Tired In Tucson

Colleges Learn to be Frugal

2009-06-19T16:05:00.000-07:00

The New York Times recently published an interesting article: For Colleges, Small Cuts Add up to Big Savings. In one college, students in dorms competed to save electricity -- getting 25% of the savings for a party -- and in another, the university hired students to do groundskeeping in return for minimum wage and a $1,000 scholarship. What is surprising is that colleges haven't done these kinds of things before (I know I would have mowed grass for a $1,000 scholarship!). Another aspect of this that the article did not discuss is the impact on the students; today's college students, or Millennials, are frequently displayed as feeling overly entitled and spoiled. What a wonderful chance to show students how to be frugal! If only the college could save money by providing financial education to its students.

College life may look different in the not-so-distant future: Students squinting out dirtier windows, faculty offices with full wastebaskets and no phones, sporting events in which opponents never meet, and paper course catalogs existing only as artifacts of the wasteful old days.

* * *
After years of boom times that led to competition among colleges to provide more luxurious dorm rooms and student centers, some perks of campus life have gone by the wayside. Dickinson, for example, is saving $150,000 by cutting back on free laundry service for students and an additional $75,000 by eliminating free ESPN and HBO in student rooms.

This is unbelievable -- almost a quarter of a million dollars every year for laundry services, ESPN and HBO? That is quite a cable bill. This may be one of those hardships that are really better for the students than the luxury accommodations. After all, in the real world, not only is there no free lunch -- there's no free laundry, either.

Ten things to save money on...or not!

2009-06-04T20:20:00.000-07:00

Kiplinger has a great quiz on some common beliefs about money-saving items. I got an 80% -- how about you?

Where'd TInT Go?

2008-09-25T22:31:00.000-07:00

My apologies to my readership that I suddenly stopped posting here, but what happened is that graduate school started up again and I am swamped with homework. I do plan to report on my spending for the summer (not good!) and I also need to vent about soccer uniforms, karate instructors and the cost of veterinary care. Regardless, I plan to be back, writing again about personal finance very soon, and I also plan to do a painful assessment of how badly we did over the summer.

How was your summer? Did you save or spend?

Principles, Ideals and Relationships: Why PF and Hollywood don't mix (to recap)

2008-07-05T20:08:00.000-07:00

I love to read J.D.'s fantastic blog, Get Rich Slowly. Not only does he have fantastic, well-written articles that come so fast it's almost too much to keep up, but he has a great readership, and looking through comments often gives me a lot of inspiration for my own, much less read blog.

After responding to a comment on his blog, I came to mine to write about it and realized that, yet again, I've left my blog for too long. I also realized that my last post might be confusing; I argue that giving an expensive gift is better than giving an IRA. I just want to say that if, hypothetically, I was a person who had $7500 to give, I would want to give someone a gift they would want, not a gift to "teach them a lesson." Let me expand on that:

First off, I've spent far too much of my life with people who give me things to teach me a lesson, whether it is political (my in-laws gave me a subscription to the ultra-conservative World magazine for Christmas one year) or religious (I have many, many Bibles from my mother). I get the principle thing, but I'd really just like, oh, I don't know, a candle? Some flowers? Or even an IRA, because that's what I'm into, and I would really appreciate it. My point is: give the gift the other person would want.

Secondly, I wanted to emphasize that the ultra-rich world of Sex and the City is not the real world. Let's not take our personal finance ideas from Hollywood! This is a pretend world that doesn't exist for most people, and we should always keep that in mind. Hollywood is not our teacher, not for relationships (who really has sex with new strangers every week?), not for ideals (like letting the guy buy the apartment), and certainly not for finance (in make-believe, you can make as much or as little money as you choose). Even the writers of the show knew they were stretching.

Last, I think it is important to find balance in life. Sometimes gifts are required in order to keep your social capital, and that social capital can be more valuable than dollars.

I am constantly in the search for balance in life and in finances, and while I am still learning, here's one thing I know: Hollywood ain't got it. And now I've done enough posting about Hollywood (there's too much in this world about Hollywood as it is) so let's get on with some posts about real finances, because that's what Tired in Tucson is about!

Sex and The City -- Fun, or bad Finance?

2008-06-18T11:40:00.000-07:00

I went to see the new movie Sex and the City a couple weeks ago. I thought it was lighthearted and fun, just like the HBO version. It also tied up more loose ends and had a pretty decent storyline. I came home missing the East Coast and great times with my female friends.

I didn't really think about the show in personal finance terms -- I mean, that episode, where she can't buy her apartment because she spent $40K in shoes? That one did it for me. Ten years ago when I lived in Japan, I saw a lot of articles about women there who would run up $40,000, $50,000 and even $70,000 in credit card debt to buy labels, and I knew that wasn't for me. One woman even used the oven in her kitchen to store extra handbags and coats. Watching the HBO series Sex and the City after I returned home was always somewhat shocking, but it was fascinating too; I remember well Carrie saying she would go without food in order to buy her copy of Vogue magazine. Let's just say I'm a lot more food driven than that.

Nevertheless, I did think about the financial aspect of their lives. I have always thought about "how" it can be humanly possible for a newspaper columnist to make the kind of money Carrie needed to support her lifestyle (I saw a piece about the making of the series that said the writers put the $40,000 shoes episode in to show how an author could manage to buy that many shoes and still live). Of course, her apartment was rent-controlled, but I remember her maxing her credit cards on one show and thinking, gosh, what's the limit on those?

I think that Sex in the City is fun and interesting, in a voyeuristic, what-if-I-blew-money-on-fashion sort of way. As far as personal finances go, Carrie and her group aren't pillars of frugality -- nor does Hollywood paint a fair picture. Ever.

Nonetheless, some articles about finances have erupted from the pure materialism shown in the movie. The money and business section of US News had a very nice piece about making major financial decisions as a single woman -- Sex and the City meets Personal Finance, which I thought was timely, and a way to use the movie as a segue into more sophisticated information about finances. I wish I had thought more about my finances as a young, single woman (who doesn't?)

Then there are the negative reactions. That Rude Girl calls the movie a two-hour-long advertisement, but then goes on to admit she recognized every name brand there -- including the sheets! Wow. I am soooo not aware of labels, at least not to that degree. I had to look up what a Manolo Blahnik was after I first watched the series (I watched them on DVD, as I've never been one to pay for HBO).

BostonGal goes on to say that Sex and the City just isn't her kind of fairytale, and says a SEP IRA contribution would have been a better gift than the Louis Vuitton bag Carrie gave her assistant. I love BostonGals blog, and I read it nearly every day, but the more I thought about this comment, the more it fell into my "why young people ignore personal finance" bag. To give someone a gift like that is immensely practical, but for a woman in her twenties who loves fashion it would be like wrapping up a pair of practical wool socks as a gift -- nice, but not endearing. Nor would the gift of an IRA contribution teach the most essential skill -- contributing to the IRA oneself.

It's easy to look back and say, I shouldn't have done it this way. I spent $12,000 I didn't have in order to go abroad in college when I was 21 years old. Do I regret this? Yes, in a "I wish I didn't have to pay that money back" kind of way. But that trip sent ripples through my future that I simply can't regret -- it sent me to Japan, where I met my husband, changed my career path, and changed my life. You can't put a price on that.

In the quest for financial liberty, it's easy to lose balance. Sometimes a grand gesture is worth the money. Sometimes you have to take a vacation, or visit a sick friend or spend the money to attend a special occasion. Sometimes you really need to buy something you don't need, if you get my drift. That's all a part of being balanced. If we don't occasionally use our money for things that bring us pleasure, such as a gift or a thing of beauty, then why have it? It's easy to go too far to one side or the other; Scrooge was, after all, a bad guy for a good reason. I'm becoming more and more interested in the social and behavioral aspects of good money sense.

So much guilt, and love, and need is wrapped up in our money and what we do with it. A friend of mine whom I consider the paragon of austerity told me she owned a $750 Louis Vuitton bag that her British mother-in-law bought for her on Bond Street. Maybe this gesture was one of those grand gestures -- after all, my friend and her daughter nearly died working with refugees in dire conditions overseas -- and maybe it was her mother-in-law's way of saying, "I'm glad you're alive." Whatever the intent, my friend treasures her bag, and I don't think she wishes she'd gotten an IRA instead.

Who knows? Maybe in 20 years, she'll wish she had gotten that IRA after all. Having already escaped death once at age 30, however, I can understand my friend, and I can understand young women all over who focus on the now rather than the later. Life is short, and precious, and sometimes it seems best to enjoy the bag in hand.

"Yesterday is history. Tomorrow is a mystery. And today? Today is a gift. That's why we call it the present." ~Babatunde Olatunji

~And~

"Let the credit card companies market as they will, the only thing that's priceless is Now." ~Caleb Baylor Hive, 2005

Photos by Tolate2sk8 and Princess Poochie, respectively. Photos used with permission. For shoes, shoes, and more shoes, Princess Poochie's website can be found here.

Credit Card Companies -- They always, always win

2008-06-05T00:25:00.000-07:00

We've been launched into summer (it's over 100 degrees in Tucson already) and our credit card debt is down to $6900. It is not the $5000 I had hoped for, but it is considerably less than the $24,000 I started at last summer. $17,100 less, to be exact.

Still, the interest we're paying on that $6900 in credit card debt is $50 a month. That's $15 for a cash withdrawal (huh? I don't even remember a cash withdrawal, but it must have been an overdraft from months and months ago) and $35 for regular interest. That's $50 we could spend on two nice items of clothing a month...or a gym membership...or we could put it aside in an IRA and have an extra $600 a year towards retirement. Oh, how the credit cards siphon money from people! From ME.

Here's an interesting article about credit card rewards:

About 85 percent of U.S. households participate in at least one rewards program, according to a study released Monday by Consumer Reports.
And though rewards do spur consumers to spend more, the study found that confusing rules and restrictions make most reward cards more trouble than they're worth.
...
And while cash back, gas and grocery rewards credit cards can offer some relief for costly essential items, they often carry higher annual percentage rates than traditional credit cards, Consumer Reports said. Looking at some of the more generous credit card rewards programs, the study found that rates varied from 9.74% to as much as 19.99%.

We've gotten caught in the "points" game before, and have learned a hard lesson from it. I racked up nearly $7000 on my American Express card trying to get cash back; the cash back I got from last year (one single purchase was over $5500 -- I just read on my own blog that I used the card to get cash back from it) equaled $118.00. $118.00? Yes, that means I put over $10,000 on my card in order to get 1% cash back, paying who knows how much in interest (my monthly interest on credit card debt used to be almost $200). Credit card companies charge daily compounding interest, but that 1% cash back is a one-time annual bonus. It's like a $30 Christmas ham for the employee who makes $20,000 a year; it's a pat on the back, not real money or real help.

Here's a tip for beating the credit card companies -- don't use your card at all. Keep it for emergencies, and when you need to use it, pay it off immediately. They've always got an ace up their sleeve, and you just can't beat them at their own game.

The only way to truly get credit card rewards is by keeping your balance at zero.

How to keep saving money when life gets in the way

2008-05-29T13:04:00.000-07:00

I've been reading some personal finance books lately (I'll review some of them here later on). There is no shortage of books on how to save, how to budget, invest, spend your money wisely, etc. What the books seem to lack, as a whole, is advice on difficult personal decisions.

This spring my marriage started to come apart. I was taken completely by surprise; my husband asked me for a divorce, and it was like a bolt out of the blue. I haven't written about it on this blog, because this blog isn't really to chronicle my personal troubles outside of financial decisions.

The problem is, divorce is a financial decision.

We talked, we went to counseling, but what really seemed to get my husband's attention was current divorce and personal property laws. I know my marriage isn't based on money, but the knowledge that we would have to sell our house in a down market, that up to 50% of his salary could go to child support, and that a divorce would bankrupt both of us was very sobering. I faced the fact that I would have to take a full-time job again and put my youngest child in daycare, and I started applying for jobs around the country.

More importantly, I made plans for my husband and I to separate. I would have left a few months ago, but I've been babysitting for a graduate student here and my leaving could have caused her to postpone graduating and getting her Ph.D. I couldn't let my emotional state cause her and her family financial hardship, so, I gritted my teeth and decided to stay until June.

Time eases all things. My husband and I have worked to solve some of our problems, and he no longer wants to get a divorce. Some things have remained, however, and one is my plan to leave in June. I no longer plan to leave for good, but I do plan to spend at least a month away. Part of that time I will stay with my parents, the other part with friends. It is an essential break that I think is necessary for me to continue my marriage. It is also a chance for me to network as I prepare to finish my master's degree next year.

All of this has been very hard to deal with, even as we have continued to pay off our debt.

I am incredibly proud of myself and my spouse, that we've stuck to our financial choices even as our personal lives have gotten more and more difficult. We had initially agreed to postpone travel for this year in order to save money, but which is better? Postpone travel and have an expensive divorce? Or pay the credit cards off a little more slowly while doing what is necessary to stay together?

Clearly, we've chosen the latter.

In addition to my travels north, my husband decided to ask his work to send him to Boston for a conference while we were gone. I know he is unhappy that I am leaving with the children for a month, so although I was initially irritated by his request to spend a week in Boston (after all, I'll be sleeping on the floor in my parents' house, not visiting fabulous historical spots in the beautiful Back Bay of Boston) I'm glad he's going.

This is at the crux of why it is so hard to eliminate debt and save money; life quite simply gets in the way.

Sometimes spouses need distance, and I know that right now I need my family and childhood friends to help me get through this. That doesn't mean I can't try to offset the costs of our travels; I hope to spend as little as possible and have some left over for the omnipresent credit cards when I return. I also hope that this time apart will continue to help my relationship with my husband because, after all, my marriage should last longer than my credit card debt.

Anyway, here's a few things we're doing to cut the costs of traveling:

Shorter trips. I'm only planning my trip in 300-mile legs or less. This means I can drive more slowly, getting the best gas mileage possible.
Camping, rather than staying in hotels. I'm camping in two national parks (possibly more) on the way up. I plan to buy the $80 annual National Park Pass; this gets me into the parks for free (usually $25 per park) and gives me a 50% discount on park campgrounds.
Hostels to keep us showered. I initially planned camp all four days, but that is difficult to do in low desert and urban areas. In searching for campgrounds, I stumbled across Bootsnall.com which featured a couple of hostels in Salt Lake City, Utah. Once I'm sure of my dates, I can book a private room there for $47.00/night plus tax. That is a room with a private bath and it includes breakfast -- hard to beat! It also comes after two nights of camping, and I'm sure we'll be ready for a real bed and a hot shower by then.
Freeze-dried food. I know this isn't the norm, but we had a failed 3-day backcountry hike a few years ago, and still have a ton of freeze-dried meals to show for it, along with a tiny camp stove and many cylinders of fuel. I plan to take this, along with a cooler of food, to help offset the cost of food on my slow trip north.
Craigslist. My husband, rather than staying in a business hotel in Boston, has contacted a local resident who rents out a room in his house by the week; the total is less than half the cost of a hotel. We aren't sure whether this will actually work out, but we're keeping our fingers crossed. It means that he can use the rest of the money alotted to him by his work for some nice dinners and maybe a little sightseeing when he isn't working, without any out-of-pocket costs.

So, even by taking the extra days, I will still pay less than $80 for lodging each way -- about what I would pay for a single night in a hotel. I do have that initial outlay for the park pass, but I'm chalking that up to education expenses, as it will be a chance for my 6-year-old to explore geology, botany, and other educational opportunities available at national parks.

The picture I posted at the beginning of this article is one I took myself in 2004, when I took my son (then two years old) on a month-long trip to Canada. I'm sorry to say that we stayed in hotels every night, and ate primarily at restaurants, and I spent upwards of $5,000 for that trip. I have $1800 saved for my trip right now, and I think I can make it on less than $1000, but even if I don't, I certainly have learned a thing or two about cutting costs these past four years.

As my trip progresses, I'll post what works and what doesn't. Hopefully I'll get another great shot of the Grand Canyon at sunset again, for one-fifth the cost.

Bought a diamond between January 1, 1994 and March 31, 2006?

2008-05-19T09:38:00.000-07:00

A class action lawsuit against DeBeers for inflating diamond prices is being settled, and today is the last day to file a claim. Anyone can file a claim, and documentation isn't needed unless your purchase was over $10,000. Here's an article about the lawsuit at Consumerist.com; you can also go directly to the class action website here.

I bought a diamond engagement ring in February 2006. We had bought gold wedding rings with engraving around the edge when we got married, but I later wished I had bought a more traditional ring, because I gained weight and it turned out the ring couldn't be resized. So, my husband bought me a beautiful diamond engagement ring for our 5th anniversary. Later, my 1-year-old daughter found the ring and toddled off with it -- I haven't seen it since -- for a loss of $800. We've searched the house repeatedly, and moving last summer it seemed sure to turn up, but it never did.

A few dollars in settlement isn't much of an exchange, but it's better than nothing...

A Belated April Net Worth

2008-05-15T11:52:00.000-07:00

Our net worth is calculated, and we've done well, raising it by almost as much as a month's take-home salary, thanks to the tax rebate.

It's not quite fair to measure net worth in the middle of the month, since we've had 6 weeks to pay debt down rather than 4, but I still think we've done well. We saved our government rebate checks rather than using them to pay down credit card debt, a decision I still feel somewhat worried about, but I hope that the cushion can help us get through the summer and buy books for classes in the fall, as we usually don't budget enough for either.

I would have liked to use our checks (plus a little) to put $2000 extra on our cc debt, bringing it down to under $5000, but I'm planning to take a trip to see my parents this summer and I would have had to use our emergency fund in order to do that. Also, my husband's GI bill runs out in June, so we wanted a little extra cushion as we prepare to live with $750 less every month. I think we've done pretty well in trimming our expenses -- my sister is quite envious of our miniscule gas bill -- and I'm continuing to try to cut corners. It would be better for me to stay here the month of June, rather than visit my family, but it's important to my personal life right now that I take this time. It's also terribly hot and miserable here in June, and a good time to be somewhere cooler.

Hopefully we'll save a little money to offset the cost, since (I'll be shameless, here) my parents and my friends will foot the cost of water and cooling (my husband usually just closes the house up and turns the a/c off when we're gone). I'm also planning to camp as we drive north, rather than stay in hotels. It's cheaper and more fun for the kids, but the biggest appeal is health related; my daughter is allergic to a lot of the cleaners/bleach used in hotels, and gets terrible rashes from staying in them. By camping we can use our own things, get nice and dirty, and she can be itch-free (I hope). I'm not sure what we'll do for showers, but 3 days without a shower, while gross, isn't the end of the world either. I'll take a camp stove and a cooler of food, so we can barbecue our way to Idaho. That should save money as well.

My hope is that my stash of money won't dwindle too badly, and I can use it to pay down credit cards when I return. I know I'm taking a risk here, but I also don't want to use the credit cards. It's purely psychological, but saving money and paying down debt is a behavioral change and I think I will be more disciplined if I cannot use the card.

This month I would have met and exceeded my networth goal of $50,000 for this year (and it's only May!) if I included the change in the worth of our house. According to Zillow, our house has gone up $10,000. But, since real estate is so rocky right now, I am keeping the worth of our house at the same for the rest of the year. The dips and hills are so unpredictable I don't want it to mar the actual progress we are making on realized debt and savings.

Scams, Shams and other Natural Enemies of Acquiring Wealth

2008-05-12T14:51:00.001-07:00

I wrote this post as a comment on J.D.'s blog, Get Rich Slowly. He did a post on Multi-Level Marketing, and it really touched a nerve with me. After spending 45 minutes on my comment, I decided to make it into an actual post.

I started tracking personal finances last year, when I quit my job to be a stay-at-home mom. I had to do it; we just couldn’t make it otherwise. But, the other motivation was that I did not want to be like my parents. I am naturally cautious, so I haven't, up until now, gotten into the specifics of my family's financial follies. It still makes me nervous to talk about it, but I hope that it might warn others away.

My parents are really terrible with money, and they’ve always complained about being poor and in debt, but the truth is they have spent thousands of dollars in bad business ventures throughout my lifetime. They did Amway, Melaleuca (still do), some Rain Forest thing, and my mom sold MaryKay and Avon products. My mom started two real businesses that lasted only a day (a $10K loss each time) and has spent almost $20,000 on schooling to be:

A medical transcriptionist

A medical assistant

A phlebotomist

A realtor

Yet she doesn’t even have an associate’s degree — they were all certificate programs. And she barely made a profit as a realtor, because she is so shy, she can hardly talk to strangers at all!

The worst one she did was selling a fake “miracle” machine. You took a drop of blood, put it on a piece of paper, and FAXED it to them. Then they took crystals out, diagnosed you, and sent you the results. Of course, since the illnesses were fake, it was easy for the machine to “cure” them (most people were diagnosed with both cancer and AIDS/HIV). But they bilked people for $1800 a machine. A lot of these people were elderly and sick. And, though my mom made a lot of money in this venture (all under the table, I might add), she also lost a lot (she gave one woman alone $5000 for “off-shore stocks,” without getting even a receipt, let alone a stock certificate).

