Merry Christmas!

We are in the middle of an 18-day road trip and are currently in Idaho. We've had a very frugal Christmas so far, and I will write more about that later. I hope that however you celebrate your Holiday (or your avoidance of the whole deal) you enjoy the day (week, etc.) and have a great experience.

Happy Holidays!

Mortgage Roundup

I've noticed a lot of articles about the current mortgage crisis in the PF community, and there is a lot of finger-pointing going on in the media as well. Here's a few articles I ran into this evening:
The Seattle Times writes It's a Wonderful Mess (great discussion thread on Seattle Bubble):

Nowadays, it's impossible to watch the 1946 holiday movie "It's a Wonderful Life" and not feel a twinge of respect for Henry F. Potter, the villainous banker played by Lionel Barrymore. Potter was not above drawing the last drop of blood, but at least borrowers knew whom to hate. And if they were late paying, they knew where to crawl.

That's not necessarily the case today. Mortgage companies often ship the loans to Wall Street, which repackages them into securities sold around the globe.

So if you're a borrower in trouble, and your loan is diced up into some mortgage-backed security, you'd be hard-pressed to find a lender's ear. How's your Chinese?

Newsweek writes about When Mortgages Made Sense:

Greenstein says loan modifications—whether done on a case-by-case basis or via the standards recently set out by the Bush administration—are the logical starting point. He also wonders if we'll hear more about steps to help people who have invested in securitized mortgages, which are now suffering losses. He hopes the lending process will move back toward stricter underwriting, to a time when people wouldn't be issued a mortgage that would consume 40 percent of their income. The Fed's reforms will help, but Greenstein says he'd also like to see the loan documents borrowers sign become more comprehensible.

The Wall Street Journal had an article entitled If Homes Cost Too Much, Is It Okay To Rent Forever? (more discussion at BostonGalsOpenWallet):

As a renter in an up-and-coming neighborhood in Manhattan, I’m particularly interested in this subject. I pay an admittedly low rent — for New York City — of under $2,300 for a large two-bedroom apartment. When I run the numbers on any mortgage calculator, it looks like we’d be spending more than $3,500 per month on a $400,000 mortgage (including taxes, but not including all the unknown expenses that come with home ownership). I know there is an upside: tax breaks, an appreciating asset, a home to call our own and shelter from the shock of rent increases. But, increasing our outlay on housing by 50% or more sounds like asking to be house poor. We’re still going to save up and sure, we’ll likely get raises along the way, but we’ve resigned ourselves to being renters for up to another decade.

There's even a movie in the works, called Maxed Out:

Maxed Out begins as Beth Naef, one of the most successful real estate brokers in the country's hottest real estate market, Las Vegas, gives us a tour of a $5.5 million spec house. What's important to her clients, she says, are elevators, massive kitchens and wine cellars. Beth is building a ten-thousand square foot McMansion of her own, a home she admits she won't be able to afford if interest rates go up. But, as she concludes, "if you look like you make money, I guess eventually you will."

Single Ma has something to say about this whole mess:

I don't even know what to say about the current mortgage industry. I don't want to pass judgment on the borrowers and I don't want to place all the blame on the lenders. But there's one thing I do know for sure - it is affecting the entire US economy. Ruthless scammers are trying to take advantage of the uninformed, savvy investors will profit from their misfortune, the government is making futile attempts to help, tax dollars will be wasted, home values are rapidly declining, and responsible borrowers are pissed...and rightfully so.

In my opinion, it's just a hot butterball mess!

Here's an interesting piece from Millionaire Mommy Next Door:

Good friends of ours built their home in Phoenix before the prices skyrocketed. They plunked a lot of cash into their home and accelerated their mortgage payoff. They now own their home free and clear. A couple years ago, they shared the exciting news that their home's value was evaluated at over $850,000 and they expected the price to appreciate to $1,000,000 very soon.

You can guess how this story ends.

Here's another one from Millionaire Mommy:

"All current living generations in America have been force-fed the idea that home ownership is absolutely essential to financial freedom. It is an article of faith in the national religion. Question this and you are branded a heretic. Somehow, through an Orwellian twisting of the language and a corruption of the educational system, debt became wealth. The last two generations that would have disputed this have passed on."

