Coffee heat rising

DIY: The great de-wallpapering adventure

Kyle at Rather Be Shopping is running a contest for smartest, dumbest, hardest, or frugalest home improvement projects. The prize is a fancy cordless drill with many trimmings, something not to be missed. So, here’s my contribution:

When my son reached grade-school age, we moved out of a very elegant house in a gentrified inner-city neighborhood in search of a functional school district and fewer transients. Though the new-to-us house, a custom-built 1950s rancher, was in a far tonier area than the one we left behind, all that proved was that the rich spend much of their time at Junior League and Men’s Arts Council and little of their time cleaning house or supervising their housekeepers. The place was filthy, smelly, and run-down.

After two weeks of nonstop scrubbing and disinfecting – during which the wife of one of my husband’s law partners showed up at the door and mistook me for the cleaning help – I was ready to take on the tired décor. I planned to paint the walls myself. It took three coats of white to cover the unholy navy blue the previous owners had put in the master bedroom. From there it was on to the kitchen.

Ah, the kitchen.

Strangely, whenever I walked in there I found myself feeling slightly dizzy, as though I’d had one gin and tonic too many.

The vast kitchen consisted of a large cooking and utility area plus a breakfast nook big enough to hold my mother’s dining room set, which I had recently inherited. One wall of the breakfast room was lined with cabinetry and glass-fronted shelving. The two rooms were nominally separated by an ell of the kitchen counter and an upper cabinet, which hung from a soffit. A soffit also ran along the kitchen’s front wall, supporting more upper cabinets.

In the past, some proud homeowner had covered the soffits, the ceilings, three walls, and the wall behind the shelves with busy blue-and-white floral wallpaper. Although it wasn’t obvious at a glance, the pattern had a direction. The wooziness one felt upon entering the rooms arose from this wallpaper. In the breakfast nook, the ceiling pattern ran north and south. In the kitchen, it ran east and west. As if it weren’t bad enough to have ditzy flowers all over the ceiling, the flowers raced back and forth in different directions!

No problem, thought I. We’ll just pull that wallpaper right off there. Hey – I knew how to remove wallpaper. I was good at it.

Yeah.

Except this stuff wasn’t your normal wallpaper. In fact, some question arose about whether it was wallpaper at all. The strips were narrow, about the width of Contact Paper. It didn’t appear to be self-sticking shelf paper, though: the surface was matte, not shiny, and it definitely was paper and not vinyl.

I hauled the ladder, a sponge, and a bucket of water into the kitchen, propped the bucket on the paint tray, climbed up, and started mopping and peeling.

Whatever it was, the paper had no interest in peeling off, thank you. On some sections, it would come off in small strips. In other areas-where more paper hid behind it-it sort of chipped off.

Down the ladder, out to the tool chest; retrieve a putty knife and a squirt bottle of vinegar water. Spray, scrape, and peel: this worked to slightly better effect, but it was slow, slow going.

The soffits had been papered by many previous owners. A layer of blue flowers came off to reveal a layer of harvest gold wheat. The harvest gold wheat came off to reveal a layer of brown with busy yellow and orange flowers. The layer of brown came off to reveal an identical layer of brown with busy yellow and orange flowers! Beneath that lurked another couple of layers in increasingly retro patterns.

The brown stuff put up an even bigger fight than the blue flowers and the gold wheat. It behaved like glued-down cardboard. Not only would it not peel off, it wouldn’t scrape off, either. It came up in quarter-inch chips.

Down from the ladder, into the car, off to the rental place. Rent a wallpaper steamer.

The rental guy pointed out that a steam iron would do the job: just turn it to “blast furnace,” hold it an inch or two away from the wall, and hit the “burst of steam” button. This, he pointed out, would be a lot easier for a 118-pound woman whose idea of exercise is an occasional walk to the refrigerator, for whom a wallpaper steamer represented a heavy, unwieldy, arm-aching chunk of a thing.

This was beginning to look like an iffy idea.

The steam iron strategy worked little better than the spray bottle. As a young mother, however, I was too dumb and too stubborn ever to say “I give up.” Oh, no.

