Punch Drunk Finances

I'm up!

I'm down!

Mostly, I am very, very confused.

My October update is good. I decreased my total indebtedness by $1,574.80. But since I had INCREASED my debt in September, the net decrease is not quite that high--$1141.80.

Still, I'm glad to be back on track and to have the debt once again heading downward.

It's been a roller coaster watching my retirement funds--up, down, up, down, down, down, and now in the last couple of days, on the way up again.

I moved a couple of credit card balances around when Chase Slate offered no-charge balance transfers, and a 3.99 interest rate for the next year and a quarter. I make sure that I never go over 50% of my credit limits on any one card. For reasons I don't quite understand (personally, I'd never lend to me!) most of my cards have limits of $15,000 or more. The good news is that now the card with the highest interest is only 8.95% and most of my debt is either still on the introductory zero-interest or 2.99% or 3.99%. More of my hard-earned money is going toward the debt, not the interest.

So much for October. November and December are always expensive months but I do have a Christmas fund, which, with any luck, will cover my holiday expenses and allow me to keep reducing my total debt.

A Drop in Lifestyle Is Not Necessarily A Drop Into Poverty

I'm feeling a tad unsympathetic.

A good friend of mine, who has been earning over $200,000 a year as the head of a public relations firm saw her business go belly up a couple of months ago when her two best clients decided they could no longer afford PR services.

So she's going from $200,000 to zero, right?

As it happens, not exactly.

She brushed off her resume and five weeks later, has landed a position in another firm.

BUT (trust me, this BUT is bigger for her than it is for me), the new job pays $115,000 per year.

She hasn't stopped whining about it since.

Hmm--but maybe she has a lot of debt? Maybe she can't afford a pay cut?

Guess again. She paid off her student loans years ago; her two sons are grown, educated and on their own; Her home is paid for (though her beach house isn't); So are her two vehicles. Not to mention retirement funds that are in excess of two million (except maybe in the last month).

So what is the problem?

It's her lifestyle.

It's a two hundred thousand dollars a year lifestyle and she's ticked off to think that she must now muddle through on a mere $115,000. It's not that she can't live without her personal trainer and her beach house and her part-time chef (I am NOT kidding!) but that she REALLY doesn't want to. And she resents that she will not end her career as the head of her own agency, but as the 'underpaid' employee of someone else.

We've had our "everyone loses in a recession" talks, but I'm not in mood to equate her circumstances with those of my more truly poverty-stricken clients, any five of whom would gladly share that $115,000 per year that she now finds insufficient.

I think what I most resent is the apocalyptic tenor of our conversations. She believes her life is over. I think it's just in for a downsizing. Actually, since she's just 54, I think she still has time to take over her new firm! And who knows how much she might be making then.

But in the meantime, can we just agree that though her income is greatly reduced, she is not exactly a baglady? Puhleeeeez!

The REAL Way to Stick It To Bank Of America

I've been a Bank of America customer for over thirty years. It happened by accident, when I first opened a checking account as I headed off to college. That first account was at a local bank that got swallowed up by a regional bank that eventually was taken over by Bank of America. The names changed, but my account continued on.

When Bank of America announced they plan to charge $5 per month for debit card use beginning in early 2012, I figured our relationship was over--that I'd take my checking account, my two savings account and my credit card and go elsewhere.

For some reason, I thought that would show 'em!

But my retired banker sister has set me straight.

The truth is, Bank of America doesn't want me as a customer in the first place. I don't have $5000 in any of my accounts. In fact, I don't have $5000 even if you combine all three accounts. My mortgage is within 2.5 years of being paid off. More to the point, it's at a different bank. So that's the bottom line--Bank of America would be happy to see me go.

Forget that! I'm not in a mood to make Bank of America happy.

So--what to do?

It turns out the answer is easy. My account at Bank of America is free because I have a direct deposit from my employer made to it. I can continue that, but I can also easily transfer part of that money (the part that I refer to as my 'walking around money') to another bank--a credit union that does not plan to charge for debit card use. In the meantime, I can keep using the online bill pay that Bank of America provides for free, as well as the free savings accounts.

