Final 2009 Net Worth Report

My net worth is now $563,743. Oddly, given that my 401(k) is increasing quite well, the total figure is $9979 less than that of the quarter ending September 30,2009.

The culprit is my home, which slid in value by nearly $25,000. I'm assuming that's the result of decreased sales during the winter, and the fact that residences in the Pacific Northwest held their value longer than other parts of the country, but now lag behind in the recovery.

However, my minivan purchase actually helped my net worth in that it is worth more than I paid for it. And, of course, the rest of my indebtedness has gone down slightly.

So, overall, I'm pleased. My net worth increased 8% over the course of 2009.

Mr. ToughMoneyLove Got No Love for Grace

ToughMoneyLove, which is a blog I regularly read, and which will appear on my blogroll when I get around to updating it later this week, is feeling less than loving about the way I handle money, especially when it comes to family members.

I wish I had some pithy response, but then I'd have to pretend I didn't agree with him.

He got a few things wrong:

I buy for my sister, NOT for her family (which consists of a husband and two cats). I tend to spend what is a lot of money for me, on her gifts, because she spends so much more on me. Witness the fact that I gave her presents totalling about $450, including that ridiculously expensive shipping charge, whereas she gave me a trip to Paris. And let us not forget from whence came the downpayment for my minivan.

Then he characterizes my current retirement savings as "pathetic" whereas Financial Engines tells me that my current $169,572 and annual contibutions of $17,000 give me an 80% chance of retiring with an income of $40,000 a year, more in take-home terms than I'm living on now.

But I have to agree that I'm no role model for how to live one's financial life. If any of my readers are looking to Grace for money answers, they are seriously deluded.

I don't write this blog, looking for cheerleaders. Still, it helps enormously to know that I am not alone in my struggle to get on a stronger financial footing. I do appreciate the support I get from my readers, and, yes, it helps to know that I'm not the only person to engage in financial idiocy from time to time.

Primarily, I write to help keep myself on the right path.

I fall off that path.

Often.

Such is life.

Which is why I write my blog.

And why I enjoy reading about the journeys of others on their paths.

What Grace Got for Christmas

Since this is my week for whining and goalsetting (both more closely intertwined than one might think!), I almost forgot to say what I got for Christmas.

Yep--my rich sister came through in a big, big way.

She's taking me to PARIS!

Soon! The last week of January, in fact!

As it turns out, this was to have been my 60th birthday present, but given that I spent my 60th recovering from open heart surgery, it was not to be. In the meantime, she had her own medical problems.

But both of us are now healthy, and we're looking forward to a much better 2010.

We're going to France with two other women, one a banker friend of my sister's and the other, a Cordon Bleu-trained chef who is already planning which restaurants we will visit in Paris.

I suppose it might have been more useful if my sister had gotten me appliances or paid to have the interior of my house painted, as she has in the past. But I am SO ready for a vacation. And I'm SO grateful to be going to Paris with one of my favorite people in the whole world.

Au Revoir!

OUCH!

For this last week of the decade, and the end of the year 2009, I will be assessing my finances and weighing the damage that various decisions (both those I made, and those forced upon me) have wrought. From out of that wreckage will come my goals for 2010 and the ensuing decade.

But first--the damage!

I started 2009 with a total debt, including my mortgage, of $100,879.22.

I ended the year owing 99,535.06.

Hmm--so I actually reduced my total indebtedness by an astounding $1344.16 or $112.01 per month. Funny--it hurt more than that while I was doing it!

My used Caravan was the obvious budget-killer. Without it, I would have reduced my debts by more than $10,000 over the course of 2009. Then, again, I'd be walking!

I started the year with a goal of reducing my credit card/loan debt by $6000. I would have come close to making it, except for the vehicle. (I suspect I'll be using the words "except for the vehicle" a lot this week!)

So my most obvious goal for next year will be NOT to make a major purchase during 2010. Been there. Done that. Used up the money!

Hard Times for the Hard Liquor Industry

So, what to make of this story from the LA Times? Spirits Not So Bright This Holiday Season.

I am not at all against drinking, and I admit to a fondness for creative cocktails when I dine out, not to mention cold beers on hot days.

But it's hard to feel sorry for the purveyors of expensive alcohol, when I think it's one of the first things that could be eliminated in a down economy.

Apparently other consumers agree with me.

save, save, SPEND, save, save

I don't regret my recent vehicle purchase, but after an entire year of trying to get my debt down, not much annual saving will show up in my year-end report due to that purchase.

Likewise, I've been diligent this Christmas about saving money wherever I can. As one example, a local department store gives a 10% senior discount on Tuesdays. I had two GameBox 360 Elite's to buy, and they haven't gone on sale anywhere that I could find. But thanks to being over 55, I got $30 knocked off the price of each of them.

But then, I blew some of that good work by failing to watch my dates closely. Somehow, I thought I had until Saturday to send my sister's Christmas package to New York at regular postal rates.

WRONG!

VERY, VERY WRONG!

Instead of $15+, it cost me $43 to guarantee that her gifts and her stocking would arrive before Christmas. These weren't even the expensive gifts, which I ordered and had sent directly from online sources. The whole package contained around $100 in gifts.

I get so annoyed with myself when I make mistakes like this.

It usually happens when I'm tired, when I'm stressed, or when I'm in a rush. All three conditions lead me to make financial misteps.

Hence, one of my New Year's Resolutions: Slow down, think about what I'm buying, and pay attention to dates!

Taken At the Movies

At the risk of sounding like just another cranky oldster, I do want to complain about movie prices.

This past week, I took two of my daughters upon two separate occasions to local cineplexes. At one, my 28 year old daughter and I saw "Precious." At the other, my 19 year old daughter and I watched "Blindside."

Both movies were quite good. Plus, there's a finance connection in that "Blindside" is based on a book by financial writer, Michael Lewis.

The mother-daughter bonding time was also good.

The cost of these outings? Too darn much!

The truth is, I hardly ever watch movies in a theatre when they are first released. For two years, one of my daughters was employed as a manager at a mall cineplex, so I had access to free movies. She's moved on to retail sales, and I've been happy to stay at home with Netflix, Redbox, and the local library ever since.

I took my daughters to matinees--supposedly cheaper. Not that I get how $8.25 per person is cheaper!

Then, I paid for a small popcorn and a small drink for each of us. It was 7.50 a person!

So, for two hours of afternoon entertainment, I spent $31.50.

How is this worth it?

I can go to a local theater/brewpub, sit on a couch, watch a second-run movie for $3, drink beer, eat pizza, and still spend far less than that. (The only drawback is that I can't take my 19 year old to the evening shows because there is an "over age 21" requirement.)

I hear that movies have not been greatly impacted by the recession. I have to say that surprises me. My past two outings to the movies have definitely impacted me! I can't say when I will bother to go again.

Grace Gets Wheels

Thank you for all your comments and help.

I took everything into consideration, and I did take much of your advice.

For example, I asked for and got a Carfax report. I had a mechanic check it out. I did a lot of internet searching before I went to a dealer.

I bought on a three year contract.

In the end I did get another Dodge Caravan.

I found it (and several other Caravans) on Craigslist.

Why not a smaller car?

There appears to be some liklihood that I may wind up with my daughter's two older children (who currently live with their father four hours away) as well as the two who live with me and their father now. If that happens, a sedan just won't cut it.

Plus, I admit it--while I like the idea of a small, fuel efficient car, I LOVE driving a minivan.

And you should see the one I got!

Unlike the very basic model I bought new ten years ago, this baby is loaded! It's a 2005 one-owner minivan with 62,000 miles on it, and every power option known to man. It has cruise control, a tilt wheel and a radio that tells me what song and what artist is playing. It has a casette player (so I don't have to throw away my oldies collection or all the grandkid's "Wee Sing" tapes, though some days, if I have to listen to another chorus of "This Old Man," I am dearly tempted!) and a CD player. It even has a computer to tell me how many miles I have left to go before I run out of gas.

I'm pretty excited, though one of my daughters pointed out that those options are on most vehicles these days.

How did my budget fare? The vehicle lists in Kelly Blue Book for $9700. I got my minivanfor exactly $8000 after paying the licensing fees. I tried but failed to dicker. The dealer said the price had been reduced because it had been on the lot for more than 90 days and it was now as low at they could go. Is that true? Who knows. It felt like a good deal to me. My mechanic said it was clean and looked to be in good shape. He pointed out that the water pump had been replaced (which I knew because the Carfax report noted it) and there was a new battery (which the dealership said they had put in a week ago when I asked).

