The Killer Week Before the New Year

Am I the only one who finds the week between Christmas and New Year's Day to be a financial black hole?

The truth is, I spent all my money for Christmas. Christmas is close enough to my next payday (December 31) that I didn't pay close attention to the fact that there are 5--count'em, FIVE--whole days before that paycheck arrives. My daughter still thinks I should feed her during those five days. Actually, since she's on her Christmas break, she's of the opinion I should also cover movies, take her to lunch and otherwise help her occupy her time in ways that financially impinge.

So yes, I stayed within my Christmas budget. But--um--no, I'm not exactly within my monthly budget.

C'mon, 2008! Get here quickly!

Merry Christmas, Happy Holidays, and All That!

What the title says!

If you're still on the computer (and just WHY would you be on the computer on Christmas Eve? A good question that I mean to ask myself later!) take a look at this week's Carnival of Personal Finance, hosted by The Digerati Life. It comes complete with Christmas ornaments.

You'll find a post of mine near the bottom.

What Small Thing Would Make You Feel Rich?

Forget the manse on the hill or the beemer in the garage. What small thing would make you feel rich?

As I was yelling at my kids to please close all the doors (to the upstairs, to the basement, to the bathroom) before turning on the heat this morning, I realized that being wealthy, to me, would be turning on the heat and neither worrying nor caring if it "got wasted." Given that my two-story 1929 house has an oil furnace, being wealthy would also mean never worrying that the tank would run dry--something that happens to me at least once every year, clogs up the lines, and costs me an extra $90 to put back into operation.

For my long-deceased mother, it would have meant using each teabag only once. As it was, she never got over her depression-era habit of using each teabag at least twice before discarding. I still can't see a saucer with a used teabag sitting on the counter without thinking of her.

My oldest daughter told me that being wealthy would mean that she could fill her car up with gas, rather than getting it $10 at a time; Her husband said he'd know he had it made when he could purchase a woodworking tool without concern that there would not be enough in the bank account to last until the end of the month.

One of my colleagues at work said he'd be wealthy when he could go through the local bookstore and pick up whatever he wanted instead of weighing how much he wanted a particular book against the amount of time he was willing to wait for it to become available at the library.

Another colleague felt that wealth would be hers when she no longer felt compelled to buy generic breakfast cereal and frozen orange juice.

So what about my readers? What minor change would make you feel richer than you are now?

The Joys of Christmas Shopping

I'm still within my Christmas budget!

This may not sound worthy of an exclamation point, given that my budget is relatively large compared to many of my readers--I have $1845 set aside. That's to cover gifts for 12 people, Christmas dinner, one round trip to a town 5 hours away to deliver gifts to some of the grandkids, one round trip to a town 2 hours north to deliver gifts to other grandkids, the tree, the greens for the house and door, the charitable contributions, and the collection plate at Christmas Mass.

But I don't recall that I've ever gotten within 15 days of Christmas and still not used my credit cards, at least not since I've been an adult.

Although it makes me anxious, I have used Ebay more than usual this Christmas. My largest expenditure was $236 for a Cricut Complete--some kind of scrapbooking device that my oldest daughter wants. I'm paying half and her sisters are contributing to the other half. It hasn't arrived yet, but I tried to keep all the safety measures in mind--paid through Paypal, bought from someone with a longish sales history, checked out the feedback, etc.

I also bought computer peripherals through Ebay. I purchased an 8 MB memory card that sells for $20+ around town for $11, including shipping. I got a 4G flashdrive for my granddaughter for $28 including shipping, when the cheapest I could find it at Circuit City or Best Buy was $34.

The tree ($20) is sitting on my porch, awaiting trimming which will happen tomorrow. The door swag ($17) is on the door. Many of the dinner supplies have been purchased. For reasons I don't understand, turkeys that sold for 19 cents a pound during Thanksgiving will be closer to 99 cents a pound at Christmas, but Christmas turkeys are a family tradition around my home. It would have been smart to buy two turkeys at Thanksgiving and save one. Unfortunately, my freezer had no room for it.

As I count up what I still have left to buy, it looks like I will actually stay within my budget.

If I can stay on target, that will be Grace's Christmas present to Grace!

Planning for 2008--Part I

The first part of any plan is knowing what one will be making. Since I am a union member, and part of our collective bargaining team, I now know exactly what I'll be making in 2008: precisely the same amount I made in 2007!

However, I will be getting a lump sum in January, 2008. That's the good news. The semi-bad news is that in January, I owe both my daughter's private school tuition and tuition and books for my granddaughter in community college. The lump sum plus another couple of hundred will just about cover both.

