Wednesday, December 31, 2008

End of the Year Reflection - My 7 Stages of Debt Repayment

After I wrote about how I'm no longer underwater on my student loans, I marveled how my debt repayment process was awfully similar to that of the 7-stages of grief.

1. Shock (1998-1999) and Denial (1998-2007)
When I graduated from law school in 1998, I knew I was graduating with a big debt ($106,925, to be exact), but I never paid attention to exactly how much and never gave much thought on how I was going to pay back the loans.

When the grace-period after graduation expired, my reaction was, “Oh my God, I don’t know how I’m going to repay this. But I’m sure it’ll all work out somehow.”

I’m not sure exactly why I thought things were going to "work out somehow", since I didn’t have a budget or a plan.




During this time, I “borrowed” (read: took accepted) money from my parents and lived on credit cards. Whenever I was short on money (which was always), I sought and received forebearances on my student loans. I lived in complete and utter denial.

It seems like other people experience this type of denial as well. This article from MSN Money highlights the story of Sophia Wallace:
The 28-year-old New York resident has a master's degree from a prestigious university, a successful career in photography, stamps in her passport from around the globe and, until recently, personal finances that were out of control.

When Wallace graduated with a student-loan debt of $60,000, she found herself overwhelmed to the point of financial paralysis. She tore through a $5,000 loan from her dad as bills stacked up. She had no idea where her money was going -- despite making what she defines as a good salary. The sense of powerlessness crippled her.

2. Pain and Guilt (1999-2001)
As I was (barely) making my minimum monthly student loan payments and digging myself deeper into credit card debt, I kept thinking to myself, “What have I done? Why didn’t I study harder during undergrad so that I could get scholarships? Why didn’t I research whether I qualified for grants? Why am I not independently wealthy? Why, why, whyyyyyyy????”

I wallowed in self-pity for about 2 years, conveniently disregarding the fact that I got myself into this whole mess.


3. Anger and Bargaining (2001)
Despite the fact that I was taking accepting money from my parents to make ends meet, I found myself getting angry at my parents for not being rich enough to pay for my law school education.

Some of my classmates/friends lived in Beverly Hills and their parents funded their education 100%. Although some of these classmates were earning the same amount as I, they were living a much more extravagant lifestyle since they had no student loans to pay back.

I grumbled that I too could be living the "high life" had my parents paid for my law school education. I cursed my parents for not being rich. (Talk about misdirected anger!)

cat
I also bought lots of Lotto tickets, praying to God, “If you let me win just enough to pay off my student loans, I promise I will do pro bono legal work for the poor and needy…” I don’t know exactly how much I spent on Lotto tickets, but that money probably would’ve been better spent paying off my debt, don't you think?


4. Depression, Reflection and Loneliness (2001-2007)
I was depressed and withdrew from many of my friends. They were all buying houses and I was still living in a rented 1 BR apartment (and still am). They were driving fancy cars and I was still driving my mom’s hand-me down, beater Toyota Corolla.

I was already $157,000+ in debt and went through a downward spiral of spending binges on cars, fancy designer clothes and accessories, and fancy vacations.

I may not be rich, but at least I can spend like one.



In 2003, I fell behind on my student loan and some credit card payments. I came to accept the fact that I was going to die with my debts. Who cares about my credit score? I'll never be able to buy a house anyways.


5. The Upward Turn (2007)
(Earlier this month, FruGal was very kind enough to highlight me in her “Five Minutes With” series. The following is from the interview.) My lightbulb moment came when I got rejected for an American Express Clear Card.

I was desperate to transfer some of my high-interest credit card balance to a 0% interest card. American Express instantly rejected me for: 1) serious delinquent payment history and 2.) excessive debt-to-credit ratio.

I’d never been rejected for a credit card so this was a horrible slap in the face. I knew I needed to do something. But what? How?


6. Reconstruction and Working Through (2007-present)
After the rejection, I tallied up my debt payments and I discovered, to my horror, that my monthly expenses were $500 over my monthly income. I had no choice but to: (a) increase my income by taking a second job and/or (b) reduce my debt.

My second job as a telemarketer for a cheesy timeshare didn’t last for a month. So I chose option (b).

In 2007, I liquidated most of my employee stock option account, my savings and my Roth IRA to pay down $17,000 of my credit card debt immediately. I also stopped contributing to my 401k (i.e., tax-deferred, employer sponsored retirement account) for 7 months to increase my cash flow. At the time, liquidating my assets was the hardest and scariest thing I’d ever done.

I was also ruing the lost opportunity of not contributing to my 401k, but as they say, things happen for a reason. This was the smartest move I ever made since I'd stopped contributing during the height of the stock market bubble and paid down my debts instead.

Anyhow, during this time, I did the next scariest thing – I created a budget for the first time in my life.


7. Acceptance and Hope (2008) [My Current Stage!!]
Up until mid-2008, I was still pretty depressed since I was upside-down on my debt and I didn't think I could pay off my debt ever.

But when I plugged the numbers in a debt reduction calculator and into my spreadsheet, I discovered that I could pay off my entire debt in 6 years and 5 months. I thought, "That’s totally do-able AND I’ll still be in my early 40s when that happens!" A ray of light.



Well… the rest is documented in my blog that I started in August 2008 with the encouragement of Sallie's Niece.

I still have a long journey ahead of me and my blog is helping me be honest and accountable. I am grateful for all the tips, support, encouragement, and yes, criticism, the PF blogging community has given me in 2008.

Thank you all and have a blessed 2009! Go PF Bloggers!

Tuesday, December 30, 2008

Security Freeze on My Credit Report Thwarted My Free Credit Check

Some time in early November, I took a 0% credit card offer to work. Mindlessly, I either misplaced the offer or I threw it away without shredding it. I became concerned enough that I placed an initial 90 day fraud alert on my credit report.

All good, but when I tried checking my free credit report from www.annualcreditreport.com this morning, I was thwarted.

I now have to fill in a written form, include a copy of an i.d. that shows my mailing address, and submit via snail mail. I'll also have to wait to receive a copy of my credit report via snail mail as well.

Sigh... I guess the price of security is convenience.

I think I'll wait to order my free credit report since I want to purchase my FICO score at the same time. According to this MSN Money article, the newly revamped FICO 08 won't be available until next year anyways:

TransUnion will offer the new score to lenders starting in late January, with Equifax introducing it in the spring, said Craig Watts, a Fair Isaac spokesman. (Experian, the third bureau, hasn't yet announced when it will offer the score.)


While I'm on the topic of free credit reports, did you know as a member of AAA, you can get free credit monitoring service? (Note: I'm not sure if this benefit is limited to Southern California AAA members only. Please check with your local branch of AAA to verify.)

As a AAA member, you can enroll in Experian's CreditCheckSelect for free and get:

  • One free online Experian Credit Report;

  • Free daily credit report monitoring;

  • Free email alerts;

  • Free fraud resolution support.

You'll need to go AAA's website to enroll. Also note that the fine print says that after you enroll, if for any reason you decide to cancel your CreditCheck Select benefit, you may not re-enroll in this free benefit at a later date. And of course, the benefit is subject to change or termination at any time without notice. (There's never a free lunch.)

Monday, December 29, 2008

My Post-Christmas Economic Stimulus Activity

I got a couple of gift cards this Christmas and I shall do my duty as a good citizen to spend it to stimulate the economy! (Eh, who am I kidding? I'm going to use them as fast as I can, before either of these stores go bankrupt.)



