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!

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?

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.

Weekend Update & Prepping For My Big Sis' Visit

My weekend officially started on Friday since I played hookie from work, using my wisdom tooth extraction the day before as an excuse. I'm happy to report that the extraction process was not as gruesome and horrible as I anticipated since my wisdom tooth was fully erupted. My out of pocket expenses weren't that bad either ($29.40) and it will probably be reimbursed by my FSA plan .

My hookie day was also a relatively frugal day since I never left my apartment until evening. (I ended up having to work some at home. So much for playing hookie!) By evening, I was sick and tired of eating soft foods and I couldn't resist the siren call of solid junk food. My only expenditure on Friday was $6.55 at McDonald's for some tasty Chicken Selects and large fries.

[Speaking of McD's, did you know you can get back 1% in Upromise rewards at McDonald's? It will require you to buy an Arch card (i.e., McD's gift card) in $10 increments and register it. Whenever I go to McD's (which is not often, I promise!), I always buy my food with my Arch card and recharge it when it's depleted.]

Anyhow, Saturday morning started off well too. I took my newspapers and bottles to the recycling center and redeemed $7.14. Cha-ching!

I then stopped by the library. Since my sis and I will be driving to Vegas, I checked out 3 new audio books to listen to in the car. I was hoping to rent some DVDs but it was pretty much picked over and the selections were pretty cr&ppy. Cost: $0.00.

Financially speaking, things went a bit downhill from there.

Since there's probably not much to do on Thanksgiving, I rented 4 DVD's for $18.85. This is relatively cheap entertainment, but it's something I wouldn't have done if my sister wasn't visiting.

I also bought stuff at Trader Joe's I normally wouldn't: a bottle of Viognier, 6-pak yogurt, marcona almonds, sliced salami, prosciutto, organic avocados plus gorgonzola crackers in addition to my regular groceries. My total damage at TJ was $32.70. (My regular groceries only accounted for about $5.00.)

But there's a reason to my madness! I'm hoping that by drinking at home and munching on decent snack foods, we won't be eating/drinking out as much while she's here. :-D



All told, my damage this weekend wasn't good but it wasn't horrendous either. (I'm curious, how much do most people spend when entertaining a family member and/or a guest at home?)

Welcome MSN Readers

I checked Google Analytics today and discovered a HUGE spike in my readership. Turns out, I was highlighted in MSN yesterday.

I'd like to say this was a happy occasion, but the comments left by readers have been... ummm... a bit harsh! As my profile indicates, I've made horrendous financial mistakes in the past which I am trying to atone for and correct. I know I'll make I'm making mistakes along the way and will likely continue to do so. (After all, to err is human, right?)

But I AM making progress and I welcome all of you to join me in my struggle, through the ugly and triumphant.

Cheap Stuff To Do In Vegas

I'm headed to Vegas over Thanksgiving weekend. So far, the plan hasn't been prudent or frugal. BUT, we're only spending a day and a half so I can't really do much damage, right? I've also been doing a bit of research to rein in the spending.

Here are some of the things I can do:

$0.00: Usually, this time of the year, Vegas gets pretty cold. But based on the weather we're having lately, it looks like we're going to have an unseasonably warm Thanksgiving. I'll be packing my bathing suit and spending some time at the pool.

$0.00: Since I'll have a car, I'm thinking of taking a side-trip downtown and check out the Fremont Street Experience. The FSE is a 90-foot-canopy that covers the entire street. Every hour between sunset and midnight it comes alive as Viva Vision -- an integrated video, graphics, and music show.


$0.99: Deep fried Twinkies and Oreos. I really don't care much for Twinkies or Oreos. But deep fried Twinkies and Oreos drizzled in chocolate and covered with powdered sugar? I'm intrigued!

$1.99: While we're Downtown, I'll have a classic shrimp cocktail at the Golden Gate's San Francisco Shrimp Bar & Deli. Or I may have the $2.99 big shrimp cocktail instead. Back when I was a college student, the shrimp cocktail in a parfait glass cost $.99 and it impressed the heck out of me. I wonder if I'll still be impressed?

$0.00: The emerging Downtown Arts District may have some free gallery tours and special events.

$2.50: The Plaza in Downtown has cheap well drinks.

$7.77: At Mr. Lucky's 24/7 in the Hard Rock Hotel, I can order the Gambler's Special: Steak, three grilled shrimp, a choice of potato or broccoli and a salad. It's not on the menu -- I'll have to ask the server -- and is available around the clock.

