Thursday, February 26, 2009

February Financial Update

Thanks to my income tax refund, my total debt (including my mortgage) is now under $100,000. It's $98,525.51 to be precise. Of that, $21, 374.22 is credit card/personal loan debt and $28,833.14 is my HELOCC. My mortgage has $48,268.15 to go and will be fully paid off on my 65th birthday--a mere five years and one month away.

The numbers are not as important as the fact that the indebtedness is finally going down at a faster rate than my usual sluggish pace.

Monday, February 23, 2009

For Grace It's Good; For The Economy, Not So Much

I just cannot get my mind around the thesis of this article from Sunday's New York times. Thrift has been an economic disaster for Japan? And the only reason the US will avoid Japan's fate is because our citizens will never practice thrift on the level the Japanese do?

I'm not much of an economist (that's what I get for being a liberal arts major!) and I don't pretend to fully understand the global downturn we're all in. But if, for my personal financial security (not to mention, sanity), I must cut back expenses, pay off debt and save for my retirement, it is disturbing to think that all of these things might lead to disaster for this country.

Am I being unpatriotic? Do I "owe" it to my country to save less? Spend more?

How could pauperizing myself be a good thing? Why would it be acceptable if I wind up depending upon state support in my old age rather than Social Security and my 401(K)? And since when is paying off my credit cards a BAD thing?

We live in interesting times, to be sure. I think I mean this in the Chinese curse sense!

Saturday, February 21, 2009

One Down, Five To Go

I love it when money comes even sooner than I expect.

According to the Where's My Refund link at the IRS website, my refund would arrive by March 3rd. Sooner is better--and it came much sooner. The refund landed in my bank account yesterday, a week and a half early and only two and a half weeks after I filed.

So-o-o, I used the money for the things I'd already planned and then used what was left over to pay off my smallest debt.

Amazing how good it feels to see a credit card zeroed out--never mind that the balance was just under a thousand dollars, and it wasn't even my highest-interest card. That's $50 a month I can put to much better use.

I am definitely getting a rush from the payoff. It's psychological, not intellectual. But it's a darn good feeling, just the same.

Onward to the other five debts (not to mention my HELOCC and my mortgage).

Sunday, February 15, 2009

Retired But Employed

Saturday's Wall Street Journal article There Goes Retirement profiles a number of retirees whose loss of assets has sent them back into the workplace. None were able to go back to their former positions, none were able to work from home, and none make anything close to the incomes they earned during their "real" working lives. But for most, that isn't the bad news. Whether it's true of everyone or just those who agreed to be interviewed for the article, most seemed happy to have the structure that part-time employment provided, as well as the additional income.

They learned some important lessons that might not be immediately apparent:

(1) Be careful of what you put on your resume when you're applying for an entry-level job. You don't want to scare off a potential employer by appearing over-qualified. (I'm thinking that an accurate resume with a carefully worded cover letter would be the answer here.)

(2) Be careful where you live--a move to a retirement community puts you into heavy competition for limited positions.

(3) Ratchet down your salary expectations. The good news is that you are not supporting yourself on your earnings, you are supplementing a depreciating portfolio. You still have your Social Security and, if you're really fortunate, your pension. $600 a month makes a genuine difference without requiring you to give up all of your free time in retirement.

(4) Don't cut all your ties to your employers and friends in the working world--they can be a good source of "small" or temporary job referrals.

Of course, what is not mentioned is that all of the retirees profiled are still in good health and are physically capable of working. Then again, most of these retirees COULD live comfortably, if not well, on their Social Security and their 401(k)'s. What they did not have was money for the extras--travel, meals out, golf, etc. They also were losing their peace of mind that they would not outlive their assets.

The "I'm retired and I'm leaving the work world behind me" attitude looks to be in for some major readjustments.

Monday, February 9, 2009

Saving That Gas Money

Liz Pulliam Weston has a great suggestion this week in her MSN money column: Pay Yourself $2 a Gallon. Everyone is saving money now that gasoline has come down in price, so she suggests putting the money no longer being used to drive, into savings.

I budget $80 every two weeks for gas. When gas was at its peak, that wasn't quite enough. But these days, I usally get by for $50 or less over 15 days.

I don't put the excess into savings, but each month, I take what is left in the envelope marked "gas money" and I snowflake it to my smallest debt.

My mortgage payment, which fluctuates due to the inclusion of insurance and property taxes, goes down $17 beginning in March. I'm planning to snowflake that one as well.

Thursday, February 5, 2009

Errata, Part Deux

More tidbits too small, too insignificant or too embarrassing to have a post all by themselves:

1. So, with reference to my whining post below, I wound up with a blocked line to my oil tank and a repair guy who was booked for the next week, but, at 1.5 times the usual rate was willing to come out that same evening. Exit $178.

2. My sister agreed go halves with me on a used vehicle for my granddaughter. Together, we told her we wouldn't pay more than $2500 total so she found one for $2400. Fortunately, one of her good buddies is a mechanic, who examined the car and pronounced it to be in decent shape for commuting. So, I'm down $1250 rather than the $3000 I feared. I did pay attention to the comments made when I first posted about this, but I ultimately decided that it is important for my granddaughter's future that she stays in college, and it is going to take a car for her to do that. She does have a part-time job and does contribute to her own keep. She will eventually have to get loans, but I want to help her put that off as far as possible.

3. I haven't posted my monthly financial update. Now, I'm burying it in the middle of this post because my total indebtedness decreased by a measly $390 during the month of January.

4. Where's JW? I made my usual swath through the regular blogs on my reading list, and suddenly "Need To Be Debt Free" has gone missing. I hope it's not permanent. When they make me God (maybe you shouldn't hold your breath!) I plan to have rules about blogs just disappearing on me.

5. I read Suze Orman's "2009 Action Plan,", having downloaded it for free from Oprah's website. Nothing new in it, but a lot of good, straight talk about the current economy and the likelihood that the recession will last awhile.

6. And finally, some GOOD news! My auto insurance company (the one that also provides my homeowner's coverage, but cut me loose after the garage fire) is rescinding their prior termination of my auto insurance. I have no idea why, but since I'm getting a great rate from them, I'm NOT going to argue. Some days it pays to have a good broker who will go to bat for you.