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Archive for June, 2006

Say no to cell phone?

June 30th, 2006 at 07:21 am

So in a moment of weakness I agreed to a two-year cellular phone contract with a special offer. Free phone, $30.00/month. I don't like cell phones at all, but maybe it's their users I disapprove of:

"HI! I'M WALKING DOWN THE STREET SOUNDING SCHIZOPHRENIC, LIKE I TALK TO MYSELF!"

"I HAVE TO SHOUT OUT MY SOCIAL SECURITY NUMBER AND TELL YOU ABOUT MY SISTER'S GAMBLING PROBLEM AND YEAST INFECTION IN FRONT OF PEOPLE ON A CROWDED BUS!"

"I AM TOO CHEAP FOR A HANDSFREE OPTION SO I WILL CRADLE MY PHONE WITH ONE HAND AND HOLD MY CIGARETTE WITH ANOTHER WHILE I KNOCK DOWN A MOTORCYCLIST AS I CLUMSILY MAKE TOO WIDE A TURN IN A VEHICLE TOO LARGE FOR ME TO COMPETENTLY CONTROL!"

"I'M HAVING A FATHER'S DAY DINNER OUT WITH MY FAMILY -- LET ME INTERRUPT THE FESTIVITIES TO FIELD THIS VERY IMPORTANT BUSINESS CALL."

I'm pretty sure I can use a cellphone without turning into one of those idjits... er, fine upstanding citizens.

But it's not going to save me any money! One guy at the motorcycle service shop sneered at me because I couldn't name a number where I'd be reached during the day -- I wanted to go shopping and conduct errands and taking the bus hither and thither would be too long. Two middle-aged men already mock me for not having a phone. I figure now that I have my own wheels I should have a phone so I can call someone in case of emergency. But then I'd need a pocket phone book in my purse too. Or recruiters can talk to me when I'm running errands and I have a better shot of getting jobs.

I have a trial period of thirty days. I get thirty whole minutes in those thirty days. I dunno... Send it back?

My challenge for July: (feel free to participate here)
Find thirty-one ways to cut $30.00 of expenditures.

Entertainment expenses have gone up: a DVD or video at our rental place of choice is now $4.00, but we can have it for a week. Wednesdays are two-for-one days though.

Making Debt Known//Dream the Impossible Dream

June 29th, 2006 at 10:40 am

Fun link! Grandfather Economic Report

This is a collection of easy-to-understand picture-reports to increase awareness of certain threats to the economic future & freedom of families and their children, compared to the past - - on family income, debt, savings, government spending, education quality, social security, regulations, taxes, inflation, energy, foreign trade and exchange, voter turnout, trust, national security, and health care.

Sixty-two percent of Americans report that they are saving and/or investing. However, more than 40 percent of all Americans save less than five percent of their annual household income. Sixteen percent save between 5 and 10 percent. Only nine percent save more than 20 percent of their annual income. - Jean Sherman Chatzky or is it Jean Chatzky Sherman?

There are a host of other goal-oriented bloggers who've seen fit to make their debt paydowns public, and I commend each one of them. I do my level best to keep up with as many as I can. Because I've been where they are. By making their debts, their goals, and their actions public, they've turned vague "ought-tos" into unmistakable, concrete targets. They're asking for an audience. They're asking for accountability. This goes against pretty much everything our society preaches regarding money and debt. And by gosh, it takes bigtime courage.
Making Your Debt Known

I owe $162610.85. There. I'm out with my debt. It would make me feel better if other Seattle families would admit to me they're feeling pinched, but they're not. I meet with single people once a month to talk about our debt and the progress and setbacks we've had. Maybe the Seattle families manage money better than I do.

How much am I paying off each month? $900 in principal, $700 in interest.

I think the Seattle families could help each other. Costco coshopping. Progressive dinners. Batch cooking. Bartering. It's outside my comfort zone to ask people if they're interested in these things, but maybe I should be brave, huh? Maybe not assume everyone has the stock option fairy or the trust fund god giving them six-digit wealth.

Maybe I'll do a bad thing and use the 3.99% convenience cheques to extend my low interest loan on the scooter -- to be paid off by April 2007. And put my money where the return will be greater -- like CDs or bonds or Fording Coal or gold.

Brother giving me $600.00 for his expenses (shopping, research). Yay.

10 Steps out of Credit Card Debt

Ooh, a clearly unreachable goal-- own the house outright by ...
SUMMARY MESSAGE
Families should not wait for government bureaucrats & politicians to 'save them' or 'set it right again' - they must take their own individual responsibility to develop actions to reduce their own consumption and invest more of their own productive time in high-quality education and savings, while maximizing their own assets free & clear of any debt. In other words, families must face the reality of certain national trends - - or suffer consequences.

Why? The legislators you elect know nothing but to drive up debt. Don't leave your Cadillac to be handled by a person who's worked only at demolition derbies.

Goals For July

June 28th, 2006 at 10:32 am

1. Do my job well.
2. Learn skills to take to the next job.
3. Network for next job.

1. Keep track of every penny that comes into the house.
2. Keep track of every penny that leaves the house.
3. Record a monthly budget.