$0.00: Free admission to Mix Lounge at THEhotel before 10 p.m. (I don't stay up much later than that anyways! LOL.)


$12.95: I can live out my fantasy to be a Showgirl. Just kidding. But I could be part of the Rio Casino's Masquerade in the Sky show.

$7.50: Try Mo's chocolate covered bacon bar at the Forum Shopes at Caesars Palace. I know it sounds disgusting but I've heard people RAVING about this.

$0.00: Centaur Art Gallery at the Fashion Show Mall.

$0.00: Last time my sister and I were in Vegas, we couldn't catch the Sirens of TI show due to high winds. Hopefully we'll catch it this time.

Why do I get the feeling that I'll suffer from a massive sugar coma during this Vegas trip? Anyhow, here's a good guide for doing Sin City on a budget. Viva Lost Wages and have a great weekend folks!

How Shtinkykat Became a Grinch

Holiday tipping etiquette suggests that I tip my newspaper delivery guy anywhere between $10-$20 this Christmas. But guess what? My newspaper delivery guy is going to get a big donut, a bagel, a big zippo from me this year.



I live on the second floor and my delivery guy tosses my newspaper from the center courtyard, over the balcony, to my front door. About a month ago, my newspaper guy hit my orchid and smashed the ceramic pot. It woke my neighbors and me and I had to clean up the mess at 3:30 a.m. Immediately after the accident, my orchid lost its blooms and has been slowly dying since. The delivery guy never left a message or apologized for the accident.

I can understand that this guy was scared for his job and was probably worried he would have to compensate me. But did this guy really think I wouldn't know it was him?

This guy is no different from any other "hit and run" driver and hence a slimeball. Quite frankly, he's lucky I never reported him to his employer. I consider that my tip for him. It's not about the money or the plant since I would've never asked for a penny had he 'fessed up. It's the principle.

Do you think I'm being petty? Or do you think the newspaper carrier doesn't deserve to be tipped either?

Thank Heavens For My Flexible Spending Account

Sallie's Niece recently wrote about her misadventures with vision insurance. This reminded me that I need to get new frames.

I got my eyes examined last October and I looked into getting new eyeglasses at that time. However, my optician told me that my vision plan would not cover the glasses since I purchased contact lenses within the past 12 months. Under my vision plan, I can get new frames every 24 months, or, contact lense every 12 months. However, I cannot get both in the same year.

I just went back to my optician to buy my glasses not realizing my prescription expired in October. Doh!! Fortunately, my optician made an exception. Phew!

Notwithstanding my vision plan, though, my new glasses cost me $281!! This is due to the fact that in addition to the new frames, I also requested thin lenses (or else I'll look like I'm wearing coke bottle bottoms), anti-glare coating and Transition lenses. (After all, I live in sunny Southern California and I can't wear sunglasses over my glasses.)



Thank heavens I currently have a $330 balance in my flexible spending account. Every year, I elect to contribute $20 per paycheck towards my FSA on a pre-tax basis. Since it's a "use-it-or-lose-it" plan where I’ll forfeit any money I haven’t spent by December 31, this is money well spent. (And this means my glasses are paid with pre-tax money. Yeay!)

I think many employers are conducting open enrollment for employee benefits now. I highly recommend that everyone contribute some money into their HSA. It's never a bad idea to put some money away for your health, especially on a pre-tax basis.

Are You Kidding Me?

I recently discovered that my renters insurance policy did not have replacement guarantee, so I called my insurance agent.

I was relieved to learn that replacement cost coverage only increases my premium by $26/year.

If I could've reached through the phone, I would've throttled my agent when she chirped, "Why did you wait so long to add this?" When I told her about how the replacement cost "mysteriously" got dropped over the years, she looked at my auto policy. As it turns out, I don't have uninsured motorist coverage either. Are you freakin' kidding me?? Arrrrrggggh!!

I got "upsold" on uninsured motorist and this other "accident forgiveness" coverage. (Actually, based upon my driving skills, this may actually be useful.) This extra coverage costs $38/year.

I'm counting my lucky stars that I didn't discover these deficiencies until after I suffered a significant loss. What's the point of having an insurance agent if they're not looking after your interests? Maybe I should check out E-surance or Progressive Insurance.