I resisted all the service contracts, theft insurance (What? Some errant soccer mom will try to steal my mini-van?) and various add-ons the salesman assured me would be wonderful things to have. And I financed at 4.49% through my credit union.

The payments will be $161 a month for 36 months and my debt load has increased considerably.

Along the way, I discovered I have a Beacon Score of 770 though I am not quite sure just what a Beacon score is.

First thing on my agenda now that I have wheels? Get a Christmas tree and try out that dazzling roof rack!

It's Dead, Jim!

Well, my 1999 Dodge Caravan, with a mere 168,000 miles to its speedometer, has finally bitten the dust. First the brakes gave out, and then the bearings. I nursed it to the airport to deliver my sister to her flight back to the Big Apple, nursed it back home, and there it gave up the ghost. (D'ya think I coulda crammed in any more cliches into one paragraph?)

This does make me wish I hadn't put the $500+ into it a couple of months back, but it doesn't matter. The car is dead.

Onward to the expense of getting another vehicle.

I hate this part--not just the expense, but the actual searching for the right car. I know zilch about cars. All I really know to do is check Kelly Blue Book for prices. But how do I evaluate the condition of the engine?

And what make and model would be most appropriate?

I would really like a small, fuel-efficient vehicle. But with the two grandkids living with me, another minivan would probably be the best option.

I need another payment like I need a hole in the head (Sheesh! Enough of the cliches already!)

Obviously, if I have to have payments, a three year plan is better than a five year plan. But would it be better to go with the lowered payments of a five year loan just in case I have trouble making higher payments? I could always double up on the payments and get it paid off sooner.

I'm thinking of getting a car in the $6000 to $8000 price range. My sister is giving me $1200 for the down payment.

Arrgh! Did I say I hate this?

Winding Up November

For reasons I will blog about later, this is likely to be the last month where my indebtedness goes down.

But, surprisingly, down it did go--to the tune of $903.31 this month.

I'm happy with that.

Next month will be a different story.

Black Friday Helped Keep Me in the Black

My sister from New York comes out to see me every Thanksgiving.

First there was Thanksgiving itself. I have it down to an art. First, I have mastered the long-suffering sigh. Then, I say, wearily, "OK, OK, I'll stuff and bake the turkey. But if I do all that work, the rest of the family has to bring the rest of the food and clean up."

What a great scam given how easy roasting a turkey is! And at 23 cents a pound for a nearly 25 pound turkey, it didn't even cost all that much.

Then, another of our longstanding family traditions is to get up really early (4:00 a.m. this year) and hit the Black Friday sales. My sister does all of her family shopping for my family that day. I get the stuff I don't think will be as cheap again before Christmas.

I failed to get one of the $200 laptops at Wal-Mart. Apparently we had to be there by 2:00 a.m. when they handed out tickets.

But a local department store had every sock and bath towel in the place at 50% off, and I definitely scored some bargains.

Plus, two of my kids want WII's this year and I got them for $174 a piece.

Old Navy was a bonanza for kid's clothes and t-shirts--everything I wanted was $5 each.

I know I'm supposed to despair of the rampant consumerism that is unleashed on Black Friday, but I was too busy out there buying.

My Christmas budget, which is usually $2000 for tree, decor, and gifts for 12 kids and grandkids, plus assorted spouses/boyfriends, is $1600 this year.

I'm determined to stay within the budget, and Black Friday helped me meet that goal.

ATM Fees? Ya Gotta Be Kidding!

My oldest daughter (in her forties, so definitely old enough to know better!) and her husband overdrew their checking account. They now have an additional $66 in overdraft charges.

Why?

Because both of them were withdrawing $20 at a time from ATM's that did not service their bank.

So, maybe they use an obscure bank that doesn't have a lot of ATM's?

Nope. They bank with Bank of America.

They got lazy and just headed for the nearest ATM. Worse, they did not pay attention to the $2 "foreign ATM" fee. $2? No big deal, right? Well, not when it overdraws one's account! Not when subsequent checks bounce and incur more fees.

My poor daughter is getting no sympathy from me.

Only once in my life have I ever used a "foreign" ATM, and that was a really, really foreign one in Japan. It still made me unhappy to pay the fee. (Not to mention the additional $3 "foreign currency" fee my bank also tacked on.)

There are some minor expenses I am constitutionally unable to stomach--ATM fees being one of them. I will go out of my way to find an ATM that doesn't charge me extra or is connected to my bank.

News Flash! When You're Laid Off, STOP Spending!

Color me cynical, but how can I feel sorry for these folks profiled in the Wall Street Journal?

I am prepared to be sympathetic to anyone laid off during the past two years, but when I read that many of them didn't cut back a bit on their lifestyle because they thought the job loss was temporary, it makes me want to scream.

If the job loss is anticipated to be temporary, then why not TEMPORARILY CUT BACK ON EXPENSES????

Why would you continue to spend even on a temporary basis, knowing that you'd have to make it all up later?

And once you've been unemployed for several months, wouldn't that be a clue that getting another position might not be as easy as it looks?

What's up with turning down jobs because one wants something better? Heck, we all want something better, even folks like me who love the work we're currently doing.

It strikes me that many of these people feel ENTITLED. Entitled to make a large salary. Entitled to own fancy and expensive vehicles. Entitled to keep using credit cards when no income is on the horizon. In general, they feel entitled to enjoy the lifestyle they once had even if the economic realities should be telling them otherwise.

Sorry, but Grace just doesn't have more compassion to give to these folks who mourn the loss of their BMW's, not when I see the working classes engaged in a struggle to survive.

October Update and Happy Halloween

One thing about having 6 and 7 year old live-in grandkids--you discover that Halloween is a MAJOR holiday. The costume planning has been going on for days as have elaborate discussions of the best neighborhoods to hit up for candy. It's been a long time since I've had kids at home who went trick or treating, but I'm enjoying it. We have instituted the "Grandma gets all the Tootsie Rolls" rule, so I'm planning to receive my share of treats as well.

In the meantime, October proved to be a better month for debt reduction than I anticipated.

Altogether, I brought my debt down by $801.99.

It would take a miracle to do the same for November or December--I'm just hoping I don't further into debt during those months.

We, Bloggers

Did you ever wonder who we, bloggers, collectively are?

According to a recent Technorati report, we're highly educated youngish males who make over $75,000 a year.

Hmm? Doesn't exactly describe me.

68% of us have been blogging for about two years. (Grace's blog is officially 2.25 years old.) 72% of us are hobbyists. (Count Grace in that number.)

What do we blog about? The general answer is "anything I can think of," as these statistics, also from Technorati's survey show. About 7% of the hobbyists have personal finance blogs.

I find that book blogs, Science Fiction blogs, cooking blogs (which is a laugh given the low level of culinary skill I possess) and personal finance blogs are the ones I am most likely to read, though I also tune in daily for two local political blogs.

Speaking of politics, I found some interesting facts among all the statistics. 50% of personal bloggers allow politics to color their particular topics while only 37% of professional bloggers allow it. Frankly, I don't know how one can discuss most topics outside of one's immediate family without at least touching on politics. Certainly, it's hard not to bring up the subject when it comes to personal finance blogging.

Like 70% of the responders in the Technorati survey, I blog for personal pleasure (and in an attempt to exercise some personal financial discipline!) but I was surprised at the number of folks who are in it for the money--not that overall, they are making that much from their blogs.

At this point in time, I don't have advertising on my blog. I'm not opposed to it but I've never quite figured out exactly how to do it or whether it would be worth it.

Maybe I should ask one of those young, well-educated men out there?

Now They Want to Gore Grace's Ox!

Yep! Now the Center for Science in the Public Interest has come out with a proposal to tax soda. President Obama has said it's not a bad idea so far as he is concerned.

If such a tax ever passes, I'll definitely feel the pinch because I drink more than my fair share of Diet Pepsi (or Diet Coke or Diet Store Brand Cola if it's cheaper).

But, you know what?

I'm OK with this tax.

It might hurt financially. I might have to cut down on my soda consumption. I might gripe some about the nanny-state. (OK, I'll probably gripe a LOT!)
But I do know that cola drinks are, in no way, necessary to my diet or my budget. They are a luxury. If I'm not willing to give them up, it shouldn't kill me to pay a little more for them, particularly if it will go to providing needed public services.

For the same reasons, I don't mind taxes on cigarettes or alcoholic beverages. Of course that's easier for me to say because I don't smoke and I drink only occasionally.

As one might expect, The American Beverage Association strongly disfavors the tax proposal, never mind that several states already have one in place.