1. Shop for car/motorcycle/home insurance.
2. Get estimates for wiring.
3. Assemble 15-30 recipes for next month from "thrifty" sources.
4. Try to work over 35 hrs/week.
5. Start researching -- buying stuff for brother.

The Dude and I are signing for the HELOC today. Yipes. Not sure if we're getting 7.24% or 7.49% or 7.99% or even 8.9%. Our Beacon score is good (above 800) but not great (below 850). I've read that you don't want to have a balance on the HELOC when the SHTF. Yet my spouse and I want to improve the wiring in our home so he and I can telecommute. There's about $120/month savings in gas, and probably $40/month extra energy charges there.

Still eating out but not liking it so much. I must be a great cook. Eating fresh salads at home instead.
Update: rate is 7.49%. Not terrible.

Maybe I should ditch that second job

June 24th, 2006 at 08:54 am

And focus on my main job. I could squeeze more ten hours of work in that, spend ten additional hours learning new skills, and EASILY triple what I'd be earning at the new job.

Why would I do this? The special needs thing really stuck in my craw. My spouse doesn't know how to help our child -- he doesn't read the stuff I do. Yes, I'd be $98 closer to paying off my scooter if I took off all Saturday to work, but I'd be $98 closer if I sat in my chair until 6 pm three more days a week.

I'm going to go tell the "family of passionate restaurateurs" that I'm passionate about helping my own family, and hope it understands.

Links Day

June 23rd, 2006 at 10:32 am

Middle Class on the Precipice by Elizabeth Warren

Bankrupt: Maxed Out in America - American RadioWorks Production

I'm going to focus on what I'm doing right. Right is rereading Your Money or Your Life. Right is keeping track of where my money goes. Right is maintaining my inexpensive, fuel-efficient ride. Right is making a plan. Right is seeking out likeminded people. Right is decluttering. Right is increasing the net worth and equity in the home.

Some Washington Firefighters' Association dude tried to convince me to give money. "Gee, I give my special needs child and living expenses higher priority. This month has been brutal for expenses and I have a limit as to how much money I can give to causes each month. That's just the cruel and abusive mother I am. See ya."

No, I can't prepay my mortgage biweekly

June 22nd, 2006 at 10:00 am

I have learned, after two attempts at partial payments, the last which had written instructions to apply toward interest and escrow but was applied toward principal and escrow, that my bank treats all partial payments as principal-only.

The bank COULD have returned my check with the written instructions with a "sorry, we can't do this. Do you want us to apply it toward principal?" But it didn't.

Here's what I now know from
Biweekly Mortgage Payments:
'Do it Yourself' Biweekly

If your lender does not offer a biweekly program and you are interested in paying it off early, you can open a bank account, arrange for it to make your monthly mortgage payment every month and pay half the monthly payment into the account every two weeks. At the end of each year, write a check on this account for an amount equal to your monthly payment and send it to the lender.

There is another simple method for prepaying a mortgage loan. Add an amount equal to 1/12 the monthly mortgage payment to each monthly payment and you will pay off the loan a little earlier than if you take out a standard biweekly.

I'm incensed, mostly at myself of course, because this is the loan that has the lowest interest rate. I could have prepaid my scooter, or put $$ toward the credit cards. Instead I get an earlier mortgage payoff date.

The bank takes no responsibility for misapplying my funds.

I'm already really stretched with the life insurance payment, the bed, the testing/evaluation fees for the tot, the deposit with the application for the child's prospective new daycare, motorcycle maintenance, the GameBoy my husband bought for himself for Father's Day.

My options, none of them really palatable:
a) suck it up and make a full payment before July 15.
b) use the 3.99% convenience checks from Bank of America
c) use the 0% convenience check from MBNA, whom I've stopped using out of spite, and get charged $75.

Things I did right:
* Met with a mom of a similarly challenged boy
* mailed a completed application form for the cheaper daycare
* mailed a completed application for cheaper long-distance phone service

Whipsawed from relief to stress

June 20th, 2006 at 12:19 pm

Yay my life insurance application has been accepted.

Bah my kid is "special needs" and treating him will delay our goals of financial freedom.

There's motivation to stay single and childfree: it's one thing to say "gosh! teehee! I ran up my credit cards on Kate Spade handbags and Manolo Blahniks! Help a girl out!" and it's another to account for your pennies but pay for speech therapy, evaluations, occupational therapy. I'm sure most couples, when they breed, are expecting a problemfree baby. I thought, until six months ago, my kid was problemfree.

I notice my friends who have special needs children either have high-paying jobs or nice timing with stock options. Now, God just came in, in the guise of a Ducati-riding client, and gave me purpose and a plan for marketing myself and developing solutions for clients. $60/hour is what I'm going to charge when I'm done with this project. Thank God for career goals.

I was gouged for life insurance too. I may just go get a full-time permanent job or sign up with my agency for life insurance benefits.

