Coffee heat rising

Dealin’ with the devil

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Have you been following the “Debt Trap” series in the New York Times? Lordie! A couple of days ago they told the story of one Diane McLeod, who despite a modest lifestyle managed to sink so deep in debt she’s being evicted from her little two-bedroom home. The unholy combination of a divorce, a couple of unexpected medical problems (does one ever expect to get sick?), a job loss, and a habit of shopping to allay depression saddled her with interest payments alone that exceeded 40% of her pre-tax pay

The conversations this harrowing story generated are clustered in the usual two camps: the All-Her-Own-Fault side and the Damn-Greedy-Capitalists side. One letter to the editor in the print edition cattily remarks that if McLeod would quit smoking (she was shown with a cigarette in her hand), she’d save $100 to $300 a month. Hello? You can be a supersophisticated Easterner and never have heard “the quality of mercy is not strained”?

Rapacious Lending Practices

The point is, though, that the lenders who got their claws into this naive and unhappy woman really did not care whether she ever paid her debts. Lenders today make their money by charging usurious interest, at rates that used to be felonious. A loan is not seen as something to be repaid, but as a long-term earning asset. Says the Times:

Though prevailing interest rates have fallen to the low single digits in recent years, for example, the rates that credit card issuers routinely charge even borrowers with good credit records have risen, to 19.1 percent last year from 17.7 percent in 2005 – a difference that adds billions of dollars in interest charges annually to credit card bills.

Average late fees rose to $35 in 2007 from less than $13 in 1994, and fees charged when customers exceed their credit limits more than doubled to $26 a month from $11, according to CardWeb, an online publisher of information on payment and credit cards.

Mortgage lenders similarly added or raised fees associated with borrowing to buy a home – like $75 e-mail charges, $100 document preparation costs and $70 courier fees – bringing the average to $700 a mortgage, according to the Department of Housing and Urban Development. These “junk fees” have risen 50 percent in recent years, said Michael A. Kratzer, president of FeeDisclosure.com, a Web site intended to help consumers reduce fees on mortgages.

A 17% interest rate is nothing other than usury. In my state, usury laws once limited the amount of interest a lender could charge to 11%-until big lenders’ lobbyists persuaded the federal government to override state usury regulations.

The issue is not that Ms. McLeod spent irresponsibly or diddles away money on her nicotine addiction. The point is that abrogation of laws and regulations that formerly protected consumers from unbridled greed is about to drive this country’s economy into the toilet, down the drain, and permanently out to sea.

The Big Picture

Again quoting the Times of July 20, 2008:

Today, Americans carry $2.56 trillion in consumer debt, up 22 percent since 2000 alone, according to the Federal Reserve Board. The average household’s credit card debt is $8,565, up almost 15 percent from 2000.

College debt has more than doubled since 1995. The average student emerges from college carrying $20,000 in educational debt.

Household debt, including mortgages and credit cards, represents 19 percent of household assets, according to the Fed, compared with 13 percent in 1980.

Even as this debt was mounting, incomes stagnated for many Americans. As a result, the percentage of disposable income that consumers must set aside to service their debt – a figure that includes monthly credit card payments, car loans, mortgage interest and principal – has risen to 14.5 percent from 11 percent just 15 years ago.

By contrast, the nation’s savings rate, which exceeded 8 percent of disposable income in 1968, stood at 0.4 percent at the end of the first quarter of this year, according to the Bureau of Economic Analysis.

More ominous, as Americans have dug themselves deeper into debt, the value of their assets has started to fall. Mortgage debt stood at $10.5 trillion at the end of last year, more than double the $4.8 trillion just seven years earlier, but home prices that were rising to support increasing levels of debt, like home equity lines of credit, are now dropping.

The combination of increased debt, falling asset prices and stagnant incomes does not threaten just imprudent borrowers. The entire economy has become vulnerable to the spending slowdown that results when consumers like Ms. McLeod hit the wall.