The American Beverage Association is only interested in our constitutional rights, and has no personal interest in the proposal (and, um, could I interest you in some beachfront property in Arizona?) To quote them:

"This kind of thinking is exactly why Americans
don't want government using the tax code to tell
them what to eat or drink. Furthermore, there
couldn't be a worse time to raise taxes on people.
In an economy like this, the last thing government
should be doing is raising taxes on the middle-class."

When it comes to raising revenue, I tend to oppose taxes that impact the poor and middle class more than any other.

So gas taxes bother me, even though I would like to see the auto industry become more environmentally sound, and our citizenry use public transportation to a greater extent. Unless one lives in an urban area, cars are a necessity for rich and poor alike.

Taxes on food generally gall me. Nothing strikes the poor more unfairly.

Taxes on soda? Not so much. I don't know if taxing sugary drinks (or even the diet ones, which aren't good for us, either) would truly make a dent in obesity, but it's a fast, easy, not very onerous way to raise revenue on an item none of us have any actual use for.

So do it!

What Should be Going Down Isn't

I don't pretend to understand the politics or finances of big oil.

I know only that I drive a car (so I use gas) and I have a furnace, (so I use heating oil).

But we're talking about petroleum-based products in both scenarios, right?

So why is gasoline coming down in price over the last two weeks but heating oil costs went up?

Am I being paranoid to think that the oil companies know that those of us who heat with oil must have it during the winter months?

All I really know is that at the first of October, I could get 100 gallons of oil for $229. Yet by the time I actually bought it, on October 16th, it cost me $253.

But during the same period, regular gas was decreasing in price. It went from $2.62 per gallon to $2.55.

Go figure.

More Real Life Curves

At least it's NOT health-related.

But life-changing? Oh yeah!

I've written before about my five adopted daughters. All but one came to me with significant emotional issues. Over time, some of those issues resolved. Some didn't. But resolved or not, eventually all five girls left home to make their way in the world as adults.

My most seriously-disturbed daughter has always had a sad and chaotic life. Unfortunately, she has four children who share in that life. Last week, the chaos became too great and the state stepped in.

The end result is that two children went with one father and two others went with another.

But one of those fathers was not in a residential setting conducive to rearing children.

Which explains how Grace, after finally living all by herself and loving it, now has a six year old and a seven year old, along with their father, sharing her home.

It IS an adjustment!

And it DOES affect my finances.

The heating bills are going up. The food expenses are increasing. And I'd forgotten all those niggling school costs that hit you every time you turn around--school lunches, PTA, Gift wrap and cookie sales, field trips, birthday parties, etc.

One one hand, I love having my grandchildren around, and knowing that they are safe. On the other hand, I get to kiss my free time and savings good-by.

I'm not sure how long this is going to last, but several months at least.

Early Retiree Follow-Up

Today's article on MSN Money by Liz Pulliam Weston Retired By 50. Where Are They Now? is an interesting follow-up on four couples she's profiled in September, 2007.

It's a good read and inspirational in terms of where frugality, savings and good planning will take you.

However, it's a bit of a cheat to say that these folks RETIRED.

Most just left their prior jobs, (some with a pension, some without) and moved on to different careers. That's hardly my definition of retirement.

Some downshifted to less stressful lives, moved onto a houseboat, cool things like that. But again, that's NOT retirement. It may just be changing to a better lifestyle.

As it turns out, only one couple truly is retired. They are living off of investments and doing well even during the recession, which is reassuring.

I don't understand Liz' definition of retirement. If I leave the job I'm currently in to, say, open a bookstore (one of those impossible dreams that always sounds better as a fantasy than it plays out in real life), I haven't retired. I've just changed fields. If I move to a cabin in the woods to write books, I haven't retired if I intend to make my living doing so.

At least to me, retirement means not working or at least not working fulltime and not working at anything particularly remunerative. It means volunteering. It means traveling. It may even mean writing books, but having tried that in the past (the publishing world was unmoved!), I would never expect to live on those royalties.

In Grace's world, retired means RETIRED!

Mom, Dad & Money

I'm a little behind on my blog reading, but when I dropped by Sunflower's blog, The Debt Chronicles, her comments about her father really got me to thinking.

I grew up in a working class family that seldom discussed finances. As children, my sister and I would ask for things or ask for money, and the answer was either yes or no, and that was it. It was only as an adult that I realized our family was always teetering on the edge of poverty. Still, because that was the same for most of the families in our small town, I never felt particuarly poor.

However, I was determined that money would not be a taboo subject with my kids. I wanted them to know the general state of my finances (which were tight while I was rearing them) so I did talk money with the children. Now I wonder if I did so too frankly.

Sunflower says that her father's comments ruined her family vacations.

I well remember one Disneyland vacation with three of my daughters where I ran out of money and we ate peanut butter sandwiches the entire two days it took us to drive home. I know that I spent those two days obsessing out loud about the money we'd spent and whether I had enough to buy gas to get us back.

Now, I'm wishing I hadn't done that. Too much information? At the expense of their pleasure in the vacation?

Not that I think my parents were necessarily correct either--it might have done me good to know the sacrifices they made to give my sister and I everything we needed and much of what we wanted.

But I don't think that reminding children of the pain of every single expenditure is the way to go. Once the decision is made to spend the money, then that should be it. Whatever is done with it should be enjoyed to the fullest--otherwise what is the point? If that enjoyment comes at the price of foregoing some other pleasure down the road, so be it. Say "no" to the new expenditure. Say why that is so. And move on.

I think I'll ask my adult kids how they now feel about the way I talked about money when they were living at home.

I wonder if I'll appreciate the answers.

September 2009 Quarterly Update

On a quarterly basis, things are definitely looking up--13% up as movement on my home values and my 401(K) funds gives my net worth an increase of $66,542.21. This means I now have a total net worth of $573,722.21.

Not bad. Not up to the June, 2008 high of almost $600,000, but still fine by me.

On the monthly side of things, it's much less exciting. In fact, after all is said and done, I reduced my total indebtedness this month by a decidedly anemic $66.37.

However, I do have my excuses! September is when I have to pay in full for my transit pass, which I then recover from my flex funds over the next six pay periods. I also pay in full for my secretary, who pays me back out of her flex funds. We save several hundred dollars a year by doing it this way, but it does temporarily impact my debt reduction.

I'm going to track my spending down to the penny in October--I want to see where I'm dribbling away my funds. [Yeah, I could make some good guesses, but nothing like a few facts to make me face my own spending habits.]

More From the Social Security Administration

I'm not one of the doomsayers who believes in the imminent or eventual collapse of Social Security. Nor is this story from Wallet Pop intended to panic anyone.

There IS money to cover the deficit, and no eligible retiree will go unserved or unpaid. Not for the first time, Social Security's income will be exceeded by its outgo--a rerun from the '80's. As happened then, the current shortage will be covered within a year or two.

But in the meantime, the Social Security Administration is doublely hammered--job losses equal less money from FICA while increased early retirements mean more demand for their funds.

What saddens me the most are the human stories behind the surge of early retirements.

It's one thing to retire by choice.

Another to have to retire due to disability or the need to care for a loved one.

By far the worst is to be capable mentally and physically of working, to WANT to work, and yet to have nothing available.

I suppose that folks 62 and over are lucky to have the choice to retire, given the large numbers of youthful and middle-aged jobseekers out there. But I doubt it feels very lucky to those taking their retirement years before they needed to, wanted to or ever intended to do so.

Scammed & Crammed

I got my telephone bill online yesterday and nearly fell off my chair.

My landline costs $27 a month give or take the occasional call to directory assistance. My latest bill was for $67! Excuuuuse me???

When I checked the billing, there were my usual monthly charges plus two $19.99 charges by Transaction Clearing ETS for Access Voice, some sort of answering service. Since I already have an answering machine, I would hardly be signing up for voicemail.

And in fact, I hadn't.

When I called my telephone carrier, they agreed to remove the charges, though they said they had had no choice but to initially add them to my bill. (Clark Howard says this is entirely incorrect.)

I also called Transaction Clearing ETS where a cheerful operator agreed to remove the charges. She asked so few questions, and was so immediately willing to help that I asked if this happened often. "Oh Yes," she replied. "We're told to take off the charges for Access Voice whenever anyone complains."

The Rip-Off Report says I'm hardly the first consumer to be targeted by Access Voice.

OK, my problem is solved. But I'm the kind of person who checks every bill. What if I wasn't? What if I was used to much higher bills, such that an extra $40 wouldn't surprise me? What if I was a business person and just automatically paid every bill as it came in?

It must be easy money for these crooks.