Ugh

June 19th, 2006 at 07:16 am

A few steps back:

I got a parking ticket when I went to orientation (for which I was paid). I could park for only two hours in an area which had limited parking to begin with for the Susan G. Komen Run for the Cure, and I was there for three hours because people were asking stupid questions. The street I'd normally choose for parking was cordoned off by police as the runners were using it for their route.

I was so selfrecriminating I was haunted by a fear of impending doom so I bought some tryptophan and 5-hydroxytryptophan (5HTP) to mellow me out.

My child emptied both my Sal Suds and my Dr. Bronner's Lavender Soap: the 32 oz. sizes. Not a frugal move. Not happy. I may need to remove them from his access. I'm using his bank account money to pay for replacements -- his father and I are that angry.

Sold his changing table/chest of drawers.
More decluttering -- removed ten hazardous waste products from our house.

We were approved for the HELOC. We expect to make changes to wiring, windows, improvements to the house to make it marketable. It helps that in our overvalued city, I'm in one of the two areas that does not yet have a growing inventory nor deflating house prices.

I'm beginning to think I'm going to have to suck up the idea of being in debt at least for one year. As long as we have my child's social communication therapy, food, transportation, scooter payments, insurance, heating, gifts, vehicle maintenance, daycare ($$$$$$ for one more year, unless he can qualify for early kindergarten and I doubt that), things will be tight.

I don't want to move anywhere else. I'm in a sustainable, progressive seaport that's near my home country. I eventually will not need a car, will not shell out nearly a thousand dollars for daycare. If I move somewhere else I'll pay more in mortgage, gas, and auto maintenance.

My Jewish uncle said people are moving to the suburbs to raise their kids. I can't afford to move to the suburbs. Five years later being stuck in a white ghetto while gas prices go up to $5.00/gallon, and needing a car to get groceries? We could walk to two supermarkets, three banks, a shopping mall, the dentist, and three drugstores where we currently are. Putting my kid in a cul-de-sac where he's more at risk of being run down in our own driveway by one of us? We're up on New Urbanism, yet we're in what USED to be the suburbs/farmland. Really, we don't need as much lawn as what we have.

And hey, my kid's not where we thought he'd be, intellectually. Still grappling with that. It may take a few swigs of Bouteille Call before I can cope.

The Budget

June 15th, 2006 at 11:02 am

Outgo:
Food: $600.00
Wine: $40.60
Housing: $1426.07
Daycare: $930.00
DCFSA: -$425.00
Utils: $279.26
Household: $125.74
Apparel: $160.66
Furnish: $165.98
Veh. sav: $405.46
Gas & Oil: $180.00
FlexCar: $87.07
PubTrans: $15.00
Veh. exp: $143.34
Healthcare: $160.00
Amusement: $120.00
PersonCare: $51.00
Reading: $30.00
Education: $100.00
Miscel.: $77.72
CashContrib:$60.00
Insurance:$ 90.00 (car, bike, life)
Internet: $26.95
Phone: $69.26
LongDist: $18.00
Gifts: $33.00
--------------------
Outgo: $4970.11/month

These are maximum average amounts. My plan is to live so low on food, and lower energy costs that any strange head-and-shoulders blip in one category can be readily absorbed.

Wrote a cheque out for escrow and interest. Still waiting for DCFSA reimbursement check for $930.00. Looks like the stock market isn't working in our favour for the stock bonus. However, we are at least increasing our equity in the home by $3000 this year. Our net worth may make a dip this year but at least it's no foreclosure, right?

Let's check in on the Maxed Out Americans: 2006Q1 household mortgage grew by 13.6%. Consumer Credit grew by a modest 2.2%. It even shrunk 0.7% in 2005Q4. Way to lay off the credit cards, America! Make Chase, MBNA, CitiBank, and Discover BEG.

I'm bracing for a 34% decline in market value for our home. Houses supposedly appreciate 1% per year, but I think it's probably more like 4-5% when inflation is factored within. My house SHOULD be $286386.37, priced at a modest YOY 4.25% appreciation. Zillow has it at $107K above that amount.

I'm learning from John December that I must be a better steward of my time, money, belongings, child, information. Scheduling these looks like a good idea -- it's too easy for me to get randomized, to get off-track.

I'm spending $2360/month on mortgage and daycare. That's a little less 50% of our budgeted takehome. Should I be concerned about saving so I can live on 60% of my income? No. I'll live on 35% of my income. I won't have daycare in a year. I won't have a mortgage in eighteen, unless I'm investing in properties.

Mean retirement assets by age of household head (35-44): $68,735. Median retirement assets (35-44): $27,000.

Funds to look into: VIPSX; EKWYX; SCGDX; FSAGX; TGLDX.

1. $100.00 toward scooter
2. $100.00 toward Roth IRA
3. $100.00 toward savings

Making changes

June 14th, 2006 at 10:02 pm

I made an appointment for a tour of the closest licensed child care provider to us. Not only is it marginally cheaper (8-9%) than where we've got the lad now, they provide lunches. Also, being three blocks away from the center makes it very easy for either one of us to go fetch the boy.

