Archive for frugality

Stimulus check, ho

June 28, 2008 at 2:39 am · Filed under credit cards, frugality, Personal Finance ·Tagged

Yes, you can read that anyway you want to.  But the point is that I got my (wait for it) . . . letter telling how much my stimulus check will be and where on line I can go to find out where the hell it is.  That sure sort of stimulated  me.

Especially since I am sort of floating between the save it all in the Emergency Fund and the spend part of it to buy something I have been putting off getting for about a year.

Like most music-heads of my generation, making tapes was what you did.  But as technology evolved, and like, has gotten, well, different, I have moved away from making my own.  I used to listen to music all the time back when FM meant free from commercials music.  But these days of promos instead of honest reviews and downloads and Ipods and MP3s just feel fake to me.  Plastic in the old sense of the word.

When I saw the Crosely CD Recorder though, my mind went immediately to the treasured 300 albums I still have stored safely in my workroom.  I could splice some great stuff was my first thought.  But my second thought was to impose the 10 second rule while pondering what else I could do with the $300 out of pocket.  At that time my ING savings were earning 3.4% so adding $300 to the 5k already there would bring in about $15 a month compounded.  Not bad.  Plus,  well that was it for the pluses. 

So I went ahead and hesitated.   Seven months went by and every time I was in Target or Linens & Things I somehow found an excuse to check to see if it was still there and maybe on sale.  Target dropped its price twice, once by $10 and once by $25.  Still . . .

Then came the news of the Stimulus Checks.  Whoa!  Since the money was extra I could just treat it like found money, right?  Plus, ING was now down to 3% and falling.  So now I was looking at $9 a month compounded that I wouldn’t earn.  Okay then, this was my emergency/special occasion fund wasn’t it?  All systems were go but somehow I found reasons for not.  Damn, how did I turn so frugal?

Fate, meanwhile seemed to be working the situation too.  My check is being sent in the July cycle.  Gas prices show no sign of falling, the economy be heading deeper into a recession followed by a spectacular inflationary period and now is not the time to slip down the slope.

And then I saw it.  Posted in the window for all, and especially me, to see.  20% off on your first purchase when you sign up for our Linens & Things store credit card.  Uh oh!  that is $60.  My dream for just $240 of found money, I’ll pay the credit card off right in the store.  

I’ll only lose out on $240 worth of interest earning but I will gain that in pleasure just in compiling my first CD.  I think I am going for it.  Come July or high water, that is.

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Let’s Get Stuffed

June 14, 2008 at 5:11 am · Filed under blogging, Books, business, Culture, frugality, Personal Finance ·Tagged

JD over at getrichslowly.org  sparked a little controversy with the we-are-Number-One-crowd last week when he posted this chapter from the Story of Stuff.  The offence taken certainly indicates how screwed up this whole consumer thing has gotten.  For one thing, we are all tied into the process through our economics (social capitalism) and our economy (the free market) and our politics (based in a fear of communism) and our religion (the failure to recogize the atheist in all of us).  So any discussion of this kind leads almost inevitably to arguements and anger and dismissal of the original idea which was that we all have too much stuff.

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I caught a cold last week

June 1, 2008 at 2:05 pm · Filed under blogging, frugality, Health, Writing ·Tagged

Or rather I should say the cold caught me.  And I have to say that it is very seldom in my life when I can’t write – something, but this has been one of those times.  Last Wednesday about 4 AM is when it started.  I woke to go pee and felt it in the top of my mouth.  A dryness, a tightness, a difficulty to swallow.  Shit! I thought.  I should have gargled right then.  Warm water, salt stirred in, head tilted back, you know the sound, gggghhhh, and spit.  But I didn’t.  Went back to bed.  Thought, I’ll be fine.

But three hours later, no way Jose.  My head had joined forces with my tightening throat and now was stuffed with snot.  I got up to go to the kitchen to start my day.  Coffee, paper, computer.  What was I thinking, I couldn’t really tell.  That morning’s post, became an afternoon’s one, and was a fair indicator of my state of mind.  If you could read my mind that is.  About three paragraphs, ending with a self-satisfied smirk of a summary.  I couldn’t sit there without breathing any longer.

