I was trying to figure out what Sharon from "Musings of a Midlife Mom" was talking about when she commented on my last post.
What? Me retire at age 59? How does that work when I'm already 60 years old?
OK, so I made a typo. After sixty years on this planet, I'm entitled to a typo or two. Or five.
69 years old, NOT 59! 69!
That's the current plan, God and my health willing. Of course, I'd be happy to retire sooner.
Maybe I could win the lottery?
God, are you paying attention?
I wonder if I have to buy a ticket first?
Friday, August 28, 2009
Thursday, August 27, 2009
August Update
August turned out much better than I anticipated, helped along by the fact that neither my TV purchase nor my van repairs (the second set) have yet registered. I reduced my total indebtedness by $737.06. Not exactly an amazing amount, but I'm just grateful it is headed in the right direction.
In the meantime, it's getting exciting watching my 401(k) recover. I now have $8000 more in my retirement savings than I had last month, and only $1025 of that comes from new contributions. According to Financial Engines (my favorite website when it comes to figuring out what I need for retirement and how I currently stand in my effort to get there), I have a 72% chance of retiring at age 59 with an income of at least $43,000. (My retirement goal is to have at least $40,000 per year, but preferably $50,000.)
So August turned out OK, if not spectacular.
On the other hand, with September comes school clothes and tuition for the grandkids.
I'm going to follow AA's example, and just take it one day and one month at a time.
In the meantime, it's getting exciting watching my 401(k) recover. I now have $8000 more in my retirement savings than I had last month, and only $1025 of that comes from new contributions. According to Financial Engines (my favorite website when it comes to figuring out what I need for retirement and how I currently stand in my effort to get there), I have a 72% chance of retiring at age 59 with an income of at least $43,000. (My retirement goal is to have at least $40,000 per year, but preferably $50,000.)
So August turned out OK, if not spectacular.
On the other hand, with September comes school clothes and tuition for the grandkids.
I'm going to follow AA's example, and just take it one day and one month at a time.
Monday, August 24, 2009
Tweaking My Bloglist
I went through my bloglist and checked that all the links work. I also removed anyone who hadn't posted to their blog in the last six months. And, since I'm always finding new personal finance blogs to read, I added a few new ones to my mix.
If you think I missed a good blog, or you want to know where YOUR blog is, leave a comment.
If you think I missed a good blog, or you want to know where YOUR blog is, leave a comment.
Sunday, August 23, 2009
The Van Lives!
What do you know!
Apparently my van's transmission is nothing to write home about, but neither does it need to be rebuilt. A $220 repair, and I'll be good to go tomorrow.
You have no idea how relieved I am, even though I have been reading the auto ads and fantasizing about a new car. I haven't had a car payment in five years, and I'm really not in a financial place to have one now.
Murphy, of course, watched my adventures in auto mechanics, and finding only disappointment there, decided to move on to my ten-year-old TV set.
Poof! One minute I'm watching it and the next, the picture is gone.
Some would point out that this might be a good time to learn to live without a TV, but that ain't gonna happen. (Um, yeah, Ole Grace is a video addict.)
But, hey! I'd just dodged an $6000 bullet, so what's $206 for a 22 inch flat screen TV, right?
Did I read Consumer Reports? Did I check for the most quality at best price? Or did I run out in a panic and buy the first reasonably priced TV set I saw? (No prizes for figuring out the answer to that one!)
This is NOT going to be one of my better months for debt reduction.
But dang! I still have my not-so-trusty Dodge Caravan, and a brand new TV. Color Grace happy!
Apparently my van's transmission is nothing to write home about, but neither does it need to be rebuilt. A $220 repair, and I'll be good to go tomorrow.
You have no idea how relieved I am, even though I have been reading the auto ads and fantasizing about a new car. I haven't had a car payment in five years, and I'm really not in a financial place to have one now.
Murphy, of course, watched my adventures in auto mechanics, and finding only disappointment there, decided to move on to my ten-year-old TV set.
Poof! One minute I'm watching it and the next, the picture is gone.
Some would point out that this might be a good time to learn to live without a TV, but that ain't gonna happen. (Um, yeah, Ole Grace is a video addict.)
But, hey! I'd just dodged an $6000 bullet, so what's $206 for a 22 inch flat screen TV, right?
Did I read Consumer Reports? Did I check for the most quality at best price? Or did I run out in a panic and buy the first reasonably priced TV set I saw? (No prizes for figuring out the answer to that one!)
This is NOT going to be one of my better months for debt reduction.
But dang! I still have my not-so-trusty Dodge Caravan, and a brand new TV. Color Grace happy!
Friday, August 21, 2009
Bi-Polar Finances
With apologies to those truly suffering from Bi-Polar Disorder (a mental illness I wouldn't wish on anyone), I sometimes wonder if I'm financially bi-polar. Keep in mind that in the rest of my life, I am a pretty steady, optimistic person. But when it comes to money, particularly MY MONEY, my emotions go all over the map--not always rationally.
Take today. For several weeks, I've been waiting for a $75 check to come through my account. I dutifully subtract it from my balance each time I view my account online. Then the bank notifies me that they made an error, and that the check was actually cashed back in June, and that it has been subtracted from the account already.
Which means I have $75 more than I thought.
Which means I'm ecstatic.
Over $75?
