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!!

A frugal fable. . . . .

In keeping with my current thoughts about the definition of success in my life (more money, or more time?) I'm reading a great book right now, entitled "Beating the Success Trap: Negotiating for the Life You Really Want and the Rewards You Deserve", by Ed Brodow. I just wanted to share a fable that is included in the beginning of the book:

"A businessman is vacationing in a sleepy fishing village in Maine. He meets a local fisherman who is docking his small boat, which contains a few fat fish. The business admires the man's haul of the day and asks how long it took to catch.

'Oh, a couple of hours', is the reply.

'Why didn't you stay out longer and catch more fish'?

'Because I already have enough to feed my family.'

'Well', the businessman continues, 'what do you do with the rest of your time'?

'I sleep late, play with my kids, make love to my wife, walk into town every night where I have a glass of wine and play cards with my buddies.'

The businessman hands him his card. 'I'm a business consultant. I can help you out. You need to spend more time fishing. Then you could sell off the extra fish and buy a bigger boat with the money. With the income from the bigger boat, you could buy several more boats. If you play your cards right, eventually you could have a fleet of fishing boats and your own cannery. You could then move to New York where you would be able to oversee your growing operation.'

'How long will all this take?' the fisherman asks.

'Twenty years.'

'Then what?'

'Then you would go public and sell your stock for millions.'

'Then what?'

'Then you would be able to retire. You could move to a small fishing village where you could afford to sleep late, fish a little, play with your kids, make love to your wife, and play cards with your buddies every night."

Wow. I mentioned before how I often come across the perfect article (or book!) when I'm trying to figure out something difficult or serious. This gives me something to think about---continue my frugal ways, live simply (no more fish than I can possibly eat) and enjoy my time now, or work long and hard, strive for more money, and enjoy it all at a point somewhere in the distant future?

Frugal exercise. . .

I've noticed a subtle thickening around my waist and hips, over the past six months or so. My doctor says that some weight gain is normal as women age, a comment I'm trying to ignore. It's probably no coincidence that this began around the time I terminated my gym membership while simultaneously beginning to socialize more (meaning, I eat---and drink---"out" more than I used to). I certainly don't want to spend any more money on a new---larger---wardrobe, so what's a gal to do when she's trying to budget AND lose some weight?

In the summer, it's not been difficult to get myself down to the track for a run---free exercise! And yesterday, I spent a grueling few hours in the front yard making a dent in the weeds that have suddenly sprung from the earth. I probably did the equivalent of a hundred lunges and squats yesterday, just pulling, gathering, and depositing in the green waste can.

Now, though, I'm starting to worry about fall and winter, when it's literally dark when I get home from work, meaning I can't just run down the street to the (unlit) track, let alone run on the paths in Mt. Tabor park. Is it better for me to spend the $35 a month on a gym membership, to avoid having to spend more money on better fitting clothing?

At this point, I'm saving money on food, since I'm trying to eat smaller portions, with more fresh fruits and vegetables, rather than the tons of pasta, rice, and noodles I generally eat. I'm also cutting back on my alcohol consumption, which is saving me a pretty penny. But I'm still not debt-free (I still owe $1800 to my credit card), and I wanted to use the gym membership as a 'reward' of sorts, when I was able to finally close that card out.

Although I haven't yet decided on the winter gym membership question, here are some habits I can develop now, to help me save money on exercise:

• Use free weights; I actually already have these, in 2 lb and 8 lb (ouch!) weights. All I need to do is get into the habit of using them regularly.
• Utilize the internet. There are actually short 'podcasts', or online videos, that go through exercise routines that I can do at home.
• Buy a jump-rope. Even if I can't run (and I LOVE running), using a jump-rope might give me the same cardio workout, possibly in less time. And it's CHEAP!
• Check out an exercise DVD from the library. It might be fun to check out a different DVD every week, so I have some variety in my exercise routines.

So there it is. There may be some alternatives to restarting my gym membership; at the very least, I'm going to give it a shot and see how I feel.

Benefits of a frugal salary. . . .

Or, more appropriately, the drawbacks of a large paycheck. On Wednesday, I wrote about the constant battle I wage within myself, trying to decide whether it would be better for me to seek a higher-paying job, or whether I should continue to pursue a frugal lifestyle that will eventually allow me to pay off my debt and live more simply (with the added benefit of having more flexibility and leisure time). It's a tough call, and one that I think many of us struggle with.

Often, when I write a blog post about some question I'm grappling with, I come across the perfect article within a few days, which helps me to see things in a different light. This is exactly what happened today!