My parents gave me a $100 gift card from Ann Taylor. This is a thoughtful gift from my mom, since she is aware of my weird superstition of wearing a new outfit (including new underwear) on New Year's Day. A male friend once said it sounded like a bogus superstition I made up to justify buying a new outfit. Ha ha ha. Maybe it is, maybe it isn't. ;-P

I already bought my New Year's outfit when I went shopping with my BFF and big sis, but I wouldn't mind buying something extra as well. If you look at my monthly budget, you'll notice I have no allowance for cosmetics or clothing. That is one of the many things I nixed from my budget when I vowed to bring my finances under control. If I need want to buy clothes or cosmetics, I'll have to pay for it from my food budget or pay for it out of my miscellaneous earmark fund. With this gift card, I'm excited I'll be able to shop for clothes without worrying how I'm going to pay for it.

My IT guy gave me a $50 gift card to Bed, Bath and Beyond. (My IT guy at work and I developed a strange tradition over the years of giving each other gift cards for our birthdays and Christmas. It's a total wash, but it's fun.)

The BBB gift card will come in handy since I'm planning a frugal bedroom makeover before the end of the year. I purchased a bed-in-a-bag on sale from Macy's a couple years ago. (See, picture at right.) I haven't taken it out of the bag yet since my current yellow, floral lampshades will clash with the brown/teal color scheme of the new bed covers. I'm planning to get new lampshades from BBB and possibly some new bath towels. And you better believe I'm going to be using all the 20% discount coupons I've been collecting the past few months for my purchases!

I'll repeat: I LOVE gift cards. :-D

Friday, December 26, 2008

Oh My Gosh... I (Finally) Caught Up To My Original Student Loan Balance!

As regular readers of this blog know, I've been bemoaning my irresponsible borrowing of student loans 13 years ago. Regular readers also know that I've been whining about how I've been out of school for 10 years, yet I owe more on my student loans now than when I graduated due to several forbearances I took. (My prior rants on this issue can be read here, here and here.)

For those unfamiliar with student loan forbearances, the process allowed me to postpone monthly payments due to hardships (or any other approved reasons), but it also allowed interest to continue to accrue, adding to the principal owed.

Up until now, I couldn't figure out what my exact original student loan balance was, because I kept such shoddy records. (You didn't expect me to be in the debt-hole I'm in by being organized, did ya?)

But today, I found the information I was looking for: I originally took out $25,500 in Federal Stafford Loans, $30,000 in Federal Unsubsidized Stafford Loans and $47,325 in Private Student Loans. [UPDATE: I forgot to add $4,100 I borrowed through the Federal Perkins Loan program. I completely forgot about this since I paid off the Perkins loan on 3/5/07. Hurray!]

My original student loan amount in 1998: $102,825 $106,925.
My current combined student loan balance: $102,726.85

I just discovered that for the first time in 10 years, I owe less [in my Federal and Private student loans] than when I graduated!


Photobucket
Note: This is how I really dance.

I know I shouldn't be elated about owing now what I did back in 1998, but I can't help but feel ecstatic. I no longer have the "sinking in quick sand" feeling. I feel like I'm FINALLY clawing my way out of this hole I've dug for myself 10-13 years ago.

Oh, happy day and what a great way to end 2008! This is the best Christmas gift I've ever given to myself!

Keeping My Fingers Crossed for a Debt-Free December

I hope everyone had a great Christmas. Mine was certainly relaxing and downright frugal (at least for the day).

Anyhow, I've been keeping track of my spending for the holidays and so far, I'm under-budget. But to be honest with you, I'm only under-budget if I count some financial chicks that haven't hatched quite yet.



My holiday budget was based upon:

  1. My Christmas fund (which was woefully underfunded at $150),

  2. My December food/gas/toiletries/incidental budget ($500),

  3. Several pending business expense reimbursements from my company ($821), and

  4. A monetary bonus that I should be getting for successfully completing a professional designation program ($480 after taxes).


Part of the problem with my budget this month was that I had couple of expenses that arose unexpectedly (e.g., my cat's $275 vet bill and $744 to replace my tires.) I've tapped my other earmark funds like my "pet fund" and "car maintenance fund" to pay for these items, but alas, they too were inadequately funded. Therefore, I'll have to access my "new laptop fund" to pay for some these expenses.

I also took an ill-timed $288 girls' getaway weekend with my BFF early this month. My BFF and I agreed that the weekend will be our Christmas gift to each other and that helped a little bit. I'll be paying for the weekend out of my "Vacation Fund", but again, the fund is insufficient. (Sigh...)

Based upon my spreadsheet, I won't incur new debt this month so long as my company reimburses/bonuses me before my credit card comes due on 1/26/09. If my company doesn't come through in time, I will either have to tap my EF or sell some company stock to pay it off. Either scenario is not great, but I am determined not to incur any new debt.

Let this be a lesson to me to avoid creating budgets and spending money based upon money that I don't yet have in hand!

Thursday, December 25, 2008

Merry Christmas from Shtinky and MJ

May your holidays be safe and joyous!

Wednesday, December 24, 2008

Pre-Holiday Miscommunication With Family Resolved

I’m spending Christmas alone this year with my cat, MJ. No sympathies, dear readers; This is by choice. (Some of my friends have kindly extended invitations to spend Christmas with their families, but I’ve declined.)

Christmas has never been THE big holiday for my family. The biggie holiday has always been New Year’s Eve, when my parents come to visit.

Since I only live in a 1 BR, I put my parents up at the local Residence Inn every year. I live in a “tony” neighborhood, so the local Residence Inn on New Year’s Eve is always surprisingly expensive (i.e., over $200/night). Hence, my “winter holiday budget” always includes 1 night hotel stay, champagne and meals (approx. $500+), in addition to gifts.

Luckily, my budget will be lower this year since my sister will be joining us. My sister will take on the financial burden of the champagne and meals. Phew!

Anyhow, last week, my sister told me that mom wanted to come a day early. I told my sister that the extra night will have to be on someone else’s dime (hint, hint), since I’m not spending over $250 for their hotel costs.

Unbeknownst to me, my sister told my mom something to the effect of, “Shtinky doesn’t want us to visit a day early.” (Grrrrrr….)



Oblivious to my sister's misrepresentation miscommunication, I called my parents yesterday to thank them for the Christmas gift that I received in the mail. My mom, in the subtlest way said, “Your sister tells us that you don’t want to spend an extra day with us....” Sigh….

I set the record straight. “No, mom. I would love for you guys to stay an extra day. It’s just that I can’t afford 2 night’s hotel stay. If you’re willing to pay an extra night, you’re more than welcome.”

I then reconsidered said, “Actually, I guess I could pay an extra night in lieu of a Christmas gift to you and dad.” As expected, my mom replied, “Oh, silly. Don’t get us anything. We'll pay for the extra night.”

But... as it turns out, my dad (who is suffering from dementia), did NOT want to come out for an extra day. This discussion was all moot and pointless all along!


pounding head


Anyhow, I'm glad any hurt feelings within my family is cleared up now.

Hope you all have a SANE holiday!

Tuesday, December 23, 2008

Gift Success and Partial Failure

I broke from my tradition of giving gift cards to my administrative assistant, my file clerk and my mailman this year. I was worried that they would've preferred a Target gift card instead.

As you recall, I got:

  • Pair of AMC Movie Theater Tickets to Mr. Contract File Clerk and Mailman.

  • Bottle of Amaretto di Saronno to admin asst.

I'm happy to report, all seemed very thrilled with the gifts I selected. My administrative assistant said she just recently finished off her bottle of Amaretto at home. (I was right - it's her favorite drink.)


The file clerk was excited to take his grandkid to the movies.

My mailman even left me a small note: "Thank you so much Miss Shtinkykat. The ticket even comes with a drink! Have a Merry Christmas and a Wonderful New Year! David the Mailman".



Before I pat myself on the back, though, I have to confess that I am going to give my "fall back gift" to the one person I forgot to buy a gift.