If you don’t think what happened to Russia can happen here, think again. Right now the world has one superpower with a (fading) supereconomy. It could very well end up with none, at least until China or the EU takes America’s place

And the Small Picture

As individuals in a megasovereignty run by entities with vast quantities of money, there’s little or nothing any of us can do about this, other than get out of debt and stay out of debt. I would suggest that far from being un-American, putting the brakes on your spending impulses and shucking off as much debt as you possibly can is the best thing you can do for your country. It may take us into some hard times, but a change in habits among consumers is about the only message that will get through to elected representatives who are supposed to speak for us, not for those who can purchase their attention.

On the individual level, avoid rapacious mortgages and watch your credit card spending carefully. If you agree with me that a credit card can be a useful tool, remember that every time you use it, you are entering into a deal with the Devil. Proceed accordingly

2 comments left on the iWeb site

!wanda

The graph on the NYT website depicting average savings vs. debts for all Americans really surprised me.Aside from a few years in the 1940’s, there has never been some mythical time when people were all prudent and frugal, making average savings exceed average debts.People are people, apparently; if you give them credit, they’ll use it.What’s changed in the past decade is how much credit people have been offered.

Why would lenders offer more and more credit to more and more people?One reason that lenders, particularly mortgage lenders, are repackaging loans and reselling them, so they don’t suffer the consequences if people default.By the time the loans were repackaged three or four times, no one knew what the real risks were.People were modeling risk based on historical models that weren’t accurate because people had never been offered such large loans before.The incentives for the financial companies were to encourage personal irresponsibility.

For individual people, I want to emphasize personal responsibility.After all, you’re the only one who can dig yourself out of your own debt, and people who take responsibility are generally more proactive about fixing their own problems.But, the financial system should also be changed to encourage more responsible lending.The system will partially fix itself- now we have better data on what people will do if you offer them dangerously large loans, and credit will tighten.We’ve begun to see this already.But there’s also a role here for regulatory changes.

Wednesday, July 23, 2008 – 11:03 A

Funny about Money

Absolutely!

About regulation: We all could do without being treated like children by the federal government. However, it’s one thing when your own stupidity harms only you and your family; it’s another when mass stupidity and greed bring down the entire country’s economy. In “killing the beast,” the idealogues who acceded to power over the past two decades may have succeeded in killing America’s well-being. It is, in a word, inexcusable.

As more and more Americans retreat into enforced frugality, our economy will continue to suffer, because its operation has been based on a false perception of affluence. People have confused debt with buying power, with the predictable result.

Thursday, July 24, 2008 – 08:18 A

A low-cost make-up kit for travel

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With airlines barring all sorts of toiletries and making it difficult or impossible to carry on more than a change of underwear, women who use expensive department-store cosmetics have a problem. Check your make-up through in a suitcase, and chances are it’ll be lost when you reach your destination. If that’s the case, you can be out several hundred dollars worth of fancy toiletries.

There’s a simple, low-cost solution. It involves taking advantage of a little secret the cosmetics industry doesn’t want you to know: pricey upscale face creams and make-up are, at base, identical to the stuff you buy at Walgreen’s.

Yes. I’m afraid it’s true. Lancôme, for example, is just L’Oréal dressed up in elegant jars and gold-plated price tags. Clinique is suspiciously reminiscent of Almay. This being so, you can safely do without your favorite products for a week or two of vacation time and still look just fine during your trip. The trick is to find something comparable to replace the liquid items you use in your daily toilette

Containers

Go to a drugstore, a camping store, or Target and get yourself a few three-ounce plastic bottles with screw-on caps. These are about the size of the free sample shampoo bottles you find in hotels and upscale motels. Plastic bottles are lighter to carry than glass jars and don’t break, and three ounces is as much as you’re allowed to carry on. Also, lay in some one-quart ziplock-style plastic bags. And a pen with indelible ink, such as a Sharpie, will come in handy.

Moisturizer

Amazingly enough, ordinary hand creams contain the same active ingredients as the most elegant, allegedly refined facial moisturizers. Look for one that has little or no perfume, so that it doesn’t clash with your favorite fragrance or annoy by filling your nostrils with some industrial chemist’s idea of what women want to rub on their hands. Keri and Cetaphil are excellent choices.