I skipped the next day.  Drugged up on NyQuil, then Dayquil, and chicken soup, I slept sitting up so I could at least breathe.  But write, no I could barely think.  Finally about 2 AM, I gave it another try.  I really enjoy the experience of making something last.  I have to admit that the things in my life count for a lot.  They act as talismans.  A shirt from ten years ago that I can pull out and wear.  My homemade dance workout shoes, two pair, which I have alternated onto the dance floor for about 10 years too.  But when I tried to write that post about frugality, it was all I could do to say two things.  Rereading only shows me that I couldn’t wait to get done.  And I was really trying.  I remember going back and forth between youtube and this blog trying to imbed a Todd Rungren video that wouldn’t take and finally giving up in sick frustration.

Then came Friday.  Yes, the Lakers were into the finals, and T and I were packing for the trip to LA but I was still one sick puppy.  Dayquil all day, I even tried alcohol, two margaritas with dinner.  Here’s how sharp my thinking was.  It’s a cold I have.  So stay warm.  Not me.  We go to the book reading after dinner and sit for two hours while the cool city breezes blew in the door and swirled around my bare legs (I was wearing shorts) and sandalled feet. 

Sick Saturday, that what I’ll have to call it.  I couldn’t drive.  Thank the gods for T.  I couldn’t think or write or even read, and you know I really have to be sick for that to happen.

So now it is a tentative Sunday.  I have only sneezed once and I have managed to write this too.  I’m going to leave you with this reference point, one I gathered from the blogger at http://www.skepticsandpolitics.blogspot.com/.  I hope to write more about it tomorrow when this cold will be going going gone.  

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These feet were made for walking

May 30, 2008 at 2:35 am · Filed under frugality, Personal Finance ·Tagged

Sometimes I just have to ask myself where did I get this frugal part of my nature.  It makes me laugh to think how odd it might seem to people that I really wear things out, literally.  It has to have an unfixable hole or an unremoveable stain before it goes in the bin.  And shoes, well, forget about it.  For one thing, I go barefoot a lot.  But my current pair of sandals are approximately 10 years old.  They’ve been resoled, insert supported, and resoled again. 

And that brings me to my current tennies, which are on their third life thanks to my local cobbler.  I have always wondered about the built in obsolescence factor in clothes.  You like a particular style, better buy two, because next year and for sure the year after that the style will have been newly improved and you’ll be left trying to make the oldie but goodie last. 

 So that brings me back to the built-in frugality.  I can remember countless times watching as my mom or grandmom patched a shirt or resewed a seam. “There’s nothing wrong with this shirt that a little love can’t repair.”  So that’s what I give those shoes when I take’em to the cobbler.

 “Can you patch the inside of the rim of the heel cup?” 

 “Sure.”

“Can you resole just the heels?”

“Sure.”

Since 2003, I have had the same pair of work shoes.  They were a good solid, comfortable fit when I bought them.  And now, they are even more so.

 

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Semi-retirement

May 27, 2008 at 3:07 pm · Filed under frugality, Health, Personal Finance, Semi-retirement ·Tagged

It isn’t that I haven’t written about this before but I have been thinking quite a bit about it since I pointed out to T that she was now living in semi-retirement.  We were sitting by the pool listening to the lapping of the water, squinting at the sunshine glints, and talking about our latest movie day.  She turned her head away from the pool and smiled at me. “I like the sound of that but what does it mean?” she said.

I could feel the little thoughts start running around in my brain.  I didn’t really want to have to think.  But that’s the problem with having a conversation, sometimes you have to converse.  “It means to me that you work when and if you want to and on the things that you decide are important and at your own pace.”  I felt so proud.  I knew John D. McDonald wouldn’t turn over in his grave though now that I thought about it I wondered how such a prolific writer ever got to live his own semi-retirement.  Oh well, he’s gone now and so is Charles Schultz the man who created my other fictional role model, Snoopy.  Which reminds me did anyone else ever see that movie “My Life as a Dog”?  Because there is the perfect example of what it means to be semi-retired.  Dogs are born that way.  Cats even more so.  Domesticated ones at least.