And if Bank of America doesn't like this?

Too bad. So sad.

I do recognize that some day the bank may figure out a way to get rid of me.

But that debit card charge won't be enough to do it.

Making Frugality Permanent. Or NOT.

Morrison at All Doors Considered has a post wherein she posits that our forced frugality of the moment may and should become a permanent mindset.

I'm not so sure about that.

I recently commented on of Sharon's posts in Musings of a Midlife Mom--telling her, quite accurately, that the moment I get my debts paid off, I intend to rehire a weekly housekeeper. Actually, I have a mental list of non-frugal items I intend to add back into my life, including two-ply toilet paper and non-generic English Muffins (Thomas, here I come!).

Some days, that list is what keeps me going.

Still, I expect that Morrison is right about some things--I don't see myself giving up the bargain hunting or the coupons. I've learned to rely on my local library for books, movies, and audio CD's. Even when I become able to purchase these items, for the sake of my very cluttered home, I don't plan to.

The biggest lesson I hope to take away is to stick with cash and give up the credit cards. Having been down the debt road for the majority of my working life, and now learning to live without it (OK, without incurring MORE of it), I see the ways in which I hope the new frugality becomes a permanent way of life.

Seniors, Health & Lessons to be Learned

It appears to me that when one reads about seniors and health, it's either dire (cancer, heart attacks, limited mobility and even more limited health coverage) or unealistically optimistic ("84-year-old climbs Mt. Everest"). I hardly ever see myself in these stories, even though I suspect I'm pretty normal when it comes to my health care needs.

I'm 62. I feel fine. I tend to rate my health as "good" but when I look at my health history, it may be that it is more in the "fair" range. I had a quadruple by-pass 2.5 years ago. I'm diabetic and have been for 12 years. The only reason I don't have high cholesterol or elevated blood pressure is that I religiously take medications that keep both within normal ranges. Ten months ago, I bowed to pressure from my nurse-practitioner and started to use insulin. It was a very good decision that has dramatically decreased my glucose levels, and, as it turned out, those who told me that the shots wouldn't physically hurt, were correct. That, too, is a good thing since I'm an utter weenie when it comes to injections.

I find myself surprised by those my age who are somehow proud of themselves for NOT taking cholesterol or blood pressure medications--as though admitting the need for them is, in itself, a failure. (Obviously, I'm talking about those of us who do have elevated numbers, not those fortunate enough not to need any medications.) This goes triple for diabetics moving from medications to insulin. I understand the latter since I, too, felt like taking insulin was an admission that I wasn't able to control my diet. Duh! I WASN'T able to control my diet. Call it what you will--lack of willpower, whatever. While I was ditzing around, promising to get my diet on track, my glucose numbers were ever-increasing. Insulin takes care of the problem. It could have taken care of the problem years before when the medications began to lose effectiveness (as they usually do after 6 to 8 years of use).

All of which leads me to Grace's Lesson for the Day--if what you're doing isn't working, FIND ANOTHER WAY!

I have a sneaking suspicion that this is a lesson that would work in my financial life as well as for my health.

A Variety of Thoughts

1. The End of the Month financial report is not good. Instead of a deficit reduction, I actually increased my debt by $433. My excuses are many and pathetic--one granddaughter's college tuition; another adult child's counselling (Trust me, this is a GOOD expense meeting a need that has existed for a long time!); Co-pays on TWO (Count'em, TWO) auto crashes, neither of them my fault. The first, which I mentioned in an earlier post, occurred during my June vacation when someone sideswiped my parked van. Four weeks later, a suicidal deer jumped in front of the same van. Each time I had to pay the deductible so there went $500. OK, so my total debt, including my mortgage is $91,695.

2. My quarterly net worth didn't fair any better--it's down $12,637 from last quarter (which had gone up almost that exact amount from the first quarter of the year, meaning I'm back where I started in January) But at $550,117, and given the vagaries of the real estate market, not to mention the stock market, I'm OK with that.

