Friday, August 31, 2007

Ebay for the Cheap & Nervous

Ah, Ebay! I love it, but I'm scared to use it.

So I browse.

But over the years, I've never bought anything that cost me more than $20. Somehow, I just can't get used to the idea of trusting some stranger to send me quality merchandise. Maybe it's the distances involved, because I do use Craigslist on a regular basis. (I especially love their free listings--check them out on Sundays to find all the stuff that didn't sell at the Saturday garage sales. I've gotten bookcases, dressers, and prom dresses, all for free.)

Back to Ebay--what I buy most often are magazine subscriptions and phone cards.

I subscribe to Oprah, Vanity Fair and Money. If I could find Real Simple (which could more accurately be titled Real Expensive) at my price, I would get that one, too. My price for any subscription, however, is $10 max.

In the five years or so that I've been purchasing magazine subscriptions from Ebay, I've been burned twice. It's easy enough for a seller to do since it usually takes around 60 days for the subscription to begin--and 60 days is too long to get any money back even if you pay through Paypal, which I do. In both cases, I used sellers with strong reputations and positive feedback. In both cases, I was one of many people scammed and it happened at Christmas time, apparently one of the more dangerous times to buy in terms of potential fraud.

Since we're talking about a total of $20 lost in five years, the risk hasn't been all that bad. Right now, I have a three year subscription to Money that I bought for $28 on Ebay as well as a 1 year subscription to Oprah that cost me $10 and a 1 year subscription to Vanity Fair I got for $6.50.

The other item I purchase regularly on Ebay is prepaid minutes for my Tracfone. (I'll post later why I use Tracfone as opposed to all the cheaper plans out there.) In the meantime, Tracfone minutes, purchased at retail, cost 34 cents a minute. If there is a bonus code, it is usually for an additional 30 minutes, which drives the price down to 22 cents a minute--still not a bargain.

On Ebay, I can purchase 60 minute cards with 60 to 90 minute bonuses from $12.50 to $17.00. Depending on how lucky I am, I then pay 8 to 14 cents a minute. I've never had a problem buying Tracfone minutes from Ebay sellers.

Another nice thing about both magazine subscriptions and prepaid cell phone cards is that there is no shipping charge.

It's the End of the Month, So How am I Doing?

I'm winding up August with a total debt reduction of $1021.34. As always, much of that ($740.71) is mortgage reduction, which leaves only $280.63 in reduced credit card debt. But down is down, so I'm satisfied. August is a tough month, financially, in the best of times, given the need for school clothes, entertaining the grandchildren, etc.

September looks to be even worse since I've got to come up with my granddaughter's college tuition, and start work on some repairs to my rental house.

At least I don't have to check my retirement funds or the value of my home. I do my net worth quarterly, so the stock market and housing market has another thirty days to get up there!

Tuesday, August 28, 2007

Topic du Jour

Interestingly, I'm not the only one thinking about Thrift or Theft. There are a number of related posts in this week's Festival of Frugality hosted by FILAM Personal Finance. Along with my post on the subject, check out Money, Matter and More Musings wherein one finds an account of a woman with a drawer full of ketchup packages that she spends hours cutting open and spooning into a full-size ketchup jar.

There is also a more puzzling reflection on whether or not one should take those small soaps and trial size shampoo/conditioners that hotels provide. Personally, I don't consider it theft to take those, especially if I've used some but not all of the shampoo--it's not like the staff can leave it in the room for the next guest.

I find myself in complete agreement with SVB at Digerati Life as she comments on the habits of the cheap and infamous. Some are savvy, many are foolish, and some are just plain crooked.

One last concession to the topic of Carnivals, not to mention self-promotion--The Carnival of Personal Finance is up and contains many fine posts, including my blog about blogs.

Monday, August 27, 2007

Not-so-expert Expert Advice

There's a "money make-over" story in today's Kansas City Star featuring a Lenexa family. No, I don't regularly read the Kansas City Star, but I do read Boston Gal's Open Wallet, where I found the link to the story. I found myself disagreeing with virtually every aspect of the "expert's" advice.

The Riesters have an annual income of $85,000 for themselves and their two pre-teen sons. They owe over $62,000 in credit card debt and are looking at school loans that will come due in another two years.

Initially, they followed Dave Ramsey's Debt Snowball plan. But, according to the article,"the snowball rolled slowly, the Riesters found. One weakness in plans such as Ramsey’s is that they often overlook the growing interest costs accumulating on the biggest balances at the end of the line."

