Quantcast Finally Frugal: 2008

The bumpy road to financial independence. . . .


Monday, December 29, 2008

A frugal homecoming. . . .

I've just spent the last week at my brother's house, having returned to Portland to melting snow and intermittent rain on Saturday. I was struck, while staying in California, by how WARM my brother's house is kept. I wore short sleeves, and walked around in bare feet most of the time. The heater was on the entire time, at 72 degrees. One night, I was too warm and discovered that the heater was still at 72 even at 1 a.m.!

It was so strange to never feel chilled, ever, and to actually be too warm, even during the day sometimes!! Such a difference from my 58 degree world in Portland, where I'm always bundled in several layers inside, including wool socks and furry 'Ugg-like' boots. I must have mentioned to my family at some point that I've slept in a hat and gloves a few times (I turn the heat off completely at night), because I received an electric heated mattress pad for Christmas!

I tried it out last night and the night before, and I have to say---I don't really like it! It's not just the fact that I'm drawing electricity to keep the bed warm, it's also that I've grown accustomed to being a little bit chilly, even at night. I actually sleep better that way---I find that I've kept the heated mattress pad on the lowest setting, and turn it off after about an hour (it has an automatic shut-off after TEN hours!). I think in the future, I'll just use it to 'pre-heat' the bed and then turn it off, if I use it at all.

It's interesting that my flannel sheets, my two down comforters, my cotton blanket and a heavy wool throw (along with three heat-seeking cats) are better at keeping me warm and comfortable than an electric device. As we head into a new year, I'm hopeful that I'll discover many more simple, sustainable habits that work just as well as budget-busting devices like my heated mattress cover.

Monday, December 22, 2008

Mother Nature trumps frugality. . . .

This is the third day straight that I've been basically trapped at home---my car is stuck in the snow and ice down the street, and it appears that it will be there for at least a few more days. We've just been through a giant (for Portland) snow storm which began last week and probably won't end until next Saturday! Meanwhile, my budget has flown out the window.

On the nights before predicted snowfall, I rushed to the nearest (not the cheapest, mind you) grocery store to stock up on essentials (hot chocolate and whipped cream being among the items purchased). I did this at least three times, and while I did bring a shopping list, my main goal was not frugality but finding what I wanted in the least time and getting home before the storms began. Added to this is the fact that everyone and his brother had the same idea, and the grocery store was packed!

Meanwhile, my heater has been on pretty much constantly for an entire week (except during the night), and while I still keep it at a low 58 degrees, I'm sure my gas bill will reflect the chilly weather and the many days last week (and this week) that I didn't go in to work. Today, I trekked out to Target for a chai latte and some books (the libraries have been closed!!!) as well as to get some cash for my trip to California in a couple of days (provided I can get to the airport and my flight isn't canceled). $107, a sweater, a belt, and four books later, I made the long slushy walk home wondering how the last week will look when I put my recent purchases into my zero-based budget for December!

Ah well! I'm safe, warm, dry and well fed. Which many people in Portland can't say right now, from the 40,000 without power to the homeless and very low-income residents. I may be somewhat silent until next weekend, as I attempt to make my way out of Portland to spend Christmas with my family!

Happy holidays, everyone!

Friday, December 19, 2008

Frugal holiday gift. . . .

Several people in my office regularly exchange small gifts around the holidays---I work in a fairly large office, and the idea of giving each person even a small, store-bought gift makes me wince. This year, I simply baked some cookies and wrapped them up for gifts. A couple of years ago however, I gave pre-made 'cookie in a bag' gifts. Not only was it much less expensive than purchasing something for everyone, it was nice to give a gift that would enable families to spend an afternoon baking cookies.

The recipe for Cranberry Hootycreeks (which I'd never heard of before), came from the Allrecipes site. Rather than purchasing jars to put the ingredients in (see photo from the Allrecipes site above), I bought low-cost clear plastic bags from Michael's Crafts, and tied them up with a big red bow. I created pretty labels with additional ingredient requirements (such as butter and eggs) as well as baking instructions.


  • 5/8 cup all-purpose flour
  • 1/2 cup rolled oats
  • 1/2 cup all-purpose flour
  • 1/2 teaspoon baking soda
  • 1/2 teaspoon salt
  • 1/3 cup packed brown sugar
  • 1/3 cup white sugar
  • 1/2 cup dried cranberries
  • 1/2 cup white chocolate chips
  • 1/2 cup chopped pecans


  1. Layer the ingredients in a 1 quart or 1 liter jar, in the order listed.
  2. Attach a tag with the following instructions: Cranberry Hootycreeks 1. Preheat oven to 350 degrees F (175 degrees C). Grease a cookie sheet or line with parchment paper. 2. In a medium bowl, beat together 1/2 cup softened butter, 1 egg and 1 teaspoon of vanilla until fluffy. Add the entire jar of ingredients, and mix together by hand until well blended. Drop by heaping spoonfuls onto the prepared baking sheets. 3. Bake for 8 to 10 minutes, or until edges start to brown. Cool on baking sheets, or remove to cool on wire racks.
Allrecipes has an entire section devoted to cookie-in-a-jar recipes. This is a fun, less-expensive way to remember the important people in your life during the holidays, without breaking the bank! Plus, sometimes people will bring the cookies into the office afterwards. . . .

Wednesday, December 17, 2008

A frugal replacement. . . .

I am a regular coffee drinker (although I recently switched to caffeine-free beans), and a day doesn't really begin until I've started sipping a cup of warm, milky coffee. Which is why I was frantic when I broke my 12-cup coffee carafe earlier this week!

I immediately started looking online for a replacement, which would (new) run me about $25, not including shipping! As I was stewing about this added cost during a month when I'm trying to buy holiday gifts while staying within a budget, I suddenly realized that I could probably find a suitable replacement at the Salvation Army or Goodwill.

Unfortunately, it's been snowing off and on for a few days, and the streets are incredibly icy, making it dangerous for me to get out to the grocery store, let alone a thrift store. That's when I remembered that I have a french press, which I purchased years ago for camping. Luckily, it is one of the few rarely-used kitchen items that I decided not to sell at my garage sale a few months ago.

I pulled it out of the cupboard, dusted it off, and with some experimentation, figured out how to make a cup of joe that is at least as good as the coffee my expensive, programmable Cuisinart makes! Added benefits? I can control how hot my coffee is (I boil the water in my teapot before adding it to the press), meaning that it stays warmer in my thermos. Also, I don't have to use a paper filter---it's built in! This is a truly 'green' coffee maker!

Once I'm mobile again (hopefully this weekend there'll be a break in the weather) I'm still going to head out and try to find a used replacement carafe. The beauty of my french press is that I can continue to drink coffee without rushing around desperately trying to find the carafe model that will fit my coffeemaker. I know if the press hadn't worked out, I would probably already have ordered an over-priced, new replacement carafe. This way I can take my time in finding a new one. And who knows? Maybe I'll like my french press so much I won't go back to the fancy programmable Cuisinart!

Monday, December 15, 2008

A frugal new year. . . . .

As I've struggled to keep a handle on my expenses while increasing the money sent to savings (and, hopefully at some point to student loan debt), I've felt the need for a new motivator. Some new goal or strategy to help me stay on track and learn new frugal skills.

I recently came across an article about a Colorado couple who, for the past year, have been living The Compact. This is an informal agreement that people make with one another to spend an entire year not buying anything new, except for food, personal grooming items, and perhaps some underwear (this particular couple also made an exception for items that they were simply unable to find in a thrift store, on Craigslist, or using Freecycle). The idea grew out of a anti-consumerism compact ten people in California's Bay Area made with each other in 1996. The idea grew wings, and there are currently over 10,000 members of the Yahoo Group associated with The Compact.

While something this radical will take some additional thought (and imagination), it's definitely an idea that appeals to me. What better way to 'force' myself to become more familiar with the thrift stores in the Portland area, while quelling my desire for new clothes and shoes (one of my vices)? Making frugal living a challenge may bring inspiration (and a fair amount of frustration, I'm guessing); more importantly, it will allow me to really 'feel' what it's like to live with what I have, rather than always striving for something new and better.

If I choose to take up The Compact for the 2009 year, I predict that I would not only find new motivation to reduce, reuse and recycle, but would also create a newfound appreciation for how good I really have it.

Saturday, December 13, 2008

Credit use decreasing. . . .

So is household worth, unfortunately! According to this CNN article, Americans owe less to banks than they ever have! Here's some text:
The government reported Thursday that household debt in the third quarter fell for the first time ever. Meanwhile, net worth dropped by the largest amount on record based on data going back to 1951.
While the fact that household worth has dropped isn't surprising, given the way homes have continued to drop in value, I am a bit curious about the decrease in credit use. I would have assumed that as people lost jobs or had their employment drop to part time, they would be more likely to pay for necessities like food and gas with credit. It appears that this is not the case, primarily because lenders are beginning to take a closer look at how much they're lending, and to whom.

