Dollars for Doughnuts

Three tickets to St. Louis for under $1000. Keep in mind I live on the coast. Also bought expensive pair of shoes, although they were fifty percent off. They are handmade Italian shoes, and when given only two choices of the "every woman is an 8B in a population of 300 million for $49.99" and "these shoes are guaranteed to fit, never to pinch or cause blisters at the heel or crush your small toe for $224" I guess I would choose the latter. Pain is not my good friend. I am not Imelda Marcos, mind. I have rain boots, motorcycle boots, slip-ons from the maternity days, cheap Doc Martens, slippers, trainers/runners/sneakers and these new shoes.

Haircut was 20% reduced from last year. I felt so hostile and bitter yesterday I couldn't face goijg with my stylist of late because he's just over the top with the feng shui waterfall, foot massager, and oasis-feel. I wanted someone no-nonsense and sleep-deprived who wasn't afraid to verbally slap me if my hormones urged me to get out of line. Fortunately that didn't happen: I suppsoe if one is self-aware to recognize one's at high-tide, one's going to be more restrained and withdrawn.

Gardening: planted carrots, beets, leeks, parsley, cabbage, broccoli, cauliflower, mint, strawberries, marjoram, dill, tomatoes, anaheim peppers, thyme, oregano. I wanted radishes! We have lots of kale. My son even bought a strawberry plant, and helped me add compost and scratched in tomato/vegetable food with a trowel and watered them with some extra plant food liquid.

It's odd, because someone when taking my deposit there tried to do a hard sell on me. Yet Chase's notification of changes, which includes fees for deposits in excess of $5000, has me considering taking the not-for-profit corporation's assets elsewhere, upon board and membership approval of course!

Are there really so many people who are fine to be nickel-and-dimed this way? Why are banks making credit unions out to be bleeding obvious choices for consumers?

We installed a new door today. Maybe I'll even get around to making the fireplace more efficient. I hate that I can't reduce my gas bill without sacrificing comfort in my home or spending $50K finishing the basement and adding insulated siding. I think it is time to move.

I have received yet another amendment to terms and conditions from Yank of America. Transaction Fee is to be raised to 4%. Now, my credit score is above 760, and I haven't used the card since August 2004 precisely because BoA can't see its way to being as competitive as my credit union. A big corporation like that, failing to be competitive. Why, butter my buns and call me a biscuit! [rolling eyes]
Maybe this is Yank of America's style of "wealth redistribution": make terms and conditions onerous so no literate, numerate cardholders will want to give it money, or prey upon those who can qualify only for that one card to give "bailouts" to the company.

Is it because of greed and innumerate ignorami that Bank of America has so many customers? Maybe if it lost customers it could be more competitive? Let the tyrant fall, I say. It doesn't seem to want to give me 25-day grace periods, or return the fees and billing cycle structure to what it was when I first got the card and my credit score was lower.

I spoke with Ka(y)cee at Bank of America, and I could only rule that it is because of BoA's fiscal mismanagement that it cannot reward or provide incentives to credit cardholders. It doesn't negotiate.

Link du Jour: Card Data Breached, Firm Says

A forum elsewhere asks if we can live without credit cards. Right now I am not prepared to live without them. I am thankful that the Appliance vendor took a personal check: I didn't want to give Bank of America any transaction fee revenue from my credit cards, but I think that, although I will have mostly cash with me on my Osaka trip, credit cards will be useful for my hotel stays. What was I supposed to do: get $800 from the ATM and say to the vendor 'uh, whatever clothes dryer I buy has to be less than the cash I have on me right now. I forgot to have $800 kicking around for when my appliances go kaput unexpectedly.'

After that, maybe not so much credit card use, except for the gym membership. I have fraud alert on some accounts.

Think of it:
Bank of America doesn't want me to use its cards. They'd have kept my 25-day grace period and improved the terms and conditions as my credit score rose.

Credit card processor companies who don't adequately protect their data don't want me to use credit cards. With cybercrime rising, I just don't see where this will do me any good.

I do have a fraud alert. Maybe that'll help.

update: Bank of America removed my 0% + 3.00% no-cap transaction fee offer and replaced it with a 1.99% + 3.00% no-cap transaction fee offer. Sounds like BAC REALLY wants my business!

