Do The Math Strategy

Some Perspective

Americans live in a culture which constantly points out to us all the stuff we don’t have. TV commercials, other people’s cars going by, store windows, everywhere we look there’s something we could potentially want, and some of it we can’t afford.

It helps to step back and take a more global view. There are plenty of people in the world working as subsistence farmers who have so little that they can’t begin to approach what Westerners call doing without.

Put in your income, and see where you stand compared to the rest of the world:


Easy Net Worth Calculation

The idea of computing your net worth can seem intimidating. It sounds awfully accounting-ish and formal. When it’s just for your own information, it’s easy.

Take a piece of paper or a spreadsheet. Write down the value of your big stuff:

Home if you own it (,

Other real estate,

Bank account balances,

Brokerage account, IRA, 401k, (just use the most recent statement. Doesn’t need to be exact to the penny.)

The amount you could get for your car, jewelry, and collectibles if you sold them, (If you guess, guess low.)

Anything else I haven’t thought of.

Add it up.

Write down everything you owe:


Credit cards, personal loans, car loans, medical and dental bills, (this does not include current utility bills, only debts)

Anything else I haven’t thought of.

Add it up.

Subtract the amount owed from the total of assets.

If the amount is negative, it’s probably a good idea to work on reducing the amount of debt you have.

If it’s positive, you’re way ahead of many people, so keep on!

Those Occasional Expenses

Bills that come in every month are predictable and easy to cope with. The ones that can throw us off are those that come in less often.

Insurance premiums, property tax, back-to-school, Christmas, and heating oil are predictable. But they fall outside the normal pattern of monthly payments. There are several ways to build up the money for these bills. You can use a Christmas club account for Christmas. You can also use it for anything due near the end of the year, such as property tax.

Another way is to divide the amount of the bill by the number of months between payments, such as six for a twice a year insurance bill. Subtract that amount from the check register each month. Then add it back when the bill comes, and write the check to pay it. If you have a separate savings account, you can actually move the money instead of just subtracting it in the check register.

For a while, I added up ALL of the irregular bills. I added an amount to save for a possible condo repair or car repair. I divided the total by twelve, and put that amount aside every month. With rare and minor exception, this method let me always have the money to pay each irregular bill as it came along. That year I bought a refrigerator, a wall air conditioner, and a (very cheap) used car, all for cash.

Some banks offer a program where each time you use your debit card, they transfer a dollar to your savings account. This can be an easy way to build up some savings. You do have to remember to subtract that extra dollar from the check register.

Staying ahead of this type of expense lets you avoid getting behind.

Those Predictable But Irregular Bills

Things like property tax, car registration, the half-yearly car insurance bill, holiday spending, vacations, big car repairs, replacing appliances are all things we know will happen. Because they don’t happen every month like rent/mortgage and utilities, it’s harder to plan for them.

Years ago I had a system for that. I added up all of those expenses for the year, divided by twelve, and put that much in a savings account each month. It worked very well. I never had to use credit to pay anything, and felt a certain financial serenity that was very nice.

An article in the Dollar Stretcher today informed me that that method is called a “sinking fund.” According to Dave Ramsey, this is different than an emergency fund. The items in the sinking fund aren’t unexpected emergencies, they are expected but irregular expenses.



Marie Brack is the author of Frugal Living for the 21st Century: Adventures in Using Your Money Wisely. It’s available on in both Kindle and paperback versions.

52 Weeks: Wills, etc – Life Insurance

The purpose of life insurance is to protect your financial dependents from serious financial problems in the event of your death. Sales persons try to sell whole life insurance to young people with no financial dependents. They’ll tell you the premiums are so much lower when you’re young, get it while it’s affordable. My own opinion is that unless you are absolutely sure your income will never be interrupted, so that you can’t pay the premium and lose all or most of what you’ve paid in, it’s too risky. My income has certainly been interrupted several times over the decades, by layoff, illness, overwhelming expenses.

Term insurance is far, far less expensive than whole life. It gives the most death benefit for the money. The large fees and commissions on whole life, variable life, and universal life put them completely outside my comfort zone. Universal life is sold as an investment vehicle. The thing is, if there comes a time when you can’t pay the premiums, within a few months the whole value of it is gone. That is beyond risky. Making those payments into your own 401k, mutual fund, bank account, or IRA is much, much safer. If you lose your job and stop paying into an IRA, you still get to keep all the money you put into it before.



Marie Brack is the author of Frugal Living for the 21st Century: Adventures in Using Your Money Wisely. It’s available on in both Kindle and paperback versions.

The Saffron – Turmeric Connection

Ever look at an interesting recipe and set out to try it, only to learn that one of the minor ingredients costs $5,000 a pound? Maybe not, or maybe because they sell it by the ounce, you don’t realize how expensive it is. On Amazon today, saffron for cooking costs $12 for .035 of an ounce, about one twenty-eighth of an ounce. That’s $342.86 per ounce, or $5,485 per pound. Many delicious seafood or rice dishes call for saffron.

Turmeric costs $3.50 for 2.35 ounces today on Amazon, or about $24 a pound. That still sounds terrible by the pound, but is quite manageable by the dash, sprinkle or 1/4 teaspoon. It is likely to be less expensive from the canisters at your health food store.

Turmeric is an excellent substitute for saffron. Or so I hear. I’ve never actually indulged invested in saffron, I just use turmeric, regardless. It makes yellow rice yellow. In combination with black pepper, it is reputed to help discourage cancer. I use small amounts because it does have a fairly strong taste.

So those delightful recipes are still possible for me, without spending a king’s ransom.

“What I Don’t Have to Spend, I Don’t Have to Earn”

About half the time when I say that to people, they stare as if what they heard me say was, “Erndampt, ag rojabrane.” I’ve tried saying it in different words, but sometimes it just doesn’t fit a person’s mindset.

If I arrange my life so that I don’t have to spend $60 a month on dry cleaning, then at least theoretically, that’s $60 I don’t have to earn that week. Of course when you have a steady and sufficient salary, you’re going to earn anyway. In that case, what you don’t have to spend, you can save up for something bigger that you want, like a vacation or early retirement.

When you’re relying on intermittent and unpredictable self-employment income, and your health isn’t reliable either, not-spending is a wonderful way to handle gaps in income. This is great for people who are retired, disabled, temporarily out of the work force for personal or family reasons, etc…..

If working overtime hours is putting pressure on your health or your family life, perhaps you could not-spend instead of working yourself into the ground.

For hundreds of examples of ways to not-spend (and still live a normal life), see my book, Frugal Living for the 21st Century: Adventures in Using Your Money Wisely.