If you haven't been been reading The Simple Dollar (and why not? I ask, since it is a wonderful blog!), you may have missed Trent's observations and questions about his grandmother who allows her adult son to live with her. The comments are just as thought-provoking as the original post, and yes, Grace added her two cents to the discussion.
Interestingly, when I submitted my post on The Grown-Up Kid Conundrum--Part Deux to this week's Carnival of Personal Finance, it was rejected as not being on-topic.
My guess is that it was just too personal a topic for the host--too much about emotions and not enough about money.
But nowhere do finances and emotions come together more clearly (or sometimes, more devastatingly) than when one is dealing with other family members.
Monday, April 21, 2008
Friday, April 18, 2008
All Things Come to Those Who Wait
OK, so this is not quite up there with world peace and curing AIDS, but some of you may recall that the reason it took me so long to cut back on my TV cable bill was that Bravo channel was not available in the basic cable package. Bravo is the home of two of my favorite programs, "Top Chef" and "Project Runway."
Reluctantly and resentfully, I did eventually cave in to the financial pressure and scale back to a basic cable service.
But hey! The Gods are smiling on Grace.
Beginning in November, "Project Runway" is moving to Lifetime, which, fortunately for moi, IS part of the basic cable line-up.
Yaayy! Now, if they will just move "Top Chef," I'll have all my favorite programs back.
Reluctantly and resentfully, I did eventually cave in to the financial pressure and scale back to a basic cable service.
But hey! The Gods are smiling on Grace.
Beginning in November, "Project Runway" is moving to Lifetime, which, fortunately for moi, IS part of the basic cable line-up.
Yaayy! Now, if they will just move "Top Chef," I'll have all my favorite programs back.
Thursday, April 17, 2008
Medical Expenses in Retirement
Liz Pulliam Weston, at MSN Money has a new post: Will Medical Bills Ruin Retirement?
This is scary stuff to those of us within ten years of retirement.
It is clear that medical expenses will be THE BIG EXPENSE for me. Including private coverage, Medicare, and long-term care insurance, there goes all the money I will save each month by no longer having a mortgage. Then again, that is the point of getting my mortgage out of the way--so I WILL have dollars available for whatever happens to me medically.
My parents did not leave me with an encouraging genetic history. Strokes, type II diabetes and heart disease run rampant in the family tree on both sides. Fortunately for my peace of mind, there's no cancer to speak of, but who knows what environmental factors play into the onset of cancer, anyway.
I've been a non-insulin-dependent diabetic for the last ten years. I assume I will live longer than my parents because I aggressively treat my high blood pressure and high cholesteral, both of which are, with medication, within normal limits. Unless there is chocolate in the immediate vicinity, I also manage my diabetes pretty well. But there's no getting around the fact that I will have medical issues in retirement and that they may well be significant.
Weston's analysis is interesting though a bit flawed. She seems to assume that retirees have not considered increased medical costs during retirement and will need additonal funds to meet those costs. Speaking for myself, I have tried to factor those in while determining just how much I'll need to maintain my desired standard of living.
The biggest issue I see for my situation is getting long-term care insurance. I should be looking for it now, but realistically, it will be a couple more years before I've got my debts reduced to the point that I can afford it (at which time, it will be even MORE expensive--one of those moving targets I can never quite reach!)
Weston is looking for a political answer. So am I, but the track record in the US when it comes to health policies has never been a good one.
This is scary stuff to those of us within ten years of retirement.
It is clear that medical expenses will be THE BIG EXPENSE for me. Including private coverage, Medicare, and long-term care insurance, there goes all the money I will save each month by no longer having a mortgage. Then again, that is the point of getting my mortgage out of the way--so I WILL have dollars available for whatever happens to me medically.
My parents did not leave me with an encouraging genetic history. Strokes, type II diabetes and heart disease run rampant in the family tree on both sides. Fortunately for my peace of mind, there's no cancer to speak of, but who knows what environmental factors play into the onset of cancer, anyway.
I've been a non-insulin-dependent diabetic for the last ten years. I assume I will live longer than my parents because I aggressively treat my high blood pressure and high cholesteral, both of which are, with medication, within normal limits. Unless there is chocolate in the immediate vicinity, I also manage my diabetes pretty well. But there's no getting around the fact that I will have medical issues in retirement and that they may well be significant.