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Link Bonus: Expensive things that save money -- I am vindicated! Dig the plug for cast iron and enamel cookware, fresh local organic produce, and energy-efficient appliances!

Girlfriend, this Action Plan is divine overness. And refreshingly low in calories, don't you know. It's so simple.
I do get tempted to pay off the HELOC tout de suite, but rather, I should just build that emergency fund (pie!) higher. Build the pie higher!

Then when inflation strikes and the 3% HELOC escalates, the emergency fund can take care of at least some of it. In fact, perhaps my savings should be prioritized post-Japan as:

1. Emergency Fund
2. Prepay mortgage (hey, it's the debt with the highest APR. Is there not a budget guru who advises paying off debts, highest APR first?)
3. HELOC
4. Roth
5. Everything else.

Here's the Goal for 2009. Decide how much you can afford to deposit. Now add 20% to that amount. ..in 2009 you cannot afford to be laid back and do what is easy.
You must push yourself as hard as possible to build your security as quickly as possible.

Indeed.

The good news is that I'm 10% up over 2006's year-end. I lost the December 2007 data when my iPod was accidentally reformatted. More good news: I have a positive net worth.

My pessimistic estimate is that my net worth will go down by 7.9%, even though I will do my best to save 25% of our gross income in retirement funds, HELOC repayment, mortgage prepayment, and something my inner doomsayer is calling "Seattle Skedaddle." Gash and gollars.

I've identified six charities and non-profits, two non-profit advocacy groups and four publicly funded radio stations to fund in 2009.

Happy New Year to you, dear reader. Be well, do good work, stay positive.

I bought some Procter & Gamble in one retirement account, just for something to do.

I have next to no fish in my freezer. I haven't been in the mood to go out to buy any, but rather have been focusing on eating on what we have. We do seem to run out of bread, butter and eggs frequently. My challenge is to run out of fresh fruit and vegetables by Thursday. Considering our CSA box sat outside for two days waiting to be picked up this will indeed be a challenge. Another challenge: finding Worcestershire sauce without high fructose corn syrup. I gave up Kellogg's cereals, Ritz Crackers and non-kosher Coke because of HFCS -- it makes me sad to have to give up Lea & Perrins too.

I bought the dress to wear to my brother's wedding for under $100 at Nordstrom. I rule! It won't make me look old or grotesquely flabby. I won't be able to do much about towering over the bride's family though (sigh).

We lost electricity in our house a few hours after my penultimate Saving Advice post. I have got to add "oil lamp" to my savings goals. It was not fun trudging outside looking for a restaurant that would be open, an not fun imagining what it would be like to wake up Christmas morning in the freezing dark.

I have a budget but am nervous about it as we still need two incomes for expenses, or one income with a fixed 30-year mortgage, a coupla more exemptions and no 401(k) savings plan and no family insurance. The food and the mortgage are what do us in. Next month our amortization schedule shows us paying more in principal than interest without prepayment, so there's something to be glad for.

The Real Change (local newspaper sold by people in need) vendors are branching out -- there were two on the main arterial. One of them sold me a mid-November paper (!!) claiming she was sold out of the current ones. I guess times are tough. I did pay her a whole dollar, same cost for a current paper. I saved fifteen cents as the library was not stocking any current New York Times papers, so no crosswords. Fortunately I have the frickin' impossible Atlantic Monthly puzzle book I bought sixteen years ago.

Off to read some Iris Murdoch and Salman Rushdie. Gotta cleanse early 1990s Manitoba and Peoria out of my head.

Requiring some extra iron and ibuprofen today. ugh.

Today -- bean soup with ham hock. Maybe kale along with it. Baked brioche. Made Poires Belle-Helene and apple crisp. Use up the fruit!

I need carnival squash and yams recipes.

The only stocks that look good to be right now are fish, chicken, vegetable and beef.

Changing Prospects for Building Home Equity predicts that new buyers in 33 overheated housing markets will likely experience negative equity, particularly if they limit themselves to 30-year loans and incur selling costs that equal 6% of the property's value, and buy a house priced at 75% of the median value.

A Low Estimate of Equity Loss for my city was $117,000. Golly! There's my cue to accelerate my house payments.

