The only thing necessary for the triumph of evil is for good men to do nothing. ―Edmund Burke
funny The winter-long El Niño rains have brought a bumper crop of spectacular flowers. The rain’s about over now, and now we have the stiff winds that, each spring, blow in the summer’s 110-degree heat and blow out the blooms. But for a few days yet, we can enjoy air perfumed with orange blossoms and spectacular sights in our yards (click for larger images):
Who needs money when we have real riches?
Guest post by Tina Minchella
I was going to title this post “why it’s never a good time to have a kid.” Many friends and family members as well as the occasional professional acquaintance discuss family planning with me. With the economic situation the way that it is, I hear over and over, “It’s not a good time to start a family. If we could just save…” And this is when I stop listening.
The truth is, it’s never a good time to start a family. I know this sounds quite shocking. But here’s why: kids are always expensive. Yes. Kids cost money. A lot of money.
As I have learned to use public transportation, to clip coupons, and to make that dollar stretch, I have also realized that there are many ways to save money entertaining little ones.
• Trade skills. I play the piano. My friend plays the piano. It’s a bad idea to teach your own child how to play a musical instrument…BUT…you can trade your services with others. Teach your friends’ children and let your friends teach yours.
• Go to the library. This is not just about saving money on books. In the summertime, many local libraries also have story time, free movies with popcorn, and nature walks. The library has become a hub for more than just books. It is a community outreach system full of fun and FREE things to entertain the little ones. Some libraries also offer monthly passes to local museums. This allows you to visit a number of local cultural sites for free.
• Go to the park. I’m not sure when TV and videogames overtook our world, but there is nothing like fresh air and the sun to entertain a child. Pack a small picnic lunch and you’re suddenly on an exciting adventure.
• Movie theaters. In the summertime, large movie theater chains play early morning movies on weekdays for families only. The theaters play older movies that have been released during the previous year and charge about 75 cents per ticket. Although they are not the newest blockbusters, the excitement and amazement little children have when seeing movies on the big screen remains.
• Kids-eat-free. Recently, a number of chain restaurants have begun having a kids-eat-free night once a week (some even do this every weekday). With the purchase of an adult meal, a child’s meal is free. There are even restaurants that cater to large families and give 2 free meals for every adult meal purchased! This is a great way to have a night out and not break the bank.
Kids cost money, but they don’t have to bankrupt you. There are a number of ways to keep having fun with kids without increasing your debt or further aggravating your financial troubles. If you’re having fun with the kids, they’ll never know that it was at a discounted rate.
Are you interested in submitting a guest post to funny about money? I broke & dislocated my shoulder this evening & so won’t be up for typing, possibly not for several weeks. Would welcome any guest posts that might keep funny going for the duration.
So now that the Dow is closing on 11,000 again, I spent part of yesterday evening counting up my shekels.
Some time back, I figured the crash of the Bush economy (oh, how i luv bugging my rightie friends with that one! 😉 ) had drained my retirement savings of about $180,000.
Things are looking somewhat better today. Thanks to ten nontaxable grand available from a whole life policy, I contrived to set things up so I could pay my share of the downtown house’s mortgage without drawing down from the big, professionally managed IRA. Landing a temporary loan modification helped, too: the reduction in monthly payments will draw out the number of months the $10,000 lasts.
Despite partially drawing down the cash in that policy, total retirement savings are now down “only” $95,400 from the all-time high in October 2007.
We know, of course, that stocks were hugely overvalued in October of 2007. And some say they’re overvalued now. Seeking a more realistic measure, I compared total savings today with the figure that appeared in January 2001, when I first started tracking the various accounts in Excel. In that scenario, over 9.4 years my savings have grown by $18,211.
Looks like a pretty poor return on investment, eh?
However, it must be remembered that I used some of my savings to pay off the loan on my house. I also used about 30 grand to copurchase the downtown house with my son. So, it could be said that some of the funds were simply reinvested elsewhere
That notwithstanding, there’s no question the crash did some serious damage. If we look at the amount that was in savings in December 2006, before the run-up had built any momentum, we see that today’s bottom line is down $55,716 off what might be regarded as a reasonable figure.
Well, it’s better than a $180,000 loss, anyway. Just depends on how you look at it, eh?
Checking net worth: Respectable, though down about $400,000 from the 2007 estimate. Net worth sustained a huge loss when the mortgage on the downtown house went upside-down. Equity in that property is now negative…to the tune of about –$60,000. However, my own house, the one that’s paid for, retained its value and may even have crept up a little. So, even though M’hijito and I took a bath in real estate, it could have been worse. A lot worse.
My net worth is still significantly stronger than most Americans’. A calculator at CNN Money suggests the median net worth for Americans my age is $232,000; mine is about three times that. For 65-year-olds in my post-canning income bracket, median net worth is $34,375; mine is about twenty times that. For those in my pre-canning income bracket, median net worth would be $301,475; mine is 2.2 times that.
Despite the fact that I moved a fair amount of cash from equities into real estate, I’m still none too thrilled at the piddling $18,000 ten-year growth in liquid holdings.