Weston's analysis is interesting though a bit flawed. She seems to assume that retirees have not considered increased medical costs during retirement and will need additonal funds to meet those costs. Speaking for myself, I have tried to factor those in while determining just how much I'll need to maintain my desired standard of living.
The biggest issue I see for my situation is getting long-term care insurance. I should be looking for it now, but realistically, it will be a couple more years before I've got my debts reduced to the point that I can afford it (at which time, it will be even MORE expensive--one of those moving targets I can never quite reach!)
Weston is looking for a political answer. So am I, but the track record in the US when it comes to health policies has never been a good one.
Wednesday, April 16, 2008
The Grown-Up Kid Conundrum--Part Deux
The "baby bloggers," meaning all those unmarried, childless twenty-somethings whose blogs I love to read, go on and on about humongous student loans. Their thirty and forty-ish partners-in-blogging are more apt to discuss the extreme expenses of child rearing.
So what does 59 year old Grace have to whine about?
Why, children, of course.
Grown up children.
Grown up children who have moved back home, with husbands and children in tow.
Trust me, this was NOT in the plan. And trust me again, this is NOT a good plan, either emotionally or financially.
Spare me the "just say no" lectures. I did say no. As my daughter's family was getting evicted from the home they shared with another family, they asked if they could move in with me for the short term. I said no, and they made other plans. Unfortunately, two days before the sheriff was set to show up at their front door, those other plans fell through. Had it been only the adults, I would have stuck to my "no." But there was a nine year old, a six year old and a four year old involved. So, reluctantly, knowing full well that this was going to be a disaster, I agreed to house the family temporarily.
It's been three weeks. So far, they've run my oil tank dry, broken the power supply to my computer, used up all the laundry detergent, clogged the toilets--yep, BOTH of them, and messed up my TIVO programming, not to mention eating every single bit of food in the house including the bag of Trader Joe's asparagus risotto that has resided in my freezer for the past two years.
That's just the financial end. Because this daughter has severe emotional issues of her own (she is fully disabled and receives SSI), the social atmosphere at home has been chaotic to say the least. I find myself staying longer at work, while my 17 year old prefers to hang out with friends, both of us doing our best to avoid being home.
April is another tough month in terms of my budget, in the best of times. With the addition of five more people, the poor budget is overwhelmed and I'm struggling to NOT add more debt to my credit cards.
My adult daughter is both smart and resourceful. She's no happier than I am with the current arrangement. She has now lined up money from two different agencies to get her family into an apartment if she can just find one that will rent to them. She says she should have it done in another two weeks.
I hope so. I've got my fingers crossed.
So what does 59 year old Grace have to whine about?
Why, children, of course.
Grown up children.
Grown up children who have moved back home, with husbands and children in tow.
Trust me, this was NOT in the plan. And trust me again, this is NOT a good plan, either emotionally or financially.
Spare me the "just say no" lectures. I did say no. As my daughter's family was getting evicted from the home they shared with another family, they asked if they could move in with me for the short term. I said no, and they made other plans. Unfortunately, two days before the sheriff was set to show up at their front door, those other plans fell through. Had it been only the adults, I would have stuck to my "no." But there was a nine year old, a six year old and a four year old involved. So, reluctantly, knowing full well that this was going to be a disaster, I agreed to house the family temporarily.
It's been three weeks. So far, they've run my oil tank dry, broken the power supply to my computer, used up all the laundry detergent, clogged the toilets--yep, BOTH of them, and messed up my TIVO programming, not to mention eating every single bit of food in the house including the bag of Trader Joe's asparagus risotto that has resided in my freezer for the past two years.
That's just the financial end. Because this daughter has severe emotional issues of her own (she is fully disabled and receives SSI), the social atmosphere at home has been chaotic to say the least. I find myself staying longer at work, while my 17 year old prefers to hang out with friends, both of us doing our best to avoid being home.
April is another tough month in terms of my budget, in the best of times. With the addition of five more people, the poor budget is overwhelmed and I'm struggling to NOT add more debt to my credit cards.
My adult daughter is both smart and resourceful. She's no happier than I am with the current arrangement. She has now lined up money from two different agencies to get her family into an apartment if she can just find one that will rent to them. She says she should have it done in another two weeks.
I hope so. I've got my fingers crossed.
Monday, April 14, 2008
Carnival of Personal Finance is Up
Gather Little By Little is hosting the 148th Carnival of Personal Finance. There are a lot of good posts there, including my review of Stanley Tombkiel's Social Security Answer Book
Friday, April 11, 2008
Time for a Book Report
The folks at Sphinx Publishing, who put out a number of self-help books on various legal subjects asked me to take a look at their Social Security Answer Book by attorney Stanley A. Tomkiel III.
