Wednesday, May 30, 2012

Not As Bad As It Could Have Been

It's time for an end-of-the-month look at my finances. Surprisingly, it's not nearly as bad as I feared.

First I had a $3500 emergency (I will spare you the details, but let's just say one of my children will not be around for quite awhile, but not as long as it might have been had she not had a very competent attorney). Then, my baby-steps emergency fund, which is supposed to contain $1000 has more like $200 in it.

So I wound up using a line of credit at my credit union to pay the bill. I've had that line for nearly a decade but haven't used it for the past three years. Just what I need--more debt!

Still, the good news is that by the end of May, I was able to throw money at my other debts such that I wound up the month only increasing my total indebtedness by $806.99. Admittedly, that's going in the wrong direction, but I was worried that the damage would be much worse. I chose not to pay back more than a minimum payment on the line of credit because it has a 7.99% interest rate while my credit cards have higher rates.

All in all, I'm glad to see May in the rearview mirror, but I'm grateful I didn't dig my hole any deeper.

Onward to June, which looks to be a much better month, God and Murphy willing!

Tuesday, May 22, 2012

Shouldn't I Have Done Better Than This By Now?

Warning! If you don't like whines, you should stop reading now.

I just had a $3500 emergency come up (at a time when I have less than $200 in my emergency account), so I know that my end-of-the-month wrap-up will not be a pretty sight. But more than that, also coming up is my 5-year anniversary of my very first post.

You'd think that five years would be more than enough time to get rid of debt, increase retirement savings, and generally be in fine shape, wouldn't you? Even with a recession smack in the middle, at least the debt should have come down, right? Well, it did come down some, but not nearly as much as it should have over a five year span. My total indebtedness has reduced only by $2105 per year, for a grand total of $10529. Likewise, my retirement savings have increased, but again, not as much as I would have predicted. I currently have $69,000 more in my 401(k) than I had in 2007, thanks to pre-tax deductions from my pay (which pay has not gone up at all in five years!). I will say that I'm glad I did not stop my retirement contributions to make increased payments on my debts--I know myself well enough to think that I would have found excuses to use that money elsewhere, in which case, my retirement fund would be seriously short about now.

So what has been my problem? Well, life did not stand still during the past five years. There was college for a child and grandchild; a new roof, replacement windows and a new furnace for the rental property; my only vehicle that died and had to be replaced; the comings and goings from my home of various adult children and grandchildren; etc. But none of these were unusual life events. These expenses could have and should have been part of my budget. If only I could get far enough ahead of current expenses to actually budget for visits from Murphy.

I'll probably be in a better mood tomorrow, but in the meantime, the whine wins!

Thursday, May 17, 2012

What's a Carnival and Why Would I Want to be in One?

I have a post this week in the Carnival of Personal Finance which is being hosted by One Cent At A Time.

My post is joined by a great many other relevant posts, plus an extended (and funny) post by the Grumpies, Nicole and Maggie, on how to properly wash dishes. Why exactly that last one is part of a personal finance carnival is open to question, but at least you'll know what to do when the dishwasher is broken.

In general terms, a carnival is a collection of posts gathered over the past week or so and presented all in one place.

When I first started blogging, I thought the blog hosts simply surfed the blogosphere and picked out the most worthy writing.

Umm--not so much.

The reality is that blog hosts sit back, eat bon-bons, and wait for individual bloggers to fling their authorial contributions into the vast void. If they like what flies by, or if they are just in a good mood, or nothing better appeared in their mailbox that week, your post will become part of the carnival.

Most carnival hosts are good about sending e-mails telling you whether you made it in or not. Unfortunately, these e-mails are sent out the same day the carnival appears online so if you're the kind of blogger who is organized and sent in your contribution a week earlier (you know this is NOT Grace, right?) then you just have to wait. OTOH, if you contributed 2 hours prior to the deadline (Yep! That would be moi!), you get the information relatively soon.

The general thought is that having one's post find its way into a Carnival will increase blog traffic. It does, particularly if your contribution is highlighted in some special way, but many carnivals, like the Carnival of Personal Finance, are huge. My experience is that my post appears in a long list of others, and tends to get lost.

However, a better way to use a Carnival to generate traffic to your blog is to actually host a carnival. The carnival websites have sign up lists to do that. I couldn't tell you how it works or how much time it entails because I've never volunteered. It seems to require an ability to have a clever theme and to post cool pictures--both of which are more than I can manage.

Still, I do contribute. That's because I really like reading the Carnivals, where I often discover financial blogs that I would otherwise miss, or come across old friends whose sites I haven't recently visited.

My personal favorites are the Carnival of Personal Finance and the Festival of Frugality. You can view the latest Festival here.