Today's Carnival

Emily at Taking Charge handled this week's Carnival of Personal Finance. Grace is there, with the post about Bernie Madoff. Lots of other good reading as well.

Naming Names

Dave Ramsey famously tells us to "give every dollar a name" when we budget.

I tried that this month.

My problem is that other names kept intruding into my budget.

Which makes me want to use a lot of names that one shouldn't in a family-oriented blog!

I went the extra mile to delineate every expense I could think of--the "every six weeks" haircut, a grandchild's birthday, stamps, etc.

I even hauled out my envelopes to carefully keep all the expenses separate.

Good plan, except there was no envelope when my 16 year old grandson called to say he failed his driver's license exam and needed $20 to take it again. I failed to name the dollars needed to buy a baby shower gift for a colleague at work--heck, I didn't even know she was pregnant. And why is it that water bills are handed out quarterly, not monthly, so that I'm always surprised when the bill comes? Neither a name nor an envelope for that, either.

So, of course, I purloined the named dollars from the food budget and the gas budget, all of which explains why I'm pretty much out of names but the month still has another 9 days till payday.

Expect some major whining to ensue!

Childfree, Childless, or Children Everywhere

I graduated high school in 1967.

I feel like I'm part of the first generation that didn't automatically assume that becoming a parent was the be-all, end-all purpose of our lives. Whether it was the feminist movement that suggested there was more out there for women than being mothers, the advent of free love that brought with it STDs which impacted our ability to give birth, or hedonistic boomer lifestyles that made children a burden as much as a blessing, it was suddenly OK not to want or have children. In fact, in some circles, it was environmentally correct to not add to the population bomb.

I'm sixty. My sister is 59. Neither of us has given birth. However, I did become a parent to five wonderful daughters through adoption.

At some point I discovered that when I initially said I didn't want children, what I really meant was that I didn't want babies and I had no particular desire to give birth. As far as passing my genes along, there are already enough chubby white women in the pool. But over time, I realized I really did want to parent. So I found a way.

Still, let there be no equivocation about the financial consequences of my decision. Even with Medicaid and monthly Adoption Assistance (all five of my adoptions were through the state foster care system), KIDS ARE EXPENSIVE! And it doesn't end with childhood. All five of my children are now adults. Adults who continue to cost their mother money!

There's an interesting discussion going on over at Voluntary Simplicity on this subject. The comments include a great deal of ambivalence as well as accusations of selfishness (though, interestingly, both lifestyles with and without children, are described as selfish).

Having children has greatly impacted my finances. Yet I don't regret my decision to parent.

Then, again, neither does my sister regret her decision to remain childfree.

A Fool By Any Other Name. . .

I had lunch on Saturday with a couple, two longtime friends from the east coast. We hadn't gotten together in over five years but at one point in our lives, we had been very close. It's the kind of friendship where even after five years, no subject is taboo. So after catching up, we started talking finances. She works in fashion; he's a research physician. Both of them were caught up in the Bernie Madoff scandal, and both of them were furious at the havoc wrecked upon their finances by Madoff.

The last time we got together, five years ago, we had laughed hysterically at the small town city council in my state who had actually used city funds to participate in what turned out to be a Nigerian scam. We marveled at idiots who were foolish enough to put their faith in an e-mail that promised them millions.

But my friends weren't laughing about Madoff. They "lost" over $600,000 in Bernie's New York version of Nigeria. I put quotations around the words "lost" because they didn't actually invest that much, but they understood that the investments they HAD made were increasing rapidly. Sadly, when the dust cleared, they were out $600,000 they thought they could count on, plus the hit that their other funds took during the current recession.

They just could not believe that people of their caliber could be scammed. The physician acknowledged that the most successful large-scale cons were usually aimed at doctors, actors, and Mormons. But though he is a physician, he's in research. Plus, he's not a member of the Latter Day Saints; he's Jewish. Plus, he's really, really smart, as is his wife.

Somehow, he expected that all of those traits would protect him from the Madoffs of this world.

I have to wonder if those attributes actually made him more vulnerable--that he felt so protected by his intelligence that he didn't question where his wonderful returns were coming from. Why was everyone else hurting as the economy slid into recession but Bernie kept their money coming?

My friends are hardly out on the street though neither one will be retiring quite as soon as they had hoped. They got rid of their Manhattan co-op (bringing a check for $22,000 to the table to do so) and moved to Park Slope. For folks familiar with NYC real estate, Park Slope is not exactly the poor side of town.

But the greatest damage was done to their sense of their innate ability to manage their money. They would never have fallen prey to the e-mail plea of a Nigerian general's widow but when the scammer comes clothed in your own religion, speaks your language and projects an air of financial sophistication?

Then, almost everyone is capable of playing the fool.

The Law of Unintended Consequences hits Young Workers

Who'a thunk that MY saving money in my 401(k) would work to the detriment of young workers?

As Catherine Rampell and Matthew Saltmarsh write in Thursday's New York Times, the losses that prospective retirees see in their 401(k)s are keeping them on the job longer, which means fewer positions opening to new employees.

This is less true in other recession-hit countries (those with--OH NO!--SOCIALIST agendas!) where government pensions ARE intended to cover all costs, unlike the United States, where Social Security is intended merely to supplement employer pensions (which are, of course, going the way of the Dodo!) and employee savings. According to the article, last year in the United States, almost a third of people ages 65 to 69 were still in the labor force; in France, just 4 percent of people this age were still working or looking for work.

This is the point where some folks sneer "Then, move to France if you want to!" Or they correctly point out the higher taxes that French citizens pay. I wonder why we can't take some lessons from countries who are handling issues like health care and retirement more effectively than we do in the US. I wonder why, instead, we so often resort to jingoistic responses that get nothing changed, and nothing solved.

As it happens, I will NOT have an employer-paid pension when I retire. As it also happens, I really like my current job. So Grace is definitely one of the old geezers standing in the way of recent college grads. I can't afford to retire "on time," (for me, age 65 and four months) But I probably wouldn't, anyway.

Grandma Goes In Debt

More (depressing!) food for thought in USA Today's story "Credit Card Debt Rises Faster for Those 65 and older."

The great bugaboos of old age--medical bills and adult children--appear to be the culprits.

The rate of increase in debt among seniors is breathtaking. The study quoted in the article shows that low- and middle-income consumers 65 and older carried $10,235 in average card debt last year, up a whopping 26% from 2005. Compare this to credit card debt for all borrowers surveyed which rose 3% during that time, to $9,827.

Much of the increase is attributed to the cost of living, combined with reductions in available retirement funds.

According to an associate director of Demos, the organization that conducted the study, "The frivolous spending idea, that's not what's driving families into crazy debt. The expense that most affects families is the cost of living."

I dunno about you, but these statistics worry me even more than the increasing debt load being accrued by young adults in college--at least our younger citizens have another forty plus years to earn money and tame the debt.

Not helping matters was the survey's finding that older folks are not only borrowing more, but they are paying higher interest rates for the privilege.

It's stories like this that make me more determined than ever to get rid of my debts BEFORE I head into retirement.

Just a Typo Away From Retirement

I was trying to figure out what Sharon from "Musings of a Midlife Mom" was talking about when she commented on my last post.

What? Me retire at age 59? How does that work when I'm already 60 years old?

OK, so I made a typo. After sixty years on this planet, I'm entitled to a typo or two. Or five.

69 years old, NOT 59! 69!

That's the current plan, God and my health willing. Of course, I'd be happy to retire sooner.

Maybe I could win the lottery?

God, are you paying attention?

I wonder if I have to buy a ticket first?

August Update

August turned out much better than I anticipated, helped along by the fact that neither my TV purchase nor my van repairs (the second set) have yet registered. I reduced my total indebtedness by $737.06. Not exactly an amazing amount, but I'm just grateful it is headed in the right direction.

In the meantime, it's getting exciting watching my 401(k) recover. I now have $8000 more in my retirement savings than I had last month, and only $1025 of that comes from new contributions. According to Financial Engines (my favorite website when it comes to figuring out what I need for retirement and how I currently stand in my effort to get there), I have a 72% chance of retiring at age 59 with an income of at least $43,000. (My retirement goal is to have at least $40,000 per year, but preferably $50,000.)

So August turned out OK, if not spectacular.

On the other hand, with September comes school clothes and tuition for the grandkids.

I'm going to follow AA's example, and just take it one day and one month at a time.

Tweaking My Bloglist

I went through my bloglist and checked that all the links work. I also removed anyone who hadn't posted to their blog in the last six months. And, since I'm always finding new personal finance blogs to read, I added a few new ones to my mix.

