Coffee heat rising

Budget: Positive news

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Well! Only six more days till the end of the current budget cycle, and an amazing $352 is left in the kitty. Not, we might add, through any extreme deprivation: I’ve gone out to eat with friends four times in the past three weeks; bought $38 worth of scrumptious wine at Costco (some of which I enjoyed last night with steak, asparagus, and a mighty tasty avocado salad); spent over $80 on gasoline; and had my hair done. Two women have even asked who does my hair! Since I cut the budget to $1,000 preparatory to canning day, having some $350 left with a less than a week to go is a very positive development, indeed.

How is this happening? Since January, on a $1,200 kitty I’ve run over budget five months out of nine. Of the four months in the black, only one of them came in with expenditures of less than $1,000; a second was close, but no cigar.

One explanation, I think, is stockpiling: at the start of this cycle, the freezer held plenty of food. Yet I’ve spent about $317 at Costco, much (but not all) of it on food. There have been no extraordinary bills (yet): no vet bills, no car repairs, no plum…oh, wait: there was a plumbing bill. Hmmm…

The big change is that I decided to abandon microbudgeting and see what would happen if I set up virtual “envelopes” for the month instead. In microbudgeting, the budgeted amount for the month is divided in four and allocated to four periods of roughly a week each. With the envelope system, you establish an amount to spend on each of several categories, and then quit spending on a given category when you reach its limit.

Presently, the result looks like this:

In this first experiment, it appears I’ve overbudgeted for Costco and underbudgeted for gasoline and hair. Since I don’t get my hair cut every month, I figured I could think of $20 as a kind of “average,” but maybe it would be better simply not to have a “hair” budget in the months when I don’t need a trim. No law says you have to have the same budget categories, month in and month out.

I hardly ever go out to eat—really, it’s a rare month when I spend as much as $50 in restaurants. For some reason, this month all my friends have been asking me to join them, and since I have precious few friends, I incline not to turn them down. At any rate, it’s covered by the savings from the pool and Cost Plus categories.

So the question is: Does a virtual “envelope” system, even when the proprietor cheats here and there, work better than microbudgeting?

Psychologically, it may: with the weekly microbudget, one feels it’s OK to spend all the way to the hilt. In fact, when the overall monthly budget gets tight, it’s difficult not to spend the entire week’s microbudget: $250 is not much to cover all one’s bills, from food and gasoline to pet care and property maintenance. One $200 run on Costco plus a tank of gas and you’re over budget…and how often can you get out of Costco for under $200?

With the envelope system, you don’t feel so constrained: you have all month in which to spend the money allocated for groceries, clothing, gasoline, and the like. One $150 trip to Costco came nowhere near running me into the red, but if I’d spent that much out of a one-week microbudget and then had to spend $35 on gas and $30 on the hairstylist, I’d have had $35 left to last the rest of the week. One trip to Safeway would have blown it. With the virtual envelopes, it’s easy to see what remains in the budget for specific purposes, making it easy to back off some expenditures as needed.

Clearly I’m going to have to reallocate allowances for some of the categories: less on Costco and more on gas, for example. But if I’m right that this approach works better than microbudgeting, the implication is huge.

Huge.

It means that next year I should easily be able to live within my much constrained means, without having to hold a fulltime job and without even having to crank any freelance work. Combined income from Social Security and part-time teaching should more than cover my needs!

$14,400 SS + $14,160 teaching – 20% tax = $22,848 net income
$565 monthly recurring costs + $1,000 discretionary budget x 12 = $18,780 routine expenses

That leaves me almost $4,070 to the good. From what I can tell, that extra amount will just cover the cost of Medicare, which should run around $300 a month, by the time I’ve cobbled together all the aspects that go to creating full coverage. It doesn’t leave anything for emergency savings, but I have $10,000 in that fund to cover 2010; in the following year I’ll be allowed to earn more money.

So, if I don’t get the Glendale Community College job, it won’t much matter: as long as I can keep discretionary spending to around $1,000 a month, I should be fine.

And in the unlikely event that I do get the job, it would make sense to stay on this budget and save all the unspent net income, thereby making it possible not only to buy a car in cash but also to replenish savings with new earnings.

Either way, the new budget is a winner!

Wish I’d written that…

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Among the dusty books and junk I brought home from the office is an anthology of essays that some publisher donated to me, in hopes that I would adopt it for one of the many classes I used to teach at the Great Desert University. In an idle moment yesterday, I happened to pick it up. It fell open to one of my favorite writers, Annie Dillard, and this incredible passage from Pilgrim at Tinker Creek.