The morning security guard at my work is unfailingly helpful and cheerful despite the fact that she's suffering from MS. It's clear that MS is taking a physical toll on her, but she makes sure none of the tenants are ever burdened with her problems. I'm embarrassed that I completely forgot about her and the gift card certainly does make it seem like she's an afterthought.

Isn't it weird? I was worried that I should've gotten the other people gift cards. And now I feel guilty that I'm getting the lady security guard a gift card. 'Tis the season of gift giving anxiety!

It Pays to Continue to Check Prices After a Big Purchase!

About 2 weeks ago, I spent $788 on a set of new tires for my car. I did some internet research on the price and I got the best deal, at the time.

For some reason, I decided to check the price on the internet again. And what did I find? The price went down $10/tire! (The web site also indicated that the store was out of stock of the tires I purchased. Looks like I purchased the last set at the higher price and the newer inventory was cheaper.)



I was sufficiently miffed that I called the store to see whether I can get a refund for the difference. Unfortunately, the first guy that answered said, "Yeah, well, the price of tires are like gas prices. They go up and down. You don't go back to a gas station to complain that the price went down a week later, right? So we can't refund you the difference."

I politely asked, "I would like to speak to your manager." The peon replied, "Well, I'm the assistant manager and the manager's not in. Tell you what. I'll contact the regional office and see what they can do for you. I'll give you a call."

Of course, I never got a call back. I called again and asked for the manager. This time, I got the real assistant manager. And guess what? He said he'll refund me the difference but I had to drive to the store 60 miles away. Since I was headed that way on business anyways, I said, "Sure." That's 44 smack-a-roos, baby! Woo hoo!

Here are the lessons I've learned:
1.) Continue to check prices after a big purchase. If the price goes down within 30 days, always ask for the difference.

2.) Don't accept "no" from the peon who answers the phone. Always ask for the manager. And always take down the date, time and name of the person you spoke to.

3.) If the answer over the phone is still "no", go to the store in person. It's much harder for someone to say "no" in person. And, the store doesn't want anyone making a ruckus in front of other patrons, so they're likely to relent.

Happy haggling! :-D

Monday, December 22, 2008

To Harvest Stock Losses or Not...

I purchased Turbo Tax Deluxe from Costco for $49.99 (plus tax) this weekend and I gave it a whirl. I don't have my W-2's or my 1099's yet, but I always try to estimate my potential tax liability in December so that I can start saving up any money that I need to pay by April 15th.



With the exception of last year, I've been fortunate to break even or nearly break even with my taxes (i.e., tax liability less than $100 for both Federal and State taxes). Last year I owed $1,142 in State and Federal taxes due to the fact that I stopped contributing to my 401k to increase revenue and to bring my debt under control. I also sold a bunch of my company stock for a profit, again to pay down my debts.

This year, I contributed to my 401k again which should help reduce my tax liability. But I also sold 14 shares of my company stock for a nice profit.

At this time, Turbo Tax doesn't have my State Forms available yet. (Estimated date of availability 12/30/08.) But based upon my guesstimate of my income and taxes paid, I'll owe about $500 solely on my Federal taxes! If I owe on my Federal, I'll definitely owe on my State taxes. Assuming the $500 estimate is correct, I may owe another $375 in State taxes. I currently have $350 set aside for paying taxes. Like everything else in my life, looks like I'm short yet again. (Story of my life!)

But, if I sell the ETFs (stock ticker: VTI, VEU and TIP) that I purchased in March 2008 for a short-term loss, my Federal tax liability goes down to about $386 and the sales proceed will help gap the estimated tax shortfall. This may be a viable option but I'll need to act before 12/31/08.

To be frankly honest, I wouldn't mind taking the loss to reduce my tax liability. I hate the fact that every time I look at my investments, I'm reminded of the massive losses of the past few months. I can always re-purchase these ETFs at the lower price after 30 days anyways.

But at the same time, I purchased these ETFs with a long-term horizon in mind. I could keep it and dollar-cost average by purchasing additional shares. Maybe I should just suck it up and try to find a way to pay my taxes without selling my ETFs? Dilemmas, dilemmas.

Friday, December 19, 2008

Doubts About Breaking From My Fall-Back Gift Formula: Gift Cards

There was an episode in Sex and the City where Carrie and her gal pals were carpooling to a mutual friend’s baby shower. She realized that she and Miranda didn’t bring a gift. (Samantha’s gift was a bottle of Vodka.)

In a fit of panic, Carrie asks, “Do you think it would be okay if I just gave her a wad of cash?” (The girls were ultimately rescued by angel-hearted Charlotte, who arrived with a big baby gift basket.)




To be honest with you, I can’t imagine anyone complaining about getting a wad of cash, in any amount, for any occasion. I certainly wouldn’t! I also wouldn’t complain about getting a gift card either.

I know Liz Pulliam Weston’s biggest objection is that cash or gift cards are tacky and thoughtless. Ms. Pulliam says:
“A gift, ideally, says, ‘I thought about you. I considered your likes and dislikes, your needs and wants, your dreams and desires, and found you this token of my esteem that I hope will delight you.’ A gift card says, ‘There! Checked you off my list.’


For friends and family, I agree with this statement since you're likely to (read: should) know their likes and dislikes. (Although... my recent gifts to my parents have been cash or cash equivalents. That's a whole 'nother story.)

But what if the recipient is someone I don't know very well? For example, the remaining people on my “to buy” list include:

• The office administrative assistant** that will be getting laid off next June;

• The contract file clerk** who will be let go end of December;

• My mailman.

(** Note: My admin assistant and contract file clerk were instrumental in helping me pass my audit so I wanted to express my gratitude.)

I don’t know any of these people very well (or, even at all). The contract worker just started late last month so I haven’t had much opportunity to talk to him. I don’t know my mailman since I live in a mongo-apartment complex and only see him on rare occasions. I guess it’s my fault that I never bothered to take time to know my admin assistant, but I also think the blame is a 2-way street. (She doesn’t make an effort to talk to me either.)

My first inclination was to just get all of them a $20 gift card from Target. (Who wouldn't want a gift card from Target?) But I ultimately got the following:

  • Mr. Contract File Clerk and Mailman will each get a pair of AMC Movie Theater Tickets (cost $15.99/pair).

  • Admin Assistant will get a 750 mL bottle of Amaretto di Saronno (cost: $17.99). (I could be terribly wrong, but I do recall her ordering an Amaretto at a prior company function. Just in case I'm mistaken, I'll throw in a gift receipt.)