I was overseas for much of this one, but when I got home and realized what was happening, I called the cops on the company - the attorney general’s office was searching for their base of operations, and the local news had done an expose on the scheme. I told my parents I had notified the police (before they raided, I might add, but my mom still refused to accept it was illegal), and luckily my mom fell and twisted her ankle and couldn’t go to work the day the police came, or she might have done time. I have never seen my father more furious with me in my entire life, though, than when I told him I had called the cops on the operation. He just couldn’t see what was happening — to him, it was his “last chance” to get the easy life, never mind the morals. For myself, it was one of my lowest points; I was terribly disappointed in both my parents.

My parents are 58 and 62 now, and they’ve finally seen the light and are going to a real financial counselor. They are saving money, investing in index funds, and paying off debt. The sad thing is that, even though they’ve found what works, they have less than $10,000 saved for retirement, with my father only 7 years away from retiring.

Don't fall for the schemes. As J.D. writes in his post (it is the name of his blog, after all), it's better to Get Rich Slowly. And that, I'm sorry to say, is the truth of the matter.

The Politics of Reality: Driving 10 mph slower saves more than repealing the Federal gas tax

2008-05-12T14:37:00.001-07:00

I always enjoy perception versus reality problems, although sometimes they make me sad, too (see this story about how "clean" biofuels are causing more environmental devastation than the Exxon spill). But, I also enjoy watching politicians squirm, and this great calculator from the NY Times shows how much you spend on gas per trip.

Using the calculator, you can see how much you'd save by having your tires properly inflated, by driving 10 mph slower, or by having the Federal Gas Tax repealed. If you click on "Drives 65 mph instead of 55 mph" and "Repeal Federal Gas Tax," you can see that driving just 10 mph faster negates any savings you might get from repealing the tax. Very revealing, I think.

I highly recommend the article it came from, too; I know that we've been spending our weekends biking the kids around town, rather than driving up to the mountains like we used to, in order to cut our costs.

Of course, our commuting now is with the 167cc scooter, and I can't tell you how smug my husband is everytime he has to fill up. "I haven't filled up for two weeks," he said last weekend, "And filling up today cost me $5.67." We took a gamble by selling the station wagon and buying the scooter (the scooter cost twice as much), but we're saving over $65-120 a month just in gas, and about $600 a year in maintenance and $500 in insurance. It looks like that scooter will pay for itself in another year or so, and I have to say -- thinking about that makes me slightly less tired than usual.

My Newest Venture: Index Funds

2008-04-06T19:18:00.000-07:00

I'm hoping to start putting a small amount of money -- say, $15-20 a paycheck -- toward a Roth IRA and invest it in an index fund. My current investments have really taught me the art of tolerance; the markets went up and my stock funds went from $1000 to $1400 in just a few months. Then the market went down, and my stocks -- mostly in solar and renewable energies -- also plunged, finally stopping at $605. I was feeling a bit panicky, and wishing I hadn't followed the advice of financial magazines (and really, I shouldn't have -- I was picking my stocks on P/E ratios, but there were a couple "big performers" that the magazines were touting, so I bought them -- and lost big.)

However, when I looked over my purchases, I decided that only one stock was an "unknown." It was stock I had bought for sentimental reasons without really scrutinizing the business practices of the company (it was near my hometown). So, I cut it loose. It was a good thing, because the stock has continued to drop, and I lost relatively little.

My stocks just surged back up to $825, and from this I've learned: thou shalt not check the stocks every day. I trust the companies I've invested in and so long as they don't go under, I know the stocks will eventually perform.

Now I am beginning to research the much-touted index funds. I've discovered the Vanguard 500, and today I saw this article on a new Vanguard Index fund that follows mid- and large-cap companies in the FTSE All-World Index. I'm also trying to follow and understand securities. At some point, I'd like to take a class; I never learned anything about finance either in high school, college, or now, having gone through most of a master's degree. It's kind of an adventure, really, except that I feel pretty stupid a lot. So I'll be posting more about Index Funds as time goes on, as well as continuing to discuss debt paydowns.

Congrats to Budgeting Babe

2008-04-06T08:31:00.000-07:00

Congrats to Budgeting Babe, who aired in this piece on CBS:

Net Worth for March

2008-04-04T13:58:00.000-07:00

As predicted, we have a positive move on our net worth for this month, going from $39,686 to 44,050, which is an increase of $4,364 for this month. This is almost entirely due to the paydown of our credit cards; we are down to a single card now.

This month we should have a positive increase also, as we continue to save and pay down our cards, but this summer we'll have to really tighten our belts.

Fantastic Post about Living with Children

2008-03-26T08:32:00.000-07:00

If you read this blog much, you may notice that I tend to rant about the perception of single people and DINKS (double-income-no-kids) couples about the reality, financial or otherwise, of living with children. It is rare that I find a post I think is really great; there was a fairly decent guest post on Get Rich Slowly called How To Prepare For A Baby Without Going Broke. There were some simple things to do, like buying used baby clothes and furniture, and borrowing from friends. It also advised breastfeeding (I breastfed both my kids and it is considerably cheaper, even with the purchase of a $250 breast pump). It recommends cloth diapering, although most cost calculators find that people tend to break even once washing (hot water is a must for a load of diapers) and the cost of the cloth diapers and diaper covers is included. We ran those calculations ourselves, and finally switched to disposables after a few months of torture, because water is at such a premium in the southwest.

What tends to bother me is the "pollyanna" attitude so many people take; the reality is that even a used crib (I was recently shopping for one for a refugee family here in Tucson) runs $75-$100. That doesn't include a mattress ($50 and up) or blankets and sheets. So even someone who buys used can expect to spend $175-$200 for a crib, and parents must be careful not to get an older crib because they can be dangerous, even fatal, for infants (their little bodies slip through the slats, which are made too big, their heads get caught and they can hang themselves). So yes, buying used can save you money, so long as you are very careful, and watch the recalls and safety issues related to used goods.

Parenting, really, is an issue of preparation; if you know what's coming, you can be ready. The most important thing to do is to be stable financially before you even get pregnant. Someone who has at least a year at the same job, very little debt and is done with school is in the best state, financially, to handle pregnancy and children without incurring bankruptcy or undue stress. That doesn't make parenting perfect -- it just makes it easier.

However, when I read this post called 25 Ways to Simplify Your Life with Kids, for the first time in a long time I felt someone "got" what it meant to parent.

Anyone who has kids knows that any life with kids is going to be complicated, at least to some degree. From extra laundry to bathing and cooking and shopping and driving and school and chores and crises and sports and dance and toys and tantrums, there is no shortage of complications.

You won’t get to ultra-simple if your life includes children … but you can find ways to simplify, no matter how many kids you have.

Take my life, for example: I have a house full of kids, and yet I’ve found ways to streamline my life, to find peace and happiness among the chaos. How is this magic trick accomplished? Nothing magical, actually, but just little things that have simplified my life over the years.

The main magic trick, however: making my family my top priority, and choosing only a small number of priorities in my life. If you have too many things you want to do, or need to do, your life will become complicated. But if you choose just a few things that are important to you, you can eliminate the rest, and simplify your life greatly.

The author goes on to list some really wonderful ways to enjoy your life as a parent, and these things also reduce costs over time. For example, cooking and cleaning with your kids reduces your tendency to eat out (or hire a housekeeper) and also provides learning time for the kids. Not over-scheduling also means not spending extra money on "activities" that may or may not be useful (a friend confessed that she spent $250 for a 6-week kinder-music course -- ouch!). My favorite tip, though, is the last one -- "Focus on Doing, not Spending." Not only do you save money this way, it also communicates something to your kids -- that love isn't about dollars.

And that, to me, just makes sense. Thanks to Zen Habits for the best post about families I've seen in a long time.

$4000 more on our credit cards

2008-03-14T10:17:00.000-07:00

We got our tax refund back, and that combined with a little extra went towards paying off another credit card. We have a little more money coming and should be able to put another $2K on the credit cards next month, so I am very happy with our debt reduction. Since we are working against a deadline in May -- we'll lose $750/month in income then -- I'm hoping to have our credit card debt down to "manageable" if not "gone." We will just have one card with a balance after this week. I will adjust the bars to the left so everyone can see our progress.

We went ahead and spent $250 of our refund on a new iTouch for my husband; he's been collecting gift cards since last fall, and had over a third saved that way. Since he's been diligently saving in a savings account, and because we've been paying things off steadily, we agreed to make this purchase. He's a tech-head and has used his iPod of 3 years ago nearly every day and it's getting pretty old and delicate (when I set it down, it turns itself on, etc.). Plus, it means a lot to him. It's important to me to pay off the debt, but it's also important to let him have some cool stuff every now and then. I can hardly get him out of holey t-shirts and khaki shorts from the used clothing store, so it isn't as if he is a spendthrift in other ways.

I'm bringing in $400/month now babysitting and this month we'll pull in around $250 for the guesthouse, so that income is relatively steady. I'd like the guesthouse to be rented out more, but I'm giving it some time. I may start looking for more advertising venues; so far I've limited myself to "free," but I may be able to find some really low-cost things to do as well. I'm considering buying a domain and building a website for it also -- maybe a good project for summer, which is off-season here.

It's amazing how much cutting our monthly expenses -- $40 here, $60 there -- really helps. I don't feel nearly as stretched financially as I was just last fall, and we had more money coming in every month then.

We sold the car! $1500 more towards paying off our credit card

2008-03-06T12:04:00.001-08:00

We finally sold the Volvo wagon yesterday, after a harrowing two days of last-minute fixes. I cracked the valve cover trying to change the valve cover gasket (gasket = .01 pounds of rubber and cardboard, valve cover = 2 lbs of metal). Luckily I found a used one, flirted with the guy at the counter and he gave me the cover for $10 instead of the $45 quoted price. Sometimes it pays to be a female who fixes cars... (not usually, though, just for the record).

So, we got $2100 for the car, and I used most of the money to pay off bills, although we've earmarked $150 for a good tune-up on our remaining car, and we are putting $1500 on credit cards.

Debt snowball, here we come!

Lessons I've Learned from Being Broke

2008-02-28T12:02:00.000-08:00

This article in Kiplinger made me start to reflect on my own life and the times when I was happiest. Ironically, the times when I had the least amount of "things" in my life were some of my happiest times. One of the things I can't explain to my husband is that right now, even though we don't have a lot of extra money, I feel rich. I own a home. I have two kids that I adore. We can afford to have birthday parties, go out for dinner and buy clothes that fit. For someone who grew up without being able to afford to either attend or have a birthday party (my mom wouldn't let me go because we couldn't afford a gift), throwing my son a party at the Children's Museum in Tucson made me very happy. We might have a crumby car, and my husband might have to save up for his iTouch, and maybe I make things from scratch during the week so we can have that Sunday morning breakfast at our favorite breakfast place, but the more I downsize and get rid of "stuff," the happier I feel.

Very un-American, isn't it? At least, what with all the newspapers and t.v. media encouraging us to spend our way out of a recession.

Here are the highlights from this article, which I found very interesting.

1. Know your priorities.
2. Debt is a vampire.
3. Have a cushion to fall back on.
4. Set goals and tune out peer pressure.
5. Small sacrifices add up to big rewards.
6. The size of my bank account doesn't matter.

My favorite quote from the article: "I remember my dad telling me that the only things worth going into debt for were those that appreciated in value: a home and an education. Anything else will suck you dry. Lesson learned."

Quote of the Week

2008-02-28T11:10:00.000-08:00

This is from a comment on Get Rich Slowly by Catherine on downsizing your life:

"I don’t want to be rich, I want to be free. And freedom is worth more than stuff."

Credit card debt down another $1000

2008-02-28T10:01:00.000-08:00

With the extra money coming in this month, we were able to put another $1000 on our credit card debt. We also put extra toward my student loans and toward the mortgage. We are slowly paying things down, and I'm looking forward to adding up net worth for February!

Here's a few things we did this month to further reduce our cost of living:

*I pulled out our old bread machine and started making my own bread. At 86 cents a loaf, I can make whole wheat, all-organic bread for 1/5 of the cost of buying it at the store.

*I started making things in bulk. I made homemade macaroni and cheese, which seemed more expensive at the time (about $8 in ingredients), but one recipe made a giant pan and it lasted for several meals. I also made pinto beans from dry beans -- 3 lbs of dry beans = $2.00. My kids absolutely love refried beans, beans and eggs, beans and quesadillas...you get the point. Since I make the beans myself, I get to control what goes in them. I put 2 strips of bacon in the entire pot, and the bacon flavor...mmmmm. And instead of one person eating 2 strips of bacon for breakfast, we ate the "taste" of the bacon in the beans for over a week. This saved money AND was better for us. (tip: I froze pints of beans, which were enough for about 2 meals. This kept them fresh, and the freezing actually makes the beans better for refrying.)

*I started making my son's lunches for school. This week I made him a lunch 3 days out of 4, and not only was he thrilled, he got fresh bread, fresh fruit and a healthy snack of root vegetable chips instead of his usual lunch at school -- pizza, pre-made bean burritos or a hotdog. I also put a note in his lunch, which made him really happy.

*I tried to get by on as little as possible. When I went to the grocery store, I stuck to fresh foods and bulk items. I found that, when I avoided the doomsday aisles of chips, crackers and juices, I could get everything I needed for under $50 a trip, or for around $100/week. This worked even at Trader Joe's.

*I bought in bulk from Amazon.com. This helped alleviate the costs of dry goods items like diapers and paper towels, and it allowed me to buy unbleached, recycled products like 7th generation. I didn't know at first if it would really reduce our total costs, but it truly has.

*I cancelled our YMCA membership. This was hard to do, but I have to go at least 10 times in a month to justify the $60 monthly cost, and it wasn't happening. I did use it last fall, when I went to Pilates 3x a week (and I loved the class!), but the nursery uses bleach and it made my daughter break out a lot afterwards, so I finally stopped going. I can still use the Y for $6-8/day, depending on which one I go to, but it was hard to give up the membership. However, $60/month was a pretty big expense -- $720/year. It is more than the insurance on our Volvo, and we're selling the car so we won't have to pay that expense, so I decided it had to be.

Those are some of the things I've done the last 6 weeks to try to save money, and it really has worked. It is surprising how the small things make a difference, and even more surprising how your attitude changes. I "treated" myself to a lunch at Barnes & Noble, and I was terribly disappointed in my $6 half-sandwich that was overcooked and drowning in cheap Italian dressing. The kids got a cookie, and for $1.95 I expected a good cookie, but it was stale and tasteless, and I thought, how their quality has gone down! But then I realized that the cafe has not changed -- I've changed. Making my food from scratch, and realizing the actual cost of a thing has changed how I look at things.

We are waiting on a possible buyer for the Volvo, so that, combined with (hopefully!) a tax return could pay off a pretty big chunk of debt. I'm feeling good about our 'debt snowball' at this point; next stop, reducing our energy bills.

The Month Of February: Success!

2008-02-23T06:36:00.001-08:00

This month we rented out our guesthouse by the week and made $450 ($100 more than monthly rental). We would have made another $80 but there was some confusion on the dates. That amount, combined with the $256 I made doing some light babysitting, brought my salary this month to $706, or roughly twice what I brought home when I worked part-time at a real job (after daycare).

The hardest part is not knowing what next month will bring, but hopefully more renters. We had a great experience this month and hope it will continue.

Fixed Costs Continue to Rise

2008-01-31T11:08:00.000-08:00

I've recently begun to address some of our fixed costs to try to pare them down as much as possible.

Unfortunately, it seems that we are fighting a losing battle -- all our efforts have merely kept us in the same place we were a year ago. The chart at the top shows our monthly gas usage for the past year; even though we used about 2/3 the amount of gas for the month of January 2008 than we did for January 2007, it cost us a third more. Our gas bill, which usually runs around $85/month in the wintertime (we live in Tucson and keep the heat around 64 degrees in winter), shot up to $144, 169% of last year's cost. We cut our use by about a third by buying gas-efficient appliances and turning the heat down as much as possible, but we are paying about 2/3 more -- which means the cost of natural gas has doubled in Tucson. This is unbelievably frustrating! Although I suppose, on the brighter side, that it could be worse; if we hadn't upgraded, we'd be paying well over $200/month for gas this winter, which is unheard of in Tucson (our house is only 1200 square feet and we have a brand-new furnace and new gas stove). We usually save money on utilities in winter here, so it's especially hard.

Whether or not this is fuel-related I don't know, but the cost of groceries in Tucson has also skyrocketed. We buy healthy, whole grain bread and usually I don't balk at the cost -- about $2.99/loaf. I tried making the same in a bread maker a few years ago and found I hardly saved any money doing it, and if I counted all the loaves I messed up, well...I was losing a bit in the process. I noticed that my bread went up to $3.29 this summer, which is high but not horrible. Then, just last week, I went to the grocery store and my bread is now $4.29 a loaf! That's a 143% markup in just six months!

This comes just after I started using the Amazon Subscribe and Save Program. Basically, if I order an item to be routinely delivered, I get free shipping plus 20% off. I can choose 1, 2, 3 or 6 month intervals. Since my daughter has extremely sensitive skin, I can't buy a lot of regular soaps or diapers, and it's been killing me to spend $12/pack for non-chlorine diapers when the regular cost $9/pack for about 1 1/2 times as many. I pay close to double; fortunately, the "hippy diapers," as we like to call them, are close to the same price if I buy them in bulk via Amazon. Unfortunately, our savings here are going to pay our expanding grocery bill in other areas. I'm not sure what to do about this, except that maybe it's time to renew that Costco membership and start shopping on the other side of town again.

I will be pulling out the bread machine again. If I can still make a loaf of multi-grain bread for $3, I can save myself over a dollar a loaf now. Other staples have gone up as well. Maybe it's time to pull out my Japanese cookbook and switch to rice?

What are you doing to save money this winter? Leave a comment and share! I need all the help I can get. :)

Extra Cash -- How To Earn More and Spend Less As A Family (Part 2)

2008-01-28T12:44:00.000-08:00

You know, I've spent several days really considering what I wanted to write in this post. After all, this is it; this is why I'm writing this blog, to talk about what it takes to save money as a family and how to avoid the pitfalls. Meanwhile, I'm trying, myself, to save money and avoid pitfalls.

In my first post about this, I talked about how truly difficult it can be to have both parents working without one or both taking on a second job. The cost of babysitters or childcare is a big problem. For those with family nearby who will watch the kids for free, well, I wish I were you. But for the rest of us whose family is in another city or state (or country), there are other issues to consider.

But I see the hole in my story, and actually it is the first thing we did when I started working, so it is my first piece of advice.

1. Stagger your hours. If you can work evenings and your spouse can work days, then you can trade off watching the kid(s). Most parents do this at some point or another, and my spouse and I traded off for nearly three years. Pitfalls include:

One parent who feels insecure about watching a very small child, or overwhelmed watching two or three. This sounds a bit silly, but the first time my husband left me alone with our first-born, who was two weeks old, I was terrified. Some families leave the role of watching young children to the mother, and the father may feel ill-prepared. Word of advice: get over it. And men? Never use the term "babysitting" when you're watching your own child. Please!
Stress on your marriage. I worked Saturdays, all day -- for three years. Even when Saturday was the only day I worked, it was hard not having a whole weekend with my spouse. We rarely got to do things as a family. It wasn't as bad when I worked nights, for some reason, probably because I worked a swing shift and was home by 9:30 p.m., but the Saturdays killed me. That being said, it can be done, but maybe not for too long -- after all, divorce is expensive too.

Despite the problems, this is the easiest strategy for most families. After all, your kids are with a loving parent, they are home, and the care is free. Even if your children go to daycare, there are really good reasons to limit their time there, and with 2 working parents, staggered hours are the best way to do it.

My next solution for families in financial trouble is really over-the-top. It is controversial, and I would hesitate to talk about it except that it just simply needs to be brought up.

2. Have one parent quit working.

If you want to earn more and spend less, and you have small children, don't get a 2nd job -- quit the one you have. Really. Particularly for lower- to middle-class families, that second job might pay for a nicer car, but most of the money will go to childcare, emergency take-out dinners and the required niceties for work (dress pants, leather shoes, etc.) Take home pay ends up being quite small; you also miss all the milestones your children go through (first steps, first words, etc.).

Quitting work doesn't mean the same thing as giving up your career. Maybe you want to finish up a bachelor's degree, or work on a master's degree. You can keep up with your former co-workers by dropping in to chat occasionally. A lot of studies show that women (I don't know of any studies regarding men) who leave the workforce have a hard time re-entering - if they re-enter with the same, old set of skills they had when they left. Taking a class is a minor expense and can be crucial to keeping your working skills sharp for when those childcare expenses drop (the older the child, the cheaper the care).

I know there is a "culture" of stay-at-home moms (SAHMs) and working moms, and the media love to play off of the culture war. I personally was a part of a "mommy group" and was irritated when they considered me a working mother (the connotation was negative) -- I worked 6 hours a week on Saturdays, and my husband was with our son the entire time -- but this kind of either/or attitude was and is simply ridiculous. I actually dropped out of the group, the prejudice among them was so strong -- they were all "devoted SAHMs" who had given up their jobs deliberately. I know that writing about the financial aspects of this just plays into the hands of these helicopter-mom types, but please note I didn't say mom should stay at home -- I said parent. I know several stay-at-home dads and my husband and I have traded off over the past 5 years; sometimes I worked part-time and he worked full-time, sometimes it was reversed. It's just good to be flexible about this as a family (for a good read, try The Two-Income Trap by Warren and Tyaqi).