As in previous articles discussing the use of credit by Americans, this one also communicates a barely disguised dismay at the fact that Americans are "spending less". This is because the economy as we know it is highly reliant on our purchase of assorted doo-dads of greater or lesser value, which are designed to wear out quickly so that we are forced to purchase replacement doo-dads.

As I've said before, this notion that Americans need to spend more to keep the economy moving is highly suspect! Why would our government and/or knowledgeable economists want Americans to use money that they don't have? It seems as if (as we're currently experiencing), building an economy on 'credit' creates a house of cards---if just a few cards at the bottom of the house are knocked out, we all come tumbling down. It's as if the people who make decisions at the very top of our economic structure want us to be a nation of serfs, ever more dependent on our 'feudal lords', the credit companies.

That is no life for me. I will continue to save money, spend it on needs (and some wants, within reason), and eventually gain financial independence from lifelong serfdom in the Land of Easy Credit.

Thursday, December 11, 2008

A Super Frugal couple. . . .

I blogged earlier this week about needing to decrease my grocery bill again; as I've fallen out of the habit of tracking every single penny, my expenses have slowly inched skyward. I hope to begin anew after the first of the year. In the meantime, I find myself buying fast food (well, Burgerville---which I argue isn't really all that bad because they use, for the most part, local suppliers) as well as 'convenience food', which is much more expensive than just buying the ingredients myself and cooking up, say, a lasagna.

Recently, I learned to my horror that my favorite 'bad' treat, frosted circus animal cookies by Mother's Cookies, have gone the way of the dodo bird. Yes. Extinct! I was devastated by this, until I learned, through a blog called The Naked Loon, that there are a couple of alternatives. So, I've been happily purchasing $3 bags of Franz frosted circus animals---not great for my budget or my waistline!

As I contemplate getting back to a more healthy, raw (and hopefully cheaper) diet, heavy on the fruits, vegetables and grains, I've learned of a couple who had as their goal to live---EAT---for just $1 a day! The two high school teachers decided to voluntarily challenge themselves---as many in the world are forced to do---to survive on less than most of us pay for a cup of coffee each day. While the experiment was 'non-political', it does force one to think of the way we live in the United States, our perceived "needs" versus "wants", and how most of the rest of the world lives.

The results were interesting; the couple blogged about losing weight (and energy), describing their daily meals, and the story was picked up by news outlets across the country. There are links to articles in the New York Times as well as links to Fox News snippets about the challenge. I've not had time to go through each article or video, the but stories and the blog are interesting, especially if you have any interest in consumerism, waste, living closer to the earth, or other issues that affect us on a local and global level.

I will certainly consider the challenge as I'm trying to get below $100 for my food budget again, beginning on January 1. Even a low $100 food budget is three times more than this couple---and many all over the world---have to spend on food.

Tuesday, December 9, 2008

Frugally festive. . . .

As I walk or drive down my street, I'm noticing lots of holiday light displays, as well as people who already have their Christmas tree decorated and lit in the front window. I'm planning on being out of town this holiday season, at least for a few days, so I'm foregoing a big holiday light display, both inside and outside of my house. Of course, even as I admire some of the more restrained and classy light shows, I wonder how much extra the display is adding to my neighbors' energy bills.

I'm currently waiting for my own energy bill, hoping that it will be manageable. My gas bill was a bit higher than I expected (I raised the thermostat to 62 from 58; I also had a housesitter who I'm sure used the heater generously while I was away last month). Now I'm hoping that I can make up the difference with a lower electricity bill. Here are some ways to make that happen, in spite of the temptation to follow my neighbors' example and join in the decorating cheer.

  • Unplug anything that can be unplugged (with the exception of the refrigerator, of course) when away on vacation. This includes, the TV, the DVD player, computers, and the microwave, among other appliances.
  • Use the oven strategically. I baked rolls for a Thanksgiving dinner I attended, while at the same time baking a last batch of cookies. Doubling up on items that cook at the same temperature will save energy, regardless of whether your oven is gas or electric.
  • Along the same lines, use lids on your saucepans, to conserve heat where you want it: inside the saucepan. Saving time on heating water or soup also saves energy.
  • Have a holiday gathering at your own home: the more bodies in your living room, the lower the thermostat needs to be. Bonus is that you'll save on the gas that it would have taken to drive to someone else's house!
  • Utilize candles as part of your holiday decorations, rather than electric lights. When used safely, candles can add a beautiful glow to the mantle or table that an electric light simply can't.
  • Speaking of lights, purchase the new LED Christmas lights, which supposedly use 90% less energy!
  • Finally, wait until night has fallen to turn on your decorative lights, and turn them off at a reasonable hour. I have a coworker who says her neighbors keep their 'mobile', electric snowman on all night long. Why waste the energy?
Personally, I think I like the idea of using candles the best of all of these frugal ideas. I'm going to pull out my beautiful red and cream candles, maybe cut some boughs from the cedar trees in my backyard, and create a natural, budget decoration that will make my house smell and look good!

Sunday, December 7, 2008

Frugal exercise, part deux. . . .

I've been largely silent over the past several days, primarily because the thought of logging in and viewing that gigantic number that represents my student loan debt makes me kind of sick. However, I guess the first step to conquering any obstacle is actually facing it, making peace with it, and studying it to determine how best to get past it. That will be a long process, I know, and my student loan debt won't be something that will go away in a month, or a year, or even probably five years.

In the meantime, I need to keep adding to my savings (which will carry me through next year when I won't be able to work full time, due to school commitments) and keeping my expenditures low.

A few months ago, I wrote about my need for more exercise---as the days have gotten shorter (and darker and less sunny), that need has just become much greater! I often hibernate in the winter, and this year is no exception. I've not motivated myself to get exercise DVD's out of the library, and running outside has been spotty at best. For that reason, I decided to renew my membership to the gym---although I did it frugally: I waited until the gym had a 'no initiation fee' special, saving me $50! So, after a year of frugality, I'm adding a regular, $30 expense back into my budget. I feel like my health (and my mood) requires this.

To offset this, I'm going to try to decrease the amount I'm spending on groceries, as this number as inched past $125 over the last few months, as I've waited to tally my expenditures until the end of the month, rather than keeping track as I go along. Maybe I'll start publishing my budget again, to keep myself a bit more accountable. Did any of you find that interesting, at all? If so, perhaps I'll start that again as of January 1.

Wednesday, December 3, 2008


Well, I did it. I logged into my SallieMae account (I had to create a new password, it had been so long). The amount I owe on my student loan is just a bit more than I had anticipated. My indebtedness to the U.S. government is:


I'm not really sure how to go about tackling this, because it's just so overwhelming to me. Of course, while I'm dithering about, getting another degree (paying for it myself, this time), and generally trying to ignore the elephant in the room, interest is accruing on this bad boy.

In fact, if I were to make the 'required' $437.33 payment for the next 21 years, I would end up paying a total of $112,453.65.
Which is simply unacceptable. By my rough calculations, I would have to pay almost $400 a month just to cover the interest payments alone (my consolidated interest rate is at 8.25%, which cannot be changed).

So, I'm trying not to cry at this point. I know, deep down, that this is just going to take a degree of creativity (and lots and lots of time), as well as some major changes in terms of my income and my expenditures.

Right after I go out and buy and devour a bar of organic chocolate, I think I need to spend some time searching the blogosphere for those motivating success stories, from 'real people' like me who overcame the odds and paid off similar (and even larger) debts than mine.

Monday, December 1, 2008

Frugality continued. . . .

Whew! Well, I've reveled in my lack of credit card debt over the past three days, since Thanksgiving. Now, it's time to plan for the future, which is going to require continuing my frugal ways. I do still have that student loan debt, after all. I'm just not sure I'm going to start paying it off yet, for reasons I'll explain below:

In the Fall of 2009---almost a year from now---I'll most likely have to drop to 75% of full time at my day job, to account for an unpaid practicum experience that is required in my graduate program. I'll probably need two full days during the week for the entire academic year (2009-2010) to take care of this requirement. Which means, of course, that my income will plummet during that year. I've been avoiding thinking about this complication, because I really wasn't sure how I was going to be able to pay my mortgage and eat with a decreased income. However, now that I'm credit card debt-free, I feel like anything is possible!

Here's what I'm currently thinking I'll do to prepare for this. I'm going to try, starting on January 1, to live on just my salary from the day job. Then I can 'bank' the earnings from my night job, which will allow me to dip into that savings during the year that I can't work a full time paid job during the day. This is going to require some very creative budgeting, especially since I would like to now send 15% of my earnings into my 403(b) plan, since I dropped it to 1% while I was in debt-repayment mode.

