Friday, February 29, 2008

The Taxman Giveth; The Creditors Taketh Away

Both my federal and state income tax refunds have now landed in my bank account. The good news is that I resisted all efforts to either do a tax-refund loan or even to pay for electronic filing. I have always done my own taxes (not to mention those of my family and some of my friends). The money is, therefore, all MINE.

At first glance, the refunds are sizeable--a total of $5794.99. Spare me all the lectures about giving the government interest-free loans. I know. I agree. But I also know Grace--there's just no way that I would have exercised the needed control to save that amount of money out of my checks. Also, the refund was greater this year due to needed repairs on my rental property which resulted in a net loss for the year.

Large as my refunds are, they are still too small to cover all the places where they are needed. $1300 will be put away for my trip to Japan next October. $2200 is to cover even more repairs to my rental. $2000 is needed to cover my daughter's private high school tuition payment and my granddaughter's college tuition.

All of which leaves me with less than $300.

I was rather hoping to treat myself to a 59th birthday present of Cirque du Soleil and dinner at Todai (where my dinner would be free but I'd have to pay for my kids). I may yet do that and apply whatever's left over to my debt snowball.

But can I indulge in a few minutes of whining? $5794.99 is just too large a sum to be wiped out this fast. Dang!

Thursday, February 28, 2008

Not Exactly LEAPING Forward

So it's the end of the month, and though it's a leap year, my finances are not exactly leaping forward. Still, the debt is going down, for which I am grateful.

My total indebtedness, including my mortgage, is down $941.75. Unfortunately, if I include only my credit cards and personal loans, just $349.08 of that counted.

My total indebtedness is now $101,358.53.

Right direction. Wrong speed.

Sunday, February 24, 2008

What Do I REALLY want?

In some circles, saving money is all about deprivation. If one can justify this with a feeling of noble satisfaction, so much the better. But not all of us do deprivation well. Count Grace in that number.

Back in the early eighties, when my weight mattered more to me than my finances, I read Susie Orbach's Fat is a Feminist Issue. One particular recommendation in that book has always stayed with me. Susie suggests that when we have a craving for a certain food, we make every effort to eat that exact food and to resist the temptation to settle for something else. For example, if I want a Snickers, and it is 3:00 a.m., either get up, get dressed, go to the nearest 7/11 and get the Snickers bar, or wait till morning to get it (if I still want it). But the key is NOT to settle for less, not to substitute the ice-cream in the freezer or the dusty Hershy bar in the bottom of my purse.

It turns out that this works for money as well. I find that monitoring what I REALLY want at any given time rather than settling for something out of habit does save me money.

Take morning coffee. First, I DO have to have coffee in the morning. If money is no object, I grab coffee and a pastry at one of the local coffee shops on my way from the bus stop to my office. Exit $3.50. On week-ends, I take the daily paper and drive to my favorite bagel shop where I linger over both my coffee and the paper.

Needless to say, I cherish my week-end mornings over coffee. I WANT those quiet times out of the house.

But the weekday coffee expense is more of a habit--I need the coffee but I don't really need it to be as expensive as stopping at the coffee shop makes it.

So on most weekdays, I now brew coffee at home and bring it to work with me. I also bring pastries from home. Even counting the costs of coffee and pastry from the grocery store, I'm saving at least $10 a week.

But I have not given up my week-ends at the coffee shop, nor do I intend to. If I did, I would definitely feel deprived.

Just as Orbach suggests being thoughtful about food, it is important to become thoughtful about money. The object is not to stop spending money, but to stop spending money on things that ultimately give us little satisfaction or pleasure and weren't really what we wanted in the first place.

Tuesday, February 19, 2008

Blogging as Therapy

Our Debt Blog left a comment here that got me to thinking. I don't blog daily. In fact, my last post was over a week ago. Yet that doesn't keep me from griping about other bloggers who post only sporadically. They should consider my gripes a compliment--I want to read MORE from them. I get cranky when they don't let me into their financial lives more frequently.

But that brings me back to why I don't post more often.

It's not like I don't have something to say. But how many times can I bemoan the state of my finances? Whine about the money I don't have? Obsess about the things I want to buy?

Then, too--how much do I really want to write about my failures.

It's a lot more fun to post when I've scored a financial coup or finally gotten my debt (including mortgage) under $100,000. Otherwise? Not so much. Do I really want to admit that the bathroom in my rental needs major repairs and will set me back some $2200?

Worse--would I want to write it down if I go off the deep end and make some really dumb purchase?


Why did I start blogging in the first place if not to establish a record of my very twisting road to retirement? If people read this to see how I'm doing, then shouldn't I be HONEST about how I'm REALLY doing?

And doesn't the act of blogging help keep me on track?

The answer to that last question is a big YES! I do strive for financial honesty in this blog. The knowledge that I'll have to post gives me pause--a financially good thing so far.

Plus, the comments I get, whether or not I take the advice, has been helpful.

So, I'll keep on keeping on.

And for you other slacking bloggers out there--you know who you are. Post something, dang it! How can I tell how I'm doing if I don't know how YOU are doing?