3. Bob Lowery often comments on this blog, and I have had his Satisfying Retirement blog in my blogroll for some time. But these days, he and his family can be found gracing Money Magazine as well.

4. Speaking of blogrolls, I regretfully removed Mein Taglich Brot from the list because Julie called it quits only a year and five months into it. Too bad because I enjoyed her perspective as a woman my age forced into an earlier retirement than anticipated as well as a bankruptcy.

Why Grace Shoulda been a Luddite

I love Science Fiction which you'd think would put me on the cutting edge of technology. But without the funds to buy into all the new technology, I've been content to wait until at least the second generation.

Maybe my electronics know they are second best?

Because all at once, they have bought the farm. Or at least vital parts of them have.

First my power cord to my laptop bent, then broke off--goodbye battery power!

Second, my Kindle, the casing of which I'd managed to crack during the first month I had it (over two years ago) suddenly wouldn't allow its power cord to charge the machine.

And finally, my landline which I get through my Comcast internet account stopped working.

Buying a power cord for the laptop was a trip. Locally, it would cost me at least $60. But on Amazon the range is from $2.99 to $80. Wow! $2.99? Well, maybe not, since the reviews kept mentioning how that particular adaptor caught on fire!

Ultimately, I spent $19 for an adaptor that included a 1 year warranty and generally acceptable reviews.

The telephone is still up in the air--meaning Comcast is sending out a repairer to figure out what's wrong and whether it is my fault or theirs. I'm thinking it's theirs, since I tried a couple of different phones, including a corded one, with no better results. If I'm wrong, it will be $60 for the house call.

And the Kindle?

Apparently no one repairs a Kindle. Which is a shame because I love my e-Reader. I may call in one of my daughters who, as a child, used to haunt garage sales, buy electronics and take them apart for fun. She still has a good record of 'figuring out how to fix things.' I'm keeping my fingers crossed.

Saving & Budgeting--Two Entirely Different Things

I had a bit of an epiphany as I was setting out new goals for myself (because, as I said before, September always feels like the beginning of a new year to me). For the first time, I realized that I cannot 'budget' my savings. To do so is to virtually guarantee that I will fail to save anything.

Usually, I try to 'give every dollar a name' as Dave Ramsey famously tells us
when following his budget instructions. I set out all my expenses and whatever is left over is labeled 'Savings.' The trouble is, somewhere between paying the bills, putting money into the envelopes and seeing what remains, those remains, the 'savings' portion, gets smaller and smaller.

But I do know there's a better way.

Two years ago, as a way to get a 'free' savings account from Bank of America (by which I mean, an account that does not need to have any particular minimum balance in it to avoid an annoying $3 per month charge), I agreed to have $50 a month transferred from my checking account into the savings account.

There was no penalty for immediately transferring the money back to checking, so I figured this was a no-brainer method to get a fee-free savings account. But a funny thing happened on my way to transferring the money back--I often forgot to do it. $50 was a small enough amount that I didn't really miss it in my budget, yet it was a large enough amount to give me $600 a year for my Christmas account.

So Grace's particular epiphany? The way to save money is to take it off the top and get it out of my checking account. If it stays in my checking account it WILL get spent, and that's irrespective of all my good intentions NOT to spend it. The surprise is that once I do get the money out of my checking account, a certain inertia sets in, and even though I could easily move the money back, I tend not to.

So my first September resolution is to up that transfer to $75. It may be a mind game but for me, it's one that works.

EOM Miscellaney

1. I reduced my total debt by only $253.90 in August. To make myself feel better, I went back and checked how much I've knocked off my indebtedness since the first of the year: $6091.48. There! I feel better already!

2. I have a post (the one about mothers, daughters and money) in the current Carnival of Personal Finance, hosted by Stumble Forward (love that name for a financial blog!). Does anybody besides me actually read the Carnival? I do because I find new-to-me blogs through it. But in checking my Sitemeter stats, I don't see that being in the carnival has brought me even one reader.

3. Chase Flexible Rewards is offering free balance transfers and a 2.99% interest rate through 1/31/2013. So Grace joined the credit card shuffle, moving balances from cards charging 13.24% and 12.24% interest. It doesn't exactly save me money each month, but it does ensure that more of my payment goes toward balance reduction.