Of course, a semi-retired human does so at their own peril.  This is not a world that likes us to do things halfway.  Either retire, you know get out of the rat race, or get back to work and, as the old song goes, “git me some money now.”  Yes, it’s also a little more difficult to be semi-retired if you live with someone who is still working.  You can see it in their eyes.  They don’t like the fact that you’re reading the paper while they’re packing a lunch.  Even if you do the housework, the laundry, the cooking, and take care of all the bill filing that doesn’t absolve you from causing them the pain of having to go into the “damn office” day after day after day.

Which is why it is really important that you figure out a way for your partner to semi-retire too.

Five ways to semi-retire without quitting your day job:

  • Set up a budget analysis – You need to know what your finances are.  How much of what you make is left over?  This can be done simply by just making a list of your expenses in one column and a list of your income streams in another.  Add up each and subtract the first sum from the second.  Think of this as laying the groundwork.  So if it turns out to be a negative amount you have already taken the first step by seeing that you are working hard for no reason since you now know that you are just treading water in the labor pool.

I know this seems like work but trust me organizing things on paper is a great way to relax.

  • Make out a list of your spare time activities – How do you unwind?  Are you a gym rat?  Do you head to the nearest bar?  What happens on the weekends?  Do you spend time alone or with friends?  When was your last semi-vacation?  You know, the kind where you went somewhere but brought your laptop just in case you had a little spare time to catch up.  While you are making this list, use a calendar to remind yourself of when these things actually happened.

Time is sometimes hard to quantify.  It passes on by or stacks up.  When you take the time to look at what you do in this backward looking way take note of how many unplanned things you do to.  Unplanning is key in the semi-retirement world.

  • Take a look at your job – Look at a week on your job, day by day.  How does each day start?  What is the first, second, third, …, thing you do once you get there?  Who is your boss or rather what is your boss?  Is a person in charge of setting your task load or are you in charge of doing that?  Do any tasks carry over from day to day?  Who do you work with?  Where do you eat that sack lunch and how long do you take to do it?  What happens at day’s end?  Do you drop your tools and head home or do you pack up some of the work to take with you? 

A semi-retired mind is in control.  The best way to get control is to know what your job really is about.

  • Figure out your hourly pay – Go back up to your budget, take the amount you added up from column two and divide it by the actual number of hours you spend working at, thinking about, and doing your job.  I know, sometimes the amount you get might turn into a reverse motivation, but that’s life.

Again, a semi-retired mind doesn’t spend a lot of time thinking about the hourly stuff but you might have to do a little growing in order to reach a point where you can mentally afford to semi-retire.  Maybe you’ll even have to do some work on the self-advancement plane in order to get there.

  • Figure out your hourly pay for the spare time activities – Same deal, go back to your budget only this time look at column one.  Total up how much are you spending on leisure time into two columns, one for cash expenses and one for credit expenses.  Divide the hours you spend into the credit expenses to see how much it is really costing you hourly to do those things.

Yes, here’s the key to semi-retirement.  It is a cash only state of being.  No credit card liabilities allowed.  Just remember that the reward is in knowing you can stay semi-retired for life once you take control.

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Scooterville

May 25, 2008 at 3:51 pm · Filed under business, frugality, Health, Personal Finance, Semi-retirement ·Tagged

For several months T has been looking at bikes.  Harleys, Vespas, Yamahas, and now at our local Costco, a Schwinn.  Yes, they all have motors which works just fine for her since she really doesn’t like pedalling a bicycle very much.  Says the seat is too hard, or there are too many hills, or it’s too much like exercise to be fun.  Weird eh?  Anyway, as gas prices have continued to rise, we’re at $4.05 today in California, she has become more and more concerned.  It takes $50 to fill her little run around BMW and that lasts about a month.  But the truck we have to take to the field to pick up our produce every other day costs $100 a tank and has to be filled weekly.  So her awareness has risen.  She also likes to think of herself riding a motorcycle, roaring around the curves of the road that leads from our produce stand back up to our house.  But that’s just a dream because the lightest Harley is way to heavy for her to balance.  Hence the Vespa or the Yamaha.