Say what? If one is making minimum payments, there should be no "growing interest costs." Minimum payments on my credit cards pay all of the interest for that month plus a few dollars towards the principal. The balance goes down slowly, but it DOES go down. In fact, if one is paying only the minimum, that minimum also goes down, if only by a dollar or two.

So what exactly are the Riesters accumulating?

The answer may be in this statement: "For the Riesters, this combination of unplanned costs plus compounding interest on their unpaid balances swelled their $43,000 balance due to more than $62,000."

Why do I have the sneaking suspicion that it is the former rather than the latter than caused that $19,000 increase?

Then, the expert hired by the paper tells them to "use a significant part of their household savings and future increased income to build an emergency fund of at least $10,000 before ramping up future debt payments."

Keep in mind that they have already put aside the Dave Ramsey emergency fund of $1000. And that they have an unbudgeted $285 per month at their disposal to put toward debts.

I just don't get it. They will soon owe $45,000 in deferred school loans. But the financial expert thinks they can pay $62,000 in credit card debt in two years? On his plan?

The math makes no sense to me.

But then, neither does much of anything else in this article.

Sunday, August 26, 2007

Thrift or Theft?

I regularly read the AOL tightwadding boards. It's not all about how to crochet popcan rings into a heating pad or throwing every leftover crust of bread into a freezer bag to later grind up for crumbs (although the latter DOES work!). Right now, the discussion is about what mutual funds are best in today's roller-coaster market.

But one issue comes up often. Someone will ask for the "best tightwadding tips" and there will be a score of replies that are less about saving money and more about stealing it.

Most common will be the suggestion to buy one small drink at a fast food restaurant and have everyone share it via the free refills. Another is to ask for water cups but fill them with soda. Considering that one generally goes to fast food restaurants with children, how is this a good idea? Do we really want our children to see theft as an option?

My daughter is a manager at a mall multi-plex. One of her duties is chasing down the folks that pay for one movie, but attempt to stay in the theatre all day watching a number of movies. When they are caught, the culprits are seldom apologetic. They point to the high price of the tickets as though that excuses their theft of services.

Then again, I am not exactly blameless on the movie front--my daughter gets me in free, so I feel obligated to pay for my poporn. But in my younger years, I was often guilty of hiding candy and soda in my purse in order to avoid the theatre's high prices. I can't say exactly why, but this still feels less like theft to me than some of my prior examples.

There is a certain thrill to frugality--a sense of being smarter than those poor schmucks who paid more for the same product or service.

But the line between thrift and theft is thin and easily crossed. I stay precariously on the thrift side, trying not to fall over onto the theft side.

Saturday, August 25, 2007

Look Out for Traffic

I check Sitemeter daily to see how many people read (or at least click on) my blog. Generally, about 30 people a day check it.

Then yesterday, that number quadrupled!

It turns out that JLP at All Matters Financial highlighted my blog along with a couple of others. Hence the new readers checking me out.

The more, the merrier. If you're new to GRACEful Retirement and haven't gotten the full story on me, click here.

Feel free to comment along the way.

Thursday, August 23, 2007

PF Blogs I Read, and Why

I am very new at Personal Finance blogging. Heck, I'm very new at paying attention to my finances.

Before I started my own blog, I was reading many others. I know my list of favorites will change over time, but I think it may be instructive to see how that happens--as in, what I read now, and what I am reading later on. Will I become more sophisticated? Will I just add to my blog list, or will I start dropping some of them along the way? Who knows? But here are the blogs I currently enjoy the most, along with my own highly subjective comments:

1. Get Rich Slowly. This was one of the first PF blogs I found online, and it turns out the author lives in my neck of the woods. He's indefatigable, often posting several times a day. He covers not only his own finances, but the finance world in general as it impacts him.

2. Boston Gal's Open Wallet. She would be my favorite blogger were it not for the fact that I'm so dang jealous of this 30-something woman who is well on her way to financial security. I forgive her for being financially smart because her eclectic blog includes lots of extraneous side information such as posts about the fate of the Meyer Lemon tree she bought awhile back, and links to numerous free samples, all of which I have ordered. She's another one that posts more than once per day--and that's another reason I remain jealous!

3.The Wastrel Show, My Journey to Eliminate Debt, Need To Be Debt Free, and Engineering My Finances. These are all very individual blogs from middle-aged adults looking toward retirement and wanting to get their financial houses in order. The journey is not easy, and these bloggers are honest about the roadblocks thrown up by life in general and their own issues specifically. EMF at Engineering My Finances tends to be a bit more general and way more math-oriented. I read him, but I don't always understand him! Bare Bones Living belongs on this list as well, though I wish she would post more often. It makes me cranky to click on a blog daily only to find the last post was written weeks ago. You'd think I'd be a bit more sympathetic since I'm lucky if I post three posts a week, but no. Do as I say, not as I do! (Courtesy of Aesop)

4. Mapgirl's Fiscal Challenge, My Money Blog, We're In Debt, Gasping for Breathe, and Blogging Away Debt. These are all baby bloggers in their early thirties or younger who will be in so much better financial shape when they reach my age, than I am.