4. For whatever reason, and notwithstanding that its been 34 years since I was last in school, Labor Day always seems like the beginning of the year for me, and a time when I'm up for making new resolutions. Sadly, however, and much like the resolutions made in January, they don't always last. But never one to give up, I'll be spending the week-end working on them anyway.

Still on the topic of Mothers and Children

Just when I thought there was nothing more to say about the financial relationships between parents and kids, there's this story about "bad mothering."

Judging from the appellate court decision the mom in question is not going to win any parenting awards but gimme a break! Sending a birthday card (which I thought sounded both cute and funny) with NO MONEY in it is "outrageous conduct?" Refusing to buy a teen age girl acne medicine results in "acute emotional trauma?" And paying for the limo but not the prom dress (never mind demanding that the little darling be home by midnight and calling her when she doesn't arrive) is "inapproriate parental behavior?" Where are these two spoiled brats coming from?

And what kind of father actively participates in a lawsuit like this? Well, except for a father who is not only a lawyer, but a bitter divorced parent. What's weird is that it looks like Dad 'won' the divorce, in that he got physical custody of both kids. That wasn't enough for him or the children?

I guess Morrison and Terry and I are all lucky our daughters didn't find themselves lawyers.

The saddest financial aspect of this story is that the otherwise very reasonable judge who dismissed this case did NOT award the mother her court costs or attorney fees. I think these kids SHOULD have had some financial consequences for filing a case like this.

Mothers, Daughters & Money

Is there any relationship more fraught with drama than that of mothers and their daughters?

I say this as the mother of five daughters. Of course, if I'd had any male children, I might have a different story. Then again, maybe not.

Two of my favorite bloggers have been grappling with the intersection between finances and adult daughters. Morrison, at All Doors Considered, is in the mood to cut her daughter off. Terry, at A Little Bit About Everything is more conflicted.

Grace? She can relate to both of these mothers.

On one hand, my daughters do need financial help from me. On the other hand, they expect me to step in entirely too often. And on the third hand (something every mother has!) I am acutely aware that saving for my retirement has to be my highest priority.

All of the above leaves out the most important issue--the emotional one.

When I provide money to my daughters, I try to make it without strings. But the emotional binds are still there. Don't they owe me something, at least respect, for getting them through their tough times?

From their point of view, am I trying to buy that respect from them? If they need what I freely give, do they then owe me?

If I don't get the level of respect and financial understanding that I want or expect, should I then cut them off entirely?

I don't have any answers. Like Morrison and Terry, I'm just now learning to ask the questions.

Counting Pennies--Literally

I had to laugh when I read Meg's latest post at World of Wealth. Unlike myself, an older struggling woman trying to get her retirement in order, Meg is a young upper-income banker well on her way to financial success.

But that doesn't mean we don't get some of the same thrills just counting up our change!

At a post-Christmas sale at Walgreen's last year, I bought a child's toy bank--actually just a jar with a battery-operated lid that counted all the change inserted into the jar. It was 75% off and priced at $2.54. Never one to pass up a deal, I sprang for the purchase.

I must be easily pleased, because it really is a thrill to insert dimes and nickels and the occasional quarter and watch it all add up. I've emptied the jar twice so far, so it now stands pretty empty, with $12.90 in it.

I don't bother rolling the coins, but I fully understand Meg's delight in the process. Somehow it feels like found money.

Living With Bad Managerial Decisions

It's my blog and I'll cry if I want to (with apologies to Leslie Gore).

I spent my week-end at my employer's Board of Directors meeting trying to head off impending lay-offs. Although the majority of union members showed up and offered to take wage freezes, furlough days and pension contribution cuts in order to save jobs and continue client service through the end of 2012 at no increased cost to the organization, our Board, in its infinite wisdom decided that lay-offs were the way to go.

Why? Because that's easier for a Board that meets only four times a year to handle. Never mind that they are laying off folks in the middle of an economic downturn. Never mind that the needs of our poverty-level clientele has never been greater.

