Boston Gal's Open Wallet

Overextended and about to lose your home? Get your friends to bail you out!

2009-11-21T14:13:00.002-05:00

The Marketplace.org story: A personal bailout party, L.A. style reports on the recent bail-out party thrown by Christine Schoenwald - charging friends to attend to raise enough money to hopefully save her home from foreclosure.

Hirsch: What about your cash cushion that you had?

Christine Schoenwald: (Laughs) I don't really have a cash cushion.

Hirsch: Why no cash cushion?

Schoenwald: I don't make very much money. And I didn't save any and the money that I had inherited many years ago is gone.

Hirsch: I want to ask you a couple of questions that might be a little difficult to answer. So first thing I understand is that you may have taken some equity out of your house along the way.

Schoenwald: Yes, we refinanced a number of times.

Hirsch: How many times?

Schoenwald: I've lost count many times.

Hirsch: And what do you think now when you look back at that activity?

Schoenwald: I know definitely we shouldn't have done it the last time.

Hirsch: Just the last time.

Schoenwald: Just the last time, because that really had made it sky rocket up.

Hirsch: Tell me about that process, was it easy to get those refinancings?

Schoenwald: Oh yeah, because I had a lot of equity in my house. This was before, you know, the financial crisis. So they're always happy to refinance me, even though I didn't make that much money, I didn't have very much in savings, but they were always happy to refinance.

Hirsch: A lot of people would call that "using your house as an ATM."

Schoenwald: Totally. Guilty as charged.

Wow, she has some really generous friends. I would hope that she planned this party only after exploring all other means of raising money (selling off some of those items she purchased with her house ATM money? Looking for additional work to raise some cash, etc) because passing the hat among your friends to bail you out of the financial hole you recklessly dug for yourself... I would find that very hard to do.

How to Escape the Rat Race

2009-11-20T11:52:00.002-05:00

The Wall Street Journal article: How to Escape the Rat Race provides a few tips and suggestions to prepare for a career change (assumes new career will pay less than old or at least take time to ramp up to old salary is starting own business), early retirement, or semi-retirement.

The experts are quick to point out that health insurance is a huge stumbling block for most considering a rat race escape. But assuming you get beyond that obstacle:

"What's the cash in your pocket that you need to check out of the rat race?" Mr. Thompson asks. "I decided I had to have two years' worth of (living) costs...in very liquid, easily accessible assets." He figured he had to cover a lot of transition costs. That included moving expenses, legacy costs (like the remainder of his lease in his old home), and enough money to support his expenses while he changed careers and ramped up his new business. Saving up to two years' worth of costs may sound daunting. But here's the good news: If you are making this kind of move, you are probably moving from a high-cost part of the country, like San Francisco or New York, to one of the cheaper ones. And your money will go a lot further there.

[...]

How far will your savings get you over the long term? Someone investing their savings conservatively should certainly be able to earn about 3% a year over inflation. If you want to withdraw $10,000 a year and make it last for, say, thirty years, you will probably need to have about $200,000, or twenty times as much, saved up now.

[...]

You might not want to go as far as Mr. Zelinski–"I don't own a cellphone, I drive a '95 Camry, and for two years I lived without a sofa," he says–but the principles he espouses aren't crazy. "You're financially independent if you have $15,000 coming in and $14,900 going out," he says.

How much do you need to be free? Maybe you should ask instead: How much do you really want to be free?

Ugh! The amount of money needed just to generate $10,000 in income a year from savings/investments is depressing. If I ever manage to retire early it will have to be from a combination of income from the rentals, interest from savings, profits from stock investments, and being mortgage-free, debt-free, and living as low-cost/no-cost as I can.

What about you?

Amazon.com Friday Sale

2009-11-20T09:31:00.002-05:00

Another Friday, another sale! My pick this week? The lightwedge book light - a superior reading-in-the-dark solution to the headlamp (as I found out the hard way). I just recently learned the lightwedge company was founded and run by a man in Newton, MA - always nice to give a shout out to a local business!

Find your own bargain at the Friday Sale. - Enjoy!

Making Sense New England

2009-11-19T20:15:00.006-05:00

I was flipping channels tonight and caught the show Making Sense New England on PBS. The half hour show had a segment featuring Amy Dacyczyn, the famous founder of the Tightwad Gazette and lifelong frugal zealot. The interview showed Amy's house in Leeds, Maine and took a tour of her sewing room.

It was kind of amazing to realize that she started the newsletter in 1991 and by 1996 had retired from interviews and finished with the books. Those books are still selling and presumably she is still enjoying an income stream from those five years of work.

If you are curious to see Amy's house and listen to her take on the current interest in all things frugal, check out the interview below:

Upward trajectory reversed

2009-11-19T09:11:00.004-05:00

USAToday's article: More members of middle class file for bankruptcy features 40-year-old single Mom Staci Schubert who was earning $275,000, when 6 years ago she decided to start her own business. The article does not say, but I have to assume that her business was not providing much income, since the article implies it ate most of her savings. The great recession has sunk the business and she has run up $65,000 in credit card debt.

She tried to find a full-time job without much luck, because the job market was saturated. Temporary freelance design work couldn't cover her bills.