Dear readers, don't just take my word on this topic. Ask questions, do some research and come to your own conclusion. The purpose of my site is not to tell you what to do. My intention is to educate.

There's a lot of information out there. As for us, we wanted to sell our house in 2005 and start renting; it would have made us debt-free. My instincts were good, but a serious illness kept us from making that happen. Now, oh, how I wish we had done it! Regardless, we will pay our debt the slow way, and if our house gets to be too much -- we'll rent it out and downsize. Luckily we got an excellent loan and bought a house well within our means; we are the minority today, I guess. Happy reading!

Another college post

In an earlier post I wrote about my extremely expensive college education, and the diminishing returns I have received from it. Part of the problem of my education choice was the fact that I was the very first person in my entire extended family to attend college, so nobody really knew what I needed. My parents dropped me at school with $50 in my pocket. They felt it would get me to my first paycheck; after all, I had a room in the dormitory, and a meal card, and a backpack with pens and notebooks. What else did I need?

Books.

My first paycheck didn't come for 6 weeks, and in that time I needed to come up with $400 worth of books. I called my parents, who said, "We don't have that kind of money! I thought your scholarships covered everything?" Well, they didn't -- the $2400 work "scholarship" allotted to me as a student worker I earned slowly, as I actually worked. I didn't understand this, so between my student work "scholarship" and my books, I was $2800 short for the year. So what was a young person to do? I wandered around at a loss until I finally ended up at a counter where they handed me an application -- for a credit card.

One week later it came in the mail. I went immediately to the bookstore, blew $400 on books and then headed to the mall to buy a winter coat. By the time I went home for Christmas, I had put $660 on the card. By the time I graduated, I owed $6,400. I finally had to negotiate a settlement, which I did, paying just $900 and getting a black mark on my credit.

Lessons I learned from this:

• Only go to college if you can afford it.
• Books cost A LOT. If you're smart, you can utilize some great new programs that weren't available when I went to college, like chegg.com or bookrenter.com -- sites where you can rent books for a fraction of the cost.
• Avoid credit cards. Avoid credit cards. Avoid credit cards AT ALL COSTS. I nearly dropped out of school because I had no money for books again my second year, and sometimes I wish I had (of course, I planned to take my credit card to Europe, so probably it was best I stayed).
• Find a mentor. Rely on them. Heavily. Seriously, I found a mentor my second year, and although he did not help my financial situation much, he did help me graduate. By my second year I was $15,000 in the hole with student loans, so graduating was smarter than dropping out.
• Ask questions! Ask the school what additional expenses you should look for, and don't disregard their response. I could have asked financial aid what to expect and they would have told me; instead I took the 1-year scholarships as a sign that I was going to make it, and when those scholarships went away after the first year I just took out more and more loans to make it through.

Learn from my mistakes; if you're going to go to college, be smart about it.

The Appliances have been Paid For!

Last week I paid took out $1400 and paid off our Sears credit card. We had to buy new appliances last month and we decided to put them on the card, but I just couldn't see paying interest on a credit card in order to keep our emergency fund filled to the brim. We decided to cut our fund to just $500 in order to pay this card off. We now have one less bill...I just hope it was the right choice.

What the heck is a Kindle?

Okay, here's another abnormal post...I guess it's just been one of those days. I was looking over my Amazon accounts (I still have that Amazon versus eBay versus Half.com post to write, and it is coming, I assure you) and I saw something about Kindle referrals.

What's a Kindle? I thought. Some kind of new phone, I assumed.

Well, it isn't. It is an electronic reader, otherwise known as a e-Book. It is about the size of a book and you can download text, newspapers, etc. to it. It doesn't use WiFi, it uses cell phone technology so you have fewer dead spots. Here's a picture:

And I have to say, while I would never buy one at the cost of $399.00, the idea of fewer books in my house...well, it's tempting. Selling my books via eBay, Half and Amazon has been stressful at best and an exercise in futility at worst. I have long known that something like this would come; is the time finally here? Has the paperback run its course? I guess I'll just have to wait and see.