(Side note: A lot of people don't realize that the FMLA, or Family and Medical Leave Act, covers fathers as well as mothers. Dads are guaranteed 12 weeks of unpaid leave after the birth of a child. My husband and I staggered ours, keeping our daughter out of care for almost 6 months. I had short-term disability insurance and received 75% pay for 8 weeks; my husband's boss asked his co-workers to "donate" leave so he got three months at home with full pay. It was the best money we've ever made!)

3. Be creative with your job. This can mean asking your boss if you can bring your child or children to work with you (this complicates if you have more than one, and is hard around the toddler stage). I was surprised to find that the affluent non-profit I worked for in Washington, D.C. was fine with me bringing my son (he cried during a call to the Undersecretary of State -- I was mortified) while the children's section of a library I worked at not only did not let me bring my children, they tried to ban them from the area if I was there (I threatened to quit -- after all, it was a public area). You never know who will be flexible -- and who won't. Here are some other job ideas:

Work at home. You might be surprised that I didn't suggest this before I suggested one spouse quit, but that's because most studies show that a parent who works at home has very little time to watch their children, and they are better off in childcare with all the accompanying ABCs and art projects. However, it can be cheaper to find someone to au pair or watch the children while you are present. Working at home during off-hours is really the best option, both mentally and financially, but we've never been able to swing it. I think this option sounds better than it actually is in practice; most people I know end up needing to put their children in childcare, at least part-time, in order to do well working at home.
Involve your children in your job. This, of course, very much depends on the job. Sometimes children can be taken along. Other jobs naturally involve your children; I worked at my son's preschool as a substitute for a while. He got 50% off tuition and I got a small wage. While I only made $7/hour, once I added the tuition break to my wage, it bumped it up to $10.75-$13/hour. It wasn't a great amount, but I could come to work when I wanted, and I received a lot of free training about discipline and child development.

4. Be creative with your non-job. Some of these ideas work for really ambitious working parents, too.

Turn a hobby into money. This can be small or big; sell your creations on Etsy, like this person, or start your own business. A friend of mine was an avid fisherman; now he owns a little fishing gear business, employs his father, and his kids (aged 9 and 12) help out. He even hires my dad to fix boats for him.
Watch someone else's kids. I just started watching an 11-month-old baby for $8/hour. Since my daughter and the baby just play together, this is up on my list of easiest jobs. The only drawbacks are all the laundry I get done while sitting on the floor, playing with them (wait, did I say drawback?)
Fix stuff. A stay-at-home dad I know fixes people's computers and does small carpentry jobs for extra cash. A mom I know is a licensed hairstylist; she goes to people's homes (particularly the elderly who don't drive, or shut-ins) and does their hair.
Be creative with your property. BostonGal rents out her basement; we are in the process of turning our guesthouse into a vacation rental.
Join a food co-op. This is just another way to turn a hobby (gardening) into money, by selling your vegetables.
Blog. I am waiting for this to work out. Still...waiting....

There are many ways to make extra money as a family, even if the difficulties of finding childcare are ever present. For the lucky, a flexible job can allow extra time for hobbies, making homemade food (cheaper) and still fitting in trips to the park. For everyone else, some life changes may be in order.

That's what kids do; they change your life. Those who try to avoid it fight a losing battle. Best to move on, cut back on costs, and occasionally remind your senator that daycare still costs more than a university education.

I'm Not Crazy

2008-01-21T13:22:00.001-08:00

Here's an article, appropriately named The Childcare Crisis, about childcare costs that show that I was actually underestimating the cost of childcare in an urban area when I quoted $1800/month:

Wendy Brauner's rent clocks in at $1,800 a month -- what some might consider a great deal in San Francisco. But don't think Brauner is living the high life. With a son, 3, and another almost 6, she was spending $2,750 a month on child care until her oldest started kindergarten last fall -- nearly 20% of her household income.

"I was writing a check for $17,000 to the preschool and wondered why it sounded so familiar," she says. "Then I realized it was a few hundred off what I paid for my first semester of college at Wellesley. It's just an enormous outlay."

I get that. Even with just one child, child-care costs were a major chunk of my own family's monthly expenses until our daughter, Harper, started kindergarten. The tab never came close to the $3,200 a month we spend for shelter, but that was mostly because, as a freelance writer, I can shuffle my work hours as needed. And that saves money -- a lot of money. In part-time day care, Harper never cost us more than $900 a month.

Still, it's a serious budget item. And we're among the lucky ones. The cost of child care in this country is one of those little secrets -- like leaky diapers and colic -- that parents just don't share with friends who are expecting.

Extra Cash -- How To Earn More and Spend Less As A Family (Part 1)

2008-01-20T11:56:00.000-08:00

One of the problems that couples with children face is the extreme cost of childcare. This interferes with a family's finances in ways couples without children (or Double Income No Kids -- DINKs) never have to face. I am always slightly amused and irritated by financial experts who recommend a 2nd or 3rd job to people in debt, because this kind of plan actually sinks a family with children further into debt. Here's why:

Kids require more than just daycare -- that cost is straightforward. Let's just say you have your child in daycare, and the daycare center is open 7 a.m. to 6 p.m. (standard hours) and you can leave your child there that entire time for a set cost -- say $450/month, which is middle of the range for Tucson. An extra job is after hours. This means that you must find a sitter for those hours, and we've never managed to find someone to babysit for us for under $7/hour, and that's dirt cheap. I remember babysitting as a teen to the tune of $2-3/hour, but trust me -- those golden days are over. First of all, it is now illegal to leave your child with anyone under the age of 13 (I babysat for extra money at 11 and 12 years old). Second, kids are simply more saavy these days, and they ask for more. We usually don't use high school aged sitters, however, because our kids are so small, and college kids don't go for less than minimum wage, but even the few times we let a high school kid watch our son (before we had 2) we still paid $6/hour and stressed about it the entire time.
Anyway, so if you take on a 2nd job, say from 5 p.m. to 8 p.m., you will pay $21+ for a sitter. Then there is dinner. A couple without kids might get away with a sandwich eaten over the sink, but kids need nutrition. But just for fun, let's say you go the cheap route -- .89/box macaroni. Watch to see how much that costs you.
Kids need attention, and that means you, not the sitter, not the minimum-wage-earning daycare worker, but you.Parents who are away from their children for great lengths of time tend to spend more on their kids to make up for it. It is very, very difficult to resist this urge. After a long workweek, who wants to fight with a child in the middle of Target over a 99 cent toy? It's only a dollar, really, but it's just that sort of thing that adds up over time.
Next, parents who work long hours and must put their children in excessive care (most daycares have a limit of 10 hours a day, so excessive is anything over that) find that their children have behavioral problems. When my husband and I had our son in daycare full-time (about 40 hours/week, or four 10-hour days), we found that most of our time at home consisted of disciplining our son. Instead of being able to enjoy our weekend, we had to enforce rules that the minimum-wage-earning daycare worker didn't. We have well-behaved children; we are not much for corporal punishment, but time-outs, early bedtimes and long talks about listening filled our weekends. This is not a solitary experience; several studies have shown that a lot of daycare = more difficult children. Parents who don't enforce the rules on the weekends experience other problems, such as injuries, that happen when kids are out of control. Even the co-pay on an emergency room visit is expensive.

Ok, so your kid is in daycare, you have a good sitter and you found a second job for both parents, with a combined extra income of $22/hour minus your sitter. You're finally getting ahead a little, although the kids are slightly misbehaving and living on macaroni and cheese dinners. You take off a little time for that checkup with the doctor, and find that your child has high cholesterol and it's exacerbating his/her asthma. Co-pays on the meds are over $50/month, and that's just the beginning.

Kids need proper nutrition. Give a kid sugar cereal for breakfast, cafeteria food for lunch and a mac-n-cheese dinner, and you get the following problems:

Childhood Obesity
Early onset of type II diabetes (check any newspaper to see diabetes skyrocketing in young children)
ADD/ADHD and other disorders (sometimes but not always linked to diet)
Lead Poisoning (yes, an iron deficiency leads to lead poisoning, which retards childhood development and requires therapy, nutrition intervention, and a whole host of other things that translate into even higher costs).
Heart disease, kidney disease, high cholesterol and high blood pressure

Sound depressing? It is. The main thing children need from their parents is the one thing hard to give -- time. No amount of extra cash will make up for a parents time. Even a parent working just a regular full-time job will find it hard to meet the needs of a single child in the hours remaining. One responsible adult in the family needs to be around to make meals and/or lunches, spend time helping with homework (school age) or playing and reading stories (little ones). If both parents are working, and at least one has a lot of energy, it is possible to make this work, so long as both parents are trying. If one has a flexible job, that's even better. But add a second job to one parent, and you invite exhaustion and illness in the adult, and you may even risk the future of your child.

So, for a family in debt, what are the options?

Want Solar? Move Now!

2008-01-16T09:40:00.000-08:00

One of my favorite PF Bloggers, BostonGal, recently unveiled her large purchase for 2008: solar panels for her house. I was pleased to read about her choice. One reason I enjoy her blog is that she tends to take the long view, and by long, I mean looonnnngggg, as in 30 years long. A lot of people commented that solar panels was a frivolous purchase, which surprised me, because solar panels cut energy costs for years and years. For someone like BostonGal, who consistently tries to cut her fixed expenses, a purchase that will pay off in 10 years and lower her cost of living then, if not now, makes perfect sense.

Anyway, in another display of utter senselessness, Congress has passed an energy bill that is unfavorable to solar energy. With energy independence in the forefront of so many people's minds, this kind of choice makes me shake my head and hold up my hands in disbelief. I tend not to talk politics in this blog -- it is about personal finance, after all -- but it does frustrate me to see bills that make energy improvements more difficult for homeowners. Last but not least, I invested in solar power, and after the bill's announcement I was puzzled to see one of my solar stocks (SunPower) plunge by about 30% (the other one, ironically, was less favorable according to the finance experts and it continues to hold steady gains). I knew SunPower had a high price to earnings ratio, and I hesitated because of this (SunPower's P/E ratio is 477; Evergreen Solar's P/E ratio was about 12 when I purchased it, although it is currently unavailable), but the herd mentality took over eventually and I bought a small amount of SPWR stock.

So, if you look at the article, you see that subsidies for solar power will expire in 2008, so BostonGal is ahead of the curve yet again. I just wish we had started watching our finances earlier; if we had, we could be installing our panels right now, too! All I can do is watch and hope that Congress, with the pressure of an election coming, acts to extend subsidies to solar. (Some people think the drawing back of solar subsidies is a good thing; see BostonGal's post on that here.)

Energy Bill Troubles Solar Industry
NEW YORK -The omission of renewed investment tax credits for solar energy in the wide-sweeping energy bill signed by President Bush late last month has put the future health of the U.S. solar power industry in question.

The bill includes more stringent mandates for fuel economy and energy efficiency, but it doesn't extend the investment tax credit for companies specializing in solar power systems. That credit, which amounts to 30 percent of the value of qualified residential or commercial solar equipment, is set to revert to 10 percent at the end of 2008 unless it is extended.

The Coffee Shop Around The Corner, Part Two (The Fight)

2008-01-16T08:00:00.001-08:00

"Anyone can start a business. You could too, you know." Of course, I did what anyone would do -- I started dreaming again. I could see the coffee shop, with a little section for kids to play in, and with the little shelf of author-signed books for sale. I could see the art on the wall, and the bags of coffee, and the cookies on the counter. And I made the mistake of opening my mouth to talk about it.

I am, in some sense, a practical person, as I mentioned before, and I am aware of the failure rate of businesses. I am aware of the fact that espresso bars are not exactly new material, and that I can go to any Barnes & Noble and get a cup of coffee and browse about a thousand books if I feel like it. I know that. But I can't help my heart dreaming about it, right? It just does.

My husband, not surprisingly, says very little, but I feel the tension in the air (my mother has started and lost two businesses). And I say, "I don't plan to run out and try this tomorrow, but it's one reason I started the personal finance blog. If we can pay off our debts, and save some money -- if I can prove to myself that I am responsible enough to do those things, and to do them slowly and systematically -- then, and only then, would I look into writing up a business plan and seeing what might come of it." My husband is silent. The minutes go by. Then he says, "You do know most businesses fail within their first year?" Silence descends.

Then the fighting started. I argued that I was smart enough to know businesses failed, thank you very much, and all I wanted was him to respect the fact that I was capable of doing such a thing, that the one thing that would make me consider divorce is the constant squashing of my ideas. He argued that he couldn't be expected to agree and support all my crazy ideas, because so many of them were improbable. I pointed out that my entire life had been improbable, from going to university to flying to a remote Japanese island and learning the language in a year, running my first marathon, marrying him and having two kids! Moving cross-country! Traveling 5,000 miles with an infant and a 5-year-old! I do six improbable things before breakfast!

Silence.

Then I dropped the big one. After all, I say, I gave up a lot to get married. I will never travel again, not like I'd hoped to. I can't skip off to any interesting job I want. I am, for all intents and purposes, trapped here. So why must I also trap my mind? Can't my mind, at the very least, be free to travel to improbable places? Spend improbably money? There's a place in this world for people like me, right? The dreamers?

The silence lasted all the way home.

To be continued in a later post...

The Coffee Shop Around the Corner

2008-01-15T13:24:00.000-08:00

Last weekend, my husband and I got into a fight. It was a big fight. It happened in the car. Neither of us raised our voices. It was about money.

Money is in the top three reasons why couples split up, but "money" is a very broad term. What does that mean, exactly? Do couples split up because they make too little money for their lifestyle, or too much? What about the decisions on what to do with the money?

Our fight was not, in the literal sense, about money. It was about my dream of owning a small business, which costs money, which puts *our* money at risk, and which I can't talk about in front of my husband without him starting to wheeze a little around the edges.

To his benefit, I have to admit something here: I am a dreamer. There's a reason why I decided to stay home, and it's not the Y chromosome. It's because the 8-5 workweek -- and the mentality that comes with it -- makes me feel like a hamster at a wheel. It makes me feel small and insignificant and tired. I am a creative type, really. I write and take photographs and design another website, which I publicly claim (for better or for worse). I'm not a great artist, or a great writer, or a great anything. It is, however, what I enjoy doing. I keep hoping I'll make money at it, but I don't, and I just keep doing it anyway.

My husband is a very prosaic sort of person, the kind who would never take a vacation because he would just forget it was an option. I work in order for vacations to happen, and it never fails to amaze me when I eagerly inquire how much vacation time he has and he says, "I don't know." I have never not known. How can you not know? How can you not look, every two weeks, and say (to yourself) "Another .6 days! Woo Hoo!" Or whatever your vacation rate is.

Anyway, I am a dreamer, and among my dreams of publishing a book, or making money writing anything at all, I also like science and would like to go back to school for a science-related degree. I like to travel, and periodically try for a job with the foreign service. Or, when I'm feeling really wild, I cruise Dave's ESL Cafe, looking for jobs teaching English, and wonder how I can trick my husband into going along with me.

All the while he plods along, getting up every morning and going to work, putting a small amount of money in savings every week, paying bills and looking for better jobs and better work. Here's the rub, though; I don't look for "better" jobs, I look for "more interesting" jobs.

It would seem that a slow mover like my husband should really be the author of a personal finance blog instead of me, but I look at money the way I look at a job; it can be the vehicle to attain certain freedoms, like nicer vacations, early retirement, and a decent car. I would sell this house and everything in it, cancel my debt, buy a van and travel through Mexico for a year in a heartbeat, but I do have a practical side that feels responsible for my student loans and my children's education. I get it. I may not be good at it, but I get it.

So one of my dreams is to own a coffee shop (or a youth hostel, but I think the coffee shop would be easier). Of course, I came to this dream about 15 years too late; if I had started a shop when I graduated high school (1994) instead of now, I would probably already be financially free to a certain degree. But at 18, I was terrified of starting my own business, and everyone said "college!" and so off to college I went. I lost a lot of money, but I had a good experience. And experience is what living is all about, right? (I keep telling myself this as I write the loan checks)

Anyway, so my DH and I took the kids up to Mt. Lemmon, which is just north of Tucson, to play in the snow. We always go to Summerhaven, the little town at the top, and walk around and buy overpriced hot chocolates. It's just a weekend treat that we do every couple months, and I don't feel guilty about our $2.50 hot chocolates at all. We tend to stop at a little shop called The Living Rainbow, and we go in and goggle all the cool stuff.

The Living Rainbow is one of those quirky little shops where you can find things you just don't see anywhere else. For example, I can buy a t-shirt that says, "This generation plants the seeds; the next generation gets the shade," and by purchasing it, I ensure that one tree is planted. There are also fighting nun action figures, beads that melted in the Mt. Lemmon fire five years ago, and "unicorn" tarot cards. I love it.

The owner always remembers us -- my first child weighed nearly 10 pounds, and so did hers -- and this time, I stopped to chat with her, which I hadn't done in a very long time. I asked her how long she had owned the shop, and she said, 29 years. I was surprised! She looks very young. So I asked her how she had started it, and she explained that, 30 years previous, her husband had walked out on her and her two sons, aged three and one. She had no money, so she started the shop with just a few items, and everytime she sold one thing, she would use the profit to buy two more. She was so embarrassed by the fact that the shop was practically empty, that she put up a sign for "information," and would talk to and try to answer tourists' questions. When I asked her about her boys, she said that they stayed in the shop with her most of the time, although the town had a babysitting co-op that she participated in as well. I murmured my admiration for what she had done, and said that I sometimes thought of starting up a business but had always been too afraid, and at that she looked me in the eye and said, "Anyone can start a business. You could too."

To be continued in the next post.

Having a baby, or how to lose $5,000 quicker than if you went to Vegas

2008-01-09T16:28:00.000-08:00

In 1998, I finished my undergraduate degree in English Lit. and was offered two choices. Choice 1: take a job as an insurance salesman and be a bane to my friends (I had to take an test asking if I would feel comfortable trying to sell insurance to guests at a dinner party. I knew the right answer, but said "no" anyway). Choice 2: take a job teaching English in Japan. With $42,000 in student loans, I went to Japan.

Surprisingly enough, I actually paid off $8,000 in loans in just 2.5 years. Then I met the love of my life, flew home, and had the cheapest church wedding on record (we actually made money on the wedding -- I plan to put our method in a post very soon). We went to Washington, D.C., where my husband had been stationed as a Marine, and after a couple of frantic months I landed a salaried position working for a think-tank in downtown D.C. I had excellent benefits, we lived in a tiny apartment, had one paid-for car that got 42 mpg, and paid most of our bills (such as yearly car insurance) in bulk. We paid off another $2500 loan in just 4 months. Then I found out I was pregnant.

I knew, somehow, that babies cost money, so for the next 8 months I put approximately $750 a month in savings. We saved over $5,000 during that time. I didn't get paid maternity leave, so only planned to take 6 weeks, but $5,000 was more than enough to cover that. Plus, my husband was still working, and we planned to stagger our leave, with one of us home with the baby for the first 3 months.

Late in my pregnancy, we decided to move. First off, our rent was going up over a $100, making our tiny apartment $1000/month. Next, having a baby in a 480 square foot apartment seemed a little claustrophobic. Finally, we wanted a place with a washer and dryer (luckily we had this foresight, as I couldn't handle stairs for nearly two weeks after the surgery and our laundromat at the old apartment was in the basement). We found an excellent place within walking distance of the metro station; the market was dropping, so the usual monthly rent of $1475 had been reduced to $1200. Even better, an intern at my work needed a place to stay short-term, so we got a two-bedroom apartment and she paid a third of the rent for it. We patted ourselves on the back; we now had a place over twice as large, and were paying the exact same price.

My first child, a boy, was born in February, 2002. I had a difficult labor and ended up with an emergency c-section, which was fully covered by my excellent insurance. I had to expand my leave to 8 weeks in order to recover from the surgery, but still, we were well covered.
We thought.

Then it happened. I decided to check out childcare -- you know, it wasn't for a few months, but I thought I should get an idea of what was out there. You parents out there, you know what is coming, don't you?

Basic childcare in Washington D.C. for an infant under 6 months ran, at that time, from $1200 a month up. Oh, you're thinking, you must mean some kind of fancy, "let's teach our children math before they speak" kind of childcare.

No, that's not the kind I mean. I mean basic childcare, as in the kind where the workers look a little shifty but you cross your fingers and hope for the best. That was the cheap, $1200 a month kind, at least at the places near my work. It went up from there.

I'm sure I could have found childcare cheaper in the suburbs, perhaps further out from where we lived, for maybe $800-900 a month, but frankly, we wouldn't have saved much money that way. We would have had to purchase a car -- I rode the subway every day, which was fully financed by my work -- and between gas and insurance it would have cost us that extra $300/month -- and it would have added an extra hour to our commute each way. We were already putting in 10-12 hour days, and honestly, we didn't think we could take the stress of a trip into the suburbs after the workday was finished.