And, I have to say, the projected 4% increase in daycare is better than the 8-12% increase we've come to expect from where we put the boy now. I hope his IQ test comes back as average (90-110) because if it comes back as gifted (120+), and they're treating him like there's something wrong with him, then I'm pulling him out.

PEMCO wants my auto insurance business. I'll see if they'll welcome the motorcycle. I could use a reduction in insurance costs. They threw in a 30 minute long distance card too. Groovy!

Spent money on lunch. I am bad. Soup, roll, salad and brownie. $4.68

Spent money on gas: $9.06. That should last me one week.

Still investigating long distance service.
Want it as cheap as possible.

My stupidity

June 13th, 2006 at 05:51 pm

You know how people get themselves in debt because they want everything now, and hang the future?

My problem is some of that, and some of wanting everything tomorrow. Tomorrow's dollars aren't going to do me good today, unless I borrow. Prepaying the mortgage: dumb. Trusting my spouse to fill in and fax Dependent Care Spending Account claims: dumb. Being permissive about entertainment spending and airy-fairy about political contributions: dumb. Those political groups aren't very effective -- I can think of four pieces of legislation THIS YEAR that would benefit us all that Congress and the Senate have either ignored or voted down.

We are not the typical rich American family with a cellphone, digital cable, a minivan and an SUV and trips to Disneyland twice a year. Considering we earn twice the median household income in Washington state it is exasperating to be this low in funds.

I did a budget for my household. It's TIGHT. More on that later.
Where is the fudge room? The food. I've been so so bad. I went to dinner w/friends, shared a Salade Nicoise (fabuleuse) and some Molten Chocolate Cake with ice cream. Monday night I went to Ezell's to pick up some fried chicken. More fast food. We eat out way too much. When do I plan for meals?

We applied for a home equity line of credit with our credit union. Only $18K. I want it like this because I don't want to be thick in debt. Using credit cards for convenience is nice. Using them for borrowing is horrible.

I am currently hating myself for being lazy and not getting buy-in from the husband about putting our spending under control. Is upgrading our wiring really going to be worth $108/month ? Is replacing the windows really going to reduce our heating/cooling costs by 20%?

I've got to be smart about expenses. Use the IQ points. Be creative or be despondent. It's not good for my family for me to be despondent.

At last, a savings goal!

June 12th, 2006 at 09:58 am

$25,000 in 24 months -- $1041.67/month.

How?
1. $5000 toward scooter
Rationale: loan goes up to 12.99% in four months. Savings: $500.00 this year
Where I am now: $391.43

2. $4000 toward savings for 2007
Rationale: emergency funds or big ticket items. Savings: $84.00 this year
Where I am now: $1000 toward savings

3. $4000 toward Roth IRA for 2006
Savings: $35020 in 2035
Where I am now: $0

4. $3000 toward windows
Savings: ???
Where I am now: $0

5. $2000 toward electricity rewiring
Savings: $1520.48 this year
Where I am now: $0

6. $3000 toward ESA for 2006
Savings: $8257 in 2018
Where I am now: $0

7. $2000 toward roof
Savings: NONE
Where I am now: $0

8. $2000 toward margin account
Investment: Sweet satisfaction of shorting loser myopic greedy companies
This won't be all at once, of course. We're pitifully but meaningfully on our way.
Savings: WHO KNOWS
Where I am now: $0.17

$158,002.73 owing on mortgage
$4915.00 owing on vehicle
$1154.00 owing on credit card

Income: $5200 net
Outgo: $4660 net

I foolishly applied $770.74 as principal rather than a halfpayment to our mortgage. This is $290.00 more than we should have paid for principal. I hope my husband can forgive me. $641.00 in interest payments have been saved, and our home will be ours free and clear by July 1, 2023.

I went to Dave Ramsey's Website and took this Smart Money Makeover web app. I noticed that the maximum number one could input for savings (rainy day fund, retirement, cash on hand) was 99999. So my number necessarily came out lower than it should have.

Currently we aren't allowing ourselves much leeway financially in our budget. I must say no to little things. Screw you, Working Assets. No to WashPIRG, Citizens action. Look at other daycares that are marginally cheaper. Slash the food budget.

Another Pleasant Valley Sunday

June 11th, 2006 at 03:29 pm

I was getting a headache at the local cafe, with the buzz and muted roar of the big screen TV showing NASCAR, the merry chatter of the Firefly TV show fans at the table behind me, and reading the NYT Magazine issue on Debt (Shudder!). It was almost enough to bring me down. I needed the hugs of my gentlemen (master and mister) to set me right. Receiving a kind blog comment on my writing style let my heart soar for a while too.

First -- to vanquish the grey slothmonster of depression one must own up to responsibility and plan for greater control of one's life, recognize one has choices. This is better than Prozac or Zoloft or Wellbutrin. I take responsibility for my family's finances. We're not terribly in the hole, we make mistakes, but it is hoped these errors are small and not fatal.