I have to get out more!
But just a week ago, I was depressed because I may well have to get a new (to me) car. The vehicle issue has not resolved, so I should still be depressed, right? But, no--I've got $75 that is new money to me!
It bothers me that I can be so thoughtful, so rational, in other aspects of my life, but not with my finances. I flow emotionally in whatever direction the financial wind is blowing.
Yesterday was down. Today is up. God only knows how I'll feel tomorrow.
Take today. For several weeks, I've been waiting for a $75 check to come through my account. I dutifully subtract it from my balance each time I view my account online. Then the bank notifies me that they made an error, and that the check was actually cashed back in June, and that it has been subtracted from the account already.
Which means I have $75 more than I thought.
Which means I'm ecstatic.
Over $75?
I have to get out more!
But just a week ago, I was depressed because I may well have to get a new (to me) car. The vehicle issue has not resolved, so I should still be depressed, right? But, no--I've got $75 that is new money to me!
It bothers me that I can be so thoughtful, so rational, in other aspects of my life, but not with my finances. I flow emotionally in whatever direction the financial wind is blowing.
Yesterday was down. Today is up. God only knows how I'll feel tomorrow.
Tuesday, August 18, 2009
More than I Financially Wanted to Know
Only once in my life have I cared enough about a photograph to check out who took the picture.
It was a photograph in Rolling Stone many years ago. It was, of course, by Annie Leibovitz.
Since that time, I've attended exhibitions of her photos in New York City, Paris and Seattle. And I always look for her work in Vanity Fair.
I marvel at how she looks at people. And how she gets them to look back at us.
But great artists are not always great at managing their money. Instead, greatness brings its own issues, including in Annie's case, addiction, perfectionism, and no one to put the brakes on when necessary.
New York Magazine takes a long look at Annie Leibovitz's finances and gives us a scary portrait of a sixty year old artist just past her zenith as well as an older parent of an eight year old daughter and four year old twins, who is now near bankruptcy.
It saddens me to see the real life warts on people whose art I admire. Not that I don't think Leibovitz brought her financial ills upon herself--clearly she did. But it gives me no joy to see her brought down financially.
It was a photograph in Rolling Stone many years ago. It was, of course, by Annie Leibovitz.
Since that time, I've attended exhibitions of her photos in New York City, Paris and Seattle. And I always look for her work in Vanity Fair.
I marvel at how she looks at people. And how she gets them to look back at us.
But great artists are not always great at managing their money. Instead, greatness brings its own issues, including in Annie's case, addiction, perfectionism, and no one to put the brakes on when necessary.
New York Magazine takes a long look at Annie Leibovitz's finances and gives us a scary portrait of a sixty year old artist just past her zenith as well as an older parent of an eight year old daughter and four year old twins, who is now near bankruptcy.
It saddens me to see the real life warts on people whose art I admire. Not that I don't think Leibovitz brought her financial ills upon herself--clearly she did. But it gives me no joy to see her brought down financially.
Friday, August 14, 2009
Snarky Television
I have a new favorite TV show--HGTV's "Real Estate Intervention."
It features totally deluded homeowners who have yet to face the fact that their homes are not worth what they want for them in what is decidely a buyer's market.
Mike Aubrey is the host. While he is a hulk-like presence (complete with bald head and Hitlerish moustache), he is gentle with these idiots as he takes them around to comparable homes that have sold for or are listed at many thousands less than the featured homeowners expect to get for their own houses.
In one case, he takes his charges to a home that is an exact duplicate of their house, except that it has a fireplace, which theirs does not. He points out the much lower selling price, at which point, they tell him, with straight faces, "Well, we think some buyers won't like the fireplace and will pay more not to have one."
Say what? Are they kidding? Personally, I never use my fireplace and wouldn't care if my home didn't have one, but even so, I'm aware that having the fireplace increases the value.
Some of the homeowners are just in sad situations fostered by a foundering economy. One older woman is selling her Georgetown home (which actually is NOT in Georgetown--something she keeps forgetting) because she lost her job and hasn't been able to find a new one. Unlike most of the featured sellers, she does wind up making about $100,000 on her eventual sale--I, for one, was happy that she did.
Which brings up another point. Several of the homeowners seemed to have been using their houses as their personal piggy bank. One family purchased their home for $120,000 but now owed over $200,000.
I purchased my home in 1993 for $95,300--a 1929 barn of a house in an iffy but thriving neighborhood. In 1999, I refinanced the home at a lower interest rate, reduced the term of the mortgage to 15 years, and pulled out $20,000 for some much-needed deferred maintainance. In 2006, I took out a second mortgage through my credit union in the amount of $30,000 to put on a new roof and add a basement waterproofing system (also much-needed in that each winter my basement doubled as a murky swimming pool!). Today, I owe a little over $45,000 on my mortgage and $28,000 on the second. The first mortgage will be fully paid off in 4.5 years. The second in 10 years, though my plan is to throw the first mortgage payments at it once I have those funds available, so it should be paid in 6 years.
The most important steps are the ones I didn't take--I did not get upside down with regard to my home. It is currently worth at least $300,000. So if push ever comes to shove, and I had to sell, I would make a considerable amount of money from the sale.
Oddly enough, since Zillow once valued my home at over $400,000 a couple of years ago, I often still feel as though I've LOST money on my house--one's personal feelings and reality are not always the same!