Anyway, all of this means that my student loan debt repayment will most likely need to be put on hold, which bums me out. A commenter a few weeks ago mentioned her own student loan debt struggle, and it motivated me to start thinking about getting rid of this debt. At this point, I can't even bring myself to look at my account, to see how much I owe (last time I checked I think it was about $55K). I'm scared to know. That's how bad it is.

Who knows? Maybe the economy will miraculously recover in time for me to sell my house next summer, and this will all be moot. Then I could send that savings straight to my student loan, and really get started on becoming truly debt free! I'm not holding my breath on the economy, though. . . .

As you can see, this 'plan' is a bit of a work in progress; I admit that I haven't even really worked the numbers out yet with my zero based budget spreadsheet, nor have I made the change to my retirement savings. My objective this week is to get all of this worked out, so I can start the New Year with a new financial goal.

Thursday, November 27, 2008

Finally free. . . . .

of credit card debt!! You are reading the blog of a woman who owes NOTHING on her personal credit cards! This is at the top of my list of things to be thankful for this year:

  1. Consumer debt-free!
  2. I have not just one job, but two!
  3. I live in a wonderful, beautiful city!
  4. I own a cozy house that is my sanctuary.
I'm going to 'live in the moment' for once, and just revel in the feeling that having no credit card debt brings to me, without thinking about what comes next. I started this journey just over a year ago, by downsizing my bills and 'upsizing' my debt repayment. I began with almost $5,000 in credit card debt, and little by little, using every spare dollar that came my way (hello 'stimulus check' and 'tax refund'!), my balances are at zero!

Honestly, I've tried to pay my credit cards off quite a few times in the past, but somehow always ended up "needing" those new boots or that "stuff" at Target (who knows what it was) and the bills grew and grew. This time was different. Why? Because of the blogosphere (including my own little blog) and all of you encouraging me via your comments and emails. Without my electronic motivation, I don't think I would have succeeded.

So, number five on the list of things for which I'm thankful this year, is:

5. YOU! Whoever you are. Thanks for reading, encouraging, suggesting, and commenting. I couldn't have done it without you!

Have a Happy Thanksgiving, everyone!

Tuesday, November 25, 2008

Tough times. . .

I just received an email from the CEO of the company I work for in the evenings, asking us to improve our efficiency and accuracy, and letting us know that we would begin being compared to other employees. If we don't measure up, well, the implication is that we would be asked to go. I'm not particularly worried for myself (I just got a raise and a promotion, after all) but there were many anxious IM's and emails from my coworkers, wondering if we're about to see the axe drop. It was a little strange, and completely unexpected, to be honest. I suppose even grant-funded non-profits are suffering from the economic crisis. . .

On a more humorous note, I just came across this "memo" on a blog called The Iterative Life, from the "CEO" of the "Stober family", discussing these very same issues. This made me giggle and I thought I'd share it. Here it is in full, below:


TO: Stober Family Members, Newton Highlands Branch

FROM: Marc Stober, Chief Operating Officer

DATE: November 21, 2008

SUBJECT: The Financial Crisis

With the recent news on Wall Street, I have been hearing many concerns about our organization’s situation and wanted to take this opportunity to detail what we are doing from the top.

First, there will be no layoffs.

As you know, we are operating at a deficit this year, due to extraordinary child care and preschool expenses. It is important to note that this is unrelated to the general financial crisis, and these expenses are fully funded through school year 2008-9.

In terms of recurring revenue, our employers have indicated that they are committed to continuing at present levels on a monthly basis. However, they are also facing pressure, and, based on our discussions with them, we are budgeting for a significantly smaller increase in revenue compared to what we have seen in recent years.

At present, our greatest exposure is highly leveraged real estate debt used to purchase our primary residence. While related debt service is our largest recurring expense, the good news is that this is a fixed expense that will not increase until at least 2013. We believe our investment is fundamentally sound, and will achieve long-term growth while continuing to provide immediate benefits through use of the underlying assets, regardless of the current market.

Our extended family’s long history of continuous operation through difficult times–including the Great Depression–gives us the strength to navigate in the present climate. However, in light of the global financial situation, there are some measures we are taking to cut back expenses. We feel these measures are prudent to preserve cash flow in the face of uncertain growth and unfavorable credit prospects.

The most difficult budget issue is transportation, and we have not made any final decisions. As you know, our second car was scheduled for replacement at the end of this school year, and we may decide to extend its service life. The reason we have not made a final decision is that repair costs required for this course of action are yet unknown. While this is potentially disappointing, keep in mind that our primary car still serves over 80% or our non-transit transportation needs. We committed to meeting those needs, and through a program of regular maintenance (that has not been cut), we have not had any unplanned downtime for a primary car in over 4 years. Additionally, thanks to successful strategic planning undertaken by the Board, we are uniquely situated for a suburban family to be able to utilize the MBTA as a safe, cost-effective option.

In the Travel and Entertainment category, you will find that fewer requests to eat in restaurants will be approved, and requests for desserts in restaurants, particularly, will not be approved (unless they are included in the cost of a kid’s meal). In the case of Cabot’s or The Cheesecake Factory, where ice cream or cheesecake, respectively, is kind of the point, sharing is strongly encouraged. An additional benefit of this will be improved health. Netflix has been put on hold for 90 days, and we will reconsider that offering then; unopened red envelopes left on top of the TV indicate a lack of demand at present. Newspaper and magazine subscriptions are subject to elimination as well. Executives, including myself, are being asked to purchase regular coffee in place of more expensive coffee drinks while traveling, and to utilize meals from our on-site food service provider whenever possible.

Charitable giving will continue, primarily to organizations to which we have supported on a regular annual basis, and new requests will be considered individually.

All major vacations, home improvements, and furniture purchases are temporarily put on hold, unless essential. Pre-approved food and clothing purchases can continue as needed and may be subject to increased budget scrutiny.

Lastly, note that we have no plans to add human resources. Requests for non-human resources (i.e., pets) may be considered in a future fiscal year.

The bottom line is that while the coming years may not be everything we want, we will stay together and have great stories to tell the grandkids.

Happy Thanksgiving.

Friday, November 21, 2008

Hmmmm. . . . .

As I continue to contemplate my status as a homeowner (and I don't mean 'status' in the "I'm superior to renters" way), I often wonder about the real benefit---especially as home values (including my own, I fear) plummet. I know that I've grown up thinking that I was "supposed" to own a home. That I wouldn't truly be successful until I stopped throwing my money down the drain by renting. And, granted, when I sold my first house in California, I did make some money---primarily because values were so incredibly inflated at that time (mid 2006).

As much as I love my cozy house, at this point, I would sell it if I thought I could and not lose money. Even breaking even would create some stress and anxiety that I'm not willing to undertake, since in Portland homes are taking an average of around 90 days to sell. In the whole scheme of things, owning a home right now just doesn't seem so wonderful. If I were a renter, I could stop working like a maniac at two jobs and put some more money in savings and retirement vehicles.

I came across an article that discusses the compulsion Americans feel towards purchasing, owning, a home. This column is written by Mark Morford, one of my all-time favorite newspaper writers. Full disclosure: Mark (since I'm one of the thousands of 'friends' on his Facebook page, I feel that I can call him by his first name) has a writing style that could be termed 'irreverent'. He puts it all out there without shame, nor does he mince words. And the words he uses! Well, let's just say he's not exactly your prim and proper newspaper columnist. Which is probably why I find his columns so delightful.

Anyway, I thought his topic was interesting today; and I loved the inference that anyone---especially an economist---who claims that remaining a renter could possibly be more beneficial than owning is the antichrist of American capitalism. This truly made me think about where my notions of homeownership came from---why I was so driven to buy when I could have simply rented happily for years. This is not to say that once I sell my house I'll never buy again. Only that I'll scrutinize the decision a tad more than I did this time, to make sure that I'm not simply buying a house to prove that I can or to feel successful or to add to my net worth in some way.

Wednesday, November 19, 2008

Overwhelmed? Have I got the book for you.

Several weeks ago, I was contacted by the publisher of an author named Louis Barajas. Mr. Barajas has a new book just out, and his representative wondered if I would be interested in reviewing it on the blog. Once I heard the title I had a feeling it would be right up my alley---and maybe yours too!

This self-help book is called 'Overworked, Overwhelmed, and Underpaid: Simple Steps to Go From Stress to Success'. Mr. Barajas is a financial planner, who focuses on underrepresented, lower income families who need help digging themselves out of debt and determining what to do with their limited money to afford the greatest security. He also does work with upper income folks, many of whom also struggle with questions surrounding personal finance.

I found his website to be very helpful, with many of the downloadeable forms that were mentioned in his book. I should note that Mr. Barajas has also written books regarding entrepreneurship and small businesses, which is a focus of his newest book.

So, how DOES one escape the cycle of feeling overworked, overwhelmed, and underpaid? The book is actually laid out in a very organized fashion (and I do love organization!).