Vespa has a new model, the 2008 Vespa S, that sells for around $4,200 and weighs in at 243 lbs and get about 69 miles to the gallon.  While Yamaha’s 2008 Vino comes in at $2700, weighs 229 lbs and claims to get 96 MPG.  Both fit her needs but the extra $1800 has her leaning towards the latter though she likes the history of the former.  Strange but true, if she can’t get the big bike then she’d like to get the one everyone knows.  But neither one of the above has a wind screen so since bugs in her teeth isn’t her style either, we have been forced to widen our search.

Here’s where price makes a difference.  Honda has its Silver Wing ABS for $8,600, and Suzuki has its Burgman 650 executive at $9,000.  Both are more solid and good for freeway traffic if you have to but since she doesn’t we are now taking a long look at Yamaha Majesty.  It’s priced at $6,000, gets 51 MPG and weighs in at 432 lbs. 

Once we make a pick though the fun really starts with the training.  First, it’s highly recommended that you practice first by doing some bike riding.  Get used to the balance required and the comparitively easy shifting.   I have to laugh as I tell her this but she doesn’t appreciate the irony.  Then take a safety course.  The Motorcycle Safety Foundation offers a 4 hour scooter school but we found out it’s not available in Cali.  Luckily, California has its own Basic Ridercourse offered through the California Motorcyclist Safety Program.  A 15 hour course leading to the M1 license that’s required here if you want to drive a bike that engine-sized over 49 cc. 

Still I have one bike I have been leaning towards that I think may be our best option.  It’s a motor bike.  It’s light in weight and is offered at least 8 different models all priced at below $2,000.  To be truthful, every time we see someone riding a motor bike, that’s really the one that T seems to like. 

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Real Estate, the new wasteland

May 21, 2008 at 3:42 pm · Filed under frugality, Personal Finance, Real Estate ·Tagged

Yes, that’s right it’s so T.S. Eliot out there and the turf has certainly turned arid.  No more money to be made lapping at the door.  Now it is a desert crawl through a landscape cactused with for sale signs.  And yes, you may need a guide to get you through to the occasional oasis. 

  • Short Sales – This can be a job.  Yes, you heard me.  You can shop Craigslist, or the classified, or just drive your city streets looking for real estate for sale, especially those that are for sale by owner.  Then you cold call the seller and ask one simple question.  “Would you be interested in a negociated short sale?”  Of course, the owner might start crying at that point, so be prepared to listen to a little pain while he or she or they try to explain their story.  Be sympathetic but honest.  A short sale arrangement will leave some mark on their credit but it is not a bankruptcy nor a failure to make your mortgage payment.  It is a way to remove the mortgage from your debit ledger and a way to walk away from the anchor that the house has become.  It costs you nothing except time as there are an array of consultants, arrangers, brokers, and downright vulture types ready to help.  They get theirs from the resale of the property somewhere down the line.  Now doesn’t that make you feel all warm and toasty?

 

  • Appraisals in the new market – Face it, everything is reset.  That zillow.com report you ran last fall is so not true anymore.  You know this because the news has it that home prices have dropped by more than 10% since then and that’s just on average.  Of course, if you had a Line of Credit attached to your property, you know this too, because those wonderful lender folks have probably reset it to $0.  What, you didn’t know.  Oh, that’s right because in most cases the borrower isn’t finding out unless they try to use it.  On top of that, in order to get your property reappraised you will have to find an independent appraiser.  Can’t have the mortgage lender do it because there have been incredible laxities in the regulation of appraisers so that the government had to step in and mandate that the appraiser cannot have any affiliation with the lender. 