5. No Credit Needed, and The Simple Dollar. Two great blogs by folks who have been there and done that, but, having gotten rid of the debt, are sticking around to give out great advice. No Credit Needed will even let you monitor your decreasing debt on his website. Simple Dollar is particularly good for relevant book reviews.

6. And finally, for the minutiae of every day spending, I like to read Lucky Robin's Blog because she blogs about every cent she saves. Think I'm kidding? She found three pennies in her couch, added them to her savings jar, and gave us the new total!

I actually read more blogs than this, but these are the ones I never miss.

I think I'll do this again in a year, and see how the list varies.

Tuesday, August 21, 2007

Festival of Frugality

Rock at Happy Rock is hosting this week's Festival of Frugality . I've got a post in there, as do 39 other bloggers.

My Personal favorite is Graham's Flexible Spending Accounts, an often-overlooked way to substantially reduce child care, medical care and transportation costs. Graham doesn't talk about transportation costs, but a Flex plan can be used for parking or public transportation expenses. There's a bit of paperwork involved, but paying for those things with before-tax dollars is absolutely worth the savings.

One other thing: If your employer doesn't do Flex, talk to the bookkeeper or Human Resources person. There are companies out there who will handle everything except the monthly paycheck reductions. Although these companies charge a fee, the employer usually comes out ahead because the employer's share of the FICA expenses are also reduced.

Monday, August 20, 2007

It's All in my Head

When it comes to being financially responsible, there is danger all around.

Most of it begins in my head--that niggling feeling that I am giving up too much pleasure now, sacrificing too much personal comfort for a goal I may not even live to reach.

Of course, it is not just 58 year old white ladies who feel this way. DH, a young black woman who blogs about her finances at Debt Hater covers this very issue.

It is so easy to simply give up saving, give up reducing debt, give up financial responsibility. Every time I slip, (and I do slip, often) I find myself saying why not stop for awhile. Take a rest. Have some fun. SPEND SOME MONEY!!

What I am trying to figure out is: When did having fun become synonymous with spending money?

DH talks about buying clothes. For her, retail therapy is a response to frustration. Not me. But calling up friends and getting them to come with me to try out some new, expensive gourmet restaurant, is. My city is something of a foodie haven--there is always a new gourmet restaurant in town.

More telling is when DH says the following: "I think I was pissed that I was still in debt anyway. I read so many other blogs or articles about people in more debt paying it off much faster. I had all these posts boasting about how I'd be done so much sooner than I thought and how great I was for getting it together."

Oh my, YES! I listen to Dave Ramsey on Fridays, and I hear all those folks calling in to say how they paid of $122,000 in 11 months. Do I feel good for them? Do I want to congratulate them? Heck no! I want to reach through the phone and strangle them. But before that, I want to know how in the world they managed to do it. And I do NOT want to hear that they sold the Mercedes or that they make $200,000 a year!

So, here I stand, warts and all. I've laid out my wallet for the blogging community to see. I hope that by keeping my finances open and honest, I'll also become honest with myself.

To again quote DH: "Then, of course, it's embarrassing to put that out in cyberspace. Hi, I'm a pf blogger whose finances are sucking."

DH, I hear ya! My goal these days is to have finances that suck less than they have in the past. The heart is willing. The head is running hard to catch up.

Friday, August 17, 2007

Why I Have Two Houses

I have in my possession every single piece of real property I have ever owned.

Which is to say, I own a two bedroom, 900 square foot, single family residence in a dying coastal timber town four hours away from the urban center where I've lived for the past 16 years. And I own (OK, I'm buying) the home in which I've resided for the past 14 years.

The coastal home is paid for. It is tax assessed at $136,000. I could probably get a little more for it because it is in a good neighborhood. However, since I've been renting it out and taking depreciation for the past 14 years, the capital gains will be substantial. It was my first home, purchased in 1976 at age 28 for the huge sum of $ 16,900. I had to assume the first mortgage and come up with a second one just to cover the down payment. I recall struggling with the question of home ownership and whether it was worth that kind of expense.

In 1990, with both parents now deceased (they lived just blocks from my home) and children who needed more than the small town school system could offer, I moved to the big city. My mother's death had left me with a small inheritance, which I used two years later as a down payment on the home in which I now live.

