Whining Season

Do you suppose there's a cosmic accountant lurking in the ether, waiting to see when Grace comes into money, who then pounces with glee? I'm guessing there is. As a prime example, I submit the following:

I mailed my tax forms yesterday. I was mentally counting up the places to put my refund. (Yeah, yeah, don't count your chickens before they hatch and all that!) But that was before I got home. Upon arrival, I discovered that:

1. My oil tank ran dry, never mind the 100 gallons I purchased in December. I guess unexpected snow storms do increase usage. It will cost me $184 for another 100 gallons, but I have my fingers crossed that the lines are not now clogged. If they are, it will cost $90 to get the furnace repair folks out.

2. My upstairs bathtub is leaking into my downstairs kitchen. I wouldn't have known about this except that with all the painting going on downstairs, everyone is showering upstairs. So this means my kitchen ceiling will have to be repaired and repainted AFTER we figure out why I have a leak in the first place. The plumbers are on their way, and I don't expect them to be cheap.

3. My granddaughter called to say that the used car she drives between work and college (in towns 40 miles apart) has 200,000 miles on it and is about to lose its front axel among numerous other problems. For a mere $3000, she could get another, safer, better used car.

So instead of being some $3700 ahead, I'm already behind, and I haven't even gotten the refund checks yet.

ARRGH!

Taxing Matters

I mailed off my state and federal tax forms this morning!

$3700 will soon be coming my way. I have plenty of places to put it, so it won't last long.

I have done my own taxes for years. In fact, I also wind up doing returns for my children, and some of my colleagues as well. I don't use software because I'm too cheap, though, for my kids, I use the free version of TaxAct available through the IRS website.

I wish I could guesstimate better because I do know that getting such a large return means the government got the free use of MY money, but it's surprisingly hard to gauge accurately. I claim three exemptions for my employer. I have decided to stick with that because I won't have any children to claim on my 2009 return. This will bring me closer to the $0 owed mark without (I hope) my having to pay taxes.

At any rate, this is the first time in my working life that I have ever gotten my tax returns filed prior to January 31st. Let's hope the tax refund folks are appreciative and equally fast.

Little Inventions, Big Impact

So I was at a party Saturday evening, (Don't laugh, and don't tell my kids, but yes, Grace does occasionally have a social life!) where the following question was raised: What three "small" inventions have most impacted your life? MY answer was (1) Pantyhose (2) birth control pills, and (3) sticky notes.

The guy I was with thought birth control pills and sticky notes were important, but he traded the pantyhose for "instant replay" (something he would never have done if he'd ever had to master garter belt 101).

My 27 year old daughter chose cell phones, Hot Pockets and IPOD's--what WOULD her generation do without electronics. I thought she would choose computers, which would have been my fourth choice, but she didn't have to--her current cell phone allows her to access the internet.

So what do you think? What inventions that have occurred since your birth have actually helped you the most or had the most impact on your life?

Fallout From the Fire

The other shoe has finally dropped.

I did know that my house insurance was likely to go up as a result of the garage fire. I even knew that my carrier might drop me altogether, though I hoped not. My experience with the insurance company, which also carries my auto insurance, was, up to now, entirely positive. They handled my claim quickly and satisfactorily.

Apparently, they were NOT so pleased by MY performance.

Not only did they cancel the policy on my home, they have also notified me that they are not going to renew my auto policy.

Say what? How does the fact that I had a garage fire (where my car was NOT parked!) make me a bad risk for auto insurance?

I am fighting the company with regard to the auto insurance. But my broker says there is nothing to be done about the cancellation of my home coverage. So it looks like I'll be paying exactly twice as much in 2009 ($1015 as opposed to $570--OK, not exactly half--math was never my strong suit!) to keep my house insured.

I'm hoping to retain the auto coverage because it will virtually double as well if I have to go elsewhere.

'Tis the Season to be Wary

Mrs. Accountability at Out of Debt Again has a post about a co-worker who got scammed on Craigslist.

I paid particular attention to this post because something similar almost happened last month to my 27 year old daughter.

My daughter, who is always looking for extra money, responded to a Craigslist "Help-Wanted" ad for mystery shoppers. My first clue, if not my daughter's, was that the response to her resume, accepting her as a mystery shopper, had a number of spelling errors. Shortly thereafter, a check arrived in the mail for $2900. My daughter was instructed to deposit the check to her bank account, keep $500 for herself, go buy an IPOD and then mail the IPOD and a cashier's check for whatever monies remained to a post office box in Atlanta.