When I was six or seven years old, growing up in Pittsburgh, I used to take a precious penny of my own and hide it for someone else to find It was a curious compulsion; sadly, I’ve never been seized by it since. For some reason I always “hid” the penny along the same stretch of sidewalk up the street. I would cradle it at the roots of a sycamore, say, or in a hole left by a chipped-off piece of sidewalk. Then I would take a piece of chalk, and, starting at either end of the block, draw some hue arrows leading up to the penny from both directions. After I learned to write I labeled the arrows: SURPRISE AHEAD or MONEY THIS WAY. I was greatly excited, during all this arrow-drawing, at the thought of the first lucky passer-by who would receive in this way, regardless of merit, a free gift from the universe. But I never lurked about. I would go straight home and not give the matter another thought, until, some months later, I would be gripped again by the impulse to hide another penny.

It is still the first week in January, and I’ve got greater plans. I’ve been thinking about seeing. There are lots of things to see, unwrapped gifts and free surprises. The world is fairly studded and strewn with pennies cast broadside from a generous hand. But—and this is the point—who gets excited by a mere penny? If you follow one arrow, if you crouch motionless by the sight of a muskrat kit paddling from its den, will you count that sight a chip of copper only, and go your rueful way? It is dire poverty indeed when a man is so malnourished and fatigued that he won’t stoop to pick up a penny. But if you cultivate a healthy poverty and simplicity, so that finding a penny will literally make your day, then, since the world is in fact planted in pennies, you have with your poverty bought a lifetime of days.

Annie Dillard, “Seeing.” Pilgrim at Tinker Creek. New York: HarperCollins, 1974.

Shopping estate sales for deals

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Five-Cent Nickel features a nice guest post by Craig Ford, proprietor of Money Help for Christians. Craig holds forth on ways and places to find a good deal, among them yard sales. Just last night, I was congratulating myself for having found one of my all-time best buys—a deluxe “Rabbit” wine opener that normally sells for as much as a hundred bucks—at an estate sale. I picked it up for five bucks.

Estate sales are different from yard sales in several big ways.

• A true estate sale is organized by professionals. Estate sale operators are companies and so must charge sales tax. They have a good feel for what things are worth (usually less than the homeowner thinks), and they usually do a nice job of organizing the merchandise.

• Estate sales are generally held inside the house and in the back yard, so you get to see how other people live.

• And some of the other people live mighty high off the hog. Estate sales often take place in multimillion-dollar homes, sometimes owned by people who can afford to maintain several places and who, when selling a house, simply dispose of all the designer furnishings and redecorate the next place from scratch.

• Estate sales may take place in gated communities and HOAs where ordinary yard sales are not permitted.

• Nine times out of ten, the offerings at an estate sale are much, much nicer than anything you find at a yard sale. Often you’ll find expensive items that are barely used or even brand-new.

In addition to the Rabbit, which I use a couple of times a week, I’ve bought high-quality cutlery, a beautiful set of coveted Tonalaware, a matching red leather sofa and recliner for M’hijito’s house, a fun leather ottoman for my own place, a gorgeous custom-made library table, upscale cookbooks, and any number of tschotchkies, yard items, and household gadgets.

The trick to estate sales is finding out about them and then getting there before they open. An easy way to find an estate sale in your area is to go to Estatesales.net and subscribe. At the site, you can click on your state and then your city to find a list of nearby sales. It’s even easier to subscribe; this will elicit a weekly e-mail listing of upcoming events, and the e-mail generally tells you whether and where the estate-sale company has posted photos.

A listing with photos is especially useful, because you get a feel for whether a given sale has goods that may interest you, and you waste a lot less time than you do wandering from yard sale to yard sale.

Remember, though, that you will be competing with antique and second-hand dealers. This means you need to get there early! Be there a half-hour before the door opens, and be prepared to stand in line. If a sale is really hot, the organizers will let only 15 or 20 people in at a time, for safety and for the sake of maintaining order. The dealers are always there as dawn cracks, and they go straight to the best stuff.

It’s smart to bring a basket, box, or shopping bag, so you’re not having to balance things in one hand while you inspect the merchandise. Also, some people will bring their own tags marked with their name and SOLD. Usually you claim an item by removing the tag or picking it up and carrying it over to the cashier’s table, but not everyone knows an untagged item is considered “sold.”

Estate sales are a lot of fun, not only because you sometimes score a fantastic deal but because you get to see some amazing real estate, some interesting antiques, and some expensive designer furniture. La Maya even found her house in our neighborhood at an estate sale. She visited the estate sale, having found it in a weekly e-mail notice, and once inside she realized she loved the beautiful house. When she asked the estate-sale organizer if the owners were planning to sell, the answer was yes! Instantly she called her partner, who agreed that it was a perfect place for them, and before long they were living around the corner from me. Now there’s an estate-sale triumph!

Ghost developments

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Inflation-adjusted housing prices in the United States by state, 1998–2006. Click on the image for a larger view.

Yesterday I spent the afternoon hanging out with my friend Kathy, who lives up against the White Tank Mountains that form the Valley’s western boundary.