If you think I missed a good blog, or you want to know where YOUR blog is, leave a comment.

The Van Lives!

What do you know!

Apparently my van's transmission is nothing to write home about, but neither does it need to be rebuilt. A $220 repair, and I'll be good to go tomorrow.

You have no idea how relieved I am, even though I have been reading the auto ads and fantasizing about a new car. I haven't had a car payment in five years, and I'm really not in a financial place to have one now.

Murphy, of course, watched my adventures in auto mechanics, and finding only disappointment there, decided to move on to my ten-year-old TV set.

Poof! One minute I'm watching it and the next, the picture is gone.

Some would point out that this might be a good time to learn to live without a TV, but that ain't gonna happen. (Um, yeah, Ole Grace is a video addict.)

But, hey! I'd just dodged an $6000 bullet, so what's $206 for a 22 inch flat screen TV, right?

Did I read Consumer Reports? Did I check for the most quality at best price? Or did I run out in a panic and buy the first reasonably priced TV set I saw? (No prizes for figuring out the answer to that one!)

This is NOT going to be one of my better months for debt reduction.

But dang! I still have my not-so-trusty Dodge Caravan, and a brand new TV. Color Grace happy!

Bi-Polar Finances

With apologies to those truly suffering from Bi-Polar Disorder (a mental illness I wouldn't wish on anyone), I sometimes wonder if I'm financially bi-polar. Keep in mind that in the rest of my life, I am a pretty steady, optimistic person. But when it comes to money, particularly MY MONEY, my emotions go all over the map--not always rationally.

Take today. For several weeks, I've been waiting for a $75 check to come through my account. I dutifully subtract it from my balance each time I view my account online. Then the bank notifies me that they made an error, and that the check was actually cashed back in June, and that it has been subtracted from the account already.

Which means I have $75 more than I thought.

Which means I'm ecstatic.

Over $75?

I have to get out more!

But just a week ago, I was depressed because I may well have to get a new (to me) car. The vehicle issue has not resolved, so I should still be depressed, right? But, no--I've got $75 that is new money to me!

It bothers me that I can be so thoughtful, so rational, in other aspects of my life, but not with my finances. I flow emotionally in whatever direction the financial wind is blowing.

Yesterday was down. Today is up. God only knows how I'll feel tomorrow.

More than I Financially Wanted to Know

Only once in my life have I cared enough about a photograph to check out who took the picture.

It was a photograph in Rolling Stone many years ago. It was, of course, by Annie Leibovitz.

Since that time, I've attended exhibitions of her photos in New York City, Paris and Seattle. And I always look for her work in Vanity Fair.

I marvel at how she looks at people. And how she gets them to look back at us.

But great artists are not always great at managing their money. Instead, greatness brings its own issues, including in Annie's case, addiction, perfectionism, and no one to put the brakes on when necessary.

New York Magazine takes a long look at Annie Leibovitz's finances and gives us a scary portrait of a sixty year old artist just past her zenith as well as an older parent of an eight year old daughter and four year old twins, who is now near bankruptcy.

It saddens me to see the real life warts on people whose art I admire. Not that I don't think Leibovitz brought her financial ills upon herself--clearly she did. But it gives me no joy to see her brought down financially.

Snarky Television

I have a new favorite TV show--HGTV's "Real Estate Intervention."

It features totally deluded homeowners who have yet to face the fact that their homes are not worth what they want for them in what is decidely a buyer's market.

Mike Aubrey is the host. While he is a hulk-like presence (complete with bald head and Hitlerish moustache), he is gentle with these idiots as he takes them around to comparable homes that have sold for or are listed at many thousands less than the featured homeowners expect to get for their own houses.

In one case, he takes his charges to a home that is an exact duplicate of their house, except that it has a fireplace, which theirs does not. He points out the much lower selling price, at which point, they tell him, with straight faces, "Well, we think some buyers won't like the fireplace and will pay more not to have one."

Say what? Are they kidding? Personally, I never use my fireplace and wouldn't care if my home didn't have one, but even so, I'm aware that having the fireplace increases the value.

Some of the homeowners are just in sad situations fostered by a foundering economy. One older woman is selling her Georgetown home (which actually is NOT in Georgetown--something she keeps forgetting) because she lost her job and hasn't been able to find a new one. Unlike most of the featured sellers, she does wind up making about $100,000 on her eventual sale--I, for one, was happy that she did.

Which brings up another point. Several of the homeowners seemed to have been using their houses as their personal piggy bank. One family purchased their home for $120,000 but now owed over $200,000.

I purchased my home in 1993 for $95,300--a 1929 barn of a house in an iffy but thriving neighborhood. In 1999, I refinanced the home at a lower interest rate, reduced the term of the mortgage to 15 years, and pulled out $20,000 for some much-needed deferred maintainance. In 2006, I took out a second mortgage through my credit union in the amount of $30,000 to put on a new roof and add a basement waterproofing system (also much-needed in that each winter my basement doubled as a murky swimming pool!). Today, I owe a little over $45,000 on my mortgage and $28,000 on the second. The first mortgage will be fully paid off in 4.5 years. The second in 10 years, though my plan is to throw the first mortgage payments at it once I have those funds available, so it should be paid in 6 years.

The most important steps are the ones I didn't take--I did not get upside down with regard to my home. It is currently worth at least $300,000. So if push ever comes to shove, and I had to sell, I would make a considerable amount of money from the sale.

Oddly enough, since Zillow once valued my home at over $400,000 a couple of years ago, I often still feel as though I've LOST money on my house--one's personal feelings and reality are not always the same!

Reality is what most of the homeowners on "Real Estate Intervention" don't want to face. Sadly, by the end of each show, most of them are still hanging onto their dreams and refusing to price their homes in line with the market. In their minds, their homes are worth more, never mind that the comparable homes sold for less, have more amenities, more space, and better lay-outs. By the end of each show, most have failed to sell their homes, or have taken them off the market entirely.

Which, of course, allows viewers like Grace to write snarky posts like this one!

Singing the No Vehicle Blues

Remember when I paid (OK, charged!) $500+ to put in a new water pump and timing belt in my 1999 Dodge Caravan a couple of weeks ago?

Well, shortly thereafter, the van started to make weird squealing noises. I took it back to Firestone to see if they had done something wrong but they told me it sounded like a transmission problem and suggested I take it to a shop that specialized in transmissions.

So, after a week and a half without a vehicle (I was afraid to drive it), I took it into a neighborhood transmission shop yesterday. Apparently, it will either be something easy to fix or it will need a rebuilt transmission, which will run $1400. No way am I going to have the latter--my whole vehicle is only worth $1600 according to Kelly Blue Book. I'm awaiting a phone call from the shop as I type.

Dang!

Not only will I have wasted the $500 (which it looks like I will be able to pay off before incurring any interest), but I will have to get another vehicle about a year earlier than I intended to.

More debt.

More monthly payments.

And a budget that can stand neither.

Grace is NOT a happy camper!

And here's the kicker! I checked out the eligibility guidelines for the "Cash for Clunkers" program. Apparently a 1999 Dodge Caravan got 19 mpg in city and highway driving when new, which puts it one mile OVER the guidelines. So no help there when it comes to purchasing a new (to me) vehicle.

Honestly, I feel like crying. I know this will all work itself out, but the thought of having to shop for another car and to incur even more debt puts me in a very whiney mood.

I do know that this time around I want a small, high-mileage car, preferably under $12,000. Beyond that? Who knows?

And I thought I Was Starting Late. . .

Just when I was thinking that I was one of the the worst of the late-bloomers (that's what I get for reading all those wonderful blogs out there by twenty-somethings who are already saving up for retirement--not to mention for weddings, homes, and kids), along comes Sarah.

Sarah was profiled on Monday's Dallas News. (Thanks to Boston Gal for pointing me toward Sarah's story.)

Sarah is 57 and has NO retirement savings. Never mind that her employer would match up to 6% of her salary (meaning, she has left substantial dollars on the table every year) or that in addition to her base salary of $58,000, she apparently makes good money from a family oil well lease.

The article is a tad cagey about just what her annual income is, at one time saying that the amount of oil-well income varies, and at another, quoting the financial advisor as saying that her total income is "very respectable." I can't tell if she's making about the same $75,000 a year I make, or not.

One comment that I don't understand is her financial planner's concern that she may wind up in bankruptcy if the oil money goes away--overall, her debt doesn't seem to me to be that substantial. She owes around $26,000. Maybe it's because I owe about $21,000 so her debt doesn't seem so far off from mine. I've never considered bankruptcy, and wouldn't unless I owed far more than I do. (I do realize that Sarah has fewer concerns about assets, which I would have to consider--she doesn't have much equity in her home.)