Reality is what most of the homeowners on "Real Estate Intervention" don't want to face. Sadly, by the end of each show, most of them are still hanging onto their dreams and refusing to price their homes in line with the market. In their minds, their homes are worth more, never mind that the comparable homes sold for less, have more amenities, more space, and better lay-outs. By the end of each show, most have failed to sell their homes, or have taken them off the market entirely.
Which, of course, allows viewers like Grace to write snarky posts like this one!
It features totally deluded homeowners who have yet to face the fact that their homes are not worth what they want for them in what is decidely a buyer's market.
Mike Aubrey is the host. While he is a hulk-like presence (complete with bald head and Hitlerish moustache), he is gentle with these idiots as he takes them around to comparable homes that have sold for or are listed at many thousands less than the featured homeowners expect to get for their own houses.
In one case, he takes his charges to a home that is an exact duplicate of their house, except that it has a fireplace, which theirs does not. He points out the much lower selling price, at which point, they tell him, with straight faces, "Well, we think some buyers won't like the fireplace and will pay more not to have one."
Say what? Are they kidding? Personally, I never use my fireplace and wouldn't care if my home didn't have one, but even so, I'm aware that having the fireplace increases the value.
Some of the homeowners are just in sad situations fostered by a foundering economy. One older woman is selling her Georgetown home (which actually is NOT in Georgetown--something she keeps forgetting) because she lost her job and hasn't been able to find a new one. Unlike most of the featured sellers, she does wind up making about $100,000 on her eventual sale--I, for one, was happy that she did.
Which brings up another point. Several of the homeowners seemed to have been using their houses as their personal piggy bank. One family purchased their home for $120,000 but now owed over $200,000.
I purchased my home in 1993 for $95,300--a 1929 barn of a house in an iffy but thriving neighborhood. In 1999, I refinanced the home at a lower interest rate, reduced the term of the mortgage to 15 years, and pulled out $20,000 for some much-needed deferred maintainance. In 2006, I took out a second mortgage through my credit union in the amount of $30,000 to put on a new roof and add a basement waterproofing system (also much-needed in that each winter my basement doubled as a murky swimming pool!). Today, I owe a little over $45,000 on my mortgage and $28,000 on the second. The first mortgage will be fully paid off in 4.5 years. The second in 10 years, though my plan is to throw the first mortgage payments at it once I have those funds available, so it should be paid in 6 years.
The most important steps are the ones I didn't take--I did not get upside down with regard to my home. It is currently worth at least $300,000. So if push ever comes to shove, and I had to sell, I would make a considerable amount of money from the sale.
Oddly enough, since Zillow once valued my home at over $400,000 a couple of years ago, I often still feel as though I've LOST money on my house--one's personal feelings and reality are not always the same!
Reality is what most of the homeowners on "Real Estate Intervention" don't want to face. Sadly, by the end of each show, most of them are still hanging onto their dreams and refusing to price their homes in line with the market. In their minds, their homes are worth more, never mind that the comparable homes sold for less, have more amenities, more space, and better lay-outs. By the end of each show, most have failed to sell their homes, or have taken them off the market entirely.
Which, of course, allows viewers like Grace to write snarky posts like this one!
Wednesday, August 12, 2009
Singing the No Vehicle Blues
Remember when I paid (OK, charged!) $500+ to put in a new water pump and timing belt in my 1999 Dodge Caravan a couple of weeks ago?
Well, shortly thereafter, the van started to make weird squealing noises. I took it back to Firestone to see if they had done something wrong but they told me it sounded like a transmission problem and suggested I take it to a shop that specialized in transmissions.
So, after a week and a half without a vehicle (I was afraid to drive it), I took it into a neighborhood transmission shop yesterday. Apparently, it will either be something easy to fix or it will need a rebuilt transmission, which will run $1400. No way am I going to have the latter--my whole vehicle is only worth $1600 according to Kelly Blue Book. I'm awaiting a phone call from the shop as I type.
Dang!
Not only will I have wasted the $500 (which it looks like I will be able to pay off before incurring any interest), but I will have to get another vehicle about a year earlier than I intended to.
More debt.
More monthly payments.
And a budget that can stand neither.
Grace is NOT a happy camper!
And here's the kicker! I checked out the eligibility guidelines for the "Cash for Clunkers" program. Apparently a 1999 Dodge Caravan got 19 mpg in city and highway driving when new, which puts it one mile OVER the guidelines. So no help there when it comes to purchasing a new (to me) vehicle.
Honestly, I feel like crying. I know this will all work itself out, but the thought of having to shop for another car and to incur even more debt puts me in a very whiney mood.
I do know that this time around I want a small, high-mileage car, preferably under $12,000. Beyond that? Who knows?
Well, shortly thereafter, the van started to make weird squealing noises. I took it back to Firestone to see if they had done something wrong but they told me it sounded like a transmission problem and suggested I take it to a shop that specialized in transmissions.
So, after a week and a half without a vehicle (I was afraid to drive it), I took it into a neighborhood transmission shop yesterday. Apparently, it will either be something easy to fix or it will need a rebuilt transmission, which will run $1400. No way am I going to have the latter--my whole vehicle is only worth $1600 according to Kelly Blue Book. I'm awaiting a phone call from the shop as I type.