Of course, I would owe all that tuition whether or not I get a lump sum, so getting the money is better than not getting it.

But it would have been nice if I could actually see, smell, touch even an extra dollar!

Sadly, it is not to be.

Miscellaneous?

One of those things Dave Ramsey is always saying is "Give every dollar a name" when budgeting. I'm working on my December budget with this in mind. But a mistake I've made in the past is naming every dollar so minutely that I'm not prepared for unexpected expenses that don't fall into my carefully-crafted catagories.

For example, in November, the following expenses cropped up: (1) My high-school senior needed $13 to go on a class outing to see Beowulf (they couldn't just read the book?); (2) My five year old granddaughter who still wears pull-ups at night left hers at home when she came for Thanksgiving--who knew that the smallest package costs $12?; (3) No one could find the corkscrew for the Thanksgiving wine and none of my neighbors had one--six unbudgeted dollars(and dang if I didn't find my old one when I was putting the turkey roaster away two days later!); (4)There were two baby showers and one retirement party in my office in November--exit $60; and (5) A friend invited me to a cocktail party--I knew she was running for state attorney general but I didn't realize the party was a fundraiser--another $25 gone, though I will recover it when I file my state income taxes.

SO--$116 dollars that had no name but still had to come from somewhere.

That's what I really hate about budgeting. How, exactly, could I have predicted any of those expenses? And none of them qualifies as an emergency expense.

So, I'm now adding a budget entry for miscellaneous. But it's just a guess as to how much to put in it. For December, I'm making it $75 and keeping my fingers crossed.

6th Month Anniversary & November wrap-up

Six months of blogging. Feels like it has been longer. I mean that in a good way!

I'll wait until the end of the year to see what my overall financial picture is like but in the meantime, November went relatively well. My indebtedness is down $993.26 counting my mortgage. If I leave the mortgage out, my debt is down $410.12--not a lot, but better than I managed to do in October.

Getting Scary Out There

I remember advising, many posts back, that one NOT keep checking one's retirement fund balance, particularly in a market as unstable as we are now experiencing. However, since I don't always take my own advice, I have peeked. Big mistake. My funds are down 10% or $17,000. I am closing my eyes, continuing to contribute, and keeping my fingers crossed that in the eleven years I have left until retirement, this will all work itself out. It had better--I have no good recipes for dogfood casserole

And a Happy Thanksgiving to All

Thanksgiving is my favorite holiday--kinda like Christmas, without the expense, the hype, or the planning. For Christmas dinner, I invite only family. But Thanksgiving is for everyone--my sister from New York, my best friend of 30+ years, the Russian woman I work with who wants to experience an American Thanksgiving, one daughter's new boyfriend, one daughter's old boyfriend who still shows up every Thanksgiving for reasons no one understands, my grandkids who range from age 19 down to age 4, the neighbor who expected to fly to California but broke her leg and can't travel, and various and sundry others.

I buy and prepare the twenty-two pound turkey. I provide the TV set--two of them, actually. One for the football games and one for the playstation.

Everyone else brings the rest of the food, and my family can generally live on the leftovers for several days.

I catch up on the gossip, my adult children who are scattered up and down the coast come together and compare notes, the grandchildren play hide and seek all over over the house--and at least three people always volunteer to do dishes because "Grace did all that work making the turkey." Lemme tell ya--offering to do the turkey is the biggest scam around. It's the easiest part of a Thanksgiving dinner and barely qualifies as cooking.

For one glorious day, I'm not even thinking about money--I'm thinking how much I enjoy just hanging out with my friends, my family and all those other interesting people who happened to come by for dinner.

D'ya suppose that's why they call it Thanksgiving?

Maxed Out is an In Movie

I'm a tad behind the curve on this one. "Maxed out" is a documentary that has been around for awhile. In my usual timely fashion, I finally watched it last night. But in the best frugal condition, I waited until it came out on DVD, and then I reserved it at my local library. So, there was Grace, two of her adult kids, and a gigantic bowl of popcorn.

The movie is laugh out loud funny. But it's the kind of movie that makes me uncomfortable even as I'm laughing. How funny is it, really, to see a 44 year old retarded man who can only write his name when he is copying from printed letters, get a credit card? Do I want to see kids enter college where they get free T-shirts by signing up for credit cards, and where, in two of the saddest cases, they commit suicide over their debt? Why am I laughing when Bush appoints a disgraced banker to head a watchdog agency, when I should be throwing shoes at the television set?

Like many documentaries with a political agenda, "Maxed Out" makes no pretense of fairness--in fact it deliberately juxtaposes scenes and comments to get easy laughs.

