Sunday, May 31, 2009

Weathering the Market During Retirement

Meet Jessica and Joel Soffer. They retired early a few years ago while still in their fifties. But the current economic crisis is catching up with them.

As somewhat misleadingly reported by the Los Angeles Times, the Soffers have a net worth of $1.4 million. I say misleading, because their actual retirement funds started at just over $600,000 and are now, of course,less. The remainder is equity in the home they love and have no intention of leaving.

One's net worth is not necessarily, or even usually, what is available for use during retirement. We all need a place to live, preferably a paid for, mortgage-free place. If we don't want to downsize or if that's not realistic (in my northwest city, downsizing is possible in terms of home size, but not realistic in terms of cost. If a 970 sq. foot downtown condo costs the same as my inner-city 2800 sq. ft. home, what's the point of moving?), then the equity is largely useless. That might change should the terms of reverse mortgages get more reasonable. But for now, when it comes to retirement planning, I only count pensions (as in, wish I had one coming!), Social Security (please let it be there when I'm ready to bail from working life!), and retirement savings.

I understand the Soffers' wanting to keep their family home. I also understand their desire to travel now while they are early in their retirement and still have their health. But one thing I don't get is the balance that the Soffers carry on their credit cards. It's not clear from the article if this is a decreasing balance or one that was acquired during retirement but either way, I'm surprised that they haven't made it a priority to wipe it out.

What I also note about the Soffers (and what I see as a real possibility in my own future) is how much they expend on their two adult children. Both of their children are single parents, and over the course of one year, the Soffers have helped out to the tune of $15,500. I wonder if they would have paid out that much had they both still been working and had a better sense of their own monthly expenses. For myself, while I do help out my five adult daughters (more than I want and less than they'd like), the fact that I have only a certain amount of income coming in each month limits how much of that I am willing to use for them. I wonder if my feelings will be different after retirement, when suddenly there is a larger "pot" of money from which to draw. I wonder if I'll remember that that "pot" must last my lifetime.

Tuesday, May 26, 2009

May Update--Getting Back on Track

Well, what d'ya know. Paying down bills and not charging ANYTHING really does reduce one's debt! You might think I'd have figured this out earlier in my 60 years, but apparently it's one of those lessons one needs to keep repeating.

SO--I reduced my indebtedness by $1116.91 during May, have managed to pay every single bill that was due this month, and have not charged ANYTHING. (Yes, I said that twice, but I'm very proud of it. And yes, I know I still have a few days to go, but when the due date for a paycheck is on a Saturday, Sunday or Monday, my employer pays on the Friday before, so I figure I can remain a good girl for the next 2.5 days.)

Thursday, May 21, 2009

Bathroom Books

I can't be the only one who does this.

I like to have at least one large tome in the bathroom that can be read in short doses without diluting either my interest or requiring me to hang out in the bathroom for more time than I already do.

Encyclopedic reference books are perfect, though they sometimes don't meet my second criterion, which is that it must be the kind of book that I won't mind getting wet, banged around, or curled up from humidity.

Enter Amy Dacyzyn's The Complete Tightwad Gazette.

I read the individual volumes as they came out, but since that was back in the '90's and frugality was still new to me, not much of it stuck. Also, I was greatly put off by an interview the author gave to Money Magazine where she was asked how her children fit in with their friends, and her response was that her children had each other--they didn't need friends. I wasn't sure what a mother who could say such a thing had to teach me about saving money.

However, this volume showed up at a library book sale a few months back, and for some time now has been my bathroom book.

Although it is dated, (computers and the internet figure not in her world) it is still a great read. I had forgotten what a strong sense of humor the author has about her own foibles, how honest she is about what does and doesn't work (getting kids to eat lima beans may never be worth the effort, no matter how frugal or nutritious), and how tolerant she is with regard to any mother's choice as to work outside the home or not.

It's the ultimate bathroom book, clearly meant to be absorbed in small doses. It took me four months to read, and I'd be willing to keep on going, if only I hadn't run out of pages.

Maybe the author was misquoted by Money Magazine? Or maybe I'll just have to forgive her for that lapse.

Oh, and her all-purpose stain removal recipe really does work!

Saturday, May 16, 2009

Moving Florence Up Front

Florence, whose blog Ruminations, is on my blogroll, left a comment on my last post, with a link to a great and cautionary tale

From an economist.

From an economist who writes for the NY Times!

Who writes about money!

Who clearly did NOT take his own advice.

So, here's the link, upfront in the blog: My Personal Credit Crisis

And here's to Florence who provided it.

Thursday, May 14, 2009

Could've Been Me

Thanks to Boston Gal for linking to this story on public radio: Putting a New Value on the Golden Years.

I have very mixed feelings as I read it.

Pretty much, any story about a single (in Meredith McKenzie's case, widowed) older woman coping with today's economic environment captures my interest. I think it is cool that she gave up real estate (or, it gave her up) to take a lesser-paying but more emotionally fruitful position helping to protect the environment. She was able to turn volunteer work into a second career, which is also admirable, though funding for her position is now in question. And she is able to adapt from renting a large home on the beach, to a one room, converted garage--again, making do with what she (no longer) has.

But what about her lack of savings?

My God! She's 56 years old, and has apparently been a widow for more than a decade. Not to mention, she was earning six figures! How could she NOT have saved anything?

I don't have a lot of room to talk--I didn't start serious savings until I was in my late 40's. I have my excuses: my child-rearing didn't end until last year; I wasn't earning anywhere near six figures; I--oh, never mind! The truth is, I just wasn't paying attention.