First, Mr. Barajas discusses the concept of overwork (as someone who works two jobs and goes to school, I felt I could relate). In essence, the message is very similar to my other favorite book, Your Money or Your Life. The main focus of this chapter is on determining what is important in our lives, and gaining balance based on that knowledge. There is a 'life blueprint' form that can help us to figure out how much of our lives we really want to devote to work, versus the time and energy we'd like to devote to family, other relationships, spirituality, or hobbies. For me, it was incredibly helpful to see my life on paper, and to make decisions that I could view in black and white, versus simply considering---with no commitment to change---while on my way to work!

Next, Mr. Barajas turns to feelings of being overwhelmed. Again, the key word in this section is 'balance'. Except in this case, Mr. Barajas discusses the 80/20 rule, in which it is posited that 80 percent of our 'output' is actually connected to just 20 percent of the energy we expend. The key here is to determine (by using lists and prioritizing our activity based on level of success or output) what it is we're doing (what is the 20%) that is accounting for 80% of our output. The theory is that then, we can achieve more with less. Less time, that is. Now, for someone with just one job or one obligation, I think this might make sense. In my own life, I found it difficult to separate each of my jobs and obligations and determine what to cut. For example, my day job is a 40 hour per week position. Although I know that some of those 40 hours are much more productive than others, I need a full time salary to pay my bills (or most of 'em, anyway!). Therefore, even if I'm only using 20% of that time usefully, I can't just leave work when I'm finished---I at least have to pretend to be getting things done so I can keep my salary and my benefits. My 'overwhelmedness' comes not from having too much to do at ONE job, but at having too many jobs! Something to think about, definitely. When I have time, I'm going to try to apply Mr. Barajas' ideas to my own unique situation to see if I can make some changes that will help.

Finally, we come to being underpaid. This section brought up some very good issues, such as the five reasons we may feel underpaid:

  1. You really ARE paid less than you're worth
  2. You don't make enough to support the lifestyle you want (or the one you already have)
  3. You're putting in more effort than you're being compensated for
  4. Work is taking you away from what's important to you
  5. You don't enjoy your work
As you can see, these are all quite different reasons for why we might feel like we're not making enough money (I can relate to several). Mr. Barajas then goes through a myriad of options for either changing careers, making more money at the career you already have, or making other changes that will affect the 'bottom line'. I hoped to see more discussion of frugal living (since that's my interest, and how I've given myself a 'raise' over the past year). However, this book is focused more on people who are willing and able to make career changes---maybe even those who would want to start their own business, since that seems to be a way to control and grow one's income more quickly than through conventional routes (like working in public education, as I do!)

In the end, I feel that this is a worthwhile book. While I've linked to Amazon.com just so you can read a synopsis of the book, I (of course) always recommend trying your public library or used book store first---it's not a financial 'bible', like Your Money or Your Life. But it is a good read, and one that I recommend to those who are thinking about making some big changes in the way they consider the interaction between work and personal life.

In fact, if this sounds interesting, I'll spread the love and mail my copy of this book to the first person who comments on this post (if you've actually made it this far you DESERVE a free book!). Just be sure to either enter your email address, or send me a separate email with your mailing address so I can send it along to you.

Monday, November 17, 2008

Frugal business travel. . . .

I'm back from my business trip (to a tropical locale, no less)! Since I was traveling to an area that is known for high prices, I wanted to pay special attention to my per diems; usually when I travel for work (which is rarely), I end up overdoing it and having to spend my own precious money to break even at the end of the trip.

This time, I did several things that helped me to stay within my business travel budget:

  • I stocked up on snacks to eat at the airport and in between conference sessions, so I wasn't tempted by the $4 muffins at the Starbucks in the hotel;
  • The conference supplied a free "continental breakfast" several mornings, which allowed me to skip the $17 version of a continental breakfast offered at the hotel restaurant!
  • The breakfast muffins and croissants were often left out or replenished for the two daily coffee breaks; at the last coffee break, I would take an extra muffin (only when I knew there were enough for everyone) to snack on later;
  • I avoided the more expensive restaurants to which my coworkers and new conference friends wanted to go to. This has been my downfall in the past: when everyone else is ordering the $20 hamburger, the $12 drinks, and the requisite dessert, it's tough to rein in my hunger/thirst AND stay within the $50 per diem for dinner!
  • Finally, I avoided the trinket and tourist shops, and walked away with some edible gifts for the office but nothing for myself.
All in all, it was a good trip! The weather was fantastic, I had fun and learned a lot at the conference, and the best part is that my employer will pay for 100% of the trip---not a dime will have to come out of my own pocket, which is as it should be!

Saturday, November 8, 2008

Continuing a frugal habit. . . .

Last year I began my frugal journey, beginning with decreasing the amount of energy I use around the house. I unplugged appliances, turned down the heat (way down!), stopped using fans on hot days, and made sure I turned off lights when I was leaving the room.

It paid off! Here are the differences in my gas bill over last year:

November 2008 bill: $9.18
November 2007 bill: $26.56

As for my electricity bill, that's been a bit more difficult, but I'm still seeing some savings there as well:

November 2008 bill: $44.94
November 2007 bill: $53.13

I think last winter I shivered more than I've ever done in my life. This year, I feel as if I'm a bit more 'immune' to the cold. Having my thermostat at 62 degrees on cold days seems almost too warm, if you can believe that! I'm hoping my immunity will last through the cold, dark winter.

As I pay off my credit card (a little less than a week from now!) and begin to think about increasing my savings and starting to chip away at my student loan debt, I'll want to remember these small victories; saving $9 dollars here and $11 dollars there may not seem like much, but over time these small savings have allowed me to meet a big goal--of doing away with my consumer debt.

Next week, I'll be away at a conference---I'm traveling frugally there, too. Although my employer will pay for the majority of my trip, I'm also buying my own snacks to bring along so I'm not tempted to pay $5 for a granola bar or bar of chocolate (I'll be in a very expensive location) . . . . Anyway, just a reminder that I may not be able to post for awhile, but I'll be back!

Have a great week, everyone!

Tuesday, November 4, 2008

Don't forget to vote. . . . .

After two lonnngggggggg years of campaigning, the day is finally here. No matter what your political orientation or how you will vote, be sure your voice is heard today!

If you need additional incentive, just know this: If you don't vote, you don't get to complain about anything our government does for the next four years! (-:

Sunday, November 2, 2008

Spreading the love. . . .

Momstheword tagged me for an award! Thanks! And now I get to pass it on to someone else. . . . .

The rules are that I'm supposed to mention who gave me the award (done!) and then comment on their blog that I posted the award (done!).

Then list six values that I hold, six things I don’t support, and pass this on to six people.

So, here goes:

Six values that I hold:

  • Frugality (of course!)
  • Empathy and generosity toward those who are less fortunate than I
  • Carving out some time for friends and family amid the chaos of life
  • Continuing to learn and grow, always
  • Viewing peope as equals regardless of their beliefs or actions
  • Taking care of myself (physically, mentally and spiritually) so I can help others
Six values that I don't support:
  • Greed
  • Judging others who hold differing beliefs
  • Always being "right"
  • Dishonesty
  • Violence and aggression toward the self, toward others, or toward the environment
  • Laziness
And now, to whom should this Kreative Blogger award go next?

Six blogs I enjoy:
So there you have it, folks! I hope you'll visit these bloggers, as I do from time to time. I can honestly say that I wouldn't be $171 away from being free and clear of credit card debt without the blogosphere to educate and support my efforts!

Friday, October 31, 2008

Bit by bit. . . . .

Today is payday!! And today, I was fortunate enough to receive two checks, one from my day job, and one from my night job. The entire "night check" went towards my credit card (aka 'emergency card') debt, leaving me with a grand total of $171 to pay off! This, I know, I can do before the end of the month.

Technically, I could send the money now and get rid of this last little bit of consumer debt. However, I'm going to be away at a professional conference the week after next, and since the university doesn't hand out advances on travel funds, I'll have to cover my meals and transportation with my own money, and receive the reimbursement after I return. I want to have a cushion of cash in my checking account, so I'm not tempted to use my "emergency card". Invariably, when I travel for business, I end up spending more than the university per diem rate, and that would end up sitting on the card until the following month when I could pay it off.

Anyway, I'm ecstatic to be $171 away from my goal, almost exactly a year after I began my frugal experiment! In December, I'll need to start thinking about how to use that 'extra' money. I know I'll start putting money back into my 403(b) retirement account, and I know I'll pad my emergency fund, but the real question is whether I should start making at least the interest payments on my gargantuan student loan debt---right now, the interest is accruing and being added to the principle, so I'm basically going into more debt by not paying at least the interest. . .

Monday, October 27, 2008

Call me crazy, but. . . . .