Importance of Renter's Insurance and Reading Your Policy

As you know, over the weekend, the Santa Ana winds wreaked havoc in Southern California by spreading wild fires. As I watched a news footage of a large apartment complex engulfed in flames, I wondered how many of the residents have renter's insurance? For these people, their entire wordly possessions have gone up in smoke.



It's times like these that I'm glad I have renter's insurance. But when I looked at my own renter's insurance, I was in for a shock.

A renter's insurance policy generally has 3 components:

1. Coverage for your personal property in the event of a covered loss,
2. Additional living expenses you incur in the event you are displaced from home as a result of a covered loss, and
3. Liability coverage (in the event you are sued due to a covered loss caused by you).

Since I live in a 1 BR, I've kept my coverage limits minimal:

Personal Property: $27,000,

Additional Living Expenses: The least of the following:

• (a) the time period required to repair property covered,
• (b) the shortest time to settle elsewhere if I decide to permanently relocate, or
• (c) 12 months (or 24 months if a state of emergency is declared).

Liability Protection: $300,000/occurrence

"Valuables" such as jewelry, watches and fur have very limited coverage under a renter's insurance policy. (Usually limited to $500-$1000.) Since I have a nice pair of diamond earrings (and other nice smaller pieces of jewlelry), I purchased a "floater" that covers my jewelry up to $2,500 per item/$10,000 per occurrence subject to a $500 deductible. This shouldn't come as a surprise but my floater costs $253/year as compared to $172/year I pay for the basic policy!

More shocking, however, was that when I purchased my renter's insurance, I had "replacement cost guarantee" for my personal property. Over the years, I never reviewed my renewal policies and discovered that the insurance company had taken that coverage off and only covered my personal property for actual cash value!

This makes a big difference since Actual Cash Value (ACV), also known as market value, means that in the event of a covered loss, my insurance company will only pay me equal to replacement cost minus depreciation. For example, if my DVD player gets stolen and it costs $200 to replace, my insurance company could potentially only reimburse me for $50.

In a total loss, the difference between ACV and Replacement Cost is not likely to make a difference since my insurance company will pay policy limits. But chances are, I'm not likely to suffer such a loss, (knock on wood). In a partial loss, renter's insurance policy with ACV coverage is pretty useless.

I'm ticked off that my insurance company would unilaterally take the Replacement Cost coverage off and I'm more ticked at myself for not catching this earlier. I'll be calling my insurance agent today to add this coverage back upon renewal in January. Sigh. Another increased cost for 2009. Bummer.

Too Close to Home...

My Non-Frugal Thanksgiving Plan (Read: Bad Decisions)

Of course, as soon as I write about how I keep my credit card debt a secret from my friends and family, I'm confronted with a scenario of how it's biting me in my patootie.

My older sister is visiting me for 5 days for Thanksgiving. Just as a background: My big sis has always been more responsible with her money than I, so she doesn't have the kind of debt that I do. She has much more discretionary income than I do. The problem is, she's not totally aware of my debt level and wants to do expensive stuff that I probably can't shouldn't afford. In her defense, I used to do all these expensive stuff with her in the past which explains why I'm up to my eyeballs in credit card debt. Unfortunately, I can't seem to tell her that I can't afford to do those kinds of things anymore.

Wimp Out Mistake #1: My sister wanted to go to the Four Seasons Resort for Thanksgiving dinner, which would have cost $110/person (not including tax, tip and alcohol). I managed to put my foot down and said absolutely not. But... I compromised and we're going to a chi-chi restaurant that serves a prix fixe Thanksgiving meal for $54/person instead. Sigh...

Wimp Out Mistake #2: I live in a 1 BR and know we will go stir crazy. I was looking up for stuff my sister and I can do for relatively cheaply during the 5 days. I asked my sister what she was interested in doing while she's out here.

Unfortunately, a friend sent us information about a $119/night deal at the Venetian. Vegas is about a 5 hour drive from where I live and my sister seemed eager to go for at least an overnight stay.

I love Vegas but I don't think I can afford this trip without dipping into my savings. I really didn't want to do this but I felt compelled to be a gracious hostess and I agreed to do the Vegas thing.

Unfortunately, the $119/night deal isn't available during the weekend of Thanksgiving and costs $250/night (not incl. tax). (Surprise, surprise.) We ended up booking a room at the Bellagio instead for.... drumroll $216.91/night (incl. tax). If you take into account gas (estimate $80), I'm looking to spend $150 for my share. And this doesn't include food or entertainment. Sigh.