URL: Drowning in Debt -- AmericanProgress.org site

I take responsibility for the environment being as bad as it is. I'm growing roses instead of vegetables. I have the dryer on for the sheets, because I'm going out soon and I KNOW my spouse won't consider drying the sheets or replacing them on the bed until 10:30 pm, when I come home.

What am I doing to make things better? Charting my finances. Meal planning. Making more vegetarian meals. Putting some clothes up to dry on the indoor clothesline. Using the scooter instead of the car for running errands, or walking if I can help it.

My kid gets the debt problem implicitly: he's an American (depends on how I view him -- he's actually a dual citizen), and he gives me, the foreigner, money. Just like Americans give foreigners interest on debt payments. If I view him as a Canadian he's volunteering his money to me so I can pay down the debt, like the taxpayer/government model.

What can I control? With whom I choose to consort. The food supply. My education. My reading. Entertainment and miscellaneous costs. My wardrobe. My scooter. I would like to control my time and my schedule better. I would like to invest money to bring down energy costs. I can control when and how much to pay creditors.

what do you do when you feel poor?

June 9th, 2006 at 01:03 pm

Apprehension and disappointment are here with irritation. They will pass.

I do not feel I do enough to save money. Some little trip-up or self-sabotaging trick will happen. My resolve is weak. I have also just seen a consciousness-raising film and then nearly had a traffic accident by some bucko pulling a Rockford in front of me at a T-section while I was making a left turn in dark, wet conditions.

Do you count your blessings? Whuggle your life and health insurances? Look at zillow.com for an estimate on your house? Be thankful for your emergency fund? Make a list of frugal things to do and use one tip daily? Make some sort of thermometer type chart and put it on the fridge?

I also feel poor. Sometimes I feel my family is conspiring against me by wasting energy, or by throwing things on the floor or leaving them on the kitchen counter or being derelict about chores so I do them and waste time I'd have otherwise spent putting things on eBay or putting other frugal ideas into practice.

It also doesn't help that $6 out of every $10 that you and I earn in America will go to pay off a loan in China or Japan or South Korea or the rest of Asia. That's the kind of mortgage nobody can afford, including you, me, the U.S. government and our kids.

It’s money that’s coming out of our pockets, and not just taxes… but also from higher gas prices, food bills, even college tuition. And be assured, Uncle Sam has no intention of paying us back.

What I need is some support and guidance on how to not let the little things snowball or get me down. For me it's especially unnerving because my spouse is "monkey see monkey do." "Well you spent $$$ on a nightie so I can spend on my hobby." "You spent $$$$ on a scooter so I can spend on one too." Well, with the exception of saving energy or picking up after oneself, that is.

He wants a week for vacation: I want a week to declutter and put things up for sale and build a vegetable garden.

Maybe the problem here is that I came from a visibly poor and uneducated family, and he came from an invisibly poor and well-educated family. Or maybe I've lived so long without disposable income, while in his landscape, disposable income makes the world go round.

I am frustrated. Someone give me a there-there please.

Maxed Out Movie Review

June 9th, 2006 at 10:24 am

I thought this was excellent, although it was biased. Maxed Out was written, directed, and produced by James Scurlock. It features interviews with Dave Ramsey, Bud Hibbs, [b]edited[b] David Szwak, and the proprietor of a pawnshop in Kirkland, Washington! I've seen the pawnshop -- it's close to a motorcycle-themed restaurant.

Moms of college students who paid a high price for their use of credit cards are interviewed. Siblings and parents of mentally and physically incapacitated people show the credit card offers their special needs relatives receive. A young family whose breadwinner served a 23-month National Guard stint in Iraq shares its bankruptcy story.

Debt collectors glibly and cheerfully saying how they liken themselves to pirates on a pirate ship, and they're pointing their scimitars into the backs of a handcuffed scallywag, trying to get them to the end of the plank as possible without losing them to the briny deep. Cut to scenes of Douglas Fairbanks's film "The Black Pirate" (1926).

I went with an acquaintance who worked as a debt collector for over a year, and she reported that the modus operandi was to cozy up and be friendly, extracting as much information from the debtor as possible to be able to serve a judgment.

Providian paid out $400 million in reparations for a class action suit because it SHREDDED or sat on cheque payments so they could charge phony late fees. Providian's former CEO was appointed by the President as Ethics Commissioner. Hahaha.

Ninety percent of credit reports have incorrect information on them. Only the credit reports of legislators, state and federal leaders, corporate CEOs, actors, anyone with power are carefully scrubbed and reviewed for errors. It's not within the credit bureaus' interest to have errorfree credit reports, because there's no money in it for them.

Maxed Out was sad, funny, angering. The motivations for people to dig a deep hole for themselves are not shared. No one mentions the lack of personal financial literacy -- can you imagine living in a capitalist country as a pe(e-)on and being ignorant about who's got your credit report, who's screwing up your credit report, and how much interest you'll pay and for how long?