Dang!
Not only will I have wasted the $500 (which it looks like I will be able to pay off before incurring any interest), but I will have to get another vehicle about a year earlier than I intended to.
More debt.
More monthly payments.
And a budget that can stand neither.
Grace is NOT a happy camper!
And here's the kicker! I checked out the eligibility guidelines for the "Cash for Clunkers" program. Apparently a 1999 Dodge Caravan got 19 mpg in city and highway driving when new, which puts it one mile OVER the guidelines. So no help there when it comes to purchasing a new (to me) vehicle.
Honestly, I feel like crying. I know this will all work itself out, but the thought of having to shop for another car and to incur even more debt puts me in a very whiney mood.
I do know that this time around I want a small, high-mileage car, preferably under $12,000. Beyond that? Who knows?
Thursday, August 6, 2009
And I thought I Was Starting Late. . .
Just when I was thinking that I was one of the the worst of the late-bloomers (that's what I get for reading all those wonderful blogs out there by twenty-somethings who are already saving up for retirement--not to mention for weddings, homes, and kids), along comes Sarah.
Sarah was profiled on Monday's Dallas News. (Thanks to Boston Gal for pointing me toward Sarah's story.)
Sarah is 57 and has NO retirement savings. Never mind that her employer would match up to 6% of her salary (meaning, she has left substantial dollars on the table every year) or that in addition to her base salary of $58,000, she apparently makes good money from a family oil well lease.
The article is a tad cagey about just what her annual income is, at one time saying that the amount of oil-well income varies, and at another, quoting the financial advisor as saying that her total income is "very respectable." I can't tell if she's making about the same $75,000 a year I make, or not.
One comment that I don't understand is her financial planner's concern that she may wind up in bankruptcy if the oil money goes away--overall, her debt doesn't seem to me to be that substantial. She owes around $26,000. Maybe it's because I owe about $21,000 so her debt doesn't seem so far off from mine. I've never considered bankruptcy, and wouldn't unless I owed far more than I do. (I do realize that Sarah has fewer concerns about assets, which I would have to consider--she doesn't have much equity in her home.)
The article doesn't mention prior marriages, so I'm assuming that Sarah, like myself, has always been single.
What IS she thinking????
Is she planning to inherit from her parents? I know of several people whose retirements are based largely on what they expect to get from their parents' estates.
Sarah says she is an optimist and has always believed it will all work out. I understand this; I think of myself as optimistic as well.
But late as I am to the world of retirement saving or planning, at least I got there before age 58!
Sarah was profiled on Monday's Dallas News. (Thanks to Boston Gal for pointing me toward Sarah's story.)
Sarah is 57 and has NO retirement savings. Never mind that her employer would match up to 6% of her salary (meaning, she has left substantial dollars on the table every year) or that in addition to her base salary of $58,000, she apparently makes good money from a family oil well lease.
The article is a tad cagey about just what her annual income is, at one time saying that the amount of oil-well income varies, and at another, quoting the financial advisor as saying that her total income is "very respectable." I can't tell if she's making about the same $75,000 a year I make, or not.
One comment that I don't understand is her financial planner's concern that she may wind up in bankruptcy if the oil money goes away--overall, her debt doesn't seem to me to be that substantial. She owes around $26,000. Maybe it's because I owe about $21,000 so her debt doesn't seem so far off from mine. I've never considered bankruptcy, and wouldn't unless I owed far more than I do. (I do realize that Sarah has fewer concerns about assets, which I would have to consider--she doesn't have much equity in her home.)
The article doesn't mention prior marriages, so I'm assuming that Sarah, like myself, has always been single.
What IS she thinking????
Is she planning to inherit from her parents? I know of several people whose retirements are based largely on what they expect to get from their parents' estates.
Sarah says she is an optimist and has always believed it will all work out. I understand this; I think of myself as optimistic as well.
But late as I am to the world of retirement saving or planning, at least I got there before age 58!
Tuesday, August 4, 2009
Festival of Frugality
Every Tuesday brings a new Festival of Frugality. This week, it is hosted by "Modern Tightwad" and Grace's post on her (accidentally) frugal week-end is among the offerings.
And, yes, I really did get through the entire week-end for a measly three bucks!
And, yes, I really did get through the entire week-end for a measly three bucks!
Sunday, August 2, 2009
Freebie Weekend
It started accidentally.
First, I stopped at the library after work and picked up the two movies I'd reserved ("Charlie's War" and "Angels and Insects") for free weekend viewing.
Then Friday evening, a neighbor who was headed out to a local park for a free blues concert, invited me to share a picnic dinner with her family. I'd won a free six-pack of "Mike's Hard Lemonade" in a grocery store drawing earlier in the week, so I brought that along as my contribution, along with a bag of potato chips that had remained miraculously unopened. The weather was warm, the music cool, and the company, great.
On Saturday, a friend and I used our Bank of America debit cards for free entry to a local historical mansion and our local art museum. This is a program available on the first Saturday and Sunday of each month, wherein any proof of a Bank of America account will get one into various city attractions. It's too bad I live nowhere near New York City, because the Bronz Zoo is on the list.