I'm tracking six properties' mortgages and deeds of trust: one acquaintance/friend and one neighbour are just treading water; two properties have equity above 40%.

I resisted the purchase. I don't need an entertainment laptop, just one to do work on (Viz Studio, Office Ultimate, Quicken, Excel). Although that recent rate cut is leading me again into temptation...

I was warned to stock up on foreign exchange, or international currency in other words, in a dream, because "inflation was coming" and I "needed to be prepared." The currencies? "gosh" and "gollars" (gold, cash, and CDN/US dollars?)

Restored most of the money I borrowed from my son. We have been selecting recipes from Leanne Ely's Saving Dinner book, and downloading winter squash recipes from the internet. I feel most cost-effective when we eat out of our pantry and incorporate grains and legumes I bought months earlier into our entrees. I also feel cost-effective when we use our slow cooker.

I am creating a new set of goals and rewards for 2009. 2008 was superexcellent for me finance-wise, so am reducing my income expectations by 45%. I will not be saving 22% of my income for retirement, nor 20% of my income for home improvement in 2009.

I am tempted to invite my female friends and fellow goal plotters to either my fave cafe or fave chocolate palace to toast our achievements this year and plan for the next.

Old Joke:
Person #1 to Person #2: "Do you know the difference between labour and capital?"
Person #2: "No, I do not know. What is the difference between labour and capital?"
Person #1: "If I lend you $10, that is capital. If I try to collect my $10 from you, that is labour."

Thank you! I'll be here all month! Try the tuna fusilli!

I'm all aflutter about what's happening in Ottawa right now, and sad about the much-too-early loss of Calculated Risk finance blogger Doris Dungey ("Tanta"), but here are some preliminary notes, cribbed from last year:

Goals

Savings:
45% of annual gross income, to be distributed among:
mortgage payoff: $1200
emergency fund: ideally $15,000
long-term savings: ideally $5,000
replacement car: ideally $14,000
home improvement: ideally $10,000
garden: ideally $800
kid's stock plan: $1200
Roth IRA: $5000

How much to save:
Somewhere between $6000 and $50000.

How much to pay down
This might sound counterintuitive, but I want always to have at least 55% equity in my house. I want to be above average in how much is owing on the house, and how much equity I have. Currently I am at 59.59%. With luck I will be back above 60% by March.

What upcoming expenses do you need to plan/save for

trip to Japan
car

What to buy, what not to buy
2009 will be a year of frugality, with the exception of a laptop and emergency replacements.
Limiting number of cash charity recipients to six this year, and political action groups to two.

What accounts do you need to open/close/consolidate

The taxable E*Trade account might eventually be sold. When I read about its eventual sale, I will transfer it to where I have my other accounts.

The Save Yourself Suze Orman Plan: close after April 18
Add personal chequing account to PayPal: remove dead account.

What do you need to teach your kids/spouse this year about finance
the glory of compound interest. 0.075 > 0.0025.
trickle-up economics
what to do or invest in in a depression/recession
dividends

What do you want to educate yourself on more
bookkeeping
organic gardening
Elliott Waves and Kondratieff Cycles
the U.S. Constitution and Bill of Rights
developing Web Parts for SharePoint 2007
nutrition
not really education, but Iris Murdoch and the rest of the Rabbit Angstrom novels and many Philip Roth novels I have not yet read, and I'm not proud of that.
MCSE

What do you want to do better in 2009 then you did in 2008

reduce my waist size to 28
stick to a frequent exercise routine
develop and stick to a cleanup routine and schedule that includes the family
track expenditures
eat more raw food
network locally
avoid bad drivers -- OMG! I have my Zune/PDA/GPS/DVD: what do I have to pay attention to traffic for? -- I don't need these people. Insurance companies do.
volunteer or give more
declutter my house -- Freecycle, sell on half.com and craigslist

P.S. I express gratitude for my inner oracle for counselling me five months ago to wait until December 1 to buy stocks. I doubled up on PAYX and took a stake in JNJ.

My root vegetables were applauded at a preThanksgiving dinner, remarkably some complimenters were under 18 (only one of them belonged to me). I know I wasn't a fan of rutabagas, turnips, or squash in my tender years. Today's children have more knowledge of nutritious food.