So, I hung onto my first home. It is easily rented. I've had four renters in 16 years, and every time one left, they brought me the next tenant. My current tenant is the son of the previous tenant, who was the best friend of the tenant before that. They have all been handy and willing to make repairs as needed.

This year, and probably part of next year, I'll be running into some expenses. The tub and enclosure in the bathroom needs to be replaced, as do most of the windows in the home. The exterior needs painting. I'm probably looking at about $10,000 to cover everything. The rent definitely will not cover that--in fact, the rent will not cover half that once I pay for taxes and insurance for the year. I intend to free up as much money as I can to pay these costs on an as-needed basis. Yet, realistically, at some point, I will have to access my HELOCC. That means my debt is going to go up.

So why keep the home? NCN of No Credit Needed asked me that question when I first started this blog. (Read his comment here.) I have no real answer. Or rather, I have answers but they are all emotional. I love that house. It was not only my first home, but it was and remains perfect--small, well-planned, energy efficient.

When I first moved, I was unsure of my new job, unsure if I'd like living permanently in a city, unsure how it would be for my children. Then I was seduced by urban living.

Now, it's just that I like knowing that I have a fallback position should my world suddenly go crazy. I can live mortgage free in that house if I have to. I don't imagine my life will ever come to that, but I find it hard to give up the safety net.

The house itself is not going down in value. The town's timber industry may be dying, but tourists to the coast are driving up prices everywhere.

I'm the kind of person who saved all the dolls I played with as a child, and have journals going back to fourth grade. Why can't I save my houses, too?

Tuesday, August 14, 2007

Waiting Till Wednesday

I get paid twice a month, on the 15th and on the last day of the month. August 15th is tomorrow--Wednesday.

Unfortunately for me, I outran my budget Saturday night.

So, rather than charge anything or move any money from savings, I decided to see if I could just wait till Wednesday to spend any money.

It's Tuesday, and so far, so good.

My car's gas tank is on empty but both my daughter and I have bus passes.

I craved dessert, so I made chocolate chip cookies. (Mama can cook, but the repertoire is limited!). There were frozen chicken breasts, packaged burritos and corn dogs in the refrigerator. My 17 year old pointed out that there was no sour cream or salsa. True. But hey, where is her pioneer spirit?

We ran out of bread, but peanut butter and jelly works OK, if not great, on tortillas. My daughter sneered, and stayed with cheese on hers.

The toilet paper is running low--we're being VERY careful in how much we use.

My daughter ran out of hair gel--a tragedy of epic proportions for a spikey-haired teen; She solved it by rounding up every soda can in the house, and even a couple she found out on the street. She got $3.40 for the recycled cans and doom was thereby averted.

I used up all the dryer sheets, but the laundry detergent held out and there's still enough for another load tonight. I decided we would tough it out with rough towels for a day or two. Nobody really noticed.

It has been an interesting experiment, and one that definitely saved me money.

Tomorrow, I buy gas, toilet paper and groceries. Yes, my darling daughter--Mama will get sour cream, salsa, and orange juice.

I doubt I'll bother with dryer sheets!

And maybe we'll take the bus to the grocery store!

Sunday, August 12, 2007

Why Yes, I Do Have a Coupon

Coupons are so declasse. They conjure up pictures of stay-at-home moms spending hours cutting up newspapers, organizing with recipe boxes, and then clogging up the check-out line at the supermarket with a zillion 20-cents-off coupons.

Better to stand back, adopt an air of weary superiority, and say "It's just not worth the minor savings to do all that work to collect on a coupon."

The only thing wrong with that picture is that it is totally, completely, financially WRONG!!!

Yes, I do coupons. Some weeks, only one or two; Other weeks, I become fanatical, matching coupons to menus and saving every penny I can. Either way, I do save money.

In my home city, the biggest mid-level supermarkets are Safeway, Albertson's, Fred Meyer's (Kroger's), WinCo and Food4Less. (I'm leaving out New Seasons, Wild Oats and Whole Foods, all of which have wonderful food and cost a fortune.)

At least once a month, Safeway publishes a "$10 off any purchase of $50 or more" coupon in the local give-away newspaper. A 20% reduction in grocery costs is nothing to sneer at, particularly when it can be combined with double coupons and sales. The trick to getting full value is to buy as close to exactly $50 in merchandise as possible.

Albertsons cleverly piggybacks onto Safeway ads by agreeing to honor any Safeway coupon. Voila! Two stores where the "double coupon" or the 20% reduction can be used.