In general, I don't favor "do it yourself" law handbooks because most legal issues are very state-specific. This means that any book that purports to cover a broad legal subject, say divorce for example, is necessarily shallow.
But Social Security is a federal program that is the same for recipients, no matter where they reside.
Tomkiel's book is chatty, easily read, and surprisingly helpful. It presents its material in a Question and Answer format, but rather than state a principle just once, the author conveys the same information in several different ways, fashioned as responses to the questions of "regular folks."
As one of those "regular folks," this worked well for me.
I turned first to the Retirement section since that is what is always on my mind. Tomkiel's answers confirmed what I already partly knew--it will be simpler and I'll get more money if I do not take retirement at age 62, but wait until my "full retirement age" of 66 or beyond. The rules are more complex for those who wish to retire at age 62, but the author does a good job of clarifying the issues surrounding this choice.
The remainder of the book covers disability, spouses' benefits, children's benefits, and instructions on how and when to apply for benefits. The rules for divorced spouses are complicated but the Question and Answer format was quite useful as a tool to understand exactly what needed to happen in order to be eligible.
I found the short chapter on Medicare to be especially helpful. Tomkiel is careful to sort out the differences between Medicare and Medicaid, which many people lump together even though they are very different programs.
The book does NOT cover Supplemental Security Income which is the federal program covering disabled persons who do not have the necessary 40 quarters of work that would enable them to get Social Security benefits.
So, do I recommend the book? Yes.
But cheapskate that I am, I'd probably suggest to my local library that THEY buy it and let me check it out!
In general, I don't favor "do it yourself" law handbooks because most legal issues are very state-specific. This means that any book that purports to cover a broad legal subject, say divorce for example, is necessarily shallow.
But Social Security is a federal program that is the same for recipients, no matter where they reside.
Tomkiel's book is chatty, easily read, and surprisingly helpful. It presents its material in a Question and Answer format, but rather than state a principle just once, the author conveys the same information in several different ways, fashioned as responses to the questions of "regular folks."
As one of those "regular folks," this worked well for me.
I turned first to the Retirement section since that is what is always on my mind. Tomkiel's answers confirmed what I already partly knew--it will be simpler and I'll get more money if I do not take retirement at age 62, but wait until my "full retirement age" of 66 or beyond. The rules are more complex for those who wish to retire at age 62, but the author does a good job of clarifying the issues surrounding this choice.
The remainder of the book covers disability, spouses' benefits, children's benefits, and instructions on how and when to apply for benefits. The rules for divorced spouses are complicated but the Question and Answer format was quite useful as a tool to understand exactly what needed to happen in order to be eligible.
I found the short chapter on Medicare to be especially helpful. Tomkiel is careful to sort out the differences between Medicare and Medicaid, which many people lump together even though they are very different programs.
The book does NOT cover Supplemental Security Income which is the federal program covering disabled persons who do not have the necessary 40 quarters of work that would enable them to get Social Security benefits.
So, do I recommend the book? Yes.
But cheapskate that I am, I'd probably suggest to my local library that THEY buy it and let me check it out!
Thursday, April 10, 2008
New Calculators, New Worries
Liz Pulliam Weston, at MSN Money, has a column regarding a new way to determine the magic number--that is, the amount one needs to have saved for retirement. Actually, this new method supposedly calculates the percentage of current pay that must be saved in order to reach one's retirement goals.
Umm--I hope NOT!
Because if this calculator is accurate, I'm in a lot of trouble.
I currently save 16% of my gross pay in my 401 K. My employer contributes 6% of my income into the same 401 K. So I thought I was doing pretty well with a total 22% contribution. But, NO! According to MSN, I need to contribute 37% to reach my goals.
That, of course, leads me to poke holes in this new calculation. My annual income is $73,500. The calculator asks me to choose either $60,000 or $80,000, neither figure particularly close to what I actually make. The calculation assumes I will need 80% of my net income in retirement and that I'd retire at age 65. It's nice that it uses a net figure rather than gross (a mistake a lot of other calculators make) but I've never thought I'd need my entire salary or even 80% of it when I finally leave work. Also, I plan to retire at 69, not 65. My house will have been paid off four years before I retire. I intend to use that additional savings for my last automobile purchase and my "retirement-gallivanting" fund. While long-term care insurance and additional health expenses may occur, I don't know that they would equal the $1400 per month I currently pay on my mortgage.