While perusing the CNN website (reading about the awful plane crash in Spain), I came across a piece from CareerBuilder.com that discusses the drawbacks of having a larger-than-average salary! If I ever needed to know that making a lot of money isn't all butterflies and sunbeams, it's now. Here's what Rachel Zupek, the author of this particular article, thinks:

• Having a higher salary than your peers may make you target #1 when it comes to layoffs. I've never thought about this, but my relatively small salary makes me fairly 'cheap' when it comes to economizing and gaining value on the university's dollar. My higher paid colleagues do the same job, and I think a cynical manager might zero in on them first (unless the union has anything to say about it) rather than sending a pink slip in my direction.
• Higher salaries also make you an IRS target. It's possible (although not in my world) that a substantial raise might elevate you to the next tax level. Which means, of course, that the hefty raise you just received might be diminished by several hundred dollars a month anyway. I receive a refund every year---primarily because I pay so much in mortgage interest---but it feels good to know that I have a chunk of change coming back every spring, regardless of the penny-pinching and extreme budgeting I do throughout the rest of the year.
• A high salary may doom you to staying put. In other words, if you're at the top of your salary rate in your chosen field, you may not be able to find another job that pays as well, for the same work. If you love your job, that's just fine. But if not, you may have to make a tough financial decision in order to find a position that is more fulfilling. In my case, for the position I hold, I think my current salary is higher than I would find as an entry-level employee at another university in this area. I'll either need to change careers entirely, stay where I'm at, or deal with a lower salary if I moved into a similar position at another institution.
• Beware the glass ceiling. Again, this has never happened to me or to anyone I know, but it's possible that you could hit the top of your salary scale in your particular company---where there's no more room to move upward in terms of salary. So you either stay put, or move into another position at another company to try to get around the glass 'salary ceiling'. What do I think about this one? I should BE so lucky! With miniscule raises in the field of education, I'd have to be here for 30 years to hit the salary ceiling.
• A higher salary doesn't equal more happiness. This is what I've read over and over again. Once you hit a certain level where your basic needs (shelter, food, clothing, etc) are met and you feel comfortable, additional money adds zero benefit to your sense of well-being. Of course, extra money placed into the appropriate retirement fund would definitely benefit you in the future, but as far as present-moment happiness, there's not much difference between a $60,000 and a $100,000 salary (again, I should BE so lucky!)

So there you have it. More money might bring more trouble than it's worth. Has this article helped me solve my dilemma? No. But I definitely have some additional ideas about salaries, money, and career choices, which are now percolating through my head as I attempt to create my September frugal budget. . . .

Frugal travel . . . . .

I received an email over the weekend from my brother and sister-in-law (the doctors), who are currently vacationing in Italy. Rome, to be exact. A wave of envy flowed through me when I read the email about visiting the Vatican and seeing Roman ruins. "Why didn't I go into a field that would allow me the financial freedom to travel like that?", I thought to myself, gloomily. I wish I loved math and science the way I love languages and culture----I could be a computer scientist or an engineer, making $80,000 a year. Then again, I would probably be working a whole lot harder and longer!

How perfect, then, that I came across this article about a gentleman named Philip Garlington, who hasn't worked full time in two years, yet travels frequently. How does he do it? He camps! Apparently, he spent last winter in a Yosemite campsite that cost $2.50 (who knows how much the propane for his heater cost. . .) He recently traveled across England in the rainy season (less expensive, then), camping out and walking from town to town to avoid spending money on public transportation.

Of his lack of regular employment, Mr. Garlington says: "I'm as unambitious as a Buddhist," and in fact avoids paying rent by house-sitting for other people. Granted, as a veteran, he has access to VA health benefits, so his healthcare needs are taken care of. He drives a compact car, and doesn't have the usual monthly bills we 'normal' people do, such as utilities and internet service.

I know that I'll never be---by choice---as frugal as Mr. Garlington, but to read about someone who "prefers leisure time to income" and actually walks the talk is kind of inspiring. I hem and haw constantly about whether I should strive for more money or more time---it seems the more money one makes, the less time one has to enjoy it. Having more free time would be lovely, but without money, what does one do with all of those extra hours? A modified version of Garlington's plan might be the ticket----travel without luxury, work without commitment. The key for me will be to find a happy medium, a balance between too much and too little. I don't know tht I'll ever get there (wherever 'there' is), but I'm certainly going to try.

Frugal bounty. . . .

Our summer has been cooler than normal, and I feel as if my vegetable garden is growing so slowly. I'm afraid that summer will be over and the fall rains will begin right around the time my tomatoes ripen. . . .