I can’t shake this nagging feeling, though, that these people would rather get plasticized moolah from Target to use as they see fit. Hmmmm....

~~~



Speaking of gifts, I previously ranted about how I was going to stiff my newspaper carrier out of a tip this year. I’m one of those people that need to be shamed into doing the right thing and I've since reconsidered.

Empress Juju reminded me, “What’s Christmas all about again?” (Although I’m generally reluctant to take advice from anyone who refers to herself an Empress….) But what really convinced me to reconsider was MoneyMateKate’s post from the paperboy’s perspective. (Just to be clear, I didn't tip as generously as MMK suggests, though. I tipped the top end of this holiday tipping guideline.)

I guess I'm doing this for myself since a grudge is eseentially a lump of coal in my heart. And who wants a lump of coal for Christmas, right?

Thursday, December 18, 2008

I Opened My Christmas Gift From My Parents Yesterday Morning

No, I didn't open this year's present. The present I opened was from 2 years ago. I opened it yesterday morning because it was cold and raining, and I needed a scarf, but couldn't find my old, ratty one. And, I knew the gift was a $275 Burberry scarf.

But why did I wait 2 years to open the gift? It's a bit complicated. My rambling explanation also doesn't make any sense, but please bear with me.

Unlike Sallies'Niece's parents who are "rich", mine are "poor". When I mean "poor", I mean negative net worth, very little savings, no real assets, and living mostly on Social Security and a small foreign pension. (Sigh... I'm an acorn that didn't fall too far from the tree.)



Nevertheless, my mom always showered my sister and me with expensive purses, jewelry and designer stuff for our birthdays and Christmas. Several years back, I announced to my mom that I was going to buy a Burberry trench coat (current retail price: $995). At that time, I earnestly (read: delusionally) believed that "affordable" meant I have the credit limit to charge the item. My mom shared the same philosophy and still does.

Anyhow, I never bought the coat, but my mom thought I did. She believed I should have a matching scarf and she gave it to me as a Christmas gift.

But why didn't I open it when I received it? Bear with me a bit more.

A while back, I discovered that my dad exhibited early signs of dementia. I was sufficiently alarmed that I convinced my parents to sign: a health-care proxy, a living will and a durable power of attorney. Since my parents live in another state, my sister and I decided to chip in to hire a local attorney to draft the legal documents. We decided having a local attorney on retainer would also be helpful in the event of an emergency. (By the way, this was the best $750 I ever spent.) In preparation for the execution of the documents, the attorney instructed my parents to bring all of their financial information with them.

What I discovered about my parent's financial situation was shocking, devastating and embarrassing. I told my parents that I didn't want them buying me expensive gifts anymore. Despite my plea, my mother gave me a Burberry watch that Christmas. (Current retail price: $325.) I threatened to mail the gift back to my parents, but my mom said she'll refuse it. As a form of protest I refused to take it out of the box. The Burberry scarf came the following year and again, I refused to use it.

My mom discovered the unopened gifts in my closet last year. She was upset, but I didn't care -- I didn't ask for gifts that my parents couldn't afford. I asked that she take it back, but she again refused. (In case you haven't noticed, stubbornness and passive aggressiveness are proud family traits. Not.)

The good news, though, is that my mom has since stopped buying me outrageously expensive designer stuff. Last year, she gave me $100 gift certificate from Trader Joe's for Christmas. (I gave my parents $100 in cash so it was pretty much a wash.)

Now that my mom and I have a meeting of the minds, I considered selling the Burberry stuff on eBay and sending my parents the money. But somehow that seemed inappropriate too. Since I wasn't going to return it or sell it, I figured I might as well use it as needed.

I know none of this makes sense. Family stuff usually don't.

Finally, please note that I didn't intend for this post to be about blaming my parents for their predicament or for failing to teach me the value of a buck. So please kindly refrain from making any negative comments about my parents. It'll break my heart.

Wednesday, December 17, 2008

Is There Guilt By Association?

I'm frankly sick and tired of the whole Rod Blagojevich scandal so I haven't followed the details very carefully. All I know is that he's the governor of Illinois who allegedly put President-elect Obama's vacant Senate seat up for sale. (I know, I know. He's innocent 'til proven guilty. But the FBI's wiretap transcript certainly makes him out to be a complete jack---.)

But what piqued my interest was a TV commentator who said President-elect Obama and Chief of Staff designate Rahm Emanuel will have "problems" since they supported Blagojevich's gubernatorial candidacy despite knowing his "shady character." The RNC was also quick to point out Obama's support of Blagojevich as well. I don't know what the commentator meant when he said Obama knew Blagojevich was a "shady character". (And how would the commentator know what Obama knew?)

Anyhow, this made me wonder: If you associate with someone who engages in financial/ethical wrongdoing, should (or will) your character be automatically impugned? Should you rebuke that person professionally and personally?

I’ve been thinking about this since my recent discussion with someone I occasionally do business, who I’ll call “Mr. C”. Mr. C is my smart, reliable go-to guy professionally. Whenever I have tough cases, I hire Mr. C to clean up the mess.

Last week Mr. C asked what I intended to do if and when I got laid off. I told him that I want to get another corporate job (versus a law firm job) since I'll likely get better benefits (e.g. matching 401k, ESOP plan, FSA, etc.) For some reason, I felt compelled to lay out my life plan to him. I told him once I pay off my debts in six years, I plan to buy a small place to live. Some time in my late 40's and early 50's, I plan to downshift my career to a government job until I qualify for Social Security and Medicare. (I’m considering working at the DMV like Patty and Selma from the Simpsons, or, the post office like Cliff Claven.)



Mr. C said my life plan was "the most depressing thing he ever heard", so I asked him what his grand future plans were. Big mistake! Mr. C said he was expecting a windfall in the near future and he was going to hide it from his wife. Once all his kids become legal adults, he planned to give the house to his wife and leave without a trace. He told me how he wanted to live a semi-nomadic life somewhere down south where no one can find him. He said he would leave a trust fund for his kids but he had no intention of paying spousal support.

I was stunned and said something to the effect of, “Sounds like someone’s suffering from a mid-life crisis!” We both laughed it off.

Notwithstanding this bizaare conversation, I've decided I'll continue to do business with him since what he does in his personal life is not my concern. I never took Community Property or Family Law classes during law school, so I don't know whether Mr. C's plans are illegal. (I do suspect it is illegal, though, since deserting a dependent spouse would presumably be against public policy.) Second of all, I'm not sure if it's even a plan. (Although a colleague previously told me that Mr. C told him the same story. If it IS a plan, he's pretty stupid to tell so many people.) Finally, none of this really matters to me since Mr. C is excellent at what he does and he gets the job assigned to him done well.

A friend (who is not in the industry and doesn't know Mr. C) said, "If he's willing to screw over his wife, he'll be willing to screw you too! You should disassociate from him." When I refused, the friend said, "Well, when he gets caught doing something unethical, the fact that you trusted him is going to reflect negatively upon you."

Initially, I'm not convinced that someone who complains he's sick of his marriage and wants to abandon it, necessarily has a propensity to do something unethical. But does his rant about his failing marriage (and his revenge fantasy) evidence his "shady character" and thus raise alarms? Is the dirt in someone's personal life a sufficient basis to abandon a professional and personal friendship? And isn't there the proverb: "Let the person among you who is without sin be the first to cast a stone"?

Tuesday, December 16, 2008

Murphy's Visit Part 2 - Does A Punctured Tire Count As An Emergency?

I have great respect for Dave Ramsey for popularizing the snowball debt reduction plan. But I do take exception with his Total Money Makeover recommendation to only keep $1,000 in one's EF while paying off debt. He indicates that $1,000 is often enough to cover an emergency. What his advice doesn't take into consideration is that emergencies often arise at once, not one at a time.

Case in point:

Before I left town on my business trip last Thursday, I had to take my cat to the vet, which cost me $275. The vet recommended additional work that would've cost an additional $400+,which I have yet to authorize. (I am praying that I won't have to in the near future.)

After I brought my cat home, I took my car to the dealership for its 35,000 mile service. (Truth be told, my car already had 38k miles on it.) While I was waiting, the service tech alerted me to a nail penetration through the front left tire.




I asked whether the tire can be plugged but was told it was illegal to patch a worn tire. (I suspect the issue is more about avoiding civil liability than following the law, but I understand why he wouldn't do it.) In fact, he recommended that I replace 3 of my tires since all but 1 of my tires were worn.

Just a little background: The reason why 1 of my tires wasn't worn was because I suffered a flat in Las Vegas last year. I had to replace the tire immediately without opportunity to comparison shop, and was sold the most expensive tire in stock. (Bastards!) Now, the dealer was convincing me to replace 3 of the tires with the "performance tire" I got in Vegas.

(Rant: Why are my tires punctured every time I drive to Vegas? Are the tire shops in Baker sprinkling the freeways with nails in hopes to get business from stranded motorists??)

Anyhow, I discovered (after the fact) that I got snookered in Vegas, so I knew my car didn't need such a high-performance tire. I turned the dealer down.

Nevertheless, I was taken aback by this recommendation since I thought I wouldn't have to replace my tires for another year, or, another 12,000 miles. But ever since my friend suffered a blow out (and subsequent spin out) on the freeway several years back, I've always erred on the side of caution with respect to my tires. Although I didn't have money set aside for this "emergency", I decided I should replace 3 of my tires and researched which tire to buy... somewhat.

My car has P215/55R17 tires on 17-inch wheels, which cost anywhere between $114/tire to $193/tire (excluding environmental fees and installation costs). (Note: The dealer quoted me $240/tire for a tire that's being sold $193/tire elsewhere!) That was pretty much the extent of my research. I used the tire shop's customer review rating on its website and opted for a familiar, reputable brand - Michelins. The tires weren't the most expensive, but weren't one of the cheaper ones either ($161/tire).

The tire shop offered to buy back the rip-off tire I got in Vegas for $30. The shop also offered to give me an additional $30 off if I replaced all 4 tires. I opted to replace all 4 tires since it didn't make sense for me to continue to drive my car with 1 oddball performance tire. I also purchased "road hazard" insurance since I seem to have a knack for driving over nails. Total cost: $788 .

I currently have approximately $100 in my "car maintenance fund". (I would've had about $350 had I not had to replace my windshield in September.) I just spent $55 of the $100 for the 35k mile car service, which leaves me with a balance of $45.

I'm expecting to get approximately $780 from my employer as reimbursement and a bonus. Fellow PF blogger Paranoid Asteroid recommends that I spend the money on my tires. But I was hoping to use the money for the holidays! (Whine....)

Do most people consider this an "emergency" or is this a routine maintenance cost that I should have anticipated?

I still haven't decided how to pay for this Murphy expense. Stay tuned.

Monday, December 15, 2008

Good News Mixed With Bad News

I'm one of those people who don't deal with stress very well. It seems to manifest itself in a physical ailment, imagined or otherwise. (Fine, fine. I admit it - I'm a hypochondriac.)



