of money you plan to spend).

2. Avoid buying anything in the checkout line. Most stupid purchases are made while you are waiting in the checkout line. That’s why you usually see so many “cool” bright things there. Just don’t look – open the newspaper or magazine instead.

3. Avoid payday shopping. The day of the salary makes us feel rich and powerful … and excited – not the best feelings for going shopping if you plan to save.

4. Maintain weekly and monthly shopping lists. Getting organized is the most effective way to keep your head.

5. Eat before going shopping. An interesting study suggests that exposure to something that stimulates the appetite can make a person more impulsive with unrelated purchases. So make sure you feel full before going to the mall.

6. Clip and take any coupons you managed to find. Like cash, coupons make sure you remember you are there to save. Consider looking for coupons online. Internet offers great tools to search and organize both online and printed coupons.

Any more tips? Please share them in the comments!

Guest post by Ann Smarty.

I was catching up on some blog reading this evening, and came across an article on Frugal Zeitgeist’s site that kept me reading until the very end.   She included a link to a story about an economics reporter (of all people!) who, despite his impressive background in covering all sorts of financial ups and downs, got himself into a predicament when he stretched way too far to buy a house that cost nearly half a million dollars.  At the time, his take home pay was $2777/month.  And his mortgage payment came to $2500/month.  He followed it up with one bad decision after another, and the article reads like a cautionary tale about what not to do – EVER.

FZ pointed out that she has a hard time drumming up much sympathy for this fellow, considering the decisions he made over the last few years.  I agree, although I do think that it took a lot of courage for him to write such a personal article and put it out there for the world to see.  Hopefully it will have the effect of reinforcing the idea that we all need to be living within our means, and will keep another family from ending up in the same boat.