This is my problem since I can't seem to tell my sister that I can't afford to do any of this stuff. I'll just need to look at my budget and see where I can squeeze extra money. I'm also expecting to get some business travel expenses reimbursed so I may be able to afford this.

Sigh. Oh well. Viva Las Vegas and have a great weekend folks!

Financial Dishonesty or Denial?

I used to date a very smart guy with a good job. But like all other past relationships, I seem to have a knack of sabotaging all promising relationships. But I digress! This post isn’t about my inability to maintain a romantic relationship. (That's a topic for a whole 'nother blog. Shtinkykat's Dysfunctional Relationship Blog, perhaps?)

Rather, I'm writing because a recent discussion with my ex hit a raw nerve. It seems that after all these years, I’m still dishonest about my dirty little huge credit card debt.

As you may know, some banks have proposed forgiving up to 40% of credit card debts owed by risky borrowers. As this LA Times article points out, the banks haven't suddenly turned altruistic on us. (Oh heavens no. Otherwise it would mean that the End of Days is near and I would have to repent for my sins.)

Rather, the banks are taking this action because they see the risky borrower as a serious bankruptcy risk where they could potentially recover nothing. The banks would rather get something rather than nothing, so this probably makes some business sense for them.

[Breaking News: The bank regulators have rejected this proposal.]

Anyhow, my ex-boyfriend and I debated whether the proposal was "right". I argued that this promoted a moral hazard, or more accurately, that it rewarded risky borrowing habits. Where's the incentive to do the right thing?

My ex countered that it's still good to be financially responsible, regardless of the handouts going to people with high credit card balances. And of course, being the left-brained, logical, smartypants that he is (no, I wasn’t dating Mr. Spock), his arguments were unassailable.

What got to me, though, was his following statement:

It's reasonable to assume that even the reduced debt level is much higher than what would be considered normal or prudent in a financial-planning sense. For example, you and I would never find ourselves with such debt levels of toxic debt. So, in a sense the person receiving the handout is getting free money, but they had to go into tons of debt to get that.

Now, if they bought something with the [debt] which retained its value or appreciated (which of course they did not haha) then it's conceivable that they will have beaten the system. But as I mentioned, of course they did not.

So I don't think that I personally have an issue with them being helped. The situation they are in, and the lifestyle choices they have made make their future financial outlook much worse than mine, regardless of the amount or frequency of handouts that they get.

I debated whether I should ‘fess up about my existing credit card debt. I was in deep credit card debt when I dated him (approximately 7 years ago) and I still am. It certainly would have given me street cred to tell him, “I’m $12,000 in credit card debt but I intend to pay every stinking cent even if they offered to write off a portion!”

But I just couldn’t. It’s not like I need to impress him now, but the words just couldn't come out.

What’s odd, though, is that I’m not ashamed to tell my friends and family, including my ex, that I’m $123,000 in debt (which is true). But I also let them assume that it’s mostly my student loan and some car loan. (For some unknown reason, I’m not ashamed about my car loan even though it’s technically a “bad loan”.)

I wonder if this dishonesty a form of denial? I'm honest with myself and that's what counts, right? Afterall, it's my own demon I have to vanquish. Is there any reason to telling my friends and family about my credit card debts?

No More Social Security Payments For the Rest of the Year But...

I looked at my most recent pay check and discovered that my pay increased by $160.92. Why? This is because I've now paid the maximum yearly Social Security limit. For the final 3 paychecks of the year, my pay should increase by about $220 per pay period.


The bad news? Looks like my "temporary pay increase" is going to be eaten away by increased costs in 2009.

For example, I only signed a 6 month lease with my apartment in July due to the uncertainty of my job. I was just told my rent will increase by $20/month in January. (Happy New Year to me...) I'm probably again only going to sign another 6 month lease so I'm expecting another rent increase in July '09. (Total expected rent increase in 2009 = $360.) (I'm not even going to think about the possibility that I may have to move into a 2 BR for now.)

My car registration ($193) will come due on 12/8/08 and I currently only have $105 saved towards it.

Additionally, with benefits open enrollment starting soon, I'm expecting to pay another $10/month $17/month in increased health and insurance costs in 2009. (Total expected increase: $120 $204.) [Note: Open enrollment started at my company today. Like always, I've underestimated the increased costs.]