Pentecostals push Entrepreneurism in Poorest Countries

I was drawn to this series about Pentecostal missionaries facing members of organized crime in Brazil; I read The Cross and the Switchblade as a teen and have always been impressed with what one man can and did do (it's the story of how Teen Challenge centers were started). Of course, religion is not the focus of this blog, nor do I ever want it to be. But when religion crosses with finance, the end result is interesting -- at least in this case.

Wealth gospel, long the territory of television evangelists and charlatans, has apparently moved to the slums with a surprisingly positive result. It sounds as if the movement is having a varying degree of success; critics point to a $33 million dollar mega-church in Guatemala that seats 12,000 and sports a heliport -- hard to justify in the middle of an impoverished region, after all. It's sort of like building a cathedral in the middle of a slum. But for those grassroots churches that are giving people seed money to start a business -- well, that seems more fiscally responsible. Or perhaps it would be better to simply say it sounds more fair. It's hard to say, but any program that encourages finance education is good by me.

The 'Gospel of Prosperity' helps Guatemalans help themselves out of poverty

Early Pentecostals reached out to the poor with the idea that poverty on earth would lead to riches in heaven. They gained a reputation for being concerned only with the "otherwordly." But the movement has unabashedly adopted a new ethos: God doesn't want anyone to be poor.

This message, known as "prosperity theology" or "health and wealth gospel," is most often associated with the newer Neo-Pentecostal branches of the religion where adherents, mostly upper and middle class, fill massive megachurches. But in Guatemala even the more traditional denominations are adopting a message of social mobility, making the words "self-improvement" and "ascent" part of the daily lexicon.

In churches like Showers of Grace, Pentecostals are told that poverty does not equal humility. They are offered business classes, taught how to save money, and encouraged to be community leaders.

Is College Worth The Money?

I was perusing Millionaire Mommy Next Door's blog (who wouldn't? I want to be a millionaire mommy too) when I saw a link to this article, entitled Is college worth the money? As someone with $49,000 of student loans still to pay, I couldn't resist. Here's what it said:

If you check the College Board's Web site (.pdf file), you'll find a reassuring study indicating that education really does pay. Without considering the intangibles, the study says each additional level of education draws a higher lifetime income. While the median high school graduate age 25 and older earns $26,300, the median college graduate age 25 and older earns $42,200. That's an annual income premium of $15,500, or 59%.

Well, maybe not.

According to the College Board, it takes 14 long years before the four-year college grad's income, net of loan payments, starts to beat what the high school grad earns. During all those 14 years, college doesn't pay. High school pays.

. . .

If college pays for the median-income worker, it may not pay as well for graduates who aren't so fortunate. Worse, if you earn less than the median, the burden of your college loans will weigh very heavily. They could, in fact, exceed your earnings gain.

Bottom line: College, particularly an expensive private college, is a high-risk investment, which, for many, won't pay.

I have to agree. I went to an expensive private college, expecting to make a lot of money when I graduated, but that wasn't the case. Not only did the private college not give me an edge -- you'd be surprised the number of "alums" from state colleges and universities that would prefer to hire their own rather than someone from a "fancy" private school -- a lot of times it actually made it more difficult to get a job because the school was small. Imagine my surprise when, five years after graduating and paying $80,000 to go to an "excellent" private school on the West Coast, someone on the East Coast asked me if the school was accredited? I nearly had a heart attack. If I had gone to Washington State University, on the other hand, I could have paid 75% less for tuition and the name recognition of the school would follow me anywhere in the U.S. -- no questions of "accreditation" required.

My alumni association constantly presses me to encourage teens to apply for the school, but I simply cannot in good faith do it. I loved my school, it was a great experience, but financially it was disastrous for me. I will soon attend my 10-year college reunion without a lot to show for the education I received.

As for my kids, I plan to send them to a state university, at least for two years. If they have the scholarships and want to get that private school diploma, they can go for the last two years.

After all, education is only as good as it frees you to do better and more interesting work; a high debt-load, even with student loans, is nothing but a different set of chains.

There's no place like home for the holidays...

We are gearing up for 3 weeks of traveling in a car with two children. One an infant.

I don't plan on being sane when I get back. :)

Anyway, if posts are spotty or nonexistent, that's why. I should be back in business in January, with lots of tips about what not to do on a car trip with children.