Lunch was another picnic, this time on the grounds of the mansion, with a terrific view of my city, including the mountains in the background. Salami sandwiches and leftover hummus never tasted so good. Then we went to an IMAX movie with the two free tickets I'd gotten a couple of months ago when the projector ate the film I'd gone to see. (I'd only purchased one ticket, but the theatre gave out two tickets to each of us as compensation for the inconvenience.)
Today I went to an office brunch to honor our summer interns.
So here it is, not quite noon on Sunday, and I've spent exactly $3.00 for the entire week-end. (If you must know where the $3 went, consider that Grace NEVER watches a movie without popcorn!)
Now that I see what a cheap weekend it has been, I think I will deliberately not spend anything for the rest of the day just so I can say I had a $3 weekend! And I didn't skimp on a thing!
First, I stopped at the library after work and picked up the two movies I'd reserved ("Charlie's War" and "Angels and Insects") for free weekend viewing.
Then Friday evening, a neighbor who was headed out to a local park for a free blues concert, invited me to share a picnic dinner with her family. I'd won a free six-pack of "Mike's Hard Lemonade" in a grocery store drawing earlier in the week, so I brought that along as my contribution, along with a bag of potato chips that had remained miraculously unopened. The weather was warm, the music cool, and the company, great.
On Saturday, a friend and I used our Bank of America debit cards for free entry to a local historical mansion and our local art museum. This is a program available on the first Saturday and Sunday of each month, wherein any proof of a Bank of America account will get one into various city attractions. It's too bad I live nowhere near New York City, because the Bronz Zoo is on the list.
Lunch was another picnic, this time on the grounds of the mansion, with a terrific view of my city, including the mountains in the background. Salami sandwiches and leftover hummus never tasted so good. Then we went to an IMAX movie with the two free tickets I'd gotten a couple of months ago when the projector ate the film I'd gone to see. (I'd only purchased one ticket, but the theatre gave out two tickets to each of us as compensation for the inconvenience.)
Today I went to an office brunch to honor our summer interns.
So here it is, not quite noon on Sunday, and I've spent exactly $3.00 for the entire week-end. (If you must know where the $3 went, consider that Grace NEVER watches a movie without popcorn!)
Now that I see what a cheap weekend it has been, I think I will deliberately not spend anything for the rest of the day just so I can say I had a $3 weekend! And I didn't skimp on a thing!
Friday, July 31, 2009
July End of Month Review
Things are looking pretty good, especially since summer is often when my budget gets shot to pieces.
I lowered my overall debt by $1075.14--it would have been $50 more if I hadn't incurred a $50 balance transfer fee when I moved one of my credit cards to a "zero interest for nine months" card. Other than that, I did not increase any other balances.
My 401(k) funds are headed up, and now stand at $142,108--still not at the $174,000+ they were in October, 2007, but increasing nicely and at least they are NOT at the $89,654 they fell to in March, 2009.
I have until August 18th to come up with the car repair monies for Firestone--it looks more or less feasible at this point, so I've got my fingers crossed.
I lowered my overall debt by $1075.14--it would have been $50 more if I hadn't incurred a $50 balance transfer fee when I moved one of my credit cards to a "zero interest for nine months" card. Other than that, I did not increase any other balances.
My 401(k) funds are headed up, and now stand at $142,108--still not at the $174,000+ they were in October, 2007, but increasing nicely and at least they are NOT at the $89,654 they fell to in March, 2009.
I have until August 18th to come up with the car repair monies for Firestone--it looks more or less feasible at this point, so I've got my fingers crossed.
Tuesday, July 28, 2009
About That Emergency Fund
When I whined about my $500+ car repair a few posts back, Living Almost Large left a comment, asking: "Don't you have any taxable investment savings? Even in stocks? Is it all in retirement account?"
Good question.
Not-so-good answer.
No, I don't have any taxable investment savings. I don't have any savings at all, except for the ever-changing but never-quite-$1000 emergency fund that Dave Ramsey says we all should have.
While people like Jennifer at "Finding Financial Peace" are well on their way to accumulating three to six months of expenses, others of us are still struggling with Murphy-visitations every time we get near to our first $1000.
JD at "Get Rich Slowly" explores with his readers the issue of what happens after you use your emergency savings. Check out the comments to his post because that's where all the action is. Some readers have three to six months stored away; others are more like Grace.
And just why does Grace have no savings?
16% of my pre-tax income goes into my retirement accounts. When one comes late to the retirement party, cash and time are of the essence. But then there are debts that need to be paid off, and daily life to be lived. When all of those are factored in, not much is left for non-retirement savings.
Right now, I am determined to pay off the car repairs prior to incurring any interest charges (I put the expense onto my dormant Firestone account). I may succeed in doing that during August, but it will mean that my emergency savings must wait another few months before it gets back up to $1000. And that is only if Murphy stays the heck away from my budget!
Good question.
Not-so-good answer.
No, I don't have any taxable investment savings. I don't have any savings at all, except for the ever-changing but never-quite-$1000 emergency fund that Dave Ramsey says we all should have.
While people like Jennifer at "Finding Financial Peace" are well on their way to accumulating three to six months of expenses, others of us are still struggling with Murphy-visitations every time we get near to our first $1000.
JD at "Get Rich Slowly" explores with his readers the issue of what happens after you use your emergency savings. Check out the comments to his post because that's where all the action is. Some readers have three to six months stored away; others are more like Grace.
