I have seen hundreds of people in financial distress. Often the nonevent problems (as opposed to events such as medical, job, relationship issues) arise from two matters that are more devastating than problems that come up because of a single costly event:
1. Sensitivity
2. Covering nonmonthly expenses with credit cards
Sensitivity, or our sensitivity to financial change, is measured as the percentage difference between our total income and our total expenditures. If I make $100,000 and spend $95,000, my sensitivity is 5 percent, as it will be if I make $20,000 and spend $19,500. If I earn $100,000 and spend $85,000, my sensitivity is 15 percent. On a $20,000 income, I would have to restrict my spending to $17,000 to bring my sensitivity to 15 percent.
Five percent is both shamefully low and higher than the national average. As you can see, the lower your sensitivity rating, the more vulnerable you are to inflation and economic recession, the harder it will be for you to save, and the more you are likely to suffer in the event of a layoff.
Never has the issue of sensitivity been more tested and proven than over the last few years. Real wages have stayed the same while expenses related to oil went up substantially. Oil prices have affected gasoline for cars, energy for running our homes, the cost of food, the cost of medical (think of all the plastic stuff doctors use), and so on, at great length. Because we saw no increase in real wages during this time, while basic costs increased tremendously, in one three-year period we went from several years of saving 5 percent of our income to spending 105 percent. This deficit spending was financed by savings or by credit card. We wiped our savings and ran up our credit cards. We have never been a nation of savers, like Japan, but we had inexpensive housing and food, compared to the rest of the world, now we do not.
Check to see what you sensitivity is—it may surprise you. Take the amount you spend and subtract it from the amount you earn. Now divide the remainder by the amount you earn. The result is your sensitivity, expressed as a decimal:
In 2008, you earned $50,000.
You spent $45,000.
$50,000
–45,000
$ 5,000
$5,000 ÷$50,000 = .10 = 10%
Nonmonthly expenses are those expenses that we have agreed to pay but are not on our monthly budget or cash flow radar screen. These typically are annual or semiannual insurance bills, car repairs, and medical costs not covered by health insurance, but let us not forget school clothes and fees, veterinary bills, or unexpected repairs to our house. Most people manage by using a line of credit, usually in the form of credit cards, to bridge the gap. The balances grow and grow, because the root of the problem, failure to plan for these expenses, is never addressed.
How to address it? One way is to set up a small savings account or money jug at home. Estimate what your nonmonthly expenses will be for a year, and then divide that by 10. Put that amount of money in the account or jug. Yeah, I get there are 12 months in a year. If you estimated correctly, this will leave you have some money for the holidays and for savings. Over time, this practice will increase your sensitivity rating, allow you to avoid increasing debt, and improve your financial health.
1. Eat in, not out. Download “101 Simple Salads for the Season” from the New York Times for an amazing list of easy, tasty, and good-for-you summer meals. This not only keeps you out of restaurants, it also gives you a whole cookbook-full of nifty recipes, for free!
2. Declutter a bookshelf or a closet and sell the discards collector’s items on Amazon.com.
3. Go for a thirty-minute walk. Regular walking amounts to free preventive medical care. In addition to the obvious weight-control benefits, it can stave off stroke, gall-bladder surgery, high blood pressure, cardiac disease, and osteoporosis. You should pay God for letting you do this!
4. Brush your teeth thoroughly twice a day and floss every night before going to sleep. Good home dental care keeps the dentist away…and as we know, dentists can be mighty expensive. More than saving on dental bills, though, good hygiene may protect you from heart disease. Daily brushing and flossing prevent gum disease, which is thought to be associated with heart attacks and stroke. Big savings there!
5. Check your local NPR station’s website for listings of community activities, many of which are free or modestly priced.
Listening to an American president who can speak intelligibly: what a thrill! As soon as President Obama began to speak to the nation on the evening of July 22, he had my attention. How I would have liked to have been among the White House press corps: Mr. President! Mr. President! So many questions.