In spite of my still-green tomatoes, there are some other garden vegetables that are finally beginning to mature. Last night, I had a pasta salad with fresh green beans, yellow zucchini, and a few tiny little cherry tomatoes that decided to ripen up just as I was fixing dinner. I even found a delicious, crispy sugar pea on the vine, to my suprise!

Unlike J.D. at Get Rich Slowly, I'm not keeping track of how much I've spent (both in terms of money and time) in my garden. I'm content with the satisfaction I get from watching plants grow (including some I grew from seed this year, for the first time) as well as from munching on produce that I was able to pick from plants in my own yard.

J.D.'s goal is to determine whether he and his wife Kris are really saving money by growing their own vegetables. If you're considering whether gardening can help you save some money at the grocery store or farmer's market, here are a few articles that might give you some insight into that:

How to Save Money in Your Home Garden

Digging Up Dinner

Garden Without Spending a Lot of Green

Happy gardening, folks!

Frugal victories. . . .

Those of you who read this blog regularly know that I've made a concerted effort to reduce my energy usage (and therefore cost) over the past year. I was very successful at this over the winter, with my monthly gas bills for 2007/2008 coming in at roughly half of what they were during the 2006/2007 winter. Yay, me!

I've had a little more difficulty in getting my electric bill to decrease substantially, though. Part of the reason for this is that I enrolled in a program in which part of my electricity comes from renewable sources, which results in a small per kilowatt charge. I'm hoping that eventually, as access to renewable energy is expanded, these costs will go away.

One small victory came with my August electric bill. While in August of 2007 my bill came up to a whopping (for me) $84 (with 813 kilowatts of usage), this month my bill was only $41, showing that I used a mere 380 kilowatts! I'm wondering if possibly this summer has been cooler than last (Oregon residents, feel free to chime in with your opinions, here!) I know that last summer I had a fan in almost every room, and sometimes left one on in the bedroom at least half the night. This year, I've used one fan, one time, when I had some friends coming over and the house felt oppressive.

The decrease in fan usage definitely made a huge difference! Now that we're in the middle of a record-breaking heat wave, I'm sure my fans will be working at least a little more than they have been, but hopefully I can just "power" through the heat and keep my electricity costs low in September as well.

Just as a refresher, here are some tips for decreasing your electricity bills.

Working for a living. . . .

I found this on the MSNBC site, at the end of a long, rather boring response to a question about whether the current recession is 'better or worse' than the recession of the 1970's. I'm not sure why we care. The recession hurts, regardless.

Anyway, the following question (and subsequent answer) was:

How many Americans are working two jobs to help cope with gas and food increasing?

About 7.8 million Americans — or about one worker in every 20 — held more than one job in June, according to the employment data released Thursday by the Bureau of Labor Statistics. Some of those people may have three jobs or more. The BLS only asks if you work more than one. And it doesn't ask why.

That’s up a bit from last June, but as a percentage of the work force, the number of people working more than one job has held fairly steady since the end of the last recession in 2001.

Unfortunately, all that the extra work — on average — hasn’t paid off very well. Adjusted for inflation, the average weekly paycheck has barely budged since then. That’s one reason American consumers are feeling so stretched: The cost of gasoline, food and other household bills is going up faster than their paychecks.

Apparently, the Bureau of Labor Statistics asks people whether they're working two jobs! But they don't take the extra step to ask WHY! I think that's a bit lazy! If you've got your subject on the phone (or have enticed him or her to return a survey via email or snail mail), wouldn't it be interesting to get some more information?? I suppose I'm interested in this because I do work two jobs, and while I could probably make it financially (once I pay my credit card off, that is) without Job #2, it sure it scary to think about losing the extra money when I've gotten so used to it. Especially now that food and gas prices have increased so substantially. . . . .

Getting rid of STUFF. . . .

As I grapple with the idea of either selling or renting out my house, in order to move into a (probably much smaller) cheaper place that is closer to downtown Portland, I'm often seized with panic when I think of all of my STUFF that sits in my closets and garage. What to do? I'm definitely considering a garage sale in the very near future, to try to get rid of some of this extraneous stuff (I have more tupperware than you can shake a stick at).

Another way to get rid of this stuff, of course, is to donate it---especially furniture and clothing. I've made bi-annual trips to the Goodwill for years, dutifully dropping off my belongings in exchange for a receipt, with which I then reduce my tax bill for the upcoming year. But what about all of that other stuff, that no one would buy at my garage sale, and that Goodwill wouldn't want? Stuff like house paint I no longer want (I have a back door half-painted with Kelly Moore's 'Seattle Red'), half-used boxes of rose fertilizer (no roses in my yard), and a huge, opened jug of Murphy's Oil Soap (I have yet another huge, opened jug under my sink---I often purchased things on a whim, not realizing I already had the exact same thing at home).