I socked away my most recent "temporary pay increase" in to my emergency fund. But with the anticipated increase in cost of living for 2009, I'll just earmark future "pay increases" it into a Cost of Living Adjustment Fund which will not count towards my savings.

Sigh... story of my life. Whenever I find extra money to save, it seems to go elsewhere. That being said, although it feels like I'm futilely running in place, I feel very good that I'm taking advantage of this temporary Social Security payment reprieve to plan ahead.

November Charity - Food Bank

Today is Veterans Day. Thank you to all the brave men and women who have served this country honorably and bravely.

~~~

I recently made a commitment to give regularly at least $20/month to charity. This month's $20 contribution went to the San Diego Food Bank.


With the economy in the toilet and many people facing potential layoffs (including yours truly), I suspect that the Food Bank's budget will be stretched thin this year (if it isn't already).

This article highlights a woman who once made $70,000/year before she was laid off. Once she burned through her tax refund and savings, she had to go to the Food Bank to make ends meet. One person left this comment in response to this article:

I have alot in common with her, and know how she feels. I too was a loan processor for more than 5 years, when I was laid off last year. I went from making 50k a year to making barely 27k a year. I was forced to enter a new career because there were just no processing jobs. ...

These are scary times. But strangely enough, donating this money gave me some emotional peace since it dawned on me that donating to charity is one way to stimulate the economy. After all, a non-profit organization is not likely to hoarde donations to improve its balance sheet. Rather, the charitable organization will likely spend the donation in furtherance of its cause. It's a win-win situation. I'm glad I made this resolution.

Now if I was thinking straight, I would've donated this month's money to a Veterans' charity. But since I didn't, I intend to donate to Veterans' charity next month. :-P

Opened A True Free Checking Account

It dawned on me over the weekend that my checking accounts with two different brick and mortar banks are not truly free since they require automatic deposits.

Although I survived the most recent round of layoffs, I'm not sure how much longer I'll be employed. In the event that I'm laid off, my automatic deposits will stop and my brick and mortar checking account will start charging me a fee.

Of course, I have the option of transferring some of my savings money to my non-interest bearing checking accounts so that I can meet the minimum balance at which the banks will waive the monthly fee. Screw that.



I currently have an automobile loan and a muy pequeno savings account with a local credit union. (The majority of my savings are with online banks like ING and DollarSavingsDirect.) I decided to open a checking account with my credit union since it offers free checking (minus cost of paper checks) with electronic statements. Sweet!

But in order to open an account, the credit union ran my credit report. Uhhhh... Not so good. I was recently so happy about increasing my FICO score to 712. Bummer. This'll take a hit.

With my new checking account number in hand, I tried to link it electronically to my ING savings account. Unfortunately, I was stumped by ING's security questions. I clearly got one or all of the questions wrong. For example, it gave me a list of phone numbers and asked me to choose the number I've had in the past. Are you serious? None of them looked familiar. Does anyone really remember the phone number they had during college?

[Sigh.] I'll now have to order paper checks and send a voided copy to ING to link my account. What a hassle!


While we're on the topic of ordering paper checks, in this age of online banking, I surprisingly have occasions where I still need to write paper checks (e.g., my rent, linking online banks). So I usually purchase my paper checks from Checks in the Mail. When ordering, I always check to see if anyone has posted any discount codes on the web. Sure enough, I found a couple: "couponcraze" (save $1 off check order) and "save20" (save 20% off check order). Cha-ching!

Once this is all complete, I'm also considering opening ING's Electric Orange checking account and making that my primary checking account since it offers an interest rate of 1.5% APY. ING is currently running a $50 bonus promotion right now to those who have an existing Orange Savings Account. (Reference code: EM227). The only problem with this offer is that you'll have to activate your Mastercard debit card and make 3 signature-based purchases within the first 45 days the account is open.

Maybe my goal next year should be simplifying my banking. This is getting out of control!

Emotional Eating Wreaking Havoc With My Frugal Living

As you may recall, I spent $91.50 on sushi a couple of days ago. After that debacle, I vowed to maintain an austere lifestyle for the rest of the month to atone. But I've been eating out a lot these days. (It's a lot of fast food but I still consider that very un-frugal.)

The economy and the uncertainty of my job is causing me to be a bit blue and lethargic. In times of stress, I like to stuff my face with greasy food, chocolate, ice cream and beer. I guess this is my other emotional blankie. (And at least I haven't gone shopping to make myself feel better, right?)

My friend suggested that I stop watching the news and CNBC. But her suggestion isn't a true panacea since I'll be trading in insecurity and stress for ignorance and apathy. No thanks.

I'm pretty sure that everyone is nervous about the economy and their financial well being. How are you all dealing with this? I'm looking for a frugal alternative to stuffing my pie-hole to deal with my stress, so your suggestions are highly welcomed.

Friday Tag

I've been tagged by MoneyMateKate on Halloween.

Here are the Rules for this tagging gig…

1. Link the tagger and provide the rules on your blog.
2. Share 7 facts about yourself.
3. Tag 7 people at the end of your post by leaving names as well as links to their blogs.
4. Let them know they’ve been tagged by leaving a comment on their blogs.