Days passed as I clung to the ladder like a monkey in the jungle canopy and steamed, sprayed, scraped, peeled, steamed, sprayed, scraped, peeled, steamed, sprayed, scraped, peeled…. I paused only long enough to pick up the kid at school and park him in front of the television. Then it was back up the ladder, steaming scraping and peeling to the tunes of Sesame Street and Mr. Rogers.

After the better part of a week, I had the stuff off the soffits and the walls behind the bookcases. Well…almost. Behind the shelves I came to a layer of excellent, solidly applied and still intact bright yellow lead paint. It had been applied over more underlaying wallpaper!

Luckily, I owned cookbooks, many cookbooks, all still in the mover’s packing boxes. Command decision: remove the paper from the intact paint, wash off the glue, and cover the more or less smooth goldenrod surface with new paint. Hide the result behind row on row of cookbooks.

Moving on, it was time to tackle the dizzy ceilings.

If Michelangelo could do it, I told myself, so can I.

Except…well, Michelangelo had scaffolding. Michelangelo had swarms of underlings. Michelangelo could lay on his back while he dealt with the ceiling of the Sistine Chapel. Michelangelo did not have to balance on the top step of an aluminum ladder while holding a sizzling steam iron over his head!

And if he did, you can bet one of the underlings would have been sent up the ladder.

More days passed. Neck-twisting, back-wrenching days. The neighbor came by and stared up at me in awe. A woman who had no fear of telling another woman she was nuts, she told me I was nuts. Obsessively, I steamed and sprayed and scraped and peeled.

Clearly, she was right.

After another week of steaming, scraping, and peeling, I finally got the layers of wallpaper off the ceiling.

Now all that remained was to remove an ancient nonfunctional intercom from the wall, patch the resulting 8 x 14-inch hole in the drywall, and paint. So it was that I learned how to do drywall repair. Not well, we might add.

I’d like to say that when the job was finished I was proud, I was pleased as punch.

But no. The result was OK. But it was just OK. Unlike the fine old 1929 hacienda we had left downtown with its shaded atrium, 18-foot lath-and-plaster walls, huge wood beams, and authentic French doors and windows, this house had nothing special to offer. It was just a tract house on steroids. Nothing that you did to it made it special. Far from feeling pleased, all I felt was glad a miserable job was finally done. At least the paint was clean and we no longer felt tipsy while we were making our breakfast coffee.

Smaller is better. Simple is best. Workmen are good. Hire them.

Twelve ways to save money on your dog

DCP_13631. Adopt an adult dog.

A grown-up that has already learned to live with humans will save you on furniture and landscaping repair, carpet cleaning, and training. And someone else has paid for spaying or neutering.

2. Choose a breed that is not on the homeowner insurer’s list of breeds that trigger higher premiums.

Avoid German shepherds, Rottweilers, pit bulls, doberman pinschers, chows, huskies, and other dogs with a reputation for unpredictability.

3. Learn to obedience-train your dog in low-cost community classes. Practice obedience training frequently, so the dog will come when called and stop when ordered.

These skills may save your dog from costly accidents or animal attacks, to say nothing of making your own life a lot more pleasant.

4. Keep your dog secured inside a yard with a sturdy, escape-proof fence (not on a tie-out!). When walking outside the yard with your dog, keep the dog on a leash at all times.

This keeps your dog safe from accidents and fights with other dogs and helps protect you and passers-by from dog bites. And that keeps your wallet safe from veterinarians’ and lawyers’ bites.

5. Exercise your dog regularly.

6. Restrict immunizations to those that are absolutely necessary.

Some shots given once a year are really needed only once every two or three years.

7. Learn to give shots yourself.

Vaccines can be purchased at feed stores and online.

8. If you live in an area where there are no mosquitoes, don’t give your dog heartworm meds. If you can’t avoid the monthly worming treatment, purchase Heartgard at Costco, where it’s much cheaper than at most veterinary offices.

9. Read the labels on dog food.

Do not feed your dog corn or corn products: at best, they’re indigestible; many dogs are allergic to corn. Dogs often manifest allergies as ear infections, a direct route for cash to flow from your wallet to your veterinarian’s pocket.