I find it difficult to feel much sympathy for the wives of husbands who work on Wall Street, who have seen their incomes shrink significantly. For example, in this LA Times article, one woman's husband was making $400,000 a year ($200,000 base salary, and, I presume, $200,000 in bonuses). Now he's down to "just" $200,000 a year. No bonus, poor guy.

Am I seriously supposed to feel bad for people who were earning---on one salary---more than I'll make in ten years?? I'm usually not this snarky on this blog (I'm plenty snarky in real life), but $200,000 is a ton of money. If you move out of your giant house with the giant yard in the great neighborhood, and maybe trade in your giant cars for one efficient one, and consider NOT spending $500 on a 3-year old's "back to school" clothes, perhaps, just perhaps, it won't hurt so bad.

Now, I know everything's relative. My salary is pretty good, and my income is actually right at the median for Portland when I include the earnings from my second job. I've got it pretty good, in spite of the crazy fun I've had with credit cards in the past (one more month to the Big Payoff, folks!). There are people out there who would look at my life and think it's pretty luxurious, frugality notwithstanding.

Truly, though, I don't think I can stand to read too many more articles about Wall Street wives (or employees, or whatever) who were making upwards of $200,000 and more a year, who are now forced to (gasp!) clean their own houses and make their own meals.

There. That's my rant. I hope to be less snarky as the week goes on!

Friday, October 24, 2008

Overheard on the Max. . . .

A woman having a conversation with her seatmate about her husband, who was laid off months ago, and hasn't been able to find a job since. She talked about the "tight market", meaning that even though he has years of experience (in what, she didn't mention) he's not receiving many responses to his resume.

She commented that she hadn't been sure they could live on just her salary, and that they were making drastic changes in what they spend money on. It appears that they're 'making it', for now, but if her partner doesn't find a job soon, they could be in trouble.

It was interesting to hear this firsthand account of the troubles that Oregonians (and Americans) are facing right now. As I wrote on Tuesday, I feel somewhat insulated from economic woe because I work for a large public university. Barring a complete meltdown in the government, my job is fairly safe.

My eavesdropping emphasized (for me, at least), the reality that folks are struggling. They're losing jobs they've held for years. They're having a lot of difficulty finding other work. Hopefully, this new economic reality will force all of us to think twice before pulling out the credit card and making unnecessary purchases; especially when that credit card might be needed for a true emergency sometime in the future (I wish they were called 'emergency cards').

Tuesday, October 21, 2008

An interesting response. . . . .

Finally, big-name economists are saying the 'R' word. Recession, that is. In fact, after months of wondering "whether", we now seem to be asking "for how long"? I was surprised to learn that my own state, Oregon, is one of 27 now considered to actually be in recession (there are 14 more 'at risk'). Perhaps because I work in public education, I've not witnessed much in the way of layoffs, and therefore, I thought Oregon was doing relatively well (as compared to, say, California).

So, now what? I suppose we go back to our tips on 'how to survive a recession'. Basically, paying down debt and not adding any additional debt is key. But there seem to be others who are taking a rather extreme view of the current economic environment. For example, in this article about a certain Seattle-ite named Atash Hagmahani (which actually is a pseudonym), who is buying nonperishable food in bulk, and generally preparing for an economic emergency he terms the "Greater Depression".

According to the author of the article, there is a small but potentially growing number of Americans who are heading into survivalist mode, what Jim Rawles calls a desire to "secure basic emergency resources that he terms “beans, bullets and Band-Aids.” And I thought I worried too much!

Now, I personally take a more moderate approach to our difficult economic times. As you know, I'm slowly paying down my credit card debt, and will begin increasing my savings by the end of the year. I don't really believe we need to be hunkered down in our houses with a year's supply of rice and beans. However, the article did contain one paragraph that illustrated the benefit that can come of recession, which is quoted here:

"In the last three or four years, Atash Hagmahani has led his clan away from what he calls their former “yuppyish lifestyle.” They no longer eat out, cook most meals from scratch, and rarely drive their one car. They also are all learning practical skills — such as sewing, nursing and wielding a gun for self-defense."
Now, if the current recession means that people are spending less on needless luxury items, saving more, and learning to make do with what they have, I'm all for it. We've lived far too long on credit, and while it will take time for our economy to move from dependence on how much we spend at the mall to other sources of growth (alternative energy, anyone?) we as individuals and as members of our communities can start making important, wallet-enhancing changes at a grass roots level.

Friday, October 17, 2008

Crazy for credit. . . .

I got home in time for the last half of a national news program on TV, and heard this very interesting quote:

"Consumer credit helps the economy the way getting drunk helps make a party more fun"
I wasn't quick enough to note the economist who said this, but I thought it was brilliant! It completely illustrates the danger of having a bit 'too much' fun at a party, and having pay for it the next day in the form of a raging hangover. I think we, as a society, are now past the point of partying, and are in the midst of a mighty hangover!

In attempting to track this economist down, I came across an article on MSNBC that discusses the 'American Debt Nightmare'. This article, at the outset, makes two very important points:

  1. We rely on consumer credit now more than we ever have in the past. On average, we spend a whopping 14% of our disposable income on credit card payments! That's a huge number! Say your disposable income (what's left after paying taxes) is $2,000 a month; if you're an average American, almost $300 of that would go to minimum credit card payments!
  2. Since Americans are clearly living way beyond their means, relying on credit cards to meet basic needs, our savings rate is miniscule. In fact, the savings rate dropped to less than 1 percent last year. How can we ever expect to reach financial independence by relying on credit cards and a savings rate that is flirting with zero percent?
This article continues by presenting 'real person' interviews with Americans who are now beginning to feel the pain, especially since credit is now drying up. One couple had their $40,000 equity line of credit frozen. Granted, it sounds like they're going to be just fine---they simply won't be able to renovate their basement this year---but it must have been quite a surprise to learn that their $40,000 'cushion' had suddenly disappeared.

This story and others simply serve to remind me that credit isn't really money---it's sort of imaginary. If you're relying on imaginary money to shore up your finances during hard times, you're putting yourself in danger. It's a sad commentary on the state of the economy, but I wonder how many of these people will remember the lessons they've learned once we're 'back in the black' financially as a country?

Tuesday, October 14, 2008

A frugal confession. . . .

So, with the colder weather and the looming threat of rain on many days, I've returned to my Max (lightrail) commute. This keeps me warm and dry, and is quicker than the bus from my house; I get to work on time each and every day, and arrive home a little earlier in the evenings, which is nice.

However, there is one thing about the Max that also holds my interest. Each morning and evening, I pass an Oregon lottery sign, which indicates how much the current lottery winnings are (today, it was $25 million). This generally sets me off on musing about what I would do with that kind of money. Assuming, after taxes, I came away with half of $25 million, my usual fantasies involve paying off my own mortgage and those of my family members, waving 'buh-bye' to my student loan debt, buying a reliable car, and traveling my tush off. Sigh.

Although I haven't bought a lottery ticket in ages (they don't fit into my frugal budget), I often feel a twinge of guilt about even fantasizing about winning the lottery. Do I really need to be a multi-millionaire to be financially independent? NO. It sure is fun to think about, though!

As usual, I came across a relevant article that discusses the many ways those of us earning an average income might be sabotaging our ability to become "millionaires" in our own right (or, at the very least, financially independent). Here are some examples of habits or beliefs that might be hurting your finances:

  • Needing to drive a fancy new car. I've often made mention of my 13 year old clunker. I still drive it because a) it runs (mostly) and b) it's paid for. I do still fantasize about a shiny new car, but my long-term financial goals simply don't include a car payment at this time.
  • Starting too late. I regret not saving and investing from the first day of my first job at the age of 16, but I also like to remind myself that at least I eventually started.
  • Not appreciating the value of learning. I often feel like I've been in school since I was 5, and actually, that is kind of true. There have been very few years in which I wasn't pursuing some sort of advanced degree. And hopefully, all of that work will pay off in terms of higher salary and more leisure time.
  • Needing a large house. One of my first posts discussed a conversation I overheard on the Max, in which a man was talking about his giant house. This is one area where my attitude has changed. Rather than striving for a larger house, I would love to get into something smaller, more energy efficient, and more importantly, cheaper!
I'll probably continue to lose myself in fantasies of winning the lottery, but will keep in mind the knowledge that it is within my power to create a financially secure life without winning millions of dollars!

Saturday, October 11, 2008

There is some good news. . . .

So, every time I think that the economic news couldn't get any worse, I click on another story that just makes me sick. I am a chronic 'worrier' (so much so that I have a library self-help DVD in my house right now entitled "WORRY"). However, based on a couple of comments from readers of Finally Frugal, I realized that we can probably find some good news in all the bad.