Last week was pretty stressful since: (1) my files at work were being audited for my year end performance review and (2) I needed to study for my last exam to get my professional designation. I started feeling ill last Wednesday but I started feeling better as soon as the sources of my stress were eliminated. (Surprise!)

Good News #1: I passed my third and final exam Saturday. (Woo hoo!) Because of this, I should get reimbursed for $330 I fronted for my study materials. And if the company doesn't reneg on its promise, I should be getting an $800 bonus. (After taxes, it should be about $450 or so.)

Bad News #1: I was hoping to use the reimbursement and bonus money towards holiday spending. But, I was visited by Murphy twice this month. (I'll report about Murphy #2 tomorrow.) I know the right thing to do is to use this money towards paying Murphy #1 and #2 but... ummm.... I'm still debating this issue. I'll get back to this issue at a later date.


Good News #2: I also passed my audit at work. This means I should be getting some kind of bonus next March and I'm considered to be in "good standing" so I qualify for my company's generous severance if and when I get laid off.

Bad News #2: This isn't so much bad news but something I'm ashamed about. Truth be told, I probably wouldn't have passed my audit if there weren't some manipulation by some nice people at work. I really haven't been focused or motivated at work this past year since I was expecting to get laid off. I put in minimal time at work and my work product reflects it. Lay off or not, I should've been more professional. Perhaps this will be one of my New Year's resolutions.


Good News #3: The remainder of the year should be relatively stress-free with the exception of New Year's Eve.

Bad News #3: Because I was out of my normal routine this past couple of weeks, I was a bit disorganized and I completely forgot my DMV renewal was due 12/8/08. Since I missed the deadline, I had to pay a $31 late fee in addition to the $193 renewal fee. Bummer. I should really calendar my non-regular expenses from now on.


Anyhow, looks like I've got a lot to catch up on with everyone's blog from last week. Looking forward to seeing what everyone's been up to. :-D

Thursday, December 11, 2008

Shtinkykat Out Sick



Will return when I feel better. Hope you all are doing well!

P.S. Thank you to those who commented and expressed sympathy re: MJ, my cat. I'm happy to report that he's back to normal (knock on wood). I haven't taken him to the vet again but he's eating and drinking normally. He's having regular BMs and he's been going in his kitty litter. Your kind words and support mean a lot.

Wednesday, December 10, 2008

Murphy Came A-Knockin'- Part I

Why does it seem that Murphy's law comes into play when things are the most completely chaotic and crazy? As you know, my sister visited me during Thanksgiving and didn't leave until last Tuesday. I went back to work on Wednesday, and I was set to travel overnight on business on Thursday. I also had plans to go on a girls' getaway with my BFF that weekend.

As I was packing my overnight bag last Thursday morning, I noticed brown spots on my bed cover. As I was wondering to myself, "What could this possibly be?", I discovered my cat, MJ, straining to defecate outside of his litter box. I yelled, "Holy cr&p!" (no pun intended), and tried to catch any droppings with a newspaper. But MJ fruitlessly kept straining and left a trail of "leakage" spots instead. (Eeeewwwwww.)

What concerned me, though, was how MJ cried in distress as he strained. Since I was going away on business and it was already too late to cancel the hotel reservation for the weekend, I rushed him the to the vet.

To my relief, MJ emptied his bowels on the examining table while the vet tech took his temperature. (Eeeewwwww.) Fortunately, MJ didn't have a fever. The vet took a blood sample and some x-rays. The vet felt that MJ was dehydrated so she gave him a bag of IV fluids. MJ was released after I paid $275 for the visit.

When I brought him home, MJ was his normal, lazy self. He ate some of the boiled chicken breast I previously cooked for him as a treat, and he drank some water from his bowl. I felt comfortable that whatever was distressing MJ had passed after he had his bowel movement. I then departed for my business travel. (Actually, there was one more visit from Murphy before I left. That'll be discussed in tomorrow's post.)

The following day, while I was away on business, the vet called to tell me that the blood tests showed MJ's kidneys may be failing. She recommended that they re-test his blood sample after giving him IV fluids 3 times a day for 3 days. She stated that if his kidneys are failing, there's nothing that can be done to reverse his condition. I would need to feed him a special diet and give him weekly IV fluids. The cost to give him fluids for 3 days, 3 times a day and to run another test would cost $400. The weekly IV fluid bags would cost $20/week.

I currently only have $150 earmarked in my "pet fund". I'm confident that I can come up with the $125 difference between my "pet fund" and the recent vet bill. But I know I can't afford the $400 re-test without tapping my EF or putting it on my credit card.

I previously wrote about how I ended up charging $3,000 worth of vet bills for my other cat, CC, before putting her to sleep. I vowed I would never make the same mistake with MJ. What I didn't anticipate, though, was the possibility that MJ would suffer from a deteriorating condition rather than an acute illness like CC.

MJ is approximately 15-17 years old (i.e., 70 to 76 years old in cat years). (He was a stray I took in so I don't know his exact age.) Is it worth paying $400 to prove he has an irreversible condition? If he is suffering from an irreversible condition, how much should I pay to make MJ's last days as comfortable as possible? Should affordability come into consideration in these types of decisions? Also, would it be more humane for me to put him down now, rather than after he is suffering from chronic kidney failure?

At this point, I haven't taken MJ back to the vet since he's eating and drinking normally. He's defecated and urinated in his litter box since the vet visit. To this day, I still don't know what the right course of action is. All I know is that I can't afford to pay significant vet bills only to put him down. My friends and family are split 50-50 with respect to what I should do.

What would you do?

Tuesday, December 9, 2008

My Girls' Getaway Weekend

As reported last week, I went on a girls' getaway weekend with my BFF. During the days leading up to the getaway, however, Mr. and Mrs. Murphy made unannounced visits that put a damper on my weekend and a huge dent in my pocketbook. I will report about the Murphies in the next couple of days.

Other than my Murphy-related expenditures, my spending during the weekend wasn't too bad. As previously reported, the hotel package cost $312.12 (including tax), but included:
  • Overnight hotel accommodation

  • Two (2) premium signature cocktails (per reservation)

  • One (1) $50- giftcard from Chi-Chi Mall

  • Two (2) 50- minute massages at The Spa

We started Staturday morning in Laguna Beach at Las Brisas' breakfast buffet. With tax and tip, the breakfast cost $20/person. Although valet parking cost $10 including tip, it allowed us to walk around the beach and the cute shops and galleries for a couple of hours after breakfast.

After we checked into the hotel, we spent some time by the pool and the hot tub for some relaxation. I wouldn't have minded spending the rest of the afternoon watching the Trojans trounce the Bruins, but it was clear my BFF didn't care to do so.

We went to CVS to buy some water and snacks ($13.23) and stopped at Claim Jumper to nosh on their yummy cheese potato cakes and couple of non-alcoholic drinks ($17.76 including tip).

We then went shopping at the tony nearby mall. I bought a black lightweight cardigan for $32.22 and some badly needed panties (4) for $21.53.

In the evening, we took advantage of the 2 free cocktails included in our package at the hotel lobby bar. Our only expense was the bartender's $5 tip.

We then dined at the mall's upscale Italian restaurant. With 2 wines and 2 entrees, the total tab came out to $58.00. We used our $50 gift certificate and added $20 to cover the shortfall plus tip. Before we left however, the waiter who took a shine to us, treated us to a complimentary tiramisu. We left an additional $10 tip.

The following day, we decided to have breakfast in bed and ordered room service for $34.47. We took a leisurely stroll around the Performing Arts Center before we headed to the spa. Since my massage was already included in the package, my only out of pocket expense was a $20 tip to the massage therapist.

My total expense for the girls' getaway: $287.52. Considering what we got, this was a steal and I can definitely cashflow this. But then, there's the Murphies...

Friday, December 5, 2008

December 08 Charity - Easter Seals Veterans Count

I recently made a commitment to donate to charity $20/month.

This month's charity is Easter Seals New Hampshire Veterans Services in honor of a former boss who served in the Marines in Vietnam. (This was his recommended charity.) I should have donated to a Veterans' charity last month in honor of Veterans Day but better late than never I say!



There have been some grim news lately about the emotional well being of soldiers who are serving in Iraq and Afghanistan including increased rates of PTSD and divorces.

When these brave soldiers return, they face some daunting challenges like:


  • Disability Issues: Due to advances in both combat technology and medical technology, many veterans return to civilian life with complex disability issues—brain injuries, amputations, severe psychological trauma.

  • Employment Issues: Members of the Guard and Reserve have returned to civilian employment only to find that they have been reassigned by their employer to lower positions, or they have lost compensation and benefits, or they have been fired.

  • Social Attitudes: Veterans feel a stronger sense of responsibility to serve their country. Ironically, the attitude that helps them endure the difficulties of war becomes a social barrier in civilian life that prevents them from asking for the health care and welfare services they need.

  • Family Issues: Veterans’ families struggle with a set of unique problems resulting from frequent and lengthy deployments. Spouses who are left behind, especially those in the Guard and Reserve who remain in their communities, do not have the support network that is available to families living on military installations. As a result, these families are isolated and experience greater stress.

Veterans' charities like the Easter Seals' Veterans Count provide important services like medical rehabilitation, vocational services, childcare and transportation to the returning veterans.

It's not much but this is my way of saying "thank you" to our modern day heroes.

Thursday, December 4, 2008

My Continued Inability to Say "No" to Friends

Vegas was fun and I definitely spent more than I should. After any kind of binge, there's always a hangover and it's no different this time. (Is it a coincidence that I had a nightmare of Suze Orman last night yelling at me, "Are you stupid? You can't afford it!"??)

dayafter

Sure, I had money saved up to pay for it. But now, my "miscellaneous fund" and my "vacation fund" balances are pretty low and I just realized I won't have any money to replenish it in December. $haronRose just recently tweaked her budget to create a new "me" fund and I commented since it was so hard and slow to save my "me" fund, I always thought twice before blowing it. Uhhhhh... yeah. That makes me a hypocrite.

Anyhow, while I'm wallowing in this Day-After hangover, I got a call from my BFF. And it looks like I've wimped myself into yet another spending bonanza weekend.

This is how the discussion went down:

BFF: My DH is in the doghouse right now.

Shtinky: Why? What happened?

BFF: Our plumbing backed up last year and we got an estimate of $5,000 to repair it. But since we didn't have the money and this repair can wait, we held off. Our plumbing backed up again and my DH called a plumber for an estimate. DH couldn't get a hold of me so he let the plumber make the repairs and he put $8,000 on our credit card!

Shtinky: Well, it needed to be repaired anyways, right?

BFF: I'm pissed off because: (a) he didn't negotiate the price, (b) the repairs could've waited and (c) he unilaterally did this without discussing it with me first!

Shtinky: Yeah, that sucks. But at least he didn't charge frivolous stuff, right?

BFF: I'm so mad at him. I don't want to look at him and I don't want to speak to him right now. I need to get away. Let's have a girls' getaway spa weekend!

Shtinky: [Internal dialogue] WTF? Weren't you just pissed that he charged some stuff and now you want to spend more money on frivolous stuff? Are you crazy woman???

Shtinky: [Actual dialogue] Yeah! Let's do it!