And just why does Grace have no savings?
16% of my pre-tax income goes into my retirement accounts. When one comes late to the retirement party, cash and time are of the essence. But then there are debts that need to be paid off, and daily life to be lived. When all of those are factored in, not much is left for non-retirement savings.
Right now, I am determined to pay off the car repairs prior to incurring any interest charges (I put the expense onto my dormant Firestone account). I may succeed in doing that during August, but it will mean that my emergency savings must wait another few months before it gets back up to $1000. And that is only if Murphy stays the heck away from my budget!
Monday, July 27, 2009
Getting A Grip on Retirement Planning
You KNOW I'm gonna sympathize with Rose Bloom who was profiled recently by the Los Angeles Times.
Rose is 53 years old, a single parent to two adult children, who is just now realizing that she has to save more than the $12,000+ she currently has in retirement accounts. She plans to work forever, but she has diabetes and heart issues. (Now do you see why Grace can relate?)
The good news is that she has a decent salary (almost $95,000 a year). Even better, she will have a pension plus Social Security when she retires. But the bad news is that she lives in California. That means her job may be in jeopardy, she can't afford a home, and the cost of living is high.
Rose is just three years older than I was when I finally buckled down to saving for retirement. I'm a bit blown away by the financial planner's numbers--somehow I just don't see her saving $500,000 over the next ten to fifteen years nor am I sure that her savings will earn a 7.5% average.
BUT, that pension is going to make up for a whole lot of savings mistakes.
Rose is 53 years old, a single parent to two adult children, who is just now realizing that she has to save more than the $12,000+ she currently has in retirement accounts. She plans to work forever, but she has diabetes and heart issues. (Now do you see why Grace can relate?)
The good news is that she has a decent salary (almost $95,000 a year). Even better, she will have a pension plus Social Security when she retires. But the bad news is that she lives in California. That means her job may be in jeopardy, she can't afford a home, and the cost of living is high.
Rose is just three years older than I was when I finally buckled down to saving for retirement. I'm a bit blown away by the financial planner's numbers--somehow I just don't see her saving $500,000 over the next ten to fifteen years nor am I sure that her savings will earn a 7.5% average.
BUT, that pension is going to make up for a whole lot of savings mistakes.
Tuesday, July 21, 2009
Earlier Than You Think
Emily Brandon, at US News & World Report's Planning To Retire has a scary post about 'earlier than planned' retirements.
My goal has always been to retire on my 69th birthday. The view from here makes my plan look feasible, but, according to Brandon, almost half of workers wind up retiring earlier than they planned to. All but 10% do so involuntarily.
Job loss, age discrimination, family duties (such as caring for a spouse or one's parents) or a personal health crisis make a mockery of well-laid plans. Only 3% of potential retirees INTEND to retire in their fifties, yet 18% do so. 21% want to work into their seventies, but only 5% will still be employed when they reach their seventh decade.
I, of course, fall into the group of seniors who haven't saved enough to have the retirement they want (modest though that might be) if they retire earlier (or even "on time" at age 65), so continued employment is a must.
It gives me pause to contemplate all the things that can go wrong between now and age 69.
My goal has always been to retire on my 69th birthday. The view from here makes my plan look feasible, but, according to Brandon, almost half of workers wind up retiring earlier than they planned to. All but 10% do so involuntarily.
Job loss, age discrimination, family duties (such as caring for a spouse or one's parents) or a personal health crisis make a mockery of well-laid plans. Only 3% of potential retirees INTEND to retire in their fifties, yet 18% do so. 21% want to work into their seventies, but only 5% will still be employed when they reach their seventh decade.
I, of course, fall into the group of seniors who haven't saved enough to have the retirement they want (modest though that might be) if they retire earlier (or even "on time" at age 65), so continued employment is a must.
It gives me pause to contemplate all the things that can go wrong between now and age 69.
Monday, July 20, 2009
Grace v. B of A--This Time, Grace Wins One
As I've pointed out in earlier posts, I've had a Bank of America checking account since the late sixties when I headed off to college. (Actually, I had an account with a different bank--several different banks, come to think of it--but ultimately, as one bank absorbed another, I found myself with Bank of America.)
My current account is called Senior Advantage and comes with free checks, no monthly service costs and no minimum balances.
On Saturday, I get a letter from Bank of America assuring me that my account will be better than ever, and oh, by the way, they were now going to assess a $15 a month charge unless I kept at least $1000 as a minimum balance.
Excuuuuse me?
If I had an extra $1000 laying around, it would be in my emergency fund, NOT my checking account! But it's a moot point since I do NOT have $1000 to put in.
I called B of A, enraged at their action, and even more enraged that they would be directing these charges at their senior citizen clients. But before I could even get out an angry sputter, the extremely nice lady at customer service agreed with me that it was outrageous and said she could solve the problem.
Did I have paychecks? Umm--Yes!
Could I do a direct deposit? Umm--I already DO have my payroll checks deposited directly into my checking account.
"Well, then," said the extremely nice lady, "We'll just sign you up for an Access Account,--same bank account number, same checks, same everything--and you'll be on your way."
Which I was, within five minutes of calling customer service.