Pour a little of this into one of the plastic bottles and screw on the cap tightly. Use your sharpie to mark the contents. You can use this cream for your face as well as other parts of your body.

Worried about drying around the eyes? A light touch of Vaseline will prevent that, no matter how desiccating the motel’s air-conditioning or the sea breezes. Get the smallest container available, and apply a thin layer where you feel your skin is especially dry. Use with restraint, to avoid creating a shiny effect.

Sunblock

Neutrogena makes a very fine sunblocker, available in grocery stores and drugstores. It’s nongreasy, noncomedogenic, odorless, and effective. Transfer some of this into a small plastic bottle so you can easily pack a little in your carry-on. Pack Neutrogena’s big bottle in the check-through. That way you’ll at least have enough to last a day or so, while you wait for lost luggage to catch up with you or get around to buying more products.

Foundation

Drugstore makeup. If you’re not used to buying foundation in the drugstore, be aware that you usually can open the bottles in the store and test them on the back of your hand. Of course, your hand isn’t exactly the same color as your face, but it’s close enough. Better brands are L’Oréal, Revlon, and Almay. The coverage and effect is identical to those of the brands you buy at expensive venues. Some of these products contain sunblockers with significant SPF protection, so if you’re planning an outdoorsy vacation, check those out.

Not long ago, for example, I was at Saks Fifth Avenue, where I allowed a cosmetics saleswoman to give me one of those “makeovers” in which they demonstrate their products and try to persuade you to go into hock to buy every item in a line. The cosmetician remarked that the makeup I had on was exceptionally good. I said it was Almay. She looked blankly at me-never heard of the stuff.

Compared to the Yves Saint Laurent makeup she put on my face that day, I’d say it more than held its own.

Drugstore cosmetics — the same brands are often available at Target and WalMart — are often on sale and so cheap you can afford to buy more than one bottle if you’re not sure which color is right. I’ve found that Walgreen’s will let you return a color that doesn’t work. Walgreen’s also sometimes stations a salesclerk in the cosmetics department who has been trained to work with make-up. These women are very good at helping you identify the right foundation colors.

Powder

If you use powder in a compact, you should be able to carry this on a plane. Drop it in your handbag or carry-on. If you use loose powder, substitute compact-style powder purchased at the drugstore cosmetic counter. Another option is to purchase make-up billed as foundation and powder together. It comes in compacts and is easy to carry on a plane.

You may want to consider foregoing powder while on vacation. It really isn’t necessary. And if you’re of a certain age, powder doesn’t “set” your makeup: it settles it: into the lines of your wrinkles, making them stand out like the canyons on the face of Mars.

Coverup

An extra dab of foundation will cover most minor flaws. Otherwise, check the drugstore counters for inexpensive tubes of coverup. L’Oréal packages an especially effective one in a small, lightweight tube.

Blusher

Since pressed powders are unlikely to be mistaken for bombs, you probably can get away with tossing this in your handbag, carry-on, or backpack. If you use a liquid or cream blusher, buy an inexpensive powdered version and a fluffy brush at the drugstore cosmetics counter. You can apply it with a cotton ball, but a brush is much easier and nicer.

Blusher also often can be dispensed with. Experiment: you may find you don’t really need it, especially if you’ll be outside a lot.

Eye shadow

Here, too, if you use liquid or cream eye shadow, substitute an inexpensive powder shadow in a neutral color. A readily available combination is a light beige or pale tan with a midrange brown for the accent color. Sometimes you can find translucent golds, which look awesome on darker complexions…and on any face at the beach.

Eyeliner

Not a likely bomb. Bring your fave eyeliner along, stashed in your handbag or carryon. Or buy an inexpensive version at the drugstore, one that can get lost without any loss to the budget.

Mascara

Ditto.

