What with most of my time absorbed by teaching, I’ve been remiss in reporting on the various goings-on in the PF blogosphere. Here are a few items of interest…
Simple Life in France and her DH, still waiting for le gouvernement to approve him to go back to teaching after his convalescence from injuries suffered in a serious road accident, have come to rest in a tiny apartment, where they may find themselves when the baby arrives. At least they now have Internet access!
Check out this interesting post at Over Forty and Loving It, who reports that honey and milk have untold benefits for your skin.
Free Money Finance has been running a series on the ten worst mistakes an investor can make. The latest installment is here; links to earlier posts can be found at the bottom of that page.
Five-Cent Nickel just posted a very interesting article about managing money invested in an HSA. Something to think about, and be aware of.
J.D. Roth and his wife are getting ready for a nice junket to Europe. In the course of searching through his closet for clothes to pack, J.D. launches into an amazing rumination on shopping and decluttering. Picture what he says here…I do mean amazing!
If like me, you make up stories when you fill in applications for the endlessly annoying store “membership” cards—fake phone numbers you haven’t a chance of remembering if you leave the card at home, for example—Simply Forties has found the iPhone app for you! It generates and stores your cards’ bar codes, which the cashier can scan right from your phone.
Karen Datko at MSN Smart Spending reports on what the new healthcare reforms will mean for you. It really is hard to understand how the Party of No figures this legislation is bad for you and bad for America. It may not be so great for the insurance companies that pour dollars into that party’s coffers, but for the rest of us? hm.
At I Pick Up Pennies, Abigail decides to cancel the Sunday paper, having realized it’s an inefficient way to gather coupons and is otherwise…well, you have to know The Arizona Republic to (dis)appreciate it! 😀
Frugal Scholar, worrying about the future of higher education in Louisiana and, by extension, the future of her and Mr. FS’s jobs, takes comfort in the discovery of a source of free food.
I love this sweet story from Stew at Gather Little by Little. Money indeed isn’t everything.
Donna Freedman advises on how to save some bucks on “salvage” groceries: food whose packaging has been slightly damaged.
Mrs. Accountability has an incredible mega-giveaway going on, to celebrate Out of Debt Again’s third anniversary. Go there now to join the fun, because time’s a-wastin’.
You have got to run over to Budgeting in the Fun Stuff’s very entertaining post, Going Too Far to Save Money! She’s found the perfect Hallowe’en frugal tip. It’s very strange and very funny. While you’re there, leave a record of your own weird frugal habit.
It reminded me of SDXB, the most accomplished cheapskate I know.
SDXB does not eat in restaurants. The de jure reason he gives is that when he was an investigative reporter he did a series on what goes on in restaurant kitchens, which caused him to lose his taste for eating out. The de facto reason, however, is that he hates, loathes, and despises having to pay for restaurant food and (worse!) having to tip the servers.
So, when he travels—which is a lot, because he loves to travel—he carries a camp stove, a Teflon frying pan, a large aluminum camp kettle, and an array of camp dishes and utensils. As soon as he arrives at a destination, the first order of business is a visit to the nearest grocery store, where he buys a canister of propane and enough food to prepare full meals.
I mean, full meals: typically pork chops, potatoes, and vegetables, with a bottle of wine to go with.
He trots these back to his motel room, where he sets up a “kitchen” on the bathroom counter—or, lacking enough room, in the bathtub or in the middle of the floor—and prepares three meals a day.
You think I’m kidding, don’t you?
When he was in the active duty Air Force Reserve, he would go TDY from one to three months a year—basically, it amounts to accepting a handsomely paid temp job. This supported his Bumhood, which he launched before he was out of his 40s. In addition to a salary and free lodging in the base’s non-com officers’ quarters, the Air Force pays workers on TDY a per-diem to cover food and transportation. The expectation is that these folks will subsist on restaurant food and take-out, and that they’ll rent a car while they’re on base.
But of course, SDXB wasn’t eating out. He was cooking breakfast, lunch, and dinner in his quarters! Not only that, but he never rented a car. He’d borrow a bicycle from a friend or pick up one cheap at the base thrift store and ride that around the base. At the end of his tour of duty, he would pocket a nice chunk of change in the form of the unused per-diem. His salary and his per-diem combined helped to support him in full bumhood for the rest of the year.