While these were interesting ideas in general, the cold, hard reality was not the cost -- it was the fact that we couldn't get childcare at all. Most places had a year waiting list; some had even longer. Childcare for infants under a year was at a premium; there simply weren't enough places equipped for babies, they could charge what they liked, and still people stood in line. I've heard since of people getting on lists as soon as they heard they were pregnant, losing the baby, and trying to get pregnant again quickly so they wouldn't lose their place in line. The insanity surrounding infant childcare is extreme in a way you simply cannot believe until you are in it.

We looked at our options, and our choices were bleak. One of us would need to stay home until childcare could be found, or we needed to move somewhere either childcare or cost of living (or both) was cheaper. I went back to my job, my husband took his 6 weeks off and we quickly found our money disappearing at alarming rates.

I received another $1000 in gift cards and cash after my son was born. My work alone gave us a whopping $600 check. But the expenses piled up; a car seat and stroller ($150), a breast pump ($275), and the simplest bed we could find, a moses basket ($60) added up to a whopping $485. That was before bottles and food and blankets and clothes and diapers...

Granted, we could have bought those things second-hand, but we were in Washington, D.C., a metro area that wasn't exactly family-friendly. I'd lived in areas where breast-pumps were constantly in the classifieds, but I never seemed to tap in to that crowd in D.C., so we ended up paying retail. Friends helped; I got a really great playgym ($50) from a shower that I used for both my kids, and our church at the time organized to bring us dinner every night for 10 days. Still, expenses kept piling up. We didn't buy a diaper pail and avoided a co-sleeper even though I was nursing, because co-sleepers started at $150 and diaper pails seemed to come with more gadgets than an airplane cockpit and couldn't be found for under $29.99. Our living room smelled of dirty diapers; our roommate, fed up with crying babies and smelly garbages, moved out. Our finances began to plunge.

We spent over $1500 the first 3 months of my son's life on stuff. To non-parents, that may sound completely unreasonable, but we honestly went into it frugally. It is just that there are so many laws, and so many scary penalties for not following those laws, that parents simply must comply. If you slip and drop your baby in the tub, you can be sued for child abuse and undergo an investigation -- thus $9.99 for a baby tub. Used car seats can have hairline fractures that compromise their safety, so we bought one new with a stroller -- $150 was a steal. The "safest" babyseat starts at $349.99 and only works until the child reaches 40 pounds. Our seat was an infant seat, and because my son was a big baby (almost 10 pounds at birth) he exceeded it within 3 months and we had to buy another seat for $150. Think we weren't looking ahead? We tried to use a "convertible" seat that is supposed to grow with the baby, but it was so large and bulky it wouldn't fit in our compact car, so we had to use an infant seat. In the end, we couldn't fit a seat in the car backwards that would fit my extra-large son, so after just 3 months we had to give in and actually buy a new car.

The new car, a Ford Focus, was as cheap a new car as we could get and we paid $11000. So now, on top of all the expenses of having a baby, we had a car payment (my one regret at this time is that we didn't buy a used car, but we were so overwhelmed we didn't think we could take it if we bought a used car and it was a lemon; ironically, we bought a new car and it was a lemon).

I went back to work and my husband decided not to renew his contract with the military, which was up in May. He'd saved up enough vacation he was able to leave the end of March. At first we thought we could make it on my salary, with him staying home, but with the roommate gone, the cost of the new apartment, the new car and the regular costs of a baby (diapers, wipes, food), our $5,000 was gone in the blink of an eye.

We had spent all we had and were sinking into credit card debt when my husband got a call back for a job in Tucson, Arizona. With a sigh of relief, I quit my job, we sold our ancient, tiny car to a relative and piled into the new one to drive four days across the country with a 4-month-old.

Five years later I am still battling the costs of having children, from my son's $50/month allergy meds to $300/semester "enrichment" classes to $40/month for judo. At every crossroad there is a cost; enrichment courses or cartoon afternoons? Childhood obesity or money for sports? My second child was much less expensive than the first -- we re-used those damned car seats -- but the costs are still there. Here in Tucson childcare runs around $500/month for infants. That's less than half the cost in D.C., but considering the University of Arizona tuition is $4800 and a year of childcare is $6000, it's hardly a deal.

So we wait, and pinch our pennies, and try to enjoy our children while they are little and try not to worry about money and try to avoid doing anything to compromise our children's futures... and the result is, I'm Tired in Tucson.

If you want to lose money fast, don't gamble. Just get pregnant.

(Photos from www.flickr.com creativecommons/babies)

New Year, Fresh Start

2008-01-07T11:47:00.001-08:00

Goal
Originally uploaded by Obi-Akpere

I am not one to make New Year's Resolutions; it just isn't my thing. When I resolve to do something, I tend to start it right away, and picking an arbitrary date to make a resolution just seems...contrived. This year, however, this worst - of - all - married - financial - years, I was really happy to see the turn of the year. I thought, early morning on January 1st (after all, I went to bed at 9 o'clock on New Year's Eve with a terrible case of the flu), here's my chance to change the numbers. New year, new taxes, new choices. There are a few switches to what I've posted in the past, and I'll explain why.

This year, I want to get rid of two student loans. Most finance experts don't encourage paying off student loans before consumer debt, but we're going to ignore this advice for a few reasons:

Right now we have our consumer debt on very low interest rates -- 4.99 and 5.99% for the life of the debt. This means we don't have to move the debt over to new cards every 6 months, and we don't have to worry about it.
I'm having a surprising amount of difficulty tracking one student loan, which is currently at 5% interest. It should be down below $5,000 by now, but the school has made some kind of mistake and has very little paperwork to show where the money went. I was paying via ACH transactions and did not realize I had no receipts with this kind of payment! There's not much I can do about this, except absorb the $300 the school insists I did not pay.
The second student loan is at a whopping 7.5% interest. If I took 10 years to pay that, I would pay triple the balance! We are much, much better at paying off consumer debt, and I will probably save money by focusing on the student loan first.
Last but not least, we are following some financial advice, and that is this: pay off the debt that bothers you the most first. I am definitely bothered by the slow pace of paying off our student loans, and I am tired of the junk mail I get about refinancing! I am ready to get rid of some of the smaller loans. Incidentally, although our consumer debt is slightly less than my two smaller student loans, the interest rates -- and the psychological benefits -- win out. Read about how blogger Get Rich Slowly used the debt snowball to pay off $35,000 in debt in just 3 years!

Next, I have decided I don't want to save a $10,000 emergency fund. That should be my goal for 2009. We have been very successful at saving small amounts of money twice a month, and I think I want to take the snail's approach on this. We should be focusing on paying off debt, and just keep $1,000 in savings for emergencies.

While I want to shrink our emergency fund and focus on debt, I also want to add more to my IRA retirement account this year. This requires a small restructuring of my account, but since one investment has gone up 78% since I bought into it, I think it is worth doing some cost averaging and investing further. This is one goal that really frightens me, as it carries risk, but I think it's time we considered it.

Lastly, I want to find alternative sources of income this year. My husband's GI bill will end in May, and with me unemployed, I have to look at ways to add to our finances. Here's a few possibilities:

A raise for my husband. This may be possible, but since he got a large raise (20%) last year, I doubt a raise will be forthcoming. We can keep an ear out, however.
An at-home job for me. I really don't want to work an outside job right now; my daughter has health issues, and keeping her out of daycare is definitely helping. Some possibilities would be restructuring advertising on my blogs, filling out surveys, mailing letters, and renting out our guesthouse by the week.
Either my husband or myself joining the National Guard. I hate the idea of doing this; I could be required to serve far from my children, negating any benefit we would get for my doing this. My husband is a former Marine and definitely does not want to re-enlist. I put it here because it is a last-ditch resort for us, and if all went well, I would only have to give one weekend a month, and wouldn't need childcare for my children.

I think 2008 is filled with some hard choices for us, but I am tired of living paycheck to paycheck, and watching our debt grow slowly over time. This year I am ready to fix things, and reduce our debt as much as humanly possible.

Merry Christmas!

2007-12-25T17:01:00.000-08:00

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

2007-12-19T20:38:00.001-08:00

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

2007-12-19T08:04:00.000-08:00

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!

2007-12-18T20:56:00.000-08:00

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?

2007-12-18T20:47:00.000-08:00

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

2007-12-18T19:08:00.000-08:00

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?

2007-12-18T11:52:00.000-08:00

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...

2007-12-14T08:39:00.000-08:00

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?

2007-12-08T16:15:00.000-08:00

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

2007-12-07T23:24:00.000-08:00

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)

2007-12-07T22:52:00.000-08:00

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

2007-12-07T09:58:00.000-08:00

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

2007-12-06T12:12:00.000-08:00

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...

2007-12-04T21:05:00.000-08:00

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...

2007-12-03T12:32:00.000-08:00

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?

2007-12-03T11:32:00.000-08:00

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

2007-12-02T22:55:00.000-08:00

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

2007-12-02T20:32:00.000-08:00

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

2007-12-01T11:05:00.000-08:00

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.

How's your gift-giving etiquette?

2007-11-24T17:43:00.000-08:00

Here's a great little self-test from Kiplinger on gift-giving etiquette.

Test Your Gift-Giving Etiquette
When giving or receiving this holiday season, there's a right -- and wrong -- way to go about it. For example, is it okay to re-gift? Do you know how to handle an unexpected present? Is an e-mail thank-you note acceptable?

I regret to say I only received a 60%, which in most schools means failure. However, I don't mind re-gifting -- it wouldn't bother me if someone re-gifted to me, and I think it's fine to send unusable things on, so long as they are still in their original packaging -- and I always gift my boss a gift. I give the same thing to my boss and co-workers (when I'm working), which is usually just a tiny box of chocolates, or a card for a free latte with a card. Regardless, it was fun to see what was there and how others scored. Enjoy!

Making a list, and really checking it twice

2007-11-24T17:05:00.000-08:00

So I caved and went to the mall and and a few other select stores yesterday and today to pick up some deals. A dear, dear friend of mine, whom I recently visited, has three children aged 7, 9 and 13. While I was there, I noticed the state of their bedding was horrible, and there were hardly any towels in the bathroom that were a single piece. So, this year, even though I am not buying gifts for any other friends, I decided to buy each child a bed-in-a-bag and to buy my friend some complete sets of towels. I budgeted around $150 for the family, knowing that I could buy super-cheap items for that but hoping I could find some nicer deals this weekend. After all, the problem with super-cheap stuff is that it just doesn't hold up, and clearly, THIS STUFF NEEDS TO HOLD UP.

I hit multiple stores looking for deals. I shopped Linens-n-Things late Friday night. I cruised Target at 10:45 p.m., noting the gaunt and exhausted faces of those poor Black Friday workers. I found one bedding package at Linens-N-Things for $49.99, and two towels sets (each with bath towels, hand towels and washcloths) for a mere $15 a piece. I had a 20% off coupon for the bedding, but I could hardly buy 3 without exceeding my budget. I soldiered on.

I haunted the basement of JCPenney's at 10 a.m. I dragged screaming family members into Sears. After an hour of picking through a few hundred comforters, I finally found two amazing comforters for just $18 each. Bingo! They were soft. They were warm. They were blue. They were perfect!

Then I found two sets of 300-thread-count sheets on clearance -- not only were they a decent thread count, but they matched the comforters. They were marked down to $16.97, with an additional 20% off. I took my haul to customer service to listen to them try to sign me up for a Sears card and to finally ring up my merchandise.

They forgot the 20% off. So okay, that's fine, I go back and show them the sign and they nod and then take my 20% off the sheets, saving me another $6.00. This would seem unremarkable, except...

I then found some really nice Skechers for my 5-year-old for Christmas. He really wanted a pair (purely due to t.v. advertising, I'll admit) but since I've only just gotten him out of plastic Spiderman sandals, I was actually happy he wanted nice shoes. I found a pair at Sears later that day marked down from $44.99 to $19.99. This is only a few dollars more than a regular pair at Target or Walmart. I seized the box (they had his size!) and took it to the register.

It rang up at regular price.

I took yet another saleslady to the sign, she checked the numbers, and then we proceed to wait nearly 20 minutes (I am serious) for a manager to show up to clear the transaction. My savings? $25.00 But this is getting a bit old...

Except for the fact that, earlier in the day at JCPenney's, I picked up a pair of jeans for my son (he's also grown out of everything the past month) that were marked down to $10.00. There was another, nearly identical pair next to it. When they rang it up...the second pair was $17.99. I had them take it back. My savings: $7.99 (actually $17.99, since I didn't go search for another pair).

So...the total mistakes for today totaled $39.00. That's nearly 40 bucks! It's hard to believe that these are all honest mistakes, and not retailers' deliberate sloppiness. This sloppiness means money in their pocket. How many people would weather the embarrassment of waiting 20 minutes for a manager to show up (who was, incidentally, completely unapologetic for the wait)?

It has only been recently that I've started really scrutinizing my receipts. My mother used to do this, but I never acquired the habit. Then I saw this article on Get Rich Slowly, and I decided to start checking and see what would happen. In addition to my $39.00 savings today (or $49.00, depending on how you see it), I have also noticed mistakes on my grocery receipts three times. For two of them it was an incorrect price, for a savings of $7.39 (the third was an item under the wrong sign, and I opted to pay the higher price for it).

If you add up the grocery mistakes, I made $46.93 this month, just by spending the time to check the receipts.

So for everyone joining the rat-race we call Holiday shopping, here's a tip: don't just check your gift list, check your receipts -- and recheck. The money I saved today meant that I came under budget for my shopping this weekend.

(On a side note: By using my coupon and insisting on the advertised discounts, I managed to buy the two towel sets and 3 complete bed sets for my friend for the low, low price of $143.79, tax included. I came under budget by $6.21 while still buying really nice, good quality items. I am very proud of my shopping this year, and glad that my good friend will have nice, warm blankets for all her kids!)

Black Friday Online

2007-11-22T07:14:00.000-08:00

I've been surfing the web, looking for Black Friday deals, and it looks like the best ones are actually online. I have to get up to take my mother-in-law to the airport early Friday morning, and I thought if anything I was already looking for was on sale, I would drop by and buy it.

I have never shopped on Black Friday, choosing instead to sleep off my large Thanksgiving dinner and ignore the mania. Last year, a friend of ours waited in front of a Best Buy in San Diego all night long, only to have to run for his life as some stressed out consumer pulled a gun. But here, in laid back Tucson, the thought of such craziness seems impossible. Maybe I'm wrong, but it looks like this year, at least, I'm not going to find out. My Black Friday will exist online this year, if at all.

Amazon.com has a great Friday sale every Friday of the year; I expect great things from their online Black Friday Sale. And if you're looking for a list of online retailers and what they are offering, here's a list of Black Friday Sales.

Just keep in mind, as one poster to this site put it; if you search around the web, most of the deals can be found anytime. So save your crazy for something more deserving than consumer goods, and keep your dollars in the bank.

Move over, E-Bay

2007-11-21T09:51:00.001-08:00

This year, I lost a $720 diamond ring. I had bought it at a discount at the Gem and Mineral Show here in Tucson. Since I lost it through basic stupidity (leaving it in a place my toddler could reach), I decided not to replace it and instead purchased a very similar ring made of cubic zirconium via Amazon.com. The new ring is small, tasteful and virtually nobody realizes it is not a diamond. The price? $13.49.

However, had I seen this site called Bidz, I might have considered buying another diamond ring, particularly if I could get one for less than $100. I don't know how long my silver and cubic zirconium ring will actually last. That being said, the prices on this site show yet another aspect to this; although the ring had been a gift, diamonds are not a good investment of money. Instead of buying a diamond ring, it would probably be worth it to take that cash, however much it may be, and buy the company that sells them -- shares of it, at least.

It may not be shiny and sparkly, and may not fit on your finger, but extra money in the bank? Now that's pretty.

DIAMONDS MAY BE forever, but on Bidz.com they're hardly priceless — and that's turning out to be a valuable strategy for this online jewelry auctioneer. Rings, ruby bracelets and pearl earrings all start off at $1 on Bidz. Shoppers decide the final price, with winners often making off with their bounty for under $100.

Bidz is the creation of Chief Executive David Zinberg, an immigrant from Moldova who took his first job in the U.S. in a shoe store. He went on to form a business selling jewelry on eBay and parlayed that into what is now Bidz.com, a roughly $400 million company whose stock has risen 125% since its May initial public offering. In August, Zinberg decided to forgo his annual salary and receive a nominal $1 a year, with no stock options or bonus, saying the move more closely ties his pay to the company's performance. The CEO owns close to three million shares of the company. (Read the entire article here).

Black Friday's comin'

2007-11-14T08:34:00.000-08:00

Black Friday is next week! How did this happen? Luckily we've already done our Christmas budget, and my family has agreed to draw names this year, which means we may actually come under budget. Also, my mother-in-law is coming for a visit next week, which I hope means I can send gifts back with her and save on shipping. I've never been a Black Friday shopper; I don't much like shopping, and the idea of standing in the cold for a "possible" deal just doesn't appeal to me. For those of you who do, Kiplinger has a list of ten ways to save money on Black Friday. My favorite is the last one -- curling up on the couch and relaxing. Because the best way to save money is not to spend any at all! I like the two below, too, and plan to spend my Black Friday doing just this:

6. Clean out your closet, basement or garage. Are your old clothes, knick knacks, books, CDs and other household items taking up precious space? Donate your used stuff to a charitable thrift store such as Goodwill or Salvation Army and get a tax write-off. Or sell it on Craigslist, eBay or Amazon.com to make some extra cash for the holidays. Learn more about where and how to sell online.

7. Assemble your financial emergency kit. This fall's California wildfires serve as a somber reminder to get all your important documents in order. A couple hours of preparation could prove priceless if disaster ever struck your family.
Gather all your important documents, including insurance policies, birth certificates, property deeds, car titles and investment records, and store them in a fireproof safe. Also, consider creating a couple of backup CDs of digital family photos to stash in your safe. Pictures are often the number-one item people wish they could take with them in an emergency.

Ironically, the one thing Kiplinger doesn't mention is a magazine subscription to them, which is a great gift that doesn't need to be shipped. My parents have talked to a financial advisor this year and are actually trying to save money. My mother is 60 and my dad is 56, and they have been spenders most of their lives (they actually did best when they were poorest; when me and my two siblings were small, they paid off their house in just 6 years. They re-mortgaged it when I was a teen and maxed out its value with an equity loan just this spring). I am happy they are starting to sort things out, and hopefully they will get good information from the magazine. I don't think they'll be offended; my mother has been asking for some kind of books or reading materials all year. I think Kiplinger is a good resource, but if anyone has a better magazine or book that works for them, leave a comment!

Preparing for the Plunge

2007-11-09T19:31:00.000-08:00

After reading about how Net Worth can be artificially high because of house prices, I've finally decided to take the plunge and adjust our net worth down. I did not use Zillow for this; instead, I found out what a similar house on our street sold for and used the price-per-square-foot to figure out ours. It is only a few thousand from the Zillow figure, anyway.

So, the worth of our house will go down $13,000 this month to reflect the housing crash. Since we've just put $25,000 into remodeling and $2500 into new appliances, this is hard for us to chew. On the bright side, we only owe 72% of the worth of the house, even having taken out money for remodeling and such, and our mortgage interest rate is just 4.375%. While we don't want the worth of our house to drop, if it did, we could weather the storm. The majority of our debt is the mortgage and our student loans; in fact, it comprises 95.7% of our total debt (24% is student loans). Our consumer debt is just 4.3% of our total debt. So, while our net worth is not terribly high, a large portion of our debt can be deferred during hard times.

Because of this, what I really want to concentrate on right now is saving for retirement and having a really well-funded emergency fund. Right now we only have 2 months worth of expenses saved, but my goal by May 2008 is to have 6 months or more saved. That way we will be ready for an impending recession.

I will say that, as a state employee, my husband has very little chance of losing his job. He was moved from "soft" money to "hard" money four years ago, and is vested as a state employee, so it would be pretty hard to fire him. We have been hoping to move and for him to get a new job in a couple of years; a recession could stymie that plan. But I think we are reasonably well prepared to weather some hard times, although we could be much better.

My big worry is if this impending recession will last more than a few years. In the 1980s, it went on forever, and if that happened, things would get very tight. Right now my husband has a secure job, but the pay isn't that great for a four-person family. He will finish his degree in May 2009, but if there aren't any other jobs out there we could be stuck. Right now he gets the GI bill to supplement our income, but that will end next year. That's a reduction of $800-$1100 a month. Living on his salary alone will be tough, and right now I am trying to live just on his income and use the GI bill as savings or to pay off debt.

I feel like we need to practice being disciplined and not just expand our living expenses because the money is there. It's hard, but things are finally starting to fall into place as we slowly reduce what we spend every week. We will get rid of our second car in the next few months; we've gotten rid of our storage unit, are using the scooter to save gas, are eating in most nights a week and making lunches. All this means that this month we have an extra $800 to put on our debt. It's not much, but every little bit counts.