Eyebrow pencil

If you color your eyebrows and your hair is brown, you can use your powder eyeshadow as eyebrow pencil, assuming you selected a tan/brown combination. Get a stiff, slanted eyebrow brush and use it to apply the shadow. If your hair is very dark, you’ll probably have to use actual eyebrow makeup.

Shampoo and Conditioner

Brace yourselves now. Shampoo is really nothing more than detergent. That’s right. It’s dish detergent. You actually can wash your hair with Dove or Ivory, whose scents are inoffensive. After a rinse with hair conditioner, you can’t tell the difference between the results from shampoo and the results from ordinary detergent.

If I’m carrying clothing that I will have to wash by hand, I bring along some Woolite. It works just fine to shampoo your hair, and you don’t have to carry two bottles of wash stuff. If your clothes will go to the cleaners or the laundromat, bring a little shampoo or detergent in one of your small plastic bottles.

You should bring conditioner, though, in case you stay in a hotel or other lodging that doesn’t supply it. Put detergent or shampoo and conditioner in small bottles for the carry-on kit. If you’re going to be gone more than a couple of days, pack the regular-sized bottles in your check-through suitcase.

If the detergent concept is too scary, check the sample-size bin at the drugstore or dollar store and pick up small containers of shampoo and conditioner that will fit in your carry-on.

Facial cleanser

Hang on to your hats, ladies. Soap will not hurt your face! Au contraire, it’s good for your face. When I was checking in to the Mayo Clinic for an appendectomy, I had to state my age. The nurse looked at me and said I couldn’t possibly be that old. “Of course I am,” said I. “Well,” she said, you sure don’t look your age.” This was after 25 sleepless hours of excruciating pain.

Fact is, I’ve been washing my face with soap and water since I was 12 years old. Apparently it hasn’t done any harm.

Plan to use the hotel’s soap. If you’re going camping, bring a bar with a moisturizer, such as Dove. Carry it in a small ziplock baggie.

Makeup Remover

Soap. Wet a bar of soap and dampen a washcloth. Wrap part of the damp washcloth around your index finger and rub some soap on the cloth. Use this to remove mascara that has run under your eyes. Wipe carefully, keeping your eyes closed, with the washcloth and warm water.

If this is too spooky, baby oil will do the trick. Stash some in another of the little bottles, and bring some cotton balls or pads.

Naturally, take your contact lenses out before applying either of these around your eyes.

Toner

A toner is nothing but a slightly acetic astringent with some perfume added. You can buy inexpensive toners at a drugstore, or you can dilute a little vinegar 50-50 with water for the purpose. Whichever you choose, store some of it in one of the small plastic bottles, and mark accordingly.

Packing It

Whether you’re trying to fit the loot in a carry-on or packing it in a check-through suitcase, remember to put all the bottles containing liquids inside a ziplock bag! Zip this tightly shut. You will have to present this at the security gage. For check-throughs, you may want to drop the first bag inside a second bag and zip that shut, too. This will prevent leakage inside your suitcase – assuming the TSA doesn’t pull the bags open and neglect to reclose them. Try using your Sharpie to label them with a polite request to reseal them.

This is where you can see the advantage of preferring powder and compact products to liquids. The more items come in plastic compacts, the more you can get into your purse or carry-on without being hassled. Transferring liquids into small bottles ups your chances of being able to fit the entire collection into a carry-on. But even if you have to check it through: if it gets lost, it’s no tragedy. You can replace the stuff inexpensively on the other end.

Tags: travel, baggage, packin

Declutter while you can

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Yesterday evening Cassie and I walked past a down-at-the-heels house in the neighborhood, its paint peeling, its roof tired, and its lawn going to weeds. At one time, the owners had a lovely, bountiful vegetable garden-someone who lived there loved to putter in the yard. Traces of their handiwork persist: the now feral vegetable patch overgrowing with weeds and bermudagrass, a trellis with a grapevine still producing lush bunches of deep purple grapes, big grapefruit trees strong and green from years of fertilizing and canny tending.