The article doesn't mention prior marriages, so I'm assuming that Sarah, like myself, has always been single.

What IS she thinking????

Is she planning to inherit from her parents? I know of several people whose retirements are based largely on what they expect to get from their parents' estates.

Sarah says she is an optimist and has always believed it will all work out. I understand this; I think of myself as optimistic as well.

But late as I am to the world of retirement saving or planning, at least I got there before age 58!

Festival of Frugality

Every Tuesday brings a new Festival of Frugality. This week, it is hosted by "Modern Tightwad" and Grace's post on her (accidentally) frugal week-end is among the offerings.

And, yes, I really did get through the entire week-end for a measly three bucks!

Freebie Weekend

It started accidentally.

First, I stopped at the library after work and picked up the two movies I'd reserved ("Charlie's War" and "Angels and Insects") for free weekend viewing.

Then Friday evening, a neighbor who was headed out to a local park for a free blues concert, invited me to share a picnic dinner with her family. I'd won a free six-pack of "Mike's Hard Lemonade" in a grocery store drawing earlier in the week, so I brought that along as my contribution, along with a bag of potato chips that had remained miraculously unopened. The weather was warm, the music cool, and the company, great.

On Saturday, a friend and I used our Bank of America debit cards for free entry to a local historical mansion and our local art museum. This is a program available on the first Saturday and Sunday of each month, wherein any proof of a Bank of America account will get one into various city attractions. It's too bad I live nowhere near New York City, because the Bronz Zoo is on the list.

Lunch was another picnic, this time on the grounds of the mansion, with a terrific view of my city, including the mountains in the background. Salami sandwiches and leftover hummus never tasted so good. Then we went to an IMAX movie with the two free tickets I'd gotten a couple of months ago when the projector ate the film I'd gone to see. (I'd only purchased one ticket, but the theatre gave out two tickets to each of us as compensation for the inconvenience.)

Today I went to an office brunch to honor our summer interns.

So here it is, not quite noon on Sunday, and I've spent exactly $3.00 for the entire week-end. (If you must know where the $3 went, consider that Grace NEVER watches a movie without popcorn!)

Now that I see what a cheap weekend it has been, I think I will deliberately not spend anything for the rest of the day just so I can say I had a $3 weekend! And I didn't skimp on a thing!

July End of Month Review

Things are looking pretty good, especially since summer is often when my budget gets shot to pieces.

I lowered my overall debt by $1075.14--it would have been $50 more if I hadn't incurred a $50 balance transfer fee when I moved one of my credit cards to a "zero interest for nine months" card. Other than that, I did not increase any other balances.

My 401(k) funds are headed up, and now stand at $142,108--still not at the $174,000+ they were in October, 2007, but increasing nicely and at least they are NOT at the $89,654 they fell to in March, 2009.

I have until August 18th to come up with the car repair monies for Firestone--it looks more or less feasible at this point, so I've got my fingers crossed.

About That Emergency Fund

When I whined about my $500+ car repair a few posts back, Living Almost Large left a comment, asking: "Don't you have any taxable investment savings? Even in stocks? Is it all in retirement account?"

Good question.

Not-so-good answer.

No, I don't have any taxable investment savings. I don't have any savings at all, except for the ever-changing but never-quite-$1000 emergency fund that Dave Ramsey says we all should have.

While people like Jennifer at "Finding Financial Peace" are well on their way to accumulating three to six months of expenses, others of us are still struggling with Murphy-visitations every time we get near to our first $1000.

JD at "Get Rich Slowly" explores with his readers the issue of what happens after you use your emergency savings. Check out the comments to his post because that's where all the action is. Some readers have three to six months stored away; others are more like Grace.

And just why does Grace have no savings?

16% of my pre-tax income goes into my retirement accounts. When one comes late to the retirement party, cash and time are of the essence. But then there are debts that need to be paid off, and daily life to be lived. When all of those are factored in, not much is left for non-retirement savings.

Right now, I am determined to pay off the car repairs prior to incurring any interest charges (I put the expense onto my dormant Firestone account). I may succeed in doing that during August, but it will mean that my emergency savings must wait another few months before it gets back up to $1000. And that is only if Murphy stays the heck away from my budget!

Getting A Grip on Retirement Planning

You KNOW I'm gonna sympathize with Rose Bloom who was profiled recently by the Los Angeles Times.

Rose is 53 years old, a single parent to two adult children, who is just now realizing that she has to save more than the $12,000+ she currently has in retirement accounts. She plans to work forever, but she has diabetes and heart issues. (Now do you see why Grace can relate?)

The good news is that she has a decent salary (almost $95,000 a year). Even better, she will have a pension plus Social Security when she retires. But the bad news is that she lives in California. That means her job may be in jeopardy, she can't afford a home, and the cost of living is high.

Rose is just three years older than I was when I finally buckled down to saving for retirement. I'm a bit blown away by the financial planner's numbers--somehow I just don't see her saving $500,000 over the next ten to fifteen years nor am I sure that her savings will earn a 7.5% average.

BUT, that pension is going to make up for a whole lot of savings mistakes.

Earlier Than You Think

Emily Brandon, at US News & World Report's Planning To Retire has a scary post about 'earlier than planned' retirements.

My goal has always been to retire on my 69th birthday. The view from here makes my plan look feasible, but, according to Brandon, almost half of workers wind up retiring earlier than they planned to. All but 10% do so involuntarily.

Job loss, age discrimination, family duties (such as caring for a spouse or one's parents) or a personal health crisis make a mockery of well-laid plans. Only 3% of potential retirees INTEND to retire in their fifties, yet 18% do so. 21% want to work into their seventies, but only 5% will still be employed when they reach their seventh decade.

I, of course, fall into the group of seniors who haven't saved enough to have the retirement they want (modest though that might be) if they retire earlier (or even "on time" at age 65), so continued employment is a must.

It gives me pause to contemplate all the things that can go wrong between now and age 69.

Grace v. B of A--This Time, Grace Wins One

As I've pointed out in earlier posts, I've had a Bank of America checking account since the late sixties when I headed off to college. (Actually, I had an account with a different bank--several different banks, come to think of it--but ultimately, as one bank absorbed another, I found myself with Bank of America.)

My current account is called Senior Advantage and comes with free checks, no monthly service costs and no minimum balances.

On Saturday, I get a letter from Bank of America assuring me that my account will be better than ever, and oh, by the way, they were now going to assess a $15 a month charge unless I kept at least $1000 as a minimum balance.

Excuuuuse me?

If I had an extra $1000 laying around, it would be in my emergency fund, NOT my checking account! But it's a moot point since I do NOT have $1000 to put in.

I called B of A, enraged at their action, and even more enraged that they would be directing these charges at their senior citizen clients. But before I could even get out an angry sputter, the extremely nice lady at customer service agreed with me that it was outrageous and said she could solve the problem.

Did I have paychecks? Umm--Yes!

Could I do a direct deposit? Umm--I already DO have my payroll checks deposited directly into my checking account.

"Well, then," said the extremely nice lady, "We'll just sign you up for an Access Account,--same bank account number, same checks, same everything--and you'll be on your way."

Which I was, within five minutes of calling customer service.

Now, why the bank couldn't have just done this on their own, since I've had my checks deposited directly for the past nineteen years, I don't know. Why they couldn't have put these options in their letter, I don't know. Why they want or need to start charging for the senior accounts, I don't know.

Then again, why I'm still with Bank of America? I don't know.

Maybe because of the extremely nice lady at customer service.

Grace vs. Car (And the Car Wins!)

The problem with living close to the financial edge is that it doesn't take much to push one right over the financial cliff!

OK, so it's not like I have a pending foreclosure or I've lost my job or anything truly horrible.

It's my 1999 Dodge Caravan with a mere 162,000 + miles under its belt. Or, to be more specific, it's the minivan's water pump which leaks and must be replaced. Don't ask me--all I know is that the temperature gauge whammed up to HOT, stayed there, and caused the alarm to keep buzzing. Not daring to look under the hood, I immediately took it to the mechanics.

The mechanics assure me that it is nothing that $512 can't fix.

I do have to have a vehicle. And I can't purchase anything else in adequate condition for the $512 it will take to make the repairs.

BUT--according to Kelly Blue Book, the whole dang car is only worth $1650! Can I just have a moment to rant about how much I DO NOT want to pay $512 for a car that is already worth so little?

Then there's the issue of my currently non-existant emergency fund. IF I had that $1000 that both Dave Ramsey and I believe I should have, no problem. Unfortunately, said emergency has been depleted by EMERGENCIES over the past couple of months and has exactly $137 in it!