I liked what he said about the way we may be able to make affordable health care a reality for most or all Americans, and how he seemed to recognize that though this is huge, truly huge, it’s not the only problem facing our country. I liked the way he seemed to hear the cries of Americans who face a choice between survival and penury…or between death and death. I liked the way he recognized that employers feel as much grief as workers over the failures of our healthcare system, and so, ultimately, will our entire economy.
And I would’ve like to know, really: Mr. President! Mr. President! Surely you don’t think that Medicare will be the model for this new system? What will you do about the fact that an American elder who has the misfortune to suffer an expensive chronic illness may pay as much as $40,000 a year for medications, until he has no more money, nay, not a sou, to support him in his technologically extended life or to keep his wife out of poverty as long as she survives him or to leave to his children to help keep them in the middle class?
Mr. President! Mr. President! What can we do to cover everyone in this country, even the ones who don’t expect to “get hit by a bus,” without bankrupting all of us?
Mr. President! Mr. President! The “97 to 98 percent” coverage of Americans you say will take place…is that enough? Please, will you define who can “afford” medical coverage?
Mr. President! Mr. President! How much of the proposed savings will come from…well, let’s call it what it is: rationing of health care?
Mr. President! Mr. President! What can be done to bring the partisan players together? Why do we have to put up with morons worthies who think they can use this crucial, painful issue to gain a political advantage?
Mr. President! Mr. President! How can we be sure American doctors can make not just a living wage, but the excellent pay deserved by a vocation that saves people’s lives?
Mr. President! Mr. President! Are we going to lose our choice of doctors and caregivers?
Mr. President! Mr. President! Are we going to lose end-of-life care?
Mr. President! Mr. President! Are elders going to be told they can’t have life-saving care, no matter how vigorous or productive they might be, because some statistician says they’re too old for the privilege?
Mr. President! Mr. President! Will we end up with a system of mediocre healthcare for the masses and “Bond Street” care for those who can afford first-rate medical care?
Mr. President! Mr. President! Will we have bureaucrats—whether in government or private industry—telling us which “blue pill” or “red pill” we’re allowed to have, no matter what our doctors and medical researchers think is best?
Mr. President! Mr. President! What exactly do you have in mind when you talk about “cuts in Medicare”? What will you do about the Monster from the Black Lagoon that is Medicare Part D? You say the donut hole will be half filled. But half of 40 grand is still 20 grand…unaffordable to people on fixed incomes.
Mr. President! Mr. President! You say “the whole point of this is to encourage changes that work.” How can we know whether a change will work in the context of a profit-making culture that doesn’t care whether things work as long as money is made? What will you do about the profit-making mentality that has infested delivery of health care in our country?
Mr. President! Mr. President! You mention the Mayo Clinic as a role model of what’s being done right. Yet Medicare’s benefits are so miserly that the Mayo will not accept new patients who are on Medicare. How will your agenda overcome this, given that a government-run program will resemble Medicare in many ways?
And you? If you were there, if you were a reporter in the White House Press Corps, what would you ask President Obama about healthcare reform?
Last week, as I reported earlier, I got two water bills from the city’s water department: one for $130, about a normal bill for this time of year, and then another marked “corrected bill,” for $87. The larger bill was completely unitemized: number of gallons consumed: 0; units billed, 0. If both of these held water (heh!), my total July water bill would be reach an all-time high of $217.
Figuring this had something to do with the recent snafu in which someone canceled my water service and restarted it in their name, I called the water department to inquire. After an especially annoying and noisy phone tree maze runaround, I finally got to a customer service rep.
She pointed out that the date on the $130.14 bill was 2008, and the account number ends in -09; the $87 bill is dated 2009 and ends in -11. To fix the mess that occurred when the chucklehead canceled my water service, they had to create a new account for me, the one ending in -11. The other bill was something the department emitted as part of the process of zeroing out the defunct -09 account. It was, she said, a duplicate of the July 2008 statement. The corrected bill of $87.34 is what I owe this month.
I said it didn’t seem likely that a bill spanning the hottest and thirstiest part of the year would be $87. Though I’m happy to get a wintertime bill in the middle of one of the hottest summers on record, I really don’t want to cheat the City. She assured me that was what I owed.