Rare among Southwesterners, these people never fenced their backyard, so you can see everything. The gardener’s old wheelbarrow lies on its side next to the house, its bottom rusted through. Mildewing frost cloths and decrepit shade curtains clutter the back porch.

At first I thought the house had been abandoned, its owners carted off to the nursing home or at least departed to cooler climes for the summer. But last night someone was home, the lights on so you could see inside the family room.

A Case Study in Clutter

What a mess in there! The place is stacked with junk: something that looked like an old exercise machine or an upended table and piles of clutter and trash that should have been thrown out years ago. Until the elderly occupant, unaware of our presence, closed the blinds on the kitchen door, you could see that room was chuckablock full of junk, too.

When we rounded the corner where the house stands, we found a car in the driveway and the garage door open. There was, after all, room for a single vehicle to fit in among the junk in the two-car garage, and so, since the driver hadn’t put the car inside, it’s possible the woman in the kitchen was a caretaker and not the homeowner. What a tangle in the garage! The place was stacked several feet out from the walls with tools, containers of household chemicals, and general junk. Someone had conceived the brilliant idea of using the pull rope for the retractable attic ladder as a device to hang bags full of old plastic grocery bags-and they must have stored a 30-year supply there! Great balloons of plastic bags stuffed with more plastic bags hung from the attic ladder rope, blocking the way to the kitchen door.

Amazing.

Don’t do this to your relatives.When you croak over — which could be any day now, no matter what your age — someone else will have to come into your house and clean out the mess. Have a little mercy. There’s no need to keep your megacollection of toy cars, hub caps, old clocks, plastic flowers, and multifarious sets of dishes with you at all times. Or every plastic bag you ever dragged home from the supermarket.

It is not frugal, not thrifty, to keep and stash every piece of junk you’ve ever managed to acquire, no matter how great a bargain it was when you got your hands on it. To the contrary: the constant acquisition of stuff drains your wealth. While you’re still healthy enough to take care of it, it burdens you with a clutter of junk to have to clean and store. When you’re too old to keep on dusting and scrubbing, it leaves you living in squalor amid stacks of mouldering debris.

The garage you paid for is meant to store your car, not trash. The space inside your house, for which you also paid dearly, is for you to live in, not to collect dust on trinkets and trash

If my neighbor had called an estate sale company and unloaded every piece of clutter that she wasn’t using, she could have had a nice chunk of cash to brighten her old age. At the very least, it would have paid for a weekend in Laughlin, Nevada

A true frugalist lives simply. And that simple lifestyle does the frugalist and her heirs a great favor: less junk to take care of means more time to enjoy healthier pursuits.

Principles of Decluttering

Here are the rules I try to live by:

  1. If I haven’t used it in a year, it goes to charity or gets sold.
  2. Nothing sits on a tabletop or counter unless it has a use.
  3. One use may be decorative, but this should be kept to a minimum: just enough to soften a stark look.
  4. I try to put things away when I’m done using them.
  5. Everything should have a place, and the “place” should be inside a drawer or a cabinet.
  6. The walls are festooned with as little stuff as possible, and what’s on the walls is the best quality artwork or crafts I can afford. Except in my office, I don’t clutter the walls with family photos.
  7. I discard empty containers, with few exceptions.
  8. It took some doing, but I finally trained myself to quit collecting old jars, boxes, cans, and fancy clothing-store bags simply because maybe someday they might come in handy. Nine and a half times out of ten, they don’t.
  9. If I find I’m not using a handy-dandy old bottle, out it goes.
  10. I do keep plastic bags, because I have two uses for them: wrapping garbage and picking up after the dog.
  11. But if I didn’t have these uses, I’d use canvas shopping bags or ask for paper bags at the store, to keep that filmy, infinitely lasting plastic out of the landfills.
  12. Instead of stuffing bags to be reused inside a plastic grocery bag hung on a nail, I use a couple of Kleenex-box-like bag holders, scored at Costco. Much neater.
  13. I have one set of dishware, not sets for everyday use and sets for entertaining and my grandmother’s Lenox from Tiffany’s. It’s a decent set of stoneware in a timeless style, which I eat from every day and which I feel comfortable using to serve guests. Ditto the glasses. Ditto the silverware.
  14. I own one set of sheets, one set of towels per bathroom, one set of kitchen towels. When they’re dirty, I wash them and put them back on the bed or into the bathroom.

