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Archive for March, 2007

Where do the trust and faith come from?

March 28th, 2007 at 12:59 pm

I saw a BBC Channel 4 documentary on families who have been pushed to extreme limits by banks' credit lending. Specifically two family breadwinners who killed themselves over the staggering debts they incurred.

My empathy was with the widows, who not only were bereft of their main income and their life partner, but were left with those mounting bills, harassing calls, and the lingering question why their departed soulmates didn't confide in them earlier, so they could attempt to fairly and judiciously manage the household. Leaving those messes behind is really awful to do to someone who loves you and who's made a commitment to be with you in rich times and in poor times.

If the departed didn't have the trust and faith in their companions to share what's going on, why did they have the trust and faith in the banks to regulate themselves and stop lending them enough rope to do themselves in financially?

I don't have any faith in the megabanks: taking away the terms of my account of ten years doesn't inspire trust, changing the credit cards' terms and agreements for the worse every couple of years doesn't inspire trust either.

Where do people come up with the trust and faith that they'll never be offered the opportunity to borrow more money than they can actually pay back? Or that the person selling them an ARM is certified, regulated, and is telling them everything they need to know? Doesn't anyone have lawyers look over their loan documents that potentially may cost them hundreds of thousands of dollars anymore? We had a lawyer look over ours.

Somehow people have ideas that they'll be saved or bailed out from their recklessness, but prefer their closest confidantes not know. Maybe they haven't had the profound losses at an early age I have. Maybe they don't feel so much of a heavy burden to fend for themselves. Maybe they get better credit card offers or loan terms than I do, or have solid recession-proof, unlayoffable jobs.

A companion film to 'Maxed Out': 'In Debt We Trust'

March 16th, 2007 at 11:02 am

In Debt We Trust is a film written and produced by Danny Schechter, that explores the debt issue. I learned of it from reading Carolyn Baker's blog.

Golly, one could make a number of analogies comparing debt to drugs, couldn't one? Addiction, false needs, anxiety, false sense of security... someone has already made a comparison to the debt industry with organized crime.

I think I'd like to see this film. It would be helpful to have it spelled out to me that I'm not supposed to be saving money so I can afford needs and my own personal wants regardless of where my income is at for my own personal freedom and security, but rather that investors in banks and credit card companies are counting on me to get in trouble so they can buy $6,000 shower curtains and H3s.
If that's not the purpose of my being here, but rather to make the most of the opportunity to grow my income and financial security and do good works for those who need them, then it's key to shut out most of the MSM and any promotions/propaganda/advertising. I'm in it for freedom, not for servitude to Bank of America.
Blogs Chart Slog Out of Debt -- NPR February 2007 story

Signed up for DiscoverU class: Investing on $25 a month

March 14th, 2007 at 09:29 pm

Now, I can pretty much predict this is going to be about direct stock investing, dividend reinvestment plans, ShareBuilder, shoestring investing. I also know I can take a dozen books on this theme out of the library, or visit a dozen websites.

Why then am I paying $49, plus a $15 Discover U fee?

Because authors and community educators Bobbi and Eric Christensen are teaching the class, as I found out on this website. Don't let the year on the page fool you -- a quick check of DiscoverU tells me it's actually 2007 they're offering the class.
It'll also be neat to find people who have investment plans but a typical, average for the area income, people I'd have more in common with. My current stock taxable accounts are worth $318. I should grow them, but emergencies and distractions have kept me on the rung of rebuilding our cash cache. I've been bad about keeping to my goals because they're unrealistic, and no one is holding me accountable. Maybe I'll find an investment buddy I can share research activities with at the class.

Dow falls 243 points on mortgage woes

March 13th, 2007 at 01:56 pm

I was waiting for this...

Fortunately it still looks like we'll both be employed for the next year, and kindergarten is promising to be lighter on our pocketbooks than $910/month preschool. Another goal could be to save six months' mortgage expenses somewhere outside retirement.