Note what’s in premium dog food and then look for similar formulas in less expensive varieties. For example, Trader Joe’s lamb and rice dog kibble is similar to much pricier premium brands. Also, feed and tack stores often sell premium kibbles at a significant discount from the prices in pet stores.

10. Learn to groom the dog yourself.

Invest in clippers for dogs that need fancy trim jobs and a Dremel to file down heavy claws.

11. Keep your dog’s teeth clean with dental-cleaning dog chews or by brushing the teeth.

12. Abstain from cosmetic surgery such as docking ears, which is cruel and unnecessary.

Home Inspections: Hire your own craftsmen

Over at Finance Gets Personal, a post about the usually startling costs of homeownership-especially during the first year or two after move-in-is causing some rueful conversation. It reminded me of a strategy I learned by dint of hard experience: in assessing a house you’re about to buy, never rely solely on the judgment of a professional home inspector. Hire craftsman whom you trust to inspect the house, too, and make the purchase contingent on passing all inspections.

A home inspector has a built-in conflict of interest. Much home inspection work comes from referrals by real estate agents. So, it’s not in an inspector’s interest to queer a sale by telling you bluntly how much is wrong with a house and what it will cost to fix it. As a result, a defect may be pointed out to you, but it’s likely to be soft-pedaled or couched in language you don’t fully understand.

This first entered my consciousness when I sold my last house. Of course, I was present when the home inspector went through the place. But while he was there, the termite inspector showed up. Having certified the house termite-free, the bug guy happened to look up at the patio roof overhang. There, behind a poorly installed gutter, he spotted dry rot (which I knew about but wished not to discuss). Enthusiastically he pointed this out and, to demonstrate why it needed to be replaced, punched a screwdriver into it, as through a block of Styrofoam.

The home inspector was standing about 15 feet away. He saw and heard this display.

Silently, I cursed the termite guy-now, I figured, I would have to pay to replace the fascia. If there ever was any question about it, the question was just answered.

Exit termite dude. Home inspector completed his rounds and went out the front door, where he attempted to close the defective latch on the security door, which (I also knew) didn’t work. I suppressed another silent curse: add expensive security door fix to the expensive wood trim fix and repainting.

Couple of days went by and lo! Along comes the home inspector’s report: nary a mention of the dry rot, nary a mention of the nonfunctional security door.

The house I was moving into, as it developed, was the House from Hell, primped to stylish prettiness by a pair of do-it-yourselfers affectionately known as Satan and Proserpine. The home inspector did highlight the out-of-code fireplace mantel and the pet door punched through the fire door that was supposed to protect the dwelling from the hazard-laden garage, wherein a gas water heater sat directly next to the gas tank of any car parked inside. He estimated the roof had another three or four years. He noted the water heater was old but said it could last several more years.

And what went around came around.

I got away with the security door and the dry rot. Satan and Proserpine got away with…

  • a DIY watering system that was out of code and didn’t water the lawn adequately;
  • DIY wiring in the garage that was a) out of code and b) unsafe;
  • a water heater that started to leak a month or two after I moved in;
  • a refrigerator that seeped water out the water dispenser in the door-and whose annoyingly obvious evidence of prior leaking disqualified it from repair by the buyer’s insurance plan;
  • a dishwasher that ran, all right, but didn’t clean anything;
  • out-of-code plumbing in the bathroom;
  • a block wall heaved and cracked by the neighbor’s tree;
  • a rusted-out swamp cooler that doesn’t work;
  • a crumbling roof that had to be replaced within a year of move-in;
  • a pool cleaner whose weird thumping noise resonated throughout the house whenever the pool pump was running;
  • a garage door opener that fell off its fittings onto my car…

I could go on at length.

Fortunately, I had budgeted a substantial amount for upgrades. That notwithstanding, I didn’t have in mind converting my decorating budget to an emergency fund.

Also serendipitously, a couple of weeks after I moved in, the pool was vandalized, destroying the plaster and all the equipment. My homeowner’s insurance ponied up the thousands and thousands of dollars required to deconstruct the pool, rebuild it, and replace all the equipment. That took care of the Pool Cleaner from Hell, anyway.