So in January 2008, she filed for Chapter 7 bankruptcy, becoming one of nearly 1.1 million consumer filers that year.

[...]

"The bankruptcy filings are a warning about the risks now facing middle-class Americans," says Warren, chair of the Congressional Oversight Panel on the Troubled Asset Relief Program (TARP). No longer can they count on a college education, a good job and homeownership to protect them from financial collapse.

"It's horrifying for people who are not used to anything but an upward trajectory," says Bob Anderson, a bankruptcy lawyer in Wilmington, N.C. "They are used to calling the shots."

Schubert agrees.

"I'm a highly educated, middle-class woman," says Schubert, who is the single parent of a 2-year-old son, Lincoln. "Until now, I have never in my life been unemployed."

The thing about those "upward trajectory" salaries - is the higher they rise, the farther they have to fall. I am sure she had her reasons for taking the risk of starting her own business and the timing of her sons birth with the start of the great recession was unfortunate - but she was making $275,000 as a single and carefree young 30-something and now it is all gone?!? This is why I am not a risk taker or gambler. Just thinking about what I could have done with that kind of income is just making me slightly depressed.

I was dreading this day

2009-11-18T16:55:00.000-05:00

Ever since eBooks started being sold I worried this day would come. But with readers costing over $200 I thought I was safe. But now Amazon has launched Kindle for PC and I am in trouble. You just download this bit of software onto your laptop (or computer) and tah-dah! Instant eBook reader.

On the one hand this is great - no need to spend hundreds on a Kindle Wireless Reading Device. But now just about any book I could want to read is available to me at the click of a mouse and instantly available via download (and instantly charged to my credit card). The barrier of first needing to spend money on yet another device has been removed and now the universe of eBooks is beckoning!

Hopefully I can resist an eBook buying binge. At least there appears to be a large number of Free eBooks posted. I am playing with the Kindle for PC using those on my laptop now.

Update: Passing this tip along - a co-worker pointed out another source for Free eBooks for me. The Barnes & Noble reader is also available as a free download.

Energy use of TVs need to slim down to match skinny flat panel profile

2009-11-18T16:32:00.004-05:00

The LATimes article: California approves new standards on energy-hungry TVs reports that television manufacturers who want to sell sets in California will need to rein in the power consumption of those sets by Jan. 1, 2011.

California moved today to crack down on the sale of energy-gobbling big-screen television sets that now account for about 10% of a typical household's monthly power bill.

After nearly two years of study, the California Energy Commission voted 5-0 to approve the nation's first efficiency regulations for TVs of up to 58 inches sold in the state.

The new standards for TVs, which take effect Jan. 1, 2011, are similar to those imposed on refrigerators, air conditioners and dozens of other household appliances since the 1970s.

[...]

"The average Californian should not see a cost premium," says the LCD TV Assn. "They will, however, benefit from dozens to hundreds of dollars in energy cost savings over their TV's lifetime, thus making the proposed standard extremely cost-effective."

Irvine-based Vizio Inc., a market leader, told the energy commission that it would have no problem complying with the new standards even before they officially take effect.

The commission estimates that switching to more efficient TVs would save an average of $30 per set per year and $8.1 billion in electricity bills statewide over the first decade.

Moving to more efficient televisions would eliminate the need to build at least one large, gas-fired electric power plant, the energy commission says. "Increased efficiency is the most cost-effective way of meeting our renewable energy goals," said commission Chairwoman Karen Douglas.

Choosing to sell yourself to save time and energy and avoid student loans

2009-11-18T11:30:00.003-05:00

The Sunday Times article: I’m Belle de Jour has the anonymous blogger and former prostitute - whose book Belle de Jour: Diary of an Unlikely Call Girl went on to spawn the tv show Secret Diary of a Call Girl - revealing herself as Dr Brooke Magnanti who specializes in developmental neurotoxicology and cancer epidemiology and is working at the Bristol Initiative for Research of Child Health and is part of an all-woman team researching the effects of exposure to the pesticide chlorpyrifos on fetuses and infants.

So how does such a well educated and professionally accomplished women find herself working in the oldest profession? Here is her explanation in the article:

After Sheffield, she moved to Scotland and worked in a hostel. “I was finishing my writing — I was getting ready to submit my thesis. I saved up a bit of money. I thought, I’ll just move to London, because that’s where the jobs are, and I’ll see what happens. So I did. I submitted the thesis but I was still preparing for the viva — there was quite a lot of writing and studying still to do.

“I couldn’t find a professional job in my chosen field because I didn’t have my PhD yet. I didn’t have a lot of spare time on my hands because I was still making corrections and preparing for the viva; and I got through my savings a lot faster than I thought I would. The difference between living in the Highlands and living in London is massive. I hadn’t really thought that one through.

“I have a pathological aversion to being in debt. My mother’s family are Jewish; there’s this hoarding thing, saving, being prepared — if you’re in debt somebody could come and knock at your door and take it all away tomorrow. It got to the point where I didn’t have quite enough money for my rent. I asked my best friend if I could borrow some money and he posted me a cheque.