~~~


For brevity's sake I won't go into details of the other reasons why DH is in the doghouse with BFF. But the bottomline is, BFF is livid (some justified, others not so much) and she wants some frivolous fun time away from hubby (partly to punish him, I suspect).

As you may know, I have this frustrating inability to say, "No," to frivolous spending with my family. I have less difficulty saying, "No," to my friends, but I found it difficult to turn my BFF down this time.

During the past couple of years, BFF underwent numerous major surgeries and is finally healthy (read: pain free) enough to go to a spa for some R & R. Since she lives 120 miles away, I don't get to see her as often as I'd like. I've always felt guilty not taking time away from work to be by her side during at least one of her surgeries. Had this been anyone else, I think (although I'm not too sure) that I would've suggested doing something cheaper.

Anyhow, our plan isn't THAT extravagant. My BFF found a great package for $289 (which will be split equally) that includes:

  • Overnight deluxe accommodations

  • Two (2) premium signature cocktails (per reservation)

  • One (1) $50- giftcard from Chi-Chi Mall (which we'll use for food)

  • Two (2) 50- minute massages at The Spa


She sounds very excited and happy about our girls' weekend. And to be honest with you, so am I. It's often frustrating not being able to say "no" to frivolous spending but sometimes not saying "no" is worth it.

Wednesday, December 3, 2008

November '08 Progress Report and Net Worth

I can't believe it's already December. And that means it's time for another Progress Report!

HAY GUYZ WUT BUTTON 4 PARASHOOT?!1!




MY DEBT
Starting DebtLast MonthThis MonthDifference
PRIVATE SL$49,528.99$48,270.11$47,955.77$(314.34)
Fed'l SL$55,852.68$55,349.50$55,230.18$(119.32)
CC$13,610.75$12,526.03$12,323.75$(202.28)
Car Loan$9,779.33$6,988.13$6,225.59$(762.54)
TOTAL:$128,771.75$123,133.77$121,735.29$(1,398.48)


Couple of my posts were highlighted on MSN recently and some readers left pretty harsh comments re: my debt and spending. Unfortunately, many people seem to have the mistaken impression that I'm continuing to dig myself deeper into debt without a plan, and I'm not.

Ever since I started blogging, I've been paying down a little over 1% every month. So far, I've paid down 5.46% of my debt without incurring new debt. (And for me, THAT's progress.)