~~~

I'm going to reveal weird stuff about myself and I'll try to link it with personal finance, after all this is a PF blog.

1. I sleep with a blankie. Yes, I know – I’m a grown woman but lemme explain. I’m not what you call an “elegant sleeper,” since I usually sleep with my mouth wide open. My blankie is economical since it prevents unnecessary drool staining on my pillow case and pillow. And have you recently priced out pillows? Good Lord. You’d think they’re made out of spun gold or something!

2. I try to avoid as much aluminum products as possible, including aluminum foil and canned drinks. I don’t know if this is true, but there appears to be anecdotal evidence linking aluminum exposure with Alzheimer’s. My dad suffers from dementia (possibly as a pre-cursor to Alzheimer’s), so I am very sensitive to this issue. I now cook with reusable stainless steel pans and I drink very little soda, which is economical, healthy and environmentally conscientious. The worst part of avoiding aluminum, though, is that I now have to endure sweaty armpits since all antiperspirants contain aluminum. :-(

3. I grow my hair out every couple of years and then donate it to Locks of Love. I usually wait until my hair grows past my breasts, which means the length of the hair that I donate gets longer and longer every time. Heh heh. By growing my hair out for this purpose, I’ve saved on reduced number of salon visits.

4. Although I’ve lived in the U.S. since I was 3 months old, I didn’t get my U.S. citizenship until 2001. (Not sure why it took me that long.) Now that I’m a citizen, I can vote on issues that affect my personal finance as well as the economy. And, yes, I voted this year! (My favorite phrase: “I’m an AmeriCAN, not an AmeriCAN’T.”)

5. I love being single. I have no desire to marry or to have children. I think this stems from the trauma of watching “Mommie Dearest” at a tender, impressionable age. (A little bit of useless, unconfirmed trivia: Christina Crawford allegedly attended my high school.) Ummm… I think the link between saving money and being childless is pretty clear.

6. I don’t own an iPod or a digital camera (except for the cr&ppy one on my cell phone). Why, oh why, didn’t I commit to frugality until AFTER I bought these with my credit card??

7. I self groom. Sorry for the TMI.

I don’t think I’m going to tag anyone. But if anyone wants to be tagged, let me know. :-D

My Commitment to Charity Will Start Now Rather Than Later

Before I dive into my discussion about charity, I've got a confession about falling off the frugal wagon last night - I spent $91.50 ($76.50 + $15.00 tip) at a sushi bar just for myself.

My apartment complex was spraywashing the garage so I couldn't come home before 6 p.m.

Bad decision #1: On a whim to buy some time, I decided to visit my local sushi bar that I haven't been to for a long time. (This is really bizarre but I’ve been craving sushi ever since I watched an episode of Dirty Jobs where Mike Rowe ate geoduck sashimi. Weird, I know!)

Bad decision #2: I should have asked to sit at a table and ordered the prix fixe sushi for $28.00, but I opted to sit at the counter.

Bad decision #3: I ordered all my favorite sushi without any consideration to price.