Until then, Happy Holidays!

Umm, what did I say about there being no recession?

While the U.S. overall is avoiding recession, apparently Arizona is not. The Arizona Daily Star had some great business articles today, starting with this one on the recession:

Arizona is among five states in the nation either in recession or on the verge of it, Vest said. The others are Michigan, California, Florida and Nevada, he said. For most, the primary cause was likely a boom and bust in the housing market with heavy speculation and prolific use of risky mortgages, he said.

"Things got a little crazy here during the housing bubble," Vest said in a press conference before the event. "It was a lot of fun while it lasted. Now we're suffering from a hangover."

Next there was a great article about the Federal Reserve stepping in to toughen rules on mortgages. What struck me was the part about loans that don't escrow taxes and insurance -- that's just plain crazy!

The proposal, expected in two weeks, is emerging as the most muscular use of regulatory power at the central bank since Fed Chairman Ben Bernanke took office in early 2006.

It is expected to target certain prepayment penalties as well as loans that don't escrow taxes and insurance. The plan also targets low-documentation loans and loans that are made regardless of a borrower's ability to make payments, Fed officials have said.

Last but not least, Fannie Mae and Freddie Mac have changed their rules on mortgages, effectively freezing out sub-prime borrowers, but the new rules will also affect prime borrowers with medium-level credit records. Looks like it's going to get a lot tougher to get a mortgage the next few years:

Giant investors Fannie Mae and Freddie Mac are imposing significant increases in fees for a broad range of borrowers who have lower than 30 percent down payments and formerly were treated as "prime" credit applicants. At the same time, the two largest private mortgage insurers — MGIC Corp. and PMI Group — are raising premiums on consumers who have low down payments and FICO scores in the mid- to upper 600s.

. . .

"This is outrageous," said Steven Moore, a mortgage broker with 1st Solution Mortgage in Falls Church, Va. "On a loan of $300,000 and with a credit score of 675 — which is not a bad score — and a 75 percent loan-to-value ratio (25 percent down payment), the cost is an additional $2,250 per loan." If the same borrower wants to do a cash-out refinancing to consolidate debt, the new Fannie-Freddie fee schedule will add another $1,500 to total costs on a $300,000 mortgage, said Moore. On a $400,000 loan, he estimates the extra fees would total $5,000.

The Backup Plan for Sub-Prime Mortgages

Here's another Kiplinger article about mortgage rates and the relief in the works:

It's a private sector plan brokered by the government that aims to prevent a wave of expected foreclosures. It would do that by allowing troubled homeowners facing interest rate hikes in the form of resets in the next two years to keep their lower introductory, or "teaser," rates for up to five more years.

Those whose rates have already reset are out of the picture, as well as non-home-owners, people who can't pay at the current rate, or those already in arrears or a month behind or more. So, basically, those who've weathered the first storm are in for some relief, with mortgage companies and their investors essentially footing the bill. While there is some talk of investor backlash through lawsuits, they say the litigation risk is "manageable," probably because nobody wants to see the entire economy tank because of this, or the housing market go into a freefall.

All in all, not a bad plan, although it's a shame there has to be a plan at all.

Focus (and I don't mean the car)

Today we decided to drain our emergency fund in order to pay down one of our credit cards. We've been waffling on this for quite some time, or at least I have, because I really wanted a $10,000 savings as a cushion, but, I know that we absolutely must get rid of our consumer debt in order to make that happen.

This is what's hard about getting out of debt...making these kinds of choices. Having that money there makes me feel comfortable, but I shouldn't feel comfortable. I should feel like I'm in debt.

*sigh*

So, here goes nothin'...

Kiplinger says Good News, Bad News on Economy

Well, I've been waiting for the words "recession," but so far the economy seems to be stabilizing, which is good news. Kiplinger writes that the fallout from housing hasn't crashed the economy, but job losses continue to bring things down. I know we've lost $35K of unrealized gain, but on the other hand, we've gained $98K on our house the past five years for a total gain of around 10%/year -- pretty decent. So it depends on which side of the housing boom you stand, I suppose.

