Monday, February 28, 2011

February Wind Up & Other Small Stuff

1. My total indebtedness went down $822.48 in February. Considering that it only went down $55 in January, I'm pretty satisfied with this month's results.

2. I've now received both my state and federal tax refunds, a little over $1700. So I should be in good shape and set to pay off a bunch of debts, right? Dream on! I spent $359 for 100 gallons of heating oil. I spent $350 for pest control. (Yep, not only have ants discovered my kitchen but at least two rats have as well. I probably should be embarrassed about that, but it turns out that the rats are a neighborhood problem. So the neighbors are banding together to attack the problem both in our homes and outdoors.) I also brought my baby-steps emergency fund up to $1000 by depositing $226. And I paid the homeowner's insurance for my rental. Then there were birthdays for three grandkids--makes me wonder what it is about that leads to all these February births. Or is it just my family?

Good-bye $1700! I hardly knew ye!

3. The 298th Carnival of Personal Finance is up at Savings to Invest. My post on being a "Go To Person" is there, as are a number of great posts covering many aspects of personal finance.

Thursday, February 24, 2011

Notes on Being the "Go To" Person

Linda P. left a note on my last blog post about the money I expect to need in retirement. The part of her comment that really caught my attention was this: "We were also the go-to people for our extended family when life dealt them financial blows. . . A fragile family member depends on our financial stability, so we must provide not only for ourselves but provide some backup for that other family member."


I relate to Linda only too well.

I am the "Go-To" person in my family. I am not the only one with a job, but I am the only one with any financial savvy. (THAT speaks volumes! When Grace is considered financially savvy, the family in definitely in trouble!)

I have five adult children, all adopted as older children from foster care, most of whom have permanent organic or emotional disorders that get in the way of education, employment, and (sometimes) common sense.

I am the person they all turn to when they run into problems, especially money problems.

I, in turn, use my newly-retired sister as my "Go-To" person. But unlike my children, I hesitate to hit my sister up for cash unless it's an emergency. (My darling kids would tell you the same thing about themselves, but with them, it's ALWAYS an emergency!)

A close friend of mine with a n'er to well son has actually borrowed money to have it available for him. I have never done that nor can I see myself doing it. But I do understand where she's coming from.

I have learned over time to set certain limits. My kids have figured out that they are better off asking me to directly pay bills rather than give them cash--they get more that way. The two daughters with children discovered early on that asking me to pay for things for my grandchilren (books, clothes, pre-school, college) was a sure bet.

If all of this sounds like a whine, it's not intended to. I am a grown-up, and I can turn off the money spigot any time I want.

It's just different when it's family.

I have no better explanation.

Monday, February 21, 2011

The Exaggerated Cost of Retirement

It really IS in how one looks at things.

Take, for example, the statistical data compiled by the Federal Reserve and analyzed by the Center for Retirement Research at Boston College for The Wall Street Journal in this article on Boomer retirement.

The statistics themselves are not encouraging:

The median 401(k) plan for folks ages 60 or 61 holds only $149,400, including plans from previous jobs. To figure the annual income from that level of savings, analysts looked at what the family would get from a fixed annuity. They found that $149,400 would generate just $9,073 a year.

The median income for the folks surveyed was $87,700.

Wow! And I thought I was behind!

In fact, the survey found that only 8% of near-retirees had saved the $636,673 necessary to generate 85% of their prior income that the analysts thought necessary for a comfortable retirement.

But that's where I part company with the analysts.

I agree with Morrison at All Doors Considered, who first brought this survey to my attention. I just don't see that I or most other retirees will really need 85% of their prior income.

I know, for myself, that I currently pay for a mortgage, and I put away a third of my income in my 401(k) as part of a belated attempt to pump up my retirement savings. Both of these expenses will be gone by the time I retire.

I also note that the analysts posit that folks will have to retire later, whereas I wonder if that is more of a "want to" than a "have to." Again, for myself, my work is an important part of who I am. Right now I do have to work until age 69 to attain the savings I think I will need. But I strongly suspect I would stay employed at least part-time past age 62 or 65 even if I didn't have to.

Morrison thinks retirees won't travel as much as they believe they might in the first days after retirement. I don't know that I fully agree, but I do know that as a retiree, I'll be able to take advantage of last-minute discounts that I currently cannot as a working woman with an employer who wants to know well in advance as to when and how long I'll be gone.

One place where she's wrong is when she says seniors willingly give up their gourmet coffee. NOT THIS SENIOR! But I do buy the coffee in bulk and make it at home most days.

There are a ton of interesting comments made on Wall Street site--good reading.

Thursday, February 17, 2011

A Class of One's Own

Morrison has an interesting post regarding the appearance of wealth on her blog "All Doors Considered."