Next up: Amazon versus Half.com. I am selling around 300 books and using both sites, with the extra money to go onto our debt, of course. Keep an eye out for the update.

November Net Worth

2007-11-07T21:54:00.000-08:00

November Net Worth: not great. Although we show a slight raise in our net worth, this is about to plummet, as we just purchased two major appliances. Our stove chose the month of October to go out, and our dishwasher hasn't worked for three months. It's just our year; it seems like everything in the house is on its last leg.

The end came with me trying to make an apple pie; I had to light the stove six times, and it took nearly 3 hours. The pie came out like applesauce, and we finally decided it was time to bite the bullet and buy new appliances (it is more than the stove is worth to fix it; we've been coaxing it along for nearly 3 years). Sears had a nice 15% off deal for people buying two appliances, so we got a new, very energy-efficient dishwasher, and a brand-new gas stove. Our 1963 Kenmore 36-inch monstrosity of a stove is no more.

In addition to buying appliances, I used the credit cards to buy some needed storage cabinets and a new drill to install them (we need a special drill for our masonry walls). This purchase, like the appliance purchases, was born out of continued frustration. I am continuing to try to get boxes unpacked and our lives in order, but some of the changes we've made to the house greatly reduced our storage space. Renting the guesthouse is a loss of 400 square feet of space as well, so I finally decided it was time to buy some cupboards for the laundry room and some under-bed storage boxes. I spent several hours considering the best course of action, and my final decision was carefully and knowingly made, even if I did have to use our credit cards. So, our credit cards went up slightly, rather than down.

On a brighter note, my investments have really taken off, and I've seen a $300 raise in their worth in the past two months. In addition to this, I am trying a few money-making things this month. They won't make up for the $1275 we spent on appliances, but it will at least help out with clutter. I am selling books via Amazon and Half.com. So far my only sale (Amazon) has resulted in a loss of .55, primarily because I chose the wrong postage (priority rather than media mail). I hope that, when this gets going, I will earn a little bit, at least enough I can buy a new novel or two when I'm done. So far I have listed about 60 books, and have 3 more boxes to go.

Our bill for the appliances hasn't shown up, so I don't have it reflected in our net worth yet, but expect it to drop sharply. I may edit it this month, or I might leave it for next, depending on when the bill comes. I am hoping, however, that next year we will see some nice savings from upgrading to energy-efficient appliances, and a lot fewer headaches.

Making a list, and sighing over the cost

2007-11-05T15:32:00.000-08:00

We have already sat down with a list and decided on most of our Christmas gifts. So far our total is around $500 for non-family members. I will be trying to reduce that as much as possible; I'd like my husband's family to start drawing names, rather than having to buy for two sisters-in-law, three brothers-in-law and six nephews and nieces, just on his side. Plus his parents. More than half our total budget will be on his family. *sigh*

Here is a great article from Kiplinger about some online tools to reduce the costs of the holidays. I am starting to feel like my father, dreading the holiday season and the loads of money it requires spending...

Sure, Thanksgiving is the traditional kick-off to the holiday shopping season. But why not get a head start before the crowds? Think of the lull between Halloween and Thanksgiving as the calm before the storm. You can take advantage of this time to prepare your budget, draw up gift lists, comparison shop for the best deals or even look for ways to earn extra cash this season.

You can't invest in love...

2007-11-04T09:27:00.000-08:00

...but you can invest in hour-long stays in themed rooms with vibrating beds. Japanese love hotels, one of my favorite Japanese things, will soon be available for the discerning investor.

The articles focuses a lot on the aspect of organized crime in the Japanese love hotel business, but unlike "by-the-hour" hotels and motels in the U.S. (which are beyond sleazy -- I know, I stayed in one with a Journalism team as a joke in college. I still can't get the image of the pink, heart-shaped bed and the red carpet out of my mind) Japanese love hotels are frequented by regular people, primarily because of the culture of large, extended families living together combined with the tradition of paper dividers between rooms.

I have a little money left to invest, so I am waiting to see what the IPO looks like, and if Americans can invest too. An eight percent dividend is pretty sweet...

TOKYO (Reuters) - Japan's secretive love hotels are opening up to European investors as one player in the sector prepares for a debut on London's stock market this month.

Japan Leisure Hotels, which owns five love hotels worth some 21 million pounds ($43.68 million) in Japan, hopes to lure investors to its IPO with an 8 percent dividend and promises of fast growth -- shedding light on a sector that is often associated with sleaze and organized crime.

Pointing your finger: not just for third grade anymore

2007-10-31T10:09:00.000-07:00

Kiplinger recently published an article called The Earnings Blame Game. Basically it is scapegoating, with companies using everything from El Nino to the recent housing crash to cover poor business models and falling income. Since I've invested in solar power and cable, I haven't seen much of this (my investments are, luckily, going up) but it might be something to keep an eye on; a company doing badly overall might just be using the latest disaster for justification.

Merrill Lynch's massive $8 billion subprime-related write-down was stunning, and the list of companies blaming housing, subprime mortgages or the credit crunch for their troubles includes not only homebuilders, banks and financial-services companies, but also car dealers, big-box retailers, semiconductor makers and freight companies.

. . .

Even Hershey (HSY) blamed the credit crunch for weakness in its candy business, saying that higher interest rates cut into distributors' profits, forcing them to whittle inventories.

In fact, you hear the same excuses in so many earnings releases that it makes you wonder: Are some companies latching onto a convenient scapegoat to camouflage other weaknesses? It wouldn't be the first time.

Sitting on $25,0000

2007-10-31T09:19:00.000-07:00

Or sleeping on, actually...

BERLIN (Reuters) - A Berlin student who bought a second-hand sofa bed at a flea market learned she had been sitting on a small fortune when she found a baroque painting hidden inside the couch.

The artwork fetched 19,200 euros ($27,660) in Hamburg after the student discovered it stashed between the folding sections of the couch she had paid 150 euros for last year, the auctioneers said Tuesday.

How to conserve the jungle: Jobs

2007-10-23T23:28:00.000-07:00

An article in CS Monitor tells how the New-York Based Wildlife Conservation Society is trying to stop poaching in Zambia: the old-fashioned way, by giving people something else to do.

The program goes beyond teaching former poachers new ways to earn a living; it is creating a sophisticated network of markets that makes money for locals while reducing poaching, improving land use, and supporting conservation.

They are also introducing carrots for those who comply (while keeping the sticks for those who don't)

Mr. Lewis notes, "[poachers] can't do it without the support of the local community."

In that context, promoting conservation means recognizing the reasons poachers hunt – and setting up a business model that gives local residents the opportunity to make a real, legal, living, says Lewis as he sits outside the program's local trading center.

Beating the Collection Companies

2007-10-22T11:59:00.000-07:00

A recent article in Kiplinger personal finance talks about lingering debts and how it can destroy your credit:

Q: I recently checked my credit report and found a $104 collection account dating from July 2006 for an unpaid utility bill. Xcel Energy claims I owe $86 from 2001, when I was in college, but I was never notified. This has knocked 100 points off my credit score. What can I do?

A: You may have to bite the bullet and pay the bill. That will at least get the collectors off your case -- but unfortunately it won't help your credit score. "Having a collection account on your credit report is statistically significant for predicting future delinquency," says Craig Watts, of Fair Isaac, the company that compiles the FICO credit score. "What you do later on what that account doesn't change its significance to the scoring formula."

In reality, after three years (the statute of limitations in Arizona) you can no longer be sued for that debt (three years for credit card debt and oral contracts, six years for written contracts and five years for promissory notes). If you're unsure of what the statute of limitations is in your state, here's a great interactive map from Bankrate. Should the company or collection agency continue to report the debt, know that you have rights and must stand up for yourself.

I think it is morally important to pay valid debts, but if you choose not to pay the debt for whatever reason -- unfair billing, for example -- you might just have to live with collection agencies calling you for a very long time. It's called Zombie Debt Collecting. Collection agencies buy that debt for pennies on the dollar, so if you pay the full amount, practically all of it goes straight to their pocket. Should you decide to pay very old debt, consider paying the original company rather than the collection agency. This keeps an unethical company from getting your money -- and possibly selling your debt again without reporting it collected.

Also, once seven years has passed, you may have to write to each of the three reporting agencies to ensure they actually drop the mark against you. I was surprised to find 9 and 12 years debts -- that had been long paid -- still on my credit report when we decided to buy our house. And, a student loan that had been paid had been accidentally marked "delinquent" rather than paid by the loan company! That was a shock.

If you're curious about your score and what's on your report, you can now check your score for free once a year at AnnualCreditReport.com.

Green Investing

2007-10-15T12:43:00.000-07:00

It's as if old hippies died and went to heaven; terms like "off-the-grid power" and "wind technology" are now as popular as Internet startup was a few years ago. I personally have put my money into Evergreen Solar and Composite Technology Corporation, but there is a wealth of companies vetted by finance publications, and many are saying that buying green could put you ahead of the game financially as green companies come into their own.

From Kiplinger: 25 Stocks to Invest in a Cleaner World

We've sifted through the implications and put together the Kiplinger Green 25, a list of companies we believe will get a big boost from the growing focus on climate change and the move toward alternative fuels. Our picks vary widely in size, and four are based overseas. Some of the stocks may be expensive, and shares of some of the smaller companies may be volatile. But we think all will do well over the long term. In addition, check out our separate profiles of five up-and-comers -- small (with market values of less than $1 billion), more-speculative companies that someday could grow into green giants.

CleanTech Blog talks about Solar Power 2007, a conference about green solar technologies, and what companies are hot right now:

In 2006, PV grew over 40% to $20 billion in revenue and over 2,500 MW of new solar power. The European Photovoltaic Industry Association (EPIA), forecasts a €300 billion industry by 2030 which will meet 9.4 per cent of the world's electricity demand. By 2030, solar is forecasted to be the least expensive source of energy in many sunny regions of the world.

Get Rich Slowly says, "Want to Save the Environment? Buy Less Stuff!"

Every time I buy something, it has an impact on the world around me. When I buy a new kitchen appliance, for example, there’s an environmental cost for the manufacturing process, for the packaging, for the transportation, and for the marketing. By reducing my role as a consumer, couldn’t I help myself and help the environment? Here are five strategies that I’ve developed to help me accomplish both goals at once...

Millionaire Mommy tells us to ignore advertisers and their siren song:

Advertising media leads us to believe that in order to be beautiful, hip and happy, we need to buy their product. What they don't tell us is that when we do, we often pollute our earth, poison our body and empty our bank account.

Last but not least, here's a few energy saving ideas of our own:

As mentioned before, we switched our commuter vehicle from a small, compact car to a 163 cc scooter. This will save us almost $200 a month in gas, insurance and parking fees as well as 1,347 pounds of carbon dioxide a year. I also plan to take my son to school on a bicycle twice a week; that saves us another 425 pounds of carbon dioxide. That's a total of 1,772 pounds saved a year. (Want to calculate how much you pollute? Go to the EPA website here).

We started shopping at a local farmer's market and I found someone who sells eggs in Tucson. Her chickens get the run of her yard, and I get cage-free eggs for $1.50/dozen. That's a savings of $1.25 per dozen versus buying the ones in the store. Next spring we'll look into buying a share of our local CSA, otherwise known as community supported agriculture, to further reduce our impact and save money on groceries. Check out Animal, Vegetable, Miracle to find more resources for buying locally.

Because we're in Tucson, we planted low-water use, native plants in our yard five years ago when we first moved. This year I turned off the watering system and everyone lived, so we look forward to saving about 1200-1500 gallons of water a month (and between $10-15/month) by having a desert landscape.

Our goals for next year include purchasing window quilts or similar to help insulate our house, purchasing an energy efficient range and dishwasher, and looking into solar panels via the Tucson Electric Power GreenWatts Program.

Got any ideas about how to reduce your footprint AND save money? Leave a comment!

Food Troubles

2007-10-08T16:46:00.000-07:00

I just got back from Wild Oats with groceries that will last for the week, at least I hope so. I have some other staples here to supplement that, but our goal is to stop eating out as much, and to eat more meals at home.

My problem is that I tend to like really good food. I have a hard time cooking unless the food is good; I use fresh spices, organic produce, and try to use hormone-free beef, lamb and chicken as much as possible. I love really fresh, good food, the kind that was mooing or growing in the sun recently. The problem is the cost. I spent $100 on groceries today, and I hope that will get me through Wednesday or Thursday. I rarely make it through the week on less than $200. I don't know how bad that is for a family of four.

The Motley Fool makes some recommendations, including joining a CSA. Our CSA, unfortunately, has a waiting list! Our name finally came up on the list in August but were unsure if we were staying in Tucson. Since it is an upfront cost of nearly $300, we decided to wait (and need to get back on the list now).

Get Rich Slowly also had a few articles on saving money at the grocery store: Tips and Tricks to Save on Food and How to Feed Yourself on $15/week. Here's another one from We're in Debt: Eight Ways to Save at the Grocery Store.

I had hoped to get by on $75 this week, but I had to buy chlorine-free diapers (my daughter gets rashes otherwise -- she struggles with eczema) and we started buying organic milk. Mostly I think the cost has to do with Tucson, and the fact that water for agriculture is expensive and most items are shipped in, increasing the cost. I know when I visited my family in Idaho, I was practically drooling at the fruit stand, the costs were so low. And my parents used to buy a side of beef every year, too. Along with the deer or elk my dad killed hunting, it usually provided meat for the entire year.

One of the difficult things for me to adjust to is city living. When we ran out of milk as a kid, we drove to my grandmother's dairy farm and dipped a couple of glass jars into the stainless steel tank. We rented a pasture and raised our own beef one year. I ate so much wild game (pheasant, grouse, deer, elk) that I did not even know these things were unusual (or in some cases, a delicacy). I feel like a foreigner in most cities; what, exactly, is normal here? Butchering my own beef and skinning the carcass was normal growing up. I raised and helped butcher my own chickens. Living in the city where everything is under cellophane is much cleaner, I'll admit, but also a lot more expensive.

For me, one of the difficult things about saving money is that you have to try, over and over, to make a concept work. It's a lot like learning a language; repetition makes for ease of use. For me today, I went into the store with a definite list, I had a budget, and I still went over my budget by $25. I could have stopped when I got my organics and chlorine-free diapers, loaded the kids up, and driven to Safeway to buy my apple juice and cheddar cheese, but I did not. It seems like a waste of gas and resources to do that, too, in addition to taking twice as long.

I suppose I ought to congratulate myself on small triumphs. Today I found myself putting back the bunch of organic kale ($1.99) and the organic leek (yes, that's leek, singular, for $2.49), even though they were both in plastic bags already. I bought nearly no produce there because it was outrageously expensive. That saved me $4.49 (plus tax) on my total. I also bought a jar of apple juice because I needed a big glass jar to make sun tea, so for $5.49 I got apple juice AND a reusable jar, when I planned that much for just a jar.

Just like debt becomes a ball that grows, reducing our costs is also a ball that grows slowly, over time. I need patience, as well as discipline, to get through this period.

*sigh*

We did it!

2007-10-08T10:57:00.000-07:00

We finally finished cleaning out our storage unit late last night. Yay! That's $174.50 a month back in our pocket.

Issues

2007-10-07T23:43:00.000-07:00

From The Tao Of Making Money, the author of M's Blog says, "Most PF Bloggers Are Rich, Self-Righteous and Inflexible." While the author did recant her comment to some degree here, it certainly made for some interesting discussion, and I realized that, while I have focused on my finances on this blog and my financial decisions, I haven't talked a lot about a whole host of other, more personal issues that do, in fact, affect how I think about money and, more importantly, how I think about life in general.

I started this blog because I admired people who used their blogs as a way to record their finances, and also because I hoped I could be like them -- that I could get out of debt that way. As this year has shown, it isn't that easy, and it was somewhat naive of me to think that way. But, what might not show is that the naivete comes from growing up poor and not really understanding the way things work. There's a kind of mentality that comes from that that is really hard to break. I tend to emulate more than innovate because I don't have the confidence someone with a large income and assets might have. I have a lot of education and I consider myself something of an academic, but it's still hard to shake the idea that "money is corrupting" (love of it is, or so the quote goes). Poor people tend to despise the rich also (I've found that wealthy people are blissfully unaware of how much the poor really despise them -- not jealousy, but real hatred, I mean). So what happens when I become, well, "rich"? It's not an easy thing to deal with, and already there are murmurings in my family when I say I can't afford so-and-so because my husband and I aren't living hand to mouth.

The worst thing that happens to the lower-middle-class because of this belief that money and wealth is bad, is corrupting, is that they tend not to make their money work for them. That is the real reason I started this blog; I wanted to really find out about retirement accounts, brokerage accounts and a whole host of other things, and I did. And you know what? Last quarter my 457 account made a 28% profit. Twenty-Eight Percent. Unbelievable!

Regardless, this comment (and the many comments that proceeded from it) reminded me that my position as someone going from a blue-collar life to a white-collar life might be an unusual one, so look for some interesting posts about it, from paying for a private college alone to how I felt about my first real paycheck to dealing with depression and chronic fatigue while looking for a first job. This is some ancient history for me, but I still am dealing with decisions I made right out of school that were directly related to my complete ignorance about personal finances and the reality of office jobs. I hadn't planned to add this element to my PF blog, but perhaps it is fitting, after all.

Breaking It Down

2007-10-07T16:13:00.000-07:00

I've wanted to break down our finances for a while now, and I finally sat down and figured out how to use Google Docs to do it. I use several computers and it makes it hard to keep track of a spreadsheet; Google Docs makes that easier, but it is a little different from Excel. Perks -- easy to use, convenient. Drawbacks -- hard to format, exporting a bit tricky. Anyway, here's the result.

As you can see if you click on the picture to the left, we have some serious debts to reduce over the next 12 months. We are in slightly worse shape debt-wise from the changes of the past six months, but in much better shape savings and retirement wise. We hope to pay off the American Express this month; we used it to buy the scooter so we could get 1% back, but we have to be careful not to pay that 17.22% interest by leaving a balance! This month we hope to: reduce our expenses by getting rid of a storage unit ($174/month), sell our car and rely on just one car and the scooter ($4500-5000 to pay off credit cards, insurance reduction of $750/year, gas reduction of $40-60/month) and move some money from a pension account into my IRA invested in stocks.

Comments? Remarks? Questions? Feel free to ask.

The U.S. Postal Service, or How I Lost $50

2007-10-04T11:11:00.000-07:00

Recently I had a little reminder pop up in my e-mail about my brother and nephew's birthday. We are heading into birthday season; 90% of my family were born in the winter, I swear. From November through February I have seven birthdays, one anniversary, Valentine's Day and Christmas. It's a financial nightmare.

Usually I ignore my brother's birthday, but this year we haven't gotten along very well and I thought I should at least send him a card. While I was at the shop, I saw a cute one for my nephew, so I picked that up, too.

I needed a good pen and there was one at the counter for $1.49, so I bought that long with the two cards for $2.25 each. My one-year-old found a cute pen that attaches to a keychain, and I am always losing pens, so I bought that too for $3.99 (yes, I knew it was a foolish purchase).

I thought I might just put stamps on the envelopes and send them, but my nephew is 17 and I knew a card without cash wouldn't be considered "thoughtful." I debated slipping a $20 bill inside, as $10 seemed chintzy, but I had already spent $9.98 plus tax, and, after all, we were trying to save money, and I had splurged on the silly pen. So, I ducked into the cute little toy/novelty shop next door to see if I could find something funny to tuck into the envelope.

I found fun bobbing ninjas for the dash of a car for the low, low price of $10. Then I found a global warming mug for my brother (the coastlines disappear when you add hot liquid) and it was $12.50. Well, I thought, for $22.50 I can get a gift for both of them, sort of like a two-for-one.

You know what's coming.

So then I walked over to the little postal shop nearby. I am terrible at sending things so I knew I had to do it right away or I would forget. Since I didn't have packaging, I had to buy it, and the mug had to be bubble-wrapped so I had to buy that too. I got the addresses from my mother while I stood there, and even though I slipped the ninjas into a plain padded envelope ($2.39) rather than a festive one, my total came to $24.52.

Ouch! I could have sent each one a twenty dollar bill and still saved $7.02. Or, I could have stuck with my original idea, swallowed my pride, and saved myself $50.00.

*sigh* These are the things that making saving money so terribly difficult -- the little decisions I have to make every day. I just hope the gifts get a laugh, but that laugh -- it's an expensive one!

Next time, I'll think twice, or at least I hope I will. Gifts are my biggest downfall, and I just don't know how to stop (and I always, I repeat, ALWAYS, lose money when I make gifts).

I'm not looking forward to Christmas...

Adding $13,500

2007-10-04T11:05:00.000-07:00

I just added $13,500 to our retirement accounts. This is the amount currently in my husband's pension fund. We debated whether or not to add it but it seems logical to put everything in. Of course, technically I should go back through the months and adjust according to how much was there, but we didn't know how much, so I decided to just add it this month and leave it. I already know we increased our net worth by $1,102.