Then again, what about Meredith's lack of real estate? I mean, she was in the business. You'd think she might have saved toward a down payment, if not for retirement.

Meredith scares me because I can see how easily I might be her! And yet, she seems like the kind of person who would be great to be friends with, or to have to dinner.

I guess I just wouldn't take financial advice from her!

Monday, May 11, 2009

Kharma, Kismet, What Have You

Not that I'm a big believer in fate, or Karma, or whatever you call it.

BUT on Saturday, I made out a shopping list for my alternate-monthly trek to Wal-Mart. It included an electrical power strip, a cheese slicer, rubber dishwashing gloves and light bulbs.

On the way out to my car, I saw that my neighbors were having a garage sale, so, naturally, I wandered over to check it out.

[Cue the Twilight Zone music]

Lo and behold, they had a heavy-duty power strip for $1.

AND a cheese-slicer--a much nicer one that I would have bought--for the incredible price of a dime.

But wait, there's more!

They also had three unopened packages of rubber gloves, size small. (When I check my weight on those charts, I immediately go to "big-boned." But that is such a lie--I have small hands, and, if I admitted it, which I won't, a small frame.) Each package was another dime.

For a grand outlay of $1.40, I got nearly everything on my list, and saved myself a trip across town.

OK, I never did get the light bulbs. Apparently there are limits to one's karma. But I'm not complaining.

Friday, May 8, 2009

More On Disappearing Bloggers

Sheesh! Now Brian at "Over 40, Overweight and In Debt" has joined the ranks of "Where'd They Go!" Come on folks--give us a heads up or a warning or a last post or SOMETHING!

Shevy from Shevy's Miscellaneous Life brings up the possibility that some of the bloggers may have died--I certainly hope that's not the case for most of them! But before I went into the hospital for my heart surgery, I did leave an envelope with my will that let my children know about my blog (which they don't know about because I've never told them) and gave them the password so that one of them could do a final post letting folks know I didn't make it.

I do think if we've taken the trouble to bring strangers into our financial life, we owe them an explanation when we decide to slam the door shut (or get it slammed on us).

Morrison from All Doors Considered posits that no one wants to read downer posts from bloggers but then, again, she says she strives to put up positive posts. Say what? I love her blog, but on any given day, she drives right over the proverbial cliff when it comes to depressing posts!

I know that Sra. Dog over at Dog Ate My Finances isn't much enjoying being jobless but I have to say, I do like reading about her struggles and find much of what she has to say about it helpful in thinking about what I would do if I were suddenly downsized out of a job. (One option: make nice to her still-employed husband so he'd let me move in with them?)

Personally, I think blogging about the "downs" of our financial lives can be as instructive as lauding our successes. Life has always tended to be more of roller-coaster ride than an ever-upward climb to the top of the mountain.

I'm not going to eliminate some of these missing blogs from my blogroll just yet. I'm keeping my fingers crossed that they will return. For future reference--if you're planning on leaving the blogging world in a non-terminal way, at least drop Grace a line first!

Thursday, May 7, 2009

Where'd They Go? And Why?

Not to sound overly cranky, but why is it that some of my favorite bloggers have decided to drop off the face of the internet?

I forgive JW, whose "Need to Be Debt Free" was one of my favorite reads--apparently someone turned his employer onto the blog and put JW's employment in jeopardy. The blog or the job -- pretty easy choice, there!

But what is Bluebird's excuse? I have always found his blog, Hedonic Adjustment, to be an interesting read. I'm hopeful about him, because he's wandered away before, and then returned. As for him being tired of blogging--my personal opinion is that no blogger should disappear until or unless GRACE grows tired of reading them!

I have no idea what happened to Petunia at Keeping Score--one day she was there and the next, she wasn't.

Then, just as I was thinking about adding Change Can Be a Good Thing to my blogroll, the author decides to hang it up. I especially like the title of that blog in all of its connotations, except the idea that she can change her mind about blogging!

Whoever said "All good things must end" probably got it right. But I reserve the right to whine and blog about it.

Wednesday, May 6, 2009

Freebie Time

OK, I admit it--I DO (sometimes; occasionally; not more than twice a week!) eat fast food. Which is why I like this coupon from Kentucky Fried Chicken for a free meal.

You can print out up to four of the coupons. As long as everyone in your party shows up in person, each person can use their own coupon.

It's good through May 19th, but it is not usable on Mother's Day.

Come on! Mother's Day? It would be just tacky to treat mom with a free coupon even if you did try to convince her that KFC was her favorite restaurant!

Friday, May 1, 2009

It's a New Month; It's a New Day!

So a couple of days ago, I was blithering about frugal fatigue and being stuck in the financial doldrums. Today, I'm feeling much better about my finances. Why? I have no clue.

But there were a few small bright spots:

For one, my oldest daughter, out of the blue, paid me back $400. The thing is, while I do "loan" my kids money from time to time, I never really expect to see the money again. My oldest daughter probably owes me around $1300 over the past year but I haven't hounded her for repayment. In fact, I've never mentioned it. That's why it was great to get an early Mother's Day card with her cash inside it. I assume it came from a tax return but whatever the source, I was glad to get it.

Another reason to feel good is that my 403(b) is finally showing signs of health. No, it's not back to where it was in October, 2007. But it's quite a bit above the "under $100,000" point it had dropped to just this past March.

And finally, I realized that April, 2009 was the first month in a long time where every single bill, including every single unexpected expense that suddenly arose, got paid, with no borrowing and no robbing one creditor to pay another. It feels fine, so fine that I want to do it again in May!