Tuesday, April 19, 2011

My Money Went Where?

It creeps up!

Last year this time, I was meeting my monthly expenses.

This year, not quite.

And it took me awhile to figure out why.

First, my car insurance went up--nearly doubled, in fact, raising from $56 a month to $93. But I did it because if I bought my car insurance from State Farm, they would deign to insure my home for a thousand less dollars per year than any other insurance company. As longtime readers may recall, my homeowner's insurance took a skyhigh leap after the garage fire three years ago.

Then, I started paying $50 per month on my granddaughter's Sallie Mae loan.

Then my two-year great Comcast bundled deal wherein my cable, internet and telephone (complete with all sorts of bells and whistles I didn't have before, like caller ID--which I love--call waiting and long distance) turned out NOT to cost the advertised $99 per month, but is more like $128 per month.

And then, the biggest budget-breaker of all, gas prices went through the ceiling. I budget $30 a week for gas. My minivan is not great for mileage, but I used to have some money left over from my gasoline line item. NOT any more! It now costs me $62 to fill up, and I consider myself lucky if I can make a tank and a half last the whole two weeks.

All of this is leaving me with too much month at the end of my money.


Back to the budget for some major over-hauling!

Sunday, April 10, 2011

Once Upon A Boring Week-end

So I had no particular plans this week-end, except to make a four hour round trip to a monthly writer's workshop I've been attending for thirty years. It is run by an 84 year old science fiction and mystery writer. Her latest novel just came out and she's working on the next one.

Guess who I want to be when I'm 84!!!

But first, I woke up to sunshine.

No big deal, you say? Hah! That means you haven't spent the wettest month in two decades in the Pacific Northwest. It's not that we, who live here, don't know to expect rain. Just NOT the amount of rain we've had, and NOT every dang day of March!

So, it's looking like a good day from the moment I get up on Saturday. Then, on my way out of town, I see that one of the cities I will be passing through is having a used book sale to support their local library.

But I'm late getting on the road, and I arrive at the book sale during it's final hour.

Sounds bad, you say? Again, Hah! It turns out that since they still have a lot of books left and don't feel like hauling them all away, we latecomers can have the books for $2 for whatever we can put in a very large shopping bag.

I come away with a load of paperback mysteries, a bunch of CD's including a number of Christmas Albums that I'm always too cheap to buy during the holidays, some young adult books for my grandkids, two lovely garden books that I'll read even if I'll probably never plant a garden, and a bunch of maps I intend to use to paper my laundry room. Not bad for two bucks!

Then I arrive at my writer's group to find that one of the participants has landed a book deal, and insists on taking us all out to dinner on his dime. Which means I can hang onto the money I intended to spend for dinner.

On Sunday, a friend invites me to the local art museum, which is having a "bring a guest for free" day for its members.

She and I go out to dinner at a fast food restaurant that is famous for its use of locally-sourced products and its rotating meals that tend to correspond to what is in season. I've known for years that they have the best fresh strawberry milkshakes in the world--well, at least in my part of the world. But one can get them only for a month or so, twice a year. Luckily for me, April is one of those months.

So, while nothing truly special happened this week-end, I had good times with good friends, ate good food, and saved some money.

Pretty darn good, I'd say!

Monday, April 4, 2011

When It Doesn't Pay to Be a Saver

I adopted my oldest daughter in 1979. Because her birthmother had died, and because her birthmother had a work history, this child received Social Security. For the first couple of years I invested the social security payments in CD's every month. What I remember the most strongly was being disappointed when the interest rate fell below 10%. It just didn't seem fair!

I was reminded of those glorious interest rates (carefully forgetting the double digit inflations rates also in effect in the early '80's) when I read this article from the Wall Street Journal. (Thanks to Boston Gal for the link.)

While the feds have necessarily held the line on interest rates for the good of the general economy, that line has not been at all kind to savers, particularly retired savers who were counting on interest rates to provide income without invading principal. These days, one feels good if interest rates break 1%, and mostly, they don't.

Boston Gal wondered why some of those interviewed didn't consider working, at least part time. That hardly seems like an option for the 91 year old retiree with whom the article opened. But I'm guessing that most of the folks in the two Florida retirement centers came there from somewhere else, and that employment opportunities are not as available as they might have been had they stayed in the communities where they were formerly employed.

It's my understanding that, as a whole, we are all saving more these days. But I didn't realize that these statistics include debt reduction as a form of saving. It is, but that doesn't mean anyone's bank account now has more cash in it.

On a very personal level, I ran the Socal Security calculator to see what I could expect. From Social Security alone, I would get $1398 right now if I retired. Not only is that not enough, but I'd have to pay for health insurance to cover me until Medicare kicks in in three years. If I wait until age 66, I'd have approximately $1962 per month and access to Medicare. And if I wait until my projected retirement date when I'm 69, I should get around $2700 per month.

Right now, I live on approximately $3600 per month since I put away over $1000 a month into my 401(k).

Financial Engines projects that I will have $404,000 in my 401(k) by the time I'm age 69. At 1% interest, that will add $336 a month to my income. At 4% (which is the figure most retirement calculators use for regular withdrawals), I would have an additional $1347 a month.

With that kind of income plus the sale of my rental home to provide the basis of a travel/entertainment fund, I should be fine.

But then, the retirees in the article thought they'd be fine as well. Having had the foresight to save on a regular basis, they are now feeling punished. Not only does this have political repercussions (because retirees vote more often than the general populace, particularly when they are unhappy) but it discourages saving among younger citizens. As the authors of the article note, low interest rates "also penalize people of any age hoping to build up funds for the future, and discourage rainy-day savings that could make U.S. consumers more resilient to job losses and other financial jolts."

Friday, April 1, 2011

Secret Spending Vices

No, not the big expenses. Not the laptop computer you decided you had to have. Not the credit card kept hidden from one's spouse. Not even the desire to dine out at a gourmet restaurant at least once a week.

What I'm talking about are the inexpensive but irresistable 'gotta-haves' that bring us joy.

Imelda had shoes.

Grace has books and notebooks.

Back in my college days, when my dormitory was in walking distance of a number of great thrift stores, I was seduced by used books. I arbitrarily set a spending limit that I honor to this day: the book or notebook must not cost me more than a dollar.

Of course, this rule would work better if I didn't find such great deals: the last time I went to a Friends of the Library Book Sale, I came across 27 such bargains!

I also love blank notebooks. I've kept a diary since 4th grade. Lately, I've branched out into 'subject specific' diaries, which is why I have a financial journal, a journal for each of my children, and, most recently, a journal in which I explore the patterns that have shown up in my life's journey.

But that still leaves me with a pile of unused blank books.

There's a great charity locally that would take donations--they run writing workshops for disadvantaged people such as the mentally ill, folks in domestic violence shelters, and the homeless. But I have such a hard time letting go of my treasures.

The dollar limit is seductive as well--after all, it's just a dollar. I can usually dig one of those up.

And it does save on home decorating costs--put up a bookshelf, cover the wall.

So, am I the only one with a secret spending vice?