I once spent an entire month with SDXB at Robins AFB. We never once ate in a restaurant or mess hall. No, I take that back: one evening his colonel took all the office staff out to eat at a nice place in Macon.
This morning while we were out estate-saling, La Maya reported on a recent burglary in which the thieves made off with the neighbors’ jewelry, and only their jewelry. Other valuables, including an iPhone left sitting on a nightstand, Mac and PC laptops, and a large-screen TV were untouched. But a lifetime’s collection of jewelry was lifted, apparently for the gold.
A chat with the police revealed that gold is now selling for $1,300 an ounce. The vic, on advice from friends, paid a visit to a nearby pawn shop, claiming to be looking for a gift for a sister who desired rubies set in gold (exactly the description of a set the couple had picked up on a trip to Spain).
They were advised not to tell a pawn dealer that they were looking for stolen goods, because of course it’s wildly illegal to accept stolen property. And as we all know, no pawn dealer would ever do any such thing, eh? Word has it that if you say you’re looking for something that was taken, the pawnshop people will freeze you right out. Instead, claim you’re shopping for a purchase that resembles the stolen jewelry and hope they bring it forth.
Anyway, when she went into this nearby pawn shop, the dealer remarked that people are flocking to sell their gold. (Yeah! And presumably everyone else’s! :-))
Prices, he said, are high and unstable—just that morning the price of gold had risen $120. He pointed out that at the current prices, you could bring in an earring that’s lost its mate or an out-dated bauble and come away with a nice pocketful of cash.
Dealers weigh your jewelry and pay by the gram or by the troy ounce. Today a gram of gold was selling for $41.66. One gram equals .035 ounce.At the end of trading today, gold was selling for $41.66 a gram, or $1,295.83 an ounce. He said even a thin piece of gold of the sort that decorates an earring could be worth a couple hundred bucks.
La Maya said she’s going to dig out the orphaned earrings she’s tossed in the drawer in the forlorn hope of someday finding their lost mates, and she’s going to schlep them to the nearest pawn shop. I’ve got a couple of orphaned earrings myself, plus a pair of old 1970s hoop earrings, massively out of style (14k, as I recall) and a gold ring that no longer will slide over a knuckle.
At those prices, you could turn your discards into enough cash to pay off a credit-card balance or take yourself out to a very nice dinner or two or thee.
Think of that. Gives new meaning to “decluttering,” doesn’t it?
Readers have suggested that one reason underlying my occasional fits of panic over money, which usually occur when something interrupts cash flow that I had planned on and depend on to pay bills, is my habit of allocating funds to various categories. Possibly, they imply, the sea would be calmer if all income poured into a single account and I just didn’t worry about whether enough was sitting there to cover taxes, insurance bills, and the inevitable little surprises. After all, I do have a decent emergency fund—$14,500, more than I gross all year from teaching. In theory, that should cushion the various little blows that strike from time to time, and it should cover the hefty annual bills one has to pay.
It is true that I have a bad habit of overmanaging my finances. The result is that I indeed do complicate things, typically by setting up piggy-banks to hold funds designated for this or that purpose. These organizational devices grow over time into weedy Gothic structures with lots of gingerbread on the facade and secret stairways inside the walls.
One facet of this underlying problem is that I’m now living on a highly variable income. From September through May, a steady flow comes in from the community college. But I never know how much that flow will be: there’s no way of knowing how many classes I’ll be teaching until they’re assigned; in September, January, and May, classes meet only a few days, and so pay from that is predictable only in its sketchiness; and I can occasionally earn little stipends by attending training workshops or preparing an online course. Social Security, we’ve seen, has its treacherous shoals. Blog income can be anything from $100 to $300 in a month. And freelance editing is very much a catch-as-catch-can endeavor.
This, for a person who harbors a pathological desire to know that each month enough cash will reside in the bank to cover the utility bills, is nervous-making.
During the time leading up to the layoff, I mapped out a strategy for “smoothing out” income so there would always be enough (I hoped) to put food on the table and run the house. Fundamentally, the idea is to build a “pool” with a reserve deep enough to protect one from unexpected expenses or periods with no income. Out of that pool, money is allocated to pay costs that recur over longer cycles than one month. In my case, these are all annual: property tax, homeowner’s insurance, car insurance, Medigap insurance. I can’t easily pay such large bills out of pocket; the only way to ensure enough cash to cover them is to self-escrow a prorated monthly amount. The income “pool” also disburses a small monthly transfer to a savings account, which accrues enough over time to pay for things like clothing and the occasional surprise car repair or plumbing bill.
