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.

Quarterly/Monthly Review

Hmm--maybe I should just stick with the quarterly review this time.

My net worth is up $4483.26 to $559,930.46. This is due primarily to the rally in the stock market this past week [though my 401(K) has not fully recovered to its highest point] and the fact that, according to Zillow, my residence has continued to increase in value. This is puzzling given the static market in my city right now, but since my home is in the $300,000 range, it may be that these homes are still affordable and therefore still in demand.

So, hey! I'm doing good, right?

Umm--well, there IS my monthly financial review. Quarterly, I'm fine. Monthly, not so much.

In spite of putting money toward debt reduction, I put much more onto my HELOCC, with a net result of now being an additional $7562.35 in debt. And, I'm back over $100,000 in total debt, which includes my mortgage. Again.

My goals for the next quarter are to get that debt down to under $100,000, survive Christmas and three daughterly birthdays, and to pay the property taxes on my rental in full (which, if I manage it, will come as a pleasant surprise to the tax department).

Where's the Middle in Middle Class?

Bluebird, over at Hedonic Adjustment has an interesting post on retirement savings (or lack thereof) by middle class folks like me.

Or not.

Bluebird thinks that his is a typical middle-class family. He's 45 and makes around $100,000. I dunno about that. Maybe it's because he lives on the east coast, where family homes sell for $400,000. But while he's middle-class, I don't think his income is typical.

I reside in the Pacific Northwest. Housing prices have soared here, as they have everywhere else. But no one I know considers $400,000 a median price for a family home. If we wanted to pay that much, we'd move to California!

Personally, I'd say that most middle income families around here are making about $60,000 a year, and that's often with two incomes. Is this just my working-class roots showing? Or am I running with a low-income crowd?

Carnivals for Mean Folks

That last post of mine shows up in two carnivals, this week, The Carnival of Personal Finance and The Carnival of Debt Reduction.

There are a lot of nice people there, too, with posts that are well worth reading.

Mean Ole Grace

Although I've tried to convey a portrait of myself as a sweet, kind middle-aged spendthrift trying hard to reform, there's another darker side to Grace.

It all started with my second daughter.

As I explained in an earlier post, I have a 31 year old emotionally disturbed child. She has never been employed for longer than two weeks, and receives SSI. She does live on her own and has since she turned 18.

Now why any creditor in his or her right mind would give this child a credit card boggles the mind. But they have. Over and over.

Credit card companies send solicitations. My daughter responds. Voila! She has a card which she then uses to the max. What she doesn't do is pay the bills. Ever.

Because she moves a lot and switches phone numbers a lot, she has a tendency to give my telephone number as her contact number. The end result is a number of telephone calls to my landline from various debt collectors.

In the beginning, it was annoying. Debt collectors start calling right after 8:00 a.m. and call into the evening. They are particularly fond of the dinner hours.

But then my youngest daughter started having some fun with it, and dang, if I didn't join her.

At first, if the collector asked for my errant adult daughter, we'd say "Just a moment," put the phone down and walk away.

Then, my youngest child got good at a plausible but totally made up foreign language where she appeared to be giving the caller another number to reach their quarry. "Vey, Vey, Vey,..." "Is that three, three, three?" "Nikto! Vey, Vey, Vey. . ." "Um, do you mean two, two, two?" "Nikto! Vey, Vey, Vey. . ."

My specialty is the phony mechanical voice. A large number of calls begin with a pre-recorded message: "Please stay on the line for an important call." So I wait, and when a human being finally picks up, I say, in my best disembodied voice: "Please stay on the line for an important call." I repeat this a couple of times, and then start singing "Memories." Badly.

That led one collector to start laughing. Since then, our goal has been to make all the collectors laugh. Most don't--they just sound confused and then they hang up. Although one said to someone else apparently in the next cubicle, "Come listen to this--it's the weirdest thing!"

My daughter's new favorite is to pretend she's looking for the debtor as well, because the debtor stole her boyfriend. She gets very aggressive, demanding that the caller tell her any addresses or phone number the caller might have for "that slut." The last time she tried it, the caller patiently told her for the Nth time that she couldn't give out the address, and that this was the only number they had. But then ended the conversation with "Honey, you can find yourself a better guy than that. Just let it go."