According to my snowball debt reduction plan, I've estimated that my debt should be $121,789.00 by 11/31/08. I'm happy to report that I'm actually $53.71 ahead. :-D

But, this doesn't change the fact that I have too much debt. :-(

I can't wait to pay off my car loan and hit the 10% payoff mark!


MY SAVINGS

LAST MONTHTHIS MONTHDIFFERENCE
$7,574.98$7,901.73+$326.75


My goal is generally to save about $200/month and I've accomplished that and more. Part of the reason why I did so well this month is because I got a temporary "raise" that I banked. But, I'm not patting myself on the back since I could've done much better.

As you recall, November started off on the wrong foot with my financial misadventure at the sushi bar and my disastrously expensive trip to Vegas (the subject of the MSN post referenced above).

I'm afraid with the recent increase in discretionary spending, I won't be able to save as much in December. :-( C'est la vie!


MY NET WORTH

LAST MONTHTHIS MONTHDIFFERENCE
($15,895.44)($21,975.91)*($6,080.47)


* Note: These are based on figures as of 12/2/08, not 11/30/08. This is a bummer since the market was up as of 11/30/08 and proceeded to tank 12/1/08.



Sheez-Louise. I'm thinking to myself, "Why even bother commenting on my free-falling net worth?" But I've found some encouraging news: if you look at the chart, the decline is a bit more shallow than between September and October.


Additionally, my debt has been steadily declining and my savings have been steadily increasing. I've started purchasing savings bonds (which probably isn't the smartest thing to do in a deflationary economy right now) but it's a long-term investment that won't lose its value.

My retirement accounts are continuing to take a beating but it's not because of anything that I've done. The market is panicked and there's nothing I can do about that. I'm still contributing to it regularly and I haven't done anything emotional or rash like moving all of my retirement assets into Treasuries. All I can do is to wait for the market to calm down and function again.

The other dark spot on my asset is the car. A review of my net worth history charts hits home the fact that cars are depreciating assets. This is why it was so silly of me to buy a brand, spankin' new car with a loan. Hopefully I won't make this mistake again in the future.

Anyhow, the breakdown of my net worth can be seen here.


Tuesday, December 2, 2008

My Epic Failure To Control Costs During Thanksgiving

I have my apartment all to myself again! I love my sister and we had a blast. But I have to admit, I love having my independence and privacy back, especially to blog!

Anyhoo, that being said, it's been a spend-crazy 6 days that I'm definitely NOT proud about. The spending binge started well in advance of my sister's arrival.




WEDNESDAY (11/26)
To make my apartment presentable for my sister, I spent the entire day cleaning, including washing clothes, towels and bed sheets. As I was making the bed, I remembered that my beloved cat scratched up all of my bed sheets and pillow cases. (I've been lax about trimming his nails and unfortunately that laziness translated into torn carpet and fabrics here and there.)

I was planning to buy new bed sheets/pillow cases anyways and I figured I could get inexpensive bed sheets from Target or Walmart for about $20. Near the end of the day, however, I was exhausted from lugging 5 loads of laundry from my apartment to the laundry room (2 flights of stairs plus approx. 50 ft each way), so I decided to go to the out of business sale at Linens 'N Things that's only 2 blocks away. I figured with 30% off, I can get just as good of a deal.

Lesson #1 - NEVER shop tired: I was looking for yellow sheets and I found a perfect set ($27.99 sale price). I was too tired to read what was included in the set and purchased a separate pillow case set ($13.99 sale price) as well. Turns out, the bed sheet set already included pillow cases. Grrrrrrr.... (Total: $45.23 (incl. tax); Over Budget: $25.23.) Worst part about this is since I bought it at a Going Out of Business Sale, all sales are final and I can't return the pillow cases. Gaaaaaahhh!


THURSDAY (11/26)
I was set to pick up my sister at the airport at 9:45 a.m. I diligently checked United's website to make sure the flight was not delayed and learned that the flight was expected early. I considered taking a hot mug of tea and a newspaper with me to read, but since the plane is expected to arrive on time, I thought, "Why bother?"

It was raining cats and dogs and I nearly killed myself driving through flash floods near the airport. By the time I got to the airport I was slightly late and the arrival sign indicated that my sister's plane had already landed. I waited for about 15 minutes but she's nowhere to be found. As it turns out, my sister's plane indeed landed but in another city. Due to inclement weather, the United flight couldn't land and eventually ran out of fuel, forcing it to refuel in Palm Springs.

Lesson #2 - Always Plan For Delays At The Airport: At this point, I was ruing my decision not to bring my tea and newspaper. I also forgot to bring my jacket so I was also freezing. I ended up buying a tall pumpkin latte at Starbucks. (Cost: $4.04. Over Budget: $4.04.)

My sister's flight finally arrived at around 11:30 a.m. and we headed straight to a local Chinese restaurant for some dim sum. (Cost: $45.00 paid for by sis; Over Budget: $0.) After lunch, my sister was very full and tired so we took it easy at my apartment catching up and napping. We then went out for our Thanksgiving meal at a tony French restaurant which set my sister back $200. (Over Budget: $0.)

I'm sure I have a money lesson here about excessive spending at restaurants but since my sister paid, I will withhold comment. :-P


FRIDAY (11/28)
We spent a leisurely morning eating breakfast at home, reading the newspaper and watching one of the DVD's I rented. I asked my sister whether she wanted to do anything and she didn't offer any suggestions. Unfortunately, since I had nothing planned, we ended up walking to the nearby mall to brave Black Friday. I vowed I wouldn't buy anything but... ended up buying a Donna Ricco shift dress on sale at Nordstrom for $81.78 and a couple of long sleeved shirts at Ann Taylor for $30.17 (Over Budget: $111.78).

The only other meal we had was a late lunch of shrimp burritos, chips and beans ($12.14). Food-wise, it was a very frugal day.

Lesson #3 - Don't Go To the Mall Out of Boredom/Don't Go To the Mall Especially If You Don't Intend to Buy Anything: I guess that's self-explanatory.


SATURDAY (11/29) - SUNDAY (11/30)
As you may know, about a couple of weeks ago, I booked a $216.91 hotel stay at the Bellagio for Thanksgiving weekend. In addition to the hotel cost, I spent $39.05 for gas, $8.95 for water/snacks and $6.40 for 2 coffees at Starbucks. I was pleasantly surprised that even with the additional snack and coffees, I was about $30 under budget for gas.

My decision to borrow audio books from the library for the road trip was a FANTASTIC idea. It was frugal and it definitely prevented drowsiness while driving through the monotonous desert scenery. It also kept me relatively sane during horrendous traffic jams on the ride back.

I also had great plans to do cheap stuff in Vegas. But what do they say about best laid plans again?

By the time we got to the hotel, it was 1 p.m. and we were famished. We went to the 24/7 cafe in the hotel where we shared a greek salad, veal schnitzel plus 2 Cokes. This set me back... drumroll... $66.00 for lunch. (Over Budget: $45)

After sightseeing and strolling down the Strip, we headed downtown to catch the free Fremont Street Experience show and to try some 99 cent deep-fried Twinkies. Just to let you know, it IS as disgusting as it sounds. As this article eloquently states, it was worth it "[f]or giggles..., ......for sh!ts... no."

My sister and I then decided to have a "light" dinner at Nobu's. This set my sister back about $90.

When we got back to the hotel, I wanted to check out the 27-foot tall cascading chocolate fountain at the Jean Phillipe Patisserie at the Bellagio. Unfortunately, we couldn't resist the pasteries and I ended up spending $31.25 for 2 coffees, a box of French macarons and a strawberry/lime cake. (Over Budget: $31.25; Eee yikes!!)

On Sunday, as MoneyMateKate so presciently predicted, my sister wanted to get a massage at the spa. Since I knew I already blew my budget six ways to Sunday, I begged off and took a long morning nap while she got her treatment. (Gotta celebrate my small victories!)

