By Alexa's husband, Seth

Sorry for the brief lapse in blogging... Alexa has been working late nights this week bringing in the bacon, so I thought I'd take this opportunity to share an honest rant about the challenges related to one way we save: Splitting meals.

We all know that meeting aggressive savings goals can be a little painful on one's lifestyle, but I feel the pain every time Alexa and I go out to eat. It's not that I go home with an empty stomach, but it's that I am acutely aware of the glares and stares that come our way from waiters when we put in our order to split just one entree with water on the side. I'm a highly empathetic person and don't want to look like Johnny Cheapskate in front of other people.

Fortunately, we've found that it's quite possible for a couple to eat out, be satisfied, and not be a cheapskate. The trick to successfully splitting a meal with a spouse is sticking to a few key principles.

First, it is an open secret most restaurants serve more than twice the amount of food an average person needs for a meal. Psychologically, we feel compelled to eat whatever is on our plate. But if you take your entree and put it on two plates, it's actually more than enough food than you need.

Secondly, and perhaps most difficult, is the quest to agree on a dish two spouses would like to share. There is no easy advice I can give, but the process involves clear communication about the types of food you desire, affirmation of the spouse's desires, and the willingness to agree on something that wasn't necessarily your first choice. In other words, it is wonderful practice for building all the core marriage skills!

Third, and finally, ordering small doesn't mean you have to be a cheapskate. If Alexa and I split a $15 entree (comes out to $7.50 each), and we had good service, we wouldn't feel bad about leaving a $4-5 tip, which equates to roughly $20-30 of food. A generous tip is not really that much to spare in the big scheme of things, especially when you're saving $10-20 on the second entree you skipped.

It's just hard sometimes to assure our waiter of our good intentions at the beginning of meals. If anyone knows how to achieve THAT, we'd love to hear about it.

We Split Too!

Couldn't Agree More

We finally purchased our airline tickets home for Christmas.

When I first looked at tickets this year (on September 21st -- the first day of Autumn), I was shocked! Even that far in advance, round trip tickets from San Francisco to Pennsylvania and Ohio were no less than $600-700, more than double what we've paid in past years. Although an expectation-adjustment was definitely necessary, we also bet that prices couldn't get much worse, and we decided to watch and wait. At last, after a few weeks of experimenting with all possible variations of our trip home and monitoring Kayak.com daily, we finally found a concoction that worked:

By purchasing two one-way tickets, we managed to get flights on premium travel dates (December 20-January 2) for what seems to be a bargain price: $433 round trip each.

Here's what we did...

• We explored variations. We searched on many different days using many different criteria: Flexible days, alternate cities near our destination, and one way tickets. We even considered flying on Christmas Eve or Christmas Day and suggesting that our families "move" Christmas... but we realized that inconveniencing our families to save money wasn't a great idea.
• We remembered to check discount airlines, like Southwest and Virgin America, in addition to search sites like Priceline and Cheaptickets. We found a great fare on the return trip ticket at Southwest -- at $200, it was less than half the price of any round trip ticket we'd seen at that point, so we snatched it up. The departure tickets were still super expensive though, so we decided to monitor them for a few weeks.
• We used a saved search, complete with flexible dates, on Kayak.com to monitor flights on or around December 20th (the Saturday before Christmas). We noticed that prices generally were higher when we searched on weekends and lower midweek, but it wasn't until this week that prices began to budge below $305. Tonight I finally stumbled upon a $233 ticket for this leg. Added to the $200 tickets for the other leg, we had a $433 fare -- far lower than any round trip ticket I've seen for those dates.
• We made some tradeoffs. The flight we settled on isn't perfect -- it has 2 layovers. But they aren't in major delay cities like Chicago or New York, and we figured we'll be spending all day traveling regardless, so why not save $150 between the two of us? Sure, $150 doesn't seem like a lot compared to a $866 total purchase, but think, you could buy an iPod with that much!
• Finally, we used Farecast to evaluate whether to buy now or wait. Actually buying the tickets is still always stressful to me... I always worry that prices may yet go down. But seeing Farecast's prediction that it's a good time to buy seemed reassuring, plus we've never seen tickets less than $433, so we went ahead and pressed "Purchase."

Paying this year's ticket prices is still pretty painful. But if you're planning holiday travel, I hope these tips can help you minimize the pain and even feel like a winner!

To encourage viewers to keep saving during the economic downturn, KTSF, an independent, Asian-language TV station in San Francisco, interviewed me about my birthmother search and my savings goals and habits.

Now if only I knew what they were saying!

I saw this

To stay on top of our finances, Seth and I have weekly "date nights" where we categorize all our transactions and see how we're doing. I know budgeting can seem like a vague concept to many people, so I wanted to share a concrete picture of what we do on these dates -- hopefully it will sound as easy as it is!

1. Categorizing: We start by entering and categorizing all of our transactions. Even if you're not keeping a budget, just keeping track of where your money is going is a great habit! To do this, we keep receipts for everything, even cash transactions. We enter all receipts and any anticipated transactions into our software of choice, categorizing each transaction and making sure our records match the bank's records. (We use Quicken 2002 to do this, but you could also use Excel or one of the great free services out there like Mint.com or Quicken Online, which both download all of your transactions for you.) We have a limited number of major categories for which we set monthly goals:
   • Auto
   • Bills
   • Eating (includes Dining and Groceries)
   • Household Maintenance
   • Medical
   • Personal Care
   • Travel
   • Everything Else

   We also use subcategories for areas of curiosity or interest -- like "Work Lunches" or "Treats." Naturally, there are lots of subcategories under "Everything Else," from "Clothing" to "Household Furnishings," but we don't have separate budgets for each of these things since they vary so much.