My daughter thinks we'd have even more fun if I'd let her swear. But I told her that wasn't fair to the minimum wage employees sitting in a cubicle making call after futile call. I suppose our jokes aren't fair either, but by this time, I figure they deserve it. We tried telling them my older child wasn't at this number, but because I was unwilling to give them a better number, they never stop calling.

And this middle aged lady has to get her kicks wherever she can find them!

Maybe a Banker Could Explain This to Me?

Perhaps it is because I don't understand the world of high (or low, for that matter) finance, but Bank of America does something that I don't understand: The tellers refuse to cash or deposit any third-party checks (the kind that are written to someone else, that someone else signs it over to me, and we both sign the back of the check). Yet, if I leave the bank, go outside to their ATM machine and deposit the same check, Bank of America accepts it, credits it to my account and doesn't give me any grief.

My 22 year old daughter doesn't have a local bank account so, for the time being, she signs her checks over to me. I write her a check on my account (which B of A will cash for her) and then I deposit the "third party" check.

Today, I was conducting a number of financial transactions at Bank of America, and momentarily forgot the teller wouldn't take the third party check. Sure enough, he wouldn't even though I pointed out that they did accept them through the ATM.

He shrugged.

So I completed the other transactions, walked over to their ATM and deposited the third party check.

It's not that much trouble to do, but tell me again how this makes any sense?

My Budget Shot to HELOC

ARRGH!

Well, I knew it was coming. The windows on my rental house have now all been replaced, to the tune of $6800.

So there goes all that nice debt reduction over the past few months. When I reconcile everything at the end of September, I'm going to be deeper in the debt-hole.

The money will come out of my HELOC. Two years ago, I got a $30,000 line of credit for repairs to both of my homes. Reroofing my residence, waterproofing the basement and making other deferred-maintenance repairs used up $20,000 of that line. I'm now about to tap most of the rest.

The one good thing is that this will not affect my cash flow each month since the monthly payment of $280 per month remains the same, whatever amount I owe. I suppose it is also good that the line of credit has a fixed interest rate of 6.75%.

Still. . .

One moment I'm focused on taking a vacation, and the next, I'm going deeper in debt.

I don't have to make a decision on the vacation until after January. So I'm putting it on hold to see how my finances hold up through Christmas and what my income tax refund is likely to be. (I guess that's another "plus." I won't have income from the rental this year and I will be able to take the loss as a deduction.)

To V(acation) or Not to V

Usually my vacations are spur-of-the moment, last-minute decisions. And usually, they wind up being to places my kids want to go. This would explain why I've been to Disneyland four times in the past ten years. Or we go to the beach. And, of course, I dig out my handy-dandy credit cards and charge air fare, motels, restaurants, etc.

Now a different opportunity has arisen, and I have enough advance notice to actually think about it, plan for it, and save toward it: My best friend of over 30 years wants to go to Japan in October, 2008. More than than, she's got frequent flyer miles she is willing to donate to my cause, and because she is Japanese-American, she has numerous relatives in Japan with whom we can stay.

Back in my college days, I took Japanese language courses for three years. I barely remember any of it now, but the fascination for things Japanese has stayed with me.

SO--I figure I will need around $2000 for this vacation, and I now have a year to save for it.

OTOH, $2000 would go a long way toward my credit card debt.

Add to that, my concern that although I've been reducing my debt for the past several months, that may not be possible every month. In fact, there is a good chance that repairs to my rental home will have to come out of my HELOCC, which will wind up increasing my debt. Since my tenant and his father are making the repairs as their time permits, I have been able, so far, to pay as they go. But when the new windows go in or the bathroom is gutted, both of which need to happen in the near future, I'll have to tap the HELOCC.

Then again, I usually get $3,000 to $4,000 back income tax refunds in March of each year. I could save vacation money out of that, and put the rest toward the debts.

Or, I could just not go to Japan!

This is not my favorite option. All of my excuses center on the "once in a lifetime" nature of this particular opportunity. If it had come up suddenly, my answer would definitely be not to go.

But I've got a year. . .

Do Not Let This be ME!

Women in Red, an ongoing MSN series/blog, today has a story that is my personal nightmare--pretty close to the one where I become a baglady with all my belongings in a shopping cart.