I fare better using MSN's calculator so that's where I'm looking, at least for the time being.
Umm--I hope NOT!
Because if this calculator is accurate, I'm in a lot of trouble.
I currently save 16% of my gross pay in my 401 K. My employer contributes 6% of my income into the same 401 K. So I thought I was doing pretty well with a total 22% contribution. But, NO! According to MSN, I need to contribute 37% to reach my goals.
That, of course, leads me to poke holes in this new calculation. My annual income is $73,500. The calculator asks me to choose either $60,000 or $80,000, neither figure particularly close to what I actually make. The calculation assumes I will need 80% of my net income in retirement and that I'd retire at age 65. It's nice that it uses a net figure rather than gross (a mistake a lot of other calculators make) but I've never thought I'd need my entire salary or even 80% of it when I finally leave work. Also, I plan to retire at 69, not 65. My house will have been paid off four years before I retire. I intend to use that additional savings for my last automobile purchase and my "retirement-gallivanting" fund. While long-term care insurance and additional health expenses may occur, I don't know that they would equal the $1400 per month I currently pay on my mortgage.
I fare better using MSN's calculator so that's where I'm looking, at least for the time being.
Sunday, March 30, 2008
Quarterly Net Worth--Surprisingly Up
I wasn't looking forward to calculating my quarterly net worth, but now that I have, I find that it's up $7497 and is a comfortable $591,595.
Of course, a considerable amount is equity tied up in my home and my rental. The rental dropped over $10,000 in value, and my 401(K), likewise, is down $10,000 from last quarter. But my residence has not only held its value but actually (according to Zillow) increased in value by another $34,000.
This makes me feel a lot better than when I look just at my monthly financial statements. My consumer debt is decreasing at a snail's pace. For the month of March, my total debt reduction is a mere $672.86 and my debt snowball is still frozen solidly in place.
Unfortunately, April is not looking more upbeat.
My intentions are good but life keeps intervening. Two major events are about to occur (about which, more, later) which will bring even more financial pressure.
Right now, my plan is to NOT acquire more debt, and to keep up at least the minimum reduction in debt while meeting life's demands out of my monthly pay.
Overall, this is a cash flow issue more than anything else. My finances should get better (in that there will be fewer demands on my paycheck), during the second half of the year. But it's the "meantime" that is a bummer.
Of course, a considerable amount is equity tied up in my home and my rental. The rental dropped over $10,000 in value, and my 401(K), likewise, is down $10,000 from last quarter. But my residence has not only held its value but actually (according to Zillow) increased in value by another $34,000.
This makes me feel a lot better than when I look just at my monthly financial statements. My consumer debt is decreasing at a snail's pace. For the month of March, my total debt reduction is a mere $672.86 and my debt snowball is still frozen solidly in place.
Unfortunately, April is not looking more upbeat.
My intentions are good but life keeps intervening. Two major events are about to occur (about which, more, later) which will bring even more financial pressure.
Right now, my plan is to NOT acquire more debt, and to keep up at least the minimum reduction in debt while meeting life's demands out of my monthly pay.
Overall, this is a cash flow issue more than anything else. My finances should get better (in that there will be fewer demands on my paycheck), during the second half of the year. But it's the "meantime" that is a bummer.
Wednesday, March 26, 2008
The View from Elsewhere
Interesting.
My blog post "Waiting for the Test to be Over" was picked up by Karen Datko, a correspondent at MSN's Smart Spending, and then designated as an "Editor's Pick."
Not only did this boost my Sitemeter numbers skyhigh, but it also resulted in a number of comments about my view of the economy and whether or not I should be worried about my retirement. At least one of the comments was more than a little strange, and another one misread me to say that I was saving $12,000 a month--to which I can only say "I WISH!"
At any rate, you can check out the responses here.
My blog post "Waiting for the Test to be Over" was picked up by Karen Datko, a correspondent at MSN's Smart Spending, and then designated as an "Editor's Pick."
Not only did this boost my Sitemeter numbers skyhigh, but it also resulted in a number of comments about my view of the economy and whether or not I should be worried about my retirement. At least one of the comments was more than a little strange, and another one misread me to say that I was saving $12,000 a month--to which I can only say "I WISH!"
At any rate, you can check out the responses here.