Ohhh-kayyyy….
The only explanation for this—other than the obvious one, that the City made a mistake—is that last winter I turned off most of the watering system and since then have been watering nonxeric plants by hand. That’s one of the reasons for yesterday’s rant about the unholy amount of work around this house: hose drags are not my favorite form of entertainment. But the June bill was $109; it covered much of May, when the weather was much cooler. It’s mighty unlikely that the bill dropped $22 when temps rose to 115, every plant in a pot had to be watered every day, and 10 roses in the ground had to be deep-watered twice a week.
To add to the silliness, the July 2008 water bill was not $130.14; it was $128.72.
So, much as I’d like to imagine I’ve found a way to cut the water bills, I doubt it. I think the City screwed up. Whaddaya bet this isn’t the last we hear of it?
This morning Cassie the Corgi and I awoke to a cityscape imbued with a strange yellow light. You couldn’t call it “golden.” Jaundiced fit better. Off in the distance occasional rolls of thunder rumbled across the sky, sounding for all the world like well-aimed bowling balls shooting up a wooden alley. To the south and west, a dark blue-gray storm drifted our way.
Last night’s windstorm blew a bushel of debris into the pool. After fishing the bonnet cleaner’s net off the bottom of the deep end, I decided to let the leaves and twigs sit until after the pump comes on and pushes them into one or two mounds, discretion being the better part. Standing in the back yard waving a metal pole around might tempt fate a little too far, given the flickers of lightning drawing ever nearer and the rain-fat clouds already overhead.
Most amazing: the air was almost cool! With temps low enough to shut off the air conditioner, we opened up the house and let some fresh air in for the first time in weeks. It’s quarter to eight and the thermometer still reads in the mid-eighties. At last! I’m sitting on the deck watching a gentle rain and enjoying my home—for the first time in many a moon.
This is the way central Arizona used to be, back in the Cretaceous before humans came along and wrecked the place. The hideous Phoenix metropolitan area—and believe me, this town is an aesthetic truck wreck, the city parents having studied everything Southern California did wrong and decided to do exactly that—has created a “heat island,” a thermal bubble arising from our having paved over mile after endless square mile with asphalt, concrete, and fake-tile roofs. Where water is no longer affordable (that is, in all of the newer development), the bladed desert floor has been covered with sizzling crushed granite and rock.
All of Arizona, including the low desert where Phoenix resides, used to experience daily thunderstorms and rain throughout the summer, starting about the end of June and lasting until the middle of August. Along about 4:00 or 5:00 p.m., the rains would drop temperatures about 20 degrees, from the low 100s to the low 80s or even the 70s.
Summers were hot, but nothing like what we see today. A 115-degree day was a rarity; it might have occurred once every three years or so, and heat like that didn’t last longer than a day or two. Now, 115 is pretty normal for July, and 118 is commonplace. In Sun City last week, SDXB recorded a temperature of 121 on his shaded back porch. That’s right: one hundred and twenty-one degrees. In the shade.
The cause of this change is supposedly the heat island: as the summer storms approach the urban area, they’re bounced back when they hit the wall of heat reflecting off the paved surfaces. And it’s true, you can see the clouds ringing the valley, see them approach, then part and go around us. Personally, I think climate change has something to do with it, too, but that’s neither here nor there. Whatever the cause, the phenomenon is real: the Valley is significantly hotter and significantly drier than it has been in European memory.
What does all this have to do with money? Well, the usual: reeel estate!
La Maya and La Bethulia have been seriously considering the upland town of Prescott as a retirement venue. Since GDU has exhibited an enthusiasm for online courses, La Maya has realized that if she could teach all her classes online, she would not be married to the Valley. La Bethulia, a psychiatric nurse practitioner with a significant reputation, has already been offered work in Prescott. So, they could reasonably move there before either of them quits working.