“I was looking at this cheque. It wasn’t even the total of my rent; it was a quarter of it or something, some stupidly low amount like £120. I thought, ‘But once I deposit this cheque, I’ll still need money for next month.’ And I couldn’t do it. I couldn’t borrow this money knowing that I couldn’t pay it back and that I’d need more pretty much straightaway. And that was when I started to think: what can I do that I can start doing straightaway, that doesn’t require a great deal of training or investment to get started, that’s cash in hand and that leaves me spare time to do my work in?”

I don’t know that prostitution would necessarily be one’s first choice, I say. Starbucks? Waitressing? Bar work? Bunking down on a friend’s floor? “Yeah, you could work behind a bar. But how many hours would you have to do just to pay your rent? I couldn’t even get an overdraft at that point, though of course once I started depositing so much cash they offered me a mortgage, about three months later! And I wasn’t prepared to borrow from friends or family. To be honest, the writing-up of a thesis takes up so much of your time and so much of your energy.”

So: hookerdom. “Yes. I didn’t object to the concept.”

Wow, that is one of the most logical yet ass-backward justifications I have ever heard for convincing yourself that something so wrong is really just being fiscally sensible...

Then I happened to catch the Oprah show yesterday - Why Millions of Women Are Using Porn and Erotica: Lisa Ling Reports in which retired porn star and new mother Jenna Jameson tells Oprah that her career in porn has bought her the big house on the water with the boat tied up on the backyard dock, original artwork on the walls, oodles of money, and the ability to retire early and be a full-time Mom to her 7-month-old twin sons. Of course she then tears up when she tells Oprah that she fears the other parents in her community will never let their children come over to her house for a play date and she fears the kind of taunting and shunning her sons may experience over her - but otherwise, the money is great.

To act like the rich, be frugal

2009-11-17T17:46:00.002-05:00

Bankrate.com interviews Thomas J. Stanley, Ph.D. in the article To act like the rich, be frugal. If the name seems familiar, that is because Thomas Stanley is the author of The Millionaire Next Door.

In the Bankrate article he is promoting his new book Stop Acting Rich: ...And Start Living Like A Real Millionaire. In the article, Stanley makes these observations:

Beyond income, one's vocation has much to do with accumulating wealth. Educators, engineers, business owners and retail store managers have a tendency to live below their means and to be quite efficient in transforming their income into wealth.

It is the home/neighborhood environment that most explains one's ability to accumulate wealth. It may be useful for people to understand that there are 1,138,070 millionaire households living in homes valued under $300,000. This is far more than the 403,211 who live in homes valued at $1 million or more.

[...]

The typical household should be able to put away 5 percent of their annual income while they are in their 30s, 10 percent when they are in their 40s, and 20 percent when they are in their 50s.

This is also related to satisfaction with life overall. There is a highly significant correlation between satisfaction in life and living in a home and neighborhood which are easily affordable.

What is a good rule if you are determined to become wealthy?

The market value of the home you purchase should be less than three times your household's total annual realized income. Also, if you are not yet wealthy, but want to be someday, never purchase a home that requires a mortgage that is more than twice your household's annual realized income.

He is preaching to the choir as far as I am concerned about the importance of a modest home/house payment to your overall wealth accumulation prospects. But if I wanted to own a home in the Boston area, I could not have done so if I strictly followed his formula. Instead, I purchased homes (first a condo then a small single family with in-law) that were affordable by Boston standards, but only met the formula after factoring in income from first renting a second bedroom and later renting the in-law unit.

His saving formula is pretty interesting. I am proud to say that I am behaving like a 50-something when it comes to my saving rate :)

Taking lemons and making lemonade

2009-11-17T08:56:00.003-05:00

The Christian Science Monitor article: Lost your job? Documentary details layoffs’ sweet side reports how Erik Proulx of Melrose, MA has been spending his time while unemployed:

Even though everyone at his Boston advertising agency knew layoffs were coming, Erik Proulx was still shocked when he lost his job as senior copywriter last October.

With no steady salary and lots of free time on his hands, the 30-something husband and father of two fired up his computer, created a website, and began blogging about his experiences. “I’ve heard so many people express some kind of despair after losing their jobs. I was one of them,” Mr. Proulx says. “It was important for me to discover in myself that this could be the best opportunity of my life – with the right attitude.”

Soon his website (www.pleasefeedtheanimals.com) was attracting hundreds of laid-off ad professionals who contributed their own experiences of creative projects they’d undertaken. Proulx was so intrigued by their stories that he ended up creating a 40-minute documentary about life on the other side of layoffs. In a strange twist of life imitating art imitating life, Proulx found fulfillment in unemployment by filming the stories of people who found fulfillment in unemployment.

“I’ve been exercising this belief that I have that when you do what you love, money just seems to fall in line,” Proulx says. “That’s fairly cliché, but it’s the truth.” In its final edits, the film – called “Lemonade” – has been sent to judges for the Sundance Film Festival.

“Lemonade” revolves around the lives of Proulx and 15 others who were laid off from the ad industry. Instead of focusing on how unemployment crimped their lives, the film looks at how their unexpected downtime allowed them to follow lifelong passions.

The film will be released at the end of November (trailer for the film below).

I tend to be one of those who disagrees with the philosophy of "follow your passion and the money will flow". I am from the school of "work is work" and do whatever it takes to take care of the bills - follow your passions in your free time. If you buckle down and play your cards right - eventually the money will be taken care of, you can quit or at least throttle way back on the work, and then devote yourself to your passions. But those are my personal prejudices.