Simplicity Makes Your Life Better — Long-term

It’s so much easier to clean house when you don’t have to pick up a lot of tchochkies, dust each of them, and dust around them! The less junk you acquire, the less work it is to care for your living environment.

From the vantage point of some maturity, it’s easy to see that developing habits of simplicity — decluttering your life early on and keeping it decluttered — will serve you well as you age. Not only will you save a great deal of cash over the years by not collecting junk that you rarely or never use, the easier it is to take care of your home, the longer you’re likely to be able to stay in your home. If cleaning around your stacks of junk is a major project, at some point along the line you will decide the heck with it. And it won’t be long afterwards that your kids will decide you can’t take care of yourself and move you to the old-folkerie…or worse, in with them!

1 Comment left on iWeb site

Anonymou

Hi, Vicky

At age 50, my spouse and I moved into a new home.I gave away 35 boxes of stuff to Goodwill.It felt so good that I’ve continued to go through the spaces of my new home with a critical eye.I frequently ask myself, have I used this in the last year?No.It’s gone.From experience, I know my daughter and son-in-law will appreciate this.

When my mother-in-law died three years ago, my husband and I cleared out her home in three days.We were able to do this because she had already disposed of all the unessential stuff from her life.

In fact, a couple years prior, my husband spent a few days with her (in another state) and helped her go through her house with the goal of eliminating stuff.They trashed stuff, they kept what Mom still needed, they gave stuff away, they boxed a few things for my husband to bring home, and they had a yard sale.

I believe they made a meaningful experience out of the process.Stuff helped them remember and relive the past.It also helped them consider the present and the future and what Mom was going to need in her last years.Certainly not the collection of mouse Christmas tree ornaments or the collection of 50’s era Hummel, which she worried would disappear with the inevitable strangers she would employ in her home.She wanted to be sure that we would keep the Hummel (with their historiical, sentimental, and real value) in the family.

And yes, Mom pocketed some cash.Further, she felt good about giving away things to people who would enjoy them.But most of all, she maintained control.She made the decisions about her own stuff and about how she would live out her future.

Mom left Hungary during WWII with one small suitcase.Perhaps it is with this perspective that at 80 she was able to make decisions about discarding stuff.I believe, though, that she relieved herself of the burdens associated with keeping stuff.

You offer helpful suggestions for people considering the usefulness of their stuff.Today we have various avenues for unloading stuff.We can give it to fmaily, friends, and/or charities.My friend puts it on the curb with a FREE sign on it.We can use Ebay to send stuff all over the world.My husband has amazingly good luck selling online.We have craigslist.

I personally don’t want to be burdened with all this stuff.I’m all for spreading mine around

Saturday, July 26, 2008 – 09:50 AM

Dollars and nickels and dimes, oh my!

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Seven-thirty in the morning and I’m beat. The pool has been backwashed, the unhappy pool cleaner set in motion (again!), the rug backing Cassie pee’d on in last night’s panic at the vacuum cleaner run through the washer and hung on the line, the regular laundry started, the ironing I haven’t done for the past three weeks set aside (to be ignored a while longer), the dog fed, me fed, the kitchen cleaned up, and the dog walked. Now to sit down to Quicken, figure out what to do with the $600 tax rebate that finally came dragging in, and decide how to handle the red ink in this month’s budget.

I’m beginning to think $1,500 just isn’t enough to cover my monthly costs above and beyond the utility, loan, and insurance payments. It seems like a generous amount: for heaven’s sake, it’s almost a whole paycheck! How can I not live on fifteen hundred bucks???This month, with two more days to go in the budget cycle, I’m $351.28 in the hole. Although I have that much in savings, it’s $1.28 more than I had budgeted to buy some much-needed clothes in this summer’s sales. So…guess I won’t be buying clothes. Again. My wardrobe is rags just now, with exactly no summer dresses or skirts. All I have to wear is Costco jeans, which make me look like a beer barrel on two legs, and I’m out of decent shirts to go with them.