Right now I feel like a serious revamping of our accounts is in order. It becomes more and more difficult to track what we actually have because we have so many accounts. This is primarily because of banks; at one bank, we have a free business account, another offered $100 to start a checking account, etc., etc. We have six accounts we use frequently (yes! six!) and another three that we could get rid of. We also have savings accounts at ING (one each) and a PayPal money market account. Most of these don't have fees (I think just one account does and I plan to have it canceled this month) which makes it easy to leave the money there. The hard part is keeping track of it.

Next up: a spreadsheet tracking our loans to date. I've been wanting to do this for some time, and I hope to get it up in a day or so.

Not great, but smoothing out

2007-10-02T15:39:00.000-07:00

Calculating this month's net worth wasn't as bad as last month, but things are still a bit rocky. We bought a scooter this month and haven't yet sold a car, so we look like we are in the hole more than we are. We had both cars repaired which helped us to decide which one to sell, and I adjusted their worth up accordingly. We will soon have the a/c in the Volvo repaired, which will set us back about $1,000, but we'll gain that in its value, too.

We've made moves to lighten our lifestyle and it will become apparent the next month or so. Getting rid of our Ford will save us in gas and insurance, plus pay for the scooter. We will save almost $60 a month just in insurance, and probably another $40 in gas, and we will soon see the $350/yr savings from switching to a motorcycle parking permit for my husband's work. Altogether that amounts to a $1,550 savings a year, or $130/month that we can put towards debt or savings.

Even though I want things to go faster, we did raise our net worth by $1,100 this month (yay!). Our debt (other than credit cards from the scooter purchase) went down slightly, and our retirement went up quite a bit as I discovered I had money in a pension account I didn't know about. I'm debating whether to add in the money in my husband's pension account too; I suppose that would be the logical thing to do, but since I don't track it monthly (cannot) then I hate to put it in. It would add another $16,000. It makes us look slightly less irresponsible regarding our retirement if I do that. ;)

I changed my ING account to an automatic withdrawal of $15 twice a month. I'm arranging to rent out our guesthouse weekly in the spring but only have it rented for 10 days at the moment, so I hope I can keep it occupied.

I checked my 457 account and noted that I received a 26% return this last quarter! Wow! Annualized that's 14.8%, which is wayyyyy beyond my expectations. Right now I'm faced with a decision regarding the money in my pension; leave it in at 8% or roll it into my stock-based IRA? It's hard to say. Right now my stocks have only just recovered from the recent dip, but we'd like to buy Google stock. I checked and someone who bought just $400 of IBM stock when they opened would have $1.1 million in shares right now. I know Google is overpriced, but we are looking at this long-term; will they be there in 2040 when I retire? Will they keep innovating ahead of the rest? It's hard to say.

My personal IRA account is really for venture capital; I am invested in two "green" firms that create solar panels and a special kind of optic cable. I just read that green investing is the new "Internet start-up" in Silicon Valley. I never wanted to be cutting edge; I just care about the environment and wanted to invest in that sector, so I'm curious to see how this pans out. Anyway, we'll be discussing whether to accept a no-risk 8% return or whether or not it's worth it to take the risk with the few thousand I have in this state pension system. It's a hard call (if I leave it, I can get $63/month pension when I retire, which is pretty underwhelming, but the interest would turn it into $40,000 which I could withdraw at that time).

So that's this month: more downsizing, an unexpected retirement account, and a move to "turtle" savings rather than "rabbit" savings. Hopefully we can hold steady.

Clutter -- out of control

2007-09-25T20:23:00.000-07:00

Luckily, this isn't my fridge. This is the refrigerator of this guy's mom, who appears to have a problem with obsessive-compulsive hoarding.

We are still working on clearing out our storage unit, which costs us $175 a month and is sucking money away from our new rental. I think we can finish it up by this weekend and the whole house-selling fiasco will be at an end.

If I didn't feel the urge to purge right now, looking at the pictures of this house convinced me that I don't want to go down that road:

Greenspan -- On my side

2007-09-20T00:47:00.000-07:00

Although I didn't start this PF blog until last year, my husband and I have been discussing investments for quite a few years. This all started back when we were newly married and living in Washington, D.C. All my co-workers invested heavily, and thus we were introduced to the concept of investing money (we were also introduced to the concept of having money period, but that's another story). We saved and saved, and I read a lot of investment brochures. An unexpected pregnancy stalled our plans, but I kept reading and learning terms.

As I have written here, this year we branched out. Not only did I start this blog and start tracking our triumphs -- and mistakes -- we even put a tentative toe into the swirling waters of stocks, via an IRA. We turned our guesthouse into a rental, discovered online savings accounts, even discussed the meaning of "equity fund."

My husband and I agree on most things, but we have a fundamental disagreement about Economics. Now, I think that my theory is the best, primarily because we usually make money on it. This is primarily because I actually invest the money, rather than thinking about investing it. This is the fundamental problem my parents have -- all talk, no money in the bank. Honestly, though, I wish he was investing his own way so we could compare. That is a future goal, I think, but for now, it's just me.

In essence, I am a psychological investor. I look at people's attitudes and try to guess what they'll do. For example, if a stock crashes, it gets my attention. If it splits, I find that a good time to buy -- people's attitudes are positive, more people are selling, etc. My husband disagrees. For him, it is math. Two stocks at $25 are the same as one at $50. Sure, that's true enough. But for me, money is an idea; math is just a convenient way to tabulate it.

What do you think, PF community? What strategies do you take when investing in stocks, and does it work? As for me, I was surprised to find that Alan Greenspan, the math genius and long-time Federal Reserve Chairman, says that stocks are based on the emotions of fear and euphoria. While I can't try to time my buying with fear and my selling with euphoria -- that really is a crap shoot -- I have to say that it sounds like Alan Greenspan is agreeing with my point of view.

Which, what with our terrible financial year, makes me feel a little euphoric myself.

Downsizing again

2007-09-17T16:14:00.000-07:00

Remember the car issue? Buy a new car, buy a used car, buy a scooter? Well, here's the story.

We have a 2002 Ford Focus and a 1990 Volvo station wagon. We bought the Ford new, but it has been a lot of trouble. We only got about a year trouble-free before things started happening to the thing.

The brakes and tires were so cheap we needed new tires at 14,000 miles, and new brakes at 17,000 miles. The rotors went out with the brakes, so it cost us nearly $600 to get that fixed. The materials in the car are extremely cheap -- the rearview mirror constantly falls off, the dashboard rattles, and the seatbelts make a squeaking noise the entire time you drive.

The transmission has gone out on it twice. The first time it was under warranty. The second time was in 2005, just 18 months later and a few hundred miles out of warranty. Before we could have it looked at, however, my husband had a major accident (the car got swept up in a flash flood) and the entire engine had to be replaced anyway, so we ended up not having to replace it ourselves. (Free transmission: positive. Car that smells like pond water: negative). The insurance company has insured the repairs it made, and the car actually ran better after it had been submerged in water, because they fixed everything, but that happiness only lasted about a year.

Now the transmission is making rumblings again; the clutch is also making strange noises, and the car has been plagued with electrical problems. The dashboard rarely works, and the car dies at every stoplight. We don't know if this is related to the flood or if it is just the general crappiness of the car.

Now for the 1990 Volvo Wagon.

We bought the Volvo as a stop-gap measure when the Ford was in the shop. It took eight weeks to get the Ford fixed, and our insurance didn't cover a rental car, so we needed something -- anything -- to drive during that time. I had been looking at slightly larger vehicles because we wanted to have another child, and a five-passenger car becomes a four passenger car if there are two car seats. I found the Volvo and it was cheap -- just $2400, and almost $900 under blue book. We bought it, and for what we paid, we've gotten a lot of driving out of the car.

About a year later, however, the a/c conked out on the Volvo (rough in Tucson, let me tell you). Since then we've had many small problems, but the worst came about 9 months ago. The car would randomly die while we were driving it. It is an automatic, so this meant we had to stop the car, put it in park and restart via the ignition. As the condition worsened, driving became hazardous. Finally, the car was only used by my husband to get to work and back, a commute of only 2.5 miles each way, and he could go via residential streets. It would die as many as four times each way. We took the car to a mechanic 3 times -- each time cost $85, just to look at it -- and while they changed the electronic fuel transmission, did something with the battery, or held up their hands in amazement, they never fixed the problem.

Two weeks ago, the Volvo died for good.

The Ford regularly dies up to a dozen times on a trip to the mall or grocery store.

We were at a loss. Here we have a five-year-old car that barely runs, and a very solid Volvo station wagon that doesn't.

We decided to just sell the Volvo for cheap, so I put it on Craigslist for $1000 and invited anyone to bring their mechanic and hope for the best. Well, someone e-mailed me the name of a Volvo mechanic here in town.

He works on his own. He travels to where the car is -- doesn't need it to be towed to him.

He charges $55 an hour, but only if he actually works an entire hour. What a concept!

He took a look at the Volvo, found what was wrong, and fixed it in less than 30 minutes. He charged us $83.51. The cost of labor was a scant $35. I was practically singing in the streets.

Meanwhile, we went Scoot Over here in Tucson to look at scooters and took some test drives. Boy, are they fun! They are a lot more powerful than they used to be. I drove a the Kymco People S 200 -- a 167cc 4-stroke -- and it went from 0 to 45 mph with just a flick of the wrist. It scared me a little -- I was in a residential area and the speed limit was 25! Plus, it's cute.

See? :)

We discussed and hemmed, we hemmed and hawed. Finally we made a decision -- we are going to keep the Volvo. Rather than invest in a car, we're investing in a mechanic.

We're going to sell the Ford. While it doesn't seem intuitive to sell the newer car, if we sell the Ford it will pay for the scooter -- in full (it's a consignment bike with just a few hundred miles on it for $3100). We'll have enough left over to pay for air conditioning in the Volvo, we won't touch our small savings and we'll get rid of a car that has been nothing but trouble. On top of that, we'll cut our insurance costs by half, even including insurance on the scooter.

It's hard to make this choice. Being a one-car family is never easy. But the scooter gets 80 miles per gallon, and together with the lower insurance, we will save nearly $100 a month. It seems like this is our time to downsize. I just hope we can be disciplined enough to pay down our debt. I can't wait to be out of debt...for the freedom it brings. If I have to give up a crumby car to get there, well, it could be worse.

The Tortoise Wins

2007-09-17T16:04:00.000-07:00

About eight months ago my husband and I both opened an ING savings account with the $25 referral bonus. I had high hopes for our finances this year, and at the time I was working full time. I immediately put an automatic $100 a month into the account, and added more when I could. My husband thought that was too much, so he just put $25 a month in.

In April, my husband and I both had to empty our savings accounts and put the money into IRAs or face paying major taxes. We started again from nearly zero.

Also in April, I went to part-time work and we decided to sell our house.

In June, I cancelled the automatic withdrawal.

Yesterday I asked my husband to check his balance. The entire time he never changed anything, and hardly noticed the $25 that went in each month.

My balance today: $61.52. His balance: $335.26.

In finance, as in many things, the tortoise wins the race. I plan to start automatic withdrawal, but this time, I'm going to follow my husband's footsteps and only put in $15-20 a month.

It pays to just plod along...

Strategy

2007-09-17T14:33:00.000-07:00

A couple of weeks ago I wrote about our plummeting finances and both cars breaking down. While none of this is pleasant, and mostly I wanted to throw myself on my bed and be depressed, it has been a good lesson. There are many decisions we made that are still excellent ones. Primarily this: we did not take out all of the equity on our house, and used most of the money on actual repairs. We still have $50,000 in equity on the house and have paid down our primary mortgage by $8,000 in three years, mainly by putting just $35-50 extra a month on our payment.

Secondly, most of our debt is in student loans that we refinanced at the bottom of the interest drop with a non-adjustable rate for the life of the loan. Eighty percent of our student loans have an interest rate of 3.47%; we have one loan at 5% and one small loan at 6.7%. Our credit card debt is down to $5,000.

We rented out the guesthouse behind our house, finally, after a lot of repairs and sweat equity. In the spring, I can rent it out weekly during the Gem and Mineral Show in Tucson and make nearly $1000 a month for it.

I quit my job, which cut down our costs for food, transportation and daycare, and which allowed my husband to go back to school. The G.I. bill more than makes up for my salary.

While taking out $45,000 in equity on the house was hard, we were desperate to make repairs, and there were several big-ticket items that we simply had to address. I hate what it's done to our finances, but there it is.

Our strategy now: hunker down and pay it back. We are focusing on the home equity loan first, as it has the highest interest rate. We are continuing to pay down the credit card, but it was actually a loan with a fixed rate of 3.99%, so we decided to keep it rather than take out more equity on our house and pay it off. Once that is paid, we can focus on paying down the mortgage. During this time, I want to save $5,000 in an emergency fund as well.

Time to tighten the belt...

Greenspan's Optimism at an End?

2007-09-17T14:32:00.000-07:00

One columnist sees Greenspan's memoir as uncharacteristically downbeat after Alan Greenspan's 18 years as an upbeat and optimistic Federal Reserve Chair. I have to say that I tend to agree with Greenspan, that times for the U.S. will get harder for a while. We have depended largely upon cheap labor and commodities from other, poorer countries, while saying that we were helping them "pull themselves up by their bootstraps." Well, funny thing is -- some of them did. And now we are seeing them demand better and wages and more fuel, energy, food, meat, textiles (you name it) for themselves. There's a reason International Funds have performed so well the last few years, and as for me, I am glad to see the change, even if it means we might have to give up that flat screen television or fancy new truck. It seems fair. Now, more than ever, we should start saving for that rainy day.

From Greenspan Taking Off Gloves in New Memoir
...In the second year of his retirement, freed from the political constraints of his old job, the maestro sounds pretty downbeat. To put it bluntly, he thinks the near-term outlook is sufficiently bleak that we'll soon be pining for his "Age of Turbulence." Between the mounting odds of a U.S. recession and a global inflation trend, Greenspan foresees sharply higher interest rates — and lower asset returns.

Putting it bluntly, of course, was never one of the chairman's faults. He's left himself plenty of wiggle room, so that the likelihood of a U.S. recession is now "slightly more than a third," i.e. only slightly higher than he estimated earlier in the year. But "we do have the capability of far bigger [housing] price declines," Greenspan told The Wall Street Journal.
And sometime after the Fed lowers interest rates to cope with that threat, it may have to jack them up again — perhaps into the double-digits — to keep the rising tide of global inflation at bay, Greenspan writes in his just-released memoir. And, by the way, Ben, you're doing a great job. Sir Alan also openly regrets the fact that the dominant political parties seem to be led by economically ignorant hacks. A pox on both their houses: The most esteemed of our public servants says he might not do his civic duty come election time. How's that for a vote of no-confidence?
The market tape seems to have Greenspan's back in at least one regard: The rapid appreciation of commodities is unquestionably eroding confidence in all the paper currencies, but in particular the U.S. dollar. The deflationary effects of the seemingly endless cheap Asian labor pool were always likely to be countered eventually by those workers' increased consumer demand. Their demand for more protein, more energy, more stuff is now stoking inflation in China and elsewhere, which Republicans and Democrats alike seem keen to import with their advocacy of a freely traded (read: weaker) dollar.

Words I Wish I Had Written

2007-09-13T10:37:00.001-07:00

Just when I feel down in the dumps, I read this post from Get Rich Slowly. I still feel crumby about our net worth, but it's reassuring to know that we are not alone and that making the best money decisions aren't always the best life decisions. Any thoughts?

Once upon a time, my husband and I made almost $100,000 a year, had a mortgage payment of $900 a month for a house in a nice neighborhood, drove two new cars, had two cell phones, a full cable package, nice computer, went to a fancy gym with a sauna, ate out all the time, etc. etc. etc. Once upon a time, I had infinite free time and remodeled our kitchen for $2000, increasing the value of our starter home by $12,000.
Then came kids.

Everyone has to adapt to children. Furniture, diapers, breast milk storage bags, and all the baby accoutrements add up fast, but our first baby came with extras — five open-heart surgeries extra. Even with good insurance, our out-of-pocket expenses for all that — plus two c-sections, and cord blood banking (I support this for chronically ill children) — were $50,000 by the time our son turned three. Our second child was less expensive, but since she showed up only 13 months after her brother, we had a double diaper/crib/car seat challenge.

Daycare is not a safe option for a baby on oxygen, going in and out of surgeries, so we had nannies for a while. They were nice girls, but in the end, after payroll taxes and salary payout, it made sense for my husband to become a stay-at-home-dad. I had the higher salary and the better insurance options, and he was willing to give it a go.

Two and a half years later:

We have one car.
I ride my bike to work.
I use the free gym at work.
I use the free banking at work.
We have only basic cable.
We drink only water.
I bring my lunch.
Our family eats out only when it fits in our budget.
We pay cash for everything, we plan all of our purchases, and we, strangely, have far more cash saved than we ever did when we made significantly more. Even stranger, I am happier now, with my costly kids and leftover lunches, than I ever was burning through money.

Net Worth, hurdling toward zero

2007-09-13T09:31:00.000-07:00

Two days ago I recalculated our net worth and got a huge shock -- if I value our house according to Zillow.com, our net worth has dropped from around $65,000 this year to a mere $15,000. How can this happen? I wondered.

The housing market is really crazy right now, and the worth of our house went from $230,000 earlier this year (according to Zillow) to $198,000. Since we also put in $22,000 worth of improvements this summer, that is a total loss of $54,000 -- ouch!

While we may not be able to sell our property for more than $198K right now, I decided to adjust the worth of the house back to $215,000 -- what we would expect to get from it. Our net worth still dropped $30,000, but I think this shows our actual spending/saving habits. We took out $45,000 in equity, paid off all our credit cards and our home equity line of credit. We still have about $4,000 left, which we will probably need to buy some kind of transportation for my husband.

When I calculated that out two days ago, it depressed me so much I spent the day in a real funk. Here I am, trying to save money, and our net worth is plummeting. It's like trying to diet and watching the scale climb.

Our biggest mistake this year was trying to sell the house in a down market. We had a million reasons for doing so, most of which were valid. We were honestly trying to downsize and move into a smaller/cheaper place, using the house to pay off all our old debt. The problem is that talking about downsizing may be easy, but actually doing it was hard. Looking at starter homes after five years of fixing up was terribly depressing, and in the end we spent a ton of money trying to sell our house while paying rent on another house, rent for storage, and utilities on both houses -- all on top of our mortgage. We spent a lot of money we will never see, and had an endlessly frustrating summer. Here's what we learned:

1. A house is NOT a good investment if it is your primary home. We know people who move into houses, fix them up and sell them for a profit. This is great if you don't have small children and don't get bitten by a down market. Not so good for us.

2. Downsizing is harder than it looks. We were faced with poor choices: move into a crumby neighborhood, buy a fixer-upper, move out into the suburbs. We looked at each and weren't happy with any of them. How could we live in a bad neighborhood with our oldest just getting ready for school? Could we really bear to live in another fixer-upper with two kids and not enough time? Could we stand a commute -- or more importantly, could our hardly-working vehicles stand it? In the end, we couldn't accept any of these things.

3. You have more than you think. After a miserable summer in a swamp-cooled house, my house -- yes, the one I have despised for five years -- was a veritable mansion with smooth floors, a working dishwasher, an energy-efficient, new washing machine, and air conditioning. I was living in the lap of luxury and was too obsessed with what I didn't have to realize it.

We've had a rough year. My husband didn't get the job he was hoping for, even after nine interviews (yes, NINE!). If he had, it would have doubled his salary -- a big blow for us. I quit my job out of frustration and exhaustion and to save us money. We had family disputes over an estate property, issues with our rental, and just this week our second car finally gave up the ghost and died for good. I had hoped to raise our net worth by $20,000 this year, not drop it by $30,000, but, as the famous Scarlett O'Hara said, "Frankly, Rhett, I don't give a damn." Oh wait, that's not the one. It's, "Tomorrow is another day." :)

Right now we are faced with a killer decision: buy a new car, a new-used car, get by with one car or buy a scooter. My husband only commutes a couple miles, so the scooter is a decent option, but getting by with one car (that only works most of the time and not all of the time) is still a challenge.

Ce la vie.

Downsizing our life

2007-09-10T12:33:00.000-07:00

During our recent moves, we decided to do a bit of downsizing. By a bit, I mean a heart-rending disposal of approximately 50% of all our worldly goods. As you can tell, this was easy for me, as I ~~am someone who throws things away all the time~~. Okay, maybe not so much. I come from the school of "save everything until you die, and then give it to a relative." My mother has kept practically everything since 1965, in addition to collecting "antiques" from long before then.

So I started wondering, since I read a lot of personal finance bloggers, if frugal people tend to save stuff like my mother does, or if it is something people do in order to appear to be frugal. Sort of an 'image versus reality' sort of thing. I mean, most PF bloggers seem thrilled to find that 50 cent box of nails they put away five years ago, counting that change towards retirement goals. But frankly, I got to the point where I was overwhelmed with things, and mostly I swam in a house too full of stuff, and ended up rebuying things simply because I couldn't find the originals I had stuck away someplace.

I may have mentioned reading Clutter's Last Stand, a book that pointed out what a waste saving stuff is. I can't disagree with the premise that saving stuff can be harmful, particularly because I tend to be a depressive person, and too much clutter depresses me even more. I have a hard time dealing with an excess of "stuff," probably because I grew up in my mother's house.