Tuesday, March 25, 2008
Retirement v. College--No Easy Ways Out
Money Magazine profiles the Wilkes family of Danville, California in the current issue.
With three children, ages 13 to 17, all of them college material, the Wilkes will be looking at retirement just as the youngest child finishes his higher education. Bruce Wilkes, age 52, supports the family and stay-at-home mom, Lorri, age 48, on $100,000 a year. Given the pricey Bay Area locale, that's not a lot of income. On the other hand, that same locale means that they now have significant equity in their home, notwithstanding the leveling-out of housing prices in California. The Wilkes owe $144,000 on a house valued at 1.2 million.
What I found interesting was how the Wilkes seem to have done everything right, financially. They have over $500,000 in retirement funds and regularly contribute an additional $600 a month. They have put aside funds (apparently around $16,000 per child) for their children's higher education. They intend that their children pay at least half of their own college costs. Their children appear to be headed to state institutions.
Still, there's no cheap and easy solution to their looming budget crisis.
The advice given looked pretty good to me. Though I did wonder why no one suggested the obvious boost to the Wilkes' income that would come if Lorri would get even a part-time job.
With three children, ages 13 to 17, all of them college material, the Wilkes will be looking at retirement just as the youngest child finishes his higher education. Bruce Wilkes, age 52, supports the family and stay-at-home mom, Lorri, age 48, on $100,000 a year. Given the pricey Bay Area locale, that's not a lot of income. On the other hand, that same locale means that they now have significant equity in their home, notwithstanding the leveling-out of housing prices in California. The Wilkes owe $144,000 on a house valued at 1.2 million.
What I found interesting was how the Wilkes seem to have done everything right, financially. They have over $500,000 in retirement funds and regularly contribute an additional $600 a month. They have put aside funds (apparently around $16,000 per child) for their children's higher education. They intend that their children pay at least half of their own college costs. Their children appear to be headed to state institutions.
Still, there's no cheap and easy solution to their looming budget crisis.
The advice given looked pretty good to me. Though I did wonder why no one suggested the obvious boost to the Wilkes' income that would come if Lorri would get even a part-time job.
Monday, March 24, 2008
Grace, at 59
I successfully turned 59 on Saturday. I celebrated with tickets to Cirque du Soleil's "Corteo", courtesy of my sister. I intended to go as a gift to myself, but to do so, I would have had to raid my income tax refund which would have been difficult, given that it has already been spent.
Fortunately, my sister paid attention to the hints I dropped and gave me two tickets as my birthday present. To quote my 17-year old: "SWEET!" The show was amazing, well worth the big bucks I didn't personally spend.
I did spring for dinner out at Todai with four of my five daughters (one lives too far away). It's a pricey seafood and sushi buffet, but the quality is a cut above most buffets. Dinners are free on one's birthday, and the many food choices kept the picky eaters happy. All in all, my 59th birthday was a good one.
But here's the rub.
I've been paying close attention to my finances for the past ten months. I've cut back in several areas (cable TV, subscriptions, clothing, etc.). I've kept up my contributions to my 401 (K). I am definitely "smarter" about my savings and my spending that I have been at any other point in my life.
So why doesn't it feel better? Why don't I feel ennobled by all this effort? Where's the smug satisfaction that should be my due?
More to the point, why was I happier when I was blithely charging up my credit cards and not worrying?
Whoever said "Ignorance is bliss" might have been talking about me.
It feels weird to be at the peak of my personal earning powers, to be doing work that I love, to have "empty nest" coming my way in just a couple of years, and to be unable to shake this sense of financial doom.
As I say this, or write it down, I realize that I don't feel doomed as to my retirement, which is pretty much on track. It's the day-to-day finances that are getting to me.
OK, enough of this! My financial and emotional goal prior to turning 60 is to find a way to get over this depressive hump.
(Love that last phrase--isn't it the perfect oxymoron?)
Fortunately, my sister paid attention to the hints I dropped and gave me two tickets as my birthday present. To quote my 17-year old: "SWEET!" The show was amazing, well worth the big bucks I didn't personally spend.
I did spring for dinner out at Todai with four of my five daughters (one lives too far away). It's a pricey seafood and sushi buffet, but the quality is a cut above most buffets. Dinners are free on one's birthday, and the many food choices kept the picky eaters happy. All in all, my 59th birthday was a good one.
But here's the rub.