It may be suggestive of "nanny state ideals" to hint that the state governments should institute some education program, but there ARE government (federal) websites and non-profit Websites for kids counseling on the wise use of credit.

There are people who learn by reading, by listening, who learn by others' mistakes, and those who have to pee on the electric fence for themselves. I'm feeling very misanthropic and thinking maybe 75% of debtors are in the latter category. Dave Ramsey confesses he was in the "pee on the electric fence" group, and I respect him more for his candour.

And the government is the most egregious debtor of all. I watched, through dated newsclips and archived SotU addresses, an earnest and concerned Jimmy Carter telling the nation of a very real threat to their livelihoods, then Connie Chung reporting how much Reagan's administration was borrowing from Social Security (there's an earlier post with a link to a table that shows the huge leap in national debt from 1980 to 1990), how Bush Senior did the same thing, and did Clinton, and now the current President has borrowed more from the American people in five years than Reagan did in eight. See, getting into trillions of dollars in debt is okay because the government does it. When you get into thousands of dollars in debt you get the hellhounds on your tail.

Let's borrow from Social Security. Let's borrow borrow borrow. But let's not raise taxes. Most of the government's money is used to service its debt. Nonimportant programs and services like infrastructure, body armor for US troops, healthcare, welfare are squeezed. Why aren't 200 million Americans calling the Feds like crazed, rabid bill collectors screaming "where's my money? you owe me money!" three times a day? Maybe we could harass someone who cheated at the polls so much or screwed over the populace so badly that he'd drive his car into a river.

Maybe it's my highly-taxed Canadian heritage speaking, but yes, let's raise taxes. The country was not at risk of going under when the super-rich were taxed at 70%. The super-rich are either taxed at 35% or are scamming their way claiming corporate welfare, and the country IS at risk of going under (my sources are William Bonner, John Rubino, Jim Jubak, Bill Fleckenstein, Ben Stein, Kevin Phillips -- happy white male capitalists all, and some of them Republicans). And most Americans are okay with this. No one liked Carter for telling the truth about the growing debt. No one will elect someone who tells the truth about the growing debt. We like either ballless representatives or the people who smile while they're screwing over the working Americans. This gives me the freaking willies, and I am more than ever motivated to clean up my crap, sell stuff on eBay, hold a garage sale, and get more liquid moolah ASAP.

It was a movie with a lot of food for thought but I was left hungry with the question: "WHAT THE HECK IS WRONG WITH PEOPLE?!"

I wish people would open their eyes and look at some graphs of spending. Perception is reality, but you know, in some cases facts can shape perception.

AAGH! My spouse wants a scooter!

June 8th, 2006 at 03:41 pm

Bully for him, you think. He's thinking fiscal sense.

No-o-o-o-o. We'd have to borrow for a scooter and we're already paying mine off. Or rather, I am already paying mine off. He got motorcycle gear with the idea that he'd be riding MY machine. We have a car. I have other ideas for money -- rebuilding the emergency fund, investing money so we have less to pay the utility companies.

I believe in a MAXIMUM of one vehicle per driver, preferably one per household, and we need one car because we have a child who is too young to ride on a motorcycle or scooter. I have to go to an office to work, so I take a scooter. It is cheaper than a car.

He can ride my scooter. I'm not averse to him riding one. I'm averse to his OWNING one when we need to be cutting our expenses.

brain dump

June 7th, 2006 at 11:41 am

I was going to stay home to clean up the house, but that would mean losing out on $160. Which I need.

I was not frugal -- I had an hourlong massage last night. It had been twenty-two months since I last had one, and my back was beginning to ache.

I'm listening to an interview with John Rubino. www.netcastdaily.com/1experts/2004/exp022804.mp3.

$34 trillion debt.
$450,000 per family of four is what we "owe." Unsustainable considering average family makes $50K a year.

Had fun inputting my birthday into the King County Records Website to see what people are taking for mortgages. I saw mostly Home Equity Lines of Credit and Home Equity Loans.

Also saw some foreclosures -- single women who bought in 2003. Not in the upscale areas, but in the poorer areas of King County.

How to manage the crash? I'm wanting to 1. pay off my scooter debt,
2. make the house more energy-efficient, 3. buy some gold,
4. invest in permaculture
5. Buy Canadian $$$.
6. Contribute to Roth IRA - mining stocks.
7. Buy foreclosed houses.

Can't do this all at once.

Patience, patience.

Also want to buy new clothes. I haven't bought much in the way of clothes because I didn't need to, I was inbetween sizes, I didn't have time to shop for quality clothes. Now my clothes are too old, not "me," don't fit, or are worn.

What I did: read through books for "must haves," learn what colours look best on me, what styles, and what image is best. I was surprised to learn I was a trendy.

Challenge: $175/month for clothes. Certainly, buying a $110 silk nightie was excessive. How do I rationalize it? Every woman needs one.

$30 for red Doc Martens -- obviously a good buy. I had no boots, and red is my fave colour.