Well, what about Freecycle? This is a group of people located all over the country, whose mission it is to pass along perfectly good items to others, to prevent their finding their way into the landfill. MSNBC even has a helpful how-to in Freecycle 'etiquette'. For some reason, I've always thought of this group as somewhere I could get stuff, not somewhere for me to get rid of stuff. And, of course, there's a group dedicated to the Portland area. For example, here's just one post to the Yahoo Group: Freecycle site, from a local resident:

"We cleaned out our garage today and have a HUGE pile out by the curb of housewares, toys, tables, etc. All in good shape! Please email for address as we aren't allowed to post on FREECYCLE. Come make our junk, your new treasure!"

I think I've solved my problem. Now for the hard part. Going through box after box after box of stuff that hasn't been unpacked since I moved to Portland over two years ago. If it's been inaccessible and unnecessary for that long, it seems as if it could easily go to a new home, without any feelings of regret or loss on my part.

Have any of you had a summer yard or garage sale this year? If so, how did you do? What items sold, and which were ignored? Any good tips for me?

Finally Frugal's Weekly Roundup. . . .

I've not had a ton of time to cruise my favorite frugal and finance websites lately, but some of the articles I did have a chance to peruse were:

Balancing Personal Principles and the Bottom Dollar: The Cost of Healthier Food Choices at The Simple Dollar. The more I try to eat a healthier diet composed of locally grown produce and hormone-free eggs and dairy, the more I realize that it's going to cost me. Trent discusses this in relation to his own family, wondering if the extra cost is really justified.

The Pull of the Credit Card at Being Frugal. A wonderful post about the love-hate relationship we have with our credit cards, and the various stages we go through once we've made the decision to cut those suckers up!

August Plastic Bag Challenge - Week 1 I've Paid For This Twice Already is on a mission to reduce her plastic bag usage, which I think is great! I've been trying to remember to bring my re-usable bags to the grocery store (and get my 5 cent per bag 'reward'), so I'll be following this one with interest.

The Envelope at Work: Do You Give (In)? This post was incredibly germane to me today. A coworker brought me two cards to sign for two people (neither of whom I really interact with on a daily basis) who recently had babies. I've congratulated each of them verbally, and signed the cards today. My coworker then waited around for a few minutes, obviously waiting for a donation. Sigh. Since I often purchase birthday and get well cards without asking for donations, I didn't give any money (plus, I have roughly 22 cents in my wallet right now). This post hit home for me---should I have given money toward the cards? I still don't know. . . .

Have a great weekend, everyone!!!

Credit spending up again. . . . .

In March, Americans decreased their credit spending---that is, the amount of spending based on credit cards and other types of financing. At the time, I thought this might have been evidence that we're finally starting to live within our means and actually pay cash for our purchases.

Now, CNN is reporting that credit spending for items like new cars, vacations, and education increased at a rate of 6.6% in June, up from a "sluggish" 1.5% increase in May. Call me crazy, but the tone of this article almost makes it sound like putting what I would consider 'luxury' purchases like cars and vacations (not education) on credit is a good thing! Am I reading this wrong? How can going into debt, especially during a recession, be a good thing?

Well, I suppose if you're the organization financing all of these loans, any increase would be a good thing. All that borrowing adds to the corporate bottom line. And if one considers the 'big picture', if the financing companies are doing well, that should at least add to the general well-being of the economy? I add a question mark at the end of that sentence because I'm not really sure about this at all.

It just blows me away that the media and the government seem to think that an increase in credit spending is OKAY. And not only is it okay, we should be doing even more of it! It seems to me that the economy would be healthier (and would also reflect a more realistic view of the financial health of our citizens) if we were encouraged to purchase things with cash, or at least with a very sizable down payment.

Frugal ambition. . . .

So, I'm loving this article I just read at SFGate (the online version of the San Francisco Chronicle), about this man---Michael Skrzypek---who managed to work from 10 weeks to 5 months over the course of two years, and did, well, nothing for the rest of the year!

What I like about this is that, although he seemed to have the talent, personality and intelligence to succeed, he clearly wasn't interested in the 'rat race' mentality, which is especially evident in SF these days, in my opinion. He didn't need to make $175,000 a year so he could rent a loft in the Marina district and drive a new Audi. Instead, his salary of $38,000 (10 weeks) and $78,000 (five months) meant that he had complete freedom to NOT WORK during the other 42 weeks and 7 months, respectively.