I've been paying close attention to my finances for the past ten months. I've cut back in several areas (cable TV, subscriptions, clothing, etc.). I've kept up my contributions to my 401 (K). I am definitely "smarter" about my savings and my spending that I have been at any other point in my life.
So why doesn't it feel better? Why don't I feel ennobled by all this effort? Where's the smug satisfaction that should be my due?
More to the point, why was I happier when I was blithely charging up my credit cards and not worrying?
Whoever said "Ignorance is bliss" might have been talking about me.
It feels weird to be at the peak of my personal earning powers, to be doing work that I love, to have "empty nest" coming my way in just a couple of years, and to be unable to shake this sense of financial doom.
As I say this, or write it down, I realize that I don't feel doomed as to my retirement, which is pretty much on track. It's the day-to-day finances that are getting to me.
OK, enough of this! My financial and emotional goal prior to turning 60 is to find a way to get over this depressive hump.
(Love that last phrase--isn't it the perfect oxymoron?)
Thursday, March 20, 2008
Free is Such a Lovely (and Dangerous) Word
In the current issue of "Money" magazine (Yes, I subscribe. I paid $30 for a three-year subscription on Ebay.) economist Dan Ariely explains why we're all suckers for "free" offers. I'd provide a link to the article, but there isn't one. That's too bad, because we are all at risk for the faulty thinking that leads us to overvalue "free" in almost any context.
Ariely gives several examples, but the funniest was one Halloween when he handed out two Hershey kisses to each trick-or-treater, then offered either a free fun-size Snickers bar or a full-size Snickers bar for the price of one Hershey kiss. No one "bought" the full-size bar, in spite of the fact that it was clearly the better financial and gustatory choice.
I confess that I, too, am a sucker for free stuff. But it pays to read the offers carefully and figure out the actual cost of the "free" items. If it leads me to pay more in the long run, it's not so "free" after all.
On the other hand, I am unapologetic in my love for free samples--a whole other catagory of "free." So long as the sample is something my family can really use and there are absolutely no costs (shipping, subscriptions that have to be cancelled, etc.), count me in. I'm especially fond of Wal-Mart's freebies. Just today, I sent away for lotion and laundry detergent samples, both of which will get good use.
Ariely gives several examples, but the funniest was one Halloween when he handed out two Hershey kisses to each trick-or-treater, then offered either a free fun-size Snickers bar or a full-size Snickers bar for the price of one Hershey kiss. No one "bought" the full-size bar, in spite of the fact that it was clearly the better financial and gustatory choice.
I confess that I, too, am a sucker for free stuff. But it pays to read the offers carefully and figure out the actual cost of the "free" items. If it leads me to pay more in the long run, it's not so "free" after all.
On the other hand, I am unapologetic in my love for free samples--a whole other catagory of "free." So long as the sample is something my family can really use and there are absolutely no costs (shipping, subscriptions that have to be cancelled, etc.), count me in. I'm especially fond of Wal-Mart's freebies. Just today, I sent away for lotion and laundry detergent samples, both of which will get good use.
Sunday, March 16, 2008
Waiting For the Test to be Over
I assume this is all a major test.
I don't believe in bonds or bond funds for a person my age or in my particular personal circumstances--I have ten years until retirement and I'm way behind when it comes to fund accrual. Better to keep buying when the market is down because it is bound to come back up and I will be glad I bought my fund shares at historic lows--that's what I tell myself.
I walk my talk--I continue to put $1025 a month into index and growth funds. Right now, I'm invested in Vanguard's S & P 500 fund, Total Stock Index fund, and the European Market Index fund. In addition, I hold funds in Ariel Appreciation, American Century Equity Income and Calvert Social Investment.
Overall, I'm down 17% which, when I allow myself to think about it, scares me to death. I started this blog last July with $176,000 in retirement savings. Now I'm down to $146,000, notwithstanding the money I keep putting in.
For all that I admire Dave Ramsey, he is so wrong about what's happening in the economy. We absolutely ARE in a recession, and I don't get why he can't admit that--I suspect it's due to his conservative/Republican politics.
My mantra is to keep doing what I'm doing--put money in regularly, assume that it will all even out in another couple of years, and DON'T PANIC.
I believe that, but for all my pep talks to myself, it is still darn hard to watch the funds dwindle.
When do I find out if I passed the test?
I don't believe in bonds or bond funds for a person my age or in my particular personal circumstances--I have ten years until retirement and I'm way behind when it comes to fund accrual. Better to keep buying when the market is down because it is bound to come back up and I will be glad I bought my fund shares at historic lows--that's what I tell myself.