Does anyone know what happens to privately owned mortgage lenders, like regional thrifts, who aren't dabbling in the subprime market when this happens? They'll probably have to tighten their lending standards too, but what else? They're not publicly traded.

I wonder if CDs, gold, and treasury notes and bonds are the way to accumulate cash in taxable accounts so as to pay off mortgage early. I know, "it's risky and bad planning to have too much of your net wo... Right now 49% of our net worth is tied into our principal residence. I feel bound: banks have taught me not to think I can profit i them, stocks are manipulated, bonds might be a sucker's game if they're issued by a debtor nation... what else is there to invest in?

I wonder how else I and my husband could protect our family from this. I wonder why people and companies never ever pay attention to economic cycles and history, or know what follows a boom. Have so few people ever rode a rollercoaster? Ever wonder if bank execs binge and purge or do yo-yo dieting the way they yo-yo mortgage lending requirements?

To quote Roseanne Roseannadanna, 'It's Always Something'

March 10th, 2007 at 09:12 pm

Thanks all for your responses and commiseration to "when are you having another kid?"

I went on a spree of sorts with the family: we bought a battery tender to work with both our scooters, 20% off. We enjoy supporting our local motorcycle accessories shop: they make shopping great. Received free faceshield cleaner.
Bought at JC Penney a twin comforter (down alternative) for the boy, as we had only hand-me-down blankets, which made me think that if any visitors saw his room, they'd be calling Child Protective Services ("I'm serious! the blankets don't match! they're older than he is!") and a 330-thread replacement set of sheets for our bed, both for slightly less than 50% the regular price.

The frugal thing to do would be to NOT buy the Battery Tender, but juicing up the bike with the car isn't always a viable option, and doesn't restore the battery beyond 80% power. That's cheaper than buying a battery every twelve-eighteen months though. I dislike the backfire of the idea that scooters will save money: I've spent money on boots, helmet, super-reflective vest, helmet halo, battery tender, maintenance. No modifications for aesthetics or warmth. At least I vanquished the temptation to buy an extra set of cold weather gloves ("if you ride for two hours in temps below 50F your hands will get cold no matter what!" said my expert friend).

I learned through my scooter battery experience that although every rider asserts 'it's always the battery' everyone has a different idea of solving the problem. Buy another battery. Check the fluid. Take it in for inspection. Jump it with a car and ride around for two hours. Buy a battery charger. I paid most attention to the Sound Rider! guy who said that scoots like mine don't like the cold, and yes it was 32F the day my scooter said 'hell no! You can't make me go!', so maybe the cold weather got it down.

Then we ate at a neighbourhood Italian comfort food restaurant with organic food. No wine. Kid was bratty-tired, but thankfully the restaurant had a corner of toys and amusements for the children six and under, so despite our limited patience with our squirmy whiny bundle of joy (yes we made absolutely sure he wasn't bothering the other patrons--we may be parents but we are conscientious and not oblivious), we'll be coming back.

Tomorrow I hope to earn six hours' overtime.

Eventually we'll sift through our linens and donate the excess: maybe three lucky homeless people out of over two thousand will have an extra layer to protect them from the elements.

My spouse did not receive WARN (Worker Asset Reduction Notice), either in writing or by telephone, so he's still employed. I guess that's good: he has excellent benefits and can continue to work at home at a schedule that accommodates our household. Too bad he has work pressures. His company's execs are creaming themselves talking of outsourcing and reduction in force. Except outsourcing of executives. Interesting how that works.

"When are you having another child?"

March 9th, 2007 at 05:02 pm

Mindboggling.

Answer: "One's all I need to be a parent. One's all I can comfortably afford."

"Why? Do you and your husband work at McDonald's?"

"Daycare is $900 a month."

I don't really feel like saying we can't afford to live here on my husband's income, nor do I feel like explaining that he doesn't feel any impetus to earn more money, or that I earn in any given month 80-120% of what he earns: being a single wage-earner family would be a big drop. I usually shoot back: "are you going to pay for it?"

