As featured in The Wall Street Journal, Money Magazine, and more!

avatar You are viewing an archive of articles by Kelly Whalen. Kelly is a mostly stay-at-home mom to four kids. You can more of her articles about personal finance at The Centsible Life. Also, you can follow Kelly on Twitter. View 's Google Profile.

Kelly Whalen

This article is presented by Kelly Whalen, Consumerism Commentary staff writer, who hosts a weekly internet show called the ¢entsible show.

Unexpected income is a problem many people would love to have, but it happens more frequently than people realize. Whether it’s a $20 birthday check from your eighty-something grandmother or a raise, there are few months we don’t have something unexpected.

When you get a windfall you could dream up many ways to spend or save it, so it is important to have a plan.

One-time income

You may find yourself with one-time income when your receive rebate checks, tax refunds, or birthday money, or if you sell something you own. Unless you are like Ebenezer Scrooge you’ll probably have the urge to spend some of this extra cash. The best way to deal with extra cash is to prioritize.

If your windfall is under $50, it’s a good idea to use this as fun money. $50 doesn’t go very far when you try to split it up, and unless you are $50 away from a savings goal or debt repayment, it will be pretty painful to put it away.

If your windfall is over $50 but under $100, put it towards debt. If you don’t have any debt use this as a little boost to your savings goals. If you have a favorite indulgence under $5, perhaps a hazelnut latte or a particular gum, spend a little on that so you don’t feel completely deprived.

If your windfall is over $100, plan to split it between spending and savings (or paying off debt). A good rule of thumb is to use a 50/50 split, though in some houses, like mine, that may be a 50/25/25 split.

If your windfall is over $1,000, I would highly recommend using it to (in this order):


Regular unexpected income

Whether your side business suddenly takes off or you get a raise from your job, careful planning will keep you from lifestyle inflation. Lifestyle inflation is an increase in cost of living corresponding to an increase in salary. No matter how much extra income you earn, you need to have priorities.

If you are in debt, paying off your debt should be your first goal. Do whatever you can to make that happen as quickly as possible. The easiest way to pay off debt is to have your money automatically deducted from your checking account the day after your paycheck arrives.

If you are out of debt, or have a comfortable amount of debt (many people consider a mortgage comfortable debt), you should consider saving all of your dough. It’s unlikely you will miss your hard-earned cash, because you are already accustomed to living within your means. Choose your own order of savings, but I highly recommend using the following order:

If you are already doing all of the above, you should consider using your leftover money to fund other investments.

If you are out of debt, maxing out all your retirement options, funding your children (or future children’s) college investments, and have a healthy savings account, you should consider any other income that isn’t accounted for your do-as-you-wish money.

How do you deal with unexpected raises or revenue? What do you do when you get an extra $100?

Photo: ervega


This article is presented by Kelly Whalen, Consumerism Commentary staff writer.

It’s fairly straightforward to figure out the difference between a need and a want. Needs are basic: food, shelter, clothing, water, warmth. We can also add to that our emotional needs: love, friendship, and care.

Wants seem easy to define. Wants are all the extras, the things that are not necessities. No one “needs” the latest gadget, the most expensive pair of running shoes in the store, or the biggest house on the block.

When it comes to actual purchases though the waters seem to get murky. Is a new pair of shoes a necessity or a want? The answer to this question depends on many factors. You would probably want to know what kind of shoes are being considered, how many pairs of shoes the person already has, whether they’re replacing another pair of shoes, and the answers to a dozen more questions. This evaluation of needs versus wants takes time.

We may go through days without having to make spending decisions, but throughout our lives we make tens of thousands of these decisions. Whether they are small purchases like a pack of gum or large ones such as our homes, we are faced over and over again with the question, “Do I really need this?”

If you are asking that question, you are already practicing smart spending habits. “Do I really need that?,” is only the tip of the iceberg though. We can build on that question to make a checklist that will help keep more money in your pocket.

shopping cartsThe situation where this often becomes useful is when you are shopping for something, perhaps groceries or a birthday gift, and you see a widget you have been thinking about buying. You look at the widget in passing or may even stop and pick up the widget off the shelf while you make a decision. Here are the questions you need to ask yourself before you put that widget in your shopping cart.