Sigh. What's done is done. Anyhow, thanks for letting me get that off my chest...

~~~

I've been thinking about charitable giving ever since I read posts by Money Funk and Beachgirl’s Budget Blog about Mary Hunt’s 10-10-80 plan. (See links for discussions about the specifics of the 10-10-80 plan.)

I think it’s a great plan, but with my existing debts, there’s no way I can afford to pay 10% of my income to charity now. I’ve been telling myself that once I pay off my debts and establish a fully funded emergency fund, I’ll start giving to charity. After all, that’s what Dave Ramsey recommends as part of his 7 baby steps.

But will I really? Or will I just increase my standard of living instead?

I started wondering about this when I discovered that with gas prices down, I’m now paying approximately $40 less in gas per month than what I was paying in July. What have I done with this windfall? Last month, my gas savings went towards paying for a new computer bag. And as you know, I blew this month's savings at the sushi bar last night.

I guess the point I’m trying to make here is that unless I make charitable giving a regular part of my budget now, any extra money in the future will get spent elsewhere.

My new regular commitment to charity will necessarily have to start modestly since I’m up to my eyeballs in debt right now and my EF is not yet fully funded.

In a nod to Mary Hunt’s 10-10-80 plan, I’ve decided to commit 10% of my monthly savings to charity. (Since my goal is to save $200/month, I’ll donate a minimum of $20/month.) And with any items I come under budget, I will split equally between my EF and charity.

I’m hoping that just like savings, I think if I make charitable giving a regular expenditure, it will eventually become automatic.

0% APR Balance Transfer Offer Not Worth It

Bank of America just sent me a 0% APR Balance Transfer offer with a transaction fee of 3%. The promotional rate applies until the closing date of October 2009 (sometime around the 26th).

In my financially carefree (read: reckless) days, I'd immediately jump on these offers in a practice I call "merry-go-card". But now that I'm trying to be a bit more rational and responsible, I calculated whether this is a good deal for me. Turns out, it's not.

I have a balance of $12,526.03 (as of October 6, 2008) on my Chase Mastercard with a 5.99% APR until it is paid off. (I know if I miss or am late on a payment, the APR will be jacked up to a usurious rate. But I'm not concerned about that since I'm now anal about paying my bills on time.)

Based upon my current debt snowball repayment plan, I am paying my Chase card $265/month until June 2009. Thereafter, I start paying $1,053/month since I'll be rolling my extinguished car payments into my credit card payments. (Of course, if I'm asked to work from home, my snowballed credit card payment will be reduced to $653/month. But since that hasn't happened yet, I'm going to proceed with the $1,053/month assumption.)

My current 1-year repayment schedule with Chase looks like this:



If I take advantage of the BofA promotional 0% balance transfer, my credit card balance will increase to $12,901.81 due to the 3% transfer fee. My 1-year repayment schedule with BofA would look like this:



It seems like I would ultimately come out ahead by about $250 by taking the BofA deal. But due to the transfer fee, I won't break even until May '09. And since the promotional rate ends in October '09, I'll probably have to do another balance transfer again. Assuming another transfer fee of 3% on the $6,570 balance, my $250 "savings" will be reduced to $52.90. Hardly worth the effort.

And, who knows where interest rates will be in a year? Seeing that the US is currently suffering the same economic malaise as Japan in the '90s, I've given myself over a 60% chance that interest rates will continue to remain low and that I'll find another 0% offer in 2009. On the other hand, since the US is printing money like crazy to fund the bailout, we could have a potential '70's-style stagflation. As I said before, I can't really read economic tea-leaves (and apparently neither can "experts" like Alan Greenspan and Ben Bernanke.)

The bottomline is, this balance transfer offer only makes sense if I can pay off the balance before the promotional rate expires because the transfer fee eats up most of my savings.

I called Chase to see whether it would be willing to reduce my current interest rate based upon the 0% offer that I received from BofA. No dice. The 5.99% life-of-loan APR is a promotional deal that they won't be willing to re-negotiate.

Yet another bitter life-lesson pill for me to swallow.

Wish I Had a Time Machine

I’ve updated my debt balances and I have to admit, I’m getting really impatient with my progress. I know I’m making decent progress every month, and I know I’m better off now than I was even 3 months ago.

I’m also VERY grateful that I haven’t had any serious setbacks since I started my blog (knock on wood). But this plodding is making me antsy and I’m afraid that this dissatisfaction will make me fall off the proverbial horse.