2. Budgeting (aka Goal Setting): It took a few months of tracking and categorizing to be able to create a budget for the first time. But once we were familiar with how much we spent in each major category every month, it wasn't hard to set rough goals for each category, including savings. The trick is trying to make sure that the total you've budgeted doesn't exceed the amount you expect to make each month. Fortunately, Quicken and Mint.com are great for helping you set reasonable goals based on your income and past behavior.
3. Evaluating: Once we've entered and reconciled everything, we look at a report of our actual spending vs. our goals. When we first started keeping a budget, we weren't sure what timeframe to look at. We've finally realized that the most useful report is one that goes from the beginning of the year to the end of the current month. This achieves two things: 1) Assuming it's not January, it smoothes out the month to month variations in actual expenses. 2) It tell us something actionable -- how much we have left to spend for the rest of the month (or if we've already spent too much!) We can then make informed choices about whether we can afford to go out to dinner again or not, for example.

If we realize we have plenty left over in one of the categories -- say, "Dining" -- we run out and treat ourselves immediately! Ok, I'm kidding -- we try to save whenever possible. But at the same time, it's important to remember that you don't have to look at budgeting as constraining -- it can also be freeing! If you've budgeted correctly and are paying yourself first, then you CAN feel free to use the money you've set aside for other things! It's like creating "gift certificates" for yourself each month that you can feel free to spend without worrying.

Seeing where all our money is going can be fun and revealing (We spend that much on toothpaste every year?!). Whether you're just starting to track expenses or want to set goals and stick to a budget, we hope it can be a rewarding experience for you, as well!

Although my husband, Seth, and I are fortunate to be dual income, living in San Francisco has its price, and almost all of my income goes towards rent, 401k, and monthly expenses. Still, in addition to saving 100% of Seth's take-home pay, we are also striving to save at least $250 of my income every month, to make sure we'd be living within our means and saving even if we weren't dual income.

Here's how we're doing this:

1) We requested that Seth's paycheck be direct deposited into our FNBO Direct account instead of checking. This ensures it begins earning interest immediately and keeps us from skimming some off the top when transferring it from checking to savings.

2) We adjusted our monthly budget so that at least $250 of my monthly pay is set aside for savings. Budgeting is one of those things that sounds harder than it is... so I'll be sharing how we do it in my next post.

3) We plan to find ways to make extra money on the side to cover one-time expenses that are outside our monthly budget (e.g., special gifts, major purchases or donations) without tapping into savings. To do this in the past, we've participated in focus groups, done freelance work and taken advantage of deals and offers (like sign-up bonuses).

So that's our high-level plan. In my next post, I'll share the nitty gritty of how we keep track of our expenses and set spending goals. I hope it will be helpful to anyone setting out to do the same!

When birthdays and holidays come around. I feel deeply driven to be the one to give someone the perfect gift, something that will just blow them away when they open it.

I've found that the shortcut to giving a mind-blowing gift is to spend a lot of money.

Getting someone a huge, unexpected gift of something they'd never buy for themselves is a sure way of bringing a smile to someone's face. The Nikon D40 I got for my mom for Mother's Day. The Father's Day Wii for which I waited in line at Target -- so I could match the magnitude of my mom's D40. But I say "shortcut" because this is admittedly, honestly, the easy way out. All I have to do is think of something, pay for it, sign a fancy card, and phew! Internal obligation to get perfect gift fulfilled.

It's way easier to run out and buy someone an expensive card and sign your name at the bottom than to invest the time and emotional energy required to write a meaningful note to that person yourself!

So I woke up tonight at 2am to hear my husband recording an incredibly sincere Facebook video letter to his sister for her birthday. He'd spent all evening writing it and the resulting letter was personal, thoughtful and memorable. It didn't cost a dime, but I'm sure it will have a much more enduring impact than an expensive gadget that will fall apart in a few years anyway (or months -- like the camera I got my sister last Christmas!).

Deeply personal gifts can take a great deal of time, effort and thought.

I've come up with some pretty creative tributes in the past, but it can really be quite hard! To write a long, meaningful letter to a family member, build a scrapbook or website dedicated to a friend, or create a funny, original card requires coming up with a good idea... a great deal of time... and actually THINKING about what that person means to you. Yikes!

But as the holidays approach this year, I don't want to be a shortcut-taker. Instead, I want to take the time to give the people I love the emotional investment they deserve.

When I'm aware of an opportunity to get "free money," not taking advantage of it feels like losing money to me. So when I heard I could get $10 for every video I submitted to FNBO Direct's Pay Yourself First Contest, I added it to the top of my to do list. (Also on my to do list was "Write a letter to my birthmother" -- which inspired my final submission. I'll be sharing more about my birthmother search soon!)

When making videos, it was easy to think of ways we save money -- my husband Seth and I are the kind of people who stayed in a tent at a KOA Kampground in San Diego to save on lodging. We love free food, participate in focus groups, walk and bike whenever possible, split meals and chase high-interest savings accounts. Among friends and family, we're kind of infamous savers -- as my sister's submission humorously illustrates.

But as obsessive as we are about saving, it doesn't mean we have a miserly lifestyle. Rather, knowing we're on top of our finances frees us to enjoy life without guilt when we choose to. (At least in principle -- sometimes feeling free can be a struggle!) By living in a tiny studio, we can afford to live within walking distance to both our workplaces. By splitting meals when we go out, we can enjoy a filet mignon now and then.

Whether you can relate to us or think we're crazy, I hope you'll get something practical out of this blog. As you follow our journey, you'll learn secrets like how to get "free" money, overcome marketers' tricks, and avoid common irrational behaviors. In other words -- reading this blog can save you money!

We hope you'll join us in learning how to make the most of each dollar while still living richly and generously!