That being said, we have thrown out a lot of good stuff, stuff I try not to think too hard about, and occasionally we've had to replace things. I was starting to rethink how much we were throwing out when I went to my parent's house. That visit gave me a sharp reminder of what it means to collect material objects, and also reaffirmed my decision to give up a lot of my belongings in order to increase my peace of mind. (Should be a formula -- decreasing material items = increasing peace of mind)

Now, my parents could be famous for "how not to invest," and I have to say that I am blogging right now in part because of them. My mother has no investments of her own, under her name. They invested $4,000 into an IRA eight years ago, it dropped to $800 in 2001 and my father promptly sold the entire portfolio and reinvested in bonds. I told my mother, "It wasn't wise to sell at the bottom of the market," and she replied, "Oh, he didn't sell them. They were transformed into bonds." I'm not sure if a magic wand was included in this, but perhaps that gives you an idea of how my parents work when it comes to finances. (Other quotable quotes: "Of course I have it in writing. I wrote it down right here," and, in response to the comment "if you spend less and save more you'll have more money," she said, "It's not that simple. Our finances just don't work like that.")

I try not to react to my parents decisions about all things material and financial in a knee-jerk sort of way, but it's hard. For years I ran my finances purely on doing the opposite of what my parents do. So I spent some time second-guessing the decision to declutter -- and not to sell the stuff, but to donate or give it away -- because I didn't want to fall into that trap again.

One look at their house convinced me I was on the right track.

My parents house is...for lack of a better phrase...stuffed like a Thanksgiving turkey. It's a cute house, really, on a very nice piece of land, and they've done some really nice improvements over the years. There are tall spruces in the front, a beautiful green lawn all around and...stuff piling up the driveway.

Inside the house, I can't walk through any single room without stepping over boxes, neatly piled clothing, "antiques" that are too large for the space, broken appliances waiting to be fixed, mail that has not been sorted...the list goes on and on. I went through my mother's mail for her once, just throwing out the junk mail, and she promptly found a missing $1800 check. Let me just say this -- keeping junk is expensive. Not only is the main living area barely usable (the kitchen is so full of dishes and various 'conveniences' that it is nearly impossibly to cook safely on the stove), but the basement is full. And the garage. And the two outbuildings. And most of the concrete back porch. And they are planning to build a huge carport -- not for the cars, but for the 'stuff.' Talk about expense!

I mentioned that I was cleaning out my house, and that recently I had thrown out everything in my closet that didn't fit. My mother frowned. "Well," she said. "What if you plan to lose weight? It isn't practical to have to buy a new wardrobe." (My mother has been planning to "lose weight" for years). I replied, "Sure it is! If I lose 20 pounds, I don't want to wear clothes from five years ago." She laughed, but I noticed she didn't give up a single too-small sweater. Or a pair of pants. She tried to press numerous things on me -- worn-out shoes, jeans for my husband, shirts in styles I would never wear. I refused them all. I realized that, not only were my parents junking up their lives, they were junking up mine as well.

So why would someone do such a thing? I talked to my dad about just one purchase -- Norton Antivirus software for his computer. He had purchased the software but it made his computer run very slowly. I suggested he use a different program, and he protested loudly that he would not. "Why?" I asked. "Because I paid for the Norton," he replied.

And there was the heart of the matter. He had paid "good money" for a program, and he'd use it, regardless of whether or not it worked well or was the right fit for him. That is the heart of the problem with their entire property -- it is full of bad purchases and poor investments, but to throw them out would be admitting they chose poorly or wrongly, and that is unbearable.

My parents do not enjoy the clutter. They grumble and fight about it, and because of it they are not proud of their house and never feel it is clean (it never appears to be, anyway, not in the traditional sense). They shuffle their possessions here and there and spend hours and hours looking for some $2 item they saved years ago. My mother is sentimentally attached to everything I ever owned, and a couple years ago they brought an entire truckload (literally -- a 3/4 ton truck full to the brim) of worthless old comics ("Are you sure Archie comics aren't worth something?" "No, they are still printing them"), graduation gowns, old prom dresses and several boxes of old letters. Most things went straight into the trash or to Goodwill. At least it got out of their basement. I was absolutely horrified they had kept all those things. I thought I had gotten rid of everything that was mine after I graduated college, but I guess my mom stashed a few things away secretly.

The irony is that under a molding pile of Reader's Digests, I found this article called "The Hoarder's Syndrome." It classifies excessive hoarding as a mental illness, and gives examples of people who have lost their lives or who have had to pay for costly cleanups ($14,000-$20,000) for clutter.

What do you think, oh ye frugal PF community? Do you save those shower curtain rings, proud not to spend $1.99 for a new set? Where is the boundary between "saving" and "mental illness." And how much is really saved in the long run?

$15-a-week for food?

2007-09-09T23:42:00.000-07:00

Wow, how time flies...I realize it has been a few weeks since I've posted something.

Here's a great article from one of my favorite blogs -- Get Rich Slowly. I like the motto, and I definitely like the advice.

This article reminded me of my last semester in college. I lost one of my three jobs (yes, three!) and it was the job that provided room and board, so I found myself trying to live on a fixed income of $615 a month. My rent was $290 a month for a tiny studio in a very bad part of town, and I had to pay for gas for my car (about $45) and for my telephone ($25). That left a scant $255 for everything else. Like the author of this article, I found that I could not eat out -- period. Not a soda, not a latte, nothing at all. I made everything from scratch, mainly living on whatever produce I could get cheap (10 pound bags of potatoes for $2.99 at the time). I had no packaged foods, no sweets, and the only drinks I could have were coffee, tea and water. I hardly had money for milk. I also went the oatmeal route for cheapness.

I don't know how I survived on so little those days, but I will say it was stressful. I want to save money, but I don't want to go back to the time when finding out the dollar movie was actually full-price would reduce me to tears (very embarrassing when with friends, I might add). Nevertheless, I will be thinking about how to curb our very bloated food budget, and add some more to our savings or towards our debt in the meantime.

From Get Rich Slowly:
1. Never allow leftovers to go bad.
2. Supplement with inexpensive foods.
3. Shop in the produce aisle.
4. Never eat out.
6. Avoid junk food.
7. Avoid pre-cooked foods.
8. Buy a basic paperback cookbook.
9. Don’t buy beverages.

The Stock Market for Twenty-Somethings

2007-08-20T12:25:00.000-07:00

This great article from the Daily Star talks about how Wallstrip.com is bringing the ever-so-exciting world of stocks and bonds to the younger generation -- sort of like YouTube meets Dilbert. Check out a sample below:

And, from Web Site Adds Zest to Investing (AZ Daily Star):
Indeed, Wallstrip has been described as the investing equivalent of YouTube — it's where stock culture meets pop culture. It's part of a new wave of social investment Web sites that feature blogging, videos and insights into the stock market aimed squarely at teenagers and the 20-something generation.
Launched in late 2006, Wallstrip has about 20,000 daily visitors and is growing, said Howard Lindzon, a venture capitalist who developed the site. A recent online skit featuring an actor mimicking James Cramer, a CNBC talk show host, garnered about 30,000 hits, making it Wallstrip's most popular feature.
No wonder Wallstrip caught the eye of CBS Interactive, which purchased it this spring for an undisclosed sum.
What's Wallstrip's appeal? "Simply, less is more," said Lindzon. "It's just a One-a-Day Vitamin approach."
While Lindzon directs the content, the real star is Lindsay Campbell, an actress turned host of a daily three-to-five-minute video chat that examines a top-performing stock, sometimes with a dose of campy humor.

When Money Means Too Much

2007-08-13T10:52:00.000-07:00

It saddened me greatly to read this article in the New York Times about the head of a Chinese Toy Company, who purportedly committed suicide after it was discovered that his company had used leaded paint for toys sold through Mattel in the U.S.

Two things stand out to me. First, that the company that provided the paint was run by a friend, and they provided this man's company with fake samples. We don't know if he knew this or not, yet we do know he felt responsible enough that he killed himself.Second, we are not recognizing the underlying message here -- that the drive to produce the cheapest products possible for Mattel not only has potentially poisoned millions of children, but has now cost the life of a businessman thousands of miles away.

What strikes me right now, as I prepare for us to move, is that these cheap toys - the ones this man died for - are the bane of my life. They complicate it, get under my feet, clutter my house, and - my son, their owner - he hardly even notices them. I have told him he may not get one more toy until we get rid of over half of what is in his room. I don't mean to say he doesn't enjoy his toys -- he is very attached to a certain pirate hat and a penguin backpack at the moment -- it is just that he has so much. Every time we go to a fast food restaurant, he gets a toy. I swear they multiply in his room at night. They overflow his toybox, and thanks to Toy Story, he refuses to throw them in the garbage. And really, he only plays with maybe a tenth of what he has.

I'm reading a book called Clutter's Last Stand -- It's Time to De-Junk Your Life! and I like the part where it states that things = time worked. Not only must we work to obtain the thing, but you must work to maintain it, clean it, put it away, etc., etc., and every time I look at something, I really think about what it costs. Things not only break us, make us poor, ruin our credit and complicate our life, but they make us prisoners.

And now someone has died for toys, for little, plastic things. When will we get perspective on this, and start valuing what really matters?

SHANGHAI, Aug. 13 — The head of a Chinese company that was behind the recall earlier this month of more than a million Mattel toys committed suicide over the weekend, China’s state-controlled media reported today.
Zhang Shuhong, a Hong Kong businessman and owner of the Lee Der Industrial Company, a company that made toys for Mattel for 15 years, hanged himself in a company warehouse in Foshan, in southern China, the Southern Metropolis Daily said today.
There was no independent confirmation of the suicide. A person who answered the phone at Lee Der’s office in Foshan City, near Guangzhou, immediately hung up.
A spokeswoman for Mattel, which is based in El Segundo, Calif., released a statement this morning that said “We were saddened to learn of this tragic news.”
The death is the latest development in a year filled with prominent recalls and product safety scandals involving goods that were made in China.
Mattel, which makes Barbie dolls and Hot Wheels cars, recalled more than a million toys worldwide after discovering that they were coated with lead paint. The recall was one of the largest this year and included 83 types of toys, including Sesame Street and Dora the Explorer characters made under the Fisher-Price brand and sold worldwide.
A string of troubling recalls of Chinese-made products this year has heightened trade tensions between the United States and China and created a public relations disaster for China, whose economy and trade surpluses are growing at a blistering pace.

So, think you're digging yourself a hole, too?

2007-08-09T10:04:00.000-07:00

For anyone who might wonder, after my last post, whether or not they are making any money as a second income earner, MSN Money has this great calculator that spells it out for you (you need to know how much you paid in taxes.) It calculates taxes, childcare, entertainment/food and other sundry expenses. According to the calculator, I made $4,970 a year working part-time. Because our situation is unique, in that we make money when we both go to school, the calculator does not factor that in, but quick addition shows $14,595 (what we'll save on student loan payments plus the GI bill) minus $4,970 still means an increase of $9,625 a year. This is a slightly different number than the one below, because I calculated the taxes myself in the previous post, and this time the MSN calculator did it for me. Regardless, we are increasing our income between $9K and $10K by me being home. Of course, that means I have to cook more meals at home and use fewer services or that money will quickly be eaten up. In short, we have to change our lifestyle. But I think we can do it, and I see this as an opportunity to save and payoff bills after the debacle of trying to sell our home this summer.

How working cost me more money than staying home

2007-08-07T23:43:00.000-07:00

Recently I posted that I quit my job, and that I am actually making more money staying at home with my children than I did working. This is true. At first, we thought I made a little, but once we really examined the numbers, we realized we were losing hundreds of dollars a month for me to work at a job I could not go any further in and that I did not particularly enjoy. Here is the breakdown for that decision and an explanation of the variations:

My net pay working part-time: $1015
Minus...
The increase in taxes because of the extra income: $300
The cost of part-time preschool for one child: $290
The cost of gas, lunches, dry cleaning, etc., for work: $75-125

Additional considerations:
The additional student loans because my husband had to quit school (that would otherwise be deferred): $125
The student loans I must pay because I had to quit school: $360

Total not including student loans: $715. Subtract this from $1015 and I get a $300 monthly paycheck, which means I actually made $3.75/hour -- far below minimum wage. This is one way to examine our finances, with me bringing home a few hundred dollars extra money a month, but it is a near-sighted view and doesn't include all the data.

If you include the student loan payments, which will now be deferred (interest paid by the government) it means we will actually make $185 more a month with me not working. Add to that the $975 he will get from his GI bill for going back to school, and we not only break even with me staying home, we bring home a whopping extra $1160 a month -- $145 more than I brought home in the first place, without any of the expenses or even taxes! This is a direct increase of $9,280 a year to our take-home pay without an increase in our tax bracket (we do not receive the GI bill in the summer).

By me quitting my job, we will both be able to finish our degrees and then move into better jobs. I could not move up the ladder any more without a master's degree. My husband is still 45 credits away from his bachelor's degree in computer science, which will set him up for jobs making as much as double his annual salary now. Although many of my feminist friends were understandably upset that I left the workforce, it was a no-brainer for us financially. Our school is free, since my husband works at the university, we get the additional money from his GI bill, AND I can actually spend time with my very young children. Leave the workforce indeed! I have never made a smarter financial decision.

Want to know what drives women from careers? Reality. I can stay home with my children and make more money than I would have working. The numbers are real; this is real life. Feminist movement, please take note -- you want women in the workforce? Fix it, and we'll come back.

Duh -- Japanese Women Discriminated Against in the Workforce

2007-08-06T16:19:00.000-07:00

In this article about Japanese women in the workforce, they finally get it right -- there are two kinds of discrimination, active and passive. The active kind is where women are simply looked over or set aside for promotions; the passive kind is where employees who leave before 6:30 p.m. (in order to pick up their children) are demoted or dismissed. I think the situation in Japan is coming to a crisis, and fast; a friend of mine has twins and is pregnant with her 3rd child, and her husband regularly does not come home before 10:30 p.m. during weekdays and frequently works weekends as well. I have a word for this kind of work ethic: insanity. While putting yourself into your job and doing well is to be commended, this is burning out your best and brightest, as well as effectively blocking women from ever entering the higher echelons of management. I lived in Japan for nearly three years, and I could never take that kind of pace (luckily, I picked the countryside, which has a much slower pace and doesn't expect people to stay past 5:00 p.m. most of the time, unless it includes heavy drinking with co-workers). Anyway, all in all an interesting article, and a great glimpse after reading about our "entitlement" generation!

TOKYO, Aug. 5 — Yukako Kurose joined the work force in 1986, a year after Japan passed its first equal opportunity law. Like other career-minded young women, she hoped the law would open doors. But her promising career at a department-store corporate office ended 15 years ago when she had a baby.

Yukako Kurose said she was forced into a dead-end clerical job after she had a baby.

She was passed over for promotions after she started leaving work before 6:30 each evening to pick up her daughter from day care. Then, she was pushed into a dead-end clerical job. Finally, she quit.

“Japanese work customs make it almost impossible for women to have both a family and a career,” said Ms. Kurose, 45, who now works for a polyester company.

Since the Equal Employment Opportunity Law was passed in 1985, women have become a common sight on factory floors, at construction sites and behind the wheels of taxis. But they have had much less success reaching positions of authority, which remain the preserve of gray-suited salarymen.

In 1985, women held just 6.6 percent of all management jobs in Japanese companies and government, according to the International Labor Organization, a United Nations agency. By 2005, that number had risen to only 10.1 percent, though Japan’s 27 million working women made up nearly half of its work force. By contrast, women held 42.5 percent of managerial jobs in the United States in 2005, the organization said.

Experts on women’s issues say outright prejudice is only part of Japan’s problem. An even bigger barrier to the advancement of women is the nation’s notoriously demanding corporate culture, particularly its expectation of morning-to-midnight work hours.

Tired of the "Why can't I have this?" question from your kids?

2007-08-03T10:17:00.000-07:00

This great article from Kiplinger gives fifteen quick comebacks to kids' shopping questions.

We can't do anything about the oversized crowds, unhelpful sales clerks or cranky kids. But we can help you take some of the headaches out of back-to-school shopping -- the nagging "Can I have that?", the silent disappointment after being denied expensive sneakers or the outright blowup over, well, you name it.

We take 15 of your kids' most difficult or embarrassing shopping questions and highlight ways to head them off, or turn them into teaching opportunities about money management and smart consumerism.

The death of a business

2007-08-01T08:11:00.000-07:00

When I started college, I had the idea in my head that I wanted to be a foreign correspondent. I loved writing and had dominated the Journalism department in my high school, even running the small town paper when times got hard, and my dream was to be the next Woodward and Bernstein, exposing corruption, educating the public...

Well, fast forward to the summer after my sophomore year. I started working for a small, local paper as a cub reporter and I had a nose for scandal. I found out that some business had come in and bought out all the buildings on Main Street and was causing each business to close, one by one, by raising rents ridiculously high (Two and three hundred percent). But...I wasn't allowed to report it.

I found out the local factory had an asbestos problem and was exposing their workers. One man had gotten in to take photos of the asbestos piled and floating in the air, and had been promptly fired. But...I wasn't allowed to report it.

Why? Advertising dollars. Relationships with owners. Big business. Money.

I quickly realized that, in most cases, reporters' hands are tied. The editor's hands are also tied. The real decisions are made in the boardroom by the owners. And becoming the owner of a media company wasn't the subject I was studying.

That was practically an innocent time. I could not have looked 12 years into the future to see how the media would consolidate...and consolidate...and consolidate. But now the content of our news is in the hands of a few extremely powerful people. Seeing yet another consolidation -- the Wall Street Journal in the hands of the man who created Fox News -- makes me glad that bloggers are out there. We are part of the last bastion of free speech available -- we and a dwindling number of small, radical local papers, a few online news' sources, podcasters. My skepticism of traditional media mounts and more and more I read the experiences of bloggers as my news (Baghdad Burning in Iraq, for example). I may have dropped Journalism in school...but I still feel wishful about the concept.

May bloggers live long and bring down more politicians!

From Murdoch Prevails by Forbes

News Corp.'s acquisition of Dow Jones will represent a coronation of sorts for Murdoch. With a prosperous TV network, a market-leading cable news channel, a soon-to-be-launched business news channel, a major film studio, big Internet assets like social-networking giant MySpace, and now The Wall Street Journal, Murdoch has arguably become the King of All Media.

This extraordinary concentration of power in the hands of one man will trouble critics of the media industry's continuing consolidation and those who disagree with Murdoch's conservative politics.

Regardless of what one thinks of his media empire, it's clear that where he leads News Corp. from here will in many ways be the story of where the media industry itself is headed. What does the future hold for newspapers, television, the film industry and the Internet? Keep an eye on News Corp. to find out.

Risk (not the game)

2007-07-27T10:05:00.000-07:00

You know, I frequently hear people talk about their investments in these terms: "Oh, I couldn't possibly tolerate losing money. I have my savings/retirement/investments in bonds and savings accounts." Since I work in a female-oriented field, these comments invariably come from women, and invariably those women are in their 30s and sometimes even their 20s. And it drives me crazy.

I am not an ultra risk taker; I've given up my dreams of skydiving and rock-climbing. Nevertheless, investing in the stock market and taking the risk of buying a stock that might go down -- very low in the risk factor, in my opinion. I want to ask those women -- have you ever bought something with a credit card and not paid it off at the end of the month? They will probably say yes (who hasn't?). Well, I want say, you've lost money to the tune of 15% and possibly 22% and 30%. Yesterday the stock market took a downturn and it caused my total losses on my stock to hit 10%. Yes, I recently bought stock with an IRA I didn't expect to have (and therefore use for "playing") and yes, I've consistently lost with these stocks. Do I care? Not really. Sure, I'd love to see my money grow, but I don't expect to sell tomorrow, and all the stocks are fairly risky. They have, in the past three months, gained 10% and lost 10%. I'm not worried about now -- I'm pretty sure that each and every one of them will still be around in 10 years, and I'm also sure that they will have gained by then. And that is all that matters.

Sure, Wild Oats might go out of business, and solar technology might flop. Those are possibilities. And if they do, I stand to lose money. But I think about this; during my college years, I paid over $2000 in interest on my credit cards. I pay nearly $700 in interest every month on my mortgage. From a logical standpoint, I am losing money hand over fist; but then again, I'm not. All choices have some sort of risk involved; buying a home over renting, using a bank rather than my mattress for my savings, using my mattress rather than my bank for my savings. I only wish I had more money available to invest in what looks to me like a sale.

I'm not the only one; market analyst Donald Luskin agrees with me, and I enjoyed his article: Market Correction Makes Stocks More Attractive. All I could do when I read it was cheer, and I just wish that more women would be willing to take risks -- with their money, and with their lives, too -- for the great returns they can get from it.

And I never want to forget one fundamental truth about investing: No matter what, stocks always have a positive expected return.

Stop for a minute and think about that seemingly simple statement. It's actually quite profound, and it's something that most investors have never really thought about consciously.