I am officially joining a gym. I need to get out of the house and slice my adipose tissue. It embarrasses me that I see skinnier moms with younger children. (Oops, there goes my manly blog percentage.)

http://www.americancivicliteracy.org/resources/quiz.aspx -- I scored 81.82% on this. Not bad for an immigrant! Maybe I almost know enough to keep up in a general conversation about US politics.
The average score for the quiz when taken online is 78% -- there's a big selection bias compared to the 49% purported to be the average American score. So does that mean average Americans fail a basic test on their history and institutions? is 81.82% a failing grade?

We had a little finance chat at the Indian restaurant yesterday: Mom, Dad, and Tired Little Profiteer (TLP) or Tired Loud Pest, depending on if you too were in the restaurant with us.

TLP: I want a MasterCard.
M & D: Why?
TLP: You can buy anything with a MasterCard.
M & D, backing away from a slippery slope: When you can demonstrate victory over your wants through delayed gratification, you can get a MasterCard. Some debit cards are branded with MasterCard, meaning that the money you already have in your account is taken instantly to pay for things.
M, failing to back away from slope: Some cards allow you to pay for more than what you actually have in your account.
TLP, gleeful: REALLY?
M & D: This is not good.

What happened to the good old days, when he identified my Bank of America credit cards as Cards of Evil?

Yesterday afternoon I identified some blue chips that might be worth purchasing in the view of a long-term holding and dividend reaping. One was MCD (McDonald's). I thought of getting some for the boy -- some junior shareholders start out with companies they know. TLP knows MCD but does NOT like MCD. He was anguished that the Golden Arches were visible from the restaurant. "I hate them!" Yells in the parking lot: "I hate you McDonald's! I don't want to eat here! I'll have to look at McDonald's!" So, maybe not for him. Unless I can coax Andrew Tobias to talk to my little boy about how he used his profits from tobacco companies to purchase Russian television network time to air non-smoking PSAs.

Frugal throw-in: apparently TLP provided enough charm and entertainment for us to receive as a gift from the restaurant management a free rice pudding at the end of our meal.

"we're losing money from defaulting customers. We need new customers. We need bailouts. No, we don't feel like going back to 25 day grace periods, nor abandoning universal default and two cycle billing. But we need bailouts."

Heaven forbid you should go back to 25 day grace periods. Or return to 1990s-era terms and conditions. You might get... CARDHOLDERS!

My son is learning about money. He's actually very good at making change, as we saw in Monopoly. For his money math project, we supplied $2.00 worth of change, labelled with his name and 'what is left of Mr. -------'s 401(k) plan'



I've arranged for a free investment checkup for his Coverdell account with an Investment Consultant.

We ordered appliances yesterday for the kitchen: $1710. We'll be paying for those with credit card, and then from savings when the bill is due.

I reread the HELOC terms and conditions, and saw a condition about suspending the credit line when the market value of the property is significantly below its appraisal value at the time of borrowing. That hasn't happened yet -- we borrowed just before our property received its highest ever assessment, but unless the County decides it doesn't need as much of our property taxes, the assessment will go down. By how much remains to be seen.

I should do some reading about the conditions that urge a lender to REDUCE the HELOC, and conditions that urge the lender to SUSPEND it.

Considering goals for 2009 -- I see some planners are mulling theirs over already. My goals shift from month to month, it seems: something always happens. Nebulous nice-to-haves would be getting the hubby to save for his retirement this year, having an equal amount saved for the replacement car as there is owing on the HELOC, and return of automatic investment into boy's Coverdell account.

Links du Jour:employers suspending 401(k) matching

American Express seeks cash advance -- considering its credit record, and ability to pay, how much APR would you assign to AXP if it came to you for money?

We are soaking beans for bean soup.
We played Depression-era Monopoly (a reprint to celebrate its 65th anniversary): my son, my husband and me. My son is mentally old enough to understand the rules, mentally strong enough to sustain interest in a game for three hours, but not savvy enough to bargain well, and not mature enough to handle not winning.

I finally used a $20 gift certificate at a beloved local bookstore: Although I was hunting for Kingsley Amis's Lucky Jim, I got French Women Don't Get Fat, Lee Bailey's City Food, Running with Scissors for me and Fantastic Voyage for the husband.