As I was figuring this out, I realized the six or eight credit union and bank accounts (not to mention the many investment accounts at Fidelity, TIAA-CREF, and Vanguard) had become unmanageably baroque. I was spending way too much time reconciling accounts and trying to figure out arithmetic and data entry errors. I decided to consolidate as many accounts as I could…that’s how, last December, I unearthed some $28,000 that had been accumulating over the years, like so much dust in the House of Usher.
So I closed all but three bank and credit union accounts, invested $14,000 in mutual funds, and kept $14,500 in the bank to serve as an emergency fund. Actually, since I did not believe I could possibly live on a gross of $29,900 (Social Security plus the $14,160 I would be limited to earning in 2010, by SS rules), I expected I would need that 14.5 grand to live on this year, and so that money became the deep underlayment of the “pool” account. It would sit there as money from various income streams piddle in to the “pool.”
The three surviving credit union accounts, then, comprised a checking account to hold the $14,500 emergency fund and month-to-month spending money, a savings account to hold a monthly set-aside for short-term emergencies and necessities such as clothing, and a money market account to hold the monthly self-escrow to cover annual property tax bills and insurance premiums. I know myself well enough to know that if I don’t put those funds where I can’t reach them casually, they will get spent long before the clothing costs or the annual bills roll in.
My financial advisers and I knew that three sections a semester, the teaching load I could reasonably expect, would put me$340 over the Medicare earned income limit, which would mean confiscation of an entire month’s Social Security check. We did not know how much Funny about Money would earn, and the amount of editorial earnings is utterly unpredictable. But we did know that every dollar earned blogging and freelancing would trigger a 50-cent penalty from Social Security; that amount, no matter how small, would be extracted in a peculiarly abusive way that is not described in Social Security’s complicated guides. To avoid having freelance and blog income bring on even more punishment for exceeding the earnings limitation, my lawyer suggested an S-corporation, which would hold that money separate from my personal income. It would have to pay me a small salary—last year that came to $500, gross—but it could pay business-related expenses out of pretax dollars, and anything above the salary I drew out would be counted as dividends, not as “earned income.”
Because corporate income must be kept separate from personal income, of course I had to establish a business account for the S-corporation. So much for my bank account simplification program!
Still, even with that corporate account in the mix, I think my system for getting by on an unpredictable and variable income works pretty well and is relatively simple. The four credit union accounts are represented here by blue boxes:
All personal income goes into a checking account, which serves as the “pool” of funds to cover all expenses, self-escrows, and savings. The personal checking account also holds the large emergency fund, which, because it represents enough for me to live on (when combined with Social Security) for a year, I regard as money to cover living expenses during a serious illness or injury that would leave me unable to work at all.
At my age, it’s not a question of if such an event will happen; it’s a question of when. For that reason, I’m extremely reluctant to dip into the “major catastrophe” emergency fund for ordinary living expenses.
That is why I had a hissy fit over the misinformation recently dispensed by Social Security’s telephone CSRs and the subsequent confiscation of next month’s Social Security check. This fiasco will require me to use up to $1,275 of my catastrophic emergency fund. After last spring and summer’s clothing purchases and the Murphy’s Law spate that occurred when too little income was flowing into that account to cover the base expenses of utilities, insurance bills, and food, not enough remains in my personal diddle-it-away savings account to cover $1,275. Drawing dividends from the S-corporation, while it’s doable, would trigger some taxes I don’t want to pay and leave too little in that account to cover the business expenses I project for the next four to six months.
As you can see, living on freelance or nine-month teaching income is a very iffy arrangement.
If you have a large enough contingency fund… If you earn more than enough to cover monthly bills, more times than not… If no major catastrophes occur… If few expensive minor headaches occur… If no one shafts you… If you can keep on getting work… If you have the self-discipline to husband your money so it will last through lean times… If you don’t have a nervous breakdown when too little comes in to cover your basic bills…
There may be other ways to manage these unknowns. The only one that occurs to me is to build a nice, deep “pool” that will always hold more than you really need to live on, and then to budget out of that enough to cover expenses. Heaven help you if you don’t have an emergency fund!