Fortunately, by this time, my daughter's BS detector went off, and she decided to google "mystery shopper scams." It was there she learned that ANY condition that she deposit a check and then "refund" some of the money by wire or by mail meant she was involved in a scam and that the check would eventually be returned to the bank as worthless.

So she reported everything to the Federal Trade Commission pursuant to the instructions from Craigslist and resigned herself to NOT making her fortune as a mystery shopper. Still, I can't help wondering if anyone was taken in by this scam, as my daughter almost was.

Just about the time we're congratulating ourselves that we'd never fall for Nigerian e-mails, or mystery shopper scams, or those "buyers" who ripped off Mrs. Accountability's co-worker, along comes a Madoff and makes fools of all of us.

Carnival of Money Stories

The "Rich Girl, Poor Girl" discussion is now part of the Carnival of Money Stories, hosted this week by Adam at Your Money Relationship. He's a guy, so, of course, he uses football metaphors. He may also win the award for tackiest trophy ever. Then again, maybe not--there's a lot of tacky to be had in sports.

Learning from the Mistakes of Others

It's one thing to watch folks make financial mistakes out of greed, stupidity or both. But it is quite another to watch what is happening to some retirees like Jim Kosel who did any number of things right, only to be foiled by what would, in other economic times, be forgivable mistakes.

Kosel is featured in the Portland Oregonian article, What To Do When The Nest Egg Cracks.

Kosel followed most of the rules pre-retirement: He saved on a regular basis; He saved over a long period of time; He planned his retirement in detail; He downsized by moving to a smaller town.

So why is he now driving a school bus and deferring his dreams of taking an RV around the country?

Well, somewhere along the line, just after he sold his urban home and found a smaller one in a rural area, he got the bright idea of NOT paying cash for the new home. Instead, he took out a mortgage, and played the stock market with the proceeds of his original sale. The idea was that he could both pay the mortgage and pocket some extra cash.

But his retirement plans hadn't included a downturn that saw 50% of his retirement funds vanish. Not only did his "extra cash" go away, so did the money for the mortgage. His retirement plans didn't include a mortgage payment. Nor did his plans include his wife losing her job.

So instead of traveling across the country in an RV, he's driving a school bus.

Hindsight being 50-50, it's easy to see where Kosel made his mistakes. No one should have a mortgage in retirement. And he should have purchased and fully paid for the RV he wanted. Economic conditions and gas prices might ground the RV upon occasion, but at least he would have it available to him.

Still, I do feel sorry for him, because I think he set a fine example for his family. If it can go so wrong for him, what about the rest of us?

Born Without a Silver Spoon in My Mouth

There's a fascinating conversation going on across several blogs. Meg at World of Wealth started it all by admitting that she comes from a wealthy family who continue to give her money and to back her financially. In later posts, she explores the effects of growing up wealthy in even more detail. Madame X from My Open Wallet weighs in thoughtfully. The Dog Ate My Finances explores the same issue from a the perspective of a poor girl who's made good, as indeed she has since she's in her mid-20's and earns around $200,000 a year.

I guess you know where Grace falls in all this--my background is much like the author of "The Dog Ate My Finances." My dad was a carpenter first, and then a longshoreman. We were solidly working class, living in a solidly working class mill town. With only one elementary school, one junior high and one high school, there wasn't much of a "wrong side of town," though if there had been, we were probably living in it.

I grew up, went to a state college (on scholarship), and then to an ivy league graduate school (on scholarship) on the east coast where I was blown away by the distinctions between rich and poor. It was as though the rich were an alien species--so far removed from my life that I couldn't relate to them but was still intrigued by their lives and delighted to share in that from time to time.

Now I'm in the middle of the middle class or maybe a tad toward the lower middle class when you add in my five kids. While I could use more money and less debt, I'm not unhappy with my position in life. Having friends who are wealthy and politically powerful (though not always both), as well as friends who never made it out of the small town we grew up in, and a few friends who got lost along the way to mental illness, drug abuse or Vietnam, I've also had a chance to compare my life with theirs.

The biggest advantage I can see to having been reared poorer is an enhanced sense of choice. Once I went to college, my parents considered their work done. They had no further aspirations for me (or for my sister--actually, they didn't even expect her to go to college, much less graduate, head into international banking and make a fortune). When my sister went into banking, they were thrilled. But then, they were thrilled when she first wanted to go to nursing school, and if she had succeeded there, they would have been just as satisfied.