I’ve thought the budget issue had to do with the heavy hits from Anna’s final illness, which added up to over $1,000. But that’s now in the past. This month’s cycle started anew, and I’ve had four unexpected dings:

Leslie’s, clean out pool filter: $87.54

  • Veterinarian: examine Cassie for limp: $95.30
  • Dry cleaner: clean dhurrie rug to remove ointments Anna rubbed into it: $15
  • Vet: X-ray Cassie’s leg after I stepped on her sore foot: $17
  • Apple: new operating system to deal with server migration: $69.82

That comes to $402.66 in extra hits. Though it sounds like a lot, it shouldn’t be enough to put me $350 in the hole. As a practical matter, the $1,500 budget normally has so much play I can buy as much as $300 in clothing or other indulgences without having to dip into savings. What that seems to suggest is instead of being “generous” by about $300 a month, my $1,500 living expenses budget now has only about $102 of play ($402 – $300). A year ago, if I’d had $402 in unplanned expenses, I’d be about a hundred bucks in the hole…not $350.

Evidently inflation in routine costs has increased my day-to-day expenses by somewhere around $300. Costco’s gas was down to $3.99/gallon last week. I paid almost $60 for a fill-up that used to cost about $35, and I’m already almost half-empty. Though I’ve been staying away from the university as much as possible, now that my dean is back in town, I really should show up to work more often. If I drove to campus every day, I would have to fill up at least once a week–possibly more than that. That’s $240 a month, up from $140. Grocery inflation? Doesn’t apply. In fact, my grocery bills have been falling because I’ve quit driving to stores whenever I need one or two things. In this budget cycle I spent $361 on groceries, a relatively modest amount for me, since that is the one area where I do indulge myself. During the same period in 2007, I spent $571 at grocery stores (though some of it went to making food for two large dogs). The hair stylist has jacked up his prices, so that this week’s haircut plus a ten-dollar tip came to $75…and he cut my hair so short I look like one of those eccentric old ladies who gets her hair shaved off so she doesn’t have to comb it.

Wait: there’s a $55 car maintenance bill; that would account for some of the overrun. So that brings extraordinary costs to $450.

Problem is, the extraordinary costs keep rolling in. Yesterday a bill for car registration showed up: $116.34. That comes off the top of next month’s billing cycle. Then Cassie pee’d on the other dhurrie rug last night, adding another spot to the place where she shat, which I never cleaned out adequately. So now that rug has to go to the cleaner. It’s old and was never a fancy, expensive number like the one I had to take to the specialty cleaner after Anna smeared antibiotic ointments all over it. So I’m unloading it on a cheaper dry-cleaning outfit, whose rep says they’ll do the job for $70. That’s $186 out of next month’s budget…before the budget cycle even begins.

This month’s $350 shortfall…where will it come from? I could use the tax rebate to cover it, but really, I wanted to put that into the Renovation Loan payoff fund. If it comes out of savings, then it seriously does mean no clothing purchases until the winter sales. Argh! I desperately need summer clothes. Since I look like a wacky old lady who gets her hair shaved off so she doesn’t have to comb it, I might as well go around in faded, worn-out rags anyway. Won’t make much difference

Uh oh. Waitminit here. Sometime back I entered a note in Quicken to the effect that there’s a surplus in the credit-card budget’s cookie jar. That’s the result of living under budget for several months and not transferring the surplus to pay down loan principal…it created a de facto emergency fund

Am I saved? Could this be true? Let us away to the credit union’s website…
* * *

HOLY mackerel!

There’s a surplus, all right. It’s nine hundred and seventy-six bucks! Lordie. I noted that at the beginning of the month and then forgot it, in the flurry over the website, the injured dog, hurting myself (when I fell on the pavement tripping over the dog), running late on a client’s job, and generally being too darn hot and too darn old.