Monday, February 11, 2008

Thanks for the Meme

Have I mentioned how much I hate Blogger tag games? Not so much for myself, since I don't mind providing the information, but for the others I'm supposed to then tag who may be less in the mood to play.

So I only do half a game. I'll respond if tagged. But I will NOT tag anyone else.

Tricia at Blogging Away Debt has tagged me for the 123 book meme. The rules are simple, especially if one is following only four of the five.

1. Pick up the nearest book (of at least 123 pages).
2. Open the book to page 123.
3. Find the fifth sentence.
4. Post the next three sentences.
5. Tag five people.

Wouldn't you know it, the book I'm currently reading is entirely apropos to blogging.

I'm almost finished with Julie Powell's Julie & Julia, a book that had its genesis in a cooking blog.

Julie, nearly 30, working as a government secretary in NYC, married to her high school sweetheart, is bored. So she makes a pact with herself to try all of Julia Child's recipes from the 1961 two-volume opus Mastering The Art of French Cooking within one year. To chart her progress and keep herself "honest," she creates a blog that allows her readers to follow along.

As it turns out, there are some dishes that cannot be saved, even when they are French and even when made by Julia Child:

"I simply can't see Sam [Samuel Pepys of diary fame] making
gelee out of calves' feet for himself. For one thing, it
turns out, making gelee out of calves' feet makes your
kitchen smell like a tannery. The gelee also, in my
admittedly limited experience, tastes like a tannery."

Julie's blog readers weigh in on her every move. Her husband gamely eats whatever she puts in front of him (though occasionally opting to call Domino's Pizza afterwards). Her friends provide social context to young married life in NYC. Julie intersperses her narrative with riffs on the lives of Julia and Paul Child--interesting because Julia Child came late to cooking.

So the book has everything: blogs, obsession, failure, and something like redemption.

Kinda like most of our personal finance blogs, huh!

Saturday, February 9, 2008

Saying Goodbye to Life Insurance

I cancelled my life insurance three days ago.

I'm still not sure I did the right thing.

It was a term life policy that cost me $78 a month for $500,000 in coverage. I got it when I was first diagnosed with Type II Diabetes and had a sudden whiff of mortality. At the time, I had three children under 18 and living at home. It was a 10 year, equal premium policy that would have to be renewed (if possible, and at a much higher rate) in two years. I do not begrudge the money spent for the policy. It gave me peace of mind that I would leave something behind for the care of my children. But increasingly, it became harder to justify the expense.

In addition to getting rid of the monthly payment (well, quarterly, actually, but I save for it monthly), my thoughts were these: All my children, except my youngest, are on their own. My youngest daughter is almost 18. She may go to college but it is likely to be a community college. The older daughters are now almost 40, 33, 26 and 23. My net worth is over half a million (due largely to my two houses, not my currently-dwindling 401(k) funds). If I die tomorrow, each of my children will get in excess of $100,000 from my estate alone, never mind the life insurance.

So I held my breath and sent in the cancellation notice.

There's no going back on it now. But can I breathe yet?

Sunday, February 3, 2008

The Joys of Commuting

No, the title of this post is not meant to be facetious.

Or sarcastic.

Or ironic.

The fact is, the metropolitan area where I live has an excellent transit system. There are three bus lines I can access, depending on whether I want to walk two blocks or five blocks from my house. In addition, my employer subsidizes the use of public transit to the extent that a annual pass which retails for more than $600 is mine for $282 a year. And best of all, my employer has a FLEX plan for transportation costs which means that $282 is paid with pre-tax dollars. It definitely works for me!

The alternatives are not great. The meters are $1.25 an hour, and vehicles must be moved across the street or to another block every 90 minutes. I do this sometimes, but remembering to move my car every ninety minutes is difficult, and the penalty is a $24 parking ticket. The cheapest downtown parking garages cost $1.25 an hour and require that the vehicle be moved every four hours. Worse, these garages "round up" to the next hour, so if I park there for three hours and ten minutes, I'm billed for four hours. The private lots near my office charge $10.50 a day for "early bird" parking.

It is true that up to $180 a month in parking charges can be run through my FLEX account, but even at pre-tax rates, that's a lot of money to pay just to have an attendant babysit my mini-van.

So, I take the only financially reasonable route--I ride the bus.

The biggest surprise for me is that I love it. And when I have to take my car into work, I find that I miss the busride.

It is 32 minutes to and from my home. People are friendly on the bus, particularly during commuter hours, but they keep to themselves. (I have occasionally taken the bus midday and find the atmosphere then more chaotic but also more entertaining.) Most have MP3 players or IPODs which keeps conversation at bay--which is fine by me.

I generally use the time to read. If I've not been able to take the bus on a particular day, it often means I have missed my reading time for the entire day, which has a tendency to make me cranky. I also use the commute time to figure out menus for the week and to create my shopping list.

I have a firm rule that the time spent during the commute is only for me, so I don't do any office work. That's partly due to confidentiality but mostly because I don't want to!

In the end, having that 32 minutes at the beginning and end of my work day is wonderfully restful. And that, dear reader, is why I LOVE my commute.