But in the end, it is an utterly maddening movie. How dare the credit card and lending industries talk about personal responsibility when they deliberately exploit the most financially vulnerable among us.

The movie ends with the passage of bankruptcy reform and the spectre of possible sub-prime mortgage failures. From the vantage point of another year, we now know that bankruptcy reform did not harm the poor as much as we thought it might, and it did harm the credit card industry far more than they predicted. Some crows come home to roost in exactly the right place!

As for the possibility of subprime mortgage issues? How many ways can one say "Duh?"

Holidays in GRACEland

I kinda blur everything from Thanksgiving through Christmas altogether--the resulting assault on my finances gives me a whopping headache.

And therein, lies my greatest discontent. How can I enjoy the holidays when I am always worried about its impact on my finances? If the true joy of the holidays is in family warmth, why are my kids and grandkids less than amused if all they get from me is socks and underwear?

Both Thanksgiving and Christmas take place at my home. My kids bring side dishes, but I'm the one buying and preparing the turkey and any other main dishes.

I'm the one who buys the "big" gifts for my children and grandchildren.

I am determined that this year will be different. I am determined to pay attention to my finances and NOT to use my credit cards.

I have a budget for the holidays. It is $1845, with a leeway of $300 due to a check that will come in December 31st.

You'd think that would be enough, but my guess is that it will be close.

Part of the reason is that at least $400 will be earmarked for gifts for my sister. Why my sister, you might well ask? Well, since our parents died, she and I are the only ones who really remember each other's birthdays, and carry on our parent's tradition of lots of nice presents under the Christmas tree. My sister has no children, and a six figure income. I may spend $400 on her, but I know that she will spend over a thousand on me. My lime-green couch, my lifetime Tivo, the sink in the upstairs bathroom are all courtesy of my sister, not to mention the Coach bag that shows up with my name on it every year. I am seriously going to ask her for a dishwasher this year! So, within the framework of my finances, I take good care of my sister at Christmas.

Then, there's my FIVE children (what WAS I thinking?) and their SIX children--ELEVEN folks who are expecting wonderful (read that: expensive) things from mom or grandma.

Plus, there are the hangers on--the boyfriends and spouses who will show up, and for whom there needs to a little something under tree.

Oh, and there's the tree ($20) and the wreath for the door ($17) and something for the Salvation Army bellringers ($20) and. . .

Sigh.

My plan, for the moment, is budget $150 apiece for my adult children, $50 for each of my youngest grandchildren, $75 for the two older grandkids, and $25 for several miscellaneous folks.

I'm curious how this compares to the rest of the world. Too much? Not enough?

Surprising Money Saves

I spent much of this weekend at a local literary festival. I budgeted the $5 per day to get in, counted on getting a lot of free pens, bookmarks and other do-dads, determined not to buy any books, and looked forward to seeing a number of my favorite authors in person.

All of the above happened as planned. I even managed not to buy any books, which--trust me on this one--took some definite intestinal fortitude.

But, big surprise for me, I also saved some money.

The local daily newspaper was one of the exhibitors. They couldn't sell me a subscription since I have been a subscriber for over 30 years. But, by promising to save me $2 per month, they did pursuade me to have the monthly costs taken directly out of my checking account. And to sweeten the deal, they threw in a $5 grocery card at a store I frequent.

I would have enjoyed this festival at any rate, but combine it with the money savings, and what's not to like?

Adoption on the Cheap

November is National Adoption month.

Given that this is a personal finance blog, and given that I adopted five daughters without spending a dime for the adoptions, I think it is time to dispense with some of the financial myths surrounding adoption expenses.

The biggest myth is that adoption is prohibitively expensive. It can be, of course. Adopting.Org reports that a private adoption of a healthy, white infant can cost anywhere from $8000 to $30,000. International adoption runs a close second, from $7,000 to $25,000.

But I adopted each of my children from state foster care. Not only did I not pay anything for the adoptions, the state reimbursed me for the travel costs involved in meeting with my children and their social workers, and continues to give me an adoption assistance payment each month. Each child was also covered by Medicaid until age 18. (I put my kids on my own insurance plan when they came into my home, but having them on Medicaid meant I never had co-pays.) Health insurance companies are required to put your adopted children onto the policy as of the date of placement in your home, even if the adoption itself doesn't take place until later. Also, healthcare providers that don't routinely take Medicaid usually will make an exception when your family is already being treated through your employer's policy.