The positive message is that the economy is bearing up despite the fallout from housing, which is clearly taking a bite out of hiring. The overall monthly gain of 94,000 jobs hides big losses in manufacturing, construction and financial services, all linked to housing woes. Fortunately, a broad array of service industries continues to add workers.

The negative message is that housing-related job losses will probably worsen in coming months as home builders continue to scale back output, many mortgage lenders pare staff, and homeowners shy away from home improvement projects. And managers in other industries will be more cautious about taking on more staff as economic growth slows.

Stressing, 35 years in advance

I keep reading all these great articles about saving for retirement, and frankly, it stresses me out. I feel moved to save money, except that I shouldn't save any more than I am -- I really need to finish paying off our consumer debt and move to student loans. Now that I am embroiled in a dispute with one of my student loans, it is even more imperative that this be behind me.

We are expecting a small inheritance this year as soon as a property sells; we are divided as to whether we should invest it or use it to pay off student loans. There are fair arguments in either direction, but what it won't do is eliminate all of our debt (it won't even come close) so a decision must be made.

Meanwhile, Vanguard has a great site on investing and how much you need to save in order to have a certain amount at retirement. We should be saving and investing $200 a month right now, but like so many families with small children, we just can't seem to get out of emergency mode. My husband does contribute around $250/month to a state pension, and when I was working I contributed $300/month to a 457 plan. But for the moment, we are living month-to-month and trying not to think of the future.

Master of my Domain...

I am now the proud owner of www.tiredintucson.com. I decided to purchase the .com domain name of my blog for a couple of reasons:

First, I think that blogging about finance is helping me and I want to continue to do it. I really do enjoy looking up information and reading other PF blogs. Learning how to handle money, how to budget and how to be frugal is something I need to do for happiness and balance in my life.

Plus, I blew $60 on some seriously sexy boots today. What can I say? It was a 60% off sale and I got sucked in. My husband refuses to let me take them back, saying they are the sexiest things I've bought this year. I guess my $9 t-shirts from Walmart just aren't cutting it...I said I needed a miniskirt to go with the boots and he offered to buy it himself. That's love, or desperation, or maybe a combination of both.

Secondly, the domain registration only cost $9.95/year. I can keep my blogger settings and continue to use blogger to support my blog (including those nifty templates - I've built sites on my own and it's a pain) for no additional cost. I can go with different and more lucrative ad accounts and there are other perks only available to domain-name owners. So, hopefully I will recoup that money by the end of the year, plus some. That's my big goal for this site for 2008 -- make more than $9.95. Whoo hoo!

Lastly, I think I have something to offer the blogging community. I read a lot of PF bloggers, but very few have children and even fewer have young kids. There's a reason for this -- people with young children are usually broke! They don't have time to think about finances, and live from disaster to disaster. How many times have I broken down because my insurance company decided not to pay for -- my C-section? Or a 5-day hospital stay when my son's throat swelled closed with croup and he nearly died? How about the $13,000 surgery my daughter needed for a birth defect last year? These crisis aren't covered by most of the books, and I think there is a need.

I nearly chose money4mama.com, but at the last minute decided to stick with TiredInTucson. It doesn't reflect the subject matter of the blog, but it's how I felt when I started it -- tired, discouraged, and looking for answers. And I'd like to continue sharing whatever I find.

So...onward! This domain is mine!

It's beginning to look a lot like Christmas...

And PF bloggers everywhere gear up for the season of madness. Here are some great Christmas articles from the PF blogging community. The first is from one of my favorite bloggers, Single Ma's Fabulous Financials:

Every single year, my mom is the hardest to shop for and I'm stumped yet again. She doesn't like me to buy things for the house. "Gifts are supposed to be for ME, the house is for everyone!" She doesn't like me to buy clothes and shoes. "SM you want me to dress like an old lady and THAT I'm not!" She's not into perfume, makeup, jewelry, or other girlie stuff. The collection inside her armoire proves it. Money is tricky because it never feels like the right amount, no matter how much I give. And she doesn't NEED anything. So what is a daughter to do?

We're in Debt talks about one Christmas ritual that doesn't cost money -- anymore, anyway. We, too, decorated our tree again last night, with my four $1 ornament additions (including a new snapshot of the two ninos) and my one splurge -- a $2.99 ornament. Our tree looks a little less bare every year...