The double coupons only double up to the first 50 cents. But even so, for items my family routinely uses, they are a great savings. As an example, my daughter and I both like Aquafresh's Extreme Clean toothpaste. The Sunday newspaper usually includes $1.00 off coupons for it. My only job is to figure out if $1.50 off Safeway/Albertson's price is more or less than $1.00 off Wal-Mart's. Wal-Mart doesn't double coupons, but sometimes their prices are so low that it is still cheaper just to use the coupon there.

Walgreen's coupons are great, while their regular prices are not. I shop at Walgreen's regularly, but only for coupon items.

It is ludicrous to suggest that cutting out coupons takes too much time. I do it while I'm watching TV. (Um, yeah--while I'm watching the news or the occasional documentary. And by the way, if you believe that, I've got a bridge in NY I could sell you!). I stuff them into an envelope that I leave in my car. No, they are not sorted by catagory--I don't hang on to that many extras.

Let's just say, I have decided I cannot afford be a coupon snob--they save me too much money that I'd rather save for other stuff, like, say reducing my debt. That's a GOOD thing!

Thursday, August 9, 2007

No Peeking!

When I started this blog two short months ago, I had $170,000 in accumulated 401 (k) funds. Today, I have $165,000, which is better than two days ago, when I had $162,000. The roller coaster that is our stock market (I am 100% invested in stock mutual funds) is making me dizzy.

The answer, of course, is NOT to abandon the stock market, but to stop looking at my funds! This is harder than it sounds.

All my funds are listed with Financial Engines. All I have to do is log on, and there are all my funds, complete with updated figures. This works fine as long as everything is going up. But the past month has been, alternately, barely OK or really depressing.

It is especially distressing because I know that my employer is depositing $500 of my hard-earned money every 15 days. Silly me--but when my money is going in, I want the totals to go up at least that much!

I know what I have to do. I have to stop taking a daily look at my account. I have to trust that over time, stock markets do go up. (I have to try NOT to think of the Japanese stock market--which apparently is unaware of that "going up over time" rule.)

My new resolution is to check my accounts once a quarter when I update my net worth. Period. Only then.

Anyone want to take bets on how long this resolution lasts?

Sunday, August 5, 2007

Financial Headgames and Grandkids

This is a follow-up post to my previous post of July 1st. The grandkids have come and gone and I made the following discoveries about them and about myself:

1. There are only so many library storytimes a 4 year old is willing to do. OTOH, both a 4 year old and a 5 year old are willing to spend 45 minutes running up and down the grand three story marble stairway in the library.

2. The "Baby Room" at the local Museum of Science and Industry is endlessly fascinating and can be visited daily without boredom--thank God for the annual pass I bought last March. It cost $125 to cover myself, my one minor child and all of my grandchildren.

3. The free lunch for children 18 and younger that is served in the city parks on weekdays during the summer is wonderful for my budget. The lunches were surprisingly healthy even with the mystery meat and cheese sandwiches. Vegetables and fruits were included. It turns out none of my grandchildren had eaten kiwis before--they were charmed by the idea of a hairy fruit that tasted like strawberries.

4. Summer concerts with picnics in the park work only if there's a playground nearby.

5. Kids will swim anywhere, in any temperature, for as long as you will let them.

6. The budget can be kissed good-bye.

I wound up spending more than I had budgeted for the grandkids' visit. But I worked very hard to avoid the sense that once I overran my budget, I should just forget about it and spend whatever I wanted. Instead, I struggled to make up for the overruns elsewhere.

For the past two weeks I have had coffee at home in the morning. As a general rule, I do this only two days a week. On the other days, I spend anywhere from $3.50 to $4.65 for morning cofee and pastries. Not these past two weeks, however!

I used public transportation as much as possible. I have an annual transit pass and the youngest grandkids could ride free. My grandkids are from small towns--they think train rides, and especially arial tram rides are special.

The grocery budget and school clothing budgets were trimmed to meet some of the expenses. Walgreens has sugarfree popsicles (the kind that you freeze when you get home) for $1 a box which contains 12 popsicles. All of my grandkids lived on these for their entire vacation. I was the coupon queen the whole time, as well. I use coupons but usually, sporadically. This time, I was fanatical.

The end result was still a budget overrun, but it was not nearly as bad as it would have been had I simply given up until the kids left.

Now that Grandma has her house back, and I can reflect on the financial aspects of grandparenting, I realize that the lesson I have to learn and relearn is that even as my budget is falling apart, I need to make every effort to control as many aspects of it as I can. Giving up, taking out the credit cards, just not worrying about the finances is way too easy. And way too expensive!