All of which added up to an expensive lesson: Never trust a home inspector whose business depends on making nice to real estate agents!

When M’hijito and I bought the Investment House, we decided to hire the craftsmen who had worked on the House from Hell to perform as our own inspectors. We made appointments with the roofer, the electrician, the HVAC technician, and the plumber to come and look the shack over.

Even though I offered to pay each man the price of a service call, two of them charged nothing. One charged fifteen bucks. The HVAC company gave us a year’s service contract for the cost of the inspection.

The Investment House was a fixer-upper and we knew it. But this time we had no surprises: we knew what needed to be fixed and exactly what it would cost to fix it.

  • The HVAC guy estimated the age of the air-conditioning/heating unit, made an educated guess at how long it would last, and gave us an estimate for how much it will cost to replace it.
  • The roofer gave us an estimate for reroofing on the spot (much less than he’d charged to reroof The House from Hell, BTW).
  • The electrician explained about the 1951 wiring and what would be entailed in updating it.
  • The plumber determined what parts of the black-iron system had been replaced with copper, discovered the house needed a pressure regulator, and gave us a fair price for installing it.

We didn’t keep it a secret from either the Realtor or the home inspector that we were hiring our own tradesmen to look the place over. As it develops, in Arizona a buyer can make the purchase of a house contingent on inspection by as many people as desired. No objection to the presence of these troops arose. In fact, I suspect knowing that experienced craftsmen would be examining the house may have caused the home inspector to issue a more thorough and accurate report than he might have produced otherwise.

An advantage of involving our own guys in the inspection was that the electrician and the plumber read the inspector’s report and explained some of the technical language. That was enlightening.

After this, every time I buy a house-whether it’s new or a resale, whether it’s my own dwelling or an investment-a team of craftsmen who are in my hire will do the inspections.

categories: real estate

4 Comments from iWeb site

BeThisWay

Excellent, excellent advice.

A month after moving into my home my finger poked a hole in the metal washbasin in one of my bathrooms.The air handler quit a month after that, a leak in a bathroom… you get the idea.

Friday, April 11, 200807:07 AM

Four Pillars

Very interesting post.I never thought of that conflict of interest.

By the way – you can make a purchase conditional on whatever you want – it’s not a legal thing.

Mike

Friday, April 11, 200807:11 AM

Anonymous

Great post, and great advice! More people would do well to pony up more money up front for experienced tradesmen rather than end up paying out the a$$ in repairs later on…

Friday, April 11, 200811:26 AM

Finance Girl

Thanks for mentioning my post.

This is very interesting, and I think your idea about hiring other tradesmen who aren’t home inspectors is great.

Frugal Friday Recipes: Beef Burgundy

Having run low on craft projects, I’ve decided to change the Friday department to recipes and cooking posts, something I’m never likely to run out of.

Last weekend I made an awesome boeuf bourguignon for some friends. It was mighty pricey: about $45 for all the ingredients. But so far, that roast has yielded 12 servings…and counting. The guest meal was wonderful, and every leftover variation has been really good, too. So, I thought I’d share the original recipe with you. Next week: all the meals that came out of it.

This recipe is not hard to make, but it requires a half-day to cook. So, plan to be around the house while it’s simmering.

You’ll need…

  • 3- to 6-pound rump roast (other cuts of beef will work)
  • 3 or 4 pieces of bacon (probably not necessary for chuck roast)
  • olive oil
  • 1 or 2 cut-up carrots
  • 1 large or 2 small cut-up onions
  • 1 bottle inexpensive but drinkable red wine
  • 1 can or box of low-salt, high-quality beef broth or beef bouillon, or two or three cups of home-made beef broth
  • 1 bay leaf or sprig of rosemary
  • 1 tsp (more or less) thyme
  • 2-inch strip of orange zest, or 1/3 tsp bottled orange peel
  • 1 large or 2 moderate-sized tomatoes
  • tomato paste
  • 2 or more cloves of garlic
  • salt and pepper
  • about ½ pound fresh mushrooms
  • about 20 small white onions
  • salt and pepper to taste
  • sour cream, if preparing gluten-free meal; or a tablespoon or two of butter with a like amount of softened butter
  • good-quality egg noodles (or, for gluten-free dining, potatoes or rice)
  • sharp paring knife
  • saucepan
  • deep, heavy frying pan or large-diameter stock pot, with lid
  • another frying pan
  • stock pot or other large pot for cooking noodles
  • water
  • cutting board
  • serving plate

First, place the bacon in the saucepan with a couple cups of of water. Heat the water to a simmer; allow to simmer about ten minutes.