I note that many of my friends felt like they HAD to go to certain schools, HAD to make a lot of money, HAD to have certain kinds of jobs, HAD to marry certain types of partners and HAD to leard certain lives. My choices, on the other hand, were wide open. When I made an early decision to work among the poor, my family thought that decision was fine. When my first job paid me $9,000 a year, no one in my family told me it was beneath me.

My parents were both reared during the depression. They were savers but they were also sharers. If I needed money, they gave it to me. The quid pro quo was that I never asked for too much because I knew they didn't have it to give.

The other great advantage is an ability to move between classes with greater comfort. By this, I mean it is easier for me to hang out with wealthy friends than it is for them to be constantly in the company of working class people. I know more about their way of life than they do of mine or, God forbid, my lower class friends. They are never going to be comfortable camping out and drinking beer but I do just fine in fancy restaurants drinking wine that costs more than the dinner.

Poor people know that the wealthy make fun of them, but it never really occurs to wealthy people that they can look ludicrous as well or that poor people notice and mock them in return.

I don't believe that there is anything ennobling about poverty. However, being reared without a lot of extra money in a working class or middle class home often brings with it choices and aspirations that are not limited by the ennui or demands of having too much money.

In my personal view, being born poverty stricken or extremely wealthy are both situations to be financially and emotionally overcome

Grace and Charity

I know that many people make their charitable donations in December. Whether that's due to Christmas spirit or impending taxes, I don't know. What I do know is that while my intent to donate is good, I actually wind up giving less than I meant to, because I usually have less money left over than I meant to.

This year, I'm trying something new--monthly donations that come directly out of my checking account and are an integral part of my budget.

I chose three charities, two of them for writers, and one to a private middle school for special needs students that my youngest daughter attended. This was a hard decision to make--in harsh economic times, there are far too many places to put one's charitable dollars.

In the end, I was partly pursuaded to make the choices I did because I already work for a non-profit that serves low-income people. Given my wages compared to what others with my education make in the private sector, I figure I've already made one donation.

But in tough economic climates, the arts always take the biggest hit because they are considered expendable. One program I am contributing to conducts writing and journalling workshops among disadvantaged populations--the homeless, addicts in recovery, teen parents, etc. The other provides scholarships to a six-week science fiction writer's workshop that I attended and loved nearly 30 years ago.

I contribute to the private middle school because it saved my daughter's academic life and because, unlike her special needs high school, it does not have an endowment program.

One thing I am curious about is whether it is better for the charity itself to get my money on a monthly basis or as a lump sum. Since personally, doing it by the month ensures that I actually have the money to give to the charity and that they actually get it, I will continue to donate by the month. But is it the best way?

Fourth Quarter Net Worth

I tally my net worth quarterly, so here's the net for December 31, 2008:

$522,948.

It would feel better if that same total on December 31, 2007 hadn't been:

$584,097.

Having done the math, I know that I've taken a $61,149 loss, or, put another way, my net worth declined nearly 10.5 percent over the course of a year.

In general, my retirement funds took the biggest hit--they are down 31%. My two pieces of real estate held up better, though, they, too, have come down in value. It still intrigues me that my rental home in a dying mill town on the coast has fared the best--I'm guessing that's because it's a good, small starter home in a good neighborhood.

I have to admit, it still feels good to be able to say I'm worth over half a million!

2009 Goals

Perhaps, before moving on to my 2009 Goals, I should look at my 2008 goals?

Then again, maybe not. Sigh. OK, here they are, direct from my 2007 wrap-up post:

1. Reduce non-mortgage debt by $6000;

2. Do not increase credit card or loan debt;

3. Add at least $12,300 to 401(k).

How did I do? Well, the non-mortgage debt was decreased by $2000 so I didn't get even 50% toward my goal. Not increasing credit card or loan debt? Umm--well, if you only look at the end of the year, I met that goal, except that I really didn't since I incurred some increases during the spring and summer that I didn't manage to pay off until this past month.

And that last goal?

Well, Grace did her part! But the economy swallowed it all up!

So,let's try this again for 2009:

1. Pay off at least $6000 in non-mortgage debt.

2. Do not increase debts on credit cards or lines of credit AT ANY TIME during the year.

3. Add $12,300 to my 401(k).

Happy New Year to one and all. If 2009 isn't prosperous, at least let it be frugal.