Reading also Fried Green Tomatoes at the Whistle Stop Cafe, and The Pursuit of Alice Thrift. I guess I need very funny novels right now.

Winterizing: rainboots, socks, gloves, hat. New shoes for boy. Thermal panels.

Kitchen is looking superbly sunny/fresh/happy: peach on top, white molding 5/8 down, mint on the bottom. White cabinets. Even the boy, who was jonesing for RED approved.

Learned the HELOC rate we are currently enjoying at prime - .75 is variable, not fixed. Fixed rate is 2.5 points, or 77.16%, higher than our current variable rate. We have up to fifteen years to pay it off: my original scheme was to pay the HELOC in three. My strategy now is to make small, but not minimum payments (for that would be interest-only: yecch) on the HELOC, ratcheting up as the lending rate rises. Put more money in the emergency fund, retirement funds, paying down the house fund. Then if we're called to pay up in full, we can do so.

I mentioned that our Visa limit went UP $7500 within ten hours of our HELOC withdrawal, yes? "More rope, madam?"

Bought Money magazine: a guilty pleasure for the alarmist feature questions. More recession watch items: one friend wants to sell his condo, two friends want to buy condos (but not my friend's condo) and my buyer's agent would like some extra work. I hope to be invited to some housewarmings in 2009.

Water bill absurdly high this cycle: blaming the garden hose timing, or a plumbing leak, or something.

My blueberry crumble sold for $15 at the bake sale. I am glad I contributed something, given our kitchen has been gutted but for a fridge and an oven. I cut some squares and meant for them to sell individually but someone bought the whole thing including the pan, which was labelled with our contact info.

$15 is a big profit for squares from a 9"x9" pan.

It's a "socially responsible" "future" type of stock. He has Dodge & Cox fund, and Mesa Realty Trust in his fund, and holds some BNI (Burlington Northern Santa Fe) in a DRP.

Maybe I should involve him in these decisions, but his math isn't quite up there yet.

12/01/2022 look at those lovely twos, and zeroes, and ones. Eight months shaved -- [insert Sesame Street Count laugh]. Do you think the Count loves to do his taxes? "Four lovely Schedules! Uh uh uh uh aaahhh! Ten terrific itemized deductions! Uh uh uh uh aaahhh! I do not fill in... 1040EZ forms." Do you suppose he approaches paroxysms of ecstasy calculating the Alternative Minimum Tax and annualization of stock option gains?

I suppose you're going to tell me the Count works for the IRS, bloodsucker that he is.

My goal next year: to surpass in retirement contributions what we spend on principal, interest, insurance and property tax.

Coming up next: Grover and Elmo as daytraders.

I delivered my November mortgage payment this morning. I had hoped to be cheery, and wrote a cute note of gratitude to wrap around my cheque. However, the vibe I got from the bank (8:45 am) was not chipper, not informed (I was asked to endorse my payment). I removed my cheque from my envelope, and kept my note hidden.

I just want to celebrate the fact that 20% of my mortgage principal has been paid off. For those of us who are reducing debt and saving and building equity, we know the thrill of bounding over an early hurdle.

I know my savings tribe will share in my celebration, even if the bank wasn't in a mood to. I treated myself to a Viennese mocha from Dilettante en route to the bus stop as a reward.

Phew! I had worried that I forgot to make BEARX part of my automated purchase plan. That's not the case! I don't have the r-to-the-power-of-3s (write it out, math geeks) to look at my balance. Other things gnawing at my nerves.

401(k): down 40%
Rollover IRA: down 10%
Roth IRA: I CAN'T LOOK.