Meanwhile, wash and cut up the carrot, onions, and tomatoes. Peel and chop the garlic. Set aside.

Drain the bacon. Dry it in paper towels. With a sharp knife, slice the fat away from the meaty part of the bacon strips. Slice the fat into thin pieces.

Dry the saucepan. Skim the bottom with a little olive oil. Place it over low heat with the meaty pieces of the bacon. Let the bacon meat cook slowly while you’re doing the next step.

Rinse the roast and dry it well with paper towels.

Cut the strips of fat into one- or two-inch long pieces. Take your knife and punch a hole in the meat, and then with the tip of the knife gently push a strip of bacon fat into the roast. Be careful not to cut yourself.

Repeat this until you’ve worked the bacon fat into holes all over the meat, top, bottom, and sides.

Keep an eye on the cooking bacon meat while this is going on. When it’s crisp, turn off the heat and set the saucepan aside with the bacon and cooking grease in it.

Pour enough olive oil into the big frying pan to skim the bottom. Place the pan over medium to medium-high heat, warm the oil, and then brown the meat on both sides. After you’ve turned turn the meat to the second side, add the cut-up onions and carrots. Stir around as the meat continues to brown. After they seem to be cooking, add the garlic.

When both sides of the meat are nicely browned, pour in about three-quarters of the bottle of wine. Add enough beef broth to just cover the meat. Add the tomatoes, the orange peel, the thyme, and the bay leaf or rosemary. Stir in a heaping tablespoon of tomato paste.

If the broth is not simmering, leave the heat on medium-high until it comes to a simmer. Then turn the heat down so that the pot will stay at the simmer. Cover the pot and go away.

Depending on the size and the cut of the meat, cooking should take two to four hours. After about 90 minutes, check every 15 or 20 minutes for doneness. The finished meat should be tender but preferably not disintegrating.

While the beef is cooking, wash and dry the mushrooms and cut off any tired-looking ends of the stems. If they’re very small, leave them whole. If they’re more than an inch or so in diameter, slice them in half or quarters lengthwise. Peel the onions (an easy way to do this is to drop them into a pan of boiling water for a minute or two, then drain them into a colander and cool quickly under cold water), slice off each end, and cut a cross into the root end of each onion.

Take the onions and place them in the saucepan you used to cook the bacon meat. Place the pan over medium heat and gently stir the onions and fried meat around for a couple of minutes. Add about ½ inch of water to the pan, cover, and simmer for a bout a half-hour, until the onions are just tender when pierced with a knife. Set aside.

Pour some olive oil in a clean frying pan and place over medium-high heat. When the oil is hot, add the mushrooms. Stir or toss the shrooms until they’re lightly browned, around five minutes or less.

When the meat is done, take it out of the pan and set it on a serving plate.

Meanwhile, place a large strainer or colander over a large bowl, and pour the pan juices through it. Push the juices out of the vegetables, and then discard the vegetable residue. Pour the juices back into the pan, and place the pan over high heat on the stove.

Allow the stock to boil down about 50%. If desired, add a little more wine or tomato paste, or both. Herbs can also be added-more thyme, a bit of marjoram, a dash of lavender, whatever you have at hand. When the stock has cooked down to about three cups, lower the heat.

If you wish to thicken the stock with sour cream, wait until you’re ready to serve the meal. Then reheat the stock gently but do not bring it to a boil (if it boils, the sour cream will curdle). Stir a few tablespoons of sour cream in to thicken a bit. This is useful if a guest is sensitive to gluten. To serve a gluten-free meal, substitute potatoes or rice for the pasta.