A number of employers (not mine, unfortunately) offer adoption benefits that are much like FLEX plans. Specific adoption expenses come out of pre-tax income. If your employer does not have such a program, it may well be worth your time to check this benefit out and present it to your employer as something they might like to offer. The big selling point is that because the employer will not have to pay FICA on pre-tax income, and because those FICA payments are usually more than what private FLEX firms charge to administer plans, the benefit is revenue-neutral for the employer. If your company already offers FLEX medical and childcare, call the administrator to see if they can handle adoption benefits as well.

There are also substantial tax benefits to adoption. These are available for all adoptions, whether domestic or international, but they are higher and better for anyone adopting out of foster care. Check out the IRS website for Forms and Instructions (Form 8839) to claim the tax credit. For one child, it is currently $10,960. It can be spread over more than one year. If the adoption is international, the credit cannot be claimed until the adoption is finalized. However, for a domestic adoption, there doesn't even have to be an adoption as a final result, provided the expenses were incurred as part of an adoption process.

For the adoption of a special needs child (and keep in mind that a "special need" can be as minor as a child being African-American, or over six years old, or part of a sibling group, or having a family history of mental or inheritable physical illness), one does not even need to have incurred that much in expenses to take the credit.

That's right--at least on the front end, one can actually make a profit on the adoption.

With my usual stellar timing, I adopted for the final time the year before that particular provision of the tax code was passed. So, no profit for Grace, unless you count the addition of five very special girls to my family as a profit.

Come to think of it, I do consider that a profit. And a blessing.

Monthly Scorecard

Thank God October is over. Between private school tuition for my 17-year-old (who attends a school for learning disabled students), various crises, getting oil for the winter, and all the niggling little expenses for my grand-daughter in her first year of college, I was barely hanging in there.

My total debt reduction for the month was a miserly $341.73. Still, it's a reduction, for which I am grateful.

And last night, I didn't have as many trick or treaters as I expected, so I have half a bag of miniature Snickers left over. I'm grateful for that, too.

Festival of Frugality is Up

Yes, it is. Being Frugal is the host, and my post about online-surveys is there among many others.

Speaking of being frugal, yesterday, I got $30 from Lightspeed Panel and 2 $10 Starbucks giftcards. I should save the latter for stocking stuffers, but an overwhelming urge for a grande coffee and a cranberry orange scone overtook me this morning, so, um, NO to that idea!

Keep Those Dollars Trickling In

Even before I write this, I suspect I'm going to get responses that tell me this is a waste of time. Nonetheless, along with similar penny ante financial activities like cutting out and using coupons, I mine simple online activities for money or gift cards. There are many sources out there, but these are the ones I use, along with my comments:

My Points: My number one favorite site for giftcards that are easy to earn. I can earn points by buying things through this site, but over the course of three years, the only thing I've ever bought is the Entertainment Book for my city. And I don't buy it until they offer the book with free shipping (or this year, $1 shipping) and a $25 restaurant card and 1000 MyPoints. However, I can also earn points just for reading the ads. This consists of opening an e-mail, clicking on the "act now" button which takes me to the advertiser's website, and then closing the website and the e-mail. Basically two clicks and I've earned 5 points. Other points are earned for surveys, including dorky 2-question surveys like "Do you have life insurance? Yes/No; Are you interested in purchasing life insurance? Yes/No." For me, that's a yes on the first and a no on the second question, at which point I earn 10 points. Then, there's signing up for newsletters, such as Viking River, a travel agency. 50 points and I never even open the ensuing e-mails. God bless the delete button. After a month or so, I terminate the subscription.

The best deals with one's MyPoints are $10 gift cards from Barnes & Noble, Old Navy, Gap, Red Lobster or various other trendy places for 1400 points. But $5 cards are available for as little as 750 points.

If I don't get the Barnes & Noble card, I spring for the $10 Starbucks card for 1450 points.

If all this sounds like too much work for too little reward, all I can say is that it's not. In my work, I get a lot of e-mail, so I don't mind opening a few extra that will give me something back over the long run.

My Survey: my favorite survey site with lots of ten point surveys, and a surprising number of longer ones. For the record, no "twenty minute" survey actually takes more than ten minutes to complete. Most surveys are worth 75 or 150 points. The points can be traded for money or gifts. At $10 per 1000 points, I usually opt for the money.

Another good survey site is Lightspeed Surveys. This one also pays $10 per 1000 points, with the points especially easy to earn.

One thing about all the survey sites is that they really don't want to hear from us older folks--I note that young women and, particularly, young men have many more surveys available to them. If one is African American or Hispanic, that will also increase the chances of a survey being available.

One way past this overt discrimination is to have a teenager in the house. Most survey sites will let your teenager earn points under your account. My daughter likes taking the surveys. Fortunately, she hasn't asked about the points or what I do with them.