Amazing grace! It’s a miracle. Maybe Lady Karma has decided to quit kicking me in the shins. Or at least, maybe this time She missed.
🙂

A step to improve the finances

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Mrs. Micah issued a challenge to readers and bloggers to describe one step, no matter how small, that they are taking to improve their financial situations. As a matter of fact, I’ve come up with something but haven’t had time to blog about it, what with the past week’s technoadventures.

Thanks to a reader’s comment, I figured out how I could pool my biweekly paychecks so as to “pay myself” on a bimonthly basis. This ensures that there always will be enough money in the account that dispenses payments, by EFT, to the utility companies, the Renovation Loan lender, the life insurance provider, and the long-term care insurer, and it allows me to fund the “piggy bank” account for credit-card charges once a month: on the first, rather than on whatever cockamamie date a paycheck arrives.

First, I funded a dormant checking account at the credit union with my state income tax refund of $1340, almost as much as one of my paychecks. I added another couple hundred bucks to bring this bankroll up to the amount of a single paycheck.

July’s first payday happened quite close to the first. I put that check in the newly grubstaked “pool” account. This brought the balance to the amount of one full month’s pay.

From that I funded the “piggy bank” account for the credit-card budget and the account that dispenses automatic payments-not with half of what is needed but in full, for the entire month.

Friday, July 18, was this month’s second payday. The credit union, apprised of my new scheme, automatically transferred the paycheck into the “pool” account. That brought the balance back up to the equivalent of one full month’s pay. On the 31st, I’ll make my regular transfers for savings from the “pool”: to the Renovation Loan repayment fund, to the property tax/homeowner’s insurance/car insurance fund, and to indulgence savings.

In Quicken, I renamed all my credit union accounts so my titles jibe with what the CU calls them at its online site, simplifying the books and cutting the likelihood of making an error.

Next time I’m at the credit union, I’ll arrange to have automatic transfers from the “pool” made on the 1st and the 31st. Ta DAAAA!!! No more fiddling with online transfers.

Everything except paying the credit card bills will be done automatically.

No more fiddling with Quicken and manual transfers. No more worrying about whether enough cash will hit the credit-card “piggy bank” to make the monthly budget. No more hating GDU’s ever-changing bimonthly pay schedule.

Now that’s what I call stress relief!

w00t! 18 grand materializes from the air!

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Lordie! Here I’ve been thinking I’d lost about $23,000 in the stock market…. Comes a statement from GDU’s Fidelity retirement plan-the first I’ve seen in a year. It turns out the balance the Fidelity rep gave me over the phone a few weeks ago was wrong. He only gave me the amount in the 401(a) plan. The fund also includes a 403(b) plan, which contains $18,465 more than the amount he said I had.

That means I’ve “only” lost about $4,535 to the bear.

Wow! I’ve never been so pleased with a loss in my life.

3 Comments left on iWeb site:

Mrs. Accountability

That’s wonderful!! Funny how the situation could cause such a paradigm shift

Friday, July 18, 2008 – 09:35 AM

Zhu

Wow, that is so cool!

I’m too chicken for stock market… I saved up a bit but I don’t like the idea of potentially losing money. I mean, I wouldn’t mind your kind of loss though

Friday, July 18, 2008 – 07:00 PM

Funny about Money

In fact, you lose money in the market and you gain it. Over time, you should make more than you lose, if you’ve diversified and invested carefully.

With mutual funds where you’re simply rolling all gains back into the fund by automatically purchasing new shares with gains or buying new shares each month with savings from your paycheck, when the market goes down you stand to earn MORE money, because you buy shares at deflated prices. As the market comes back up, your existing shares plus the shares you bought in the bargain basement make money.

This is most obvious in your 401(k) or 403(b), where you and your employer are plowing money into the funds every payday. It’s hair-raising to get a statement that shows the plan has lost more than you and your employer combined put into it over the quarter…until you realize the contributions are buying lots of shares at reduced prices. When the market comes back to normal, you feel mighty flush.