This morning a student sent over his latest paper, a response to an assignment in which I asked classmates to write a narrative describing their response to a tour of the campus library. This library, in addition to functioning as a busy learning center full of constant activity, houses a Southwestern art collection donated by an emeritus professor, and so there’s lots to see in there.
As he was charming me with his usual well-tuned authorial voice, he remarked in passing that although he had been attending the college off and on for the past three years, this was the first time he’d sent foot in the library.
Boink! Even dinosaurs have startle reflexes!
After an internal holy mackerel dialogue, I realized that even though the library is still the heart and brains of a college campus, there’s a reason my students seem to have set as their goal moving through two to four years of higher education without ever visiting a campus library: they can.
So much learning is available on-line, including full-text scholarly articles and books, that a good student quite reasonably can expect to get through most courses, writing creditable term papers and studying for challenging exams, without ever visiting a museum of books.
Frugalscholar, is that your hat in orbit overhead?
As I continued to read his essay and thought about his passing observation, I realized he was commenting, unconsciously, on something that has occurred to me, to at least one of my academic coconspirators, and probably to Frugalscholar: Why the heck are we keeping all these books in our houses?
Frugalscholar has shown the way to peddling scores of books online. Are we sitting on a small gold mine here, one whose financial proceeds would do us a lot more good than the decorator quality of a wallful of books?
Like many other academics, I have ceiling-to-floor bookcases in the living room and the family room, and of course the de rigueur six-foot shelf of reference works in the office (make that 18 feet). As a writer and then later as a younger editor, I used to have recourse to this library all the time. Even the most unlikely occupants of those shelves would occasionally be picked up, looked over, borrowed from. My library was an integral part of my work as a teacher, a thinker, and a writer. And I used one part of it or another every single day.
Recently, however, I’ve come to realize that I hardly ever open a book anymore. The only works I use at all are a few cookbooks…and half the time I get my recipes off the Internet—like everything else. When I write, when I grade papers, when I edit a client’s copy, when I check facts, I invariably use the Internet. The encyclopedias, the various dictionaries, the OED, the history and political science texts, the novels, the chronicles, the tomes of literary criticism and social history and science and mathematics: they just sit there gathering dust. Two walls filled with dust-catchers!
Truly, today I could get by with a computer and the following:
The Oxford Dictionary of French
La Petite Larousse
The Oxford Dictionary of Spanish
The Harper-Collins Dictionary of Italian
Collier’s Latin Dictionary
Cassel’s German Dictionary
The Compact OED Random House Webster’s Dictionary
The Chicago Manual of Style
The MLA Style Manual
The APA Style Manual
The CSE Scientific Style and Format Manual
Roget’s Thesaurus
A couple of field guides to birds
A field guide to Southwestern flora
A few favorite cookbooks
And that’s it. None of these (except the recipe books, maybe) has an acceptable online equivalent. All the fiction? It could go. The classics are online at Project Gutenberg. Most of the contemporary fiction is eminently disposable stuff, occupying shelf space by default. The nonfiction tomes are largely out of date—maybe one in thirty is worth keeping.
Because Poisoned Pen Press keeps me supplied with light fiction (at the price, o’course, of having to edit the stuff), I hardly ever buy “airplane books” anymore—their detective novels supply all my bedtime and idle moment reading. Partly because I’m paid to read and don’t feel inclined to devote leisure time to reading and partly because I don’t have a helluva lot of leisure time, I almost never buy new books.
So…why is my house filled with books?
I asked La Maya the same question, and she responded with approximately my own sentiment: Books define our identity as academics. We keep them because they say something to others (and to ourselves) about us. Also, she remarked, a bookcase full of hefty tomes makes a nice decorator item.
Yes.
I wonder what on earth I would do with those big walls in the absence of running foot after vertical and horizontal running foot of books.
Fine art? The sum total of every book I could sell wouldn’t buy one Ed Mell painting. Maybe some Navajo rugs? They’d cut the echo, though not as well as all those books. I haven’t been up to the rez to price any of those lately, but one thing’s for sure: if you have to ask, you can’t afford it.
So, what we have here is a lifetime of learning—or the metaphor thereof—reduced to interior decoration. The truth is, everything I once used books for has been transferred to a computer monitor.
