Sunday, January 30, 2011

Frugality: Temporary, Tenuous, and Not Really Our Style

The folks at The Hartman Group, a consulting and reseach firm out of Washington state that monitors consumer spending with a jaundiced eye, aren't impressd with our collective rush to frugality. In fact, they already see us moving away from it as economic times get better. [A synopsis of their report is here. There's also a link to download the entire report.]

I wish I could disagree with them. I would certainly like to think that the consumer spending lessons I'm learning now because I have to will hold over in more stable times.

Alas, these consultants don't believe it.

And for good reason. As they so succinctly wrap it up:

"We knew it was coming. It always does.

With the start of every recession comes
a deluge of media and analyst reports
highlighting the American consumer's
sudden conversion from foolish, Godless
consumer to wise spendthrift.

They always call it the "New Frugality."

The report is dry and academic but contains flashes of humor, as when one researcher notes a Time magazine article on newfound frugality he came across during his research. "The Simple Life: Goodbye to Having It All," was published in March 1991. That, of course, preceded the era of excess in which consumers spent with wild abandon, turning to their homes' equity for cash when the credit cards maxed out.

I'm scrimping and saving right now. But with more economic stability (and less debt) I can scrimp more, save more, and feel the effects less. This is my goal, but as history (both this country's history and my personal history) can attest, learning from experience doesn't always work that way.

Friday, January 28, 2011

More Miscellany

1. I refuse to do an end-of-the-month report this January. Because if I did, I would have to admit that I have reduced my overall debt by a mere $55. January is always an impossible month--not only are there Christmas bills to catch up with, but my homeowner's insurance comes due on both my residence and my rental, as do my property tax payments. In my state, there is no sales tax (YAY!) but we get hit hard with property taxes (OUCH!). I feel lucky to have had any debt reduction at all.

2. My 401(k) has hit an all-time high of $216,000. Financial Engines says it is "very likely" that when I retire, I will have an annual income of $57,000 per year (including Social Security). I feel good about that. Although my current income is higher, I live on less than $57,000 a year because I pay $1050 per month (pre-tax) into my retirement funds.

3. I'm in love with my new, very cheap Tracfone. It cost me a whopping $9.99 and came with free "Double Minutes." The double minutes card usually sells for $49.99 though it is currently on sale for $19.99. Either way, I got quite the bargain at less than ten bucks. Then, it turns out that promo codes still work, so with the 200 minute card my sister put in my Christmas stocking, I got a total of 460 minutes. I figure that will last me all year. I don't like talking on cell phones, so I use mine just to check in with my kids, when I'm running late, and for the feeling of safety it gives me to know that I can summon help if I need to. Of course my kids laugh at me because my phone is just a phone--I can call or text. But there's no e-mail, there's no camera, and it doesn't make my morning coffee. For $9.99, I'm not complaining, especially when I see THEIR cellphone bills!

Monday, January 17, 2011

The Carnival of Personal Finance is Up

I've got a post in The Carnival of Personal Finance, hosted this week by "My Personal Finance Journey."

Lots of good financial information in this carnival, along with envy-producing photos of how some of the richest folks in the world live.

Sunday, January 16, 2011


Small stuff to report:

1. My monthly housing payments are going down by $79 a month beginning February. Yay! I'm making immediate arrangements to apply that money automatically to my debt snowball. (The reason is a reduction in my homeowner's insurance, which has been skyhigh since my garage fire 2.5 years ago--this should keep going down annually for the next couple of years.)

2. Is there something wrong with my math? I am a member of My Points and periodically redeem the points for gift cards. Usually I get a $10 Starbucks card in trade for 1550 points. But when, as I did over Christmas, I accumulate a lot of points, I spring for a $25 Starbucks giftcard for 3600 points on the assumption I'm getting a better deal.

But guess what? The math doesn't work!

It turns out that, by a minute fraction, it is actually cheaper to keep getting $10 cards. (.00645 cents per point for the $10 card, and .00694 cents per point for the $25 card.)

Who'd've thunk?

3. There's a good article on how to prepare for retirement as a single woman. Thanks to Rhea at Boomer Chronicles for calling it to my attention.

Friday, January 14, 2011

Finally! Some Good News about Retirement!

Thanks to this post at "My Retirement Blog," I discovered a survey that says Baby Boomers are enjoying their retirement in ways that previous generations didn't. I do have some concerns about the way the survey was conducted--maybe folks who are pleased with their current condition are more likely to respond to a voluntary online poll?

But the results are in line with how I expect to answer when I finally retire. I fully expect to enjoy myself, to be engaged in my community, to travel, and to generally participate in life. I expect that even if I have financial or health concerns.