Decorating our Christmas tree is always a fun time for the two of us. The best part is that our tree grows at about the same rate as we buy new ornaments. This means that our tree always looks full, without us having to spend more money.

Don't Mess With Texas writes about children and play credit cards. I know a friend of mine actually lets her kids play with the "fake" credit cards companies send with pre-approved offers, but I've always shredded ours. I love piggy banks but I know the new rage is an ATM machine for allowance money. Teaching kids they can withdraw without any deposits (the deposits come from mom and dad) is a little disturbing to me...

And the use of plastic by young (and younger) people is now being reinforced by some popular board games. The trend started a couple of years ago, but it's really taking off this holiday season, according to a report this week on the CBS Early Show.

Financial expert Dave Ramsey and program host Harry Smith took a look at all the toys that are not-so-subtly teaching kids to pay with plastic.

Among the games that now supply kids with fake plastic instead of toy money are Monopoly, Life, Barbie (not surprisingly; look at the clothes she buys!) and even Dora the Explorer. Can SpongeBob SquarePants be far behind?

My Open Wallet recommends a good antidote for all the consumerism this holiday season: giving to charity.

It's that time of year: all the fuss over Black Friday and holiday gift guides can lead to a certain level of disgust with rampant consumerism and greed. The story that did it for me was a mention of a woman who hurled her entire body onto a pile of $50 digital photo frames at WalMart to make sure she'd be able to buy one.

So what's a good antidote? Thinking about ways to help people whose needs are more basic, or organizations that do valuable work.

PF Advice talks about the phenomenon of Christmas in December November October and how parents eventually can just get by with one fall Turkey dinner:

As the Christmas juggernaut rolls on, it consumes and assimilates all Holidays in its path. Soon Santa Claus will get credit for Thanksgiving and that tradition will die off on its own. Jolly ole St. Nick will come down your chimney with a sack of presents and a turkey. The presents will be left under the tree and the turkey dinner will be left on the dining room table.

This will mean two things for parents. First, they will have to sneak the presents under the tree while preparing Christmas dinner, and giving the credit for the wonderful meal formally known as Thanksgiving to the fictitious reverse burglar as well. Second, they will only have to have one major Holiday meal. No more turkeys and hams and double doses of mashed potatoes and candied yams. Just one Turkey dinner that will satisfy all.

From Millionaire Mommy, a thousand words:

And with that, a Merry Christmas to all, and to all a good...avoidance of the holiday crowds.

Fiscal Responsibility?

I am deep into negotiations with my loan provider, also my alma mater, on the student loan that mysteriously went up by $318.73 last month (5% interest on $5200 can hardly explain that; the interest should have been $24). Here's a quick recap of this journey that is quickly turning into quagmire:

1. The loan handler, mycampusloan.com, does not have ANY RECORDS of anything except the amount I paid every month. They don't have an amortization chart (the rep couldn't even pronounce it, called it an "immunization chart," which I may find humorous later but don't now) and they don't have a record of how much the loan is or how much it is reduced every month.

2. The financial officer at my university, someone whom I know personally (in a removed, business sort of way) also has NO RECORDS OF ANY KIND. She shows my payments being made every month, and how much goes to interest or principal, but that's it. She offered to send that information to me, "for me to figure out," and I said I could get it online. It still doesn't tell me anything; I can add it up but cannot calculate capitalized interest and such without some serious software.

3. When I expressed my disbelief, she said, and I quote, "But I don't need that information. I just subtract your payment every month from the total." So I said, "What was my total at time of payment last month?" and she said, "I don't have that information." So I said, "Why?" She replied, "Well, because it depends on what day you make your payment what your total should be." So I said, "But you know what day I made my payment last month! Shouldn't you have a record of the total that day?" And she said, "This isn't helping. We're just going around in circles."

I'm going to have to conclude at this point that some kind of fraud is happening. I mean, my payments aren't going where they are supposed to be going, or there is some kind of rerouting. I requested 12 months of statements and my payment schedule going back to 1998. Part of the problem is that I have not received any statements since I started paying my bills online. Apparently, the loan handlers should have been sending me statements, and when I hung up with the school loan officer, she was sounding rather panicked.