Hopefully for Erik and his family's sake (his wife posted this on his blog recently - The Yin And Yang Of It - giving a glimpse into the financial strain the family is operating under) the film (and likely book deal) will be a financial success. Will it also launch a new and stable career? Hopefully that will happen as well.

Time to plug the little holes

2009-11-15T19:54:00.004-05:00

With winter weather fast approaching, I am once again looking around my little home to see where I can make improvements to save a bit of money. A simple and relatively cheap project is installing outlet and switch sealers or gaskets. The first step is for me to count up all of the electric outlets and wall switches that are on exterior walls inside my home.

While I am making notes of the outlets, I am also counting how many outlets are without plugs. As part of this project, I also need to order those baby proofing plastic plugs to close off those openings.

Once I have my count, I place my order and wait for the box to arrive. I anticipate the hardest part of the whole project will be moving some furniture to get access to some outlets. But spending a bit of time now completing this project seems well worth the effort since once complete, it should not have to be redone in future seasons.

Gasket Covers, Electrical Outlet & Light Switch Plate Draft Stopper Foam Gaskets

M-D Building Products 3434 Switch Plate Sealer, White

M-D Building Products 87916 6 Outlet Plate Sealers, White

Mommy's Helper Outlet Plugs 12 Pack

Money Makeover: Phyllis Werlin

2009-11-15T07:42:00.003-05:00

The Boston Globe Money Makeover: A plan for getting by, working less profiles single, 50-year-old Malden, MA resident Phyllis Werlin who is currently unemployed after her second layoff in 12 months. With another job hunt in front of her, Phyllis wondered - can she afford to look for part-time work and use her extra time to pursue other interests? If she did semi-retire now, would she outlive her money?

Levit, of Paragon Financial Advisors in Newton, crunched the numbers, looking at Werlin’s expenses, the expected return on her investments, and the size of her Social Security payments once she reached full retirement age. The one thing she didn’t factor in was Werlin’s life expectancy. Rather than risk Werlin outliving her money, Levit said, “I just plan for you never to die.’’

The bad news, Levit said, was that her portfolio - built from savings and an inheritance from her father - just wasn’t big enough for her to retire now. If she started taking money out of the portfolio today and wanted it to last, she could take only $34,000 a year, adjusted for inflation - not enough to support a lifestyle that currently costs $41,000. To comfortably make ends meet, however, the former tech-support staffer only had to earn between $7,000 and $12,000 a year for the next 16 years. After that, Social Security would kick in, providing Werlin with the extra funds needed.

“That’s lower than I thought,’’ said a pleased Werlin, noting that Levit’s numbers give her real flexibility in making her next professional move. “Can I find a job that pays $12,000 a year? Yeah, I think I can.’’

Levit’s projections, of course, were based on assumptions, including an inflation-adjusted 6 percent rate of return on Werlin’s portfolio, 3 percent inflation, Social Security payments of at least $12,000 a year, and a continuation of Werlin’s frugal lifestyle. Just how risky were those assumptions?

Once again, a money makeover that leaves out all of the important numbers! It would have been really nice to know just how much Phyllis' nest egg is (her savings plus the inheritance).

The social security number had me intrigued. Spending the next 16 years earning much less will not impact her final qualifying payout? Or can someone who earns only $12,000 per year for 16 years prior to benefits payout still qualify for a benefit that will basically equal the yearly earnings for the most recent decade plus of history? The article does say that she currently qualifies for $18,500 a year - it would be nice to know what her recent salary has been.

Finally, I would have liked a clearer picture of her current budget. It says she is living on $41,000 per year. How much of that is going toward housing, utilities, food, transportation, entertainment, taxes, insurance, etc? Does she own her home or is she a renter? Sometimes I wish they would just obscure the name and give us all of the details!

What did you think of this Money Makeover?

Could you survive on social security?

2009-11-14T19:38:00.003-05:00

The Daily Mail article: Could you survive on the State pension? reports on a very interesting experiment in England where young volunteers agreed to take a week off work and live on a week's pension payment:

As part of the experiment, which was also undertaken by former England rugby star Kyran Bracken and broadcast journalist Rosie Millard, the volunteers had to agree not to work for the week while they lived on the basic pension and to keep a diary of their progress.

Deductions were made from their £95.25 weekly income to take into account the cost of gas and electricity, insurance, mobile phones and cable TV and car usage. Costs were averaged over the year to give a weekly sum.

This left Carly with £58.34 to live on while fellow volunteer Will Rimmer, 26, had £65.06.

Participants had to disregard any food and toiletries in the house or petrol in the car and start from scratch.

Anything they did during the week had to be paid for out of their pension income and could not be supplemented by their savings or salaries. Neither Carly nor Will has started long-term savings plans, so would the experiment shock them into taking action?

The good news is each volunteer who had not been putting anything aside for retirement before participating in the experiment is now changing that - all seem to now understand how important it is to save for retirement.

I wonder if something like this could be done here in the US? Perhaps as a retirement education workshop? Have participants use their Social Security Statement info to get an idea of how much they likely will qualify for - then try living on that for a week. It is one thing to see the monthly dollar amount in the booklet that appears every two years and another thing to actually try to function on that amount.

