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.

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.

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.

Thanks to Living Almost Large

If you haven't been reading Living Almost Large, you're missing an interesting and thoughtful financial blog. I'd say that even if she hadn't bribed me. But bribe me, she did. I received in the mail today, a copy of "Investing in an Uncertain Economy For Dummies," which I won by responding to a contest on her blog. Never mind that there were only two entries. Maybe if the title had been "How to Survive in an Uncertain Economy," there might have been more interest?

I doubt investing will be much on my mind during the next year, but I'm still glad I won the book, and I DO plan to read it. Thanks, LAL.

Christmas Confessions

They say that man plans, God laughs.

I should have kept that in mind when I made my Christmas budget.

This year, God not only laughed, S/he decided to give us WEATHER. I realize that folks who do not live in the pacific northwest already have WEATHER, but we residents of the rainforest just have wet or wetter. We do NOT usually have 14 inches of snow! The entire city shut down for the week before Christmas. I couldn't go to work, which was fine by me. But I couldn't get much else done, either.

Financially, there was weather-related good news and bad news. I saved a bundle on gas since I could not get my car out of the driveway. However, I spent way more than I wanted to on groceries since the only stores within walking distance were a local mini-mart and Whole Foods (what some accurately refer to as Whole Paycheck). We ate well for Christmas, but it was expensive.

Some of my adult children and their children couldn't get to my home at all. Others wore out their welcome as I played host for over a week--about five days longer than any of us wanted! More unanticipated expense.

Then there were the gifts that I had not yet purchased. Forget sales. The only thing that mattered was whether the store that sold what I wanted was reachable by bus. Then I paid whatever the price was. Naturally, that price was generally higher.

Interestingly, none of this bothered me too much because I still had some of my "garage fire" money. Funny thing about having funds that have not been earmarked--they not only give one a sense of comfort, but they are far too easy to spend. I did much better at sticking to my budget last year when I was worried about every penny.

Ah well--onward to 2009. My year-end wrap up and new goals are coming tomorrow.

In the meantime, I finally updated my links. Thanks for your help.

Use It or Lose It

My house is a mess due to the painters. I can barely walk in my living room where all the bedroom furniture is currently hanging out.

So, unable to keep things clean at home, I'm, instead, determined to tidy up my blog--specifically my links to other blogs.

Can I just say that when I like a blog, I like to read NEW posts in that blog? Some of you have fallen by the wayside. I miss you. Where did you go? I want you back.

Solitary Dancer at Bare Bones Living is gone, though she assured me in a private e-mail that she is still tracking her finances, just not so publicly. The guys at Engineering My Finances and The Platinum Years haven't posted since February and July respectively.

At any rate, if you're still alive and haven't posted in awhile, let me know.

If you have a blog that you think I should be reading (and therefore adding to the list), let me know that, too.

I'm giving it a week, and then--

Ruthless pruning will ensue.

The Hidden Costs Behind the Free Gifts

I was thinking about this as I marched through Walgreen's picking up several packages of Double A and Triple A batteries. (They are "buy one, get one free" this week.) Once the grandkids run through these batteries for their electronic Christmas gifts, their parents will be stuck supplying the "free" gifts with expensive batteries.

And then there's Grace. My baby sister is paying for my interiors to be painted--it's an expensive and welcome gift. BUT. . .

Who knew all the hidden costs?

For example--the drapes in the master bedroom. I've been here sixteen plus years and have never done more than occasionally vacuum them. But when I took them down for the painters (and recovered from the dust-induced sneezing fit), it was painfully obvious that they needed a professional cleaning. How is it I have survived 59 years on this planet and didn't know that dry cleaners charge by the pleat for draperies? Two sets of clean drapes later, I am out $180!

It also turns out that once the closet doors were painted, their hardware looked shabby. For a mere $48, I combated shabbiness throughout the bedrooms!

Yes, I love my free gift. I'm just a tad less enamoured of the unexpected expenses that came along with it.

Ah Warren--Say It Ain't So

A rather disturbing blog entry concerning Warren Buffett and his granddaughter appeared this morning on AOL. I don't know what bothered me more--Buffett's casual assumption than an "adopted grandchild" was less than a "real"--read that, biological--grandchild, or that one of the richest men in the world would allow a grandchild to go without health insurance.