Boy Meets Bed/Care and Maintenance of Friends

June 6th, 2006 at 10:45 am

We are "blessed" to be within walking distance of three mattress stores, and two department store chains in a mall.
The three of us went to J. C. Penney to look for a bed for the kid: he is the right size for a "big boy bed" and is toilet trained at last.

"They had a sale just this past weekend, I know that," says the man. We go, and yes, 30% off boxsprings and mattresses and metal frames on a "pre-sale." The orders are taken at sale price, and later the charge is made. $477.31 including tax and delivery from California.

Spent $36.77 on two Japanese books for my second bestest friend -- even though they weren't on her wish list she says they were EXACTLY what she needed and is very thrilled that I could read her that well (don't we all like it when our friends and loved ones understand us so implicitly?).

Spent $32.00 on an Amazon.com gift for my friend Betsy, and $23.70 on an Amazon.com gift for my friend Diane. Dammit, why do Geminis have to be so friendly? They and the Sagittarians loosen my pursestrings.

I don't know what's stopping me from decluttering -- overly scattered? I offered $50/room to my aunt to help organize. She hasn't taken the bait.

1. 15 minutes: pick up crap
2. 20 minutes: sweep up crap.
3. 15 minutes: throw away crap.
4. 10 minutes: photograph furniture and post pics on craigslist.org

I've finally met the Stanley & Danko barometer of financial adequacy!

June 5th, 2006 at 02:14 pm

How to increase net worth:
Reduce debt
Make home improvements that yield a higher return than the APR charged to pay for them
Increase Savings and Investment

Cash:$ 3700
CDs: $ 2100
Bonds$ 1120
MF: $ 4064
Prop:$15000
Autos:$8000
Ret:$140000
hom:$380000 (zillow.com est.)
------------
$553984 Total Assets

Credit Cards: $115.13 (0%, pay in full)
Mortgage: $159,434.41 (5%)
Loan bal: 5,613.85 (2.9%)
------------------
$165,163.39 Total Liabilities

$388820.61 Net Worth
Formula:
Expected Net Worth = Age*Realized Pretax Annual Household Income/10

So I recognize this reveals my age somewhat, but no matter.

So, whittle down the loan, build up the cash. I'll approach it from a 50% whittle/50% build.

From: http://www.myvesta.org/pubs/pdf/net_worth.pdf

Deceptive consumption lifestyles

June 5th, 2006 at 11:03 am

I see Lexus and BMW SUVs in the farm parking lot. I am impressed... momentarily.

Yes, there's a bubble. UNLESS: people have all these oodles of cash. They're superlative savers or they have lots of money through inheritance or good jobs or they're self-employed.

48% of Seattle households and 42% of the population are cons...

Median house price in my city: $405000
Median family income: $54,223

Median net worth: $69,400 (35-44 y.o.)
Median net worth: $226,100 (univ. degree)
Median net worth: $140,700 (white)
Median net worth: $67,200 (wage slave)
Median net worth: $94,800 (West)
Median net worth: $184,400 (homeowner)

Numbers from Survey of Consumer Finances Bulleti: Recent Changes in U.S. Family Finances: Evidence from the 2001 and 2004 Survey of Consumer Finances

http://www.federalreserve.gov/Pubs/oss/oss2/2004/bull0206.pdf


Self-employed seems to be the way to go.
I should come up with some businesses. I suppose they're counting home equity as part of net worth.

If I were to count home equity as net worth is in the six figures, despite not being Republican, a business owner, or from even middle-class parents, nor ever having hit the stock options lottery.

If I didn't count it, I'd still be in the six figures. I should thank my blessings and keep on track with my goals. Writing down the goals would be a help.

I shouldn't feel awful about driving around in a dirty 10-year-old car, or wearing cheap clothes. I do feel awful about the disorganization and clutter in my home, my car, my life. I need some help with this.

Well-meaning people try to stoke my schadenfreude: "You don't know how financed to the hilt those people are." True -- I know nothing about them other than they licensed their luxury vehicles in Washington state, and they're white (from the patron demographic scan at the farm store).

Can you imagine someone leasing or financing a Hummer, BMW, Lexus, Lincoln Navigator, Escalade, or Mercedes-Benz SUV? Or using zero to ten percent and an 5/1 ARM to finance a McMansion one hour or more away from work? Isn't that sad? It's like one pathetic "look at me" lie, like my car and cheap clothes are a pathetic "don't look at me" lie.

According to the most recent figures from the Federal Reserve Board, consumer debt hit $1.98 trillion in October 2003, up from $1.5 trillion three years ago. This figure, representing credit card and car loan debt, but excluding mortgages, translates into approximately $18,700 per US household.

http://www.federalreserve.gov/releases/G19/Current/ -- Check out the latest Consumer Credit stats. Autos are being financed at terms beyond five years (with the exception of 1Q2005 and 2Q2005), and the loan-to-value ratio is 91. A record amount of over $25,000 is the amount financed.

Oh, and do I believe the cash-out refis for vacations, luxury vehicles and plasma HD televisions myth? No. Maybe 16% of cash-out refis do this. More than twice that percentage use the equity for home remodeling, or sending Tyler or Ashley off to university.