What do you think? Do you know anyone (perhaps yourself) who could benefit from such an exercise?

Life on Severance: Comfort, Then Crisis

2009-11-13T11:16:00.004-05:00

The Wall Street Journal article from earlier this week - Life on Severance: Comfort, Then Crisis makes you wonder how people can use severance to delude themselves that their financial lives have not been cratered by the great recession...

After working for more than a decade in New York ad shops, Chuck Hipsher moved to Detroit in 2005. He took a position at the Campbell-Ewald agency, where he helped launch the Chevrolet Silverado campaign. Raised riding in the back of his grandfather's Chevy pickup in Iowa, Mr. Hipsher, 50, says he was "elated" at the opportunity.

He met his wife at the ad agency, and the two had a $40,000 wedding. Kelly Hipsher, 32, was laid off in October 2007 and found out she was pregnant in February 2008. A week later, Mr. Hipsher's pink slip followed. Two months after that, the out-of-work couple moved to Greenville, S.C., to be closer to family and get a fresh start. Together, they had received about $60,000 in severance. "Now we have $600 to our name," says Mr. Hipsher.

Although their rent was cheaper, Mr. Hipsher says the family continued to spend like before. They moved with three cars -- two BMWs and a Chevy Silverado. They continued to buy cases of $36-a-bottle wine. They spent $250 a month on a cleaning lady, and Mr. Hipsher dropped $50 a week on flowers for his wife. The couple still dined out regularly.

"We were stupid," he says. "You become accustomed to a certain lifestyle. When your world changes and things dictate that you change, you're pretty stubborn to give things up."

He sold the BMWs and voluntarily turned in his beloved Silverado to avoid the repo man. "It was heartbreaking," he says. He replaced the fancy wheels with a Chrysler minivan.

Before the layoffs, the Hipshers had no debt. Today, they owe about $70,000 -- including money borrowed from family members and $31,000 in credit-card debt. To hold off the collection companies that call daily, Mr. Hipsher says he is doing his best but is also considering filing for personal bankruptcy.

After a stint selling new and used BMWs on a lot in Greenville, Mr. Hipsher recently began consulting for free for a small marketing firm, "to stay busy."

In September, a Web solutions company hired him as a marketing director. Between salary and commission, he thought he could match half his old income. But so far, he says he's only received about $1,220. Tight for cash recently, he pawned his wife's $12,000 wedding ring for a $2,000 loan. He has until Dec. 28 to pay back the principal, plus $500 in interest -- or else he forfeits the ring.

Looking back, he kicks himself for failing to enforce financial discipline right after losing his job in Detroit. "That precious nest egg is gone," he says.

Follow-up to story on WSJ Blog - Revisiting Lives After Long-Term Layoffs

Amazon.com Friday Sale

2009-11-13T08:13:00.003-05:00

Another Friday, another sale! You can tell the holiday shopping season has begun just by the larger selection of goods and categories in this weeks sale. My pick this week? The flexible and compact tripod.

Find your own bargain at the Friday Sale. - Enjoy!

CoinStar free $10 promotion is happening again this year

2009-11-12T18:26:00.002-05:00

CoinStar has one again rolled out its holiday promotion. You bring $40.00 worth of coins to a machine that issues gift eCertificates, convert that change into an eCertificate at the numerous retailers in the program (I tend to go for the Amazon.com bucks) - since you are getting a gift card instead of cash you avoid paying any fees. When your $40.00 eCertificate prints out a $10 form will be at the bottom. Fill out the form and mail it in to get your free $10 eCertificate!

This worked well for me last year. Since I am a frequent Amazon.com shopper, it is well worth it for me to convert 2 $20 bills into quarter rolls at my bank and then spend some time at the CoinStar machine at my local grocery store turning those rolls into an eCertificate to get the extra $10. I just wish the extra $10 arrived before Christmas instead of after...

As always with any promotion such as this, be sure to read all the fine print carefully and ensure you fill-out the claim form in full and accurately to ensure you qualify and really get the free bonus.

Update from Boston Gal's HQ

2009-11-10T10:54:00.004-05:00

Last night I came home to a stuffed mailbox which included both good and bad news in those #10 business envelopes.

Citibank sent me a letter to inform me my Mastercard interest rate is rising to 29.99%. According to this New York Times article - A Squeeze on Customers Ahead of New Rules - I am not the only one getting one of these notices. Luckily I don't carry a balance on my credit card and I am good about paying my monthly bill on time. This is the only credit card I carry and it is a rewards card. If they start charging me a yearly fee and/or drop the rewards part I will have to go shopping for a different card.

My monthly Comcast bill arrived and once again the balance jumped dramatically. My bill increased by $30.00 - signaling that it was time to do the old retention call dance. This time the best offer they had for me knocked the bill back by $20.00. I swear I would just drop the cable TV portion of my bill if I was not including that for my basement tenant as a "free" perk of the apartment. I seem to be watching less and less TV. Maybe that will change with winter just around the corner. Either way, I will have to seriously revisit the cable TV issue when next I am renting the basement apartment.