What doesn't appeal to me is the whole doing nothing thing. If I had that kind of time, I wouldn't spend three hours walking the dog, I would drive to the coast and walk along the beach, go camping, hang out in coffee shops, volunteer, read, do some more volunteering, and, well, make really good use of my time without the stressing about how little of it I actually had (like I do now). Of course, I'd try to live my life frugally, to get the most out of my salary (note: $78,000 would do nicely---I can't imagine NOT being able to live like a rockstar on that kind of money).

One of the reasons I've gone back to school (yet again!) is so that I can eventually find a fulfilling job that doesn't require me to be on the clock from 8 - 5, Monday through Friday, 50 weeks a year. Michael Skrzypek proves that it can be done, although he may have gone to an extreme I'll never even attempt to replicate. I think the key here is to realize that in order to have that kind of freedom, frugal living wouldn't be just a hobby, but a requirement.

I'm out of practice. . . . .!

August is my month! My month to get back on board with tracking my money (what comes in, what goes out, and what stays in savings. . . .). So far, it's been very difficult to get 'back on the wagon'. Once I stopped paying attention to where every penny was going, boy did they GO! June and July were just a whirlwind of socializing, school, travel, and spending. I've had a great time, but my bank accounts have definitely felt the difference. I didn't understand what a huge influence my money-tracking ways have had until I stopped doing it for a couple of months.

One thing that truly reminded me of how important this really is was a recent appointment I had with a mortgage counselor. I've been considering renting my house out, and either purchasing (hence the mortgage application) or renting a place "closer-in", meaning closer to downtown Portland. I love my cozy house and yard, but am getting tired of being so far from work, from school, and from friends.

Anyway, in the course of this appointment, it became clear to me that my money-tracking ways over the past eight months have given me a much better sense of how much money I really have to work with on a daily, weekly, and monthly basis. The counselor gave me a 'payment shock' worksheet to complete, in which the mortgage applicant estimates the cost of the mortgage in combination with other monthly bills such as utilities, food, and entertainment. I was able to very quickly estimate how much I spend in each of these areas, because I now know how much I 'average' per month in spending. It felt great! I described my expense worksheets to the counselor, and she said that I'm in the minority---most people really don't know how much they're spending on necessities, let alone on fun stuff like clothing and travel.

That definitely felt good. For about five minutes, until I realized how easy it had been to let my good habits fall by the wayside once the sun came out in Oregon. Will summer always be my most difficult 'frugal' time? I've definitely spent much, much, more on entertainment than probably during the previous eight months combined. And 'forgetting' to write these expenditures down or enter them in my worksheet was probably just my subconscious making sure I didn't start to feel guilty about living my life and having fun (at a cost).

So, once again, now that it's August, I'm back on the frugal bandwagon. I may spend more than I did in the rainy months of fall and winter, but I'm going to try to keep track of that spending, regardless of the guilt factor.

Frugal families. . . .

I'm babysitting an almost-five-month old tonight for a friend who is using the free evening to go out on a 'date' with her husband. I love kids, so a couple of hours with a cooing, gurgling baby is my idea of a fun time.

The reason I'm writing about this? The parents of this baby are raising two young children on a miniscule budget, but I've literally never seen their four-year-old wearing the same thing twice, and my friend swears she rarely buys any clothing for her, and when she does, it's from thrift shops.

How do they do this? Aside from visiting the Goodwill on a regular basis, they accept hand-me-downs from everyone. Their daughter wears Merrell shoes (pricey, even for tiny sizes) that a pint-sized 'fashion plate' grew out of in about three months. She has an itty-bitty ballerina outfit that rivals those worn by the local dance troupe. She has these great striped tights that I wish I could find in my own size. And they paid little to nothing for all of these items. Same goes for toys. . .

One of the most refreshing side-effects of this thrift store/hand-me-down lifestyle is that their girls aren't covered in pink bows and taffetta from head to toe. Sometimes, the baby is mistaken for a boy ("what's his name"?) because she's wearing blue, green, and brown clothing that is typically seen on little boys these days. But hey, she's five months old! She doesn't know the difference!

Meanwhile, I have a friend (yes, my 'shopping buddy') who asked me what I thought about a pair of $39 jeans she was considering purchasing for her three year old (another fashion plate). $39!!!!! I rarely pay that much for my own jeans! I think the shock and disgust visible on my face was enough to communicate my opinion about overpriced jeans (or any clothing item) for a tiny person.

I love the fact that my friends who are raising their girls not as accessories to be admired and dressed up like little dolls, but as future frugal thrift-store shoppers who understand that real substance is more important than how much one paid for one's shoes.