Now, why the bank couldn't have just done this on their own, since I've had my checks deposited directly for the past nineteen years, I don't know. Why they couldn't have put these options in their letter, I don't know. Why they want or need to start charging for the senior accounts, I don't know.
Then again, why I'm still with Bank of America? I don't know.
Maybe because of the extremely nice lady at customer service.
My current account is called Senior Advantage and comes with free checks, no monthly service costs and no minimum balances.
On Saturday, I get a letter from Bank of America assuring me that my account will be better than ever, and oh, by the way, they were now going to assess a $15 a month charge unless I kept at least $1000 as a minimum balance.
Excuuuuse me?
If I had an extra $1000 laying around, it would be in my emergency fund, NOT my checking account! But it's a moot point since I do NOT have $1000 to put in.
I called B of A, enraged at their action, and even more enraged that they would be directing these charges at their senior citizen clients. But before I could even get out an angry sputter, the extremely nice lady at customer service agreed with me that it was outrageous and said she could solve the problem.
Did I have paychecks? Umm--Yes!
Could I do a direct deposit? Umm--I already DO have my payroll checks deposited directly into my checking account.
"Well, then," said the extremely nice lady, "We'll just sign you up for an Access Account,--same bank account number, same checks, same everything--and you'll be on your way."
Which I was, within five minutes of calling customer service.
Now, why the bank couldn't have just done this on their own, since I've had my checks deposited directly for the past nineteen years, I don't know. Why they couldn't have put these options in their letter, I don't know. Why they want or need to start charging for the senior accounts, I don't know.
Then again, why I'm still with Bank of America? I don't know.
Maybe because of the extremely nice lady at customer service.
Thursday, July 16, 2009
Grace vs. Car (And the Car Wins!)
The problem with living close to the financial edge is that it doesn't take much to push one right over the financial cliff!
OK, so it's not like I have a pending foreclosure or I've lost my job or anything truly horrible.
It's my 1999 Dodge Caravan with a mere 162,000 + miles under its belt. Or, to be more specific, it's the minivan's water pump which leaks and must be replaced. Don't ask me--all I know is that the temperature gauge whammed up to HOT, stayed there, and caused the alarm to keep buzzing. Not daring to look under the hood, I immediately took it to the mechanics.
The mechanics assure me that it is nothing that $512 can't fix.
I do have to have a vehicle. And I can't purchase anything else in adequate condition for the $512 it will take to make the repairs.
BUT--according to Kelly Blue Book, the whole dang car is only worth $1650! Can I just have a moment to rant about how much I DO NOT want to pay $512 for a car that is already worth so little?
Then there's the issue of my currently non-existant emergency fund. IF I had that $1000 that both Dave Ramsey and I believe I should have, no problem. Unfortunately, said emergency has been depleted by EMERGENCIES over the past couple of months and has exactly $137 in it!
SO, onto my Firestone Card goes the charge--I'll apply the emergency fund to the balance and hope to pay off the card in full by the payment due date.
But I will NOT be happy about it!
OK, so it's not like I have a pending foreclosure or I've lost my job or anything truly horrible.
It's my 1999 Dodge Caravan with a mere 162,000 + miles under its belt. Or, to be more specific, it's the minivan's water pump which leaks and must be replaced. Don't ask me--all I know is that the temperature gauge whammed up to HOT, stayed there, and caused the alarm to keep buzzing. Not daring to look under the hood, I immediately took it to the mechanics.
The mechanics assure me that it is nothing that $512 can't fix.
I do have to have a vehicle. And I can't purchase anything else in adequate condition for the $512 it will take to make the repairs.
BUT--according to Kelly Blue Book, the whole dang car is only worth $1650! Can I just have a moment to rant about how much I DO NOT want to pay $512 for a car that is already worth so little?
Then there's the issue of my currently non-existant emergency fund. IF I had that $1000 that both Dave Ramsey and I believe I should have, no problem. Unfortunately, said emergency has been depleted by EMERGENCIES over the past couple of months and has exactly $137 in it!
SO, onto my Firestone Card goes the charge--I'll apply the emergency fund to the balance and hope to pay off the card in full by the payment due date.
But I will NOT be happy about it!
Monday, July 13, 2009
Carnival of Personal Finance Link
My last post on the credit card shuffle is included in The 213th Carnival of Persona Finance hosted by Man vs. Debt .
Lots of interesting posts, not to mention some nice shots of New Zealand.
Lots of interesting posts, not to mention some nice shots of New Zealand.
Sunday, July 12, 2009
Shuffling the Cards
I have a brand new credit card.
It's part of my "let's see if I can get a low-cost, no-interest balance transfer" debt reduction plan.
I get a lot of credit card applications in the mail. I scrutinize each one to see if it will meet my needs. Most don't.
I don't know if it is true for everyone, but I no longer get applications with no balance transfer fees. Most charge 3 or 4% with no ceiling on the transfer charge. It would cost me between $165 and $220 to transfer the balance on my highest card. Hmm--I don't think so!
The card I finally accepted charges 3% but has a $50 maximum. That's the best deal I've seen over the past six months.
I also notice that the zero percent offers have become markedly more limited. Some don't apply to balance transfers at all. Since I have no desire to put additional charges on any credit card, these offers don't attract me.
Others offer zero percent for six months. That's something of a bummer because I fondly recall getting prior offers of 18 months at no interest. The card I accepted is for 9 months.