Usually the people who ask me why I don't have more children are the people who gripe about families breeding more than they need to/can afford. Or are from countries with subsidized daycare. Or are in their sixties.

Free online vintage ephemera films on money

March 9th, 2007 at 03:29 pm

Before interest-only and option ARMs, before thirty-year mortgages, before subprime credit card companies like Providian and Aspire, even before Social Security, Americans had different ideas about saving, thrift, debt and credit.

Myvesta.org presents for our viewing pleasure ephemeral films.

Also, from Get Rich Slowly see a link to CNN Money's Prioritizer tool. My five money priorities:
1. Save 10% of income for retirement, as Social Security's supposed to be wiped out at 2042.
2. Save for new windows for house.
3. Save $3600 for summer vacation.
4. Save for new roof for house.
5. Save 30% for replacement car downpayment.

I recorded two spreadsheets, one for what I could expect if social security were still around for me (HAHAHAHAHAHA) and one if it weren't. I'm slightly behind in the second scenario, expecting to live on 52% of our current income (no daycare, no mortgage, that combination is 48% of our expenses).

Local blog found: Debt in Seattle

March 9th, 2007 at 12:15 pm

I found a local debt blog and am tempted to invite the woman to our debt support group meeting tomorrow. So refreshing to find Seattleites who save and live on their earned income.

I was feeling all punk and angry about my $169 natural gas bill in January -- I know, get the film for the windows, feel for drafts, do an energy audit, I do read the blog comments -- but that's a trifle compared to a $480 gas bill like the author of Debt in Seattle has. She has three little ones. I have one little one. I'm trying to teach him to suck it up and be Canadian about colder temperatures. "When I was your age I had a SNOWSUIT! You've never had one! It got so cold out some days we had to stay indoors." Ah yes, memories of ice fishing, snowshoeing, and skating on frozen-over lakes: REAL WINTER.

I saw on Heating Degree Days the months and their temperatures' differences from a set temperature. There's some ratio calculated where the fewer days with temperatures below 65 degrees, the warmer it is. Degree Days also indicate possible explanations for not seeing predicted savings from weatherization work. With an energy rate increase and cold weather and power outages from a bad winter, what would make me expect savings from keeping the thermostat at 58F at night and 64F during the day?

I tend to forget that my gas bill comes to $15 in the summer months.

Windows Project Guessing

March 8th, 2007 at 01:55 pm

Eight windows, two of them very large (living room). Guessing $375 - $500 for each window, plus tax, plus 15% for contingencies: $5000.00. Somehow I sense it'll be much more. The two windows in our bedroom cost $2000.

I can risk $6000 from the HELOC.
Told Lord and Master I'd feel better with $5000 in savings (not locked up in CDs), and having the tax bill paid prior. I want at least one-third of the cost available in cash before going forward with the work.

low U-factor, under 0.35
high solar heat gain coefficient
argon gas fill

west windows: three
east window: one
-- SHGC lower than 0.55

south windows: two
-- SHGC high
-- U-factor under 0.35

I don't know how to get technical information from the manufacturers' websites: I'm looking at Marvin, Lindal and Andersen.

Sent off last $900 for 2006 Roth IRA

March 7th, 2007 at 03:43 pm

Whew. It won't reach my brokerage until next week, but still, there's something celebratory about squeezing in that last payment.

An oops though, I've contributed $3250 already. Perhaps the brokerage'll move $150 to the 2007 contribution.

Ten months at $400/month for Roth IRA 2007 contribution.

I bought a $500 CD with a $500/month "add-to" feature. In retrospect I think this might be a bit much. Then again, it depends on what the end expenditure will be: windows, a car, vacation...

Scooter Calculator: Oil and Money Savings

March 5th, 2007 at 09:31 pm

Betweem Two Rivers Scooter Calculatorl allows me to get a better idea of what impact my scooter use has on the environment and the economy.