Link du Jour: Dividend Stock Investment Strategy

I know someone personally who's gone through a foreclosure. I wondered if he knew of the Hope for Homeowners program or if it rolled out too late or something. I'm wondering, if lenders/mortgagors are so willing to reduce the inventory of REOs, why notice of trustee sales are up so much. Are the programs ineffective, are they useful to only 3% of the population, did the troubled seek out help only to be denied and turned away?
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On my scooter trip yesterday I paid $3.60 to fill up for 120 miles. I did start out with a full tank and it's now 55% full, but still -- it's rare for me to have an eight-hour travel tour for $3.60. It helped to fuel up in the rural areas without so many gasoline taxes too. We talked about how the global recession/depression might delay the peak oil crisis. Fewer vehicles on the road, fewer imports, more reliance on bicycles, car-sharing and public transportation in urban areas. People who freaked out at USD $4.50/gallon and bought Priuses won't be able to easily go back to the SUVs when gas gets cheaper as the flow of consumer credit has contracted: they'll be "stuck" with their 40+ mpg cars for longer than they planned. Then again, they won't be able to borrow for alternate fuel or electric vehicles either. I wish car-sharing companies were publicly traded.
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Fave money podcasts right now: Money Girl and NPR's Michelle Singletary.

My Congresscritter wants to abolish the 401(k) tax benefits. However, a different kind of mandatory retirement plan is being discussed.

Smart Money identified my city as one of nine whose real estate values haven't completely tanked. Depends what neighborhood, size, school cluster, economic vitality we're talking about. The schools where I live are crowded and we need more capacity. Still, many houses in our area are for sale.

No Microsoft Money for 2009, but Quicken Online is ditching its fees.

I'm paying attention to peer-to-peer lending sites in the wreckage of tapeworm bank implosions.

If the US dollar is rising, why does it buy fewer Yen than it did a month ago? Look at the Yahoo! currency chart.

1. The contingency part of my remodel budget is sadly getting a workout. Water/drain supply issues and new circuits. Perhaps the solution to the plumbing issue will result in fewer leaks and lower water usage costs.

2. People in my life are being more open with their finances. This is comforting and refreshing, for I was a stresscookie due to believing I was failing to keep up. Several families are sharing experiences in redoing their "never touched" kitchens. There's some relief in buying a home that hasn't changed ownership in 50 years, but there are some headaches too.

3. Milestones reached this week:
20% spending on the kitchen (no reward);
40% costs for Osaka;
90% annual 401(k) contribution;
75% annual Roth IRA contribution;
20% proposed saving for replacement 4-wheel covered vehicle (no reward)

Rewards:
close to retail priced item of clothing (shoes or boots)
daytrip out with the scooter (scheduled for Sunday: I can fill up for less than $10 again! Bonus!)
two neat magazines (I bought ShopSmart, I can have one more)
scented sea salts for the bath, Market Spice Tea (when I empty two tea boxes) and an at-home facial.

4. I am 0.34% away from reaching the 20% mortgage principal paid milestone. One more week...

5. I've read a prediction that the prime rate will be reduced at the Oct. 29 meeting. Please, yes, reduce that rate. I hope I won't be dinged for the $19000 cabinets prior to the rate cut. If yes, I guess it'll be cash, as my credit card doesn't run that high and I don't feel like exhausting my emergency fund right now.

My mid-1990s cookware is past its warranty. I've just read Mad as a Hatter and am considering gradually replacing my cookware with Le Creuset, which can be pricey. However, I will use eBay when I can.

Link du Jour: smartstops.net Oh that I had learned of this site back in August...

Smart starts
Potential long-term growth industries worth researching this fall and investing this winter:
environmental companies
low-end retailers
educational companies
infrastructure companies
biotechnology
Real Estate Invetment Trusts
tax preparation companies
asset management firms focused predominantly on retirement assets

How do you gird yourself to open the envelopes and look at the statements: epidural? bourbon? marijuana? gin? yoga? deep meditation? hypnosis?

As I pushed $4000 to the chequing account for the kitchen remodel, I thought about everything else I wanted: Osaka for the lads, maximizing my Roth IRA contribution, paying off the kitchen within three years if I decide to stay here, a car within twenty-four months, and wondering if we're really saving enough to make that happen. I have to get through my head that this is not a normal month for expenses: who buys appliances, fixtures, tiles, flooring every month?

Maybe it's time to put 1/4 to 1/3 of my savings in laddered CDs or TIPs to handle debt repayment. Maybe I should start amortizing, and stop dreaming that I'm going to afford a new car. Or, gasp! horror! slow down the debt repayment because the interest rates are low and build up cash to buy the car and for the lads to, it is hoped, follow my weak lead for dollar-cost averaging and buying low.