Jane is a 52 year old single mother of two (barely) adult children. She earns $1800+ per month. Her mortgage and condo fees are in excess of $1400 per month, which leaves little room for anything else, certainly not the $400 per month she pays for food. The latter figure seems high to me. For myself and my 17 year old daughter, I budget $400 per month but that's always where the wiggle-room is in my budget. If I make do with less take-out and more home-cooking (thank god, Papa Murphy's Take and Bake Pizza counts in my house as "home-cooking"), I can get by for less than that.

Jane's condo has significant equity, and she could use that to pay off all her debts, including a large one that comes due in 18 months. But it's not clear what rents are in her area or if she'd have a monthly savings by liquidating the condo.

The scariest part is that Jane has only $5000 in retirement funds. At age 52, she's a long way from where she needs to be.

There are message boards and comments at the end of the article. Those were interesting to read as well.

Sneaky Little Devils

Oh, those credit card companies!

I have a Bank of America credit card that is part of my checking account overdraft protection. That card resides with several others in a block of ice at the back of my freezer. I haven't used it in two years and there is no balance on it.

Today, they made me an offer that I probably won't refuse. If I pay any one of a number of utility bills (Comcast, electric, telephone, for examples) one time with the B of A credit card, they will send me a free $10 Union/Texaco gas card.

$10 free gas is $10 free gas, so I will likely pay my telephone bill with the credit card, then pay the card in full when I get the credit card bill.

But they are so hoping that I won't do that--that I'll run short when the credit card bill comes in and just pay the minimum. Actually, from the advertising material they sent along, they are hoping I will sign up to pay my utility bills every month by credit card.

I think it's a bet that often pays off for Bank of America. More than that, I'm sure I've fallen prey to similar tactics in the past.

Just to make certain I won't this time (and given my need to put aside my less-pressing bills this month to pay my granddaughter's college tuition, there is always the chance that B of A's tactics might work), I've decided to place an amount equal to the electric bill in a separate savings account to await the coming of the Bank of America credit card bill.

Tony's Personal Economy is Far from His Spin on the National Economy

EMF at Engineering My Finances pointed me toward this story on Tony Snow. Tony, a spinmeister for Bush and the president's policies, both at home and abroad, has a lot in common with me: namely, procrastination. Both of us were late to get on the 401(K)bandwagon.

But the big difference between Tony and myself (beyond the fact that he makes 2.2 times per year what I make) is that he is battling cancer for the second time. It appears that he is not hoping for a cure. Instead, the goal is to turn his cancer into a chronic but treatable illness.

He DOES have decent health care. So do I.

But a whole lot of people in this country don't. And for those that do, the costs have skyrocketed.

I doubt the irony of his boss' policies on health care is lost on Tony. But good and dutiful employee that he is, he's toeing the party line regarding any form of universal health care.

Still, he's getting out the job. He's leaving others to put a happy spin on the prez while he goes back to making even more money because that 401(K) still needs filling.

Flying Without a Net

Today I have to come up with just under a thousand dollars for my granddaughter's first semester tuition and books for college. While this is a far cry from the $40,000 the folks in my last post are paying for their daughter (God bless community colleges!), I am finding it annoyingly difficult to cobble together these funds.

And therein lies what I hate most about (relative) poverty.

It's not like I don't have assets. Or a sufficient income. Or even lines of credit or credit cards that I could access (provided, with the latter, that I unfreeze the block of ice where I currently keep them). But the debts I carry make sure that my cash flow often doesn't flow like it should.

Writing an $800 check for tuition or $180 for books should NOT be that big of a deal! And yet it is.

I'm trying to gather up the college funds without looting my $1000 emergency fund or adding additional debt. That means raiding other parts of my budget. The most flexible budgetary lines are, of course, those pertaining to food and entertainment. Unfortunately, I've already cut them about as far as I really want to--without resorting to Dave Ramsey's "beans & rice" diet. So I am figuring out which bills I can carry another month without damaging my credit rating. Comcast doesn't report payments less than 30 days late, so they can wait. The newspaper will let me go a couple of months before I get rather gently worded reminders to pay. The garbage company gives me a free ride for an extra thirty days. The water company? Forget it! They start adding fees if I'm even five days late. And the credit cards? Don't ask.

All of this means that next month, I'll have to pay double on several bills. But at least I won't have to worry about the tuition again until late January. Maybe, by then, college will have its own line item in my budget.