And since I’m about to quit working with a vengeance, I could in theory retire there, if I could find a decent house that I could afford. With real estate values depressed, usually pricey property is about within reach, especially if I could sell my house by-owner and save the 6 to 8 percent Realtor’s fee.
This summer has been about the worst in my memory. I’ve never seen it stay so oppressively hot for so long. We’ve had day after day after day of 115-degree-plus temperatures, and nights that don’t cool down: it’s routine to walk outside at 9:00 or 10:00 p.m. into 100-degree darkness.
IMHO, that’s not livable. Like snowbound northerners, you avoid going outdoors unless you’re forced to. A drive over almost-melting streets is miserable and dangerous—everyone’s tempers are short, people do crazy things, and nastiness is the standard mood of fellow drivers on streets and in the parking lots. When you come out of the grocery store, having left your car locked up for 20 minutes or so, the steering wheel is so hot it will burn your hands, and if your car has vinyl seats, you’d better not be wearing shorts. Literally: people have sustained second-degree burns from sitting on hot car seats.
Devil-pod tree, a.k.a. acacia salicina
Meanwhile, every plant on my considerable piece of property has to be watered EVERY DAY. The potted tomatoes, herbs, squash, and cantaloupe are wilting by 8:00 or 9:00 a.m., and if I had the temerity to take a weekend’s vacation in cooler climes, every plant would be dead by 5:00 p.m. on the day I left. Even in full shade, some plants’ leaves are burned. Because of the hot, dusty winds and the fact that Satan and Proserpine (previous owners of the House from Hell) planted the devil-pod tree next to the pool directly in the flow of the prevailing summer winds, the damned pool is chuckablock full of cleaner-choking pods and straplike leaves, all of which have to be fished out of the pool before the system comes on. The tiles have to be cleaned every day, the walls scrubbed down every morning, the pool refilled (it loses about an inch a day to evaporation) every morning.
These outdoor chores take about two to three hours. Every. Single. Day. Miss a day, and you get a green pool and a yardful of dead plants. All this work gets done in 100-degree heat, starting at about 5:30 or 6:00 a.m. It means I get to put in two hours of physical labor in crushing heat under a searing sun before I can feed the dog or have my own breakfast.
And the dog, the one that refuses to use a doggy door and regards the out of doors with horror? She has to be walked before the sun comes up and again after the sun goes down. Otherwise, the pavement will burn her feet.
Know what? I’m bloody sick of it.
So, once again, I’m seriously considering selling the house and moving someplace more habitable.
Prescott historic bungalow
La Maya’s online property searches have found a number of very nice homes in Prescott in the $300,000 to $400,000 range. I can’t afford that. My house is only worth about $280,000, max. If I have to fork over a Realtor’s commission and assorted rips to the various other characters that have their fingers in every realty transaction, the best I can expect to net on the sale of this house is about $263,000. There are a few places in that price range in and around Prescott. Most of them are tract houses that look cheaply built. It’s hard to get enthusiastic about moving into one of those. But every now and then something like this little historic house pops up: looks like a shotgun house on the outside and appears to be surrounded by newer construction, but all the interior pictures look make it look very charming.
Then there’s the actual cost of moving to be kept in mind. It’s not cheap to pack up a four-bedroom house and haul it to another city. Although I don’t have a lot of furniture, what I do have is stuff I’m not getting rid of—solid birch casework that my mother bought when we came back to this country in the late 1950s, and some leather pieces I couldn’t begin to replace on the nonsalary that will be my income after December 31.
Prescott condo
And finally, there’s the question of whether Prescott can provide me a job to earn the required $14,100 to supplement Social Security and retirement income, money that will just barely keep me out of poverty. I’m not at all sure about that. Prescott has only two colleges, and neither of them pays what the Maricopa County Community College District pays adjunct faculty. I’m afraid I’d have to wait tables to keep the coyote from the door. And…well, I don’t want to.
Those are the financial issues. Others: I don’t know anyone up there. And a check of the Weather Underground shows lows of 16 degrees during December 2008 and January 2009. Daytime temperatures are balmy enough…but I’m not at all sure I want to deal with subfreezing nights and the attendant ice on the roads, frozen pipes, and high heating bills.