Sunday, May 13, 2012

Enough About the Death of Social Security Already!

Every time I turn around, another article, news story, discussion or diatribe about Social Security pops up on the radar.

When a person is my age, and the prospect of Social Security is just around the corner (give or take six years), these articles, news stories, etc. take on new meaning.

And raise new fears.

If we read or listen to TV or surf the internet we all 'know' the Social Security system is a shambles, can't be repaired, and will be lucky to cover MY retirement, never mind that of my kids.

The recent 2012 Report from the Social Security Trustees brought another spate of scare stories.

In the report, the trustees projected that, largely because of changed economic conditions, Social Security would be able to pay full benefits only for 21 years, and 75 percent of the benefits after that assuming no changes were made.

The reaction to the report, and the media storm around it make one question the actual literacy of the press. Somehow, the news stories missed the parts of the report that refer to the shortfall (a shortfall that will exist ONLY if Congress does NOTHING to secure more funds) as "manageable." More than that, many of the news stories talked about Social Security running out of money in the forseeable future. Again, that's NOT what the report says. It says if NOTHING is done, the payouts will be reduced by one-quarter AFTER another two decades. I am not all that great at math, but even I know that three-quarters of a pay-out is not ZERO payout.

The Columbia Journalism Review has a very snarky 'review' of the press coverage.

As dysfunctional as our current congress is, I don't think the members (or their replacements in the next twenty years) are politically suicidal enough to allow Social Security to reduce payments by 25%, much less become bankrupt.

Wednesday, May 9, 2012

I Can't Explain It. I Just Have to Spend It!

I love my readers, and I especially love it when they comment on some of my dumber statements.

If you've read the comments to my April Update, then you've met Mike. Mike, politely but emphatically, thinks I'm making a mistake spending a lot of money on my sister's birthday gifts when that money could better be spent reducing my considerable debts. My woefully inadequate response is that "I can't explain it, but I do have to do this." Mike's heard that one before and he's not buying it.

Let's get one thing straight: Mike is right and Grace is wrong.

That doesn't mean I'm not going to spend the money on my sister, because I am. But he's right that I shouldn't.

By way of apology, I used to have a much longer lists of things I 'had' to have or money I 'had' to spend. I had to have expanded cable--how else to watch new movies and catch every chapter of "Game of Thrones?" I had to buy books--reading is important when I commute by bus, and then, there's my Kindle Fire that my sister gave me for Christmas. I had to buy coffee and pastries every morning--it set the pace for the rest of my day.

Over time, I have managed to reduce most of these 'have to haves.' The public library solves a lot of the problems. They have DVD's and if I can't get the new movie fast enough through them, there's always Redbox. The library has the whole first season of "Game of Thrones" and it's more fun to watch all the episodes back-to-back, The library even has books for my kindle. Buying coffee beans and bringing coffee to the office has saved me a bundle, and who knew that Toaster Strudel travels just fine in a briefcase, especially when the office kitchen has a toaster? It's not free but it's a lot cheaper than the $4.25 a morning I used to spend.

I find that working around a 'want' is easier for me than giving something up completely.

I used to have an annual pass to my city's art museum. These days, I still see all the exhibits, but I do it the first weekend of each month when I can flash my Bank of America checking account and get in for free.

I still love to eat out, but I've discovered Happy Hour can substitute for dinner and gives me access to the great dishes my foodie city is known for. (Then there are the food carts that are all over this city, including across the street from my office. A fair number of chefs here have started with a food cart.)

My sister is a different kind of problem. I adore her, though it was not always that way. When we were growing up, she was the pretty, popular kid while I was the smart bookworm. She went to MY senior prom while I stayed home and cried. But growing up helps a lot of relationships and it certainly helped ours. She is my best friend even though she lives on the East Coast and I'm here on the West Coast. We have a tradition of extravagant gifts to each other on birthdays and at Christmas. I have definitely cut back on my level of extravagance, but I'm not willing to eliminate it.

And no, I can't really explain it.

But there it is!

Wednesday, May 2, 2012

April Update

April was a surprisingly good month on the debt-reduction front. I managed to reduce what I owe by $1017.91.

May will probably not be as good because I have property tax payments to make, along with my sister's birthday. As longtime readers know, my baby sister (a retired East Coast banker) always comes through for me financially, so I go all out for her birthday and Christmas presents. Of course, all out for Grace is considerably less than what she spends on me!

On a more depressing front, My Retirement Blog reports that by age 55, 60% of us have saved $100,000 or less for our retirement. I guess I should be glad that I finally hit the $250,000 mark (albeit at age 63, NOT age 55) but since I feel like $400,000 is a more reasonable figure for me to feel comfortable in retirement, I'm not feeling good for myself, and I'm truly appalled for those even less prepared.