Here's some of the result:

you burn 107.14 gallons of fuel in your Yamaha Majesty each year, and that amount of fuel costs you $277.50. In your other vehicles you burn 88.89 gallons of fuel, which cost you $230.22.

If you did not have your bike, you would be forced to put 10,000.00 miles on your other vehicle each year. This would cost you $959.26 in fuel charges each year. Having your bike saves you $298.06 in fuel costs each year.

If you did not use your bike, you would burn 370.37 gallons of fuel, but with your bike you only burn 255.29 gallons of gas each year. Therefore, using your bike conserves 115.08 gallons of gas each year. Translated into barrels of oil, that represents 5.48 barrels of oil that did not need to be refined for the gas you used.

If 1,847,820 people in this country rode a scooter like you, an entire day's worth of oil imports into this country would not be required, resulting in more than $500 million dollars that the country would not need to devote towards foreign oil purchases.


The goal for the planet is to reduce our energy use by 80% over four decades. This is a decent start. Of course, if I rode a smaller scooter or a bicycle, the savings would be greater.

I also had a no-spend day.

monthly meandering

March 1st, 2007 at 11:12 am

Today I start writing down everything I spend money on.

It feels good to have a month's planned expenditures in a chequing account.

Yesterday I told the lads that we are scrimping $500/month to be set aside for the purchase of a recent vintage automobile. Our car is now exactly at 130,000 mi. We've owned it for nine years. Contrary to my born-again "green" attitude, I am considering, among the Toyota Prius, a Honda Accord, Toyota Camry, Volkswagen Passat 3.6, or a BMW 325i, as we have several low-fuel or no-fuel commuting options: carpool, flexcar, motorscooter, bus, bicycle. I want an automobile only because we do get foul weather on occasion--it snowed here today--and I have a small child who justly does not feel safe riding behind us on our scooters, and there are times I tote more than just drycleaning/librarybooks/3bagsgroceries. I'm not going to keel over and die in a messy pool of guilt because my car gets only 24 mpg when our other self-commandeered options get 80 mpg and 55 mpg and more use out of them -- we don't drive our kid to many places other than friends' birthday parties, appointments outside the city, or roadtrips.

My husband was asked why we don't have two cars. Since 2001 we've been bouncing around from having one to two cars in our driveway: I don't really buy cars, I just 'rent them' or 'maintain them' while their owners are overseas. They're expensive to insure, feed, park and maintain.Driving is actually more pleasant now, because I don't have that defensive "everybody hates me and my fuel efficient freedom, I must protect myself from jealous killers who pretend to be oblivious with their Blackberries and cellphones" mantra behind the wheel that I do on my scooter.

Today also in earnest I start planning for what could be the first and last major roadtrip we take as a family this summer: a cruise down as much of Highway 101 as we can. I'm budgeting $3400 for twelve days. It'll be like Steinbeck's 'Travels with Charley.'

I will buy the Consumer Reports April Auto issue, or look at it in the library.

I am $900 away from maximizing my Roth IRA contribution for 2006.

I ordered seed catalogues from Landreth, Seeds of Change, Territorial Seeds, Abundant Life, and Heirloom Seeds. I saw an article on MotherEarthLiving.com about the ten best beginner crops and really just want to stick to herbs and a handful of vegetables: green leafy sturdy varieties; tomatoes if I can.

My wackiness for this week is 'how to apportion out the overage to crawl toward my individual savings goals.' Better than last week's quarterly neurosis of 'I am going to live my life in poverty'. My husband said I should be happy that I fared better than my parents but gee, isn't faring better than dysfunctional high school dropouts who spent most of their lives in the poverty line a low expectation?

I saw that the energy credit for windows tops out at $200. Not quite the heftiness of the solar energy credit. I know I've posted before about the question of energy savings using solar energy. Now, I am concentrating on windows. We'd been wanting to finish up our windows replacement from two years ago.

I must remember that if I sink because of deflating home equity and mutual fund NAVs, so too do my friends and associates.