Gotta Luv the Pension Plan

The San Diego Union Tribute profiles a fairly typical boomer retiring couple. He's 64 and ending 32 years as a firefighter. She's 58 and a teacher's aide. They have what I think are adequate savings ($400,000+) but they also have an eighteen year old daughter about to enter an expensive college. (I consider any college that will cost more than $40,000 per year darn expensive.)

Crucial to their retirement plan is the $5850 per month Mr. Campbell will receive as his pension. That's only $15,000 less than he makes working full time in a very dangerous occupation. He will also get an additional $600 per month from Social Security, which is perplexing. Shouldn't it be considerably more than that, say closer to $1500?

At any rate, there will be no pension for me. Unlike my father, a disabled longshoreman who made 65% of his prior salary in pension benefits, or my mother, who received $85 per month for the 14 years she had worked for the phone company before marrying my father, I cannot depend on the employer largesse that my parents considered their due.

I have no problem with Mr. Campbell getting his pension. There's much to admire about anyone who has been protecting my property (analagously speaking, since he lives in San Diego and I don't) for the past 32 years. I just feel badly that pensions in general are going the way of the Dodo bird.

Paying for college right around retirement seems like a boomer right of passage. Many of us had a lot of fun in our twenties and thirties, delaying our families until we were in our forties. Nothing wrong with that except that one day we wake up and we're age-sixty with age-forty-something financial issues.

The advice the Campbells are given is predictible: They cannot afford to retire. Mr. Cambell may not want to continue as a firefighter, but he's going to have to work at something. The planner suggests he find a position that pays at least $50,000 a year, and that he work until he's 70.

I'm guessing that's not quite what these boomers had in mind.

Ebay for the Cheap & Nervous

Ah, Ebay! I love it, but I'm scared to use it.

So I browse.

But over the years, I've never bought anything that cost me more than $20. Somehow, I just can't get used to the idea of trusting some stranger to send me quality merchandise. Maybe it's the distances involved, because I do use Craigslist on a regular basis. (I especially love their free listings--check them out on Sundays to find all the stuff that didn't sell at the Saturday garage sales. I've gotten bookcases, dressers, and prom dresses, all for free.)

Back to Ebay--what I buy most often are magazine subscriptions and phone cards.

I subscribe to Oprah, Vanity Fair and Money. If I could find Real Simple (which could more accurately be titled Real Expensive) at my price, I would get that one, too. My price for any subscription, however, is $10 max.

In the five years or so that I've been purchasing magazine subscriptions from Ebay, I've been burned twice. It's easy enough for a seller to do since it usually takes around 60 days for the subscription to begin--and 60 days is too long to get any money back even if you pay through Paypal, which I do. In both cases, I used sellers with strong reputations and positive feedback. In both cases, I was one of many people scammed and it happened at Christmas time, apparently one of the more dangerous times to buy in terms of potential fraud.

Since we're talking about a total of $20 lost in five years, the risk hasn't been all that bad. Right now, I have a three year subscription to Money that I bought for $28 on Ebay as well as a 1 year subscription to Oprah that cost me $10 and a 1 year subscription to Vanity Fair I got for $6.50.

The other item I purchase regularly on Ebay is prepaid minutes for my Tracfone. (I'll post later why I use Tracfone as opposed to all the cheaper plans out there.) In the meantime, Tracfone minutes, purchased at retail, cost 34 cents a minute. If there is a bonus code, it is usually for an additional 30 minutes, which drives the price down to 22 cents a minute--still not a bargain.

On Ebay, I can purchase 60 minute cards with 60 to 90 minute bonuses from $12.50 to $17.00. Depending on how lucky I am, I then pay 8 to 14 cents a minute. I've never had a problem buying Tracfone minutes from Ebay sellers.

Another nice thing about both magazine subscriptions and prepaid cell phone cards is that there is no shipping charge.

It's the End of the Month, So How am I Doing?

I'm winding up August with a total debt reduction of $1021.34. As always, much of that ($740.71) is mortgage reduction, which leaves only $280.63 in reduced credit card debt. But down is down, so I'm satisfied. August is a tough month, financially, in the best of times, given the need for school clothes, entertaining the grandchildren, etc.

September looks to be even worse since I've got to come up with my granddaughter's college tuition, and start work on some repairs to my rental house.

At least I don't have to check my retirement funds or the value of my home. I do my net worth quarterly, so the stock market and housing market has another thirty days to get up there!