I walk my talk--I continue to put $1025 a month into index and growth funds. Right now, I'm invested in Vanguard's S & P 500 fund, Total Stock Index fund, and the European Market Index fund. In addition, I hold funds in Ariel Appreciation, American Century Equity Income and Calvert Social Investment.
Overall, I'm down 17% which, when I allow myself to think about it, scares me to death. I started this blog last July with $176,000 in retirement savings. Now I'm down to $146,000, notwithstanding the money I keep putting in.
For all that I admire Dave Ramsey, he is so wrong about what's happening in the economy. We absolutely ARE in a recession, and I don't get why he can't admit that--I suspect it's due to his conservative/Republican politics.
My mantra is to keep doing what I'm doing--put money in regularly, assume that it will all even out in another couple of years, and DON'T PANIC.
I believe that, but for all my pep talks to myself, it is still darn hard to watch the funds dwindle.
When do I find out if I passed the test?
Friday, March 7, 2008
The Ides are still Marching
Among the many things I hate about not having money is how the thought begins to occupy every waking moment.
I know obsession when I see it, and right now, I am obsessed with finding every stray penny.
Dave Ramsey talks about "gazelle intensity" in paying off debt, but sometimes that kind of intensity winds up being focused on just meeting current bills, never mind reducing the debt beyond the minimum payments.
I don't see anything character-building about these feelings. Quite the opposite. As an exmple, I was actually glad to hear that my granddaughter couldn't go to zoo with me this week-end as we'd planned. Rather than be upset that she was sick or that we wouldn't have a fun day out, I was just relieved that I won't have to spend money on the two of us for the outing.
How pathetic is that?
I know obsession when I see it, and right now, I am obsessed with finding every stray penny.
Dave Ramsey talks about "gazelle intensity" in paying off debt, but sometimes that kind of intensity winds up being focused on just meeting current bills, never mind reducing the debt beyond the minimum payments.
I don't see anything character-building about these feelings. Quite the opposite. As an exmple, I was actually glad to hear that my granddaughter couldn't go to zoo with me this week-end as we'd planned. Rather than be upset that she was sick or that we wouldn't have a fun day out, I was just relieved that I won't have to spend money on the two of us for the outing.
How pathetic is that?
The Ides of March
Periodically, my finances drive me into a funk.
Now would be one of those periods. I have always had a cash flow problem, some months worse than others.
March has, so far, been the pits. You'd think (well, maybe not YOU, but certainly I'd think) that getting a large tax refund would make March an easy month. But, no! There were far too many places to put that money and I'm getting dinged by expenses I'd forgotten about--such as March is when my Zoo and Science Museum memberships come due. And March is when my daughter's school wants me to buy (or sell, which I refuse to do to my friends) ten $25 raffle tickets. I might feel better about the latter if I'd ever won anything, but, again, no! Then the tire-buying I had planned for June could not be put off one more day, much less two months. And Spring Break is in March, which always means more expense with the kids out of school even if we don't (and this year, for sure, we WON'T) go on a vacation. And it turns out that when one's daughter is graduating in May, all the graduation expenses are supposed to be paid in March. And. . . and . . .
Oh, yeah--And March is when I turn 59.
Arrgh!
I want this month OVER.
But more than that--I want a guarantee that April will be better.
Now would be one of those periods. I have always had a cash flow problem, some months worse than others.
March has, so far, been the pits. You'd think (well, maybe not YOU, but certainly I'd think) that getting a large tax refund would make March an easy month. But, no! There were far too many places to put that money and I'm getting dinged by expenses I'd forgotten about--such as March is when my Zoo and Science Museum memberships come due. And March is when my daughter's school wants me to buy (or sell, which I refuse to do to my friends) ten $25 raffle tickets. I might feel better about the latter if I'd ever won anything, but, again, no! Then the tire-buying I had planned for June could not be put off one more day, much less two months. And Spring Break is in March, which always means more expense with the kids out of school even if we don't (and this year, for sure, we WON'T) go on a vacation. And it turns out that when one's daughter is graduating in May, all the graduation expenses are supposed to be paid in March. And. . . and . . .
Oh, yeah--And March is when I turn 59.
Arrgh!
I want this month OVER.
But more than that--I want a guarantee that April will be better.
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!
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.
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.
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?
But---
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?
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?
But---
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!
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!
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