I am just so saddened by these actions which strike me as short-sighted. Having worked in my field for the past 38 years, and having weathered four serious financial crises before this one, I know that predicting our organizations's finances three to five years down the road is a fool's errand.

So here's the kicker! On a personal level, the Board's decision works well for me. I am not one of those in danger of being laid off. Now, my wages won't be frozen, I won't have to take any furlough days (resulting in a 4% pay reduction) and all the current employer contributions to my 401(k) will continue to be made.

I should be happy, right?

Then why am I feeling so darn frustrated?

And depressed?

EOM Wrap-Up and Misc.

1. I lowered my total debt (including my mortgage) by $1093.97 during July. Pretty good for a summer month. August is the month I worry most about--not only do I have my grandkids visiting during that month, but the little darlings need school clothes, supplies and shoes. So, my total indebtedness right now (again, including my mortgage) is $91,516.35.

2. Am I the only one really tired of people comparing our country's fiscal crisis to our family budgets? I don't pretend to understand the financial or political ramifications surrounding the debt ceiling, but I'm pretty sure it's a tad more complicated than my personal finances. Everything in life is NOT simple nor has simplistic answers. I say this without reference to the respective culpability of Republicans or Democrats for the current mess.

3. I'm doing more work on my blogroll. Mapgirl seems to have disappeared (or at least not renewed her website), which is a shame. Hers was one of the first financial blogs I started reading. Shevy at Shevy's Miscellaneous Blog also appears to have left the blogosphere. I will miss her orthodox Jewish perspective on personal finance. On the other hand, I've also been reading Mutant Supermodel for quite awhile, so I'm not quite sure why she wasn't already on my list. Another addition is Yes, I am Cheap. Two of my favorite retirement bloggers are retiring from blogging as well, so farewell to For The First Time: Feminist Women Entering Retirement but I'm leaving Retirement: A Fulltime Job up for awhile to see if Syd decides to keep blogging after all. In the meantime, I'm adding Bob Lowry's Satisfying Retirement to my blogroll. Am I missing some other great blogs? Let me know.

Job Losses are a Bummer, Even When It Isn't My Job

Our agency is facing a major budget crunch. While my position is safe, those of nearly a quarter of our staff are at risk. Lay-off notices go out in mid-August.

Since I'm president of our white-collar union, I'm the one getting the panicked phone calls, the tears, the concerns of those staff members worried about their jobs and the concerns of other staff members who will have to pick up the slack--not an easy thing when we're all working at maximum capacity as it is.

So right now we are negotiating with management to see if we can cut back the number of affected employees by giving up certain financial rights we union members gained by tough bargaining two years ago. The truth is, I and most of my fellow workers WILL give up time and money to keep as many people employed here as possible.

But we differ on what we think it is reasonable to give up. Our time (and as a result a reduction in pay)? A wage freeze? A percentage or two of our pension payments? A lesser contribution toward health care? All of the above?

Some of us have budgets so tight now that any reduction in pay is going to hurt.

I'm hearing from folks who are the only employed member of their household; from people with serious chronic illnesses who are dependent upon our health benefits (which will be paid for four months after the lay-off notices, but after that, only the very expensive COBRA benefits will be available); from folks concerned about losing their homes or their vehicles.

In short, I'm learning much more than I ever wanted to know about the personal financial circumstances of the people I work with. Hardly any of these people have spent their money foolishly. But a number of them truly are only a paycheck away from disaster. This is especially true for the single parents among us.

Can you tell that I hate this?

College Ain't What it Used to Be

I started my undergraduate college in 1967. It was a revelation, and I can honestly say it opened my eyes to a whole new world outside of the small, homogenous, working class coastal town I'd grown up in. I was the first one in my family to even consider higher education. Heck, my mother was the only one who finished high school.

Thanks to scholarships, my college education cost me $54 a term.

But clearly it's a different world out there now.

This article from CNN just makes me sad.

Sad and angry--especially angry that an education could possibly cost anyone that much money, and sad that anyone would really think it is worth it to incur that level of debt.