My car insurance company sent me my annual mileage statement form to fill out. Generally I qualify for the low mileage discount since I try to keep my driving to a minimum. With my new car I feel like I have a clean slate. The form always asks questions like "How many miles have you driven in the last 12 months" and current odometer readings. I admit to not tracking my yearly driving. Whenever I see this form I always wish they would just tell me what I put down as the odometer reading last year - that would answer the question of how many miles I have been driving for the last year! This year, I am finally going to get smart about this. I will fill out that form and then scan it and save it before mailing it back to the company. Lazy book keeping will never again stand in my way of qualifying for this discount!

I am still playing with my Knifty Knitter Long Loom Set and plarn (yarn made from plastic bags). As you can see in the picture above, I completed my first larger project - a welcome mat. Well, it was suppose to be a welcome mat, but I kind of muffed the last row and now one side is wonky. I think I know what I did wrong, so hopefully my next one will be good enough for me to put out on public display on my door step. This mat is not going to waste - it has found a home in my side porch/mud room and will be hanging out under my winter boots. It took over 100 brown plastic bags to make that mat. I am going to focus on making some smaller squares for now. I think I should be able to knit those together into a larger and more interesting door mat.

Net Worth November 2009

2009-11-07T09:28:00.002-05:00

The stock market did not help me this month. Seeing the accounts go down after a few months of upward movement was discouraging. My savings grew just through interest payments - but that was by design. For the first time I have focused on throwing "extra" cash toward my mortgage principal payment instead of stashing it into my savings accounts.

Giving myself the challenge to pay-off my mortgage as early as I possibly can was not easy. After so many years of focusing on building up my savings, seeing that line item languish is slightly disturbing.

To make myself feel better about my decision to stop adding to savings and instead pay down principal - I took a look at what my current extra payment is saving me in future interest payments. So far my early principal payment has shaved two months off my 30 year mortgage and saved me $2,967.48 in future interest payments.

It will be a struggle to keep throwing money at the principal over the next couple of months now that the holiday season is ramping up. Perhaps starting this right before Christmas was not the smartest move on my part - regardless the challenge has begun!

Amazon.com Friday Sale

2009-11-06T09:02:00.002-05:00

Another Friday, another sale! My pick this week? The Strollometer Wheel-based Stroller Speedometer/Odometer. Looks like a great baby shower gift!

Find your own bargain at the Friday Sale. - Enjoy!

Voluntary Simplicity

2009-11-03T08:42:00.003-05:00

I spent some time poking around Oprah.com last night looking for something interesting (to me) to read. I came across Women Around the World which aired October 21. The portion which showed the home tour in Denmark was certainly eye catching. Ah, the people of Denmark - such great aesthetic sense AND you may soon be a country filled with electric cars. Jealous am I!

But it was this O Magazine article Back to Basics: Living with "Voluntary Simplicity" from back in January of this year that truly captured my attention. The author of the piece, Allison Glock, weaves the tale of her friend, Kristen Martini, who divorced her husband along with the McMansion and all of its "stuff" to rent a little one bedroom cabin in the woods which she now shares with her 8 year-old twins - in with a report about the Simple Living Institute of Florida. But it is her friend's story I found interesting.

Kristen lives with her 8-year-old twins, Aidan and Ellie, in a stucco cottage in the woods. The house is miniature and remote, at the end of a long unpaved drive. It is 800 square feet, with low wood ceilings and stone floors. The family of three shares one bedroom and two beds. The single bath is the size of a telephone booth. The first time I visited, I was both impressed and appalled. "Maybe you shouldn't have put the house in the dryer?" I teased.

Before renting the cottage, they had lived in a 3,600-square-foot, five-bedroom house with two kitchens. There was a playroom. There was a laundry room. There was enough space not to see each other for hours at a stretch. "I didn't even use some of the rooms," Kristen says. In the cottage, privacy is nonexistent, yet she loves her home with unbridled fervor.

Her new lifestyle has a precedent. "I lived in the woods when I was 21, 22," she says. "I had my own garden. I was really into my nice, quiet, cheap life."

Then she got engaged to a businessman and told herself grown-ups didn't live in the woods, without a television or a set of china. So after she got married, she found herself in a huge home, full of things, which she took great care in placing here and there, while ignoring the signs that all was not well beneath the surface.

The babies were a distraction for a time. Then they weren't. Depression followed. And insomnia. Then medications, therapy. None of it worked. Kristen found herself unable to get out of bed. She lost 20 pounds. Her husband, earnest and traditional, was confused by her unhappiness. After all, they were supposed to be living the American dream.

"I knew it was time to get out when my life started to make me physically sick," she says now.

Kristen realized that to become the person she longed to be, she had to leave her marriage. So, after much soul-searching, she abandoned her old life in its entirety—her spouse, her furniture, excess clothes, collectible salt and pepper shakers—and returned, with her children, to the woods of her youth.

"The day I moved, I brought only my car, a few clothes, and food," she says. "I got to the cottage around 4 in the afternoon and went out looking for firewood. As I made a big pile by my door, I kept thinking, I'm getting my do-over!"

I feel like I have been striving these past few years to live a simpler life. For me simple living does not mean retreating into the woods. I like my urban setting just fine. My version of the simple life also does not involve being a renter. Nor does it involve a life without things like a healthy emergency fund or retirement accounts.