  • Is this widget on my list? If it isn’t, put it down and write it on your list for future purchases. If you aren’t shopping with a list, start! Lists are a great way to keep track of all the things you need and want. If it’s on your list you can continue.
  • Do I need this widget? No justifications here. Is it an absolute have-to-have-it item? If you said yes, buy it. If you said no, continue to the next question.
  • Can I afford this widget? If you answered no, put the credit card back in your wallet and back slowly away. If you answered yes, continue to the next question.
  • Do I want to spend my money on this widget? Are there better things you could be spending your money on? Is there a goal you have in mind? For me the idea of being debt-free is much more appealing than the widget I am considering. You may have a goal in mind such as a new home or a vacation with your family, so while the question might be easy to answer, it will depend on what your individual goals are.

Taking a few moments to evaluate our purchases while making them is crucial to maintaining a healthy balance of spending and saving. Using this checklist will only take a few seconds, but it could be the difference between a decent net worth and a fantastic one.

As a mom, I am faced with purchasing decisions not just for myself but for my family and household as well. Using this checklist has stopped me from overbuying, overspending, and buying things I don’t need.

How do you keep yourself in check when you are spending money? Do you use a checklist or evaluation process?

Photo: robholland


This article is presented by Kelly Whalen, Consumerism Commentary staff writer who attended Toy Fair this week in New York City.

Should you be one of the millions of Americans (nearly 75%) who receives a tax refund this year, you may be making all sorts of plans for your money. Some people will plan to spend it and some will plan to save it. What’s the best use of your refund?

As a personal finance writer, from now through April I hear from many readers who don’t know what they should do with their tax refund. The average tax refund is over $2,600. That’s quite a few clams!

You have three options, and I’ll offer several ideas on how to use each option.

1. Save your money.

  • Emergency Fund: If you don’t have one, using your tax refund to jump-start an emergency fund is an excellent use of your money.
  • IRA: If you throw the money you anticipate getting into an IRA you can get an even bigger tax break. Jump-start your retirement savings, and save on taxes as well.
  • Long-Term Savings: Are your emergency fund and IRA fully funded? Save it for a nice boost for your car replacement fund, down payment fund, or other savings goal.

2. Spend you money.

  • Pay off debt: Many Americans will spend their money on necessities, reducing their consumer debt. This offers the most bang for your buck. If you are debt-free, keep reading.
  • Needs: Many people put off larger purchases, whether because they can’t afford it, or the expense is painful. Use your tax refund as a means to purchase something that is needed. Whether it’s a new set of tires for your car, or a new water heater.
  • Wants: If you’re a frugal person who has their finances in order it’s likely that you don’t spend a lot on things you want. Now is the time to spring for the vacation you always put off or a new wardrobe to replace your dated work clothes.

3. A combination of spend and save.

Saving and spending portions of your income tax refund is a balanced approach. That way you get to take care of something important or necessary, as well as have some fun with your money.

A word of wisdom: If you are getting a large refund, you should consider changing your withholding on your paycheck. You can print out a W-4 from or pick one up from your Human Resources Department. While many people, including myself, receive refunds due to the sheer number and variety of deductions and credits they have, you may be able to adjust your withholding so that you receive more money in every paycheck.

Rather than wait all year to get a large check you can set up your own refund system by automatically debiting your checking account on each payday to send the “extra” money to a savings account, or specific debt. You still won’t see the money in your account, and at the end of the year will have that much more saved or paid off.

Do you typically get a tax refund? If you will be this year, what do you plan to do with your money? If you need some more ideas, here are ten ways to spend your tax refund for fun.


This article is presented by Kelly Whalen, Consumerism Commentary staff writer who bought a second car with her husband last weekend.

As a busy mom of four and work-from-home parent, I often get told people don’t know how I do it all. It’s simple, I don’t. These are some of my techniques to save time, which means more money in my pocket, and more time for my family.

Whether you are a busy parent or a single person with a demanding job, most of us have a few items on our to-do list that stay there endlessly. After a hard day’s work the last thing we want to do is clean the soap scum off the shower walls or spend an hour cooking a healthy dinner.

While most of us think having help is only for people making six (or seven) digit salaries, there are ways to make your life run smoother without costing you all your hard earned cash.

Start by making a list of all the obligations, errands, and chores you do in a week. The best way to do this is personal finance style. Write down what you are doing as you go. You’ll want three columns: one for description, one for time (include driving time), and one for cost.

After a week or two you will have a solid idea of what you are doing, and how much money and time it takes. Now you can go through and order them from most to least important. I don’t know about you, but scrubbing the floor is usually the last thing on my list.

Now we start Round One of eliminations. Take anything extraneous, say that extra trip to the grocery store, and cross it out. Errands that can be combined should be grouped together.