There is one thing, common to bloggers, that I do not do. That is, I don't have any paid advertising on this site. I may change my mind about that in the future, but for the time being, I want this site to be all Grace, all the time, with no advertising to distract either me or the reader.

A Spoonful of Sugar

Let's start with the fact that it was all my fault.

I knew I had online payments to make on the 15th. It was a Monday, I got busy, and next thing ya know, I'd missed the cut-off time (3:00 p.m. ET, which is, unfortunately, noon for me on the west coast).

So I was looking at late payment fees on three credit cards that ranged from $22 to $39.

I lamented the loss to a co-worker who said "Call them up and ask them to rescind the charges. Be nice."

I was fine with the calling up piece, but I am not known for always being nice. However, it was worth a try.

I only called two places. The third was handled entirely by e-mail. I was so nice, and so apologetic, it's lucky I didn't go into a diabetic coma

Dang if it didn't work.

I told everyone who responded, including "Robert" with the suspiciously heavy Indian accent, that I knew I was in the wrong and that I had, in fact, made a late payment. Since I was only one day late, and it hadn't happened in the past, and I was a good customer (here, I had my fingers crossed that they looked only at my balances and payment history without noticing that I hadn't charged anything in almost a year), could they please just this once help me out.

When they did help me out, I thanked them profusely.

I saved myself $78.

Of course, I wouldn't have had those charges in the first place if I'd been a tad more prompt with my payments

Toilet Paper Economics

Big Sigh.

Kimberly-Clark has announced it will be raising toilet paper prices in January, 2008.

Is there any better indication of creeping inflation?

The problem for those of us already practicing frugality is that there is nowhere to go to avoid these price increases. Well, I guess that's not entirely true--one could always move from 2-ply to 1-ply, but there is a limit to the sacrifices I'm willing to make to save a dollar.

When we already buy generic products, check for the lowest prices, and generally use it up, wear it out or don't buy in the first place, what happens when the lowest prices rise?

This, of course, is the curse always visited upon the poor. There are some items, like toilet paper, that one must buy. And if one's income does not increase at a rate commensurate with what one must buy--well, no wonder the poor keep getting poorer. And the frugal wind up saving less.

No Easy Answers, but the Advice Seems Questionable

The Boston Globe presents a money makeover for a 55 year old single school teacher with a son who is a junior in college.

As a single parent in my late '50's I'm drawn to these stories. I wind up measuring my progress against others in my age/financial bracket with similar life circumstances.

Diane's financial situation is serious, but I wonder at some of the advice the counselor is giving her. Initially, he suggests foreclosure on her condominium as a viable option. Really? While it is certainly an option, it appears to me that it would be among Diane's worst choices. Her credit rating is already trashed due to payments she missed while waiting to get on a professional debt-reduction plan. Fortunately, she refuses to consider a foreclosure. Good for her.

Then the financial "expert" suggests that she retire from teaching in order to access her pension funds. He says she can get some other job. This strikes me as crazy. While teachers are in demand, it takes awhile to "grow into" one's position at any given school. I assume she would have to change school districts and possibly even states in order to access the pension if she intends to teach somewhere else. At age 55, I also assume she enjoys teaching as a career. How emotionally healthy would it be to change careers at her age, even if she wanted to? What about health insurance? She would have 18 months of health insurance coverage under COBRA, but only if she can afford the monthly costs. Given that teachers tend to have unusually good health benefits at unusually high costs (for the employer, not the employee), COBRA may be too expensive an option for her.

In the end, the "expert" does give Diane enough ammunition to approach her lenders and secure a two-year moratorium on an interest/payment reset. This is temporary, of course, but in two years, her son will be through with college. One hopes he would be employed and able to help out on any remaining loan payments. At the least, she will have had two years to build up equity in her condominium in the event she has to sell it.

I am no personal finance expert. Part of the reason I read as much in the field as I do, and all of the reasons for having this blog center around the expertise of others. It bothers me to read advice such as that given to Diane--so much of it appears to me to be downright harmful.

How does one wade through it? How does one know who to trust? How does anyone in crisis figure out what the next step is for them?

I Should Be Where? At What Age?

Hazzard, at Everybody Loves Your Money has a nifty chart of what your net worth should be at every age from 21 to 64. As long as we're talking about net worth, it works for me. I'm only a few thousand behind. But I suspect it's really savings Hazzard is talking about. In that case, I'm way off the mark. I should have $580,781 accumulated. Instead, as of this morning, I have $172,009. If I count my rental home, which could be liquidated, that only brings the total up to $309,605.

Sigh.