Reading about someone just deciding one day to chuck it all and live on little is entertaining. But how can that be sustainable for the rest of their life? So many questions popped into my head as I was reading the article. It is implied that Kristen Martini is currently supporting herself and her two children on a "small salary as an elder caretaker, [with] cash to spare" - so when she left her husband she did not take alimony or child support? Was she working before she left the marriage, if not how did she find her current job - is it stable? Does her current job provide her and her children with health care benefits? How about a retirement plan? What about college funds for the kids?

Voluntary Simplicity alone does not solve all of your financial obligations. It can certainly make attaining them easier. But only if you are still working on them. In other words, you can walk away from the McMansion, but not the need to keep funding the retirement accounts...

Using downtime to grow food for the food pantry

2009-11-02T07:38:00.003-05:00

The USAToday article: S.D. man uses unemployment to raise food for charities is starting my Monday on a hopeful note thanks to Brian Parsons who has been using his time since unemployed to grow food for his local food pantries.

Parsons, who was laid off from his job as an electrician last November, says he's raised about 22,000 pounds of food since last April and given nearly all of it to food banks and other charities.

"He sees this as something he can do for the Lord and for the poor, as well," says his friend Dave Tims, who has brought volunteers to the garden to help out.

Parsons began the garden about two years ago, and the loss of his job, while a concern, did give him more time to work at it, he said, as he loaded zucchini and squash into his pickup at the four-acre garden on the city's northern edge.

This day, the food would be delivered to the Sioux Falls Food Pantry downtown. Other donations have gone to The Banquet, which serves free meals to the city's needy.

"I know exactly what everybody out there who is unemployed is feeling," he says. "I get people who come out and they say, 'I know this family, and they're hurting.' Just like I was when I got laid off. So I just start taking wheelbarrows of food to them."

Parsons, 49, is a survivor of testicular cancer. He grew up in Woonsocket, S.D., an upbringing that he says taught him the value of charity.

"We were taught to be this way, to help people," he says. "When you grow up out here in the Midwest and you're farmers, you tend to help each other out."

Since losing his job, Parsons says he's been making ends meet through a variety of sources including his wife Samantha's income from her job at Sioux Falls packaging company and some financial help from friends and relatives. He is still looking for a job.

Nice to see a story about someone unemployed who is actively doing something very worthwhile.

Another reason to never marry

2009-10-30T22:22:00.002-04:00

The Wall Street Journal article: The New Art of Alimony tells the tale of several Massachusetts couples who learned the hard way that a failed marriage can cost you for the rest of your life...

Paul and Theresa Taylor were married for 17 years. He was an engineer for Boston's public-works department, while she worked in accounting at a publishing company. They had three children, a weekend cottage on the bay and a house in the suburbs, on a leafy street called Cranberry Lane. In 1982, when they got divorced, the split was amicable. She got the family home; he got the second home. Both agreed "to waive any right to past, present or future alimony."

But recently, more than two decades after the divorce, Ms. Taylor, 64, told a Massachusetts judge she had no job, retirement savings or health insurance. Earlier this year, the judge ordered Mr. Taylor, now 68 and remarried, to pay $400 per week to support his ex-wife.

"This is insane," Mr. Taylor says, adding that the payments cut his after-tax pension by more than one-third. "Someone can just come back 25 years later and say, 'My life went down the toilet, and you're doing good—so now I want some of your money'?"

[...]

In 2003, more than two decades after agreeing to end a 17-year marriage without alimony, Ms. Taylor was diagnosed with melanoma. She lost her publishing job when her employer of 38 years filed for bankruptcy protection. She'd recently surrendered her home to the bank and filed for personal bankruptcy to resolve $27,000 in medical and credit-card debts.

Mr. Taylor, meanwhile, had retired after 33 years working for the city of Boston, with an annual pension of $56,000.

In a September 2007 complaint filed in a state probate court, Ms. Taylor cited "changes in circumstances" and sued her former husband for support payments. She wrote that Mr. Taylor owned homes in Florida and Cape Cod and traveled to Europe.

In court, Mr. Taylor said he was sensitive to his former wife's plight, but that too much time had passed and that their divorce was final 25 years ago. His second wife, he said, had inherited the Cape Cod house from her father. Their trips were financed through home-swaps and reduced-fare tickets from his stepson, an airline employee.

In June 2008, a probate judge ordered Mr. Taylor to pay temporary alimony based on Ms. Taylor's "dire immediate need" and his "ability to pay." In its January final order, the court, citing Mr. Taylor's income from his pension, told Mr. Taylor to pay his ex-wife $400 per week for five years. The payment will eventually fall to about $250 a week for the rest of her life.

Virginia Connelly, Ms. Taylor's lawyer, says she can see how Mr. Taylor could find the situation unfair. But under Massachusetts law, she said, judges who want to keep a person off public services can turn to the ex-spouse.

In May, to seek relief from legal and other bills, Mr. Taylor declared personal bankruptcy. He is still responsible for supporting his ex-wife. "If she loses all her money, so what? She can just take me back to court," he says. "Somewhere along the line I should have peace of mind."