For example, some people are keeping things in perspective and doing just fine, like Marci:

"What's the worst that can happen? I could lose all my money, my IRAs, my PERS, and SS, and my job. I think I'll still be ok. The house is paid for - and my bare bones emergency budget is under $400/month, under $300 if I defer the property taxes for up to 4 yrs.. I don't think all the pieces of the pie would get lost at the same time. Therefore, I'm just not going to waste time worrying."
In response to my post about sending a $1,000 windfall to my credit card company, 'Melanie' had this to say:
"Way to go FF! Those "three check months" can be a real boon - I managed to eat up nearly that much student loan debt in just a few years by throwing every tax refund, "third check" and found dollar I could find at it. I'm now down to under $6k. Have faith, you're on the right track and I'm cheerin' you on."
This got me thinking: one of the things that keeps me motivated about paying off debt are the stories from other people about their journey toward financial independence. I LOVE hearing about folks like Melanie who have succeeded in doing just what I'm attempting! Someday soon, I'm going to compile a list of posts from across the blogosphere that highlight and celebrate people who are either close to meeting their debt-free goals, or have actually gotten there.

Here's an example of the type of story I'm talking about, posted on The Consumerist, and entitled: Reader pays off $14,330 in 20 months with our tips. This is a wonderful story, not just because it's a motivator, but because this reader shares her personal strategies, month-to-month, that enabled her to get out of debt.

I guess in the end, I can choose to focus on the gloom and doom, or I can choose to focus on getting myself to a place where I can say: "I'm ok", like Marci, or where I can say that I've paid off most of my student loan debt, like Melanie has. And then maybe my story will help others get motivated to pay their debts, and so on, and so on. . . . .

Wednesday, October 8, 2008

Better late than never. . . .

In scanning personal finance websites, I'm always sucked in by titles that suggest that the author can help me survive this 'economic downturn'. Although I think I'm in fairly good shape now---assuming I don't lose my day job---I'm still not feeling totally comfortable with my day-to-day financial life. I think this is primarily because I'm a news junkie, and reading about 300 or 400 or 500 point drops in the Dow make me jittery, regardless of my miniscule retirement investments.

The articles that make me incredulous are the ones that purport to tell Americans what to "do" with their money, now. The little voice at the back of my head always asks , "what money"? Perhaps because we're hearing the worst-of-the-worst news day in and day out, I imagine that no one has any extra money to invest.

In any case, I definitely lean toward articles that give commonsense advice to people who may already be in financial difficulty, but who, with some discipline and hard work, can weather the storm and come out of this crisis without losing any more money than they already have. With that in mind, here are some ideas gleaned from recent articles that resonated with me:

  • As painful as it may be, take stock of your financial situation. List your debts---all of them---as well as your income. Take a close look at how much you're spending on a daily, weekly and monthly basis, and compare that to how much you're bringing in.
  • Pay the most important bills first, if you have to make a choice. What's more important? Paying the cable bill or the electricity bill? I'd say electricity, personally.
  • Call those credit card companies, and ask for a lower interest rate. This has worked for me on multiple occasions---they're not going to offer this to you, so you have to be the one to ask.
  • Speaking of credit cards: STOP using them! Unless you've got a major emergency, those credit cards need to stay in a drawer at home.
  • Pay more than the minimum on your debts. Due to my second job, I'm able to pay much more than the minimum on my credit card---plus I throw any additional income toward my credit card debt. Because of this (and the fact that I canceled cable, my gym membership, and other 'luxuries') I will hopefully have my last credit card paid off by November!
  • Speaking of second jobs, consider getting one. Although my second job only brings in about $600 a month, this has been instrumental in getting my financial house in order. An added benefit is that it lowers my stress level when considering a job loss (this isn't going to happen, but I'm a worrier. . . .)
Although I started doing most of these things almost a year ago (!!), even if I started tomorrow I would be better off than if I never began at all. To paraphrase a popular quote:
"The best time to fix your finances was yesterday. The next best time is today."

Monday, October 6, 2008

Americans are finding frugality. . . . .

Granted, they're finding it out of necessity more than anything else, but it's interesting all the same. A New York Times article is predicting that this holiday season will see fewer Americans buying big-ticket items for their families. This, of course, is seen as hurting the economy. I lean toward the opinion that our economy needs to rely less on Americans' use of credit to purchase more and more stuff, but on manufacturing, technology, and exports of our goods and services to other countries.

I'm thinking about asking my family if we can have a gift-giving 'moratorium' this holiday season. Or at the very least, a limit on how much we spend on each other. I know that over the years, my parents have sought to give bigger and better gifts, always trying to outdo the giving of the year before, and I would estimate that at least 90% of that giving was driven by credit cards, not by cash.

How about all of you? Do you intend to spend less this season than you did last year? Why or why not? Do you have any creative ways of giving gifts that don't require huge outlays of money?

Thursday, October 2, 2008

$1,000 lighter. . . . .

My credit card debt, that is! I sent off my electronic payment to American Express yesterday, and although it hasn't shown up on my online statement yet, once the payment is processed I'll owe a bit less than $550 to AMEX. It's a fabulous feeling!

I'm going to keep my emergency fund just where it is at $1,600, and try to send a bit more to AMEX this month from my regular pay (I just realized that in October, I'll receive three checks---rather than two---from my night job). That way, I'll still have a shot at killing my credit card debt by the beginning of November.

Another little bit of help I'll be receiving is the fact that I was offered a promotion and small raise (15%) from my night job! I just completed my first timesheet with the new pay, and although it's only a $2/hour raise, it really does add up!

I can finally imagine a time in the near future when I can breathe a little easier each month when the bills arrive---without my credit card debt, I can build up my emergency fund and then start working on that behemoth of debt: my student loans. I get tense just thinking about the $55,000 I owe to Uncle Sam, but I suppose if I can work at it little by little I'll eventually take care of it.

Continuing to watch my spending habits and learn more about frugal living strategies will help me keep my budget in line with my goal: to be debt free!

Tuesday, September 30, 2008

Frugal economy. . . .

The more I read about our collapsing economy (I'm an internet news addict, these days), the more I thank my lucky stars that I began paying off debt and saving money almost 12 months ago. One of my bank accounts (no longer used for anything other than ATM withdrawals) is at Washington Mutual, which, as I'm sure you've heard, 'failed', was taken over by the government, and is subsequently being sold to J.P. Morgan Chase. Incidentally, I heard this news late last week; by today, my ING Account showed not 'WAMU' as a linked account, but in fact 'J.P. Morgan'! They certainly didn't waste any time!

Last week (or, geez, was it only a few days ago?), I wrote about my upcoming lump sum payment for a retroactive pay increase. I intend to send this money to my credit card, paying off about $1,000 in debt in one fell swoop! I also contemplated using some of my emergency fund (of which I have $1,600) to pay off the rest of my credit balance. Several commenters thought I should keep the emergency fund as it is, 'just in case'.

I'm definitely leaning in that direction, folks, not only because of the points my commenters brought up, but also because of this financial article, reminding readers what to do in an economy like ours. Basically, the author suggests that we should act as if we were preparing to lose our jobs! In short, this means:

  • Decreasing contributions to a 401(k) or 403(b). I already did this last spring, when I became determined to pad my emergency fund (something the author recommends) and pay down my credit when a labor strike seemed imminent.
  • Eliminate unnecessary payroll deductions. The author uses charitable donations as an example, which seems sad. However, I suppose in the long run a strategy like this would work better for charities anyway; keeping oneself healthy financially in the short term would allow one to increase donations in the future.
  • Reduce income tax withholdings. Or, put another way, decrease the money that you'll receive as a refund later and increase take-home pay now.
  • If you're still brave enough to be investing in the stock market, diversify. Personally, I don't have the stomach to even look at my tax deferred investment account, let alone play with the contributions.
  • Pay off any 401(k) loans. Hopefully none of us have taken a loan on our retirement!
  • Research life and health insurance options, in the event of a layoff. Find out how long you're covered and for how much; if you're lucky enough to have a spouse or partner who has coverage, consider switching to their plan.
So there you have it. Luckily, I'm already doing all of these things and more, although I'm still nervous, of course. My job is secure---for now. But it's nice to have even a smallish emergency fund to back me up in the event of a financial meltdown.

In other news, Dave Ramsey's coming to town on November 1st, and I can't decide if I want to shell out the $36 it would cost to see him in person. I know it would be a great motivator and reminder---Dave's book, The Total Money Makeover, is one of the first financial books I read that catapulted me into my frugal lifestyle. I'll have to see how much money is left in my checking account after I've sent my mega-payment to the credit card company later this week!

Saturday, September 27, 2008

Another reason to minimize credit card use. . .

So, I came across this article based on an interview with two women who worked for a large bank, as customer service representatives (you know, the people we call when we want a balance transfer, or a lower interest rate, or a late fee removed). Apparently, these employees were encouraged to "sell" credit to people----especially people who sounded as if they were already in financial dire straits.

For example, they were trained to listen for phrases like "I can't pay my bills", "My son is going to college", or "My car isn't running". These consumers were considered 'marks', and were then sold credit at "the highest rate possible".