SO, onto my Firestone Card goes the charge--I'll apply the emergency fund to the balance and hope to pay off the card in full by the payment due date.

But I will NOT be happy about it!

Carnival of Personal Finance Link

My last post on the credit card shuffle is included in The 213th Carnival of Persona Finance hosted by Man vs. Debt .

Lots of interesting posts, not to mention some nice shots of New Zealand.

Shuffling the Cards

I have a brand new credit card.

It's part of my "let's see if I can get a low-cost, no-interest balance transfer" debt reduction plan.

I get a lot of credit card applications in the mail. I scrutinize each one to see if it will meet my needs. Most don't.

I don't know if it is true for everyone, but I no longer get applications with no balance transfer fees. Most charge 3 or 4% with no ceiling on the transfer charge. It would cost me between $165 and $220 to transfer the balance on my highest card. Hmm--I don't think so!

The card I finally accepted charges 3% but has a $50 maximum. That's the best deal I've seen over the past six months.

I also notice that the zero percent offers have become markedly more limited. Some don't apply to balance transfers at all. Since I have no desire to put additional charges on any credit card, these offers don't attract me.

Others offer zero percent for six months. That's something of a bummer because I fondly recall getting prior offers of 18 months at no interest. The card I accepted is for 9 months.

The usual interest rate after the initial offer period runs out is between 8 and 12%. The one I accepted will go to 11.99% after 9 months, just a tad under what I'm currently paying.

Still, there is at least a $450 benefit to me when I transfer my highest credit card balance.

My highest balance is also the card with the highest interest rate: 12.24% The balance is $5400. Since I'm doing the Dave Ramsey snowball, I only make minimum payments (roughly $113 per month) on this card. Finance charges, which reduce slightly with each payment, are currently $57.34 per month. Therefore, even when I count the addition of the $50 balance transfer fee, I will be applying an additional $463 during the nine zero-interst months to debt reduction.

I assume there will be some effect on my credit score, though this new card has a $10,000 limit, so my $5400 transfer still leaves a lot of room--I understand credit scoring companies like that.

What else did I do with my brand new credit card? Well, I activated it, signed it, and promptly froze it my ice-cube tray along with my other credit cards!

Gone the Way of the Dodo?

On Friday, having gotten the day off for the July 4th weekend, I hauled four boxes of books to my local bookstore, intent upon creating a sizeable snowflake for my credit card debt.

I did generate $54, so that was good.

But Goodwill wound up with a full box of donations because the bookstore wasn't interested in a lot of the books I thought would sell well. For the record, historical non-fiction and craft books were immediately taken. The Patricia Cornwall and John Sandford hardcover mysteries? Not so much.

When I asked why, I was told that these are considered 'leisure reading.'
Apparently, there's not a strong market for 'leisure reading' in hardcover.

Really? People don't want their fun reading in anything but paperback? I get that paperbacks lighter and easier to carry. And cheaper to buy in the first place.

But personally, only a hardcover feels like a real book to me.

I say this in spite of the fact that I hang out with science fiction writers who often find their work appearing in paperback originals. I say this in spite of the fact that I now read some books on my Kindle, so they "exist" only in electronic form.

Funny that I brought up science fiction. I read it, I write it, and I seldom see books or mention of books in it--in future worlds, books are on computers or directly inserted into the brain or injected by weird-looking devices. But whatever their form, they aren't the good old hardcover books that I know and love.

I dunno.

Paperbacks may be cheap. And electronic books cheaper still.

But I like hardcovers. If, one day, they disappear in favor of books in alternate forms, I'm gonna miss 'em.

End of Month Recap With Only a Minimum of Lying

On second thought, forget lying--I consider it more like financial misdirection.

First, my quarterly net worth update: I'm up $24,465 to a total net worth of $507,180. Really good, though it begs the point that the first quarter of 2009 was an all-time low economically. And that every other quarter, back to 12/31/2006 was higher. Also, given that the stock market is down today, but was up yesterday (the last full day that I could use for my calculations), chances are, my retirement funds are lower than the numbers I used.

See? Not exactly a lie, but not the full truth, either.

Second, my debts are down by $1122.26. These numbers are accurate. Sort of. I chart my credit cards by the last statement. What I ignore are any purchases made since the statements came out. So, either I won't reduce my indebtedness by as much next month or I'll have to make larger payments to the balances. My plan is to do the latter, as I have in the past, when I don't really want to admit I haven't been as frugal as I sometimes make it sound. My true goal (which I achieved last month and the month before) is to make NO new purchases on any credit card. I tell you when I do that. It's just that I don't always 'fess up when I don't!

Immoral? Tacky? Or A-OK?

I'm curious about this, but just so you know--I already did it. My question now is whether I should feel guilty about it.

My (did I mention she is rich?) baby sister gave me a Kindle for my 60th birthday. Along with it, she also gave me a $500 giftcard from Amazon.

Obviously, the intent was for me to use the giftcard to buy books for the Kindle. Which I have, though I tend mostly to download the free books that are offered periodically. I never would have gotten a Kindle for myself but now that I have it, I find it handy for commuter-reading on the bus, and if I can ever afford to travel again, I think it will be great then, too.

But have you noticed that people tend to buy gifts for others that they'd like for themselves? Well, it became apparent to me that my sister would like a Kindle of her own. Given that she travels all the time, she would undoubtedly use it far more than I do.

First, I checked with her husband who was giving her an entirely different gift. Then I sent her a Kindle for her birthday present. It cost $349, which I did not have. So, I used that giftcard.

Hence, the question. Was it tacky to use what was essentially her money to buy her a birthday gift I knew she would like? Or was it the act of a loving sibling who really wanted her sister to have a birthday gift she'd especially enjoy? (Hmmm--Grace votes for the latter!)

I still have money left on the giftcard with which to buy books for my own Kindle. Does that make a difference?

Is there, in fact, any moral issue here at all?

Rx for Prescriptions

I remember spending nights with my grandparents (who lived next door--it was a SMALL town) and being freaked out at the number of medications lined up on their bathroom shelf.

That was a long time ago, and I'm now the grandparent, and yes, there is a shelf full of prescription medicines in my bathroom.

Not that I'm complaining.

The fact that I have taken blood pressure and cholestrol medications for the past ten years means that I was in good shape for my heart surgery in March, and contributed to my fast recovery. The medications I take regularly for diabetes are necessary for continued longevity.

But it's a darn good thing I have insurance and only have to pay a $10 co-pay for my prescriptions, because I take five different medications each day.

Lately, I've been searching for ways to reduce those costs. I already pay my co-pays with tax-free dollars since I have a flex medical account. But what other savings might there be?

As it turns out, I had to look no further than my HMO pharmacy. To go into the clinic monthly costs $10 per prescription, not to mention the time loss. But if I buy a 90 day supply of each medicine, I can do that for $27 per prescription plus make 66% fewer visits to the pharmacy.

But wait--there's more!

If I order by mail or over the internet, I can get a 90 day supply of each medicine shipped to me for $20 per prescription. (The package is pretty large--it probably does NOT make my mailman happy.)

Don't have an HMO? Maybe, don't have insurance?

Wal-Mart runs a cost-effective program for the most-used prescriptions. I checked their list of $4 medications, and it includes every one of mine with one exception (I was initially prescribed the most common blood pressure medication, but 10% of users develop a really loud and annoying cough. Wouldn't you know it, Grace is in that 10%). Wal-Mart also provides an additional discount for the purchase of a 90 day supply ($10) bringing the cost of common drugs down to $3.33 a prescription.

I'm not the biggest fan of Wal-Mart, but you can't beat those prices.

I know that I will, at a minimum, start getting my prescriptions by mail. I haven't decided if I will (or even if I can) forego the HMO pharmacy in favor of Wal-Mart.

In the meantime, I will hope that I don't ever contract the infection that a close friend of mine recently did--the drug that ultimately knocked out the bacterium cost her $495. And that WAS the CO-PAY!

Postal Ponderings

There I was, hanging out at the local post office with two packages: a yellow box emblazoned with hearts and filled with shoes, socks, and books for a grandchild who lives out of state who is having a birthday; and a more demure bubble-wrap-envelope filled with Skittles, jerky, fruit roll-ups, and underwear for a grandson who is spending his summer working for the US Forest Service.

I was prepared to pay big bucks to send these packages out in the fastest reasonable manner. But what shocked me was that the faster Priority Mail (will get there in 1-2days) was only 47 cents more than the slower Parcel Post (projected arrival in 5-9 days).