As the mother of five daughters adopted from the foster care system, there is no question in my mind that these are my "real" kids. Nor do/did my parents, sister or friends ever question that. They didn't get a vote, either. What the heck does Buffett mean when he says HE didn't adopt her as a grandchild--um, Warren? YOU didn't have to--YOUR SON adopted her, and that makes her YOUR grandchild. Don't you have lawyers who can explain that to you?

Of course, the grandchild in question is an adult and apparently makes $40,000 a year, so it's not like Buffett owes her health insurance, but you'd think it would concern him that she doesn't have any.

I know it concerns me when my adult children or my grandchildren don't have health insurance, even though I am not in a position to provide it for them.

I dunno--even assuming that Buffett has more reason than a documentary film and an Oprah interview to dislike his granddaughter, his statements about adoption and his lack of assistance to her are disturbing. It's not like he's being asked to give her a Corvette--it's HEALTH INSURANCE, for Pete's sake.

Freemarket Kharma

Fortunately, I have never said I was a nice person. Or if I did say it, you should probably know not to trust me on the subject.

It's not nice to have warm, fuzzy feelings over the misfortunes of others.

But. . .

Mea Culpa. I couldn't help myself.

There I was, thumbing through my new issue of Vanity Fair (purchased frugally for a six dollar annual subscription rate on E-Bay) and I happened on Michael Shnayerson's article about the cutbacks the super rich are having to make in the wake of the Wall Street crisis.

I particularly liked the trophy wife gazing at shelves of $6000 handbags bemoaning the fact that she will have to cut back her maid service. She couldn't just sell one of those fancy bags? Pardon me if I'm feeling sorrier for the maid than I am for Ms. Trophyette.

Actually, it is the personal trainers, the nannies, the charities who depend on monies from the well-monied, the waiters and the real estate agents who are the real losers here. But the very wealthy, down to their last ten million or so, seem more worried about the upkeep on their summer homes than the fate of those they employ.

Poor, pitiful them.

And shame on Grace for having a laugh at their expense (both literally and figuratively!)

Errata

This is a list of bits and pieces that don't warrent an entire post but are too good not to put somewhere on this blog.

1. My total indebtedness went down in November, though not by much. I'll do a more thorough analysis at the end of December.

2. My 401(k) is back over $100,000 but the roller coaster is giving me a headache. I have made a decision NOT to increase the monthly amount I put into my 401(k) in 2009 but I'm not going to reduce it either.

3. On the job front, I will not be getting a raise this year, but I will get a lump sum payment in January. We are unionized and have a salary scale. I've been at the top of the scale for years, so rather than keep adding steps to the scale, I am more likely to get a lump sum that is a percentage of my annual wage. The truth is, I rather like this, though I would not want it to continue forever. I could get $120 more per month which winds up being about $42 more per paycheck or I could get one larger check. Sad to say, I am more likely to put the lump sum toward debt reduction than the regular monthly increase.

4. I did hit the major sales on Black Friday, and if I do say so myself, I got a lot of great deals and no lives were lost. In fact, it seemed to me that there were not as many folks out at 5:00 a.m. as I've seen in the past. One local store puts all their socks and bath towels on sale at half-price--I stocked up for the year. Another had comforters for $9.99. I got several since I never seem to have enough blankets, especially when I have guests. For whatever reason, GPS units are on everyone's Christmas list this year, so I bought several TomTom 125 units for $99 each--the lowest price I've seen for those. I also got 60% off on children's winter jackets, so guess what the grandkids are getting from Grandma Grace this year.

5. My sister (the rich one, and the provider of major gifts to moi!) came for Thanksgiving and gave me my gift early--a great gift it is, too! She is paying for my entire home interior to be repainted and rewallpapered. I've been in this home 18 years and have repainted only two rooms. After assorted children and grandchildren, some with serious behavior issues that impacted (literally!) the walls of my house, it badly needs refurbishing. Not to mention that the previous owners thought that blue plaid wallpaper would look good in the kitchen. Ahem! Since when is blue plaid wallpaper a good idea for ANY room? So Grace is knee deep in color chips and wallpaper samples. Pray for her, and keep her away from magenta accent walls!

6. I love cranky bloggers, so I particularly appreciated this one from Becoming Debt Free in 2009. The woman who griped about new hubby's child support debt annoyed me the most, especially because she may well be in the old wife's position some day.

7. Gas is $1.69 and my 100 gallons of heating oil is now $189 rather than the $307 it was I paid the last time I put oil in the tank.

That's it for the small stuff. More, later.