Nice grass over there, but maybe that green effect is some sort of illusion.
My house is too big for me, and the pool is an ungodly amount of work that’s turned into quite a grind. Maybe what I need to do is look for a smaller place here in town—maybe even a cheaper one, and use the profit to rent a place in the north country during the summers.
One way or another, the weather issue > a livability issue > a real estate issue > a money matter. How is it that everything eventually boils down to money?
Here in town, a chain of nurseries regularly advertises hot sales of trees, especially in the summer (heh heh…get it?). Because there are quite a few outlets, you can always find one relatively close to where you live, and they have a large selection. M’hijito and I are finally ready to landscape the long-neglected yard at the downtown house, and so we went over there to see if we could find a few xeric trees at a good price. What we found were a couple of salesmen whose high-pressure tactics rivaled the worst I’ve ever seen in a car dealership.
The first one to glom onto us was a fast-talking character who struck me as oily. Asked to show us a desert willow, a Sonoran emerald paloverde, and a Meyer lemon and to suggest one other shade tree, he schlepped us around to various peakèd-looking trees tagged with outrageous prices, given their modest size and poor condition. They wanted $250 for 24-inch trees; I’ve paid less for mature specimens in good shape. When the guy heard me say to M’hijito that the price was way too high, he started in on the pitch. We could, he exclaimed, get these fine trees for much less!
How much less?
Well, that depended on how many trees we bought. He would give us a price for all of them.
How much will you charge per tree?
He refused to say, insisting instead that we decide on the trees we wanted and then he would give us a batch price, which he guaranteed would be less than the marked prices.
Desert willow blossom
The desert willows we saw were just barely OK: alive, but none of them had a decent branch structure. When we asked if they carried Sonoran emerald or Desert Museum paloverdes, he actually tried to tell us the sickly trees billed as “hybrid” paloverdes were Sonoran emeralds. Only one of the Desert Museum specimens was acceptable, and it had a “sold” tag on it.
My son pointed out that the Meyer lemons appeared to be diseased. The salesman tried to tell us it was nothing: “just” thrips, which all lemon trees supposedly get—”they’re in the air and there’s nothing you can do about it.” (Odd. Wonder why neither of my lemon trees have picked this up out of “the air.”)
Then, in true car-lot fashion, the guy got his “manager” in on the pitch. We were told that we had to buy a batch of trees right now if we wanted to get this fantastic price: $115 a tree, plus tax. They actually used language to the effect that they had to “get these trees off the lot.”
Right. Before they die here instead of in your yard…
When we said we wanted to check some other nurseries before making a decision, the manageroid announced that if we left without buying, the miraculous offer would no longer apply.
That was fine, said M’hijito; ‘bye!
Instantly the guy changed his tune and said if we wanted to look at other nurseries, that would be fine; they would match any other nursery’s price. But we would soon find that no one else had stock as good as Moon Valley’s.
So it was into our broiling chariot for a long drive across town to Baker’s.
Baker’s has a reputation for priciness, but it’s the best nursery I’ve found in the urban area, except maybe for Harper’s, which has followed the white flight to the far East Valley and so is no longer reasonably accessible to people who have stayed in the central city.
Instead of being pounced, here we had to approach an employee and describe what we wanted. He took us to an absolutely gorgeous emerald paloverde. The Meyer lemons were in excellent condition, with no sign of disease or mysterious airborne “harmless” insect infestations. And, interestingly, he suggested we might consider waiting to buy until the worst of the heat has passed, since transplanting the trees out of their pots stresses them under the best of circumstances and could kill them in 115-degree weather.
The price for 24-inch trees? Eighty-five dollars.
Some difference, eh? You can imagine where we’ll be buying the trees. If you live in Arizona or Nevada, run, don’t walk, away from Moon Valley Nurseries!
Takeaway messages for readers everywhere:
• As soon as a sales rep starts to high-pressure you, flee! • Before opening your wallet, always, always, always go to more than one retailer and get bids from more than one service provider.