The usual interest rate after the initial offer period runs out is between 8 and 12%. The one I accepted will go to 11.99% after 9 months, just a tad under what I'm currently paying.
Still, there is at least a $450 benefit to me when I transfer my highest credit card balance.
My highest balance is also the card with the highest interest rate: 12.24% The balance is $5400. Since I'm doing the Dave Ramsey snowball, I only make minimum payments (roughly $113 per month) on this card. Finance charges, which reduce slightly with each payment, are currently $57.34 per month. Therefore, even when I count the addition of the $50 balance transfer fee, I will be applying an additional $463 during the nine zero-interst months to debt reduction.
I assume there will be some effect on my credit score, though this new card has a $10,000 limit, so my $5400 transfer still leaves a lot of room--I understand credit scoring companies like that.
What else did I do with my brand new credit card? Well, I activated it, signed it, and promptly froze it my ice-cube tray along with my other credit cards!
It's part of my "let's see if I can get a low-cost, no-interest balance transfer" debt reduction plan.
I get a lot of credit card applications in the mail. I scrutinize each one to see if it will meet my needs. Most don't.
I don't know if it is true for everyone, but I no longer get applications with no balance transfer fees. Most charge 3 or 4% with no ceiling on the transfer charge. It would cost me between $165 and $220 to transfer the balance on my highest card. Hmm--I don't think so!
The card I finally accepted charges 3% but has a $50 maximum. That's the best deal I've seen over the past six months.
I also notice that the zero percent offers have become markedly more limited. Some don't apply to balance transfers at all. Since I have no desire to put additional charges on any credit card, these offers don't attract me.
Others offer zero percent for six months. That's something of a bummer because I fondly recall getting prior offers of 18 months at no interest. The card I accepted is for 9 months.
The usual interest rate after the initial offer period runs out is between 8 and 12%. The one I accepted will go to 11.99% after 9 months, just a tad under what I'm currently paying.
Still, there is at least a $450 benefit to me when I transfer my highest credit card balance.
My highest balance is also the card with the highest interest rate: 12.24% The balance is $5400. Since I'm doing the Dave Ramsey snowball, I only make minimum payments (roughly $113 per month) on this card. Finance charges, which reduce slightly with each payment, are currently $57.34 per month. Therefore, even when I count the addition of the $50 balance transfer fee, I will be applying an additional $463 during the nine zero-interst months to debt reduction.
I assume there will be some effect on my credit score, though this new card has a $10,000 limit, so my $5400 transfer still leaves a lot of room--I understand credit scoring companies like that.
What else did I do with my brand new credit card? Well, I activated it, signed it, and promptly froze it my ice-cube tray along with my other credit cards!
Sunday, July 5, 2009
Gone the Way of the Dodo?
On Friday, having gotten the day off for the July 4th weekend, I hauled four boxes of books to my local bookstore, intent upon creating a sizeable snowflake for my credit card debt.
I did generate $54, so that was good.
But Goodwill wound up with a full box of donations because the bookstore wasn't interested in a lot of the books I thought would sell well. For the record, historical non-fiction and craft books were immediately taken. The Patricia Cornwall and John Sandford hardcover mysteries? Not so much.
When I asked why, I was told that these are considered 'leisure reading.'
Apparently, there's not a strong market for 'leisure reading' in hardcover.
Really? People don't want their fun reading in anything but paperback? I get that paperbacks lighter and easier to carry. And cheaper to buy in the first place.
But personally, only a hardcover feels like a real book to me.
I say this in spite of the fact that I hang out with science fiction writers who often find their work appearing in paperback originals. I say this in spite of the fact that I now read some books on my Kindle, so they "exist" only in electronic form.
Funny that I brought up science fiction. I read it, I write it, and I seldom see books or mention of books in it--in future worlds, books are on computers or directly inserted into the brain or injected by weird-looking devices. But whatever their form, they aren't the good old hardcover books that I know and love.
I dunno.
Paperbacks may be cheap. And electronic books cheaper still.
But I like hardcovers. If, one day, they disappear in favor of books in alternate forms, I'm gonna miss 'em.
I did generate $54, so that was good.
But Goodwill wound up with a full box of donations because the bookstore wasn't interested in a lot of the books I thought would sell well. For the record, historical non-fiction and craft books were immediately taken. The Patricia Cornwall and John Sandford hardcover mysteries? Not so much.
When I asked why, I was told that these are considered 'leisure reading.'
Apparently, there's not a strong market for 'leisure reading' in hardcover.
Really? People don't want their fun reading in anything but paperback? I get that paperbacks lighter and easier to carry. And cheaper to buy in the first place.
But personally, only a hardcover feels like a real book to me.
I say this in spite of the fact that I hang out with science fiction writers who often find their work appearing in paperback originals. I say this in spite of the fact that I now read some books on my Kindle, so they "exist" only in electronic form.
Funny that I brought up science fiction. I read it, I write it, and I seldom see books or mention of books in it--in future worlds, books are on computers or directly inserted into the brain or injected by weird-looking devices. But whatever their form, they aren't the good old hardcover books that I know and love.
I dunno.
Paperbacks may be cheap. And electronic books cheaper still.
But I like hardcovers. If, one day, they disappear in favor of books in alternate forms, I'm gonna miss 'em.
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