In an attempt to make myself feel better, I think about how things were back in November 1998. I’d just graduated from law school in June and I’d taken the bar exam some time in August or September. I was still working as a clerk at a private law firm until I got my bar results.

After I passed the bar in late November, I was earning $45,000/year with no retirement benefits. (Yes, folks. Not ALL attorneys make bank straight out of law school.) The deferral period for my student loans were coming to an end and the repayment period was starting. I’m pretty sure I had less than $500 in my savings account at the time and I had no clue how I was going to repay my student loans. I’m also certain I had quite a bit of credit card debt since I lived on my credit cards while I was unemployed after graduation. Stupid, stupid, stupid.

Here’s a bit of depressing (or more accurately, pathetic) news: I graduated in 1998 with approximately $100,000 in student loans. Guess how much I currently owe 10 years later? $103,619.61!! This is due to negative amortization from forbearing on the loan when things got tight. (Keep in mind that at the time, "financially tight" meant I wanted a new Coach purse and my credit card was maxed out.)

Let me be a warning to you all: Do not request a forbearance unless you ABSOLUTELY have no other options. (I really feel like belting out Cher's "If I Can Turn Back Time" right about now...)

But flash forward to present. Although I have just as much debt as I did in 1998, I also have MUCH more in my retirement and liquid savings. I've also turned a new leaf and I have a plan for paying off my debt by 2014. I'm not incurring new debt in the interim and I'm also saving little by little.

But why, oh, why is this process so tedious and excruciating? [Whine...]

I wish I had a time machine where I could see how I'm doing in 2018. If all goes to plan, I'm hoping that:

• I'm debt free other than my mortgage
• My home is financed with a 15-year fixed mortgage
• I'll have $36,000 in liquid savings
• I'll own $3,500 in US Savings Bonds
• I'll have $457,000 in my 401k and Roth IRA
• I'll be making plans to downshift my career at age 59 1/2.

I hate putting down my long term goals in writing. After all, as Homer Simpson says:

(Thank you to Sallie's Niece, from whose blog I lifted this picture.)

I guess in 2018, I'll look back at this post as a time capsule. I wonder what I'll be thinking then?

Anyhow, it's election day. Hope you're all voting!

October '08 Debt and Net Worth Progress Report

I really didn't want to do my October '08 progress report because it meant I'd have to look at my 401k and my investment account statements. But there's no point in hiding since I have to deal with it. Just like any other bad news, I just gotta suck it up and face it like a pussycat that I am, so here goes. (Wait. That didn't come out right. Oh, heck. You get the idea.)

MY DEBT

	Starting Debt	Last Month	This Month	Difference
PRIVATE SL	$49,528.99	$48,576.21	$48,270.11	$(306.10)
Fed'l SL	$55,852.68	$55,483.81	$55,349.50	$(134.31)
CC	$13,610.75	$12,743.77	$12,526.03	$(217.74)
Car Loan	$9,779.33	$7,747.90	$6,988.13	$(759.77)
TOTAL:	$128,771.75	$124,551.69	$123,133.77	$(1,417.92)

The progress on my debt reduction plan makes me want to sing Fog Hat's classic song: "Slow ride, take it easy..."

I keep telling myself, "Progress is progress." But still.... grrrrrrr.....

You can check out the progress of my "Slow Ride" here in my snowball debt reduction plan.


MY SAVINGS

LAST MONTH	THIS MONTH	DIFFERENCE
$7,356.51	$7,574.98	+$218.47

I try to save about $200 every month. As you know, I bought beer with the $10 I earned from my recycling proceeds, but I also made an extra effort to save an additional $10 as well. I guess I did well. :-D

I also opened a new high-interest savings account with Dollar Savings Direct. I always worried that I would become one of those crazy old ladies who collects cats. Thankfully, looks like I'm collecting savings accounts instead. :-D


MY NET WORTH

LAST MONTH	THIS MONTH	DIFFERENCE
($4,316.87)	($15,895.44)	($11,578.57)

Writing about my net worth reminded me of the a classic MGM cartoon called "Bad Luck Blackie", about a cute white kitten who is tormented by a bully bulldog. The kitten enlists the help of a black cat who causes the bulldog to suffer series of misfortunes. In the end, you see huges objects falling from the sky onto the bulldog. Yep. That final scene pretty much sums up my free falling net worth. But I'm not going to dwell on that.

As indicated in my prior posts, I:

1. Started purchasing I-Series savings bonds from the U.S. Treasury. I plan to continue to buy small amounts of bonds every month;
2. Opened a new high-interest savings account with Dollar Savings Direct;
3. Will start earning snowflake money through Pinecone Research.

I'm not expecting to, nor will I, get rich from these efforts. But they're all small baby steps in my long-term retirement planning and net worth building.

The breakdown of my net worth can be seen here.