Next, you want to look at what is costing you the most that you value the least. Value here isn’t referring to money, it’s referring to what you care about. For me that might be dry cleaning. For you it may be the car wash you get every week.

To Do ListNow here’s where the tricky part is. You want to save say ten hours a week so you can earn more at your side gig (ahem) or spend more time with your kids. How do you do that without breaking the bank?

Hire help

The most obvious way to lighten your load is to hire someone to help you. While the cost may seem prohibitive, it can be cost effective if the payoff (time, more work hours) is worth it. Examples: hiring a babysitter, virtual assistant, or house cleaner.


Consider trading your services for something else you need. You can find people to barter with in your neighborhood, church, at your kid’s PTA, or on Craig’s List. For instance I have traded organizing services for pet care.

Bank on it

Have you heard of Time Banks? They are organizations that are aimed at helping members find free help in exchange for services performed. Think of it as bartering on steroids. For instance I could do some bookkeeping for one member, and in exchange I get time banked, and can use it to have another member fix my leaky faucet. Don’t have a local Time Bank, consider starting one.

Drop it off the list

Maybe you are an over-volunteerer like me, or maybe you have been doing the same thing for awhile and are looking for a change. Consider dropping everything off your list that you aren’t passionate about. Don’t be afraid to say no if new opportunities arise.

Reduce your needs

Try cutting back. If you go to the dry cleaners once a week, try cutting back to every other week. Next time you are shopping look for clothes you can wash and wear at home. Instead of getting an oil change every 3,000 miles check your car’s manual which likely tells you that you can wait until you hit the 6,000 mile mark.

Automate it

Have you considered trying to get your toiletries delivered? You don’t even have to think about it when you need toilet paper, it arrives on your doorstep at regular intervals. If you sign up through my affiliate link you get a $10 credit after you spend $50. Other examples include getting a coffee subscription, and of course automating paying your bills.

Partially outsource

Another time saver is partial outsourcing. This could be ordering groceries online so that you can pick them up, signing up for a CSA, or getting the USPS to pick up your packages and drop off stamps.

I’ve found success in all these methods, and it has been eye opening to see how easily I can outsource some of my obligations, and get rid of others, while improving my bottom line, and my quality of life.

What about you? Have you outsourced some of your obligations? Tell me what you did, and what worked and didn’t in the comments.

Photo credit: Still Thinking


Fitness: Physical or Fiscal?

by Kelly Whalen

This article is presented by Kelly Whalen, Consumerism Commentary staff writer. The costs of health care rose dramatically in the past year for many Americans. Hewitt Associates, a global human resources consulting firm, measured an increase in group insurance premiums of 6 percent percent in 2009, and that’s only part of the full health care picture. […]

10 comments Read the full article →

Buying a Second Car

by Kelly Whalen

If my husband had a car to drive to work and had taken my son to school, I would have saved three hours of my day. Yes, three hours. We are a family of six with one car. This is the result of a decision we made a few months ago when our second car […]

38 comments Read the full article →

Debt Relief: Reminders of What You Are Doing Right

by Kelly Whalen

This article is presented by Kelly Whalen, Consumerism Commentary staff writer. Like many Americans my family has debt. We are working diligently to pay off our debt. We’ve slashed expenses, given up hobbies, and even become a one car family. We have a plan. A timeline. We’re constantly working on creative ways to shave some […]

1 comment Read the full article →

Discounts Via Social Media: A Surprising Way to Save

by Kelly Whalen

This article is presented by Kelly Whalen, Consumerism Commentary staff writer. Kelly is celebrating her one-year blog anniversary this week. Everyone loves a good deal, but finding time to comparison shop at various stores can be time consuming. As a parent of four kids I’m not keen on taking the kids to multiple stores just […]

9 comments Read the full article →

How To Stick With Your 2010 Resolutions

by Kelly Whalen

This article is presented by Kelly Whalen, Consumerism Commentary staff writer. It’s the time of year when everyone is talking about their New Year’s resolutions or goals for the year. Tops on the majority of Americans’ New Year’s resolutions for 2010 are losing weight, quitting smoking, and saving more money. While losing weight and quitting […]

2 comments Read the full article →

New Year’s Eve on a Budget

by Kelly Whalen

This article is presented by Kelly Whalen, Consumerism Commentary staff writer. At midnight people around the world will be celebrating a new year with celebrations, parties, or a quiet evening at home. You may already have plans to party like it’s 2009, but if you don’t here are a few ways you can celebrate without […]

0 comments Read the full article →
Page 1 of 212