It is everyone's worst enemy, the idea that your loans would not be going down as much as they should, but you know, when I was overseas, it seemed like my loans should have been going down faster (although I didn't track them closely like I do now) and I actually accused my mother of forgetting to send the payments for me. I started sending them personally via cashier's checks from overseas, telling her it just made me "feel better."

But maybe it was the cashier's checks that were more trackable; maybe I was right and the money wasn't going where it should, but my mother wasn't at fault at all. I am feeling a little panicked and overwhelmed at the moment, and wondering what to do about all this. I do have prepaid legal services. Is $300 worth calling a lawyer? What should I do?

December Net Worth

Here's a *big sigh* for the month of November. What went right, what went wrong.

1. Consumer debt -- up. This is primarily because we bought a new stove and dishwasher. Our old ones just didn't cut it anymore -- oven did not work and dishwasher did not wash. We spent $1600 on new, energy-efficient versions, but we won't see the savings from that anytime soon. We put it on our Sears card in order to take advantage of a 15% off deal, and our rebate check just came two days ago. We should have this paid off by January. As for the others...I used my credit card for a few Christmas gifts. It was very bad of me, but it put me about $75 over what I paid on it this month. So, one good choice, one bad choice.

2. House value -- down. I finally and officially dropped our house value from $218K to $205K. I don't know how accurate this is, but I do know this -- our house was worth $235K in 2005 and dropping any further is really going to start hurting. I had dropped the worth of the house on NetWorthIQ last month, so the net worth totals are different; I didn't do it on the spreadsheet until this month. The spreadsheet hurt more, for some reason.

3. Student loans...up? I'm glad I'm tracking these things, because I noticed an unexplained $200 increase on my Perkins' Loan (actually $318, but my $120 payment hasn't gone through, so I am giving them the benefit of the doubt). Whaaaa? I have auto-debit on this and there should be no problems whatsoever. So why am I $200 in the red all of a sudden? I was close to breaking the $5000 mark and should do it in February or so, so this was a real blow. Add to that the fact that I don't get physical mail from this loan, and there was no amortization schedule available online, and all my red flags are waving. $200 isn't an enormous sum, but hey -- it's still $200!!

4. Investments -- down. I lost heavily on my investments, with a slightly shaky recovery just before I ran this spreadsheet. Had I done it two days ago, it would have been worse. So, my investments were down by quite a bit, which is disheartening.

So around $13,400 of our losses this month were completely out of my control. $1398 of the decrease to our net worth is explained by our appliance purchase; that leaves the last $2.00 to me. So at most we treaded water. We had a lot of expenses come up in November, and I kind of feel that, particularly around the holidays, treading water is a good thing. We bought most of our gifts with cash. We had a flood disaster in our house, and the insurance money from that went to cleanup but there was enough left over to finish sealing our floor and help pay for holiday expenses. I had to have new glasses and contacts, and my son has grown out of nearly every article of clothing he owns.

Side note: For some reason, I had miscalculated investments on NetWorthIQ, so our networth seems to go up (and it does, really; what shows is accurate). This, too, is no fault of ours, and doesn't show the kind of fiscal discipline I am striving for.

Right now we are getting ready for a vacation, and I doubt we will save more in December. In a way, I wish I could just call it off, stay home and save money, except that I really, really want to see everyone we are visiting. So, we are making some financial decisions that are emotional right now -- I want to see my friends and family, even if we can't afford it, for example -- but, as we learned while trying to sell our house, some decisions about money are not just about the numbers. My children need to see their grandparents. We need a break from Tucson. I can never get my husband to take a vacation, so I've got to take the opportunity while I can.

Hopefully we can sell the Volvo to come up with extra cash and to cut expenses. After Christmas, I am keeping my fingers crossed we will be able to rent the guesthouse weekly as planned without a lot of vacancy. Mostly I am just hoping that we can have our financial house in order by summer, when the GI bill money is gone.

I am taking some financial risks; I just hope I don't get burned.