Update: Man, Woman, Baby And The Book Deal

2009-10-28T10:18:00.005-04:00

Starting back in March NPR aired a series of stories by Caitlin Shetterly about her family's financial failure, cross-country trek, move to her Mother's spare room, and ultimate move to an affordable rental. You can catch up on the journey in the posts below:

- A Man, Woman, Baby And An Empty Bank Account (March 2009)

- I can't even break my own dreams because they're being broken for me (May 2009)

- Update: A Man, A Woman, Baby, and a new apartment (August 2009)

- Broke and borrowing for their dreams (September 2009)

On September 25, 2009 Caitlin posted this on her blog:

And then my life, our lives, my son’s life, changed in a few hours yesterday. And when I say changed, I mean our fates took a totally new turn.

Yesterday, at 5 PM, my book based on this blog, this very thing I’ve been pestering you all with for over a year now, these very words you probably sometimes want to, or even do, delete because as my OB and friend Dr. Ghozland once pointed out “You’re the longest writer in the world!” was sold to be made into a book which will be released next winter. And, like that, with sixteen dollars in the bank account and no idea how we were going to pay next week’s bills, our lives totally changed.

There is a lot of work ahead. I have to deliver a whole book by early spring, Dan has to stay in school, we have a lot of putting back together of the disaster of our financial lives. But now we can do all that and we can do it carefully and well.

While I am happy that Caitlin and her family are moving toward a bit of financial stability, I am also kind of disappointed to see yet again, a book deal is saving the day.

Don't get me wrong, I have enjoyed following these writers and maybe it is not fair to pick on them - they do write for a living and book deals do fall within the realm of their job prospects. I guess I get annoyed because these writers capture our interest because they are telling stories about their financial hardships. "Hey, look at us, we did stupid things with our money just like you" they seem to be sayings and then flailing around and chronicling how hard it is for them, just like it is for us, to try to change, dig themselves out, or otherwise come to grips with the financial outfall of this great recession. Only they really aren't like the rest of us readers because more often than not what truly saves them is the book deal. Something the majority of us could not land in a million years.

Some examples of writers who found financial salvation after years of living beyond their means via the book deal:

Hodding Carter - also wrote a frugal column for Gourmet Magazine until that publication folded. Currently working on his book and blogging.

Edmund L. Andrews - current New York Times economic reporter who found himself in debt after a divorce, 2nd marriage, new spouse unemployment, serial refinances, and ultimately burdened with a $500,000 mortgage on a home not worth the amount owed. He wrote a book: Busted: Life Inside the Great Mortgage Meltdown. Last we heard from Andrews, he and his new family were still living in their home, but had stopped paying the mortgage. He was waiting to hear back from the bank if they would forgive some of his loan and/or lower his interest rate. I have no idea if the book ultimately saved him from foreclosure or not. He still has his day job at the Times. But the book deal certainly brought in some much needed cash to the family.

What do you think? Any other examples of financially strapped folks saved by the book deal?

Making money off the spare bedroom

2009-10-28T09:23:00.002-04:00

The New York Times article: Staying With Newfound Friends, for a Fee has reporter Matt Gross utilizing the website AirBnB.com to find an inexpensive place to stay in a NYC neighborhood for the night. You can read the article for his take on how the website booking, paying, and screening process worked out. But it was his review of his hosts that caught my eye:

As he gave me the tour, he told me about how he and Catalina had become AirBnB.com hosts. In June, he’d been laid off from his job designing Web interfaces, and though he’d since gone freelance and opened MarketPublique.com, an online vintage-clothing marketplace, they decided to make some money off the second bedroom. I was their fifth AirBnB.com guest since August. (The legalities of these short-term sublets are a gray area that AirBnB.com doesn’t concern itself with.)

Interesting way to try to earn a bit of extra money.

Working stinks, but running out of money is worse

2009-10-27T12:45:00.003-04:00

The Wall Street Journal article: When Returning to Work Is Harder Than It Seems interviews some recently hired workers who are having trouble adjusting after a long period of unemployment.

Mr. Wallace, 40, began spending much more time with his two boys while he tried to start his own business—and then when he was interviewing and negotiating for a full-time job. During the nine months he was unemployed, he spent many afternoons hanging out with his sons after school. He also dedicated upward of an hour each day to exercise. He lost 25 pounds and shaved almost 30 points off of his cholesterol level.

But then, in March Mr. Wallace started a job at Penneco Oil Co. in Delmont, Pa., as a chief operations officer. His bank account is fatter—but so is he, having gained back 15 pounds. "I'm finding less time now," says Mr. Wallace, who has traded running and weight-lifting for walking the dog.

He also spends less time with his two sons. Less frequent are the after-school driveway basketball games and impromptu walks before dinner. "I get home at 6:15 and they've been home from school for a couple of hours," says Mr. Wallace. By the time he gets home, it's time for a quick dinner and homework—then the boys are off to bed. And he says the boys have noticed that he is less care-free than he was during his time off.

It is frustrating when you realize how much of your time is spent working and missing out on home life. Of course, the folks in the article are fortunate enough to have found jobs. The Marketplace.org piece Workers over 40 struggle in job market tells of many who haven't found work.

Reminder that tonight the Frontline story: Close to Home is airing on PBS. If you miss it, they should replay it online for free.