But if everyone can eat flour, the classic way to thicken this sauce is with a beurre manié. Take equal parts of white flour and room temperature butter and mash them together. One or two tablespoons apiece will probably do. With the broth simmering vigorously, stir pieces of the flour-butter paste in a little at a time, stirring until the sauce thickens. Taste the sauce; season with salt and pepper if necessary.

Place the meat back in the sauce and add the onions and mushrooms. The roast can be served immediately or may be set aside and reheated later.

If you are serving noodles, fill a stock pot with water and place it over high heat. When the water comes to a boil, add a package of noodles and cook until just soft. If you are serving potatoes, peel and boil them (or simply clean and boil, if you are using tiny new potatoes or fingerlings). If you are serving rice, cook according to package directions.

Slice the meat and serve with the sauce and noodles (or other starch). A generous green salad will suffice for vegetables and extra color.

Net Worth Update: Better than expected

One good thing about being a pessimist: you’re never unpleasantly surprised. What surprises come your way are always pleasant.

Despite the market roller coaster, my investments are doing better than expected. The Vanguard mutual finds are holding their own, and the broad array of securities managed by the amazing Dick Stern and John Reimer actually earned $1,500 last month.

I ran a net worth calculation last night: over nine hundred grand. Looks like I should turn in my notice this very morning, right?

Well, there’s a problem: besides the fact that it’s all on paper, I’m house-poor. Those figures include the $300,000 value of my own paid-off dwelling plus my share of the Investment House, which M’hijito is occupying while we wait for its value to grow. My liquid holdings are worth only a little over half my net worth. Combined with the piddling Social Security I would get if I quit now (or, for that matter, that I will get if I manage to hang on to my job for another three years, until I’m 66), it will not generate enough for me to live on.

I use almost all of my net salary to support the house, the yard, the dog, the car, a small savings project, and myself. Because I telecommute several days a week, never eat lunch out, and wear Costco jeans to work, the fact of the matter is that quitting my job will not result in any day-to-day savings. To gross an income equivalent to my present net income would take 6 percent of my cash holdings. That’s about 2 percent too much.

My share of the Investment House mortgage is $1,000 a month, which comes out of the proceeds on my investments. We will save $200 or $300 a month with the refinance on the Investment House. But that notwithstanding, my savings plus Social Security will not generate enough to support me in my present home.

I figure I need to work until I’m 70-almost seven more years!-if I’m to stay in this house for the rest of my life.

Since GDU is millions of dollars in the hole and my own college just had its budget slashed by $2.8 million, a nonessential job with a year-to-year contract such as mine is not bloody likely to last another seven years.

If I lose my job within the next four or five years, my plan is to sell the house and move out to Sun City, where acceptable housing is cheaper and the cost of living is amazingly low. Taxes are a third of what I’m paying here and auto and homeowner’s insurance are half the gouge in my present Zip code. Utility bills are lower, because the houses are smaller and they all have (hideous!) gravel landscaping. Grocery stores are much closer and can be accessed in a golf cart, and other routine shopping destinations, such as Home Depot and Costco, are also far closer than they are to my present “centrally located” house. So, gasoline costs would be lower even if I kept the Dog Chariot.

Trouble is, I don’t want to live in Sun City. It’s safer and quieter (as in “the quiet of the mausoleum”), but it’s a ghetto for old folks. I don’t want to live where everyone looks like me, and I don’t want to move away from my friends and what’s left of my family.

But if I lose my job, I won’t have a choice.

If I manage to stay here, when I die my son will inherit a paid-off house. If he’s still living in the Investment House-which he could be…at my age my mother had one year left-he also will inherit enough to pay off the mortgage on that place. He covets my house, which would be an excellent home for a young man or…oh, say, a young man, a wife, and a kid or two? He could either sell the Investment House and put the proceeds in the stock market or rent it for a nice stream of secondary income. Or he could sell both houses and move into a much nicer place.

Any of those would be good.

In the meantime, the fact that I’m worth damn near a million dollars and cannot retire absolutely blows me away. My father thought he would have it made when he reached his savings goal of $100,000. And at the time he did quit his job, that was enough to support him and my mother in what they regarded as comfort. Then came the inflation of the 1970s. By the end of his lifetime he barely had enough to keep a roof over his head. And my father was the Emperor of Tightwads.