Old-fashioned values...wrapped in a franchise known for its lack of them

I'm always interested in old-fashioned business values. I guess it is a bit of nostalgia on my part; on the one hand, I wish all businesses had Jimmy Stewart as the manager. On the other hand, I am aware that Silent Spring was written during that "Golden Era," and that it was a time of child labor, unfair wages and pitiful working conditions. It's easy to look back and see either the good or the bad, but every age is mixed.

Today McDonald's is known for its poor employee benefits, lack of available health insurance, union-busting and environmental destruction from buying cheap South American beef. So it seems odd to feature a McDonald's franchisee as the epitome of the best of old-fashioned values, but it's true. I heard of the Canchola family and their incredible success with a McDonald's store on the U.S./Mexico border shortly after moving here; just mention the name to any long-time Tucsonan and they will probably nod. Rumor is that their first year, every child (there were six) worked to keep the store going. The family contributed to the community and became the stopover for those going shopping over the border (we've been there multiple times). I'm not a big fan of McDonald's, but I am a big fan of the Cancholas and their compassionate business ethics. For this reason, I am sad that the store is being handed over to someone outside of the family, and I also give the family my best wishes. I only wish everyone could be as amazing in their community; it would be a different world.

End of era at Golden Arches in Southern Arizona
"...'You have to give back.' "
That attitude is something Canchola credits others for instilling in him.
"A lot of people helped me in my life. I learned from them, and I learned that you don't pay those people back. You can't; you pay forward," he said in an interview with the Star in 1988. "You help somebody else that's coming along."
From that mind-set grew the idea of a Christmas Day celebration for children living in dilapidated, hillside shacks on "el otro lado" — the other side of the border.
What began as a family-sized event grew to involve thousands of children, coordination with immigration officials and volunteers from all over Southern Arizona who were drawn to the Canchola family fiesta.
This year, the burger joint will stand dark on Dec. 25, although the new owners hope to host the party again starting next year.
Dr. Richard Carmona, who volunteered at the Christmas party for 20 years, called the news the "end of an era."
"The Cancholas are a wonderful family who have done so much for this community," he said. "The situation is very sad."
Carmona, president of Canyon Ranch Institute in Tucson, would travel to Nogales from Washington, D.C., for the annual event when he was U.S. surgeon general.
"I always remember this one little girl who wouldn't eat her hamburger because she wanted to take it home and share it with her family," he said. "The event brought so much happiness — at least for a little while — to so many." (picture from www.azstarnet.com)

A minor remodel...for the rest of us

One of my major frustrations in house remodeling, house decorating or anything that has to do with the appearances of our private or semi-private lives, is that magazines frequently feature only the upper middle-class. By this I mean people who think they are middle class, but really are upper middle class. Anyone who makes over, oh, $85,000/year is, in my opinion, out of the middle class bracket. So I'm always amused by the statement, "middle-class couple Jane and Jack made $250,000 last year..." I mean, I'm sorry, maybe I grew up a little too poor, but my dad made $20,000/year in the '80s and there were 5 of us and we were not on any government assistance.

My husband makes $54,000/year for our family of four. We currently supplement that with a combination of free school (my husband is a university employee) and the GI bill, as well as $350/month from our tenant. We are not rolling in dough; soon we will be a one-car family again. But I think we're fine. Sure, it would be great if I worked full-time, bumping our income up to $87,000/year, but we've made our choices.

This summer we did a lot of remodeling. We redid our guest house, refaced the kitchen, tore out and redid the hall bath, put in new flooring in the entire house and knocked out a wall in the kitchen. We also had the house painted and the landscape redone, all new appliances put in and we purchased a new dining room table, office desk and bedroom set. Our total? Around $42,000, including rent on another place while we did it.

So when I see people earmark $54,000 for a kitchen redo, all I can do is roll my eyes and wonder, who the hell spends that kind of money? I mean, we might replace our cupboards in the spring, but only if we can make it happen for under $5K. I have a word for stories about expensive remodeling...sponsored.

According to Remodeling magazine's "2006 Cost vs. Value Report," a "minor," midrange kitchen remodel averaged $17,928, and 85% of the money was recouped at sale. A "major," midrange remodel averaged $54,241 and returned 80% of the cost. Both projects include replacing the sink, faucet, countertop, flooring, oven and cooktop.