But on reflection, my sense is that a free-and-clear house may be more valuable than smoke-and-mirrors money in stocks and bonds. While the sale price of a house may rise and fall, the value of a roof over your head is pretty immutable. It’s hard to evict a person from a house that has no mortgage.
To rent my house would cost between $800 and $1,200 a month. At 4.8 percent, principal and interest for a traditional 20 percent-down mortgage on this house would cost about $995. So I figure owning the house outright represents a return on investment of about $1,000 a month. Though that’s only a 5% annual return on the house’s present sale value, the fact is that if I had to pay $1,000 a month out of my much-reduced “retirement” income, I could not afford to stay in my home! And since my home is nothing very extravagant, that would mean that when I was laid off I would have had to move into some pretty downscale digs.
Another benefit to owning the house: when I shuffle off this mortal coil, the house will pass directly to my son, giving him a pleasant place to live with very little overhead. He then can rent the downtown house for the amount of the mortgage (or, if things are better, sell it) and end up with a solid basis to build his own retirement savings.
Both of these advantages, IMHO, are huge.
How are things in your money bin? Are you seeing any improvement?
Some of it, anyway.
Two of the three checks that went missing after I mailed them to the credit union almost two weeks ago have finally posted. Mercifully, one was from Google Adsense, an outfit whose customer service is so horrific I had about decided to just eat the $160 loss rather than try to do battle with them.
So $460 of the floating $560 has made it to shore. The hundred-dollar check from the limited partnership, which I’d posted in personal checking, has yet to surface. However, I had told the partnership that their check was disappeared, and so they may have already stopped payment on that check. Presumably they’ll issue a new one. But if not, a hundred bucks I can do without…five times that, no.
Well, all that rhapsodizing about how much extra money resides in the checking account just turned into a dirge.
Yet another piece of paper came from the Social Security Administration, informing me that my monthly checks are about to drop to $974. That’s the net on $1,257 after the dings for taxes and Medicare: a 23 percent gouge.
Which reminded me that I still haven’t signed up for Part D, another hassle and hoop to jump through. That will have to wait until next week, since the next few days are going to be very hectic. And that I haven’t paid the Costco membership. And that I haven’t paid the COBRA bill for April.
At any rate, the cut in “pay” isn’t as drastic as it looks, because the $200 to $300 a month COBRA has been lifting out of my pocket has come from net income, and so it’s really about a wash. Medicare, Medigap, and Part D will add up to about $240 a month, about $40 more than this month’s COBRA payment that includes Delta Dental. So even though the paycheck drops precipitously, the amount I have to write checks for isn’t quite as high.
Except of course it isn’t a wash. Medicare is higher than COBRA, and it doesn’t cover dental care. Delta Dental will go away after the ARRAS discount ends, because its cost to private individuals is higher than the cost of routine care. To have enough on hand to cover the inevitable major dental work that comes with age, I’ll have to self-escrow something every month to put into an account to pay for future dental disasters. How much, I can’t imagine. A crown costs about a thousand bucks around here, so I suppose that would be about $83 a month.
Because Medicare fails to cover dental care, I’m allowed to keep the COBRA coverage for Delta, which I will do until September, when the ARRAS discount expires. Meanwhile, in another week I’m getting a new crown on the tooth I broke when I bit down on an olive pit—it’s been patched with a large filling, since the ding didn’t hit the pulp and nerve, but the Doc agrees that it’s going to have to be fixed while I still have some coverage.
Mercifully, he says I shouldn’t need a root canal. Ugh!
Delta’s coverage is pretty piddly. I’ll still have to pay half the cost of the crown, around $400 or $500. That will have to come out of my year’s emergency savings, which I’ve kept in the bank for 2010 where it’ll be handy if I find I can’t live on my income during this especially penurious year. Thank God I have it! Otherwise I’d just have to wait until the tooth starts to rot and then have it pulled.
In the tax gouge department, I think it’s likely that I’ll get the money back next April, since I’ll earn so little this year that a) the cost of Medicare combined with the long-term care premiums, nine months of Delta Dental premiums, the crown, and God only knows whatever medical bills happen next will exceed 7.5 percent of adjusted gross income; and b) net earned income probably will be so low that I won’t owe tax on Social Security at all. But meanwhile, I have to live until next April.
Hmmmm…. Did you know contact lenses and the cost of over-the-counter contact lens solutions are considered eligible medical expenses? That’s interesting; I thought those were vanity items. They’ll also accept the cost of Lasik eye surgery and getting your teeth straightened. If you kept track of all the stuff you’re allowed to count as medical expenses and you didn’t earn much, you just might hit that 7.5 percent threshhold. On a $35,000 income, that would only be $2,625. If you’re not getting health insurance through your employer, then you can count your healthcare premiums…and in that case, $2600 isn’t very much. Even if you made something closer to a living wage, say 50 grand, health insurance premiums could easily combine with fairly routine care to push your costs up to the $3,750 that is 7.5 percent of that salary.
I wonder if health insurance premiums will still be deductible under the new regime? Since Medicare qualifies, it’s reasonable to think they’ll make the new required premiums deductible, too.
Doesn’t matter for me: Arizona intends to opt out of the federal healthcare plan, anyway. Our intrepid leaders opted out of Medicaid, so I expect they’ll get their idiotic way with this, too.