  • Sell or holdon – Now here is where the deal gets really tight.  Say you bought into this whole Kiyosaki thing.   Bought into the cash flowing rental property market.  Bought and bought and bought using OPM.  You know, leveraged your buys so that now you are stretched across the deals like the ultimate plastic man/woman.  (See reset above.)  That snapping sound you hear is your own fingers as they have to let go of something because the property value you were counting on has suddenly sunk and that renter you had locked in has suddenly rediscovered the urge to buy for herself at the newly depressed but now equal to her monthly rental payment prices.  Oops!  So suddenly the question isn’t when can I raise the rent again?  It’s what if I raise it and they go shopping?  The smart owner at this point has already sent out a letter to all renters stating that the possibilty exists that they might buy from you.  The smart owner is facing the fact that this downturn has not bottomed out.  Those frustrated renters who have been sitting just outside the candy store window watching everyone else claim the American Dream are now girding their loins, so to speak, and becoming the new wave of home owners.  That’s the real Tsunami in the room.  Your bankruptees will become your renters while your frugal renters get some justice.  Oh man, the free market economy may finally be adjusting in favor of the little guy.

That’s it for today.  Tomorrow we will continue this journey with a look into the following water holes:

  • Carry Bank Loans
  • Credit Union vs Bank
  • Retirement real estate and the reverse mortgage

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Gambling the night away

May 16, 2008 at 12:46 am · Filed under frugality, Personal Finance ·Tagged ,

Whirr, click, jangle jingle jangle, that’s the sound the new slots make that’s so much like the real thing that you actually look down to see if the tray is filling with quarters.  Luckily for us, within an hour’s drive from where we live there are eight casinos to choose from if you want to just spend the night gambling.  Five of them provide hotels if you can afford to stay over and vacate.  One is just a large but very popular card room.  And all of them have benefited from the new slot machines the voters have just installed. 

Of course, you have heard about the fabulous buffet, right?  Billboards show and celebrities extol the qualities that make all you can eat a suitable reward for taking a chance.  Instant winners, cash, cash, cash, and, oh yeah, the roll call of headline attractions coming to a stage near you.  Not to sound cynical but who are they kidding?  But on the other hand, if you are talking addiction then fat people and their gambling habits is not a bad place to start.

But all of that aside, I didn’t begin this post to berate the gambler within us, nor to make fun of the gazillions of seniors who live for the bus ride.  I am really just happy that the gambling industry has become the be all and end all of our nation’s retirement community.  As far as I know, Vegas and Florida now officially employ the most seniors per capita.  So, when it is time to take a break around here, there is nothing like heading out to our local (see the above) gambling den to remove the stresses and strains of ordinary living.

I don’t know how to say this so I’ll just say it okay.  Some people are just addicted.  Others apparently have too much time on their hands.  A few are just interested in the spectacle.  And one or two, like me, just tag along because that’s where their significant other likes to go.

When I first met my partner, we worked all the time.  As independent contractors, we filled the hours with multiple jobs since we both had put ourselves in debt for various reasons and now we were hard at work digging our way out.  So it was with some surprise, when we finally got a break, it was T’s birthday, that I discovered she had booked us rooms in Laughlin.  I was amazed.  She knew all the games, and really liked to play the roulette table.  Well, you know what they say, party hardy.  Only, when we got back home to go to work, she was more than a little depressed.  The fact that I don’t gamble had sort of acted as ballast but still she had lost all the extra money it had taken her weeks to earn in just three short days.

As she explained it to me, it was a family thing.  Everyone in her family; grandma, dad, mom, sisters, brother, cousins, aunts and uncles, all gambled.  They played puzzles, worked out sudokus, and couldn’t wait to think of another excuse to hit the nearest casino.  She even told me stories about how her grandmother taught her to read the tote board and pick six. 

But a funny thing has happened on the way to today.  T who used to need to gamble now can only handle it in very short doses.  Not because she isn’t still addicted, you know, once an alcoholic always an alcoholic.  But because she has replaced that need with something even more powerful.  She wants to be free from debt and semi-retired like me.  And I should say, she wants to stay free from debt because by dint of paying off her credit card debt, and starting her own business, she has been debt free for two years now.  So when we go vacationing at our local casino now, she may gamble a bit, but her need to keep her money makes it easy for her to get up and walk away.  We have even gone there and just spent our time at the pool, and dancing at night, and seeing a show, without once dropping even a penny in a slot.   These days, instead of gambling, it’s more likely we’ll be gamboling the night away.