For individuals, that’s not necessarily a bad thing. Our students, at least the ambitious among them, can access as much information in an hour as once took us half a semester to dig out. I can check a fact in 30 seconds, a chore that once could have taken me anywhere from 15 minutes (if a source was at hand) to a day or more (if I had to traipse to a library or archive to track it down).
But what about our culture, our society? Now, there I’m not at all convinced that the demise of the book and the rise of the Library of the Internet are happy developments. For one thing, paranoia tells us that censorship of online resources is even easier than censorship of print material. But the big repercussions, the scary ones, are economic.
• Who will continue to produce “content” if all creative and scholarly work is available for free on the Web? • How many jobs will be lost when a print book is a rarity? • How many graphic artists, editors, circulation drones and managers, librarians, printers, paper manufacturers, ink makers, and booksellers will be stocking shelves at the Walmart? • How much more power will monied interests have over the intellectual and scientific direction of our country? • And when an entire generation has never known the pleasure of reading for the sheer joy of reading, what will that mean for the entire economy of the developed world?
I don’t know the answers to these questions. But the fact that we have to ask them makes me itch.
So after class this noon I schlepped over to the Social Security Administration offices with several missions in mind: First to find out what they’re going to do to me for the crime of earning yet another $2,400 over the poverty-level earned income limitation; second, to ask where to mail the Form SS-31 to ensure that this year’s RASL payment is counted as pre-2010 income; and third, to find out what to do with the couple hundred bucks that Unemployment Insurance is apparently going to send me.
Yes. Unemployment Insurance. Last week I got a $25 check and a notice saying the Feds had told the state Department of Economic Security that some of last year’s recipients were entitled to more payments than had been disbursed. No explanation of why, or of why I should be among those recipients when, say, La Maya was not so blessed. But apparently they’re going to send about a half-dozen checks. These also represent 2009 income, UI for the furlough days GDU inflicted on us in the first six months of that year.
Well. There’s no way of getting DES to fill out and send a Form SS-31. You can’t reach them on the phone—they don’t answer telephone calls, and if you manage to get through to an answering machine, they don’t return calls. They’ve barricaded the employees behind locked doors and they don’t let the public in. So how exactly to communicate to Social Security that this little chunk of illicit income—made so because it racks up still more dollars above and beyond the permitted $14,160 earned income—represents 2009 money remained to be seen.
After sitting around for an hour or so, I got to speak with a live human being, a very nice gentleman who seemed (as they all do) pretty knowledgeable.
He said that even though the amount I’ll earn as a result of taking on another class this fall will exceed the amount of a monthly benefits check, they will not withhold more than one check. So I’m only out the cash for October, not for October and November. In January, they’ll bill me for the small amount left to pay up. The missing $111 Medicare Part B premium, payable in October, will be extracted from the November check.
So, that’s not the disaster I feared.
He also pointed out that despite losing an entire month’s SS income in September, overall for 2010 I end up with more money than I would’ve had with full Social Security and only the income limit of $14,160. While that’s so, I noted, that doesn’t do me any good next month, when I need the money to live on.
Luckily, there’s an emergency fund to fall back on. But diddling it away on utility bills, gasoline, and food is not what I had in mind: that money is there to cover me if I get hurt or too sick to work. And we do know that at my age, the operative term there is not if but when.
Presumably by the middle of next semester—if the college gives me three sections in the spring semester—I’ll be able to replenish the $975 that will have to be consumed next month to meet basic expenses and the extra $111 engrossed from November’s income for October’s Medicare B payment.
It’ll all work out over the long term. It’s just annoying, because it puts the eefus on my goal of living within my monthly means. And it does bite into my emergency savings.
Meanwhile, the Social Security dude was able to enter the data from the Form 31 from the state while I was sitting there. He said that issue is now settled.
We shall see.
As for the weird burst of Unemployment Insurance, he said that UI is not regarded as earned income! And that issue is a nonissue.
So it goes. A couple of questions were clarified. It’s inconvenient and it’s going to make next month another straitened, penurious month, something I’m mightily tired of after three months without enough income to cover base expenses. But what the heck.
Not what I wanted to do with my afternoon. SDXB, who’s back in town for the nonce, had invited me over for lunch. That scheme was scotched. Tomorrow, maybe.