When she returned from her spa treatment, however, I again blew it by lunching at the Bellagio Buffet (Cost: $71.00; Over Budget: $50. Egads.)

Sooo... all told, in addition to $216.91, I ended up incurring an additional $167.79 to my Bellagio room charge.


MONDAY (12/1)
My sister's last day with me. As usual, we ate breakfast at home, read the papers and watched the final 2 DVDs I rented. In the afternoon, we went to the touristy downtown area. We had 2 drinks at a posh historic hotel which set my sister back about $28 and we had dinner at a Spanish restaurant that cost me $55 (Over Budget: $35). On the bright side, I'll have a couple day's worth of lunches from the left over paella. :-D

FINAL TALLY
TOTAL SPENT (Not Including Stuff My Sister Paid For): $667.92
OVER BUDGET: $272.47

Well... what I can say about this carnage? Nothing. But not to worry folks. I just crunched the numbers and I have enough money earmarked in my "misc. fund" and "vacation fund" to cover this. (The earmarked funds are separate and apart from my Emergency Fund.)

During this holiday, I was thankful for my family (i.e., I never felt the urge to strangle my sister while she stayed at my place).


I'm also grateful that I haven't gone further into debt this year. I hope you all had a wonderful holiday too!

Thursday, November 27, 2008

Shtinkykat On Vacation - Happy Thanksgiving!

My sister's staying at my place this week and I'll have absolutely no privacy. Since I keep my finances and my blog a secret from my friends and family, I won't have any time to update this blog for about 5 days.

But I'm sure I'll have lots to report about my spending after I get back from Vegas my sister leaves. (Eek.)

Happy Thanksgiving everyone!

Wednesday, November 26, 2008

Is Tracked Shipping Worth It When You Purchase Off the 'Net?

Call me old school but I rarely buy stuff online or by mail order. I recently ordered a box of checks and a check cover from Checks in the Mail. When I placed my order, I opted for free shipping (bulk rate, non-tracked, US mail), although the company recommended shipping + tracking.

Ultimately, I got my checks but my $6.99 vinyl check cover never made it. (Sounds like a perfect example of pennywise, pound foolishness. Damn.)



I've placed an email complaint about this but I suspect that since I opted for the cheapest (free) delivery method, they'll tell me I'm TSOL. Bummer.

I've never had problems with Checks In The Mail in the past. But then again, I've never ordered anything other than checks from this company. I doubt I'll ever do that again.

Many PF bloggers like Miss M are writing about how you can get money back from sites like ebates. Although my interest is piqued, this recent experience makes me less likely to buy stuff online since I'm too cheap to pay for tracked shipping.

Anyhow, I am happy to report that I've mitigated my loss, though. I went to Bank of America to deposit some checks. I asked the friendly teller whether she had any check covers she can spare and she gave me two.

I guess there's something to be said for banking at a traditional bricks and mortar bank. :-D Now I'm not so bummed about my lost $6.99 check cover. (Actually, I'm still pretty bummed.)

This made me wonder, though: Do most people pay for tracked shipping when they order stuff off the internet? I wonder if I should do so in the future? Is it worth the additional money to save myself from the aggravation of a missing delivery?

Tuesday, November 25, 2008

Tap My 401K to Pay My Student Loans? Not a Chance

Someone posed the following questions to Donna Freedman at MSN Money’s Moneyblog. Although the writer wasn’t addressing me, I think the writer thought of these questions after reading about how much debt I have.


Hi Donna!
I have three questions that I thought you would be the best one to ask. Forgive me if any of them are dumb!

1) Does it not seem that it should be made legal (if it isn't), to roll one's 401k money over into student loans?

2) Is 100k the "usual" amount for an education these days? I realize that is a very broad question but it just seems that unless you're talking PHD, to end up with that much in student loans must mean living pretty high on the hog in the process. (!)

What say you oh money guru?!

P.S. I enjoy your articles immensely!




Initially, no, these questions aren’t dumb. And secondly, I too enjoy Donna’s articles tremendously.

Let me address question #2 first:
Is incurring $100k normal for education these days?

Answer: That depends whether you attend a state school or a private school. It would also depend what degree you’re working towards.

Using my life example:

I got my B.A. from a state school that is currently charging in-state residents $8,100 for tuition and $1,500 for textbooks for the 2008-2009 school year. (The fee for out-of-state students is $19,000.) Assuming 4 years and 4% inflation per year, a current student can expect to incur approximately $41,000 to obtain a Bachelor’s degree.

I got my post-graduate degree from a private school. According to my alma mater’s website, the annual tuition is now $37,890/year (not including student activity fees, parking, etc.) There is no estimate for textbooks but I’ll assume $1,500/year. Assuming it takes 3 years to get the degree and 4% inflation every year, a current student can expect to pay $122,959 to obtain this degree.

Keep in mind that the estimates above do not include room and board, transportation costs, etc. So, yes, it is possible to incur $100,000 for education without living “high on the hog” these days.

But…in my case my student loans are currently high as they are because I did live “high on the hog”. I would estimate that 20%-25% of my student loans were incurred to pay for living expenses in addition to tuition/textbooks. I could have worked while I was attending school to pay for my living expenses. But I chose not to since I wanted to “have fun” while attending graduate school.

Additionally, as I explained in this prior post, the combination of a low starting salary, a layoff and irresponsible spending forced me to seek several forbearances on my student loans. Although the forbearance option allowed me to postpone my monthly payments, it also meant that interest kept accruing and adding on to the principal I owed. As a result, 10 years later, I owe more on my student loans than when I graduated.

Now, returning to question #1:
Does it not seem that it should be made legal (if it isn't), to roll one's 401k money over into student loans?

Answer: A 401k participant may be able to take a “hardship withdrawal” to pay for post-secondary education for 12 months IF the participant's 401k plan allows for it. You typically need to show that you don’t have other resources to meet that need. Even if you can overcome this hurdle, the early withdrawals will be subject to applicable income taxes and a 10% early withdrawal penalty if you are younger than 59 ½.

I’m not sure if the writer was asking whether we should be able to use our 401k money to pay off student loans without penalty. My answer to that questions would be, “No.” I used to wish and pray for this type of “windfall” legislation, but not anymore.

First off, by participating in the 401k, I derived couple of tax benefits: 1.) it reduced my taxable income on the years I contributed and 2.) my returns in my 401k are tax deferred. (For the purpose of this discussion, let’s forget the fact that my 401k is losing money this year.) I’m assuming that the 10% early withdrawal penalty serves the dual purpose of discouraging me from tapping my 401k before retirement and to pay back taxes that I would have had to pay had I not participated in the 401k. Needless to say, removing this disincentive is a bad idea since it discourages saving and it robs the country of taxes that are rightfully owed.

Additionally, there are also plenty of good articles like this one that point out why people shouldn’t raid their 401ks to pay off debt, including double taxation and lost compound earnings.

But the real reason why I won’t tap my 401k even if there wasn’t a tax penalty is because I’m a true believer that when I've gotten myself into debt the old fashioned way, I need to take responsibility for it the old fashioned way by paying back the principal and interest little by little, bit by bit. The process is admittedly slow, tedious and painful. But the process has taught me the valuable lesson of how important it is to budget and live within my means.

Due to my recent commitment to tackle my debt, I’m proud to report I haven’t incurred new debt this entire year and I do not plan to either. Even my
criticized upcoming Vegas trip
will be paid with cash I've earmarked as "mad money".

I realize, however, that although I won't be incurring new debt to take this trip, it's still not prudent since the money spent could be used to pay down debt or to bolster my emergency fund. Sigh. I may not always do the "right thing" financially but I am willing to pay the consequences.