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Found Money

May 14, 2008 at 3:50 pm · Filed under frugality, Personal Finance, Semi-retirement ·Tagged ,

No, I’m not talking about that “stimulus check”.  Nor do I mean those pennies, sometimes nickles or dimes, that you find spilled out of someone’s pocket in front of the 7/11.  I am talking about real found money.  You are going through the pockets of an old jacket, and there inside the inside vest pocket, folded up nice and neat, is a sort of crisp $50 bill.  A quick memory search reveals that a  couple of years or so ago, you don’t wear jackets that much, you put the bill there in anticipation of needing it to pay your share of some trip you and T were taking.  But that is all history now.

So what do I do with it?  Back in those spendthrift days, $50 was a night out dancing, or the movies for two, or dinner before a Laker game.  It was pocket money.  But that was before the plan.  And the monthly budget that developed from the plan.  I am semi-retired (more on that another time) and the plan is that T join me in that state as quickly as possible.  Hence the budget.

Budget for T

Monthly income less monthly expenses less minimal entertainment costs less coincidental repair or replacement expenses less automatic savings deduction to ING account and Ameritrade Save Yourself account less $10 pocket money = semi-retirement in three years.

Income stream = monthly paycheck + stoozed money market, CD, saving accounts, loan to the corportation interest earnings + off the book cash bonuses + 5 real estate rental property rents + part time real estate jobs.

Expenses = Share of  monthly rent + $25 towards weekly food + difference between monthly rental income and mortgage/insurance/repairs + medical bills for recent gall bladder surgery + ING savings + Save Yourself Ameritrade auto deduct + self-directed IRA + $ for occasional eat out/movie out/trip to casino out (more on this later too)

 So the first question is when should I share the news and let her decide about her half?  Because that’s the way it is now.  We share everything 50/50.  So now the question is what do I do with my $25?   Boy, I can tell you I am suddenly a lot less excited.  $25 is half a tank of gas, it’s a week worth of groceries, it’s my weekly expensed money, it’s the bill for two weeks worth of dry cleaning, it’s . . . not much in other words.  Wait I know where I can use it.  I’ll put into my newly formed freedom account, thanks JD.

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Stimulus check

May 3, 2008 at 2:22 pm · Filed under business, credit cards, frugality, Personal Finance ·Tagged ,

This week the government announced the schedule for the delivery of our stimulus tax check.  If you used an electronic debit to pay your taxes, you will get yours in early May.  If you paid the old fashion way, then those checks will be spread out over the next three months with the latest being delivered in July.  I don’t now about you, but if I was one those receiving my check in July, then “frustrating” would be the descriptor I’d be using instead of “stimulus”.  With everyone else already in their money so to speak, the pressure to spend it ahead of time via credit card will grow exponentially.  Just what we need, more pressure to use credit.

Meanwhile, the possibility that the U.S. will suddenly change into a nation of savers with this check continues to disappear as food and fuel prices escalate.  The free market frame of mind that has held America and the world in thrall for the last 30 years is going to be more than difficult to shake off.  Just as individuals have been captured in the credit debt cycle of living large, so is the U.S. caught in the cycle of being the world’s only super power.  Both with the same type debt loads, and with the same spending styles.  I see no reason not to believe that just as American lenders are extremly unfriendly when we don’t pay on time, so to will the foreign investor countries follow form.

Our problem, it seems to me, is our very own political and economic behavior.  As a people, according to the last two elections, we eschew taxes.  The lower the better.  For the middle and lower class that means they will have a few more dollars upon which to survive.  For the rich and the ultra-rich, it means they will have more and more to invest and sock away and pay for the richest standard of living in the world.  Politically, because we are constantly stressed out over which party is in power, we almost never notice that economically both parties are the same old same believers in the efficacy of the free market.  Though I don’t know if believe in is the right phrase at this point.  Many of them may be finally noticing the free market failures but just like any credit debtor knows being locked in means paying for your mistakes right to the very bankrupt and foreclosed end.

Tomorrow I’ll be reviewing Charles R. Morris’s The Trillion Dollar Meltdown.  I am hoping it will provide some ideas for what we as individuals and as a nation can do to turn this disaster into an opportunity.  After all, isn’t that what super powers do, save the world?

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