Now that it's clear Americans have been financially overextended for a very long time (and I include myself in that group), we can see that part of the reason for this has been what I consider to be unethical selling practices by American banks and lenders. 'Selling' credit to a person who has a very good chance of repaying that debt is good for the economy and the country; pushing credit on people who are already stretched to the limit and who will probably miss their payments (thereby allowing the bank to increase interest rates) is immoral and dangerous.

I'm not saying that people don't have a responsibility to determine whether they are able to repay their debt before borrowing money. But I think at least part of the horrendous economic problems we're facing have to do with lenders threw money at people they knew would be unable to pay on time. Just one more reason to keep the credit cards safely stashed in a drawer at home, unless a true emergency presents itself.

Thursday, September 25, 2008

A frugal increase. . . . .

My union negotiated a small increase for us in July, and we are now seeing our retroactive pay (the raise was negotiated to start as of January 2008). I received my electronic paystub yesterday, and it appears that my January-August pay increase amounts to about $1,000, after taxes!! Although my monthly income will increase by less than $130, anything is better than nothing in this precarious economy.

As for that $1,000, what do you think I'll be doing with it? Buying new clothes? Downpayment on a new car? A trip to California? Nope, nope and nope. I'm going to send all of it straight to my credit card debt, meaning that by the end of next week, my credit card balance will finally amount to less than $1,000---in fact, it will be just over $500!!! This means that by the end of November at the latest, I should finally have my credit card paid off.

Now, here's my dilemma: remember when my union was considering a strike, and I decided to send more money to my emergency fund, "just in case"? Well, I now have a bit over $1,600 in my EF. Dave Ramsey says I should have $1,000 stashed away for emergencies, until my debt is paid off. I'm considering using $300-$400 of the funds in my EF to pay my credit card debt down even further, which would allow me to be credit card debt-free by the end of October!

What do you think? Unless a huge emergency occurs in the next two or three months, I should be covered---I'll be able to start building my EF up even higher after the credit card is paid off, and have no credit debt would be phenomenal!

Tuesday, September 23, 2008

Saving for the future. . . .

The fall term is upon me, and with the changing leaves, classes starting, and chillier weather, so arrives my tuition bill. Since I work at the university, I'm eligible for tuition benefits, which amount to roughly $2,700 a term (not a bad chunk of change). However, I'm responsible for approximately $300 for university and department fees, plus book costs. In years past, these costs normally ended up on my credit card---I never had $300 in my checking account at any one time, let alone the $150 additional for textbooks and other school supplies!

These days, however, I have my ING Direct savings sub-account entitled 'Tuition and books', to which $133 is sent every payday. Right now there is more than enough to pay my fees, and on October 1st, there will be an additional $133 added to it, which will help cover my book costs.

A simple change in my budgeting system has allowed me to pay for these items outright, rather than putting them on credit and paying 8 or 9 or 12 or 15% interest over many, many months. I'm actually amazed at how simple it is, and the best part is the decrease in stress when the term begins---I have the money. It's in the bank. I can pay with cash! Well, with 'debit', but you get the point.

And it was so simple! All I did was:

1. estimate the amount I would need for tuition and fees, plus books, each term. This is admittedly the most difficult part; it's basically a 'guesstimate'. However, once I'd come up with this estimate, I:

2. multiplied that number by four. Why four? Because the Oregon university system runs on quarters---four terms per year (as compared to the semester system, which I prefer, by the way). So if I know that I'll be taking courses every term during a year, then I'll need to know my yearly tuition, fees, and related school costs. Then I:

3. divided by 12. This gives me the rough monthly 'cost' of attending school, which is around $133. Finally, I:

4. created an ING sub-account (I LOVE sub-accounts!) into which I deposit $133 each month. I had to begin the sub-account at the beginning of a term, so the money in the account had time to grow large enough to cover the following term's bills.

It works like a charm! I know it sounds like an exercise for a kindergartner, and I probably shouldn't be so delighted by it, but for someone who used to regularly put piddly amounts on credit---even items that I had known well in advance I would have to purchase, it's nothing short of a miracle.

Saturday, September 20, 2008

What we've given up. . . .

As the economic news continues to worsen, I'm thanking my lucky stars I started living more frugally almost a year ago (!!!), and am used to the 'loss' of certain luxuries. What have I given up, over the past ten months?

  • Cable TV (with all the 'extra' time I have I read more, see my friends more, and write this blog)
  • My gym membership
  • A warm(er) house in the winter
  • A cool(er) house in the summer
  • My overly expensive Verizon wireless plan (I'm now a pay-as-I-go wireless customer, and it's working out brilliantly, thank you very much!)
  • My car (I'm now a public transportation junkie)
  • Buying books left and right (have I mentioned that the local library has FREE books and movies, AND has heating and air conditioning for those extra cold/hot days?)

What's interesting (and yes, disturbing) to me is reading about families who are just beginning to cut out their own luxuries, whatever they are. CNN has a section on its website called 'iReport', and this week quite a few American families detailed how their lives have changed since the economy started heading south. After reading some of these stories, I, for one, feel incredibly lucky to have not one, but TWO jobs, considering there are highly-educated and experienced folks out there who cannot even find one job.

Even in the midst of paying off debt and trying to live more frugally, I think this new economic downturn can result in positive changes, both politically and personally. The fear and anxiety that Americans are feeling just serves to emphasize to me that living below my means is the way to go: in healthy economic conditions I can save for the future while enjoying my life; in horrific conditions like we're witnessing now, my frugal ways will help me stay afloat until the economy improves, as it always does!

Thursday, September 18, 2008

A really small house. . .

As I was searching for a home to purchase in the Portland area over two years ago, I remember thinking that I absolutely, positively, needed a certain amount of square footage in order to be happy. I ruled out anything that had less than 900 square feet, and although there were 'tiny' houses at about 750 square feet in my price range (and in attractive locations), I didn't even deign to look at them. "Much too small", I thought. "I need something that is at least as big as my house in California" (which, you may be surprised to learn, was just 1,000 square feet).

So, I ended up with a lovely 980 square foot house in a nice neighborhood that is unfortunately far, far away from where I work, in downtown Portland. Now I find myself considering selling my house in order to move 'closer in' to downtown, which means that I'll probably forfeit some space, whether I buy or rent. Now, however, a 750 square foot house sounds just fine! Since I've become more frugal, more committed to simple living, my attitude has changed. I no longer need a certain number of square feet to fit all of my stuff---instead, my stuff will just need to fit into the space I find! Now, this is assuming I make the decision to sell my house, which is by no means an easy one, in this market.

It was heartening to see, however, there there are others who feel that they can live in spaces far, far smaller than those that even I am contemplating! One of the homeowners interviewed for this article lives in a 100 square foot "wee house", located on a friend's property! In fact, a 'green builder' in Arizona has this to say:

"I'm not the Gallup poll, but I hear the same story over and over: 'We got rid of that big house, and now I have time to see my husband. Before, we used to work all week and then we'd spend the weekend on the house."

This mirrors the quote that lives in the far right corner of my blog, by Ellen Goodman, in which she laments that the new 'normal' is spending all day working in order to afford the house we don't get to spend any time in!

Now, I truly don't (at this point in my life) see myself in a 100 square foot 'wee house'. But the mere thought of it truly does help me to see that the only limitations I face are the ones I place on myself!

Tuesday, September 16, 2008

Surprising savings. . . .

I returned from the phenomenally sunny and warm Oregon coast on Saturday, and bid goodbye to my parents on Sunday. Now I'm attempting to catch up to my budget and finances after a week of walks on the beach, wonderful meals, and cable TV (I must admit, one of the real 'luxuries' for me was being able to watch HGTV).

I budgeted $200 for the past week, expecting to pay for part of the hotel bills as well as some of the food costs. The beauty of having family visit, however, is that paying one's own way becomes somewhat difficult. I asked---and was politely turned down---to pay for the first hotel we stayed in. At no time was I asked to pay for any meals or gas costs!

As for shopping, I spent roughly $45 on a sweater-jacket (in a style I have been searching for), but the rest of our shopping revolved around helping my mom find a gift for a friend who was watching their house and feeding their cat in my parents' absence. To be entirely honest, the boutiques we visited on the trip were so expensive I couldn't have purchased anything had I wanted to, unless I used my credit card. Which I did NOT do, of course!

So, I think I spent about $60 for the whole week on the coast, including my new sweater and some coffee and muffin purchases I made. We ate out a LOT, and I found myself wishing that we could just go to a grocery store, buy some apples, cheese and bread, and have a frugal picnic. However, it was my parents' vacation more than mine (I can go back to the coast any time I want), so I suppressed my frugal instincts, and ate much more richly than I have in a long time.

In retrospect, I'm glad I didn't spend my entire beach budget; I realized when I returned that I gave up an entire week of night work (meaning I also gave up an entire week of pay), so my budget is going to be somewhat tight for the rest of the month.