I have five daughters, only two of whom have yet tried college. One started at age 30 and put herself through three years with Pell grants and her own earnings. She quit when a summer internship led her to the job of her dreams with the state. Another went for one semester, borrowing a small amount to supplement what her mother (Ahem! That would be Grace!) had saved for her. Had she not dropped out to be with her boyfriend (a whole other story, and needless to say, the boyfriend was history shortly thereafter!), I was prepared to sell my rental property in order to keep her in school.

But to incur $50,000+ in student loans? Or $100,000? Wow! Where were the parents? Didn't they offer any money or advice along the way? Where did these young people think their loan payments were going to come from?

I can't help it. I'm just shaking my head.

Age or Stress or Both?

Although I sometimes take issue with her answers, there's no doubting that Morrison at "All Doors Considered" often asks the right questions. In this post, she talks about juggling bank accounts and making mistakes. What she wants to know is if the mistakes are related to age or to financial stress.

First of all, let me raise my hand when it comes to making mistakes when using more than one bank account.

Two months ago, in order to score a free $125, I opened a Chase Bank checking account. To make sure that there are no monthly fees, I had to have a direct deposit of at least $500 per month. That didn't appear to be a problem because I have my primary mortgage with Chase, so my plan was to deposit enough money in the account once per month to cover the mortgage payment. Unfortunately, my employer insists that the same amount come out of each of my two paychecks to go into whatever bank accounts I direct. This is the trade-off for being allowed to direct deposits into two different accounts.

Bottom line? I now have to decide which bills come out of which account. It's not rocket science, but for some reason, my age-addled brain has been having problems figuring this out.

So it's my age, right?

Or could it be stress, because the REAL bottom line is that there isn't quite enough in either account to fully cover all of my bills plus my WAM (Walking Around Money, which includes my food budget and gas for the car).

Still, if I had to bet, I'd bet it's mostly about my age, and not my stress level.

I so often find myself groping for a name or a word, even though I have always prided myself on my memory. I know this is a function of being 62, but that doesn't mean I'm happy about it.

I dislike crossword puzzles, but I make myself do the New York Times Crossword daily because someone told me it was a way to prevent memory loss. Yet more and more, I find that I cannot complete the puzzle in one setting. I have to put it aside and come back to it at least an hour later, at which point I can somehow put together the words that failed me the first time.

If it weren't that the alternatives are worse, I'd really hate getting older!

The First Years of Retirement

I've been a fan of Sylvia Bereskin's blog For The First Time: Feminist Women Retiring with Gusto since she first started it. It's never been a financial blog, but rather, a meditation on how retirement changes (or doesn't change) one's life.

Sylvia is giving up her blog, but not without first wrapping up the fears, joys and valid concerns about retirement as she experienced them during the first two years.

It's a fascinating list, and I find myself in some of her descriptions-- does the word 'workaholic' sound familiar? I have been defined by my work for the past 38 years and it scares me a little to think about putting it aside. Not that I would ever give it up entirely--there are still numerous volunteer opportunities in my field. But so much of my life has been planned around my job or my family. The family is grown and, more or less, on their own now.

The work remains constant. What will it feel like to walk away from that?

But reading Sylvia's take on it makes me feel better. We are still making progress even when we leave a huge chunk of our previous life behind. And the adjustments, both positive and negative, can be suprising.

Surprises! My favorite part of life.

Quarterly Net Worth

My net worth is up this 2nd quarter of the year from last quarter by nearly $12,550, due largely to increases in value for my home and my rental. This brings my current net worth to $562,755. Before I start celebrating, I need to keep in mind that this is still some $2000 less than what I had in December, 2010.

June 2011 Wind-Up

OK--vacation's over and now it's back to real life, with no lobster or lazy mornings in sight.

Overall, I stayed within my vacation budget, thanks to my friends who traveled with me and my sister who covered my transportation and housing expenses.

I did decrease my overall debt by another $835.79, which is less than last month, but pretty good considering that it is summer. That leaves my total debt, including mortgage, as $92,610.32.

Onward to July!