The far west and east sides of the Valley were the scenes of the most frantic building campaigns during the late, great Real Estate Bubble, whose collapse has affected the Phoenix area possibly more than any other major metropolis in the country. Phoenix, like Las Vegas (another hard-hit town), has a typically Southwestern boom-and-bust economy. Based on nothing solid, our spates of prosperity evaporate into the dry desert air at the first breath of a hard wind.

The west side has been filled with toss-’em-up tracts, styrofoam-and-stick houses that go off like Roman candles if a fire starts somewhere in the structure, that split and fall apart as the poorly compacted clay beneath them settles, and that stand eave-to-eave, crammed so close together that you might as well be living in an apartment as in one of the laughably dubbed “single-family homes.” Even the most expensive housing there is built this way: people packed in like hens in a commercial chicken farm.

These tracts are half empty. As housing prices ran up, new housing sold for even more than existing housing, which itself was selling for far more than what it was worth. As buyers defaulted, builders went belly-up, leaving many developments only partially built out and many houses standing empty.

Because the frantic building took place on the edges of the sprawl (Phoenix’s City Parents carefully study Los Angeles so they can imitate everything L.A. did wrong), the bust has affected the new areas far more than the central parts of the city.

I was amazed at what we saw as we drove around: mile on mile on mile of shiny new strip shopping  malls, all of them empty. One mall had a single Italian restaurant in it. Another had housed a couple of businesses that had closed and cleared out their equipment, while other space evidently had never been leased.

In one development, an empty mall had a dusty sign next to an empty bank building: “Citibank: Coming Soon!”

We went by a shoe store we both like, because it sells European styles that look nice on your feet without crushing your bones.

Gone.

By and large, the surviving commerce consists of big box stores, beauty salons and supply houses, and a few chain restaurants. Everything else is absent.

It’s eerie to drive through a vast area and see swaths of empty buildings. The place looks like an empty movie set. Or like it had been evacuated and the residents never returned.

Kathy was surprised when I said that our part of town has no empty shopping malls, and in fact centrally located strip malls are being renovated and are fully occupied. She has seen these ghost strip malls for so long, she’s come to think of them as a normal part of the landscape.

What a landscape it is! Vast Potemkin villages of ghost neighborhoods and ghost shopping malls. If this is going on all across the country, America is in deep trouble.

Image: “United States Housing Bubble,” Wikipedia. GNU Free Documentation License.

Die cast…

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The interview at Glendale Community College went well. I think. But then…what do I know?

Their strategy is to hand you a C-level student paper and ask you to grade it in 15 minutes. Then they take a half hour during which you are to respond to six questions. So it’s a whirlwind trip that can’t possibly reveal very much about any one candidate other than how he combs his hair or whether she brushes her teeth.

A friend had clued me that Glendale prides itself on its high-tech pedagogy and that its leadership is committed to the Student Success Initiative, and so I had several related buzzwords on my tongue. Probably if I was weak on anything it was on pedagogical theory. I don’t do theory well. I teach by the seat of my pants. Generally I come out about where the theorists would like, but I don’t get there the same way.

So, we shall see.

We may see fairly soon: they’re hiring for January! We’re already a third of the way through November. They’ll have to select a hire soon, in order to get the person on the payroll by the time spring classes begin. Surely they’ll make a decision by the middle of December.

A whole flock of chickens

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HondaInsight

Let’s count some chickens before they’re hatched!

Today I’m going to interview for a full-time teaching job at a nearby community college. The likelihood that they’ll hire me is about zero, but miracles happen. So I dare to daydream…

♣ If I get this job, the first thing I’m gunna do is buy some decent clothes. Years of living in Costco jeans have left me without any real clothes. No more than one or two outfits in the closet would do for an interview or for work in an office anywhere other than academia.

♣ The second thing I’m gunna do is hire someone to take care of the pool.

♣ Then I’m going to get a car that doesn’t guzzle $80 or $90 worth of gas every month.

♣ And forthwith, while housing prices are still depressed, I’m going to look for someplace to live that doesn’t have a swimming pool, two unused bedrooms, and a big yard to take care of.

♣ And next summer, I will put my beautiful little dog in the beautiful new sporty car and head for northern New Mexico, where we will see nary a 116-degree day through the entire month of July!

♣ County employees (the community colleges belong to the Maricopa County) share in the Arizona State Retirement System, a defined-benefits pension plan. I wonder if they therefore also get RASL? If that is the case, then instantly I get hired, my RASL would max out.

Yes. If I were paid my present salary on a nine-month basis, my hourly rate would jump from $30 an hour to about $85 an hour. Half of that times all my unused sick leave would come to $51,850. RASL maxes out at $30,000, so I would be well beyond that. I could actually use some of my sick leave without biting into that retirement benefit!

Mwha ha hah!

Nothing like a little wool-gathering to start your day...

Above the Clouds.  Arun Kulshreshtha.
Wikipedia Commons. Creative Commons Attribution 3.0 United States