I think Baby Boomers are more used to setting specific goals, having "5 year plans," and generally planning for the future.

I say that even though the evidence is we haven't been so great about our financial planning.

I know that I have given my life plans--the career path I chose, the children I adopted, the places I've lived--far more thought than my parents did theirs. Life seemed to happen TO them, while I feel like I have been more in charge of the life I have led.

Naturally, not all those decisions, however well thought out, have actually worked out. And, along the way, I forgot to plan for some of the details, like exactly how I was going to fund my retirement.

But hey--I'm working on a plan for that NOW!

Wednesday, January 12, 2011

Life--Could Use Some Perspective There, Too

Sharon, over at Musings of a Midlife Mom, has a thoughtful post on being grateful.

She's been doing great on her budget and determination to save, but Murphy has been just as determined to bring her down. In a prior post she admitted to going on a mild spending spree, even in the face of (or maybe because of) Murphy.

Some readers, including moi, chided her a bit.

But just when we get to whining about our financial situations, sometimes reality sets in. For Sharon, it was Haiti.

For me, it's thinking about the fact that even factoring in inflation, I make far more than my parents ever made per year. If a single person, including a single person with expensive adult kids, cannot make it on $75,000 a year, something is very, very wrong.

And to then whine about it?

I gotta get me a life!

And I'd better smarten up about the gratitude. My life could be so much worse.

Monday, January 10, 2011

Bonds--Trying to Get Some Perspective

I often read that if one doesn't understand what a proposed investment is or does, one shouldn't invest in it. But if I followed that rule, I'd have no investments at all. The truth is, when the talk goes to stocks and bonds, my eyes glaze over. The best I can do is stick with mutual funds, cross my fingers and hope for the best.

That worked well for me in 2010. In 2008 and 2009, not so much.

But at age 61 and 8 years from retirement, I need to get a lot more serious about bonds and bond funds. (Will the blogger at Living Almost Large please stop smirking and muttering "I told you so" under her breath!)

So far, I have almost a 10% stake in bonds. That's up from 7% in 2008 but it needs to be at least 25% so I have reallocated more of my future deposits in my 401(k) to get me up to that mark.

As usual, my timing is impeccably bad. Grace is buying bonds when everyone else is--never a good sign when it comes to investments. Money Magazine has been warning its readers for months now that we are in the midst of a bond bubble and that it is due to burst soon.

But what do I do? Clearly, my retirement funds are still top-heavy with stocks, and my stomach (not to mention my bank account) cannot take another couple of years like the last ones. I need bonds so I have to buy them. Just my luck that I'm buying them at the top of the market.

My solution, if you can call it that, is NOT to reallocate the monies or funds I already have, but to put new contributions mostly into a bond index fund, and a smidge into an international index fund where I'm a bit low at the moment.

While I was at it, I increased my 401(k) contribution by another $10 a month. Don't laugh. My wages are frozen for three years, so I wasn't planning to make any increases. But since my payroll taxes are going down, I tossed in another $10 toward my future retirement.

Sunday, January 2, 2011

Redecorating the Blog


Maybe you thought from the header that I'd finally decided to get rid of all the PINK???


Maybe someday, but in the meantime. . .

I've run through my blog list and made some additions and subtractions.

I gave Fighting Foreclosure--Getting Nine Hundred nine months to start posting again but it was not to be. I hate it when some of my favorite bloggers fall off the face of the blogosphere, but I can't keep clicking on their site forever.

Tony Cassise died. Though his blog remains online, I'm removing it from my list. It was a pleasure to have known him, even if only via the internet.

The young veteran and newly minted CPA at "$647,000 in Debt" has taken his blog private, having encountered real-life consequences to the airing of his financial information. That's one of the unfortunate hazards of blogging, but I will continue to wish him well as he recovers from the pre-recession euphoria and gets himself on a stable financial footing.

I'm going to hang onto Oh, My Aching Debts" for another couple of months. Ditto Betty at ""Bouncing Back from Bankruptcy" who assures her faithful readers she will be blogging again--This reader is waiting most impatiently.

I've added some new blogs, most of them related to retirement, like the view from Australia in "Towards Retirement With Debt," and Texas with Frugal Texas Gal.

Then there's "Grumpy Rumblings of the Untenured" wherein Nicole or Maggie or both wax eloquent on various topics. It is certainly NOT a retirement blog, nor exactly a financial blog though both topics come up. As do shoes, academic cheating, science fiction and whatever is on these two academics' minds. Plus, of course, they are prone to leaving comments on MY blog.

If you have seen some blogs (or are the author of some blogs) that I should know about, let me know.