Even if I had a million dollars in cash, the return combined with Social Security would not replace my income. I probably could live on it…now. But in ten years? twenty years? If I escape the family disease, I easily could live into my 90s. That’s another thirty years! Wow.

Save, young pups. Save, save, save!

Managing Your Emergency Fund: The paycheck-to-paycheck safety net

In the hideous biweekly pay environment, no matter how you try to arrange things there will be times when you will find yourself without enough to cover your normal bills. This happens because paydays move around, so that occasionally your second paycheck of the month arrives after your bills are due and after other living expenses have consumed most of your first paycheck.

That’s the case for me this month: automatic payments for all my utilities and two insurance bills are made by the 20th. My Visa bill will be due about then, too (fortunately, it will be small). Normally plenty of money is in the account to cover all these expenses, because normally by the 20th two paychecks have been fed into that account. The first paycheck covers my recurring expenses and a few other living expenses; the second covers the rest of the grocery bills and such costs. But not this month: in April I don’t get paid until the 25th.

On April 20, when the American Express billing cycle closes, I will be $200 in the hole.

The credit union, however, will think I have $300 left in my checking account. The only reason the account will appear to be in the black even after I’ve spent $200 more than I deposited it is that I keep a $500 cushion in that account. I make it a matter of principle never to go below that $500 cushion. So, in my universe a balance of $500 is the same as zero, and a balance of $300 means the account is really $200 in the red.

The only thing between me and two hundred bucks’ worth of bounced transactions is an emergency fund of a few hundred dollars.

As we have seen, I have about $18,000 in an emergency fund, enough to tide me over for six months should I lose my job. Since I started setting money aside in a fund to pay off the low-interest Renovation Loan, I’ve managed to squirrel away another $13,000, which if push came to shove could serve as more emergency cash. Most of this money is kept in conservative mutual funds, where it earns a little interest.

However, I keep $500 of it in my checking account for exactly the kind of short-term emergency I’m experiencing this month.

The April 25 paycheck will replenish the checking account’s emergency cushion and cover the rest of my April bills. But May also will see the second paycheck come in after all my recurring bills are due, and so once again I will need that $500 cushion to keep from overdrawing the account.

A back-up for the checking-account cushion is check-bouncing protection, a line of credit extended by the credit union which, for a fee, will cover overdrafts up to $3,000, about one month’s net pay. As long as no payments are drawn on this line of credit, it costs me nothing. If I bounce a check or EFT, the interest will be around 11%, but if I repay the overdraft immediately, it will cost me just a few dollars—a far cry from a bounced-check penalty and the umbrage of creditors.

So, here’s a sensible approach to managing emergency funds as they accrue:

1. First, build a cushion in your checking account that will cover a short-term overdraft.

Consider this amount to be your “zero” point! When your balance approaches the amount of your cushion, regard it as actually approaching zero. When you start to eat into your cushion, your checking account is in the negative numbers. Behave accordingly: quit spending and find a way to replenish the checking account as fast as you can, even if it means transferring funds from savings.

2. Once the checking-account cushion is in place, continue building your emergency fund, but plan to invest the bulk of the money in an interest-bearing account. When you reach $3,000, for example, you can open a low-expense fund at Vanguard, where a money market fund pays as much as the highest-paying bank savings accounts do and where other relatively safe instruments return around 8% over time.

3. Get overdraft protection with your bank or credit union. If your bank charges you for this service, move your accounts to a bank that restrains itself from gouging you.

Overdraft protection is your emergency fund’s emergency fund. In the event of a minor disaster-a late paycheck, for example-it gives you an extra safety net. Arrange for this while you still have a job, because of course if you are unemployed you’re unlikely to qualify for a line of credit.

categories: personal finance

2 Comments from iWeb site

Mydailydollars

Good advice!I certainly sleep better at night with a small emergency fun, even while I’m paying off my credit card debt.

Tuesday, April 8, 200808:19 AM

Mrs. Micah

When in college, I had $200 which I considered untouchable. And my account never went below that…but if something had come up, it could have. I also had savings linked to my checking, which helped just in case.

Tuesday, April 8, 200809:56 AM