Tuesday, September 9, 2008

A frugal vacation. . . .

Hey there! I'm on the beautiful Oregon coast, without access to a computer (gasp!) so I'll be back next week!

Have a frugal week!

Monday, September 8, 2008

A frugal sale. . . .

Well, that was more work than I've ever done for $60! My yard sale, that is. The day (Saturday) dawned overcast and chilly, so my visitors were few and far between. Interestingly, I had my 'rushes' early on and then at the very end, as I was packing up. Although I didn't 'make a killing' as they say, there was at least one benefit to the hours and hours I spent going through boxes and decluttering my house and garage: I took everything that remained straight to the Goodwill. Meaning that my house and closets look much cleaner and emptier! So, all in all, it was definitely worth the work.

On a side note, as I was checking Craigslist to check out my 'yard sale competition', I noticed a posting that was titled: "The Dave Ramsey Sale". This guy was taking Dave's advice and getting out of debt by selling extraneous items (he had lots of sports equipment listed for sale). I thought that was wonderful! I hope he made tons of cash, and sent it all to his creditors. By the way, if you're new to getting out of debt, be sure to read The Total Money Makeover, by Dave Ramsey. This book, along with Your Money or Your Life, jump-started my motivation level and almost a year later, I'm still committed to getting out of debt (and I'm almost there---in terms of my credit card debt, that is!) Note: borrow them from the library first, before deciding to buy.

Now, if you've made it this far, I just have a little 'vacation' announcement to make. My family is here visiting from California, and we're off to the Oregon coast for a little rest and relaxation---and it's supposed to be beautiful weather there this week! So, I won't be posting until next week! We're hitting Cannon Beach (note to Marci: we unfortunately won't make it as far south as your town), and my goal is to try not to get back into my old shopping habits while with my mom, with whom I used to shop when I lived in California. In fact, the first thing she said when I announced I was moving to Oregon was "But who will I go shopping with"? Cannon Beach is a cute little town with loads of shops and boutiques, so it will be a bit of a challenge. I'll check in a week from today to let you know how it went!

Have a wonderful week, everyone!

Thursday, September 4, 2008

On becoming a nag. . . . .

I had my hair cut today, at one of those cheap places where you never see the same stylist twice. It's always sort of a crapshoot: "Will my bangs be too short? Will the layers be short enough? Look at all that hair on the floor! I swear I asked for just an inch off the bottom!" Quite the adventure! I've still not been home to 'style' it the way I like it, so while I have a good feeling about this $15 haircut, the jury's still out.

Anyway, as I was chatting with the young stylist, she mentioned that she had just recently opened a savings account, with which she is going to save up for a trip to Europe next year. Excited, I immediately started asking questions: "What kind of savings account? Were there fees? Is she saving automatically?" Then I realized that I was asking very personal questions of a relative stranger, and shut my trap. I truly wanted to ask her about how she is saving for retirement, which probably hasn't even entered her mind at this point, but I successfully reined in my curiosity. Based on some other comments she made, however, I gathered that saving money is not her strong point.

I've been trying, for two years, to convince a young (28) coworker to open a tax deferred investment account in addition to the pension that we'll receive as state employees (assuming we make it to retirement age). He's been dragging his feet, and will probably continue to do so, regardless of my nagging (or maybe because of my nagging. . .) I use the words 'compound interest' and 'millionaire' many times in my little talks with him, to no avail. I simply can't understand his reluctance. Then, yesterday, I read this article concerning young Americans and their reluctance to save for retirement.

The survey results presented in the article indicated that young Americans (defined as those in their "20's and 30's") often cash out their 401(k) accounts each time they change employers, rather than letting the accounts roll over and continue growing! And most people will change jobs at least 6 times during their lifetime (I think I've almost hit that milestone). I actually have a friend who did this recently---she and her husband were moving across the country, and she took money out of her retirement account to use as savings while she looked for a job----as far as I know, it never went back into her fund.

Although I am in no way a financial expert, and my own financial history is less than stellar, I consider the money I put into my 403(b) to be sacrosanct, not to be touched unless there is a dire emergency. This is because I understand that I've waited a long time to begin saving, and I need all the compound interest benefit I can get so that I can someday retire. I only wish I'd figured all of this out when I was in my mid-20's before racking up thousands (and thousands) of dollars of credit card debt!

Tuesday, September 2, 2008

Frugal clutter. . . . .

Yesterday, in honor of Labor Day, I started hoisting boxes from the upper reaches of the garage, with the goal of finding items I could easily part with at my yard sale next Saturday. When I first began thinking about having a tag sale several weeks ago, I was afraid that I wouldn't have enough 'stuff' to sell. There's nothing worse than a yard sale with only a few items, and I just couldn't picture what exactly---beyond a few obvious kitchen gadgets and some furniture---I could sell.

The garage, however, turned out to be a veritable goldmine! There were more than a few boxes that had never been unpacked. I hadn't unpacked them when I moved to Portland over two years ago, and lived in an apartment. I hadn't unpacked them when I moved into the house I live in now. I realized that if I've been able to live without these things for this long, I could easily 'let go' and sell them. Now one wall of my office is lined with boxes and bags of price-tagged STUFF that I don't need now, and probably never really 'needed'. It feels GREAT! And I still have two more boxes to open and investigate. . . . .

Another benefit of this Labor Day 'purge' is that I went through piles of paperwork going back years and years. I filled my entire recycling can with shredded documents! My particular form of clutter-disease is made up almost entirely of paper (mostly mail) and clothing. Mail and other documents are stacked and stacked day after day, until guests are imminent, and then the stacks are hidden in drawers and boxes. Rarely are they looked at again (I once found an eight-month-old check for $1,200 in one of these stacks)! I'm getting much better at taking care of mail at the moment it enters my house, but again, it felt phenomenal to rid myself of these lurking stacks once and for all!

It was a bit like a geological survey; for example, I found old check registers ranging from five to eight years ago. It was incredibly interesting to see what sorts of things I was spending my money on, so long ago. The number of checks I wrote to credit card companies astounds me, and it's clear from the amounts that I was simply paying the minimums. Here's an example of just one round of credit card bill-paying:

  • The Gap: $15
  • MBNA: $55
  • Macys: $21
  • Wells Fargo: $35
  • Gottschalk's: $24
  • Victoria's Secret: $20
  • Mervyn's: $35

I couldn't believe how many department store cards I had! And I was paying over 20% interest on those cards, no doubt!

So, my Labor Day was both laborious and educational. I learned that I've created and maintained much better habits, and that I'm not a prisoner of my stuff---I really can (and will, this Saturday) get rid of the things that take up space in my life.

Friday, August 29, 2008

My housing slump. . . .

I've been considering lately whether it's a good idea to hold onto my house (which is further away from downtown Portland than I want to be) or whether I should sell it and move on. With that in mind, I asked a local realtor to come out to my house last weekend to take a look and give me her advice.

Although I won't receive the formal market evaluation until next week, the realtor seemed optimistic----more optimistic than I am, for sure! I know part of that is the fact that the realtor is a businesswoman---she needs to list houses in order to sell them, in order to make a commission and ultimately feed her family. So of course she's going to tell me that my price requirements are reasonable (I simply want to pay off what I owe, not make a profit) and that my house "shows well" compared to the competition. Actually, I do know how to make a house look attractive and cozy, so that last part isn't so far from the truth.

Yesterday, I sat and worked out the one thing I've been avoiding: If I sell my house and end up renting, how much more will I pay in taxes, without my mortgage interest and real estate tax deduction? Turns out, my taxes will double (disclaimer: I'm not a tax expert, nor am I particularly great at math, but generally I try to be more conservative when I'm inputting numbers that will lead to a tax estimate).

At first, I blanched at the thought of paying more taxes. Then I considered that, with my relatively low salary, I really don't pay THAT much in taxes anyway, compared to people like my brother and his wife. Then I wondered how I could offset those taxes. Well, I could increase my contributions to my 403(b) plan. I had been putting between 10-12% of my salary into my 403(b); in April, I cut that to 1% until my debt is paid off. Without a mortgage to pay, I could put a whopping 25% or more into my 403(b)---with money left over for travel and other fun pursuits---and reduce my tax bill quite a bit. Not as much as my mortgage interest would, but the savings would be substantial, AND I'd be investing in my retirement at the same time. By the way, I use an incredibly useful tool called Paycheck City, with which you can play around with your withholdings and view your net pay under all sorts of different scenarios.

So the inner dialogue continues. I'll revisit this next week, once I've received the formal market evaluation. My parents are coming for a visit the week after next, and I'm sure I'll bounce some of these ideas off them as well (they're not known for financial 'astuteness', but it's always nice to hear a second opinion).

Have a lovely, relaxing, Labor Day weekend, everyone!!

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