I admire her skill at maintaining her family's appearance of having money while living on a limited income. I also agree that often that appearance can be enhanced due more to careful shopping and a high degree of cleanliness than an actual expenditure of dollars. As Morrison herself put it, she has done a remarkable job of marketing her family.

I guess my question comes down to "market to whom?" and ultimately, "Why?"

I am reminded that most of the millionaires interviewed for Thomas Stanley and William Danko's book, "The Millionaire Next Door" didn't worry nearly so much about the appearance they projected. They wore clothes off the rack and drove mid-range vehicles.

I think it comes down to the 'why'--if one is a fashionista, then buying a pair of expensive Italian shoes on sale in Milan and taking good care of them for years makes sense. It goes to one's confidence, and the image one wants to project.

But if the only point is to impress in-laws that one rarely sees? I don't quite get that.

Then again, I'm the last person to talk about style. Let's just say that when the fashion genes were handed out, my sister got my share. (In fact, if you see me wearing anything the least bit fashionable, it's a good bet it was a gift from my sister.)

Still, I enjoy many activities that appear to be aimed at the wealthy--I go to the local Art Museum; I attend the symphony and the opera; I love the various lecture series offered throughout my city. It's just that I never buy season tickets. Instead I'm dependent on friends (Always make friends with doctors' spouses--they have season tickets to everything and their spouses are often unavailable to go.) and Groupon and waiting in lines for last minute empty seats. Once I'm sitting in the audience, no one really knows how (cheaply!) I got there.

Morrison's final observation is that "It is better to look good than to feel good."

I can't relate to that one either. I'm much more attracted to the idea of feeling good, whether it's about clothes, money, or lifestyle.

Thursday, February 10, 2011


1. It's time to say Good-bye to Sra. Dog (at The Dog Ate My Finances) and Florence at Ruminations. I've removed them both from my bloglist but please, if either of you starts a new blog, let me know. In the meantime, I'm glad you each made a final post--I get so annoyed at blogs that just peter out and fall off the radar (hmm--two cliches in the same sentence--not bad!)

2. I've rarely met a contest I didn't like, particularly when the prizes involve writing materials. Hence this note about a journal giveaway at Notebook Stories. These are elegant promotional books produced by Brandbook-de, and I want to win one of them. If you go to the website, it helps if you read German!

In four years of blogging and entering blogger giveaways, I've won exactly twice, once a book on finance and once a book from the Orange Prize list. But both were terrific, so I keep entering.

Sunday, February 6, 2011

Are Women STUPID?

I came of professional age in the early '70's. I have always proudly identified myself as a feminist. I have worked and supported myself and my family for the past 38 years.

So, no, I don't generally think of women as stupid.

That is, until I read an article like this one. Where on earth did Wells Fargo find these women?

Even my eighth grade algebra (in which class I got a D+--that plus being for perfect attendance!) tells me that one cannot withdraw 11% a year from one's retirement accounts and expect it to last any time at all.

I'm a little more forgiving of women who think $200,000 in retirement savings is the minimum needed for a comfortable standard of living, though I fall squarely in the men's camp because my minimum goal has always been $400,000. (I'm a little over half way there, but I've also got another 8 years to accumulate funds.)

What IS encouraging is that women are more likely to ask for help. (What is it about that Y chromosone that makes men think they don't need to ask for assistance with anything, including driving directions?)

What I wonder is if we're going to take the advice when we get it.

My hope is that women are simply uneducated financially, NOT that they are less bright than men.

But honestly?

Who, in their right mind, thinks they can reduce their assets by 11% (never mind the 30% that a few posited!) a year?

Tuesday, February 1, 2011

Tax Time--For Me If Not For the IRS

I was so proud of myself--I got my taxes done and e-filed by January 31st (a personal speed record for me, even knowing that I was getting money back). Furthermore, I went with TaxAct, which allowed free preparation and filing with no income restrictions. (Most of the sytems that let one prepare and file for free have a top income level of $58,000.)

And just to sweeten the pot, I entered TaxAct through My Points and got an additional 400 points.

Mine is not a complicated tax return, but I do itemize my deductions, and I have to file a Schedule E for my rental income. Not a problem for TaxAct.

But the IRS is apparently having some issues.

I just got a notice that my return won't actually be e-filed until February 14th because the IRS isn't sure how certain tax reforms will affect returns. ARRGH! None of the reforms affect me, so I would like it if they would just go ahead and give me back my money.

Which, by the way, is some $1500 this year. (I am a tad confused by that since my income and deductions are pretty much the same this year as last, and yet I got only $500+ back last year--not, mind you, that I'm arguing with that!)

How come the one year I get my act together early is the one year the IRS is late????

Good thing I'm not a conspiracy theorist!