What gives?

According to the person stamping my packages, the recent postage price increases (you know--the one where you're now paying $ .44 cents for each letter you send) also increased the rates for Parcel Post but NOT for Priority Mail.

This results in the two rates usually being with $.50 of each other.

This also means that the post office got an additional $.47 from Grace because why bother with Parcel Post at these rates?

Perhaps I should keep quiet about it--I have a feeling the government's response would be to RAISE the amount needed for Priority Mail!

Retirement, Defined. Or Not.

CNN blogger, Jack Cafferty had an interesting question today. Has Your Definition of Retirement Changed? Among the usual political responses (let's blame the Democrats, the Republicans, Obama, sunspots), smug "I'm doing fine, thank you, and I could care less about those who aren't" declarations, and concerns raised by Gen X and Y'ers, are other comments both wise and funny.

Absolutely, my definitions of retirement have changed.

I believe we've all had to rethink exactly what retirement will mean to each of us. It's not only the money, but the time. As retirement draws closer for me, I've started to realize I must make lifestyle plans as well. What I discovered during my recovery from heart surgery was that days filled with books (even good ones) and TV (even good. . .oh never mind!) quickly breed boredom.

I don't share the paranoia of some of those who responded to Cafferty's column. For example, I'm quite confident Social Security will be around for coming generations. But this particular recession has been a wake-up call for everyone. We just can't count on the things some of us thought would always be there: ever-rising markets; lasting good health; an encompassing sense of having made it.

Poverty Economics 101

Thanks to Single Ma at Fabulous Financials for referencing this Washington Post article about the high cost of being poor.

I live in a transitioning urban neighborhood that has traditionally been home to a majority of African American residents. Over the 16 years I've lived here, it has become increasingly trendy. That means we finally got a supermarket--two of them, in fact. But for years, the only grocery stores within walking distance were small and expensive neighborhood operations. The housing stock is old--great for yuppie rehabbers, but less satisfactory for families who have lived here since their homes were built in the 1930's and '40's. We have the second highest crime rate in our city, recently edged out of first place by a low-income white neighborhood on the other side of town. Our insurance rates reflect this.

Professionally, I work with and for poor people. For all my whining about my finances, I am grateful NOT to be in their shoes. I DO have a washer and dryer. I DO have the funds to replace my ten-year-old van when it finally dies. I DO have a bank account--more than one, in fact, so there's no charge to cash my checks.

Recently, a friend griped to me about all the "benefits" a "welfare mom" gets. He started off with subsidized housing. I responded that in our city, less than 12% of the poor have subsidized housing. The rest pay market rates for what are often substandard apartments--the kind of places that don't ask questions about prior evictions or require that the family make 3 times the rent each month. He was surprised to find that food stamps are based on a PERCENTAGE of what a single person or family needs to feed themselves for a month, and that the percentage is NOT 100%.

As the Washington Post article says, "You have to be rich to be poor."

Loving My Kitchen

My (rich) sister's Christmas gift to me was a complete interior repainting of my house. The entire residence looks 100% better, but nowhere did the paint make a bigger difference than in my kitchen.

Keep in mind that my kitchen had blue plaid wallpaper which was coming off the walls. I'm not sure that the wallpaper could ever have looked good, even when new. But it was especially unattractive as it peeled. Now that the wallpaper is gone, and the walls are sage green, one can safely cook in my kitchen without wanting to throw up. (There will be no cracks about my cooking--I'm talking about walls, here!)

The kitchen also came with fake oak veneer cabinets. Amazingly, these look a lot better now that they are painted white and the wooden knobs have been changed out for ones made of brushed nickle.

I'm happy with the new look.

But I'm getting a little tired of folks who keep asking if I was going to have granite counters and stainless steel appliances installed.

Umm--NO!

I wouldn't have granite counters put in even if I could afford them, which I can't.

In fact, I don't get the attraction of granite at all. It's expensive; it's heavy; it's easily stained unless properly sealed; it requires maintenance that I'm unlikely to do; dishes break when dropped on it (something klutzy Grace does all too often); it dulls knives if you cut on it; and it can crack if stressed.

My counters are formica and they work just fine. If I felt I needed new counters, I'd likely get more formica, though perhaps in a different color or pattern.

My real point here is that if granite really isn't optimal in a kitchen, why are all the "in" remodelers and designers using it? Why are people paying a premium for homes that have it?

I feel the same way about stainless steel appliances. Why get something that is a magnet for scratches and fingerprints, requires significantly more expense and maintainance and doesn't work any better than a regular appliance? (Oh, and speaking of magnets, WON'T allow you to stick one's treasured magnets on the front of it!)

Isn't it all a bit precious and silly to pay extra for items of decor that don't enhance the function of the room or the activities that take place there?

Or am I just being cheap?

The Not-So-Financially Grown-Up Kids

While I'm not certain that Jung got it right about Synchronicity, there are still plenty of examples in daily life. Witness my thoughts about giving money to my children, which coincided with a "Ask Amy's" column in Today's Washington Post and a new entry on World of Wealth. [You may have to register to get on the Washington Post site, but registration is free.]

Amy's inquirer and Meg's family are at opposite ends of the issue. How do you handle it when you don't have the money to keep on giving the way you used to, or how do you make decisions about giving the money, when you do have it. Meg, of course, has the "problem" of how to graciously accept the gifts--we should all have her issues!

I note that many of the personal finance bloggers and those who comment on the blogs either have no adult children or have no children at all. Frankly this makes it easier for them to stand back and insist that one's adult children "stand on their own two feet." I will be interested to see how it works out for them as they do have families, and their children become adults. Given that many of us took to baring our financial souls on the internet because we were not exactly role models when it came to our own finances, will we be surprised if our kids aren't all that good at it either?

I've never had large sums to give to any of my daughters, but like the parents who wrote Amy for advice, my children do expect me to cover meals out, to help them with payments here and there when they run into trouble, to cover tuition and books for college (fortunately, my granddaughter is using the local community college for her higher education), and generally to "be there" for them financially. I don't think any of them has a clear idea of what I make or what my expenses are.

I have two conflicting mindsets about all of this. On one hand, I adopted children who were damaged, both emotionally and organically. I knew it was unlikely they would ever achieve my level of education or income. So helping them out has been built in to my parenting, and that did not end when they became adults and left home. On the other hand, we all have to be realistic. I cannot afford to support five families. I have to prioritize what I'm willing to give my children, and I do make an effort to equalize the monies that I give out.

I estimate that, on average, I spend about $600 a month on my children and grandchildren. Not all of that is spent in any given month, but I spend more than that three times a year when my granddaughter's college tuition comes due. So, $600 a month on average. That is money that could go a long way toward reducing my credit card debt.

I have not completely worked out how I feel about this expense. Right now, I include it in my budget. And right now, it is all financially doable. But I wonder how it will play out if/when I find myself in the position of Amy's letter-writer.

Attitude

BlueBird, over at Hedonic Adjustment posed an interesting question in his Tuesday post.

Bluebird asks his question in the context of union employees, but I think it is a fine question to ask generally: Why is the answer to inequity to make everybody as worse off as the worst?

How many times do we hear that "people on welfare" get too many freebies? Or complaints that too much of Obama's stimulus program is going to folks in foreclosure rather than those who are actually making their mortgage payments? Or rants against union employees with good healthcare benefits?

Why is the knee-jerk response to take away those benefits from the poor and working class rather than work to expand them into the middle class?

I understand envy. It's not like I don't get jealous of people who make more than I do, are smarter than I am, or have more opportunities than I do. But I don't see how my being jealous means they (whoever "they" might be) should make do with less.

Just so you know where I'm coming from--I work for a non-profit. Although I am an considered a "professional," my entire program is unionized, and I am currently president of my local. I make quite a bit less than I would if I worked for a private corporation. But I do have excellent health benefits (for which I and my recently unblocked arteries are duly grateful!).

Others with my education could have my health benefits if they worked here, but first, they would have to accept my pay. Like that is an option!

So is the answer to say that if one group can't have (because their employer can't or won't pay for it) my level of health benefits, then I shouldn't have it either?

In a different context, (and referring to a past post by Morrison at All Doors Considered), should the fact that an uneducated Deli worker from the projects got financial help from the government to move her family into a suburban home while a newly unemployed, college-educated banker is facing homelessness mean that we should never have helped the deli worker? Would taking funds away from her do anything for the about-to-be-homeless executive?

Somehow, I can't imagine those who "envy" the deli worker would really want to live her life in order to reap her "government benefits."

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.

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.)

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!

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.

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!