Oh check this out for a laugh. You know about red states and blue states? That's all a myth. America is the RED NATION.
http://en.wikipedia.org/wiki/List_of_countries_and_territori...

I like how there was a 188.2% increase in debt under Ronald Reagan. The US govt debt went from $930.2 billion to $3,233.3 from 1980 to 1990.
I should chart my net worth and spending month to month. Quicken? Graph paper?

Thanks for the warm welcome/debt support group

June 3rd, 2006 at 08:10 am

Thanks for the warm welcome! I look forward to reading your blogs and forum posts!

So I'm in a debt support group. It's not Debtors Anonymous -- we're open about what we owe, we know each other's names and e-mail addresses. I've been in it for six years -- I started with about $12K in consumer non-mortgage debt (net worth wasn't so high then), and was from February 2002 to September 2005, debtfree.

We meet at a restaurant or cafe the first Saturday of the month, usually. There are only four of us.

I spent some time this morning mulling over home improvements and how to finance them. I expect my credit score will take a hit when MBNA requires my letter ordering my account to be closed. You see, they sent out this draconian Terms and Conditions agreement, and maybe they're testing the reading comprehension of their credit cardholders, or wanting to slough away the freeloaders/deadbeats. Maybe we're at a point at the economy where the credit card companies DON'T want people to borrow money. Certainly MBNA, who can look at my credit report, doesn't seem to care that I'm using credit sources other than them. They don't want my business, it seems.

I had great credit with them, but they're trying to screw everybody around with the removal of transaction caps, introduction of tiered fees and universal default pricing, and reduction of grace period. It's as if they want me to either leave, or risk heavier handcuffs. I didn't know, seven years ago when I applied for their affinity card, that they would screw up so bad that their profits would dive by 94% and they'd be acquired by Bank of America.

I have a line of credit and a credit card with a local credit union, and another credit card with BoA. I'd like to stop doing business with BoA too, because they too have introduced tiered fees, but my credit score would hit the skids. Not coincidentally, My BoA and MBNA cards have the highest APRs of all my credit sources.

So this is how a big bank's mind works: lobby for a bankruptcy law, watch everyone and her half-sister file bankruptcy right before the deadline, attempt to recoup losses by penalizing people who haven't filed bankruptcy.

Do I have an outstanding balance with BoA? Yes, but I don't carry it from payment period to payment period -- I pay it in full. I use it mostly for online purchases and gasoline. I suppose it's all about principle as well as principal. If I don't need to borrow money then who cares about transaction fees, grace periods or universal pricing? Who cares about credit scores? If your car/home/life insurer or prospective employer determines your premium by looking at your credit report, maybe you should care about credit scores.
Or switch to another insurer.

A fellow immigrant asked me how I knew all this stuff about saving and investing -- I told her that as immigrants we have shorter credit histories and are more vulnerable to being yanked around by big banks and credit card companies. Also, if we're used to a lower cost of living and a higher tax rate, one can't help but save money unless one gets sucked into the oh so seductive consumption racket. Which I did, eventually. I still succumb time and again but only with ample rationalizations ("oh I need this for work. I need to have my freedom. I will realize a decades-long dream if I do this.").

Oh yes, and I spent NO MONEY on Friday! Other than paying a $170.00 bill for my child's outpatient care from April.

Hello World

June 2nd, 2006 at 01:50 pm

HELLO - happywave

I am a thirty-something wife and mother, and neurotic homeowner in Seattle, Washington. Funny that some of the most revered simple living and frugal people live in a city with the country's highest cost of living! Delighted to be in their company, and in yours!

159,434.41 owing on mortgage
5,616.42 owing on vehicle
113.00 owing on credit card

Income: $5200 net
Outgo: $4660 net

I am not the most frugal of people, and I'm hypocritical in some areas -- I like to motor on my scoot around the land, and I've been known to eat meat on occasion. I don't subscribe to cable television but I do pay $$ for film festivals and DVD/video rentals. I try to drink green tea but sometimes when it's cold and wet foamy hot coffee calls to me like a nursing blanket.

Current things:
Interested in saving at least a dollar a day. Mortgage costs are up $33.41 a month.

Interested in cutting monthly outgo to $4194 ON AVERAGE.


Favourite links:
www.mymoney.gov
www.goodadvicepress.com/pci.htm
www.hillbillyhousewife.com

Favourite money commentators:
Scott Burns
Richard Jenkins
Michelle Singletary

Favourite frugality gurus:
Janet Luhrs
Nancy Castleman
Deborah Taylor-Hough
Vicki Robin

What I'll be using this space for:
listing money saving tips I like
posting URLs to money saving websites I like
posting my financial goals

Paid $20.15 yesterday for gas, cappuccino, lunch

Dude paid $8.00 for parking and for coffee club monthly dues

Paid $29.14 for garlic, B-100 vitamins, Emergen-C, Vitamin D milk, fruit leather.
Emergen-C was happily $4.96 cheaper than the last box I bought.

$57.29