If markets are at all efficient, then risky securities like stocks must be priced so that the people who hold them — the people who take risk — will get rewarded for that risk-taking, at least on average. If the fundamentals get worse, then stock prices will fall so that from their new low level investors will still have a positive expected return.

Yes, that's an argument for always holding stocks. But believing that argument doesn't make me a perma-bull. It just means I think that over time I'll get rewarded for taking risk.

Markets aren't always perfectly efficient, nor are they perfectly right. Sometimes the risks in the world aren't fully appreciated by markets — or at least the risks I think are out there aren't. Then I'm bearish. Sometimes the risks in the world are overemphasized — or at least the risks I think are out there are — and that's when I'm bullish.

The 12 kinds of ads

2007-07-24T09:05:00.000-07:00

The 12 kinds of ads is a great slideshow from Slate (scroll to the bottom to click next). The one ad I don't see there is the "this is such a great deal" ad and I have to confess, that is the one to which I am the most susceptible. I tend to see great deals and then overbuy. This is in part because I don't really like shopping, and hate to return over and over looking for deals. It is also hard to pass up really good sales -- I just got a knit cotton top at Eddie Bauer for $6 (normally $20) and while it was a great deal, I probably could have lived without it if I hadn't seen the sale. Nevertheless, it is useful to see the tactics ad executives use, and I agree with the author, that it is like dispelling the magic from a magic trick to see how things are put together.

Harry Potter and the Stock Market

2007-07-24T07:36:00.000-07:00

Recently I was one of those "aged 8 to 80" fans that stood in line for the seventh and final Harry Potter book. This year, I opted against standing in line for three hours at Borders to save $15 (that's only $5 an hour, people, and I had to work in the morning!) and instead paid full price to a local bookstore. The fantastic part about that was, not only did I support a local business, I simply drove up to the parking lot at 11:55 p.m., and at 12:05 a.m. someone handed me a beautiful, new copy of the book. Yes, I could have done what BostonGal did, and ordered through Amazon (and gotten the book on Saturday) but all in all, $15 was a cheap ticket to a huge party Friday night, and one where taking my 5-year-old didn't garner stares of disapproval. My son and I actually went to three parties on Friday, all of which were free, and he won $5 worth of Harry Potter paraphernalia, so I guess that puts us down to $10 for the night. I'm a hard core fan so it was worth the extra money to me, although I did balk at the $12 I spent on snacks, so I suppose I should revise that total to $22 (or $27) for not waiting until Saturday. Still, I don't think I would have missed it for the world, and it was worth every penny to see kids dressed up as house elves and adults dressed as their favorite characters. It makes my brief foray into the scene of the Rocky Horror Picture Show crowd during my college years seem pale in comparison.

Nevertheless, despite trying to be financially minded, it never occurred to me to look at Scholastic stock during all this. I am buying stock these days but I still don't think enough about the things I use and what would be good to buy. So far my stocks have fluctuated wildly -- the stock I bought via Barron's recommendation is doing well, and the two that I chose (and that I know) are down about $90 between the two of them (roughly 10%). I'm not fussed; I know that stocks are a long-term investment and not a short-term gamble. I have watched relatives take the equity from the homes via loans and gamble it away (literally) on day-trading. I don't anticipate going that route anytime soon! So, despite the warning in this article, Scholastic is on my list of stocks to consider.

Can Harry Potter's Publisher Make Magic, Too?
Sometimes you can take the old Peter Lynch adage about investing "in what you know" a little too far. Take the Harry Potter mania that has been sweeping the Western world since midnight on July 21. That's when fans from eight to eighty dressed up, lined up and paid up ($34.99, full price) for the seventh and presumably final adventure of everyone's favorite schoolboy wizard.

Some 8.3 million copies of J.K. Rowling's Harry Potter and the Deathly Hallows flew off the shelves in the first 24 hours after its release, according to its publisher, Scholastic And it looks like more than one investor in the Barnes and Noble queue figured that shares in Scholastic (symbol SCHL) might make some magic, too.

...

Instead of reacting to the hoopla surrounding the final book in the series, investors would be better served focusing on Scholastic's fiscal fourth-quarter earnings, released on July 19th. The company posted a profit of $40 million for the quarter ended May 31, or 93 cents a share, up from $38 million, or 91 cents a share, in the same quarter a year ago. But analysts had expected earnings of $1.02 a share. Result: Scholastic shares sank as low as $33 on July 19 before rebounding to close at $34.21 that day.

...

Longer-term investors needn't give up on Scholastic, however. Not including Hogwarts-related earnings, the stock is selling at just 16 times Crum's fiscal '08 earnings estimate -- a reasonable value, especially considering the stock's comparable four-year average price-earnings ratio of 18. FBR's Godsey sees Scholastic trading up to $38 a share over the next 12 months, as the rest of Scholastic's businesses continue to grow modestly -- an indication that there likely is life after Harry Potter, after all.

But for now, savvy investors will resist the urge to transfer their excitement about a great book to an okay stock. You've got plenty of time to read all 784 pages -- and then some -- before revisiting this one.

Farming Loans for the Poor

2007-07-23T10:40:00.000-07:00

Recently I received a rather desperate e-mail from a Tibetan nun in India that I have sponsored the past few years. Her father is a farmer and, in order to jumpstart his crops, he took out a small loan. His crops failed and now he is unable to pay the loan back.

I asked Nam, the sponsee, how much her father took out in his loan, and it took a few e-mails before she finally responded.

You have also asked me how much money did father borrowed,I asked him and he told Rs.20,000. Its[sic] quite much but all are doing the same.

I looked up 20,000 Indian rupees to see how much that is in dollars: $496 by the current exchange rate.

For $500, a farmer may lose his land...it's hard to believe. I will send her some money (not all of it) and I sent her a warning about loans, losing your land to the bank, etc. It seems that the farming crisis of the mid-20th century in the U.S. is happening in other parts of the world now. It is particularly upsetting because Nam and her family are refugees -- apparently, the loan came from a refugee resettlement project of some kind.

This story gives me a little perspective on the stress of our debts right now. What would Nam think about our $186,000 worth of mortgage, credit card and student loan debt? Probably she would pass out in horror. Five hundred dollars is enough to decimate her family.

Someday I may look back and think my debts were pretty minor...I hope. Until then, I will be scrambling to find some money to send to Nam. I hate to reward bad behavior, but I also pledged to keep her family from starvation. Always the poor are hit the hardest...

Mackey slams my first stock investment

2007-07-14T11:23:00.000-07:00

John Mackey, Chief Executive of Wild Foods, gets caught slamming competitor Wild Oats.

SAN FRANCISCO (MarketWatch) -- The Securities and Exchange Commission has opened an informal inquiry into Whole Foods Market Inc. Chief Executive John Mackey's anonymous posts to Internet message boards, according to a report late Friday on The Wall Street Journal's Web site.
The SEC is looking into Mackey's roughly eight years of anonymous posting, which included positive remarks about his own company's health and disparaging remarks about a company Whole Foods (WFMI : Whole Foods Market Inc WFMI40.50, +1.50, +3.8%) is currently attempting to acquire, the report said.

I wouldn't care about this, except that I recently invested my IRA in stocks, and Wild Oats was one of the stocks I chose. This year we were finally forced to invest in IRAs because of our tax burden. I also finally navigated the wild world of purchasing stocks, with a little help from Banc of America. I find it funny that someone as important as John Mackey would spend time slamming his competitor on a message board, and even funnier that he now stands to be a part of that competitor. Brings to mind the old adage, "Don't burn bridges," and is one reason that, after suddenly turning in my two weeks' notice at work, I sat down with my supervisor and let her know that I liked her and was not quitting because of her for any reason. Why do I care? Because it is nice to keep those bridges in good working order. She might the one to hire me back in a few years. (For future posts: How I made less money working than I will unemployed.)

High End Homes Hold Up In Value

2007-07-12T18:03:00.000-07:00

This article from the New York Times shows a continuing trend -- the rich are getting richer, the middle is trying to hold steady, and, as the author put it, the poor "are getting creamed." It is so hard to bypass those roadblocks from one segment of the population to another...

The homes that are having a hard time selling are the average-priced homes,” said Vanessa Justice, a real estate agent with Pacific Union GMAC in the Bay Area, where the median house price is about $750,000. For upper-end homes, she said, “it’s actually pretty crazy right now.”

It has been a while since real estate agents used the word “crazy” in a positive way, but Ms. Justice is onto something here: the high end of the market is surviving the slump much better than any other segment. Even as foreclosures keep rising and overall sales continue to plummet, more expensive homes have staged a bit of a comeback in recent months. They’re spending less time languishing on the market than others, and their prices appear to be holding up better.

This split in the market helps explain why the sales of Manhattan apartments, some of the priciest homes in the country, have remained fairly strong...

...Finally, both the recent rise in interest rates and the problems in the mortgage market have had a much bigger effect on low-income and middle-class buyers than affluent ones. It’s become harder to get a subprime mortgage, while the uptick in interest rates this year has added about $100 to the monthly payment on an average fixed-rate 30-year mortgage.

As Mark Zandi, chief economist of Moody’s Economy.com, summed up the market: “The low end is getting creamed. The middle is struggling. The high end is running on its own dynamic.”

I'm back...finally

2007-07-12T15:02:00.001-07:00

It's hard to believe I haven't posted on this blog for three months. Three months! But even my primary blog (family blog) has really suffered the past few months.

We've been in the midst of trying to sell our house, and man, has it been a nightmare. I should have posted my entries about it here, since it is mostly a financial decision, but I posted it to my family blog and now I regret it. I got some unnecessary comments (your house will never sell! Never! The market sucks!) and finally just took the posts down.

So, here is a summary of what we have done so far, and a look at our financial downfalls.

1. We spent more than we needed to fixing up the house, and a lot of that money went to fixes that then needed to be fixed.

We asked our realtor to recommend someone to help us fix a lot of little things around the house, and she recommended a three-man handyman team to us. Sensing we didn't want to spend a lot of money, she recommended guys who worked for cheap.

Big, big mistake.

I rarely pick the lowest bid when I have someone bid on a home improvement project because I find that people who bid too low tend to do shoddy work. It just goes with the territory -- if you're working for bottom dollar, you don't work as hard. So, I tell the person I pick that they weren't the lowest bid but they emphasized quality and that's what I am paying for.

Well, I went with what the realtor recommended this time and it slapped us in the face. The three guys were lazy, charged me by the hour (and worked slowly) and I had to go along behind them and fix things they did wrongly or poorly -- setting up a dishwasher incorrectly, painting house trim sloppily (still need to fix this), not cleaning up after themselves (they dumped red paint in my backyard the day before my open house -- impossible to get out and looked like a bloodbath in my backyard). The final straw was when they asked for their last checks and when I went to check their work, only half had been done and what had been done was sloppy. So, I canceled their checks ($60 charge), had an estimate done on what their work was worth and paid only that. I then had to pay someone else to fix the dishwasher, and because they had smoked cigarettes in the house (yes! cigarettes!) I had to repaint the living and dining room and most of the ceiling in the area where they worked, pay to have the carpets professionally cleaned again ($130 loss) and I had to clean filters and scrub floors to get the smell out. The money was one thing -- the mental anguish and extra work another. This lesson learned -- pay for the guys who do good work.

2. Poor planning.
We seem to be buying stuff and then rebuying and then rebuying again...for example, we had the carpets cleaned twice ($340 total) and now we are replacing the carpets because they are just too worn, so we take a $340 loss. If we had planned ahead and thought things through, we would have done this from the start. After all, I've lived there five years and am fully aware of the poor condition of the carpets.

I painted the kitchen cupboards -- a huge project that took two weeks -- and I couldn't figure out why it was taking so long or why the paint kept peeling off. Turns out I was supposed to use oil-based paint instead of acrylic, something that neither my realtor nor any of the handymen mentioned, and now the cupboards will, at some point, need to be resanded and repainted. Again.

We elected not to fix the cement slab that makes up the front porch but it looks so cracked that we went out and bought bamboo mats to cover it. The mats were $100 and we didn't realize the Tucson sun would make quick work of them, so they are already warping and crumbling after only 6 weeks. We will probably have to throw them away and resurface the concrete anyway. Resurfacing will cost around $350 (if we can do it ourselves), but the extra $100 means we will spend $450.

3. Financial consequences
All in all our credit card bill has gone up around $8500 since we decided to put the house on the market, plus the cash we've paid for fixes. Now we are in a place where we either have to do some major renovating and move back in, or reduce the price of the house severely and sell it for cheap. Since we can still rent out the guesthouse and that will pay for a home equity loan, I am planning to move back in, but it kills me because when we put the house up for sale again (we plan to relocate in the next year or so) we will have to do it all over again. It isn't possible to live in a house with kids and not need to paint and fix everything before putting the house up for sale, and right now my house at least is clean, painted and mostly empty. Our lease here is up in August, however, and we can't keep paying rent and a mortgage indefinitely. I am resigned to it and a small part of me thinks it will be nice to have a clean, mostly-repaired and freshly painted house to live in again.

We learned a lot of hard lessons throughout this whole process, but I also learned to be more grateful for my home. I've looked at a lot of other houses in the same price range and I realize, now, that I really have a beautiful home in a nice neighborhood. We have family nearby and never need to worry about someone breaking in or trespassing on our property because we know all our neighbors. The rental we are in now was broken into a few nights ago while we were sleeping -- I heard the intruder and the person fled, thankfully, without confrontation (and nothing was missing). I am not the sort to be intimidated by this sort of thing (I don't have any illusions of safety in the first place and I know that random theft and violence happen) but I realized that we are more protected in our other house because of its location. I also am grateful for the air conditioning that we installed four years ago -- we have swamp cooling in this house, and boy, it's hot right now. Swamp coolers drop the temperature about 20 degrees, so in Tucson, when it's 110 degrees outside like it is now, the temp inside only drops to around 90 degrees or so. I had forgotten what life was like sweating under a fan all night, and I am anxious to sell and then move elsewhere, or to go back to my lovely air conditioned home.

If and when I do, I want to walk around and enjoy my grassy back yard (grass!), my fully functioning showers (one shower here does not work and the other is so small we can't bend over but must crouch down to pick anything up), and the comfort of knowing exactly where everything is. I plan to replace floors, add shelving in the kitchen, resurface the hall bath and add a kitchenette to the guest house before we move back in, all as part of the home equity loan. I guess one more silver lining came out of this -- we have been so frugal the past five years we haven't wanted to put a lot of money into upgrading our house (we've mostly done sweat equity, landscaping and fixing things that were really, really broken) and this is sort of forcing us to do this. You can see the free fall on my net worth to the right though -- it isn't cheap, and we are giving up our financial goals in order to do it.

The good news is that all this work means our house will be worth more and hopefully will fetch a better price when we do sell. I'm keeping my fingers crossed the investment will work out.

Twenty Small Ways to Save the Planet

2007-04-23T15:33:00.000-07:00

This is a great article by Smart Money. Even though I am something of a "green" person, I did not know about some things on the list, like the fact that printers and other electronics have energy star labels, or that you can pay to offset the emissions of your car every year. My favorite? Reducing junk mail. You don't have to be "green" to know what a waste of time, money and resources that is.

April Net Worth -- it's ugly

2007-04-13T11:44:00.000-07:00

If you check out my net worth badge to the side, you'll see that my net worth has dropped by $20,000 this month. The primary reason is that we are selling our house, and the cold, hard fact of the matter is the housing market is down and the worth of our home has dropped $20,000.

On the bright side, our retirement accounts have gone up 70%. The accounts themselves did increase in value, but we also added $2,000 into last-minute IRAs so we wouldn't have to pay as much in taxes. We still need to come up with a fairly large chunk of money for taxes, primarily due to a miscalculation on state taxes, but the silver lining is that this has forced us to add more to our retirement accounts. Last year our retirement accounts went from $350 to $2400, primarily due to aggressive contributions on my part (my husband didn't actually have a retirement account until about a week ago), but it's still paltry compared to what we should have. Now we have passed the $5,000 mark, which is a nice feeling.

You might be wondering -- why sell our house when we were looking to rent out the guesthouse? I will address this more completely in another post but essentially we are trying to buy out the rest of the family in an estate settlement and had to make the choice to sell our property. I just wish this had all happened two years ago when the housing market was hot, but oh well...we won't lose money on the deal because we didn't go crazy during the refinance rush and get a variable APR or max out our equity. In fact, except for a small home equity loan that we used to fix some major problems, we haven't touched our equity at all. It was hard to do -- everyone pushed us to refinance and take out our equity to get rid of other debts, but now I am glad we stuck it out and paid things down. We've finished paying off both vehicles and although we clearly still haven't gotten a good grip on our credit card debt, the only other debt we have are student loans.

Kiva

2007-04-13T11:40:00.000-07:00

One of the most amazing ideas I've seen in a long time, Kiva is a microloan program for the world's poor. Basically, you choose to give $25 to someone to help fund their start-up business, and then you get repaid with interest. While there is some risk that the business will go under, Kiva says that fully funded loans (most loans are around $1500) have had 100% repayment since they began.

What a wonderful way to invest in humanity and help people to "pull themselves up by their bootstraps."

Risk versus Return: why stocks are less risky than bonds

2007-03-23T16:29:00.000-07:00

This great article from the author of Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market talks about how bonds, over time, are actually riskier than stocks.

I have a few financial quirks. One is, whatever my college roommate does -- do the same thing. This was someone who saved money while paying for private school. This was someone who turned around and paid off $30,000 in student loans in 3 years. If she decides to invest, I invest. If she saves with PayPal, I save with PayPal. You get the picture.

The other thing is, whatever my parents do -- do the opposite. This is because my parents have perpetual bad luck with financial ventures of all kinds. They buy cars that blow up, die, depreciate madly, lose their paintjobs, etc. They currently own four cars between the two of them. They invest in stocks and the moment the stocks tank, they pull out their money and reinvest in bonds without waiting for their stocks to recover. My dad bought gold low and now that gold is high, he refuses to sell. The list goes on and on...

Anyway, my dad thinks bonds are the greatest thing since sliced bread. I have always thought bonds are a rip-off, and this confirms it. I love the risk of the stock market, to tell you the truth. And I especially love the fact that -- hey, I'm 31 years old! If my stocks tank, I have another 34 years to let them recover, or to remake that money, or whatever. I don't understand people in their 20s who are terrified of losing money in investments. Did you drink a latte this morning? You just threw $3 down the drain. Go to parties? Impulse shop? Drink alcohol? All these things cause you to lose money. So why the hell do you care if you lose a few hundred in stocks? I lost several thousand investing in a private college education, and I'm losing thousands more on interest from my student loans. The nice part about stocks (as well as the education, as it were) is that I actually stand to get money back. What could be more fabulous?

Here's the graphic. I love hard facts that go against people's general ideas. It makes me feel all warm and gooey inside. :) As you can see, treasury bonds and stocks carry the same risk of 6.9, but the rate of return on the stocks is 2.575 times higher than the rate of return on bonds. Inflation-protected bonds carry slighly less risk but the rate of return is even less than regular bonds and rate of return is 68% less than that of the stocks. Ouch!

I'll pick the stocks, thank you.

From credit cards to identity theft

2007-03-12T09:22:00.000-07:00

From the Boston Globe (and thanks to BostonGal):

One day you're an average citizen, managing the monthly bills, doing the 9-to-5 thing. The next day you stop for gas, scrape away a silver circle on a card, and become a millionaire. Or you call a phone 10 states away and learn a stranger is claiming to be you. What's it like to always leave home without the plastic? Or dream about opening your own cafe -- and then actually doing it? Or take time off and refocus your priorities by listening to a lama? Meet five folks who've encountered financial situations the rest of us only fantasize -- or fret -- about.

My favorite story -- the man who won a million dollars and celebrated by ordering take-out.

March Money

2007-03-09T13:50:00.000-08:00

Well, if you look to the sidebar to my networth, you can see it -- the line pointing down. Yes, I did our March financials and the prognosis is not good. Primarily this is because we spent $1500 on childcare for January and another $800 for February. There was some crossover as I went part-time before the end of February and so we still had to pay a lot but with reduced income. That resulted in a $2400 leap in my credit card bill, so that is my goal for this month -- to start paying that down. Otherwise our debt is slowly but surely retreating, and I hope that a few months of level-headed spending will have us on our way.

My life has been super stressful of late, mainly due to my job. I don't tend to write about work at all; even though this blog is anonymous, I am a little paranoid. Many people have lost their jobs for blogging about work! That being said, there was a personnel issue at work, and a fellow co-worker was accusing me of various things that were not true. I think it was a case of out-the-door-itis. By this I mean that, since I was nearly out the door, I was a convenient scapegoat for everything that went wrong or didn't get done. However, I said my piece and now I'm laying low and waiting for things to blow over. I think this is how it frequently happens, anyway -- there are good times and there are bad times, but things work out in the end.

Regardless, the stress meant I haven't posted much on this blog and so I'm ready to get started again. I am hoping we can get a better handle on our finances this year. The daycare situation really knocked us for a loop, but now that I am part-time I think we can get on track again. My oldest is going to school in the fall, too, and so long as we don't pay for private school I think it will be a relief not to have to pay for preschool or daycare anymore.

Here's to hoping for a better month in March.