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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!

Text is Grandfather Economic Report and Link is http://mwhodges.home.att.net/
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.
Text is Making Your Debt Known and Link is http://www.mdmproofing.com/iym/weblog/2006/05/making-your-debt-known.html
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.

Text is 10 Steps out of Credit Card Debt and Link is http://moneycentral.msn.com/content/Savinganddebt/Managedebt/P36233.asp
10 Steps out of Credit Card Debt

Text is Ooh, a clearly unreachable goal-- own the house outright by the time I'm 45! I think I'll go for it! and Link is http://mwhodges.home.att.net/to-do-list.htm
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

Text is Middle Class on the Precipice and Link is http://www.harvard-magazine.com/on-line/010682.html
Middle Class on the Precipice by Elizabeth Warren

Text is Bankrupt: Maxed Out in America and Link is http://americanradioworks.publicradio.org/features/bankruptcy
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

Text is Biweekly Mortgage Payments and Link is http://mortgage-x.com/library/biweekly.asp
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.